[Federal Register Volume 83, Number 4 (Friday, January 5, 2018)]
[Rules and Regulations]
[Pages 589-592]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-28505]



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 Rules and Regulations
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  Federal Register / Vol. 83, No. 4 / Friday, January 5, 2018 / Rules 
and Regulations  

[[Page 589]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 927

[Doc. No. AMS-SC-17-0045; SC17-927-1 FR]


Pears Grown in Oregon and Washington; Increased Assessment Rate 
for Processed Pears

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation from the Processed Pear 
Committee (Committee) to increase the assessment rate established for 
the 2017-2018 and subsequent fiscal periods from $7.00 to $8.00 per ton 
of ``summer/fall'' pears for canning. The assessment rate will remain 
in effect indefinitely unless modified, suspended, or terminated. This 
rule also makes administrative revisions to the subpart headings to 
bring the language into conformance with the Office of Federal Register 
requirements.

DATES: Effective February 5, 2018.

FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson or Gary Olson, 
Northwest Marketing Field Office, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA; Telephone: (503) 326-
2724, Fax: (503) 326-7440, 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 rule is issued under Marketing 
Order No. 927, as amended (7 CFR part 927), regulating the handling of 
pears grown in Oregon and Washington. Part 927 (hereinafter 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, handlers, and processors of processed 
pears grown in Oregon and Washington, and a public member.
    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, Oregon and Washington 
pear handlers are subject to assessments. Funds to administer the Order 
are derived from such assessments. It is intended that the assessment 
rate as issued herein will be applicable to all assessable ``summer/
fall'' pears for canning beginning July 1, 2017, and to 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.
    This rule increases the assessment rate established for the 2017-
2018 and subsequent fiscal periods from $7.00 to $8.00 per ton for 
``summer/fall'' pears for canning handled under the Order. The 
assessment rate for ``winter'' and ``other'' pears for processing would 
remain unchanged at zero.
    The Order authorizes 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 of the Committee are 
growers, handlers, and processors of pears grown in Oregon and 
Washington, and a public member. They 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.
    For the 2012-2013 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, the following three base rates of 
assessment: (a) $7.00 per ton for any or all varieties or subvarieties 
of pears for canning classified as ``summer/fall'', excluding pears for 
other methods of processing; (b) $0.00 per ton for any or all varieties 
or subvarieties of pears for processing classified as ``winter''; and 
(c) $0.00 per ton for any or all varieties or subvarieties of pears for 
processing classified as ``other''. The assessment on ``summer/fall'' 
pears applies only to pears for canning and excludes pears for other 
methods of processing defined in Sec.  927.15, as pears for 
concentrate, freezing, dehydrating, pressing, or in any other way to 
convert pears into a processed product. This rate structure continues 
in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by USDA upon recommendation and information 
submitted by the Committee or other information available to USDA.
    The Committee met on May 31, 2017, and unanimously recommended

[[Page 590]]

