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

DEPARTMENT OF AGRICULTURE

[Docket No. FV95-979-1IFR; Amendment 1]

Melons Grown in South Texas; Increased Expenses and Establishment

of Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Amended interim final rule with request for comments.

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SUMMARY: This interim final rule amends a previous interim final rule

which authorized administrative expenses for the South Texas Melon

Committee (Committee) under M.O. No. 979. This interim final rule

increases the level of authorized expenses and establishes an

assessment rate to generate funds to pay those expenses. Authorization

of this increased budget enables the Committee to incur expenses that

are reasonable and necessary to administer the program. Funds to

administer this program are derived from assessments on handlers.

DATES: Effective October 1, 1995, through September 30, 1996. Comments

received by February 5, 1996, will be considered prior to issuance of a

final rule.

ADDRESSES: Interested persons are invited to submit written comments

concerning this action. Comments must be sent in triplicate to the

Docket Clerk, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456,

room 2523-S, Washington, DC 20090-6456, FAX 202-720-5698. 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.

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 of Agriculture (Department) is issuing this rule in

conformance with Executive Order 12866.

This interim final 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,

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and ends September 30, 1996. This interim final 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 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 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 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

of Agriculture 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 the research 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 October 31, 1995, were $398,821,

which is within the maximum permitted by the order of two fiscal

periods' expenses.

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.

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 action until 30 days after publication in the Federal Register

because: (1) The Committee needs to have sufficient funds to pay its

expenses which are incurred on a continuous basis; (2) the fiscal

period began on October 1, 1995, and the marketing order requires that

the rate of assessment for the fiscal period apply to all assessable

melons handled during the fiscal period; (3) handlers are aware of this

action which was unanimously recommended by the Committee at a public

meeting and is similar to that taken for the 1994-95 fiscal period; and

(4) this interim final rule provides a 30-day comment period, and all

comments timely received will be considered prior to finalization of

this action.

List of Subjects in 7 CFR Part 979

Marketing agreements, Melons, Reporting and recordkeeping

requirements.

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

amended as follows:

PART 979--MELONS GROWN IN SOUTH TEXAS

1. The authority citation for 7 CFR part 979 continues to read as

follows:

Authority: 7 U.S.C. 601-674.

2. Section 979.218 is revised to read as follows:

Note: This section will not appear in the Code of Federal

Regulations.

Sec. 979.218 Expenses and assessment rate.

Expenses of $395,159 by the South Texas Melon Committee are

authorized and an assessment rate of $0.07 per carton is established

for the fiscal period ending September 30, 1996. Unexpended funds may

be carried over as a reserve.

Dated: December 27, 1995

Sharon Bomer Lauritsen,

Deputy Director, Fruit and Vegetable Division, Agricultural Marketing

Service

[FR Doc. 96-74 Filed 1-3-96; 8:45 am]

BILLING CODE 3410-02-P