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[Federal Register Volume 70, Number 175 (Monday, September 12, 2005)]
[Proposed Rules]
[Pages 53737-53739]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-17963]

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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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Federal Register / Vol. 70, No. 175 / Monday, September 12, 2005 / 
Proposed Rules

[[Page 53737]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 987

[Docket No. FV05-987-1 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 2005-
06 and subsequent crop years from $0.85 to $0.95 per hundredweight of 
dates handled. The committee locally administers the marketing order 
which regulates the handling of dates produced 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 
committee recommended increasing the assessment rate because additional 
revenues are needed to fund program operations and build up its 
financial reserve to a more satisfactory level. 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 12, 2005.

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 E-mail: [email protected]; 
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.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Program Analyst, or 
Terry Vawter, Marketing Specialist, California Marketing Field Office, 
Fruit and Vegetable Programs, AMS, USDA; Telephone: (559) 487-5901, 
Fax: (559) 487-5906; or George Kelhart, Technical Advisor, 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.
    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: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Marketing Order No. 987, both as amended (7 CFR part 
987), regulating the handling of domestic dates produced or packed in 
Riverside County, 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 
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 on October 1, 2005, and continue until amended, suspended, or 
terminated. This rule would 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 2005-06 and subsequent crop years from $0.85 to $0.95 
per hundredweight of assessable dates handled.
    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 producer-
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 at a 
public meeting. Therefore, all directly affected persons have an 
opportunity to participate and provide input.
    For the 2004-05 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, 2005, and unanimously recommended 
2005-06 crop year expenditures of $169,197 and an assessment rate of 
$0.95 per hundredweight of dates handled. In comparison, last year's 
budgeted

[[Page 53738]]

expenditures were $223,000. The recommended assessment rate of $0.95 is 
$0.10 higher than the rate currently in effect. The increase in the 
assessment rate is needed to fund the committee's budget and maintain 
an acceptable operating reserve.
    Proceeds from sales of cull dates are deposited in a surplus 
account for subsequent use by the committee in covering 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 2005-06 crop year, the committee estimated that $2,000 from the 
surplus account would be needed to refund assessments used in paying 
committee expenses incurred in disposing of surplus dates.
    The budgeted administrative expenses for the 2005-06 crop year 
include $85,697 for labor and office expenses. This compares to $90,427 
in labor and office expenses in 2004-05. In addition, $70,000 has been 
budgeted for marketing and promotion under the program for the 2005-06 
crop year. This compares to $112,499 in budgeted marketing and 
promotion expenses for the 2004-05 crop year. A total of $14,303 is 
budgeted as a contingency reserve for 2005-06 to build up its financial 
reserve. The committee did not include a contingency reserve in last 
year's budget. The committee also proposed that $10,000 be included in 
its 2005-2006 budget for an economic analysis of its promotion 
activities. Last year's budget did not include funds for this purpose.
    The assessment rate of $0.95 per hundredweight of assessable dates 
was derived by applying the following formula where:
    A = 2004-05 reserve on 10/1/05 ($1,000).
    B = 2005-06 reserve on 9/30/06 ($14,303).
    C = 2005-06 expenses ($169,197).
    D = Cull Surplus Fund ($2,000).
    E = 2005-06 expected shipments (190,000 hundredweight). (B - A + C 
- D) / E = $0.95 per hundredweight.
    Estimated shipments should provide $180,500 in assessment income. 
Income derived from handler assessments and $2,000 from the cull 
surplus fund would be adequate to cover budgeted expenses. Funds in the 
reserve are expected to total about $14,303 by September 30, 2006, and 
therefore would be less than the maximum permitted by the order (not to 
exceed 50 percent of the average of expenses incurred during the most 
recent five preceding crop years as required under Sec.  987.72(c)).
    The proposed assessment rate 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 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 2005-06 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. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 124 producers of dates in the production 
area and approximately 10 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 $6,000,000.
    An industry profile shows that four of the 10 handlers (40 percent) 
had date sales over $6,000,000 and could be considered large handlers 
by the Small Business Administration. Six of the 10 handlers (60 
percent) had date sales of less than $6,000,000 and could be considered 
small handlers. An estimated 7 producers, or less than 6 percent, of 
the 124 total producers, would be considered large producers with 
annual incomes over $750,000. The remaining the producers have incomes 
less than $750,000. The majority of handlers and producers of 
California dates may be classified as small entities.
    This rule would increase the assessment rate established for the 
committee and collected from handlers for the 2005-06 and subsequent 
crop years from $0.85 to $0.95 per hundredweight of assessable dates 
handled. The committee unanimously recommended 2005-06 expenditures of 
$169,197 and the $0.95 per hundredweight assessment rate at its meeting 
on June 16, 2005. The proposed assessment rate of $0.95 is $0.10 higher 
than the rate currently in effect. The quantity of assessable dates for 
the 2005-06 crop year is estimated at 190,000 hundredweight. Thus, the 
$0.95 per hundredweight rate should provide $180,500 in assessment 
income. This, along with approximately $2,000 from the surplus account, 
would be adequate to meet the committee's 2005-06 crop year expenses 
and to augment its financial reserve.
    The budgeted administrative expenses for the 2005-06 crop year 
include $85,697, for labor and office expenses. This compares to 
$90,427 in labor and office expenses in 2004-05. In addition, $70,000 
has been budgeted for marketing and promotion under the program for the 
2005-06 crop year. This compares to $112,499 in budgeted marketing and 
promotion expenses for the 2004-05 crop year. A total of $14,303 is 
budgeted to be carried over as a financial reserve for 2005-06. The 
committee also proposed that $10,000 be included in the budget for an 
economic analysis of its promotion program for the 2005-06 crop year, 
as required by USDA.
    The committee reviewed and unanimously recommended 2005-06 
expenditures of $169,197 which include marketing and promotion 
programs. Prior to arriving at this budget, the committee considered 
alternative expenditure levels and alternative assessment levels. The 
committee agreed that the increased assessment rate was appropriate to 
cover expenses and build up its operating reserve to a

