Apricots Grown in Designated Counties in Washington; Increased Assessment Rate, 57493-57495 [2016-20096]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 81, Number 163 (Tuesday, August 23, 2016)]
[Proposed Rules]
[Pages 57493-57495]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-20096]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

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

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Federal Register / Vol. 81, No. 163 / Tuesday, August 23, 2016 / 
Proposed Rules

[[Page 57493]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 922

[Doc. No. AMS-SC-16-0050; SC16-922-1 PR]


Apricots Grown in Designated Counties in Washington; Increased 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Washington Apricot Marketing Committee (Committee) to increase the 
assessment rate established for the 2016-17 and subsequent fiscal 
periods from $0.75 to $1.40 per ton of Washington apricots handled 
under the marketing order. The Committee, which is composed of growers 
and handlers, locally administers the order which regulates the 
handling of apricots grown in designated counties in Washington. 
Assessments upon apricot handlers are used by the Committee to fund 
reasonable and necessary expenses of the program. The fiscal period 
begins April 1 and ends March 31. The assessment rate would remain in 
effect indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by September 22, 2016.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Specialty Crops Program, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or Internet: https://www.regulations.gov. Comments should reference the document number and 
the date and page number of this issue of the Federal Register and will 
be made available for public inspection in the Office of the Docket 
Clerk during regular business hours, or can be viewed at: https://www.regulations.gov. All comments submitted in response to this 
proposed rule will be included in the record and will be made available 
to the public. Please be advised that the identity of the individuals 
or entities submitting the comments will be made public on the internet 
at the address provided above.

FOR FURTHER INFORMATION CONTACT: Dale Novotny, Marketing Specialist, or 
Gary D. Olson, Regional Director, Northwest Marketing Field Office, 
Marketing Order and Agreement Division, Specialty Crops Program, AMS, 
USDA; Telephone: (503) 326-2724, Fax: (503) 326-7440, or Email: 
DaleJ.Novotny@ams.usda.gov or GaryD.Olson@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Antoinette Carter, Marketing Order and 
Agreement Division, Specialty Crops Program, AMS, USDA, 1400 
Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; 
Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email: 
Antoinette.Carter@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing 
Agreement and Order No. 922, both as amended (7 CFR part 922), 
regulating the handling of apricots grown in designated counties in 
Washington, hereinafter referred to as the ``order.'' The order is 
effective under the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 12866, 13563, and 13175.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the order now in effect, apricot handlers 
in designated counties in Washington are subject to assessments. Funds 
to administer the order are derived from such assessments. It is 
intended that the assessment rate as proposed herein would be 
applicable to all assessable Washington apricots beginning April 1, 
2016, and continue until amended, suspended, or terminated.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. Such 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing, USDA would rule on the petition. The Act provides 
that the district court of the United States in any district in which 
the handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction to review USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This proposed rule would increase the assessment rate established 
for the Committee for the 2016-17 and subsequent fiscal periods from 
$0.75 to $1.40 per ton of Washington apricots handled under the order.
    The Washington apricots marketing order provides authority for the 
Committee, with the approval of USDA, to formulate an annual budget of 
expenses and collect assessments from handlers to administer the 
program. The members of the Committee are producers and handlers of 
apricots in designated counties in Washington. 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 2015-16 and subsequent fiscal periods, the Committee 
recommended, and the USDA approved, an assessment rate that would 
continue in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by USDA upon recommendation and information 
submitted by the Committee or other information available to USDA.
    The Committee met on May 11, 2016, and unanimously recommended 
2016-17 expenditures of $7,160 and an assessment rate of $1.40 per ton 
of apricots. In comparison, the previous fiscal period's budgeted 
expenditures were $7,610. The recommended assessment rate of $1.40 per 
ton is $0.65

