Olives Grown in California; Decreased Assessment Rate
| Published date | 04 March 2020 |
| Citation | 85 FR 12757 |
| Record Number | 2020-04369 |
| Section | Proposed rules |
| Court | Agricultural Marketing Service |
Federal Register, Volume 85 Issue 43 (Wednesday, March 4, 2020)
[Federal Register Volume 85, Number 43 (Wednesday, March 4, 2020)]
[Proposed Rules]
[Pages 12757-12759]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-04369]
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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. 85, No. 43 / Wednesday, March 4, 2020 /
Proposed Rules
[[Page 12757]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 932
[Doc. No. AMS-SC-20-0012; SC20-932-2 PR]
Olives Grown in California; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement a recommendation from the
California Olive Committee (Committee) to decrease the assessment rate
established for the 2020 fiscal year and subsequent fiscal years. The
proposed assessment rate would remain in effect indefinitely unless
modified, suspended, or terminated.
DATES: Comments must be received by April 3, 2020.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposed rule. Comments must be sent to the Docket
Clerk, Marketing Order and Agreement Division, Specialty Crops Program,
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 document 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
proposed 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: Kathie Notoro, Marketing Specialist,
or Terry Vawter, Regional Director, California Marketing Field Office,
Marketing Order and Agreement Division, Specialty Crops Program, AMS,
USDA; Telephone: (559) 538-1672, Fax: (559) 487-5906, or Email:
[email protected] or [email protected].
Small businesses may request information on complying with this
regulation by contacting Richard Lower, Marketing Order and Agreement
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue
SW, Stop 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491,
Fax: (202) 720-8938, or Email: [email protected].
SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553,
proposes an amendment to regulations issued to carry out a marketing
order as defined in 7 CFR 900.2(j). This proposed rule is issued under
Marketing Agreement and Order No. 932, as amended (7 CFR part 932),
regulating the handling of olives grown in California. Part 932
(referred to as 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 Committee locally
administers the Order and is comprised of producers and handlers of
olives operating within the area of production, and a public member.
The Department of Agriculture (USDA) is issuing this proposed rule
in conformance with Executive Orders 13563 and 13175. This proposed
rule falls within a category of regulatory actions that the Office of
Management and Budget (OMB) exempted from Executive Order 12866 review.
Additionally, because this proposed rule does not meet the definition
of a significant regulatory action, it does not trigger the
requirements contained in Executive Order 13771.
See OMB's Memorandum titled ``Interim Guidance Implementing Section
2 of the Executive Order of January 30, 2017, titled `Reducing
Regulation and Controlling Regulatory Costs'[thinsp]'' (February 2,
2017).
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. Under the Order now in effect, California olive
handlers are subject to assessments. Funds to administer the Order are
derived from such assessments. It is intended that the assessment rate
would be applicable to all assessable olives beginning on January 1,
2020, and 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 proposed rule would decrease the assessment rate from $44.00
per ton of assessed olives, the rate that was established for the 2018-
19 and subsequent fiscal years, to $15.00 per ton of assessed olives
for the 2020 and subsequent fiscal years. The proposed lower rate is
the result of a significantly higher crop size, and the need to cover
Committee expenses.
The 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 are
familiar with the Committee's needs and with the costs of 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.
The Committee met on December 5, 2019, and unanimously recommended
2020 expenditures of $1,035,406, and an assessment rate of $24.00 per
ton of assessed olives. In comparison, last year's budgeted
expenditures were $1,628,923. However, on December 6, 2019, the
Committee staff received an email requesting that the assessment rate
be lower than the unanimously
[[Page 12758]]
agreed to rate of $24.00. The Committee met again by conference call on
January 22, 2020, to discuss the possibility of a lower assessment
rate. During the conference call, a handler and some producers stated
they would be willing to pay up to $100.00 per ton during the next
alternate low bearing year, if the crop volume tonnage drops below what
is necessary to fund the Committee's activities. After further
Committee discussions, an assessment rate of $15.00 per ton of assessed
olives was recommended. The proposed assessment rate of $15.00 is
$29.00 lower than the rate currently in effect. Producer receipts show
a yield of 81,689 tons of assessable olives from the 2019 crop year.
This is substantially more than the 2018 crop year, which yielded
17,953 tons of assessable olives. The 2020 fiscal year assessment rate
decrease is appropriate to ensure the Committee has enough revenue to
fund the recommended 2020 budgeted expenditures while ensuring the
funds in the financial reserve would be kept within the maximum
permitted by Sec. 932.40.
The Order has a fiscal year and a crop year that are independent of
each other. The crop year is a 12-month period that begins on August 1
of each year and ends on July 31 of the following year. The fiscal year
is the 12-month period that begins on January 1 and ends on December 31
of each year. Olives are an alternate-bearing crop, with a small crop
followed by a large crop. For this assessment rate proposed rule, the
actual 2019 crop year receipts are used to determine the assessment
rate for the 2020 fiscal year.
The major expenditures recommended by the Committee for the 2020
fiscal year includes $631,300 for program administration, $123,500 for
marketing activities, $225,606 for research, and $55,000 for inspection
equipment. Budgeted expenses for these items during the 2019 fiscal
year were $713,900 for program administration, $513,500 for marketing
activities, $343,523 for research, and $58,000 inspection equipment.
