Olives Grown in California; Revisions to Handling Requirements and Notice of Request for Revision of a Currently Approved Information Collection

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV99-932-3 PR]

Olives Grown in California; Revisions to Handling Requirements

and Notice of Request for Revision of a Currently Approved Information

Collection

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposal invites comments on revisions to the handling

requirements under the California olive marketing order and announces

the Agricultural Marketing Service's (AMS) intention to request a

revision to the currently approved information collection requirements

issued under the marketing order. The olive marketing order regulates

the handling of olives grown in California, and is administered locally

by the California Olive Committee (committee). This rule would

establish exemption and safeguard requirements for handlers desiring to

ship a small portion of their olives as new packaged olive products for

test marketing and market development projects. If implemented, this

rule would help provide uniform procedures under the order and improve

overall program administration.

DATES: Comments must be received by December 27, 1999.

ADDRESSES: Interested persons are invited to submit written comments

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

Fruit and Vegetable Programs, AMS, USDA, room 2525-S, PO Box 96456,

Washington, DC 20090-6456; Fax: (202) 720-5698; or E-mail:

[email protected]. All comments should reference the docket

number and the date and page number of this issue of the Federal

Register and will be made available for public inspection in the Office

of the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, California Marketing

Field Office, Marketing Order Administration Branch, F&V, 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, PO 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, PO 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 proposal is issued under Marketing

Agreement No. 148 and Marketing 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 proposed

rule in conformance with Executive Order 12866.

This proposal has been reviewed under Executive Order 12988, Civil

Justice Reform. This rule is not intended to have retroactive effect.

This proposal 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. A 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 proposal invites comments on revisions to handling

requirements under the order for olives grown in California. The

revision would implement procedures and reporting requirements for

handlers desiring to use a small portion of their olives to test market

and initiate market development projects for new packaged olive

products. The procedures include completion and submission of a new

form, the COC Form 155, and approval by committee staff. This rule also

announces AMS's intention to request a revision to the currently-

approved information collection requirements issued under the marketing

order.

Sections 932.51 and 932.52 of the olive marketing order authorize

regulatory requirements regarding the handling of California packaged

olives. Such requirements include incoming and outgoing handling

requirements with regard to quality, size, and style of olives. Certain

of these requirements are implemented under Sec. 932.149. Styles of

olives include whole, pitted, sliced, segmented (wedged), halved,

chopped, and broken pitted. Under this proposal, handlers would be

permitted to use other styles of olives and to add other ingredients to

the finished product, such as flavorings, pieces of garlic, or jalapeno

peppers.

Section 932.55 of the order provides authority for exempting from

any or all requirements handlers handling olives which are used for

specified purposes, including shipments of olives used to facilitate

the conduct of marketing research and development projects. Section

932.55 of the order also provides authority for the committee to

recommend rules, regulations, and safeguards necessary to ensure that

[[Page 57598]]

olives exempted under the provisions of this section are handled only

as authorized.

Section 932.155 of the order's rules and regulations provides

specific safeguards for certain special purpose shipments of packaged

olives. However, these regulations do not include requirements and

procedures related to shipping packaged olives for test marketing and

market development. In the past, the committee has on occasion approved

such marketing projects. This rule proposes revising Sec. 932.155 for

the purpose of clarifying the language and to include an exemption and

safeguards in the rules and regulations for shipments of new packaged

products for test marketing and market development. This would clarify

existing practices in the regulations, and would establish uniform

procedures for all handlers to ensure that the handling of new product

packaged olives exempted under the provisions of Sec. 932.55 will be

handled only as authorized. Such new products could include packaged

olives of different styles than those earlier mentioned containing

various ingredients or flavorings, such as pieces of garlic, or

jalapeno peppers.

The proposed rule includes a new form, the COC 155. Prior to

engaging in test marketing and initiating market development projects

for a new product, a handler would be required to file the COC 155 with

the committee. The form includes: (1) The name and address of the

requesting handler; (2) the quantity of olives to be utilized (limited

to not more than five percent of the applicant handler's crop year

acquisitions); (3) specific market outlet; (4) flavorings or other

ingredients added to the olives; (5) style of olives used; (6) type of

olives used, either black or green ripe; (7) container sizes; (8)

varieties used, whether Ascolano, Barouni, Manzanillo, Mission,

Sevillano, etc.; (9) sizes of olives utilized; (10) approximate dates

on which the new product will be packaged; (11) place of inspection;

(12) certification that all assessments and reporting in effect under

the marketing order will be met prior to shipment; (13) certification

that all such fruit will be kept separate from other packaged olives

and will be so identified by control cards or other means acceptable to

the Inspection Service; (14) purpose and nature of the request, whether

for test marketing, evaluation, market research, etc.; and (15) an

estimate of the amount of time required to complete the market-test.

