South Texas Melons; Increased Expenses and Establishment of Assessment Rate

DEPARTMENT OF AGRICULTURE

7 CFR Part 979

[Docket No. FV94-979-1FIR]

South Texas Melons; Increased Expenses and Establishment of

Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a

final rule, without change, the provisions of an amended interim final

rule that increased the level of authorized expenses and established an

assessment rate that generated funds to pay those expenses.

Authorization of this budget enables the South Texas Melon Committee

(Committee) to incur expenses that are reasonable and necessary to

administer the program. Funds to administer this program are derived

from assessments on handlers.

EFFECTIVE DATE: October 1, 1994, through September 30, 1995.

FOR FURTHER INFORMATION CONTACT: Martha Sue Clark, Marketing Order

Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O.

Box 96456, room 2523-S, Washington, DC 20090-6456, telephone 202-720-

9918, or Belinda G. Garza, McAllen Marketing Field Office, Fruit and

Vegetable Division, AMS, USDA, 1313 East Hackberry, McAllen, TX 78501,

telephone 210-682-2833.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement No. 156 and Order No. 979 (7 CFR part 979), regulating the

handling of melons grown in South Texas. The marketing agreement and

order are 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 is issuing this rule in conformance with Executive

Order 12866.

This rule has been reviewed under Executive Order 12778, Civil

Justice Reform. Under the marketing order provisions now in effect,

South Texas melons are subject to assessments. It is intended that the

assessment rate as issued herein will be applicable to all assessable

melons handled during the 1994-95 fiscal period, which began October 1,

1994, and ends September 30, 1995. 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 the Secretary 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 requesting a modification of the order or to be exempted

therefrom. A handler is afforded the opportunity for a hearing on the

petition. After the hearing the Secretary 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 in equity to review the

Secretary's ruling on the petition, provided a bill in equity is filed

not later than 20 days after the date of the entry of the ruling.

Pursuant to the 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. 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 40 producers of South Texas melons under

this marketing order, and approximately 19 handlers. Small agricultural

producers have been defined by the Small Business Administration (13

CFR 121.601) as those having annual receipts of less than $500,000, and

small agricultural service firms are defined as those whose annual

receipts are less than $5,000,000. The majority of South Texas melon

producers and handlers may be classified as small entities.

The budget of expenses for the 1994-95 fiscal period was prepared

by the South Texas Melon Committee, the agency responsible for local

administration of the marketing order, and submitted to the Department

for approval. The members of the Committee are producers and handlers

of South Texas melons. They are familiar with the Committee's needs and

with the costs of goods and services in their local area and are thus

in a position to formulate an appropriate budget. The budget was

formulated and discussed in a public meeting. Thus, all directly

affected persons have had an opportunity to participate and provide

input.

The assessment rate recommended by the Committee was derived by

dividing anticipated expenses by expected shipments of South Texas

melons. Because that rate will be applied to actual shipments, it must

be established at a rate that will provide sufficient income to pay the

Committee's expenses.

Committee administrative expenses of $207,500 for personnel,

office, and compliance expenses were recommended in a mail vote. The

assessment rate and funding for the research and promotion projects

were to be recommended at a later Committee meeting. The Committee

administrative expenses of $207,500 were published in the Federal

Register as an interim final rule November 15, 1994 (59 FR 58760). That

interim final rule added Sec. 979.217, authorizing expenses for the

Committee, and provided that interested persons could file comments

through December 15, 1994. No comments were filed.

The Committee subsequently met on December 13, 1994, and

unanimously recommended an increase of $9,700 for administrative

expenses, plus $158,426 in research expenses, for a total budget of

$375,626. Budget items for 1994-95 which have increased compared to

those budgeted for 1993-94 (in parentheses) are: Office salaries,

$22,000 ($15,600), insurance, $6,250 ($5,250), accounting and audit

$2,600 ($2,300), rent and utilities, $6,000 ($4,000), disease

management programs, $86,716 ($82,000), melon breeding and cultivar

development, $43,824 ($23,118), and variety evaluation, $9,186

($8,460). Items which have decreased compared to the amount budgeted

for 1993-94 (in parentheses) are: Insect management programs, $18,700

($34,390), and $3,823 for cultural practices for which no funding was

recommended this year. All other items are budgeted at last year's

amounts.

The initial 1994-95 budget, published on November 15, 1994, did not

establish an assessment rate. Therefore, the Committee also unanimously

recommended an assessment rate of [[Page 16768]] $0.07 per carton. This

rate, when applied to anticipated shipments of approximately 45,000

cartons, will yield $315,000 in assessment income, which, along with

$60,626 from the reserve, will be adequate to cover budgeted expenses.

Funds in the reserve as of January 31, 1995, were $367,369, which is

within the maximum permitted by the order of two fiscal periods'

expenses.

An amended interim final rule was published in the Federal Register

on January 30, 1995 (60 FR 5560). That interim final rule amended

Sec. 979.217 to increase the level of authorized expenses and establish

an assessment rate for the Committee. That rule provided that

interested persons could file comments through March 1, 1995. No

comments were received.

While this action will impose some additional costs on handlers,

the costs are in the form of uniform assessments on handlers. Some of

the additional costs may be passed on to producers. However, these

costs will be offset by the benefits derived from the operation of the

marketing order. Therefore, the Administrator of the AMS has determined

that this action will not have a significant economic impact on a

substantial number of small entities.

After consideration of all relevant matter presented, including the

information and recommendations 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.

It is further found that good cause exists for not postponing the

effective date of this rule until 30 days after publication in the

Federal Register (5 U.S.C. 553) because the Committee needs to have

sufficient funds to pay its expenses which are incurred on a continuous

basis. The 1994-95 fiscal period began on October 1, 1994. The

marketing order requires that the rate of assessment for the fiscal

period apply to all assessable melons handled during the fiscal period.

In addition, handlers are aware of this rule which was recommended by

the Committee at a public meeting and published in the Federal Register

as an amended interim final rule.

List of Subjects in 7 CFR Part 979

Marketing agreements, Melons, Reporting and recordkeeping

requirements.

PART 979--MELONS GROWN IN SOUTH TEXAS

Accordingly, the interim final rule revising Sec. 979.217 which was

published at 60 FR 5560 on January 30, 1995, is adopted as a final rule

without change.

Dated: March 28, 1995.

Sharon Bomer Lauritsen,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 95-8098 Filed 3-31-95; 8:45 am]

BILLING CODE 3410-02-W-P