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[Federal Register Volume 76, Number 90 (Tuesday, May 10, 2011)]
[Proposed Rules]
[Pages 26946-26948]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-11042]

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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. 90 / Tuesday, May 10, 2011 / Proposed 
Rules

[[Page 26946]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1206

[Document No. AMS-FV-11-0021]

Mango Promotion, Research, and Information Order; Assessment 
Increase

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule proposes amendment of the Mango Promotion, Research, 
and Information Order (Order) to increase the assessment rate on first 
handlers and importers of mangos from one half cent per pound to three 
quarters of a cent per pound. The increase is permitted under the 
Order, which is authorized by the Commodity Promotion, Research, and 
Information Act of 1996 (Act). The National Mango Board (Board), which 
administers the Order, recommended this action to ensure that the 
Board's research and promotion programs continue to be adequately 
funded.

DATES: Comments must be received by July 11, 2011.

ADDRESSES: Comments may be submitted electronically at http://www.regulations.gov. Comments may also be sent to the Research and 
Promotion Branch, Fruit and Vegetable Programs, Agricultural Marketing 
Service (AMS), U.S. Department of Agriculture, Room 0634-S, Stop 0244, 
1400 Independence Avenue, SW, Washington, DC 20250-0244; fax (202) 205-
2800. All comments submitted should reference the document number and 
title of this proposed rule, and will be included in the record and 
made available for public inspection. Comments may be viewed on the 
Internet at http://www.regulations.gov, or at the above office. Please 
be advised that the identity of individuals or entities submitting 
comments will be made public on the Internet at the above Web site.

FOR FURTHER INFORMATION CONTACT: Veronica Douglass, Marketing 
Specialist, Research and Promotion Branch, Fruit and Vegetable 
Programs, AMS, USDA, 1400 Independence Avenue SW, Room 0634-S, Stop 
0244, Washington, DC 20250-0244; telephone: (888) 720-9917; fax: (202) 
205-2800; e-mail: veronica.douglass@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under the Mango 
Promotion, Research, and Information Order (Order) (7 CFR part 1206). 
The Order is authorized under the Commodity Promotion, Research, and 
Information Act of 1996 (Act) (7 U.S.C. 7411-7425).

Executive Order 12866

    The Office of Management and Budget (OMB) has waived the review 
process required by Executive Order 12866 for this action.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. It is not intended to have a retroactive effect.
    Section 524 of the Act provides that the Act shall not affect or 
preempt any other State or Federal law authorizing promotion or 
research relating to an agricultural commodity.
    Under the Act, a person subject to an order may file a petition 
with the U.S. Department of Agriculture (Department) stating that an 
order, any provision of an order, or any obligation imposed in 
connection with an order, is not established in accordance with the 
law, and requesting a modification of an order or an exemption from an 
order. Any petition filed challenging an order, any provision of an 
order, or any obligation imposed in connection with an order, shall be 
filed within two years after the effective date of an order, provision, 
or obligation subject to challenge in the petition. The petitioner will 
have the opportunity for a hearing on the petition. Thereafter, the 
Department will issue a ruling on the petition. The Act provides that 
the district court of the United States for any district in which the 
petitioner resides or conducts business shall have the jurisdiction to 
review a final ruling on the petition, if the petitioner files a 
complaint for that purpose not later than 20 days after the date of the 
entry of the Department's final ruling.

Regulatory Flexibility Analysis and Paperwork Reduction Act

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this action on the small entities that would be 
affected by this rule. The purpose of the RFA is to fit regulatory 
action to scale on businesses subject to such action so that small 
businesses will not be disproportionately burdened.
    The Small Business Administration defines small agricultural 
producers as those having annual receipts of no more than $750,000 and 
small agricultural service firms as those having annual receipts of no 
more than $7 million (13 CFR part 121). First handlers and importers 
would be considered agricultural service firms, and the majority of 
mango producers, first handlers and importers would be considered small 
businesses. Although this criterion does not factor in additional 
monies that may be received by producers, handlers and importers of 
mangos, it is an inclusive standard for identifying small entities.
    Mango producers are not subject to the assessment. First handlers 
and importers who market or import less than 500,000 pounds of mangos 
annually are exempt from the assessment. Mangos that are exported out 
of the United States are also exempt from assessment. Furthermore, 
while domestic and foreign producers are not subject to assessment 
under the order, but such individuals are eligible to serve on the 
Board along with importers and first handlers. Currently, approximately 
five first handlers and 193 importers are subject to assessment under 
the Order.
    Under the current Order, first handlers and importers of 500,000 
pounds or more of mangos per year each pay a mandatory assessment of 
one half cent per pound of mangos handled or imported. The proposed 
amendment to the Order would increase the rate of assessment currently 
paid by first handlers and importers of mangos to three quarters of a 
cent per pound. Exempt handlers and importers would remain exempt from 
assessment. While this amendment will have an economic impact on 
handlers and importers of more than 500,000 pounds of mangos

