[Federal Register Volume 85, Number 94 (Thursday, May 14, 2020)]
[Rules and Regulations]
[Pages 28841-28843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09345]



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 Rules and Regulations
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  Federal Register / Vol. 85, No. 94 / Thursday, May 14, 2020 / Rules 
and Regulations  

[[Page 28841]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

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


Olives Grown in California; Decreased 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) to decrease the assessment rate established 
for the 2020 fiscal year and subsequent fiscal years. The assessment 
rate will remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective June 15, 2020.

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, 
amends regulations issued to carry out a marketing order as defined in 
7 CFR 900.2(j). This 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 rule in 
conformance with Executive Orders 13563 and 13175. This action falls 
within a category of regulatory actions that the Office of Management 
and Budget (OMB) exempted from Executive Order 12866 review. 
Additionally, because this 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' '' (February 2, 2017).
    This 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 
will 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 action decreases 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 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. Industry members 
serving on the Committee are familiar with its needs and with the costs 
of goods and services in their local area and are thus able to 
formulate an appropriate budget and assessment rate. The assessment 
rate is formulated and discussed in a public meeting. 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 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 agreed to and 
recommended. The assessment rate of $15.00 is $29.00 lower than the 
rate currently in effect. Handlers received 81,689 tons of assessable 
olives from the 2019 crop year. This is substantially more than the 
2018 crop year, which was 17,953 tons of assessable olives. The 2020 
fiscal year assessment rate decrease will ensure the Committee has 
enough revenue to fund the recommended 2020 budgeted expenditures while 
ensuring the funds in the financial reserve will be kept within the 
maximum permitted by Sec.  932.40.

[[Page 28842]]

    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 assessment rate rules under the Order, 
the actual, rather than estimated, 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 established in this final 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 would 
be undertaken as necessary. The Committee's budget 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 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 final rule decreases 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. The $15.00 rate should provide 
$1,225,335 in assessment revenue. The lower assessment rate is possible 
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 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 expenses, the 
high volume of assessable olives, and additional pertinent factors.
    NASS data indicate 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 will be approximately 0.02 
percent.
    This action decreases 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 will 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 and the January 22, 2020, meetings were public meetings.

[[Page 28843]]

All entities, both large and small, were able 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 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 will 
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. As noted in the 
initial regulatory flexibility analysis, 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 4, 2020 (85 FR 12757). Copies of the proposed rule 
were provided to all olive producers and handlers. The proposal was 
made available through the internet by USDA and the Office of the 
Federal Register. A 30-day comment period ending April 3, 2020, was 
provided for interested persons to respond to the proposal. No comments 
were received. Accordingly, no changes will be made to the proposed 
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/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.
    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 will tend to 
effectuate the declared policy of the Act.

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 
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. Revise Sec.  932.230 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.

Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-09345 Filed 5-13-20; 8:45 am]
 BILLING CODE 3410-02-P