Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 /Rules and Regulations 39699

A review of historical information and

preliminary information pertaining to

the upcoming fiscal period indicates

that the f.o.b. price for the 1998–99

season could range between $4.50 and

$9.00 per 7⁄10 bushel carton of oranges

and grapefruit, depending upon the fruit

variety, size, and quality. Therefore, the

estimated assessment revenue for the

1998–99 fiscal period as a percentage of

the total pack-out revenue could range

between 2.4 and 1.2 percent.

This action decreases the assessment

obligation imposed on handlers.

Assessments are applied uniformly on

all handlers, and some of the costs may

be passed on to producers. However,

decreasing the assessment rate reduces

the burden on handlers and may reduce

the burden on producers. 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

10, 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 action imposes 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.

The Department has not identified

any relevant Federal rules that

duplicate, overlap, or conflict with this

rule.

After consideration of all relevant

material 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 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 oranges and grapefruit

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; and (4) this interim

final rule provides a 60-day comment

period, and all comments timely

received will be considered prior to

finalization of this rule.

List of Subjects in 7 CFR Part 906

Marketing agreements, Grapefruit,

Oranges, Reporting and recordkeeping

requirements.

For the reasons set forth in the

preamble, 7 CFR part 906 is 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:

§ 906.235 Assessment rate.

On and after August 1, 1998, an

assessment rate of $0.11 per 7⁄10 bushel

carton is established for oranges and

grapefruit grown in the Lower Rio

Grande Valley in Texas.

Dated: July 21, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable

Programs.

[FR Doc. 98–19886 Filed 7–23–98; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[FV98–989–2 IFR]

Raisins Produced From Grapes Grown

In California; Increase in Desirable

Carryout Used to Compute Trade

Demand

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Interim final rule with request

for comments.

SUMMARY: This rule increases the

desirable carryout used to compute the

yearly trade demand for raisins covered

under the Federal marketing order for

California raisins. The order regulates

the handling of raisins produced from

grapes grown in California and is

administered locally by the Raisin

Administrative Committee (Committee).

Trade demand is computed based on a

formula specified in the order, and is

used to determine volume regulation

percentages for each crop year, if

necessary. Desirable carryout, one factor

in this formula, is the amount of

tonnage from the prior crop year needed

during the first part of the next crop

year to meet market needs, before new

crop raisins are available for shipment.

This rule increases the desirable

carryout from 2 to 21⁄2 months of prior

year’s shipments. This increase allows

for a higher free tonnage percentage

which makes more raisins available to

handlers for immediate use early in the

season.

DATES: Effective August 1, 1998.

Comments must be received by August

3, 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.

All comments should reference the

docket number and the date and page

number of this issue of the Federal

Register and will be made available for

public inspection in the Office of the

Docket Clerk during regular business

hours.

FOR FURTHER INFORMATION CONTACT:

Maureen T. Pello, Marketing Specialist,

California Marketing Field Office, Fruit

and Vegetable Programs, AMS, USDA,

2202 Monterey Street, suite 102B,

Fresno, California 93721; telephone:

(209) 487–5901, Fax: (209) 487–5906; 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, or 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, P.O. Box 96456, room

2525–S, Washington, DC 20090–6456;

telephone (202) 720–2491; Fax: (202)

205–6632.

SUPPLEMENTARY INFORMATION: This rule

is issued under Marketing Agreement

and Order No. 989 (7 CFR part 989),

both as amended, regulating the

handling of raisins produced from

grapes grown in California, hereinafter

referred to as the ‘‘order.’’ The order is

effective under the Agricultural

Marketing Agreement Act of 1937, as
39700 Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 /Rules and Regulations

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. This rule is not intended to

have retroactive effect. 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. A

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 in

equity 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 desirable

carryout used to compute the yearly

trade demand for raisins regulated

under the order. Trade demand is

computed based on a formula specified

in the order, and is used to determine

volume regulation percentages for each

crop year, if necessary. This rule

increases the desirable carryout, one

factor in this formula, from 2 to 21⁄2

months of prior year’s shipments. This

increase allows for a higher free tonnage

percentage which makes more raisins

available to handlers for immediate use

early in the season. This rule was

unanimously recommended by the

Committee at a meeting on June 11,

1998.

