[Federal Register Volume 80, Number 126 (Wednesday, July 1, 2015)]
[Rules and Regulations]
[Pages 37533-37535]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-16176]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Doc. No. AMS-FV-14-0105; FV15-932-1 FR]


Olives Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation from the California 
Olive Committee (committee) for an increase of the assessment rate 
established for the 2015 and subsequent fiscal years from $15.21 to 
$26.00 per assessable ton of olives handled. The committee locally 
administers the marketing order and is comprised of producers and 
handlers 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 will remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Effective July 2, 2015.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, Senior Marketing 
Specialist or Martin Engeler, Regional Manager, California Marketing 
Field Office, Marketing Order and Agreement Division, Fruit and 
Vegetable Program, 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 Jeffrey Smutny, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, 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 Orders 12866, 13563, and 13175.
    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 issued herein will be applicable to all assessable 
olives beginning on January 1, 2015, 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 increases the assessment rate established for the 
committee for the 2015 and subsequent fiscal years from $15.21 to 
$26.00 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 2014 and subsequent fiscal years, the committee 
recommended, and USDA approved, an assessment rate that

[[Page 37534]]

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 9, 2014, and unanimously recommended 
2015 fiscal year expenditures of $1,374,072, and an assessment rate of 
$26.00 per ton of assessable olives. Olives are an alternate-bearing 
crop: A large crop followed by a smaller crop. Olive producers and 
handlers are accustomed to wide swings in crop yields, which 
necessarily result in fluctuations in the assessment rate from year to 
year. In comparison, last year's budgeted expenditures were $1,262,460. 
The assessment rate of $26.00 is $10.79 higher than the rate currently 
in effect.
    The committee recommended the higher assessment rate because of a 
substantial decrease in assessable olive tonnage for the 2014 crop 
year. The olive tonnage available for the 2014 crop year was less than 
40,000 tons, which compares to the 91,000 tons reported for the 2013 
crop year, as reported by the California Agricultural Statistics 
Service (CASS).
    The reduced crop is due to olives being an alternate-bearing fruit. 
The 2014 crop was what is called the ``off'' crop--the smaller of the 
two bearing-year crops.
    In addition to the funds from handler assessments, the committee 
also plans to use available reserve funds to help meet its 2015 fiscal 
year expenses.
    The major expenditures recommended by the committee for the 2015 
fiscal year include $259,231 for research, $450,000 for marketing 
activities, $122,000 for inspection equipment and electronic reporting 
development, and $393,500 for administration. The major expenditures 
for the 2014 fiscal year included $312,560 for research, $565,600 for 
marketing activities, $37,800 for inspection equipment and electronic 
reporting development, and $346,500 for administration.
    Overall 2015 expenditures include an increase in inspection 
equipment and electronic reporting development expenses due to the need 
to purchase, test, install, and link new sizers to the electronic 
reporting system. Additionally, the research budget contains a 
contingency of $41,000 for new opportunities that may arise during the 
fiscal year, and the administrative budget includes a $31,000 
contingency for unforeseen issues.
    The assessment rate recommended by the committee resulted from 
consideration of anticipated fiscal year expenses, actual olive tonnage 
received by handlers during the 2014 crop year, and additional 
pertinent information. As reported by CASS, actual assessable tonnage 
for the 2014 crop year is under 40,000 tons or less than half of the 
91,000 assessable tons in the 2013 crop year, which is a result of the 
alternate-bearing characteristics of olives.
    Income derived from handler assessments, along with interest income 
and funds from the committee's authorized reserve will be adequate to 
cover budgeted expenses. Funds in the reserve will 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 will be in effect 
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 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 2015 fiscal 
year budget and those for subsequent fiscal years 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 
businesses 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 1,000 
producers of olives in the production area and 2 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 as those whose annual receipts are less than $7,000,000 (13 CFR 
121.210).
    Based upon information from the industry and CASS, the average 
producer price for the 2014 crop year was approximately $1,027 per ton, 
and total assessable volume was less than 40,000 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 will increase the assessment rate established for the 
committee and collected from handlers for the 2015 and subsequent 
fiscal years from $15.21 to $26.00 per ton of assessable olives. The 
committee unanimously recommended 2015 fiscal year expenditures of 
$1,374,072, and an assessment rate of $26.00 per ton. The higher 
assessment rate is necessary because assessable olive receipts for the 
2014 crop year were reported by CASS to be less than 40,000 tons, 
compared to 91,000 tons for the 2013 crop year.
    Income derived from the $26.00 per ton assessment rate, along with 
funds from the authorized reserve and interest income, should be 
adequate to meet this fiscal year's expenses.
    The major expenditures recommended by the committee for the 2015 
fiscal year include $259,231 for research, $450,000 for marketing 
activities, $122,000 for inspection equipment development, and $393,500 
for administration. Budgeted expenses for these items in 2014 were 
$312,560 for research, $565,600 for marketing activities, $37,800 for 
inspection equipment and electronic reporting development, and $346,500 
for administration.
    The committee deliberated many of the expenses, weighing the 
relative value of various programs or projects, and decreased their 
costs for research and marketing, while increasing their costs for 
inspection equipment and electronic reporting development, as well as 
their administrative expenses.
    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

