Dried Prunes Produced in California; Decreased Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 993

[Docket No. FV99-993-3 PR]

Dried Prunes Produced in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: This rule would decrease the current assessment rate from

$3.28 to $2.00 per ton of salable dried prunes established for the

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

the 1999-2000 and subsequent crop years. The Committee is responsible

for local administration of the marketing order which regulates the

handling of dried prunes grown in California. Authorization to assess

dried prune handlers enables the Committee to incur expenses that are

reasonable and necessary to administer the program. The assessment rate

decrease is possible because the 1999-2000 assessable tonnage is

expected to total 173,700 salable tons (74 percent higher than last

crop year). The $2.00 assessment rate would allow the Committee to meet

its 1999-2000 expenses. The crop year begins August 1 and ends July 31.

The assessment rate would remain in effect indefinitely unless

modified, suspended, or terminated.

DATES: Comments must be received by August 30, 1999.

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) 720-5698; or E-mail:

[email protected]. 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: Toni Sasselli, Marketing Assistant, or

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

Office, Fruit and Vegetable Programs, AMS, USDA, 2202 Monterey Street,

suite 102B, Fresno, California 93721; telephone (559) 487-5901; Fax

(559) 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) 720-5698. Small businesses may request information

on complying with this regulation, or obtain a guide on complying with

fruit, vegetable, and specialty crop marketing agreements and orders by

contacting Jay Guerber, Marketing Order Administration Branch, Fruit

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

Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 720-

5698, or E-mail: Jay.G[email protected]. You may view the marketing

agreement and order small business compliance guide at the following

web site: http://www.ams.usda.gov/fv/moab.html.

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 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

dried prune handlers are subject to assessments. Funds to administer

the order are derived from such assessments. It is intended that the

assessment rate as proposed herein would be applicable to all

assessable dried prunes beginning on August 1, 1999, 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 would decrease the assessment rate established for the

Committee for the 1999-2000 and subsequent crop years from $3.28 per

ton to $2.00 per ton of salable 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 1998-99 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 29, 1999, and unanimously recommended to

[[Page 41046]]

increase its 1999-2000 budget from $327,180 to $347,400 and decrease

the current assessment rate from $3.28 to $2.00 per ton of salable

dried prunes. Even with the increased budget, the $1.28 per ton

decrease in the assessment rate to $2.00 per ton would allow the

Committee to meet its 1999-2000 expenses. The California Agricultural

Statistical Service estimates a 180,000 ton crop during the 1999-2000

crop year, of which 6,300 tons are not expected to be salable because

of size or quality, leaving a balance of 173,700 salable tons. This is

a 74 percent increase in salable tonnage from last year and allows the

Committee to recommend lowering its assessment rate.

The following table compares major budget expenditures recommended

by the Committee on June 29, 1999, and major budget expenditures in the

revised budget recommended on December 1, 1998.

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

($1,000)

Budget expense categories -------------------------------

1998-99 1999-2000

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

Salaries, Wages and Benefits............ 189.7 201.265

Research and Development................ 0 30

Office Rent............................. 23 24

Travel.................................. 18.5 21

Reserve (Contingencies)................. 50.93 16.735

Equipment Rental........................ 9 9.5

Data Processing......................... 3.85 5

Stationary and Printing................. 5 5.5

Office Supplies......................... 5 5

Postage and Messenger................... 5 7

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

The assessment rate recommended by the Committee was derived by

dividing anticipated expenses by the estimated salable tons of

California dried prunes. Production of dried prunes for the year is

estimated at 173,700 salable tons which should provide $347,400 in

assessment income. Income derived from handler assessments would be

adequate to cover budgeted expenses. Interest income also would be

available if assessment income is reduced for some reason. The

Committee is authorized to use excess assessment funds from the 1998-99

crop year (currently estimated at $51,857) for up to 5 months beyond

the end of the crop year to meet 1999-2000 crop year expenses. At the

end of the 5 months, the Committee refunds or credits excess funds to

handlers (Sec. 993.81(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

1999-2000 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 1,250 producers of dried prunes 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 less than $500,000, and small agricultural

service firms are defined as those whose annual receipts are less than

$5,000,000.

