This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

49905

Vol. 62, No. 185

Wednesday, September 24, 1997

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 993

[Docket No. FV97–993–1 FIR]

Dried Prunes Produced in California;

Increased Assessment Rate

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Final rule.

SUMMARY: The Department of

Agriculture (Department) is adopting, as

a final rule, without change, the

provisions of an interim final rule

which increased the assessment rate for

the Prune Marketing Committee

(Committee) under Marketing Order No.

993 for the 1997–98 and subsequent

crop years. The Committee is

responsible for local administration of

the marketing order which regulates the

handling of dried prunes grown in

California. Authorization to assess dried

prune handlers enables the Committee

to incur expenses that are reasonable

and necessary to administer the

program. The 1997–98 crop year covers

the period August 1 through July 31.

The assessment rate will continue in

effect indefinitely unless modified,

suspended, or terminated.

EFFECTIVE DATE: October 24, 1997.

FOR FURTHER INFORMATION CONTACT:

Richard P. Van Diest, Marketing

Specialist, or Diane Purvis, Marketing

Assistant, California Marketing Field

Office, Fruit and Vegetable Division,

AMS, USDA, 2202 Monterey Street,

Suite 102B, Fresno, California 93721;

telephone: (209) 487–5901, Fax: (209)

487–5906; or George Kelhart, Marketing

Order Administration Branch, Fruit and

Vegetable Division, AMS, USDA, Room

2525–S, P.O. Box 96456, Washington,

DC 20090–6456; telephone: (202) 720–

2491, Fax: (202) 720–5698. Small

businesses may request information on

compliance with this regulation by

contacting Jay Guerber, Marketing Order

Administration Branch, Fruit and

Vegetable Division, AMS, USDA, Room

2525–S, P.O. Box 96456, Washington,

DC 20090–6456; telephone: (202) 720–

2491, Fax: (202) 720–5698.

SUPPLEMENTARY INFORMATION: This rule

is issued under Marketing Agreement

and 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 is issuing this rule in

conformance with Executive Order

12866.

This final rule was 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 be applicable to all

assessable dried prunes beginning

August 1, 1997, 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 continues in effect the

assessment rate of $1.60 per salable ton

of dried prunes established for the

Committee for the 1997–98 and

subsequent crop years. The assessment

rate had been $1.50 per ton of salable

dried prunes.

The California dried prune 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 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 1996–97 and subsequent crop

years, the Committee recommended,

and the Department approved, an

assessment rate that would continue in

effect from crop year to crop year

indefinitely 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 June 24, 1997,

and unanimously recommended 1997–

98 expenditures of $331,960 and an

assessment rate of $1.60 per salable ton

of dried prunes. In comparison, last

year’s budgeted expenditures were

$283,500; and the assessment rate was

$1.50 per salable ton. The 1997–98 crop

year assessment rate is increased $0.10.

The primary reason for the higher

budget is a comprehensive acreage

survey of all California’s producing

counties. This acreage survey will help

the industry estimate dried prune

production and fulfill marketing plans.

The major expenditures

recommended by the Committee for the

1997–98 crop year include: $176,300 for

salaries, wages, and benefits; $30,000 for

research and development; $23,000 for

office rent; $21,000 for travel; $20,000

for acreage survey; $8,060 for the

reserve for contingency; $5,000 for

office supplies; $9,000 for rental of

equipment; and $8,000 for data

processing. Budgeted expenses for major

items in 1996–97 were $142,120,
49906 Federal Register / Vol. 62, No. 185 /Wednesday, September 24, 1997 /Rules and Regulations

$30,000, $22,000, $20,000, $11,000,

$8,430, $6,500, $3,800, and $6,500,

respectively.

The assessment rate recommended by

the Committee was derived by dividing

anticipated expenses by its estimate of

assessable California dried prunes for

1997–98. Assessable tonnage for the

year is estimated at 207,475 salable tons

which should provide $331,960 in

assessment income. Income derived

from handler assessments and interest

income will be adequate to cover

budgeted expenses. Any funds not

expended by the Committee during a

crop year may be used, pursuant to

§ 993.81(c), for a period of five months

subsequent to that crop year. At the end

of such period, the excess funds are

returned or credited to handlers.

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 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 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 1997–98 budget was

approved by the Department on August

4, 1997, and those for subsequent crop

years will be reviewed each year 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

this rule on small entities. Accordingly,

AMS has prepared this final 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 1,400

producers of dried prunes in California

and approximately 21 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.

