[Federal Register Volume 72, Number 44 (Wednesday, March 7, 2007)]
[Proposed Rules]
[Pages 10091-10093]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-3936]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 72, No. 44 / Wednesday, March 7, 2007 / 
Proposed Rules  

[[Page 10091]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. AMS-FV-06-0225; FV07-932-1 PR]


Olives Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule proposes an increase in the assessment rate 
established for the California Olive Committee (committee) for the 2007 
and subsequent fiscal years from $11.03 to $47.84 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 would remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by March 22, 2007.

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 Internet: http://www.regulations.gov. 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.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Jennifer R. Garcia, Marketing 
Specialist, or Kurt J. Kimmel, Regional Manager, California Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 
487-5906; or E-mail: [email protected] or [email protected].
    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 proposed herein would be applicable to all 
assessable olives beginning on January 1, 2007, 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 established for the 
committee for the 2007 and subsequent fiscal years from $11.03 to 
$47.84 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 2006 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 12, 2006, and unanimously recommended 
2007 fiscal year expenditures of $950,396 and an assessment rate of 
$47.84 per ton of assessable olives. In comparison, the budgeted 
expenditures for fiscal year 2006 were $1,301,121. The assessment rate 
of $47.84 is $36.81 higher than the rate currently in effect. The 
committee recommended the higher assessment rate because the 2006-07 
assessable olive receipts as reported by the California Agricultural 
Statistics Service (CASS) are only 16,270 tons, which compares to 
114,761 tons in

[[Page 10092]]

2005-06. Unusual weather conditions, including a wet winter and very 
hot summer, contributed to a substantially smaller crop. The committee 
also plans to use available reserve funds to help meet its 2007 
expenses.
    The major expenditures recommended by the committee for the 2007 
fiscal year include $365,775 for research, $332,450 for marketing 
activities, and $252,171 for administration. Budgeted expenditures for 
these items in 2006 were $210,000, $800,700, and $290,421, 
respectively. The committee recommended a larger 2007 research budget 
so it can continue its ongoing olive fly research and research to 
develop a mechanical olive harvesting method. The 2007 marketing 
program would be scaled back. Recommended decreases in the 
administrative budget are due mainly to tighter budgeting in several 
areas.
    The assessment rate recommended by the committee was derived by 
considering anticipated fiscal year expenses, actual olive tonnage 
received by handlers during the 2006-07 crop year, and additional 
pertinent factors. Actual assessable tonnage for the 2007 fiscal year 
is expected to be lower than the 2006-07 crop receipts of 16,270 tons 
reported by the CASS because some olives may be diverted by handlers to 
uses that are exempt from marketing order requirements. Income derived 
from handler assessments, along with funds from the committee's 
authorized reserve and interest income, would be adequate to cover 
budgeted expenses. Funds in the reserve would be kept within the 
maximum permitted by the order of approximately one fiscal year's 
expenses (Sec.  932.40).
    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 is effective for an indefinite 
period, the committee would 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 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 2007 budget and those for 
subsequent fiscal years 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 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 $6,500,000.
    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 would increase the assessment rate established for the 
committee and collected from handlers for the 2007 and subsequent 
fiscal years from $11.03 to $47.84 per ton of assessable olives. The 
committee unanimously recommended 2007 expenditures of $950,396 and an 
assessment rate of $47.84 per ton. The proposed assessment rate of 
$47.84 is $36.81 higher than the 2006 rate. The higher assessment rate 
is necessary because assessable olive receipts for the 2006-07 crop 
year were reported by the CASS to be 16,270 tons, compared to 114,761 
tons for the 2005-06 crop year. Actual assessable tonnage for the 2007 
fiscal year is expected to be lower because some of the receipts may be 
diverted by handlers to exempt outlets on which assessments are not 
paid.
    Income generated from the $47.84 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 would be 
kept within the maximum permitted by the order of about one fiscal 
year's expenses (Sec.  932.40).
    Expenditures recommended by the committee for the 2007 fiscal year 
include $365,775 for research, $332,450 for marketing activities, and 
$252,171 for administration. Budgeted expenses for these items in 2006 
were $210,000, $800,700, and $290,421 respectively. The committee 
recommended a larger 2007 research budget so it can continue its olive 
fly research projects and research to develop a mechanical olive 
harvesting method. The 2007 marketing program would be scaled back. 
Recommended decreases in the administrative budget are due mainly to 
tighter budgeting in several areas.
    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 
reduced olive production. The assessment rate of $47.84 per ton of 
assessable olives was derived by considering anticipated expenses, the 
volume of assessable olives and additional pertinent factors.
    A review of historical information indicates that the grower price 
for the 2006-07 crop year was approximately $960.57 per ton for canning 
fruit and $344.56 per ton for limited-use sizes, leaving the balance as 
unusable cull fruit. Approximately 87 percent of a ton of olives are 
canning fruit sizes and 9 percent are limited use sizes, leaving the 
balance as unusable cull fruit. Grower revenue on 16,270 total tons of 
canning and limited-use sizes would be $14,704,092 given the current 
grower prices for those sizes. Therefore, with an assessment rate 
increased from $11.03 to $47.84, the estimated assessment revenue is 
expected to be approximately 5 percent of grower revenue.
    This action would 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 
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 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 
12, 2006, meeting was a public meeting and all entities, both large and 
small, were able

[[Page 10093]]

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 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.
    The AMS is committed to complying with the E-Government Act, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.
    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 15-day comment period is provided to allow interested persons to 
respond to this proposed rule. Fifteen days is deemed appropriate 
because: (1) The 2007 fiscal year began on January 1, 2007, 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 and unanimously 
recommended at a public meeting, 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.

    For the reasons set forth in the preamble, 7 CFR part 932 is 
proposed to be amended as follows:

PART 932--OLIVES GROWN IN CALIFORNIA

    1. The authority citation for 7 CFR part 932 continues to read as 
follows:

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

    2. Section 932.230 is revised to read as follows:


Sec.  932.230  Assessment rate.

    On and after January 1, 2007, an assessment rate of $47.84 per ton 
is established for California olives.

    Dated: March 1, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
 [FR Doc. E7-3936 Filed 3-6-07; 8:45 am]
BILLING CODE 3410-02-P