[Federal Register Volume 65, Number 39 (Monday, February 28, 2000)]
[Rules and Regulations]
[Pages 10374-10376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-4611]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 979

[Docket No. FV00-979-1 FR]


Melons Grown in South Texas; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule increases the assessment rate established for the 
South Texas Melon Committee (Committee) for the 1999-2000 and 
subsequent fiscal periods from $0.04 to $0.05 per carton of melons 
handled. The Committee is responsible for local administration of the 
marketing order which regulates the handling of melons (cantaloupes and 
honeydews) grown in South Texas. Authorization to assess melon handlers 
enables the Committee to incur expenses that are reasonable and 
necessary to administer the program. The fiscal period began October 1 
and ends September 30. The assessment rate will remain in effect 
indefinitely unless modified, suspended, or terminated.

EFFECTIVE DATE: February 29, 2000.

FOR FURTHER INFORMATION CONTACT: Cynthia Cavazos, Marketing Assistant, 
McAllen Marketing Field Office, Fruit and Vegetable Programs, AMS, 
USDA, 1313 E. Hackberry, McAllen, Texas 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 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: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 156 and Order No. 979, both as amended (7 CFR part 979), 
regulating the handling of melons grown in South 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, South Texas 
melon 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 
melons beginning on October 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

[[Page 10375]]

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 periods from $0.04 to 
$0.05 per carton of melons handled.
    The South Texas melon 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 growers and handlers of 
South Texas melons. They are familiar with the Committee's needs and 
with the costs of 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 1997-1998 and subsequent fiscal periods, the Committee 
recommended, and the Department approved, an assessment rate 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, in a mail vote, unanimously recommended 1999-2000 
expenses of $219,148 for personnel, office, compliance, promotion, and 
research expenses. These expenses were approved in September 1999. The 
assessment rate and specific funding for research and promotion 
projects were to be recommended at a later Committee meeting.
    The Committee met on November 4, 1999, and unanimously recommended 
1999-2000 expenditures of $265,500 and an assessment rate of $0.05 per 
carton of melons. In comparison, last year's budgeted expenditures were 
$219,148. The assessment rate of $0.05 is $0.01 higher than the rate 
currently in effect. The Committee voted to increase its assessment 
rate because the current rate would not have generated the income 
needed to administer the marketing order and would have reduced the 
Committee's reserve funds beyond the level acceptable to the Committee. 
Assessment income, along with funds from the Committee's authorized 
reserve, should provide the Committee with adequate funds to meet its 
1999-2000 fiscal period's expenses.
    The major expenditures recommended by the Committee for the 1999-
2000 fiscal period include $98,800 for personnel and administrative 
expenses, $31,200 for compliance activities, $110,500 for research 
projects, and $25,000 for promotional activities. Budgeted expenses for 
these items in 1998-1999 were $97,600, $32,400, $79,148, and $10,000, 
respectively.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, expected shipments of South Texas 
melons, and the amount of funds in the Committee's operating reserve. 
Melon shipments for the year are estimated at 4,200,000 cartons, which 
should provide $210,000 in assessment income at the $0.05 per carton 
rate. Income derived from handler assessments, along with funds from 
the Committee's authorized reserve, will be adequate to cover budgeted 
expenses for the 1999-2000 fiscal period. Funds in the reserve 
(currently $316,208) will be kept within the maximum permitted by the 
order (approximately two fiscal periods' expenses; Sec. 979.44).
    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 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 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 
budget and those for subsequent fiscal periods 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 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 20 growers of South Texas melons in the 
production area and 20 handlers subject to regulation under the 
marketing order. Small agricultural growers have been defined by the 
Small Business Administration (SBA) (13 CFR 121.201) 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.
    Most of the handlers are vertically integrated corporations 
involved in producing, shipping, and marketing melons. For the 1998-99 
marketing year, melons produced on 8,364 acres were shipped by the 
industry's 20 handlers with the average acreage being 418 acres and the 
median volume handled was 193,867 cartons. In terms of production 
value, average revenues for the 20 handlers were estimated to be $2.9 
million.
    The South Texas melon industry is characterized by growers and 
handlers whose farming operations generally involve more than one 
commodity, and whose income from farming operations is not exclusively 
dependent on the production of melons. Alternative crops provide an 
opportunity to utilize many of the same facilities and equipment not in 
use when the melon production season is complete. For this reason, 
typical melon growers and handlers either double-crop melons during 
other times of the year or produce alternate commodities, like onions.
    Based on the SBA's definition of small entities, the Committee 
estimates that a majority of the 20 handlers regulated by the order 
would be considered small entities if only their spring melon revenues 
are considered. However, revenues from other productive enterprises 
would likely push a large number of these handlers above the $5,000,000 
annual receipt