[[Page 26947]]

per year, the impact is expected to be offset by the benefits to the 
mango industry. Assessment revenue is used by the Board to finance 
promotion, research, and information programs designed to increase 
consumer demand for mangos. Assessments at the current rate of one half 
cent per pound generate about $3.4 million in annual revenue. The Order 
is administered by the Board under U.S. Department of Agriculture 
supervision.
    According to the Board, additional revenue is needed to avoid 
reductions in the promotions budget and to increase investment in 
marketing and research programs. At its September 2009 meeting, the 
Board voted to propose a 50 percent increase in the mango assessment 
rate upon completion of the March 2010 referendum to determine whether 
mango handlers and importers favored continuation of the Order. The 
proposed increase is consistent with section 1206.42(b) of the Order, 
which permits modification of the assessment rate by the Board with the 
approval of the Secretary, after the first referendum is conducted.
    Mango assessment collections began on January 3, 2005, however, 
Board activities did not begin until 2006. Consequently, the Board was 
able to grow a considerable reserve that was used to supplement annual 
assessment revenues from 2007 until 2009. In 2010, higher than expected 
assessment revenue made it possible for the Board to operate without 
exceeding the total assessments collected for that year and to begin 
2011 with approximately $1.6 million in available resources. However, 
with 2011 spending projected at approximately $4.3 million and 
assessment income projected at approximately $3.2 million, the Board is 
expected to begin 2012 with a reserve of $505,244. With no extra funds 
available from reserves, and if the assessment rate is kept at the 
current level, the Board's budget would be decreased.
    In 2010, an econometric study of the effects of the Board's 
promotion activities on U.S. mango demand was conducted by Dr. Ronald 
Ward of the University of Florida. The study indicates that from 2005 
through 2009, the value of mango imports to the U.S. grew from $169 
million to $217 million. This is significant as the vast majority of 
mangos consumed in the U.S. are imported. The growth in value is the 
result of both higher prices and greater volumes imported. The study 
also found that the Board's activities have had a positive economic 
impact on the demand for mangos, both in attracting more buyers and in 
increasing the number of mangos purchased per buyer. According to the 
study, increased spending by the Board would correspond to increases in 
market penetration and the number of households purchasing mangos. 
Likewise, decreased spending would correspond to declines in both of 
those areas. Based on the analysis of these two factors and the value 
of mango imports, the study concludes that every $1 invested in the 
Board adds an additional $7 to mango freight on board revenues. This 
study is available from the Board and the Agricultural Marketing 
Service Web site.
    An increase of one quarter of a cent per pound in the mango 
assessment rate is expected to add an additional $1.6 million per year 
to the Board's assessment revenue. With the additional revenue 
collected, the Board intends to invest primarily in marketing and 
research programs. In addition, the Board would be able to establish a 
contingency fund to ensure consistent funding in the face of market 
instability.
    The Board considered three alternatives prior to recommending that 
the assessment rate be increased. First, the Board considered reducing 
investment in its research program. However, postponing the human 
nutrition studies that may help the Board to develop health messages 
that increase demand for mangos could hinder expansion of the U.S. 
mango market. Second, the Board considered limiting investment in 
programs designed to improve the quality of mangos available at the 
retail level. Delivering higher quality mangos to U.S. consumers is one 
of the Board's top priorities because higher quality translates to 
higher demand. Third, the Board considered reducing funding for its 
marketing programs. Lowering the funding level for marketing programs 
would significantly reduce the Board's ability to conduct promotion and 
consumer marketing activities, thereby hindering its efforts to 
increase demand for mangos.
    This rule does not impose additional recordkeeping requirements on 
first handlers, importers, or producers of mangos. Additionally, first 
handlers or importers of less than 500,000 pounds of mangos per year 
are exempt.
    There are no Federal rules that duplicate, overlap, or conflict 
with this rule. Additionally, section 517(c) of the Act states that not 
more than one assessment may be levied on a first handler or importer.
    In accordance with the Office of Management and Budget (OMB) 
regulation (5 CFR part 1320) that implements the Paperwork Reduction 
Act of 1995 (44 U.S.C. Chapter 35), the information collection and 
recordkeeping requirements that are imposed by the Order have been 
approved previously under OMB control number 0581-0093. This rule does 
not result in a change to the information collection and recordkeeping 
requirements previously approved.
    We have performed this initial Regulatory Flexibility Analysis 
regarding the impact of this proposed amendment to the Order on small 
entities and we invite comments concerning potential effects of this 
amendment on small businesses.

