[Federal Register Volume 69, Number 179 (Thursday, September 16, 2004)]
[Rules and Regulations]
[Pages 55733-55736]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-20849]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Docket No. FV04-920-2 IFR]


Kiwifruit 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 and changes the 
assessable unit from $0.045 per 22-pound, volume-fill container or 
container equivalent to $0.002 per pound of kiwifruit established for 
the Kiwifruit Administrative Committee (committee) for the 2004-05 and 
subsequent fiscal periods. The assessment rate of $0.002 per pound of 
kiwifruit is $0.000045 per pound less than the assessment rate 
currently in

[[Page 55734]]

effect. 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.

DATES: Effective September 17, 2004. Comments received by November 15, 
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, 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, or 
Terry Vawter, 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 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, 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 and changes the assessable 
unit established for the committee for the 2004-05 and subsequent 
fiscal periods from $0.045 per 22-pound, volume-fill container or 
equivalent to $0.002 per pound of kiwifruit. The assessment rate of 
$0.002 per pound of kiwifruit is about $0.000045 per pound less than 
the assessment rate currently in effect for the 2003-04 and subsequent 
fiscal periods.
    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 2002-03 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 15, 2004, and unanimously recommended 
2004-05 fiscal period expenditures of $91,839 and an assessment rate of 
$0.002 per pound of kiwifruit. In comparison, last fiscal period's 
budgeted expenditures were $88,659. The assessment rate of $0.002 per 
pound of kiwifruit is $0.000045 per pound lower than the rate currently 
in effect and is based upon a per-pound unit rather than upon a 22-
pound, volume-fill container or container equivalent.
    The committee unanimously recommended decreasing the assessment 
rate slightly because the 2004-05 fiscal period kiwifruit crop is 
expected to be 8,550,000 pounds larger than the 2003-04 crop of 
41,850,000 pounds. Revenue from assessments, along with other revenue 
from interest income and reserve carryover funds, should allow the 
committee to meet its expenses. The reserve at the end of the fiscal 
period should be about $30,686, which is within the maximum amount 
permitted under the marketing order.
    The following table compares major budget expenditures recommended 
by the committee for the 2003-04 and 2004-05 fiscal periods:

------------------------------------------------------------------------
           Budget expense categories              2003-04      2004-05
------------------------------------------------------------------------
Administrative Staff & Field Salaries.........      $57,600      $61,000
Travel........................................        7,200        6,500
Office Costs/Annual Audit.....................       14,075       14,555
Vehicle Expense Account.......................        9,784        9,784
------------------------------------------------------------------------


[[Page 55735]]

    The assessment rate recommended by the committee was derived by the 
following formula: The anticipated 2004-05 fiscal period expenses 
($91,839) minus the 2003-04 fiscal period carry forward ($21,725), plus 
the 2005-06 fiscal period anticipated reserve ($30,686), divided by the 
total estimated 2004-05 fiscal period shipments (50,400,000 pounds of 
kiwifruit). This results in an assessment rate of $0.002 per-pound. 
This rate should provide sufficient funds in combination with reserve 
funds to meet the anticipated expenses of $91,839 and result in a 
reserve of $30,686 in July 2005, which is acceptable to the committee. 
This reserve is also 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 is effective 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 2004-05 fiscal period 
budget and those for subsequent fiscal periods 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 270 producers of kiwifruit in the 
production area and approximately 45 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 less than $750,000, and defines small agricultural service 
firms as those whose annual receipts are less than $5,000,000.
    None of the 45 handlers subject to regulation have annual kiwifruit 
sales of $5,000,000. In addition, only six producers 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 decreases the assessment rate established for the 
committee and collected from handlers for the 2004-05 and subsequent 
fiscal periods from $0.045 per 22-pound, volume-fill container or 
container equivalent to $0.002 per pound of kiwifruit.
    The committee unanimously recommended 2004-05 fiscal period 
expenditures of $91,839 and an assessment rate of $0.002 per pound of 
kiwifruit. The proposed assessment rate of $0.002 per pound of 
kiwifruit is $0.000045 lower than the rate during the 2003-04 fiscal 
period, and is based upon a per-pound assessable unit rather than the 
assessment rate currently in effect, which is based upon a 22-pound 
container or container equivalent. The quantity of assessable kiwifruit 
for the 2004-05 fiscal period is estimated to be 50,400,000 pounds of 
kiwifruit. Thus, the $0.002 per-pound rate should provide $100,800 in 
assessment income and be adequate to meet this fiscal period's 
expenses.
    The following table compares major budget expenditures recommended 
by the committee for the 2003-04 and 2004-05 fiscal periods:

------------------------------------------------------------------------
           Budget expense categories              2003-04      2004-05
------------------------------------------------------------------------
Administrative Staff & Field Salaries.........      $57,600      $61,000
Travel........................................        7,200        6,500
Office Costs/Annual Audit.....................       14,075       14,555
Vehicle Expense Account.......................        9,784        9,784
------------------------------------------------------------------------

    The committee reviewed and unanimously recommended 2004-05 fiscal 
period expenditures of $91,839, which included increases in salaries 
and office/annual audit costs, and a decrease in travel expenses. Prior 
to arriving at this budget, the committee considered alternative 
expenditure levels and varying crop sizes, but ultimately decided that 
the recommended levels were reasonable to properly administer the 
order.
    The assessment rate recommended by the committee was derived by the 
following formula: The anticipated 2004-05 fiscal period expenses 
($91,839) minus the 2003-04 fiscal period carry forward ($21,725), plus 
the 2005-06 fiscal period anticipated reserve ($30,686), divided by the 
total estimated 2004-05 fiscal period shipments (50,400,000 pounds of 
kiwifruit). This results in an assessment rate of $0.002 per-pound. 
This rate should provide sufficient funds in combination with reserve 
funds to meet the anticipated expenses of $91,839 and result in a 
reserve of $30,686 in July 2005, which is acceptable to the committee. 
This reserve is also 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 2004-05 fiscal period could range between $9.50 and 
$13.00 per pound of kiwifruit. Therefore, the estimated assessment 
revenue for the 2004-05 fiscal period as a percentage of total grower 
revenue could range between 0.015 and 0.021 percent.
    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 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 15, 2004, meeting was a public meeting and all

[[Page 55736]]

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 action 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 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 is also found and determined upon good 
cause that it is impracticable, 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 2004-05 fiscal period began on August 1, 
2004, and the marketing order requires that rate of assessment for each 
fiscal period apply to all assessable kiwifruit handled during such 
fiscal period; (2) the committee needs to have sufficient funds to pay 
its expenses, which are incurred on a continuous basis; (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 fiscal periods; and (4) this interim final rule 
provides a 60-day comment period, and all comments timely received will 
be considered prior to finalization of this rule.

List of Subjects in 7 CFR Part 920

    Kiwifruit, Marketing agreements.

0
For the reasons set forth in the preamble, 7 CFR part 920 is amended as 
follows:

PART 920--KIWIFRUIT GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 920 continues to read as 
follows:

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


0
2. Section 920.213 is revised to read as follows:


Sec.  920.213  Assessment rate.

    On and after August 1, 2004, an assessment rate of $0.002 per pound 
of kiwifruit is established for kiwifruit grown in California.

    Dated: September 9, 2004.
A. J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-20849 Filed 9-15-04; 8:45 am]
BILLING CODE 3410-02-P