[Federal Register Volume 84, Number 191 (Wednesday, October 2, 2019)]
[Proposed Rules]
[Pages 52384-52386]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21023]


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 Proposed Rules
                                                 Federal Register
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 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.
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  Federal Register / Vol. 84, No. 191 / Wednesday, October 2, 2019 / 
Proposed Rules  

[[Page 52384]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 922

[Doc. No. AMS-SC-19-0048; SC19-922-1 PR]


Marketing Order Regulating the Handling of Apricots Grown in 
Designated Counties in Washington; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Washington Apricot Marketing Committee (Committee) to increase the 
assessment rate established for the 2019-2020 and subsequent fiscal 
periods. The assessment rate would remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Comments must be received by November 1, 2019.

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: Dale Novotny, 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, 
proposes to amend 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. 922, as amended (7 CFR part 922), regulating the handling of 
apricots grown in designated counties of Washington. Part 922 (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 apricot growers and 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, Washington apricot 
handlers are subject to assessments. Funds to administer the Order are 
derived from such assessments. It is intended that the proposed 
assessment rate would be applicable to all assessable Washington 
apricots for the 2019-2020 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 authorizes the Committee, with the approval of USDA, to 
formulate an annual budget of expenses and collect assessments from 
handlers to administer the program. Committee members are familiar with 
its needs and with the costs of goods and services in their local area 
and can 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 proposed rule would increase the assessment rate from $1.00 to 
$2.86 per ton of Washington apricots handled for the 2019-2020 and 
subsequent fiscal periods. The proposed higher rate is necessary to 
fund the Committee's 2019-2020 fiscal period budgeted expenditures. 
Based on input received from growers at an annual meeting, the 2019 
crop of Washington apricots is expected to be unusually low because of 
the effects of late season frost on budding orchard trees. The 
Committee believes that increasing the assessment rate would allow the 
Committee to fully fund its 2019-2020 budgeted expenses.
    The Committee held a well-publicized meeting May 8, 2019, at which 
all interested parties were encouraged to participate in the 
discussions. However,

[[Page 52385]]

the Order's quorum requirement was not met and the Committee was not 
able to conduct official business. The following day, the Committee 
conducted the voting by email and unanimously recommended 2019-2020 
fiscal period expenditures of $8,325 and an assessment rate of $2.86 
per ton of apricots handled. The 2019-2020 fiscal period budgeted 
expenses are unchanged from the prior year. The proposed assessment 
rate of $2.86 is $1.86 higher than the $1.00 per ton rate currently in 
effect.
    The Committee recommended the assessment rate increase due to the 
anticipated reduced production level in 2019 resulting from a late 
season frost that damaged the crop. The 2018 crop was also smaller than 
the Committee had anticipated by 2,036 tons, which resulted in the 
Committee using more funds from its financial reserve than expected.
    The major expenditures recommended by the Committee for the 2019-
2020 fiscal period include $4000 for program management contract 
services provided by the Washington State Fruit Commission, $2,600 for 
annual audit and legal expenses, $1,300 for Committee travel and 
meeting expenses, and $425 for administrative expenses. In comparison, 
the aforementioned expense categories budgeted for the 2018-2019 fiscal 
period were the same amounts.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, expected apricot sales, and the 
amount of funds available in the authorized reserve. Expected income 
derived from handler assessments of $9,438 (3,300 tons of apricots at 
$2.86 per ton), would be adequate to cover budgeted expenses of $8,325 
and contribute $1,113 to the Committee's financial reserve. Funds in 
the reserve (estimated to be $7,211 at the beginning of the 2019-2020 
fiscal period) would be kept within the maximum permitted by Sec.  
922.142(a) by not exceeding the expenses of approximately one fiscal 
period.
    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 
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 Act

