FR Doc 03-29513

[Federal Register: November 25, 2003 (Volume 68, Number 227)]
[Rules and Regulations]
[Page 66001-66003]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25no03-1]

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Rules and Regulations
Federal Register
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[[Page 66001]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 906

[Docket No. FV04-906-1 IFR]

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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule increases the assessment rate established for the
Texas Valley Citrus Committee (Committee) for the 2003-04 and
subsequent fiscal periods from $0.11 to $0.14 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 began August 1 and ends July
31. The assessment rate will remain in effect indefinitely unless
modified, suspended, or terminated.

DATES: Effective November 26, 2003. Comments received by January 26,
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: moab.docketclerk@usda.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: Jay.Guerber@usda.gov.

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, 2003, 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 increases the assessment rate established for the
Committee for the 2003-04 and subsequent fiscal periods from $0.11 to
$0.14 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 2002-03 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 29, 2003, and unanimously recommended
2003-04 expenses of $1,222,506 for

[[Page 66002]]

management, administrative, compliance, a Mexican Fruit Fly program,
and advertising and promotion. The Committee recommended that the
current assessment rate of $0.11 per \7/10\-bushel carton continue for
the 2003-04 fiscal period. The quantity of assessable citrus was
estimated at 10 million \7/10\-bushel cartons or equivalents.
The Committee met again on October 8, 2003, and unanimously
recommended revised 2003-04 expenditures of $1,322,506 and an
assessment rate of $0.14 per \7/10\-bushel carton or equivalent of
oranges and grapefruit. In comparison, last year's budgeted
expenditures were $1,226,022. The assessment rate of $0.14 is $0.03
higher than the rate currently in effect. The Committee recommended the
$0.14 assessment rate to cover the increased costs associated with
implementing a more comprehensive Mexican Fruit Fly program, and a
significant decrease in the assessable production estimate for the
2003-04 marketing season. At this meeting, the estimate of assessable
citrus was reduced to 9 million \7/10\-bushel cartons or equivalents.
The major expenditures recommended by the Committee for the 2003-04
fiscal period include $800,000 for advertising, $279,000 for the
Mexican Fruit Fly program, $119,929 for management and administration
of the program, and $72,777 for compliance. Budgeted expenses for these
items in 2002-03 were $810,500, $179,000, $107,845, and $74,777,
respectively.
As mentioned earlier, the Committee's fiscal period begins August
1. There are no citrus shipments out of the production area during the
months of August, September, and part of October. Some shippers begin
shipping during the latter part of October, but shipments are light
until late November when heavier shipments begin. On October 31, 2003,
the Committee's reserve totaled $16,230. The Committee will need to
make significant advertising and promotion expenditures (about $60,000)
during November.
The Committee believes that assessment billings at the lower $0.11
per \7/10\-bushel carton rate may not be sufficient to cover all of its
expenses. Assessing at the higher $0.14 rate sooner would enable the
Committee to maintain its reserves at a satisfactory level and ensure
that all of its obligations are met.
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 $1,260,000 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 ($16,230 on October 31) 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 2003-04 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 214 producers of oranges and grapefruit in
the production area and approximately 16 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 16
handlers (38 percent) shipped over 588,235 \7/10\-bushel carton
equivalents of oranges and grapefruit. Using an average f.o.b. price of
$8.50 per \7/10\-bushel carton, these handlers could be considered
large businesses under SBA's definition, and the remaining 10 handlers
(62 percent) could be considered small businesses. Of the approximately
214 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 increases the assessment rate established for the
Committee and collected from handlers for the 2003-04 and subsequent
fiscal periods from $0.11 to $0.14 per \7/10\-bushel carton equivalent
of oranges and grapefruit.
The Committee met on May 29, 2003, and unanimously recommended
2003-04 expenses of $1,222,506 for management, administrative,
compliance, a Mexican Fruit Fly program, and advertising and promotion.
The Committee recommended that the current assessment rate of $0.11 per
\7/10\-bushel carton continue for the 2003-04 fiscal period. The
quantity of assessable citrus was estimated at 10 million \7/10\-bushel
cartons or equivalents.
The Committee met again on October 8, 2003, and unanimously
recommended revised 2003-04 expenditures of $1,322,506 and an
assessment rate of $0.14 per \7/10\-bushel carton or equivalent of
oranges and grapefruit. In comparison, last year's budgeted
expenditures were $1,226,022. The assessment rate of $0.14 is $0.03
higher than the current rate. The Committee recommended the $0.14
assessment rate to cover the increased costs associated with the
Committee's desire to implement a more comprehensive Mexican Fruit Fly
program, and a significant decrease in the assessable production
estimate for the 2003-04 marketing season. At this meeting, the
estimate of assessable citrus was reduced to 9 million \7/10\-bushel
cartons or equivalents.
The major expenditures recommended by the Committee for the 2003-04
fiscal period include $800,000 for advertising, $279,000 for the
Mexican Fruit Fly program, $119,929 for management and administration
of the program, and $72,777 for compliance.

