[Federal Register Volume 69, Number 157 (Monday, August 16, 2004)]
[Proposed Rules]
[Pages 50339-50341]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-18610]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 987

[Docket No. FV04-987-2 PR]


Domestic Dates Produced or Packed in Riverside County, 
California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: This rule would increase the assessment rate established for 
the California Date Administrative Committee (committee) for the 2004-
05 and subsequent crop years from $0.75 to $0.85 per hundredweight of 
dates handled. The committee locally administers the marketing order 
which regulates the handling of dates produced or packed in Riverside 
County, California. Authorization to assess date handlers enables the 
committee to incur expenses that are reasonable and necessary to 
administer the program. The Committee recommended increasing the 
assessment rate because additional revenues are needed to fund program 
operations. The crop year begins October 1 and ends September 30. The 
assessment rate would remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Comments must be received by September 15, 2004.

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]; 
or Internet: http://www.regulations.gov. 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 be viewed at: 
http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Program Analyst, Terry 
Vawter or Richard P. Van Diest, Marketing Specialists, California 
Marketing Field Office, Fruit and Vegetable Programs, AMS, USDA, 2202 
Monterey St., suite 102B, Fresno, CA 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 and Marketing Order No. 987, both as amended (7 CFR part 
987), regulating the handling of domestic dates produced or packed in 
Riverside County, 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.''
    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 
date handlers are subject to assessments. Funds to administer the order 
are derived from

[[Page 50340]]

such assessments. It is intended that the assessment rate as proposed 
herein would be applicable to all assessable dates beginning on October 
1, 2004, and continue until amended, suspended, or terminated. This 
rule would 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 2004-05 and subsequent crop years from $0.75 to $0.85 
per hundredweight of assessable dates handled.
    The California date 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 producer-
handlers of California dates. 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 at a 
public meeting. Thus, all directly affected persons have an opportunity 
to participate and provide input.
    For the 2003-04 and subsequent crop years, the committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from crop year to crop 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 June 30, 2004, and unanimously recommended 
2004-05 crop year expenditures of $223,000 and an assessment rate of 
$0.85 per hundredweight of dates handled. In comparison, last year's 
budgeted expenditures were $225,365. The recommended assessment rate of 
$0.85 is $0.10 higher than the rate currently in effect. The increase 
in the assessment rate is needed to fund the committee's budget and 
maintain its operating reserve at about $36,000, which the committee 
deems satisfactory.
    Proceeds from sales of cull dates are deposited in a surplus 
account for subsequent use by the committee in covering the surplus 
pool share of the committee's expenses. Handlers may also dispose of 
cull dates of their own production within their own livestock-feeding 
operation; otherwise, such cull dates must be shipped or delivered to 
the committee for sale to non-human food product outlets. For the 2004-
05 crop year, the committee voted to use $2,000 from the surplus 
account to help fund the committee's budget of $223,000.
    The budgeted administrative expenses for the 2004-05 crop year 
include $90,427 for labor and office expenses. This compares to 
$123,710 in budgeted expenses in 2003-04. In addition, $112,499 has 
been budgeted for marketing and promotion under the program for the 
2004-05 crop year. This compares to $101,655 in budgeted marketing and 
promotion expenses for the 2003-04 crop year. A total of $20,074 is 
budgeted as a contingency reserve for 2004-05. A reserve of $10,000 was 
included in the budget for 2003-04.
    The assessment rate of $0.85 per hundredweight of assessable dates 
was derived by applying the following formula where:

A=Cull Surplus Fund ($2,000)
B=2004-05 expected shipments (260,000 hundredweight)
C=2004-05 expenses ($223,000);
(C-A) B = $0.85 per hundredweight.

    Estimated shipments should provide $221,000 in assessment income. 
Income derived from handler assessments and $2,000 from the cull 
surplus fund would be adequate to cover budgeted expenses. Funds in the 
reserve are expected to total about $35,700 by September 30, 2005, and 
therefore would be less than the maximum permitted by the order (not to 
exceed 50 percent of the average of expenses incurred during the most 
recent five preceding crop years as required under Sec.  987.72(c)).
    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 
crop 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 2004-05 budget and those 
for subsequent crop 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 124 
producers of dates in the production area and approximately 10 handlers 
subject to regulation under the marketing order. The Small Business 
Administration (13 CFR 121.201) defines small agricultural producers as 
those having annual receipts of less than $750,000, and small 
agricultural service firms are defined as those having annual receipts 
of less than $5,000,000.
    An industry profile shows that four of the 10 handlers (40 percent) 
shipped over $5,000,000 of dates and could be considered large handlers 
by the Small Business Administration. Six of the 10 handlers (60 
percent) shipped under $5,000,000 of dates and could be considered 
small handlers. An estimated 7 producers, or less than 6 percent, of 
the 124 total producers, would be considered large producers with 
annual incomes over $750,000. The majority of handlers and producers of 
California dates may be classified as small entities.

