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Rules and Regulations Federal Register

54235 

Vol. 70, No. 177 

Wednesday, September 14, 2005 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 905 

[Docket No. FV05–905–2 IFR] 

Oranges, Grapefruit, Tangerines, and 

Tangelos Grown in Florida; Modifying 

Procedures and Establishing 

Regulations To Limit Shipments of 

Small Sizes of Red Seedless Grapefruit 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Interim final rule with request 

for comments. 

SUMMARY: This rule limits the volume of 

sizes 48 and 56 red seedless grapefruit 

entering the fresh market and changes 

procedures used for this purpose under 

the marketing order for oranges, 

grapefruit, tangerines, and tangelos 

grown in Florida (order). The order is 

administered locally by the Citrus 

Administrative Committee (Committee). 

The procedural changes modify the way 

a handler’s average week is determined 

by providing that if crop conditions 

limit shipments from any of the three 

prior seasons, a prior season or seasons 

can be used for the three-season average. 

The average week is used by the 

Committee in determining the handler 

shipment allotments. This rule also 

limits the volume of small sizes entering 

the fresh market for the first 22 weeks 

of the 2005–2006 season beginning 

September 19, 2005. This action is 

intended to make the regulation more 

responsive to industry needs and 

provide adequate supplies of small red 

seedless grapefruit without saturating 

all markets. It is expected to stabilize 

supplies and improve grower returns. 

DATES: Effective September 15, 2005; 

comments received by October 14, 2005, 

will be considered prior to issuance of 

a final rule. 

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; E-mail: 

moab.docketclerk@usda.gov; or Internet: 

http://www.regulations.gov. 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, or 

can be viewed at: http:// 

www.ams.usda.gov/fv/moab.html. 

FOR FURTHER INFORMATION CONTACT: 

Doris Jamieson, Southeast Marketing 

Field Office, Marketing Order 

Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA; 

Telephone: (863) 324–3375, Fax: (863) 

325–8793; or George Kelhart, Technical 

Advisor, 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. 

Small businesses may request 

information on complying with this 

regulation by contacting Jay Guerber, 

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: 

Jay.Guerber@usda.gov. 

SUPPLEMENTARY INFORMATION: This rule 

is issued under Marketing Agreement 

No. 84 and Marketing 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 

(USDA) 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 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. A 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 changes the procedures used 

to limit the volume of sizes 48 and 56 

red seedless grapefruit entering the fresh 

market by modifying the way a 

handler’s average week is determined. 

The procedural changes provide that if 

crop conditions limit shipments from 

any of the three prior seasons, a prior 

season or seasons can be substituted in 

the three-season average. This rule also 

limits the volume of small sized red 

seedless grapefruit entering the fresh 

market for the first 22 weeks of the 

2005–2006 season beginning September 

19, 2005. This action is intended to 

make the regulation more responsive to 

industry needs and provide adequate 

supplies of small red seedless grapefruit 

without saturating all markets. It is 

expected to stabilize supplies and 

improve grower returns. The Committee 

unanimously recommended this action 

at a meeting held on May 10, 2005. 

Section 905.52 of the order provides 

authority to limit shipments of any 

grade or size, or both, of any variety of 

Florida citrus. Such limitations may 

restrict the shipment of a portion of a 

specified grade or size of a variety. 

Under such a limitation, the quantity of 

such grade or size a handler may ship 

during a particular week is established 

as a percentage of the total shipments of 

such variety shipped by that handler 

54236 Federal Register / Vol. 70, No. 177 / Wednesday, September 14, 2005 / Rules and Regulations 

during a prior period, established by the 

Committee and approved by USDA. 

Section 905.153 of the regulations 

specifies procedures for limiting the 

volume of small red seedless grapefruit 

entering the fresh market. These 

procedures specify that the Committee 

may recommend that only a certain 

percentage of sizes 48 and 56 red 

seedless grapefruit can be made 

available for fresh shipment for any 

week or weeks during the regulatory 

period. The regulation period is 22 

weeks long and begins the third Monday 

in September. Under such a limitation, 

the recommended percentage is applied 

to each handler’s average week to 

determine the quantity of sizes 48 and 

56 red seedless grapefruit the handler 

may ship. The average week constitutes 

the prior period specified in § 905.52. 

Therefore, an average week is calculated 

for each handler. 

Currently, an average week is 

calculated using the immediately 

preceding three seasons. This rule 

amends § 905.153 to modify the way a 

handler’s average week is determined. 

Provisions are added providing that if 

crop conditions limit shipments from 

any of the three prior seasons, a prior 

season or seasons can be used for the 

three-season average. 

An average week is calculated by 

adding the total red seedless grapefruit 

shipments by a handler during the 33- 

week period beginning the third 

Monday in September for the 

immediately preceding three seasons. 

This total is divided by three to 

establish an average season, and is then 

divided by the 33 weeks in a season to 

derive the average week. When the 

Committee utilizes the provisions of 

§ 905.153 and establishes percentages 

for the regulatory period, a handler’s 

average week is multiplied by the 

applicable percentage to establish that 

handler’s allotment for shipping small 

red seedless grapefruit during that 

particular week. 

In 2004, the major grapefruit growing 

regions in Florida suffered significant 

damage and fruit loss from multiple 

hurricanes. The official USDA crop 

estimate for the 2004–05 season 

reflected a 69 percent decrease from the 

previous season’s estimate. Fresh 

shipments of red grapefruit for the 

2004–05 season were reduced by more 

than 63 percent in comparison to the 

2003–04 season. Consequently, the 

percentage of size regulation was not 

utilized for the 2004–05 season. 

The Committee met May 10, 2005, to 

consider implementing a percentage of 

size regulation for red seedless 

grapefruit for the 2005–06 season. 

During its discussions, concerns were 

raised regarding the impact of the 2004–

05 season when calculating a handler’s 

average week. Most handlers’ shipments 

reflect a significant decline in volume 

for the 2004–05 season, with some 

handlers shipping no volume at all due 

to the damage sustained by their 

packinghouses. The Committee believes 

using figures from a season in which 

adverse crop conditions cause a 

reduction in the amount of fruit 

produced would distort the accuracy of 

a handler’s average shipments. 

Committee members agreed including 

the 2004–05 season in the calculation of 

a handler’s average week would result 

in averages that are not reflective of a 

handler’s average shipments. 

