Winter Pears Grown in Oregon and Washington; Increased Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 927

[Docket No. FV98-927-1 PR]

Winter Pears Grown in Oregon and Washington; Increased Assessment

Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate established for

the Winter Pear Control Committee (Committee) under Marketing Order No.

927 for the 1998-99 and subsequent fiscal periods from $0.44 to $0.49

per standard box of winter pears handled. The Committee is responsible

for local administration of the marketing order which regulates the

handling of winter pears grown in Oregon and Washington. Authorization

to assess winter pear handlers enables the Committee to incur expenses

that are reasonable and necessary to administer the program. The 1998-

99 fiscal period began July 1 and ends June 30. The assessment rate

would remain in effect indefinitely unless modified, suspended, or

terminated.

DATES: Comments must be received by August 20, 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: Teresa L. Hutchinson, Northwest

Marketing Field Office, Fruit and Vegetable Programs, 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 Programs, AMS, USDA, Room

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

690-3919, 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, DC 20090-6456; telephone:

(202) 720-2491, Fax: (202) 205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement No. 89 and Order No. 927, both as amended (7 CFR part 927),

regulating the handling of winter pears grown in Oregon and Washington

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 proposed herein would be applicable to all assessable winter pears

beginning July 1, 1998, and continue until modified, suspended, or

terminated. This rule would 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 $0.44 to

$0.49 per standard box of winter pears handled.

The 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

Committee consists of six producer members and six handler members,

each of whom is 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 budget and

assessment rate were discussed at a public meeting and all directly

affected persons had an opportunity to participate and provide input.

For the 1997-98 and subsequent fiscal periods, the Committee

recommended, and the Department approved, an assessment rate of $0.44

per standard box 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 29, 1998, and unanimously recommended

1998-99 expenditures of $7,958,083 and an assessment rate of $0.49 per

standard box of winter pears handled during the 1998-99 and subsequent

fiscal periods. In comparison, last year's budgeted expenditures were

$8,066,790. The assessment rate of $0.49 is $0.05 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 decided that an

assessment rate of more than $0.49 would generate income in excess of

that needed to adequately administer the program.

[[Page 39038]]

Major expenses recommended by the Committee for the 1998-99 fiscal

period include $6,719,500 for paid advertising, $460,925 for unforeseen

expenses, $302,000 for improvement of winter pears, $182,785 for

salaries, and $75,000 for market development. Budgeted expenses for

these items in 1997-98 were $7,010,550, $268,632, $346,200, $161,549,

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 15,100,000 standard

boxes, which should provide $7,399,000 in assessment income. Income

derived from handler assessments, along with interest income and funds

from the Committee's authorized reserve, will be adequate to cover

budgeted expenses. Funds in the reserve (currently $470,000) will be

kept within the maximum permitted by the order of approximately one

fiscal period's expenses (Sec. 927.42).

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 will be undertaken as necessary. The Committee's

1998-99 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 this rule would have 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 would increase the assessment rate established for the

Committee for the 1998-99 and subsequent fiscal periods from $0.44 to

$0.49 per standard box of winter pears handled. The Committee met on

May 29, 1998, and unanimously recommended 1998-99 expenditures of

$7,958,083 and an assessment rate of $0.49 per standard box of winter

pears handled. In comparison, last year's budgeted expenditures were

$8,066,790. The assessment rate of $0.49 is $0.05 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 decided that an

assessment rate of more than $0.49 would generate income in excess of

that needed to adequately administer the program.

Major expenses recommended by the Committee for the 1998-99 fiscal

period include $6,719,500 for paid advertising, $460,925 for unforeseen

expenses, $302,000 for improvement of winter pears, $182,785 for

salaries, and $75,000 for market development. Budgeted expenses for

these items in 1997-98 were $7,010,550, $268,632, $346,200, $161,549,

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 15,100,000 standard

boxes, which should provide $7,399,000 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. The operating reserve is within the maximum

permitted by the order of approximately one fiscal period's expenses

(Sec. 927.42).

Recent price information indicates that the grower price for the

1998-99 marketing season will range between $6.18 and $10.78 per

standard box of winter pears handled. Therefore, the estimated

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

total grower revenue would range between 0.5 and 0.8 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 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 29,

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 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.

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

opportunity to respond to this request for information and comments.

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 began on July 1, 1998,

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

period apply to all assessable winter pears handled during such fiscal

period; (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.

[[Page 39039]]

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

proposed to be amended as follows:

PART 927--WINTER PEARS GROWN IN OREGON AND WASHINGTON

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 proposed to be amended by removing the words

``July 1, 1997,'' and adding in their place the words ``July 1, 1998,''

and by removing ``$0.44'' and adding in its place ``$0.49.''

Dated: July 15, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 98-19389 Filed 7-20-98; 8:45 am]

BILLING CODE 3410-02-P