[Federal Register Volume 70, Number 157 (Tuesday, August 16, 2005)]
[Proposed Rules]
[Pages 48082-48084]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-16207]



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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Docket No. FV05-920-2 PR]


Kiwifruit Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate and change the 
assessable unit established for the Kiwifruit Administrative Committee 
(Committee) for the 2005-06 and subsequent fiscal periods from $0.002 
per pound of kiwifruit to $0.045 per 9-kilo volume-fill container or 
equivalent 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 begins August 1 and ends July 
31. The assessment rate would remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Comments must be received by September 6, 2005.

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]. 
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: Shereen Marino, Marketing Specialist, 
California Marketing Field Office, Fruit and Vegetable Programs, AMS, 
USDA; 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 proposed herein would be applicable to all 
assessable kiwifruit beginning on August 1, 2005, 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 would increase the assessment rate and change the 
assessable unit established for the Committee for the 2005-06 and 
subsequent fiscal periods from $0.002 per pound of kiwifruit to $0.045 
per 9-kilo volume-fill container or equivalent 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 2004-05 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 June 28, 2005, and unanimously recommended 
2005-06 expenditures of $91,989 and an assessment rate of $0.045 per 9-
kilo volume-fill container or equivalent of kiwifruit. In comparison, 
last year's budgeted expenditures were $91,839. The assessment rate of 
$0.045 per 9-kilo volume-fill container or equivalent is about $0.0003 
per pound higher than the rate currently in effect. The higher 
assessment rate is needed because the 2004-2005 crop was smaller than 
expected and assessment income fell short of expenses. Reserve funds 
were used to meet the shortfall. The higher assessment rate should 
generate sufficient income to cover anticipated 2005-06 expenses and 
maintain an adequate reserve.
    The following table compares major budget expenditures recommended 
by the Committee for the 2004-05 and 2005-06 fiscal periods:

------------------------------------------------------------------------
        Budget expense categories             2004-05         2005-06
------------------------------------------------------------------------
Administrative Staff & Field Salaries...         $61,000         $61,000
Travel..................................           6,500           6,500
Office Costs/Annual Audit...............          14,555          14,705

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Vehicle Expense Account.................           9,784           9,784
------------------------------------------------------------------------

    The assessment rate recommended by the Committee was derived by the 
following formula: Anticipated expenses ($91,989), plus the desired 
2006 ending reserve ($35,010), minus the 2005 beginning reserve 
($15,524), divided by the total estimated 2005-06 shipments (2,475,000 
9-kilo volume-fill containers). An additional $100 in interest income 
is also anticipated, bringing the total projected 2005-06 revenue to 
$111,475. This calculation requires the $0.045 per 9-kilo volume-fill 
container assessment rate. This rate should provide sufficient funds to 
meet the anticipated expenses of $91,839 and result in a July 2006 
ending reserve of $35,010, which is within the authorized reserve 
permitted by the order. The authorized reserve is approximately one 
fiscal period's expenses (Sec.  920.41).
    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 
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 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 2005-06 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 45 handlers of California kiwifruit subject 
to regulation under the marketing order and approximately 275 growers 
in the production area. Small agricultural service firms are defined by 
the Small Business Administration (13 CFR 121.201) as those whose 
annual receipts are less than $6,000,000, and small agricultural 
producers are defined as those whose annual receipts are less than 
$750,000.
    None of the 45 handlers subject to regulation have annual kiwifruit 
sales of at least $6,000,000. In addition, six growers subject to 
regulation have annual sales exceeding $750,000. Therefore, a majority 
of the kiwifruit handlers and growers may be classified as small 
entities.
    This rule would increase the assessment rate and change the 
assessable unit established for the Committee and collected from 
handlers for the 2005-06 and subsequent fiscal periods from $0.002 per 
pound of kiwifruit to $0.045 per 9-kilo volume-fill container or 
equivalent of kiwifruit. The Committee unanimously recommended 2005-06 
expenditures of $91,989 and an assessment rate of $0.045 per 9-kilo 
volume-fill container or equivalent of kiwifruit. The proposed 
assessment rate of $0.045 is $0.0003 higher than the 2004-05 rate. The 
quantity of assessable kiwifruit for the 2005-06 fiscal period is 
estimated at 2,475,000 9-kilo volume-fill containers or equivalent of 
kiwifruit. Thus, the $0.045 rate should provide $111,375 in assessment 
income and be adequate to meet this year's expenses.
    The following table compares major budget expenditures recommended 
by the Committee for the 2004-05 and 2005-06 fiscal years:

------------------------------------------------------------------------
        Budget expense categories             2004-05         2005-06
------------------------------------------------------------------------
Administrative Staff & Field Salaries...         $61,000         $61,000
Travel..................................           6,500           6,500
Office Costs/Annual Audit...............          14,555          14,705
Vehicle Expense Account.................           9,784           9,784
------------------------------------------------------------------------

    The Committee reviewed and unanimously recommended 2005-06 
expenditures of $91,989, which included an increase in audit expenses. 
Prior to arriving at this budget, the Committee considered alternative 
expenditure levels, 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: 
Anticipated expenses ($91,989), plus the desired 2006 ending reserve 
($35,010), minus the 2005 beginning reserve ($15,524), divided by the 
total estimated 2005-06 shipments (2,475,000 9-kilo volume-fill 
containers). This calculation resulted in the $0.045 per 9-kilo volume-
fill container assessment rate. This rate would provide sufficient 
funds to meet the anticipated expenses of $91,989 and result in a July 
2006 ending reserve of $35,010, which is within the authorized reserve 
permitted by the order. The authorized reserve is approximately one 
fiscal period's expenses (Sec.  920.41). An additional $100 in interest 
income is also anticipated, bringing the total projected 2005-06 
revenue to $111,475.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the grower 
price for the 2005-06 season could be about $8.09 per 9-kilo volume-
fill container or equivalent of kiwifruit. Therefore, the estimated 
assessment revenue for the 2005-06 fiscal period as a percentage of 
total grower revenue is estimated at about 0.56 percent.
    This action would increase the assessment obligation imposed on

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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 
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 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 June 28, 2005, 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 
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.
    A 20-day comment period is provided to allow interested persons to 
respond to this proposed rule. Twenty days is deemed appropriate 
because: (1) The 2005-06 fiscal period began on August 1, 2005, and the 
marketing order requires that the 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 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 920

    Kiwifruit, Marketing agreements, Reporting and record keeping 
requirements.

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

PART 920--KIWIFRUIT GROWN IN CALIFORNIA

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

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

    2. Section 920.213 is revised to read as follows:


Sec.  920.213  Assessment rate.

    On and after August 1, 2005, an assessment rate of $0.045 per 9-
kilo volume-fill container or equivalent of kiwifruit is established 
for kiwifruit grown in California.

    Dated: August 11, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-16207 Filed 8-15-05; 8:45 am]
BILLING CODE 3410-02-P