expenditures of $800,150 for the 2017-2018 fiscal period. In 
comparison, the previous fiscal period's budgeted expenditures were 
$855,268. The assessment rate of $8.00 per ton for ``summer/fall'' 
pears for canning established by this rule is $1.00 higher than the 
rate currently in effect.
    The major expenditures recommended by the Committee for the 2017-
2018 fiscal period include $605,606 for promotion and paid advertising, 
$147,694 for research, $25,000 for administration, and $21,850 for 
Committee expenses. In comparison, major expenditures for the 2016-2017 
fiscal period included $682,130 for promotion and paid advertising, 
$127,288 for research, $25,000 for administration, and $20,850 for 
Committee expenses.
    Committee members estimate the 2017-2018 crop to be 100,000 tons, 
which would be less than the 2016-2017 production of 103,000 tons by 
3,000 tons. Pear production tends to fluctuate due to the effects of 
weather, pollination, and tree health. Because of the anticipated 
smaller crop, the Committee recommended to both lower budgeted expenses 
and increase the assessment rate for ``summer/fall'' pears in order to 
align assessment income with expenses.
    The Committee's recommended assessment rate was derived by dividing 
the 2017-2018 anticipated expenses by the expected shipments of 
``summer/fall'' pears for canning, while also taking into account 
interest income and the Committee's monetary reserve. Shipments of 
``summer/fall'' pears for canning for 2017-2018 fiscal period are 
estimated at 100,000 tons, which should provide $800,000 (100,000 tons 
x $8.00 per ton) in assessment income. The projected revenue from 
handler assessments, together with funds from interest income, should 
be adequate to cover the 2017-2018 fiscal period budgeted expenses of 
$800,150.
    Section 927.42(a) authorizes the Committee to carry over excess 
funds into subsequent fiscal periods as a reserve, provided that funds 
do not exceed approximately one year's operational expenses. The 
Committee expects its monetary reserve, which was estimated to be 
$544,990 at the end of the 2016-2017 fiscal period, to remain unchanged 
during the 2017-2018 fiscal period. The reserve will be kept within the 
established limits of the Order and will provide the Committee with 
greater ability to absorb fluctuations in assessment income and 
expenses into the future.
    The assessment rate established in this final 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 
further modification of the assessment rate is needed. Further 
rulemaking will be undertaken as necessary. The Committee's budgets 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 1,200 growers of processed pears in the 
regulated production area and approximately 50 processed pear handlers 
subject to regulation under the Order. Small agricultural producers are 
defined by the Small Business Administration as those having annual 
receipts of 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 the Noncitrus Fruits and Nuts 2016 Summary issued in 
June 2017 by the National Agricultural Statistics Service, the total 
farm-gate value of ``summer/fall'' processed pears grown in Oregon and 
Washington for 2016 was $27,874,000. Based on the number of ``summer/
fall'' processed pear growers in the Oregon and Washington, the average 
gross revenue for each grower can be estimated at approximately $23,228 
($27,874,000 divided by 1,200). Furthermore, based on Committee 
records, the Committee has estimated that all of the Oregon-Washington 
pear handlers currently ship less than $7,500,000 worth of processed 
pears each on an annual basis. From this information, it is concluded 
that the majority of growers and handlers of Oregon and Washington 
processed pears may be classified as small entities.
    This rule increases the assessment rate collected from handlers, 
for the 2017-2018 and subsequent fiscal periods from $7.00 to $8.00 per 
ton for ``summer/fall'' pears for canning. The Committee unanimously 
recommended 2017-2018 expenditures of $800,150 and an assessment rate 
of $8.00 per ton for ``summer/fall'' pears for canning. The assessment 
rate of $8.00 is $1.00 higher than the rate established for the 2012-
2013 fiscal period. Because of the anticipated smaller crop, the 
Committee recommended to both lower budgeted expenses and increase the 
assessment rate for ``summer/fall'' pears in order to align assessment 
income with expenses.
    The 2017-2018 estimate of ``summer/fall'' pears for canning is 
100,000 tons. At the $8.00 per ton assessment rate, the Committee 
anticipates that assessment income of approximately $800,000, along 
with interest income, should be adequate to cover budgeted expenses for 
the 2017-2018 fiscal period of $800,150. With the recommended 
assessment rate and budgeted expense level, the Committee does not 
anticipate utilizing any funds from the monetary reserve. As such, 
reserve funds are estimated to be $544,990 at the end of the 2017-2018 
fiscal period on June 30, 2018. That reserve level is within the 
maximum permitted by the Order of approximately one fiscal period's 
operational expenses (Sec.  927.42(a)).
    The major expenditures recommended by the Committee for the 2017-
2018 fiscal period include $605,606 for promotion and paid advertising; 
$147,694 for research; $25,000 for administration; and $21,850 for 
Committee expenses. In comparison, major expenditures for the 2016-2017 
fiscal period included $682,130 for promotion and paid advertising; 
$127,288 for research; $25,000 for administration; and $20,850 for 
Committee expenses.
    The Committee discussed alternatives to this action, including 
recommending alternative expenditure levels and assessment rates. 
Although lower assessment rates were considered, none were selected 
because they would not have generated sufficient income to administer 
the Order. Similarly, the

