[Federal Register Volume 62, Number 216 (Friday, November 7, 1997)]
[Rules and Regulations]
[Pages 60156-60158]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29479]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 920
[Docket No. FV97-920-3 FIR]
Kiwifruit Grown in California; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (Department) is adopting, as a
final rule, without change, the provisions of an interim final rule
which increased the assessment rate for the Kiwifruit Administrative
Committee (Committee) under Marketing Order No. 920 for the 1997-98 and
subsequent fiscal periods. The Committee is responsible for local
administration of the marketing order which regulates the handling of
kiwifruit grown in California. Authorization to assess kiwifruit
handlers enables the Committee to incur expenses that are reasonable
and necessary to administer the program. The 1997-98 fiscal period
covers the period August 1 through July 31. The assessment rate will
continue in effect indefinitely unless modified, suspended, or
terminated.
EFFECTIVE DATE: December 8, 1997.
FOR FURTHER INFORMATION CONTACT: Diane Purvis, Marketing Assistant, or
Rose Aguayo, Marketing Specialist, California Marketing Field Office,
Fruit and Vegetable Programs, AMS, USDA, 2202 Monterey Street, Suite
102B, Fresno, California 93721; telephone: (209) 487-5901, Fax: (209)
487-5906; or George Kelhart, Marketing Order Administration Branch,
Fruit and Vegetable Programs, AMS, USDA, Room 2525-S, P.O. Box 96456,
Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 720-
5698. Small businesses may request information on compliance with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, Room 2525-S, P.O. Box
96456, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202)
720-5698.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order
No. 920, as amended (7 CFR part 920), regulating the handling of
kiwifruit grown in California, hereinafter referred to as the
``order.'' The marketing 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 is issuing this rule in conformance with Executive
Order 12866.
This final rule was reviewed under Executive Order 12988, Civil
Justice Reform. Under the marketing order now in effect, California
kiwifruit handlers are subject to assessments. Funds to administer the
order are derived from such assessments. It is intended that the
assessment rate as issued herein will be applicable to all assessable
kiwifruit beginning August 1, 1997, and continuing 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 the Secretary 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 the Secretary 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 the
Secretary'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 continues in effect the assessment rate of $0.0225 per
tray or tray equivalents of assessable kiwifruit for the Committee for
the 1997-98 and subsequent fiscal periods.
The kiwifruit marketing order provides authority for the Committee,
with the approval of the Department, to formulate an annual budget of
expenses and collect assessments from handlers to administer the
program. Section 920.41 authorizes the Committee to borrow funds. The
members of the Committee are producers of California kiwifruit and one
non-industry member. 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 1996-97 and subsequent fiscal periods, the Committee
recommended,
[[Page 60157]]
and the Department approved, an assessment rate that would continue in
effect from season to season indefinitely unless modified, suspended,
or terminated by the Secretary upon recommendation and information
submitted by the Committee or other information available to the
Secretary.
The Committee met on June 25, 1997, and unanimously recommended
1997-98 expenditures of $161,286 and an assessment rate of $0.0225 per
tray or tray equivalent of kiwifruit. In comparison, last year's
budgeted expenditures were $178,598. The assessment rate of $0.0225 per
tray or tray equivalent is $0.0050 higher than last year's established
rate. The 1996-97 kiwifruit crop was short 3.3 million trays or tray
equivalents of the quantity projected in the crop estimate. The
Committee met in February 1997 and approved the borrowing of funds to
cover expenses for the remainder of the 1996-97 season. The Committee
borrowed $11,052 as of May 31, 1997, and estimated that an additional
$22,401 might be needed to cover expenses through the end of the fiscal
period. Because the Committee's reserve has been depleted, the
Committee voted to increase its assessment rate to cover the budgeted
expenses, to reimburse the borrowed funds, and to establish an adequate
reserve. The order provides authority for a maximum reserve equal to
approximately one fiscal period's expenses.
The Committee discussed alternatives to this rule, including
alternative expenditure levels and alternative assessment rates. An
assessment rate of $0.0200 was considered but not recommended because
it would not generate the income necessary to administer the program
with an adequate reserve. The major expenditure levels recommended by
the Committee for the 1997-98 year include $102,200 for administrative
staff and field salaries, $13,825 for travel, food, and lodging; and
$12,200 for accident and health insurance. Budgeted expenses for these
items in 1996-97 were $108,500, $20,398, and $13,000, respectively.
The assessment rate recommended by the Committee was derived by
considering anticipated expenses, expected shipments of California
kiwifruit, and additional pertinent factors. Kiwifruit shipments for
the year are estimated at 10 million trays or tray equivalents of
kiwifruit which should provide $225,000 in assessment income. Income
derived from handler assessments, along with interest income, will be
adequate to cover budgeted expenses, reimbursement of borrowed funds,
and to fund an adequate reserve. Future reserve funds will be kept
within the maximum permitted by the order.
