Domestic Dates Produced or Packed in Riverside County, CA; Increased Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 987

[Docket No. FV98-987-1 PR]

Domestic Dates Produced or Packed in Riverside County, CA;

Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This rule would increase the assessment rate from $0.0556 to

$0.10 per hundredweight established for the California Date

Administrative Committee (Committee) under Marketing Order No. 987 for

the 1998-99 and subsequent crop years. The Committee is responsible for

local administration of the marketing order which regulates the

handling of dates produced or packed in Riverside County, California.

Authorization to assess date handlers enables the Committee to incur

expenses that are reasonable and necessary to administer the program.

The fiscal period begins October 1 and ends September 30. The

assessment rate would remain in effect indefinitely unless modified,

suspended, or terminated.

DATES: Comments must be received by September 22, 1998.

ADDRESSES: Interested persons are invited to submit written comments

concerning this rule. Comments must be sent to the Docket Clerk, Fruit

and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456,

Washington, DC 20090-6456; Fax: (202) 205-6632. 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: Diane Purvis, Marketing Assistant, or

Richard P. Van Diest, Marketing Specialist, California Marketing Field

Office, Fruit and Vegetable Programs, AMS, USDA, 2202 Monterey St.,

suite 102B, Fresno, CA 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, P.O. 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, P.O. Box 96456, Washington, DC 20090-6456; telephone:

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

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement and Order No. 987, both as amended (7 CFR part 987),

regulating the handling of domestic dates produced or packed in

Riverside County, 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

date 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 dates

beginning on October 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

[[Page 39758]]

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 would increase the assessment rate established for the

Committee for the 1998-99 and subsequent crop years from $0.0556 per

hundredweight to $0.10 per hundredweight of assessable dates handled.

The California date 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 producer-

handlers of California dates. 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 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 4, 1998, and unanimously recommended

1998-99 expenditures of $80,000 and an assessment rate of $0.10 per

hundredweight of dates handled. In comparison, last year's budgeted

expenditures were $60,000. The assessment rate of $0.10 is $0.0444

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

needed to offset an expected reduction in funds available to the

Committee from the sale of cull dates. Proceeds from such sales are

deposited into the surplus account for subsequent use by the Committee

in covering the surplus pool share of the Committee's expenses.

Handlers may also dispose of cull dates of their own production within

their own livestock-feeding operation; otherwise, such cull dates must

be shipped or delivered to the Committee for sale to non-human food

product outlets.

The Committee expects to apply $40,000 of surplus account monies to

cover surplus pool expenses during 1997-98. Based on a recent trend of

declining sales of cull dates over the past few years, the Committee

expects the surplus pool share of expenses during 1998-99 to be

$30,000, or $10,000 less than expected during 1997-98. Hence, the

revenue available from the surplus pool to cover Committee expenses

during 1998-99 is expected to be 25 percent less than last year. To

offset this reduction in income, the Committee recommended increasing

the assessment rate and using $20,000 from its administrative reserves

to fund the 1998-99 budget.

The major expenditures recommended by the Committee for the 1998-99

year include $32,100 in salaries and benefits, $20,000 in office

administration, and $23,990 in office expenses. Office administration

includes $16,000 towards the salary for a new compliance officer

position. Budgeted expenses for these items in 1997-98 were $37,627 in

salaries and benefits and $18,507 in office expenses.

The assessment rate recommended by the Committee was derived from

applying the following formula where:

A = 1998-99 surplus account ($30,000);

B = amount taken from administrative reserves ($20,000);

C = 1998-99 expenses ($80,000);

D = 1998-99 expected shipments (300,000 hundredweight);

(C -(A + B)) D = $0.10 per hundredweight.

Estimated shipments should provide $30,000 in assessment income.

Income derived from handler assessments, the surplus account (which

contains money from cull date sales), and the administrative reserves

would be adequate to cover budgeted expenses. Funds in the reserve are

expected to total about $20,000 by September 30, 1998, and therefore

would be less than the maximum permitted by the order (not to exceed

50% of the average of expenses incurred during the most recent five

preceding crop years; Sec. 987.72(c)).

The proposed assessment rate would 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 would be in effect for an indefinite

period, the Committee would continue to meet prior to or during each

crop 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 would

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

1998-99 budget and those for subsequent crop years would 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 135 producers of dates in the production

area and approximately 20 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 of less than $500,000, and small agricultural service firms

are defined as those having annual receipts of less than $5,000,000.

The majority of California date producers and handlers may be

classified as small entities.

This rule would increase the assessment rate established for the

Committee and collected from handlers for the 1998-99 and subsequent

crop years from $0.0556 per hundredweight to $0.10 per hundredweight of

assessable dates handled. The Committee unanimously recommended 1998-99

expenditures of $80,000 and an assessment rate of $0.10 per

hundredweight. The proposed assessment rate of $0.10 is $0.0444 higher

than the 1997-98 rate. The quantity of assessable dates for the 1998-99

crop year is estimated at 300,000 hundredweight. Thus, the $0.10

[[Page 39759]]

rate should provide $30,000 in assessment income and, in conjunction

with other funds available to the Committee, be adequate to meet this

year's expenses. Funds available to the Committee include income

derived from assessments, the surplus account (which contains money

from cull date sales), and the administrative reserves.

The higher assessment rate is needed to offset an expected

reduction in funds available to the Committee from the sale of cull

dates to non-human food product outlets. Proceeds from such sales are

deposited into the surplus account for subsequent use by the Committee.

Last year, the Committee applied $40,000 to the budget from the sale of

cull dates as the surplus account's share of Committee expenses. Based

on a trend of declining sales of cull dates over the past few years,

this year the Committee expects to only be able to apply $30,000 (25

percent less) to the budget from the sale of cull dates.

The Committee reviewed and unanimously recommended 1998-99

expenditures of $80,000 which included increases in salaries and

benefits and administrative expenses. Prior to arriving at this budget,

the Committee considered alternative expenditure levels, including a

proposal to not fund a compliance officer position, but determined that

expenditures for the position were necessary to promote compliance with

program requirements. The assessment rate of $0.10 per hundredweight of

assessable dates was then determined by applying the following formula

where:

A = 1998-99 surplus account ($30,000);

B = amount taken from administrative reserves ($20,000);

C = 1998-99 expenses ($80,000);

D = 1998-99 expected shipments (300,000 hundredweight);

(C - (A + B)) D = $0.10 per hundredweight.

A review of historical information and preliminary information

pertaining to the upcoming crop year indicates that the grower price

for the 1998-99 season could range between $30 and $75 per

hundredweight of dates. Therefore, the estimated assessment revenue for

the 1998-99 crop year as a percentage of total grower revenue would be

less than one percent.

This action would increase 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

would 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 date 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 4,

1998, 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 proposed rule would impose no additional reporting or

recordkeeping requirements on either small or large California date

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.

A 60-day comment period is provided to allow interested persons to

respond to this proposed rule.

List of Subjects in 7 CFR Part 987

Dates, Marketing agreements, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 987 is

proposed to be amended as follows:

PART 987--DOMESTIC DATES PRODUCED OR PACKED IN RIVERSIDE COUNTY,

CALIFORNIA

1. The authority citation for 7 CFR part 987 continues to read as

follows:

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

2. Section 987.339 is proposed to be revised to read as follows:

Sec. 987.339 Assessment rate.

On and after October 1, 1998, an assessment rate of $0.10 per

hundredweight is established for California dates.

Dated: July 21, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 98-19887 Filed 7-23-98; 8:45 am]

BILLING CODE 3410-02-P