Olives Grown in California; Proposed Amendments to the Marketing Order No. 932 and Referendum Order, 11312-11315 [2020-03893]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 85, Number 39 (Thursday, February 27, 2020)]
[Proposed Rules]
[Pages 11312-11315]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03893]


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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. 39 / Thursday, February 27, 2020 / 
Proposed Rules

[[Page 11312]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[AMS-SC-19-0081; SC-19-932-2]


Olives Grown in California; Proposed Amendments to the Marketing 
Order No. 932 and Referendum Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule and referendum order.

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SUMMARY: This rulemaking proposes amendments to Marketing Order No. 
932, which regulates the handling of olives grown in California. The 
proposed amendments would change the California Olive Committee's 
(Committee) quorum requirements. In addition, USDA is proposing a 
clarifying change stating that alternate members acting as members to 
form a quorum would also be eligible to cast votes.

DATES: The referendum will be conducted from March 9 through March 20, 
2020. The representative period for the referendum is August 1 through 
July 31, 2019.

FOR FURTHER INFORMATION CONTACT: Melissa Schmaedick, Senior Marketing 
Specialist, or Andrew Hatch, Chief, Rulemaking Services Branch, 
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] 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 proposal, pursuant to 5 U.S.C. 553, 
proposes amendments to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This proposal is issued under 
Marketing 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.'' Section 608c(17) of the Act and the applicable procedural 
requirements governing the formulation of marketing agreements and 
orders (7 CFR part 900) authorize amendment of the Order through this 
informal rulemaking action.
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 13563 and 13175. This action 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' '' (February 2, 2017).
    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. This proposed rule is not intended to have retroactive 
effect. This proposed rule would not preclude, preempt, or supersede 
any State program covering olives grown in California.
    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. A 
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 no later than 20 days after the date of 
entry of the ruling.
    Section 1504 of the Food, Conservation, and Energy Act of 2008 
(2008 Farm Bill) (Pub. L. 110-246) amended section 608c(17) of the Act, 
which in turn required the addition of supplemental procedural 
requirements to 7 CFR part 900 (73 FR 49307; August 21, 2008). The 
amendment of section 608c(17) of the Act and additional supplemental 
procedural requirements authorize the use of informal rulemaking (5 
U.S.C. 553) to amend Federal fruit, vegetable, and nut marketing 
agreements and orders. USDA may use informal rulemaking to amend 
marketing orders based on the nature and complexity of the proposed 
amendments, the potential regulatory and economic impacts on affected 
entities, and any other relevant matters.
    AMS has considered these factors and has determined that the 
amendments proposed are not unduly complex and the nature of the 
proposed amendments is appropriate for utilizing the informal 
rulemaking process to amend the Order. A discussion of the potential 
regulatory and economic impacts on affected entities is discussed later 
in the ``Final Regulatory Flexibility Analysis'' section of this 
proposed rule.
    The Committee unanimously recommended the amendments following 
deliberations at a public meeting held on July 29, 2019. The proposed 
action would amend the Order by changing the Committee's quorum 
requirements. USDA is proposing an additional clarifying change to the 
Order's quorum requirements by stating that alternate members acting as 
members to form a quorum would also be eligible to cast votes. In 
addition to these proposals, USDA proposes to make any additional 
changes to the Order as may be necessary to conform to any amendment 
that may result from this rulemaking action.
    A proposed rule soliciting comments on the proposed amendments was 
issued on November 1, 2019 and published in the Federal Register on 
November 6, 2019 (84 FR 59736). No comments were received. AMS will

[[Page 11313]]

conduct a grower referendum to determine support for the proposed 
amendments. If appropriate, a final rule will then be issued to 
effectuate the amendments favored by growers in the referendum.
    The Committee's proposed amendments would amend the Order by 
removing the requirement of having five producer members and five 
handler members in attendance to form a quorum and clarify that 
alternate members acting as members could satisfy the quorum 
requirement. USDA is proposing a clarifying change to the Order's 
quorum requirements by stating that alternate members acting as members 
to form a quorum would also be eligible to cast votes.

