[Federal Register: November 26, 2004 (Volume 69, Number 227)]
[Rules and Regulations]
[Page 68755-68759]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26no04-1]
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Rules and Regulations
Federal Register
________________________________________________________________________
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[[Page 68755]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 916 and 917
[Docket No. FV04-916/917-4 FIR]
Nectarines and Peaches Grown in California; Decreased Assessment
Rates
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Agriculture (USDA) is adopting, as a final
rule, without change, an interim final rule that decreased the
assessment rates established for the Nectarine Administrative Committee
and the Peach Commodity Committee (committees) for the 2004-05 and
subsequent fiscal periods. The Nectarine Administrative Committee (NAC)
decreased its assessment rate from $0.20 to $0.195 per 25-pound
container or container equivalent of nectarines handled. The Peach
Commodity Committee (PCC) decreased its assessment rate from $0.20 to
$0.19 per 25-pound container or container equivalent of peaches
handled. The committees locally administer the marketing orders that
regulate the handling of nectarines and peaches grown in California.
Authorization to assess nectarine and peach handlers enables the
committees to incur expenses that are reasonable and necessary to
administer the programs. The fiscal periods run from March 1 through
the last day of February. The assessment rates will remain in effect
indefinitely unless modified, suspended, or terminated.
DATES: Effective December 27, 2004.
FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Program Analyst, and/or
Rose Aguayo, Marketing Specialist, California Marketing Field Office,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 2202 Monterey Street, suite 102B, Fresno, California 93721,
(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: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement Nos. 85 and 124 and Order Nos. 916 and 917, both as amended
(7 CFR parts 916 and 917), regulating the handling of nectarines and
peaches grown in California, respectively, hereinafter referred to as
the ``orders.'' The marketing agreements and orders are effective under
the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C.
601-674), hereinafter referred to as the ``Act.''
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 orders now in effect, California
nectarine and peach handlers are subject to assessments. Funds to
administer the orders are derived from such assessments. It is intended
that the assessment rates as issued herein will be applicable to all
assessable nectarines and peaches beginning on March 1, 2004, and
continue until amended, suspended, or terminated. This rule will 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 continues in effect the action that decreased the
assessment rates established for the NAC for the 2004-05 and subsequent
fiscal periods from $0.20 to $0.195 per 25-pound container or container
equivalent of nectarines and for the PCC for the 2004-05 and subsequent
fiscal periods from $0.20 to $0.19 per 25-pound container or container
equivalent of peaches.
The nectarine and peach marketing orders provide authority for the
committees, with the approval of USDA, to formulate an annual budget of
expenses and collect assessments from handlers to administer the
programs. The members of the NAC and PCC are producers of California
nectarines and peaches, respectively. They are familiar with the
committees' needs, and with the costs for goods and services in their
local area and are, thus, in a position to formulate appropriate
budgets and assessment rates. The assessment rates are formulated and
discussed in public meetings. Thus, all directly affected persons have
an opportunity to participate and provide input.
NAC Assessment and Expenses
The NAC recommended, for the 2004-05 fiscal period, and USDA
approved, an assessment rate of $0.195 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 NAC met on April 28, 2004, and unanimously recommended 2004-05
fiscal period expenditures of $5,162,866 and an assessment rate of
$0.195 per 25-pound container or container equivalent of nectarines. In
comparison, last year's expenditures were initially budgeted at
$4,173,438. The assessment rate of
[[Page 68756]]
$0.195 is $0.005 lower than the rate previously in effect.
After the 2003-04 fiscal period budget was formulated and
recommended to USDA in May 2003, the committee received one Federal and
two State grants which affected both committee income and expenditures.
The NAC also used reserve funds to conduct research on the development
of a commercial nectarine beverage. The NAC subsequently unanimously
recommended an amended budget for the 2003-04 fiscal period. Under this
amended budget, the Federal grant of $533,921 and a State grant of
$200,557 were applied to the export market development program, and a
State grant of $3,667 was applied to the research program, along with
$45,000 of reserve funds.
The assessment rate decrease for the 2004-05 fiscal period was
recommended because excess funds from the 2003-04 fiscal period
totaling $786,521 were carried into 2004-05. This was substantially
higher than what the NAC deemed satisfactory. Moreover, the 2004
nectarine crop was expected to be larger than last year's crop. The
lower assessment rate also addressed the needs of nectarine growers and
handlers who have been affected by low commodity prices for the last
few years.
