Kiwifruit Grown in California; Decreased Assessment Rate, 62959-62961 [2013-24892]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 78, Number 205 (Wednesday, October 23, 2013)]
[Rules and Regulations]
[Pages 62959-62961]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24892]



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Federal Register / Vol. 78, No. 205 / Wednesday, October 23, 2013 / 
Rules and Regulations

[[Page 62959]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Docket No. AMS-FV-13-0071; FV13-920-2 IR]


Kiwifruit Grown in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule decreases the assessment rate established for the 
Kiwifruit Administrative Committee (Committee) for the 2013-14 and 
subsequent fiscal periods from $0.035 to $0.025 per 9-kilo volume-fill 
container or equivalent of kiwifruit. The Committee locally administers 
the marketing order, which regulates the handling of kiwifruit grown in 
California. Assessments upon kiwifruit handlers are used by the 
Committee to fund reasonable and necessary expenses of the program. The 
fiscal period began on August 1 and ends July 31. The assessment rate 
will remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective October 24, 2013. Comments received by November 22, 
2013, will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order and Agreement Division, Fruit and Vegetable Program, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938, or internet: https://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: https://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 comments will be made public on the internet at the 
address provided above.

FOR FURTHER INFORMATION CONTACT: Kathie Notoro, Marketing Specialist, 
or Martin Engeler, Regional Director, California Marketing Field 
Office, Marketing Order and Agreement Division, Fruit and Vegetable 
Program, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or 
Email: Kathie.Notoro@ams.usda.gov, or Martin.Engeler@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: Jeffrey.Smutny@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 920, as amended (7 CFR part 920), regulating the handling of 
kiwifruit grown in 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 Orders 12866 and 13563.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, California 
kiwifruit 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 will be applicable to all assessable 
kiwifruit beginning on August 1, 2013, 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 rule decreases the assessment rate established for the 
Committee for the 2013-14 and subsequent fiscal periods from $0.035 to 
$0.025 per 9-kilo volume-fill container or equivalent of kiwifruit.
    The California kiwifruit 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 Committee members are producers of California kiwifruit. 
They are familiar with the Committee's needs and with the costs of 
goods and services in their local area. Therefore, they are 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 2008-09 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal period to fiscal period 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 July 11, 2013, and unanimously recommended 
2013-14 expenditures of $113,550 and an assessment rate of $0.025 per 
9-kilo volume-fill container or equivalent of kiwifruit. In comparison, 
last year's budgeted expenditures were $108,075. The assessment rate of 
$0.025 per 9-kilo volume-fill container or equivalent is $0.010 per 9-
kilo volume-fill container or equivalent less than the rate currently

[[Page 62960]]

