[Federal Register Volume 68, Number 69 (Thursday, April 10, 2003)]
[Rules and Regulations]
[Pages 17539-17544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-8800]



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  Federal Register / Vol. 68, No. 69 / Thursday, April 10, 2003 / Rules 
and Regulations  

[[Page 17539]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 993

[Docket No. FV02-993-2 FR]


Dried Prunes Produced in California; Revising the Regulations 
Concerning Compensation Rates for Handlers' Services Performed 
Regarding Reserve Prunes Covered Under the California Dried Prune 
Marketing Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This rule revises the regulations concerning compensation 
rates for handlers' services performed in connection with reserve 
prunes covered under Marketing Order No. 993 (order). The order 
regulates the handling of dried prunes produced in California and is 
administered locally by the Prune Marketing Committee (Committee). This 
rule will establish a procedure in the administrative rules and 
regulations which the Committee will follow to compute the level of 
handler payments for holding reserve prunes during and beyond the crop 
year of acquisition. These payment rates will reflect current industry 
costs. The rule also will establish time frames for changing the 
payment rates, and procedures for informing interested persons of the 
payment rates and payment procedures. This rule also does not allow for 
payment of handler services for reserve prunes released through the 
handler acceptance of diversion certificates if the released prunes 
have not been stored by the handler.

EFFECTIVE DATE: This final rule becomes effective May 12, 2003.

FOR FURTHER INFORMATION CONTACT: Richard P. Van Diest, Marketing 
Specialist, 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 final rule is issued under Marketing 
Agreement and Order No. 993, both as amended (7 CFR part 993), 
regulating the handling of dried prunes produced 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 final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect. 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. A 
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 final rule revises the regulations concerning compensation to 
handlers for services they perform pertaining to reserve prunes covered 
under the order. Under the order, handlers are compensated for such 
costs as inspection, receiving, storing, grading, and fumigation of 
reserve prunes held for the account of the Committee. In the 
administrative rules and regulations, the compensation rate has been 
$25 per ton since the early 1970's. This rule establishes a procedure 
in the administrative rules and regulations that the Committee will 
follow to compute the level of handler payments that reflect current 
industry costs instead of having the compensation rate stated in the 
rule. The Committee will obtain current industry costs through surveys 
of dried prune handlers and compute average costs based on the number 
of handlers participating in the survey. Abnormally high or low results 
will not be considered in the average. The average may be rounded to 
the nearest $0.25. USDA will approve the updated compensation rate 
computed by the Committee. The Committee will announce the compensation 
rate for handling reserve prunes at the time the Committee reviews the 
industry statistics during the latter part of June and notify all 
handlers accordingly. Additional payment for handler services for 
reserve prunes held beyond the crop year of acquisition will be updated 
through a stated percentage of the handler compensation rate during the 
crop year of acquisition. The Committee unanimously recommended this 
action on November 29, 2001.
    The order provides authority for volume regulation designed to 
promote orderly marketing conditions, to stabilize prices and supplies, 
and to improve producer returns. When volume regulation is in effect, a 
certain percentage of the California prune crop may be sold by handlers 
to any market (salable tonnage) while the remaining percentage must be 
held by handlers in a reserve pool (or reserve) for the account of the 
Committee. Reserve prunes are disposed of through various programs 
authorized under the order, including government purchases. Net

[[Page 17540]]

proceeds generated from sales of reserve prunes are distributed to the 
reserve pool's equity holders, primarily producers.

Definitions

    Section 993.21c of the prune marketing order defines salable prunes 
as prunes which are free to be handled pursuant to any salable 
percentage established by the USDA pursuant to Sec.  993.54.
    Section 993.21d of the order defines reserve prunes as prunes which 
must be withheld in satisfaction of a reserve obligation arising from 
the application of a reserve percentage established by the USDA 
pursuant to Sec.  993.54.
    Section 993.54 of the order provides authority for USDA, based on 
recommendations by the Committee and supporting information supplied by 
the Committee, or from other available information, to establish 
salable and reserve percentages for dried prunes received by handlers 
during a crop year. The crop year begins August 1 and runs through July 
31. When salable and reserve percentages are in effect, Sec.  993.57 
requires handlers to hold in their possession or under their control, 
for the account of the Committee, the quantity of prunes necessary to 
meet their reserve obligation.

