[Federal Register: June 20, 2007 (Volume 72, Number 118)]
[Proposed Rules]
[Page 33919-33922]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20jn07-29]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 916 and 917
[Docket No. AMS-FV-07-0053; FV07-916/917-5 PR]
Nectarines and Peaches Grown in California; Decreased Assessment
Rates
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule would decrease the assessment rates established for
the Nectarine Administrative Committee and the Peach Commodity
Committee (committees) for the 2007-08 and subsequent fiscal periods
from $0.21 to $0.06 per 25-pound container or container equivalent of
nectarines and peaches handled. The committees locally administer the
marketing orders that regulate the handling of nectarines and peaches
grown in California. Assessments upon nectarine and peach handlers are
used by the committees to fund reasonable and necessary expenses of the
programs. The fiscal period runs from March 1 through the last day of
February. The assessment rates would remain in effect indefinitely
unless modified, suspended, or terminated.
DATES: Comments must be received by July 2, 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: (202) 720-8938; 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: Jennifer Garcia, Marketing Specialist,
or Kurt Kimmel, Regional Manager, California Marketing Field Office,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906; or e-mail:
Jennifer.Garcia3@usda.gov or Kurt.Kimmel@usda.gov.
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: (202) 720-
2491, Fax: (202) 720-8938, or e-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order
Nos. 916 and 917, both as amended (7 CFR parts 916 and 917), regulating
the handling of nectarines and peaches grown in California,
respectively, hereinafter referred to as the ``orders.'' The orders 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.
[[Page 33920]]
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the marketing orders now in effect, California
nectarine and peach handlers are subject to assessments. Funds to
administer the orders are derived from such assessments. It is intended
that the assessment rates as proposed herein would be applicable to all
assessable nectarines and peaches beginning on March 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 decrease the assessment rates established for the
Nectarine Administrative Committee (NAC) and the Peach Commodity
Committee (PCC) for the 2007-08 and subsequent fiscal periods from
$0.21 to $0.06 per 25-pound container or container equivalent of
nectarines and peaches handled.
The nectarine and peach marketing orders provide authority for the
committees, with the approval of USDA, to formulate annual budgets of
expenses and collect assessments from handlers to administer the
programs. The members of NAC and PCC are producers of California
nectarines and peaches, respectively. They are familiar with the
committees' needs, and with the costs for goods and services in their
local area and are, therefore, in a position to formulate appropriate
budgets and assessment rates. The assessment rates are formulated and
discussed in public meetings. Thus, all directly affected persons have
an opportunity to participate and provide input.
NAC Assessment and Expenses
For the 2006-07 fiscal period, the NAC recommended, and USDA
approved, an assessment rate of $0.21 per 25-pound container or
container equivalent of nectarines that would continue in effect from
fiscal period to fiscal period unless modified, suspended, or
terminated by USDA upon recommendation and information submitted by the
committee or other information available to USDA.
The NAC met on May 1, 2007, and unanimously recommended 2007-08
expenditures of $1,446,654 and an assessment rate of $0.06 per 25-pound
container or container equivalent of nectarines. In comparison, the
budgeted expenditures for the 2006-07 fiscal period were $4,473,764.
The proposed assessment rate of $0.06 per 25-pound container or
container equivalent of nectarines is $0.15 lower than the rate
currently in effect. Combining expected assessment revenue of
$1,140,000 with the $322,051 carryover available from the 2006-07
fiscal period and other income such as interest and research grants
should be adequate to meet committee needs. The proposed assessment
rate is also likely to provide a $127,133 reserve, which may be used to
cover administrative expenses prior to the beginning of the 2008-09
shipping season as provided in the order (Sec. 916.42).
The NAC recommended a substantially reduced 2007-08 fiscal period
budget and assessment rate because promotional activities, as well as
portions of the committee's administrative and inspection programs,
have been discontinued. A new California State marketing program that
will conduct such activities has been implemented. An interim final
rule discussing this subject was published on April 16, 2007, in the
Federal Register at 72 FR 18847.
Expenditures recommended by the NAC for the 2007-08 fiscal period
include $262,444 for administration, $37,476 for inspection and
compliance, $196,147 for production research, and $950,587 for consumer
and category research. Budgeted expenses for these items in 2006-07
were $567,856 for administration; $1,070,832 for inspection; $201,702
for production research; and $2,633,374 for promotions, which included
consumer and category research.
The NAC 2007-08 fiscal period assessment rate was derived after
considering anticipated fiscal year expenses; estimated assessable
nectarines of 19,000,000 25-pound containers or container equivalents;
the estimated income from other sources, such as interest; and the need
for an adequate financial reserve to carry the NAC into the 2008-09
fiscal period. Therefore, the NAC recommended an assessment rate of
$0.06 per 25-pound container or container equivalent.
