[Federal Register Volume 65, Number 20 (Monday, January 31, 2000)]
[Unknown Section]
[Pages 4573-4576]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-2039]



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Rules and Regulations
                                                Federal Register
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  Federal Register / Vol. 65, No. 20 / Monday, January 31, 2000 / Rules 
and Regulations

[[Page 4573]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV99-932-3 FR]


Olives Grown in California; Revisions to Handling Requirements

AGENCY:  Agricultural Marketing Service, USDA.

ACTION:  Final rule.

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SUMMARY:  This rule revises the handling requirements under the 
California olive marketing order. The olive marketing order regulates 
the handling of olives grown in California, and is administered locally 
by the California Olive Committee (committee). This rule establishes 
exemption, safeguard, and reporting requirements for handlers desiring 
to ship a small portion of their olives as new packaged olive products 
for test marketing and market development projects. This rule will help 
provide uniform procedures under the order and improve overall program 
administration.

EFFECTIVE DATE:  This final rule becomes effective February 1, 2000.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, 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, 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 complying with this 
regulation 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: [email protected].

SUPPLEMENTARY INFORMATION:  This final rule is issued under Marketing 
Agreement No. 148 and Marketing 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 final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect. This final 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 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 final rule revises the handling requirements under the order 
for olives grown in California. The revision implements procedures and 
reporting requirements for handlers desiring to use a small portion of 
their olives to test market and initiate market development projects 
for new packaged olive products. The procedures include completion and 
submission of a new form, the COC Form 155, and approval by committee 
staff.
    Sections 932.51 and 932.52 of the olive marketing order authorize 
regulatory requirements regarding the handling of California packaged 
olives. Such requirements include incoming and outgoing handling 
requirements with regard to quality, size, and style of olives. Certain 
of these requirements are implemented under Sec. 932.149. Styles of 
olives include whole, pitted, sliced, segmented (wedged), halved, 
chopped, and broken pitted. Handlers will be permitted to use other 
styles of olives and to add other ingredients to the finished product, 
such as flavorings, pieces of garlic, or jalapeno peppers.
    Section 932.55 of the order provides authority for regulatory 
exemptions for olives which are used for specified purposes, including 
shipments of olives used to facilitate the conduct of marketing 
research and development projects. Section 932.55 of the order also 
provides authority for the committee to recommend rules, regulations, 
and safeguards necessary to ensure that olives exempted under the 
provisions of this section are handled only as authorized.
    Section 932.155 of the order's rules and regulations provides 
specific safeguards for certain special purpose shipments of packaged 
olives. However, these regulations do not include requirements and 
procedures related to shipping packaged olives for test marketing and 
market development. In the past, the committee has, on occasion, 
approved such marketing projects. This rule revises Sec. 932.155 for 
the purpose of clarifying the language and to include an exemption and 
safeguards in the rules and regulations for shipments of new packaged 
olive products for test marketing and market development. The revision 
clarifies existing practices in the regulations, and establishes 
uniform procedures for all handlers to ensure that the handling of new 
product packaged olives exempted under the provisions of Sec. 932.55 
will be handled only as authorized. Such new products could include 
packaged olives of different styles containing various ingredients or 
flavorings, such as pieces of garlic, or jalapeno peppers.
    The rule specifies information requested on a new form, the COC 
155. Prior to engaging in test marketing and initiating market 
development projects

[[Page 4574]]

