Olives Grown in California; Increased Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV98-932-1 FR]

Olives Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule increases the assessment rate established for the

California Olive Committee (Committee) under Marketing Order No. 932

for the 1998 and subsequent fiscal years from $14.99 to $17.10 per ton

of assessable olives. The Committee is responsible for local

administration of the marketing order which regulates the handling of

olives grown in California. Authorization to assess olive handlers

enables the Committee to incur expenses that are reasonable and

necessary to administer the program. The fiscal year began on January 1

and ends December 31. The assessment rate will remain in effect

indefinitely unless modified, suspended, or terminated.

EFFECTIVE DATE: April 24, 1998.

FOR FURTHER INFORMATION CONTACT: Diane Purvis, Marketing Assistant, or

J. Terry Vawter, 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, Technical Advisor, Marketing Order

Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room

2525-S, PO Box 96456, Washington, DC 20090-6456; telephone: (202) 720-

2491, Fax: (202) 205-6632. 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, PO Box 96456, Washington, DC 20090-6456; telephone: (202)

720-2491, Fax: (202) 205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement No. 148 and Order No. 932, both as amended (7 CFR part 932),

regulating the handling of olives grown 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

olive 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

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applicable to all assessable olives beginning January 1, 1998, and

continue 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 1998 and subsequent fiscal years from $14.99 per ton

to $17.10 per ton.

The California olive 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 olives. 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 1997 and subsequent fiscal years, the Committee

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

continue in effect from fiscal year to fiscal year 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 December 11, 1997, and unanimously recommended

1998 expenditures of $1,750,400 and an assessment rate of $17.10 per

ton of olives received during the 1997-98 crop year, which began August

1, 1997, and ends July 31, 1998. In comparison, last year's budgeted

expenditures were $2,159,265. The assessment rate of $17.10 is $2.11

higher than the rate currently in effect.

Olive trees have an alternate-bearing characteristic causing a

large crop one year and a small crop the next. Handler receipts of

olives for the 1997-98 crop year were 85,585 tons, which is 41 percent

less than the 144,075 tons received in 1996-97. Although the 1998

fiscal year budgeted expenditures are less than those in the prior

year, the decrease in olive receipts necessitates an increase in the

assessment rate to cover all anticipated expenditures. If the

assessment rate is not increased from the 1997 fiscal year assessment

rate of $14.99, funds will fall approximately $467,481 short of 1998

fiscal year budgeted expenses.

The major expenditures recommended by the Committee for the 1998

year include $357,900 for administration, $50,000 for research, and

$1,308,500 for market development. Budgeted expenses for these items in

1997 were $390,890, $173,375, and $1,595,000, respectively.

The assessment rate recommended by the Committee was derived by

considering anticipated expenses, actual receipts of olives, and

additional pertinent factors. The revised assessment rate should

provide $1,463,504 in assessment income. Income derived from handler

assessments, interest, and carryover of reserve funds will be adequate

to cover budgeted expenses. Funds in the reserve (currently $287,996)

will be kept within the maximum permitted by the order (approximately

one fiscal year's expenses; Sec. 932.40).

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 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 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

1998 budget was approved on February 17, 1998, and those for subsequent

fiscal years 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 1,200 producers of olives in the production

area and 4 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 olive producers may be classified as small entities. None of

the handlers may be so classified.

This rule increases the assessment rate established for the

Committee and collected from handlers for the 1998 and subsequent

fiscal years from $14.99 per ton of olives to $17.10 per ton of olives.

The Committee unanimously recommended 1998 expenditures of $1,750,400

and an assessment rate of $17.10 per ton of olives. The assessment rate

of $17.10 is $2.11 higher than the 1997 rate. The $17.10 rate should

provide $1,463,504 in assessment income. The Committee will use reserve

funds and interest income to make up the shortfall in assessment

income. Therefore, income derived from handler assessments, interest,

and carried over reserve funds will be adequate to cover budgeted

expenses for the 1998 fiscal period. Funds in the reserve (currently

$287,996) will be kept within the maximum permitted by the order

(approximately one fiscal year's expenses; Sec. 932.40).

Although the 1998 fiscal year budgeted expenditures are less than

those in the prior year, the decrease in olive receipts necessitates an

increase in the assessment rate to cover all anticipated expenditures.

If the

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assessment rate is not increased from the 1997 fiscal year assessment

rate of $14.99, funds will fall approximately $467,481 short of 1998

fiscal year budgeted expenses.

A review of historical and preliminary information pertaining to

the current crop year indicates that the grower prices for the 1997-98

crop year could range from $150 to $825 per ton of olives for canning

sizes. Therefore, the estimated assessment revenue for the 1998 fiscal

year as a percentage of total grower revenue could range between 11.4

and 2 percent, respectively. If the prices for canning sizes average

about $500 per ton during the 1997-98 crop year, the estimated

assessment revenue for the 1998 fiscal year as a percentage of total

grower revenue will be about 3 percent.

This action increases 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, 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 olive industry and all interested

persons were invited to attend the meeting and participate in Committee

deliberations on all issues. Like all Committee meetings, the December

11, 1997, meeting was a public meeting and all entities, both large and

small, were able to express views on this issue. In addition, all four

regulated handlers are equally represented on the Committee and voted

unanimously in favor of the assessment increase. Finally, interested

persons were invited to submit information on the regulatory and

information impacts of this rule on small entities.

This rule imposes no additional reporting or recordkeeping

requirements on California olive handlers, none of which are small

entities. 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.

A proposed rule concerning this action was published in the Federal

Register on February 17, 1998 (63 FR 7732). Copies of the proposed rule

were also mailed or sent via facsimile to all olive handlers. Finally,

the proposal was made available through the Internet by the Office of

the Federal Register.

A 30-day comment period ending March 19, 1998, was provided for

interested persons to respond to the proposal. No comments were

received in response to the proposal.

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 also found and determined that good

cause exists for not postponing the effective date of this rule until

30 days after publication in the Federal Register because the marketing

order requires that the rate of assessment for each fiscal period apply

to all assessable olives handled during such period. The fiscal year

under the order covers the period January 1 through December 31.

Further, handlers are aware of this rule which was recommended at a

public meeting. Also, a 30-day comment period was provided in the

proposed rule, and no comments were received.

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

1. The authority citation for 7 CFR part 932 continues to read as

follows:

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

2. Section 932.230 is revised to read as follows:

Sec. 932.230 Assessment rate.

On and after January 1, 1998, an assessment rate of $17.10 per ton

is established for assessable olives grown in California.

Dated: April 9, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 98-10772 Filed 4-22-98; 8:45 am]

BILLING CODE 3410-22-P