[Federal Register Volume 74, Number 166 (Friday, August 28, 2009)]
[Proposed Rules]
[Pages 44304-44306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-20769]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 987

[Docket No. AMS-FV-09-0045; FV09-987-2 PR]


Domestic Dates Produced or Packed in Riverside County, CA; 
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 California Date Administrative Committee (Committee) for the 2009-
10 and subsequent crop years from $0.60 to $0.75 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 
would remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Comments must be received by September 28, 2009.

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. 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: 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 proposed herein would be applicable to all assessable dates 
beginning October 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 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 2009-10 and

[[Page 44305]]

subsequent crop years from $0.60 to $0.75 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 2008-09 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 June 9, 2009, and unanimously recommended 
2009-10 expenditures of $200,000 and an assessment rate of $0.75 per 
hundredweight of California dates. In comparison, last year's budgeted 
expenditures were $176,384. The assessment rate of $0.75 is $0.15 
higher than the rate currently in effect. The Committee recommended a 
higher assessment rate to cover increased expenses including increased 
marketing and promotion efforts, and nutritional research. Income 
generated through the higher assessment rate combined with reserve 
funds should be sufficient to cover anticipated 2009-10 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 higher expenses, the reserve at the end 
of the 2009-10 crop year is not projected to exceed this limit.
    Income from sales of cull dates are deposited in a surplus account 
for subsequent use by the Committee to cover 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 
2009-10 crop year, the Committee estimated that $1,500 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 2009-10 
crop year include $60,000 for general and administrative programs, 
$97,000 for promotional programs, and $28,000 for marketing and media 
consulting. The Committee also budgeted $15,000 to conduct nutritional 
research.
    By comparison, expenditures recommended by the Committee for the 
2008-09 crop year include $66,384 for general and administrative 
programs, $82,000 for promotional programs, $28,000 for marketing and 
media consulting.
    The assessment rate of $0.75 per hundredweight of assessable dates 
was derived by applying the following formula where:

A= 2008-09 estimated reserve on 09/30/09 ($65,566);
B= 2009-10 estimated reserve on 09/30/10 ($39,566);
C= 2009-10 expenses ($200,000);
D= Cull Surplus Fund ($1,500);
F= 2009-10 expected shipments (23,000,000 pounds).
[(C-A+B-D)/F] x 100.

    The assessment rate proposed in this rule 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 proposed assessment rate would be in effect for an 
indefinite period, the Committee would 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 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 2009-10 budget and those 
for subsequent crop 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) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) 
has considered the economic impact of this action 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 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 $7,000,000.
    According to the National Agricultural Statistics Service (NASS), 
data for the most-recently completed crop year, 2008, indicates that 
about 3.34 tons, or 6,680 pounds, of dates were produced per acre. The 
2008 grower price published by NASS was $1,470 per ton, or $.735 per 
pound. Thus, the value of date production in 2008 averaged about $4,909 
per acre (6,680 pounds per acre times $.735 per pound). At that average 
price, a producer would have to have over 152 acres to receive an 
annual income from dates of $750,000 ($750,000 divided by $4,909 per 
acre equals 152.7 acres).
    According to committee staff, the majority of California date 
producers farm less than 152 acres. Thus, it can be concluded that the 
majority of date producers could be considered small entities. 
According to data from the committee, the majority of handlers of 
California dates may also be considered small entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 2009-10 and subsequent 
crop years from $0.60 to $0.75 per hundredweight of dates handled. The 
Committee unanimously recommended 2009-10 expenditures of $200,000 and 
an assessment rate of $0.75 per hundredweight of dates. The proposed 
assessment rate of $0.75 is $0.15 higher than the 2008-09 rate 
currently in effect. The quantity of assessable dates

[[Page 44306]]

for the 2009-10 crop year is estimated at 23,000,000 pounds. Thus, the 
$0.75 rate should provide $172,500 in assessment income and, with 
reserve funds of $65,566 and the $1,500 contribution from the surplus 
program, will be adequate to meet the 2009-10 crop year expenses.
    The major expenditures recommended by the Committee for the 2009-10 
crop year include $60,000 for general and administrative programs, 
$97,000 for promotional programs, and $28,000 for marketing and media 
consulting. The Committee also budgeted $15,000 as a contingency 
reserve for other marketing and promotion projects that it may wish to 
support later in the year.
    The Committee reviewed and unanimously recommended 2009-10 crop 
year expenditures of $200,000. 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 the Committee ultimately 
decided that the recommended levels were reasonable to properly 
administer the order. The assessment rate of $0.75 per hundredweight of 
dates was then derived, based upon the Committee's estimates of the 
incoming reserve, income, and anticipated expenses.
    As previously noted, according to the NASS data, the season average 
grower price for 2008 crop dates is projected at $1,470 per ton, or 
$73.50 per hundredweight. No official NASS estimate is available yet 
for 2009. The average grower price for the period of 2005-08 is 
$1,833.00 per ton, or $91.65 per hundredweight.
    To calculate the percentage of grower revenue represented by the 
assessment rate for 2009, the assessment rate of $0.75 (per 
hundredweight) divided by the estimated average grower price. This 
results in estimated assessment revenue for 2008 crop dates as a 
percentage of grower revenue of 1.02 percent ($0.75 divided by $73.50 
per hundredweight). As previously mentioned, NASS data for 2009 is not 
yet available.
    However, applying the same calculations above using the average 
grower price for the period of 2005-08 would result in estimated 
assessment revenue as percentage total grower revenue of 0.82 percent 
for the 2008-09 crop year ($0.75 divided by $91.65 per hundredweight). 
Thus, the assessment revenue should be less than 1 percent of estimated 
grower revenue in 2009.
    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 date industry and all interested 
persons were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the June 9, 
2009, 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 rule, including 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 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.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: (1) The 2009-10 crop year begins on October 1, 2009, and the 
marketing order requires that the rate of assessment for each crop year 
apply to all assessable dates handled during such crop year; (2) the 
Committee needs to have sufficient funds to pay its expenses which are 
incurred on a continuous basis; and (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.

List of Subjects in 7 CFR Part 987

    Dates, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 987 is 
amended as follows:

PART 997--DATES PRODUCED OR PACKED IN RIVERSIDE COUNTY, CALIFORNIA

    1. The authority citation for 7 CFR part 987 continues to read as 
follows:

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

    2. Section 987.339 is revised to read as follows:


Sec.  987.339  Assessment rate.

    On and after October 1, 2009, an assessment rate of $0.75 per 
hundredweight is established for California dates.

    Dated: August 24, 2009.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. E9-20769 Filed 8-27-09; 8:45 am]
BILLING CODE 3410-02-P