[Federal Register Volume 73, Number 160 (Monday, August 18, 2008)]
[Proposed Rules]
[Pages 48156-48159]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-19018]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 922

[Docket No. AMS-FV-08-0052; FV08-922-1 PR]


Apricots Grown in Designated Counties in Washington; Increased 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate established for 
the Washington Apricot Marketing Committee (Committee) for the 2008-09 
and subsequent fiscal periods from $1.50 to $2.00 per ton for 
Washington apricots. The Committee is responsible for local 
administration of the marketing order regulating the handling of 
apricots grown in designated counties in Washington. Assessments upon 
handlers of apricots are used by the Committee to fund reasonable and 
necessary expenses of the program. The fiscal period for the marketing 
order begins April 1 and ends March 31. The assessment rate would 
remain in effect indefinitely unless modified, suspended or terminated.

DATES: Comments must be received by September 2, 2008.

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ADDRESSES: Interested persons are invited to submit written comments 
regarding 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: Robert J. Curry or Gary D. Olson, 
Northwest Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW Third Avenue, 
suite 385, Portland, OR 97204; Telephone: (503) 326-2724; Fax: (503) 
326-7440; 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 Order 
No. 922 (7 CFR part 922), as amended, regulating the handling of 
apricots grown in designated counties in Washington, 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, apricot 
handlers in designated counties in Washington 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 Washington apricots beginning 
April 1, 2008, 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 2008-09 and subsequent fiscal periods from $1.50 to 
$2.00 per ton for Washington apricots handled under the order.
    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 handlers of apricots in designated counties 
in Washington. 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. Thus, 
all directly affected persons have an opportunity to participate and 
provide input.
    For the 2007-08 and subsequent fiscal periods, the Committee 
recommended, and the USDA approved, an assessment rate of $1.50 per ton 
of apricots handled. This rate continues 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 May 15, 2008, and unanimously recommended 
2008-09 expenditures of $7,093. In comparison, last year's budgeted 
expenditures were $6,743. In addition, the Committee recommended that 
the $1.50 per ton assessment rate be increased by $0.50 to $2.00 per 
ton of apricots handled. The Washington apricot production area 
experienced freezing weather in April this year that may have a 
significant impact on apricot production. As a result, the Committee 
has estimated a total fresh crop of only 3,650 tons for this season--
significantly less than the 6,620 tons of fresh prunes reported to the 
Committee by industry handlers last season. Due to this anticipated 
shortfall, the Committee recommended that the assessment rate be 
increased by $0.50 to help ensure that budgeted expenses are adequately 
covered.
    The major expenditures recommended by the Committee for the 2008-09 
fiscal period include $4,800 for the management fee, $1,000 for 
Committee travel, $100 for compliance, and $1,193 for equipment 
maintenance, insurance, bonds, and miscellaneous expenses. In 
comparison, major expenditures for the 2007-08 fiscal period included 
$4,800 for the management fee, $1,000 for travel, $500 for the annual 
financial audit, $100 for compliance, and $343 for equipment 
maintenance, insurance, bonds, and miscellaneous expenses.
    The assessment rate recommended by the Committee was derived by 
dividing the anticipated expenses of $7,093 by the projected 2008 3,650 
ton apricot production. Applying the $2.00 per ton assessment rate to 
this crop estimate should provide $7,300 in assessment income. Although 
the 3,650 ton crop estimate reflects the Committee's best current 
assessment of the damage the late-season freezing temperatures may have 
on production this season, Committee members expressed some concern 
that production could potentially end up even shorter. Because of the 
crop estimate uncertainty, the Committee felt the $2.00 per ton 
assessment rate is warranted even though the projected fiscal year-end 
reserve balance at this time is $8,173. Although this is slightly 
higher than the recommended budget, the reserve would still be within 
the order's limit of approximately one fiscal period's operational 
expenses.
    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 would be effective for an indefinite 
period, the Committee would 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 the Committee's meetings are available from the

[[Page 48158]]

