[Federal Register Volume 67, Number 122 (Tuesday, June 25, 2002)]
[Rules and Regulations]
[Pages 42707-42709]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-15962]



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  Federal Register / Vol. 67, No. 122 / Tuesday, June 25, 2002 / Rules 
and Regulations  

[[Page 42707]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 916

[Docket No. FV02-916-2 IFR]


Nectarines Grown in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule decreases the assessment rate established for the 
Nectarine Administrative Committee (committee) for the 2002-03 and 
subsequent fiscal periods from $0.20 to $0.19 per 25-pound container or 
container equivalent of nectarines handled. The committee locally 
administers the marketing order which regulates the handling of 
nectarines grown in California. Authorization to assess nectarine 
handlers enables the committee to incur expenses that are reasonable 
and necessary to administer the program. The fiscal period runs from 
March 1 through the last day of February. The assessment rate would 
remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: June 26, 2002. Comments received by August 26, 2002, 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, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938, 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, or can be viewed at: http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Marketing Assistant, 
California Marketing Field Office, Fruit and Vegetable Programs, AMS, 
USDA, 2202 Monterey Street, suite 102B, Fresno, California 93721, (559) 
487-5901, Fax: (559) 487-5906; or George Kelhart, Technical Advisor, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 
20250-0237; telephone: (202) 720-2491, Fax: (202) 720-8938.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue SW, STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938, or e-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 124 and Order No. 916, both as amended (7 CFR part 916), 
regulating the handling of nectarines 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 (USDA) 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 
nectarine handlers are subject to assessments. Funds to administer the 
orders are derived from such assessments. It is intended that the 
assessment rate as issued herein would be applicable to all assessable 
nectarines beginning on March 1, 2002, 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 USDA 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 USDA'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 decreases the assessment rate established for the 
committee for the 2002-03 and subsequent fiscal periods from $0.20 to 
$0.19 per 25-pound container or container equivalent of nectarines.
    The nectarine marketing order provides authority for the committee, 
with the approval of the USDA, to formulate an annual budget of 
expenses and collect assessments from handlers to administer the 
program. The members of the committee are producers of California 
nectarines. 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 2001-02 fiscal period, the committee recommended, and the 
Department approved, an assessment rate that would continue in effect 
from fiscal period to fiscal period unless modified, suspended, or 
terminated by USDA upon recommendation and information submitted by the 
committee or other information available to USDA.
    The committee met on May 1, 2002, and unanimously recommended 2002-
03 expenditures of $4,671,342 and an assessment rate of $0.19 per 25-
pound container or container equivalent of nectarines. In comparison, 
last year's budgeted expenditures were $4,338,744. The recommended rate 
is $0.01 lower than the rate currently in effect.

[[Page 42708]]

    The decrease was recommended because the crop is expected to be 
larger than estimated earlier this year. In early spring, the crop was 
estimated to be 22 million containers or container equivalents of 
nectarines. The crop is now estimated to be more than 23 million 
containers or container equivalents. Assessment income and funds from 
the committee's operating reserve will be adequate to cover approved 
committee expenses in 2002-03.
    The major expenditures recommended by the committee for 2002-03 
include $505,000 for salaries and benefits, $309,039 for general 
expenses, $1,050,000 for inspection, $138,018 for research, and 
$2,574,160 for domestic and international promotion.
    Budgeted expenses for these items in 2001-02 were $423,176 for 
salaries and benefits, $157,821 for general expenses, $1,000,000 for 
inspection, $169,393 for research, and $2,429,000 for domestic and 
international promotion.
    To determine the applicable 2002-03 assessment rate, the committee 
considered the total expenses of $4,671,342, and the assessable 
nectarines estimated at 23,248,000 25-pound containers or container 
equivalents. At that rate, assessment income for 2002-03 will be 
$4,417,120. The committee began 2002-03 with $684,368 in operating 
reserves and expects to end the fiscal period with $350,000. Section 
916.42 authorizes a reserve equal to about one fiscal period's 
expenses. Funds from the committee's operating reserve will be kept 
within the maximum permitted.
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by the 
USDA 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 will continue to meet prior to each fiscal period 
to recommend a budget of expenses and meet during each fiscal period to 
consider recommendations for modification of the assessment rate. The 
dates and times of committee meetings are available from the committee 
or USDA.
    Committee meetings are open to the public and interested persons 
may express their views at these meetings. USDA will evaluate committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking will 
be undertaken as necessary. The committee's 2002-03 budget and those 
for subsequent fiscal periods would be reviewed and, as appropriate, 
approved by the Department.