Currently the prune industry profile shows that 8 of the 20

handlers (40 percent) shipped over $5,000,000 of dried prunes and could

be considered large handlers by the Small Business Administration.

Twelve of the 20 handlers (60 percent) shipped under $5,000,000 of

dried prunes and could be considered small handlers. An estimated 90

producers, or about 7 percent of the 1,250 total producers, would be

considered large growers with annual income over $500,000. The majority

of handlers and producers of California dried prunes may be classified

as small entities.

This rule would decrease the current assessment rate established

for the Committee and collected from handlers for the 1999-2000 and

subsequent crop years from $3.28 per ton to $2.00 per ton of salable

dried prunes. The Committee unanimously recommended 1999-2000

expenditures of $347,400 and an assessment rate of $2.00 per ton of

salable dried prunes. The proposed assessment rate of $2.00 is $1.28

lower than the current 1998-99 rate (64 FR 3621, January 25, 1999). The

quantity of assessable dried prunes for the 1999-2000 crop year is now

estimated at 173,700 salable tons. Thus, the $2.00 rate should provide

$347,400 in assessment income and be adequate to meet this year's

expenses. Interest income also would be available to cover budgeted

expenses if the 1999-2000 expected assessment income falls short.

The following table compares major budget expenditures recommended

by the Committee on June 29, 1999, with major budget expenditures in

the revised budget recommended on December 1, 1998.

[[Page 41047]]

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

($1,000)

Budget expense categories -------------------------------

1998-99 1999-2000

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

Salaries, Wages and Benefits............ 189.7 201.265

Research and Development................ 0 30

Office Rent............................. 23 24

Travel.................................. 18.5 21

Reserve (Contingencies)................. 50.93 16.735

Equipment Rental........................ 9 9.5

Data Processing......................... 3.85 5

Stationery and Printing................. 5 5.5

Office Supplies......................... 5 5

Postage and Messenger................... 5 7

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

The Committee reviewed and unanimously recommended 1999-2000

expenditures of $347,400. The assessment rate of $2.00 per ton of

salable dried prunes was then determined by dividing the total

recommended budget by the estimated salable dried prunes. The Committee

is authorized to use excess assessment funds from the 1998-99 crop year

(currently estimated at $51,857) for up to 5 months beyond the end of

the crop year to fund 1999-2000 crop year expenses. At the end of the 5

months, the Committee refunds or credits excess funds to handlers

(Sec. 993.81(c)). Anticipated assessment income and interest income

during 1999-2000 would be adequate to cover authorized expenses.

Recent price information indicates that the grower price for the

1999-2000 season should average above $850 per salable ton of dried

prunes. Based on estimated shipments of 173,700 salable tons,

assessment revenue during the 1999-2000 crop year is expected to be

less than 1 percent of the total expected grower revenue.

This action would decrease the assessment obligation imposed on

handlers. Assessments are applied uniformly on all handlers, and some

of the costs may be passed on to producers. However, decreasing the

assessment rate would reduce the burden on handlers, and may reduce the

burden on producers. 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 29, 1999, 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 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.

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 1999-2000 crop year begins on August 1, 1999, and the

marketing order requires that the rate of assessment for each crop year

apply to all assessable dried prunes handled during such crop year; (2)

the proposed rule would decrease the assessment rate for assessable

prunes beginning with the 1999-2000 crop year; and (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.

List of Subjects in 7 CFR Part 993

Marketing agreements, Plums, Prunes, Reporting and Recordkeeping

requirements.

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

proposed to be 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.

2. Section 993.347 is revised to read as follows:

Sec. 993.347 Assessment rate.

On and after August 1, 1999, an assessment rate of $2.00 per ton is

established for California dried prunes.

Dated: July 23, 1999.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 99-19352 Filed 7-28-99; 8:45 am]

BILLING CODE 3410-02-P