When a handler is fairly consistent in 

the amount of fruit shipped each season, 

one season of decreased volume has the 

potential to drastically reduce their 

shipment average. With the handler’s 

average week based on a three-season 

average, including a season such as last 

season could significantly lower the 

handler’s average week on which the 

percentage of size regulation is based, 

decreasing a handler’s allotment of 

small grapefruit sizes. 

Including the 2004–05 season in base 

calculations would reduce the total base 

available to the industry by more than 

20 percent. However, the impact on 

individual handlers could be as great as 

reducing their base by a third. 

Therefore, the Committee voted 

unanimously to change § 905.153 to 

exclude the 2004–05 season when 

calculating a handler’s average week. 

To accommodate this 

recommendation and provide a method 

to handle similar situations should they 

occur during future seasons, this rule 

amends § 905.153 to provide that should 

shipments from any or all of the 

immediately preceding three seasons be 

limited because of crop conditions, the 

Committee could use a prior season or 

seasons when determining the threeseason average for the purpose of 

calculating a handler’s average week. 

Under this change, the Committee 

would meet prior to the issuance of a 

percentage size regulation and 

determine which seasons are to be used 

to calculate a handler’s average week. 

This change gives the Committee some 

additional flexibility to account for 

adverse crop conditions and assists in 

providing an average reflective of a 

handler’s normal shipments. For the 

2005–06 season, each handler’s average 

week will be computed using the 2001–

02, 2002–03, and the 2003–04 seasons. 

This interim final rule also limits the 

volume of sizes 48 (39⁄16 inches 

minimum diameter) and 56 (35⁄16 inches 

minimum diameter) red seedless 

grapefruit entering the fresh market by 

instituting weekly percentages for the 

first 22 weeks of the 2005–06 season. 

This rule establishes weekly percentages 

at 35 percent for the first six weeks 

(September 19, 2005 through October 

30, 2005), and 25 percent for weeks 

seven through 22 (October 31, 2005 

through February 19, 2005). The 

Committee also unanimously 

recommended this action at its May 10, 

2005, meeting. This action is similar to 

those taken in previous seasons. 

A normal season for Florida grapefruit 

runs from September through June. 

During the first 22 weeks, there is 

usually an oversupply of small red 

seedless grapefruit and a reduced 

demand for such fruit until later in the 

season when there is a greater demand 

for smaller sizes from export markets. 

The Committee believes the over 

shipment of smaller-sized red seedless 

grapefruit in the first 22 weeks of the 

season has a detrimental effect on the 

market. 

While there is a market for smallsized red seedless grapefruit, the 

availability of large quantities 

oversupplies the fresh market with these 

sizes and negatively impacts the market 

for all sizes. These smaller sizes, 48 and 

56, normally return the lowest prices 

when compared to the other larger sizes. 

When there is too much volume of the 

smaller sizes available, the 

overabundance of small-sized fruit pulls 

the prices down for all sizes. This action 

is intended to stabilize the early season 

(22-week) supply of small red seedless 

grapefruit and to help improve the 

prices received by growers. In the 

absence of this action, grower prices 

may be lower than their cost of 

production. 

For the three seasons prior to the use 

of percentage size regulation, 1994–95, 

1995–96, and 1996–97, returns for red 

seedless grapefruit had been declining, 

often not returning the cost of 

production. On-tree prices for red 

seedless grapefruit had fallen steadily 

from $6.87 per box (13⁄5 bushel) during 

the 1991–92 season, to $3.38 per box 

during the 1993–94 season, to $1.91 per 

box during the 1996–97 season. 

An economic study done by the 

University of Florida—Institute of Food 

and Agricultural Sciences in May 1997, 

found that on-tree prices had fallen from 

a high near $7.00 per carton in 1991–92 

to around $1.50 per carton for the 1996– 

97 season. The study projected that if 

the industry elected to make no 

changes, the on-tree price would remain 

around $1.50 per carton. The study also 

indicated that increasing minimum size 

restrictions could help raise returns. 

Federal Register / Vol. 70, No. 177 / Wednesday, September 14, 2005 / Rules and Regulations 54237 

The Committee believes the over 

shipment of smaller-sized red seedless 

grapefruit contributed to these poor 

returns for growers and to lower prices. 

Based on available statistical 

information, Committee members 

concluded that once shipments of sizes 

48 and 56 reached levels above 250,000 

cartons per week, prices declined on 

those and most other sizes of red 

seedless grapefruit. The Committee 

believed if shipments of small sizes 

were maintained at around or below 

250,000 cartons a week, prices would 

stabilize and demand for the larger, 

more profitable sizes would increase. 

Consequently, in 1996, the Committee 

recommended changing their rules and 

regulations to establish the procedures 

in § 905.153 to limit the volume of small 

red seedless grapefruit entering the 

market. The Committee has successfully 

used the provisions of § 905.153 to 

address the problems associated with 

the over shipment of small red seedless 

grapefruit, recommending percentage of 

size regulation during the first 11 weeks 

of the 1997–98, 1998–99, 1999–2000, 

and 2000–01 seasons, and for the first 

22 weeks for the 2001–02, 2002–03, and 

2003–04 seasons. Due to the extensive 

damage from three major hurricanes in 

2004, percentage of size regulation was 

not utilized for the 2004–05 season. 

When percentage of size regulation has 

been utilized, prices have increased and 

movement stabilized when compared to 

seasons without regulation. 

Because of the damage from the 2004 

hurricanes, production of red seedless 

grapefruit for the 2005–06 season is not 

anticipated to be as large as in seasons 

past. The crop is expected to rebound 

from last season’s weather reduced 

volume. However, an accurate estimate 

of the crop will not be available until 

the official USDA crop estimate is 

released in October. In addition, for four 

of the last five seasons prior to the 

hurricanes, the crops have displayed a 

tendency toward a greater volume of 

small sizes than in previous seasons. It 

is possible that trees stressed by last 

season’s storms may produce an even 

greater volume of small-sized fruit. 

