[Federal Register Volume 64, Number 18 (Thursday, January 28, 1999)]
[Rules and Regulations]
[Pages 4286-4288]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-1970]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV99-932-2 IFR]


Olives Grown in California; Modification to Handler Membership on 
the California Olive Committee

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule invites comments on modifications to the handler 
membership on the California Olive Committee (Committee). The Committee 
locally administers the California olive marketing order (order) which 
regulates the handling of olives grown in California. The Committee is 
composed of 16 industry members of which 8 are producers and 8 are 
handlers. Current handler membership is allocated between cooperative 
marketing organizations and independent handlers (handlers not 
affiliated with cooperatives), and the number of handler members that 
may be affiliated with any one handler is limited to two. This rule 
removes the distinction between cooperative and independent handlers, 
removes the limitation on handler affiliation, and reallocates handler 
membership on the basis of the total quantity of olives handled. These 
modifications will allow two vacant handler member positions on the 
Committee to be filled. This rule was unanimously recommended by the 
Committee.

DATES: Effective January 29, 1999; comments received by March 29, 1999 
will be considered prior to issuance of a final rule.

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]. All comments should reference the docket 
number and the date and page number of this issue of the Federal 
Register and will be made available for public inspection in the Office 
of the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Mary Kate Nelson, Marketing 
Specialist, California Marketing Field Office, Marketing Order 
Administration Branch, F&V, AMS, USDA, 2202 Monterey Street, suite 
102B, Fresno, California 93721; telephone: (559) 487-5901, Fax: (559) 
487-5906; or George Kelhart, Technical Advisor, Marketing Order 
Administration Branch, F&V, AMS, USDA, room 2525-S, P.O. Box 96456, 
Washington, DC 20090-6456; telephone: (202) 720-9921; Fax: (202) 720-
5698. Small businesses may request information on complying with this 
regulation, or obtain a guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders by contacting Jay 
Guerber, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, P.O. Box 96456, room 2525-S, 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. This rule is not intended to have retroactive effect. 
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. A handler is afforded the opportunity for

[[Page 4287]]

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 date of the entry of the ruling.
    Section 932.25 of the order provides for the establishment of the 
Committee to locally administer the terms and provisions of the order. 
The Committee is composed of 16 industry members, each with an 
alternate. Of the 16 industry members, 8 are producers and 8 are 
handlers. This section also specifies how the handler membership on the 
Committee is allocated. Authority is provided for the Committee, with 
the approval of the Secretary, to change the allocation of both 
producer and handler members as may be necessary to assure equitable 
representation.
    Section 932.159 of the administrative rules and regulations 
provides that two members shall represent cooperative marketing 
organizations and six members shall represent handlers who are not 
cooperative marketing organizations. In addition, Sec. 932.160 limits 
to two the number of handler members that may be affiliated with the 
same handler.
    The Committee met on December 10, 1998, and unanimously recommended 
modifying the rules and regulations to remove the distinction between 
cooperative and independent handlers, and the limitation on the number 
of handler members that may be affiliated with the same handler. It 
also unanimously recommended that the two handlers who handled the 
largest and second largest total volume of olives during the crop year 
in which nominations are made and the preceding crop year be 
represented by three members each, and that the third largest handler 
be represented by two members. This rule is intended to modify the 
Committee's handler membership to reflect structural changes within the 
handler segment of the industry, and to enable the Committee to operate 
at full strength; i.e., with all eight handler and producer positions 
filled.
    The structure of the olive industry has changed over the years and 
the number of handlers, both cooperative and independent, has 
decreased. At one time, there were a number of cooperative marketing 
organizations and independent handlers and the Committee's structure 
was designed so that four of the eight handler seats were held by 
cooperatives and four were held by independents. This representation 
was also weighted by the volume of olives handled so that if one group, 
either cooperatives or independents, handled 65 percent or more of the 
total industry's volume handled during the nominating crop year and the 
preceding crop year, that group would have five seats on the Committee 
and the other group would have three seats.
    In 1993, handler membership on the Committee was reallocated to 
reflect changes within the industry. The number of industry handlers 
declined to only five handlers--one cooperative and four independents. 
At that time, Sec. 932.159 of the order's rules and regulations was 
modified to reapportion handler membership to provide cooperative 
handlers with two seats on the Committee and independent handlers with 
six seats.
    Since 1993, the number of handlers in the olive industry has 
continued to decline. Today there are three handlers remaining--one 
cooperative and two independents. Because there is only one existing 
cooperative, the Committee believes that the distinction regarding 
cooperative and independent handlers on the Committee is no longer 
appropriate or necessary.
    Additionally, Sec. 932.160 specifies that no more than two nominees 
for member and alternate member positions may be affiliated with the 
same handler. Because there are only three handlers remaining in the 
industry, this restriction has resulted in two vacant handler positions 
on the Committee that cannot be filled.
    To allow these positions to be filled and enable the Committee to 
operate at full strength, the Committee recommended that Sec. 932.159 
be revised to eliminate the distinction between cooperative marketing 
organizations and independent handlers (or handlers not affiliated with 
a cooperative marketing organization). It also recommended that the 
eight handler seats on the Committee be reallocated based on the total 
volume of olives handled during the crop year in which nominations are 
made and the preceding crop year, with the handlers handling the first 
and second largest volume being represented with three members each, 
and the remaining handler being represented with two members.
    The reallocation of handler membership in Sec. 932.159 makes the 
two nominee limitation on affiliation with the same handler specified 
in Sec. 932.160 unnecessary, and that section is removed.
    These changes are designed to modify the Committee's handler 
membership to reflect structural changes within the handler segment of 
the industry, and to remove the current barriers to filling the two 
vacant handler positions on the Committee.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this action 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 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 3 handlers of California olives who are subject to 
regulation under the marketing order and approximately 1,200 olive 
producers in the regulated area. Small agricultural service firms have 
been defined by the Small Business Administration (13 CFR 121.601) as 
those having annual receipts of less than $5,000,000, and small 
agricultural producers are defined as those having annual receipts of 
less than $500,000. None of the olive handlers may be classified as 
small entities.
    Based on a review of historical and preliminary price and marketing 
information, total grower revenue for the 1998-99 crop year (August 1 
through July 31) is estimated to be approximately $39,500,000, and the 
average grower revenue will be approximately $33,000. Thus, it can be 
concluded that the majority of producers of California olives may be 
classified as small entities.
    This rule modifies the order's administrative rules and regulations 
regarding the structure of handler membership on the Committee. The 
Committee locally administers the order and is composed of 16 industry 
members. Eight of the 16 industry members are producers and 8 are 
handlers. Current handler membership provisions distinguish between 
cooperative marketing organizations and independent handlers specifying 
that two members shall represent cooperative marketing organizations 
and six members shall represent handlers who are not cooperative 
marketing organizations. The handler nominee provisions also specify 
that no more than two nominees for handler member

