[Federal Register Volume 63, Number 124 (Monday, June 29, 1998)]
[Proposed Rules]
[Pages 35164-35166]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-17251]


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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. 124 / Monday, June 29, 1998 / 
Proposed Rules  

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 928

[Docket No. FV98-928-1 PR]


Papayas Grown in Hawaii; 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 Papaya Administrative Committee (Committee) under Marketing Order 
No. 928 for the 1998-99 and subsequent fiscal years from $0.0059 to 
$0.0063 per pound of papayas handled. The Committee is responsible for 
local administration of the marketing order which regulates the 
handling of papayas grown in Hawaii. Authorization to assess papaya 
handlers enables the Committee to incur expenses that are reasonable 
and necessary to administer the program. The fiscal year begins July 1 
and ends June 30. The assessment rate would remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by July 29, 1998.

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) 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: Diane Purvis, Marketing Assistant, and 
Terry Vawter, Marketing Specialist, California Marketing Field Office, 
Fruit and Vegetable Programs, AMS, USDA, 2202 Monterey Street, Suite 
102B, Fresno, California 93721; telephone: (209) 487-5901, Fax: (209) 
487-5906; 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. 155 and Order No. 928, both as amended (7 CFR part 928), 
regulating the handling of papayas grown in Hawaii, 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, papaya 
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 papayas beginning 
on July 1, 1998, 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 1998-99 and subsequent fiscal years from $0.0059 per 
pound to $0.0063 per pound of papayas handled.
    The papaya 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 
papayas. 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 1996-97 and subsequent fiscal years, the Committee 
recommended, and the Department approved, an assessment rate that would 
continue in effect from fiscal year to fiscal year 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 May 7, 1998, and recommended 1998-99 
expenditures of $561,500 and an assessment rate of $0.0063 per pound of 
papayas. In comparison, last year's budgeted expenditures were 
$623,000. The assessment rate of $0.0063 per pound is $0.0004 higher 
than the rate currently in effect. The Committee determined that the 
present assessment rate would be inadequate to fund its anticipated 
expenses and maintain a sufficient reserve fund for the 1998-99 fiscal 
year. The Committee is authorized to maintain an operating reserve in 
an amount not to exceed approximately one fiscal year's operational 
expenses. Last year, the reserve fund was $110,000. At the end of the 
1998-99 fiscal year the operating reserve is

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expected to be $25,200, which is considered adequate by the Committee. 
After consideration of anticipated expenses for the 1998-99 fiscal 
year, it was determined that assessment income, interest, and income 
from other sources would provide sufficient funds to meet anticipated 
expenses and maintain an adequate reserve fund.
    The major expenditures recommended by the Committee for the 1998-99 
fiscal year include $183,000 for marketing and promotion, $171,500 for 
research and development, and $98,000 for salaries. Budgeted expenses 
for these items in 1997-98 were $200,000 for marketing and promotion, 
$225,000 for research and development, and $81,000 for salaries, 
respectively.
    The assessment rate recommended by the Committee was derived by 
dividing assessment income needed by expected shipments of papayas. 
Papaya shipments for 1998-99 are estimated at 38 million pounds which 
should provide $239,400 in assessment income. Income derived from 
handler assessments, when combined with income from the Hawaii 
Department of Agriculture, State of Hawaii (Research), USDA's Foreign 
Agricultural Service, County of Hawaii, and the Japanese Inspection 
program, along with interest income and $84,800 from the Committee's 
authorized reserve, will be adequate to cover budgeted expenses. Funds 
in the reserve (estimated to be $25,200 at the end of the 1998-99 
fiscal year) would be kept within the maximum permitted in 
Sec. 928.42(a)(2) of the order. The order authorizes approximately one 
fiscal year's expenses for the reserve.
    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 year 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 are encouraged to 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 1998-99 budget and those for subsequent fiscal years 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 400 producers of papayas in the production 
area and approximately 60 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.
    Last year, as a percentage, four handlers each shipped in excess of 
3.85 million pounds of papayas, and the remaining handlers each shipped 
less than 3.85 million pounds of papayas. Using an average f.o.b. price 
of $1.30 per pound, the four handlers shipping in excess of 3.85 
million pounds of papayas each could be considered large businesses and 
the remaining handlers could thus be considered small businesses under 
SBA's definition. Using an average grower price of $0.45 per pound and 
industry shipments of 36 million pounds, grower revenues would be $16.2 
million. Average revenue per grower would thus be $40,500. Based on the 
foregoing, the majority of handlers and producers of papayas may be 
classified as small entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 1998-99 and subsequent 
fiscal years from $0.0059 per pound to $0.0063 per pound of papayas 
handled. The Committee recommended 1998-99 expenditures of $561,500 and 
an assessment rate of $0.0063 per pound of papayas handled. The 
proposed assessment rate of $0.0063 per pound is $0.0004 higher than 
the 1997-98 rate. The quantity of assessable papayas for the 1998-99 
fiscal year is estimated at 38 million pounds. Thus, the $0.0063 rate 
should provide $239,400 in assessment income. Income derived from 
handler assessments, the Hawaii Department of Agriculture, State of 
Hawaii (Research), USDA's Foreign Agricultural Service, County of 
Hawaii, and Japanese Inspection program, along with interest income and 
$84,800 from the Committee's authorized reserve, will be adequate to 
cover budgeted expenses. Funds in the reserve (estimated to be $25,200 
at the end of the 1998-99 fiscal year) would be kept within the maximum 
permitted in Sec. 928.42(a)(2) of the order. The order authorizes 
approximately one fiscal year's expenses for the reserve.
    The Committee recommended 1998-99 expenditures of $561,500 which 
include decreases in marketing and promotion, and research and 
development programs. The Committee discussed further decreases in 
these budget categories to avoid increasing the assessment rate, but it 
decided that the programs should be funded at the recommended levels. 
Salary increases were budgeted to cover the costs of a new employee. 
The assessment rate of $0.0063 per pound of assessable papayas was 
determined by dividing the assessment income needed by the quantity of 
assessable papayas, estimated at 38 million pounds for the 1998-99 
fiscal year. This estimate would generate $239,400 in assessment 
income. When combined with $237,300 in anticipated income from other 
sources including $84,800 from the reserve, the Committee would have 
adequate funds to meet 1998-99 expenses.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal year indicates that the grower price 
for the 1998-99 season could range between $.30 and $0.45 per pound of 
papayas. Therefore, the estimated assessment revenue for the 1998-99 
fiscal year as a percentage of total grower revenue could range between 
1.4 and 2.1 percent.
    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 papaya industry, and all interested persons 
were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee

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meetings, the May 7, 1998, 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 papaya 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 Committee needs to have sufficient funds to pay its 
expenses which are incurred on a continuous basis; (2) the 1998-99 
fiscal year begins on July 1, 1998, and the marketing order requires 
that the rate of assessment for each fiscal year apply to all 
assessable papayas handled during such fiscal year; and (3) handlers 
are aware of this action which was 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 928

    Marketing agreements, Papayas, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 928 is 
proposed to be amended as follows:

PART 928--PAPAYAS GROWN IN HAWAII

    1. The authority citation for 7 CFR part 928 continues to read as 
follows:

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

    2. Section 928.226 is proposed to be revised to read as follows:


Sec. 928.226  Assessment rate.

    On and after July 1, 1998, an assessment rate of $0.0063 per pound 
is established for papayas grown in Hawaii.

    Dated: June 23, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-17251 Filed 6-26-98; 8:45 am]
BILLING CODE 3410-02-P