Based on the available information, 

the Committee believes that for the 

2005–06 season, small sized red 

seedless grapefruit would again 

negatively impact the market for all 

grapefruit if not regulated. By regulating 

the volume of small sizes entering the 

fresh market for the first 22 weeks of the 

season, shipments of sizes 48 and 56 

can be maintained near the 250,000 

carton per week level. To address the 

volume of small-sized red seedless 

grapefruit available and to prevent the 

over shipment of small sizes, the 

Committee voted unanimously to utilize 

the provisions of § 905.153 and establish 

percentage of size regulation for each 

week of the 22-week regulatory period 

for the 2005–06 season. 

In making its recommendation, the 

Committee considered the success of 

previous percentage of size regulations 

and their experience from past seasons. 

One such indicator is a study 

commissioned by the Committee to 

determine the merit of percentage of 

size regulation. The study completed by 

Robert E. Barber, Jr., Director of 

Economics, Florida Citrus Mutual, 

entitled ‘‘An Econometric Spatial 

Equilibrium Analysis of the 48/56 Red 

Grapefruit Rule,’’ dated July 1, 2003, 

evaluated the effectiveness of past 

percentage of size regulations. 

One of the Committee’s goals in 

establishing percentage of size 

regulation was to stabilize prices and 

increase returns. The Committee 

believes percentage of size regulation 

has been effective in this area, and the 

study shows this to be true. The study 

estimates that percentage of size 

regulation has increased total f.o.b. 

revenues for red grapefruit by a total of 

12 percent or $18.9 million over the sixyear period from 1997–98 to 2002–03, 

averaging $3.15 million per season. 

Each of the six seasons had an increase 

in f.o.b. revenues ranging from a low of 

$2.52 million during the 1999–2000 

season to a high of $3.73 million for the 

2002–03 season. The f.o.b. prices per 

carton are also estimated to have 

increased by an average of 17 percent or 

$1.00 per carton during this six-year 

period. 

In the three seasons prior to the first 

percentage of size regulation in 1997–

98, prices of red seedless grapefruit fell 

from a weighted average f.o.b. price of 

$7.80 per carton in October to a 

weighted average f.o.b. price of $5.50 

per carton in December. In the seven 

seasons utilizing percentage of size 

regulation, red seedless grapefruit 

maintained higher prices throughout the 

season with a weighted average f.o.b. 

price of $8.26 per carton in October, 

$7.12 per carton in December, and 

remained at around $7.09 in April. 

Average prices for the season have also 

been higher during seasons with 

percentage of size regulation. The 

average season price for red seedless 

grapefruit was $7.10 for the last seven 

seasons compared to $5.83 for the three 

seasons prior to using percentage of size 

regulation. The Barber study shows that 

prices for the seasons 1997–98 to 2002–

03 would have been from around $0.72 

to $1.00 lower per carton without 

regulation. 

On-tree prices for fresh red seedless 

grapefruit have also been higher during 

seasons with percentage of size 

regulation than for the three seasons 

prior to regulation. The average on-tree 

price for fresh red seedless grapefruit 

was $5.28 for the seasons 1998–99 

through 2003–04 with percentage of size 

regulation compared to $3.08 for the 

three seasons prior to regulation. 

In September 2004, the University of 

Florida, Citrus Research and Education 

Center published an estimated cost of 

production for grapefruit for the 2003–

04 season. The cost to produce 

grapefruit for the fresh market was 

estimated at $1,089.13 per acre for the 

Indian River area, the major grapefruit 

production area in Florida. Indian River 

grapefruit production ranges from 325 

boxes per acre to 525 boxes per acre and 

has averaged around 445 boxes per acre. 

Based on the cost of production, and the 

average boxes per acre, growers need to 

earn a total on-tree value (fruit going 

both to the fresh market and to 

processing) of approximately $2.45 per 

box in order to break even. For the three 

seasons prior to percentage of size 

regulation, the total on-tree value 

averaged $1.78 per box. Comparatively, 

for the seasons with regulation, 1998–99 

through 2003–04, the on-tree value has 

averaged $2.88 per box for red 

grapefruit. 

Small growers have struggled the last 

ten seasons to receive returns above the 

cost of production. For many, the higher 

on-tree returns produced under 

percentage of size regulation have meant 

the difference between profit and loss. 

Another of the Committee’s goals for 

percentage of size regulation was 

maintaining the price differential 

between larger and smaller sizes. At the 

start of the season, larger-sized fruit 

command a premium price. The f.o.b. 

price can be $4 to $10 more a carton 

than for the smaller sizes. For 2003–04, 

the f.o.b. price for a size 27 averaged 

$12.38 per carton in October 2003. This 

compares to an average f.o.b. price of 

around $6.38 per carton for a size 56 

during the same period. In the three 

seasons before the issuance of a 

percentage size regulation, the f.o.b. 

price for large sizes dropped to within 

$1 or $2 of the f.o.b. price for small sizes 

by the middle of the season due to the 

oversupply of the smaller sizes. 

Percentage of size regulation has 

helped sustain the price differential, 

maintaining higher prices for the largersized fruit. During the three seasons 

before regulation, the average 

differential between the carton price for 

a size 27 and a size 56 was $3.47 at the 

end of October and dropped to $1.68 by 

mid-December. In the seven seasons 

54238 Federal Register / Vol. 70, No. 177 / Wednesday, September 14, 2005 / Rules and Regulations 

with percentage of size regulation, the 

average differential between the carton 

price for a size 27 and a size 56 was 

$5.51 at the end of October, $3.83 in 

mid-December, and remained at around 

$3.36 the first week in May. The Barber 

study also states that f.o.b. revenues for 

larger sized red grapefruit benefited 

substantially from percentage of size 

regulation. Of the $18.9 million increase 

in total fresh f.o.b. revenues for red 

grapefruit the last six seasons, nearly 

$16.7 million can be attributed to gains 

made by fruit larger than sizes 48 and 

56. 

According to the Economic Analysis 

and Program Planning Branch, USDA, 

the margins between the prices for the 

various sizes of red grapefruit have 

remained fairly constant throughout the 

seasons covered under percentage of 

size regulation. However, they further 

indicated that if the domestic market 

becomes glutted with too many smallsized grapefruit (48 and 56), the margins 

would be negatively impacted and total 

grower returns would be reduced. 

The goal of this percentage of size rule 

is to reduce the volume of the least 

valuable fruit in the market and 

strengthen grower prices and revenues. 