PCC Assessment and Expenses
For the 2006-07 fiscal period, the PCC recommended, and USDA
approved, an assessment rate of $0.21 per 25-pound container or
container equivalent of peaches that would continue in effect from
fiscal period to fiscal period unless modified, suspended, or
terminated by USDA upon recommendation and information submitted by the
committee or other information available to USDA.
The PCC met on May 1, 2007, and recommended 2007-08 expenditures of
$1,486,971 and an assessment rate of $0.06 per 25-pound container or
container equivalent of peaches. In comparison, budgeted expenditures
for the 2006-07 fiscal period were $4,988,914. The proposed assessment
rate of $0.06 per 25-pound container or container equivalent of peaches
is $0.15 lower than the rate currently in effect. Combining expected
assessment revenues of $1,200,000 with the $420,386 carryover available
from the 2006-07 fiscal period and other income such as interest and
research grants should be adequate to meet committee needs. The
proposed assessment rate is also likely to provide a $188,222 reserve,
which may be used to cover administrative expenses prior to the
beginning of the 2008-09 shipping season as provided in the order
(Sec. 917.38).
The PCC recommended a substantially reduced 2007-08 fiscal period
budget and assessment rate because promotional activities, as well as
portions of the committee's administrative and inspection programs,
have been discontinued. A new California State marketing program that
will conduct such activities has been implemented. An interim final
rule discussing this subject was published on April 16, 2007, in the
Federal Register at 72 FR 18847.
Expenditures recommended by the PCC for the 2007-08 fiscal period
include $267,025 for administration, $87,693 for inspection and
compliance, $196,149 for production research, and $936,104 for consumer
and category research. Budgeted expenses for these items in 2006-07
were $936,104 for administration; $1,299,211 for inspection; $210,718
for production research; and $2,849,961 for promotions, which included
consumer and category research.
[[Page 33921]]
The PCC 2007-08 fiscal period assessment rate was derived after
considering anticipated fiscal year expenses; estimated assessable
peaches of 20,000,000 25-pound containers or container equivalents; the
estimated income from other sources, such as interest; and the need for
an adequate financial reserve to carry the PCC into the 2008-09 fiscal
period. Therefore, the PCC recommended an assessment rate of $0.06 per
25-pound container or container equivalent.
Continuance of Assessment Rates
The proposed assessment rates 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 these assessment rates would be in effect for an
indefinite period, the committees would continue to meet prior to or
during each fiscal period to recommend budgets of expenses and consider
recommendations for modification of the assessment rates. The dates and
times of committee meetings are available from the committees' Web site
at http://www.eatcaliforniafruit.com or USDA. Committee meetings are
open to the public and interested persons may express their views at
these meetings. USDA would evaluate the committees' recommendations and
other available information to determine whether modification of the
assessment rate for each committee is needed. Further rulemaking would
be undertaken as necessary. The committees' 2007-08 fiscal period
budgets and those for subsequent fiscal periods 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 676 producers of nectarines and peaches in
the production area and approximately 175 handlers subject to
regulation under the orders. Small agricultural producers are defined
by the Small Business Administration (13 CFR 121.201) as those having
annual receipts of less than $750,000, and small agricultural service
firms are defined as those whose annual receipts are less than
$6,500,000.
According to the committees' staff, approximately 85 percent of all
the handlers within the industry may be classified as small entities.
For the 2006 marketing season, staff estimated that the average handler
price received was $9.00 per container or container equivalent of
nectarines or peaches. A handler would have to ship at least 722,223
containers to have annual receipts of $6,500,000.
Also, the committees' staff has estimated that more than 90 percent
of all the producers in the industry may be classified as small
entities. For the 2006 marketing season, staff estimated the average
producer price received was $4.50 per container or container equivalent
for nectarines and peaches. A producer would have to produce at least
166,667 containers of nectarines and peaches to have annual receipts of
$750,000.
With an average producer price of $4.50 per container or container
equivalent, and a combined packout of nectarines and peaches of
36,388,996 containers, the value of the 2006 packout is estimated to be
$163,750,482. Dividing this total estimated grower revenue figure by
the estimated number of producers (676) yields an estimate of average
revenue per producer of about $242,234 from the sales of peaches and
nectarines.
This rule would decrease the assessment rates established for NAC
and PCC for the 2007-08 and subsequent fiscal periods from $0.21 to
$0.06 per 25-pound container or container equivalent of nectarines or
peaches.
The NAC recommended 2007-08 fiscal period expenditures of
$1,446,654 for nectarines and an assessment rate of $0.06 per 25-pound
container or container equivalent of nectarines. The PCC recommended
2007-08 fiscal period expenditures of $1,486,971 for peaches and an
assessment rate of $0.06 per 25-pound container or container equivalent
of peaches. The proposed assessment rates of $0.06 are $0.15 lower than
the rates currently in effect.
