[Federal Register Volume 64, Number 212 (Wednesday, November 3, 1999)]
[Rules and Regulations]
[Pages 59604-59606]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28751]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 928

[Docket No. FV99-928-1 FR]


Papayas Grown in Hawaii; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule increases the assessment rate from $0.0063 to $0.008 
per pound of assessable papayas established for the Papaya 
Administrative Committee (Committee) under Marketing Order No. 928 for 
the 1999-2000 and subsequent fiscal years. 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 began on July 
1 and ends June 30. The assessment rate will remain in effect 
indefinitely unless modified, suspended, or terminated.

EFFECTIVE DATE: November 4, 1999.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, Marketing Specialist, 
California Marketing Field Office, Fruit and Vegetable Programs, AMS, 
USDA, 2202 Monterey Street, Suite 102B, Fresno, California 93721; 
telephone: (559) 487-5901; Fax: (559) 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) 720-5698. Small 
businesses may request information on complying with this regulation 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].

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 
July 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 increases the assessment rate established for the 
Committee for the 1999-2000 and subsequent fiscal years from $0.0063 
per pound to $0.008 per pound of assessable papayas.
    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 1998-1999 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 April 22, 1999, to discuss the crop estimate, 
budget, and assessment rate for the 1999-2000 fiscal year. On July 15, 
1999, the Committee completed a mail ballot on the crop estimate and 
assessment rate, and on an eight-to-one vote, adopted a crop estimate 
of 40 million pounds of

[[Page 59605]]

assessable papayas and an assessment rate of $0.008 per pound for the 
1999-2000 and subsequent fiscal years. The person who voted no objected 
to the higher assessment rate. The Committee unanimously recommended a 
1999-2000 fiscal year budget of $522,500.
    The assessment rate of $0.008 is $0.0017 higher than the rate 
currently in effect. The budgeted expenses are $39,000 less than the 
$561,500 budgeted for last year. The Committee determined that a higher 
assessment rate was necessary to meet the recommended expenses and 
maintain a reserve fund for the 1999-2000 fiscal year. For several 
fiscal years, money from the reserve fund has been used to meet a 
portion of budgeted expenses in an effort to keep the assessment rate 
as low as possible. The Committee believes a further reduction of the 
reserve fund would not be prudent.
    The Committee is authorized to maintain reserve funds in an amount 
not to exceed approximately one fiscal year's operational expenses. 
Last year, the reserve fund was $25,200. This year it is expected to be 
$25,000, which is approximately one percent lower than the previous 
year and considered adequate by the Committee. After consideration of 
the estimated crop size and anticipated expenses for the 1999-2000 
fiscal year, it was determined that increasing the assessment rate by 
approximately 27 percent will provide sufficient funds to meet 
anticipated expenses and maintain an adequate reserve fund.
    The major expenditures recommended by the Committee for the 1999-
2000 year include $230,000 for marketing and promotion, $90,500 for 
research and development, and $98,000 for salaries. Budgeted expenses 
for these items in 1998-99 were $183,000 for marketing and promotion, 
$171,500 for research and development, and $98,000 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 the year are estimated at 40 million pounds which 
should provide $320,000 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 of $16,000, will be adequate to 
cover budgeted expenses. Funds in the reserve (estimated to be $25,000 
at the end of the 1999-2000 fiscal year) will 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 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 will be in effect for an indefinite 
period, the Committee will 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 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 
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 final 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.
    Based on a reported average f.o.b. price of $1.30 per pound of 
papayas, a handler would have to ship in excess of 3.85 million pounds 
of papayas to have annual receipts of $5,000,000. Last year, a majority 
of the handlers shipped less than 3.85 million pounds of papayas, and, 
therefore, could be considered small businesses under SBA's definition.
    Based on a reported average grower price of $0.45 per pound and 
industry shipments of 36 million pounds, total grower revenues would be 
$16.2 million. Average grower revenue would thus be $40,500. Based on 
the foregoing, the majority of producers of papayas may be classified 
as small entities.
    This rule increases the assessment rate established for the 
Committee and collected from handlers for the 1999-2000 and subsequent 
fiscal years from $0.0063 per pound to $0.008 per pound of assessable 
papayas. The Committee recommended 1999-2000 expenditures for $522,500 
and the $0.008 per pound assessment rate. The assessment rate of $0.008 
is $0.0017 higher than the 1998-99 rate. The quantity of assessable 
papayas for the 1999-2000 fiscal year is estimated at 40 million 
pounds. Thus, the $0.008 rate should provide $320,000 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 the Japanese Inspection program, along 
with interest income of $16,000, will be adequate to cover budgeted 
expenses. Funds in the reserve (estimated to be about $25,000 at the 
end of the 1999-2000 fiscal year) will 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 1999-2000 expenditures of $522,500. The 
major expenditures recommended for the 1999-2000 year include $230,000 
for marketing and promotion, $90,500 for research and development, and 
$98,000 for salaries. Budgeted expenses for these items in 1998-99 were 
$183,000 for marketing and promotion, $171,500 for research and 
development, and $98,000 for salaries, respectively.
    The Committee discussed the alternative of decreasing expenditure 
levels for marketing and promotion and further reducing research and 
development expenditures. It determined that the programs should be 
funded at the recommended levels. The assessment rate of $0.008 per 
pound of assessable papayas was determined by dividing the assessment 
income needed by the quantity of assessable papayas, estimated at 40 
million pounds for the 1999-2000 fiscal year. This estimate would 
generate $320,000 in assessment income. When combined with $208,800 in 
anticipated income from the

[[Page 59606]]

previously mentioned sources, and $16,000 in interest income, the 
Committee will have adequate funds to meet its 1999-2000 expenses.
    A review of historical information and preliminary information 
pertaining to the 1999-2000 fiscal year indicates that the grower price 
for the season could range between $.30 and $.45 per pound of papayas. 
Therefore, the estimated assessment revenue for the 1999-2000 fiscal 
year as a percentage of total grower revenue could range between 1.8 
and 2.7 percent.
    This action increases 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 
are offset by the benefits derived by the operation of the marketing 
order. In addition, the Committee's meeting was widely publicized 
throughout the Hawaii papaya industry and all interested persons were 
invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the April 22, 
1999, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large Hawaii 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 proposed rule concerning this action was published in the Federal 
Register on September 2, 1999 (64 FR 48115). Copies of the proposed 
rule were also mailed or sent via facsimile to all papaya handlers. 
Finally, the proposal was made available through the Internet by the 
Office of the Federal Register. The period of comments ended October 4, 
1999. No comments were received.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at the 
following web site: http://www.ams.usda.gov/fv/moab.html. Any questions 
about the compliance guide should be sent to Jay Guerber at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it 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 also found and determined that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because: (1) Handlers 
are already receiving 1999-2000 crop papayas from growers; (2) the 
1999-2000 fiscal year began on July 1 and the order requires that the 
assessment rate apply to all papayas received during that fiscal year; 
(3) the Committee needs to have sufficient funds to pay its expenses 
which are incurred on a continuous basis; (4) handlers are aware of 
this action which was recommended at a public meeting, and is similar 
to other assessment rate actions issued in past years; (5) a 30-day 
comment period was provided for in the proposed rule, and no comments 
were received.

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 
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 revised to read as follows:


Sec. 928.226  Assessment rate.

    On and after July 1, 1999, an assessment rate of $0.008 per pound 
is established for Hawaii papayas.

    Dated: October 28, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-28751 Filed 11-2-99; 8:45 am]
BILLING CODE 3410-02-P