[Federal Register Volume 63, Number 142 (Friday, July 24, 1998)]
[Rules and Regulations]
[Pages 39697-39699]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19886]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
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Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 / Rules
and Regulations
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 906
[Docket No. FV98-906-1 IFR]
Oranges and Grapefruit Grown in the Lower Rio Grande Valley in
Texas; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule decreases the assessment rate from $0.125 to $0.11
per \7/10\ bushel carton established for the Texas Valley Citrus
Committee (Committee) under Marketing Order No. 906 for the 1998-99 and
subsequent fiscal periods. The Committee is responsible for local
administration of the marketing order which regulates the handling of
oranges and grapefruit grown in the Lower Rio Grande Valley in Texas.
Authorization to assess orange and grapefruit handlers enables the
Committee to incur expenses that are reasonable and necessary to
administer the program. The fiscal period begins August 1 and ends July
31. The assessment rate will remain in effect indefinitely unless
modified, suspended, or terminated.
DATES: Effective July 27, 1998. Comments received by September 22,
1998, 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, Fruit
and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456,
Washington, DC 20090-6456; Fax: (202) 205-6632. 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: Belinda G. Garza, McAllen Marketing
Field Office, Fruit and Vegetable Programs, AMS, USDA, 1313 E.
Hackberry, McAllen, TX 78501; telephone: (956) 682-2833, Fax: (956)
682-5942; or George Kelhart, Technical Advisor, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room
2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202)
720-2491, Fax: (202) 205-6632. Small businesses may request information
on compliance with this regulation by contacting Jay Guerber, Marketing
Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA,
room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone:
(202) 720-2491, Fax: (202) 205-6632.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 906 (7 CFR part 906), regulating the handling
of oranges and grapefruit grown in the Lower Rio Grande Valley in
Texas, hereinafter referred to as the ``order.'' 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 rule in
conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the marketing order now in effect, orange and
grapefruit handlers in the Lower Rio Grande Valley in Texas 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 oranges and grapefruit beginning
August 1, 1998, 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 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 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 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 to review the
Secretary'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 deceases the assessment rate established for the
Committee for the 1998-99 and subsequent fiscal periods from $0.125 to
$0.11 per \7/10\ bushel carton handled.
The Texas orange and grapefruit marketing order provides authority
for the Committee, with the approval of the Department, to formulate an
annual budget of expenses and collect assessments from handlers to
administer the program. The members of the Committee are producers and
handlers of Texas oranges and grapefruit. They are familiar with the
Committee's needs and with the costs for 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.
For the 1996-97 and subsequent fiscal periods, the Committee
recommended, and the Department approved, an assessment rate that would
continue in effect from fiscal period to fiscal period unless modified,
suspended, or terminated by the Secretary upon recommendation and
information submitted by the Committee or other information available
to the Secretary.
The Committee met on June 10, 1998, and unanimously recommended
1998-99 expenditures of $1,172,950 and an assessment rate of $0.11 per
7/10 bushel carton of oranges and grapefruit handled. In comparison,
last year's budgeted expenditures were $1,100,478. The assessment rate
of $0.11 is $0.015 lower than the rate currently in effect. The
Committee voted to lower its assessment rate and use more of the
[[Page 39698]]
reserve to cover its expenses. The assessment rate decrease is
necessary to bring expected assessment income closer to the amount
necessary to administer the program for the 1998-99 fiscal period. At
the current rate, assessment income would exceed anticipated expenses
by about $14,550, and the projected reserve on July 31, 1999, would
exceed the level the Committee believes to be adequate to administer
the program.
The major expenditures recommended by the Committee for the 1998-99
fiscal period include $768,700 for advertising and promotion, and
$170,000 for the Mexican Fruit Fly support program. Budgeted expenses
for these items in 1997-98 were $712,000 and $170,000, respectively.
Budget increases for 1998-99 (with the 1997-98 budgeted amounts in
parentheses) include administrative at $68,313, ($64,548), and
compliance at $73,369, ($71,112). A new budget item for 1998-99
includes funds totaling $14,000 for promotion program evaluation.
The assessment rate recommended by the Committee was derived by
dividing anticipated expenses by expected shipments of Texas oranges
and grapefruit. Texas orange and grapefruit shipments for the year are
estimated at 9.5 million cartons which should provide $1,045,000 in
assessment income. 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 (currently
$270,000) will be kept within the maximum permitted by the order
(approximately one fiscal periods' expenses; Sec. 906.35).
The assessment rate established in this rule will continue in
effect indefinitely unless modified, suspended, or terminated by the
Secretary 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 for modification of the assessment rate. The dates and
times of Committee meetings are available from the Committee or the
Department. Committee meetings are open to the public and interested
persons may express their views at these meetings. The Department will
evaluate Committee recommendations and other available information to
determine whether modification of the assessment rate is needed.
Further rulemaking will be undertaken as necessary. The Committee's
1998-99 budget and those for subsequent fiscal periods will be reviewed
and, as appropriate, approved by the Department.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), 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
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 2,000 producers of oranges and grapefruit
in the production area and 17 handlers subject to regulation under the
marketing order. Small agricultural producers have been defined by the
Small Business Administration (SBA) (13 CFR 121.601) as those having
annual receipts 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 orange and grapefruit producers and
handlers may be classified as small entities.