The assessment rate established in this rule will continue in
effect indefinitely unless modified, suspended, or terminated by the
Secretary upon recommendation and information submitted by the
Committee or other available information.
Although this assessment rate is effective for an indefinite
period, the Committee will continue to meet prior to or during each
fiscal period 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 the
Department. Committee meetings are open to the public and interested
persons may express their views at these meetings. The Department 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
1997-98 budget was approved by the Department on August 18, 1997; and
those for subsequent fiscal periods will be reviewed and, as
appropriate, approved by the Department.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), 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
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. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 450 producers of kiwifruit in the
production area and approximately 60 handlers subject to regulation
under the marketing order. Small agricultural producers have been
defined by the Small Business Administration (13 CFR 121.601) as those
having annual receipts less than $500,000, and small agricultural
service firms are defined as those whose annual receipts are less than
$5,000,000. One of the 60 handlers subject to regulation has annual
kiwifruit sales of at least $5,000,000; and the remaining 59 handlers
have sales less than $5,000,000, excluding receipts from any other
sources. Ten of the 450 producers subject to regulation have annual
sales of at least $500,000; and the remaining 440 producers have sales
less than $500,000, excluding receipts from any other sources.
Therefore, a majority of California kiwifruit producers and handlers
may be classified as small entities.
This rule continues the assessment rate of $0.0225 per tray or tray
equivalents of assessable kiwifruit for the 1997-98 and subsequent
fiscal periods. The Committee unanimously recommended 1997-98
expenditures of $161,286 and an assessment rate of $0.0225 per tray or
tray equivalent of kiwifruit. The 1996-97 kiwifruit crop was short 3.3
million trays or tray equivalents of the estimated crop. The Committee
met in February 1997 and approved borrowing funds to cover expenses for
the remainder of the 1996-97 season. The Committee has borrowed $11,052
as of May 31, 1997, and estimates that an additional $22,401 may be
needed to cover expenses through the end of the fiscal period. As the
Committee's reserve is depleted and funds have been borrowed to meet
the remaining 1996-97 expenses, the Committee voted to increase its
assessment rate to cover the budgeted expenses, to reimburse the
borrowed funds, and to establish an adequate reserve.
The Committee discussed alternatives to this rule, including
alternative expenditure levels and alternative assessment rates. An
assessment rate of $0.0200 was considered but not recommended because
it would not generate the income necessary to administer the program
with an adequate reserve. The Committee also considered reducing the
compliance staff by two personnel, but determined that one part-time
position would be eliminated. The major expenditure levels recommended
by the Committee for the 1997-98 year include $102,200 for
administrative staff and field salaries, $13,825 for travel, food, and
lodging; and $12,200 for accident and health insurance. Budgeted
expenses for these items in 1996-97 were $108,500, $20,398, and
$13,000, respectively.
Kiwifruit shipments for the year are estimated at 10 million trays
or tray equivalents which should provide $225,000 in assessment income.
Income derived from handler assessments, along with interest income,
will be adequate to cover the budgeted expenses and the shortage of
funds resulting from the 1996-97 crop shortage. As the Committee's
reserve is depleted, the Committee voted to increase its
[[Page 60158]]
assessment rate to cover the budgeted expenses, to reimburse the
borrowed funds, and to establish an adequate reserve. Reserve funds
will be kept within the maximum permitted by the order.
A review of historical information and preliminary information
pertaining to the crop year indicates that the grower price for the
1997-98 season is estimated to be approximately $1.62 per tray or tray
equivalent of kiwifruit. Therefore, the estimated assessment revenue
for the 1997-98 crop year as a percentage of total grower revenue will
be approximately 1.4 percent.
This rule continues in effect the assessment obligation imposed on
handlers. While the assessment rate this fiscal period is higher than
that of last year, the additional costs upon handlers are minimal and
in the form of uniform assessments on all handlers. Some of the
additional costs may be passed on to producers. However, these costs
will 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 kiwifruit 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 25, 1997, meeting was a public meeting and all entities, both
large and small, were able to express views on this issue.
This action will not impose any additional reporting or
recordkeeping requirements on either small or large California
kiwifruit 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.
The Department has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this final rule.
An interim final rule concerning this action was published in the
Federal Register on August 26, 1997 (62 FR 45146). Copies of the rule
were mailed or sent via facsimile to all Committee members and
kiwifruit handlers. Finally, the rule was made available through the
Internet by the Office of the Federal Register. A 30-day comment period
was provided. No comments were received.
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.
List of Subjects in 7 CFR Part 920
Kiwifruit, Marketing agreements.
PART 920--KIWIFRUIT GROWN IN CALIFORNIA
Accordingly, the interim final rule amending 7 CFR part 920 which
was published at 62 FR 45146 on August 26, 1997, is adopted as a final
rule without change.
Dated: November 3, 1997.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 97-29479 Filed 11-6-97; 8:45 am]
BILLING CODE 3410-02-P