[Federal Register Volume 70, Number 187 (Wednesday, September 28, 2005)]
[Rules and Regulations]
[Pages 56561-56563]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-19309]



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  Federal Register / Vol. 70, No. 187 / Wednesday, September 28, 2005 / 
Rules and Regulations  

[[Page 56561]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Docket No. FV05-920-2 FR]


Kiwifruit Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This rule increases the assessment rate and changes 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. Assessments upon kiwifruit handlers are used by the 
Committee to fund reasonable and necessary expenses of the program. The 
fiscal period began on August 1 and ends July 31. The assessment rate 
will remain in effect indefinitely unless modified, suspended, or 
terminated.

EFFECTIVE DATE: September 29, 2005.

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 issued herein will 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 increases the assessment rate and changes 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 continued 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

[[Page 56562]]

 
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 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 will be in effect 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 2005-06 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 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 increases the assessment rate and changes 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 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 will 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 will increase 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 
will 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.
    This final rule 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.

[[Page 56563]]

    The proposed rule concerning this action was published in the 
Federal Register on August 16, 2005 (70 FR 48082). Copies of the rule 
were mailed or sent via facsimile to all Committee members and 
kiwifruit handlers. Finally, the rule was made available through the 
Internet by USDA and the Office of the Federal Register. A 20-day 
comment period ending September 6, 2005, was provided to allow 
interested persons to respond to the proposal. 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 matter 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.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) 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. In addition, a 20-
day comment period was provided for in the proposed rule.

List of Subjects in 7 CFR Part 920

    Kiwifruit, Marketing agreements, Reporting and record keeping 
requirements.

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, 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: September 22, 2005.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 05-19309 Filed 9-27-05; 8:45 am]
BILLING CODE 3410-02-P