Lime Research, Promotion, and Consumer Information Order; Amendments

DEPARTMENT OF AGRICULTURE

7 CFR Part 1212

[FV-93-707FR]

RIN 0581-AB19

Lime Research, Promotion, and Consumer Information Order;

Amendments

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule amends the Lime Research, Promotion, and Consumer

Information Order. These amendments revise the definition of the term

``lime'' in order to cover seedless rather than seeded limes; increase

the exemption level from less than 35,000 pounds annually to less than

200,000; alter the size, composition, and term of office of the Lime

Board; and make necessary conforming changes. This document is

necessary to implement amendments to the Lime Research, Promotion, and

Consumer Information Act of 1990.

EFFECTIVE DATE: February 8, 1995.

ADDRESSES: Richard Schultz, Research and Promotion Branch, Fruit and

Vegetable Division, AMS, USDA, P.O. Box 96456, Room 2535-S, Washington,

DC 20090-6456.

[[Page 7436]] FOR FURTHER INFORMATION CONTACT: Richard Schultz at the

above address or telephone (202) 720-5976.

SUPPLEMENTARY INFORMATION: This final rule amends the Lime Research,

Promotion, and Consumer Information Order [7 CFR 1212], herein referred

to as the Order. The Order is effective under the Lime Research,

Promotion, and Consumer Information Act of 1990 (1990 Act) [Pub. L.

101-624, 7 U.S.C. 6201-6212], as amended by the Lime Research,

Promotion, and Consumer Information Improvement Act (1993 Act) [Pub. L.

103-194, Dec. 14, 1993].

The Department of Agriculture (Department) is issuing this rule in

conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12778, Civil

Justice Reform. It is not intended to have retroactive effect. 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 Sec. 1957 of the Act, a

person subject to the Order may file a petition with the Secretary of

Agriculture (Secretary) stating that the Order or any provision of the

Order, or any obligation imposed in connection with the Order, is not

in accordance with law and requesting a modification of the Order or an

exemption from the Order. The petitioner is afforded the opportunity

for a hearing on the petition. After such hearing, the Secretary will

make a ruling on the petition. The Act provides that the district

courts of the United States in any district in which a person who is a

petitioner resides or carries on business are vested with jurisdiction

to review the Secretary's ruling on the petition, if a complaint for

that purpose is filed within 20 days after the date of the entry of the

ruling.

Regulatory Impact Analysis

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Administrator of the Agricultural Marketing Service

(AMS) has considered the economic impact of this rule on small

entities.

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.

The 1990 Act exempted lime producers who produce less than 35,000

pounds annually for the fresh market from being subject to the Order.

When the 1990 Act was enacted, there were an estimated 325 producers

who produced at least 35,000 pounds annually and were subject to the

Order. When the 1993 Act was enacted, the exemption level was increased

to less than 200,000 pounds annually. At this exemption level, there

are an estimated 50 producers who produce at least 200,000 pounds and

will be subject to the Order. Despite this increase in exemption level,

the majority of producers subject to the Order will still be classified

as small entities. Small agricultural producers have been defined by

the Small Business Administration (SBA) [13 CFR 121.601] as those

having annual receipts of less than $500,000.

The increase in exemption level is not expected to significantly

affect the number of first handlers who are responsible for collecting

and remitting producer assessments to the Lime Board (Board). The

number of first handlers remains at approximately 25. The increase in

exemption level, which also applies to imports, is not expected to

significantly affect the number of importers of fresh market limes. The

number of importers subject to the Order will increase from 5 to 35.

However, this increase in importers is not primarily due to the

increase in the exemption level but rather to the changing character of

the lime industry. As in the case of producers, the majority of first

handlers and importers subject to the Order will still be classified as

small entities. Small agricultural service firms, which include

handlers and importers, have been defined by the SBA as those having

annual receipts of less than $5,000,000.

Since the enactment of the 1990 Act, the character of the lime

industry has significantly changed. As a result of the extensive damage

to lime orchards in Florida by Hurricane Andrew in August 1992,

domestic production has plummeted and the volume of imports has

increased dramatically. Domestic production is not expected to reach

pre-Hurricane Andrew levels for possibly two to three years because

Florida accounted for a majority of domestic production.

