[Federal Register Volume 64, Number 18 (Thursday, January 28, 1999)]
[Proposed Rules]
[Pages 4350-4352]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-1969]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV99-932-1 PR]


Olives Grown 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 $17.10 to 
$26.18 per ton of olives established for the California Olive Committee 
(Committee) under Marketing Order No. 932 for the 1999 and subsequent 
fiscal years. The Committee is responsible for local administration of 
the marketing order which regulates the handling of olives grown in 
California. Authorization to assess olive handlers enables the 
Committee to incur expenses that are reasonable and necessary to 
administer the program. The fiscal year began January 1 and ends 
December 31. The assessment rate would remain in effect indefinitely 
unless modified, suspended, or terminated.

DATES: Comments must be received by March 1, 1999.

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) 720-5698; or E-mail: 
[email protected]. 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, and 
Mary Kate Nelson, 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) 720-5698. Small businesses may request information 
on compliance with this regulation, or obtain a guide on complying with 
fruit, vegetable, and specialty crop marketing agreements and orders by 
contacting Jay Guerber,

[[Page 4351]]

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) 720-5698, or E-mail: 
Jay__N__G[email protected]. You may view the marketing agreement and 
order small business compliance guide at the following web site: http:/
/www.ams.usda.gov/fv/moab.html.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 148 and Order No. 932, both as amended (7 CFR part 932), 
regulating the handling of olives 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 
olive 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 
olives beginning on January 1, 1999, 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 1999 and subsequent fiscal years from $17.10 per ton 
to $26.18 per ton of olives.
    The California olive 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 olives. 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 1998 and subsequent fiscal years, the Committee 
recommended, and the Department approved, an assessment rate that would 
continue in effect from fiscal year to fiscal year unless modified, 
suspended, or terminated by the Secretary upon recommendation and 
information submitted by the Committee or other information available 
to the Secretary.
    The Committee met on December 10, 1998, and unanimously recommended 
1999 expenditures of $1,845,185 and an assessment rate of $26.18 per 
ton of olives. In comparison, last year's budgeted expenditures were 
$1,750,000. The assessment rate of $26.18 is $9.08 higher than the rate 
currently in effect. A higher assessment rate is needed because:
    (1) Assessable tonnage is down for the second year in a row due in 
large part this crop year to adverse conditions created by the weather 
phenomenon El Nino. Assessable tonnage in 1996 totaled 144,075 tons, in 
1997 it totaled 85,585 tons, and in 1998 the assessable tonnage totaled 
67,990 tons; and
    (2) Rather than reduce 1999 expenditures, the Committee determined 
that more funds are needed to continue the development of an improved 
mechanical olive harvester that can efficiently harvest most orchard 
configurations. The California olive industry recognized that it needs 
to make cutting harvesting costs a top priority if it is to remain 
competitive with imports. Consequently, after considerable discussion, 
the Committee recommended increasing the $52,000 1999 Research Fund 
initially suggested by Committee members by an additional $250,000. The 
additional $250,000 is to be used specifically for the purpose of 
further development of a mechanical harvester that can be more 
effectively utilized by growers throughout the California olive 
industry while at the same time reducing harvesting costs.
    The following table compares major budget expenditure 
recommendations for the 1999 fiscal year with those from last year:

------------------------------------------------------------------------
              Budget expenditure                    1998         1999
------------------------------------------------------------------------
Administration................................     $357,900     $346,485
Research......................................       50,000      302,000
Market Development............................    1,308,500    1,190,500
------------------------------------------------------------------------

    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, actual receipts of olives, and 
additional pertinent factors. The quantity of assessable olives for the 
1999 fiscal year is 67,990 tons which should provide $1,779,978 in 
assessment income. Income derived from handler assessments, interest, 
and carryover of reserve funds would be adequate to cover budgeted 
expenses. Funds in the reserve (currently $316,409) would be kept 
within the maximum permitted by the order (approximately one fiscal 
year's expenses, Sec. 932.40).
    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 
fiscal 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 
1999 budget and those for subsequent fiscal 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.

