Decrease of Assessment Rate for Texas Oranges and Grapefruit, 14479-14481 [2023-04809]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 88, Number 46 (Thursday, March 9, 2023)]
[Rules and Regulations]
[Pages 14479-14481]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-04809]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 906

[Doc. No. AMS-SC-22-0048]


Decrease of Assessment Rate for Texas Oranges and Grapefruit

AGENCY: Agricultural Marketing Service, Department of Agriculture 
(USDA).

ACTION: Final rule.

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SUMMARY: This final rule implements a recommendation from the Texas 
Valley Citrus Committee to decrease the assessment rate established for 
the 2022-23 and subsequent fiscal periods. The assessment rate will 
remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective April 10, 2023.

FOR FURTHER INFORMATION CONTACT: Delaney Fuhrmeister, Marketing 
Specialist, or Christian D. Nissen, Branch Chief, Southeast Region 
Branch, Market Development 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, Market Development Division, 
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 
0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, 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 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 Texas Valley Citrus 
Committee (Committee) locally administers the Order and is comprised of 
producers and handlers of oranges and grapefruit operating within the 
area of production.
    The Agricultural Marketing Service (AMS) is issuing this rule in 
conformance with Executive Orders 12866 and 13563. Executive Orders 
12866 and 13563 direct agencies to assess all costs and benefits of 
available regulatory alternatives and, if regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
distributive impacts, and equity). Executive Order 13563 emphasizes the 
importance of quantifying both costs and benefits, reducing costs, 
harmonizing rules, and promoting flexibility. This action falls within 
a category of regulatory actions that the Office of Management and 
Budget (OMB) exempted from Executive Order 12866 review.
    This rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which 
requires agencies to consider whether their rulemaking actions would 
have tribal implications. AMS has determined that this rule is unlikely 
to have substantial direct effects on one or more Indian tribes, on the 
relationship between the Federal Government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian tribes.
    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 2022-23 
fiscal period, 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 the Department of 
Agriculture (USDA) a petition stating that the order,

[[Page 14480]]

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 no later than 20 days after the date of the entry of 
the ruling.
    This rule decreases the assessment rate for the 2022-23 and 
subsequent fiscal periods from $0.05 to $0.03 per \7/10\-bushel carton 
or equivalent of oranges and grapefruit.
    The Order authorizes the Committee, with the approval of AMS, to 
formulate an annual budget of expenses and collect assessments from 
handlers to administer the program. The members of the Committee are 
familiar with the Committee's needs and with the costs for goods and 
services in their local area and are able to 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.
    For the 2021-22 and subsequent fiscal periods, the Committee 
recommended, and AMS approved, an assessment rate that would continue 
in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by AMS upon recommendation and information 
submitted by the Committee or other information available to AMS. That 
regulatory amendment raised the assessment rate from $0.01 per \7/10\-
bushel carton to its current level of $0.05 per \7/10\-bushel carton.
    The Committee met on May 24, 2022, and recommended 2022-23 
expenditures of $134,970 and an assessment rate of $0.03 per \7/10\-
bushel carton or equivalent. In comparison, last year's budgeted 
expenditures were $43,900. The assessment rate of $0.03 is $0.02 lower 
than the rate currently in effect. The Committee voted to decrease the 
assessment rate due to an increase in production. The Committee 
estimates production for 2022-23 fiscal period to be approximately 4 
million \7/10\-bushel cartons or equivalent, an increase from the 1 
million cartons estimated to be produced the previous year. At the 
current assessment rate, assessment income would equal $200,000, 
exceeding the Committee's anticipated expenditures of $134,970. By 
decreasing the assessment rate by $0.02, assessment income will be 
approximately $120,000. This amount, along with reserve funds and 
interest income, should provide sufficient funds to meet 2022-23 
anticipated expenses.
    Major expenditures recommended by the Committee for the 2022-23 
year include $66,220 for management expenses, $50,000 for compliance, 
and $18,750 for administrative expenses. Budgeted expenses for these 
items in 2021-22 were $20,000, $10,000, and $13,900, respectively.
    The assessment rate recommended by the Committee was derived by 
reviewing anticipated expenses, expected shipments of Texas oranges and 
grapefruit, and the level of funds in reserve. Orange and grapefruit 
shipments for the 2022-23 year are estimated at 4,000,000 \7/10\-bushel 
cartons or equivalent, which will provide approximately $120,000 in 
assessment income (4,000,000 cartons multiplied by $0.03). Income 
derived from handler assessments at the rate newly established by this 
rule, along with reserve funds and interest income, should be adequate 
to cover budgeted expenses. Funds in the reserve (currently about 
$89,126) are expected to be kept within the maximum permitted by the 
Order (approximately one fiscal period's expenses as authorized in 
Sec.  906.35).
    This assessment rate will continue in effect indefinitely unless 
modified, suspended, or terminated by AMS 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. Dates and 
times of Committee meetings are available from the Committee or AMS. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. AMS evaluates Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed, and further rulemaking 
would be undertaken as necessary. The Committee's 2022-23 budget and 
those for subsequent fiscal periods will be reviewed and, as 
appropriate, approved by AMS.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of 
this final 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 120 producers of oranges and grapefruit in 
the production area and 14 handlers subject to regulation under the 
marketing order. Small agricultural producers are defined by the Small 
Business Administration (SBA) as those having annual receipts of 
$3,500,000 or less, and small agricultural service firms are defined as 
those whose annual receipts are $30,000,000 or less (13 CFR 121.201).
    According to data from the National Agricultural Statistics Service 
(NASS), the weighted average free-on-board price for Texas citrus for 
the 2019-20 season was approximately $16.20 per \7/10\-bushel carton or 
equivalent with total shipments of around 8.2 million cartons. Based on 
the number of handlers and the NASS data, handlers have average annual 
receipts of well below $30 million ($16.20 multiplied by 8.2 million 
cartons equals $132,840,000, divided by 14 equals $9.5 million).
    In addition, based on NASS and Committee data the reported weighted 
average producer price for the 2020-21 season was around $9.82 per \7/
10\-bushel carton of Texas citrus with total shipments of around 4.45 
million cartons. Based on producer price, shipment data, and the total 
number of Texas citrus producers, the average annual producer revenue 
is significantly below $3,500,0000 ($9.82 multiplied by 4.45 million 
cartons equals $43,699,000 divided by 119 producers equals $367,218). 
Thus, the majority of Texas citrus handlers and growers may be 
classified as small entities.
    This final rule decreases the assessment rate established for the 
Committee and collected from handlers for the 2022-23 and subsequent 
fiscal periods from $0.05 to $0.03 per \7/10\-bushel carton or 
equivalent of oranges and grapefruit grown in the Lower Rio Grande 
Valley in Texas. The Committee recommended 2022-23 expenditures of 
$134,970 and an assessment rate of $0.03 per \7/10\-bushel carton. The 
assessment rate of $0.03 is $0.02 less

