[Federal Register Volume 74, Number 54 (Monday, March 23, 2009)]
[Rules and Regulations]
[Pages 12051-12053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-6249]



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  Federal Register / Vol. 74, No. 54 / Monday, March 23, 2009 / Rules 
and Regulations  

[[Page 12051]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Docket No. AMS-FV-08-0095; FV09-920-1 FIR]


Kiwifruit Grown in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule which decreased the 
assessment rate established for the Kiwifruit Administrative Committee 
(Committee) for the 2008-09 and subsequent fiscal periods from $0.045 
to $0.035 per 9-kilo volume-fill container or equivalent of kiwifruit. 
The Committee locally administers the marketing order which regulates 
the handling of kiwifruit grown in California. Assessments upon 
kiwifruit handlers are used by the Committee to fund reasonable and 
necessary expenses of the program. The fiscal period begins on August 1 
and ends July 31. The assessment rate will remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Effective Date: April 22, 2009.

FOR FURTHER INFORMATION CONTACT: Debbie Wray, 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. 920, as amended (7 CFR part 920), regulating the handling of 
kiwifruit 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 
kiwifruit 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 
kiwifruit beginning on August 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 continues in effect the action that decreased the 
assessment rate established for the Committee for the 2008-09 and 
subsequent fiscal periods from $0.045 to $0.035 per 9-kilo volume-fill 
container or equivalent of kiwifruit.
    The California kiwifruit 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 of California 
kiwifruit. They are familiar with the Committee's needs and 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 2005-06 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
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 October 14, 2008, and unanimously recommended 
2008-09 expenditures of $76,492 and an assessment rate of $0.035 per 9-
kilo volume-fill container or equivalent of kiwifruit. In comparison, 
last year's budgeted expenditures were $99,302. The assessment rate of 
$0.035 per 9-kilo volume-fill container or equivalent is $0.010 per 9-
kilo volume-fill container or equivalent less than the rate previously 
in effect. The decreased assessment rate is primarily due to a decrease 
in management expenditures for the 2008-09 fiscal year.
    The following table compares major budget expenditures recommended 
by the Committee for the 2007-08 and 2008-09 fiscal periods:

[[Page 12052]]



------------------------------------------------------------------------
        Budget expense categories             2007-08         2008-09
------------------------------------------------------------------------
Staff Salaries/Management...............         $65,150         $56,700
Financial Management Services...........          12,000           1,000
Audit Expense...........................           5,000           3,500
Vehicle Maintenance/Insurance...........           3,180  ..............
Travel..................................           3,300           3,500
Office Expenses.........................           2,830           4,500
------------------------------------------------------------------------

    The assessment rate recommended by the Committee was derived by 
using the following formula: Anticipated 2008-09 expenses ($76,492), 
minus the difference between the 2008 beginning reserve ($62,647) and 
the desired 2009 ending reserve ($54,311), divided by the total 
estimated 2008-09 shipments (1,944,444 9-kilo volume-fill containers). 
This formula results in the assessment rate of $0.035 per 9-kilo 
volume-fill container or equivalent. As mentioned earlier, kiwifruit 
shipments for the year are estimated at 1,944,444 9-kilo volume-fill 
containers which should provide $68,056 in assessment income. An 
additional $100 in penalty and interest income is also anticipated, 
bringing the total projected 2008-09 revenue to $68,156. Income 
generated through this rate, plus interest income and reserve funds, 
will provide sufficient funds to meet the anticipated expenses of 
$76,492 and should result in a July 2009 ending reserve of $54,311 
which is within the maximum reserve of approximately one fiscal year's 
expenses permitted by the order (Sec.  920.42).
    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 period 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 fiscal periods will be reviewed and, as appropriate, 
approved by USDA.

