[Federal Register Volume 70, Number 80 (Wednesday, April 27, 2005)]
[Proposed Rules]
[Pages 21682-21684]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-8359]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 915

[Docket No. FV05-915-1 PR]


Avocados Grown in South Florida; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate established for 
the Avocado Administrative Committee (Committee) for the 2005-06 and 
subsequent fiscal years from $0.20 to $0.27 per 55-pound bushel 
container or equivalent of avocados handled. The Committee locally 
administers the marketing order which regulates the handling of 
avocados grown in South Florida. Authorization to assess avocado 
handlers enables the Committee to incur expenses that are reasonable 
and necessary to administer the program. The fiscal year began April 1 
and ends March 31. The assessment rate would remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by May 27, 2005.

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; 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: William G. Pimental, Marketing 
Specialist, Southeast Marketing Field Office, Fruit and Vegetable 
Programs, AMS, USDA, 799 Overlook Drive, Suite A, Winter Haven, Florida 
33884: Telephone: (863) 324-3375, Fax: (863) 325-8793; 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 No. 121 and Order No. 915, both as amended (7 CFR part 915), 
regulating the handling of avocados grown in South Florida, 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, Florida 
avocado handlers are subject to assessments. Funds to administer the 
order are derived from such assessments. It is intended that the 
assessment rate as proposed herein would be applicable to all 
assessable avocados beginning on April 1, 2005, 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

[[Page 21683]]

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 would increase the assessment rate established for the 
Committee for the 2005-06 and subsequent fiscal years from $0.20 to 
$0.27 per 55-pound bushel container or equivalent of avocados.
    The Florida avocado 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 
Florida avocados. 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 2002-03 and subsequent fiscal years, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal year to fiscal year 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 February 17, 2005, and recommended with a vote 
of nine in favor and one abstention, 2005-06 expenditures of $211,038 
and an assessment rate of $0.27 per 55-pound bushel container or 
equivalent of avocados. In comparison, last year's budgeted 
expenditures were $241,568. The recommended assessment rate is $0.07 
higher than the rate currently in effect. The Committee recommended the 
increase to rebuild its reserves which have been reduced in recent 
years. In 2003-04, the Committee estimated assessable production at one 
million containers but only harvested 660,000, causing the Committee to 
use its reserves to cover necessary expenses. In 2004-05, it appears 
there will be another shortfall of approximately 100,000 containers. 
Thus, 2004-05 assessments will be reduced by approximately $20,000 and 
the Committee will again have to use reserves to cover its expenses. 
The Committee reserves are estimated to be approximately $110,000 at 
the start of the new fiscal year that began April 1, 2005. The 
Committee expects 900,000 55-pound bushel containers to be harvested 
during the 2005-06 fiscal year. This is expected to result in 
approximately $32,000 in excess assessment income, which would increase 
the Committee's reserves to around $142,000.
    The major expenditures recommended by the Committee for the 2005-06 
year include $90,235 for salaries, $24,203 for insurance and bonds, 
$22,730 for employee benefits, $15,000 for research, and $10,000 for 
local and national enforcement. Budgeted expenses for these items in 
2004-05 were $79,800, $26,093, $23,643, $21,000, and $43,135, 
respectively. The budget item local and national enforcement was 
reduced for 2005-06 because the compliance officer was hired as 
Committee manager and this person will perform both compliance and 
managerial functions. The budget item salaries, reflects these function 
changes.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses and increase in reserves by expected 
shipments of Florida avocados. Avocado shipments for the year are 
estimated at 900,000 bushels which should provide $243,000 in 
assessment income. Income derived from handler assessments, along with 
interest income would be adequate to cover budgeted expenses. Funds in 
the reserve (estimated to be about $110,000 on April 1, 2005) would be 
kept within the maximum permitted by the order (approximately three 
fiscal years' expenses).
    The proposed assessment rate would 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 would be in effect for an indefinite 
period, the Committee would 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 USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA would evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking would 
be undertaken as necessary. The Committee's 2005-06 budget and those 
for subsequent fiscal years would 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 150 producers of avocados in the production 
area and approximately 33 handlers subject to regulation under the 
marketing order. Small agricultural producers are defined by the Small 
Business Administration (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 $6,000,000.
    According to the National Agricultural Statistics Service (NASS) 
and data provided by the Committee, the average Florida grower price 
for fresh avocados during the 2003-04 season was equivalent to $22.22 
per 55-pound bushel container and total shipments were around 660,000 
55-pound bushels. Approximately 11 percent of all handlers handled 76 
percent of Florida avocado shipments. Using the average price and 
information provided by the Committee, nearly all avocado handlers 
could be considered small businesses under the SBA definition. In 
addition, based on production and grower prices, and the total number 
of Florida avocado growers, the average annual grower revenue is 
approximately $98,000. Thus, the majority of Florida avocado producers 
may also be classified as small entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 2005-06 and subsequent 
fiscal years from $0.20 to $0.27 per 55-pound bushel of avocados. The 
Committee recommended 2005-06 expenditures of $211,038 and an 
assessment rate of $0.27 per 55-pound bushel of avocados. The proposed 
assessment rate of $0.27 is $0.07 higher than the 2004-05 rate.

