Winter Pears Grown in Oregon, Washington, and California; Increased Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 927

[Docket No. FV97-927-1 IFR]

Winter Pears Grown in Oregon, Washington, and California;

Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: This interim final rule increases the assessment rate

established for the Winter Pear Control Committee (Committee) under

Marketing Order No. 927 for the 1997-98 and subsequent fiscal periods.

The Committee is responsible for local administration of the marketing

order which regulates the handling of winter pears grown in Oregon,

Washington, and California. Authorization to assess winter pear

handlers enables the Committee to incur expenses that are reasonable

and necessary to administer the program. The 1997-98 fiscal period for

this marketing order covers the period July 1 through May 31. The

assessment rate will continue until amended, suspended, or terminated.

DATES: Effective on August 21, 1997. Comments received by September 19,

1997, will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments

concerning this rule. Comments must be sent in triplicate to the Docket

Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S, P.O. Box

96456, 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: Teresa L. Hutchinson, Northwest

Marketing Field Office, Fruit and Vegetable Division, AMS, USDA, 1220

SW Third Avenue, Room 369, Portland, OR 97204; Telephone: (503) 326-

2724, Fax: (503) 326-7440 or George J. Kelhart, Marketing Order

Administration Branch, Fruit and Vegetable Division, AMS, USDA, Room

2525-S, P.O. Box 96456, Washington, DC 20090-6456; Telephone: (202)

690-3919, Fax: (202) 720-5698. Small businesses may request information

on compliance with this regulation by contacting Jay Guerber,

Marketing Order Administration Branch, Fruit and Vegetable Division,

AMS, USDA, Room 2525-S, P.O. Box 96456, Washington, DC 20090-6456;

Telephone: (202) 720-2491, Fax: (202) 720-5698.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement and Order No. 927, both as amended (7 CFR part 927),

regulating the handling of winter pears grown in Oregon, Washington,

and California hereinafter referred to as the ``order.'' 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 of Agriculture (Department) 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, winter pear

handlers are subject to assessments. Funds to administer the order are

derived from such assessments. It is intended that the assessment rate

as issued herein will be applicable to all assessable winter pears

beginning July 1, 1997, and continuing 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 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

[[Page 44203]]

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 to review the

Secretary'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 increases the assessment rate established for the

Committee for the 1997-98 and subsequent fiscal periods from $0.405 to

$0.44 per standard box.

The winter pear marketing order provides authority for the

Committee, with the approval of the Department, 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

winter pears. 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 1996-97 and subsequent fiscal periods, the Committee

recommended, and the Department approved, an assessment rate that would

continue in effect from fiscal period to fiscal period indefinitely

unless modified, suspended, or terminated by the Secretary upon

recommendation and information submitted by the Committee or other

information available to the Secretary.

The Committee met on May 30, 1997, and unanimously recommended

1997-98 expenditures of $8,066,790 and an assessment rate of $0.44 per

standard box of winter pears. In comparison, last year's budgeted

expenditures were $5,502,979. The assessment rate of $0.44 is $0.035

more than the rate currently in effect. The Committee recommended an

increased assessment rate, because the current rate would not generate

enough income to adequately administer the program.

The Committee discussed alternatives to this rule, including

alternative expenditure levels. Major expenses recommended by the

Committee for the 1997-98 fiscal period include $7,010,550 for paid

advertising, $346,200 for improvement of winter pears (production

research), $161,549 for salaries, and $75,000 for industry development.

Budgeted expenses for these items in 1996-97 were $4,674,675, $249,316,

$154,387, and $75,000, respectively.

The assessment rate recommended by the Committee was derived by

dividing anticipated expenses by expected shipments of winter pears.

Winter pear shipments for the year are estimated at 17,310,000 standard

boxes, and the $0.44 per standard box assessment rate should provide

$7,616,400 in assessment income. Income derived from handler

assessments, along with funds from the Committee's authorized reserve,

will be adequate to cover budgeted expenses. Funds in the reserve will

be kept within the maximum permitted by the order.

The assessment rate established in this rule will continue in

effect indefinitely unless modified, suspended, or terminated by the

Secretary upon recommendation and information submitted by the

Committee or other available information.

Although this assessment rate is effective for an indefinite

period, the Committee will continue to meet prior to or during each

fiscal period 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 the

Department. Committee meetings are open to the public and interested

persons may express their views at these meetings. The Department will

evaluate Committee recommendations and other available information to

determine whether modification of the assessment rate is needed.