Proposal--Quorum Requirement

    Section 932.25 establishes the Committee, with 16 members (eight 
producer members and eight handler members) and further allows the 
Committee to be increased by a public member (who is not to be a 
producer or handler of olives nor an officer, employee or director of 
any producer or handler of olives) for a potential total of 17 members. 
In addition, this section requires that each member has an alternate 
who meets the same qualifications as the member. The Committee 
currently operates with 17 members and 17 alternate members.
    Section 932.30 further states that each alternate member shall act 
in the place and stead of such member (a) during such member's absence, 
and (b) in the event of such member's removal, resignation, 
disqualification or death, until a successor for such member's 
unexpired term has been selected and has qualified.
    Section 932.36 establishes the Committee's quorum requirements. 
Current requirements state that a quorum must consist of at least 10 
members of whom at least five must be producer members and at least 
five must be handler members and, if the Committee is increased by the 
addition of a public member, a quorum must consist of at least 11 
members of which at least five must be producer members and at least 
five must be handler members. Given that the Committee currently has a 
public member, a quorum of 11 members of which five must be producers 
and five must be handlers is required.
    This proposed action would amend Sec.  932.36 by removing the 
requirement of having five producer members and five handler members in 
attendance to form a quorum. The proposed modified language would 
define a quorum as consisting of at least 10 members and, if the 
committee is increased by the addition of a public member, a quorum 
would consist of at least 11 members.
    The proposed modification would also clarify that alternate members 
acting as members could satisfy the quorum requirement. The Committee's 
recommended amendment, that would modify the second sentence of the 
current Sec.  932.36, adds a phrase recognizing that alternate members 
who are serving in place of an absent member should be counted as full 
Committee members in the context of constituting a quorum. This 
proposed phrase reiterates the authority of alternate members as 
specified in Sec.  932.30.
    For clarity and consistency, USDA proposes adding the same phrase 
to the first sentence of Sec.  932.36. The proposed revision to the 
sentence would read as follows: ``Decisions of the committee shall be 
by majority vote of the members, including alternates acting as 
members, present and voting, and a quorum must be present: . . .'' This 
proposed additional revision would clarify that alternate members 
acting as members could not only fulfill quorum requirements, but they 
would also be able to vote as members on matters of Committee business 
in the absence of their member.
    Since promulgation of the Order in 1965, the California olive 
industry has seen reductions of 64 percent (from 2500 to 900) and 93 
percent (from 28 to two) in the number of California olive producers 
and handlers, respectively. Industry consolidation has resulted in 
increased difficulties in filling Committee member seats as well as 
fulfilling quorum requirements at meetings.
    Given the current quorum requirement of a minimum of five producers 
and five handlers in attendance, the absence of just one individual may 
result in the lack of a quorum. Without a quorum, the Committee is 
unable to vote on business decisions or make regulatory recommendations 
to USDA. Meetings without a quorum are also costly as attendees must 
travel to attend the meeting, thus incurring travel costs in addition 
to time lost operating their businesses.
    Adjusting the current quorum requirement as proposed would lower 
the risk of not reaching a quorum during scheduled meetings due to the 
absence of the required number of producer or handler members. This 
change would streamline the Committee's operations and increase its 
effectiveness by allowing the Committee to conduct business as long as 
the minimum number of members are in attendance. It would also reduce 
the risk of members incurring costs from traveling to meetings at which 
business cannot be conducted due to lack of a quorum.
    For the reasons stated above, it is proposed that Sec.  932.36, 
Quorum requirement, be amended by removing the requirement of having 
five producer members and five handler members in attendance to form a 
quorum and clarify that alternate members acting as members could 
satisfy the quorum requirement. It is also proposed that Sec.  932.36 
be further amended by USDA's proposed clarifying change. This proposed 
addition has been incorporated into the amendatory text of this 
document.

Final Regulatory Flexibility Analysis

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the 
economic impact of this action 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 
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 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 900 producers of olives in the production 
area and two handlers subject to regulation under the Order. The Small 
Business Administration (SBA) defines small agricultural producers as 
those having annual receipts of less than $1,000,000, and small 
agricultural service firms as those whose annual receipts are less than 
$30,000,000 (13 CFR 121.201).
    According to the National Agricultural Statistics Service (NASS) 
data, as of June 2019 the average price to producers for the 2018 crop 
year was $766.00 per ton, and total assessable volume for the 2018 crop 
year was 17,953 tons. Based on production, the total number of 
California olive producers, and price paid to those producers, the 
average annual producer revenue is less than $1,000,000 ($766.00 times 
17,953 tons equals $13,751,998 divided by 900 producers equals an 
average annual producer revenue of $15,280.00). Therefore, most olive 
producers may be classified as small entities. Both handlers may be 
classified as large entities under the SBA's