Without this rule, the fresh grapefruit 

market will become glutted with smallsized fruit, which will have a negative 

impact on prices for larger-sized fruit 

and grower returns. Absent this rule, the 

price margins between sizes (23, 27, 32, 

36, 40, 48, and 56) will diminish and 

ultimately result in lower grower 

returns. This rule is intended to fully 

supply all markets for small sizes with 

fresh red seedless grapefruit sizes 48 

and 56, while avoiding oversupplying 

these markets to the detriment of grower 

revenues. 

The Committee believes percentage of 

size regulation has also helped stabilize 

the volume of small sizes entering the 

fresh market. During deliberations in 

past seasons, Committee members 

concluded once shipments of sizes 48 

and 56 reached levels above 250,000 

cartons per week, prices declined on 

those and most other sizes of red 

seedless grapefruit. The last seven 

seasons during the weeks regulated by 

a percentage of size regulation, weekly 

shipment of sizes 48 and 56 red seedless 

grapefruit remained near or below 

250,000 cartons for nearly 80 percent of 

the regulated weeks. Also, based on the 

Barber study, while percentage of size 

regulation has been successful in 

controlling the volume of small sizes 

entering the fresh market, it has had 

only a limited affect on total shipments. 

In addition, an economic study by 

Florida Citrus Mutual (Lakeland, 

Florida) dated April 1998, also found 

that the weekly percentage regulation 

was effective. The study stated that part 

of the strength in early season pricing 

appeared to be due to the use of the 

weekly percentage rule to limit the 

volume of sizes 48 and 56. It said prices 

were generally higher across the size 

spectrum with sizes 48 and 56 having 

the largest gains, and larger-sized 

grapefruit also registering modest 

improvements. The rule shifted the size 

distribution toward the higher-priced, 

larger-sized grapefruit, which helped 

raise average f.o.b. prices. It further 

stated that sizes 48 and 56 accounted for 

only 17 percent of domestic shipments 

during the same period in the 1997–98 

season, as small sizes were used to 

supply export customers with 

preferences for small-sized grapefruit. 

There are also other conditions 

warranting the consideration of 

establishing percentage of size 

regulation for the 2005–06 season. For 

the five seasons, 1999–2000 through 

2003–04, the percentage of the 

remaining crop represented by small 

sizes in February averaged around 45 

percent. This compares to an average of 

31 percent for the same month for 

seasons 1995–96 through 1997–98. 

These five seasons, 1999–2000 through 

2003–04, averaged a greater percentage 

of smaller sizes across each month, 

October through February, than over the 

three seasons 1995–96 through 1997–98. 

For the eight of the nine seasons prior 

to the 2004–05 season, there has been a 

movement toward an increased volume 

of small sizes as a percentage of the 

overall crop. Currently, it is unclear 

how the 2005–06 crop will size. Due to 

hurricane damage in 2004, it is 

anticipated that the 2005–06 crop will 

be smaller than in past seasons, but 

production will be significantly greater 

than last season. However, it is possible 

that because of the weather damage 

sustained during the 2004–05 seasons, a 

larger quantity of the fruit produced 

may be small sizes, making an even 

greater supply of small-sized fruit 

available for market. 

European and Asian markets also 

impact the volume of small sizes 

available. These markets have shown a 

strong demand for the smaller-sized red 

seedless grapefruit. The increase in the 

value of currency in these markets 

compared to the dollar resulted in more 

shipments of smaller-sized red seedless 

grapefruit to these markets. However, a 

reduction in shipments to these areas 

could occur during the coming season if 

market conditions change. This could 

result in a greater amount of small sizes 

for remaining markets to absorb. 

The market for processed grapefruit is 

also a consideration. Approximately 48 

percent of red seedless grapefruit was 

used for processing in 2003–04, with the 

majority being squeezed for juice. 

However, this outlet offers limited 

returns. Of the last eight seasons, only 

1999–2000 produced on-tree returns for 

processed red seedless grapefruit 

exceeding $1 per box. Returns for 2003–

04 processed red seedless grapefruit 

averaged a negative $0.13 per box. 

When on-tree returns for processed 

grapefruit drop below a dollar, there is 

pressure to shift a larger volume of the 

overall crop to the fresh market to 

benefit from the higher prices normally 

paid for fresh fruit. From 1999–2000 

through 2003–04, the differential 

between fresh prices and processed 

prices has averaged $5.06 per box. 

Consequently, growers prefer to ship 

grapefruit to the fresh market. 

By the start of the season, the Florida 

Department of Citrus projects that 

around 26 weeks worth of juice will 

remain in inventory. Due to current 

inventories, on-tree prices for processed 

red seedless grapefruit for the 2005–06 

season are expected to remain below a 

dollar. A fair percentage of red seedless 

grapefruit shipped for processing are 

smaller sizes. With limited returns for 

processed grapefruit, an additional 

volume of small sizes could be shifted 

toward the fresh market, as was the case 

last season, further aggravating 

problems with excessive volumes of 

small sizes. 

The percentage of size regulation has 

a positive impact on grower returns and 

is intended to make the most 

economically viable fruit available to 

the fresh market without oversupplying 

small-sized fruit. The above 

considerations further support the need 

to control the volume of sizes 48 and 56 

during the season to prevent small sizes 

from overwhelming all markets. 

The Committee believes the volume of 

small red seedless grapefruit available 

will have a detrimental effect on the 

market if it is not controlled. Members 

believe establishing weekly percentages 

during the seven seasons prior to the 

hurricanes have been effective and that 

problems successfully addressed by 

percentage of size regulation will return 

without regulation. In its discussion of 

this issue, the Committee recognized 

that the crop size would reflect the 

damage sustained from last season’s 

hurricanes. However, they still support 

the use of percentage size regulation for 

the 2005–06 season. 

Even though the overall crop may be 

reduced, a substantial increase in 

volume is expected in comparison to the 

2004–05 season. In addition, as was the 

case last season, a greater percentage of 

the overall volume may be shifted to the 

Federal Register / Vol. 70, No. 177 / Wednesday, September 14, 2005 / Rules and Regulations 54239 

fresh market, further increasing fresh 

shipments. In the seasons prior to last 

season, approximately 50 percent of the 

crop went for processing. However, with 

last season’s weather reduced crop, 

approximately 65 percent of the crop 

was shipped to the fresh market. 

