[Federal Register Volume 69, Number 205 (Monday, October 25, 2004)]
[Rules and Regulations]
[Pages 62175-62177]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-23827]



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  Federal Register / Vol. 69, No. 205 / Monday, October 25, 2004 / 
Rules and Regulations  

[[Page 62175]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 906

[Docket No. FV04-906-2 FIR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule which decreased 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 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 on 
August 1 and ends July 31. The assessment rate will remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: November 24, 2004.

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.
    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 continues in effect the action that decreased the 
assessment rate established for the 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 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 previously 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

[[Page 62176]]

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 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.

Final 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 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 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 continues in effect the action that decreased 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 previous 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 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 continues in effect the action that decreased 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.

[[Page 62177]]

    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.
    An interim final rule concerning this action was published in the 
Federal Register on July 29, 2004 (69 FR 45231). Copies of that rule 
were also mailed or sent via facsimile to all orange and grapefruit 
handlers. Finally, the interim final rule was made available through 
the Internet by USDA and the Office of the Federal Register. A 60-day 
comment period was provided for interested persons to respond to the 
interim final rule. The comment period ended on September 27, 2004, and 
no comments were received.
    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.

List of Subjects in 7 CFR Part 906

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

PART 906--ORANGES AND GRAPEFRUIT GROWN IN LOWER RIO GRANDE VALLEY 
IN TEXAS

0
Accordingly, the interim final rule amending 7 CFR part 906 which was 
published at 69 FR 45231 on July 29, 2004, is adopted as a final rule 
without change.

    Dated: October 19, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-23827 Filed 10-22-04; 8:45 am]
BILLING CODE 3410-02-P