Almonds Grown in California; Expenses and Assessment Rate

SUMMARY: This interim final rule authorizes expenditures and

establishes an assessment rate under Marketing Order No. 981 for the

1994-95 crop year. Authorization of this budget enables the Almond

Board of California (Board) to incur expenses that are reasonable and

necessary to administer the program. Funds to administer this program

are derived from assessments on handlers.

DATES: Effective beginning July 1, 1994, through June 30, 1995.

Comments received by August 15, 1994, will be considered prior to

issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments

concerning this action. Comments must be sent in triplicate to the

Docket Clerk, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456,

Room 2523-S, Washington, DC 20090-6456, FAX 202-720-5698. Comments

should reference the docket 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.

FOR FURTHER INFORMATION CONTACT: Martha Sue Clark, Marketing Order

Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O.

Box 96456, room 2523-S, Washington, DC 20090-6456, telephone 202-720-

9918; or Martin Engeler, California Marketing Field Office, Fruit and

Vegetable Division, AMS, USDA, 2202 Monterey Street, Suite 102B,

Fresno, California 93721, telephone 209-487-5901.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement and Order No. 981, both as amended [7 CFR part 981],

regulating the handling of almonds grown in California. The marketing

agreement and order are 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 (Department) is issuing this rule in

conformance with Executive Order 12866.

This interim final rule has been reviewed under Executive Order

12778, Civil Justice Reform. Under the provisions of the marketing

order now in effect, California almonds are subject to assessments. It

is intended that the assessment rate as issued herein will be

applicable to all assessable almonds handled during the 1994-95 crop

year, which begins July 1, 1994, and ends June 30, 1995. This interim

final 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), 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

requesting 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 in equity to review the Secretary's

ruling on the petition, provided a bill in equity is filed not later

than 20 days after the date of the entry of the ruling.

Pursuant to the requirements set forth in the Regulatory

Flexibility Act (RFA), the Administrator of the Agricultural Marketing

Service (AMS) has considered the economic impact of this rule on small

entities.

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 7,000 producers of California almonds under

this marketing order, and approximately 115 handlers. Small

agricultural producers have been defined by the Small Business

Administration (13 CFR 121.601) as those having annual receipts of less

than $500,000, and small agricultural service firms are defined as

those whose annual receipts are less than $5,000,000. The majority of

California almond producers and handlers may be classified as small

entities.

The budget of expenses for the 1994-95 crop year was prepared by

the Almond Board of California, the agency responsible for local

administration of the marketing order, and submitted to the Department

for approval. The members of the Board are producers and handlers of

California almonds. They are familiar with the Board'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. The budget was formulated

and discussed in a public meeting. Thus, all directly affected persons

have had an opportunity to participate and provide input.

The assessment rate recommended by the Board was derived by

dividing anticipated expenses by expected receipts of California

almonds. Because that rate will be applied to handlers' actual

receipts, a rate must be established that will provide sufficient

income to pay the Board's budgeted expenses.

The Board met on May 16, 1994, and unanimously recommended a 1994-

95 budget of $9,435,262, $1,631,808 more than the previous year. Budget

items for 1994-95 which have increased compared to those budgeted for

1993-94 (in parentheses) are: Research conference, $25,000 ($12,000),

office rent, $90,000 ($73,672), Board's financial audit, $12,500

($9,900), data processing, $6,000 ($5,000), telephone, $31,000

($30,000), utilities, $13,500 ($10,000), postage and delivery, $32,000

($30,000), repairs and maintenance, $12,500 ($9,000) miscellaneous

expenses, $10,000 ($5,000), dues, subscriptions, and registration fees

$7,500 ($5,000), alliances with other organizations to provide

information on almonds to consumers, $20,000 ($5,000), production

research, $489,134 ($485,854), promotional activities, $6,575,000

($5,400,000), crop estimate, $85,600 ($75,000), office equipment,

$15,000 ($7,000), and the addition of $35,310 for an acreage survey,

$300,000 for reserve replenishment, $150,000 for program accountability

analyses to assess the effectiveness of the advertising and market

development programs, and $50,000 for new product and issues research,

for which no funding was recommended last year. Items which have

decreased compared to those budgeted for 1993-94 (in parentheses) are:

Salaries, $795,318 ($796,378), travel, $100,000 ($126,500), Board

travel, $22,500 ($25,000), meetings, $35,000 ($40,000), equipment rent,

$5,000 ($8,000), Board insurance, $40,000 ($45,000), security, $2,500

($3,000), office supplies, $15,000 ($20,000), printing, $12,000

($18,000), publications, $3,500 ($3,750), newsletter and releases,

$25,000 ($35,000), econometric model and statistical analysis, $40,000

($75,000), vehicles, $15,000 ($29,500), computers and software, $25,000

($40,000), and furniture and fixtures, $10,000 ($46,500).

