2011-22119. Dried Prunes Produced in California; Decreased Assessment Rate

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Interim rule with request for comments.

SUMMARY:

This rule decreases the assessment rate established for the Prune Marketing Committee (Committee) for the 2011-12 and subsequent crop years from $0.27 to $0.22 per ton of salable dried prunes handled. The Committee locally administers the marketing order which regulates the handling of dried prunes produced in California. Assessments upon dried prune handlers are used by the Committee to fund reasonable and necessary expenses of the program. The crop year begins August 1 and ends July 31. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated.

DATES:

Effective August 31, 2011. Comments received by October 31, 2011, 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, 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 document 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, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this rule will be included in the record and will be made available to the public. Please be advised that the identity of the individuals or entities submitting the comments will be made public on the Internet at the address provided above.

FOR FURTHER INFORMATION CONTACT:

Andrea Ricci or Kurt Kimmel, 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 Laurel May, 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 Order No. 993, both as amended (7 CFR part 993), regulating the handling of dried prunes produced in California, hereinafter referred to as the “order.” The 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 (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 issued herein will be applicable to all assessable dried prunes beginning August 1, 2011, and continue until amended, suspended, or terminated.

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 decreases the assessment rate established for the Committee for the 2011-12 and subsequent crop years from $0.27 per to $0.22 per ton of salable dried prunes.

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 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 2010-11 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 16, 2011, and unanimously recommended 2011-12 expenditures of $46,497 and an assessment rate of $0.22 per ton of salable dried prunes. In comparison, last year's budgeted expenditures were $55,548. The assessment rate of $0.22 is $0.05 lower than the rate currently in effect.

The Committee unanimously recommended the lower assessment rate because of a substantial decrease in salaries and wages expense. The current excess funds carried forward and estimated interest income combined with the funds generated from the decreased assessment rate and decreased crop is expected to provide adequate income to cover anticipated 2011-12 year expenses.

The major expenditures recommended by the Committee for the 2011-12 year include $20,993 for salaries and wages expense, $9,783 for operating expenses, and $15,721 for contingences. Budgeted expenses for these items in 2010-11 were $31,781, $10,730, and $13,037, respectively.

The assessment rate recommended by the Committee was derived by considering the excess funds carried forward into the 2011-12 crop year, the estimated interest income, the estimated salable tons of California dried prunes, and handler assessment revenue needed to meet anticipated expenses. Excess funds carried forward are expected to be about $19,650 and interest income is estimated at $7. Dried prune production for the year is estimated at 122,000 salable tons, which should provide $26,840 in assessment income. In addition, most of the Committee's expenses reflect its portion of the joint administrative costs of the Committee and the California Dried Plum Board (CDPB). Based on the Committee's reduced activities in the recent years, it is funding only 5 percent of the shared expenses of the two programs. This funding level is similar to that of last year. The Committee believes that the current excess funds carried forward from the 2010-11 crop year and estimated interest income combined with funds generated from the lower 2011-12 assessment rate and decreased crop will be adequate to cover its anticipated 2011-2012 expenses of $46,497.

The Committee is authorized under § 993.81(c) of the order to use excess assessment funds from the 2010-11 crop year (currently estimated at $19,650) for up to 5 months beyond the end of the crop year to meet the 2011-12 crop year expenses. At the end of the 5 months, the Committee either refunds or credits excess funds to handlers.

The assessment rate established in this rule will continue in effect indefinitely unless modified, suspended, or terminated by USDA 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 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 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 2011-12 budget and those for subsequent crop years will be reviewed and, as appropriate, approved by USDA.

Initial Regulatory Flexibility Analysis

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), 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 800 producers of dried prunes in the California area and approximately 21 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $7,000,000.

Committee data indicates that about 64 percent of the handlers ship under $7,000,000 worth of dried prunes. Dividing the average dried prune crop value for 2010 reported by the National Agricultural Statistics Service (NASS) of $149,860,000 by the number of producers (800) yields the average annual producer revenue estimate of about $187,325. Thus, the majority of handlers and California dried prune producers may be classified as small entities.

This rule decreases the assessment rate established for the Committee and collected from handlers for the 2011-12 and subsequent crop years from $0.27 to $0.22 per ton of salable dried prunes. The Committee unanimously recommended 2011-12 estimated expenses of $46,497 and a decreased assessment rate of $0.22 per ton of salable dried prunes.

The quantity of assessable dried prunes for the 2011-12 crop year is estimated at 122,000 tons. Thus, the $0.22 rate should provide $26,840 in assessment income. The current excess funds carried forward and estimated interest income combined with funds generated from the decreased assessment rate and decreased crop is expected to provide adequate income to cover anticipated 2011-12 crop year expenses.

The major expenditures recommended by the Committee for the 2011-12 crop year include $20,993 for salaries and wages expense, $9,783 for operating expenses, and $15,721 for contingences. Budgeted expenses for these items in 2010-11 were $31,781, $10,730, and $13,037, respectively.

The Committee unanimously recommended the lower assessment rate because of a substantial decrease in salaries and wages expense. The current excess funds carried forward and estimated interest income combined with the funds generated from the decreased assessment rate and decreased crop are expected to provide adequate income to cover anticipated 2011-12 year expenses.

The Committee discussed alternatives to this rule, including alternative expenditure levels, but determined that the recommended expenses were reasonable and necessary to adequately cover program operations. Prior to arriving at its budget of $46,497, the Committee considered information from various sources, including the Committee's Executive Subcommittee. The Executive Subcommittee reviewed the administrative expenses shared between the Committee and the CDPB in recent years.

According to NASS, the season average producer price was $1,230 in 2009 and $1,180 per ton of salable dried prunes in 2010. A review of this historical data and preliminary information pertaining to the upcoming crop year indicates that the producer prices for the 2011-12 crop year could range between $1,230 and $1,180. Therefore, the estimated assessment revenue for the 2011-12 crop year as a percentage of total producer prices during the 2011-12 crop year could range between 0.018 and 0.019 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 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 16, 2011, 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 comments on this interim rule, including the regulatory and informational impacts of this action on small businesses.

In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. Chapter 35), the order's information collection requirements have been previously approved by the Office of Management and Budget (OMB) and assigned OMB No. 0581-0178 Vegetable and Specialty Crop Marketing Orders. No changes in those requirements as a result of this action are necessary. Should any changes become necessary, they would be submitted to OMB for approval.

This action 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 reduce information requirements and duplication by industry and public sector agencies.

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/​MarketingOrdersSmallBusinessGuide. Any questions about the compliance guide should be sent to Laurel May 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 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 because: (1) The 2011-12 crop year begins on August 1, 2011, 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) this action decreases the assessment rate for assessable dried prunes beginning with the 2011-12 crop year; (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 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 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:

§ 993.347

Assessment rate.

On and after August 1, 2011, an assessment rate of $0.22 per ton is established for California dried prunes.

Dated: August 19, 2011.

David R. Shipman,

Acting Administrator, Agricultural Marketing Service.