The order provides authority for

volume regulation designed to promote

orderly marketing conditions, stabilize

prices and supplies, and improve

producer returns. When volume

regulation is in effect, a certain

percentage of the California raisin crop

may be sold by handlers to any market

(free tonnage) while the remaining

percentage must be held by handlers in

a reserve pool (or reserve) for the

account of the Committee. Reserve

raisins are disposed of through certain

programs authorized under the order.

For instance, reserve raisins may be sold

by the Committee to handlers for free

use or to replace part of the free tonnage

raisins they exported; used in diversion

programs; carried over as a hedge

against a short crop the following year;

or disposed of in other outlets not

competitive with those for free tonnage

raisins, such as government purchase,

distilleries, or animal feed. Net proceeds

from sales of reserve raisins are

distributed to the reserve pool’s equity

holders, primarily producers.

Section 989.54 of the order prescribes

procedures to be followed in

establishing volume regulation and

includes methodology used to calculate

percentages. Trade demand is based on

a computed formula specified in this

section, and is used to determine

volume regulation percentages. Trade

demand is equal to 90 percent of the

prior year’s shipments, adjusted by the

carryin and desirable carryout

inventories.

At one time, § 989.54(a) also specified

actual tonnages for desirable carryout

for each varietal type regulated.

However, in 1989, these tonnages were

suspended from the order, and

flexibility was added so that the

Committee could adopt a formula for

desirable carryout in the order’s rules

and regulations. The formula has

allowed the Committee to periodically

adjust the desirable carryout to better

reflect changes in each season’s

marketing conditions.

The formula for desirable carryout has

been specified since 1989 in § 989.154.

Initially, the formula was established so

that desirable carryout was based on

shipments for the first 3 months of the

prior crop year—August, September,

and October (the crop year runs from

August 1 through July 31). This amount

was gradually reduced to 21⁄2 months in

1991–92, 21⁄4 months in 1995–96, and to

its current level of 2 months in 1996–

97. The Committee reduced the

desirable carryout because it believed

that an excessive supply of raisins was

available early in a new crop year

creating unstable market conditions.

At its June 11, 1998, meeting, the

Committee evaluated the 2-month

desirable carryout level and

recommended adjusting the formula

back up to 21⁄2 months of prior year’s

shipments (August, September, and onehalf of October). In its deliberations, the

Committee considered the impact of the

reduction in desirable carryout over the

past few years along with a change to

one of its export programs operated

under the order. Prior to 1995, the

Committee administered an industry

export program whereby handlers who

exported California raisins could

purchase, at a reduced rate, reserve

raisins for free use. This effectively

blended down the cost of the raisins

which were exported, allowing handlers

to be price competitive in export

markets (prices in export markets are

generally lower than the domestic

market). One problem that the industry

found with this ‘‘raisin-back’’ program

was that the reserve raisins which

handlers received went back into free

tonnage outlets creating an excessive

supply of raisins. To correct this

problem, the industry gradually

switched to a program which offered

cash, rather than reserve raisins, to

exporting handlers. The desirable

carryout was reduced down to 2 months

to help decrease the supply of raisins

available early in a season and, thus,

stabilize market conditions.

The Committee now believes that not

enough raisins are being made available

for growth. Increasing the desirable

carryout allows for a higher trade

demand figure and, thus, a higher free

tonnage percentage which makes more

raisins available to handlers for

immediate use early in the season. A

higher free tonnage percentage may also

improve early season returns to

producers (producers are paid an

established field price for their free

tonnage).

At the meeting, the Committee also

compared the average desirable carryout

for the past 7 years with the average,

actual tonnage that all handlers have in

inventory at the end a crop year.

