[Federal Register Volume 67, Number 194 (Monday, October 7, 2002)]
[Rules and Regulations]
[Pages 62318-62320]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-25429]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 906

[Docket No. FV02-906-1 IFR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule decreases the assessment rate established for the 
Texas Valley Citrus Committee (Committee) for the 2002-03 and 
subsequent fiscal periods from $0.12 to $0.11 per \7/10\-bushel carton 
of oranges and grapefruit handled. The Committee locally administers 
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 began August 1 and ends July 31. The assessment rate 
will remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective October 8, 2002. Comments received by December 6, 2002 
will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938, 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, or can be viewed at: http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Belinda G. Garza, Regional Manager, 
McAllen Marketing Field Office, Marketing Order Administration Branch, 
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, 1400 Independence Avenue SW., 
STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-2491, Fax: 
(202) 720-8938.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938, or e-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 906, as amended (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 order is 
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 (USDA) 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 issued herein 
will be applicable to all assessable oranges and grapefruit beginning 
on August 1, 2002, 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 USDA 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 USDA 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 USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.

[[Page 62319]]

    This rule decreases the assessment rate established for the 
Committee for the 2002-03 and subsequent fiscal periods from $0.12 to 
$0.11 per \7/10\-bushel carton of oranges and grapefruit.
    The Texas orange and grapefruit marketing order provides authority 
for the Committee, with the approval of USDA, 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 1999-2000 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by USDA upon recommendation and information 
submitted by the Committee or other information available to USDA.
    The Committee met on May 30, 2002, and unanimously recommended 
2002-03 expenditures of $1,226,022 and an assessment rate of $0.12 per 
\7/10\-bushel carton of oranges and grapefruit. The Committee met again 
on August 28, 2002, and recommended a decreased assessment rate of 
$0.11, with no change to the previously approved budget of $1,226,022. 
Thirteen of the 14 Committee members and alternates acting as members 
voted in support of the $0.11 per \7/10\-bushel carton decrease. One 
Committee member voted against the decrease. In comparison, last year's 
budgeted expenditures were $1,236,777. The assessment rate of $0.11 is 
$0.01 lower than the rate currently in effect. The Committee voted to 
reduce the assessment rate after determining that its reserve fund was 
higher than they believed necessary, and to lower handler assessment 
costs for 2002-03 by $100,000.
    The major expenditures recommended by the Committee for the 2002-03 
fiscal period include $810,500 for advertising, $179,000 for the 
Mexican Fruit Fly program, $107,845 for management and administration 
of the program, and $74,777 for compliance. Budgeted expenses for these 
items in 2001-02 were $810,500, $197,000, $104,500, and $74,777, 
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 10 million \7/10\-bushel cartons, which should provide 
$1,100,000 in assessment income. Income derived from handler 
assessments, along with interest income and funds from the Committee's 
authorized reserve, will be adequate to cover budgeted expenses. Funds 
in the reserve (currently $274,041) will be kept within the maximum of 
one fiscal period's expenses permitted by the order (Sec.  906.35).
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by USDA 
upon recommendation and information submitted by the Committee or other 
available information.
    Although this assessment rate is effective 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 USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA 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 2002-03 budget and those 
for subsequent fiscal periods will be reviewed and, as appropriate, 
approved by USDA.