Shipment reports of domestic limes, from January 1, 1994, through

December 31, 1994, indicate truck shipments of 11.32 million pounds

from Florida and 4.23 million pounds from California, for a total of

15.55 million pounds. Shipment reports of imported limes for the most

recent 12 month period, November 1, 1993, through October 31, 1994,

indicate truck shipments of 240.46 million pounds from Mexico plus an

additional 8.02 million pounds from 13 other countries. Imports

currently represent roughly 94 percent of lime shipments in the United

States.

The Order, prior to this action, required lime producers, producer-

handlers, and importers who produce or import 35,000 pounds or more

annually for fresh market to pay an assessment not to exceed one cent

per pound of limes. This action limits assessment obligations to

producers, producer-handlers, and importers who produce or import

200,000 pounds or more annually. The expected results of this action

will significantly decrease the number of persons subject to the Order

and decrease the amount of assessments collected.

This action also alters the size and composition of the Board, the

administrative body appointed by the Secretary to operate the Order,

from 11 members to seven. Further, it reduces the number of producer

members serving on the Board from seven to three. The number of

importer members will remain at three. The seventh member will be the

public member. These changes to the Board's size and membership are

reflective of the current structure of the lime industry.

Accordingly, the Administrator of the AMS has determined that the

changes reflected in this action will not have a significant economic

impact on a substantial number of small entities.

Paperwork Reduction

In accordance with the Paperwork Reduction Act of 1980 [44 U.S.C.

Chapter 35] the information collection requirements contained in the

Order have been approved by the OMB and were assigned OMB number 0581-

0093, except for the Board nominee background statement form which was

assigned OMB number 0505-0001. This action will generally reduce the

number of information collections, and hence the reporting burden. The

information collection requirements of the Order are as follows:

(1) A periodic report by each first handler who handles limes for

fresh market. The estimated number of respondents required to complete

this report is 25, each submitting a maximum of 12 responses per year,

with an estimated average reporting burden of 30 minutes per response.

First handlers may alternatively prepay assessments annually, requiring

only an initial report of anticipated assessments and a final annual

report of actual handling;

(2) A periodic report by each importer who imports 200,000 or more

pounds annually for fresh market. The estimated number of respondents

completing this report is 35, each [[Page 7437]] submitting a maximum

of 12 responses per year, with an estimated average reporting burden of

15 minutes per response;

(3) A refund application form for persons who desire a refund of

their assessments. The estimated number of respondents completing this

application is five, each submitting two responses per year, with an

estimated average reporting burden of 15 minutes per response;

(4) An importer reimbursement application for persons who import

less than 200,000 pounds annually and desire to be reimbursed for

assessments collected by the U.S. Customs Service. The estimated number

of respondents completing this application is 20, each submitting one

response per year, with an estimated average reporting burden of 15

minutes per response;

(5) An exemption application for persons who produce or import less

than 200,000 pounds annually for fresh market to be exempt from

assessments and recordkeeping requirements. The estimated number of

respondents completing this application is 600, each submitting one

response per year, with an estimated average burden of 15 minutes per

response;

(6) A referendum ballot to be used not later than 30 months after

assessments begin under the amended Order and periodically thereafter

to indicate whether producers and importers favor continuance of the

Order. The estimated number of respondents completing this ballot is

85, each submitting one response approximately every five years, or an

annual average of 10 respondents, with an estimated average reporting

burden of 15 minutes per response;

(7) A nominee background statement form for Board member and

alternate positions. Two nominees will be nominated for each open

position on the Board. The estimated number of respondents completing

this form is 28 during the first year of Order operations, and

approximately eight per year thereafter, with an estimated average

reporting burden of 30 minutes per response; and

(8) A requirement to maintain records sufficient to verify reports

submitted under the Order. The estimated number of persons required to

comply with this requirement is 70, each of whom will have an estimated

annual burden of seven minutes.

Background

The 1990 Act was enacted on November 28, 1990, for the purpose of

establishing an orderly procedure for the development and financing of

an effective and coordinated program of research, promotion, and

consumer information to strengthen the domestic and foreign markets for

limes. The Order required by the 1990 Act became effective on January

27, 1992 [57 FR 2985], after notice and comment rulemaking.