Desirable carryout has averaged 66,033

tons at 21⁄2 months, 63,424 tons at 21⁄4

months, and 63,364 tons at 2 months.

For the past 7 years, an average of

101,459 tons has been held in inventory

by all handlers at the end of a crop year.

Increasing the desirable carryout to 21⁄2

months would allow this factor to move

towards what handlers are actually

holding in inventory at the end of a crop

year.

Much of the discussion at the

Committee’s meeting concerned the

desirable carryout of Natural (sun-dried)

Seedless raisins (Naturals). Naturals are

the major commercial varietal type of

raisin produced in California. Volume

regulation has been implemented for

Naturals for the past several seasons.

However, the Committee also believes

that the increase in desirable carryout to

21⁄2 months should apply to the other

varietal types of raisins covered under

the order.

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.
Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 /Rules and Regulations 39701

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 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 20 handlers

of California raisins who are subject to

regulation under the order and

approximately 4,500 raisin producers in

the regulated area. Small agricultural

service firms have been defined by the

Small Business Administration (13 CFR

121.601) as those having annual receipts

of less than $5,000,000, and small

agricultural producers are defined as

those having annual receipts of less than

$500,000. No more than 7 handlers, and

a majority of producers, of California

raisins may be classified as small

entities. Thirteen of the 20 handlers

subject to regulation have annual sales

estimated to be at least $5,000,000, and

the remaining 7 handlers have sales less

than $5,000,000, excluding receipts

from any other sources.

This rule increases the desirable

carryout used to compute the yearly

trade demand for raisins regulated

under the order. Trade demand is

computed based on a formula specified

under § 989.54(a) of the order, and is

used to determine volume regulation

percentages for each crop year, if

necessary. Desirable carryout, one factor

in this formula, is the amount of

tonnage from the prior crop year needed

during the first part of the succeeding

crop year to meet market needs, before

new crop raisins are available for

shipment. This rule increases the

desirable carryout specified in § 989.154

from 2 to 21⁄2 months of prior year’s

shipments.

The 21⁄2 month desirable carryout

level applies uniformly to all handlers

in the industry, whether small or large,

and there are no known additional costs

incurred by small handlers. As

previously mentioned, increasing the

desirable carryout increases trade

demand and the free tonnage percentage

which makes more raisins available to

handlers early in the season. A higher

free tonnage percentage may also

improve early season returns to

producers (producers are paid an

established field price for their free

tonnage).

The Committee considered a number

of alternatives to the one-half month

increase in the desirable carryout level.

The Committee has an appointed

subcommittee which periodically holds

public meetings to discuss changes to

the order and other issues. The

subcommittee met on April 21 and June

9, 1998, and discussed desirable

carryout. The subcommittee considered

establishing a set tonnage for desirable

carryout (i.e., 75,000 tons for Naturals).

However, this alternative would not

allow the desirable carryout to fluctuate

with changing market conditions from

year to year. The subcommittee

considered lowering the desirable

carryout for Naturals by 15,000 tons to

tighten the supply of raisins early in the

season even more. However, the

majority of subcommittee members

believed that the early season supply of

raisins needed to be increased rather

than decreased.

Another alternative raised at the

Committee meeting was to make more

raisins available to handlers at the end

of a crop year through the industry’s ‘‘10

plus 10’’ offers. The ‘‘10 plus 10’’ offers

are two offers of reserve pool raisins

which are made available to handlers

during each season. Handlers may sell

their ‘‘10 plus 10’’ raisins as free

tonnage to any market. For each such

offer, a quantity of reserve raisins equal

to 10 percent of the prior year’s

shipments is made available for free use.

The Committee considered offering for

sale to handlers as free use an additional

quantity of reserve raisins equal to 5

percent of the prior year’s shipments.