Initial Regulatory Flexibility Analysis

    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 410 producers of oranges and grapefruit in 
the production area and approximately 15 handlers subject to regulation 
under the marketing order. Small agricultural producers are defined by 
the Small Business Administration (SBA) (13 CFR 121.201) as those 
having annual receipts less than $750,000, and small agricultural 
service firms are defined as those whose annual receipts are less than 
$5,000,000.
    An updated Texas citrus industry profile shows that 6 of the 15 
handlers (40 percent) shipped over 651,042 \7/10\-bushel cartons of 
oranges and grapefruit. Using an average f.o.b. price of $7.68 per \7/
10\-bushel carton, these handlers could be considered large businesses 
under SBA's definition, and the remaining 9 handlers (60 percent) could 
be considered small businesses. Of the approximately 410 producers 
within the production area, few have sufficient acreage to generate 
sales in excess of $750,000. Thus, the majority of handlers and 
producers of Texas oranges and grapefruit may be classified as small 
entities.
    This rule decreases the assessment rate established for the 
Committee and collected from handlers for the 2002-03 and subsequent 
fiscal periods from $0.12 to $0.11 per \7/10\-bushel carton of oranges 
and grapefruit. The Committee recommended 2002-03 expenditures of 
$1,226,022 and an assessment rate of $0.11 per \7/10\-bushel carton of 
oranges and grapefruit. The recommended assessment rate of $0.11 is 
$0.01 lower than the current rate. The quantity of assessable oranges 
and grapefruit for the 2002-03 fiscal year is estimated at 10 million 
cartons. Income derived from handler assessments, along with interest 
income and funds from the Committee's authorized reserve, will be 
adequate to cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2002-03 
fiscal period include $810,500 for advertising, $179,000 for the 
Mexican Fruit Fly program, $107,845 for management and administration 
of the program, and $74,777 for compliance. Budgeted expenses for these 
items in 2001-02 were $810,500, $197,000, $104,500, and $74,777, 
respectively.
    The Committee recommended the $0.11 assessment rate to lower its 
operating reserve to $171,249. With a $0.12 assessment rate, the 
Committee projected its reserve on July 31, 2003, to be $271,249, and 
it thought that was higher than needed to administer the program. It 
also recommended the reduced rate to lower handler assessments by 
$100,000 during 2002-03.

[[Page 62320]]

    The Committee reviewed and unanimously recommended 2002-03 
expenditures of $1,226,022, which included a decrease in the Mexican 
Fruit Fly program and an increase in the management and administration 
of the program. Budgeted expenses for the advertising program and the 
compliance program remained 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 higher assessment rate unchanged. However, it concluded 
that the reserves currently held by the Committee are higher than the 
Committee needs to administer the program.
    The proposed assessment rate of $0.11 per \7/10\-bushel carton of 
assessable oranges and grapefruit was determined by dividing the total 
budget by the 10 million \7/10\-bushel cartons of oranges and 
grapefruit estimated for the 2002-03 fiscal period. The $0.11 rate will 
provide $1,100,000 in assessment income. The additional $126,022 to 
fund the Committees estimated expenses will come from the Committee's 
reserve, a refund of an overpayment from the Mexican Fruit Fly program, 
and interest income.
    A review of historical information (October 1998 through May 2002) 
and preliminary information pertaining to the upcoming fiscal period 
indicates that the packinghouse door price for the 2002-03 fiscal 
period could range, monthly, from $1.65 to $10.36 per \7/10\-bushel 
carton of Texas oranges and grapefruit, depending upon the fruit 
variety, size, and quality. Therefore, the estimated assessment revenue 
for the 2002-03 fiscal period as a percentage of total grower 
(packinghouse door) revenue could range between 6.67 percent and 1.06 
percent.
    This action decreases the assessment obligation imposed on 
handlers. Assessments are applied uniformly on all handlers, and some 
of the costs may be passed on to producers. However, decreasing the 
assessment rate reduces the burden on handlers, and may reduce the 
burden on producers. 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 August 28, 2002, 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 action imposes 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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 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 upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect, and 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 2002-03 fiscal period began on August 1, 
2002, 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; (2) this action decreases the 
assessment rate for assessable oranges and grapefruit beginning with 
the 2002-03 fiscal period; (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; and (4) this 
interim final rule provides a 60-day comment period, and all comments 
timely received will be considered prior to finalization of this rule.

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 
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, 2002, an assessment rate of $0.11 per \7/
10\-bushel carton is established for oranges and grapefruit grown in 
the Lower Rio Grande Valley in Texas.

    Dated: October 1, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-25429 Filed 10-4-02; 8:45 am]
BILLING CODE 3410-02-P