The committee shall promptly approve or deny the application, and may

add limitations to any such approval.

Any product remaining at the end of the test-market period shall be

disposed of according to paragraph (a) of Sec. 932.155, which specifies

procedures for disposing of packaged olives in the production of olive

oil, donating to a charitable organization, and by dumping.

On December 10, 1998, the committee met to discuss the

recommendation. Additional discussion occurred at various subcommittee

meetings prior to the December 10, 1998, committee meeting.

According to the committee, demand for packaged olives has remained

relatively stagnant in recent years. The committee believes that to

improve returns to producers and handlers, handlers must have the

flexibility to respond to shifting trends in the marketplace by test

marketing new products. Handlers must be allowed the opportunity to try

marketing innovative new products free from certain marketing order

obligations, such as style and flavor requirements, which appear to be

too restrictive for these new products. Such shipments, will,

therefore, be exempt from the requirements of Sec. 932.149. Because it

appears that such shipments can comply with all other order

requirements, they will remain applicable. This would allow the

handlers to respond to marketing opportunities and requests from

buyers, which could result in increased olive sales. In addition, since

handlers have large amounts of capital invested in their processing

plants, any increase in the amount of olives processed yields a

reduction of per unit processing costs, which is a benefit to handlers

and producers.

It has been the industry's experience that the ability to ship new

products for test marketing and market development helps to encourage

handlers to develop new product lines. The committee believes that this

option should continue to be available, allowing handlers to take

advantage of additional marketing opportunities to expand the market

for processed olives. Adding procedures to the rules and regulations

will help clarify the existing practice, and will provide uniform

requirements for handlers.

Therefore, when the committee met in December, it unanimously

recommended modifying the rules and regulations to specify procedures

and reporting requirements to permit handlers to ship a small portion

of their olives for new packed olive products for test marketing and

market development projects. In addition, the committee recommended

development of a new form, the COC Form 155, that handlers interested

in test marketing and market development projects for new olive

products must complete and file with the committee.

The information supplied by the applicant handler would provide the

committee with information necessary to ensure that the product is used

for test marketing or for marketing development projects and that the

Inspection Service is aware of the product.

The new COC Form 155 will require a revision in the information

collection requirements under the order. It is estimated that COC Form

155 would require 20 minutes for the applicant handlers to complete. It

is expected that this could result in an increased reporting burden to

handlers. The increased burden is estimated to be 20 minutes per

handler annually. If all three handlers applied, the COC Form 155 would

add 1 hour in total annual hours to the current response burden.

The information collection requirements contained in the referenced

Sec. 932.155 will require approval by the Office of Management and

Budget (OMB) under the provisions of 44 U.S.C. Chapter 35.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), AMS has considered the economic impact of this action 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 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 3 handlers subject to regulation under the order and

approximately 1,200 producers of olives in the regulated area. Small

agricultural service firms have been defined by the Small Business

Administration (13 CFR 121.601) as those having annual receipts of less

than $5,000,000, and small agricultural producers are defined as those

having annual receipts of less than $500,000. None of the olive

handlers may be classified as small entities. The majority of producers

may be classified as small entities.

A review of historical and preliminary information pertaining to

the current fiscal year (January 1 through December 31) indicates that

the total grower revenue for the 1999 crop year (August

[[Page 57599]]

1 through July 31) is estimated to be approximately $39,500,000, and

the average grower revenue approximately $33,000. Thus, it can be

concluded that the majority of producers of California olives may be

classified as small entities.

This rule would revise Sec. 932.155 to include requirements for

handlers desiring to ship olives to test markets and initiate market

development projects for small quantities of new olive products. This

rule would also reformat Sec. 932.155 for purposes of clarity.

An alternative to this action would be to maintain the status quo,

whereby the regulations would not address the needs of handlers

desiring to ship new products for test marketing and market

development. However, the committee and the Department believe that

regulations should be modified to address these needs. This would help

ensure uniform requirements and procedures are followed by handlers who

desire to test market and initiate market development projects. Such

activity could ultimately result in increasing sales of processed

olives.

