[Federal Register Volume 83, Number 219 (Tuesday, November 13, 2018)]
[Rules and Regulations]
[Pages 56255-56257]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-24728]



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 Rules and Regulations
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  Federal Register / Vol. 83, No. 219 / Tuesday, November 13, 2018 / 
Rules and Regulations  

[[Page 56255]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 927

[Doc. No. AMS-SC-18-0048; SC18-927-1 FR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation from the Fresh Pear 
Committee (Committee) to increase the assessment rate established for 
the 2018-2019 and subsequent fiscal periods. The assessment rate will 
remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective December 13, 2018.

FOR FURTHER INFORMATION CONTACT: Barry Broadbent, Marketing Specialist, 
or Gary Olson, Regional Director, 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, 
amends 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, (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 and 
handlers operating within the area of production, and a public member.
    The Department of Agriculture (USDA) is issuing this final rule in 
conformance with Executive Orders 13563 and 13175. This 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 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 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. The assessment rate established by 
this rule will be applicable to all assessable pears 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 are 
familiar with the Committee's needs and with the costs of goods and 
services in their local area and are in a position to formulate an 
appropriate budget and assessment rate. The assessment rate is 
formulated and discussed in a public meeting where all directly 
affected persons have an opportunity to participate and provide input.
    This rule increases the assessment rate from $0.449 to $0.463 per 
44-pound standard box or equivalent of fresh ``summer/fall'' and 
``winter'' pears handled for the 2018-2019 and subsequent fiscal 
periods. The higher rate is necessary to fully cover the Committee's 
2018-2019 fiscal period budgeted expenditures. The Committee has had to 
draw from its monetary reserve to partially fund program activities 
during the last two fiscal periods. Drawing from reserves to fund 
operations on an on-going basis is not a sustainable strategy. 
Therefore, increasing the continuing assessment rate will allow the 
Committee to fully fund budgeted expenses and replenish its financial 
reserve.
    The Committee met on May 31, 2018, and unanimously recommended 
2018-2019 fiscal period expenditures of $9,213,133 and an assessment 
rate of $0.463 per standard box or equivalent of fresh ``summer/fall'' 
and ``winter'' pears handled. In comparison, last year's budgeted 
expenditures were $9,282,059. The new assessment rate of $0.463 is 
$0.014 higher than the $0.449 rate previously in effect. The Committee 
recommended the assessment rate increase because expenditures have 
exceeded assessment revenue in the previous two fiscal periods.
    The major expenditures recommended by the Committee for the 2018-
2019 fiscal period include $550,790 for contracted administration by 
Pear Bureau Northwest, $190,700 for administrative expenses, $771,643 
for production research and market development, and $7,700,000 for 
promotion and paid advertising for both ``summer/fall'' and ``winter'' 
varieties of fresh pears. In comparison, major expenses for the 2017-
2018 fiscal period included $512,928 for contracted

[[Page 56256]]

