[Federal Register Volume 67, Number 158 (Thursday, August 15, 2002)]
[Proposed Rules]
[Pages 53322-53324]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-20688]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 67, No. 158 / Thursday, August 15, 2002 / 
Proposed Rules  

[[Page 53322]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Docket No. FV02-920-4 PR]


Kiwifruit Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This rule would increase the assessment rate established for 
the Kiwifruit Administrative Committee (Committee) for the 2002-03 and 
subsequent fiscal periods from $0.03 to $0.045 per 22-pound volume fill 
container or equivalent of kiwifruit. Expenses for 2002-03 are higher 
than last fiscal period and the current assessment rate would not 
generate enough funds to cover the expenses. The Committee locally 
administers the marketing order which regulates the handling of 
kiwifruit grown in California. Authorization to assess kiwifruit 
handlers enables the Committee to incur expenses that are reasonable 
and necessary to administer the program. The fiscal period 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 16, 2002.

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, 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, or 
Rose M. Aguayo, Marketing Specialist, California Marketing Field 
Office, Fruit and Vegetable Programs, 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, 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 Order 
No. 920, as amended (7 CFR part 920), regulating the handling of 
kiwifruit grown in California, hereinafter referred to as the 
``order.'' The order is 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 
kiwifruit handlers are subject to assessments. Funds to administer the 
order are derived from such assessments. It is intended that the 
assessment rate as proposed herein would be applicable to all 
assessable kiwifruit beginning on August 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 USDA 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 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 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 would increase the assessment rate established for the 
Committee for the 2002-03 and subsequent fiscal periods from $0.03 to 
$0.045 per 22-pound volume fill container or equivalent of kiwifruit.
    The California kiwifruit marketing order provides authority for the 
Committee, with the approval of 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 
kiwifruit. They are familiar with the Committee's needs and 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 at a public meeting. Thus, all 
directly affected persons have an opportunity to participate and 
provide input.
    For the 2000-01 and subsequent fiscal periods, the Committee 
recommended, and USDA 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 July 10, 2002, and unanimously recommended 
2002-03 expenditures of $80,760 and an assessment rate of $0.045 per 
22-pound volume fill container or equivalent of kiwifruit. In 
comparison, last year's budgeted expenditures were $78,000. The 
assessment rate of $0.045 is $0.015 higher than the rate currently in 
effect. The higher assessment rate is needed to offset the 2002-03 
increase in salaries

[[Page 53323]]

and vehicle expenses, and to keep the operating reserve at an adequate 
level.
    The following table compares major budget expenditures recommended 
by the Committee for the 2002-03 and 2001-02 fiscal periods:

------------------------------------------------------------------------
            Budget expense  categories               2002-03    2001-02
------------------------------------------------------------------------
Administrative Staff & Field Salaries.............    $55,500    $50,000
Travel............................................      5,000      9,500
Office Costs/Annual Audit.........................     14,500     14,500
Vehicle Expense Account...........................      5,760      4,000
------------------------------------------------------------------------

    The assessment rate recommended by the Committee was derived by the 
following formula: Anticipated expenses ($80,760), plus the desired 
2003 ending reserve ($36,287), minus the 2002 beginning reserve 
($23,979), divided by the total estimated 2002-03 shipments (2,068,182 
22-pound volume fill containers). This calculation resulted in the 
$0.045 assessment rate. This rate would provide sufficient funds to 
meet the anticipated expenses of $80,760 and result in a July 2003 
ending reserve of $36,287, which is acceptable to the Committee. The 
July 2003 ending reserve funds (estimated to be $36,287) would be kept 
within the maximum permitted by the order, approximately one fiscal 
period's expenses (Sec. 920.41).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by 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 would continue to meet prior to or during each 
fiscal period 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 USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA 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 2002-03 budget and those 
for subsequent fiscal periods would be reviewed and, as appropriate, 
approved by USDA.

