[Federal Register Volume 69, Number 244 (Tuesday, December 21, 2004)]
[Rules and Regulations]
[Pages 76379-76381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27908]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Docket No. FV04-920-2 FIR]


Kiwifruit Grown in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule which decreased the 
assessment rate established for the Kiwifruit Administrative Committee 
(committee) 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 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 January 20, 2005.

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.''
    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 continues in effect the action that decreased the 
assessment rate established for the committee 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 
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

[[Page 76380]]

$0.000045 per pound lower than the rate previously 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
------------------------------------------------------------------------

    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 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 will be reviewed and, as 
appropriate, approved by USDA.

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 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 continues in effect the action that decreased 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 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 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 2004-05 fiscal period indicates that the grower price 
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 continues in effect the action that decreased the 
assessment

[[Page 76381]]

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 entities, both large and small, were able to express views on this 
issue.
    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.
    An interim final rule concerning this action was published in the 
Federal Register on September 16, 2004 (69 FR 55733). Copies of that 
rule were also mailed or sent via facsimile to all kiwifruit handlers. 
Finally, the interim final rule was made available through the Internet 
by USDA and the Office of the Federal Register. A 60-day comment period 
was provided for interested persons to respond to the interim final 
rule. The comment period ended on November 15, 2004, and no comments 
were received.
    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.

List of Subjects in 7 CFR Part 920

    Kiwifruit, Marketing agreements, Reporting and recordkeeping 
requirements.

PART 920--KIWIFRUIT GROWN IN CALIFORNIA

0
Accordingly, the interim final rule amending 7 CFR part 920 which was 
published at 69 FR 55733 on September 16, 2004, is adopted as a final 
rule without change.

    Dated: December 15, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-27908 Filed 12-20-04; 8:45 am]
BILLING CODE 3410-02-P