[[Page 66003]]

Budgeted expenses for these items in 2002-03 were $810,500, $179,000,
$107,845, and $74,777, respectively.
The Committee's fiscal period begins August 1. There are no citrus
shipments out of the production area during the months of August,
September, and part of October. Some shippers begin shipping during the
latter part of October, but shipments are light until late November
when heavier shipments begin. On October 31, 2003, the Committee's
reserve totaled $16,230. The Committee will need to make significant
advertising and promotion expenditures (about $60,000) during November.
The Committee believes that assessment billings at the lower $0.11
per \7/10\-bushel carton rate may not be sufficient to cover all of its
expenses. Assessing at the higher $0.14 rate sooner would enable the
Committee to maintain its reserves at a satisfactory level and ensure
that all of its obligations are met.
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 $1,260,000 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.
In arriving at this budget, the Committee considered information
from various sources, including the Committee's Executive Committee.
Alternative expenditure levels were discussed based upon the relative
need of the Mexican Fruit Fly program to the Texas citrus industry.
The proposed assessment rate of $0.14 per \7/10\-bushel carton of
assessable orange and grapefruit was then determined by dividing the
total recommended budget by the 9 million \7/10\-bushel cartons of
oranges and grapefruit estimated for the 2003-04 fiscal period. The
$0.14 rate will provide $1,260,000 in assessment income. The additional
$62,506 to fund the Committee's estimated expenses will come from the
Committee's reserve and interest income.
A review of historical information (October 1999 through May 2003)
and preliminary information pertaining to the upcoming fiscal period
indicates that the packinghouse door price for the 2003-04 fiscal
period could range, monthly, from $0.26 to $6.41 per \7/10\-bushel
carton of Texas oranges and from $1.30 to $7.30 for Texas grapefruit,
depending upon the fruit variety, size, and quality. Therefore, the
estimated assessment revenue for the 2003-04 fiscal period as a
percentage of total grower (packinghouse door) revenue could range
between 2.2 and 53.8 percent for oranges and 1.9 to 10.8 percent for
grapefruit.
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 meetings were widely publicized
throughout the Texas orange and grapefruit industry and all interested
persons were invited to attend the meetings and participate in
Committee deliberations on all issues. Like all Committee meetings, the
May 29 and October 8, 2003, meetings were public meetings 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 2003-04 fiscal period began on August 1,
2003, 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) the Texas citrus industry must
have funding available to implement, as necessary, a more comprehensive
Mexican Fruit Fly program; (3) the Committee needs to have sufficient
funds to pay its expenses which are incurred on a continuous basis; (4)
handlers are aware of this action which was unanimously recommended by
the Committee at a public meeting and is similar to other assessment
rate actions issued in past years; and (5) 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, 2003, an assessment rate of $0.14 per \7/
10\-bushel carton or equivalent is established for oranges and
grapefruit grown in the Lower Rio Grande Valley in Texas.

Dated: November 19, 2003.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 03-29513 Filed 11-21-03; 10:05 am]

BILLING CODE 3410-02-P