Under this proposed rule, the committee would review written

requests from handlers interested in test marketing and market

development of new product lines. Such requests would be made on a new

form, the COC 155, which would require uniform information from all

applicant 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.

This new form is anticipated to be utilized when handlers have

developed new product lines which they desire to test market.

Accordingly, this action would impose an additional reporting or

recordkeeping requirement on three olive handlers by requiring COC Form

155 to be filed prior to the test marketing of a new canned olive

product. The form is estimated to take approximately 20 minutes to

complete. There are only three handlers regulated under the order, and

the additional burden created by the use of this form by all handlers

is estimated to be 1 annual hour.

The Department has not identified any relevant Federal rules that

duplicate, overlap, or conflict with this proposed rule.

In addition, the committee's meeting was widely publicized

throughout the olive industry and all interested persons were

encouraged to attend the meeting and participate in committee

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

10, 1998, meeting was a public meeting and all entities, both large and

small, were encouraged to express views on this issue. The committee is

comprised of 16 members, of which 8 are producers and 8 are handlers.

Each of the three handler entities is presently represented on the

committee. Finally, interested persons are invited to submit

information on the regulatory and informational impacts of this action

on small businesses.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.

Chapter 35), AMS announces its intention to request a revision to a

currently approved information collection for olives grown in

California, Marketing Order No. 932.

Title: Olives Grown in California, Marketing Order 932.

OMB Number: 0581-0142.

Expiration Date of Approval: October 31, 2000.

Type of Request: Revision of a currently approved information

collection.

Abstract: Marketing order programs provide an opportunity for

producers of fresh fruits, vegetables, and specialty crops, in a

specified production area, to work together to solve marketing problems

that cannot be solved individually. Order regulations help ensure

adequate supplies of good quality product and adequate returns to

producers. Under the Agricultural Marketing Agreement Act of 1937

(Act), as amended (7 U.S.C. 601-674), marketing order programs are

established if favored by producers in referenda. The handling of the

commodity is regulated. The Secretary of Agriculture is authorized to

oversee order operations and issue regulations recommended by a

committee of representatives from each commodity industry.

The information collection requirements in this request are

essential to carry out the intent of the Act, to provide the

respondents the type of service they request, and to administer the

California olive marketing order program, which has been operating

since 1965.

The California olive marketing order authorizes the issuance of

quality, size, and inspection requirements. The order also has

authority for research and development projects, including paid

advertising. Pursuant to section 8e of the Act, import grade and size

requirements are implemented on olives imported into the United States.

The order and its rules and regulations authorize the California

Olive Committee (committee), the agency responsible for local

administration of the order, to require handlers and producers to

submit certain information. Much of this information is compiled in

aggregate and provided to the industry to assist in marketing

decisions.

The committee has developed forms as a means for persons to file

required information with the committee relating to olive supplies,

shipments, dispositions, and other information necessary to effectively

carry out the purpose of the Act and the order. California olives are

shipped year-round and these forms are used accordingly.

These forms require the minimum information necessary to

effectively carry out the requirements of the order, and their use is

necessary to fulfill the intent of the Act as expressed in the order.

The information collected would be used only by authorized

representatives of the USDA, including AMS, Fruit and Vegetable

Programs regional and headquarter's staff, and authorized employees of

the committee. Authorized committee employees and the industry are the

primary users of the information and AMS is the secondary user.

This proposed collection consists of a requirement for handlers to

file a form with the committee for approval to ship new olive products

to be test marketed.

The committee believes that to improve returns to producers and

handlers, handlers should be encouraged to look for outlets for new

product lines. One method to encourage development of new products is

to continue to allow test marketing of such products by including

authority in the rules and regulations that is uniformly applied to all

handlers. The information supplied by the applicant handler would

provide the committee with information necessary to ensure that the

product is used for test marketing or for marketing development

projects and that the inspection service is aware of the product.

Estimate of Burden: Public reporting burden for this collection of

information is estimated to average \1/3\ hour per response.

Respondents: California olive handlers.

Estimated Number of Respondents: 3

Estimated Number of Responses per Respondent: one annually.

Estimated Total Annual Burden on Respondents: 1 hour.

