[Federal Register Volume 64, Number 161 (Friday, August 20, 1999)]
[Rules and Regulations]
[Pages 45407-45409]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-21673]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 64, No. 161 / Friday, August 20, 1999 / Rules
and Regulations
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 906
[Docket No. FV99-906-2 FR]
Oranges and Grapefruit Grown in Lower Rio Grande Valley in Texas;
Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule increases the assessment rate from $0.11 to $0.12
per \7/10\ bushel carton of oranges and grapefruit established for the
Texas Valley Citrus Committee (Committee) under Marketing Order No. 906
for the 1999-2000 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 began on
August 1 and ends July 31. The assessment rate will remain in effect
indefinitely unless modified, suspended, or terminated.
EFFECTIVE DATE: August 21, 1999.
FOR FURTHER INFORMATION CONTACT: Cynthia Cavazos, Marketing Assistant,
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) 720-5698.
SUPPLEMENTARY INFORMATION: Small businesses may request information on
complying with this regulation, or obtain a guide on complying with
fruit, vegetable, and specialty crop marketing agreements and orders 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.G[email protected]. You may view the marketing
agreement and order small business compliance guide at the following
web site: http://www.ams.usda.gov/fv/moab.html.
This rule is issued under Marketing Agreement and Order No. 906, as
amended (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, 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 increases the assessment rate established for the
Committee for the 1999-2000 and subsequent fiscal periods from $0.11 to
$0.12 per 7/10 bushel carton of oranges and grapefruit 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 1998-99 and subsequent fiscal periods, the Committee
recommended, and the Department approved, an assessment rate of $0.11
per 7/10 bushel carton 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 8, 1999, and unanimously recommended
1999-2000 expenditures of $1,148,850 and an assessment rate of $0.12
per 7/10 bushel carton of oranges and grapefruit handled. In
comparison, last year's budgeted expenditures were $1,181,950. The
assessment rate of $0.12 is $0.01 higher than the rate previously in
effect. The Committee has operated under a lower assessment rate in
recent years and used available reserve funds to make up most of the
difference between assessment income and expenses. Since 1994, the
Committee's reserve has decreased from almost $400,000 to
[[Page 45408]]
slightly under $120,000. Thus, the Committee recommended increasing the
assessment rate because the previous rate would not have generated
enough income to cover 1999-2000 expenses, and the Committee only
wanted to use a limited amount of reserve funds to meet expenses. The
Committee wanted to ensure that adequate reserve funds were available
to meet unexpected expenses.
The major expenditures recommended by the Committee for the 1999-
2000 fiscal period include $739,000 for advertising and promotion,
$179,000 for the Mexican Fruit Fly program, $109,781 for management and
administration of the program, and $73,369 for compliance. Budgeted
expenses for these items in 1998-99 were $768,700, $179,000, $109,781,
and $73,369, respectively.
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 7/10 bushel cartons, which should provide
$1,140,000 in assessment income. Income derived from handler
assessments, along with interest income and funds from the Committee's
authorized reserve, should be adequate to cover budgeted expenses.
Funds in the reserve (currently $119,402) will be kept within the
maximum of one fiscal period's expenses permitted by the order
(Sec. 906.35).
The assessment rate established by 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 will be in effect 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
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 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.
There are approximately 315 producers of oranges and grapefruit in
the production area and 16 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 Texas orange and grapefruit producers and
handlers may be classified as small entities.
Last year, 5 of the 16 handlers (31 percent) each shipped over
625,000 7/10 bushel cartons of oranges and grapefruit. Using an average
f.o.b. price of $8.00 per carton, these handlers could be considered
large businesses by the SBA, and the remaining 11 handlers (69 percent)
could be considered small businesses. Of the approximately 315
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 increases the assessment rate established for the
Committee and collected from handlers for the 1999-2000 and subsequent
fiscal periods from $0.11 to $0.12 per 7/10 bushel carton of oranges
and grapefruit. The Committee unanimously recommended 1999-2000
expenditures of $1,148,850 and an assessment rate of $0.12 per 7/10
bushel carton. The assessment rate of $0.12 is $0.01 higher than the
1998-99 rate. The Committee recommended increasing the assessment rate
because the previous rate would not have generated enough income to
cover 1999-2000 expenses, and the Committee only wanted to use a
limited amount of reserve funds to meet expenses. The Committee wanted
to ensure that adequate reserve funds were available to meet unexpected
expenses. As mentioned earlier, the quantity of assessable oranges and
grapefruit for the 1999-2000 season is estimated at 9.5 million 7/10
bushel cartons. Assessment income, along with interest income and funds
from the Committee's authorized reserve, should be adequate to cover
budgeted expenses.
