[Federal Register Volume 63, Number 27 (Tuesday, February 10, 1998)]
[Proposed Rules]
[Pages 6679-6681]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3286]


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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. 63, No. 27 / Tuesday, February 10, 1998 / 
Proposed Rules  

[[Page 6679]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 911 and 915

[Docket No. FV98-911-1 PR]


Limes and Avocados Grown in Florida; Establishment of a 
Continuing Assessment Rate for Limes and a Decrease in the Continuing 
Assessment Rate for Avocados

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would establish an assessment rate for the Lime 
Administrative Committee (LAC) under Marketing Order No. 911 for the 
1998-99 and subsequent fiscal years and decrease the assessment rate 
established for the Avocado Administrative Committee (AAC) under 
Marketing Order No. 915 for the 1998-99 and subsequent fiscal years. 
The Lime and Avocado Administrative Committees (Committees) are 
responsible for local administration of the marketing orders which 
regulate the handling of limes and avocados grown in Florida. 
Authorization to assess lime and avocado handlers enables the 
Committees to incur expenses that are reasonable and necessary to 
administer the programs. The fiscal years begin April 1 and end March 
31. The assessment rates would remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Comments must be received by March 12, 1998.

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, 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: Doris Jamieson, Southeast Marketing 
Field Office, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 2276, 
Winter Haven, FL 33883-2276; telephone: (941) 299-4770, Fax: (941) 299-
5169; 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 No. 126 and Marketing Order No. 911, both as amended (7 CFR 
part 911), regulating the handling of limes grown in Florida, and 
Marketing Agreement No. 121 and Marketing Order No. 915, both as 
amended (7 CFR part 915), regulating the handling of avocados grown in 
Florida, hereinafter referred to as the ``orders.'' The marketing 
agreements and orders 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 orders now in effect, Florida lime 
and avocado handlers are subject to assessments. Funds to administer 
the orders are derived from such assessments. It is intended that the 
assessment rates as issued herein would be applicable to all assessable 
limes and avocados beginning April 1, 1998, and continue until amended, 
suspended, or terminated. This rule would 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 establish an assessment rate for the LAC for the 
1998-99 and subsequent fiscal years of $0.16 per bushel container. This 
rule would also decrease the assessment rate established for the AAC 
for the 1998-99 and subsequent fiscal years from $0.16 per bushel 
container to $0.08 per bushel container.
    The Florida lime and avocado marketing orders provide authority for 
the Committees, with the approval of the Department, to formulate an 
annual budget of expenses and collect assessments from handlers to 
administer the programs. The members of the Committees are producers 
and handlers of Florida limes and avocados. They are familiar with the 
Committees' needs and with the costs for goods and services in their 
local areas and are thus in a position to formulate appropriate budgets 
and assessment rates. The assessment rates are formulated and discussed 
in public meetings. Thus, all directly affected persons have an 
opportunity to participate and provide input.
    For the 1996-97 and subsequent fiscal years, the AAC recommended, 
and the Department approved, an assessment rate that would continue in 
effect from fiscal year to fiscal year 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 LAC has not assessed handlers since the 1995-96 
fiscal year. It has

[[Page 6680]]