Background

    Under the Order, the Board administers a nationally coordinated 
program of research and promotion designed to strengthen the position 
of mangos in the marketplace and to establish, maintain, and expand 
U.S. markets for mangos. The program is financed by assessments on 
first handlers and importers of 500,000 pounds or more of mangos per 
year. The Order specifies that first handlers are responsible for 
submitting assessments to the Board on a monthly basis and maintaining 
records necessary to verify their reporting. Importers are responsible 
for paying assessments on mangos imported for marketing in the United 
States through the U.S. Customs and Border Protection Service of the 
U.S. Department of Homeland Security.
    This rule proposes an increase of one quarter of a cent per pound 
in the mango assessment rate. Currently, the assessment rate is one 
half cent per pound of mangos handled domestically or imported into the 
United States. In order to sustain and expand its promotion, research, 
and communications programs, the Board contends that additional revenue 
is required. The proposed assessment rate increase is expected to 
generate an additional $1.6 million annually, depending on the volume 
of mangos handled in the United States or imported into the United 
States. In 2010, a total of 717,830,404 pounds of mangos were subject 
to assessment, resulting in approximately $3.6 million in assessment 
revenue. Less than one percent of the total assessments were from 
domestic handlers as the vast majority of assessments were collected 
from importers. The Board states that the proposed assessment rate 
increase would enable it to make additional investments in its 
marketing and research programs. In addition, the Board states that 
some of the additional revenue could be used to establish a

[[Page 26948]]

contingency fund to ensure consistent funding for its programs.
    The Board, whose members represent domestic producers, first 
handlers, importers, and foreign producers, voted at its September 12, 
2009, meeting to propose the assessment rate increase of one quarter of 
a cent per pound after the March 2010 continuance referendum. Of the 
members present at the meeting, 9 voted in favor and 4 opposed proposal 
of the assessment rate increase. The four Board members that voted 
against the assessment increase stated that the increase would be 
passed onto mango producers. The assessment will be imposed on first 
handlers and importers who would pay assessments under the Order. 
Business decisions on how to manage assessments, including whether to 
pass back the cost of assessments to producers, are made by handlers 
and importers based on their respective business practices.
    This rule would amend the rules and regulations issued under the 
Order. This rule would increase the assessment rate by one quarter of a 
cent per pound of mangos handled in the United States or imported. The 
assessment rate would increase from one half cent to three quarters of 
a cent per pound. This proposed increase is consistent with section 
517(d) of the Act, which permits the Board to recommend to the 
Secretary a rate of assessment. Section 1206.42(a) of the Order states 
that the assessment rate may be modified by the Board with the approval 
of the Secretary, after the first referendum is conducted. The Board 
recommends the proposed assessment rate increase based on budget 
constraints imposed on its marketing, research, and industry relations 
programs by the current assessment rate. Accordingly, section 
1206.42(b) of the Order would be revised.
    A 60-day comment period is provided to allow interested persons to 
respond to this proposal. All written comments received in response to 
this rule by the date specified would be considered prior to finalizing 
this action.

List of Subjects in 7 CFR Part 1206

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Mango promotion, Reporting and 
recording requirements.

    For the reasons set forth in the preamble, 7 CFR part 1206 is 
proposed to be amended as follows:

PART 1206--MANGO RESEARCH, PROMOTION, AND INFORMATION ORDER

    1. The authority citation for 7 CFR part 1206 continues to read as 
follows:

    Authority:  7 U.S.C. 7411-7425 and 7 U.S.C. 7401.

    2. In section 1206.42, paragraph (b) is revised to read as follows:

Sec.  1206.42  Assessments.

* * * * *
    (b) The assessment rate shall be three quarters of a cent per pound 
on all mangos. The assessment rate will be reviewed and may be modified 
by the Board with the approval of the Department, after the first 
referendum is conducted as stated in Sec.  1206.71(b). The Department 
will amend this section if the assessment rate is modified.
* * * * *

    Dated: April 29, 2011.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. 2011-11042 Filed 5-9-11; 8:45 am]
BILLING CODE 3410-02-P
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