Authority To Pay Handlers for Reserve Pool Services

    Section 993.59 of the order specifies that handlers be compensated 
for necessary services performed in connection with reserve prunes 
including, but not limited to inspection, receiving, storing, grading, 
and fumigation. The payment is made on the tonnage of reserve prunes 
held by the handler for the account of the Committee, in accordance 
with a schedule of payments.

Handler Service Payments and Conditions for Reserve Prunes

    Pursuant to Sec.  993.59 of the order, details of the criteria and 
procedures for compensating prune handlers in connection with reserve 
prunes are established by regulation after recommendation by the 
Committee. They may be found in Sec.  993.159 of the administrative 
rules and regulations. Since the early 1970's, the compensation rate 
has been $25 per ton. The prune industry has not implemented salable 
and reserve percentages since 1971; therefore, the compensation rate 
does not reflect current costs. In recent years, the Committee has 
considered implementing a reserve.
    The Committee normally meets during the end of June or early July 
to discuss marketing policy issues and decides whether to recommend 
implementing a reserve. The Committee met on November 29, 2001, and 
unanimously recommended revising the rules and regulations pertaining 
to the compensation rates for handler services in connection with 
reserve prunes. One change recommended establishes a procedure in the 
administrative rules and regulations for computing the compensation 
rates instead of having the rates stated in the rule. To aid in 
formulating the compensation rates, the Committee will obtain current 
costs through surveys of dried prune handlers and compute average costs 
based on the number of handlers participating in the survey. Abnormally 
high or low results will not be considered in the average. The average 
may be rounded to the nearest $0.25.
    An updated compensation rate for handling reserve prunes during the 
crop year of acquisition will be computed when the Committee considers 
its annual marketing policy, but no later than July 20. This date could 
be extended up to 10 days, if warranted by a late crop. During 
marketing policy discussions, the Committee reviews, among other 
things, industry production and marketing statistics for dried prunes 
here and abroad, pricing information for domestic and foreign produced 
dried prunes, and handler costs for holding reserve prunes, including, 
but not limited to inspection, receiving, storing, grading, and 
fumigating prunes. Any recommended change in compensation rate will be 
reviewed, and will have to be approved by USDA. Upon approval, the 
Committee will inform all handlers of the changed compensation rate for 
the upcoming crop year. The process will be completed by the beginning 
of the crop year (August 1).
    On November 29, 2001, the Committee also recommended that no 
payment for handler services be made for reserve prunes released by 
handler acceptance of diversion certificates under Sec. Sec.  993.62 
and 993.162, if the handler has not stored the prunes. For example, a 
handler may have a reserve obligation of 1,000 tons and received 900 
tons worth of diversion certificates. The handler submits the 900 tons 
of diversion certificates to the Committee and requests that he be 
relieved of 900 tons of reserve prune obligation, leaving a reserve 
obligation of 100 tons. In this situation, the Committee will only 
reimburse the handler for reserve pool costs on the 100 tons.
    The Committee intends to pay up to one-half the compensation rate 
(first payment) as soon as practicable after the majority of the 
deliveries have been made and funds are available. During normal years, 
the first payment will occur after the second quarter of the crop year 
(usually during February) and quarterly payments will be made 
thereafter, as funds are available. The crop year runs from August 1 
through July 31.
    The Committee also recommends a number of administrative changes to 
the rules and regulations. They include: (1) Correcting a reference in 
Sec.  993.159(a) from Sec.  993.57 to Sec.  993.59; (2) adding a 
provision in Sec.  993.159(a)(1) stating that in crop years when the 
Committee recommends a reserve pool, it shall meet by July 20 to review 
costs for handler services in connection with reserve prunes pursuant 
to Sec.  993.59, except that the Committee may extend this date by not 
more than 10 business days if warranted by a late crop; (3) adding 
weighing and stacking prunes as part of the direct labor costs in Sec.  
993.159(a)(2); (4) adding clean-up, health insurance, pension plan 
contributions, vacation pay, holiday and other paid days off as part of 
the plant overhead costs in Sec.  993.159(a)(2); and (5) eliminating 
reference to personal pronouns and replacing them with a descriptive 
noun so the regulatory text is not gender specific. Paragraphs (a)(1), 
(2), and (3) of Sec.  993.159 are modified accordingly.
    In addition, the Committee recommended that the provisions in Sec.  
993.159(c)(2) regarding payments to handlers for services rendered in 
connection with reserve prunes held beyond the end of the crop year of 
acquisition also be updated. The regulations currently establish the 
reimbursement rate for storage and fumigation at $2 per ton for the 
first quarter of the year beyond the crop year of acquisition. This 
approximates 10 percent of the current handler compensation rate for 
the crop year of acquisition. The Committee recommended that handlers 
be compensated at 10 percent of the yearly rate computed by the 
Committee and approved by USDA for the crop year of acquisition for the 
first quarter after the crop year of acquisition, rather than 
establishing a specific rate. That paragraph also specifies specific 
amounts per ton for storage and fumigation for the second, third, and 
fourth quarters after the crop year of acquisition at $1.00, $0.25, and 
$0.25 per ton, respectively. This equates to 50 percent of the first 
quarter's amount for the second quarter and 25 percent each for the 
third and fourth quarters. Rather than maintaining specific rates for 
the

