Apricots Grown in Designated Counties in Washington; Increased Assessment Rate, 74659-74662 [2016-25694]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 81, Number 208 (Thursday, October 27, 2016)]
[Rules and Regulations]
[Pages 74659-74662]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25694]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 922

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


Apricots Grown in Designated Counties in Washington; Increased 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements 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: Effective October 28, 2016.

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 Richard Lower, 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: Richard.Lower@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This 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.''

[[Page 74660]]

    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 12866, 13563, and 13175.
    This 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 issued herein will 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 rule increases 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 apricot 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 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 
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 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 should provide the Committee 
with the ability to absorb fluctuations in assessment income and 
expenses into the future.
    The assessment rate will 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 will be in effect for an indefinite 
period, the Committee will 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 will evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking will 
be undertaken as necessary. The Committee's 2016-17 budget and those 
for subsequent fiscal periods will be reviewed and, as appropriate, 
approved by USDA.

Final 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 rule on small entities. 
Accordingly, AMS has prepared this final 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

[[Page 74661]]

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. Most apricot producers and all handlers accounted for 
in the regulated area are engaged in the production of other crops in 
addition to apricots. 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 average revenue from the sale of apricots was approximately 
$84,000. In addition, based on information from the USDA's Market News 
Service, 2015 f.o.b. prices for Washington No.1 apricots ranged from 
$20.00 to $26.00 per 24-pound container for both loose pack and 2-layer 
tray-pack containers. Using average prices and shipment information 
provided by the Committee, 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 rule increases 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 new 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 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 2016-17 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 increases 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 
are 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 were invited 
to submit comments on this 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 rule imposes no 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. As noted in the 
initial regulatory flexibility analysis, USDA has not identified any 
relevant Federal rules that duplicate, overlap or conflict with this 
final rule.
    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.
    A proposed rule concerning this action was published in the Federal 
Register on August 23, 2016 (81 FR 57493). Copies of the proposed rule 
were also mailed or sent via facsimile to all apricot handlers. 
Finally, the proposal was made available through the internet by USDA 
and the Office of the Federal Register. A 30-day comment period ending 
September 22, 2016, was provided for interested persons to respond to 
the proposal. No comments were received.
    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 Richard Lower at the 
previously-mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because: (1) The 
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. Further, handlers are aware of this rule 
which was recommended at a public meeting. Also, a 30-day comment

[[Page 74662]]

period was provided for in the proposed rule.

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 
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: October 19, 2016.
Elanor Starmer,
Administrator, Agricultural Marketing Service.
[FR Doc. 2016-25694 Filed 10-26-16; 8:45 am]
BILLING CODE 3410-02-P