[Federal Register Volume 68, Number 46 (Monday, March 10, 2003)]
[Proposed Rules]
[Pages 11340-11342]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-5561]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV03-932-1 PR]


Olives Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate established for 
the California Olive Committee (committee) for the 2003 and subsequent 
fiscal years from $10.09 to $13.89 per ton of olives handled. The 
committee locally administers the marketing order regulating the 
handling of olives grown in California. Authorization to assess olive 
handlers enables the committee to incur expenses that are reasonable 
and necessary to administer the program. The fiscal year began January 
1 and ends December 31. The assessment rate would remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by April 9, 2003.

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 viewed at: http//www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Program Assistant, 
California Marketing Field Office, Marketing Order Administration 
Branch, 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 
Agreement No. 148 and 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 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 
olive 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 olives beginning on January 1, 2003, 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 2003 and subsequent fiscal years from $10.09 per ton 
to $13.89 per ton of olives.
    The California olive 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 and handlers of 
California olives. 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 2002 and subsequent fiscal years, the committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal year to fiscal year 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 December 11, 2002, and unanimously recommended 
fiscal year 2003 expenditures of $1,230,590 and an assessment rate of 
$13.89 per ton of olives. In comparison, last year's budgeted 
expenditures were $1,428,585. The assessment rate of $13.89 is $3.80 
higher than the $10.09 rate currently in effect.
    Expenditures recommended by the committee for the 2003 fiscal year 
include $633,500 for marketing development, $347,090 for 
administration, and $250,000 for research. Budgeted expenses for these 
items in 2002 were $811,935 for marketing development, $339,650 for 
administration, and $250,000 for research.
    The assessment rate recommended by the committee was derived by 
considering anticipated expenses, actual olive tonnage received by 
handlers, and additional pertinent factors. The California Agricultural 
Statistics Service (CASS) reported olive receipts for the 2002-03 crop 
year at 89,006 tons, which compares to 123,439 for the 2001-02 crop 
year. The reduction in the crop size for the 2002-03 crop year, due in 
large part to the alternate-bearing

[[Page 11341]]

characteristics of olives, has made it necessary for the committee to 
recommend an increase in the assessment rate from the current $10.09 
per assessable ton to $13.89 per assessable ton, an increase of $3.80 
per ton. Income derived from handler assessments, interest, and 
utilization of reserve funds will be adequate to cover budgeted 
expenses. Funds in the reserve will be kept within the maximum 
permitted by the order of approximately one fiscal period's expenses 
(Sec.  932.40).
    The assessable tonnage for the 2003 fiscal year is expected to be 
less than the receipts of 89,006 tons reported by CASS, because some 
olives may be diverted by handlers to uses that are exempt from 
marketing order requirements. The quantity of olives that is expected 
to be diverted cannot be published in this document. The olive industry 
consists of only three handlers, two of which are much larger than the 
third, and the confidentially of this handler information must be 
maintained to protect the proprietary business positions of each of the 
handlers.
    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 year 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 2003 budget and those for 
subsequent fiscal years 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 1,200 producers of olives in the production 
area and 3 handlers subject to regulation under the marketing order. 
Small agricultural producers are defined by the Small Business 
Administration (13 CFR 121.601) 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.
    Based upon information from the committee, the majority of olive 
producers may be classified as small entities. One of the handlers may 
be classified as a small entity, but the majority of the handlers may 
be classified as large entities.
    This rule would increase the assessment rate established for the 
committee and collected from handlers for the 2003 and subsequent 
fiscal years from $10.09 per ton to $13.89 per ton of olives. The 
committee unanimously recommended 2003 expenditures of $1,230,590 and 
an assessment rate of $13.89 per ton. The proposed assessment rate of 
$13.89 per ton is $3.80 per ton higher than the 2002 rate. The quantity 
of olive receipts for the 2002-03 crop year was reported by CASS to be 
89,006 tons, but the actual assessable tonnage for the 2003 fiscal year 
is expected to be lower. This is because some of the receipts are 
expected to be diverted by handlers to exempt outlets on which 
assessments are not paid. The amount of assessable tonnage cannot be 
reported in this document. The amount of the exempt tonnage must be 
kept confidential so the business position of each of the three olive 
handlers is not revealed. The $13.89 per ton assessment rate should be 
adequate to meet this year's expenses when combined with funds from the 
authorized reserve and interest income. Funds in the reserve will be 
kept within the maximum permitted by the order of about one fiscal 
period's expenses (Sec.  932.40).
    Expenditures recommended by the committee for the 2003 fiscal year 
include $633,500 for marketing development, $347,090 for 
administration, and $250,000 for research. Budgeted expenses for these 
items in 2002 were $811,935 for marketing development, $339,650 for 
administration, and $250,000 for research.
    Last year's olive receipts totaled 123,439 tons compared to this 
year's tonnage of 89,006. Although the committee decreased 2003 
expenses, the significant decrease in olive production makes the higher 
assessment rate necessary.
    The research expenditures will fund studies to develop chemical and 
scientific defenses to counteract a threat from the olive fruit fly in 
the California production area. Market development expenditures are 
lower because the committee's marketing program for 2003 is limited to 
consumer and nutritionist activities. The committee reviewed and 
unanimously recommended 2003 expenditures of $1,230,590, which reflects 
decreases in the research, market development, and administrative 
budgets.
    Prior to arriving at this budget, the committee considered 
information from various sources, such as the committee's Executive 
Subcommittee and the Market Development Subcommittee. Alternate 
spending levels were discussed by these groups, based upon the relative 
value of various research and marketing projects to the olive industry 
and the anticipated olive production. The assessment rate of $13.89 per 
ton of assessable olives was derived by considering anticipated 
expenses, the volume of assessable olives, and additional pertinent 
factors.
    A review of historical and preliminary information pertaining to 
the upcoming fiscal year indicates that the grower price for the 2002-
03 crop year is estimated to be approximately $672 per ton for canning 
fruit and $306 per ton for limited-use size fruit. Approximately 85 
percent of a ton of olives are canning fruit sizes and 10 percent are 
limited-use sizes, leaving the balance as unusable cull fruit. Total 
grower revenue on 89,006 tons would then be $53,563,811 given the 
percentage of canning and limited-use sizes and current grower prices 
for those sizes. Therefore, if the assessment rate is increased from 
$10.09 to $13.89, the estimated assessment revenue is expected to be 
approximately 2.3 percent of grower revenue.
    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 
are offset by the benefits derived by the operation of the marketing 
order. In addition, the committee's meeting was widely publicized 
throughout the California

[[Page 11342]]

olive industry and all interested persons were invited to attend the 
meeting and participate in committee deliberations on all issues. Like 
all committee meetings, the December 11, 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 proposed rule would impose no additional reporting or 
recordkeeping requirements on California olive 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 2003 fiscal year began on January 1, 2003, and the 
marketing order requires that the rate of assessment for each fiscal 
year apply to all assessable olives handled during such fiscal year; 
(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 932

    Marketing agreements, Olives, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 932 is 
proposed to be 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. Section 932.230 is revised to read as follows:


Sec.  932.230  Assessment rate.

    On and after January 1, 2003, an assessment rate of $13.89 per ton 
is established for California olives.

    Dated: March 4, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-5561 Filed 3-7-03; 8:45 am]
BILLING CODE 3410-02-P