[[Page 4352]]

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 1,200 producers of olives in the production 
area and 3 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. None of the olive 
handlers may be classified as small entities, while the majority of 
olive producers may be classified as small entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 1999 and subsequent 
fiscal years from $17.10 per ton to $26.18 per ton of olives. The 
Committee recommended 1999 expenditures of $1,845,185 and an assessment 
rate of $26.18 per ton. The proposed assessment rate of $26.18 is $9.08 
higher than the 1998 rate. The quantity of assessable olives for the 
1999 fiscal year is 67,990 tons. Thus, the $26.18 rate should provide 
$1,779,978 in assessment income and be adequate to meet this year's 
budgeted expenses, when combined with funds from the authorized reserve 
and interest income.
    The following table compares major budget expenditure 
recommendations for the 1999 fiscal year with those from last year:

------------------------------------------------------------------------
              Budget expenditure                    1998         1999
------------------------------------------------------------------------
Administration................................     $357,900     $346,485
Research......................................       50,000      302,000
Market Development............................    1,308,500    1,190,500
------------------------------------------------------------------------

    A higher assessment rate is needed for 1999 because:
    (1) Assessable tonnage is down for the second year in a row due in 
large part this crop year to adverse conditions created by the weather 
phenomenon El Nino. Assessable tonnage in 1996 totaled 144,075 tons, in 
1997 it totaled 85,585 tons, and in 1998 the assessable tonnage totaled 
67,990 tons; and
    (2) Rather than reduce 1999 expenditures, the Committee determined 
that more funds are needed to continue the development of an improved 
mechanical olive harvester that can efficiently harvest most orchard 
configurations. The California olive industry recognized that it needs 
to make cutting harvesting costs a top priority if it is to remain 
competitive with imports. Consequently, after considerable discussion, 
the Committee recommended increasing the $52,000 1999 Research Fund 
initially suggested by Committee members by an additional $250,000. The 
additional $250,000 is to be used specifically for the purpose of 
further development of a mechanical harvester that can be more 
effectively utilized by growers throughout the California olive 
industry while at the same time reducing harvesting costs.
    The Committee reviewed and unanimously recommended 1999 
expenditures of $1,845,185 which included the $250,000 increase in 
Research for further development of an improved mechanical olive 
harvester. To finance this additional research allotment, the Committee 
considered reducing the Market Development budget item by amounts 
ranging from $100,000 to $309,530. The prevailing opinion was that the 
money allocated for 1999 Market Development recommended by the 
Marketing Subcommittee remain the same ($1,190,500) as initially 
suggested, which is $118,000 less than budgeted for 1998. The Committee 
members believed that the Administrative Budget had already been 
reduced as low as possible ($11,415 less than for 1998). The only other 
alternative was to increase the assessment rate. The assessment rate of 
$26.18 per ton of assessable olives was then derived by considering 
anticipated expenses, actual receipts of olives, and additional 
pertinent factors.
    Based on a review of historical and preliminary marketing and price 
information, grower revenue for the 1998-99 crop year (August 1 through 
July 31) is estimated to be approximately $39,500,000. Therefore, the 
estimated assessment revenue of $1,779,978 for the 1999 fiscal year 
will be approximately 4.5 percent of 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 olive industry, and all interested 
persons were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the December 
10, 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 California olive 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 Committee needs to have sufficient funds to pay its 
expenses which are incurred on a continuous basis; (2) the 1999 fiscal 
year began on January 1, 1999, and the order requires that the rate of 
assessment for each fiscal year apply to all assessable olives handled 
during such fiscal year; (3) all three handlers are represented on the 
Committee and participated in deliberations, (4) and all 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 932

    Marketing agreements, Olives, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 932 is 
proposed to be amended as follows:

PART 932--OLIVES GROWN IN CALIFORNIA

    1. The authority citation for 7 CFR part 932 continues to read as 
follows:

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

    2. Section 932.230 is proposed to be revised to read as follows:


Sec. 932.230  Assessment rate.

    On and after January 1, 1999, an assessment rate of $26.18 per ton 
is established for California olives.

    Dated: January 22, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-1969 Filed 1-27-99; 8:45 am]
BILLING CODE 3410-02-P