Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida; Increased Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 905

[Docket No. FV98-905-3 PR]

Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida;

Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate from $0.0035 to

$0.00385 per 4/5 bushel carton established for the Citrus

Administrative Committee (Committee) under Marketing Order No. 905 for

the 1998-99 and subsequent fiscal periods. The Committee is responsible

for local administration of the marketing order which regulates the

handling of citrus grown in Florida. Authorization to assess citrus

handlers enables the Committee to incur expenses that are reasonable

and necessary to administer the program. The fiscal period begins

August 1 and ends July 31. The assessment rate would remain in effect

indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by August 17, 1998.

ADDRESSES: Interested persons are invited to submit written comments

concerning this rule. Comments must be sent to the Docket Clerk, Fruit

and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456,

Washington, DC 20090-6456; Fax: (202) 205-6632. 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: Doris Jamieson, Southeast Marketing

Field Office, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 2276,

Winter Haven, FL 33883-2276; telephone: (941) 299-4770, Fax: (941) 299-

5169; or George Kelhart, Technical Advisor, Marketing Order

Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room

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

720-2491, Fax: (202) 205-6632. Small businesses may request information

on compliance with this regulation by contacting Jay Guerber, Marketing

Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA,

room 2525-S, P.O. Box 96456, Washington,

[[Page 38348]]

DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement No. 84 and Order No. 905, both as amended (7 CFR part 905),

regulating the handling of Oranges, Grapefruit, Tangerines, and

Tangelos grown in Florida, 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, Florida citrus

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 citrus beginning

on August 1, 1998, and continue 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

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 would increase the assessment rate established for the

Committee for the 1998-99 and subsequent fiscal periods from $0.0035 to

$0.00385 per 4/5 bushel carton handled.

The Florida citrus 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

Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida. 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 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 22, 1998, and unanimously recommended

1998-99 expenditures of $242,275 and an assessment rate of $0.00385 per

\4/5\ bushel carton of citrus. In comparison, last year's budgeted

expenditures were $242,000. The assessment rate of $0.00385 is $0.00035

higher than the rate currently in effect. Shipments of fresh citrus for

the 1997-98 season are expected to be less than the Committee's initial

estimate of 65,000,000 cartons. Estimated shipments for 1998-99 are

61,500,000 cartons, or 3,500,000 million cartons less than the 1997-98

estimate. Due to the reduced fresh shipments of Florida citrus to

interstate and export markets, the Committee voted to increase the

assessment rate to generate funds necessary to meet Committee operating

expenditures, and maintain an adequate operating reserve.

The major expenditures recommended by the Committee for the 1998-99

year include $115,800 for salaries, $36,000 for Manifest Department-

FDACS, $18,400 for insurance and bonds, and $12,325 for retirement

plan. Budgeted expenses for these items in 1997-98 were $105,300,

$36,000, $16,500, and $11,200, respectively.

The assessment rate recommended by the Committee was derived by

dividing anticipated expenses by expected shipments of Florida citrus.

As mentioned earlier, citrus shipments for 1998-99 are estimated at

61,500,000 cartons which should provide $236,775 in assessment income.

Income derived from handler assessments, along with interest income and

funds from the Committee's authorized reserve, would be adequate to

cover budgeted expenses. Funds in the reserve (currently $109,371)

would be kept within the maximum permitted by the order (approximately

one-half of one fiscal period's expenses; Sec. 905.42).

The proposed assessment rate would 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 would be in effect for an indefinite

period, the Committee would 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 would

evaluate Committee recommendations and other available information to

determine whether modification of the assessment rate is needed.

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

1998-99 budget and those for subsequent fiscal periods would 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 rule 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 11,000 producers of citrus in the

production area and approximately 109 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 Florida citrus producers and handlers may

be classified as small entities.