Analysis of NAC Budget
The quantity of assessable nectarines for the 2007-08 fiscal period
is estimated at 19,000,000 25-pound containers or container
equivalents. Thus, the $0.06 rate should provide $1,140,000 in
assessment income.
The major expenditures recommended by the NAC for the 2007-08 year
include $262,444 for administration; $37,476 for inspection and
compliance; $196,147 for production research; and $950,587 for consumer
and category research, which were previously included in the promotions
budget. Budgeted expenses for these items in 2006-07 were $567,856,
$1,070,832, $201,702, and $2,633,374, respectively.
The NAC recommended a decrease in the assessment rate to meet
anticipated 2007-08 expenses and provide a financial reserve of
$127,133, which is needed to fund expenses for the following year until
assessments for that year are received.
Analysis of PCC Budget
The quantity of assessable peaches for the 2007-08 fiscal year is
estimated at 20,000,000 25-pound containers or container equivalents.
Thus, the $0.06 rate should provide $1,200,000 in assessment income.
The major expenditures recommended by PCC for the 2007-08 year
include $267,025 for administration; $87,693 for inspection and
compliance; $196,149 for production research; and $936,104 for consumer
and category research, which were previously included in the promotions
budget. Budgeted expenses for these items in 2006-07 were $629,024,
$1,299,211, $210,718, and $2,849,961, respectively.
The PCC recommended a decrease in the assessment rate to meet
anticipated 2007-08 fiscal period expenses and provide a financial
reserve of $188,222, which is needed to fund expenses for the following
year until assessments for that year are received.
Considerations in Determining Expenses and Assessment Rates
Prior to arriving at these budgets, the committees considered
information and recommendations from various sources, including, but
not limited to: Their Executive Committee, their Research Subcommittee,
their International Programs Subcommittee, their Domestic Promotion
Subcommittee, and the Nectarine and Peach Estimating Committees.
Because fewer programs will be conducted under the Federal orders
during this fiscal year compared to previous years, the committees
decided the assessment rates should be reduced to prevent the
accumulation of reserves beyond the levels allowed under the orders.
Therefore, they recommended decreasing the
[[Page 33922]]
assessment rates to $0.06 per 25-pound container or container
equivalent. This would allow them to meet their 2007-08 fiscal period
expenses and carry over necessary reserves to finance operations before
2008-09 fiscal period assessments are collected.
A review of historical and preliminary information pertaining to
the upcoming fiscal period indicates that the grower price for
nectarines and peaches for the 2007-08 season could range between $6.00
and $8.00 per 25-pound container or container equivalent. Therefore,
the estimated assessment revenue for the 2007-08 fiscal period as a
percentage of total grower revenue could range between .75 and 1
percent.
This action would decrease 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 would reduce the burden on handlers, and may reduce the
burden on producers. In addition, the committees' meetings were widely
publicized throughout the California nectarine and peach industries and
all interested persons were invited to attend the meetings and were
encouraged to participate in the committees' deliberations on all
issues. Like all committee meetings, the May 1, 2007, meetings were
public meetings and entities of all sizes 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 proposed rule would impose no additional reporting or
recordkeeping requirements on either small or large 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 10-day comment period is provided to allow interested persons to
respond to this proposed rule. Ten days is deemed appropriate because:
(1) The 2007-08 fiscal period began on March 1, 2007, and the marketing
orders require that the rates of assessment for each fiscal period
apply to all assessable nectarines and peaches handled during such
fiscal period; (2) the proposed rule would decrease the assessment
rates for assessable nectarines and peaches beginning with the 2007-08
fiscal period; and (3) handlers are aware of this action, which was
discussed by the committees at public meetings and recommended at their
meetings on May 1, 2007, and is similar to other assessment rate
actions issued in past years.
List of Subjects
7 CFR Part 916
Marketing agreements, Nectarines, Reporting and recordkeeping
requirements.
7 CFR Part 917
Marketing agreements, Peaches, Pears, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR parts 916 and 917
are proposed to be amended as follows:
1. The authority citation for 7 CFR parts 916 and 917 continues to
read as follows:
Authority: 7 U.S.C. 601-674.
PART 916--NECTARINES GROWN IN CALIFORNIA
2. Section 916.234 is revised to read as follows:
Sec. 916.234 Assessment rate.
On and after March 1, 2007, an assessment rate of $0.06 per 25-
pound container or container equivalent of nectarines is established
for California nectarines.
PART 917--PEACHES GROWN IN CALIFORNIA
3. Section 917.258 is revised to read as follows:
Sec. 917.258 Assessment rate.
On and after March 1, 2007, an assessment rate of $0.06 per 25-
pound container or container equivalent of peaches is established for
California peaches.
Dated: June 13, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E7-11822 Filed 6-19-07; 8:45 am]
BILLING CODE 3410-02-P