The assessment rate recommended by the Committee resulted from
consideration of anticipated fiscal year expenses, actual olive tonnage
received by handlers during the 2019 crop year, and the amount in the
Committee's financial reserve. Income derived from handler assessments,
along with interest income and funds from the Committee's authorized
reserve, will be adequate to cover budgeted expenses. Funds in the
reserve will be kept within the maximum permitted by the Order of
approximately one fiscal year's expenses.
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 assessment rate would be in effect for an indefinite
period, the Committee would continue to meet prior to or during each
fiscal 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 budget for subsequent
fiscal 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 proposed 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
businesses 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 800 producers of olives in the production
area and two handlers subject to regulation under the Order. Small
agricultural producers are defined by the Small Business Administration
(SBA) as those having annual receipts less than $1,000,000, and small
agricultural service firms are defined as those whose annual receipts
are less than $30,000,000 (13 CFR 121.201).
Based upon National Agricultural Statistics Service (NASS)
information as of June 2019, the average price to producers for the
2019 crop year was $766.00 per ton, and total assessable volume for the
2019 crop year was 81,689 tons. Based on production, price paid to
producers, and the total number of California olive producers, the
average annual producer revenue is less than $1,000,000 ($766.00 times
81,689 tons equals $62,573,774 divided by 800 producers equals an
average annual producer revenue of $78,217.22). Thus, the majority of
olive producers may be classified as small entities. Both handlers may
be classified as large entities under the SBA's definitions because
their annual receipts are greater than $30,000,000.
This proposal would decrease the assessment rate collected from
handlers for the 2020 and subsequent fiscal years from $44.00 to $15.00
per ton of assessable olives. The Committee unanimously recommended
2020 expenditures of $1,035,406 and an assessment rate of $15.00 per
ton of assessable olives. The recommended assessment rate of $15.00 is
$29.00 lower than the 2019 rate. The quantity of assessable olives for
the 2020 Fiscal year is 81,689 tons. Thus, the $15.00 rate should
provide $1,225,335 in assessment revenue. The lower assessment rate is
proposed because annual receipts for the 2019 crop year are 81,689 tons
compared to 17,953 tons for the 2018 crop year. Olives are an
alternate-bearing crop, with a small crop followed by a large crop.
Income derived from the $15.00 per ton assessment rate, along with
funds from the authorized reserve and interest income, should be
adequate to meet this fiscal year's expenses.
The major expenditures recommended by the Committee for the 2020
fiscal year include $631,300 for program administration, $123,500 for
marketing activities, $225,606 for research, and $55,000 for inspection
equipment. Budgeted expenses for these items during the 2019 fiscal
year were $713,900 for program administration, $513,500 for marketing
activities, $343,523 for research, and $58,000 for inspection
equipment. The Committee deliberated on many of the expenses, weighed
the relative value of various programs or projects, and decreased its
expenses for marketing and research activities.
Prior to arriving at this budget and assessment rate, the Committee
considered information from various sources including the Committee's
Executive, Marketing, Inspection, and Research Subcommittees. Alternate
expenditure levels were discussed by these groups, based upon the
relative value of various projects to the olive industry and the
increased olive production. The assessment rate of $15.00 per ton of
assessable olives was derived by considering anticipated
[[Page 12759]]
expenses, the high volume of assessable olives, and additional
pertinent factors.
A review of NASS information indicates that the average producer
price for the 2019 crop year was $766.00 per ton. Therefore, utilizing
the assessment rate of $15.00 per ton, the assessment revenue for the
2020 fiscal year as a percentage of total producer revenue would be
approximately 0.02 percent.
This proposed action would decrease 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, decreasing
the assessment would reduce the burden on handlers and may reduce the
burden on producers. The Committee's meetings were widely publicized
throughout the production area. The olive industry and all interested
persons were invited to attend the meetings and participate in
Committee deliberations on all issues. Like all Committee meetings, the
December 5, 2019, meeting and the January 22, 2020, meetings were
public meetings, and all entities, both large and small, were able to
express views on this issue. Interested persons are invited to submit
comments on this proposed rule, including the regulatory and
information collection impacts of this action on small businesses.
In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C.
Chapter 35), the Order's information collection requirements have been
previously approved by OMB and assigned OMB No. 0581-0178 Vegetable and
Specialty Crops. No changes in those requirements are necessary as a
result of this action. Should any changes become necessary, they would
be submitted to OMB for approval.
This proposed rule would not impose any additional reporting or
recordkeeping requirements on either small or large California olive
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 action.
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/rules-regulations/moa/small-businesses. Any questions
about the compliance guide should be sent to Richard Lower 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.
List of Subjects in 7 CFR Part 932
Marketing agreements, Olives, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 932 is
proposed to be amended as follows:
PART 932--OLIVES GROWN IN CALIFORNIA
0
1. The authority citation for 7 CFR part 932 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Section 932.230 is revised to read as follows:
Sec. 932.230 Assessment rate.
On and after January 1, 2020, an assessment rate of $15.00 per ton
is established for California olives.
Dated: February 27, 2020.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-04369 Filed 3-3-20; 8:45 am]
BILLING CODE 3410-02-P