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 326 producers of kiwifruit in the 
production area and approximately 52 handlers subject to regulation 
under the marketing order. Small agricultural producers are defined by 
the Small Business Administration (13 CFR 121.201) as those having 
annual receipts less than $750,000, and small agricultural service 
firms are defined as those whose annual receipts are less than 
$5,000,000.
    None of the 52 handlers subject to regulation have annual kiwifruit 
sales of at least $5,000,000. Two of the 326 producers subject to 
regulation have annual sales of at least $750,000. Thus, the majority 
of handlers and producers of kiwifruit may be classified as small 
entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 2002-03 and subsequent 
fiscal periods from $0.03 to $0.045 per 22-pound volume fill container 
or equivalent of kiwifruit. The Committee unanimously recommended 2002-
03 expenditures of $80,760 and an assessment rate of $0.045 per 22-
pound volume fill container or equivalent of kiwifruit. The proposed 
assessment rate of $0.045 is $0.015 higher than the 2001-02 rate. The 
quantity of assessable kiwifruit for the 2002-03 fiscal period is 
estimated at 2,068,182 22-pound volume fill container or equivalent of 
kiwifruit. Thus, the $0.045 rate should provide $93,068 in assessment 
income and be adequate to meet this year's expenses.
    The following table compares major budget expenditures recommended 
by the Committee for the 2002-03 and 2001-02 fiscal years:

------------------------------------------------------------------------
            Budget expense  categories               2002-03    2001-02
------------------------------------------------------------------------
Administrative Staff & Field Salaries.............    $55,500    $50,000
Travel............................................      5,000      9,500
Office Costs/Annual Audit.........................     14,500     14,500
Vehicle Expense Account...........................      5,760      4,000
------------------------------------------------------------------------

    The Committee reviewed and unanimously recommended 2002-03 
expenditures of $80,760, which included increases in administrative 
salaries and vehicle expenses. Prior to arriving at this budget, the 
Committee considered alternative expenditure levels, but ultimately 
decided that the recommended levels were reasonable to properly 
administer the order. The assessment rate recommended by the Committee 
was derived by the following formula: Anticipated expenses ($80,760), 
plus the desired 2003 ending reserve ($36,287), minus the 2002 
beginning reserve ($23,979), divided by the total estimated 2002-03 
shipments (2,068,182 22-pound volume fill containers). This calculation 
resulted in the $0.045 assessment rate. This rate would provide 
sufficient funds to meet the anticipated expenses of $80,760 and result 
in a July 2003 ending reserve of $36,287, which is acceptable to the 
Committee. The July 2003 ending reserve funds (estimated to be $36,287) 
would be kept within the maximum permitted by the order, approximately 
one fiscal period's expenses (Sec. 920.41).
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the grower 
price for the 2002-03 season could range between $9.50 and $13.00 per 
22-pound volume fill container or equivalent of kiwifruit. Therefore, 
the estimated assessment revenue for the 2002-03 fiscal period as a 
percentage of total grower revenue could range between 0.5 and 0.3 
percent.
    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 kiwifruit industry and all 
interested persons were invited to attend the meeting and participate 
in Committee deliberations on all issues. Like all Committee meetings, 
the July 10, 2002, meeting was a public meeting and all entities, both 
large and small, were able to express views on this issue. Finally,

[[Page 53324]]

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 
kiwifruit 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.
    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 2002-03 fiscal period begins on August 1, 2002, and 
the marketing order requires that the rate of assessment for each 
fiscal period apply to all assessable kiwifruit handled during such 
fiscal period; (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 920

    Kiwifruit, Marketing agreements.

    For the reasons set forth in the preamble, 7 CFR part 920 is 
proposed to be amended as follows:

PART 920--KIWIFRUIT GROWN IN CALIFORNIA

    1. The Authority citation for 7 CFR part 920 continues to read as 
follows:

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

    2. Section 920.213 is revised to read as follows:


Sec. 920.213  Assessment rate.

    On and after August 1, 2002, an assessment rate of $0.045 per 22-
pound volume fill container or equivalent of kiwifruit is established 
for kiwifruit grown in California.

    Dated: August 8, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-20688 Filed 8-14-02; 8:45 am]
BILLING CODE 3410-02-P