Total income received for the 2004-05 fiscal period is projected to
be approximately $5,800,677. Decreasing the assessment rate from $0.20
to $0.195 per 25-pound container is expected to provide about
$4,199,453 in assessment revenue, and along with other income, to allow
the NAC to start the 2005 season with about $499,811 in reserve funds.
The major expenditures recommended by the NAC for the 2004-05
fiscal period include $219,872 for salaries and benefits, $146,613 for
general expenses and industry activities, $1,153,676 for inspection,
$208,568 for research, and $3,161,852 for domestic and export market
development programs.
Budgeted expenses for these items in the 2003-04 fiscal period were
initially estimated to be $226,121 for salaries and benefits, $142,612
for general expenses and industry activities, $1,210,220 for
inspection, $138,929 for research, and $2,263,061 for domestic and
export market development programs.
The major expenditures under the amended 2003-04 fiscal period
budget include $226,121 for salaries and benefits, $142,612 for general
expenses and industry activities, $1,210,220 for inspection, $187,596
for research, and $2,997,539 for domestic and export market development
programs.
The 2004-05 fiscal period NAC assessment rate was derived after
considering the total NAC expenses of $5,162,866; the initial estimated
assessable nectarines of 22,245,000 twenty-five-pound containers or
container equivalents; the estimated income from other sources, such as
interest and grants; and the need for an adequate financial reserve to
carry the NAC into the 2005 season. The committee has determined that a
carry-in of $400,000 is historically necessary to meet its obligations
in the early part of each season, before handler assessments are billed
and received. To meet these goals, the NAC recommended an assessment
rate of $0.195 per 25-pound container or container equivalent.
According to the committee, that assessment rate will result in an
adequate carry-in, while maintaining reserves within the maximum
permitted by the order (approximately one year's expenses; Sec.
916.42).
PCC Assessment and Expenses
The PCC recommended, for the 2004-05 fiscal period, and USDA
approved, an assessment rate of $0.19 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 PCC also met on April 28, 2004, and recommended 2004-05 fiscal
period expenditures of $5,178,002 and an assessment rate of $0.19 per
25-pound container or container equivalent of peaches. In comparison,
last year's expenditures were initially budgeted at $4,086,316. The
assessment rate of $0.19 is $0.01 lower than the rate previously in
effect.
After the 2003-04 fiscal period budget was formulated and
recommended to USDA in May 2003, the PCC received one Federal and two
State grants which affected both committee income and expenditures. The
committee subsequently unanimously recommended an amended budget for
the 2003-04 fiscal period on June 23, 2004. Under this amended budget,
the Federal grant of $488,845 and a State grant of $149,667 were
applied to the export market development program, and a State grant of
$3,667 was applied to the cultural research program.
The decrease for the 2004-05 fiscal period was recommended because
excess funds from 2003-04 totaling $915,375 were carried into the 2004-
05 fiscal period. This is substantially higher than needed by the PCC
to cover early season expenses. In addition, the 2004 peach crop was
expected to be higher than last year's crop. The lower assessment rate
also addressed the needs of peach growers and handlers who have been
affected by low commodity prices for the last few years.
Total income received for the 2004-05 fiscal period was projected
to be approximately $5,883,385. Decreasing the assessment rate from
$0.20 to $0.19 per 25-pound container was expected to provide about
$4,153,654 assessment revenue, and along with other income, to allow
the PCC to start the 2005 season with about $567,383 in reserve funds.
The major expenditures recommended by the PCC for the 2004-05
fiscal period include $219,872 for salaries and benefits, $148,598 for
general expenses and industry activities, $1,240,520 for inspection,
$208,570 for research, and $3,188,457 for domestic and export market
development programs.
Budgeted expenditures for these items in the 2003-04 fiscal period
were initially estimated to be $226,121 for salaries and benefits,
$144,743 for general expenses and industry activities, $1,173,480 for
inspection, $138,930 for research, and $2,211,346 for domestic and
export market development programs.
The major expenditures under the amended budget for 2003-04 fiscal
period include $226,121 for salaries and benefits, $144,743 for general
expenses and industry activities, $1,173,480 for inspection, $142,597
for research, and $2,849,858 for domestic and export market development
programs.
