[Federal Register Volume 64, Number 51 (Wednesday, March 17, 1999)]
[Proposed Rules]
[Pages 13123-13125]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6490]


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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. 64, No. 51 / Wednesday, March 17, 1999 / 
Proposed Rules  

[[Page 13123]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 915

[Docket No. FV99-915-1 PR]


Avocados Grown in South Florida; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would increase the assessment rate from 
$0.08 to $0.16 per 55-pound bushel container or equivalent of avocados 
established for the Avocado Administrative Committee (Committee) under 
Marketing Order No. 915 for the 1999-2000 and subsequent fiscal years. 
The Committee is responsible for local administration of the marketing 
order which regulates the handling of avocados grown in South Florida. 
Authorization to assess avocado handlers enables the Committee to incur 
expenses that are reasonable and necessary to administer the program. 
The fiscal year begins April 1 and ends March 31. The assessment rate 
would remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Comments must be received by April 16, 1999.

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) 720-5698; or E-mail: 
[email protected]. 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) 720-5698. 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__N__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.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 121 and Order No. 915, both as amended (7 CFR part 915), 
regulating the handling of avocados grown in South Florida, 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, Florida 
avocado 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 
avocados beginning on April 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 would increase the assessment rate established for the 
Committee for the 1999-2000 and subsequent fiscal years from $0.08 per 
55-pound bushel container or equivalent to $0.16 per 55-pound bushel 
container or equivalent of South Florida avocados handled.
    The Florida avocado 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 Florida avocados. 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 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 January 13, 1999, and unanimously recommended 
1999-2000 expenditures of $167,335 and an assessment rate of $0.16 per 
55-pound bushel container or equivalent of avocados handled. In 
comparison, last year's budgeted expenditures were $174,344. The 
assessment rate of $0.16 is $0.08 higher than the rate currently in

[[Page 13124]]

effect. For the 1998-99 fiscal period, the Committee voted to lower its 
assessment rate from $0.16 to $0.08 to reduce the funds in its 
operating reserve. It wanted to bring its reserve closer to one year's 
operating expenses. With this accomplished, the Committee voted to 
return the assessment rate to the previous level of $0.16 to cover 
1999-2000 expenses. As discussed later, the Committee expects to use 
interest income and reserve funds to cover its anticipated expenses 
during 1999-2000 because the $0.16 per 55-pound bushel container or 
equivalent assessment rate is expected to generate $144,000, which is 
$23,335 less than the Committee's budgeted expenses.
    The major expenditures recommended by the Committee for the 1999-
2000 year include $46,000 for salaries, $39,500 for production 
research, $27,000 for local and national enforcement, $10,040 for 
employee benefits, $8,955 for insurance and bonds, and $5,500 for 
travel. Budgeted expenses for these items in 1998-99 were $46,000, 
$41,500, $32,000, $9,778, $8,516, and $7,000, respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Florida 
avocados. Avocado shipments for the year are estimated at 900,000 55-
pound bushel containers which should provide $144,000 in assessment 
income. Income derived from handler assessments, along with interest 
income and funds from the Committee's authorized reserve, would be 
adequate to cover budgeted expenses. Funds in the reserve (currently 
$187,615) would be kept within the maximum of 3 fiscal years' 
operational expenses permitted by the order (Secs. 915.42 and 915.142).
    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 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 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 
1999-2000 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 149 producers of avocados in the production 
area and approximately 48 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 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 the South Florida avocado 
shipments during that season. Many 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 price 
per 55-pound container or equivalent, about 90 percent of the avocado 
handlers could be considered small businesses under SBA's definition 
and about 10 percent of the handlers could be considered large 
businesses. The majority of handlers and producers of Florida avocados 
may be classified as small entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 1999-2000 and subsequent 
fiscal years from $0.08 per 55-pound bushel container or equivalent to 
$0.16 per 55-pound bushel container or equivalent of avocados. The 
Committee unanimously recommended 1999-2000 expenditures of $167,335 
and an assessment rate of $0.16 per 55-pound bushel container or 
equivalent handled. The proposed assessment rate of $0.16 is $0.08 
higher than the 1998-99 rate. The quantity of assessable avocados for 
the 1999-2000 season is estimated at 900,000 containers. Thus, the 
$0.16 rate should provide $144,000 in assessment income. Assessment 
income, along with interest income and funds from the Committee's 
authorized reserve, would be adequate to cover budgeted expenses.
    The major expenditures recommended by the Committee for the 1999-
2000 year include $46,000 for salaries, $39,500 for production 
research, $27,000 for local and national enforcement, $10,040 for 
employee benefits, $8,955 for insurance and bonds, and $5,500 for 
travel. Budgeted expenses for these items in 1998-99 were $46,000, 
$41,500, $32,000, $9,778, $8,516, and $7,000, respectively.
    During the 1998-99 season, the Committee voted to decrease the 
assessment rate to bring its operating reserve closer to one year's 
operating expenses. For the 1999-2000 fiscal period, the Committee 
voted to return to the previous rate of $0.16 to cover authorized 
expenses. The Committee expects to use interest income and funds from 
its operating reserve to cover 1999-2000 expenses. This would be 
necessary because assessment income is expected to total $144,000, and 
the Committee's budget totals $167,335.
    The Committee's 1999-2000 budgeted expenditures of $167,335 include 
increases in employee benefits and office equipment. Prior to arriving 
at this budget, the Committee considered information from various 
sources, such as the Committee's Budget Subcommittee. Alternative 
expenditure levels were discussed, based upon the relative value of 
various research projects to the South Florida avocado industry.
    The assessment rate of $0.16 per 55-pound bushel container or 
equivalent of assessable avocados was then determined by dividing the 
total recommended budget by the quantity of assessable avocados, 
estimated at 900,000 55-pound bushel containers or equivalents for the 
1999-2000 fiscal period. This rate is expected to provide $144,000 in 
assessment income, which is $23,335 below budgeted expenses. The 
Committee found this acceptable because interest income and funds from 
the Committee's operating reserve would be available to make up the 
deficit.
    A review of historical information indicates that the grower price 
for the 1999-2000 season could range between

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$13.20 and $14.90 per 55-pound bushel container or equivalent of 
avocados. Therefore, the estimated assessment revenue for the 1999-2000 
fiscal year as a percentage of total grower revenue could range between 
1 and 1.2 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 Florida avocado industry and all interested 
persons were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the January 
13, 1999, 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 Florida 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 1999-2000 fiscal year begins on April 1, 1999, and the 
marketing order requires that the rate of assessment for each fiscal 
year apply to all assessable avocados handled during such fiscal year; 
(2) the Committee needs to have sufficient funds to pay its expenses 
which are incurred on a continuous basis; and (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.

List of Subjects in 7 CFR Part 915

    Avocados, Marketing agreements, Reporting and recordkeeping 
requirements.
    For the reasons set forth in the preamble, 7 CFR part 915 is 
proposed to be amended as follows:

PART 915--AVOCADOS GROWN IN SOUTH FLORIDA

    1. The authority citation for 7 CFR part 915 continues to read as 
follows:

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

    2. Section 915.233 is revised to read as follows:


Sec. 915.233  Assessment rate.

    On and after April 1, 1999, an assessment rate of $0.16 per 55-
pound bushel container or equivalent is established for avocados grown 
in South Florida.

    Dated: March 11, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-6490 Filed 3-16-99; 8:45 am]
BILLING CODE 3410-02-P