Such an additional offer could generate

revenue that could be used to sustain

the Committee’s ‘‘cash-back’’ export

program. As previously explained,

under this program, handlers who

export raisins to certain markets may

receive cash from the reserve pool. This

effectively blends down the cost of the

raisins which were exported, allowing

handlers to be price competitive in

export markets (prices in export markets

are generally lower than the domestic

market). However, there is currently no

provision in the order for this additional

5 percent offer.

Another alternative that was raised at

the Committee’s meeting was to include

a policy statement concerning reserve

pool equity along with the

recommendation to increase the

desirable carryout. Some industry

members are concerned that increasing

desirable carryout, thereby increasing

the free tonnage percentage, may reduce

handler purchases of ‘‘10 plus 10’’

raisins and, thus, impact pool revenue.

As previously mentioned, net proceeds

from sales of reserve raisins are

distributed to reserve pool equity

holders, primarily small producers.

After much discussion, the majority of

Committee members agreed that reserve

pool equity was a separate issue from

desirable carryout and would be

addressed by the Committee’s Audit

Subcommittee.

This rule will not impose any

additional reporting or recordkeeping

requirements on either small or large

raisin 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. Finally, the Department

has not identified any relevant Federal

rules that duplicate, overlap or conflict

with this rule.

In addition, the Committee’s

subcommittee meetings on April 21 and

June 9, 1998, and the Committee

meeting on June 11, 1998, where this

action was deliberated were public

meetings widely publicized throughout

the raisin industry. All interested

persons were invited to attend the

meetings and participate in the

industry’s deliberations. Finally, all

interested persons are invited to submit

information on the regulatory and

informational impacts of this action on

small businesses.

After consideration of all relevant

material presented, including the

Committee’s recommendation, and

other information, it is found that this

interim final rule, as hereinafter set

forth, will tend to effectuate the

declared policy of the Act.

This rule invites comments on

increasing the desirable carryout level

currently specified under the California

raisin order. A 10-day comment period

is deemed appropriate because the order

provides that the Committee meet to

compute and announce the trade

demand for any varietal type for which

volume regulation may be

recommended for the 1998–99 crop year

on or before August 15, and desirable

carryout is a necessary factor in that

calculation. Any comments received

will be considered prior to finalization

of this rule.

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 1998–99 crop year

begins on August 1, 1998, and this rule

should be effective promptly because

the order provides that the Committee

meet on or before August 15 to compute

and announce the trade demand, and
39702 Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 /Rules and Regulations

the desirable carryout level is a

necessary item in that calculation; (2)

this action is a relaxation in that

increasing the desirable carryout

increases the trade demand and free

tonnage percentage making more raisins

available to handlers for immediate use

early in the season; (3) producers and

handlers are aware of this action which

was unanimously recommended by the

Committee at a public meeting; and (4)

this rule provides a 10-day comment

period and any comments received will

be considered prior to finalization of

this rule.

List of Subjects in 7 CFR Part 989

Grapes, Marketing agreements,

Raisins, Reporting and recordkeeping

requirements.

For the reasons set forth in the

preamble, 7 CFR part 989 is amended as

follows:

PART 989—RAISINS PRODUCED

FROM GRAPES GROWN IN

CALIFORNIA

1. The authority citation for 7 CFR

part 989 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. Section 989.154 is revised to read

as follows:

§ 989.154 Desirable carryout levels.

The desirable carryout levels to be

used in computing and announcing a

crop year’s marketing policy shall be

equal to the total shipments of free

tonnage of the prior crop year during

August, September, and one-half of

October, for each varietal type,

converted to a natural condition basis:

Provided, That should the prior year’s

shipments be limited because of crop

conditions, the Committee may select

the total shipments during the months

of August, September, and one-half of

October during one of the three crop

years preceding the prior crop year.

Dated: July 21, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable

Programs.

[FR Doc. 98–19874 Filed 7–22–98; 10:03 am]

BILLING CODE 3410–02–P

FEDERAL HOUSING FINANCE BOARD

12 CFR Part 934

[No. 98–32]

RIN 3069–AA70

Authority to Approve Federal Home

Loan Bank Bylaws

AGENCY: Federal Housing Finance

Board.

