[Federal Register Volume 74, Number 33 (Friday, February 20, 2009)]
[Rules and Regulations]
[Pages 7782-7785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-3596]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Doc. No. AMS-FV-08-0105; FV09-932-1 IFR]


Olives Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule increases the assessment rate established for the 
California Olive Committee (committee) for the 2009 and subsequent 
fiscal years from $15.60 to $28.63 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 February 21, 2009. Comments received by April 21, 
2009, 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 made available for public inspection in the Office of the Docket 
Clerk during regular business hours, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this rule 
will be included in the record and will be made available to the 
public. Please be advised that the identity of the individuals or 
entities submitting the comments will be made public on the Internet at 
the address provided above.

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:

[[Page 7783]]

[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 issued herein will be applicable to all assessable 
olives beginning on January 1, 2009, 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 there from. 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 increases the assessment rate established for the 
committee for the 2009 and subsequent fiscal years from $15.60 to 
$28.63 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 2008 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 10, 2008, and unanimously recommended 
2009 fiscal year expenditures of $1,482,349 and an assessment rate of 
$28.63 per ton of assessable olives. In comparison, last year's 
budgeted expenditures were $1,588,552. The assessment rate of $28.63 is 
$13.03 higher than the rate currently in effect. The committee 
recommended the higher assessment rate because the 2008-09 assessable 
olive receipts as reported by the California Agricultural Statistics 
Service (CASS) are only 49,067 tons, which compares to 108,059 tons in 
2007-08. A series of very high temperatures and a large crop in 2007 
contributed to a substantially smaller crop in 2008. The committee also 
plans to use available reserve funds to help meet its 2009 expenses.
    The major expenditures recommended by the committee for the 2009 
fiscal year include $495,000 for research, $627,800 for marketing 
activities, and $359,549 for administration. Budgeted expenditures for 
these items in 2008 were $500,000, $750,000, and $288,552, 
respectively. The 2009 marketing and research programs will be scaled 
back. Recommended increases in the administrative budget are due to 
additional costs associated with the anticipated hiring of a new 
Executive Director.
    The assessment rate recommended by the committee was derived by 
considering anticipated fiscal year expenses, actual olive tonnage 
received by handlers during the 2008-09 crop year, and additional 
pertinent factors. Actual assessable tonnage for the 2009 fiscal year 
is expected to be lower than the 2008-09 crop receipts of 49,067 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, should 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 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 would 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 2009 budget and those for 
subsequent fiscal 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) (5 U.S.C. 601-612), 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

[[Page 7784]]

unique in that they are brought about through group action of 
essentially small entities acting on their own behalf.
    There are approximately 1,000 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 $7,000,000.
    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 increases the assessment rate established for the 
committee and collected from handlers for the 2009 and subsequent 
fiscal years from $15.60 to $28.63 per ton of assessable olives. The 
committee unanimously recommended 2009 expenditures of $1,482,349 and 
an assessment rate of $28.63 per ton. The assessment rate of $28.63 is 
$13.03 higher than the 2008 rate. The higher assessment rate is 
necessary because assessable olive receipts for the 2008-09 crop year 
were reported by the CASS to be 49,067 tons, compared to 108,059 tons 
for the 2007-08 crop year. Actual assessable tonnage for the 2009 
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 $28.63 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 2009 fiscal year 
include $495,000 for research, $627,800 for marketing activities, and 
$359,549 for administration. Budgeted expenditures for these items in 
2008 were $500,000, $750,000, and $288,552, respectively. The 2009 
marketing and research programs will be scaled back.
    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 $28.63 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 2008-09 crop year was approximately $1,109.47 per ton for 
canning fruit and $380.71 per ton for limited-use sizes, leaving the 
balance as unusable cull fruit. Approximately 84 percent of the total 
tonnage of olives received is canning fruit sizes and 11 percent is 
limited use sizes, leaving the balance as unusable cull fruit. Grower 
revenue on 49,067 total tons of canning and limited-use sizes would be 
$49,283,177 given the current grower prices for those sizes. Therefore, 
with an assessment rate increased from $15.60 to $28.63, the estimated 
assessment revenue is expected to be almost 3 percent of grower 
revenue.
    This action increases 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 
will 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 
10, 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 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.
    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 2009 fiscal year began on January 1, 2009, 
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; (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; 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 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, 2009, an assessment rate of $28.63 per ton 
is established for California olives.


[[Page 7785]]


    Dated: February 13, 2009.
David R. Shipman,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. E9-3596 Filed 2-19-09; 8:45 am]
BILLING CODE 3410-02-P