[[Page 37535]]

value of various projects to the olive industry and the reduced olive 
production. The assessment rate of $26.00 per ton of assessable olives 
was derived by considering anticipated expenses, the volume of 
assessable olives, and additional pertinent factors.
    A review of preliminary information indicates that average producer 
prices for 2014 crop olives were approximately $1,027 per ton. 
Therefore, utilizing the assessment rate of $26.00 per ton, the 
estimated assessment revenue for the 2015 fiscal year as a percentage 
of total producer revenue would be approximately 2.5 percent.
    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 
would be offset by the benefits derived from the operation of the 
marketing order. In addition, the committee's meeting was widely 
publicized throughout California's olive industry and all interested 
persons were invited to attend the meeting and encouraged to 
participate in committee deliberations on all issues. Like all 
committee meetings, the December 9, 2014, meeting was a public meeting 
and all entities, both large and small, were encouraged to express 
views on this issue.
    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 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 rule 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. USDA has not 
identified any relevant Federal rules that duplicate, overlap, or 
conflict with this final 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.
    A proposed rule concerning this action was published in the Federal 
Register on March 30, 2015 (80 FR 16590). Copies of the proposed rule 
were also provided to all olive handlers, as well as to all committee 
members. Finally, the proposal was made available through the Internet 
by USDA and the Office of the Federal Register. A 30-day comment 
period, ending April 29, 2015, was provided for interested persons to 
respond to the proposal. One comment was received.
    The commenter noted that the net increase in the assessment rate is 
not proportional to the proposed increase in expenses for the 
committee, and the proposed rule did not explain how the magnitude of 
the proposed increase in the assessment rate was reached.
    In response to the comment, the assessment rate is based upon 
several factors: The assessable production, the programs and costs the 
committee finds reasonable and necessary for the fiscal year (proposed 
budget of expenses), as well as the amount of funds available in the 
committee's financial reserve, if they choose to use such funds to 
offset their proposed expenses. The committee determines, based upon 
their experience with costs in their area and the types of marketing 
programs they propose, what their budget of expenses will be. Thus, 
they agreed that increasing the assessment rate to meet their program 
administration and marketing needs was acceptable, reasonable, and 
necessary to achieve their program administration and marketing goals. 
They also determined that an even larger assessment increase could be 
averted by utilizing funds from their financial reserves.
    The commenter also noted that the proposed rule states that the 
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.'' The commenter stated that such language seemed at odds 
to language in the rule indicating that the alternate-bearing 
characteristics of olives result in wide swings in production, causing 
frequent changes to the assessment rate.
    In response to this comment, such language is necessary to ensure 
that the assessment rate established continues throughout the entire 
fiscal period and beyond, if necessary, thereby ensuring that 
assessments on olives continue uninterrupted. Should the committee find 
it necessary to change the assessment rate at any time, USDA would 
consider their recommendation and other available information.
    Accordingly, no changes will be made to the rule as proposed based 
on the comment 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/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Jeffrey Smutny 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 also found and determined that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because olive 
handlers have already received 2014-15 crop year olives from producers, 
the fiscal year began on January 1, 2015, and the assessment rate 
applies to all olives received during the 2014-15 crop year. Further, 
handlers are aware of this rule, which was recommended at a public 
meeting. Also, a 30-day comment period was provided for in the proposed 
rule.

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 
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, 2015, an assessment rate of $26.00 per ton 
is established for California olives.

    Dated: June 26, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2015-16176 Filed 6-30-15; 8:45 am]
 BILLING CODE 3410-02-P