Oranges and Grapefruit Grown in Lower Rio Grande Valley in Texas; Increased Assessment Rate, 49381-49383 [2011-20120]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 76, Number 154 (Wednesday, August 10, 2011)]
[Proposed Rules]
[Pages 49381-49383]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-20120]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 76 , No. 154 / Wednesday, August 10, 2011 / 
Proposed Rules

[[Page 49381]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 906

[Doc. No. AMS-FV-11-0057; FV11-906-1 PR]


Oranges and Grapefruit Grown in Lower Rio Grande Valley in Texas; 
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 Texas Valley Citrus Committee (Committee) for the 2011-12 and 
subsequent fiscal periods from $0.12 to $0.14 per 7/10-bushel carton or 
equivalent of oranges and grapefruit handled. The Committee locally 
administers the marketing order which regulates the handling of oranges 
and grapefruit grown in the Lower Rio Grande Valley in Texas. 
Assessments upon orange and grapefruit handlers are used by the 
Committee to fund reasonable and necessary expenses of 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 22, 2011.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or Internet: https://www.regulations.gov. Comments should reference the document 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, or can be viewed at: https://www.regulations.gov. All comments submitted in response to this rule 
will be included in the record and will be made available to the 
public. Please be advised that the identity of the individuals or 
entities submitting the comments will be made public on the Internet at 
the address provided above.

FOR FURTHER INFORMATION CONTACT: Belinda G. Garza, Regional Manager, 
Texas Marketing Field Office, Marketing Order Administration Branch, 
Fruit and Vegetable Programs, AMS, USDA; Telephone: (956) 632-5330, 
Fax: (956) 632-5358, or E-mail: Belinda.Garza@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Laurel May, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 
720-2491, Fax: (202) 720-8938, or E-mail: Laurel.May@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 906, as amended (7 CFR part 906), regulating 
the handling of oranges and grapefruit grown in the Lower Rio Grande 
Valley in 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 (USDA) 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, orange and 
grapefruit handlers in the Lower Rio Grande Valley 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 oranges and grapefruit beginning 
on August 1, 2011, and continue until amended, suspended, or 
terminated.
    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 USDA 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, USDA 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 USDA'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 2011-12 and subsequent fiscal periods from $0.12 to 
$0.14 per 7/10-bushel carton or equivalent of oranges and grapefruit 
handled.
    The Texas orange and grapefruit marketing order provides authority 
for the Committee, with the approval of USDA, 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 
Texas oranges and grapefruit. 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 2004-05 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by USDA upon recommendation and information 
submitted by the Committee or other information available to USDA.
    The Committee met on June 9, 2011, and unanimously recommended 
2011-12 expenditures of $1,224,037 and an assessment rate of $0.14 per 
7/10-bushel carton or equivalent of oranges and grapefruit handled. In 
comparison, last year's budgeted expenditures were $1,109,037. The 
proposed assessment rate of $0.14 is $0.02 higher than the rate 
currently in effect. The Committee recommended a higher assessment rate 
due to an expected smaller crop and an

[[Page 49382]]

