[Federal Register Volume 85, Number 43 (Wednesday, March 4, 2020)]
[Proposed Rules]
[Pages 12757-12759]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-04369]


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 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. 85, No. 43 / Wednesday, March 4, 2020 / 
Proposed Rules  

[[Page 12757]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Doc. No. AMS-SC-20-0012; SC20-932-2 PR]


Olives Grown in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
California Olive Committee (Committee) to decrease the assessment rate 
established for the 2020 fiscal year and subsequent fiscal years. The 
proposed assessment rate would remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Comments must be received by April 3, 2020.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Specialty Crops Program, 
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 
proposed 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: Kathie Notoro, Marketing Specialist, 
or Terry Vawter, Regional Director, California Marketing Field Office, 
Marketing Order and Agreement Division, Specialty Crops Program, AMS, 
USDA; Telephone: (559) 538-1672, Fax: (559) 487-5906, or Email: 
[email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Marketing Order and Agreement 
Division, Specialty Crops 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 action, pursuant to 5 U.S.C. 553, 
proposes an amendment to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This proposed rule is issued under 
Marketing Agreement and Order No. 932, as amended (7 CFR part 932), 
regulating the handling of olives grown in California. Part 932 
(referred to as 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 Committee locally 
administers the Order and is comprised of producers and handlers of 
olives operating within the area of production, and a public member.
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 13563 and 13175. This proposed 
rule falls within a category of regulatory actions that the Office of 
Management and Budget (OMB) exempted from Executive Order 12866 review. 
Additionally, because this proposed rule does not meet the definition 
of a significant regulatory action, it does not trigger the 
requirements contained in Executive Order 13771.
    See OMB's Memorandum titled ``Interim Guidance Implementing Section 
2 of the Executive Order of January 30, 2017, titled `Reducing 
Regulation and Controlling Regulatory Costs'[thinsp]'' (February 2, 
2017).
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the 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 
would be applicable to all assessable olives beginning on January 1, 
2020, 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 proposed rule would decrease the assessment rate from $44.00 
per ton of assessed olives, the rate that was established for the 2018-
19 and subsequent fiscal years, to $15.00 per ton of assessed olives 
for the 2020 and subsequent fiscal years. The proposed lower rate is 
the result of a significantly higher crop size, and the need to cover 
Committee expenses.
    The 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 are 
familiar with the Committee's needs and with the costs of 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.
    The Committee met on December 5, 2019, and unanimously recommended 
2020 expenditures of $1,035,406, and an assessment rate of $24.00 per 
ton of assessed olives. In comparison, last year's budgeted 
expenditures were $1,628,923. However, on December 6, 2019, the 
Committee staff received an email requesting that the assessment rate 
be lower than the unanimously

[[Page 12758]]

