Olives Grown in California; Increased Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV98-932-1 PR]

Olives Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate established for

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

932 for the 1998 and subsequent fiscal years. The Committee is

responsible for local administration of the marketing order which

regulates the handling of olives grown in California. Authority to

assess olive handlers enables the Committee to incur expenses that are

reasonable and necessary to administer the program. The fiscal year

began January 1 and ends December 31. The assessment rate would remain

in effect indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by March 19, 1998.

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 Programs, AMS, USDA, room 2525-S, PO 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

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, 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 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 applicable to all assessable

olives beginning January 1, 1998, 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 would increase the assessment rate established for the

Committee for the 1998 fiscal year 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 fiscal year 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 fiscal year 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 59% 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

[[Page 7733]]

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's 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 would be adequate

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

would 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 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 is effective for an indefinite

period, the Committee would 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 and are published in local newspapers. 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 fiscal year budget and

those for subsequent fiscal 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 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. None of the olive

handlers may be classified as small entities, while the majority of

olive producers may be classified as small entities.

This rule would increase the assessment rate established for the

Committee and collected from handlers for the 1998 fiscal year and

subsequent fiscal years from $14.99 per ton to $17.10 per ton. The

Committee unanimously recommended 1998 fiscal year expenditures of

$1,750,400 and an assessment rate of $17.10 per ton. The increased

assessment rate is needed because the quantity of assessable olives for

the 1998 fiscal year is 85,585 tons, a decrease of 59% from last year's

crop of 144,075 tons. The $17.10 rate should provide $1,463,504 in

assessment income and be adequate to meet this year's budgeted

expenses, when combined with funds from the authorized reserve and

interest income.

A review of historical and preliminary information pertaining to

the upcoming fiscal 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. Because most of the canning sizes

will probably be sold closer to the $825 per ton price, the estimated

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

grower revenue will be closer to 2 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

are expected to 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. 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 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 30-day comment period is provided to allow interested persons to

respond to this proposed rule. Thirty days is deemed appropriate

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

expenses which are incurred on a continuous basis; (2) the 1998 fiscal

year began on January 1, 1998, and the marketing order requires that

the rate of assessment for each fiscal year apply to all assessable

olives handled during such fiscal year; (3) all four handlers are

represented on the Committee and participated in deliberations; and (4)

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.

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

proposed to be 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 proposed to be revised to read as follows:

[[Page 7734]]

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: February 9, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 98-3869 Filed 2-13-98; 8:45 am]

BILLING CODE 3410-02-P