In March 1992 the Department conducted nomination meetings to

nominate lime producers and importers for appointment to the Board. The

Board members were appointed by the Secretary in September 1992, and

the Board conducted its first meeting at the Department in Washington,

DC in October 1992. During the course of this meeting, the Board and

the Department concluded that a technical amendment was needed to cover

seedless rather than seeded limes. Consequently, full implementation of

the Order was delayed until the enactment of such technical amendment.

The 1993 Act contained the necessary technical amendment to cover

seedless limes (citrus latifolia) rather than seeded limes (citrus

aurantifolia) under the Order. The 1993 Act also provided for

increasing the exemption level from less than 35,000 pounds annually to

less than 200,000; terminating the initial Board; changing the size and

composition of the Board; and delaying the initial referendum date.

A proposed rule published in the April 7, 1994, issue of the

Federal Register [58 FR 3446] invited comments on amending the Order to

reflect the provisions of the 1993 Act. The Act, as amended, revises

the definition of the term ``lime'' from citrus aurantifolia to citrus

latifolia; increases the exemption level from less than 35,000 pounds

annually to less than 200,000; alters the size, composition, and term

of office of the Board; and makes conforming changes.

The Department received one comment on the April 7 proposed rule.

This comment was received from the California Association of

Limegrowers. The commenter requested clarification on whether producers

and importers subject to the Order will be required to pay an

assessment on their total annual production or importation, or on the

portion of their volume surpassing the exemption level of less than

200,000 pounds annually. In response to this comment, producers and

importers of 200,000 pounds or more of limes annually will be required

to pay assessments on their total annual production or importation.

This rule changes the definition of ``lime'' from citrus

aurantifolia (seeded lime) to citrus latifolia (seedless lime) in

Sec. 1212.5 of the Order. Although the intent of the Act was to cover

seedless limes, the definition of ``lime'' in Sec. 1953(6) of the 1990

Act applied only to seeded limes.

This rule increases the producer and importer exemption level from

less than 35,000 pounds annually to less than 200,000 pounds annually.

This revised exemption level was reached through industry consensus.

Therefore, this rule changes references to 35,000 pounds in

Secs. 1212.65, 1212.68, and 1212.69 of the Order to 200,000 pounds. In

addition, a new paragraph (d) has been added to Sec. 1212.68 of the

Order whereby exempt importers may obtain a refund of assessments

collected by the U.S. Customs Service.

Moreover, this rule changes the size of the Board from 11 members

to seven. The Board, prior to this action, was composed of seven

producer members, three importer members, and their alternates. The

public member position was vacant. This action decreases the number of

producer members from seven to three, which more fairly reflects the

current structure of the lime industry. Therefore, Secs. 1212.30,

1212.32, and 1212.34 of the Order have been either amended or revised

to make these changes in the Board's composition.

This rule also changes the Board's composition in Sec. 1212.30(b)

relative to representation of producer and importer members within the

two districts established under the Order.

District 1 includes the States east of the Mississippi River, Puerto

Rico, and the District of Columbia. District 2 includes the States west

of the Mississippi River. Prior to this action, the Order provided for

six producer members and one importer member and their alternates from

District 1, and one producer member and two importer members and their

alternates from District 2. This action reduces the number of producer

members from District 1 from six to two by amending and revising

Sec. 1212.30 of the Order.

Further, as a result of this allocation of Board membership, the

realignment of districts or reapportionment of membership between

Districts 1 and 2 on the basis of changes in production and importation

is no longer necessary. Such realignment or reapportionment is

inconsistent with the 1993 Act. Therefore, any references to such

realignment or reapportionment have been removed from Secs. 1212.18,

1212.30, and 1212.40 of the Order.

Reducing the size of the Board affects the requirements for a

quorum and the number of trustees which will be designated if the

program were to be terminated. Therefore, this action

[[Page 7438]] amends Sec. 1212.37 of the Order by decreasing from six

to four the number of members needed to constitute a quorum at Board

meetings and by changing the number of trustees designated in

Sec. 1212.84 of the Order from five to four.