Comments are invited on: (1) Whether the proposed collection of the

information is necessary for the proper performance of the functions of

the agency, including whether the

[[Page 57600]]

information will have practical utility; (2) the accuracy of the

agency's estimate of the burden of the proposed collection of

information, including the validity of the methodology and assumptions

used; (3) ways to enhance the quality, utility and clarity of the

information to be collected; and (4) ways to minimize the burden of the

collection of information on those who are to respond, including

through the use of appropriate automated, electronic, mechanical, or

other technological collection techniques or other forms of information

technology.

Comments should reference OMB No. 0581-0142 and California Olive

Marketing Order No. 932, and be sent to the USDA in care of the docket

clerk at the address referenced above. All comments received will be

available for public inspection during regular business hours at the

same address and will become a matter of public record.

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

respond to this proposal. All responses to this notice will be

summarized and included in the request for OMB approval.

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. In Sec. 932.155, paragraphs (a) and (b) are revised to read as

follows:

Sec. 932.155 Special purpose shipments.

(a) The disposition of packaged olives covered by Sec. 932.152(d)

which are not reprocessed, and new packaged olive products covered

under paragraph (b) of this section which have not been disposed of by

the end of the test market period, shall be handled in conformity with

the applicable provisions of this paragraph.

(1) Under supervision of the Inspection Service, such packaged

olives may be disposed of for use in the production of olive oil or

dumped.

(2) Such packaged olives may be disposed of to a charitable

organization for use by such organization, provided the following

conditions are met:

(i) Any handler who wishes to so dispose of olives shall first file

a written application with, and obtain written approval thereof from,

the committee. Each such application shall contain at least:

(A) The name and address of the handler and the charitable

organization;

(B) The physical location of the charitable organization's

facilities;

(C) The quantity in cases, the variety, size, can size, and can

code of the packaged olives; and

(D) A certification from the charitable organization that such

olives will be used by the organization and will not be sold.

(ii) Prior to approval, the committee shall perform such

verification of the accuracy of the information on the application as

it deems necessary. The committee may deny any application if it finds

that the required information is incomplete or incorrect, or has reason

to believe that the intended receiver is not a charitable organization,

or that the handler or the organization has disposed of packaged olives

contrary to a previously approved application. The committee shall

notify the applicant and the organization in writing of its approval,

or denial, of the application. Any such approval shall continue in

effect so long as the packaged olives covered thereby are disposed of

consistent with this section. The committee shall notify the handler

and the organization of each such termination of approval. The handler

shall furnish the committee upon demand such evidence of disposition of

the packaged olives covered by an approved application as may be

satisfactory to the committee.

(b) In accordance with the provisions of Sec. 932.55(b), packaged

olives to be used in marketing development projects may be handled

without regard to Sec. 932.149 provided the following conditions are

met. Such olives must be identified to the satisfaction of the

Inspection Service and kept separate from other packaged olives. The

handler shall submit to the committee for its approval ``COC Form 155''

at least 10 working days prior to the shipment of such packaged olives

to test markets, and report progress or changes to the committee, as

requested. The applicant handler shall provide the following

information on COC Form 155:

(1) The quantity of olives to be utilized (limited to not more than

five percent of the handler's crop year acquisitions);

(2) Specific market outlet;

(3) Flavorings or other ingredients added to the olives;

(4) Style of olives used;

(5) Type of olives used, either black or green ripe;

(6) Container sizes;

(7) Varieties used, whether Ascolano, Barouni, Manzanillo, Mission,

Sevillano, etc.;

(8) Sizes of olives utilized;

(9) Approximate dates when the new product will be packaged;

(10) Name and address of requesting handler;

(11) Place of inspection;

(12) Certification that all assessment and reporting requirements

in effect under the marketing order will be met prior to shipment;

(13) Certification that all such fruit will be kept separate from

other packaged olives and will be so identified by control cards or

other means acceptable to the Inspection Service;

(14) Purpose and nature of the request, whether for test marketing,

evaluation, market research, etc.; and

(15) An estimate of the amount of time required to complete the

test. The committee shall promptly approve or deny the application, and

may add limitations to any such approval. Upon approval, the applicant

handler shall notify the Inspection Service. Packaged olives so

identified and remaining unused at the end of the approved test-market

period shall be disposed of according to paragraph (a) of this section.

* * * * *

Dated: October 18, 1999.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 99-27744 Filed 10-25-99; 8:45 am]

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