[Federal Register Volume 83, Number 61 (Thursday, March 29, 2018)]
[Rules and Regulations]
[Pages 13378-13380]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-06282]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 906

[Doc. No. AMS-SC-17-0037; SC17-906-1 FR]


Oranges and Grapefruit Grown in the Lower Rio Grande Valley in 
Texas; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation from the Texas Valley 
Citrus Committee (Committee) to decrease the assessment rate 
established for the 2017-18 and subsequent fiscal periods for oranges 
and grapefruit handled under Marketing Order 906. The assessment rate 
will remain in effect indefinitely unless modified, suspended, or 
terminated. This rule also makes administrative revisions to the 
subpart headings of the Order.

DATES: Effective April 30, 2018.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, 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 Agreement and 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 Committee locally 
administers the Order and is comprised of producers and handlers of 
oranges and grapefruit operating within the production area.
    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 provisions of the Order now in effect, Texas 
orange and grapefruit 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 beginning on August 1, 2017, 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

[[Page 13379]]

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.
    This rule decreases the assessment rate from $0.09, the rate that 
was established for the 2016-17 and subsequent fiscal periods, to $0.02 
per 7/10-bushel carton or equivalent of oranges and grapefruit handled 
for the 2017-18 and subsequent fiscal periods. The decrease reflects a 
reduction in expenses of more than $595,000 from not funding the 
Mexican fruit fly control program.
    The Committee met on August 8, 2017, and unanimously recommended 
2017-18 expenditures of $152,920 and an assessment rate of $0.02 per 7/
10-bushel carton or equivalent of oranges and grapefruit. The 
assessment rate of $0.02 is $0.07 lower than the rate currently in 
effect. The Committee recommended decreasing the assessment rate to 
reflect that they would not be funding the Mexican fruit fly control 
program, reducing their budget by more than $595,000. Income derived 
from handler assessments, along with interest income and funds from the 
Committee's authorized reserve, will be adequate to cover budgeted 
expenses.
    Of the total $152,920 budgeted for the 2017-18 fiscal period, major 
expenditures recommended by the Committee include $79,220 for 
management, $50,000 for compliance, and $23,700 for operating expenses. 
Compared to the previous fiscal year's budget of $751,148, budgeted 
expenses for these items in 2016-17 were $77,200, $50,000, and $23,700, 
respectively.
    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 calculated at $150,000 (7.5 million 7/10-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 $152,920. Funds in the reserve (currently 
$282,572) will be kept within the maximum permitted by the Order 
(approximately one fiscal period's expenses as stated in Sec.  906.35).
    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 2017-18 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 170 producers of oranges and grapefruit in 
the production area and 13 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 Committee data, the average price for Texas citrus 
during the 2015-16 season was approximately $17.48 per box and total 
shipments were 7.5 million boxes. Using the average price and shipment 
information, the number of handlers (13), and assuming a normal 
distribution, the majority of handlers would have average annual 
receipts of greater than $7,500,000. Thus, the majority of Texas citrus 
handlers may be classified as large business entities.
    In addition, based on information from the National Agricultural 
Statistics Service, the weighted grower price for Texas citrus during 
the 2015-16 season was approximately $14.64 per box. Using the weighted 
average price and shipment information, and assuming a normal 
distribution, the majority of producers would have annual receipts of 
less than $750,000. Thus, the majority of Texas citrus producers may be 
classified as small business entities.
    This rule decreases the assessment rate collected from handlers for 
the 2017-18 and subsequent fiscal periods from $0.09 to $0.02 per 7/10-
weight bushel carton or equivalent of Texas citrus. The Committee 
unanimously recommended 2017-18 expenditures of $152,920 and an 
assessment rate of $0.02 per 7/10-bushel carton or equivalent handled. 
The assessment rate of $0.02 is $0.07 lower than the 2016-17 rate. The 
quantity of assessable oranges and grapefruit for the 2017-18 fiscal 
period is estimated at 7.5 million 7/10-bushel cartons. Thus, the $0.02 
rate should provide $150,000 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 $79,220 for management, $50,000 for compliance, and 
$23,700 for operating expenses. Budgeted expenses for these items in 
2016-17 were $77,200, $50,000, and $23,700, respectively.
    The Committee recommended decreasing the assessment rate to reflect 
that it would not be funding the Mexican fruit fly control program, 
reducing its budget by more than $595,000.
    Prior to arriving at this budget and assessment rate, the Committee 
considered information from various sources, such as the Committee's 
Budget and Personnel Committee, and the Research Committee. Alternative 
expenditure levels were discussed by these committees who reviewed the 
relative value of various activities to the Texas citrus industry. 
These committees determined that all program activities

[[Page 13380]]

were adequately funded and essential to the functionality of the Order, 
thus no alternate expenditure levels were deemed appropriate. 
Additionally, alternate assessment rates of $0.01 and $0.015 per 7/10 
bushel-carton were discussed. However, it was determined that these 
lower assessment rates would draw too heavily from reserves, roughly 
$78,000 and $43,000, respectively. The proposed rate of $0.02 per 7/10 
bushel-carton would draw an anticipated $2,800 from reserves, thereby 
leaving reserves intact for future needs.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the average 
grower price for the 2017-18 season should be approximately $15.50 per 
7/10-bushel carton or equivalent of oranges and grapefruit. Therefore, 
the estimated assessment revenue for the 2017-18 crop year as a 
percentage of total grower revenue would be about 0.1 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 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 August 8, 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, Fruit Crops. 
No changes in those requirements as a result 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 Texas orange 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, 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 the Federal 
Register on December 4, 2017 (82 FR 57164). Copies of the proposed rule 
were also mailed or sent via facsimile to all Texas citrus handlers. 
Finally, the proposal was made available through the internet by USDA 
and the Office of the Federal Register. A 30-day comment period ending 
January 3, 2018, was provided for interested persons to respond to the 
proposal. Two comments were received, one in support of the change, and 
one comment outside the scope of this action. One commenter in support 
of the action stated that the reduced rate is fair and continues to 
allow the Committee to pay its expenses. Administrative revisions to 
the subpart headings were included in the proposed rule. No comments 
were received on those changes. 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.
    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, 7 CFR part 906 is 
amended as follows:

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

0
1. The authority citation for 7 CFR part 906 continues to read as 
follows:

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

[Subpart Redesignated as Subpart A]

0
2. Redesignate ``Subpart--Order Regulating Handling'' as ``Subpart A--
Order Regulating Handling.''

[Subpart Redesignated as Subpart B and Amended]

0
3. Redesignate ``Subpart--Rules and Regulations'' as subpart B and 
revise the heading to read as follows:

Subpart B--Administrative Requirements

0
4. Section 906.235 is revised to read as follows:


Sec.  906.235  Assessment rate.

    On and after August 1, 2017, an assessment rate of $0.02 per 7/10-
bushel carton or equivalent is established for oranges and grapefruit 
grown in the Lower Rio Grande Valley in Texas.

[Subpart Redesignated as Subpart C]

0
5. Redesignate ``Subpart--Container and Pack Requirements'' as 
``Subpart C--Container and Pack Requirements.''

    Dated: March 23, 2018.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2018-06282 Filed 3-28-18; 8:45 am]
 BILLING CODE 3410-02-P