[[Page 57494]]

per ton higher than the rate currently in effect.
    Last year at the May 12, 2015, meeting, Committee members voted to 
moderately increase the budget from $7,095 to $7,610, and to decrease 
the assessment rate from $1.50 to $0.75 per ton of apricots handled. 
The Committee was attempting to lower their excess reserve funds to 
approximately one fiscal period's operating expenses to remain in 
compliance with Sec.  922.42(a)(2) of the order. The Committee based 
its recommendation on a crop estimate of 5,800 tons for the 2015-16 
crop year. The actual crop yield for that period was 4,795 tons, 1,005 
tons less than the 5,800 ton estimate used by the Committee for 
budgeting purposes. Low water supply and higher than average 
temperatures were reported by the industry at the May 11, 2016, meeting 
as the major factors for the short 2015-16 crop. As a result of the 
reduced crop size and related lower assessment revenue, the Committee 
was forced to use more funds from its reserve than previously 
anticipated. The Committee intends to fully fund ongoing operations and 
maintain adequate reserve funds through the implementation of the 
proposed assessment rate increase for the 2016-17 and future fiscal 
periods.
    The major expenditures recommended by the Committee for the 2016-17 
fiscal period include $3,000 for the contracted management fee to the 
Washington State Fruit Commission, $1,200 for Committee travel, $2,000 
for the annual audit, $500 for computer and technical services, and 
$250 for office supplies. Budgeted expenses for these items in the 
2015-2016 fiscal period were $3,000 for the management fee, $1,200 for 
Committee travel, $2,500 for the annual audit, and $500 for office 
supplies, respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Washington 
apricots, while also taking into account the Committee's monetary 
reserve. Washington apricot shipments for the year are estimated at 
5,000 tons which should provide $7,000 in assessment income at the 
proposed rate of $1.40 per ton of Washington apricots handled. Income 
derived from handler assessments, along with interest income and funds 
from the Committee's authorized reserve, would be adequate to cover 
budgeted expenses for the 2016-17 fiscal period. Funds in the reserve 
(currently $7,301) would be kept within the maximum amount permitted by 
the order of approximately one fiscal period's operational expenses. 
Authority for maintaining a financial reserve is found in Sec.  
922.42(a)(2) of the order. The Committee expects its monetary reserve 
to decrease from $7,301 at the beginning of the 2016-17 fiscal period 
to approximately $7,141 at the end of the 2016-17 fiscal period. That 
amount would be within the provisions of the order and would provide 
the Committee with the ability to absorb fluctuations in assessment 
income and expenses into the future.
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA upon recommendation 
and information submitted by the Committee or other available 
information.
    Although this assessment rate would be in effect for an indefinite 
period, the Committee would continue to meet prior to or during each 
fiscal period to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of the Committee meetings are available from the Committee or the 
USDA. Committee meetings are open to the public and interested persons 
may express their views at these meetings. USDA would evaluate 
Committee recommendations and other available information to determine 
whether modification of the assessment rate is needed. Further 
rulemaking would be undertaken as necessary. The Committee's 2016-17 
budget and those for subsequent fiscal periods would be reviewed and, 
as appropriate, approved by USDA.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) 
has considered the economic impact of this proposed 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 
businesses subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf.
    There are approximately 100 growers and 17 handlers of Washington 
apricots subject to regulation under the marketing order in the 
regulated area. Small agricultural producers are defined by the Small 
Business Administration (SBA) as those having annual receipts of less 
than $750,000, and small agricultural service firms are defined as 
those whose annual receipts are less than $7,500,000 (13 CFR 121.201).
    The National Agricultural Statistics Service (NASS) reports that 
the 2015 total production and utilization (including both fresh and 
processed markets) of Washington apricots was approximately 8,000 tons, 
the average price was $1,050 per ton, and the total farm-gate value was 
approximately $8,400,000. Based on these reports and the number of 
apricot growers within the production area, it is estimated that the 
2015 gross-average producer revenue from the sale of apricots was 
approximately $84,000.
    There are approximately 17 handlers under the order. According to 
information from the Committee, handlers shipped 4,795 tons of apricots 
during the 2015-16 fiscal period (approximately 400,000 24-pound 
containers), for an average of 282 tons (or 23,500 24-pound containers) 
of apricots shipped per handler.
    In addition, based on information from the USDA's Market News 
Service, 2015 freight-on-board prices for Washington No.1 apricots 
ranged from $20.00 to $26.00 per 24-pound container, with an average 
f.o.b price of $23.00 per container, for both loose-pack and 2-layer 
tray-pack containers. As such, the total value of apricots handled most 
likely ranged between $8,000,000 and $10,400,000, with most of the 17 
handlers in the production area handling less than $1,000,000. Average 
handler revenue from the sale of apricots in 2015 is estimated at 
approximately $541,176. Using this information, it is determined that 
each of the Washington apricot handlers currently ship less than 
$7,500,000 worth of apricots on an annual basis. In view of the 
foregoing, it is concluded that the majority of handlers and growers of 
Washington apricots may be classified as small entities.
    This proposal would increase the assessment rate established for 
the Committee, and collected from handlers, for the 2016-17 and 
subsequent fiscal periods from $0.75 to $1.40 per ton of Washington 
apricots handled. The proposed assessment rate of $1.40 is $0.65 higher 
than the 2015-16 rate. The quantity of assessable apricots for the 
2016-17 fiscal period is estimated at 5,000 tons. Thus, the $1.40 rate 
should provide $7,000 in assessment income and, combined with the 
existing reserve fund, should be adequate to meet this year's budgeted 
expenses.
    The major expenditures recommended by the Committee for the