[[Page 17541]]

second, third, and fourth quarters, the Committee recommended that the 
rates be expressed as these percentages in the administrative rules and 
regulations. Expressing these rates paid to handlers for services 
rendered beyond the crop year of acquisition as percentages will add 
flexibility to the regulatory scheme and eliminate the need to revise 
that part of the regulations when the rates for handler services during 
the crop year are changed.
    The Committee also recommended that it be allowed to determine the 
rate per ton for bin rental within the industry for the succeeding crop 
year and to inform handlers in accordance with paragraph (e) of Sec.  
993.159. Handlers will be compensated at that rate for use of their 
bins in storing reserve prunes for the account of the Committee. 
Paragraphs (c)(1) and (2) of Sec.  993.159 are modified accordingly.
    New paragraph (e) of Sec.  993.159 will specify that the Committee 
shall give reasonable publicity to producer and handler members and 
alternates who serve on the Committee, commercial dehydrators, 
handlers, and the cooperative bargaining association(s) of each meeting 
to consider handler payment rates or any modification thereof, and each 
such meeting shall be open to them. Similar publicity shall be given to 
producer and handler members and alternates who serve on the Committee, 
commercial dehydrators, handlers, and the cooperative bargaining 
association(s) of each payment rate modification submitted to USDA for 
review and approval. The Committee shall notify producer and handler 
members and alternates who serve on the Committee, commercial 
dehydrators, handlers, and cooperative bargaining association(s) of 
USDA's action on payment rates and conditions for payment by first 
class mail and/or by electronic communications.