[[Page 14481]]

than the previous rate. The quantity of assessable Texas citrus for the 
2022-23 season is estimated at 4 million \7/10\-bushel cartons. Thus, 
the $0.03 rate should provide $120,000 in assessment income. Income 
derived from handler assessments along with interest income and funds 
from the Committee's authorized reserve should be adequate to cover 
budgeted expenses.
    Major expenditures recommended by the Committee for the 2022-23 
fiscal period include $66,220 for management expenses, $50,000 for 
compliance, and $18,750 for administrative expenses. Budgeted expenses 
for these items in 2021-22 were $20,000, $10,000, and $13,900, 
respectively.
    The Committee recommended decreasing the assessment rate based on 
the 2022-23 estimate of 4 million \7/10\-bushel cartons or equivalent, 
3 million more than estimated for the previous year. At the current 
assessment rate of $0.05 and with the 2022-23 crop estimated to be 4 
million \7/10\-bushel cartons, assessment income would equal $200,000 
($0.05 multiplied by 4 million cartons), an amount exceeding the 
Committee's anticipated expenditures of $134,970. By decreasing the 
assessment rate by $0.02, assessment income will be approximately 
$120,000 ($0.03 multiplied by 4 million cartons). This amount, along 
with interest income, and funds from the authorized reserve, should 
provide sufficient funds to meet 2022-23 anticipated expenses.
    Prior to arriving at this budget and assessment rate, the Committee 
considered maintaining the current assessment rate of $0.05. However, 
leaving the assessment unchanged would generate excess revenue over the 
Committee's budgeted expenses for the 2022-23 and potentially cause 
reserve amounts to surpass the limits specified by the Order. 
Consequently, the Committee determined the assessment rate should be 
decreased to $0.03 per \7/10\-bushel carton and the alternative 
rejected.
    A review of historical information and preliminary information 
pertaining to the upcoming season indicates that the producer price for 
the 2022-23 season should be approximately $12.85 per \7/10\-bushel 
carton or equivalent of oranges and grapefruit. The new assessment rate 
of $0.03 per \7/10\-bushel carton or equivalent of oranges and 
grapefruit represents 0.23 percent of the $12.85 revenue for the 2022-
23 fiscal period as a percentage of total producer revenue ($0.03 
divided by $12.85 multiplied by 100).
    This rule 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 Texas 
citrus 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 24, 2022, 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 OMB and assigned OMB No. 0581-0189, Fruit Crops. 
No changes in those requirements are necessary as a result of this 
rule. 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 oranges 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, AMS has not identified any 
relevant Federal rules that duplicate, overlap, or conflict with this 
rule.
    AMS is committed to complying with the E-Government Act for the 
purpose of promoting the use of the internet and other information 
technologies that 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 November 18, 2022 (87 FR 69208). Copies of the proposed 
rule were also mailed or sent via email to all Texas citrus handlers. A 
copy of the proposed rule was made available through the internet by 
AMS and https://www.regulations.gov. A 30-day comment period ending 
December 19, 2022, was provided for interested persons to respond to 
the proposal.
    One comment was received. The comment did not address the merits of 
this action. Accordingly, no changes have been made to the rule as 
proposed.
    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, the Agricultural 
Marketing Service amends 7 CFR part 906 as follows:

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

0
1. The authority citation for 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, 2022, an assessment rate of $0.03 per \7/
10\-bushel carton or equivalent is established for oranges and 
grapefruit grown in the Lower Rio Grande Valley in Texas.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-04809 Filed 3-8-23; 8:45 am]
BILLING CODE 3410-02-P