[[Page 53739]]

satisfactory level ($14,303). The assessment rate of $0.95 per 
hundredweight of assessable dates was then determined by applying the 
following formula where:
    A = 2004-05 reserve on 10/1/05 ($1,000).
    B = 2005-06 reserve on 9/30/06 ($14,303).
    C = 2005-06 expenses ($169,197).
    D = Cull Surplus Fund ($2,000).
    E = 2005-06 expected shipments (190,000 hundredweight). (B - A + C 
- D) E / $0.95 per hundredweight.
    Estimated shipments should provide $180,500 in assessment income. 
Income derived from handler assessments and $2,000 from the cull 
surplus fund would be adequate to cover budgeted expenses. Funds in the 
administrative reserve are expected to total about $14,303 by September 
30, 2006, and therefore would be less than the maximum permitted by the 
order (not to exceed 50 percent of the average of expenses incurred 
during the most recent five preceding crop years as required under 
Sec.  987.72(c)).
    A review of historical information and preliminary information 
pertaining to the upcoming crop year indicates that the grower price 
for the 2005-06 season could range between $45 and $50 per 
hundredweight of dates. Therefore, the estimated assessment revenue for 
the 2005-06 crop year as a percentage of total grower revenue is 
approximately 2 percent.
    This action would increase the assessment obligation imposed on 
handlers under the Federal marketing order. 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 16, 2005, 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 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 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.
    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 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: (1) The 2005-06 crop year begins on October 1, 2005, 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--DOMESTIC 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, 2005, an assessment rate of $0.95 per 
hundredweight is established for California dates.

    Dated: September 6, 2005.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 05-17963 Filed 9-9-05; 8:45 am]
BILLING CODE 3410-02-P
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