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 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 1,205 producers of dried prunes in the 
production area and approximately 24 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 of less than $750,000, and small agricultural service 
firms are defined as those whose annual receipts are less than 
$5,000,000.
    An updated industry profile shows that 9 out of 24 handlers (37.5 
percent) shipped over $5,000,000 worth of dried prunes and could be 
considered large handlers by the Small Business Administration. Fifteen 
of the 24 handlers (62.5 percent) shipped under $5,000,000 worth of 
prunes and could be considered small handlers. An estimated 32 
producers, or less than 3 percent of the 1,205 total producers, will be 
considered large growers with annual incomes over $750,000. The 
majority of handlers and producers of California dried prunes may be 
classified as small entities.
    Pursuant to Sec.  993.59 of the order, this final rule will allow 
the Committee to compute and announce the level of payments paid to 
handlers for services performed in connection with holding reserve 
prunes for the account of the Committee. Each handler holding reserve 
prunes for the account of the Committee will complete such services so 
that the Committee is assured that the prunes are maintained in good 
condition. The Committee will use the procedure specified in the 
administrative rules and regulations for computing the payment levels. 
This flexibility will allow for cost updates in a timely and efficient 
manner and at less cost to implement. This rule will allow the 
Committee to survey each of the prune handlers to obtain their costs 
for each category of expenses for handling reserve prunes listed in 
Sec.  993.159 of the administrative rules and regulations. These costs 
will be averaged according to the formula in the rules and regulations. 
After reviewing and computing these costs, the Committee will submit 
the compensation rates to USDA for approval. After USDA approves the 
compensation rates, the payment rates will be publicized as required in 
paragraph (e) of this section. No payments for handler services will be 
made for reserve prunes released by handler acceptance of diversion 
certificates if the handler has not stored the released dried prunes 
for the account of the Committee.
    The Committee also recommended a number of administrative changes 
to the rules and regulations. They include: (1) Correcting a section 
reference in Sec.  993.159(a) from Sec.  993.57 to Sec.  993.59; (2) 
Adding a provision to Sec.  993.159(a)(1) stating that in crop years 
when the Committee recommends a reserve pool, it shall meet by July 20 
to review the costs incurred by handlers in connection with holding 
reserve prunes for the account of the Committee, except that the 
Committee may extend this date up to 10 business days if warranted by a 
late crop; (3) Adding weighing and stacking prunes as part of the 
direct labor costs in Sec.  993.159(a)(2); (4) Adding clean-up, health 
insurance, pension plan contributions, vacation pay, holiday and other 
paid days off as part of the plant overhead costs in Sec.  
993.159(a)(2); and (5) Eliminating references to personal pronouns and 
replacing them with descriptive nouns so the regulatory text is not 
gender specific. Paragraphs (a)(1), (2), and (3) of Sec.  993.159 are 
modified accordingly.
    In addition, the Committee recommended that the provisions in Sec.  
993.159(c)(2) also be updated and be formula based. These provisions 
regard payments to handlers for services (storage and fumigation) 
rendered in connection with reserve prunes held beyond the crop year of 
acquisition. The regulations currently establish the reimbursement rate 
at $2 per ton for the first quarter of the crop year after acquisition. 
This approximates 10 percent of the current handler compensation rate 
for the crop year of acquisition. The Committee recommended that the 
handler payment rate for the first quarter of the crop year after 
acquisition be 10 percent of the yearly rate for the crop year of 
acquisition, rather than establishing a specific payment rate. That 
paragraph also specifies specific amounts per ton for storage and 
fumigation for the second, third, and fourth quarters of the crop year 
following acquisition at $1.00, $0.25, and $0.25 per ton, respectively. 
This equates to 50 percent of the first quarter's amount for the second 
quarter and 25 percent each for the third and fourth quarters. Rather 
than maintaining specific rates for the second, third, and fourth 
quarters, the Committee recommended that the rates be expressed as 
these percentages in the administrative rules and regulations. 
Expressing these rates paid to handlers for services rendered beyond 
the crop year of acquisition as percentages will add flexibility to the 
regulatory scheme and eliminate the need to revise that part of the 
regulations when the rates for

[[Page 17542]]

