[Federal Register Volume 83, Number 213 (Friday, November 2, 2018)]
[Proposed Rules]
[Pages 55111-55113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-23917]


 ========================================================================
 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. 213 / Friday, November 2, 2018 / 
Proposed Rules  

[[Page 55111]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 987

[Doc. No. AMS-SC-18-0058; SC18-987-1 PR]


Domestic Dates Produced or Packed in Riverside County, 
California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: This proposed rule would implement a recommendation from the 
California Date Administrative Committee (Committee) to increase the 
assessment rate for the 2018-19 and subsequent crop years for 
California dates handled under Marketing Order 987. The assessment rate 
would remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Comments must be received by December 3, 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: 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].
    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 Order No. 987, as amended (7 CFR part 987), regulating the 
handling of domestic dates produced or packed in Riverside County, 
California. Part 987, (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 producer-
handlers 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'[thinsp]'' (February 2, 2017).
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the Order now in effect, California date 
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 dates 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 increase the assessment rate from $0.05 
per hundredweight, the rate that was established for the 2016-17 and 
subsequent crop years, to $0.15 per hundredweight of dates handled for 
the 2018-19 and subsequent crop years. The proposed higher rate is 
necessary in order to provide sufficient funds to cover the 2018-19 
anticipated expenses. As a result of three consecutive assessment 
decreases, a smaller crop, anticipated increases in the cost of the 
annual financial audit, and increased costs for dues and subscriptions, 
the Committee recommended an increased assessment rate. The 2018-19 
crop is estimated to be approximately 29,000,000 pounds, down from 
36,000,000 pounds for the 2017-18 crop year.

[[Page 55112]]

    The Committee's operating reserve is low enough that an increase in 
the assessment rate is necessary to ensure that there are sufficient 
funds to pay for all the Committee's proposed expenses, while also 
ensuring that the Committee has an operating reserve to carry into the 
2019-20 crop year.
    The Committee met on June 28, 2018, and unanimously recommended 
increasing the assessment rate from the current $0.05 per hundredweight 
to $0.15 per hundredweight in order to maintain expenses at a level 
consistent with recent crop years' expenses, draw a portion of the 
expenses from the existing operating reserve, and provide a sufficient 
operating reserve to carry forward. The assessment rate increase, along 
with the funds from the reserve and other income, should provide 
sufficient funds to cover anticipated expenses.
    The Committee estimates the 2018-19 domestic date crop to be 
29,000,000 pounds (290,000 hundredweight), which, at the proposed $0.15 
rate, should generate $43,500 in assessment income. Other income, which 
includes items such as interest income, is expected to be approximately 
$5,000. Combined with the anticipated $50,000 in beginning year 
operating reserve funds, the total funds available for the 2018-19 crop 
year are expected to be $98,500.
    The Committee's expenses for the 2018-19 crop year are estimated at 
$83,740. The Committee's expenses are entirely operational, since it 
conducts its research and promotion programs through its sister 
organization, the California Date Commission, a California State 
marketing program. The major administrative expenses include $58,000 
for salaries and $25,740 for office and Committee expenses such as 
rent, insurance, postage, website and email, utilities, meeting costs, 
and other miscellaneous administrative expenses.
    The previous crop year's budget was $67,800, and budgeted expenses 
for salaries and for office and Committee expenses were $50,000 and 
$17,800, respectively. Increases in the cost of the annual audit, 
personnel, and in dues and subscriptions account for some of the 
increased expenses in the 2018-19 crop year.
    The increased cost for the annual audit reflects the Committee's 
need to conduct a comprehensive, government-mandated ``single-audit 
(Yellow Book audit).'' Dues and subscriptions have increased due to the 
Committee's use of an import reporting subscription service, which 
provides detailed data on date imports.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, expected volume of dates handled, and 
the amount of funds available in the operating reserve. Income derived 
from handler assessments of $43,500 (290,000 hundredweight assessed at 
the proposed rate of $0.15), along with other income and funds from the 
Committee's operating reserve, would be adequate to cover budgeted 
expenses of $83,790. Funds in the operating reserve (currently $50,000) 
would not exceed the average of the annual expenses of the preceding 
five years, as mandated by Sec.  987.72(d).
    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 would continue to meet prior to or during each 
crop year 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 crop 
years 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 70 date producers in the production area 
and 11 date handlers subject to regulation under the Order. The Small 
Business Administration defines small agricultural producers as those 
having annual receipts of less than $750,000, and small agricultural 
service firms as those whose annual receipts are less than $7,500,000. 
(13 CFR 121.201)
    According to the National Agricultural Statistics Service (NASS), 
data for the most-recently completed crop year (2017) shows that about 
3.23 tons, or 6,460 pounds, of dates were produced per acre. The 2017 
producer price published by NASS was $2,840 per ton. Thus, the value of 
date production per acre averaged about $9,173 (3.23 tons times $2,840 
per ton). At that average price, a producer would have to farm nearly 
82 acres to receive an annual income from dates of $750,000 ($750,000 
divided by $9,173 per acre equals 81.76 acres). According to Committee 
staff, the majority of California date producers farm less than 81 
acres during the 2017-18 crop year. Thus, it can be concluded that the 
majority of date producers could be considered small entities. 
Furthermore, based on a reported average price of $1.25 per pound for 
packaged dates handled, a handler would have to handle at least 
6,000,000 pounds to have $7,500,000 in annual receipts (6,000,000 
multiplied by $1.25 per pound). According to information from the 
Committee on handler utilization of dates, only three of the regulated 
handlers handled less than 6,000,000 pounds during the 2017-18 crop 
year. Thus, most of the handlers could be considered large entities.
    This proposed rule would increase the assessment rate collected 
from handlers for the 2018-19 and subsequent crop years from $0.05 to 
$0.15 per hundredweight of dates handled. The Committee unanimously 
recommended 2018-19 expenditures of $83,790 and an assessment rate of 
$0.15 per hundredweight of dates, which is $0.10 higher than the 2016-
17 rate currently in effect. The quantity of assessable dates for the 
2018-19 crop year is estimated at 29,000,000 pounds (290,000 
hundredweight). Thus, the proposed $0.15 rate should provide $43,500 in 
assessment income. Income derived from handler's assessments, funds 
from the Committee's authorized reserve, and other income should be 
adequate to cover expenses for the 2018-19 crop year.
    The total expenditure recommended by the Committee for the 2018-19 
crop year is $83,790, compared to $67,800 for the 2017-18 crop year. 
The Committee recommended a higher assessment rate because its 
operating reserve would otherwise be too small to fund program

