[Federal Register Volume 76, Number 90 (Tuesday, May 10, 2011)]
[Proposed Rules]
[Pages 26946-26948]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-11042]
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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. 76, No. 90 / Tuesday, May 10, 2011 / Proposed
Rules
[[Page 26946]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1206
[Document No. AMS-FV-11-0021]
Mango Promotion, Research, and Information Order; Assessment
Increase
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule proposes amendment of the Mango Promotion, Research,
and Information Order (Order) to increase the assessment rate on first
handlers and importers of mangos from one half cent per pound to three
quarters of a cent per pound. The increase is permitted under the
Order, which is authorized by the Commodity Promotion, Research, and
Information Act of 1996 (Act). The National Mango Board (Board), which
administers the Order, recommended this action to ensure that the
Board's research and promotion programs continue to be adequately
funded.
DATES: Comments must be received by July 11, 2011.
ADDRESSES: Comments may be submitted electronically at http://www.regulations.gov. Comments may also be sent to the Research and
Promotion Branch, Fruit and Vegetable Programs, Agricultural Marketing
Service (AMS), U.S. Department of Agriculture, Room 0634-S, Stop 0244,
1400 Independence Avenue, SW, Washington, DC 20250-0244; fax (202) 205-
2800. All comments submitted should reference the document number and
title of this proposed rule, and will be included in the record and
made available for public inspection. Comments may be viewed on the
Internet at http://www.regulations.gov, or at the above office. Please
be advised that the identity of individuals or entities submitting
comments will be made public on the Internet at the above Web site.
FOR FURTHER INFORMATION CONTACT: Veronica Douglass, Marketing
Specialist, Research and Promotion Branch, Fruit and Vegetable
Programs, AMS, USDA, 1400 Independence Avenue SW, Room 0634-S, Stop
0244, Washington, DC 20250-0244; telephone: (888) 720-9917; fax: (202)
205-2800; e-mail: [email protected].
SUPPLEMENTARY INFORMATION: This rule is issued under the Mango
Promotion, Research, and Information Order (Order) (7 CFR part 1206).
The Order is authorized under the Commodity Promotion, Research, and
Information Act of 1996 (Act) (7 U.S.C. 7411-7425).
Executive Order 12866
The Office of Management and Budget (OMB) has waived the review
process required by Executive Order 12866 for this action.
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. It is not intended to have a retroactive effect.
Section 524 of the Act provides that the Act shall not affect or
preempt any other State or Federal law authorizing promotion or
research relating to an agricultural commodity.
Under the Act, a person subject to an order may file a petition
with the U.S. Department of Agriculture (Department) stating that an
order, any provision of an order, or any obligation imposed in
connection with an order, is not established in accordance with the
law, and requesting a modification of an order or an exemption from an
order. Any petition filed challenging an order, any provision of an
order, or any obligation imposed in connection with an order, shall be
filed within two years after the effective date of an order, provision,
or obligation subject to challenge in the petition. The petitioner will
have the opportunity for a hearing on the petition. Thereafter, the
Department will issue a ruling on the petition. The Act provides that
the district court of the United States for any district in which the
petitioner resides or conducts business shall have the jurisdiction to
review a final ruling on the petition, if the petitioner files a
complaint for that purpose not later than 20 days after the date of the
entry of the Department's final ruling.
Regulatory Flexibility Analysis and Paperwork Reduction Act
In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C.
601-612), the Agricultural Marketing Service (AMS) has considered the
economic impact of this action on the small entities that would be
affected by this rule. The purpose of the RFA is to fit regulatory
action to scale on businesses subject to such action so that small
businesses will not be disproportionately burdened.
The Small Business Administration defines small agricultural
producers as those having annual receipts of no more than $750,000 and
small agricultural service firms as those having annual receipts of no
more than $7 million (13 CFR part 121). First handlers and importers
would be considered agricultural service firms, and the majority of
mango producers, first handlers and importers would be considered small
businesses. Although this criterion does not factor in additional
monies that may be received by producers, handlers and importers of
mangos, it is an inclusive standard for identifying small entities.
Mango producers are not subject to the assessment. First handlers
and importers who market or import less than 500,000 pounds of mangos
annually are exempt from the assessment. Mangos that are exported out
of the United States are also exempt from assessment. Furthermore,
while domestic and foreign producers are not subject to assessment
under the order, but such individuals are eligible to serve on the
Board along with importers and first handlers. Currently, approximately
five first handlers and 193 importers are subject to assessment under
the Order.