handler services during the crop year are changed.
    The Committee also recommended that it be allowed to determine the 
rate per ton for bin rental within the industry for the succeeding crop 
year and to inform handlers in accordance with paragraph (e) of Sec.  
993.159. Handlers will be compensated at that rate for the use of their 
bins in storing reserve prunes for the account of the Committee. 
Paragraphs (c)(1) and (2) of Sec.  993.159 are modified accordingly.
    New paragraph (e) of Sec.  993.159 will specify that the Committee 
give reasonable publicity to producer and handler members and 
alternates who serve on the Committee, commercial dehydrators, 
handlers, and the cooperative bargaining association(s) of each meeting 
to consider handler payment rates or any modification thereof, and each 
such meeting shall be open to them. Similar publicity will be given to 
producer and handler members and alternates who serve on the Committee, 
commercial dehydrators, handlers, and the cooperative bargaining 
association(s) of each payment report submitted to USDA for review and 
approval. The Committee will notify producer and handler members and 
alternates who serve on the Committee, commercial dehydrators, 
handlers, and cooperative bargaining association(s) of USDA's action on 
payment rates and conditions for payment by first class mail and/or by 
electronic communication.
    Regarding the impact of this rule on affected entities, the order 
provides that handlers shall store reserve prunes for the account of 
the Committee. Net proceeds from sales of such reserve prunes are 
distributed back to the reserve pool's equity holders, primarily 
producers. Handlers are compensated from reserve pool funds for their 
costs in inspecting, receiving, storing, grading, fumigation, and 
handling reserve prunes. Currently, handlers are compensated at a rate 
of $25 per ton for reserve prunes acquired during a particular crop 
year. The $25 per ton rate has been the compensation rate since the 
early 1970's. Costs have increased dramatically in the past 30 years. 
The Committee recommended that a procedure be added to the 
administrative rules and regulations to allow the Committee to adjust 
the compensation rate for handling reserve prunes in a timely manner 
instead of specifying them in the rules and regulations. The industry 
meets during the end of June or early July to discuss marketing policy 
issues, including reserve pooling, for the next crop year, which begins 
August 1. A procedure in the administrative rules and regulations will 
allow the Committee to update the compensation rate during a particular 
crop year in a timely, efficient, and less expensive manner. The 
computed payment rates will be recommended by the Committee and 
approved administratively by USDA. After USDA approval the payment 
rates will be publicized as required in Sec.  993.159(e).
    This rule will allow the Committee to reimburse handlers their 
actual costs incurred in holding reserve prunes for the account of the 
Committee. While this may reduce net proceeds to the equity holders, it 
shifts the costs to the appropriate entities. There should be no 
disproportionate impact of this action on small entities. Costs of the 
reserve pool are taken out of the proceeds of the pool and each equity 
holder shares in the expenses based on their proportionate share of 
prunes in the reserve pool.
    The Committee discussed other alternatives to this change on 
November 29, 2001, including doing nothing. However, that will leave 
reserve pooling as a less viable supply management option due to the 
outdated schedule of handler payments. Another option discussed was to 
update the data for a given crop year; however, the survey and formula 
procedure was considered more viable.
    This action will allow the Committee to survey prune handlers to 
obtain their costs applicable to holding reserve prunes for the account 
of the Committee. Reporting and recordkeeping burdens are necessary for 
compliance purposes and for developing statistical data to administer 
the program. This rule will impose some additional reporting and 
recordkeeping requirements on both small and large California dried 
prune handlers. In order to help the Committee formulate the 
compensation rate for handler services in connection with reserve 
prunes, current costs will be obtained through a survey voluntarily 
submitted by dried prune handlers. The average costs will be computed 
based on the number of handlers participating in the survey. It is 
estimated that it will take an average of 15 minutes per response to 
collect this information. If all 24 handlers participate in the survey, 
the additional burden created is estimated to be 6 hours. However, the 
Committee believes that the burden to complete a handler compensation 
survey will be outweighed by obtaining and using updated cost data to 
determine the handler compensation for handling reserve prunes.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), AMS is seeking approval for the additional burden imposed 
by the Handler Compensation Survey. Upon OMB approval, the additional 
burden will be merged into the information collection currently 
approved under OMB No. 0581-0178, Vegetable and Specialty Crop 
Marketing Orders. As noted in the initial regulatory flexibility 
analysis, the USDA has not identified any relevant Federal rules that 
duplicate, overlap or conflict with this rule.
    In addition, the Committee's Supply Management Subcommittee meeting 
on November 28, 2001, and the Committee meeting on November 29, 2001, 
where this action was deliberated were both public meetings widely 
publicized throughout the prune industry. All interested persons, both 
large and small, were invited to attend the subcommittee and Committee 
meetings and participate in the industry's deliberations.
    A proposed rule concerning this action was published in the Federal 
Register on Tuesday, October 15, 2002, (67 FR 63568). Copies of this 
rule were mailed or sent via facsimile to all Committee members, 
alternates and dried prune handlers. Finally, the Office of the Federal 
Register and USDA made the rule available through the Internet. The 
rule provided a comment period that ended December 16, 2002. No 
comments were received. Accordingly, no changes will be made to the 
rule as proposed.
    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 matter 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 993

    Marketing agreements, Plums, Prunes, Reporting and recordkeeping 
requirements.