Initial Regulatory Flexibility Analysis

    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 300 California nectarine handlers subject 
to regulation under the order covering nectarines grown in California, 
and about 1,800 producers of nectarines grown in California. Small 
agricultural service firms, which include handlers, are defined by the 
Small Business Administration (13 CFR 121.201) as those whose annual 
receipts are less than $5,000,000. Small agricultural producers are 
defined by the Small Business Administration as those having annual 
receipts of less than $750,000. A majority of these handlers and 
producers may be classified as small entities.
    In the 2001 season, the average handler price received was $9.00 
per container or container equivalent of nectarines. A handler would 
have to ship at least 555,556 containers or container equivalents of 
nectarines to have annual receipts of $5,000,000. Based on shipment 
data maintained by the committee's staff, it is estimated that small 
handlers of nectarines represent approximately 94 percent of the 
handlers within the industry.
    In the 2001 season, the average producer price received was $5.50 
per container or container equivalent of nectarines. A producer would 
have to produce at least 136,364 containers or container equivalents of 
nectarines to have annual receipts of $750,000. Based on data 
maintained by the committee's staff, it is estimated that small 
producers represent approximately 78 percent of the nectarine producers 
within the industry.
    This rule decreases the assessment rate established for the 
committee and collected from handlers for the 2002-03 and subsequent 
fiscal periods from $0.20 to $0.19 per 25-pound container or container 
equivalent of nectarines. The committee unanimously recommended 2002-03 
expenditures of $4,671,342 and an assessment rate of $0.19 per 25-pound 
container or container equivalent of nectarines. The recommended 
assessment rate is $0.01 lower than the current rate. The quantity of 
assessable nectarines for the 2002-03 fiscal year is estimated at 
23,248,000 25-pound containers or container equivalents. Thus, the 
$0.19 rate should provide $4,417,120 in assessment income. Income 
derived from handler assessments, along with other income and funds 
from the committee's authorized reserve would be adequate to cover 
budgeted expenses.
    The major expenditures recommended by the committee for the 2002-03 
year include $505,000 for salaries and benefits, $309,039 for general 
expenses, $1,050,000 for inspection, $138,018 for research, and 
$2,574,160 for domestic and international promotion.
    Budgeted expenses for these items in 2001-02 were $423,176 for 
salaries and benefits, $157,821 for general expenses, $1,000,00 for 
inspection, $169,393 for research, $2,429,000 for domestic and 
international promotion.
    The decrease was recommended because the crop is expected to be 
larger than estimated earlier in the year. The crop estimate in early 
spring was 22 million containers or container equivalents of 
nectarines. The crop is now estimated to be more than 23 million 
containers or container equivalents. The committee reviewed and 
unanimously recommended 2002-03 expenditures of $4,671,342.
    Prior to arriving at this budget, the committee considered 
information and recommendations from various sources, including, but 
not limited to: the Management Services Committee, the Research 
Subcommittee, the International Programs Subcommittee, the Grade and 
Size Subcommittee, the Domestic Promotion Subcommittee, and the Grower 
Relations Subcommittee. The assessment rate of $0.19 per 25-pound 
container or container equivalent is expected to result in an operating 
reserve of $350,000, which is less than the committee generally 
recommends, but considered adequate to meet the committee's financial 
needs in the early part of the 2003 season.
    A review of historical and preliminary information pertaining to 
the upcoming fiscal period indicates that the grower price for the 
2002-03 season could range between $5.50 and $6.00 per 25-pound 
container or container equivalent

[[Page 42709]]

of nectarines. Therefore, the estimated assessment revenue for the 
2002-03 fiscal period as a percentage of total grower revenue could 
range between 3.17 and 3.45 percent.
    This action decreases the assessment obligation imposed on 
handlers. Assessments are applied uniformly on all handlers, and some 
of the costs may be passed on to producers. However, decreasing the 
assessment rate reduces the burden on handlers, and may reduce the 
burden on producers. In addition, the committee's meeting was widely 
publicized throughout the California nectarine industry and all 
interested persons were invited to attend the meeting and participate 
in committee deliberations on all issues. Like all committee meetings, 
the May 1, 2002, 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 action imposes no additional reporting or recordkeeping 
requirements on either small or large 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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule. A small business guide on 
complying with fruit, vegetable, and specialty crop marketing 
agreements and orders may be viewed at: http://www.ams.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 material 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.
    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) This assessment rate is lower than the assessment 
rate currently in effect; (2) the committee needs to have sufficient 
funds to pay its expenses which are incurred on a continuous basis; (3) 
the 2002-03 fiscal period began on March 1, 2002, and the marketing 
order requires that the rate of assessment for each fiscal period apply 
to all assessable nectarines handled during such fiscal period; (4) 
handlers are aware of this action which was unanimously recommended by 
the committee at public meetings and is similar to other assessment 
rate actions issued in past years; and (5) this interim final rule 
provides a 60-day comment period, and all comments timely received will 
be considered prior to finalization of this rule.

List of Subjects in 7 CFR Part 916

    Nectarines, Marketing agreements, Reporting and recordkeeping 
requirements.


    For the reasons set forth in the preamble, 7 CFR part 916 is 
amended as follows:

PART 916--NECTARINES GROWN IN CALIFORNIA

    1. The authority citation for 7 CFR part 916 continues to read as 
follows:

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


    2. Section 916.234 is revised to read as follows:


Sec. 916.234  Assessment rate.

    On and after March 1, 2002, an assessment rate of $0.19 per 25-
pound container or container equivalent of nectarines is established 
for California nectarines.

    Dated: June 20, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-15962 Filed 6-24-02; 8:45 am]
BILLING CODE 3410-02-P