    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 are unique in that they are brought about through 
group action of essentially small entities acting on their own behalf.
    There are approximately 315 growers and 13 handlers of apricots in 
the regulated production area subject to regulation under the Order. 
Small agricultural service firms are defined by the Small Business 
Administration (SBA) as those having annual receipts of less than 
$7,500,000, and small agricultural producers are defined as those 
having annual receipts of less than $750,000 (13 CFR 121.201).
    According to data from USDA Market News, the 2018 season average 
f.o.b. price for Washington apricots was approximately $25.07 per 
carton. The Committee reported that the industry shipped 3,964 tons for 
the season, which equals approximately 528,533 cartons (3,964 tons at 
an approximate net weight of 15 pounds per carton). Using the number of 
handlers, and assuming a normal distribution, most handlers would have 
average annual receipts of less than $7,500,000 ($25.07 times 528,533 
equals $13,250,331 divided by 13 handlers equals $1,019,256 per 
handler).
    In addition, based on USDA National Agricultural Statistics Service 
data, the weighted average grower price for the 2018 season was $1,330 
per ton of apricots. Based on grower price, shipment data, and the 
total number of Washington apricot growers, and assuming a normal 
distribution, the average annual grower revenue is below $750,000 
($1,330 times 3,964 tons equals $5,272,120 divided by 315 growers 
equals $16,737 per grower). Thus, most growers and handlers of 
Washington apricots may be classified as small entities.
    This proposed rule would increase the assessment rate collected 
from handlers for the 2019-2020 and subsequent fiscal periods from 
$1.00 to $2.86 per ton of Washington apricots handled. The Committee 
unanimously recommended 2019-2020 fiscal period expenditures of $8,325 
and the $2.86 per ton assessment rate. The proposed assessment rate of 
$2.86 is $1.86 higher than the rate for the 2018-2019 fiscal period. 
The Committee estimates that the industry will handle 3,300 tons of 
fresh, Washington apricots during the 2019-2020 fiscal period. Thus, 
the $2.86 per ton rate should provide $9,438 in assessment income. 
Income derived from handler assessments would be adequate to cover all 
budgeted expenses. In addition, the Committee anticipates adding $1,113 
to its monetary reserve in the 2019-2020 fiscal period.
    The major expenditures recommended by the Committee for the 2019-
2020 fiscal period include $4000 for program management contract 
services provided by the Washington State Fruit Commission, $2,600 for 
annual audit and legal expenses, $1,300 for Committee travel and 
meeting expenses, and $435 for administrative expenses. Those budgeted 
expenditures are unchanged from the previous fiscal period.
    The proposed increased assessment rate is necessary to cover all 
the Committee's 2019-2020 fiscal period budgeted expenditures and 
replenish its financial reserve. The Committee has had to draw from its 
monetary reserve to partially fund program activities during previous 
fiscal periods.
    Prior to arriving at this budget and assessment rate 
recommendation, the Committee considered maintaining the current 
assessment rate of $1.00 per ton. However, after grower input and 
discussions at its May 8, 2019, meeting, the anticipated crop was 
downgraded from 5,500 to 3,300 tons. This amount of production at the 
current assessment level of $1.00 per ton would not generate enough 
assessment income to fund the Committee's operations for the 2019-2020 
fiscal period and allow it to maintain an adequate financial reserve. 
Based on estimated shipments, the recommended assessment rate of $2.86 
per ton of apricots should provide $9,438 in assessment income. The 
Committee determined assessment revenue at the proposed higher rate

[[Page 52386]]

would be adequate to cover all budgeted expenditures for the 2019-2020 
fiscal period and allow it to make a small contribution to its 
financial reserve. Reserve funds would be kept within the amount 
authorized in the Order.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the average 
grower price for the 2019-2020 season should be approximately $800-
$1,600 per ton of Washington apricots. Therefore, the estimated 
assessment revenue for the 2019-2020 marketing year as a percentage of 
total grower revenue would be between 0.18 and 0.36 percent.
    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 growers. However, these costs 
would be offset by the benefits derived by the operation of the Order.
    The Committee's meetings are widely publicized throughout the 
Washington apricot industry. All interested persons were invited to 
attend the meeting and participate in Committee deliberations on all 
issues. Like all Committee meetings, the May 8, 2019, meeting was a 
public meeting and all entities, both large and small, were able to 
express views on this issue. In addition, 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. 0581-0178, 
Specialty Crops. No changes in those requirements would be necessary 
because 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 Washington apricot 
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 922

    Apricots, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 922 is 
proposed to be amended as follows:

PART 922--MARKETING ORDER REGULATING THE HANDLING OF APRICOTS GROWN 
IN DESIGNATED COUNTIES IN WASHINGTON

0
1. The authority citation for part 922 continues to read as follows:

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

0
2. Section 922.235 is revised to read as follows:


Sec.  922.235  Assessment rate.

    On and after April 1, 2019, an assessment rate of $2.86 per ton is 
established for Washington apricots handled in the production area.

    Dated: September 23, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2019-21023 Filed 10-1-19; 8:45 am]
BILLING CODE 3410-02-P