used reserve funds to cover authorized expenses.
    The Committees met on December 10, 1997, and the LAC unanimously 
recommended 1998-99 expenditures of $130,785 and an assessment rate of 
$0.16 per bushel container of limes. The AAC also met on December 10, 
1997, and unanimously recommended 1998-99 expenditures of $166,844 and 
an assessment rate of $0.08 per bushel container of avocados.
    In comparison, last year's budgeted expenditures were $101,630 for 
the LAC and $123,000 for the AAC. The assessment rate for the LAC of 
$0.16 is the same as the rate established for the 1995-96 fiscal year, 
the last year handlers were assessed. The assessment rate for the AAC 
of $0.08 is $0.08 lower than the rate currently in effect.
    In an effort to reduce industry costs and assist with the recovery 
from Hurricane Andrew which hit southern Florida in August of 1992, the 
LAC has been operating from its reserve funds for the past two years. 
With the lime industry beginning to recover and reserve funds reduced, 
the LAC voted to establish an assessment rate to cover operating 
expenses.
    The AAC has excess reserve funds. They voted to decrease the 
assessment rate and use reserve funds to cover operating expenses and 
reduce reserve levels.
    The major expenditures recommended by the LAC for the 1998-99 year 
include $46,000 for salaries, $25,000 for local and national 
enforcement, $9,448 for employee benefits, $9,000 for research, $8,287 
for insurance and bonds, and $4,500 for travel. The LAC budgeted 
expenses for these items in 1997-98 were $40,000, $15,595, $5,500, 
$5,000, $0, and $3,000, respectively.
    The major expenditures recommended by the AAC for the 1998-99 year 
include $46,000 for salaries, $34,000 for research, $32,000 for local 
and national enforcement, $9,778 for employee benefits, $8,516 for 
insurance and bonds, and $7,000 for travel. The AAC budget expenses for 
these items in 1997-98 were $40,000, $7,000, $26,595, $6,380, $7,937, 
and $7,000, respectively.
    The assessment rates recommended by the Committees were derived by 
dividing anticipated expenses by expected shipments of Florida limes 
and avocados. Lime shipments for the year are estimated at 600,000 
bushel containers which should provide $96,000 in assessment income. 
Avocado shipments for the year are estimated at 90,000 bushel 
containers which should provide $72,000 in assessment income. Income 
derived from handler assessments, along with interest income and funds 
from the Committees' authorized reserves, would be adequate to cover 
budgeted expenses. Funds in the reserves would be kept within the 
maximum permitted by the orders. (Secs. 911.42 and 915.42--three fiscal 
years' operational expenses). Reserves for limes are currently around 
$100,000, and reserves for avocados stand at around $250,000.
    The proposed assessment rates would continue in effect indefinitely 
unless modified, suspended, or terminated by the Secretary upon 
recommendation and information submitted by the Committees or other 
available information.
    Although these assessment rates are effective for an indefinite 
period, the Committees will continue to meet prior to or during each 
fiscal year to recommend budgets of expenses and consider 
recommendations for modification of the assessment rates. The dates and 
times of Committee meetings are available from the Committees 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 rates are needed. 
Further rulemaking will be undertaken as necessary. The Committees' 
1998-99 budgets and those for subsequent fiscal years 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 111 producers of limes and 141 producers of 
avocados in the production area and approximately 33 lime handlers and 
49 avocado handlers subject to regulation under the marketing orders. 
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.
    Based on the Florida Agricultural Statistical Service and Committee 
data, the average price for fresh limes during the 1995-96 season was 
$8.05 per 88 pound box equivalent and total shipments were 371,413 
bushels. Approximately 20 percent of all handlers handled 86 percent of 
Florida lime shipments. The average price for fresh avocados during the 
1996-97 season was $13.20 per 55 pound bushel box equivalent for all 
domestic shipments and the total shipments were 917,861 bushels. 
Approximately 10 percent of all handlers handled 90 percent of Florida 
avocado shipments. Many lime and avocado handlers ship other tropical 
fruit and vegetable products which are not included in the committee 
data but would contribute further to handler receipts.
    Using the average prices, about 90 percent of lime and avocado 
handlers could be considered small businesses under the SBA definition 
and about 10 percent of the handlers could be considered large 
businesses. The majority of Florida lime and avocado producers and 
handlers may be classified as small entities.
    This rule would establish an assessment rate for the LAC and 
collected from handlers for the 1998-99 and subsequent fiscal years of 
$0.16 per bushel container. The LAC unanimously recommended 1998-99 
expenditures of $130,785 and an assessment rate of $0.16 per bushel 
container for 1998-99 and subsequent fiscal years. The assessment rate 
of $0.16 is the same as the rate established for the 1995-96 fiscal 
year, the last year handlers were assessed. The quantity of assessable 
limes for the 1998-99 fiscal year is estimated at 600,000 containers. 
Thus, the $0.16 rate for limes should provide $96,000 in assessment 
income. The assessment income, along with interest income and funds 
from the Committee's authorized reserve, would be adequate to cover 
budgeted expenses for 1998-99.
    This rule would also decrease the assessment rate established for 
the AAC and collected from handlers for the 1998-99 and subsequent 
fiscal years from $0.16 per bushel container to $0.08 per bushel 
container. The AAC unanimously recommended 1998-99 expenditures of 
$166,844 and an assessment rate of $0.08 per bushel container of 
avocados. The assessment rate of $0.08 is $0.08 lower than the 1997-98 
rate. The quantity of assessable avocados for the 1998-99 fiscal year 
is estimated at 900,000 containers. Thus,

