Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Proposed Rules 38347

professional requesting the formula.

Low-calorie formulas may not be

prescribed solely for the purpose of

managing body weight of infants. * * *

* * * * *

(3) Food Package III—Children/

Women with Special Dietary Needs.

Children and women with special

dietary needs may receive the following

supplemental foods if a licensed health

care professional, authorized to write

medical prescriptions under State law,

determines that the participant has a

medical condition which precludes or

restricts the use of conventional foods

and necessitates the use of a formula

including, but not limited to, metabolic

disorders, inborn errors of amino acid

metabolism, gastrointestinal disorders,

malabsorption syndrome and allergies.

The supplemental foods described

below are not authorized solely for the

purpose of enhancing nutrient intake or

managing body weight of children and

women participants. Any formula

issued shall be supported with a

medical documentation. This

documentation shall be kept in the

participant’s certification file and shall

include at a minimum the: brand name

of the formula prescribed; medical

diagnosis warranting the prescription;

length of time the prescribed formula is

medically required by the participant;

and signature of the health care

professional requesting the formula.

* * * * *

4. In section 246.16:

a. The introductory text of paragraph

(k) is revised.

b. Paragraph (k)(1) is revised.

c. The first sentence in paragraph

(k)(2)(i)(A) is revised.

The revisions read as follows:

§ 246.16 Distribution of funds.

* * * * *

(k) Requirements for infant formula

procurement. Unless granted a waiver

under paragraph (l) of this section, all

State agencies with retail food delivery

systems (except Indian State agencies

with 1000 or fewer participants in April

of any fiscal year, which shall be

exempted for the following fiscal year)

shall implement an infant formula cost

containment measure through one of the

two methods cited below:

(1) Single-supplier competitive

method. The single-supplier

competitive method is a solicitation of

sealed competitive bids for rebates from

infant formula manufacturers, as

follows:

(i) Invitations for bids shall be for

each of the forms (e.g., concentrated

liquid, powdered and ready-to-feed) of a

single iron-fortified, milk-based infant

formula that:

(A) Meets the requirements of an ironfortified infant formula as described in

§ 246.10(c)(1)(i);

(B) Can be routinely issued to the

majority of generally healthy, full-term

infants.

(ii) State agencies shall solicit bids

based on an estimated total amount of

infant formula it expects to issue. Such

estimates shall be based on the current

number of infant participants, excluding

those infants exclusively breastfed and

those issued an exempt infant formula.

The estimated total amount of infant

formula shall be expressed in terms of

the proportion of each form of formula

expected to be issued (e.g., concentrated

liquid, powdered and ready-to-feed).

(iii) Invitations for bid and contracts

shall require the manufacturer to pay a

rebate for any nonexempt infant formula

the winning bidder produces that is

issued by the State agency. The rebate

for each of these other infant formulas

shall yield the same percentage discount

on the wholesale cost as the rebate for

the infant formula described in

paragraph (k)(1)(i) of this section.

(iv) State agencies shall award the

contract(s) as follows:

(A) Based on the lowest net price for

the infant formula described in

paragraph (k)(1)(i) of this section; or

(B) Based on the highest rebate,

provided the State agency demonstrates

to the satisfaction of FNS before issuing

the invitation for bids that the weighted

average retail prices for different brands

of infant formula in the State that meet

the requirements of paragraph (k)(1)(i)

of this section vary by 5 percent or less.

The weighted average retail price must

take into account the proportion of each

infant formula the State agency expects

to issue and both authorized food

vendors and stores which do not

participate in the program in the State.

(2) * * *

(i) Food cost savings.

(A) Single Supplier Competitive

System. The State agency shall project

food costs savings in the single-supplier

competitive system based on the net

wholesale price or highest rebate, as

described in paragraph (k)(1)(v)(B) of

this section, the total number of units of

the specified types and forms of infant

formula to be purchased under the

program less the number of units of

alternative brands anticipated to be

prescribed by physicians and purchased

by participants. * * *

* * * * *

Dated: July 10, 1998.

Shirley R. Watkins,

Under Secretary, Food, Nutrition and

Consumer Services.

[FR Doc. 98–18957 Filed 7–15–98; 8:45 am]

BILLING CODE 3410–30–U

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.

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,
38348 Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Proposed Rules

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; § 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
Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Proposed Rules 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:

§ 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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 924

[Docket No. FV98–924–1 PR]

Fresh Prunes Grown in Designated

Counties in Washington and Umatilla

County, Oregon; Increased

Assessment Rate

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Proposed rule.

SUMMARY: This rule would increase the

assessment rate established for the

Washington-Oregon Fresh Prune

Marketing Committee (Committee)

under Marketing Order No. 924 for the

1998–99 and subsequent fiscal periods

from $0.75 to $1.00 per ton of fresh

prunes handled. The Committee is

responsible for local administration of

the marketing order which regulates the

handling of fresh prunes grown in

designated counties in Washington and

Umatilla County, Oregon. Authorization

to assess fresh prune handlers enables

the Committee to incur expenses that

are reasonable and necessary to

administer the program. The 1998–99

fiscal period began April 1 and ends