[[Page 591]]

Committee did not recommend lower levels of budgeted expenditures than 
it did because it would have reduced the effectiveness of the program.
    A review of historical data and preliminary information pertaining 
to the upcoming fiscal period indicates that the grower price for the 
2017-2018 fiscal period could range between $325 and $346 per ton of 
``summer/fall'' processed pears. Therefore, the estimated assessment 
revenue for the 2017-2018 fiscal period, as a percentage of total 
grower revenue, could range between 2.31 and 2.46 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 growers. However, these costs are 
offset by the benefits derived by the operation of the Order.
    In addition, the Committee's meeting was widely publicized 
throughout the processed pear 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 31, 
2017, 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 OMB and assigned OMB No. 0581-0189 (Generic 
Fruit 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 final rule imposes no additional reporting or recordkeeping 
requirements on either small or large processed pear 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 Federal 
Register on September 18, 2017 (82 FR 43504). Copies of the proposed 
rule were emailed to the Committee office. Finally, the proposal was 
made available through the internet by USDA and the Office of the 
Federal Register. A 15-day comment period ending October 3, 2017, was 
provided for interested persons to respond to the proposal.
    Three comments were received during the comment period in response 
to the proposed rule. One comment was generally in support of the 
proposal. The other two comments, while not expressly opposed to the 
proposed action, raised concerns regarding the impact that the 
increased assessment rate would have on growers and consumers.
    Specifically, one of the two commenters questioned how the 
increased assessment rate would affect growers and whether the 
increased assessment would lead to an increase in farm profits. The 
commenter also questioned the impact on consumers and if the action 
would lead to higher canned pear prices. Lastly, the commenter wanted 
to know when growers and handlers will receive back-pay for the 
``summer/fall'' pears for canning that were sold after July 1, 2017, 
and before the effective date of this final rule. The other commenter 
was concerned about the impact that the increased assessment rate would 
have on small growers.
    USDA considered the comments submitted and reached the following 
conclusions. First, marketing orders assess handlers, not growers. As 
such, growers will not be directly impacted by this action. However, as 
mentioned previously in this rule, some of the additional costs to 
handlers as a result of this action may be passed on to growers. 
Nevertheless, USDA believes that such additional costs would be offset 
by the economic benefits derived by the operation of the Order. Any 
impact of this action on growers would not affect small growers more 
than large growers.
    Additionally, as mentioned previously in this rule, assessments 
upon processed pear handlers are used by the Committee to fund the 
reasonable and necessary expenses of the Order. Section 927.15 
authorizes the Committee, with the approval of USDA, to formulate an 
annual budget of expenses and collect assessments from handlers to 
administer the program. Assessments are not considered additional 
payments for sold product. Therefore, growers and handlers will not 
receive back-pay for previously sold ``summer/fall'' pears for canning.
    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: 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.
    This final rule also makes administrative revisions to the subpart 
headings of the regulations.
    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, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.

List of Subjects in 7 CFR Part 927

    Marketing agreements, Pears, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 927 is 
amended as follows:

PART 927--PEARS GROWN IN OREGON AND WASHINGTON

0
1. The authority citation for 7 CFR part 927 continues to read as 
follows:

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

Subpart A--[Amended]

0
2. Designate the subpart labeled ``Order Regulating Handling'' as 
subpart A.

Subpart B--Administrative Provisions

0
3. Designate the subpart labeled ``Rules and Regulations'' as subpart B 
and revise the heading as shown above.

0
4. Amend Sec.  927.237 by revising the introductory text and paragraph 
(a) to read as follows:


Sec.  927.237  Processed pear assessment rate.

    On and after July 1, 2017, the following base rates of assessment 
for pears for processing are established for the Processed Pear 
Committee:
    (a) $8.00 per ton for any or all varieties or subvarieties of pears 
for canning classified as ``summer/fall'' excluding pears for other 
methods of processing;
* * * * *


[[Page 592]]


    Dated: December 29, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2017-28505 Filed 1-4-18; 8:45 am]
 BILLING CODE 3410-02-P