Dried Prunes Produced in California; Increased Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 993

[Docket No. FV97-993-1 IFR]

Dried Prunes Produced in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule increases the assessment rate for the

Prune Marketing Committee (Committee) under Marketing Order No. 993 for

the 1997-98 and subsequent crop years. The Committee is responsible for

local administration of the marketing order which regulates the

handling of dried prunes produced in California. Authorization to

assess prune handlers enables the Committee to incur expenses that are

reasonable and necessary to administer the program. The 1997-98 crop

year covers the period August 1 through July 31. The assessment rate

will continue in effect indefinitely unless modified, suspended, or

terminated.

DATES: Effective August 1, 1997. Comments received by September 3, 1997

will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments

concerning this rule. Comments must be sent in triplicate to the Docket

Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S, PO Box

96456, 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: Richard P. Van Diest, Marketing

Specialist, or Diane Purvis, Marketing Assistant, California Marketing

Field Office, Fruit and Vegetable Division, 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 Division, AMS, USDA, room

2525-S, PO Box 96456, Washington, DC 20090-6456; telephone: (202) 690-

3919, 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 Division, AMS, USDA,

room 2525-S, PO Box 96456, Washington, DC 20090-6456; telephone: (202)

720-2491, Fax: (202) 720-5698.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement and Order No. 993, both as amended (7 CFR part 993),

regulating the handling of dried prunes produced in California,

hereinafter referred to as the ``order.'' 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 rule has been reviewed under Executive Order 12988, Civil

Justice Reform. Under the marketing order now in effect, California

prune 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

prunes 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 increases the assessment rate established for the

Committee for the 1997-98 and subsequent crop years from $1.50 to $1.60

per salable ton of dried prunes.

The California dried prune 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. The members of the Committee are producers and

handlers of California dried prunes. 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 crop years, the Committee

recommended, and the Department approved, an assessment rate that would

continue in effect from crop year to crop year indefinitely unless

modified, suspended, or terminated by the Secretary upon recommendation

and information submitted by the Committee or other available

information available to the Secretary.

The Committee met on June 24, 1997, and unanimously recommended

1997-98 expenditures of $331,960 and an assessment rate of $1.60 per

salable ton of dried prunes. In comparison, last year's budgeted

expenditures were $283,500. The assessment rate of $1.60 is $0.10

higher than the rate currently in effect. The higher assessment rate is

needed to cover increases in costs for the Committee's acreage survey

and staff salaries.

The major expenditures recommended by the Committee for the 1997-98

crop year include $176,300 for salaries, wages, and benefits, $30,000

for research and development, $23,000 for office rent, $21,000 for

travel, $20,000 for acreage survey, $8,060 for the reserve for

contingency, $5,000 for office supplies, $9,000 for rental of

equipment, and $8,000 for data processing. Budgeted expenses for these

items in 1996-97 were $142,120, $30,000, $22,000, $20,000, $11,000,

$8,430, $6,500, $3,800, and $6,500, respectively.

The assessment rate recommended by the Committee was derived by

dividing anticipated expenses by its estimate of assessable California

dried prunes for 1997-98. Assessable tonnage for the year is estimated

at 207,475 salable tons which should provide $331,960 in assessment

income. Income derived from handler assessments and interest income

will be adequate to cover budgeted expenses. Any funds not expended by

the Committee during a crop year may be used, pursuant to

Sec. 993.81(c), for a period of five months subsequent to that crop

year. At the end of such period, the excess funds are returned or

credited to handlers.

[[Page 41809]]

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 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 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 initial 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 1,400 producers of dried prunes in the

production area and approximately 21 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. The majority of California dried prune producers and

handlers may be classified as small entities.

Last year, as a percentage, about 29 percent of the handlers

shipped over $5,000,000 worth of dried prunes and 71 percent of the

handlers shipped under $5,000,000 worth of prunes. In addition, based

on acreage, production, producer prices provided by the Committee, and

the total number of dried prune producers, the average annual producer

revenue is approximately $136,000. The majority of handlers and

producers of California dried prunes may be classified as small

entities.