[[Page 10376]]

threshold. Of the 20 growers within the production area, few have 
sufficient acreage to generate sales in excess of $500,000; therefore, 
the majority of growers 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 periods from $0.04 to $0.05 per carton of melons. The Committee 
unanimously recommended 1999-2000 expenditures of $265,500 and an 
assessment rate of $0.05 per carton of melons. In comparison, last 
year's budgeted expenditures were $219,148. The assessment rate of 
$0.05 is $0.01 higher than the 1998-1999 rate. At the rate of $0.05 per 
carton and an estimated 2000 melon production of 4,200,000 cartons, the 
projected income derived from handler assessments ($210,000), along 
with 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 $98,800 for personnel and administrative 
expenses, $31,200 for compliance activities, $110,500 for research 
projects, and $25,000 for promotional activities. Budgeted expenses for 
these items in 1998-1999 were $97,600, $32,400, $79,148, and $10,000, 
respectively.
    The Committee voted to increase its assessment rate because the 
current rate would not have generated the income needed to administer 
the marketing order and would have reduced the Committee's reserve 
funds beyond the level acceptable to the Committee. Assessment income, 
along with funds from the Committee's authorized reserve, should 
provide the Committee with adequate funds to meet its 1999-2000 fiscal 
period's expenses.
    The Committee reviewed and unanimously recommended 1999-2000 
expenditures of $265,500, which included increases in personnel, 
promotion, and research projects. Prior to arriving at this budget, the 
Committee considered information from various sources, including the 
Research and Post Harvest Subcommittees. Alternative expenditure levels 
were discussed by these groups, based upon the relative value of 
various research projects to the melon industry. The assessment rate of 
$0.05 per carton of assessable melons was then determined by 
considering the total recommended budget, the quantity of assessable 
melons, estimated at 4,200,000 cartons for the 1999-2000 fiscal period, 
and the amount of funds in the Committee's operating reserve. The 
recommended rate will generate $210,000, which is $55,500 below the 
anticipated expenses. The Committee found this acceptable because 
reserve funds will be used to make up the deficit.
    A review of historical and preliminary information pertaining to 
the upcoming fiscal period indicates that the grower price for the 
1999-2000 marketing season could range between $9.00 and $12.00 per 
carton of cantaloupes and between $6.00 and $9.00 per carton of 
honeydew melons. Therefore, the estimated assessment revenue for the 
1999-2000 fiscal period as a percentage of total grower revenue could 
range between .55 and .42 percent for cantaloupes and between .83 and 
.55 percent for honeydew melons.
    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 South Texas melon industry and all interested persons 
were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the November 
4, 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 South Texas melon 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 January 10, 2000 (65 FR 1347). Copies of the proposed rule 
were also mailed or sent via facsimile to all melon handlers. Finally, 
the proposal was made available through the Internet by the Office of 
the Federal Register. A 30-day comment period ending February 9, 2000, 
was provided for interested persons to respond to the proposal. 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 is 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 is 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) The 
1999-2000 fiscal period began on October 1, 1999, and the marketing 
order requires that the rate of assessment for each fiscal period apply 
to all assessable melons handled during such fiscal period; (2) the 
Committee needs to have sufficient funds to pay its expenses which are 
incurred on a continuous basis; and (3) the handlers are aware of this 
rule which was unanimously recommended by the Committee at a public 
meeting. Also, a 30-day comment period was provided for in the proposed 
rule, and no comments were received.

List of Subjects in 7 CFR Part 979

    Marketing agreements, Melons, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 979 is 
amended as follows:

PART 979--MELONS GROWN IN SOUTH TEXAS

    1. The authority citation for 7 CFR part 979 continues to read as 
follows:

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

    2. Section 979.219 is revised to read as follows:


Sec. 979.219  Assessment rate.

    On and after October 1, 1999, an assessment rate of $0.05 per 
carton is established for South Texas melons.

    Dated: February 23, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-4611 Filed 2-25-00; 8:45 am]
BILLING CODE 3410-02-P