[Federal Register Volume 65, Number 6 (Monday, January 10, 2000)]
[Proposed Rules]
[Pages 1347-1349]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-507]
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Proposed Rules
Federal Register
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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. 65, No. 6 / Monday, January 10, 2000 /
Proposed Rules
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 979
[Docket No. FV00-979-1 PR]
Melons Grown in South Texas; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule would increase the assessment rate established for
the South Texas Melon Committee (Committee) for the 1999-2000 and
subsequent fiscal periods from $0.04 to $0.05 per carton of melons
handled. The Committee is responsible for local administration of the
marketing order which regulates the handling of melons (cantaloupes and
honeydews) grown in South Texas. Authorization to assess melon handlers
enables the Committee to incur expenses that are reasonable and
necessary to administer the program. The fiscal period began October 1
and ends September 30. The assessment rate would remain in effect
indefinitely unless modified, suspended, or terminated.
DATES: Comments must be received by February 9, 2000.
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) 720-5698, or E-mail:
moab.docketclerk@usda.gov. 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: Cynthia Cavazos, Marketing Assistant,
McAllen Marketing Field Office, Fruit and Vegetable Programs, AMS,
USDA, 1313 E. Hackberry, McAllen, Texas 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) 720-5698.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room
2525-S, Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202)
720-5698, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement No. 156 and Order No. 979, both as amended (7 CFR part 979),
regulating the handling of melons grown in South 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, South Texas
melon handlers are subject to assessments. Funds to administer the
order are derived from such assessments. It is intended that the
assessment rate as proposed herein would be applicable to all
assessable melons beginning on October 1, 1999, 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 would increase the assessment rate established for the
Committee for the 1999-2000 and subsequent fiscal periods from $0.04 to
$0.05 per carton of melons handled.
The South Texas melon 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 growers and handlers of
South Texas melons. They 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.
For the 1997-1998 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, in a mail vote, unanimously recommended 1999-2000
expenses of $219,148 for personnel, office, compliance, promotion, and
research expenses. These expenses were approved in September 1999. The
assessment rate and specific funding for research and promotion
projects were to be recommended at a later Committee meeting.
The Committee met on November 4, 1999, and unanimously recommended
1999-2000 expenditures of $265,500 and an assessment rate of $0.05 per
carton of melons. In comparison, 1998-99 budgeted expenditures were
$219,148. The assessment rate of $0.05 is $0.01 higher than the rate
currently in
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effect. The Committee voted to increase its assessment rate because the
current rate would not generate the income needed to administer the
marketing order and would reduce the Committee's reserve funds beyond
the level acceptable to the Committee. Assessment income, along with
funds from the Committee's authorized reserve, would provide the
Committee with adequate funds to meet its 1999-2000 fiscal period's
expenses.
The major expenditures recommended by the Committee for the 1999-
2000 fiscal period include $98,800 for personnel and administrative
expenses, $31,200 for compliance activities, $110,500 for research
projects, and $25,000 for promotional activities. Budgeted expenses for
these items in 1998-99 were $97,600, $32,400, $79,148, and $10,000,
respectively.
The assessment rate recommended by the Committee was derived by
considering anticipated expenses, expected shipments of South Texas
melons, and the amount of funds in the Committee's operating reserve.
Melon shipments for the year are estimated at 4,200,000 cartons, which
should provide $210,000 in assessment income at the $0.05 per carton
rate. Income derived from handler assessments, along with funds from
the Committee's authorized reserve, would be adequate to cover budgeted
expenses for the 1999-2000 fiscal period. Funds in the reserve
(currently $316,208) would be kept within the maximum permitted by the
order (approximately two fiscal periods' expenses; Sec. 979.44).
The proposed assessment rate would 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 would be in effect for an indefinite
period, the Committee would 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 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
1999-2000 budget and those for subsequent fiscal periods would 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 20 growers of South Texas melons in the
production area and 20 handlers subject to regulation under the
marketing order. Small agricultural growers 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.
Most of the handlers are vertically integrated corporations
involved in producing, shipping, and marketing melons. For the 1998-99
marketing year, melons produced on 8,364 acres were shipped by the
industry's 20 handlers with the average acreage being 418 acres and the
median volume handled was 193,867 cartons. In terms of production
value, average revenues for the 20 handlers were estimated to be $2.9
million.
The South Texas melon industry is characterized by growers and
handlers whose farming operations generally involve more than one
commodity, and whose income from farming operations is not exclusively
dependent on the production of melons. Alternative crops provide an
opportunity to utilize many of the same facilities and equipment not in
use when the melon production season is complete. For this reason,
typical melon growers and handlers either double-crop melons during
other times of the year or produce alternate commodities, like onions.