[[Page 4288]]

and alternate member positions may be affiliated with the same handler.
    This rule modifies the order's rules and regulations to remove the 
distinction between cooperative and independent handlers, and to 
specify that the number of members representing each of the three 
currently existing industry handlers shall be based on the total volume 
of olives handled during the nominating crop year and the preceding 
crop year, with the two handlers handling the largest and second 
largest volume of olives represented by three members and alternates 
each, and the remaining handler represented by two members and 
alternates. This rule also removes provisions limiting the number of 
members to which each handler is entitled because the limitation is no 
longer necessary. The changes were unanimously recommended by the 
Committee and are intended to modify the Committee's handler membership 
to reflect structural changes within the handler segment of the 
industry, and to remove current barriers to filling two vacant handler 
positions on the Committee. Authority for this rule is provided in 
Sec. 932.25 which allows the Committee, with the approval of the 
Secretary, to reallocate the Committee's producer or handler membership 
as necessary to assure equitable representation.
    Removal of the distinction between cooperative and independent 
handlers will not have any impact on handlers or producers in the 
California olive industry.
    One alternative to this rule discussed at the meeting was to leave 
the language in Sec. 932.159 unchanged; however, the Committee believes 
that the distinction between cooperative and independent is no longer 
appropriate, because there is only one existing cooperative in the 
industry and two independent handlers. Another alternative discussed at 
the meeting was to leave Sec. 932.160 of the order's rules and 
regulations unchanged so that only two members may be affiliated with 
the same handler, but with only three handlers currently in the 
industry that would result in uneven representation between growers 
with eight members and handlers with six members, and would fail to 
assure equitable representation on the Committee as is required 
pursuant to Sec. 932.25.
    This rule will not impose any additional reporting or recordkeeping 
requirements on any of the three 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. In addition, the Department has not identified 
any relevant Federal rules that duplicate, overlap, or conflict with 
this proposed rule.
    Further, the Committee's meeting was widely publicized throughout 
the 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 their views on this issue. All three industry handlers are 
currently represented on the Committee and participated in the 
deliberations. Finally, interested persons are invited to submit 
information on the regulatory and informational impacts of this action 
on small businesses.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
this interim final rule, as hereinafter set forth, will tend to 
effectuate the declared policy of the Act.
    This rule invites comments on modifications to the handler 
membership on the Committee. Any comments received will be considered 
prior to finalization of this rule.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register 
because: (1) There are currently two vacant handler member seats on the 
Committee that cannot be filled until these modifications to the 
administrative rules and regulations are implemented, and it is 
important that the Committee operate at full strength; (2) timely 
implementation of this action will allow the vacancies to be filled; 
(3) the Committee unanimously recommended these changes at a public 
meeting and interested parties had an opportunity to provide input; (4) 
all three handlers are represented on the Committee and participated in 
deliberations; and (5) this rule provides a 60-day comment period and 
any comments received will be considered prior to finalization of this 
rule.

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 
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 932.159 is revised to read as follows:


Sec. 932.159  Reallocation of handler membership.

    Pursuant to Sec. 932.25, handler representation on the committee is 
reallocated to provide that the two handlers who handled the largest 
and second largest total volume of olives during the crop year in which 
nominations are made and in the preceding crop year shall be 
represented by three members and alternate members each, and the 
remaining handler shall be represented by two members and alternate 
members.


Sec. 932.160  [Removed]

    3. Section 932.160 is removed.

    Dated: January 22, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-1970 Filed 1-27-99; 8:45 am]
BILLING CODE 3410-02-P