[Federal Register Volume 84, Number 52 (Monday, March 18, 2019)]
[Rules and Regulations]
[Pages 9693-9695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-04909]



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 Rules and Regulations
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  Federal Register / Vol. 84, No. 52 / Monday, March 18, 2019 / Rules 
and Regulations  

[[Page 9693]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 987

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


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements 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 will remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Effective April 17, 2019.

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, 
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. 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 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, California date 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 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 rule increases 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 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.
    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 2018-19 crop year 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 $0.15 rate, 
should generate $43,500 in assessment income. Other

[[Page 9694]]

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 
$83,790. 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 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 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 
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.

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 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 farmed 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 handler 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 rule increases 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 $83,740 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 $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 
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 higher assessment rate applied to the 
estimated crop, combined with carry-in funds 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

[[Page 9695]]

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 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 action increases 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.
    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. 0581-0178, Vegetable 
and Specialty 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 final rule imposes no 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. 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 November 2, 2018 (83 FR 55111). Copies of the proposed rule 
were provided to all California date handlers. The proposal was also 
made available through the internet by USDA and the Office of the 
Federal Register. A 30-day comment period ending December 3, 2018, was 
provided for interested persons to respond to the proposal. No comments 
were received. Accordingly, no changes will be made to the rule as 
proposed.
    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 987

    Dates, Marketing agreements, Reporting and recordkeeping 
requirements.

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

PART 987--DOMESTIC DATES PRODUCED OR PACKED IN RIVERSIDE COUNTY, 
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: March 12, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2019-04909 Filed 3-15-19; 8:45 am]
BILLING CODE 3410-02-P