Currently, as a percentage, about 34

percent of the handlers shipped over

$5,000,000 worth of dried prunes and

66 percent of the handlers shipped

under $5,000,000 worth of prunes. In

addition, based on acreage, production,

producer prices provided by the

Committee, and the total number of

dried prune producers, the average

annual producer revenue is

approximately $136,000. The majority

of handlers and producers of California

dried prunes may be classified as small

entities.

This rule continues the assessment

rate of $1.60 per salable ton for the

1997–98 and subsequent crop years. The

Committee unanimously recommended

1997–98 expenditures of $331,960 and

an assessment rate of $1.60 per salable

ton of California dried prunes. The

assessment rate of $1.60 is $0.10 more

than the 1996–97 rate. The Committee

estimated assessable dried prunes in

1997–98 at 207,475 salable tons. Thus,

the prior crop year assessment rate of

$1.50 would only have provided

$311,212 in revenue, which would not

have been adequate to meet the

Committee’s 1997–98 budgeted

expenses. The $1.60 rate should provide

$331,960 in assessment income and be

adequate to meet this year’s expenses.

The Committee’s increase from

$283,500 to $331,960 in budgeted

expenses for 1997–98 results primarily

from increases in the following line item

categories—total personnel (salaries,

wages, and benefits), rental of

equipment, data processing, and acreage

survey. Expenses for these items for

1997–98, with last year’s budgeted

expenses in parenthesis, are: total

personnel—$176,300 ($142,120); rental

of equipment—$9,000 ($3,800); data

processing—$8,000 ($6,500); and

acreage survey—$20,000 ($11,000). The

increase will provide wage and benefit

increases for the staff. The increase in

acreage survey will allow the Committee

to conduct a more comprehensive dried

prune acreage survey than last year. The

Committee considered the alternative of

conducting a smaller scale survey at less

cost, but decided that a survey of all

California’s producing counties was

needed to help the industry make

production and marketing plans. The

Committee feels that all of the expense

levels are appropriate and reasonable.

Recent price information indicates

that the grower price for the 1997–98

season should average $800 per salable

ton of dried prunes. Based on estimated

shipments of 207,475 salable tons, the

estimated assessment revenue for the

1997–98 crop year is less than 1 percent

of the total expected grower revenue.

Any funds not expended by the

Committee during a crop year may be

used, pursuant to § 993.81(c), for a

period of five months subsequent to that

crop year. At the end of such period, the

excess funds are returned or credited to

handlers.

While this rule imposes some

additional costs on handlers, the costs

are minimal and in the form of uniform

assessments on all handlers. Some of

the additional costs may be passed on

to producers. However, these costs will

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

24, 1997, meeting was a public meeting

and all entities, both large and small,

were able to express views on this issue.

This rule does not impose any

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 Department has not identified

any relevant Federal rules that

duplicate, overlap, or conflict with this

final rule.

An interim final rule concerning this

action was issued by the Department on

July 29, 1997, put on display at the

Office of the Federal Register on August

3, 1997, and published in the Federal

Register on August 4, 1997 (62 FR

41808). Copies of the rule were mailed

or sent via facsimile to all Committee

members and dried prune handlers.

Finally, the rule was made available

through the Internet by the Office of the

Federal Register. A 30-day comment

period was provided. No comments on

the interim rule were received.

After consideration of all relevant

material presented, including the

information and recommendation

submitted by the Committee and other
Federal Register / Vol. 62, No. 185 /Wednesday, September 24, 1997 /Rules and Regulations 49907

1Farm Credit System associations that are

shareholders of an FCB include Federal land bank

associations, Federal land credit associations,

production credit associations, and agricultural

credit associations.

available information, it is hereby found

that this rule, as hereinafter set forth,

will tend to effectuate the declared

policy of the Act.

List of Subjects in 7 CFR Part 993

Dried prunes, Marketing agreements,

Reporting and recordkeeping

requirements.

PART 993—DRIED PRUNES

PRODUCED IN CALIFORNIA

Accordingly, the interim final rule

amending 7 CFR part 993 which was

published at 62 FR 41808 on August 4,

1997, is adopted as a final rule without

change.

Dated: September 17, 1997.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 97–25275 Filed 9–23–97; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF AGRICULTURE

Rural Housing and Community

Development Service

Rural Business and Cooperative

Development Service

Rural Utilities Service

Consolidated Farm Service Agency

7 CFR Part 1924

Construction and Repair

CFR Correction

In Title 7 of the Code of Federal

Regulations, parts 1900 to 1939, revised

as of January 1, 1997, make the

following correction:

1. On page 97, in § 1924.5(h), in the

fourth line, ‘‘103–354ing’’ should read

‘‘103–354, prior to beginning’’.

