Melons Grown in South Texas; Increased Expenses and Establishment of Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 979

[Docket No. FV95-979-1FIR]

Melons Grown in South Texas; 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 to generate funds to pay those expenses under Marketing

Order No. 979 for the 1995-96 fiscal period. 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, 1995, through September 30, 1996.

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, 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 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 1995-96 fiscal period, which began October 1,

1995, and ends September 30, 1996. 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

[[Page 7689]]

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 30 producers of South Texas melons under

this marketing order, and approximately 27 handlers. Since the amended

interim final was issued, information regarding a decrease in the

number of producers from approximately 40 to 30 and an increase in the

number of handlers from approximately 19 to 27 was received. 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 1995-96 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 $234,044 for personnel,

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

assessment rate and funding for research and promotion projects were to

be recommended at a later Committee meeting. The Committee

administrative expenses of $234,044 were published in the Federal

Register as an interim final rule October 23, 1995 (60 FR 54294). That

interim final rule added Sec. 979.218, authorizing expenses for the

Committee, and provided that interested persons could file comments

through November 22, 1995. No comments were filed.

The Committee subsequently met on December 12, 1995, and

unanimously recommended an increase of $1,000 for administrative

expenses, plus $160,115 in research expenses, for a total budget of

$395,159. Budget items for 1995-96 which have increased compared to

those budgeted for 1994-95 (in parentheses) are: Manager's salary,

$19,094 ($15,172), office salaries, $24,000 ($22,000), payroll taxes,

$4,000 ($3,100), insurance, $8,000 ($6,250), rent and utilities, $6,500

($6,000), supplies, $2,000 ($1,500), postage, $1,500 ($1,000),

telephone and telegraph, $4,000 ($2,500), furniture and fixtures,

$2,000 ($1,000), equipment rental and maintenance, $3,500 ($2,500),

contingencies, $6,000 ($5,278), Committee expenses, $2,000 ($700),

manager's travel, $5,000 ($3,000), variety evaluation, $10,875

($9,186), and $3,750 for deferred compensation (manager's retirement),

which was not a line item expense last year. Items which have decreased

compared to the amount budgeted for 1994-95 (in parentheses) are: field

travel, $4,000 ($5,000), and field salary, $5,500 ($8,000). All other

items are budgeted at last year's amounts, including $86,716 for a

disease management program, $18,700 for an insect management program,

$32,674 for breeding and variety development, and $11,150 for control

of melon diseases.

The initial 1995-96 budget, published on October 23, 1995, did not

establish an assessment rate. Therefore, the Committee also unanimously

recommended an assessment rate of $0.07 per carton, the same as last

year. This rate, when applied to anticipated shipments of approximately

4,500,000 cartons, will yield $315,000 in assessment income, which,

along with $80,159 from the reserve, will be adequate to cover budgeted

expenses. Funds in the reserve as of December 31, 1995, were $398,821,

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 4, 1996 (61 FR 248). That interim final rule amended

Sec. 979.218 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 February 5, 1996. 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 1995-96 fiscal period began on October 1, 1995. 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.

For the reasons set forth in the preamble, 7 CFR part 979 is

amended as follows:

PART 979--MELONS GROWN IN SOUTH TEXAS

Accordingly, the amended interim final rule revising Sec. 979.218

which was published at 61 FR 248 on January 4, 1996, is adopted as a

final rule without change.

[[Page 7690]]

Dated: February 23, 1996.

Martha B. Ransom,

Acting Deputy Director, Fruit and Vegetable Division.

[FR Doc. 96-4704 Filed 2-28-96; 8:45 am]

BILLING CODE 3410-02-P