Committee or USDA. The Committee's meetings are open to the public and 
interested persons may express their views at these meetings. USDA 
would evaluate the Committee's 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 2008-09 budget and those for subsequent fiscal periods 
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.
    There are approximately 300 apricot producers within the regulated 
production area and approximately 22 regulated handlers. Small 
agricultural producers are defined by the Small Business Administration 
(13 CFR 121.201) as those having annual receipts of less than $750,000, 
and small agricultural service firms are defined as those whose annual 
receipts are less than $6,500,000.
    The Washington Agricultural Statistics Service has prepared a 
report showing that the total 7,000 ton apricot utilization sold for an 
average of $1,120 per ton in 2007 with a total farm-gate value of 
approximately $7,827,000. Based on the number of producers in the 
production area (300), the average annual producer revenue from the 
sale of apricots in 2007 can thus be estimated at approximately 
$26,090. In addition, based on information from the Committee and 
USDA's Market News Service, 2007 f.o.b. prices ranged from $18.00 to 
$20.00 per 24-pound loose-pack container, and from $20.00 to $22.00 for 
2-layer tray pack containers. Approximately 40 percent of the 2007 
6,620 ton fresh pack-out was packed in 24-pound loose-pack containers 
while the remainder was packed in 2-layer tray-pack containers 
(weighing an average of about 20 pounds each). On the high end, this 
would have grossed the 22 apricot handlers approximately $13,151,700 in 
f.o.b. receipts for the 2007 crop--leaving average receipts for each 
handler well below the SBA's $6,500,000 threshold for small businesses. 
Therefore, the majority of producers and handlers of Washington 
apricots may be classified as small entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 2008-09 and subsequent 
fiscal periods from $1.50 to $2.00 per ton for apricots handled under 
the order's authority. The Committee also unanimously recommended 2008-
09 expenditures of $7,093. With a 2008-09 Washington apricot crop 
estimate of 3,650 tons, the Committee anticipates assessment income of 
about $7,300. Due to the sharply smaller crop expected this season, the 
Committee recommended the assessment rate increase to help ensure that 
budgeted expenses are adequately covered.
    Although there continues to be uncertainty this season regarding 
production totals due to the mid-spring freezing weather, income 
derived from handler assessments should adequately cover budgeted 
expenses. Because of the crop estimate uncertainty, the Committee felt 
the $2.00 per ton assessment rate is warranted even though the 
projected fiscal year-end reserve balance at this time is $8,173. 
Although this is slightly higher than the recommended budget, the 
reserve would still be within the order's limit of approximately one 
fiscal period's operational expenses.
    The major expenditures recommended by the Committee for the 2008-09 
fiscal period include $4,800 for the management fee, $1,000 for 
Committee travel, $100 for compliance, and $1,193 for equipment 
maintenance, insurance, bonds, and miscellaneous expenses. In 
comparison, major expenditures for the 2007-08 fiscal period included 
$4,800 for the management fee, $1,000 for travel, $500 for the annual 
financial audit, $100 for compliance, and $343 for equipment 
maintenance, insurance, bonds, and miscellaneous expenses.
    The Committee discussed alternatives to this recommended assessment 
increase. Leaving the assessment rate at the current $1.50 per ton was 
discussed, but not seriously considered since such a rate would not 
have earned adequate income and would have thus significantly depleted 
the Committee's reserves. Although a rate of assessment somewhat less 
than the recommended $2.00 per ton rate would have potentially covered 
the recommended expenses, the Committee chose the higher rate due to 
the uncertainty the members felt regarding the 3,650 ton crop estimate. 
The mid-April freeze experienced in the growing regions this year left 
doubt in some members' minds that the final pack-out this season will 
even reach the 3,650 ton estimate.
    A review of historical information and preliminary information 
pertaining to the upcoming crop year indicates that the producer price 
for the 2008-09 season could average about $1,000 per ton for fresh 
Washington apricots. Therefore, the estimated assessment revenue for 
the 2008-09 fiscal period as a percentage of total producer revenue is 
0.2 percent for Washington apricots.
    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 order.
    In addition, the Committee's meeting was widely publicized 
throughout the Washington apricot industry and all interested persons 
were invited to attend and participate in Committee deliberations on 
all issues. Like all Committee meetings, the May 15, 2008, meeting was 
a public meeting and all entities, both large and small, were able to 
express views on the issues. 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 Washington apricot 
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. Additionally, USDA 
has not identified any relevant Federal rules that duplicate, overlap, 
or conflict with this rule.
    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.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and order may be viewed at: http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide.

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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 2008-09 fiscal period began on April 1, 2008, and the 
order requires that the assessment rate for each fiscal period apply to 
all assessable apricots handled during such fiscal period; (2) the 
Washington apricot harvest and shipping season is expected to begin as 
early as the last week of June; (3) the Committee needs to have 
sufficient funds to pay its expenses, which are incurred on a 
continuous basis; and (4) handlers are aware of this action, which was 
recommended by the Committee at a public meeting and is similar to 
other assessment rate actions issued in past years.

List of Subjects in 7 CFR Part 922

    Apricots, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 922 is 
proposed to be amended as follows:

PART 922--APRICOTS GROWN IN DESIGNATED COUNTIES IN WASHINGTON

    1. The authority citation for 7 CFR part 922 continues to read as 
follows:

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

    2. Section 922.235 is revised to read as follows:


Sec.  922.235  Assessment rate.

    On or after April 1, 2008, an assessment rate of $2.00 per ton is 
established for the Washington Apricot Marketing Committee.

    Dated: August 12, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-19018 Filed 8-15-08; 8:45 am]
BILLING CODE 3410-02-P