[Federal Register Volume 69, Number 145 (Thursday, July 29, 2004)]
[Rules and Regulations]
[Pages 45231-45233]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17273]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 906

[Docket No. FV04-906-2 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.

-----------------------------------------------------------------------

SUMMARY: This rule decreases the assessment rate established for the 
Texas Valley Citrus Committee (Committee) for the 2004-05 and 
subsequent fiscal periods from $0.14 to $0.12 per \7/10\-bushel carton 
or equivalent 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 begins August 1 and ends July 
31. The assessment rate will remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Effective July 30, 2004. Comments received by September 27, 
2004, 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]; 
or Internet: http://www.regulations.gov. 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 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 
August 1, 2004, 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.

[[Page 45232]]

    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.
    This rule decreases the assessment rate established for the 
Committee for the 2004-05 and subsequent fiscal periods from $0.14 per 
to $0.12 per \7/10\-bushel carton or equivalent 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 2003-04 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 21, 2004, and recommended 2004-05 
expenditures of $1,005,956 and an assessment rate of $0.12 per \7/10\-
bushel carton or equivalent of oranges and grapefruit. Thirteen of the 
14 Committee members and alternates acting as members voted in support 
of the $0.02 decrease per \7/10\-bushel carton or equivalent. One 
Committee member voted against the recommendation because he wanted the 
decrease to be larger. In comparison, last year's budgeted expenditures 
were $1,322,506. The assessment rate of $0.12 is $0.02 lower than the 
rate currently in effect. The decrease in the assessment rate and 
budget is primarily due to lower promotion and Mexican Fruit Fly 
program budgets. The reduced assessment rate and budget will lower 
handler costs by about $180,000 and will keep the Committee's operating 
reserve at an acceptable level.
    The major expenditures recommended by the Committee for the 2004-05 
fiscal period include $550,000 for promotion, $204,000 for the Mexican 
Fruit Fly Support Program, $123,679 for management and administration 
of the program, and $72,777 for compliance. Budgeted expenses for these 
items in 2003-04 were $800,000, $279,000, $119,929, and $72,777, 
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 fiscal 
period are estimated at 9 million \7/10\-bushel cartons or equivalents, 
which should provide $1,080,000 in assessment income. Income derived 
from handler assessments will be more than adequate to cover budgeted 
expenses. Funds in the reserve (currently $175,000) 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 2004-05 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 215 producers of oranges and grapefruit in 
the production area and approximately 13 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 2 of the 13 
handlers (15 percent) could be considered large businesses under SBA's 
definition, and the remaining 11 handlers (85 percent) could be 
considered small businesses. Of the approximately 215 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 2004-05 and subsequent 
fiscal periods from $0.14 to $0.12 per \7/10\-bushel carton or 
equivalent of oranges and grapefruit.
    The Committee met on May 21, 2004, and recommended 2004-05 
expenditures of $1,005,956 and an assessment rate of $0.12 per \7/10\-
bushel carton or equivalent of oranges and grapefruit. The assessment 
rate of $0.12 is $0.02 lower than the current rate. As mentioned 
earlier, the quantity of assessable oranges and grapefruit for the 
2004-05 fiscal period is estimated at 9 million \7/10\-bushel cartons 
or equivalents. Thus, the $0.12 assessment rate should provide 
$1,080,000 in assessment income and be more than adequate to cover 
budgeted expenses.
    The major expenditures recommended by the Committee for the

[[Page 45233]]

2004-05 fiscal period include $550,000 for promotion, $204,000 for the 
Mexican Fruit Fly Support Program, $123,679 for management and 
administration of the program, and $72,777 for compliance. Budgeted 
expenses for these items in 2003-04 were $800,000, $279,000, $119,929, 
and $72,777, respectively.
    The Committee recommended the $0.12 assessment rate primarily 
because it reduced its promotion and Mexican Fruit Fly programs. At a 
$0.14 assessment rate, the Committee projected its reserve on July 31, 
2005, to be $401,160, which it believed was more than needed to 
administer the program. It also recommended the reduced assessment rate 
to lower handler costs by about $180,000 during 2004-05.
    The Committee reviewed and recommended 2004-05 expenditures of 
$1,005,956, which included decreases in the promotion and Mexican Fruit 
Fly programs and an increase in the management and administration of 
the marketing order program. In arriving at the budget, the Committee 
considered information from various sources, including the Executive 
Committee. Alternative expenditure levels were discussed, based upon 
the relative need of the Mexican Fruit Fly program to the Texas citrus 
industry.
    The assessment rate recommended by the Committee was derived by 
dividing the total recommended budget by the 9 million \7/10\-bushel 
cartons of oranges and grapefruit estimated for the 2004-05 fiscal 
period. The $0.12 rate will provide $1,080,000 in assessment income. 
This is approximately $74,044 above the anticipated expenses, which the 
Committee determined to be acceptable.
    A review of historical information from recent seasons (2000-2002) 
and preliminary information pertaining to the upcoming fiscal period 
indicates that the season average packinghouse door price for the 2004-
05 fiscal period could likely range from $1.40 to $2.60 per \7/10\-
bushel carton of Texas oranges, and from $2.15 to $2.70 for Texas 
grapefruit. Therefore, the estimated assessment revenue for the 2004-05 
fiscal period as a percentage of total grower (packinghouse door) 
revenue could range between 8.6 and 4.6 percent for oranges and between 
5.6 and 4.4 percent for grapefruit.
    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 May 21, 2004, 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 2004-05 fiscal period begins on August 1, 
2004, 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 2004-05 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.

0
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

0
1. The authority citation for 7 CFR part 906 continues to read as 
follows:

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

0
2. Section 906.235 is revised to read as follows:


Sec.  906.235  Assessment rate.

    On and after August 1, 2004, an assessment rate of $0.12 per \7/
10\-bushel carton or equivalent is established for oranges and 
grapefruit grown in the Lower Rio Grande Valley in Texas.

    Dated: July 23, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-17273 Filed 7-28-04; 8:45 am]
BILLING CODE 3410-02-P