Dried Prunes Produced in California; Decreased Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 993

[Docket No. FV99-993-3 FR]

Dried Prunes Produced in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule decreases the 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 will allow the Committee to meet its 1999-2000

expenses. The crop year began August 1 and ends July 31. The assessment

rate will remain in effect indefinitely unless modified, suspended, or

terminated.

EFFECTIVE DATES: September 20, 1999.

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 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].

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 issued herein will 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 decreases 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

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

decreasing 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 allowed 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 1998-99 budget recommended on December 1, 1998.

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($1,000)

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

1998-99 1999-2000

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Salaries, Wages & Benefits.................. 189.7 201.265

Research & 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 & Printing....................... 5 5.5

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

Postage & Messenger......................... 5 7

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The assessment rate recommended by the Committee was derived by

dividing

[[Page 50427]]

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 will be adequate to cover budgeted

expenses. Interest income also will 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 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

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 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

1999-2000 budget and those for subsequent crop 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 1,250 producers of dried prunes in the

production area and approximately 20 handlers subject to regulation

under the marketing order. Small agricultural producers are 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, could 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 decreases the 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 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 will 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.

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

($1,000)

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

1998-99 1999-2000

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

Salaries, Wages & Benefits.................. 189.7 201.265

Research & 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 & Printing....................... 5 5.5

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

Postage & 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 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 will 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 decreases 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 reduces 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.

This rule imposes 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

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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 July 29, 1999 (64 FR 41045). Copies of the proposed rule

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

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

the Federal Register. A 30-day comment period ending August 30, 1999,

was provided for interested persons to respond to the proposal. No

comments were received.

A small business guide on complying with fruit, vegetable, and

speciality crop marketing agreements and orders may be viewed at the

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

about the compliance guide should be sent to Jay Guerber at the

previously mentioned address in the FOR FURTHER INFORMATION CONTACT

section.

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: (1) The

Committee needs to collect assessments from handlers based on the lower

rate as soon as possible to pay its expenses which are incurred on a

continuous basis; (2) the 1999-2000 crop year began 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

year; (3) handlers are aware of this rule which was recommended

unanimously at a public meeting; and (4) a 30-day comment period was

provided for in the proposed rule, and no comments were received.

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

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: September 13, 1999.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 99-24239 Filed 9-16-99; 8:45 am]

BILLING CODE 3410-02-P