Further, it is anticipated that a greater 

percentage of the crop will be small 

sizes. Consequently, the Committee 

believes weekly percentage of size 

regulation should be established for 

each of the 22 weeks of the regulatory 

period for the 2005–06 season. The 

Committee recommended establishing 

weekly percentages at 35 percent for the 

first six weeks and 25 percent for weeks 

seven through 22. 

The Committee considered the 

percentages set in previous seasons as a 

basis for the 2005–06 season. They also 

took into consideration the damage to 

the citrus industry as a result of the 

2004 hurricanes and how more 

information regarding the crop would be 

available following the start of the 

season. Members of the Committee 

agreed that there will be a smaller than 

usual crop of red seedless grapefruit for 

the 2005–06 season, but believe that 

percentages need to be established to 

prevent a glut on the market to provide 

some restriction while affording volume 

for those markets that prefer small sizes. 

Committee members believe if 

shipments of small sizes are maintained 

at around or below 250,000 cartons a 

week, prices stabilize and demand for 

larger, more profitable sizes increases. 

The Committee considered the 250,000- 

carton level when recommending the 

weekly percentages, and set the first six 

weeks at 35 percent. Setting the 

percentages at 35 percent provides a 

total industry base of 242,739 cartons 

(35 percent of the total industry base of 

693,540 cartons). This allows total 

industry shipments to approach the 

250,000 carton level without exceeding 

it. 

For the remaining 16 weeks, the 

Committee recommended setting 

weekly percentages at 25 percent, the 

tightest restriction allowed under the 

order’s rules and regulations. At the 

time of the May meeting, grapefruit had 

not yet begun to size, giving little 

indication as to the distribution of sizes, 

the size of the overall crop, or the 

impact of the lingering effects of last 

season’s storms. The Committee 

recognized the first reports on how the 

crop is sizing will not be available until 

after September, and that more 

information regarding the current 

season will be available following the 

official USDA crop estimate in October. 

Setting the weekly percentages at 25 

percent for each of the remaining weeks 

provides the Committee with the 

greatest flexibility in responding to the 

information regarding this season as it 

comes available. As was their practice 

during the first seasons of percentage of 

size regulation, the Committee believes 

it is best to set regulation for these 

weeks at the most restrictive level, and 

then relax the percentage as conditions 

warrant. 

Because of the likelihood that this 

season will differ considerably from 

previous seasons where percentage of 

size regulation was implemented, the 

Committee wants to ensure it has the 

best information available when 

considering the established percentages. 

Consequently, the Committee intends to 

meet as needed during the season to 

consider adjustments in the weekly 

percentage rates, as was done in 

previous seasons. Further, at the May 

10, 2005, meeting, it was stated that the 

48 and Smaller Red Grapefruit 

Subcommittee (subcommittee) will meet 

shortly after the 2005–06 crop estimate 

is released on October 11, 2005. At that 

time, the subcommittee will review the 

information available and develop 

recommendations for consideration by 

the full Committee, including increasing 

the set percentages to release greater 

quantities of sizes 48 and 56, or even 

withdrawing regulation should 

conditions warrant. 

Therefore, the Committee believes it 

is best to set regulation at these levels, 

and then relax the percentages later in 

the season based on the additional 

information as it comes available. Any 

changes to the weekly percentages set 

by this rule will require additional 

rulemaking and the approval of USDA. 

This rule establishes weekly 

percentages at 35 percent for the first six 

weeks and 25 percent for weeks seven 

through 22. This rule is intended to 

fully supply all markets for small sizes 

with fresh red seedless grapefruit sizes 

48 and 56, while avoiding 

oversupplying these markets to the 

detriment of grower revenues. The 

Committee plans to meet as needed 

during the 22-week period to ensure 

weekly percentages are at the 

appropriate levels. 

Under § 905.153, the quantity of sizes 

48 and 56 red seedless grapefruit a 

handler may ship during a regulated 

week is calculated using the set weekly 

percentage. The set percentage is 

applied to a handler’s average week to 

determine that handler’s allotments of 

small sizes. Utilizing the provisions 

discussed in the first part of this rule 

and the Committee’s recommendation at 

its May 10, 2005, meeting, a handler’s 

average week for the 2005–06 season 

will be calculated using the 2001–02, 

2002–03, and 2003–04 seasons. 

Handlers can fill their allotment with 

size 56, size 48, or a combination of the 

two sizes such that the total of these 

shipments is within the established 

limits. The Committee staff performs the 

specified calculations and provides 

them to each handler. The regulatory 

period begins the third Monday in 

September, September 19, 2005. Each 

regulation week begins Monday at 12 

a.m. and ends at 11:59 p.m. the 

following Sunday. 

Section 905.153(d) provides 

allowances for overshipments, loans, 

and transfers of allotment. These 

tolerances allow handlers the 

opportunity to supply their markets 

while limiting the impact of small sizes. 

The Committee can also act on behalf 

of handlers wanting to arrange allotment 

loans or participate in the transfer of 

allotment. Repayment of an allotment 

loan is at the discretion of the handlers 

party to the loan. The Committee will 

inform each handler of the quantity of 

sizes 48 and 56 red seedless grapefruit 

they can handle during a particular 

week, making the necessary adjustments 

for overshipments and loan repayments. 

Section 8e of the Act requires that 

whenever grade, size, quality, or 

maturity requirements are in effect for 

certain commodities under a domestic 

marketing order, including grapefruit, 

imports of that commodity must meet 

the same or comparable requirements. 

This rule does not change the minimum 

grade and size requirements under the 

order, only the percentages of sizes 48 

and 56 red grapefruit that may be 

handled. Therefore, no change is 

necessary in the grapefruit import 

regulations as a result of this action. 

Initial Regulatory Flexibility Analysis 

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. 

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 75 handlers 

of Florida grapefruit who are subject to 

regulation under the marketing order 

54240 Federal Register / Vol. 70, No. 177 / Wednesday, September 14, 2005 / Rules and Regulations 

and approximately 11,000 growers of 

citrus in the regulated area. Small 

agricultural service firms, including 

handlers, are defined by the Small 

Business Administration (SBA) as those 

having annual receipts of less than 

$6,000,000, and small agricultural 

producers are defined as those having 

annual receipts of less than $750,000 

(13 CFR 121.201). 

