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.

Proposed Rules Federal Register

15522

Vol. 60, No. 57

Friday, March 24, 1995

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 981

[Docket No. FV94–981–4 PR]

Almonds Grown in California;

Reduction of Expenses and

Assessment Rate

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Proposed rule with request for

comments.

SUMMARY: This proposed rule invites

comments on revising the expenses and

assessment rate previously established

under Marketing Order No. 981 for the

1994–95 crop year. This proposal would

reduce the budget of expenses and rate

which almond handlers may be assessed

for funding expenses by the Almond

Board of California (Board) that are

reasonable and necessary to administer

the program.

DATES: Comments received by April 24,

1995, will be considered prior to

issuance of a final rule.

ADDRESSES: Interested persons are

invited to submit written comments

concerning this action. Comments must

be sent in triplicate to the Docket Clerk,

Fruit and Vegetable Division, AMS,

USDA, P.O. Box 96456, Room 2523–S,

Washington, DC 20090–6456, FAX 202–

720–5698. 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.

FOR FURTHER INFORMATION CONTACT:

Kathleen M. Finn, Marketing Specialist,

Marketing Order Administration

Branch, Fruit and Vegetable Division,

AMS, USDA, P.O. Box 96456, room

2536–S, Washington, DC 20090–6456,

telephone 202–720–1509, or FAX (202)

720–5698; or Martin Engeler, Assistant

Officer-In-Charge, California Marketing

Field Office, Fruit and Vegetable

Division, AMS, USDA, 2202 Monterey

Street, Suite 102B, Fresno, California

93721, telephone 209–487–5901, or

FAX (209) 487–5906.

SUPPLEMENTARY INFORMATION: This

proposed rule is issued under Marketing

Agreement and Order No. 981, both as

amended [7 CFR part 981], regulating

the handling of almonds grown in

California. 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

(Department) is issuing this proposed

rule in conformance with Executive

Order 12866.

This proposed rule has been reviewed

under Executive Order 12778, Civil

Justice Reform. Under the provisions of

the marketing order now in effect,

California almonds are subject to

assessments. It is intended that the

assessment rate as proposed herein will

be applicable to all assessable almonds

handled during the 1994–95 crop year,

which began July 1, 1994, and ends June

30, 1995. This proposed 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), 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

requesting 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 in equity to

review the Secretary’s ruling on the

petition, provided a bill in equity is

filed not later than 20 days after the date

of the entry of the ruling.

Pursuant to the requirements set forth

in the Regulatory Flexibility Act (RFA),

the Administrator of the Agricultural

Marketing Service (AMS) has

considered the economic impact of this

rule on small entities.

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 7,000

producers of California almonds under

this marketing order, and approximately

115 handlers. Small agricultural

producers have been defined by the

Small Business Administration [13 CFR

121.601] as those having annual receipts

of less than $500,000, and small

agricultural service firms are defined as

those whose annual receipts are less

than $5,000,000. The majority of

California almond producers and

handlers may be classified as small

entities.

A budget of expenses and rate of

assessment for the 1994–95 crop year

was recommended on May 18, 1994, by

the Board, the agency responsible for

local administration of the program. An

interim final rule was issued in the

Federal Register on July 14, 1994, [59

FR 35847] and a final rule was issued

in the September 8, 1994 Federal

Register [59 FR 46321]. Approved

expenditures total $9,435,262 with an

approved assessment rate of 2.25 cents

per pound. Of the 2.25 cents per pound,

handlers could receive credit-back

against their assessment obligation up to

one cent per pound for their own

promotional expenditures. Specific

explanations of various expenditure

categories and comparisons with a prior

period are contained in the

aforementioned final rule.

The Board met on September 14,

1994, and recommended, by a seven to

two vote, postponing its paid

advertising campaign and directly

related activities until further notice. It

also voted to postpone assessment

billings pending evaluation of legal

issues and future program activities.

Generic public relations activities and

other promotion-related activities to

which the Board was contractually

committed at that time are to be

continued. This action was taken as a

result of uncertainty created by legal
Federal Register / Vol. 60, No. 57 / Friday, March 24, 1995 / Proposed Rules 15523

decisions regarding the Board’s former

advertising and promotion program.

Specifically, the Ninth Circuit Court

of Appeals ruled in December 1993, that

aspects of the Board’s former advertising

and promotion program in the 1980’s

were unconstitutional. On remand, the

district court subsequently awarded

plaintiff handlers refunds of

assessments and other money spent

under the program. This decision was

issued on September 6, 1994, which led

to the Board’s actions to postpone

advertising activities at its September

14, 1994, meeting. The district court’s

remand decision is currently being

appealed. In addition, several handlers

filed legal challenges to the Board’s

current credit-back advertising and

promotion program, pursuant to Section

608(c)(15)(A) of the Act.

