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[Federal Register: September 15, 2010 (Volume 75, Number 178)]
[Proposed Rules]               
[Page 56019-56021]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15se10-32]                         

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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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[[Page 56019]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 987

[Docket No. AMS-FV-10-0059; FV10-987-2 PR]

 
Domestic Dates Produced or Packed in Riverside County, CA; 
Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate established for 
the California Date Administrative Committee (Committee) for the 2010-
11 and subsequent crop years from $0.75 to $1.00 per hundredweight of 
dates handled. The Committee locally administers the marketing order, 
which regulates the handling of dates grown or packed in Riverside 
County, California. Assessments upon date handlers are used by the 
Committee to fund reasonable and necessary expenses of the program. The 
crop year begins October 1 and ends September 30. The assessment rate 
would remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Comments must be received by October 15, 2010.

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 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: Jeff Smutny, Marketing Specialist, or 
Kurt J. 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: 
Jeffrey.Smutny@ams.usda.gov or Kurt.Kimmel@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Antoinette Carter, 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: 
Antoinette.Carter@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 987, as amended (7 CFR part 987), regulating the handling of dates 
grown or packed in Riverside County, 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, Riverside 
County, California date 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 dates beginning October 1, 2010, and would 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 would increase the assessment rate established for the 
Committee for the 2010-11 and subsequent crop years from $0.75 to $1.00 
per hundredweight of dates.
    The California date 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 dates. 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 2009-10 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 24, 2010, and unanimously recommended 
2010-11 expenditures of $245,000 and an assessment rate of $1.00 per 
hundredweight of California dates. In comparison, last year's budgeted 
expenditures were $200,000. The modified assessment rate of $1.00 is 
$0.25 higher than the rate currently in effect. The Committee 
recommended a higher assessment rate to offset the 2010-11 budgeted 
increases in salaries, operating expenses, and promotion programs, and 
to build their operating reserve. The higher assessment rate should be 
sufficient to cover the 2010-

[[Page 56020]]

11 budgeted expenses and meet their financial goals.
    Section 987.72(c) authorizes the Committee to establish and 
maintain an operating reserve not to exceed 50 percent of an average 
year's expenses. Funds from the reserve are available for the 
Committee's use during the crop year to cover budgeted expenses as 
necessary or for other purposes deemed appropriate by USDA. The 
Committee expects to carry a $40,000 reserve into the 2010-11 crop 
year. They expect to add $16,500 to the reserve during the year, for a 
desired carryout of approximately $56,000, which is well below the 
limit specified in the order.
    Income from the sale of cull dates is deposited in a surplus 
account for subsequent use by the Committee to cover the surplus pool 
share of the Committee's expenses. Handlers may also dispose of cull 
dates of their own production within their own livestock-feeding 
operation; otherwise, such cull dates must be shipped or delivered to 
the Committee for sale to non-human food product outlets. Pursuant to 
Sec.  987.72(b), the Committee is authorized to temporarily use funds 
derived from assessments to defray expenses incurred in disposing of 
surplus dates. All such expenses are required to be deducted from 
proceeds obtained by the Committee from the disposal of surplus dates. 
For the 2010-11 crop year, the Committee estimated that $1,500 from the 
surplus account would be needed to temporarily defray expenses incurred 
in disposing of surplus dates.
    The major expenditures recommended by the Committee for the 2010-11 
crop year include $85,000 for general and administrative programs, 
$127,875 for promotional programs, $17,900 for nutritional research, 
and $14,225 for marketing and media consulting. The budgeted amount for 
promotional programs includes a $29,000 contingency fund that would 
allow the Committee to take advantage of unexpected marketing 
opportunities that may present themselves during the year.
    By comparison, expenditures recommended by the Committee for the 
2009-10 crop year included $60,000 for general and administrative 
programs, $97,000 for promotional programs, $15,000 for nutritional 
research, and $28,000 for marketing and media consulting.
    The assessment rate of $1.00 per hundredweight of assessable dates 
was derived by applying the following formula where:

A = 2009-10 estimated reserve on 09/30/10 ($40,000);
B = 2010-11 estimated reserve on 09/30/11 ($56,500);
C = 2010-11 expenses ($245,000);
D = Cull Surplus Fund ($1,500);
F = 2010-11 expected shipments (26,000,000 pounds).
[(C - A + B - D)/F] x 100.