The 2004-05 fiscal period PCC assessment rate was derived after
considering the total PCC expenses of $5,178,002; the estimated
assessable peaches of 22,601,000 twenty-five-pound container or
container equivalents; the estimated income from other sources, such as
interest and grants; and the need for an adequate financial reserve to
carry the PCC into the 2005 season. The committee has determined that a
carry-in of $500,000 is historically necessary to meet its obligations
in the early part of each season, before handler assessments are billed
and received.
To meet these goals, the PCC recommended an assessment rate of
$0.19 per 25-pound container or container equivalent. According to the
committee, that assessment rate will result in an adequate carry-in,
while maintaining reserves within the maximum permitted by the order
(one year's expenses; Sec. 917.38).
[[Page 68757]]
Continuance of Assessment Rates
The assessment rates will continue in effect indefinitely unless
modified, suspended, or terminated by USDA upon recommendation and
information submitted by the committees or other available information.
Although these assessment rates are effective for an indefinite
period, the committees will continue to meet prior to or during each
fiscal period to recommend a budget of expenses and consider
recommendations for modification of the assessment rates. The dates and
times of committee meetings are available from the committees' website
or USDA. Committee meetings are open to the public and interested
persons may express their views at these meetings. USDA will evaluate
the committees' recommendations and other available information to
determine whether modification of the assessment rate for each
committee is needed. Further rulemaking will be undertaken as
necessary. The committee's 2004-05 budget and those for subsequent
fiscal periods will be reviewed and, as appropriate, approved by USDA.
Final 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 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
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.
Industry Information
There are approximately 250 California nectarine and peach handlers
subject to regulation under the orders covering nectarines and peaches
grown in California, and about 1,800 producers of these fruits in
California. The Small Business Administration [13 CFR 121.201] defines
small agricultural service firms as those whose annual receipts are
less than $5,000,000. The Small Business Administration also defines
small agricultural producers as those having annual receipts of less
than $750,000. A majority of these handlers and producers may be
classified as small entities.
The committees' staff has estimated that there are less than 20
packers in the industry who could be defined as other than small
entities. In the 2003 season, the average handler price received was
$7.00 per container or container equivalent of nectarines or peaches. A
handler would have to ship at least 714,286 containers to have annual
receipts of $5,000,000. Given data on shipments maintained by the
committees' staff and the average handler price received during the
2003 season, the committees' staff estimates that small packers
represent approximately 94 percent of all the packers within the
industry.
The committees' staff has also estimated that less than 20 percent
of the producers in the industry could be defined as other than small
entities. In the 2003 season, the average producer price received was
$4.00 per container or container equivalent for nectarines and peaches.
A producer would have to produce at least 187,500 containers of
nectarines and peaches to have annual receipts of $750,000. Given data
maintained by the committees' staff and the average producer price
received during the 2003 season, the committees' staff estimates that
small producers represent more than 80 percent of the producers within
the industry.
The nectarine and peach marketing orders provide authority for the
committees, with the approval of USDA, to formulate an annual budget of
expenses and collect assessments from handlers to administer the
programs. The members of the NAC and PCC are producers of California
nectarines and peaches, respectively.
This rule continues in effect the action that decreased the
assessment rates established for the NAC for the 2004-05 and subsequent
fiscal periods from $0.20 to $0.195 per 25-pound container or container
equivalent of nectarines and for the PCC for the 2004-05 and subsequent
fiscal periods from $0.20 to $0.19 per 25-pound container or container
equivalent of peaches.
The NAC recommended 2004-05 fiscal period expenditures of
$5,162,866 for nectarines and an assessment rate of $0.195 per 25-pound
container or container equivalent of nectarines. The assessment rate of
$0.195 is $0.005 lower than the previous rate. The PCC recommended
expenditures of $5,178,002 for peaches and an assessment rate of $0.19
per 25-pound container or container equivalent of peaches. The
assessment rate of $0.19 is $0.01 lower than the previous rate.
Analysis of NAC Budget
The quantity of assessable nectarines for the 2004-05 fiscal period
was estimated at 22,245,000 twenty-five-pound container or container
equivalents. Thus, the $0.195 rate was expected to provide $4,337,775
in assessment income. Income derived from handler assessments and other
sources will be adequate to cover budgeted expenses and permit an
adequate reserve.