[[Page 11314]]

definitions because their annual receipts are greater than $30,000,000.
    The proposed change would revise the quorum requirement for 
Committee meetings by removing the requirement of having five producer 
members and five handler members in attendance to form a quorum. The 
proposed modified language would define a quorum as consisting of at 
least 10 members and, if the Committee is increased by the addition of 
a public member, a quorum would consist of at least 11 members.
    The Committee unanimously recommended the proposed amendment at a 
public meeting on July 29, 2019. If this proposed amendment is approved 
in a referendum, there would be no direct financial effects on 
producers or handlers as it is primarily administrative in nature. The 
proposed amendment would increase the efficiency of the Committee's 
operations and allow it to respond more quickly to the industry's 
needs.
    The number of producers and handlers operating in the industry has 
decreased significantly since the marketing order was established in 
1965, dropping from 2,500 to 900 (64 percent) and from 28 to two (93 
percent), respectively. Industry consolidation has made it difficult to 
find enough members to fill positions on the Committee. Moreover, 
fulfilling quorum requirements at meetings has also become increasingly 
challenging.
    Changing the quorum requirement from the current 11-member 
requirement, of which five must be producers and five must be handlers, 
to simply the attendance of 11 members would increase meeting 
efficiency by making the quorum requirement more easily fulfilled. This 
proposed change would also reduce costs to members, Committee staff, 
and USDA employees who travel to meetings where a quorum is not 
established. If implemented, the proposed amendment is not expected to 
result in any increases in economic costs or burden to industry 
members, USDA staff or consumers.
    Alternatives to this proposed amendment, including making no 
changes at this time, were considered by the Committee. One alternative 
included lowering the required number of producer or handler members in 
attendance. However, given that there are only two handlers in 
operation within the industry, this option was still considered too 
restrictive by the Committee. Therefore, the alternatives were not 
considered viable by the Committee.
    AMS believes the proposed amendment is justified and necessary to 
ensure the Committee's ability to locally administer the program. 
Modifying the quorum requirement as proposed in this rule would ensure 
a more efficient and orderly flow of business.

Paperwork Reduction Act

    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 because of this 
action would be necessary. Should any changes become necessary, USDA 
would submit them to OMB for approval. This proposed rule would impose 
no additional reporting or recordkeeping requirements on either 
California olive handler.
    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. In addition, USDA 
has not identified any relevant Federal rules that duplicate, overlap, 
or conflict with this rule.
    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.
    The Committee publicizes all of its meetings throughout the 
California olive production area and encourages interested parties to 
participate in its deliberations. Like all Committee meetings, the July 
29, 2019, meeting was public, and all entities, both large and small, 
were encouraged to express their views on the proposed amendment.
    A proposed rule concerning this action was published in the Federal 
Register on November 6, 2019 (84 FR 59736). Copies of the proposed rule 
were sent via email to all Committee members and California olive 
handlers. The rule was also made available through the internet by USDA 
and the Office of the Federal Register. A 30-day comment period ending 
December 6, 2019, allowed interested persons to respond to the 
proposal. No comments were received; therefore, no changes were made to 
the proposed amendments.
    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/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.

Findings and Conclusions

    The findings and conclusions and general findings and 
determinations included in the proposed rule set forth in the November 
6, 2019, issue of the Federal Register are hereby approved and adopted.

Marketing Order

    Annexed hereto and made a part hereof is the document entitled 
``Order Amending the Order Regulating the Handling of Olives Grown in 
California.'' This document has been decided upon as the detailed and 
appropriate means of effectuating the foregoing findings and 
conclusions. It is hereby ordered that this entire rule be published in 
the Federal Register.

Referendum Order

    It is hereby directed that a grower referendum be conducted in 
accordance with the procedure for the conduct of referenda (7 CFR part 
900.400-407) to determine whether the annexed order amending the Order 
regulating the handling of olives grown in California is approved by 
growers who have engaged in the production of olives within the 
production area during the representative period. The representative 
period for the conduct of such referendum is hereby determined to be 
August 1 through July 31, 2019.
    The agents of the Secretary to conduct such referendum are 
designated to be Kathie Notoro and Terry Vawter, California Marketing 
Field Office, Marketing Order and Agreement Division, Specialty Crops 
Program, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or 
Email: [email protected] or [email protected], respectively.

List of Subjects in 7 CFR Part 932

    Olives, Marketing agreements, Reporting and recordkeeping 
requirements.