    The assessment rate proposed in this rule would 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 proposed 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 Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking would 
be undertaken as necessary. The Committee's 2010-11 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) (5 U.S.C. 601-612), the Agricultural Marketing Service (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.
    There are approximately 85 producers of dates in the production 
area and 9 handlers subject to regulation under the marketing order. 
The Small Business Administration (13 CFR 121.201) defines small 
agricultural producers as those having annual receipts of less than 
$750,000, and small agricultural service firms are defined as those 
having annual receipts of less than $7,000,000.
    According to the National Agricultural Statistics Service (NASS), 
data for the most-recently completed crop year, 2009-10, indicates that 
about 3.8 tons, or 7,600 pounds, of dates were produced per acre. The 
2009-10 producer price published by NASS was $1,450 per ton, or $0.725 
per pound. Thus, the value of date production in 2009-10 averaged about 
$5,510 per acre (7,600 pounds per acre times $0.725 per pound). At that 
average price, a producer would have to farm more than 136 acres to 
receive an annual income from dates of $750,000 ($750,000 divided by 
$5,510 per acre equals 136.1 acres). According to the Committee's 
staff, the majority of California date producers farm fewer than 136 
acres. Thus, it can be concluded that the majority of date producers 
could be considered small entities. According to data from the 
Committee, the majority of California date handlers may also be 
considered small entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 2010-11 and subsequent 
crop years from $0.75 to $1.00 per hundredweight of dates handled. The 
Committee unanimously recommended 2010-11 expenditures of $245,000 and 
an assessment rate of $1.00 per hundredweight of dates. The proposed 
assessment rate is $0.25 higher than the 2009-10 rate currently in 
effect. The quantity of assessable dates for the 2010-11 crop year is 
estimated at 26,000,000 pounds. Thus, the $1.00 rate should provide 
approximately $260,000 in assessment income and will be adequate to 
meet the budgeted expenses.
    The major expenditures recommended by the Committee for the 2010-11 
crop year include $85,000 for general and administrative programs, 
$127,875 for promotional programs, $17,900 for nutritional research, 
and $14,225 for marketing and media consulting. The Committee also 
hopes to add $16,500 to its operating reserve. Prior to arriving at 
this budget, the Committee considered information from various sources, 
such as the Committee's Marketing Subcommittee. Alternative expenditure 
levels were discussed, but the Committee ultimately decided that the 
recommended levels were reasonable to properly administer the order. 
The assessment rate of $1.00 per hundredweight of dates was then 
derived, based upon the Committee's estimates of the available 
operating reserve, projected crop size, and anticipated expenses.
    As previously noted, NASS reported that the average producer price 
for 2009-10 crop dates was $1,450 per ton, or $72.50 per hundredweight. 
No

[[Page 56021]]

official NASS estimate is available yet for 2010-11. However, the 
average grower price for the 3-year period between 2007-08 and 2009-10 
was $1,756.67 per ton, or $87.83 per hundredweight.
    Assuming that the average producer price for 2010-11 will range 
between $72.50 and $87.83 per hundredweight, the estimated assessment 
revenue, stated as a percentage of producer revenue, would range 
between 1.38 and 1.14 percent ($1.00 per hundredweight divided by 
either $72.50 or $87.83 per hundredweight). Thus, assessment revenue 
should be less than 1.5 percent of estimated producer revenue for 2010-
11.
    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 date 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 24, 
2010, 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 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 date 
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 Antoinette Carter at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: (1) The 2010-11 crop year begins on October 1, 2010, and the 
marketing order requires that the rate of assessment for each crop year 
apply to all assessable dates 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 987

    Dates, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 987 is 
proposed to be amended as follows:

PART 987--DATES PRODUCED OR PACKED IN RIVERSIDE COUNTY, CALIFORNIA

    1. The authority citation for 7 CFR part 987 continues to read as 
follows:

    Authority:  7 U.S.C. 601-674.

    2. Section 987.339 is revised to read as follows:

Sec.  987.339  Assessment rate.

    On and after October 1, 2010, an assessment rate of $1.00 per 
hundredweight is established for California dates.

    Dated: September 10, 2010.
David R. Shipman,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2010-22981 Filed 9-14-10; 8:45 am]
BILLING CODE 3410-02-P
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