[Federal Register Volume 69, Number 26 (Monday, February 9, 2004)]
[Rules and Regulations]
[Pages 5905-5907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-2654]



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  Federal Register / Vol. 69 , No. 26 / Monday, February 9, 2004 / 
Rules and Regulations  

[[Page 5905]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV04-932-1 IFR]


Olives Grown in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule decreases the assessment rate established for the 
California Olive Committee (committee) for the 2004 and subsequent 
fiscal years from $13.89 to $12.18 per ton of assessable 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.

EFFECTIVE DATE: February 10, 2004; comments received by April 9, 2004, 
will be considered prior to issuance of a final rule.

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]. 
All comments should reference the docket number and the date and page 
number of this issue of the Federal Register and will be made 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: Terry Vawter, 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 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 be applicable to all assessable olives beginning on 
January 1, 2004, 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 decreases the assessment rate established for the 
committee for the 2004 and subsequent fiscal years from $13.89 per ton 
of assessable olives to $12.18 per ton of assessable 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 budget and assessment rate is deliberated and formulated in a 
public meeting, and the expenditures are deliberated in various public 
subcommittee meetings prior to the committee meeting. Thus, all 
directly affected persons have an opportunity to participate and 
provide input.
    Prior to this rule, the committee recommended, and USDA approved, 
an assessment rate that continued in effect until 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, 2003, and unanimously recommended 
fiscal year 2004 expenditures of $1,269,063 and an assessment rate of 
$12.18 per ton of olives. In comparison, last year's budgeted 
expenditures were $1,230,590. The assessment rate of $12.18 is $1.71 
lower than the $13.89 rate in place for the 2003 fiscal year.

[[Page 5906]]

    The committee recommended expenditures for the 2004 fiscal year, 
including $633,500 for marketing development, $360,563 for 
administration, and $225,000 for research. The committee also 
recommended a fiscal year 2004 expenditure of $50,000 for the 
development of an enhanced flavor standards program.
    For the 2003 fiscal year, budgeted expenses for these items were 
$633,500 for marketing development, $347,090 for administration, and 
$250,000 for research. There were no budgeted expenditures for the 
development of flavor standards and flavor-standards inspection 
training for the 2003 fiscal year.
    The California Agricultural Statistics Service (CASS) reported 
olive receipts for the 2003-04 crop year at 102,703 tons, which 
compares to 89,006 for the 2002-03 crop year. The increase in the crop 
size for the 2003-04 crop year, due in large part to the alternate-
bearing characteristics of olives, has made it possible for the 
committee to recommend the $1.71 per ton decrease from the current 
$13.89 per assessable ton rate to $12.18 per assessable ton. The 
assessment rate recommended by the committee was derived by considering 
anticipated expenses, actual olive tonnage received by handlers, and 
additional pertinent factors.
    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 of approximately one fiscal 
period's expenses as required by Sec. 932.40 of the marketing order.
    The assessable tonnage for the 2004 fiscal year is expected to be 
less than the receipts of 102,703 tons reported by CASS, because 
handlers may divert some olives for uses that are exempt from marketing 
order requirements.
    The assessment rate continues 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 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 and subcommittee 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 2004 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 to ensure 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. 
The Small Business Administration (13 CFR 121.601) defines small 
agricultural producers as those with annual receipts less than 
$750,000, and small agricultural service firms as those with annual 
receipts less than $5,000,000.
    Based upon information from the committee, the majority of olive 
producers may be classified as small entities, but not all of the 
handlers may be classified as small entities.
    This rule decreases the assessment rate established for the 
committee and collected from handlers for the 2004 and subsequent 
fiscal years from $13.89 per ton to $12.18 per ton of olives. The 
committee unanimously recommended 2004 fiscal year expenditures of 
$1,269,063 and an assessment rate of $12.18 per ton. The assessment 
rate of $12.18 per ton is $1.71 per ton lower than the 2003 rate.
    The quantity of olive receipts for the 2003-04 crop year was 
reported by CASS to be 102,703 tons, but the actual assessable tonnage 
for the 2003-04 crop year is expected to be lower. This is because 
handlers are expected to divert some olives to exempt outlets on which 
assessments are not paid.
    The $12.18 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 of approximately one fiscal period's expenses as required by 
Sec. 932.40 of the marketing order.
    Expenditures recommended by the committee for the 2004 fiscal year 
include $633,500 for marketing development, $360,563 for 
administration, and $225,000 for research. The committee also 
recommended a fiscal year 2004 expenditure of $50,000 for the 
development of an enhanced flavor standards program.
    Budgeted expenses for these items in the 2003 fiscal year were 
$633,500 for marketing development, $347,090 for administration, and 
$250,000 for research. There were no expenditures for the development 
of flavor standards and flavor-standards training for inspection 
personnel in the 2003 fiscal year.
    Olive receipts totaled 102,703 tons for the 2003-04 crop year 
compared to the 2002-03 crop year's tonnage of 89,006. The committee 
has increased fiscal year 2004 expenses, but the increase in olive 
production makes the lower assessment rate possible.
    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 the 
same because the committee's marketing program for fiscal year 2004 is 
similar.
    The committee reviewed the budget and assessment rate, and 
unanimously recommended fiscal year 2004 expenditures of $1,269,063, 
which reflect decreased research expenditures and increased 
administrative and flavor-standards expenditures.
    While deliberating this budget, the committee considered 
information from various sources, such as the committee's Executive, 
Research, and Marketing Subcommittees. Alternate spending levels were 
discussed by these groups, based upon the relative costs and benefits 
to the olive industry of various research and marketing projects, the 
total quantity of assessable olives received by handlers, and other 
pertinent factors. Such deliberations resulted in the recommended 2004 
budget and the assessment rate of $12.18 per ton of assessable olives.
    A review of historical industry information and preliminary 
information pertaining to the upcoming fiscal year indicates that the 
grower price for the 2003-04 crop year will be a weighted average of 
$478 per ton for canning size fruit and $254 per ton for limited-use 
size fruit. The weighted average is calculated by the committee

