[Federal Register Volume 67, Number 180 (Tuesday, September 17, 2002)]
[Rules and Regulations]
[Pages 58509-58511]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-23550]



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  Federal Register / Vol. 67, No. 180 / Tuesday, September 17, 2002 / 
Rules and Regulations  

[[Page 58509]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 916

[Docket No. FV02-916-2 FIR]


Nectarines Grown in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule which decreased 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 will remain in effect indefinitely unless modified, 
suspended, or terminated.

EFFECTIVE DATE: October 17, 2002.

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.''
    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 
order are derived from such assessments. It is intended that the 
assessment rate as issued herein will 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 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 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 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 continues in effect the decreased assessment rate 
established for the committee for the 2002-03 and subsequent fiscal 
periods. The rate was decreased 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 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 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 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 previous rate.
    The decrease was recommended because the crop is expected to be 
larger than originally estimated. 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

[[Page 58510]]

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 the $0.19 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 approximately one fiscal period's 
expenses. Funds from the committee's operating reserve will be kept 
within the maximum permitted.
    The assessment rate will 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 is effective for an indefinite 
period, the committee will continue to meet annually to recommend a 
budget of expenses and 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 will be reviewed and, as appropriate, approved by USDA.

Final 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 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 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 continues in effect the decreased assessment rate 
established for the committee and collected from handlers for the 2002-
03 and subsequent fiscal periods. The assessment rate was decreased 
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 previous 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 will 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 originally estimated. 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 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 continues in effect the decreased 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

[[Page 58511]]

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. 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.
    An interim final rule concerning this action was published in the 
Federal Register on June 25, 2002 (67 FR 42707). Copies of that rule 
were made available to all nectarine growers. Finally, the interim 
final rule was made available through the Internet by the Office of the 
Federal Register and USDA. A 60-day comment period was provided for 
interested persons to respond to the interim final rule. The comment 
period ended on August 26, 2002, and no comments were received.
    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.

List of Subjects in 7 CFR Part 916

    Nectarines, Marketing agreements, Reporting and recordkeeping 
requirements.

PART 916--NECTARINES GROWN IN CALIFORNIA

    Accordingly, the interim final rule amending 7 CFR part 916 which 
was published at 67 FR 42707 on June 25, 2002, is adopted as a final 
rule without change.

    Dated: September 11, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-23550 Filed 9-16-02; 8:45 am]
BILLING CODE 3410-02-P