[Federal Register Volume 86, Number 220 (Thursday, November 18, 2021)]
[Proposed Rules]
[Pages 64408-64410]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25116]


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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. 86, No. 220 / Thursday, November 18, 2021 / 
Proposed Rules  

[[Page 64408]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 906

[Doc. No. AMS-SC-21-0065; SC21-906-1 PR]


Increased Assessment Rate for Texas Oranges and Grapefruit

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Texas Valley Citrus Committee (Committee) to increase the assessment 
rate established for the 2021-22 and subsequent fiscal periods. The 
proposed assessment rate would remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Comments must be received by December 20, 2021.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Market Development 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 individuals or entities submitting comments will be 
made public on the internet at the address provided above.

FOR FURTHER INFORMATION CONTACT: Abigail Campos, Marketing Specialist, 
or Christian D. Nissen, Regional Director, Southeast Marketing Field 
Office, Market Development Division, Specialty Crops Program, AMS, 
USDA; Telephone: (863) 324-3375, Fax: (863) 291-8614, or Email: 
[email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Market Development 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 
Agreement No. 121 and Marketing Order No. 906, both as amended (7 CFR 
part 906), regulating the handling of oranges and grapefruit grown in 
the Lower Rio Grande Valley in Texas. Part 906, (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 comprises 
producers and handlers of oranges and grapefruit operating within the 
production area.
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 12866 and 13563. Executive Orders 
12866 and 13563 direct agencies to assess all costs and benefits of 
available regulatory alternatives and, if regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
distributive impacts and equity). Executive Order 13563 emphasizes the 
importance of quantifying both costs and benefits, reducing costs, 
harmonizing rules, and promoting flexibility. This action falls within 
a category of regulatory actions that the Office of Management and 
Budget (OMB) exempted from Executive Order 12866 review.
    This proposed rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which 
requires agencies to consider whether their rulemaking actions would 
have tribal implications. AMS has determined that this proposed rule is 
unlikely to have substantial direct effects on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian tribes.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the Order now in effect, Texas citrus 
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 oranges and grapefruit for the 
2021-22 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.
    This proposed rule would increase the assessment rate from $0.01 
per 7/10-bushel carton or equivalent, the rate that was established for 
the 2018-19 and subsequent fiscal periods, to $0.05 per 7/10-bushel 
carton or equivalent of oranges and grapefruit handled for the 2021-22 
and subsequent fiscal periods.
    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. Members are familiar with the 
Committee's needs and with costs for goods and services in their local 
area and are in a position to formulate an appropriate budget and 
assessment rate. The assessment rate is

[[Page 64409]]

formulated and discussed in a public meeting. Thus, all directly 
affected persons have had an opportunity to participate and provide 
input.
    For the 2018-19 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate of $.01 per 7/10-
bushel carton or equivalent of oranges and grapefruit handled. That 
assessment rate continues to be in effect unless modified, suspended, 
or terminated by USDA upon recommendation and information submitted by 
the Committee or other information available to USDA.
    The Committee met on July 14, 2021, and recommended 2021-22 
expenditures of $43,900 and an assessment rate of $0.05 per 7/10-bushel 
carton or equivalent. In comparison, the previous fiscal period's 
budgeted expenditures were $155,720. The assessment rate of $0.05 is 
$0.04 higher than the rate currently in effect. The Committee 
unanimously voted to increase the assessment rate due to the extensive 
tree damage from a freeze experienced in Texas occurring in February 
2021. This February freeze decreased the 2020-21 production from an 
expected 7.5 million 7/10-bushel cartons to 3.1 million 7/10-bushel 
cartons. The Committee discussed how freeze damages caused a depletion 
of financial reserves for the 2020-21 fiscal period due to assessment 
income being lower than expected. Production will be further reduced 
during the upcoming fiscal period because of freeze damage to trees. 
Estimated production for the 2021-22 fiscal period has been reduced 
from 7.5 million 7/10-bushel cartons or equivalents to 1 million. At 
the current assessment rate, assessment income would equal $10,000, an 
amount insufficient to cover the Committee's anticipated expenses of 
$43,900. By increasing the assessment rate by $0.04, assessment income 
would be $50,000. This amount should provide sufficient funds to meet 
fiscal period 2021-22 anticipated expenses.
    Major expenditures recommended by the Committee for the 2021-22 
fiscal period include $20,000 for management expenses, $13,900 for 
administrative expenses, and $10,000 for compliance. Budgeted expenses 
for these items in the 2020-21 fiscal period were $79,220, $26,500, and 
$50,000, respectively.
    The Committee derived the recommended assessment rate by 
considering anticipated expenses and expected shipments of Texas 
oranges and grapefruit. Orange and grapefruit shipments for the 2021-22 
fiscal period are estimated at 1,000,000 7/10-bushel cartons or 
equivalents, which should provide $50,000 in assessment income 
(1,000,000 cartons multiplied by $0.05). Income derived from handler 
assessments at the proposed rate, along with interest income, should be 
adequate to cover estimated program expenses of $43,900. Funds in the 
reserve (currently about $43,000) would be kept within the maximum 
permitted by Sec.  906.35 of the Order (approximately one fiscal 
period's expenses).
    The proposed assessment rate 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 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. 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 2021-22 budget and those 
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 are unique in that they are brought about through 
group action of essentially small entities acting on their own behalf.
    There are approximately 119 producers of oranges and grapefruit in 
the production area and 14 handlers subject to regulation under the 
Order. Small agricultural producers are defined by the Small Business 
Administration (SBA) as those having annual receipts of less than 
$1,000,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $30,000,000 (13 CFR 121.201).
    According to data from the National Agricultural Statistics Service 
(NASS), the industry, and the Committee, the weighted average free-on-
board price for Texas citrus for the 2019-20 fiscal period was 
approximately $16.20 per carton, with total shipments of around 8.2 
million cartons. Based on this information, total annual receipts of 
Texas citrus handlers in the 2019-20 fiscal period was approximately 
$132,840,000 ($16.20 multiplied by 8.2 million cartons equals 
$132,840,000). Dividing by the number of citrus handlers infers average 
annual receipts of less than $30 million ($132,840,000 divided by 14 
handlers equals $9.5 million).
    In addition, based on NASS data, the weighted average producer 
price for the 2019-20 fiscal period was around $5.65 per carton of 
Texas citrus. Based on producer price, shipment data, and the total 
number of Texas citrus producers, the average annual producer revenue 
is below $1,000,0000 ($5.65 multiplied by 8.2 million cartons equals 
$46,330,000 divided by 119 producers equals approximately $389,328).
    This proposal would increase the assessment rate and collected from 
handlers for the 2021-22 and subsequent fiscal periods from $0.01 per 
7/10-bushel carton or equivalent to $0.05 per 7/10-bushel carton or 
equivalent of oranges and grapefruit grown in the Lower Rio Grande 
Valley in Texas. The Committee recommended 2021-22 expenditures of 
$43,900 and an assessment rate of $0.05 per 7/10-bushel carton. The 
proposed assessment rate of $0.05 is $0.04 higher than the current 
rate. The quantity of assessable Texas Citrus for the 2021-22 fiscal 
period is estimated at 1,000,000 7/10-bushel cartons. Thus, the $0.05 
rate should provide $50,000 in assessment income ($0.05 multiplied by 
1,000,000 cartons), which should be adequate to cover budgeted expenses 
for the 2021-22 season.
    Major expenditures recommended by the Committee for the 2021-22 
fiscal period include $20,000 for management expenses, $13,900 for 
administrative expenses, and $10,000 for compliance. Budgeted expenses 
for these items in 2020-21 were $79,220, $26,500, and $50,000, 
respectively.
    The Committee recommended increasing the assessment rate because of 
the extensive tree damage from the freeze in February 2021. At the 
current assessment rate of $0.01 and with the 2021-22 crop estimated to 
be 1,000,000 7/10-bushel cartons, assessment income would equal $10,000 
($0.01 multiplied

