83 FR 49499 - Oranges, Grapefruit, Tangerines, and Pummelos Grown in Florida; Decreased Assessment Rate

DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

Federal Register Volume 83, Issue 191 (October 2, 2018)

This proposed rule would implement 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 would remain in effect indefinitely unless modified, suspended, or terminated.

[Federal Register Volume 83, Number 191 (Tuesday, October 2, 2018)]
[Proposed Rules]
[Pages 49499-49501]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-21424]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 905

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


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement 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 would remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Comments must be received by November 1, 2018.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Specialty Crops Program, 
AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or internet: http://www.regulations.gov. Comments should reference the document number and 
the date and page number of this issue of the Federal Register and will 
be available for public inspection in the Office of the Docket Clerk 
during regular business hours, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this 
proposed rule will be included in the record and will be made available 
to the public. Please be advised that the identity of the individuals 
or entities submitting the comments will be made public on the internet 
at the address provided above.

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, 
proposes an amendment to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This proposed 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 proposed rule 
in conformance with Executive Orders 13563 and 13175. This proposed 
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 proposed 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'[thinsp]'' (February 2, 2017).
    This proposed 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 
would 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 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.

[[Page 49500]]

    This proposed rule would decrease 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 cartons 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 cartons 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, would be adequate to cover budgeted 
expenses of $130,260. Funds in the reserve are estimated to be at 
$147,500 and would be kept within the maximum permitted by the Order. 
As stated in Sec.  [thinsp]905.42, the amount of the reserve is not to 
exceed two fiscal periods' expenses.
    The assessment rate proposed in this rule would continue in effect 
indefinitely unless modified, suspended, or terminated by USDA based 
upon recommendation and information submitted by the Committee or other 
available information.
    Although the proposed assessment rate would be effective 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 would evaluate 
Committee recommendations and other available information to determine 
whether modification of the assessment rate is needed. Further 
rulemaking would be undertaken as necessary. The Committee's 2018-19 
budget and those for subsequent fiscal periods will be reviewed and, as 
appropriate, approved by USDA.

Initial 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 proposed rule on small 
entities. Accordingly, AMS has prepared this initial 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 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 proposal would decrease the assessment rate collected from 
handlers for the 2018-19 and subsequent fiscal periods from $0.02 to 
$0.015 per 4/5-bushel cartons of citrus. The Committee unanimously 
recommended 2018-19 expenditures of $130,260 and an assessment rate of 
$0.015 per 4/5-bushel cartons. The proposed 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), would 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 alternate expenditure levels were deemed appropriate.
    Based on these discussions and estimated shipments, the recommended 
assessment rate of $0.015 would provide $123,750 in assessment income. 
The Committee determined that assessment revenue, along with funds from 
reserves and interest income, would 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

[[Page 49501]]

that the average grower price for the 2018-19 season should be 
approximately $8.30 per 4/5-bushel cartons 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 proposed rule would decrease 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. Interested persons are invited to submit comments 
on this proposed rule, including the regulatory and information 
collection impacts of this action on small businesses.
    Based on its evaluation of the Committee recommendation and other 
available information, USDA has determined that a modification of the 
assessment rate for the 2018-19 Florida citrus fiscal period would be 
appropriate. Therefore, USDA issues this proposed rule.
    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 would be necessary as a result 
of this proposed rule. Should any changes become necessary, they would 
be submitted to OMB for approval.
    This proposed rule would not impose any 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.
    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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this proposed rule.
    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.

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 
proposed to be 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: September 27, 2018.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2018-21424 Filed 10-1-18; 8:45 am]
BILLING CODE 3410-02-P