Under the current Order, first handlers and importers of 500,000
pounds or more of mangos per year each pay a mandatory assessment of
one half cent per pound of mangos handled or imported. The proposed
amendment to the Order would increase the rate of assessment currently
paid by first handlers and importers of mangos to three quarters of a
cent per pound. Exempt handlers and importers would remain exempt from
assessment. While this amendment will have an economic impact on
handlers and importers of more than 500,000 pounds of mangos
[[Page 26947]]
per year, the impact is expected to be offset by the benefits to the
mango industry. Assessment revenue is used by the Board to finance
promotion, research, and information programs designed to increase
consumer demand for mangos. Assessments at the current rate of one half
cent per pound generate about $3.4 million in annual revenue. The Order
is administered by the Board under U.S. Department of Agriculture
supervision.
According to the Board, additional revenue is needed to avoid
reductions in the promotions budget and to increase investment in
marketing and research programs. At its September 2009 meeting, the
Board voted to propose a 50 percent increase in the mango assessment
rate upon completion of the March 2010 referendum to determine whether
mango handlers and importers favored continuation of the Order. The
proposed increase is consistent with section 1206.42(b) of the Order,
which permits modification of the assessment rate by the Board with the
approval of the Secretary, after the first referendum is conducted.
Mango assessment collections began on January 3, 2005, however,
Board activities did not begin until 2006. Consequently, the Board was
able to grow a considerable reserve that was used to supplement annual
assessment revenues from 2007 until 2009. In 2010, higher than expected
assessment revenue made it possible for the Board to operate without
exceeding the total assessments collected for that year and to begin
2011 with approximately $1.6 million in available resources. However,
with 2011 spending projected at approximately $4.3 million and
assessment income projected at approximately $3.2 million, the Board is
expected to begin 2012 with a reserve of $505,244. With no extra funds
available from reserves, and if the assessment rate is kept at the
current level, the Board's budget would be decreased.
In 2010, an econometric study of the effects of the Board's
promotion activities on U.S. mango demand was conducted by Dr. Ronald
Ward of the University of Florida. The study indicates that from 2005
through 2009, the value of mango imports to the U.S. grew from $169
million to $217 million. This is significant as the vast majority of
mangos consumed in the U.S. are imported. The growth in value is the
result of both higher prices and greater volumes imported. The study
also found that the Board's activities have had a positive economic
impact on the demand for mangos, both in attracting more buyers and in
increasing the number of mangos purchased per buyer. According to the
study, increased spending by the Board would correspond to increases in
market penetration and the number of households purchasing mangos.
Likewise, decreased spending would correspond to declines in both of
those areas. Based on the analysis of these two factors and the value
of mango imports, the study concludes that every $1 invested in the
Board adds an additional $7 to mango freight on board revenues. This
study is available from the Board and the Agricultural Marketing
Service Web site.
An increase of one quarter of a cent per pound in the mango
assessment rate is expected to add an additional $1.6 million per year
to the Board's assessment revenue. With the additional revenue
collected, the Board intends to invest primarily in marketing and
research programs. In addition, the Board would be able to establish a
contingency fund to ensure consistent funding in the face of market
instability.
The Board considered three alternatives prior to recommending that
the assessment rate be increased. First, the Board considered reducing
investment in its research program. However, postponing the human
nutrition studies that may help the Board to develop health messages
that increase demand for mangos could hinder expansion of the U.S.
mango market. Second, the Board considered limiting investment in
programs designed to improve the quality of mangos available at the
retail level. Delivering higher quality mangos to U.S. consumers is one
of the Board's top priorities because higher quality translates to
higher demand. Third, the Board considered reducing funding for its
marketing programs. Lowering the funding level for marketing programs
would significantly reduce the Board's ability to conduct promotion and
consumer marketing activities, thereby hindering its efforts to
increase demand for mangos.
This rule does not impose additional recordkeeping requirements on
first handlers, importers, or producers of mangos. Additionally, first
handlers or importers of less than 500,000 pounds of mangos per year
are exempt.
There are no Federal rules that duplicate, overlap, or conflict
with this rule. Additionally, section 517(c) of the Act states that not
more than one assessment may be levied on a first handler or importer.