Based on industry and Committee 

data, the average annual f.o.b. price for 

fresh Florida red seedless grapefruit 

during the 2003–04 season was 

approximately $7.58 per 4⁄5-bushel 

carton, and total fresh shipments for the 

2003–04 season are estimated at 24.7 

million cartons of red grapefruit. 

Approximately 25 percent of all 

handlers handled 75 percent of Florida’s 

grapefruit shipments. Using the average 

f.o.b. price, at least 80 percent of the 

grapefruit handlers could be considered 

small businesses under the SBA 

definition. Therefore, the majority of 

Florida grapefruit handlers may be 

classified as small entities. The majority 

of Florida grapefruit producers may also 

be classified as small entities. 

This rule changes the procedures used 

to limit the volume of sizes 48 and 56 

red seedless grapefruit entering the fresh 

market by modifying the way a 

handler’s average week is determined. 

The changes provide that if crop 

conditions limit shipments from any of 

the immediately preceding three 

seasons, a prior season or seasons can be 

used for the three-season average. This 

rule also limits the volume of small 

sizes entering the fresh market for the 

first 22 weeks of the 2005–2006 season 

beginning September 19, 2005. This 

action makes the regulation more 

responsive to industry needs and 

provides adequate supplies of small red 

seedless grapefruit without saturating 

all markets. This is intended to help 

stabilize supplies and improve grower 

returns. This rule revises the provisions 

of § 905.153 and utilizes these 

provisions to establish the percentage 

size regulation. Authority for this action 

is provided in § 905.52 of the order. The 

Committee unanimously recommended 

these changes at a meeting held on May 

10, 2005. 

The first action in this rule revises the 

procedures in § 905.153 used in 

implementing percentage size 

regulations for small red seedless 

grapefruit under the order. These 

procedures will be applied uniformly 

for all handlers regardless of size. This 

action is not expected to decrease the 

overall consumption of red seedless 

grapefruit or result in any additional 

costs for the industry. 

Prior to this change, a handler’s 

average week, which is used as a base 

during percentage of size regulation, 

was calculated using the immediately 

preceding three seasons. This change 

provides that should shipments from 

any or all of the three prior seasons be 

limited because of crop conditions, the 

Committee could use a prior season or 

seasons when determining the threeseason average for the purpose of 

calculating a handler’s average week. 

This change provides the Committee 

with some additional flexibility to 

account for adverse crop conditions and 

assists in providing an average reflective 

of a handler’s normal shipments. 

Using shipment figures from a season 

where adverse crop conditions reduced 

the amount of fruit shipped would 

distort the accuracy of a handler’s 

average shipments. In 2004, the major 

grapefruit growing regions in Florida 

suffered significant damage and fruit 

loss from multiple hurricanes, reducing 

the official USDA crop estimate by 69 

percent from the previous season. Most 

handlers’ shipments reflected a 

significant decline in volume, with 

some handlers shipping no volume at 

all due to the damage sustained by their 

packinghouses. 

With the handler’s average week 

based on a three-season average, 

including a season such as last season 

could significantly lower the handler’s 

average week, decreasing a handler’s 

allotment of small size. Including the 

2004–05 season in base calculations for 

the 2005–06 season would reduce the 

total industry base available by more 

than 20 percent, with the possible 

reduction for individual handlers being 

as much as a third. 

Consequently, this change provides 

additional allotment in seasons 

following years where the crop was 

reduced by adverse weather conditions. 

It allows the Committee to exclude 

those seasons, thus, providing an 

average week that more closely reflects 

a handler’s shipments and makes 

additional allotment available. 

In terms of the second action 

implemented by this rule, while the 

establishment of volume regulation may 

necessitate additional spot picking, 

which could entail slightly higher 

harvesting costs, in most cases this is 

already a standard industry practice. 

The Barber study indicates that spot 

picking only fractionally increases 

harvesting costs on just a small segment 

of the boxes picked. In addition, with 

spot picking, the persons harvesting the 

fruit are more selective and pick only 

the desired sizes and qualities. This 

reduces the amount of time and effort 

needed in sorting fruit because 

undersized fruit is not harvested. This 

may result in a cost savings through 

reduced processing and packing costs. 

In addition, because this regulation is 

only in effect for part of the season, the 

overall effect on costs is minimal. 

Consequently, this action is not 

expected to appreciably increase costs 

to producers. 

If a 25 percent restriction on small 

sizes had been applied during the 22- 

week period for the three seasons prior 

to the 1997–98 season, an estimated 

average of 3.1 percent of overall 

shipments during that period would 

have been constrained by regulation. A 

large percentage of this volume most 

likely could have been replaced by 

larger sizes for which there are no 

volume restrictions. Under regulation, 

larger sizes have been substituted for 

smaller sizes with a nominal effect on 

overall shipments. 

Handlers can also transfer, borrow or 

loan allotment based on their needs in 

a given week. Handlers also have the 

option of over shipping their allotment 

by 10 percent in a week, provided the 

over shipment is deducted from the 

following week’s shipments (over 

shipments are not allowed during the 

last regulated week). Approximately 315 

loans and transfers were used during the 

2003–04 season. Statistics for 2003–04 

show the total available allotment was 

used in only 3 weeks of the regulated 

period. Therefore, the overall impact of 

this regulation on total shipments 

should be minimal. 

The Committee believes establishing 

percentage of size regulation during the 

2005–06 season will have benefits 

similar to those realized under past 

regulations. Handlers and producers 

have received higher returns under 

percentage of size regulation than 

without regulation. In the three seasons 

prior to the first percentage of size 

regulation in 1997–98, prices of red 

seedless grapefruit fell from a weighted 

average f.o.b. price of $7.80 per carton 

in October to a weighted average f.o.b. 

price of $5.50 per carton in December. 

In the seven seasons utilizing 

percentage of size regulation, red 

seedless grapefruit maintained higher 

prices throughout the season with a 

weighted average f.o.b. price of $8.26 

per carton in October, to an average 

f.o.b. price of $7.12 per carton in 

December, and remained at around 

$7.09 in April. Average prices for the 

season have also been higher during 

seasons with percentage of size 

regulation. The average season price for 

red seedless grapefruit was $7.10 for the 

seven seasons utilizing percentage of 

size regulation compared to $5.83 for 

the three seasons prior to using 

Federal Register / Vol. 70, No. 177 / Wednesday, September 14, 2005 / Rules and Regulations 54241 

regulation. The Barber study estimates 

that prices for the seasons 1997–98 to 

2002–03 would have been from around 

$0.72 to $1.00 lower per carton without 

regulation. 

