[Federal Register Volume 63, Number 161 (Thursday, August 20, 1998)]
[Rules and Regulations]
[Pages 44541-44544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-22454]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 920
[Docket No. FV98-920-3 IFR]
Kiwifruit Grown in California; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule decreases the assessment rate and changes the
assessable unit from $0.0225 per tray or tray equivalent to $0.05 per
22-pound volume fill container or equivalent of kiwifruit established
for the Kiwifruit Administrative Committee (Committee) under Marketing
Order No. 920 for the 1998-99 and subsequent fiscal periods. The
assessment rate of $0.0225 per tray or tray equivalent approximates
$0.0675 per 22-pound volume fill container. Thus, the assessment rate
of $0.05 per 22-pound volume fill container is less than the assessment
rate currently in effect. The Committee is responsible for local
administration of the marketing order which regulates the handling of
kiwifruit grown in California. Authorization to assess kiwifruit
handlers enables the Committee to incur expenses that are reasonable
and necessary to administer the program. The fiscal period began August
1 and ends July 31. The assessment rate will remain in effect
indefinitely unless modified, suspended, or terminated.
DATES: Effective August 21, 1998. Comments received by October 19,
1998, will be considered prior to issuance of a final rule.
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, 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: Toni Sasselli, Marketing Assistant or
Rose M. Aguayo, 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, 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 Order
No. 920, as amended (7 CFR part 920), regulating the handling of
kiwifruit grown in California, hereinafter referred to as the
``order.'' The marketing order is 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
[[Page 44542]]
in effect, California kiwifruit 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 kiwifruit beginning August 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 decreases the assessment rate and changes the assessable
unit established for the Committee for the 1998-99 and subsequent
fiscal periods from $0.0225 per tray or tray equivalent to $0.05 per
22-pound volume fill container or equivalent. The assessment rate of
$0.0225 per tray or tray equivalent approximates $0.0675 per 22-pound
volume fill container. Thus, the assessment rate of $0.05 per 22-pound
volume fill container for the 1998-99 and subsequent fiscal periods is
less than the assessment rate currently in effect.
The California kiwifruit 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 of California
kiwifruit. 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 1997-98 and subsequent fiscal periods, the Committee
recommended, and the Department approved, an assessment rate that would
continue in effect from fiscal period to fiscal period 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 July 8, 1998, and unanimously recommended
1998-99 expenditures of $135,250 and an assessment rate of $0.05 per
22-pound volume fill container or equivalent of kiwifruit. In
comparison, last year's budgeted expenditures were $161,286, and the
assessment rate was $0.0225 per tray equivalent, which approximates
$0.0675 per 22-pound volume fill container. The assessment rate of
$0.05 per 22-pound volume fill container is $0.0175 or 26 percent lower
than the equivalent rate currently in effect. The Committee voted to
reduce 1998-99 budgeted expenditures and the assessment rate to lessen
the financial burden on California kiwifruit handlers.
The Committee recommended changing the assessable unit to a 22-
pound volume fill container or equivalent basis because this container
is now the predominant container being used by handlers within the
industry. Tray packs had been the container of choice in previous
seasons, but handlers have been switching gradually to volume fill
containers.
The Committee owes $32,577 to the California Kiwifruit Commission
(Commission) and plans to pay off the loan during the 1998-99 fiscal
period. The Commission administers a State program utilized to promote
kiwifruit grown in California. The Committee and Commission share staff
and expenses pursuant to an agreement.
During the 1997-98 fiscal period, the Committee borrowed $32,577
from the Commission pursuant to Sec. 920.41 of the order to cover a
funding deficit. Handler assessments received were lower than expected
because the 1997-98 crop of 9 million trays or tray equivalents and
shipments of 8.5 million trays or tray equivalents were smaller than
the Committee anticipated. The Committee had estimated that assessments
would total $225,000 for the 1997-98 fiscal period, and that shipments
for the period would total 10 million trays or tray equivalents.
The following table compares major budget expenditures (in
thousands of dollars) recommended by the Committee for the 1998-99 and
1997-98 fiscal periods:
------------------------------------------------------------------------
Budget expense categories 1998-99 1997-98
------------------------------------------------------------------------
Administrative Staff & Field Salaries............. 44.2 102.2
Contingency Fund/Operating Reserve................ 29.2 0
Travel, Food & Lodging............................ 5 13.8
Accident & Health Insurance....................... 3.8 12.2
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The assessment rate recommended by the Committee was derived by
considering anticipated expenses, expected shipments of California
kiwifruit, and additional pertinent factors. Kiwifruit shipments for
the year are estimated at 2,705,000 22-pound volume fill containers or
equivalents of kiwifruit, which should provide $135,250 in assessment
income. Income derived from handler assessments will be adequate to
cover budgeted expenses, to reimburse the borrowed funds, and to fund
an adequate reserve. It is anticipated that the assessment rate of
$0.05 per 22-pound volume fill container or equivalent of kiwifruit
handled will provide a reserve of $29,200 at the end of the fiscal
year. Currently, there are no funds in the reserve. Reserve funds will
be kept within 1 fiscal period's expenses, the maximum permitted under
Sec. 920.42 of the order.
