[Federal Register Volume 64, Number 137 (Monday, July 19, 1999)]
[Proposed Rules]
[Pages 38597-38599]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18318]


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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. 137 / Monday, July 19, 1999 / 
Proposed Rules  

[[Page 38597]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 906

[Docket No. FV99-906-2 PR]


Oranges and Grapefruit Grown in Lower Rio Grande Valley in Texas; 
Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase 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 begins 
August 1 and ends July 31. The assessment rate would remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by August 9, 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: Belinda G. Garza, Regional Manager, 
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. 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.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 906 (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 proposed herein 
would be applicable to all assessable oranges and grapefruit beginning 
on 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 would increase 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 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

[[Page 38598]]

budgeted expenditures were $1,181,950. The assessment rate of $0.12 is 
$0.01 higher than the rate currently 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 slightly under $120,000. Thus, the 
Committee recommended increasing the assessment rate because the 
current rate would not generate enough income to cover 1999-2000 
expenses, and the Committee only wants to use a limited amount of 
reserve funds to meet expenses. The Committee wants to ensure that 
adequate reserve funds are available to meet unexpected expenses.
    The major expenditures recommended by the Committee for the 1999-
2000 fiscal period include $739,000 for advertising, $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, would be adequate to cover budgeted expenses. Funds 
in the reserve (currently $119,402) would be kept within the maximum of 
one fiscal period's expenses permitted by the order (Sec. 906.35).
    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 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 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 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 would increase 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 proposed assessment rate of $0.12 is $0.01 higher 
than the 1998-99 rate. The Committee recommended increasing the 
assessment rate because the current rate would not generate enough 
income to cover 1999-2000 expenses, and the Committee only wants to use 
a limited amount of reserve funds to meet expenses. The Committee wants 
to ensure that adequate reserve funds are available to meet unexpected 
expenses. 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, would 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 that the 1999-2000 rate of 
assessment be increased to $0.12 per \7/10\ bushel carton. The 
Committee recommended increasing the assessment rate because the 
current rate would not generate enough income to cover 1999-2000 
expenses, and the Committee only wants 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

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retaining the current $0.11 per \7/10\ bushel carton assessment rate 
for the 1999-2000 fiscal period would reduce 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 proposed assessment rate of $0.12 per 
\7/10\ bushel carton of assessable oranges and 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 would 
come from the Committee's reserve and interest income.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the f.o.b. 
price for the 1999-2000 season could range from $4.75 to $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 the total pack-out 
revenue could range between .96 and 2.5 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 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. 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 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 20-day comment period is provided to allow interested persons to 
respond to this proposed rule. Twenty days is deemed appropriate 
because: (1) The 1999-2000 fiscal period begins 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; (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 906

    Grapefruit, Marketing agreements, Oranges, Reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, 7 CFR part 906 is 
proposed to be 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: July 14, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-18318 Filed 7-16-99; 8:45 am]
BILLING CODE 3410-02-P