for a new product, a handler will be required to file the COC 155 with 
the committee. The form includes: (1) The name and address of 
requesting handler; (2) the quantity of olives to be utilized (limited 
to not more than five percent of the applicant handler's crop year 
acquisitions); (3) specific market outlet; (4) flavorings or other 
ingredients added to the olives; (5) style of olives used; (6) type of 
olives used, either black or green ripe; (7) container sizes; (8) 
varieties used, whether Ascolano, Barouni, Manzanillo, Mission, 
Sevillano, etc.; (9) sizes of olives utilized; (10) approximate dates 
on which the new product will be packaged; (11) place of inspection; 
(12) certification that all assessments and reporting requirements in 
effect under the marketing order will be met prior to shipment; (13) 
certification that all such fruit will be kept separate from other 
packaged olives and will be so identified by control cards or other 
means acceptable to the Inspection Service; (14) purpose and nature of 
the request, whether for test marketing, evaluation, market research, 
etc.; (15) an estimate of the amount of time required to complete the 
test. The committee shall promptly approve or deny the application, and 
may add limitations to any such approval.
    Any product remaining at the end of the test-market period shall be 
disposed of according to paragraph (a) of Sec. 932.155, which specifies 
procedures for disposing of packaged olives in the production of olive 
oil, donating to a charitable organization, or by dumping.
    On December 10, 1998, the committee met to discuss the 
recommendation. Additional discussion occurred at various subcommittee 
meetings prior to the December 10, 1998, committee meeting.
    According to the committee, demand for packaged olives has remained 
relatively stagnant in recent years. The committee believes that to 
improve returns to producers and handlers, handlers must have the 
flexibility to respond to shifting trends in the marketplace by test 
marketing new products. Handlers must be allowed the opportunity to try 
marketing innovative new products free from certain marketing order 
obligations, such as style and flavor requirements which appear to be 
too restrictive for these new products. Such shipments will, therefore, 
be exempt from the requirements of Sec. 932.149. Because it appears 
that such shipments can be made in compliance with all other order 
requirements, they will remain applicable. This rule will allow 
handlers to respond to marketing opportunities and requests from 
buyers, which could result in increased olive sales. In addition, since 
handlers have large amounts of capital invested in their processing 
plants, any increase in the amount of olives processed yields a 
reduction of per unit processing costs, which is a benefit to handlers 
and producers.
    It has been the industry's experience that the ability to ship new 
products for test marketing and market development helps to encourage 
handlers to develop new product lines. The committee believes that this 
option should continue to be available, allowing handlers to take 
advantage of additional marketing opportunities to expand the market 
for processed olives. Adding procedures to the rules and regulations 
will clarify the existing practice, and will provide uniform 
requirements for handlers.
    Therefore, when the committee met in December, it unanimously 
recommended modifying the rules and regulations to specify procedures 
and reporting requirements to permit handlers to ship a small portion 
of their olives for new packaged olive products for test marketing and 
market development projects. In addition, the committee recommended 
development of a new form, the COC Form 155, that handlers interested 
in test marketing and market development projects for new olive 
products must complete and file with the committee.
    The information supplied by the applicant handler will provide the 
committee with information necessary to ensure that the product is used 
for test marketing or for marketing development projects and that the 
Inspection Service is aware of the product.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), AMS has considered the economic impact of this action on 
small entities. Accordingly, AMS has prepared this final 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 2 handlers subject to regulation under the order and 
approximately 1,200 producers of olives in the regulated area. In the 
initial regulatory flexibility analysis, we estimated that there were 
three handlers subject to regulation under the order. Since publication 
of the proposed rule, more current information indicates that there are 
two handlers subject to regulation. 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. Neither of the olive handlers may be classified as 
small entities. The majority of producers may be classified as small 
entities.
    A review of historical and preliminary information pertaining to 
the 1999-2000 crop year (August 1 through July 31) indicates that total 
grower revenue for the 1999 crop will approximate $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 final rule revises Sec. 932.155 to include requirements for 
handlers desiring to ship olives to test markets and initiate market 
development projects for small quantities of new olive products. This 
rule also reformats Sec. 932.155 for the purposes of clarity.
    An alternative to this action would be to maintain the status quo, 
whereby the regulations would not address the needs of handlers 
desiring to ship new products for test marketing and market 
development. However, the committee and the Department believe that 
regulations should be modified to address these needs. This will ensure 
that uniform guidelines and procedures are followed by handlers 
desiring to test market and initiate market development projects. Such 
activities could ultimately result in increasing sales of processed 
olives.
    Under this rule, the committee will review written requests from 
handlers interested in test marketing and market development of new 
product lines. Such requests will be made on a new form, the COC 155, 
which requires uniform information from all applicant 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. This new form is 
anticipated to be utilized when handlers have developed new product 
lines which they desire to test market.
    The change in handling regulations will provide increased 
flexibility to handlers to respond to shifting trends in the 
marketplace.

[[Page 4575]]

    The reporting and recordkeeping burden has changed from the burden 
in the proposed rule because the number of handlers subject to 
regulation under the order has dropped from three to two. Accordingly, 
this action imposes an additional reporting or recordkeeping 
requirement on two olive handlers by requiring them to complete COC 
Form 155 prior to the test marketing of a new canned olive product. The 
new form will be filed annually and will take about 20 minutes to 
complete. Therefore, the additional burden created by the use of this 
form by the two handlers is estimated to be 40 minutes. However, the 
committee believes that the burden of such a requirement will be 
outweighed by the opportunities for handlers to test market new 
products.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection requirements that are contained 
in this rule have been approved by the Office of Management and Budget 
(OMB) and have been assigned OMB No. 0581-0142 for documents required 
under the olive marketing order. As noted in the initial regulatory 
flexibility analysis, the Department has not identified any relevant 
Federal rules that duplicate, overlap, or conflict with this final 
rule.
    In addition, the committee's meeting was widely publicized 
throughout the olive industry and all interested persons were 
encouraged 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 encouraged to express views on this issue. The committee is 
comprised of 16 members, of which 8 are producers and 8 are handlers. 
Each of the two handler entities is presently represented on the 
committee.
    A proposed rule concerning this action was published in the Federal 
Register on October 26, 1999 (64 FR 57597). The proposal also announced 
AMS's intent to request a revision to the currently approved 
information collection requirements issued under the order. Copies of 
the proposal were provided to the two affected handlers on October 26, 
1999. Finally, the proposed rule was made available through the 
Internet by the Office of the Federal Register. A 60-day comment 
period, ending December 27, 1999, was provided to allow interested 
persons to respond to the proposal. No comments were received.
    A small business guide on complying with fruit vegetable, and 
specialty crop marketing agreements and orders may be viewed at the 
following website: http://www.usda.gov/fv/moab.html. Any questions 
about the compliance guide should be sent to Jay Guerber at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant matters presented, including 
the information and recommendation submitted by the committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because shipments of olives occur all 
year-round, and, therefore, the safeguard procedures on test marketing 
new products should be in effect as soon as possible. Handlers are 
aware of this action which was unanimously recommended by the committee 
at a public meeting. Finally, a 60-day comment period was provided to 
allow interested persons to respond to this proposal, and no comments 
were received.

