[Federal Register Volume 63, Number 19 (Thursday, January 29, 1998)]
[Rules and Regulations]
[Pages 4366-4368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2123]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 979

[Docket No. FV98-979-1 IFR]


Melons Grown in South Texas; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule decreases the assessment rate 
established for the South Texas Melon Committee (Committee) under 
Marketing Order No. 979 for the 1997-98 and subsequent fiscal periods. 
The Committee is responsible for local administration of the marketing 
order which regulates the handling of melons grown in South Texas. 
Authorization to assess Texas melon handlers enables the Committee to 
incur expenses that are reasonable and necessary to administer the 
program. The 1997-98 fiscal period began October 1 and ends September 
30. The assessment rate will continue in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Effective January 30, 1998. Comments received by March 30, 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 in triplicate to the Docket 
Clerk, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, PO 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: Cynthia Cavazos or Belinda G. Garza, 
McAllen Marketing Field Office, Fruit and Vegetable Programs, AMS, 
USDA, 1313 East Hackberry, McAllen, Texas 78501; telephone: (956) 682-
2833, Fax: (956) 682-5942 or George J. Kelhart, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room 
2525-S, PO 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, PO Box 96456, Washington, DC 20090-6456; telephone: (202) 
720-2491, Fax: (202) 205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 156 and Order No. 979 (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 issued herein will be applicable to all assessable 
melons beginning October 1, 1997, and continuing 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

[[Page 4367]]

later than 20 days after the date of the entry of the ruling.
    This rule decreases the assessment rate established for the 
Committee for the 1997-98 and subsequent fiscal periods from $0.07 to 
$0.04 per carton.
    The 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 producers 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 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 indefinitely 
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 telephone vote, unanimously recommended 1997-98 
administrative expenses of $100,000 for personnel, office, and the 
travel portion of the compliance budget. These expenses were approved 
in September 1997. The assessment rate and funding for research 
projects, promotion, and the road guard station maintenance portion of 
the compliance budget were to be recommended at a later Committee 
meeting.
    The Committee subsequently met on December 16, 1997, and 
unanimously recommended 1997-98 expenditures of $158,200 and an 
assessment rate of $0.04 per carton of melons. In comparison, last 
year's budgeted expenditures were $308,000. The assessment rate of 
$0.04 is $0.03 less than the rate currently in effect. The Committee 
voted to lower its assessment rate and use more of the 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 1997-98 fiscal period. At the current rate, 
assessment income would exceed anticipated expenses by about $112,700, 
and the projected reserve of $234,269 on September 30, 1998, would 
exceed the level the Committee believes to be adequate to administer 
the program.
    Major expenses recommended by the Committee for the 1997-98 fiscal 
period include $84,500 for personnel and administrative expenses, 
$40,500 for compliance, $23,200 for research projects, and $10,000 for 
promotion. Budgeted expenses for these items in 1996-97 were $84,500, 
$115,500, $108,000, and $0, respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of South Texas 
melons. Melon shipments for the year are estimated at 3,870,000 
cartons, which should provide $154,800 in assessment income. Income 
derived from handler assessments, along with funds from the Committee's 
authorized reserve, will be adequate to cover budgeted expenses. Funds 
in the reserve (currently $228,669) will be kept within the maximum 
permitted by the order (approximately two fiscal periods' expenses; 
Sec. 979.44).
    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 
1997-98 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 action 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 33 producers of South Texas melons in the 
production area and approximately 16 handlers subject to regulation 
under the marketing order. Small agricultural producers have been 
defined by the Small Business Administration (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 South Texas melon producers and handlers 
may be classified as small entities.
    This rule decreases the assessment rate established for the 
Committee and collected from handlers for the 1997-98 and subsequent 
fiscal periods from $0.07 to $0.04 per carton. The Committee 
unanimously recommended 1997-98 expenditures of $158,200 and an 
assessment rate of $0.04 per carton of melons. In comparison, last 
year's budgeted expenditures were $308,000. The assessment rate of 
$0.04 is $0.03 less than the rate currently in effect. At the rate of 
$0.07 per carton and an estimated 1998 melon production of 3,870,000 
cartons, the projected reserve on September 30, 1998, would exceed the 
level the Committee believes to be adequate to administer the program. 
The Committee decided that an assessment rate of less than $0.04 would 
not generate the income necessary to administer the program with an 
adequate reserve.
    Major expenses recommended by the Committee for the 1997-98 fiscal 
period include $84,500 for personnel and administrative expenses, 
$40,500 for compliance, $23,200 for research projects, and $10,000 for 
promotion. Budgeted expenses for these items in 1996-97 were $84,500, 
$115,500, $108,000, and $0, respectively.
    Melon shipments for the year are estimated at 3,870,000 cartons, 
which should provide $154,800 in assessment income. Income derived from 
handler assessments, along with funds from the Committee's authorized 
reserve, will be adequate to cover budgeted expenses. Funds in the 
reserve (currently $228,669) will be kept within the maximum permitted 
by the order (approximately two fiscal periods' expenses; Sec. 979.44).
    Recent price information indicates that the grower price for the 
1997-98 marketing season will range between $7.00 and $9.00 per carton 
of cantaloupes and between $5.00 and $7.00 per carton of honeydew 
melons.

[[Page 4368]]

Therefore, the estimated assessment revenue for the 1997-98 fiscal 
period as a percentage of total grower revenue will range between .006 
and .004 percent for cantaloupes and between .008 and .006 percent for 
honeydew melons.
    This action reduces the assessment obligation imposed on handlers. 
While this rule imposes some additional costs on handlers, the costs 
are minimal and in the form of uniform assessments on all handlers. 
Some of the additional costs may be passed on to producers. However, 
these costs will 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 December 
16, 1997, 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 will not impose any 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.
    After consideration of all relevant matter 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) This action reduces the current assessment rate 
for South Texas melons; (2) the 1997-98 fiscal period began on October 
1, 1997, and the marketing order requires that the rate of assessment 
for each fiscal period apply to all assessable melons 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 979

    Marketing agreements, Melons, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 979 is 
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.


Sec. 979.219  [Amended]

    2. Section 979.219 is amended by removing the words ``October 1, 
1996,'' and adding in their place the words ``October 1, 1997,'' and by 
removing ``$0.07'' and adding in its place ``$0.04.''

    Dated: January 23, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-2123 Filed 1-28-98; 8:45 am]
BILLING CODE 3410-02-P