0
For the reasons set forth in the preamble, 7 CFR part 993 is amended as 
follows:

PART 993--DRIED PRUNES PRODUCED IN CALIFORNIA

0
1. The authority citation for 7 CFR part 993 continues to read as 
follows:


[[Page 17543]]


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


0
2. Section 993.159 is revised to read as follows:


993.159  Payments for services performed with respect to reserve 
tonnage prunes.

    (a) Payment for crop year of acquisition. Each handler shall, with 
respect to reserve prunes held by the handler for the account of the 
Committee pursuant to Sec.  993.59, be paid at a rate computed by the 
Committee (natural condition rate) for necessary services rendered by 
the handler in connection with such prunes so held during all or any 
part of the crop year in which the prunes were physically received from 
producers or dehydrators. Each handler holding reserve prunes shall 
perform such services to assure that the prunes are maintained in good 
condition. No payment will be made for prunes released by handler 
acceptance of diversion certificates if the handler has not stored the 
released prunes. The rate of payment shall be established by the 
Committee and must be approved by the Secretary. Following such 
approval, it shall be publicized as required in paragraph (e) of this 
section.
    (1) On or before July 20 of each crop year when the Committee 
recommends a reserve pool (except the Committee may extend this date by 
not more than ten business days if warranted by a late crop), the 
Committee shall hold a meeting to review the costs for necessary 
services rendered by handlers in connection with reserve prunes.
    (2) Such amount shall, together with the additional payments, as 
provided in this section, be in full payment for the costs incurred in 
connection with but not be limited to the following services: 
Inspection, receiving, storing, grading, fumigation, and handling. The 
costs include, but are not limited to:
    (i) Acquisition costs, which include those for salaries, 
commission, or brokerage fees, transportation and handling between 
plants and receiving stations, inspection, and other costs, including 
container expenses, incidental to acquisition or storage;
    (ii) Direct labor costs, which include those for weighing, 
receiving and stacking, grading, preliminary sorting and storing 
(including that performed by the handler at the receiving station), and 
loading for shipment or other delivery to the Committee or its 
designee;
    (iii) Plant overhead costs, which include those for supervision, 
indirect labor, fuel, power and water, taxes and insurance on 
facilities, depreciation and rent, repairs and maintenance (clean-up, 
etc.), factory supplies and expense, and employee benefits (payroll 
taxes, compensation insurance, health insurance, pension plan 
contributions, vacation pay, holiday and other paid days off, and other 
such costs).
    (3) The Committee shall survey all handlers to obtain their costs 
for services performed with respect to reserve tonnage prunes. The 
Committee will compute the average industry cost for holding reserve 
pool prunes by adding each handlers' cost data, and dividing the 
composite figure by the number of handlers participating in the survey. 
In the event that any handler's cost data is too low or too high, the 
Committee may choose to exclude the high and low data in computing an 
industry average. The industry average costs may be rounded to the 
nearest $0.25. The industry average costs computed by the Committee 
shall be publicized by the Committee pursuant to paragraph (e) of this 
section.
    (b) Reimbursement for required insurance costs. Each handler 
holding reserve prunes for the account of the Committee shall maintain 
proper insurance thereon, including fire and extended coverage, in 
valuations (according to grade and/or size) established by, or 
acceptable to, the Committee for the particular crop year. The 
Committee shall reimburse the handler for the actual costs of such 
insurance. Prior to the receipt of reserve prunes at the beginning of 
each crop year, the handler shall certify to the Committee and the 
Secretary of Agriculture, on Form PMC 4.5, that such handler has a fire 
and extended coverage policy fully insuring all reserve prunes received 
by the handler during such crop year. Such certification shall contain 
the following information:
    (1) The name and address of the handler;
    (2) The location(s) where reserve prunes will be held for the 
account of the Committee and the premium rate per $100 value per annum 
at each location;
    (3) The value per ton at which the reserve prunes are insured; and
    (4) The name and address of the insurance underwriter.
    (c) Certain additional payments in connection with the holding of 
reserve prunes for the account of the Committee.
    (1) Whenever a handler is directed by the Committee to move and 
dump containers or reserve prunes held by the handler for the account 
of the Committee for the purpose of causing an inspection to be made of 
the prunes as provided in Sec.  993.75, but without taking delivery of 
the prunes at that time, the handler shall be paid for such services at 
a rate per ton (natural condition weight) determined by the Committee 
and approved by the Secretary of Agriculture. Such reimbursement rate 
shall be computed as described in paragraph (a)(3) of this section and 
publicized as required in paragraph (e) of this section.
    (2) Additional payment for reserve tonnage prunes held beyond the 
crop year of acquisition shall be made in accordance with this 
paragraph. Each handler holding reserve prunes shall complete such 
services so that the Committee is assured that the prunes are 
maintained in good condition.
    (i) For storage and necessary fumigation, each handler shall be 
compensated at a per ton rate announced by the Committee in accordance 
with paragraph (a)(3) of this section:
    (A) For all or any part of the first 3 months of the succeeding 
crop year, the rate per ton shall be 10 percent of the yearly rate 
established for the crop year of acquisition;
    (B) For all or any part of the second 3 months of the succeeding 
crop year, the rate per ton shall be 50 percent of the rate established 
for the first 3 months of the succeeding crop year;
    (C) For all or any part of the third 3 months of the succeeding 
crop year, the rate per ton shall be 25 percent of the rate established 
for the first 3 months of the succeeding crop year;
    (D) For all or any part of the fourth 3 months of the succeeding 
crop year, the rate per ton shall be 25 percent of the rate established 
for the first 3 months of the succeeding crop year;
    (ii) For all or part of the succeeding crop year, the Committee 
shall determine the per ton rate for bin rental within the industry and 
announce bin rental rate to the industry pursuant to paragraph (e) of 
this section.
    (iii) For insurance as prescribed in paragraph (b) of this section.
    (d) Certain additional payments in connection with the delivery of 
reserve prunes to the Committee or its designee.
    (1) Whenever a handler is directed by the Committee to deliver to 
it or its designee reserve prunes in natural condition, the Committee 
shall furnish the handler with the containers in which to deliver the 
prunes, or reimburse the handler, at cost, for any containers which the 
handler furnishes pursuant to an agreement with the Committee.
    (2) Whenever the Committee arranges with a handler for the reserve 
prunes delivered to it or its designee to be in processed and packaged 
condition, the Committee shall reimburse the handler

[[Page 17544]]

at the agreed rate, determined by the Committee to be reasonable, for 
the processing, container, and packaging costs.
    (e) The Committee shall give reasonable publicity to producer and 
handler members and alternates who serve on the Committee, commercial 
dehydrators, handlers, and the cooperative bargaining association(s) of 
each meeting to consider handler payment rates or any modification 
thereof, and each such meeting shall be open to them. Similar publicity 
shall be given to producer and handler members and alternates who serve 
on the Committee, commercial dehydrators, handlers, and the cooperative 
bargaining association(s) of each payment rate modification submitted 
to USDA for review and approval. The Committee shall notify producer 
and handler members and alternates who serve on the Committee, 
commercial dehydrators, handlers, and cooperative bargaining 
association(s) of USDA's action on payment rates and conditions for 
payment by first class mail and/or by electronic communications.

    Dated: April 3, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-8800 Filed 4-9-03; 8:45 am]
BILLING CODE 3410-02-P