On-tree earnings per box for fresh red 

seedless grapefruit have also improved 

under regulation, providing better 

returns to growers. The average on-tree 

price for fresh red seedless grapefruit 

was $5.28 for the seasons 1998–99 

through 2003–04 with percentage of size 

regulation, compared to $3.08 for the 

three seasons prior to regulation. Small 

growers have struggled the last nine 

seasons to receive returns near the cost 

of production. For many, the higher 

returns provided by percentage of size 

regulation meant the difference between 

profit and loss. 

Shipments during the 22 weeks 

covered by this regulation account for 

nearly 60 percent of the total volume of 

red seedless grapefruit shipped to the 

fresh market. Considering this volume 

and the very limited returns from 

grapefruit for processing, it is 

imperative that returns from the fresh 

market be maximized during this 

period. 

The Barber study estimates that prices 

rose anywhere from 12.9 percent or $.72 

to 17.5 percent or $1.00 per 4⁄5-bushel 

carton during percentage of size 

regulation. Even if this action were only 

successful in raising returns by $.10 per 

carton, this increase in combination 

with the substantial number of 

shipments generally made during this 

22-week period, would represent an 

increased return of nearly $1.4 million. 

Consequently, any increased returns 

generated by this action should more 

than offset any additional costs 

associated with this regulation. 

The purpose of this rule is to help 

stabilize the market and improve grower 

returns. Percentage of size regulation is 

intended to reduce the volume of the 

least valuable fruit in the market, and 

shift it to those markets that prefer small 

sizes. This regulation helps the industry 

address marketing problems by keeping 

small sizes (sizes 48 and 56) more in 

balance with market demand without 

glutting the fresh market with these 

sizes. 

This rule provides a supply of smallsized red seedless grapefruit sufficient 

to meet market demand, without 

saturating all markets with these small 

sizes. This action is not expected to 

decrease the consumption of red 

seedless grapefruit. The benefits of this 

action are expected to be available to all 

red seedless grapefruit growers and 

handlers regardless of their size of 

operation. This action will likely help 

small, under-capitalized growers who 

need additional weekly revenues to 

meet operating costs. 

The Committee considered several 

alternatives when discussing these 

actions. One alternative was 

maintaining the way a handler’s average 

week is calculated using the 

immediately preceding three seasons. 

The Committee believes that including 

numbers from the 2004–05 season 

would result in averages unreflective of 

a handler’s shipments. Therefore, this 

alternative was rejected. The Committee 

also considered not recommending 

percentage of size regulation for the 

2005–06 season. However, because more 

information regarding the season would 

be available in October, the Committee 

agreed percentage of size regulation 

should be established at the levels 

recommended. Following the 

announcement of the official crop 

estimate on October 11, 2005, the 

question of whether to adjust the levels 

recommended or to remove regulation 

entirely will be revisited. Therefore, this 

alternative was also rejected. 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

Chapter 35), the information collection 

requirements contained in this rule have 

been previously approved by the Office 

of Management and Budget (OMB) and 

assigned OMB No. 0581–0189. As with 

all Federal marketing order programs, 

reports and forms are periodically 

reviewed to reduce information 

requirements and duplication by 

industry and public sectors. 

AMS is committed to compliance 

with the Government Paperwork 

Elimination Act (GPEA), which requires 

Government agencies in general to 

provide the public the option of 

submitting information or transacting 

business electronically to the maximum 

extent possible. 

In addition, USDA has not identified 

any relevant Federal rules that 

duplicate, overlap or conflict with this 

rule. However, red seedless grapefruit 

must meet the requirements as specified 

in the U.S. Standards for Grades of 

Florida Grapefruit (7 CFR 51.760 

through 51.784) issued under the 

Agricultural Marketing Act of 1946 (7 

U.S.C. 1621 through 1627). 

Further, the Committee’s meeting was 

widely publicized throughout the citrus 

industry and all interested persons were 

invited to attend the meeting and 

participate in Committee deliberations. 

Like all Committee meetings, the May 

10, 2005, meeting was a public meeting 

and all entities, both large and small, 

were able to express their views on this 

issue. Finally, interested persons are 

invited to submit information on the 

regulatory and informational impacts of 

this action on small businesses. 

A small business guide on complying 

with fruit, vegetable, and specialty crop 

marketing agreements and orders may 

be viewed at: http://www.ams.usda.gov/ 

fv/moab.html. Any questions about the 

compliance guide should be sent to Jay 

Guerber at the previously mentioned 

address in the FOR FURTHER INFORMATION

CONTACT section. 

This rule invites comments on 

revising the procedures used to limit the 

volume of sizes 48 and 56 red seedless 

grapefruit entering the fresh market 

under the order and on limiting the 

volume of small red seedless grapefruit 

entering the fresh market during the first 

22 weeks of the 2005–06 season. Any 

comments received will be considered 

prior to finalization of this rule. 

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. 

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) This rule needs to be in 

place when the regulatory period begins 

September 19, 2005, and handlers need 

to consider their allotment and how best 

to service their customers; (2) the 

industry has been discussing this issue 

for some time, and the Committee has 

kept the industry well informed; (3) this 

action has been widely discussed at 

various industry and association 

meetings, and interested persons have 

had time to determine and express their 

positions; (4) this action is similar to 

those recommended in previous 

seasons; and (5) this rule provides a 30- 

day comment period and any comments 

received will be considered prior to 

finalization of this rule. A comment 

period of 30 days is appropriate because 

it will allow for any needed intraseasonal changes to be made in a timely 

manner. 

List of Subjects in 7 CFR Part 905 

Grapefruit, Marketing agreements, 

Oranges, Reporting and recordkeeping 

requirements, Tangelos, Tangerines. 

■ For the reasons set forth in the 

preamble, 7 CFR part 905 is amended as 

follows: 

54242 Federal Register / Vol. 70, No. 177 / Wednesday, September 14, 2005 / Rules and Regulations 

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. 

§ 905.153 [Amended] 

■ 2. In § 905.153, paragraph (a), a new 

sentence is added following the third 

sentence to read as follows: ‘‘If crop 

conditions limit shipments from any or 

all of the immediately preceding three 

season(s), the committee may use a prior 

season or seasons for the purposes of 

calculating an average week.’’