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. In Sec. 932.155, paragraphs (a) and (b) are revised to read as 
follows:


Sec. 932.155  Special purpose shipments.

    (a) The disposition of packaged olives covered by Sec. 932.152(d) 
which are not reprocessed, and new packaged olive products covered 
under paragraph (b) of this section which have not been disposed of by 
the end of the test market period, shall be handled in conformity with 
the applicable provisions of this paragraph.
    (1) Under the supervision of the Inspection Service, such packaged 
olives may be disposed of for use in the production of olive oil or 
dumped.
    (2) Such packaged olives may be disposed of to a charitable 
organization for use by such organization, provided the following 
conditions are met:
    (i) Any handler who wishes to so dispose of olives shall first file 
a written application with, and obtain written approval thereof, from 
the committee. Each such application shall contain at least:
    (A) The name and address of the handler and the charitable 
organization;
    (B) The physical location of the charitable organization's 
facilities;
    (C) The quantity, in cases, the variety, size, can size, and can 
code of the packaged olives; and
    (D) A certification from the charitable organization that such 
olives will be used by the organization and will not be sold.
    (ii) Prior to approval, the committee shall perform such 
verification of the accuracy of the information on the application as 
it deems necessary. The committee may deny any application if it finds 
that the required information is incomplete or incorrect, or has reason 
to believe that the intended receiver is not a charitable organization, 
or that the handler or the organization has disposed of packaged olives 
contrary to a previously approved application. The committee shall 
notify the applicant and the organization in writing of its approval, 
or denial, of the application. Any such approval shall continue in 
effect so long as the packaged olives covered thereby are disposed of 
consistent with this section. The committee shall notify the handler 
and the organization of each such termination of approval. The handler 
shall furnish the committee, upon demand, such evidence of disposition 
of the packaged olives covered by an approved application as may be 
satisfactory to the committee.
    (b) In accordance with the provisions of Sec. 932.55(b), packaged 
olives to be used in marketing development projects may be handled 
without regard to Sec. 932.149 provided the following conditions are 
met. Such olives must be identified to the satisfaction of the 
Inspection Service and kept separate from other packaged olives. The 
handler shall submit to the committee for its approval ``COC Form 155'' 
at least 10 working days prior to the shipment of such packaged olives 
to test markets, and report progress or changes to the committee, as 
requested. The applicant handler shall provide the following 
information on COC Form 155:
    (1) The quantity of olives to be utilized (limited to not more than 
five percent of the handler's crop year acquisitions);
    (2) Specific market outlet;
    (3) Flavorings or other ingredients added to the olives;
    (4) Style of olives used;
    (5) Type of olives used, either black or green ripe;

[[Page 4576]]

    (6) Container sizes;
    (7) Varieties used, whether Ascolano, Barouni, Manzanillo, Mission, 
Sevillano, etc.;
    (8) Sizes of olives utilized;
    (9) Approximate dates when the new product will be packaged;
    (10) Name and address of requesting handler;
    (11) Place of inspection;
    (12) Certification that all assessment and reporting requirements 
in effect under the marketing order will be met prior to shipment;
    (13) Certification that all such fruit will be kept separate from 
other packaged olives and will be so identified by control cards or 
other means acceptable to the Inspection Service;
    (14) Purpose and nature of the request, whether for test marketing, 
evaluation, market research, etc.; and
    (15) An estimate of the amount of time required to complete the 
test. The committee shall promptly approve or deny the application, and 
may add limitations to any such approval. Upon approval, the applicant 
handler shall notify the Inspection Service. Packaged olives so 
identified and remaining unused at the end of the approved test-market 
period shall be disposed of according to paragraph (a) of this section.
* * * * *

    Dated: January 24, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-2039 Filed 1-28-00; 8:45 am]
BILLING CODE 3410-22-