BILLING CODE 1505-01-D

FARM CREDIT ADMINISTRATION

12 CFR Part 615

RIN 3052–AB75

Funding and Fiscal Affairs, Loan

Policies and Operations, and Funding

Operations; Cumulative Voting

AGENCY: Farm Credit Administration.

ACTION: Final rule.

SUMMARY: The Farm Credit

Administration (FCA), through the FCA

Board (Board), issues a final rule

amending § 615.5230 of its regulations

to provide that a Farm Credit Bank (FCB

or bank) may eliminate cumulative

voting in director elections with the

consent of 75 percent of the bank’s

association shareholders. This rule is

necessary because the existing

requirement of unanimous consent was

unduly burdensome, complicated, and

provided questionable benefits. The

effect of this rule is to ease the

unanimous consent requirement while

maintaining significant protection for

the minority interests.

DATES: This regulation shall become

effective October 24, 1997, during

which either or both houses of Congress

are in session. Notice of the effective

date will be published in the Federal

Register.

FOR FURTHER INFORMATION CONTACT:

Gaylon J. Dykstra, Policy Analyst, Office

of Policy Development and Risk

Control, Farm Credit Administration,

McLean, VA 22102–5090, (703) 883–

4498;

or

Rebecca S. Orlich, Senior Attorney,

Office of General Counsel, Farm

Credit Administration, McLean, VA

22102–5090, (703) 883–4020, TDD

(703) 883–4444.

SUPPLEMENTARY INFORMATION: The FCA

proposed to amend § 615.5230 of its

regulations on April 25, 1997 (62 FR

20131), to provide that an FCB may

eliminate the cumulative voting

requirement for the election of directors

by a vote of 75 percent of the bank’s

association shareholders.1 The proposed

rule was in response to petitions from

several Farm Credit System (System)

institutions requesting that the FCA

revise the existing unanimous consent

requirement for eliminating cumulative

voting. The 30-day comment period

expired on May 27, 1997.

The FCA received a total of eight

comment letters. Five of the letters

represented seven associations (some

commented jointly). The other three

were from the FCB of Wichita

(transmitting comments of 10 of its

affiliated associations); the FCB of

Texas; and the Tenth District Federation

of Production Credit Associations

(Federation), whose members are

affiliated with the FCB of Texas.

Nine associations and the Federation

supported the proposed amendment;

seven associations opposed the

proposed amendment. One association

requested that the FCA reconsider the

recommendation of a two-thirds

majority made by several petitioners but

supported the proposed amendment if

the FCA could not support the twothirds majority. The FCB of Texas stated

that it believed that a simple majority

vote of all associations should control

cumulative voting, but that

alternatively, the supermajority

requirement should be based on the

number of associations that actually

vote. Two institutions specifically

endorsed the proposal to accord each

association one vote in a vote to

eliminate cumulative voting.

The associations that supported the

proposed amendment generally

commented that the existing regulation

was unduly burdensome, complicated,

and provided questionable benefits. One

commenter stated that the current

regulation ‘‘allows only one vote to void

the wishes of the remainder of the

District who support a less restrictive

consent for change.’’

Four associations that opposed the

proposed amendment supported the

continuation of the existing regulation.

They commented that the original intent

of the regulation was to provide smaller

associations a meaningful vote by

allowing them to cumulate their votes in

elections and that this is now even more

paramount because of the mergers,

consolidations, and proposed joint

management agreements at the district

level. They further stated that it was

important for all stockholders in the

district banks to have the maximum

opportunity to voice their respective

votes and that there was ‘‘no valid

reason for an association located in a

smaller geographic size to forfeit this

right.’’

After careful consideration of the

comments, the FCA adopts the rule as

proposed. The FCA continues to believe

that cumulative voting provides

important protection to minority

interests and, consequently, should not

be subject to elimination by a two-thirds

majority. The 75-percent supermajority

provides the proper balance among the

differing opinions by easing the

unanimous requirement for eliminating

cumulative voting while maintaining

significant protection for the minority

interests.

As noted above, one commenter

stated that a supermajority requirement

should be a percentage of only the

shareholders that participate in the vote,

rather than the total number of voting

shareholders. The effect of such a

change would be the possibility that a

smaller number of shareholders would

be able to eliminate cumulative voting

if some shareholders abstain. The FCA

is not persuaded that such a change is

appropriate.