increase in budgeted expenses. Budgeted expenses were increased to 
provide additional funding for the Committee's Mexican fruit fly 
program, and also to fund a Federal Agriculture Improvement Reform 
(FAIR) review analysis to be conducted next fiscal period. In 1996, 
Congress mandated that every five years commodity boards established 
under the oversight of the Secretary of Agriculture pursuant to a 
commodity promotion law should fund an independent evaluation of the 
effectiveness of their generic promotion program, which is now commonly 
known as a FAIR review.
    The Committee projected a reduced crop of 8,750,000 7/10-bushel 
carton equivalents, which would be 289,137 7/10-bushel carton 
equivalents less than the 9,039,137 7/10-bushel carton equivalents 
handled during the 2010-11 fiscal period. Furthermore, due to severe 
cuts in the State of Texas' budget, the Texas Department of Agriculture 
requested the citrus industry's assistance in funding a Mexican fruit 
fly trapping program, which is essential to the industry's well-being. 
Based on a decreased crop estimate and anticipated expenditure 
increases, the Committee unanimously recommended that the assessment 
rate of $0.12 currently in effect be increased by $0.02. Income derived 
from handler assessments and interest would be adequate to cover 
budgeted expenses.
    The major expenditures recommended by the Committee for the 2011-12 
fiscal period include $479,000 for the Mexican fruit fly support, 
trapping, and bait spray programs; $425,000 for promotion; and $250,737 
for management, administration, and compliance oversight. In 
comparison, major expenditures for these items in 2010-11 (current 
fiscal period) were $229,000, $600,000, and $246,737, respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenditures by estimated shipments of Texas 
oranges and grapefruit. As mentioned earlier, orange and grapefruit 
shipments for the 2011-12 fiscal period are estimated at 8.75 million 
7/10-bushel carton equivalents, which should provide $1,225,000 in 
assessment income. Income generated through the $0.14 assessment rate 
and interest would be more than sufficient to meet anticipated expenses 
($1,224,037). Reserve funds at the end of 2011-12 are projected at 
$283,774, well below one fiscal period's expenses, which would be 
within the maximum reserve amount permitted under the order (Sec.  
906.35).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA 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 USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA 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 2011-12 budget and those 
for subsequent fiscal periods would be reviewed and, as appropriate, 
approved by USDA.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), 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.
    There are approximately 177 producers of oranges and grapefruit in 
the production area and approximately 12 handlers subject to regulation 
under the marketing order. Small agricultural producers are defined by 
the Small Business Administration (SBA) (13 CFR 121.201) as those 
having annual receipts less than $750,000, and small agricultural 
service firms are defined as those whose annual receipts are less than 
$7,000,000.
    An updated Texas citrus industry profile shows that 6 of the 12 
handlers (50 percent) would be considered large businesses under SBA's 
definition, and the remaining 6 handlers (50 percent) would be 
considered small businesses. Of the approximately 177 producers within 
the production area, few have sufficient acreage to generate sales in 
excess of $750,000. Thus, half of the handlers and the majority of 
producers of Texas oranges and grapefruit may be classified as small 
entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 2011-12 and subsequent 
fiscal periods from $0.12 to $0.14 per 7/10-bushel carton or equivalent 
of oranges and grapefruit. The Committee unanimously recommended 2011-
12 expenditures of $1,224,037 and an assessment rate of $0.14 per 7/10-
bushel carton or equivalent handled. The quantity of assessable oranges 
and grapefruit for the 2011-12 fiscal period is estimated at 8.75 
million 7/10-bushel carton equivalents. Thus, the $0.14 assessment rate 
should provide $1,225,000 in assessment income which would be 
sufficient to meet anticipated expenses.
    The major expenditures recommended by the Committee for the 2011-12 
fiscal period include $479,000 for the Mexican Fruit Fly support, 
trapping, and bait spray programs; $425,000 for promotion; and $250,737 
for management, administration, and compliance oversight. Major 
expenditures for these items in 2010-11 (current fiscal period) were 
$229,000, $600,000, and $246,737, respectively.
    The increased assessment rate recommended by the Committee was due 
to a reduced crop estimate (8.75 million 7/10-bushel carton equivalents 
of oranges and grapefruit), and an increase in budgeted expenditures to 
provide additional funding for the Mexican fruit fly program and a FAIR 
analysis. With anticipated assessment income of $1,225,000, and 
anticipated expenditures of $1,224,037, funds in the reserve would be 
kept within the maximum of one fiscal period's expenses permitted by 
the order (Sec.  906.35).
    In arriving at its recommended budget, the Committee considered 
alternative expenditure levels based upon the relative need of the 
Mexican fruit fly trapping and promotion programs to the Texas citrus 
industry. The assessment rate of $0.14 per 7/10-bushel carton 
equivalent was then determined by dividing the total recommended budget 
by the quantity of assessable oranges and grapefruit, estimated at 8.75 
million 7/10-bushel carton equivalents for the 2011-12 fiscal period. 
Considering assessment revenue and interest, total revenue would be 
approximately $2,463 above the anticipated expenses, which the 
Committee determined to be acceptable.

[[Page 49383]]

    A review of historical information from recent seasons (2008-2010) 
and preliminary information pertaining to the upcoming fiscal period 
indicates that the season average packinghouse door price for the 2011-
12 fiscal period could likely range from $6.24 to $8.23 per 7/10-bushel 
carton equivalent of Texas oranges, and from $10.90 to $15.55 for Texas 
grapefruit. Therefore, the estimated assessment revenue for the 2011-12 
fiscal period as a percentage of total grower (packinghouse door) 
revenue could range between 1.7 and 2.2 percent for oranges and between 
0.9 and 1.3 percent for grapefruit.
    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 order. 
In addition, the Committee's meeting was widely publicized throughout 
the Texas orange and grapefruit industry and all interested persons 
were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the June 9, 
2011, 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 comments on this proposed rule, including 
the regulatory and informational impacts of this action on small 
businesses.
    In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0189 (Generic Fruit Crops--Mandatory). No changes 
in those requirements as a result of this action are necessary. Should 
any changes become necessary, they would be submitted to OMB for 
approval.
    This proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large Texas orange and 
grapefruit 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.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: https://www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Laurel May at the 
previously-mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    A 10-day comment period is provided to allow interested persons to 
respond to this proposed rule. Ten days is deemed appropriate because: 
(1) The 2011-12 fiscal period begins on August 1, 2011, and the 
marketing order requires that the rate of assessment for each fiscal 
period apply to all assessable oranges and grapefruit handled during 
such fiscal period; (2) the Committee needs to have sufficient funds to 
pay its expenses, which are incurred on a continuous basis; 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 906

    Grapefruit, Marketing agreements, Oranges, Reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, 7 CFR part 906 is 
proposed to be amended as follows:

PART 906--ORANGES AND GRAPEFRUIT GROWN IN LOWER RIO GRANDE VALLEY 
IN TEXAS

    1. The authority citation for 7 CFR part 906 continues to read as 
follows:

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

    2. Section 906.235 is revised to read as follows:


Sec.  906.235  Assessment rate.

    On and after August 1, 2011, an assessment rate of $0.14 per 7/10-
bushel carton or equivalent is established for oranges and grapefruit 
grown in the Lower Rio Grande Valley in Texas.

    Dated: August 3, 2011.
David R. Shipman,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2011-20120 Filed 8-9-11; 8:45 am]
BILLING CODE 3410-02-P