83 FR 31442 - Oranges, Grapefruit, Tangerines, and Pummelos Grown in Florida; Increased Assessment Rate

DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

Federal Register Volume 83, Issue 130 (July 6, 2018)

This rule implements a recommendation from the Citrus Administrative Committee (Committee) for an increase of the assessment rate established for the 2017-18 and subsequent fiscal periods. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated.

[Federal Register Volume 83, Number 130 (Friday, July 6, 2018)]
[Rules and Regulations]
[Pages 31442-31444]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-14514]



[[Page 31442]]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 905

[Doc. No. AMS-SC-17-0074; SC18-905-1 FR]


Oranges, Grapefruit, Tangerines, and Pummelos Grown in Florida; 
Increased 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) for an increase of the assessment 
rate established for the 2017-18 and subsequent fiscal periods. The 
assessment rate will remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Effective August 6, 2018.

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: [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 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 2017-18 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 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.
    This rule increases the assessment rate from $0.009, the rate that 
was established for the 2013-14 and subsequent fiscal periods, to $0.02 
per \4/5\-bushel carton of citrus handled for the 2017-2018 and 
subsequent fiscal periods. The higher rate is a result of a smaller 
crop forecast due to hurricane damage and the need to cover Committee 
expenses.
    The Committee met on June 29, 2017, and unanimously recommended 
both maintaining the 2013-14 assessment rate and new 2017-18 budgeted 
expenditures of $132,000. Following the significant damage experienced 
by the industry from Hurricane Irma, the Committee held a second 
meeting on November 9, 2017, to discuss a revised crop estimate for 
2017-18. Due to significant crop damage, the Committee estimated that 
assessable cartons for 2017-18 should be six million cartons, down from 
8.6 million originally projected at a June 29, 2017, meeting. Given the 
reduced estimate, the Committee voted to increase the assessment rate 
from $0.009 to $0.02 per \4/5\-bushel cartons of citrus to provide 
additional assessment income in Order to meet the budgeted expenses of 
$132,000 and draw less funds from the reserves. The assessment rate 
increase, along with the funds from reserves and interest income, 
should provide sufficient funds to cover anticipated expenses.
    Of the total $132,000 budgeted for the 2017-18 fiscal period, major 
expenditures recommended by the Committee include $75,000 for salaries, 
$10,000 for data collection and fresh shipments reporting, and $9,000 
for auditing & accounting. Compared to the previous fiscal year's 
budget of $140,600, budgeted expenses for these items were $75,000, 
$25,000, and $9,200, respectively. The significant decrease in budgeted 
expenses for data collection and fresh shipment reporting stems from 
the development of a new computer program that better reports and 
extrapolates data, thus reducing reporting time and increasing 
efficiencies.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, expected shipments, and the amount of 
funds available in the authorized reserve. Income derived from handler 
assessments of $120,000 (six million \4/5\ bushel cartons assessed at 
$0.02 per carton), along with interest income and funds from the 
Committee's authorized reserve, should be adequate to cover budgeted 
expenses of $132,000. Funds in the reserve (currently $124,040) would 
be kept within the maximum permitted by Sec.  [thinsp]905.42 and would 
not exceed the expenses of two fiscal periods.
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by USDA

[[Page 31443]]

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 2017-18 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 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 Marketing 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, for the 2016-17 season the 
weighted average f.o.b. price for Florida citrus was approximately 
$15.20 per carton with total shipments of 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 handlers of Florida citrus may be classified as 
large entities, while the majority of growers may be classified as 
small entities.
    This rule increases the assessment rate collected from handlers for 
the 2017-18 and subsequent fiscal periods from $0.009 to $0.02 per \4/
5\-bushel carton of Florida citrus. The Committee unanimously 
recommended 2017-18 expenditures of $132,000 and an assessment rate of 
$0.02 per \4/5\-bushel carton of citrus handled. The assessment rate of 
$0.02 is $0.011 higher than the 2016-17 rate. The quantity of 
assessable citrus for the 2017-18 fiscal period is estimated at six 
million \4/5\-bushel cartons. Thus, the $0.02 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.
    The major expenditures recommended by the Committee for the 2017-18 
year include $75,000 for salaries, $10,000 for data collection, and 
$9,000 for auditing and accounting. Budgeted expenses for these items 
in 2016-17 were $75,000, $25,000, and $9,200, respectively.
    As a result of damage from Hurricane Irma, the Committee estimates 
the 2017-18 crop to be approximately six million \4/5\-bushel cartons, 
down from the 8.6 million \4/5\-bushel cartons estimated on June 29, 
2017. Due to the decline in production, the current assessment rate 
would be insufficient to cover the Committee's anticipated expenditures 
and would further deplete the Committee's reserve fund. The assessment 
rate increase will generate additional revenue and will help offset the 
amount of reserves needed to fund the budget. Therefore, the Committee 
recommended increasing the assessment rate.
    Prior to arriving at this budget and assessment rate, the Committee 
considered maintaining the current assessment rate of $0.009 per \4/5\-
bushel cartons of citrus. However, leaving the assessment unchanged 
will not generate sufficient revenue to meet the Committee's expenses 
for the 2017-18 budget of $132,000 and will deplete the reserve. Based 
on estimated shipments, the recommended assessment rate of $0.02 should 
provide $120,000 in assessment income. The Committee determined 
assessment revenue, along with interest income and funds from the 
authorized reserves should be adequate to cover budgeted expenses for 
the 2017-18 fiscal period.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal year indicates that the average 
grower price for the 2017-18 season should be approximately $21.38 per 
\4/5\-bushel cartons of citrus. Therefore, the estimated assessment 
revenue for the 2017-18 fiscal period as a percentage of total grower 
revenue will be about 0.09 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 marketing 
Order. In addition, 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 June 29, 
2017, and November 9, 2017, meetings were public meetings, 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 OMB and assigned OMB No. 0581-0178 Vegetable and 
Specialty Crops. No changes in those requirements are necessary as a 
result of this action. 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 rules that duplicate, overlap, or conflict with this 
final rule.
    AMS is committed to complying with the E-Government Act, to promote 
the

[[Page 31444]]

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 April 2, 2018 (83 FR 14203). 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 May 3, 
2018, was provided for interested persons to respond to the proposal. 
One comment was received during the comment period. The commenter was 
in favor of the regulation. 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: http://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, Reporting and 
recordkeeping requirements, Tangerines, Pummelos.

    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 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, 2017, an assessment rate of $0.02 per \4/5\-
bushel carton or equivalent is established for Florida citrus covered 
under the Order.

    Dated: July 2, 2018.
Bruce Summers,
Administrator, Agricultural Marketing Service.
 [FR Doc. 2018-14514 Filed 7-5-18; 8:45 a.m.]
 BILLING CODE 3410-02-P