This rule would increase the assessment rate established for the

Committee and collected from handlers

[[Page 38349]]

for the 1998-99 and subsequent fiscal periods from $0.0035 per \4/5\

bushel carton to $0.00385 per \4/5\ bushel carton handled. The

Committee unanimously recommended 1998-99 expenditures of $242,275 and

an assessment rate of $0.00385 per \4/5\ bushel carton. The proposed

assessment rate of $0.00385 per \4/5\ bushel carton is $0.00035 higher

than the 1997-98 rate. The quantity of assessable citrus for the 1998-

99 season is estimated at 61,500,000. Thus, the $0.00385 rate should

provide $236,775 in assessment income. Income derived from handler

assessments, along with interest income and funds from the Committee's

authorized reserve, would be adequate to meet this year's expenses.

The Committee estimates a reduced amount of fresh shipments of

Florida citrus for the 1998-99 season. They unanimously recommended

1998-99 expenditures of $242,275 which included increases in staff

salaries and benefits, and equipment rental. Due to the anticipated

reduction of fresh shipments, the Committee voted to increase the

assessment rate to generate the funds necessary to meet the Committee's

operating expenses and maintain an adequate operating reserve. The

Committee's authorized reserve (approximately one-half of one fiscal

period's expenses) is currently $109,371. The revenue from assessments,

along with interest income and funds from the Committee's authorized

reserve, would be adequate to cover budgeted expenses.

The Committee reviewed and unanimously recommended 1998-99

expenditures of $242,275 which included increases in staff salaries and

benefits, and equipment rental. Prior to arriving at this budget, the

Committee considered information from various sources, such as the

Committee's Budget Sub-Committee. Alternative expenditure levels were

discussed. However, it was determined that the increases in salaries,

benefits, and equipment were needed and justified. The assessment rate

of $0.00385 per \4/5\ bushel carton of assessable Florida citrus was

then determined by dividing the total recommended budget by the

quantity of assessable citrus, estimated at 61,500,000 \4/5\ bushel

cartons for the 1998-99 fiscal period. This is approximately $5,500

below the anticipated expenses. Assessment income, along with interest

income and funds from the Committee's authorized reserve, would be

adequate to cover budgeted expenses, which the Committee determined to

be acceptable.

There are several varieties of citrus regulated under the order. In

the 1997-98 season, the f.o.b. price ranged from around $5.83 to $6.71

for oranges, from around $5.26 to $6.31 for grapefruit, and from around

$7.17 to $20.39 for speciality citrus. Depending on the volume and

variety produced by the individual grower, the price for Florida citrus

during the 1998-99 season is expected to range between $5.26 and $20.39

per \4/5\ bushel carton. Therefore, the estimated assessment revenue

for the 1998-99 fiscal period as a percentage of total grower revenue

could range between 0.02 and 0.07 percent.

This action would increase the assessment obligation imposed on

handlers. While assessments impose some additional costs on handlers,

the costs are minimal and uniform on all handlers. Some of the

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

would be offset by the benefits derived by the operation of the

marketing order. In addition, the Committee's meeting was widely

publicized throughout the Florida citrus 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 22,

1998, 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 proposed rule would impose no additional reporting or

recordkeeping requirements on either small or large Florida citrus

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.

A 30-day comment period is provided to allow interested persons to

respond to this proposed rule. Thirty days is deemed appropriate

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

expenses which are incurred on a continuous basis; (2) the 1998-99

fiscal period begins on August 1, 1998, and the marketing order

requires that the rate of assessment for each fiscal period apply to

all assessable citrus handled during such fiscal period; and (3)

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.

List of Subjects in 7 CFR Part 905

Grapefruit, Marketing agreements, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 905 is

proposed to be amended as follows:

PART 905--ORANGES, GRAPEFRUIT, TANGERINES, AND TANGELOS GROWN IN

FLORIDA

1. The authority citation for 7 CFR part 905 continues to read as

follows:

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

2. Section 905.235 is proposed to be revised to read as follows:

Sec. 905.235 Assessment rate.

On and after August 1, 1998, an assessment rate of $0.00385 per 4/5

bushel carton is established for assessable Florida citrus covered

under the order.

Dated: July 10, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 98-18913 Filed 7-15-98; 8:45 am]

BILLING CODE 3410-02-P