Oranges and Grapefruit Grown in Lower Rio Grande Valley in Texas; Decreased Assessment Rate, 55931-55933 [2018-24493]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 83, Number 218 (Friday, November 9, 2018)]
[Rules and Regulations]
[Pages 55931-55933]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-24493]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 906

[Doc. No. AMS-SC-18-0044; SC18-906-1 FR]


Oranges and Grapefruit Grown in Lower Rio Grande Valley in Texas; 
Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation from the Texas Valley 
Citrus Committee (Committee) to decrease the assessment rate 
established for the 2018-19 and subsequent fiscal periods. The 
assessment rate will remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Effective December 10, 2018.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Marketing Specialist, 
or Christian D. Nissen, Regional Director, Southeast Marketing Field 
Office, Marketing Order and Agreement Division, Specialty Crops 
Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 291-8614, or 
Email: [email protected] or [email protected].
    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: [email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
amends regulations issued to carry out a marketing order as defined in 
7 CFR 900.2(j). This rule is issued under Marketing Agreement and Order 
No. 906, as amended (7 CFR part 906), regulating the handling of 
oranges and grapefruit grown in the Lower Rio Grande Valley in Texas. 
Part 906, referred to as ``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 Committee locally 
administers the Order and is comprised of producers and handlers of 
oranges and grapefruit operating within the production area.
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 13563 and 13175. This action falls 
within a category of regulatory actions that the Office of Management 
and Budget (OMB) exempted from Executive Order 12866 review. 
Additionally, because this rule does not meet the definition of a 
significant regulatory action, it does not trigger the requirements 
contained in Executive Order 13771. See OMB's Memorandum titled 
``Interim Guidance Implementing Section 2 of the Executive Order of 
January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs' '' (February 2, 2017).
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the Order now in effect, Texas citrus handlers 
are subject to assessments. Funds to administer the Order are derived 
from such assessments. It is intended that the assessment rate will be 
applicable to all assessable oranges and grapefruit for the 2018-19 
crop year 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

[[Page 55932]]

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.
    The 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 are 
familiar with the Committee's needs and with the costs of goods and 
services in their local area and can formulate an appropriate budget 
and assessment rate. The assessment rate is formulated and discussed in 
a public meeting and all directly affected persons have an opportunity 
to participate and provide input.
    This rule decreases the assessment rate from $0.02, the rate that 
was established for the 2017-18 and subsequent fiscal periods, to $0.01 
per 7/10-bushel carton or equivalent of oranges and grapefruit handled 
for the 2018-19 and subsequent fiscal periods. The Committee 
recommended decreasing the assessment rate and utilizing funds from its 
authorized reserve to reduce the reserve balance. The reserve balance 
has been greater than the sum allowable under Sec.  906.35 of the 
Order, which is approximately equivalent to one year's operating 
expenses, since 2017. In 2017-18, the Committee was able to reduce its 
budget by more than $595,000 when an alternative funding source was 
found for the Mexican fruit fly control program. This dramatic 
reduction in the overall budget prompted the Committee's need to reduce 
the balance of the authorized reserve to reflect the lower operating 
budget.
    The Committee met on May 23, 2018, and unanimously recommended 
2018-19 expenditures of $152,920 and an assessment rate of $0.01 per 7/
10-bushel carton or equivalent of oranges and grapefruit. The itemized 
budgeted expenses, including $79,220 for management, $50,000 for 
compliance, and $23,700 for operating expenses, are the same as the 
previous fiscal period. However, the assessment rate of $0.01 is lower 
than the $0.02 rate currently in effect.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, expected shipments of 7.5 million 7/
10-bushel cartons, and the amount of funds available in the authorized 
reserve. Income derived from handler assessments, calculated at $75,000 
(7.5 million x $0.01), along with interest income and funds from the 
Committee's authorized reserve, should be adequate to cover budgeted 
expenses of $152,920. Funds in the reserve are estimated to be $287,295 
at the end of the 2017-18 fiscal period. No additional funds can be 
added to the reserve until the balance drops below approximately one 
fiscal period's expenses as stated in Sec.  906.35.
    The assessment rate established in this rule 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 Committee meetings are available from the Committee or 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 2018-19 budget and those 
for subsequent fiscal periods would 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 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 170 producers of oranges and grapefruit in 
the production area and 13 handlers subject to regulation under the 
Order. Small agricultural producers are defined by the Small Business 
Administration (SBA) as those having annual receipts 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).
    According to Committee data, the average price for Texas citrus 
during the 2016-17 season was approximately $16 per carton and total 
shipments were 7.6 million cartons. Using the average price and 
shipment information, the number of handlers, and assuming a normal 
distribution, the majority of handlers would have average annual 
receipts of greater than $7,500,000 ($16 per carton times 7.6 million 
cartons equals $121.6 million, divided by 13 equals $9.4 million per 
handler).
    In addition, based on National Agricultural Statistics Service 
information, the weighted grower price for Texas citrus during the 
2016-17 season was approximately $9.35 per carton. Using the weighted 
average price and shipment information, the number of producers and 
assuming a normal distribution, the majority of producers would have 
annual receipts of $418,000, which is less than $750,000 ($9.35 per 
carton times 7.6 million cartons equals $71.06 million, divided by 170 
equals $418,000 per producer). Thus, the majority of handlers of Texas 
citrus may be classified as large entities, while the majority of 
producers may be classified as small entities.
    This rule decreases the assessment rate collected from handlers for 
the 2018-19 and subsequent fiscal periods from $0.02 to $0.01 per 7/10-
bushel carton or equivalent of Texas citrus. The Committee unanimously 
recommended 2018-19 expenditures of $152,920 and an assessment rate of 
$0.01 per 7/10-bushel carton or equivalent handled. The assessment rate 
of $0.01 is $0.01 lower than the 2017-18 rate. The quantity of 
assessable oranges and grapefruit for the 2018-19 fiscal period is 
estimated at 7.5 million 7/10-bushel cartons. The $0.01 rate should 
provide $75,000 in assessment income (7.5 million x $0.01). Income 
derived from handler assessments, along with interest income and funds 
from the Committee's authorized reserve, should be adequate to cover 
budgeted expenses.
    The major expenditures recommended by the Committee for the 2018-19 
year include $79,220 for management, $50,000 for compliance,

