[Federal Register: April 27, 2005 (Volume 70, Number 80)]
[Proposed Rules]
[Page 21682-21684]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27ap05-27]
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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: moab.docketclerk@usda.gov; 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: Jay.Guerber@usda.gov.
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