agreed to rate of $24.00. The Committee met again by conference call on 
January 22, 2020, to discuss the possibility of a lower assessment 
rate. During the conference call, a handler and some producers stated 
they would be willing to pay up to $100.00 per ton during the next 
alternate low bearing year, if the crop volume tonnage drops below what 
is necessary to fund the Committee's activities. After further 
Committee discussions, an assessment rate of $15.00 per ton of assessed 
olives was recommended. The proposed assessment rate of $15.00 is 
$29.00 lower than the rate currently in effect. Producer receipts show 
a yield of 81,689 tons of assessable olives from the 2019 crop year. 
This is substantially more than the 2018 crop year, which yielded 
17,953 tons of assessable olives. The 2020 fiscal year assessment rate 
decrease is appropriate to ensure the Committee has enough revenue to 
fund the recommended 2020 budgeted expenditures while ensuring the 
funds in the financial reserve would be kept within the maximum 
permitted by Sec.  932.40.
    The Order has a fiscal year and a crop year that are independent of 
each other. The crop year is a 12-month period that begins on August 1 
of each year and ends on July 31 of the following year. The fiscal year 
is the 12-month period that begins on January 1 and ends on December 31 
of each year. Olives are an alternate-bearing crop, with a small crop 
followed by a large crop. For this assessment rate proposed rule, the 
actual 2019 crop year receipts are used to determine the assessment 
rate for the 2020 fiscal year.
    The major expenditures recommended by the Committee for the 2020 
fiscal year includes $631,300 for program administration, $123,500 for 
marketing activities, $225,606 for research, and $55,000 for inspection 
equipment. Budgeted expenses for these items during the 2019 fiscal 
year were $713,900 for program administration, $513,500 for marketing 
activities, $343,523 for research, and $58,000 inspection equipment.
    The assessment rate recommended by the Committee resulted from 
consideration of anticipated fiscal year expenses, actual olive tonnage 
received by handlers during the 2019 crop year, and the amount in the 
Committee's financial reserve. 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.
    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 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 budget 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 proposed 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 
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 800 producers of olives in the production 
area and two handlers subject to regulation under the Order. Small 
agricultural producers are defined by the Small Business Administration 
(SBA) as those having annual receipts less than $1,000,000, and small 
agricultural service firms are defined as those whose annual receipts 
are less than $30,000,000 (13 CFR 121.201).
    Based upon National Agricultural Statistics Service (NASS) 
information as of June 2019, the average price to producers for the 
2019 crop year was $766.00 per ton, and total assessable volume for the 
2019 crop year was 81,689 tons. Based on production, price paid to 
producers, and the total number of California olive producers, the 
average annual producer revenue is less than $1,000,000 ($766.00 times 
81,689 tons equals $62,573,774 divided by 800 producers equals an 
average annual producer revenue of $78,217.22). Thus, the majority of 
olive producers may be classified as small entities. Both handlers may 
be classified as large entities under the SBA's definitions because 
their annual receipts are greater than $30,000,000.
    This proposal would decrease the assessment rate collected from 
handlers for the 2020 and subsequent fiscal years from $44.00 to $15.00 
per ton of assessable olives. The Committee unanimously recommended 
2020 expenditures of $1,035,406 and an assessment rate of $15.00 per 
ton of assessable olives. The recommended assessment rate of $15.00 is 
$29.00 lower than the 2019 rate. The quantity of assessable olives for 
the 2020 Fiscal year is 81,689 tons. Thus, the $15.00 rate should 
provide $1,225,335 in assessment revenue. The lower assessment rate is 
proposed because annual receipts for the 2019 crop year are 81,689 tons 
compared to 17,953 tons for the 2018 crop year. Olives are an 
alternate-bearing crop, with a small crop followed by a large crop. 
Income derived from the $15.00 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 2020 
fiscal year include $631,300 for program administration, $123,500 for 
marketing activities, $225,606 for research, and $55,000 for inspection 
equipment. Budgeted expenses for these items during the 2019 fiscal 
year were $713,900 for program administration, $513,500 for marketing 
activities, $343,523 for research, and $58,000 for inspection 
equipment. The Committee deliberated on many of the expenses, weighed 
the relative value of various programs or projects, and decreased its 
expenses for marketing and research activities.
    Prior to arriving at this budget and assessment rate, the Committee 
considered information from various sources including 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 
increased olive production. The assessment rate of $15.00 per ton of 
assessable olives was derived by considering anticipated

[[Page 12759]]

expenses, the high volume of assessable olives, and additional 
pertinent factors.
    A review of NASS information indicates that the average producer 
price for the 2019 crop year was $766.00 per ton. Therefore, utilizing 
the assessment rate of $15.00 per ton, the assessment revenue for the 
2020 fiscal year as a percentage of total producer revenue would be 
approximately 0.02 percent.
    This proposed action would decrease 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, decreasing 
the assessment would reduce the burden on handlers and may reduce the 
burden on producers. The Committee's meetings were widely publicized 
throughout the production area. The olive industry and all interested 
persons were invited to attend the meetings and participate in 
Committee deliberations on all issues. Like all Committee meetings, the 
December 5, 2019, meeting and the January 22, 2020, meetings were 
public meetings, and all entities, both large and small, were able to 
express views on this issue. Interested persons are invited to submit 
comments on this proposed rule, including the regulatory and 
information collection 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 OMB and assigned OMB No. 0581-0178 Vegetable and 
Specialty Crops. No changes in those requirements are necessary as a 
result of this action. Should any changes become necessary, they would 
be submitted to OMB for approval.
    This proposed rule would not impose any 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 action.
    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/rules-regulations/moa/small-businesses. Any questions 
about the compliance guide should be sent to Richard Lower 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.

List of Subjects in 7 CFR Part 932

    Marketing agreements, Olives, 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

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, 2020, an assessment rate of $15.00 per ton 
is established for California olives.

    Dated: February 27, 2020.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-04369 Filed 3-3-20; 8:45 am]
BILLING CODE 3410-02-P