[Federal Register Volume 83, Number 165 (Friday, August 24, 2018)]
[Proposed Rules]
[Pages 42805-42807]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-18363]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 83, No. 165 / Friday, August 24, 2018 / 
Proposed Rules  

[[Page 42805]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 906

[Doc. No. AMS-SC-18-0044; SC18-906-1 PR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule would implement a recommendation from the 
Texas Valley Citrus 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 September 24, 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 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: 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, 
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. 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 area of 
production.
    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' '' (February 2, 2017).
    This proposed 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 
would be applicable to all assessable oranges and grapefruit 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.
    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 $0.01 per 7/10-bushel carton or equivalent of oranges and 
grapefruit handled for the 2018-19 and subsequent fiscal periods. The 
Committee recommended decreasing the assessment rate and utilizing 
funds from its authorized reserve in order to reduce the reserve 
balance. The reserve balance has been greater than the sum allowable 
under the Order, which is approximately equivalent to one year's 
operating expenses, since 2017. In 2017-18, the Committee was able to 
reduce its budget by more than $595,000 when an alternative funding 
source was found for

[[Page 42806]]

the Mexican fruit fly control program. This dramatic reduction in the 
overall budget prompted the Committee's need to reduce the balance of 
the authorized reserve to reflect the lower operating budget.
    The Committee met on May 23, 2018, and unanimously recommended 
2018-19 expenditures of $152,920 and an assessment rate of $0.01 per 7/
10-bushel carton or equivalent of oranges and grapefruit. The itemized 
budgeted expenses, including $79,220 for management, $50,000 for 
compliance, and $23,700 for operating expenses, are the same as the 
previous fiscal period. However, the proposed assessment rate of $0.01 
is lower than the $0.02 rate currently in effect.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, expected shipments of 7.5 million 7/
10-bushel cartons, and the amount of funds available in the authorized 
reserve. Income derived from handler assessments, calculated at $75,000 
(7.5 million x $0.01), along with interest income and funds from the 
Committee's authorized reserve, would be adequate to cover budgeted 
expenses of $152,920. Funds in the reserve are estimated to be $287,295 
at the end of the 2017-18 fiscal period. No additional funds can be 
added to the reserve until the balance drops below approximately one 
fiscal period's expenses as stated in Sec.  906.35.
    The assessment rate proposed in this rule would 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 would 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 would 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 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, 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 2016-17 season was approximately $16 per carton and total 
shipments were 7.6 million cartons. Using the average price and 
shipment information, the number of handlers, and assuming a normal 
distribution, the majority of handlers would have average annual 
receipts of greater than $7,500,000 ($16 per carton times 7.6 million 
cartons equals $121.6 million, divided by 13 equals $9.4 million per 
handler).
    In addition, based on National Agricultural Statistics Service 
information, the weighted grower price for Texas citrus during the 
2016-17 season was approximately $9.35 per carton. Using the weighted 
average price and shipment information, the number of producers and 
assuming a normal distribution, the majority of producers would have 
annual receipts of $418,000, which is less than $750,000 ($9.35 per 
carton times 7.6 million cartons equals $71.06 million, divided by 170 
equals $418,000 per producer). Thus, the majority of handlers of Texas 
citrus may be classified as large entities, while the majority of 
producers 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 
$0.01 per 7/10-bushel carton or equivalent of Texas citrus. The 
Committee unanimously recommended 2018-19 expenditures of $152,920 and 
an assessment rate of $0.01 per 7/10-bushel carton or equivalent 
handled. The proposed assessment rate of $0.01 is $0.01 lower than the 
2017-18 rate. The quantity of assessable oranges and grapefruit for the 
2018-19 fiscal period is estimated at 7.5 million 7/10-bushel cartons. 
Thus, the $0.01 rate should provide $75,000 in assessment income (7.5 
million x $0.01). Income derived from handler assessments, along with 
interest income and funds from the Committee's authorized reserve, 
would be adequate to cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2018-19 
year include $79,220 for management, $50,000 for compliance, and 
$23,700 for operating expenses. Budgeted expenses for these items in 
2017-18 were the same.
    The Committee recommended decreasing the assessment rate and 
utilizing funds from its authorized reserve in order to reduce the 
reserve balance to bring it in line with the limitation under the Order 
of approximately one year's expenses.
    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 were adequately 
funded and essential to the functionality of the Order; thus, no 
alternate expenditure levels were deemed appropriate. Additionally, the 
Committee discussed alternatives of maintaining the current assessment 
rate of $0.02 and lowering the assessment rate to $0.015 per 7/10-
bushel carton or equivalent. However, these alternatives were not 
recommended because the Committee determined that these assessment 
rates would not draw a sufficient amount of funds from the authorized 
reserve to bring the reserve fund total in line with Order 
requirements.
    Based on these discussions and estimated shipments, the recommended 
assessment rate of $0.01 would provide $75,000 in assessment income. 
The Committee determined that assessment revenue, along with funds from 
the reserve 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 42807]]

that the average grower price for the 2018-19 season should be 
approximately $9.50 per 7/10-bushel carton or equivalent of oranges and 
grapefruit. Therefore, the estimated assessment revenue for the 2018-19 
crop year as a percentage of total grower revenue would be about 0.1 
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 Texas 
citrus industry. All interested persons were invited to attend the 
meeting and participate in Committee deliberations on all issues. Like 
all Committee meetings, the May 23, 2018, meeting was a public meeting, 
and all entities, both large and small, were able to express views on 
this issue. Finally, interested persons are invited to submit comments 
on this proposed rule, including the regulatory and information 
collection 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 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 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. 
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 906

    Grapefruit, Marketing agreements, Oranges, Reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, 7 CFR part 906 is 
proposed to be 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.

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


Sec.  906.235  Assessment rate.

    On and after August 1, 2018, an assessment rate of $0.01 per 7/10-
bushel carton or equivalent is established for oranges and grapefruit 
grown in the Lower Rio Grande Valley in Texas.

    Dated: August 21, 2018.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2018-18363 Filed 8-23-18; 8:45 am]
 BILLING CODE 3410-02-P