[[Page 64410]]

by 1,000,000 cartons), an amount insufficient to cover the Committee's 
anticipated expenditures of $43,900. By increasing the assessment rate 
by $0.04, assessment income would be approximately $50,000 ($0.05 
multiplied by 1,000,000 cartons). This amount should provide sufficient 
funds to meet 2021-22 anticipated expenses.
    Prior to arriving at this budget and assessment rate, the Committee 
considered maintaining the current assessment rate of $0.01. However, 
leaving the assessment unchanged would not generate sufficient revenue 
to meet the Committee's expenses for the 2021-22 budget of $43,900 and 
would diminish reserves. Therefore, the alternative was rejected.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the producer 
price for 2021-22 should be approximately $5.42 per 7/10-bushel carton 
or equivalent of oranges and grapefruit. Therefore, the estimated 
assessment revenue for the 2021-22 fiscal period as a percentage of 
total producer revenue would be approximately 0.9 percent ($50,000 
divided by $5.42 x 1,000,000 cartons).
    This action would increase the assessment obligation imposed on 
handlers. While assessments impose additional costs on handlers, costs 
are minimal and uniform on all handlers, and some portion of additional 
costs may be passed through to producers. However, these costs are 
expected to be offset by benefits derived by the operation of the 
Order.
    The Committee's meeting was widely publicized throughout the Texas 
citrus industry. All interested persons were invited to attend the 
meeting and participate in Committee deliberations on all issues. Like 
all Committee meetings, the July 14, 2021, meeting was a public meeting 
and all entities, both large and small, were able to express views on 
this issue. Finally, interested persons are invited to submit comments 
on this proposed rule, including the regulatory and informational 
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. 0581-0189 Fruit 
Crops. No changes in these 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 Texas orange and 
grapefruit 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, promoting 
the use of the internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services.
    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.
    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 matter.

List of Subjects in 7 CFR Part 906

    Grapefruit, Marketing agreements, Oranges, Reporting and 
recordkeeping requirements.

    For reasons set forth in the preamble, 7 CFR part 906 is proposed 
to be amended as follows:

PART 906--ORANGES AND GRAPEFRUIT GROWN IN LOWER RIO GRANDE VALLEY 
IN TEXAS

0
1. The authority citation for 7 CFR part 906 continues to read as 
follows:

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

0
2. Section 906.235 is revised to read as follows:


Sec.  906.235  Assessment rate.

    On and after August 1, 2021, an assessment rate of $0.05 per 7/10-
bushel carton or equivalent is established for oranges and grapefruit 
grown in the Lower Rio Grande Valley in Texas.


Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2021-25116 Filed 11-17-21; 8:45 am]
BILLING CODE P