[Federal Register Volume 67, Number 194 (Monday, October 7, 2002)]
[Rules and Regulations]
[Pages 62320-62323]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-25428]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Docket No. FV02-920-4 FR]


Kiwifruit Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This rule increases 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. 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 began August 1 and ends July 
31. The assessment rate will remain in effect indefinitely unless 
modified, suspended, or terminated.

EFFECTIVE DATE: October 8, 2002.

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

[[Page 62321]]

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 issued herein will 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 increases 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 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 using 
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 will 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) will be within the 
maximum permitted by the order, approximately one fiscal period's 
expenses (Sec.  920.41).
    The assessment rate established in this rule 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 will be in effect for an indefinite 
period, the Committee will 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 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 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 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

[[Page 62322]]

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 increases 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 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 using 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 will 
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) will be 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 increases 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 
will 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.
    This rule imposes 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 proposed rule concerning this action was published in the Federal 
Register on August 15, 2002 (67 FR 53322). Copies of the proposed rule 
were also mailed or sent via facsimile to all California kiwifruit 
handlers. Finally, the proposal was made available through the Internet 
by the Office of the Federal Register and USDA. A 30-day comment period 
ending September 16, 2002, was provided for 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: 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 also found and determined that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because: (1) Handlers 
are already receiving the 2002-03 kiwifruit crop and the marketing 
order requires that the rate of assessment apply to all assessable 
kiwifruit handled during the 2002-03 and subsequent seasons; (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. Also, a 30-day comment period was provided for in the proposed 
rule, and no comments were received.

List of Subjects in 7 CFR Part 920

    Kiwifruit, Marketing agreements.


    For the reasons set forth in the preamble, 7 CFR part 920 is 
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: October 1, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-25428 Filed 10-4-02; 8:45 am]
BILLING CODE 3410-02-P