[[Page 21684]]

The quantity of assessable avocados for the 2005-06 fiscal year is 
estimated at 900,000 55-pound bushels. Thus, the $0.27 rate should 
provide $243,000 in assessment income and be adequate to meet expenses.
    The major expenditures recommended by the Committee for the 2005-06 
year include $90,235 for salaries, $24,203 for insurance and bonds, 
$22,730 for employee benefits, $15,000 for research, and $10,000 for 
local and national enforcement. Budgeted expenses for these items in 
2004-05 were $79,800, $26,093, $23,643, $21,000, and $43,135, 
respectively. The budget item local and national enforcement was 
reduced for 2005-06 because the compliance officer was hired as 
Committee manager and this person will perform both compliance and 
managerial functions. The budget item salaries, reflects these function 
changes.
    The Committee recommended the increase in the assessment rate to 
rebuild its reserves which have been reduced in recent years. In 2003-
04, the Committee estimated assessable production at one million 
containers, but only harvested 660,000, causing the Committee to use 
its reserves to cover necessary expenses. For the 2004-05 season, it 
appears there will be another production shortfall of approximately 
100,000 containers below the Committee's estimate. Thus, 2004-2005 
assessments will be about $20,000 less than expected and the Committee 
will again have to use its reserves to cover expenses.
    The Committee reserves are estimated to be approximately $110,000 
at the start of the new fiscal year that began April 1, 2005. The 
Committee estimates 900,000 55-pound bushel containers will be 
harvested during the 2005-06 fiscal year. This is expected to result in 
$32,000 in excess assessment income, which would increase the 
Committee's reserves to around $142,000.
    The Committee reviewed and recommended 2005-06 expenditures of 
$211,038 which included increases in administrative and office 
salaries, and insurance and bond programs. Prior to arriving at this 
budget, the Committee considered information from various sources, such 
as the Committee's Budget Subcommittee. Several alternative assessment 
and expenditure levels were discussed by these groups based on at what 
level to fund a research project and on how much they wanted to add to 
reserves. The assessment rate of $0.27 per 55-pound bushel container of 
assessable avocados was then determined by dividing the total 
recommended budget, including the increase in reserves, by the quantity 
of assessable avocados, estimated at 900,000 55-pound bushel containers 
or equivalents for the 2005-06 fiscal year. This is approximately 
$32,000 above the anticipated expenses, which the Committee determined 
to be acceptable.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal year indicates that the average 
Florida grower price for the 2005-06 marketing season could range 
between around $15.00 and $22.00 per 55-pound bushel container or 
equivalent of avocados. Therefore, the estimated assessment revenue for 
the 2005-06 fiscal year as a percentage of total grower revenue could 
range between 1.2 and 1.8 percent.
    This action would increase 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 
would be offset by the benefits derived by the operation of the 
marketing order. In addition, the Committee's meeting was widely 
publicized throughout the Florida avocado industry and all interested 
persons were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the February 
17, 2005, 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 proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large Florida avocado 
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.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: (1) The 2005-06 fiscal year began on April 1, 2005, and the 
marketing order requires that the rate of assessment for each fiscal 
year apply to all assessable avocados handled during such fiscal year; 
(2) the Committee needs to have sufficient funds to pay its expenses 
which are incurred on a continuous basis; and (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.

List of Subjects in 7 CFR Part 915

    Avocados, Marketing agreements, Reporting and recordkeeping 
requirements.
    For the reasons set forth in the preamble, 7 CFR part 915 is 
proposed to be amended as follows:

PART 915--AVOCADOS GROWN IN SOUTH FLORIDA

    1. The authority citation for 7 CFR part 915 continues to read as 
follows:

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

    2. Section 915.235 is revised to read as follows:


Sec.  915.235  Assessment rate.

    On and after April 1, 2005, an assessment rate of $0.27 per 55-
pound container or equivalent is established for avocados grown in 
South Florida.

    Dated: April 21, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-8359 Filed 4-26-05; 8:45 am]
BILLING CODE 3410-02-P