In accordance with the Office of Management and Budget (OMB)
regulation (5 CFR part 1320) that implements the Paperwork Reduction
Act of 1995 (44 U.S.C. Chapter 35), the information collection and
recordkeeping requirements that are imposed by the Order have been
approved previously under OMB control number 0581-0093. This rule does
not result in a change to the information collection and recordkeeping
requirements previously approved.
We have performed this initial Regulatory Flexibility Analysis
regarding the impact of this proposed amendment to the Order on small
entities and we invite comments concerning potential effects of this
amendment on small businesses.
Background
Under the Order, the Board administers a nationally coordinated
program of research and promotion designed to strengthen the position
of mangos in the marketplace and to establish, maintain, and expand
U.S. markets for mangos. The program is financed by assessments on
first handlers and importers of 500,000 pounds or more of mangos per
year. The Order specifies that first handlers are responsible for
submitting assessments to the Board on a monthly basis and maintaining
records necessary to verify their reporting. Importers are responsible
for paying assessments on mangos imported for marketing in the United
States through the U.S. Customs and Border Protection Service of the
U.S. Department of Homeland Security.
This rule proposes an increase of one quarter of a cent per pound
in the mango assessment rate. Currently, the assessment rate is one
half cent per pound of mangos handled domestically or imported into the
United States. In order to sustain and expand its promotion, research,
and communications programs, the Board contends that additional revenue
is required. The proposed assessment rate increase is expected to
generate an additional $1.6 million annually, depending on the volume
of mangos handled in the United States or imported into the United
States. In 2010, a total of 717,830,404 pounds of mangos were subject
to assessment, resulting in approximately $3.6 million in assessment
revenue. Less than one percent of the total assessments were from
domestic handlers as the vast majority of assessments were collected
from importers. The Board states that the proposed assessment rate
increase would enable it to make additional investments in its
marketing and research programs. In addition, the Board states that
some of the additional revenue could be used to establish a
[[Page 26948]]
contingency fund to ensure consistent funding for its programs.
The Board, whose members represent domestic producers, first
handlers, importers, and foreign producers, voted at its September 12,
2009, meeting to propose the assessment rate increase of one quarter of
a cent per pound after the March 2010 continuance referendum. Of the
members present at the meeting, 9 voted in favor and 4 opposed proposal
of the assessment rate increase. The four Board members that voted
against the assessment increase stated that the increase would be
passed onto mango producers. The assessment will be imposed on first
handlers and importers who would pay assessments under the Order.
Business decisions on how to manage assessments, including whether to
pass back the cost of assessments to producers, are made by handlers
and importers based on their respective business practices.
This rule would amend the rules and regulations issued under the
Order. This rule would increase the assessment rate by one quarter of a
cent per pound of mangos handled in the United States or imported. The
assessment rate would increase from one half cent to three quarters of
a cent per pound. This proposed increase is consistent with section
517(d) of the Act, which permits the Board to recommend to the
Secretary a rate of assessment. Section 1206.42(a) of the Order states
that the assessment rate may be modified by the Board with the approval
of the Secretary, after the first referendum is conducted. The Board
recommends the proposed assessment rate increase based on budget
constraints imposed on its marketing, research, and industry relations
programs by the current assessment rate. Accordingly, section
1206.42(b) of the Order would be revised.
A 60-day comment period is provided to allow interested persons to
respond to this proposal. All written comments received in response to
this rule by the date specified would be considered prior to finalizing
this action.
List of Subjects in 7 CFR Part 1206
Administrative practice and procedure, Advertising, Consumer
information, Marketing agreements, Mango promotion, Reporting and
recording requirements.
For the reasons set forth in the preamble, 7 CFR part 1206 is
proposed to be amended as follows:
PART 1206--MANGO RESEARCH, PROMOTION, AND INFORMATION ORDER
1. The authority citation for 7 CFR part 1206 continues to read as
follows:
Authority: 7 U.S.C. 7411-7425 and 7 U.S.C. 7401.
2. In section 1206.42, paragraph (b) is revised to read as follows:
Sec. 1206.42 Assessments.
* * * * *
(b) The assessment rate shall be three quarters of a cent per pound
on all mangos. The assessment rate will be reviewed and may be modified
by the Board with the approval of the Department, after the first
referendum is conducted as stated in Sec. 1206.71(b). The Department
will amend this section if the assessment rate is modified.
* * * * *
Dated: April 29, 2011.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. 2011-11042 Filed 5-9-11; 8:45 am]
BILLING CODE 3410-02-P