[Federal Register Volume 73, Number 166 (Tuesday, August 26, 2008)]
[Rules and Regulations]
[Pages 50188-50191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-19697]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 987

[Docket No. AMS-FV-08-0056; FV08-987-1 IFR]


Domestic Dates Produced or Packed in Riverside County, CA; 
Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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[[Page 50189]]

SUMMARY: This rule decreases the assessment rate established for the 
California Date Administrative Committee (Committee) for the 2008-09 
and subsequent crop years from $0.75 to $0.60 per hundredweight of 
dates handled. The Committee locally administers the marketing order 
which regulates the handling of dates grown 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 
crop year begins October 1 and ends September 30. The assessment rate 
will remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective August 27, 2008. Comments received by October 27, 
2008, 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 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: Terry Vawter, Senior 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 Order 
No. 987, as amended (7 CFR part 987), regulating the handling of dates 
grown or packed in Riverside County, 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 
date 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 applicable to all assessable dates 
beginning October 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 decreases the assessment rate established for the 
Committee for the 2008-09 and subsequent crop years from $0.75 per to 
$0.60 per hundredweight of dates.
    The California date 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 members of the Committee are producers and 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 in a public meeting. Thus, 
all directly affected persons have an opportunity to participate and 
provide input.
    For the 2007-08 and subsequent crop years, the Committee 
recommended, and USDA approved, an assessment rate that would 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 May 29, 2008, and unanimously recommended 
2008-09 expenditures of $176,384 and an assessment rate of $0.60 per 
hundredweight of California dates. In comparison, last year's budgeted 
expenditures were $209,182. The assessment rate of $0.60 is $0.15 lower 
than the rate currently in effect. The Committee recommended a lower 
assessment rate because the 2007 crop was larger than expected, 
resulting in excess assessment income and thus a larger reserve. Income 
generated through the lower assessment rate combined with reserve funds 
should be sufficient to cover anticipated 2008-09 expenses.
    Section 987.72(c) states that the reserve may not exceed 50 percent 
of the average of expenses incurred during the most recent five 
preceding crop years. With the larger 2007 crop, the reserve at the end 
of the 2007-08 crop year is projected to exceed this limit. Excess 
assessment funds will be refunded to handlers to reduce the reserve and 
bring it in line with order requirements.
    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 2008-09 crop year, the Committee estimated that $4,500 from the 
surplus account would be needed to temporarily defray expenses incurred 
in disposing of surplus dates.
    The major expenditures recommended by the Committee for the 2008-09 
crop year include $66,384 for general and administrative programs, 
$82,000 for promotional programs, and $28,000 for marketing and media 
consulting. The Committee also budgeted $10,000 as a contingency 
reserve for other marketing and promotion projects that it may wish to

[[Page 50190]]