[[Page 55113]]

operations when combined with other income. In addition, the crop 
estimate for the 2018-19 crop year is expected to be 29,000,000 pounds, 
compared to 36,000,000 pounds for the 2017-18 crop year.
    The income generated from the proposed higher assessment rate 
applied to the estimated crop, combined with carry-in funds from the 
2017-18 crop year and income from other sources, should be sufficient 
to cover anticipated 2018-19 expenses and to maintain a financial 
reserve within the limit specified by the Order.
    Section 987.72(d) states that the Committee may maintain an 
operating monetary reserve not to exceed the average of one year's 
expenses incurred during the most recent five preceding crop years, 
except that an established reserve need not be reduced to conform to 
any recomputed average. The Committee estimated a $50,000 reserve 
carry-in for the 2018-19 crop year. It expects to utilize $35,290 of 
the reserve during the year, leaving a reserve of approximately $14,710 
at the end of the 2018-19 crop year, which is within the limit 
specified in the Order.
    The Committee reviewed and unanimously recommended 2018-19 crop 
year expenditures of $83,790. Prior to arriving at this budget, the 
Committee considered information from its Budget Subcommittee 
(Subcommittee), which met on June 7, 2018. The Subcommittee discussed 
alternative expenditure levels and assessment rates, including not 
changing the assessment rate or adjusting expenses. Ultimately, the 
Subcommittee and the Committee recommended an assessment rate of $0.15 
per hundredweight of dates handled after considering several factors 
including the anticipated 2018-19 crop, the Committee's estimated 2018-
19 reserve carry-in and other income, and its anticipated expenses.
    A review of historical and preliminary information pertaining to 
the upcoming crop year indicates that the producer price for the 2017-
18 crop year was approximately $142.00 per hundredweight of dates. 
Utilizing that price, the estimated crop size, and the proposed 
assessment rate of $0.15 per hundredweight, the estimated assessment 
revenue for the 2018-19 crop year as a percentage of total producer 
revenue will be approximately 0.1 percent ($0.15 per hundredweight 
divided by $142 per hundredweight).
    This proposed action would increase 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 producers. However, these 
costs would be offset by the benefits derived by the operation of the 
Order. In addition, the Committee's and the Subcommittee's meetings 
were widely publicized throughout the California date industry. All 
interested persons were invited to attend the meetings and encouraged 
to participate in Committee deliberations on all issues. Like all 
Committee meetings, the June 28, 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 the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0178 Vegetable and Specialty Crops. No changes in 
those requirements would be necessary as a result of this action. 
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 date 
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 987

    Dates, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 987 is 
proposed to be amended as follows:

PART 987--DOMESTIC DATES PRODUCED OR PACKED IN RIVERSIDE, 
CALIFORNIA

0
1. The authority citation for part 987 continues to read as follows:

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

0
2. Section 987.339 is revised to read as follows:


Sec.  987.339  Assessment rate.

    On and after October 1, 2018, an assessment rate of $0.15 per 
hundredweight is established for dates produced or packed in Riverside 
County, California.

    Dated: October 29, 2018.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2018-23917 Filed 11-1-18; 8:45 am]
 BILLING CODE 3410-02-P