ACTION: Final rule.

SUMMARY: The Federal Housing Finance

Board (Finance Board) is adopting the

interim final rule that added a new

provision to its regulation on Federal

Home Loan Bank (FHLBank) operations

to devolve responsibility for approving

FHLBank bylaws or amendments

thereto from the Finance Board to the

boards of directors of the FHLBanks as

a final rule without change. The rule is

part of the Finance Board’s continuing

effort to devolve management and

governance responsibilities to the

FHLBanks and is consistent with the

goals of the Regulatory Reinvention

Initiative of the National Performance

Review.

EFFECTIVE DATE: The final rule will

become effective on August 24, 1998.

FOR FURTHER INFORMATION CONTACT:

Amy R. Maxwell, Compliance

Assistance Division, Office of Policy,

202/408–2882, or Janice A. Kaye,

Attorney-Advisor, Office of General

Counsel, 202/408–2505, Federal

Housing Finance Board, 1777 F Street,

N.W., Washington, DC 20006.

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Background

Subject to the approval of the Finance

Board, section 12(a) of the Federal

Home Loan Bank Act authorizes the

board of directors of each FHLBank to

‘‘prescribe, amend, and repeal by-laws,

rules, and regulations governing the

manner in which its affairs may be

administered.’’ 12 U.S.C. 1432(a). In

December 1997, the Finance Board

published an interim final rule with

request for comments that added a new

section, designated as § 934.16, to its

regulation on FHLBank operations. See

62 FR 65197 (Dec. 11, 1997), codified at

12 CFR 934.16. The 30-day public

comment period closed on January 12,

1998. See id. This new provision

authorizes the board of directors of each

FHLBank to prescribe, amend, or repeal

bylaws or bylaws amendments

governing the manner in which the

FHLBank administers its affairs without

the prior approval of the Finance Board

provided that the bylaws or bylaws

amendments are consistent with

applicable statutes, regulations, and

Finance Board policies.

II. Analysis of Public Comments and

the Final Rule

The Finance Board received one

comment in response to the interim

final rule. The commenter supports the

rule because it promotes more efficient

operations that benefit the FHLBanks,

their members, and homebuyers.

Accordingly, for the reasons set forth in

detail in the interim final rulemaking,

the Finance Board is adopting the

interim final rule that devolves

responsibility for approving FHLBank

bylaws and amendments thereto from

the Finance Board to the boards of

directors of the FHLBanks without

change.

III. Regulatory Flexibility Act

The Finance Board adopted this

amendment to part 934 in the form of

an interim final rule and not as a

proposed rule. Therefore, the provisions

of the Regulatory Flexibility Act do not

apply. See 5 U.S.C. 601(2), 603(a).

IV. Paperwork Reduction Act

This final rule does not contain any

collections of information pursuant to

the Paperwork Reduction Act of 1995.

See 44 U.S.C. 3501 et seq. Consequently,

the Finance Board has not submitted

any information to the Office of

Management and Budget for review.

List of Subjects in 12 CFR Part 934

Federal home loan banks, Securities,

Surety bonds.

Accordingly, the Federal Housing

Finance Board hereby adopts the

interim final rule amending 12 CFR part

934 that was published at 62 FR 65197

on December 11, 1997, as a final rule

without any change.

Dated: July 8, 1998.

By the Board of Directors of the Federal

Housing Finance Board.

Bruce A. Morrison,

Chairperson.

[FR Doc. 98–19811 Filed 7–23–98; 8:45 am]

BILLING CODE 6725–01–P

FEDERAL HOUSING FINANCE BOARD

12 CFR Part 937

[No. 98–28]

Financial Disclosure by the Federal

Home Loan Banks

AGENCY: Federal Housing Finance

Board.

ACTION: Final rule.