Further rulemaking will be undertaken as necessary. The Committee's

1997-98 budget and those for subsequent fiscal periods will be reviewed

and, as appropriate, approved by the Department.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Agricultural Marketing Service (AMS) has considered the

economic impact of this action 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 1,800 producers of winter pears in the

production area and approximately 90 handlers subject to regulation

under the marketing order. Small agricultural producers have been

defined by the Small Business Administration (13 CFR 121.601) as those

having annual receipts 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 winter pear producers and handlers may be

classified as small entities.

This rule increases the assessment rate established for the

Committee and collected from handlers for the 1997-98 and subsequent

fiscal periods. The Committee unanimously recommended 1997-98

expenditures of $8,066,790 and an assessment rate of $0.44 per standard

box of winter pears. The assessment rate of $0.44 is $0.035 more than

the rate currently in effect. The Committee recommended an increased

assessment rate, because the current rate would not generate enough

income to adequately administer the program. That is, enough income

would not be generated to cover its increased expenses, and maintain an

adequate operating reserve.

The Committee discussed alternatives to this rule, including

alternative expenditure levels. Major expenses recommended by the

Committee for the 1997-98 fiscal period include $7,010,550 for paid

advertising, $346,200 for improvement of winter pears (production

research), $161,549 for salaries, and $75,000 for industry development.

Budgeted expenses for these items in 1996-97 were $4,674,675, $249,316,

$154,387, and $75,000, respectively. The increase in paid advertising

is needed to help the industry market this season's crop, which is

significantly larger than last year's crop. A lower level of funding

for paid advertising was ruled out by the Committee because it felt

that a more aggressive advertising program was needed this season to

market the large crop. The increased level for production research

provides funds for current and anticipated research in 1997-98.

The Committee discussed the alternative of not increasing the

assessment rate. However, it decided against this course of action

because continuation of the current rate would not provide enough

income to meet its 1997-98 budgeted expenses, and maintain an adequate

operating reserve.

Winter pear shipments for the year are estimated at 17,310,000

standard boxes, which should provide $7,616,400 in assessment income.

Income derived from handler assessments, along with funds from the

Committee's authorized reserve, will be adequate to cover budgeted

expenses. Funds in the reserve will be kept within the maximum

permitted by the order.

[[Page 44204]]

Recent price information indicates that the grower price for the

1997-98 marketing season will range between $4.82 and $11.81 per

standard box of winter pears. Therefore, the estimated assessment

revenue for the 1997-98 fiscal period as a percentage of total grower

revenue will range between 0.04 and 0.09 percent.

This action will increase the assessment obligation imposed on

handlers. While this rule will impose some additional costs on

handlers, the costs are minimal and in the form of uniform assessments

on all handlers. Some of the additional costs may be passed on to

producers. However, these costs will be offset by the benefits derived

by the operation of the marketing order. In addition, the Committee's

meeting was widely publicized throughout the winter pear industry and

all interested persons were invited to attend the meeting and

participate in Committee deliberations on all issues. Like all

Committee meetings, the May 30, 1997, 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 action will not impose any additional reporting or

recordkeeping requirements on either small or large winter pear

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.

The Department has not identified any relevant Federal rules that

duplicate, overlap, or conflict with this rule. After consideration of

all relevant matter presented, including the information and

recommendation 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 rule until 30 days after publication in the Federal

Register because: (1) The 1997-98 fiscal period began on July 1, 1997,

and the marketing order requires that the rate of assessment for each

fiscal period apply to all assessable winter pears handled during such

fiscal period; (2) handlers are aware of this action which was

unanimously recommended by the Committee at a public meeting and is

similar to other assessment rate actions issued in past years; and (3)

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

comments timely received will be considered prior to finalization of

this rule.

List of Subjects in 7 CFR Part 927

Marketing agreements, Pears, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 927 is

amended as follows:

PART 927--WINTER PEARS GROWN IN OREGON, WASHINGTON, AND CALIFORNIA

1. The authority citation for 7 CFR part 927 continues to read as

follows:

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

Sec. 927.236 [Amended]

2. Section 927.236 is amended by removing the words ``July 1,

1996,'' and adding in their place the words ``July 1, 1997,'' and by

removing ``$0.405'' and adding in its place ``$0.44.''

Dated: August 14, 1997.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 97-22013 Filed 8-19-97; 8:45 am]

BILLING CODE 3410-02-P