07-4369. Dried Prunes Produced in California; Increased Assessment Rate

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Proposed rule.

SUMMARY:

This rule would increase the assessment rate established for the Prune Marketing Committee (committee) for the 2007-08 and subsequent crop years from $0.40 to $0.60 per ton of salable dried prunes. The committee locally administers the marketing order that regulates the handling of dried prunes in California. Assessments upon dried prune handlers are used by the committee to fund reasonable and necessary expenses of the program. The higher assessment rate is needed to offset an anticipated decrease in dried prune production this year. 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 September 27, 2007.

ADDRESSES:

Interested persons are invited to submit written comments concerning this rule. Comments must be sent to the Docket Clerk, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Fax: [phone]; or Internet: http://www.regulations.gov. 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, or can be viewed at: http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:

Terry Vawter, Senior Marketing Specialist, or Kurt Kimmel, Regional Manager, California Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA; Telephone: [phone], Fax: [phone]; or E-mail: [e-mail] or [e-mail].

Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: [phone], Fax: [phone], or E-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

This rule is issued under Marketing Agreement No. 110 and Marketing 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 (USDA) 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, 2007, 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 USDA 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 USDA 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 USDA'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 2007-08 and subsequent crop years from $0.40 to $0.60 per ton of salable dried prunes handled.

The California dried prune marketing order provides authority for the committee, with the approval of USDA, 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 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 at a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.

For the 2006-07 and subsequent crop years, the committee recommended, and USDA approved, an assessment rate that would continue in effect from crop year to crop year unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the committee or other information available to USDA.

The committee met on June 28, 2007, and unanimously recommended an increased assessment rate of $0.60 per ton of salable dried prunes and expenditures totaling $102,523 for the 2007-08 crop year. In comparison, last year's approved expenses as amended in April 2007 were $104,973. The proposed assessment rate of $0.60 per ton of salable dried prunes is $0.20 higher than the rate currently in effect.

The committee recommended a higher assessment rate based on a production estimate of 95,000 tons of salable dried prunes for this year, which is substantially less than the 187,737 tons produced last year. At the proposed assessment rate the assessment income for the 2007-08 crop year would be $57,000. The committee's proposed budget of expenses of $102,523 includes a five percent increase in personnel expenses, and a two percent increase in operating expenses. Combined salaries and expenses are about four percent higher than last year, or about $65,580. The committee also included $36,943 for contingencies. Most of the committee's expenses reflect its portion of the joint administrative costs of the committee and the California Dried Plum Board. Based on the committee's reduced activities in recent years, it is funding only ten percent of the shared expenses of the two programs. This funding level is similar to that of last year. The committee believes carryover funds, plus assessment and interest income, would be adequate to cover its estimated expenses of $102,523.

The major expenditures recommended by the committee for the 2007-08 crop year include $50,505 for salaries and benefits, $15,075 for operating expenses, and $36,943 for contingencies. For the 2006-07 crop year, the committee's budgeted expenses were $48,405 for salaries and benefits, $15,645 for operating expenses, and $44,326 for contingencies.

The assessment rate recommended by the committee was derived by dividing anticipated expenses by the estimated salable tons of California dried prunes. Dried prune production for the year is estimated to be 95,000 salable tons, which should provide $57,000 in assessment income at the proposed $0.60 per ton of salable dried prunes. Income derived from handler assessments, plus excess funds from the 2006-07 crop year should be adequate to cover budgeted expenses.

The committee is authorized under § 993.81(c) of the order to use excess assessment funds from the 2006-07 crop year (currently estimated at $45,423) for up to 5 months beyond the end of the crop year to meet 2007-08 crop year expenses. At the end of the 5 months, the committee either refunds or credits excess funds to handlers.

The proposed assessment rate would continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the committees 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 USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA would evaluate the committee's recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking would be undertaken as necessary. The committees' 2007-08 budget and those for subsequent crop years would be reviewed and, as appropriate, approved by USDA.

Initial Regulatory Flexibility Analysis

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.

There are approximately 1,100 producers of dried prunes in the production area and approximately 22 handlers subject to regulation under the marketing order. The Small Business Administration (13 CFR 121.201) defines small agricultural producers as those whose annual receipts are less than $750,000, and small agricultural service firms as those whose annual receipts are less than $6,500,000.

