[Federal Register Volume 63, Number 152 (Friday, August 7, 1998)]
[Proposed Rules]
[Pages 42284-42286]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21198]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 993

[Docket No. FV98-993-2 PR]


Dried Prunes Produced in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate from $1.60 to 
$2.16 per ton of salable dried prunes established for the Prune 
Marketing Committee (Committee) under Marketing Order No. 993 for the 
1998-99 and subsequent crop years. The Committee is responsible for 
local administration of the marketing order which regulates the 
handling of dried prunes grown in California. Authorization to assess 
dried prune handlers enables the Committee to incur expenses that are 
reasonable and necessary to administer the program. The crop year 
begins August 1 and ends July 31. The assessment rate would remain in 
effect indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by September 8, 1998.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, Fruit 
and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456, 
Washington, DC 20090-6456; Fax: (202) 205-6632. Comments should 
reference the docket number and the date and page number of this issue 
of the Federal Register and will be available for public inspection in 
the Office of the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Diane Purvis, Marketing Assistant, or 
Richard P. Van Diest, Marketing Specialist, California Marketing Field 
Office, Fruit and Vegetable Programs, AMS, USDA, 2202 Monterey Street, 
suite 102B, Fresno, California 93721; telephone (209) 487-5901; Fax 
(209) 487-5906; or George Kelhart, Technical Advisor, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room 
2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202) 
720-2491, Fax: (202) 205-6632. Small businesses may request information 
on compliance with this regulation by contacting Jay Guerber, Marketing 
Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 
room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: 
(202) 720-2491, Fax: (202) 205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 993, both as amended (7 CFR part 993), 
regulating the handling of dried prunes grown in California, 
hereinafter referred to as the ``order.'' The marketing agreement and 
order are effective under the Agricultural Marketing Agreement Act of 
1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the 
``Act.''
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, California 
dried prune handlers are subject to assessments. Funds to administer 
the order are derived from such assessments. It is intended that the 
assessment rate as issued herein will be applicable to all assessable 
dried prunes beginning on August 1, 1998, and continue until amended, 
suspended, or terminated. This rule will not preempt any State or local 
laws, regulations, or policies, unless they present an irreconcilable 
conflict with this rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with the Secretary a 
petition stating that the order, any provision of the order, or any 
obligation imposed in connection with the order is not in accordance 
with law and request a modification of the order or to be exempted 
therefrom. Such handler is afforded the opportunity for a hearing on 
the petition. After the hearing the Secretary would rule on the 
petition. The Act provides that the district court of the United States 
in any district in which the handler is an inhabitant, or has his or 
her principal place of business, has jurisdiction to review the 
Secretary's ruling on the petition, provided an action is filed not 
later than 20 days after the date of the entry of the ruling.
    This rule would increase the assessment rate established for the 
Committee for the 1998-99 and subsequent crop years from $1.60 per ton 
to $2.16 per ton of salable dried prunes.
    The California dried prune marketing order provides authority for 
the Committee, with the approval of the Department, to formulate an 
annual budget of expenses and collect assessments from handlers to 
administer the program. The members of the Committee are producers and 
handlers of California dried prunes. They are familiar with the 
Committee's needs and with the costs for goods and services in their 
local area and are thus in a position to formulate an appropriate 
budget and assessment rate. The assessment rate is formulated and 
discussed in a public meeting. Thus, all directly affected persons have 
an opportunity to participate and provide input.
    For the 1997-98 and subsequent crop years, the Committee 
recommended, and the Department approved, an assessment rate that would 
continue in effect from crop year to crop year unless modified, 
suspended, or terminated by the Secretary upon recommendation