[[Page 50341]]

    This rule would increase the assessment rate established for the 
committee and collected from handlers for the 2004-05 and subsequent 
crop years from $0.75 to $0.85 per hundredweight of assessable dates 
handled. The committee unanimously recommended 2004-05 expenditures of 
$223,000 and the $0.85 per hundredweight assessment rate at their 
meeting on June 30, 2004. The proposed assessment rate of $0.85 is 
$0.10 higher than the rate currently in effect. The quantity of 
assessable dates for the 2004-05 crop year is estimated at 260,000 
hundredweight. Thus, the $0.85 per hundredweight rate should provide 
$221,000 in assessment income. This, along with approximately $2,000 
from the surplus account, would be adequate to meet the committee's 
2004-05 crop year expenses.
    The budgeted administrative expenses for the 2004-05 crop year 
include $90,427 for labor and office expenses. This compares to 
$123,710 in budgeted expenses in 2003-04. In addition, $112,499 has 
been budgeted for marketing and promotion under the marketing order for 
the 2004-05 crop year. This compares to $101,655 in budgeted marketing 
and promotion expenses for the 2003-04 crop year. A total of $20,074 is 
budgeted as a contingency reserve. A reserve totaling $10,000 was 
budgeted last year.
    The committee reviewed and unanimously recommended 2004-05 
expenditures of $223,000 which include marketing and promotion 
programs. Prior to arriving at this budget, the committee considered 
alternative expenditure levels and alternative assessment levels. The 
committee agreed that the increased assessment rate was appropriate to 
cover expenses and maintain its operating reserve at a satisfactory 
level ($35,700). The assessment rate of $0.85 per hundredweight of 
assessable dates was then determined by applying the following formula 
where:

A=Cull Surplus Fund ($2,000)
B=2004-05 expected shipments (260,000 hundredweight)
C=2004-05 expenses ($223,000);
(C-A) B = $0.85 per hundredweight.

    Estimated shipments should provide $221,000 in assessment income. 
Income derived from handler assessments and $2,000 from the cull 
surplus fund would be adequate to cover budgeted expenses. Funds in the 
administrative reserve are expected to total about $35,700 by September 
30, 2005, and therefore would be less than the maximum permitted by the 
order (not to exceed 50 percent of the average of expenses incurred 
during the most recent five preceding crop years as required under 
Sec.  987.72(c)).
    A review of historical information and preliminary information 
pertaining to the upcoming crop year indicates that the grower price 
for the 2004-05 season could range between $40 and $120 per 
hundredweight of dates. Therefore, the estimated assessment revenue for 
the 2004-05 crop year as a percentage of total grower revenue could 
range between .7 and 2.1 percent.
    This action would increase the assessment obligation imposed on 
handlers under the Federal marketing order. 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 would 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 date industry 
and all interested persons were invited to attend the meeting and 
participate in committee deliberations on all issues. Like all 
committee meetings, the June 30, 2004, 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 either small or large California date 
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 2004-05 crop year begins on October 1, 2004, and the 
marketing order requires that the rate of assessment for each crop year 
apply to all assessable dates handled during such crop 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 987

    Dates, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 987 is 
proposed to be amended as follows:

PART 987--DOMESTIC DATES PRODUCED OR PACKED IN RIVERSIDE COUNTY, 
CALIFORNIA

    1. The authority citation for 7 CFR part 987 continues to read as 
follows:

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

    2. Section 987.339 is revised to read as follows: Sec.  987.339 
Assessment rate.
    On and after October 1, 2004, an assessment rate of $0.85 per 
hundredweight is established for California dates.

    Dated: August 10, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-18610 Filed 8-13-04; 8:45 am]
BILLING CODE 3410-02-P