The Board again met on November 30,

1994, and recommended, by a seven to

three vote, reducing the assessment rate

by eliminating the portion applicable to

credit-back to handlers for their own

promotional activities (one cent), and by

eliminating the portion of the remaining

assessment applicable to generic

promotion activities. The resulting

assessment rate the Board recommended

handlers pay was .47 cents per pound.

Concurrently, the Board again

postponed assessment billings pending

further evaluation of the Board’s

financial status. These actions were

taken because of the apparent lack of

support by some handlers at the present

time for generic promotion and creditback programs, demonstrated by legal

challenges filed by such handlers

representing a significant portion of the

industry volume. One Board member

commented that since the handlers who

have filed legal challenges are not likely

to pay the advertising assessment, it is

not equitable for the remainder of the

industry to shoulder the expense of an

advertising program.

The Board met again on February 1,

1995, and recommended, by a six to

four vote, to further reduce the

assessment rate. The Board

recommended an assessment rate of .25

cents per pound. This action was taken

after the Board further evaluated its

financial position and current and

future program activities.

If implemented and collected, an

assessment rate of .25 cents per pound

will generate income of $1,675,000

based on an estimated assessable crop of

670 million pounds. When combined

with cash and cash equivalents held by

the Board, this would provide the Board

with sufficient income to meet its

administrative expenses and those

promotional expenses to which it is

contractually obligated for the

remainder of the current fiscal year.

To reduce the budget of expenses

previously approved ($9,435,262), the

Board deleted the funds budgeted for

reserve replenishment ($300,000) and at

its November 30, 1994, meeting,

postponed a major portion ($3.9

million) of the $4.7 million funds

budgeted for promotional activities.

These revisions would reduce the

budget to $5,235,262. The reduced

budget would provide the Board with

sufficient capital to carry into the next

fiscal year to finance operations prior to

collection of future assessments.

Concerns were raised that the

reduction of the assessment rate midway through the crop year may generate

complaints from those handlers who

relied on the final rule of September 8,

1994, which established an assessment

rate of 2.25 cents per pound, of which

handlers could receive credit-back up to

one cent per pound for their own

promotional expenditures. Some

handlers have incurred expenses that

would be eligible for credit-back under

the provisions of that rule.

If the assessment rate is reduced with

no portion being creditable, there will

be no assessment for these handlers to

claim credit-back against. However, an

assessment rate of .25 cents per pound

is significantly lower than the current

rate of 2.25 cents. Under the current

established assessment of 2.25 cents, if

handlers claimed credit-back for the

entire one cent, they would still be

required to pay 1.25 cents per pound to

the Board. Handlers would pay

significantly less even if they conducted

advertising for which they believed

credit-back would be obtained. In

addition, benefits are derived from

advertising undertaken by these

handlers.

This action would reduce the

assessment obligation imposed on

handlers. The assessments would be

uniform for all handlers. The

assessment cost would be offset by the

benefits derived by the operation of the

marketing order. Therefore, the

Administrator of the AMS has

determined that this action would not

have a significant economic impact on

a substantial number of small entities.

Interested persons are invited to

submit their views and comments on

this proposal. Comments received

within 30 days of publication of this

proposed rule in the Federal Register

will be considered prior to any final

action being taken.

List of Subjects in 7 CFR Part 981

Almonds, Marketing agreements,

Nuts, Reporting and recordkeeping

requirements.

For the reasons set forth in the

preamble, 7 CFR part 981 is proposed to

be amended as follows:

PART 981—ALMONDS GROWN IN

CALIFORNIA

1. The authority citation for 7 CFR

part 981 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. Section 981.341 is revised to read

as follows:

§ 981.341 Expenses and assessment rate.

Expenses of $5,235,262 by the

Almond Board of California are

authorized for the crop year ending June

30, 1995. An assessment rate for the

crop year payable by each handler in

accordance with § 981.81 is fixed at .25

cents per kernel pound of almonds. Of

the .25 cents assessment rate, none is

available for handler credit-back

pursuant to § 981.441.

Dated: March 21, 1995.

Sharon Bomer Lauritsen,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 95–7336 Filed 3–23–95; 8:45 am]

BILLING CODE 3410–02–W

7 CFR Part 1036

[Docket No. DA–95–13]

Milk in the Eastern Ohio-Western

Pennsylvania Marketing Area;

Proposed Termination of Certain

Provisions of the Order

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Proposed termination of rule.

SUMMARY: This document invites written

comments on a proposal to terminate

the advertising and promotion

provisions of the Eastern Ohio-Western

Pennsylvania order. Termination of the

provisions was requested by several

associations of dairy farmers whose

milk is pooled under the order.

Termination would eliminate redundant

expenses in administering regional

advertising and promotion programs

without affecting producers’

participation.

DATES: Comments are due on or before

April 7, 1995.

ADDRESSES: Comments (two copies)

should be filed with the USDA/AMS/

Dairy Division, Order Formulation

Branch, Room 2971, South Building,

P.O. Box 96456, Washington, DC 20090–

6456.