This rule increases the assessment rate established for the

Committee and collected from handlers for the 1997-98 and subsequent

crop years from $1.50 to $1.60 per salable ton. The Committee

unanimously recommended 1997-98 expenditures of $331,960 and an

assessment rate of $1.60 per salable ton of California dried prunes.

The assessment rate of $1.60 is $0.10 more than the rate currently in

effect. The Committee estimated assessable dried prunes in 1997-98 at

207,475 salable tons. Thus, the current $1.50 rate of assessment would

only provide $311,212 in revenue, which would not be adequate to meet

the Committee's 1997-98 budgeted espenses. The $1.60 rate should

provide $331,960 in assessment income and be adequate to meet this

year's expenses.

The Committee's increase from $283,500 to $331,960 in budgeted

expenses for 1997-98 results primarily from increases in the following

line item categories--total personnel (salaries, wages, and benefits),

rental of equipment, data processing, and acreage survey. Expenses for

these items for 1997-98, with last year's budgeted expenses in

parenthesis, are: Total personnel--$176,300 ($142,120); rental of

equipment--$9,000 ($3,800); data processing--$8,000 ($6,500); and

acreage survey--$20,000 ($11,000). The increase is needed to provide

wage and benefit increases for the staff. The increase in acreage

survey is necessary to allow the Committee to conduct a more

comprehensive dried prune acreage survey than conducted last year. The

Committee considered the alternative of conducting a smaller scale

survey at less cost, but decided that a survey of all California's

producing counties was needed to help the industry make production and

marketing plans. In making its budget recommendation, the Committee

felt that all of the expense levels were appropriate and reasonable.

Any funds not expended by the Committee during a crop year may be

used, pursuant to Sec. 993.81(c), for a period of five months

subsequent to that crop year. At the end of such period, the excess

funds are returned or credited to handlers.

California dried prune price information is not yet available for

the 1997-98 crop year. Producer prices averaged $940 per ton in the

previous crop year. The proposed $1.60 per ton assessment rate for the

1997-98 crop year is insignificant when compared to the average prices

received the previous year and what is expected for the 1997-98 crop

year.

This action will increase the assessment obligation imposed on

handlers. While this rule will impose some additional costs on

handlers, the costs 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 dried prune

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 24, 1997, meeting was a public meeting and

all entities, both large and small, were able to express views on this

issue. Finally, interested persons are invited to submit information on

the regulatory and informational impacts of this action on small

businesses.

This action will not impose any additional reporting or

recordkeeping requirements on either small or large California dried

prune 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 rule.

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 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 rule until 30 days after publication in the Federal

Register because: (1) The Committee needs to have sufficient funds to

pay its expenses which are incurred on a continuous basis; (2) the

1997-98 crop year begins on August 1, 1997, and the marketing order

requires that the rate of assessment for each crop year apply to

[[Page 41810]]

all assessable dried prunes handled during such crop year; (3) handlers

are aware of this action which was unanimously recommended by the

Committee at a public meeting and is similar to other assessment rate

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 rule.

List of Subjects in 7 CFR Part 993

Dried prunes, Marketing agreements, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 993 is

amended as follows:

PART 993--DRIED PRUNES PRODUCED IN CALIFORNIA

1. The authority citation for 7 CFR part 993 continues to read as

follows:

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

Sec. 993.347 [Amended]

2. Section 993.347 is amended by removing ``August 1, 1996,'' and

adding in its place ``August 1, 1997,'', and by removing ``$1.50'' and

adding in its place ``$1.60.''

Dated: July 29, 1997.

Ronald L. Cioffi,

Acting Director, Fruit and Vegetable Division.

[FR Doc. 97-20457 Filed 8-1-97; 8:45 am]

BILLING CODE 3410-02-U