The 1993 Act requires that appointments of the Board members made

under the 1990 Act be terminated. Such appointments will be terminated

on the effective date of this rule and, when practicable, new

appointments will be made by the Secretary. The 1993 Act also specifies

that the initial Board members under the amended Order will serve

initial terms of office of 30 months. This change is directly related

to the provision of the 1993 Act which delays the deadline for the

initial referendum until 30 months after the date on which the

collection of assessments begin under the amended Order. A conforming

change in Sec. 1212.67 of the Order pursuant to the 1993 provision has

also been made.

In order to provide administrative continuity during the 30 months

prior to the initial continuance referendum, the 1993 Act provides that

the initial Board members under the amended Order serve 30-month

concurrent terms of office. The 1990 Act provided for the staggering of

the terms of office of the initial Board members. Although staggered

terms of office are generally desirable, this created a situation where

30 percent or more of the Board's membership could change prior to the

initial referendum. In contrast, the 1993 Act provides that the initial

Board members under the amended Order serve 30-month concurrent terms

of office and that staggered terms be reinstituted after the referendum

if the program continues. The purpose of this change is to minimize the

organizational uncertainties associated with Board member turnover and

to facilitate organizational continuity during the period prior to the

initial referendum. Therefore, this action also revises Sec. 1212.34 of

the Order.

In addition, a technical change is made to Sec. 1212.64 of the

Order to add the code number for limes from the Harmonized Tariff

Schedule of the United States.

After consideration of all relevant material presented, it is found

that the amendments to the Order herein tend to effectuate the declared

policy of the Act, as amended.

Pursuant to the provisions of 5 U.S.C. 553, it is found and

determined that good cause exists for not postponing the effective date

of this action until 30 days after publication in the Federal Register

because (1) this action is required by the 1993 Act; (2) the proposed

rule provided a 30-day period to allow interested parties to comment

prior to this action; (3) the amended Order cannot be fully implemented

until this rule becomes effective and the initial Board is appointed;

and (4) no useful purpose would be served by a delay of the effective

date.

List of Subjects in 7 CFR Part 1212

Administrative practice and procedure, Advertising, Limes,

Marketing agreements, Reporting and recordkeeping requirements.

For the reasons set forth in the preamble, 7 CFR Part 1212 is

amended as follows:

PART 1212--LIME RESEARCH, PROMOTION, AND CONSUMER INFORMATION

1. The authority citation for 7 CFR Part 1212 is revised to read as

follows:

Authority: 7 U.S.C. 6201-6212.

Subpart A--Lime Research, Promotion, and Consumer Information Order

Sec. 1212.2 [Amended]

2. Section 1212.2 is amended by removing the phrase ``and any

amendments thereto'' and adding in its place ``as amended''.

Sec. 1212.5 [Amended]

3. Section 1212.5 is amended by removing the word ``aurantifolia''

and adding in its place ``latifolia''.

Sec. 1212.18 [Amended]

4. Section 1212.18 is amended by removing the phrase ``, or other

subdivisions as may be prescribed pursuant to Sec. 1212.40(o)''.

5. In Sec. 1212.30 paragraph (a) is amended by removing the word

``Seven'' and adding in its place ``Three''; paragraph (b) is revised;

and paragraph (c) and the undesignated concluding text are removed as

follows:

Sec. 1212.30 Establishment and membership.

* * * * *

(b) Two of the three producer members shall be producers of limes

in District 1, and one producer member shall be a producer of limes in

District 2. One of the three importer members shall be an importer of

limes in District 1, and two importer members shall be importers of

limes in District 2. The public member shall be selected at large.

Sec. 1212.31 [Amended]

6. Section 1212.31 is amended by revising the section heading and

paragraph (a), designating the existing text of paragraph (k) as

paragraph (k)(1) and revising it, and designating the concluding text

at the end of the section as paragraph (k)(2) to read as follows:

Sec. 1212.31 Nominations.

* * * * *

(a) Except for the member and alternate member who represent the

general public, nominations of initial members to the Board shall be

submitted to the Secretary for selection as soon as practicable after

February 8, 1995. In subsequent years, nominations of members to the

Board shall be submitted to the Secretary by the Board by August 1.

Nominations may be made by means of group meetings for producer and

importer members or by mail ballot.