■ 3. Section 905.350 is added to read as 

follows: 

§ 905.350 Red seedless grapefruit 

regulation. 

This section establishes the weekly 

percentages to be used to calculate each 

handler’s weekly allotment of small 

sizes. Handlers can fill their allotment 

with size 56, size 48, or a combination 

of the two sizes such that the total of 

these shipments are within the 

established weekly limits. The weekly 

percentages for size 48 (39⁄16 inches 

minimum diameter) and size 56 (35⁄16

inches minimum diameter) red seedless 

grapefruit grown in Florida, which may 

be handled during the specified weeks, 

are as follows: 

Week Weekly 

percentage 

(a) 9/19/05 through 9/25/05 ...... 35 

(b) 9/26/05 through 10/2/05 ...... 35 

(c) 10/3/05 through 10/9/05 ...... 35 

(d) 10/10/05 through 10/16/05 .. 35 

(e) 10/17/05 through 10/23/05 .. 35 

(f) 10/24/05 through 10/30/05 ... 35 

(g) 10/31/05 through 11/6/05 .... 25 

(h) 11/7/05 through 11/13/05 .... 25 

(i) 11/14/05 through 11/20/05 ... 25 

(j) 11/21/05 through 11/27/05 ... 25 

(k) 11/28/05 through 12/4/05 .... 25 

(l) 12/5/05 through 12/11/05 ..... 25 

(m) 12/12/05 through 12/18/05 25 

(n) 12/19/05 through 12/25/05 .. 25 

(o) 12/26/05 through 1/1/06 ...... 25 

(p) 1/2/06 through 1/8/06 .......... 25 

(q) 1/9/06 through 1/15/06 ........ 25 

(r) 1/16/06 through 1/22/06 ...... 25 

(s) 1/23/06 through 1/29/06 ...... 25 

(t) 1/30/06 through 2/5/06 ......... 25 

(u) 2/6/06 through 2/12/06 ........ 25 

(v) 2/13/06 through 2/19/06 ...... 25 

Dated: September 9, 2005. 

Lloyd C. Day, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. 05–18279 Filed 9–13–05; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2005–20475; Directorate 

Identifier 2004–NM–157–AD; Amendment 

39–14250; AD 2005–18–10] 

RIN 2120–AA64 

Airworthiness Directives; Boeing 

Model 777–200 and –300 Series 

Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Final rule. 

SUMMARY: The FAA is adopting a new 

airworthiness directive (AD) for certain 

Boeing Model 777–200 and –300 series 

airplanes. This AD requires 

modification of the splice plate 

assemblies installed under the floor 

panels at the forward and aft edges of 

the cabin aisle. This AD results from 

reports of cracking of the aluminum 

splice plates under the floor panels in 

the cabin aisle. We are issuing this AD 

to prevent loss of the capability of the 

cabin floor and seat track structure to 

support the airplane interior inertia 

loads under emergency landing 

conditions. Loss of this support could 

lead to galley or seat separation from 

attached restraints, which could result 

in blocking of the emergency exits and 

consequent injury to passengers and 

crew. 

DATES: This AD becomes effective 

October 19, 2005. 

The incorporation by reference of a 

certain publication listed in the AD is 

approved by the Director of the Federal 

Register as of October 19, 2005. 

ADDRESSES: For service information 

identified in this AD, contact Boeing 

Commercial Airplanes, P.O. Box 3707, 

Seattle, Washington 98124–2207. 

Docket: The AD docket contains the 

proposed AD, comments, and any final 

disposition. You can examine the AD 

docket on the Internet at http:// 

dms.dot.gov, or in person at the Docket 

Management Facility office between 9 

a.m. and 5 p.m., Monday through 

Friday, except Federal holidays. The 

Docket Management Facility office 

(telephone (800) 647–5227) is located on 

the plaza level of the Nassif Building at 

the U.S. Department of Transportation, 

400 Seventh Street SW, room PL–401, 

Washington, DC. This docket number is 

FAA–2005–20475; the directorate 

identifier for this docket is 2004–NM–

157–AD. 

FOR FURTHER INFORMATION CONTACT: Gary 

Oltman, Aerospace Engineer, Airframe 

Branch, ANM–120S, FAA, Seattle 

Aircraft Certification Office, 1601 Lind 

Avenue, SW., Renton, Washington 

98055–4056; telephone (425) 917–6443; 

fax (425) 917–6590. 

SUPPLEMENTARY INFORMATION: The FAA 

proposed to amend 14 CFR part 39 with 

an AD for certain Boeing Model 777–

200, –200ER, and –300 series airplanes. 

That action, published in the Federal 

Register on March 3, 2005 (70 FR 

10337), proposed to require 

modification of the splice plate 

assemblies installed under the floor 

panels at the forward and aft edges of 

the cabin aisle. 

Comments 

We provided the public the 

opportunity to participate in the 

development of this AD. We have 

considered the comments that have 

been submitted on the proposed AD. 

Request To Add Optional Inspection 

Program 

One commenter asks that, in addition 

to the terminating action specified in 

the proposed AD, an optional inspection 

program be implemented to do 

inspections of the most affected areas, 

with replacement or repair of affected 

parts on attrition. The commenter states 

that such an inspection should be added 

as a compliance option, in lieu of a full 

modification, or in conjunction with a 

longer compliance time. The commenter 

adds that, in order to accomplish the 

modification, access to some locations 

will be difficult; therefore, consideration 

should be given to adding inspections to 

extend the compliance time. The 

commenter suggests adding to the 

proposed AD an internal general visual 

inspection of the floor splice plates that 

are visible from the forward and aft pit. 

In addition, the commenter 

recommends inspecting from above for 

flexing and ‘‘clicking’’ noises commonly 

associated with splice plate cracking of 

the remaining areas located in the 

overwing section and not viewable from 

the pits. The commenter suggests that 

the inspections be done at intervals no 

longer than 48 months apart, and that a 

full general visual inspection of all 

affected splice plates be done within a 

72-month period to allow for normal 

maintenance cycles that facilitate the 

inspection. 

The commenter states that it was 

instrumental in identifying and 

reporting cracked splice plate 

discrepancies to the airplane 

manufacturer in December 1999. The 

reports brought about changes 

addressing the subject issue that were