[Federal Register Volume 70, Number 213 (Friday, November 4, 2005)]
[Rules and Regulations]
[Pages 67085-67087]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-22046]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 987

[Docket No. FV05-987-1 FR]


Domestic Dates Produced or Packed in Riverside County, CA; 
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 Date Administrative Committee (committee) for the 2005-06 
and subsequent crop years from $0.85 to $0.95 per hundredweight of 
dates handled. The committee locally administers the marketing order 
which regulates the handling of dates produced or packed in Riverside 
County, California. Assessments upon date handlers are used by the 
committee to fund reasonable and necessary expenses of the program. The 
committee recommended increasing the assessment rate because additional 
revenues are needed to fund program operations and build up its 
financial reserve to a more satisfactory level. The crop year began 
October 1 and ends September 30. The assessment rate will remain in 
effect indefinitely unless modified, suspended, or terminated.

DATES: Effective Dates: November 5, 2005.

FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Program Analyst, or 
Terry Vawter, 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 final rule is issued under Marketing 
Agreement and Marketing Order No. 987, both as amended (7 CFR part 
987), regulating the handling of domestic dates produced or packed in 
Riverside County, California, hereinafter referred to as the ``order.'' 
The marketing agreement and order are 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 final 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 
date handlers are subject to assessments. Funds to administer the order 
are derived from such assessments. It is intended that the assessment 
rate herein would be applicable to all assessable dates beginning on 
October 1, 2005, and continue until amended, suspended, or terminated. 
This final rule will not preempt any State or local laws, regulations, 
or policies, unless they present an irreconcilable conflict with this 
final 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 2005-06 and subsequent crop years from $0.85 to $0.95 
per hundredweight of assessable dates handled.
    The 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 and producer-handlers of California dates. 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 formulated and discussed at a public meeting. Therefore, all 
directly affected persons had an opportunity to participate and provide 
input.
    For the 2004-05 and subsequent crop years, the committee 
recommended, and USDA approved, an assessment rate that will continue 
in effect from crop year to crop year 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 16, 2005, and unanimously recommended 
2005-06 crop year expenditures of $169,197 and an assessment rate of 
$0.95 per hundredweight of dates handled. In

[[Page 67086]]

comparison, last year's budgeted expenditures were $223,000. The 
recommended assessment rate of $0.95 is $0.10 higher than the rate 
currently in effect. The increase in the assessment rate is needed to 
fund the committee's budget and maintain an acceptable operating 
reserve.
    Proceeds from sales of cull dates are deposited in a surplus 
account for subsequent use by the committee in covering the surplus 
pool share of the committee's expenses. Handlers may also dispose of 
cull dates of their own production within their own livestock-feeding 
operation; otherwise, such cull dates must be shipped or delivered to 
the committee for sale to non-human food product outlets. Pursuant to 
Sec.  987.72(b), the committee is authorized to temporarily use funds 
derived from assessments to defray expenses incurred in disposing of 
surplus dates. All such expenses are required to be deducted from 
proceeds obtained by the committee from the disposal of surplus dates. 
For the 2005-06 crop year, the committee estimated that $2,000 from the 
surplus account would be needed to refund assessments used in paying 
committee expenses incurred in disposing of surplus dates.
    The budgeted administrative expenses for the 2005-06 crop year 
include $85,697 for labor and office expenses. This compares to $90,427 
in labor and office expenses in 2004-05. In addition, $70,000 has been 
budgeted for marketing and promotion under the program for the 2005-06 
crop year. This compares to $112,499 in budgeted marketing and 
promotion expenses for the 2004-05 crop year. The committee also 
proposed that $10,000 be included in its 2005-2006 budget for an 
economic analysis of its promotion activities. Last year's budget did 
not include funds for this purpose.
    The proposed rule erroneously indicated that the committee's 2005-
06 budget included a line item for a contingency reserve. However, the 
$14,303 figure is the committee's estimate of reserve funds that would 
be available at the end of the 2005-06 crop year. Additionally, last 
year's budget included a line item for a contingency reserve of 
$20,074.
    The assessment rate of $0.95 per hundredweight of assessable dates 
was derived by applying the following formula where:
    A = 2004-05 reserve on 10/1/05 ($1,000).
    B = 2005-06 reserve on 9/30/06 ($14,303).
    C = 2005-06 expenses ($169,197).
    D = Cull Surplus Fund ($2,000).
    E = 2005-06 expected shipments (190,000 hundredweight).
    (B - A + C - D) / E = $0.95 per hundredweight.
    Estimated shipments should provide $180,500 in assessment income. 
Income derived from handler assessments and $2,000 from the cull 
surplus fund will be adequate to cover budgeted expenses. Funds in the 
reserve are expected to total about $14,303 by September 30, 2006, and 
therefore would be less than the maximum permitted by the order (not to 
exceed 50 percent of the average of expenses incurred during the most 
recent five preceding crop years as required under Sec.  987.72(c)).
    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 
crop 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 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 crop years would 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 124 producers of dates in the production 
area and approximately 10 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 of 
less than $750,000, and small agricultural service firms are defined as 
those having annual receipts of less than $6,000,000.
    An industry profile shows that four of the 10 handlers (40 percent) 
had date sales over $6,000,000 and could be considered large handlers 
by the Small Business Administration. Six of the 10 handlers (60 
percent) had date sales of less than $6,000,000 and could be considered 
small handlers. An estimated 7 producers, or less than 6 percent, of 
the 124 total producers, would be considered large producers with 
annual incomes over $750,000. The remaining producers have incomes less 
than $750,000. The majority of handlers and producers of California 
dates may be classified as small entities.
    This final rule increases the assessment rate established for the 
committee and collected from handlers for the 2005-06 and subsequent 
crop years from $0.85 to $0.95 per hundredweight of assessable dates 
handled. The committee unanimously recommended 2005-06 expenditures of 
$169,197 and the $0.95 per hundredweight assessment rate at its meeting 
on June 16, 2005. The assessment rate of $0.95 is $0.10 higher than the 
rate currently in effect. The quantity of assessable dates for the 
2005-06 crop year is estimated at 190,000 hundredweight. Thus, the 
$0.95 per hundredweight rate should provide $180,500 in assessment 
income. This, along with approximately $2,000 from the surplus account, 
will be adequate to meet the committee's 2005-06 crop year expenses and 
to augment its financial reserve.
    The budgeted administrative expenses for the 2005-06 crop year 
include $85,697, for labor and office expenses. This compares to 
$90,427 in labor and office expenses in 2004-05. In addition, $70,000 
has been budgeted for marketing and promotion under the program for the 
2005-06 crop year. This compares to $112,499 in budgeted marketing and 
promotion expenses for the 2004-05 crop year. The committee also 
proposed that $10,000 be included in the budget for an economic 
analysis of its promotion program for the 2005-06 crop year, as 
required by USDA. A total of $14,303 is estimated to be carried over as 
a financial reserve at the end of 2005-06.
    The committee reviewed and unanimously recommended 2005-06 
expenditures of $169,197 which include