in effect. This action will provide sufficient revenue to meet the 
Committee's expenses while maintaining a financial reserve within the 
maximum amount permitted under the order, which is approximately one 
fiscal period's expense.
    The major expenditures recommended by the Committee for the 2013-14 
year include $76,125 for management expenses, $7,500 for a financial 
audit, $5,000 for handler audits, and $10,000 for a contingency fund. 
Budgeted expenses for these items in 2012-13 were $72,500 for 
management expenses, $7,000 for a financial audit, $5,000 for handler 
audits, and $10,000 for a contingency fund.
    The assessment rate recommended by the Committee was derived by 
considering the amount of revenue needed to meet anticipated expenses, 
estimated shipments of California kiwifruit, excess funds carried into 
the 2013-14 crop year, and estimated interest income. Kiwifruit 
shipments for the year are estimated at 2,600,000 9-kilo volume-fill 
containers. When applied to the new assessment rate, this should 
provide $65,000 in income. Assessment income, combined with interest 
income and reserve funds, will be sufficient to meet the anticipated 
expenses of $113,550. This also should result in a July 2014 ending 
reserve of $101,391, which is within the maximum reserve of 
approximately one fiscal year's expenses permitted by the order (Sec.  
920.42).
    The assessment rate established by this rule will 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 is effective for an indefinite 
period, the Committee will continue to meet prior to or during each 
fiscal period to recommend a budget of expenses and consider 
recommendations to modify 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 will evaluate Committee 
recommendations and other available information to determine whether to 
modify the assessment rate, and further rulemaking will be undertaken 
as necessary. The Committee's 2013-14 budget and those for subsequent 
fiscal periods will 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 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 178 kiwifruit growers in the production 
area and approximately 28 handlers subject to regulation under the 
marketing order. Small agricultural producers are defined by the Small 
Business Administration (13 CFR 121.201) as those having annual 
receipts less than $750,000, and small agricultural service firms are 
defined as those whose annual receipts are less than $7,000,000.
    The California Agricultural Statistical Service (CASS) reported 
total California kiwifruit production for the 2011-12 season at 37,700 
tons, with an average price of $775 per ton. Based on the average price 
and shipment information provided by the CASS and the Committee, it 
could be concluded that the majority of kiwifruit handlers would be 
considered small businesses under the SBA definition. Based on 
kiwifruit production and price information, as well as the total number 
of California kiwifruit growers, average annual grower revenue is less 
than $750,000. Thus, the majority of California kiwifruit producers may 
also be classified as small entities.
    This rule decreases the assessment rate established for the 
Committee and collected from handlers for the 2013-14 and subsequent 
fiscal periods from $0.035 to $0.025 per 9-kilo volume-fill container 
or equivalent of kiwifruit. The Committee unanimously recommended 2013-
14 expenditures of $113,550 and an assessment rate of $0.025 per 9-kilo 
volume-fill container. The proposed assessment rate of $0.025 is $0.010 
lower than the 2012-13 rate. The quantity of assessable kiwifruit for 
the 2013-14 fiscal year is estimated at 2,600,000 9-kilo volume-fill 
containers. Thus, the $0.025 rate should provide $65,000 in assessment 
income and combined with reserve funds and interest income, should be 
adequate to meet this year's expenses.
    The major expenditures recommended by the Committee for the 2013-14 
year include $76,125 for management expenses, $7,500 for a financial 
audit, $5,000 for handler audits, and $10,000 for a contingency fund. 
Budgeted expenses for these items in 2012-13 were $72,500 for 
management expenses, $7,000 for a financial audit, $5,000 for handler 
audits, and $10,000 for a contingency fund.
    The Committee unanimously recommended the lower assessment rate. 
Income generated from this assessment rate, plus reserve funds and 
interest income, will be sufficient to meet the Committee's anticipated 
expenses of $113,550 and should result in a July 2014 ending reserve of 
$101,391, which is within the maximum reserve amount of approximately 
one fiscal year's expenses permitted by the order (Sec.  920.42).
    Prior to arriving at this budget and assessment rate, the Committee 
considered alternative expenditure levels, but ultimately decided that 
the recommended levels were reasonable and necessary to properly 
administer the order.
    A review of historical information and preliminary information 
pertaining to the upcoming season indicates that the grower price for 
2013-14 could range between $750 and $850 per ton, or between $7.42 to 
$8.42 per 9-kilo volume-fill container of assessable kiwifruit. 
Utilizing these estimates and the assessment rate of $0.025, estimated 
assessment revenue as a percentage of total producer revenue could 
range between 0.30 and 0.34 percent for the season.
    This action decreases the assessment obligation imposed on 
handlers. Assessments are applied uniformly on all handlers, and some 
of the costs may be passed on to producers. However, decreasing the 
assessment rate reduces the burden on handlers and may reduce the 
burden on producers. In addition, the Committee's meeting was widely 
publicized throughout the California kiwifruit industry and all 
interested persons were invited to attend the meeting and participate 
in Committee deliberations on all issues. Like all Committee meetings, 
the July 11, 2013, 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 interim rule, 
including the regulatory and informational impacts of this action on 
small businesses.

[[Page 62961]]

    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 the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0189. No changes in those requirements as a 
result of this action are necessary. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This action imposes no additional reporting or recordkeeping 
requirements on either small or large California kiwifruit 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: https://www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Jeffrey Smutny at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant material presented, including 
the Committee's information and recommendation, and other available 
information, it is hereby found that this rule, as hereinafter set 
forth, will tend to effectuate the declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register 
because: (1) The 2013-14 fiscal year began on August 1, 2013, handlers 
began shipping kiwifruit in mid-September, and the order requires that 
the rate of assessment for each fiscal period apply to all assessable 
kiwifruit handled during the period; (2) this action decreases the 
assessment rate for assessable kiwifruit beginning with the 2013-14 
fiscal year; (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; and (4) 
this interim rule provides a 30-day comment period, and all comments 
timely received will be considered prior to finalization of this rule.

List of Subjects in 7 CFR Part 920

    Kiwifruit, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 920 is 
amended as follows:

PART 920--KIWIFRUIT GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 920 continues to read as 
follows:

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


0
2. Section 920.213 is revised to read as follows:


Sec.  920.213  Assessment rate.

    On and after August 1, 2013, an assessment rate of $0.025 per 9-
kilo volume-fill container or equivalent of kiwifruit is established 
for kiwifruit grown in California.

    Dated: October 17, 2013.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2013-24892 Filed 10-22-13; 8:45 am]
BILLING CODE 3410-02-P