[[Page 5907]]

staff and takes into account the prices per ton offered by each handler 
for various sizes of the major olive varieties produced.
    Approximately 85 percent of a ton of olives are canning sizes and 
10 percent are limited-use sizes, leaving the balance as cull fruit. 
Thus, given the current anticipated grower prices, the average grower 
price per ton would be $431.70. The estimated assessment revenue is 
expected to be approximately 2.8 percent of the average grower price. 
Total grower revenue on 102,703 tons would be $44,336,885.
    This action decreases the 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 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, 2003, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue. The subcommittee 
meetings, as well, were public all interested parties were encouraged 
to attend and provide comments. Finally, interested persons are invited 
to submit information on the regulatory and informational impacts of 
this action on small businesses.
    This rule imposes 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.
    This rule invites comments on the decreased assessment rate for 
2004 and subsequent fiscal years under the Federal marketing order 
regulating olives grown in California. Any comments received will be 
considered prior to finalization of this rule.
    After consideration of all relevant material presented, including 
the committee's recommendation and other information, it is found that 
this interim final rule, as hereinafter set forth, will tend to 
effectuate the declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impractical, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register 
because: (1) The 2004 fiscal year began on January 1, 2004, and the 
marketing order requires that the rate of assessment for each fiscal 
year apply to all assessable olives handled during applicable the crop 
year; (2) this action decreases the assessment rate and the committee 
needs sufficient funds to pay its expenses which are incurred on a 
continuous basis; and (3) this action was unanimously recommended by 
the committee at a public meeting attended by handlers, 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.


0
For the reasons set forth in the preamble, 7 CFR part 932 is amended as 
follows:

PART 932--OLIVES GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 932 continues to read as 
follows:


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


0
2. Section 932.230 is revised to read as follows:



Sec. 932.230  Assessment rate.

    Beginning on January 1, 2004, an assessment rate of $12.18 per ton 
is established for California olives.

    Dated: February 3, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-2654 Filed 2-6-04; 8:45 am]
BILLING CODE 3410-02-P