support later in the year. By comparison, expenditures recommended by 
the Committee for the 2007-08 crop year include $87,312 for general and 
administrative programs, $67,870 for promotional programs, $24,000 for 
marketing and media consulting, $5,000 for moving expenses, and $5,000 
for updating marketing materials. The Committee budgeted $20,000 as a 
contingency reserve for other marketing and promotion projects.
    The assessment rate of $0.60 per hundredweight of assessable dates 
was derived by applying the following formula where:
    A= 2007-08 estimated reserve on 09/30/08 ($134,757);
    B= 2008-09 estimated reserve on 10/01/09 ($78,996);
    C= 2008-09 expenses ($176,384);
    D= Cull Surplus Fund ($4,500);
    E= Assessment Refund ($15,877); and
    F= 2008-09 expected shipments (22,000,000 pounds).
    [(B-A+C-D+E)/F] *100.
    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 
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 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 2008-09 budget and those 
for subsequent crop years will 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 85 producers of dates in the production 
area and 9 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 $6,500,000.
    According to the National Agricultural Statistics Service (NASS), 
data for the most recently completed crop year (2006) shows that about 
3.12 tons, or 6,240 pounds, of dates were produced per acre. The 2006 
grower price published by the NASS was $1,320 per ton, or $.66 per 
pound. Thus, the value of date production per acre in 2006 averaged 
about $4,118 (6,240 pounds times $.66 per pound). At that average 
price, a producer would have to farm over 182 acres to receive an 
annual income from dates of $750,000 ($750,000 divided by $4,118 per 
acre equals 182 acres). According to Committee staff, the majority of 
California date producers farm less than 182 acres. Thus, it can be 
concluded that the majority of date producers could be considered small 
entities. The majority of handlers of California dates may also be 
considered small entities.
    This rule decreases the assessment rate established for the 
Committee and collected from handlers for the 2008-09 and subsequent 
crop years from $0.75 to $0.60 per hundredweight of dates handled. The 
Committee unanimously recommended 2008-09 expenditures of $176,384 and 
an assessment rate of $0.60 per hundredweight of dates, which is $0.15 
lower than the 2007-08 rate, currently in effect. The quantity of 
assessable dates for the 2008-09 crop year is estimated at 22,000,000 
pounds. Thus, the $0.60 rate should provide $132,000 in assessment 
income and, with reserve funds of $39,884 and the $4,500 contribution 
from the surplus program, will be adequate to meet the 2008-09 crop 
year expenses.
    The major expenditures recommended by the Committee for the 2008-09 
crop year include $66,384 for general and administrative programs, 
$82,000 for promotional programs, and $28,000 for marketing and media 
consulting. The Committee also budgeted $10,000 as a contingency 
reserve for other marketing and promotion projects that it may wish to 
support later in the year.
    The Committee recommended a lower assessment rate because the 2007 
crop was larger than expected, resulting in excess assessment income 
and thus a larger reserve. Income generated through the lower 
assessment rate combined with reserve funds should be sufficient to 
cover anticipated 2008-09 expenses.
    The Committee reviewed and unanimously recommended 2008-09 crop 
year expenditures of $176,384. Prior to arriving at this budget, the 
Committee considered information from various sources, such as the 
Committee's Marketing Subcommittee. Alternative expenditure levels were 
an option available to the Committee, but given the extra assessment 
income generated from the larger-than-expected 2007-08 crop, it was 
ultimately determined that a $176,384 budget would be appropriate. The 
assessment rate of $0.60 per hundredweight of dates was then derived, 
based upon the Committee's estimates of the incoming reserve, income, 
and anticipated expenses.
    According to the NASS, the season average grower price for 2007 
crop dates is projected at $1,800 per ton, or $90 per hundredweight. No 
official NASS estimate is available yet for 2008. The average grower 
price for 2005-07 is $1,517 per ton, or $76 per hundredweight.
    To calculate the percentage of grower revenue represented by the 
assessment rate for 2007, the assessment rate of $0.75 (per 
hundredweight) is divided by the estimated average grower price. This 
results in estimated assessment revenue for the 2007-08 crop year as a 
percentage of grower revenue of .83 percent ($0.75 divided by $90 per 
hundredweight). As previously mentioned, NASS data for 2008 is not yet 
available. However, applying the same calculations above using the 
average grower price for 2005-07 would result in estimated assessment 
revenue as a percentage total grower revenue of .79 percent for the 
2008-09 crop year ($0.60 divided by $76 per hundredweight). Thus, the 
assessment revenue should be well below 1 percent of estimated grower 
revenue in 2008.
    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 date industry and all interested 
persons were invited to attend the meeting and

[[Page 50191]]

participate in Committee deliberations on all issues. Like all 
Committee meetings, the May 29, 2008, 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 comments on 
this interim final rule, including 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 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.
    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/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide. 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 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 2008-09 crop year begins on October 1, 2008, 
and the marketing order requires that the rate of assessment for each 
crop year applies to all assessable dates handled during such crop 
year; (2) the action decreases the assessment rate for assessable dates 
beginning with the 2008-09 crop year; (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; and (4) this interim final rule provides a 60-day comment 
period, and all comments timely received will be considered prior to 
finalization of this rule.

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--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, 2008, an assessment rate of $0.60 per 
hundredweight is established for California dates.

    Dated: August 20, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-19697 Filed 8-25-08; 8:45 am]
BILLING CODE 3410-02-P