[[Page 57495]]

2016-17 fiscal period include $3,000 for the contracted management fee 
to the Washington State Fruit Commission, $1,200 for Committee travel, 
$2,000 for the annual audit, $500 for computer and technical services, 
and $250 for office supplies. Budgeted expenses for these items in the 
2015-2016 fiscal period were $3,000 for the management fee, $1,200 for 
Committee travel, $2,500 for the annual audit, and $500 for office 
supplies.
    The Committee discussed alternatives to this action, including 
recommending alternative expenditure levels and assessment rates. 
Although lower assessment rates were considered, none were selected 
because they would not have generated sufficient income to administer 
the order.
    A review of historical data and preliminary information pertaining 
to the upcoming 2016-17 fiscal period season indicates that the grower 
price for Washington apricots could range between $1,050 and $1,300 per 
ton. Therefore, the assessment revenue for the 2016-17 fiscal period, 
as a percentage of total grower revenue, could range between 0.133 and 
0.108 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. However, these costs 
would be offset by the benefits derived by the operation of the order.
    In addition, the Committee's meeting was widely publicized 
throughout the Washington apricot 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 11, 
2016, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue. Finally, interested 
persons are invited to submit comments on this proposed rule, including 
the regulatory and informational impacts of this action on small 
businesses.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0189. No changes in those requirements as a 
result of this action are necessary. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This proposed rule would not impose any additional reporting or 
recordkeeping requirements on either small or large Washington apricot 
handlers. As with all Federal marketing order programs, reports and 
forms are periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this action.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions 
about the compliance guide should be sent to Antoinette Carter at the 
previously-mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    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 2016-17 fiscal period began on April 1, 2016, and the 
marketing order requires that the rate of assessment for each fiscal 
period apply to all assessable Washington apricots handled during such 
fiscal period; (2) the Committee needs to have sufficient funds to pay 
its expenses, which are incurred on a continuous basis; (3) handlers 
are already shipping Washington apricots from the 2016 crop; and (4) 
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 922

    Apricots, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 922 is 
proposed to be amended as follows:

PART 922--APRICOTS GROWN IN DESIGNATED COUNTIES IN WASHINGTON

0
1. The authority citation for 7 CFR part 922 continues to read as 
follows:

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

0
2. Section 922.235 is revised to read as follows:


Sec.  922.235  Assessment rate.

    On or after April 1, 2016, an assessment rate of $1.40 per ton is 
established for Washington apricots handled in the production area.

    Dated: August 18, 2016.
Elanor Starmer,
Administrator, Agricultural Marketing Service.
[FR Doc. 2016-20096 Filed 8-22-16; 8:45 am]
BILLING CODE 3410-02-P