Based on the SBA's definition of small entities, the Committee
estimates that a majority of the 20 handlers regulated by the order
would be considered small entities if only their spring melon revenues
are considered. However, revenues from other productive enterprises
would likely push a large number of these handlers above the $5,000,000
annual receipt threshold. Of the 20 growers within the production area,
few have sufficient acreage to generate sales in excess of $500,000;
therefore, the majority of growers may be classified as small entities.
This rule would increase the assessment rate established for the
Committee and collected from handlers for the 1999-2000 and subsequent
fiscal periods from $0.04 to $0.05 per carton of melons. The Committee
unanimously recommended 1999-2000 expenditures of $265,500 and an
assessment rate of $0.05 per carton of melons. In comparison, last
year's budgeted expenditures were $219,148. The proposed assessment
rate of $0.05 is $0.01 higher than the rate currently in effect. At the
rate of $0.05 per carton and an estimated 2000 melon production of
4,200,000 cartons, the projected income derived from handler
assessments ($210,000), along with funds from the Committee's
authorized reserve, would be adequate to cover budgeted expenses.
The major expenditures recommended by the Committee for the 1999-
2000 fiscal period include $98,800 for personnel and administrative
expenses, $31,200 for compliance activities, $110,500 for research
projects, and $25,000 for promotional activities. Budgeted expenses for
these items in 1998-1999 were $97,600, $32,400, $79,148, and $10,000,
respectively.
The Committee voted to increase its assessment rate because the
current rate would not generate the income needed to administer the
marketing order and would reduce the Committee's reserve funds beyond
the level acceptable to the Committee. Assessment income, along with
funds from the Committee's authorized reserve, would provide the
Committee with adequate funds to meet its 1999-2000 fiscal period's
expenses.
The Committee reviewed and unanimously recommended 1999-2000
expenditures of $265,500, which included increases in personnel,
promotion, and research projects. Prior to arriving at this budget, the
Committee considered information from various sources, including the
Research and Post Harvest Subcommittees. Alternative expenditure levels
were discussed by these groups, based upon the relative value of
various research projects to the melon industry. The assessment rate of
$0.05 per carton of assessable melons was then determined by
considering the total recommended budget, the quantity of assessable
melons, estimated at 4,200,000 million cartons for the 1999-2000 fiscal
period,
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and amount of funds in the Committee's operating reserve. The
recommended rate will generate $210,000, which is $55,500 below the
anticipated expenses. The Committee found this acceptable because
reserve funds will be used to make up the deficit.
A review of historical information and preliminary information
pertaining to the upcoming fiscal period indicates that the grower
price for the 1999-2000 marketing season could range between $9.00 and
$12.00 per carton of cantaloupes and between $6.00 and $9.00 per carton
of honeydew melons. Therefore, the estimated assessment revenue for the
1999-2000 fiscal period as a percentage of total grower revenue could
range between .55 and .42 percent for cantaloupes and between .83 and
.55 percent for honeydew melons.
This action would increase 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, these costs
would be offset by the benefits derived by the operation of the
marketing order. In addition, the Committee's meeting was widely
publicized throughout the South Texas melon industry and all interested
persons were invited to attend the meeting and participate in Committee
deliberations on all issues. Like all Committee meetings, the November
4, 1999, 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 proposed rule would impose no additional reporting or
recordkeeping requirements on either small or large South Texas melon
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.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at the
following web site: http://www.ams.usda.gov/fv/moab.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.
A 30-day comment period is provided to allow interested persons to
respond to this proposed rule. Thirty days is deemed appropriate
because: (1) The 1999-2000 fiscal period began on October 1, 1999, and
the marketing order requires that the rate of assessment for each
fiscal period apply to all assessable melons handled during such fiscal
period; (2) the Committee needs to have sufficient funds to pay its
expenses which are incurred on a continuous basis; and (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.
List of Subjects in 7 CFR Part 979
Marketing agreements, Melons, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 979 is
proposed to be amended as follows:
PART 979--MELONS GROWN IN SOUTH TEXAS
1. The authority citation for 7 CFR part 979 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 979.219 is revised to read as follows:
Sec. 979.219 Assessment rate.
On and after October 1, 1999, an assessment rate of $0.05 per
carton is established for South Texas melons.
Dated: January 4, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-507 Filed 1-7-00; 8:45 am]
BILLING CODE 3410-02-P