[[Page 6681]]

the $0.08 rate for avocados should provide $72,000 in assessment 
income. The assessment income, along with interest income and funds 
from the Committee's authorized reserve, would be adequate to cover 
budgeted expenses.
    Due to the devastation of Hurricane Andrew in August of 1992, the 
LAC has been operating from its reserve funds for the past two years. 
The industry has now adequately recovered from the loss. In order not 
to deplete reserve funds further, the LAC voted to establish an 
assessment rate for 1998-99 and subsequent fiscal years. The 
assessments, along with interest income and reserves, would cover 
committee operating expenses.
    The AAC has a surplus in its reserve fund. The AAC voted to 
decrease the assessment rate and use funds from the reserves. The 
assessments, along with interest income and reserves, would cover 
committee operating expenses.
    The LAC reviewed and unanimously recommended 1998-99 expenditures 
of $130,785 which include increases in salaries, office space, aerial 
photo/tree count, and office equipment. The AAC reviewed and 
unanimously recommended 1998-99 expenditures of $166,844 which include 
increases in salaries, office space, and aerial photo/tree count. Prior 
to arriving at this budget, the Committees considered information from 
various sources, such as the Committees' Budget Subcommittee. 
Alternative expenditure levels were discussed by these groups, based 
upon the relative value of various research projects to the lime and 
avocado industries. The LAC budgeted $9,000 and the AAC budgeted 
$34,000 for research.
    The assessment rate of $0.16 per bushel container of assessable 
limes was then determined by dividing the total recommended budget by 
the quantity of assessable limes, estimated at 600,000 bushel 
containers for the 1998-99 fiscal year. This is approximately $35,000 
below the anticipated expenses, which the LAC determined to be 
acceptable. The assessment rate of $0.08 per bushel container of 
assessable avocados was then determined by dividing the total 
recommended budget by the quantity of assessable avocados, estimated at 
900,000 bushel containers for the 1998-99 fiscal year. This is 
approximately $171,000 below the anticipated expenses, which the AAC 
determined to be acceptable.
    A review of historical information indicates that the grower price 
for the 1998-99 season could range between $4.16 and $9.50 per 
container of limes. Therefore, the estimated assessment revenue for the 
1998-99 crop year as a percentage of total grower revenue could range 
between 1.6 and 3.8 percent.
    A review of historical information indicates that the grower price 
for the 1998-99 season could range between $13.20 and $14.90 per 
container of avocados. Therefore, the estimated assessment revenue for 
the 1998-99 crop year as a percentage of total grower revenue could 
range between .5 and .6 percent.
    This action would increase the assessment obligation imposed on 
lime handlers and decrease the assessment obligation imposed on avocado 
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 orders. In addition, the Committees' meetings were widely 
publicized throughout the Florida lime and avocado industries and all 
interested persons were invited to attend the meetings and participate 
in deliberations on all issues. Like all LAC and AAC meetings, the 
December 10, 1997, meetings were public meetings 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 Florida lime and 
avocado 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 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: (1) The Committees need to have sufficient funds to pay 
expenses which are incurred on a continuous basis; (2) the 1998-99 
fiscal years begin on April 1, 1998, and the orders require that the 
rates of assessment for each fiscal year apply to all assessable limes 
and avocados handled during such fiscal years; and (3) handlers are 
aware of this action which was unanimously recommended by the 
Committees at a public meeting and is similar to other assessment rate 
actions issued in past years.

List of Subjects

7 CFR Part 911

    Limes, Marketing agreements, Reporting and recordkeeping 
requirements.

7 CFR Part 915

    Avocados, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR parts 911 and 915 
are proposed to be amended as follows:
    1. The authority citation for both 7 CFR parts 911 and 915 
continues to read as follows:

    Authority: 7 U.S.C. 601-674.

PART 911--LIMES GROWN IN FLORIDA

    2. A new subpart titled ``Assessment Rates'' and a new Sec. 911.234 
are proposed to be added to read as follows:

    Note: This section will appear in the Code of Federal 
Regulations.

Subpart--Assessment Rates


Sec. 911.234  Assessment rate.

    On and after April 1, 1998, an assessment rate of $0.16 per bushel 
container is established for Florida limes.

PART 915--AVOCADOS GROWN IN SOUTH FLORIDA

    3. A new subpart titled ``Assessment Rates'' is proposed to be 
added and Sec. 915.235 is proposed to be revised to read as follows:

    Note: This section will appear in the Code of Federal 
Regulations.

Subpart--Assessment Rates


Sec. 915.235  Assessment rate.

    On and after April 1, 1998, as assessment rate of $0.08 per bushel 
container is established for South Florida avocados.

    Dated: February 4, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-3286 Filed 2-9-98; 8:45 am]
BILLING CODE 3410-02-P