[Federal Register Volume 83, Number 190 (Monday, October 1, 2018)]
[Proposed Rules]
[Pages 49312-49314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-21264]


 ========================================================================
 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. 190 / Monday, October 1, 2018 / 
Proposed Rules  

[[Page 49312]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Doc. No. AMS-SC-18-0060; SC18-920-1 PR]


Kiwifruit Grown California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: This proposed rule would implement a recommendation from the 
Kiwifruit Administrative Committee (Committee) to decrease the 
assessment rate established for the 2018-2019 and subsequent fiscal 
periods. The assessment rate would remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Comments must be received by October 31, 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: Maria Stobbe, Marketing Specialist or 
Terry Vawter, Senior Marketing Specialist, California Marketing Field 
Office, Marketing Order and Agreement Division, Specialty Crops 
Program, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, 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. 920, as amended (7 CFR part 920), 
regulating the handling of kiwifruit grown in California. Part 920 
(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 of kiwifruit 
operating within the area of production, and one member of the public.
    The Department of Agriculture (USDA) is issuing this proposed 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 proposal 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, kiwifruit handlers 
in California 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 kiwifruit for the 2018-2019 
fiscal period, 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 of the 
Committee are producers of kiwifruit grown in California, and one 
member of the public. 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.
    This proposed rule would decrease the assessment rate for the 2018-
2019 and subsequent fiscal periods from $0.040 to $0.025 per 9-kilo 
volume-fill container or equivalent of kiwifruit handled.
    The Committee met on July 19, 2018, and unanimously recommended 
2018-19 expenditures of $119,000, and an assessment rate of $0.025 per 
9-kilo volume-fill of kiwifruit. In comparison, last year's budgeted 
expenditures were $114,383. The assessment rate of $.025 is $0.015 
lower than the rate currently in effect. The Committee currently has a 
cash reserve of approximately $52,056. The proposed decreased 
assessment rate, plus the cash reserve are sufficient

[[Page 49313]]

to fund the 2018-2019 budgeted expenses.
    The major expenditures recommended by the Committee for 2018-2019 
include $80,000 for management services, $29,000 in office 
expenditures, and $10,000 for research. Budgeted expenses for these 
items in 2017-2018 were $80,000 for management services, $24,383 in 
office expenditures, and $10,000 for research.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, expected shipments of kiwifruit in 
the production area, and the level of funds in the authorized reserve. 
Kiwifruit shipments for the 2018-2019 season are estimated at 4,207,071 
9-kilo volume-fill containers, which should provide $105,177 in 
assessment income (4,207,071 9-kilo volume-fill containers times $0.025 
per container equals $105,177). Income derived from handler 
assessments, along with interest income and funds from the Committee's 
authorized reserve, would be adequate to cover budgeted expenses. Funds 
in the reserve (currently $52,056) would be kept within the maximum 
permitted by the Order (approximately one fiscal period's expenses).
    The assessment rate recommended in this proposal would continue in 
effect indefinitely unless modified, suspended, or terminated by USDA 
upon recommendation and information submitted by the Committee and 
other available information.
    Although this assessment rate would be in effect for an indefinite 
period, the Committee would 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 budget for subsequent 
fiscal periods would 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 140 producers of kiwifruit 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 Committee, USDA Market News, and National Agricultural 
Statics Service (NASS) data, the average price of kiwifruit for the 
2016-17 season was approximately $0.92 per pound, and the total crop 
was approximately 9.0 million tray equivalents, or 63 million pounds. 
Based on the average price and handler-specific annual kiwifruit sales 
data provided by the Committee, nineteen of the twenty handlers have 
average annual receipts less than $7,500,000. Thus, the majority of 
kiwifruit handlers may be classified as small business entities.
    In addition, based on information from the NASS, the average grower 
price for kiwifruit during the 2016-17 season was approximately $0.525 
cents per pound. The Committee analyzed grower-specific production data 
and determined that growers with production over 204,081 9-kilo volume-
fill containers would be classified as large entities (204,081 9-kilo 
volume-fill containers time 7 pounds per container times $0.525 per 
pound = $749,998). Using the NASS average grower price and the 
Committee's specific grower production information, at least 130 of 140 
producers have annual receipts of less than $750,000. Thus, the 
majority of the kiwifruit producers may be classified as small 
entities.
    This proposal would decrease the assessment rate collected from 
handlers for the 2018-2019 and subsequent fiscal periods from $0.040 to 
$0.025 per 9-kilo volume-fill container of kiwifruit. The Committee 
unanimously recommended 2018-2019 expenditures of $119,000, and an 
assessment rate of $0.025 per 9-kilo volume-fill container. The 
proposed assessment rate of $0.025 is $0.015 lower than the 2017-2018 
rate. The quantity of assessable commodity for the 2018-2019 fiscal 
year is estimated at 4,207,071 9-kilo volume-fill container. Thus, the 
$0.025 rate should provide $105,177 in assessment income (4,207,071 x 
$0.025). Income derived from handler assessments, along with interest 
income and funds from the Committee's authorized reserve (currently, 
$52,056), would be adequate to cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2018-
2019 fiscal year include $80,000 for management services, $29,000 in 
office expenditures, and $10,000 for research. Budgeted expenses for 
these items in 2017-2018 were $80,000 for management services, $24,383 
in office expenditures, and $10,000 for research. The Committee 
estimates that the funds in the reserve (currently $52,056) would be 
reduced by $13,303 to ensure the reserve remains within the maximum 
permitted by the Order (approximately one fiscal period's expenses).
    Prior to arriving at this budget and assessment rate, the Committee 
considered various options, such as maintaining the current assessment 
rate and expenditure levels. Alternative expenditure levels were 
discussed by the Committee, based upon the relative value of various 
activities to the kiwifruit industry. The Committee ultimately 
determined that 2018-2019 expenditures of $119,000 were appropriate, 
the recommended $0.025 assessment rate, and the use of $13,303 from the 
financial reserve, would be sufficient to meet its expenses.
    A review of historical crop and price information, as well as 
preliminary information pertaining to the upcoming fiscal period, 
indicates that the shipping point price for the 2017-2018 season 
averaged about $17.32 per 9-kilo volume-fill container of California 
kiwifruit handled. If the 2018-2019 price is similar to the 2017-2018 
price, estimated assessment revenue as a percentage of total estimated 
handler revenue would be 0.14 percent for the 2018-2019 season ($0.025 
divided by $17.32 per 9-kilo volume-fill container).
    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 would reduce the burden on handlers, and may reduce 
the burden on producers. This proposal would not have a significant 
economic impact on a substantial number of small entities.
    The Committee's meeting was widely publicized throughout the 
production

[[Page 49314]]

area. All interested persons were invited to attend the meeting and 
participate in Committee deliberations on all issues. Like all 
Committee meetings, the July 19, 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.
    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 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 California 
kiwifruit 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 action.
    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.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. All written comments timely received 
will be considered before a final determination is made on this rule.

List of Subjects in 7 CFR Part 920

    Kiwifruit, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 920 is 
proposed to be amended as follows:

PART 920--KIWIFRUIT GROWN IN CALIFORNIA

0
1. The authority citation for part 920 continues to read as follows:

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

0
2. Section 920.213 is revised to read as follows:


Sec.  920.213   Assessment rate.

    On and after August 1, 2018, an assessment rate of $0.025 per 9-
kilo volume-fill container or equivalent of kiwifruit is established 
for kiwifruit grown in California.

    Dated: September 26, 2018.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2018-21264 Filed 9-28-18; 8:45 am]
 BILLING CODE 3410-02-P