[[Page 42285]]

and information submitted by the Committee or other information 
available to the Secretary.
    The Committee met on June 25, 1998, and unanimously recommended 
1998-99 expenditures of $348,840 and an assessment rate of $2.16 per 
ton of salable dried prunes. In comparison, last year's budgeted 
expenditures were $331,960 and the assessment rate was $1.60 per ton. 
The $0.56 per ton increase in the assessment rate is needed to generate 
sufficient income to meet higher 1998-99 expenses, including increases 
in salaries and operating expenses, and to offset an expected reduction 
in the size of the crop because of unusually cool and wet weather this 
season. The California Agricultural Statistical Service estimates a 
170,000 ton crop during the 1998-99 crop year, of which 8,500 tons are 
not expected to be salable because of size or quality, leaving a 
balance of 161,500 salable tons.
    The following table compares major budget expenditures (in 
thousands of dollars) recommended by the Committee for the 1998-99 and 
1997-98 crop years:

------------------------------------------------------------------------
          Budget expense categories              1998-99       1997-98  
------------------------------------------------------------------------
Salaries, Wages & Benefits..................        191.5         176.3 
Research & Development......................         30            30   
Office Rent.................................         23            23   
Travel......................................         21            21   
Acreage Survey..............................         21            20   
Reserve (Contingencies).....................          9.14          8.06
Equipment Rental............................          9             9   
Data Processing.............................          8             8   
Stationary & Printing.......................          5.5           5   
Office Supplies.............................          5             5   
Postage & Messenger.........................          5             5   
------------------------------------------------------------------------

    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected salable tons of California 
dried prunes. Production of dried prunes for the year is estimated at 
161,500 salable tons which should provide $348,840 in assessment 
income. Income derived from handler assessments, along with interest 
income, would be adequate to cover budgeted expenses. The Committee is 
authorized to use excess assessment funds from the 1997-98 crop year 
(currently estimated at $48,255) for up to five months beyond the end 
of the crop year to meet 1998-99 crop year expenses. At the end of the 
five months, the Committee refunds or credits excess funds to handlers 
(Sec. 993.81(c)).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by the Secretary upon 
recommendation and information submitted by the Committee or other 
available information.
    Although this assessment rate would be in effect for an indefinite 
period, the Committee would continue to meet prior to or during each 
crop year to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or the 
Department. Committee meetings are open to the public and interested 
persons may express their views at these meetings. The Department would 
evaluate Committee recommendations and other available information to 
determine whether modification of the assessment rate is needed. 
Further rulemaking would be undertaken as necessary. The Committee's 
1998-99 budget and those for subsequent crop years would be reviewed 
and, as appropriate, approved by the Department.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule on small entities. Accordingly, AMS has 
prepared this initial regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 1,400 producers of dried prunes in the 
production area and approximately 19 handlers subject to regulation 
under the marketing order. Small agricultural producers have been 
defined by the Small Business Administration (13 CFR 121.601) as those 
having annual receipts less than $500,000, and small agricultural 
service firms are defined as those whose annual receipts are less than 
$5,000,000.
    Last year, 7 of the 19 handlers (37%) shipped over $5,000,000 of 
dried prunes and could be considered large handlers by the Small 
Business Administration. Twelve of the 19 handlers (63%) shipped under 
$5,000,000 of dried prunes and could be considered small handlers. An 
estimated 110 producers, or less than 8% of the 1,400 total producers, 
would be considered large growers with annual income over $500,000. The 
majority of handlers and producers of California dried prunes may be 
classified as small entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 1998-99 and subsequent 
crop years from $1.60 per ton to $2.16 per ton of salable dried prunes. 
The Committee unanimously recommended 1998-99 expenditures of $348,840 
and an assessment rate of $2.16 per ton. The proposed assessment rate 
of $2.16 is $0.56 higher than the 1997-98 rate. The quantity of 
assessable dried prunes for the 1998-99 crop year is estimated at 
161,500 salable tons. Thus, the $2.16 rate should provide $348,840 in 
assessment income and be adequate to meet this year's expenses. 
Interest income also would be available to cover budgeted expenses if 
the 1998-99 expected income falls short.
    The following table compares major budget expenditures (in 
thousands of dollars) recommended by the Committee for the 1998-99 and 
1997-98 crop years:

------------------------------------------------------------------------
          Budget expense categories              1998-99       1997-98  
------------------------------------------------------------------------
Salaries, Wages & Benefits..................        191.5         176.3 
Research & Development......................         30            30   
Office Rent.................................         23            23   
Travel......................................         21            21   
Acreage Survey..............................         21            20   
Reserve (Contingencies).....................          9.14          8.06
Equipment Rental............................          9             9   
Data Processing.............................          8             8   
Stationary & Printing.......................          5.5           5   
Office Supplies.............................          5             5   
Postage & Messenger.........................          5             5   
------------------------------------------------------------------------

    Because of unusually cool and wet weather this season, the 1998-99 
dried prune crop is expected to be composed of a higher proportion of 
small, lower quality fruit. The California Agricultural Statistical 
Service estimates a 170,000

[[Page 42286]]

ton crop during the 1998-99 crop year, of which 8,500 tons are not 
expected to be salable because of size or quality, leaving a balance of 
161,500 salable tons.
    The Committee reviewed and unanimously recommended 1998-99 
expenditures of $348,840 which included increases in administrative and 
office salaries and operating expenses. Prior to arriving at the 1998-
99 budget, the Committee reviewed a budget that did not reflect any 
salary increases. Despite the expected reduced size of the crop, it 
recommended salary increases, thus increasing the budget. The 
assessment rate of $2.16 per ton of salable dried prunes was then 
determined by dividing the total recommended budget by the quantity of 
salable dried prunes, estimated at 161,500 salable tons for the 1998-99 
crop year. The Committee is authorized to use excess assessment funds 
from the 1997-98 crop year (currently estimated at $48,255) for up to 
five months beyond the end of the crop year to fund 1998-99 crop year 
expenses. At the end of the five months, the Committee refunds or 
credits excess funds to handlers (Sec. 993.81(c)).
    Recent price information indicates that the grower price for the 
1998-99 season should average $800 per salable ton of dried prunes. 
Based on estimated shipments of 161,500 salable tons, the estimated 
assessment revenue for the 1998-99 crop year is expected to be less 
than 1 percent of the total expected grower revenue.
    This action would increase the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to producers. However, these costs 
would be offset by the benefits derived by the operation of the 
marketing order. In addition, the Committee's meeting was widely 
publicized throughout the California dried prune industry, and all 
interested persons were invited to attend the meeting and participate 
in Committee deliberations on all issues. Like all Committee meetings, 
the June 25, 1998, meeting was a public meeting and all entities, both 
large and small, were able to express views on this issue. Finally, 
interested persons are invited to submit information on the regulatory 
and informational impacts of this action on small businesses.
    This proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large California dried 
prune handlers. As with all Federal marketing order programs, reports 
and forms are periodically reviewed to reduce information requirements 
and duplication by industry and public sector agencies.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: (1) The 1998-99 crop year begins on August 1, 1998, and the 
marketing order requires that the rate of assessment for each crop year 
apply to all assessable dried prunes handled during such crop year; (2) 
the Committee needs to have sufficient funds to pay its expenses which 
are incurred on a continuous basis; and (3) handlers are aware of this 
action which was unanimously recommended by the Committee at a public 
meeting and is similar to other assessment rate actions issued in past 
years.

List of Subjects in 7 CFR Part 993

    Marketing agreements, Plums, Prunes, Reporting and Recordkeeping 
requirements.
    For the reasons set forth in the preamble, 7 CFR part 993 is 
proposed to be amended as follows:

PART 993--DRIED PRUNES PRODUCED IN CALIFORNIA

    1. The authority citation for 7 CFR part 993 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

    2. Section 993.347 is proposed to be revised to read as follows:


Sec. 993.347  Assessment rate.

    On and after August 1, 1998, an assessment rate of $2.16 per ton is 
established for California dried prunes.

    Dated: August 3, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-21198 Filed 8-6-98; 8:45 am]
BILLING CODE 3410-02-P