* * * * *

(k) (1) In the event of a mail ballot, all qualified persons

interested in serving on the Board or who are interested in nominating

another person to serve on the Board shall submit to the Board in

writing such information as name, mailing address, number of pounds

produced, marketed, handled, or imported, or other information as may

be required, in order to place that person on the ballot: Provided,

That in the case of nominating the initial Board under the amended Act,

the Secretary shall mail out the ballots and cause press releases

concerning the distribution of ballots and pertinent information on

balloting to be distributed to the media in the lime producing and

importing areas. These ballots shall be returned to the Secretary.

* * * * *

Sec. 1212.32 [Amended]

7. Section 1212.32 is amended by removing the word ``seven'' and

adding in its place ``three''.

8. Section 1212.34 is revised to read as follows:

Sec. 1212.34 Term of office.

(a) The initial members of the Board and their respective

alternates shall serve 30-month concurrent terms of office.

(b) The term of office for the initial Board shall begin

immediately following appointment by the Secretary. In subsequent

years, the term of office shall begin on January 1 or such other period

which may be approved by the Secretary.

(c) Subsequent appointments to the Board will be for a term of 3

years, except that during the initial 3-year appointments, members and

their alternates shall serve terms as follows: one producer member from

District 1 and one importer member from District 2 shall be appointed

for a term of 1 year; [[Page 7439]] the importer member from District 1

and the producer member from District 2 shall be appointed for a term

of 2 years; and one producer member from District 1 and one importer

member from District 2 shall be appointed for a term of 3 years.

(d) Board members and alternates shall serve during the term of

office for which they are selected and have qualified, and until their

successors are selected and have qualified.

(e) No member or alternate shall serve more than two successive

terms. However, members and alternates serving a term of 1 year, after

having served a 30-month concurrent term, may serve a third successive

term.

Sec. 1212.37 [Amended]

9. In Sec. 1212.37 paragraph (a) is amended by removing the word

``Six'' and adding in its place ``Four''.

Sec. 1212.40 [Amended]

10. Section 1212.40 is amended by removing paragraph (o) and

redesignating paragraphs (p), (q), and (r) as paragraphs (o), (p), and

(q) respectively.

11. Section 1212.64 is amended by adding a new paragraph (j) to

read as follows:

Sec. 1212.64 Assessments.

* * * * *

(j) The import assessment shall be uniformly applied to imported

limes that are identified by the number 0805.90.0010 in the Harmonized

Tariff Schedule of the United States or any other number used to

identify limes as defined in Sec. 1212.5.

Sec. 1212.65 [Amended]

12. In Sec. 1212.65 paragraph (c)(2)(viii) is amended by removing

the number ``35,000'' and adding in its place ``200,000''.

13. Section 1212.67 is amended by revising the introductory text of

paragraph (a) to read as follows:

Sec. 1212.67 Refunds.

(a) Subject to the provisions of this section any producer,

producer-handler, or importer shall have the right to personally demand

and receive from the Board a refund of assessments paid by or on behalf

of such producer, producer-handler, or importer for any calendar month

during the period beginning on the date on which the collection of

assessments begins under this Order and ending on the effective date of

the referendum mandated by section 1960(a) of the Act; Provided, That:

* * * * *

Sec. 1212.68 [Amended]

14. In Sec. 1212.68 paragraph (a) is amended by removing the number

``35,000'' wherever it appears and adding in its place ``200,000''; and

by adding a new paragraph (d) to read as follows:

Sec. 1212.68 Exemption from assessment.

* * * * *

(d) Importers who are exempt from assessment shall be entitled to

reimbursement of assessments collected by the U.S. Customs Service and

shall apply to the Board for reimbursement of such assessments paid on

a marketing year basis. The Board shall reimburse such assessments

within 30 days of receiving an importer's application.

Sec. 1212.69 [Amended]

15. Section 1212.69 is amended by removing the number ``35,000''

and adding in its place ``200,000''.

Sec. 1212.84 [Amended]

16. In Sec. 1212.84 paragraph (a) is amended by removing the word

``five'' and adding in its place ``four''.

Dated: February 2, 1995.

Patricia Jensen,

Acting Assistant Secretary, Marketing and Regulatory Programs.

[FR Doc. 95-3144 Filed 2-7-95; 8:45 am]

BILLING CODE 3410-02-P