    Dated: February 21, 2020.
Bruce Summers,
Administrator, Agricultural Marketing Service.

Order Amending the Order Regulating the Handling of Olives Grown in 
California 1
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    \1\ This order shall not become effective unless and until the 
requirements of Sec.  900.14 of the rules of practice and procedure 
governing proceedings to formulate marketing agreements and 
marketing orders have been met.
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Findings and Determinations

    The findings hereinafter set forth are supplementary to the 
findings and

[[Page 11315]]

determinations which were previously made in connection with the 
issuance of the marketing order; and all said previous findings and 
determinations are hereby ratified and affirmed, except insofar as such 
findings and determinations may be in conflict with the findings and 
determinations set forth herein.
    1. The Order, as amended, and as hereby proposed to be further 
amended, and all of the terms and conditions thereof, would tend to 
effectuate the declared policy of the Act;
    2. The Order, as amended, and as hereby proposed to be further 
amended, regulates the handling of olives grown in California in the 
same manner as, and are applicable only to, persons in the respective 
classes of commercial and industrial activity specified in the Order;
    3. The Order, as amended, and as hereby proposed to be further 
amended, is limited in application to the smallest regional production 
area which is practicable, consistent with carrying out the declared 
policy of the Act, and the issuance of several orders applicable to 
subdivisions of the production area would not effectively carry out the 
declared policy of the Act;
    4. The Order, as amended, and as hereby proposed to be further 
amended, prescribe, insofar as practicable, such different terms 
applicable to different parts of the production area as are necessary 
to give due recognition to the differences in the production and 
marketing of olives produced in the production area; and
    5. All handling of olives produced in the production area as 
defined in the Order is in the current of interstate or foreign 
commerce or directly burdens, obstructs, or affects such commerce.

Order Relative to Handling

    It is therefore ordered, that on and after the effective date 
hereof, all handling of olives grown in California shall be in 
conformity to, and in compliance with, the terms and conditions of the 
said order as hereby proposed to be amended as follows:
    The provisions of the proposed marketing order amending the Order 
contained in the proposed rule issued by the Administrator on November 
1, 2019, and published in the Federal Register (84 FR 59736) on 
November 6, 2019, will be and are the terms and provisions of this 
order amending the Order and are set forth in full herein.

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. Revise Sec.  932.36 to read as follows:


Sec.  932.36  Procedure.

    Decisions of the committee shall be by majority vote of the 
members, including alternates acting as members, present and voting, 
and a quorum must be present: Provided, That decisions requiring a 
recommendation to the Secretary on matters pertaining to grade and size 
regulations shall require at least 10 affirmative votes, at least 5 of 
which must be from producer members and at least 5 of which must be 
from handler members and, if the committee is increased by the addition 
of a public member, at least 11 affirmative votes shall be required, at 
least 5 of which must be from producer members and at least 5 of which 
must be from handler members. A quorum shall consist of at least 10 
members, including alternates acting as members, and, if the committee 
is increased by the addition of a public member, a quorum shall consist 
of at least 11 members, including alternates acting as members. Except 
in case of an emergency, a minimum of 5 days advance notice shall be 
given with respect to any meeting of the committee. In case of an 
emergency, to be determined within the discretion of the chairman of 
the committee, as much advance notice of a meeting as is practicable in 
the circumstances shall be given. The committee may vote by mail or 
telegram upon due notice to all members, but any proposition to be so 
voted upon first shall be explained accurately, fully, and identically 
by mail or telegram to all members. When voted on by such method, at 
least 14 affirmative votes, of which seven shall be producer member 
votes and seven shall be handler member votes, shall be required for 
adoption and, if the committee is increased by the addition of a public 
member, votes by mail or telegram shall require at least 15 affirmative 
votes, of which at least 7 shall be producer member votes and at least 
7 shall be handler member votes. The committee may recommend for the 
Secretary's approval changes in the number of affirmative votes 
required for adoption of any proposition voted upon by means of a mail 
or telegram ballot: Provided, That the number of affirmative votes 
required for adoption shall not be less than 10, and in any case an 
equal number of producer member and handler member votes shall be 
required for adoption and, if the committee is increased by the 
addition of a public member, the number of affirmative votes required 
for adoption shall be increased by 1.

[FR Doc. 2020-03893 Filed 2-26-20; 8:45 am]
 BILLING CODE 3410-02-P