[Federal Register Volume 70, Number 80 (Wednesday, April 27, 2005)]
[Rules and Regulations]
[Pages 21614-21616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-8360]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV05-932-1 FR]


Olives Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule increases the assessment rate established for the 
California Olive Committee (committee) for the 2005 and subsequent 
fiscal years from $12.18 to $15.68 per ton of 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 current fiscal year began 
January 1 and ends December 31. The assessment rate will remain in 
effect indefinitely unless modified, suspended, or terminated.

DATES: Effective April 28, 2005.

FOR FURTHER INFORMATION CONTACT: Laurel May, 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. The assessment rate issued 
herein will be effective beginning on January 1, 2005, apply to all 
first handled assessable olives from the current crop year, and will 
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 increases the assessment rate established for the 
committee for the 2005 and subsequent fiscal years from $12.18 per ton 
to $15.68 per ton of olives first handled from the applicable crop 
years.
    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 fiscal year, which is the 12-month period between January 
1 and December 31, begins after the corresponding crop year, which is 
the 12-month period beginning August 1 and ending July 31 of the 
subsequent year. Fiscal year budget and assessment recommendations are 
made after the corresponding crop year olive tonnage is reported. 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 assessment 
rate is discussed in a public meeting. Thus, all directly affected 
persons have an opportunity to participate and provide input.
    For the 2004 and subsequent fiscal years, the committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal year to fiscal year unless modified, suspended, 
or terminated by USDA upon recommendation and information submitted by 
the committee or other information available to USDA.

[[Page 21615]]

    The committee met on December 13, 2004, and unanimously recommended 
fiscal year 2005 expenditures of $1,217,014 and an assessment rate of 
$15.68 per ton of olives first handled during the 2004-05 crop year. In 
comparison, the expenditures for fiscal year 2004 were originally 
budgeted at $1,269,063. In July of 2004, the committee voted 
unanimously to increase the budget by $117,535 to fund a research 
project. The committee's reserves were used to fund the revised budget. 
The revised budget for 2004 totaled $1,386,598.
    The assessment rate of $15.68 is $3.50 higher than the $12.18 rate 
currently in effect. Expenditures recommended by the committee for the 
2005 fiscal year include $680,000 for marketing activities, $337,014 
for administration, and $200,000 for research. Budgeted expenses for 
these items in 2004 were originally $633,500 for marketing activities, 
$360,563 for administration, and $225,000 for research. The revised 
2004 budget provided $342,535 for research.
    The assessment rate recommended by the committee was derived by 
considering anticipated fiscal year expenses (including restoration of 
the reserve funds allocated to the 2004 emergency research project), 
actual olive tonnage received by handlers during the 2004-05 crop year, 
and additional pertinent factors. The California Agricultural 
Statistics Service (CASS) reported olive receipts for the 2004-05 crop 
year at 85,862 tons, which compares to 102,703 for the 2003-04 crop 
year. The reduction in the crop size for the 2004-05 crop year, due in 
large part to the alternate-bearing characteristics of olives, has made 
it necessary for the committee to recommend an increase in the 
assessment rate from the current $12.18 per assessable ton to $15.68 
per assessable ton, an increase of $3.50 per ton. 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 permitted by the order of approximately one fiscal 
period's expenses (Sec.  932.40).
    The assessable tonnage for the 2005 fiscal year is expected to be 
less than the 2004-05 crop year receipts of 85,862 tons reported by 
CASS, because some olives may be diverted by handlers to uses that are 
exempt from marketing order requirements.
    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 will be in effect for an indefinite 
period, the committee will 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 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 2005 budget and those for 
subsequent fiscal years 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 910 producers of olives in the production 
area and 3 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 less 
than $750,000, and small agricultural service firms are defined as 
those whose annual receipts are less than $6,000,000.
    Based upon information from the committee, the majority of olive 
producers may be classified as small entities. One of the handlers may 
be classified as a small entity, but the majority of the handlers may 
be classified as large entities.
    This rule increases the assessment rate established for the 
committee and collected from handlers for the 2005 and subsequent 
fiscal years from $12.18 per ton to $15.68 per ton of first handled 
olives from the applicable crop years. The committee unanimously 
recommended 2005 expenditures of $1,217,014 and an assessment rate of 
$15.68 per ton. The assessment rate of $15.68 per ton is $3.50 per ton 
higher than the 2004 rate.
    The quantity of olive receipts for the 2004-05 crop year was 
reported by CASS to be 85,862 tons, but the actual assessable tonnage 
for the 2005 fiscal year is expected to be lower. This is because some 
of the receipts are expected to be diverted by handlers to exempt 
outlets on which assessments are not paid.
    The $15.68 per ton assessment rate should be adequate to meet this 
year's expenses. Funds in the reserve will be kept within the maximum 
permitted by the order of about one fiscal period's expenses (Sec.  
932.40).
    Expenditures recommended by the committee for the 2005 fiscal year 
include $680,000 for marketing development, $337,014 for 
administration, and $200,000 for research. Budgeted expenses for these 
items in 2004 were originally $633,500 for marketing development, 
$360,563 for administration, and $225,000 for research. The research 
budget was increased to $342,535 in July 2004 to fund an additional 
project unanimously recommended by the committee.
    In 2003-04, olive receipts totaled 102,703 tons compared to the 
2004-05 crop year's tonnage of 85,862. Although the committee decreased 
2005 budgeted expenses, the significant decrease in olive production 
makes the higher assessment rate necessary.
    The research expenditures will fund studies to develop chemical, 
biological, and cultural controls of the olive fruit fly in the 
California production area. The budget for market development 
expenditures has been increased because the committee's marketing 
program for 2005 has been expanded to include nutrition and education 
outreach activities for wider audiences. Some of the outreach 
activities include cookbook contributions, school activities, and 
website development. The committee reviewed and unanimously recommended 
2005 expenditures of $1,217,014, which reflect an increase in the 
market development budget and decreases in the research and 
administrative budgets.
    Prior to arriving at this budget, the committee considered 
information from various sources, such as the committee's Executive 
Subcommittee and the Market Development Subcommittee. Alternate 
spending levels were discussed by these groups, based upon the relative 
value of various research and marketing projects to the olive industry 
and the anticipated olive production. The assessment rate of