[[Page 55933]]

and $23,700 for operating expenses. Budgeted expenses for these items 
in 2017-18 were the same.
    The Committee recommended decreasing the assessment rate and 
utilizing funds from its authorized reserve to reduce the reserve 
balance to bring it in line with the limitation under the Order of 
approximately one year's expenses.
    Prior to arriving at this budget and assessment rate, the Committee 
considered information from various sources, such as the Committee's 
Budget and Personnel Committee, and the Research Committee. Alternative 
expenditure levels were discussed by these committees who reviewed the 
relative value of various activities to the Texas citrus industry. 
These committees determined that all program activities were adequately 
funded and essential to the functionality of the Order; thus, no 
alternative expenditure levels were deemed appropriate. Additionally, 
the Committee discussed alternatives of maintaining the current 
assessment rate of $0.02 and lowering the assessment rate to $0.015 per 
7/10-bushel carton or equivalent. These alternatives were not 
recommended because the Committee determined that these assessment 
rates would not draw enough funds from the authorized reserve to bring 
the reserve fund total in line with Order requirements.
    Based on these discussions and estimated shipments, the recommended 
assessment rate of $0.01 should provide $75,000 in assessment income. 
The Committee determined that assessment revenue, along with funds from 
the reserve and interest income, should be adequate to cover budgeted 
expenses for the 2018-19 fiscal period.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the average 
grower price for the 2018-19 season should be approximately $9.50 per 
7/10-bushel carton or equivalent of oranges and grapefruit. The 
estimated assessment revenue for the 2018-19 crop year as a percentage 
of total grower revenue would be about 0.1 percent.
    This action decreases the assessment obligation imposed on 
handlers. Assessments are applied uniformly on all handlers, and some 
of the costs may be passed on to producers. Decreasing the assessment 
rate reduces the burden on handlers and may also reduce the burden on 
producers.
    The Committee's meeting was widely publicized throughout the Texas 
citrus industry. All interested persons were invited to attend the 
meeting and participate in Committee deliberations on all issues. Like 
all Committee meetings, the May 23, 2018, meeting was a public meeting, 
and all entities, both large and small, were able to express views on 
this issue.
    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 OMB and assigned OMB No. 0581-0189, Fruit 
Crops. No changes in those requirements because 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 Texas orange and grapefruit 
handlers. As with all Federal marketing order programs, reports and 
forms are periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies. 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 24, 2018 (83 FR 42805). Copies of the proposed rule 
were also mailed or sent via facsimile to all Texas citrus handlers. 
The proposal was made available through the internet by USDA and the 
Office of the Federal Register. A 30-day comment period ending 
September 24, 2018, was provided for interested persons to respond to 
the proposal.
    One comment was received. The commenter expressed concern that the 
beginning of the applicable timeframe for the new assessment rate 
precedes the closing date for public comments. The Order requires that 
the rate of assessment for each fiscal period apply to all assessable 
Texas citrus handled during such fiscal period. Further, the rulemaking 
process is designed to provide interested parties with the opportunity 
to comment on actions being considered by USDA. All comments timely 
received were considered prior to the finalization of this rule. 
Accordingly, no changes will be made to the rule as proposed, based on 
the comment 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 will tend to 
effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 906

    Grapefruit, Marketing agreements, Oranges, Reporting and 
recordkeeping requirements.
    For the reasons set forth in the preamble, 7 CFR part 906 is 
amended as follows:

PART 906--ORANGES AND GRAPEFRUIT GROWN IN LOWER RIO GRANDE VALLEY 
IN TEXAS

0
1. The authority citation for 7 CFR part 906 continues to read as 
follows:

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

0
2. Section 906.235 is revised to read as follows:


Sec.  906.235  Assessment rate.

    On and after August 1, 2018, an assessment rate of $0.01 per 7/10-
bushel carton or equivalent is established for oranges and grapefruit 
grown in the Lower Rio Grande Valley in Texas.

    Dated: November 5, 2018.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2018-24493 Filed 11-8-18; 8:45 am]
 BILLING CODE 3410-02-P