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 is effective for an indefinite
period, the Committee will continue to meet prior to or during each
fiscal period 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
1998-99 budget and those for subsequent fiscal periods 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
[[Page 44543]]
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 450 producers of kiwifruit in the
production area and approximately 60 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. One of the 60 handlers subject to regulation has annual
kiwifruit sales of at least $5,000,000, and the remaining 59 handlers
have sales less than $5,000,000, excluding receipts from any other
sources. Ten of the 450 producers subject to regulation have annual
sales of at least $500,000, and the remaining 440 producers have sales
less that $500,000, excluding receipts from any other sources. The
majority of California kiwifruit producers and handlers may be
classified as small entities.
This rule decreases the assessment rate and changes the assessable
unit established for the Committee for the 1998-99 and subsequent
fiscal periods from $0.0225 per tray or tray equivalent to $0.05 per
22-pound volume fill container or equivalent. The assessment rate of
$0.0225 per tray or tray equivalent approximates $0.0675 per 22-pound
volume fill container. Thus, the assessment rate of $0.05 per 22-pound
volume fill container for the 1998-99 and subsequent fiscal periods is
$0.0175 less than the assessment rate currently in effect. The
Committee unanimously recommended 1998-99 expenditures of $135,250. The
quantity of assessable kiwifruit for the 1998-99 fiscal period is
estimated at 2,705,000, 22-pound volume fill containers. Thus, the
$0.05 rate should provide $135,250 in assessment income and be adequate
to meet this year's expenses.
The Committee recommended changing the assessable unit to a 22-
pound volume fill container or equivalent basis because this container
is now the predominate container being used by handlers within the
industry. Tray packs had been the container of choice in previous
seasons, but handlers have been switching gradually to volume fill
containers.
The following table compares major budget expenditures (in
thousands of dollars) recommended by the Committee for the 1998-99 and
1997-98 fiscal years:
------------------------------------------------------------------------
Budget expense categories 1998-99 1997-98
------------------------------------------------------------------------
Administrative Staff & Field Salaries............. 44.2 102.2
Contingency Fund/Operating Reserve................ 29.2 0
Travel, Food & Lodging............................ 5 13.8
Accident & Health Insurance....................... 3.8 12.2
------------------------------------------------------------------------
The Committee owes $32,577 to the California Kiwifruit Commission
(Commission) and plans to pay off the loan during the 1998-99 fiscal
period. The Commission administers a State program utilized to promote
California kiwifruit. The Committee and Commission share staff and
expenses through an agency agreement.
The Committee borrowed the money from the Commission pursuant to
Sec. 920.41 of the order to cover a fund shortage during the 1997-98
fiscal period. Handler assessments received were lower than expected
because the 1997-98 crop of 9 million trays or tray equivalents and
shipments of 8.5 million trays or equivalents were smaller than the
Committee anticipated. The Committee had estimated that assessments
would be $225,000 for the 1997-98 fiscal period and that kiwifruit
shipments would be 10 million trays or equivalents.
To lessen the financial burden on handlers, the Committee voted to
reduce 1998-99 expenditures and the assessment rate. The reduced rate
will allow the Committee to meet its expenses, to reimburse the
borrowed funds, and to establish an adequate reserve (estimated to be
$29,200 at the end of the 1998-99 fiscal period). Currently, there are
no funds in the reserve. Section 920.42 of the order provides for a
maximum reserve equal to approximately 1 fiscal period's expenses.
Prior to arriving at this budget, the Committee considered
information from various sources, such as the Committee's Finance and
Assessment Subcommittee. Alternative expense levels and assessment
rates were considered at several industry strategic planning meetings.
The assessment rate of $0.05 per 22-pound volume fill container or
equivalent of assessable kiwifruit was determined by dividing the total
recommended budget for 1998-99 by the quantity of assessable kiwifruit,
estimated at 2,705,000 22-pound volume fill containers or equivalents.
A review of historical information and preliminary information
pertaining to the upcoming fiscal period indicates that the grower
price for the 1998-99 season will be approximately $7.59 per 22-pound
volume fill container or equivalent of kiwifruit. Therefore, the
estimated assessment revenue for the 1998-99 fiscal period as a
percentage of total grower revenue is estimated at 0.7 percent.
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 kiwifruit industry and all
interested persons were invited to attend the meeting and participate
in Committee deliberations on all issues.
Like all Committee meetings, the July 8, 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 action imposes no additional reporting or recordkeeping
requirements on either small or large California kiwifruit 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.
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 is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect, and that good cause exists for not postponing the effective
date of this rule until 30 days after publication in the Federal
Register
[[Page 44544]]
because: (1) The 1998-99 fiscal period began on August 1, 1998, and the
marketing order requires that the rate of assessment for each fiscal
period apply to all assessable kiwifruit handled during such fiscal
period; (2) this action decreases the assessment rate for assessable
kiwifruit beginning with the 1998-99 fiscal period; (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; and (4) this interim final rule provides a 60-day
comment period, and all comments timely received will be considered
prior to finalization of this rule.
List of Subjects in 7 CFR Part 920
Kiwifruit, Marketing agreements.
For the reasons set forth in the preamble, 7 CFR part 920 is
amended as follows:
PART 920--KIWIFRUIT GROWN IN CALIFORNIA
1. The authority citation for 7 CFR part 920 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 920.213 is revised to read as follows:
Sec. 920.213 Assessment rate.
On and after August 1, 1998, an assessment rate of $0.05 per 22-
pound volume fill container or equivalent of kiwifruit is established
for kiwifruit grown in California.
Dated: August 13, 1998.
Eric M. Forman,
Acting Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-22454 Filed 8-19-98; 8:45 am]
BILLING CODE 3410-02-P