Final 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 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.
    There are approximately 31 handlers of California kiwifruit subject 
to regulation under the marketing order and approximately 220 growers 
in the production area. Small agricultural service firms are defined by 
the Small Business Administration (SBA) (13 CFR 121.201) as those 
having annual receipts of less than $7,000,000, and small agricultural 
producers are defined as those having annual receipts of less than 
$750,000. None of the 31 handlers subject to regulation have annual 
kiwifruit sales of $7,000,000. Dividing average crop value for 2007-08 
reported by the National Agricultural Statistics Service (NASS) of 
$22,517,000 by the number of producers (220) yields an average annual 
producer revenue estimate of about $102,350, which is well below the 
SBA threshold of $750,000. Based on the foregoing, it may be concluded 
that all kiwifruit handlers and the majority of producers may be 
classified as small entities.
    This rule continues in effect the action that decreased the 
assessment rate established for the Committee and collected from 
handlers for the 2008-09 and subsequent fiscal periods from $0.045 to 
$0.035 per 9-kilo volume-fill container or equivalent of kiwifruit. The 
Committee unanimously recommended 2008-09 expenditures of $76,492 and 
an assessment rate of $0.035 per 9-kilo volume-fill container or 
equivalent of kiwifruit. The assessment rate of $0.035 is $0.010 lower 
than the 2007-08 rate. The quantity of assessable kiwifruit for the 
2008-09 fiscal period is estimated at 1,944,444 9-kilo volume-fill 
containers or equivalent of kiwifruit. Thus, the rate should provide 
$68,056 in assessment income. Income derived from handler assessments, 
along with penalty and interest income and funds from the Committee's 
authorized reserve, will be adequate to cover budgeted expenses.
    The following table compares major budget expenditures recommended 
by the Committee for the 2007-08 and 2008-09 fiscal years:

------------------------------------------------------------------------
        Budget expense categories             2007-08         2008-09
------------------------------------------------------------------------
Staff Salaries/Management...............         $65,150         $56,700
Financial Management Services...........          12,000           1,000
Audit Expense...........................           5,000           3,500
Vehicle Maintenance/Insurance...........           3,180  ..............
Travel..................................           3,300           3,500
Office Expenses.........................           2,830           4,500
------------------------------------------------------------------------

    The Committee reviewed and unanimously recommended 2008-09 
expenditures of $76,492 which included a reduction in management 
expenses. Prior to arriving at this budget, the Committee considered 
alternative expenditure levels, but ultimately decided that the 
recommended levels were reasonable to properly administer the order. 
The assessment rate recommended by the Committee was derived by using 
the following formula:

[[Page 12053]]

Anticipated 2008-09 expenses ($76,492), minus the difference between 
the 2008 beginning reserve ($62,647) and the desired 2009 ending 
reserve ($54,311), divided by the total estimated 2008-09 shipments 
(1,944,444 9-kilo volume-fill containers). This formula results in the 
assessment rate of $0.035 per 9-kilo volume-fill container or 
equivalent. As mentioned earlier, kiwifruit shipments for the year are 
estimated at 1,944,444 9-kilo volume-fill containers which should 
provide $68,056 in assessment income. An additional $100 in penalty and 
interest income is also anticipated, bringing the total projected 2008-
09 revenue to $68,156. Income generated through this rate, plus 
interest income and reserve funds, will provide sufficient funds to 
meet the anticipated expenses of $76,492 and should result in a July 
2009 ending reserve of $54,311 which is within the maximum reserve of 
approximately one fiscal year's expenses permitted by the order (Sec.  
920.42).
    According to NASS, the season average grower price for years 2006 
and 2007 were $911 and $950 per ton, respectively. These prices provide 
a range within which the 2008-09 season average grower price could 
fall. Dividing these average grower prices by 2,000 pounds per ton 
provides a price per pound range of $0.46 to $0.48. Multiplying these 
per-pound prices by 19.8 pounds (the weight of a 9-kilo volume-fill 
container) yields a 2008-09 price range estimate of $9.11 to $9.50 per 
9-kilo volume-fill container of assessable kiwifruit.
    To calculate the percentage of grower revenue represented by the 
assessment rate, the assessment rate of $0.035 per 9-kilo volume-fill 
container is divided by the low and high estimates of the price range. 
The estimated assessment revenue for the 2008-09 fiscal year as a 
percentage of total grower revenue would thus likely range between 
0.368 and 0.384 percent.
    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 
kiwifruit industry and all interested persons were invited to attend 
the meeting and participate in Committee deliberations on all issues. 
Like all Committee meetings, the October 14, 2008, 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 kiwifruit 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. In addition, as 
noted in the initial regulatory flexibility analysis, 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.
    An interim final rule concerning this action was published in the 
Federal Register on December 12, 2008 (73 FR 75537). Copies of that 
rule were also mailed or sent via facsimile to all kiwifruit handlers. 
Finally, the interim final 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 February 10, 2009, 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/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.

List of Subjects in 7 CFR Part 920

    Kiwifruit, Marketing agreements, Reporting and recordkeeping 
requirements.

PART 920--KIWIFRUIT GROWN IN CALIFORNIA

0
Accordingly, the interim final rule amending 7 CFR part 920, which was 
published at 73 FR 75537 on December 12, 2008, is adopted as a final 
rule without change.

    Dated: March 18, 2009.
Craig Morris,
Acting Associate Administrator.
 [FR Doc. E9-6249 Filed 3-20-09; 8:45 am]
BILLING CODE 3410-02-P