Oranges, Grapefruit, Tangerines, and Pummelos Grown in Florida; Decreased Assessment Rate, 2047-2049 [2019-01141]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 84, Number 25 (Wednesday, February 6, 2019)]
[Rules and Regulations]
[Pages 2047-2049]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-01141]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 84, No. 25 / Wednesday, February 6, 2019 / 
Rules and Regulations

[[Page 2047]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 905

[Doc. No. AMS-SC-18-0065; SC18-905-4 FR]


Oranges, Grapefruit, Tangerines, and Pummelos Grown in Florida; 
Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation from the Citrus 
Administrative 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 March 8, 2019.

FOR FURTHER INFORMATION CONTACT: Abigail Campos, 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: Abigail.Campos@usda.gov or Christian.Nissen@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@usda.gov.

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. 905, as amended (7 CFR part 905), regulating the handling of 
oranges, grapefruit, tangerines, and pummelos grown in Florida. Part 
905, (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 growers and handlers 
operating within the area of production, and a public member.
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 13563 and 13175. This rule 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, Florida 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 citrus 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 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 
$0.015 per 4/5-bushel carton of citrus for the 2018-19 and subsequent 
fiscal periods. Shipments from last season exceeded initial projections 
after Hurricane Irma, allowing the Committee to maintain their 
financial reserve. As the industry continues to recover from Hurricane 
Irma, the Committee estimates that the 2018-19 Florida citrus crop will 
be around 8,250,000 regulated cartons, an increase of nearly one 
million cartons from last season. The anticipated increase in 
production prompted the Committee to recommend the reduction in the 
assessment rate.
    The Committee met on July 17, 2018, and unanimously recommended 
2018-19 expenditures of $130,260 and an assessment rate of $0.015 per 
4/5-bushel carton of citrus. The major expenditures recommended by the 
Committee for the 2018-19 year include $113,260 for management, $9,000 
for auditing, and $4,000 for travel. Budgeted expenses for these items 
in 2017-18 were $75,000, $9,000, and $4,200, respectively.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, expected shipments of 8.25 million 4/
5-bushel cartons, and the amount of funds available in the authorized 
reserve. Income derived from handler assessments calculated at $123,750 
(8.25 million x $0.015), along with interest income and funds from the 
Committee's authorized reserve, should be adequate to cover budgeted 
expenses of $130,260. Funds in the reserve are estimated to be $147,500 
and would be kept within the maximum permitted by the Order. As

[[Page 2048]]

stated in Sec.  [thinsp]905.42, the amount of the reserve is not to 
exceed two fiscal periods' expenses.
    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 500 producers of Florida citrus in the 
production area and approximately 20 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 data from the National Agricultural Statistics Service 
(NASS), the industry, and the Committee, the weighted average f.o.b. 
price for Florida citrus for the 2016-17 season was approximately 
$15.20 per carton with total shipments of around 12.6 million cartons. 
Using the number of handlers, and assuming a normal distribution, the 
majority of handlers have average annual receipts of more than 
$7,500,000 ($15.20 times 12.6 million equals $191,520,000 divided by 20 
handlers equals $9,576,000 per handler).
    In addition, based on the NASS data, the weighted average grower 
price for the 2016-17 season was around $8.30 per carton of citrus. 
Based on grower price, shipment data, and the total number of Florida 
citrus growers, and assuming a normal distribution, the average annual 
grower revenue is below $750,000 ($8.30 times 12.6 million cartons 
equals $104,580,000 divided by 500 growers equals $209,160 per grower). 
Thus, the majority of Florida citrus handlers may be classified as 
large entities, while the majority of growers 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 $0.015 per 4/5-
bushel carton of citrus. The Committee unanimously recommended 2018-19 
expenditures of $130,260 and an assessment rate of $0.015 per 4/5-
bushel carton. The assessment rate of $0.015 is $0.005 lower than the 
2017-18 rate. The quantity of assessable citrus for the 2018-19 fiscal 
period is estimated at 8.25 million 4/5-bushel cartons. Thus, the 
$0.015 rate should provide $123,750 in assessment income (8.25 million 
x $0.015). Income derived from handler assessments, along with interest 
income and funds from the Committee's authorized reserve (currently 
$147,500), should be adequate to cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2018-19 
fiscal year include $113,260 for management, $9,000 for auditing, and 
$4,000 for travel. Budgeted expenses for these items in 2017-18 were 
$75,000, $9,000, and $4,200, respectively.
    Shipments from last season exceeded initial projections after 
Hurricane Irma, allowing the Committee to maintain its financial 
reserve. The Committee estimates the 2018-19 Florida citrus crop will 
be around 8,250,000 regulated cartons, an increase of nearly one 
million cartons from last season. The Committee recommended the 
reduction in the assessment rate based on the anticipated increase in 
production.
    Prior to arriving at this budget and assessment rate, the Committee 
considered information from the Executive Committee. Alternative 
expenditure levels and assessment rates were discussed by the Executive 
Committee, based upon the relative value of various activities to the 
citrus industry. The Committee determined that all program activities 
were adequately funded and essential to the functionality of the Order, 
thus no alternative expenditure levels were deemed appropriate.
    Based on these discussions and estimated shipments, the recommended 
assessment rate of $0.015 should provide $123,750 in assessment income. 
The Committee determined that assessment revenue, along with funds from 
reserves 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 $8.30 per 
4/5-bushel carton of citrus. Therefore, the estimated assessment 
revenue for the 2018-19 crop year as a percentage of total grower 
revenue would be about 0.2 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. However, 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 
Florida citrus industry. All interested persons were invited to attend 
the meeting and participate in Committee deliberations on all issues. 
Like all Committee meetings, the July 17, 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 Florida citrus handlers. As with 
all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies. As noted in the 
initial regulatory flexibility analysis, USDA has not identified any 
relevant Federal

[[Page 2049]]

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 October 2, 2018 (83 PR 49499). Copies of the proposed rule 
were also mailed or sent via facsimile to all Florida 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 November 
1, 2018, was provided for interested persons to respond to the 
proposal.
    One comment was received in support of the regulation. The 
commenter stated that producers would benefit from this action and this 
reduction is a way to ensure production growth and reinvestment in 
citrus crops year after year. Three additional comments were also 
received but did not address the merits of this action. Accordingly, no 
changes will be made to the rule as proposed, based on the comments 
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 905

    Grapefruit, Marketing agreements, Oranges, Pummelos, Reporting and 
recordkeeping requirements, Tangerines.

    For the reasons set forth in the preamble, 7 CFR part 905 is 
amended as follows:

PART 905--ORANGES, GRAPEFRUIT, TANGERINES, AND PUMMELOS GROWN IN 
FLORIDA

0
1. The authority citation for 7 CFR part 905 continues to read as 
follows:

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


0
2. Section 905.235 is revised to read as follows:


Sec.  905.235  Assessment rate.

    On and after August 1, 2018, an assessment rate of $0.015 per 4/5-
bushel carton or equivalent is established for Florida citrus covered 
under the Order.

    Dated: January 31, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2019-01141 Filed 2-5-19; 8:45 am]
BILLING CODE 3410-02-P