[Federal Register Volume 77, Number 108 (Tuesday, June 5, 2012)]
[Proposed Rules]
[Pages 33104-33106]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-13526]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 77, No. 108 / Tuesday, June 5, 2012 / 
Proposed Rules  

[[Page 33104]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Doc. No. AMS-FV-11-0093; FV12-932-1 PR]


Olives Grown in California; 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 Olive Committee (Committee) for the 2012 and subsequent 
fiscal years from $16.61 to $31.32 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 begins January 1 and 
ends December 31. The assessment rate would remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by July 5, 2012.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order and Agreement Division, 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 document 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: Jerry L. Simmons, Marketing Specialist 
or Kurt J. Kimmel, Regional Manager, California Marketing Field Office, 
Marketing Order and Agreement Division, Fruit and Vegetable Programs, 
AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or Email: 
[email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Laurel May, Marketing Order and Agreement 
Division, 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 Email: [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 proposed herein would be applicable to all 
assessable olives beginning on January 1, 2012, and continue until 
amended, suspended, or terminated.
    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 2012 and subsequent fiscal years from $16.61 to 
$31.32 per ton of assessable olives.
    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 members of the Committee are producers and handlers of 
California olives. 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 2011 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 15, 2011, and unanimously recommended 
2012 expenditures of $1,197,291 and an assessment rate of $31.32 per 
ton of assessable olives. Olives are an alternate year bearing crop. 
Olive growers and handlers are accustomed to wide swings in crop yields 
and assessments from year to year. In comparison, last year's budgeted 
expenditures were $2,203,909. The assessment rate of $31.32 is $14.71 
higher than the rate currently in effect.
    The Committee recommended the higher assessment rate because of a 
substantial decrease in assessable olive volume for the 2012 fiscal 
year. The olive volume available for fiscal year 2011 as reported by 
the California Agricultural Statistics Service (CASS) is

[[Page 33105]]

26,944 tons, which compares to 167,000 tons reported for the 2010 
fiscal year. The reduced crop is due to olives being an alternate year 
bearing fruit. The Committee also plans to use available reserve funds 
to help meet its 2012 expenses.
    The major expenditures recommended by the Committee for the 2012 
fiscal year include $333,791 for research, $480,000 for marketing 
activities, $50,000 for inspection equipment development, and $333,500 
for administration. Budgeted expenses for these items in 2011 were 
$1,093,009, $700,000, $75,000 and $335,900, respectively.
    The assessment rate recommended by the Committee was derived by 
considering anticipated fiscal year expenses, actual olive tonnage 
received by handlers during the 2011 crop year, and additional 
pertinent factors. Actual assessable tonnage for the 2012 fiscal year 
is expected to be lower than the 2011 crop receipts of 167,000 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 interest income and funds from the 
Committee's authorized reserve would 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 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 in effect for an indefinite 
period, the Committee would 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 would 
be undertaken as necessary. The Committee's 2012 budget and those for 
subsequent fiscal 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 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 1000 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 industry and CASS, the average 
grower price for 2011 was approximately $798 per ton and total grower 
production was around 26,944 tons. Based on production, producer 
prices, and the total number of California olive producers, the average 
annual producer revenue is less than $750,000. Thus, the majority of 
olive producers may be classified as small entities. Both of the 
handlers may be classified as large entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 2012 and subsequent 
fiscal years from $16.61 to $31.32 per ton of assessable olives. The 
Committee unanimously recommended 2012 expenditures of $1,197,291 and 
an assessment rate of $31.32 per ton. The higher assessment rate is 
necessary because assessable olive receipts for the 2012 fiscal year 
were reported by the CASS to be 26,944 tons, compared to 167,000 tons 
for the 2011 fiscal year. Actual assessable tonnage for the 2012 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 derived from the $31.32 per ton assessment rate along with 
funds from the authorized reserve and interest income should be 
adequate to meet this year's expenses.
    The major expenditures recommended by the Committee for the 2012 
fiscal year include $333,791 for research, $480,000 for marketing 
activities, $50,000 for inspection equipment development, and $333,500 
for administration. Budgeted expenses for these items in 2011 were 
$1,093,009, $700,000, $75,000 and $335,900, respectively. The Committee 
recommended decreases in all major expense categories due to the huge 
decrease in assessable crop volume as reported by the CASS.
    Prior to arriving at this budget, the Committee considered 
information from various sources, such as the Committee's Executive, 
Marketing, Inspection, and Research Subcommittees. Alternate 
expenditure levels were discussed by these groups, based upon the 
relative value of various projects to the olive industry and the 
reduced olive production. The assessment rate of $31.32 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 and preliminary information 
pertaining to the upcoming fiscal year indicates that grower price 
could range between approximately $1000 per ton and $1,200 per ton. 
Therefore, the estimated assessment revenue for the 2012 fiscal year as 
a percentage of total grower revenue could range between 2.6 and 3.1 
percent.
    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's 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 15, 2011, 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 
proposed rule, including the regulatory and informational impacts of 
this action on small businesses.
    In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. 
chapter 35), the order's information collection requirements have been 
previously approved by the Office of

[[Page 33106]]

Management and Budget (OMB) and assigned OMB No. 0581-0178. No changes 
in those requirements as a result of this action are necessary. Should 
any changes become necessary, they would be submitted to OMB for 
approval.
    This proposed rule would impose 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: 
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about 
the compliance guide should be sent to Laurel May 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 2012 fiscal year began on January 1, 2012, 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 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 932

    Olives, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 932 is 
proposed to be amended as follows:

PART 932--OLIVES GROWN IN CALIFORNIA

    1. The authority citation for 7 CFR part 932 continues to read as 
follows:

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

    2. Section 932.230 is revised to read as follows:


Sec.  932.230  Assessment rate.

    On and after January 1, 2012, an assessment rate of $31.32 per ton 
is established for California olives.

    Dated: May 30, 2012.
David R. Shipman,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2012-13526 Filed 6-4-12; 8:45 am]
BILLING CODE 3410-02-P