[[Page 21616]]

$15.68 per ton of assessable olives was derived by considering 
anticipated expenses, the volume of assessable olives first handled 
from the 2004-05 crop year, and additional pertinent factors.
    A review of historical and preliminary information pertaining to 
the upcoming fiscal year indicates that the grower price for the 2004-
05 crop year is estimated to be approximately $720 per ton for canning 
fruit and $276 per ton for limited-use size fruit. Approximately 85 
percent of a ton of olives are canning fruit sizes and 10 percent are 
limited-use sizes, leaving the balance as unusable cull fruit. Total 
grower revenue on 85,862 tons would then be $54,917,335 given the 
percentage of canning and limited-use sizes and current grower prices 
for those sizes. Therefore, with a $15.68 per ton assessment rate, the 
estimated assessment revenue is expected to be approximately 2.33 
percent of grower revenue.
    This action increases the assessment obligation imposed on 
handlers. 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 
are offset by the benefits derived by the operation of the marketing 
order. 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 
13, 2004, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue.
    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 proposed rule concerning this action was published in the Federal 
Register on February 22, 2005 (70 FR 8545). Copies of the rule were 
mailed or sent via facsimile to all committee members and olive 
handlers. Finally, the rule was made available through the Internet by 
USDA and the Office of the Federal Register. A 30-day comment period 
was provided to allow interested persons to respond to the proposal. 
One comment was received, but that comment was not relevant to this 
rulemaking action.
    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.
    Pursuant to 5 U.S.C. 553, it is also found and determined 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 2005 
fiscal year began on January 1, 2005, and the marketing order requires 
that the rate of assessment for each fiscal year apply to all 
assessable olives handled; (2) the committee needs 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 years; and (4) a 30-day comment period was 
provided for in the proposed rule and no relevant comments were 
received.

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.

    On and after January 1, 2005, an assessment rate of $15.68 per ton 
is established for California olives.

    Dated: April 21, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-8360 Filed 4-26-05; 8:45 am]
BILLING CODE 3410-02-P