The major expenditures recommended by the Committee for the 1999-
2000 fiscal period include $739,000 for advertising and promotion,
$179,000 for the Mexican Fruit Fly program, $109,781 for management and
administration of the marketing order program, and $73,369, for
compliance. Budgeted expenses for these items in 1998-99 were $768,700,
$179,000, $109,781, and $73,369, respectively.
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
depressed prices. The Committee recommended increasing the assessment
rate to $0.12 per 7/10 bushel carton because the previous rate would
not have generated enough income to cover 1999-2000 expenses, and the
Committee only wanted to use a limited amount of reserve funds ($5,850)
to meet expenses. Interest income totaling $3,000 will also be used to
cover program expenses in 1999-2000. At the end of the 1999-2000 fiscal
period the reserve is expected to be $113,552.
The Committee reviewed and unanimously recommended 1999-2000
expenditures of $1,148,850, which included a decrease in the
advertising and promotion program. 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,
including the Executive Committee. The Committee considered leaving the
established lower assessment rate unchanged. The Committee, however,
concluded that retaining the previous rate of assessment for the 1999-
2000 fiscal period would have reduced the Committee's reserve to an
unacceptable level. Alternative expenditure levels were discussed based
upon the relative value of the advertising and promotion program to the
Texas citrus industry. The assessment rate of $0.12 per 7/10 bushel
carton of assessable oranges and
[[Page 45409]]
grapefruit was determined by dividing the total recommended budget by
the quantity of assessable oranges and grapefruit estimated at 9.5
million 7/10 bushel cartons for the 1999-2000 fiscal period. The $0.12
rate should provide $1,140,000 in assessment income. The additional
$8,850 will come from the Committee's reserve and interest income.
A review of historical information and preliminary information
pertaining to the 1999-2000 fiscal period indicates that the f.o.b.
price for the 1999-2000 season could range from $4.75 and $12.50 per 7/
10 bushel carton of oranges and grapefruit depending upon the fruit
variety, size, and quality. Therefore, the estimated assessment revenue
for the 1999-2000 fiscal period as a percentage of total pack-out
revenue could range between .96 and 2.5 percent.
This action increases 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
are offset by the benefits derived by the operation of the marketing
order. 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 8,
1999, meeting was a public meeting and all entities, both large and
small, were able to express views on this issue.
This rule 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.
A proposed rule concerning this action was published in the Federal
Register on July 19, 1999 (64 FR 38597). Copies of the proposed rule
were also mailed or sent via facsimile to all Texas orange and
grapefruit handlers. Finally, the proposal was made available through
the Internet by the Office of the Federal Register. A 20-day comment
period ending August 9, 1999, was provided for interested persons to
respond to the proposal. No comments were received.
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 that good
cause exists for not postponing the effective date of this rule until
30 days after publication in the Federal Register because the 1999-2000
fiscal period began on August 1, 1999, 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,
and handlers will begin harvesting their fruit in early September. The
Committee needs to have sufficient funds to pay its expenses which are
incurred on a continuous basis. Further, handlers are aware of this
rule which was unanimously recommended by the Committee at a public
meeting. Also, a 20-day comment period was provided for in the proposed
rule.
List of Subjects in 7 CFR Part 906
Grapefruit, Marketing agreements, 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, 1999, an assessment rate of $0.12 per 7/10
bushel carton is established for oranges and grapefruit grown in the
Lower Rio Grande Valley in Texas.
Dated: August 17, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-21673 Filed 8-19-99; 8:45 am]
BILLING CODE 3410-02-P