[[Page 67087]]

marketing and promotion programs. Prior to arriving at this budget, the 
committee considered alternative expenditure levels and alternative 
assessment levels. The committee agreed that the increased assessment 
rate was appropriate to cover expenses and build up its operating 
reserve to a satisfactory level ($14,303). The assessment rate of $0.95 
per hundredweight of assessable dates was then determined by applying 
the following formula where:
    A = 2004-05 reserve on 10/1/05 ($1,000).
    B = 2005-06 reserve on 9/30/06 ($14,303).
    C = 2005-06 expenses ($169,197).
    D = Cull Surplus Fund ($2,000).
    E = 2005-06 expected shipments (190,000 hundredweight).
    (B - A + C - D) / E = $0.95 per hundredweight.
    Estimated shipments should provide $180,500 in assessment income. 
Income derived from handler assessments and $2,000 from the cull 
surplus fund would be adequate to cover budgeted expenses. Funds in the 
administrative reserve are expected to total about $14,303 by September 
30, 2006, and therefore would be less than the maximum permitted by the 
order (not to exceed 50 percent of the average of expenses incurred 
during the most recent five preceding crop years as required under 
Sec.  987.72(c)).
    A review of historical information and preliminary information 
pertaining to the upcoming crop year indicates that the grower price 
for the 2005-06 season could range between $45 and $50 per 
hundredweight of dates. Therefore, the estimated assessment revenue for 
the 2005-06 crop year as a percentage of total grower revenue is 
approximately 2 percent.
    This action increases the assessment obligation imposed on handlers 
under the Federal marketing order. 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 date 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 16, 2005, meeting was a public meeting and all entities were 
able to express views on this issue.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large California date 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 September 12, 2005 (70 FR 53737). Copies of the rule were 
mailed or sent via facsimile to all date handlers. Finally, the rule 
was made available through the Internet by USDA and the Office of the 
Federal Register. A 30-day comment period ending October 12, 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 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 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 
2005-06 crop year began on October 1, 2005, and the marketing order 
requires that the rate of assessment for each crop year apply to all 
assessable dates handled during such crop year; (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. Also, a 
30-day comment period was provided for in the proposed rule, and no 
comments were received.

List of Subjects in 7 CFR Part 987

    Dates, Marketing agreements, Reporting and recordkeeping 
requirements.


0
For the reasons set forth in the preamble, 7 CFR part 987 is amended as 
follows:

PART 987--DOMESTIC DATES PRODUCED OR PACKED IN RIVERSIDE COUNTY, 
CALIFORNIA

0
1. The authority citation for 7 CFR part 987 continues to read as 
follows:

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


0
2. Section 987.339 is revised to read as follows:


Sec.  987.339  Assessment rate.

    On and after October 1, 2005, an assessment rate of $0.95 per 
hundredweight is established for California dates.

    Dated: October 31, 2005.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 05-22046 Filed 11-3-05; 8:45 am]
BILLING CODE 3410-02-P