The Board also unanimously recommended an assessment rate of 2.25

cents per kernel pound, the same as last year. The Board further

recommended that handlers should be eligible to participate in credit-

back for their own market promotion activities for up to 1.00 cent of

the 2.25 cents assessment rate, the same as last year. Revenues are

expected to be $7,396,250 from administrative assessments (591,700,000

pounds @ 1.25 cents per pound), $1,065,060 from the portion of

assessments eligible for credit but received by the Board from handlers

who do not obtain credit for their own activities, $40,000 from

interest, and $16,000 from the almond industry conference, for a total

of $8,517,310.

These projections would result in a $917,952 shortfall in revenue

based on current estimates of the 1994 crop yield. In light of this

projected revenue shortfall, the Board recommended that any shortfall

of up to $150,000 be applied against reserve replenishment and that the

amount of money for this item be reduced accordingly. The Board also

recommended that any additional shortfall be applied against its

consumer TV activities and that the amount of money spent for these

activities be reduced accordingly. However, the Board decided not to

reduce the total amount for these two items by the amount of the

expected shortfall because it expects additional revenue to accrue if

the crop is larger than estimated. In the event a larger crop results

in revenue in excess of the $9,435,261.77 budgeted, the Board

recommended that consumer public relations activities be increased up

to a total of $840,000, from $650,000.

Unexpended funds from 1994-95 may be carried over to cover expenses

during the first four months of the 1995-96 crop year.

This action will impose an obligation to pay assessments on

handlers. The assessments are uniform for all handlers and are the same

as those imposed last year. The assessment cost will be offset by the

benefits derived by the operation of the marketing order. Therefore,

the Administrator of the AMS has determined that this action will not

have a significant economic impact on a substantial number of small

entities.

After consideration of all relevant matter presented, including the

information and recommendations submitted by the Board 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 is also found and determined upon good

cause that it is impracticable, unnecessary, and contrary to the public

interest to give preliminary notice prior to putting this rule into

effect and that good cause exists for not postponing the effective date

of this action until 30 days after publication in the Federal Register

because: (1) The Board needs to have sufficient funds to pay its

expenses which are incurred on a continuous basis; (2) the crop year

begins on July 1, 1994, and the marketing order requires that the rate

of assessment for the crop year apply to all assessable California

almonds handled during the crop year; (3) handlers are aware of this

action which was unanimously recommended by the Board at a public

meeting and is similar to other budget actions issued in past years;

and (4) this interim final rule provides a 30-day comment period, and

all comments timely received will be considered prior to finalization

of this action.

List of Subjects in 7 CFR Part 981

Almonds, Marketing agreements, Nuts, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 981 is

amended as follows:

PART 981--ALMONDS GROWN IN CALIFORNIA

1. The authority citation for 7 CFR part 981 continues to read as

follows:

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

2. A new Sec. 981.341 is added to read as follows:

Note: This section will not appear in the Code of Federal

Regulations.

Sec. 981.341 Expenses and assessment rate.

Expenses of $9,435,262 by the Almond Board of California are

authorized for the crop year ending June 30, 1995. An assessment rate

for the crop year payable by each handler in accordance with

Sec. 981.81 is fixed at 2.25 cents per kernel pound of almonds. Of the

2.25 cents assessment rate, 1.00 cent per kernel pound of almonds is

available for handler credit-back pursuant to Sec. 981.441.

Dated: July 8, 1994.

Terry C. Long,

Acting Deputy Director, Fruit and Vegetable Division.

[FR Doc. 94-17109 Filed 7-13-94; 8:45 am]

BILLING CODE 3410-02-P5