[Federal Register Volume 71, Number 119 (Wednesday, June 21, 2006)]
[Rules and Regulations]
[Pages 35493-35495]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-9724]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV06-932-1 FIR]


Olives Grown in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule that decreased 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 that 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 Date: July 21, 2006.

FOR FURTHER INFORMATION CONTACT: Laurel May, Marketing Specialist, or 
Kurt Kimmel, Regional Manager, 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.
    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.''
    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 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 continues in effect the action that decreased 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,

[[Page 35494]]

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 originally 
estimated. 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 
previously 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 (7 CFR 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 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 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 850 producers of olives in the production 
area. Small agricultural producers are defined by the Small Business 
Administration (13 CFR 121.201) as those having annual receipts less 
than $750,000. Based upon information from the committee, the majority 
of olive producers may be classified as small entities.
    There are two handlers subject to regulation under the marketing 
order. At the time the interim final rule was published, the definition 
of small agricultural service firms included those whose annual 
receipts were less than $6,000,000, and both handlers were classified 
as large entities. Subsequently, the definition of small agricultural 
service firms was changed to include those whose annual receipts are 
less than $6,500,000. Based upon information from the committee, both 
handlers may be classified as large entities.
    This rule continues in effect the action that decreased 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 assessment rate is $4.65 lower than the rate previously in 
effect.
    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 the order of about one fiscal year's expenses (7 
CFR 932.40).
    Expenditures recommended by the committee for the 2006 fiscal year

[[Page 35495]]

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, are adequate to 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 compared to the previous year's 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 continues in effect the action that decreased 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.
    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.
    AMS is committed to compliance with the Government Paperwork 
Elimination Act (GPEA), which requires Government agencies in general 
to provide the public the option of submitting information or 
transacting business electronically to the maximum extent possible.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    An interim final rule concerning this action was published in the 
Federal Register on March 13, 2006 (71 FR 12614). Copies of the rule 
were faxed to both olive handlers. Finally, the interim rule was made 
available through the Internet by USDA and the Office of the Federal 
Register. A 60-day comment period was provided for interested persons 
to respond to the interim final rule. The comment period ended on May 
12, 2006, and 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 herby found that this rule, as hereinafter 
set forth, will tend to effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 932

    Marketing agreements, Olives, Reporting and recordkeeping 
requirements.

PART 932--OLIVES GROWN IN CALIFORNIA

0
Accordingly, the interim final rule amending 7 CFR part 932 that was 
published at 71 FR 12614 on March 13, 2006, is adopted as a final rule 
without change.

    Dated: June 15, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-9724 Filed 6-20-06; 8:45 am]
BILLING CODE 3410-02-P