[Federal Register Volume 71, Number 48 (Monday, March 13, 2006)]
[Rules and Regulations]
[Pages 12614-12616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-2367]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV06-932-1 IFR]


Olives Grown in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule decreases the assessment rate established for the 
California Olive Committee (committee) for the 2006 and subsequent 
fiscal years from $15.68 to $11.03 per assessable ton of olives 
handled. The committee locally administers the marketing order which 
regulates the handling of olives grown in California. Assessments upon 
olive handlers are used by the committee to fund reasonable and 
necessary expenses of the program. The fiscal year began January 1 and 
ends December 31. The assessment rate will remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Effective March 14, 2006. Comments received by May 12, 2006, 
will be considered prior to issuance of a final rule.

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, or 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: Laurel May, California Marketing Field 
Office, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, 2202 Monterey Street, Suite 102B, Fresno, CA 
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. It is intended that the 
assessment rate as issued herein will be effective beginning on January 
1, 2006, apply to all 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

[[Page 12615]]

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 decreases the assessment rate established for the 
committee for the 2005 and subsequent fiscal years from $15.68 to 
$11.03 per ton of assessable olives 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 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 2005 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.
    The committee met on December 13, 2005, and made recommendations 
regarding their fiscal year 2006 expenditures and assessment rate. 
Subsequently, the committee revised its budget recommendation because 
it anticipated higher administrative expenses than it had estimated 
earlier. In a mail vote completed on January 27, 2006, the committee 
unanimously recommended 2006 fiscal year expenditures of $1,301,121 and 
an assessment rate of $11.03 per ton of assessable olives. In 
comparison, the budgeted expenditures for fiscal year 2005 were 
$1,217,014. The assessment rate of $11.03 is $4.65 lower than the rate 
currently in effect.
    The major expenditures recommended by the committee for the 2006 
fiscal year include $800,700 for marketing activities, $290,421 for 
administration, and $210,000 for research. Budgeted expenditures for 
these items in 2005 were $680,000, $337,014, and $200,000, 
respectively.
    The assessment rate recommended by the committee was derived by 
considering anticipated fiscal year expenses, actual olive tonnage 
received by handlers during the 2005-06 crop year, and additional 
pertinent factors. The California Agricultural Statistics Service 
(CASS) reported assessable olive receipts for the 2005-06 crop year at 
114,761 tons, compared to 85,862 tons for the 2004-05 crop year. The 
increased production of assessable olives for the 2005-06 crop year is 
due in part to the alternate-bearing nature of olives, with heavy 
production in one year followed by light production the next. Although 
the committee's budgeted expenses for fiscal year 2006 are higher than 
those for 2005, the increased production would yield increased total 
assessment funds, even at the lower rate, covering the increased 
expenditures. Additionally, actual administrative expenditures in 2005 
were less than the amount budgeted, enabling the committee to carry 
excess funds into the 2006 fiscal year and offset the assessments 
needed to cover budgeted expenses.
    Income derived from handler assessments, along with interest income 
and funds from the committee's authorized reserve, 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 year's 
expenses (Sec.  932.40).
    The assessable tonnage for the 2006 fiscal year is expected to be 
slightly less than the 2005-06 crop receipts of 114,761 tons reported 
by CASS because some olives may be diverted by handlers to uses that 
are exempt from marketing order requirements.
    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 is effective 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 2006 budget and those for 
subsequent fiscal years will be reviewed and, as appropriate, approved 
by USDA.

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 850 producers of olives in the production 
area and 2 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. Both of the handlers may 
be classified as large entities.
    This rule decreases the assessment rate established for the 
committee and collected from handlers for the 2006 and subsequent 
fiscal years from $15.68 to $11.03 per ton of assessable olives. The 
committee unanimously recommended 2006 expenditures of $1,301,121 and 
an assessment rate of $11.03 per ton. The recommended assessment rate 
is $4.65 lower than the current rate.
    The quantity of assessable olive receipts for the 2005-06 crop year 
was reported by CASS to be 114,761 tons, but the actual assessable 
tonnage for the 2006 fiscal year is expected to be slightly 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 $11.03 per ton assessment rate should be adequate to meet this 
year's expenses when combined with funds from the authorized reserve 
and interest income. Funds in the reserve will be kept within the 
maximum permitted by

[[Page 12616]]

the order of about one fiscal year's expenses (Sec.  932.40).
    Expenditures recommended by the committee for the 2006 fiscal year 
include $800,700 for marketing development, $290,421 for 
administration, and $210,000 for research. Budgeted expenses for these 
items in 2005 were $680,000, $337,014, and $200,000, respectively.
    Assessable olive receipts for the 2005-06 crop year were 114,761 
tons, compared to 85,862 tons for the 2004-05 crop year. The increased 
production of assessable olives will yield increased assessment funds, 
even at the lower rate. These funds, along with unused assessments from 
the 2005 fiscal year that have been carried into 2006, and interest 
income, cover the increased expenditures.
    The committee reviewed and unanimously recommended 2006 
expenditures of $1,301,121. This reflects increases in the committee's 
research and market development budgets and a decrease in the 
administrative budget. The committee recommended a larger research 
budget intended to further the study of olive fly management and 
development of a mechanical olive harvesting method. The 2006 marketing 
program recommendation includes participation in media activities in 
conjunction with the release of a new diet plan book, translation of 
some of the committee's education and nutrition materials into Spanish, 
and continuation of several outreach activities including cookbook 
contributions, Web site development, and educational programs for 
school children. Recommended decreases in the administrative budget are 
due mainly to personnel changes in the committee's staff.
    Prior to arriving at this budget, the committee considered 
information from various sources, such as the committee's Executive, 
Market Development, and Research Subcommittees. 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 $11.03 per ton of 
assessable olives was derived by considering anticipated expenses, the 
volume of assessable olives, and additional pertinent factors.
    A review of historical and preliminary information pertaining to 
the upcoming fiscal year indicates that the grower price for the 2005-
06 crop year is estimated to be approximately $714 per ton for canning 
fruit and $314 per ton for limited-use sizes, leaving the balance as 
unusable cull fruit. Approximately 76 percent of a ton of olives are 
canning fruit sizes and 17 percent are limited use sizes, leaving the 
balance as unusable cull fruit. Total grower revenue on 114,761 tons 
would then be $73,485,966, given the percentage of canning and limited-
use sizes and current grower prices for those sizes. Therefore, with an 
assessment rate decreased from $15.68 to $11.03, the estimated 
assessment revenue is expected to be approximately 1.72 percent of 
grower revenue.
    This action decreases the assessment 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 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, 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 action imposes no additional reporting or recordkeeping 
requirements on either small or large 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 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 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect, and 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 2006 fiscal year began on January 1, 2006, 
and the marketing order requires that the rate of assessment for each 
fiscal year apply to all assessable olives handled during such fiscal 
year; (2) the committee needs sufficient funds to pay its expenses, 
which are incurred on a continuous basis; and (3) handlers are aware of 
this action, which was discussed by the committee at a public meeting 
and unanimously recommended by a mail vote, and is similar to other 
assessment rate actions issued in past years.

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, 2006, an assessment rate of $11.03 per ton 
is established for California olives.

    Dated: March 7, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 06-2367 Filed 3-10-06; 8:45 am]
BILLING CODE 3410-02-U