administration, $232,200 for administrative expenses, $836,931 for 
production research and market development, and $7,700,000 for 
promotion and paid advertising.
    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. Anticipated income derived 
from handler assessments of $9,260,000 (20 million standard boxes or 
equivalent at $0.463 per box) should be adequate to cover budgeted 
expenses of $9,213,133, with any excess funds used to replenish the 
Committee's monetary reserve. Funds in the reserve (currently 
$1,096,332) will be kept within the maximum permitted by Sec.  
927.42(a) and will not exceed the expenses of approximately one fiscal 
period.
    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 would 
be undertaken as necessary. The Committee's budget for subsequent 
fiscal periods will 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 827 growers of fresh pears in the 
production area and approximately 38 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 data from USDA Market News, the industry, and the 
Committee, for the 2016-17 season, the weighted average f.o.b. price 
for Oregon-Washington fresh pears was approximately $26.99 per standard 
44-pound box. Total shipments for that period were 17,878,219 standard 
boxes or equivalent. Using the number of handlers, and assuming a 
normal distribution, the majority of handlers may have average annual 
receipts of more than $7,500,000 ($26.99 per box times 17,878,219 
equals $482,533,130 divided by 38 handlers equals $12,698,240 per 
handler).
    In addition, based on National Agricultural Statistics Service 
data, the industry produced 441,950 tons of fresh pears in the 
production area during the 2016-2017 season, with an average grower 
price of $797 per ton. Based on the average grower price, production, 
and the total number of Oregon-Washington fresh pear growers, and 
assuming a normal distribution, the average annual grower revenue is 
below $750,000 ($797 per ton times 441,950 tons equals $352,234,150 
divided by 827 growers equals $425,918 per grower). Thus, the majority 
of Oregon and Washington fresh pear handlers may be classified as large 
entities, while the majority of growers may be classified as small 
entities.
    This rule increases the assessment rate collected from handlers for 
the 2018-2019 and subsequent fiscal periods from $0.449 to $0.463 per 
standard box or equivalent of Oregon and Washington fresh ``summer/
fall'' and ``winter'' pears handled. The Committee unanimously 
recommended 2018-2019 fiscal period expenditures of $9,213,133 and the 
$0.463 per standard box or equivalent assessment rate. The assessment 
rate of $0.463 is $0.014 higher than the rate for the 2017-2018 fiscal 
period. The quantity of assessable fresh ``summer/fall'' and ``winter'' 
pears for the 2018-2019 fiscal period is estimated at 20 million 
standard boxes or equivalent. Thus, the $0.463 rate should provide 
$9,260,000 in assessment income. Income derived from handler 
assessments should be adequate to cover budgeted expenses, with any 
excess funds used to replenish the Committee's monetary reserve.
    The major expenditures recommended by the Committee for the 2018-
2019 fiscal period include $550,790 for contracted administration by 
Pear Bureau Northwest, $190,700 for administrative expenses, $771,643 
for production research and market development, and $7,700,000 for 
promotion and paid advertising for both ``summer/fall'' pears and 
``winter'' pears. Budgeted expenses for these items in the 2017-2018 
fiscal period were $512,928, $232,200, $836,931, and $7,700,000, 
respectively.
    The higher assessment rate is necessary to fully cover the 
Committee's 2018-2019 fiscal period budgeted expenditures. The 
Committee has had to draw from its monetary reserve to partially fund 
program activities during the 2016-2017 and 2017-2018 fiscal periods. 
Drawing from its financial reserve to fund operations on an on-going 
basis is not a sustainable strategy. Increasing the continuing 
assessment rate will allow the Committee to fully fund budgeted 
expenses and replenish its financial reserve.
    Prior to arriving at this budget and assessment rate, the Committee 
considered maintaining the current assessment rate of $0.449 per 
standard box or equivalent. However, leaving the assessment unchanged 
would not have generated sufficient revenue to meet the Committee's 
2018-2019 fiscal period budgeted expenses of $9,213,133, and would have 
required the Committee to continue to deplete its financial reserve. 
Based on estimated shipments, the recommended assessment rate of $0.463 
per standard box or equivalent should provide $9,260,000 in assessment 
income. The Committee determined assessment revenue should be adequate 
to cover budgeted expenses for the 2018-2019 fiscal period. Any excess 
assessment revenue will be allocated to replenish the Committee's 
monetary reserve. Reserve funds will be kept within the amount 
authorized in the Order.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal year indicates that the average 
grower price for the 2018-2019 season should be approximately $800 per 
ton of fresh pears. Therefore, the estimated assessment revenue for the 
2018-2019 fiscal period as a percentage of total grower revenue is 
about 2.6 percent.
    This action increases the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal

[[Page 56257]]

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 Oregon and Washington fresh pear 
industry. All interested persons were invited to attend the meeting and 
participate in Committee deliberations on all issues. Like all 
Committee meetings, the May 31, 2018, 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 the OMB and assigned OMB No. 0581-0189 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 rule imposes no additional reporting or recordkeeping 
requirements on either small or large Oregon and Washington fresh 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. 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 August 28, 2018 (83 FR 43799). Copies of the proposed rule 
were also mailed or sent via facsimile to all Oregon and Washington 
fresh pear handlers. The proposal was made available through the 
internet by USDA and the Office of the Federal Register. A 30-day 
comment period ending September 27, 2018, was provided for interested 
persons to respond to the proposal. One comment was received during the 
comment period. The commenter was in favor of the regulation. 
Accordingly, no changes will be made to the rule as proposed, based on 
the comment 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 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.

0
2. In Sec.  927.236, the introductory text and paragraphs (a) and (b) 
are revised to read as follows:


Sec.  927.236   Assessment rate.

    On and after July 1, 2018, the following base rates of assessment 
for fresh pears are established for the Fresh Pear Committee:
    (a) $0.463 per 44-pound net weight standard box or container 
equivalent for any or all varieties or subvarieties of fresh pears 
classified as ``summer/fall'';
    (b) $0.463 per 44-pound net weight standard box or container 
equivalent for any or all varieties or subvarieties of fresh pears 
classified as ``winter''; and
* * * * *

    Dated: November 7, 2018.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2018-24728 Filed 11-9-18; 8:45 am]
 BILLING CODE 3410-02-P