Last year, 4 of the handlers each shipped over 833,000 \7/10\
bushel cartons of oranges and grapefruit, which at an average free-on-
board (f.o.b.) price of $6.00, generated approximately $5 million in
gross sales. These handlers would be considered large businesses under
SBA's definition, and the remaining 13 handlers would be considered
small businesses. Of the approximately 2,000 producers within the
production area, few have sufficient acreage to generate sales in
excess of $500,000; therefore, a majority of producers of Texas oranges
and grapefruit may be classified as small entities.
This rule decreases the assessment rate established for the
Committee and collected from handlers for the 1998-99 and subsequent
fiscal periods from $0.125 to $0.11 per \7/10\ bushel carton handled.
The Committee unanimously recommended 1998-99 expenditures of
$1,172,950 and an assessment rate of $0.11 per \7/10\ bushel carton.
The assessment rate of $0.11 is $0.015 lower than the 1997-98 rate. As
mentioned earlier, the quantity of assessable oranges and grapefruit
for the 1998-99 season is estimated at 9.5 million cartons. Income
derived from handler assessments, along with interest income and funds
from the Committee's authorized reserve, will be adequate to cover
budgeted expenses.
The major expenditures recommended by the Committee for the 1998-99
fiscal period include $768,700 for advertising and promotion, and
$170,000 for the Mexican Fruit Fly support program. Budgeted expenses
for these items in 1997-98 were $712,000 and $170,000, respectively.
Budget increases for 1998-99 (with the 1997-98 budgeted amounts in
parentheses) include administrative at $68,313, ($64,548), and
compliance at $73,369, ($71,112). A new budget item for 1998-99
includes funds totaling $14,000 for promotion program evaluation.
Many producers are still recovering from the devastating freezes of
1983 and 1989 that virtually destroyed the Texas citrus industry. Most
trees in the production area were planted within the past ten years and
have not yet reached full maturity. As a result, yields are still
somewhat low and profit to the producers is marginal. Also, a general
oversupply of citrus from other domestic sources and foreign countries
is depressing prices. To allow more of the revenue from sales to be
retained by those paying assessments, the Committee recommended that
the 1998-99 rate of assessment be reduced to $0.11 per \7/10\ bushel
carton. A reduction in the assessment rate will, however, cause the
Committee to draw approximately $122,950 from reserves to meet the
1998-99 budget. At the end of the 1998-99 fiscal period, the reserve is
expected to be $126,428. Interest income totaling $5,000 also will be
used to cover program expenses in 1998-99.
The Committee reviewed and unanimously recommended 1998-99
expenditures of $1,172,950, which included increases in administrative
costs, compliance, the advertising and promotion program, and the
addition of funds to cover promotion program evaluation. Budgeted
expenses for the Mexican Fruit Fly program were left the same as last
year. In arriving at the budget, the Committee considered information
from various sources. A lower assessment rate was considered. The
Committee, however, concluded that establishing a lower rate would
require it to use to much of its reserve. Based on its estimate of
anticipated 1998-99 shipments, the Committee concluded that an
assessment rate of $0.11 per \7/10\ bushel carton of oranges and
grapefruit would generate the income necessary to administer the
program with an appropriate reserve level.
[[Page 39699]]
A review of historical information and preliminary information
pertaining to the upcoming fiscal period indicates that the f.o.b.
price for the 1998-99 season could range between $4.50 and $9.00 per
\7/10\ bushel carton of oranges and grapefruit, depending upon the
fruit variety, size, and quality. Therefore, the estimated assessment
revenue for the 1998-99 fiscal period as a percentage of the total
pack-out revenue could range between 2.4 and 1.2 percent.
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 Texas orange and grapefruit industry and all
interested persons were invited to attend the meeting and participate
in Committee deliberations on all issues. Like all Committee meetings,
the June 10, 1998, 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 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 Texas orange and grapefruit
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.
The Department has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this rule.
After consideration of all relevant material presented, including
the information and recommendation submitted by the Committee 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 Committee needs to have sufficient funds to
pay its expenses which are incurred on a continuous basis; (2) the
1998-99 fiscal period begins on August 1, 1998, and the marketing order
requires that the rate of assessment for each fiscal period apply to
all assessable oranges and grapefruit handled during such fiscal
period; (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 final rule provides a 60-day comment period, and all comments
timely received will be considered prior to finalization of this rule.
List of Subjects in 7 CFR Part 906
Marketing agreements, Grapefruit, Oranges, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, 7 CFR part 906 is
amended as follows:
PART 906--ORANGES AND GRAPEFRUIT GROWN IN LOWER RIO GRANDE VALLEY
IN TEXAS
1. The authority citation for 7 CFR part 906 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 906.235 is revised to read as follows:
Sec. 906.235 Assessment rate.
On and after August 1, 1998, an assessment rate of $0.11 per \7/10\
bushel carton is established for oranges and grapefruit grown in the
Lower Rio Grande Valley in Texas.
Dated: July 21, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-19886 Filed 7-23-98; 8:45 am]
BILLING CODE 3410-02-P