An estimated 1,068 of the 1,100 producers (97.1 percent) have incomes of less than $750,000 and would be considered small producers. Fourteen of the 22 handlers (63.6 percent) have incomes from handling prunes of less than $6,500,000 and could be considered small handlers. Therefore, the majority of handlers and producers of California dried prunes may be classified as small entities.

This rule would increase the assessment rate established for the committee and collected from handlers for the 2007-08 and subsequent crop years from $0.40 to $0.60 per ton of salable dried prunes.

The committee met on June 28, 2007, and unanimously recommended estimated expenses for 2007-08 of $102,523 and an increased assessment rate of $0.60 per ton of salable dried prunes. The committee's recommended budget was based on a five percent increase in personnel expenses and a two percent increase in operating expenses. Combined salaries and expenses are about four percent higher than last year, or about $65,580. The committee also included $36,943 for contingencies. Most of the committee's expenses reflect its portion of the joint administrative costs of the committee and the California Dried Plum Board. Based on the committee's reduced activities in recent years, it is funding only ten percent of the shared expenses of the two programs. This funding level is similar to that of last year. The committee believes carryover funds, plus assessment and interest income, would be adequate to cover its estimated expenses of $102,523.

The proposed assessment rate of $0.60 per ton of salable dried prunes is $0.20 higher than the rate currently in effect. The quantity of salable dried prunes for the 2007-08 crop year is currently estimated at 95,000 tons of salable dried prunes, compared to 187,737 tons of salable dried prunes for the 2006-07 crop year.

The major expenditures recommended by the committee for the 2007-08 crop year include $50,505 for salaries and benefits, $15,075 for operating expenses, and $36,943 for contingencies. Budgeted expenses for these items in 2006-07 were $48,405 for salaries and benefits, $15,645 for operating expenses, and $44,326 for contingencies.

The 2007-08 crop year assessment rate was derived after considering anticipated crop year expenses; estimated production of salable dried prunes; and the estimated income from other sources, such as interest. Therefore, the committee recommended an assessment rate of $0.60 per ton of salable dried prunes.

Prior to arriving at its budget of $102,523, the committee considered information from various sources, including the committee's Executive Subcommittee. Alternative assessment rates, including the rate currently in effect, and different expenditure levels were discussed by the subcommittee and the committee. An alternative to this action would be to continue with the $0.40 per ton assessment rate. However, an assessment rate of $0.60 per ton of salable dried prunes, along with excess funds from the 2006-07 crop year, is needed to provide enough income to fund the committee's operations.

Therefore, the committee agreed that $0.60 per ton of salable dried prunes is an acceptable assessment rate. Section 993.81(c) of the order provides the committee the authority to use excess assessment funds from the 2006-07 crop year (currently estimated at $45,423) for up to 5 months beyond the end of the crop year to meet 2007-08 crop year expenses. At the end of the 5 months, the committee either refunds or credits excess funds to handlers.

A review of historical information and preliminary data pertaining to the upcoming crop year indicates that the producer price for the 2007-08 crop year is expected to average between $1,500 and $1,600 per ton of salable dried prunes. Based on an estimated 95,000 salable tons of dried prunes, assessment revenue as a percentage of producer prices during the 2006-07 crop year is expected to be between .038 and .040 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 would 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 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 28, 2007, meeting was a public meeting and all entities, both large and small, were encouraged to express views on this issue. Finally, interested persons are invited to submit comments on this proposed rule, including 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 AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: 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.

A 20-day comment period is provided to allow interested persons to respond to this proposed rule. Twenty days is deemed appropriate because: (1) The 2007-08 crop year will begin on August 1, 2007, and the marketing order requires that the rate of assessment for each crop year apply to all assessable prunes handled during such crop year; (2) the committee needs to have sufficient funds to pay its expenses which are incurred on a continuous basis; 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:

§ 993.347

Assessment rate.

On and after August 1, 2007, an assessment rate of $0.60 per ton of salable dried prunes is established for California dried prunes.

Dated: August 30, 2007.

Lloyd C. Day,

Administrator, Agricultural Marketing Service.