The NAC met on April 28, 2004, and recommended 2004-05 fiscal
period expenditures of $5,162,866 and an assessment rate of $0.195 per
25-pound container or container equivalent of nectarines. In
comparison, last year's expenditures were initially budgeted at
$4,173,438. The assessment rate of $0.195 is $0.005 lower than the rate
previously in effect.
The major expenditures recommended by the NAC for the 2004-05
fiscal period include $219,872 for salaries and benefits, $146,613 for
general expenses and industry activities, $1,153,676 for inspection,
$208,568 for research, and $3,161,852 for domestic and export market
development programs.
Budgeted expenses for these items in the 2003-04 fiscal period were
initially estimated to be $226,121 for salaries and benefits, $142,612
for general expenses and industry activities, $1,210,220 for
inspection, $138,929 for research, and $2,263,061 for domestic and
export market development programs.
After the 2003-04 fiscal period budget was formulated and
recommended to USDA in May 2003, the committee received one Federal and
two State grants which affected both committee income and expenditures.
The NAC also conducted research to test a commercial nectarine drink,
using reserve funds. The committee subsequently unanimously recommended
an amended budget for the 2003-04 fiscal period. Under this amended
budget, the Federal grant of $533,921 and a State grant of $200,557
were applied to the export marketing development program, and a State
grant of $3,667 was applied to the research program, along with $45,000
from the committee's reserves for the nectarine drink.
The major expenditures under the 2003-04 fiscal period amended
budget include $226,121 for salaries and benefits, $142,612 for general
expenses and industry activities, $1,210,220 for inspection, $187,596
for research, and $2,997,539 for domestic and export market development
programs.
The lower assessment rate is possible because of the $786,521 in
excess funds
[[Page 68758]]
carried into the 2004-05 fiscal period. This will provide adequate
funds at the beginning of the 2005 season before assessment collections
begin. A financial reserve carry-in is desirable because major expense
outlays for seasonal promotions and other activities occur before
assessments are received.
The 2004-05 fiscal period assessment rate for the NAC was derived
after considering the total NAC expenses of $5,162,866; the estimated
assessable nectarines of 22,245,000 twenty-five-pound containers or
container equivalents; the estimated income from other sources, such as
interest and grants; and the need for an adequate financial reserve to
carry the NAC into the 2005 season.
To meet this goal, the NAC recommended an assessment rate of $0.195
per 25-pound container or container equivalent. According to the
committee, that assessment rate will result in an adequate carry-in,
while carrying reserves within the maximum permitted by the order (one
year's expenses; Sec. 916.42).
Analysis of PCC Budget
The quantity of assessable peaches for the 2004-05 fiscal period is
estimated at 22,601,000 twenty-five-pound containers or container
equivalents. Thus, the $0.19 rate should provide $4,294,190 in
assessment income. Income derived from handler assessments and other
sources will be adequate to cover budgeted expenses and permit a small
increase in reserves.
The PCC also met on April 28, 2004, and recommended 2004-05 fiscal
period expenditures of $5,178,002 and an assessment rate of $0.19 per
25-pound container or container equivalent of peaches. In comparison,
last year's expenditures were initially budgeted at $4,086,316. The
assessment rate of $0.19 is $0.01 lower than the rate currently in
effect.
The major expenditures recommended by the PCC for the 2004-05
fiscal period include $219,872 for salaries and benefits, $148,598 for
general expenses and industry activities, $1,240,520 for inspection,
$208,570 for research, and $3,188,457 for domestic and export market
development programs.
The major expenditures initially recommended by the PCC for the
2003-04 fiscal period include $226,121 for salaries and benefits,
$144,743 for general expenses and industry activities, $1,173,480 for
inspection, $138,930 for research, and $2,211,346 for domestic and
export market development programs.
After the 2003-04 fiscal period budget was formulated and
recommended to USDA in May 2003, the committee received one Federal and
two State grants which affected both committee income and expenditures.
The committee subsequently unanimously recommended an amended budget
for the 2003-04 fiscal period. Under this amended budget, the Federal
grant of $488,845 and a State grant of $149,667 were applied to the
export market development, and a State grant of $3,667 was applied to
the cultural research program.
The major expenditures under the amended budget for 2003-04 fiscal
period include $226,121 for salaries and benefits, $144,743 for general
expenses and industry activities, $1,173,480 for inspection, $142,597
for research, and $2,849,858 for domestic and export market development
programs.
The lower assessment rate is possible because of the carry-in of
$915,375 in excess funds from the 2003-04 fiscal period into the 2004-
05 fiscal period. This is substantially higher than the PCC needs for
early season expenses before assessment collections begin. A financial
reserve carry-in of approximately $500,000 is desirable because major
expense outlays for seasonal promotions and other activities occur
before assessments are received.
The 2004-05 fiscal period assessment rate for the PCC was derived
after considering the total PCC expenses of $5,178,002; the estimated
assessable peaches of 22,601,000 twenty-five-pound containers or
container equivalents; the estimated income from other sources, such as
interest and grants; and the need for an adequate financial reserve to
carry the PCC into the 2005 season.
To meet this goal, the PCC recommended an assessment rate of $0.19
per 25-pound container or container equivalent. According to the
committee, the assessment rate will result in an adequate carry-in,
while keeping reserves within the maximum permitted by the order (one
year's expenses; Sec. 917.38).
Considerations in Determining Expenses and Assessment Rates
Prior to arriving at these budgets, the committees considered
information and recommendations from various sources, including, but
not limited to: The Executive Committee, the Research Subcommittee, the
International Programs Subcommittee, the Tree Fruit Quality
Subcommittee, and the Domestic Promotion Subcommittee.
Each of the committees then reviewed the proposed expenses; the
total estimated assessable 25-pound containers or container
equivalents; and the estimated income from other sources, such as
interest income and grants, prior to recommending a final assessment
rate. The NAC decided that an assessment rate of $0.195 per 25-pound
container or container equivalent will allow it to meet its 2004-05
fiscal period expenses and carry over an operating reserve of about
$499,811 which is in line with the committee's financial needs. The PCC
decided that an assessment rate of $0.19 per 25-pound container or
container equivalent will allow it to meet its 2004-05 fiscal period
expenses and carry over an operating reserve of $567,383, which is in
line with the committee's financial needs. The committees then
unanimously recommended these rates to USDA.
A review of historical and preliminary information pertaining to
the upcoming fiscal period indicates that the grower price for the 2004
crop year for nectarines and peaches could range between $4.00 and
$6.00 per 25-pound container or container equivalent. Therefore, the
estimated assessment revenue for the 2004-05 fiscal period as a
percentage of total grower revenue could range between 4.9 percent and
3.2 percent for nectarines, and 4.7 percent and 3.2 percent for
peaches.
This action continues in effect the action that decreased 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 rates reduces the burden
on handlers, and consequently may reduce the burden on producers.
In addition, the committees' meetings were widely publicized
throughout the California nectarine and peach industries and all
interested persons were invited to attend the meetings and participate
in the committees' deliberations on all issues. Like all committee
meetings, the April 28, 2004, meetings were public meetings and
entities of all sizes were able to express views on this issue.
Finally, interested persons were invited to submit information on the
regulatory and informational impacts of this action on small
businesses.
This action imposes no additional reporting or recordkeeping
requirements on either small or large 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.
[[Page 68759]]
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
An interim final rule concerning this was published in the Federal
Register on August 16, 2004 (69 FR 50278). Copies of that rule were
also mailed or sent via facsimile to all nectarine and peach handlers.
Finally, the interim final rule was made available through the Internet
by USDA and the Office of the Federal Register. A 60-day comment period
was provided for interested persons to respond to the interim final
rule. The comment period ended on October 15, 2004, and no comments
were received.
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/mb.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.
After consideration of all relevant material presented, including
the committees' recommendations, and other information, it is hereby
found that this rule, as hereinafter set forth, will tend to effectuate
the declared policy of the Act.
List of Subjects
7 CFR Part 916
Marketing agreements, Nectarines, Reporting and recordkeeping
requirements.
7 CFR Part 917
Marketing agreements, Peaches, Pears, Reporting and recordkeeping
requirements.
PART 916--NECTARINES GROWN IN CALIFORNIA
0
Accordingly, the interim final rule amending 7 CFR part 916 which was
published at 69 FR 50278, on August 16, 2004, is adopted as a final
rule without change.
PART 917--PEACHES GROWN IN CALIFORNIA
0
Accordingly, the interim final rule amending 7 CFR part 917 which was
published at 69 FR 50278, on August 16, 2004 is adopted as a final rule
without change.
Dated: November 19, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-26121 Filed 11-24-04; 8:45 am]
BILLING CODE 3410-02-U