[Federal Register Volume 87, Number 78 (Friday, April 22, 2022)]
[Proposed Rules]
[Pages 24070-24072]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-08606]


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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. 87, No. 78 / Friday, April 22, 2022 / 
Proposed Rules  

[[Page 24070]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 915

[Doc. No. AMS-SC-22-0004; SC22-915-1 PR]


Avocados Grown in South Florida; 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 
Avocado Administrative Committee to increase the assessment rate 
established for the 2022-23 and subsequent fiscal years. The assessment 
rate would remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Comments must be received by May 23, 2022.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be submitted to the Docket 
Clerk electronically by Email: [email protected] or 
internet: https://www.regulations.gov. Comments should reference the 
document number and the date and page number of this issue of the 
Federal Register and can be viewed at: https://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 the individuals or entities submitting the 
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 Region Branch, 
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, 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. 915, both as amended (7 CFR 
part 915), regulating the handling of avocados grown in south Florida. 
Part 915, (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 Avocado 
Administrative Committee (Committee) locally administers the Order and 
is comprised of growers and handlers operating within the area of 
production, and a public member.
    The Agricultural Marketing Service (AMS) 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, Florida avocado 
handlers are subject to assessments. Funds to administer the Order are 
derived from such assessments. It is intended that the assessment rate 
as proposed herein would be applicable to all assessable Florida 
avocados for the 2022-23 fiscal 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 the United States 
Department of Agriculture (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 no later than 20 days after the date of the entry of 
the ruling.
    This proposed rule would increase the assessment rate established 
for the 2022-23 and subsequent fiscal years from $0.45 to $0.50 per 55-
pound container or equivalent of avocados.
    The Order authorizes the Committee, with the approval of AMS, to 
formulate an annual budget of expenses and collect assessments from 
handlers to administer the program. The members of the Committee are 
familiar with the Committee's needs and with the costs for goods and 
services in their local area and are able to formulate an appropriate 
budget and assessment rate. The assessment rate is formulated and 
discussed in a public meeting, and all directly affected persons have 
an opportunity to participate and provide input.
    For the 2021-22 and subsequent fiscal years, the Committee 
recommended, and AMS approved, an assessment rate that would continue 
in effect from fiscal

[[Page 24071]]

year to fiscal year unless modified, suspended, or terminated by AMS 
upon recommendation and information submitted by the Committee or other 
information available to AMS.
    The Committee met on January 12, 2022, and recommended 2022-23 
expenditures of $268,484 and an assessment rate of $0.50 per 55-pound 
container or equivalent of avocados. In comparison, last year's 
budgeted expenditures were $348,484. The assessment rate of $0.50 is 
$0.05 higher than the rate currently in effect. The Committee discussed 
the need to increase the assessment rate based on the 2022-23 crop 
estimate of 500,000 55-pound containers, a decrease from 800,000 from 
the previous year. At the current assessment rate, assessment income 
would equal only $225,000, an amount insufficient to cover the 
Committee's anticipated expenditures of $268,484. By increasing the 
assessment rate by $0.05, assessment income would be $250,000, which 
would reduce the amount of funds needed from the Committee's authorized 
reserve to cover the 2022-23 budgeted expenses. This amount, along with 
interest income, and funds from the reserve, should provide sufficient 
funds to meet 2022-23 anticipated expenses.
    Major expenditures recommended by the Committee for the 2022-23 
year include $116,164 for salaries, $53,350 for employee benefits, and 
$26,500 for office rent and supplies. Budgeted expenses for these items 
in 2021-22 were $116,164, $53,350, and $26,500 respectively.
    The assessment rate recommended by the Committee was derived by 
reviewing anticipated expenses, expected shipments of Florida avocados, 
and the level of funds in reserve. Avocado shipments for the year are 
estimated at 500,000 55-pound containers, which should provide $250,000 
in assessment income (500,000 containers x $0.50). Income derived from 
handler assessments at the proposed rate, along with interest income, 
and funds from the Committee's authorized reserve, should be adequate 
to cover budgeted expenses. Funds in the reserve (currently about 
$230,000) are expected to be kept within the maximum permitted by the 
Order (approximately three fiscal years' expenses as authorized in 
Sec.  915.42).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by AMS 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 year 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 AMS. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. AMS evaluates 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 2022-23 budget and those 
for subsequent fiscal years would be reviewed and, as appropriate, 
approved by AMS.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), 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 315 growers of Florida avocados in the production area 
and 24 handlers subject to regulation under the Order. Small 
agricultural growers are defined by the Small Business Administration 
(SBA) as those having annual receipts 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 the National Agricultural Statistical Service, the 
average grower price paid for Florida avocados during the 2020-21 
season was $21.97 per 55-pound container. Utilized production was 
equivalent to 624,364 55-pound containers for a total value of over 
$13,717,277 ($21.97 multiplied by 624,364 55-pound containers equals 
$13,717,277). Dividing the crop value by the estimated number of 
growers yields an estimated average receipt per grower of $43,547 
($13,717,277 divided by 315), so the majority of growers would have 
annual receipts of less than $1,000,000.
    AMS Market News reported April 2021 terminal market prices for 
green skinned avocados were about $83.60 per 55-pound container. Using 
this price and the total utilization, the total 2020-21 handler crop 
value is estimated at $52.2 million ($83.60 multiplied by 624,364 55-
pound containers equals $52.2 million). Dividing this figure by the 
number of handlers yields an estimated average annual handler receipt 
of $2.18 million ($52.2 million divided by 24), which is below the SBA 
threshold for small agricultural service firms. Thus, the majority of 
Florida avocado growers and handlers may be classified as small 
entities.
    This proposal would increase the assessment rate collected from 
handlers for the 2022-23 and subsequent fiscal years from $0.45 to 
$0.50 per 55-pound container or equivalent of avocados. The Committee 
recommended 2022-23 expenditures of $268,484 and an assessment rate of 
$0.50 per 55-pound container or equivalent of avocados. The proposed 
assessment rate of $0.50 is $0.05 higher than the previous rate. The 
quantity of assessable avocados for the 2022-23 season is estimated at 
500,000 55-pound containers. Thus, the $0.50 rate should provide 
$250,000 in assessment income. Income derived from handler assessments, 
along with interest income, and funds from the Committee's authorized 
reserve, would be adequate to cover budgeted expenses.
    Major expenditures recommended by the Committee for the 2022-23 
fiscal year include $116,164 for salaries, $53,350 for employee 
benefits, and $26,500 for office rent and supplies. Budgeted expenses 
for these items in 2021-22 were $116,164, $53,350, and $26,500, 
respectively.
    The Committee recommended increasing the assessment based on the 
2022-23 crop estimate of 500,000 55-pound containers, which is a 
decrease from the 800,000 55-pound containers estimated for the 
previous year. At the current assessment rate, assessment income would 
equal $225,000, an amount insufficient to cover the Committee's 
anticipated expenditures of $268,484. By increasing the assessment rate 
by $0.05, assessment income would be $250,000, which would reduce the 
amount of funds needed from reserves. This amount, along with interest 
income, and funds from reserve, should provide sufficient funds to meet 
2022-23 anticipated expenses.
    Prior to arriving at this budget and assessment rate, the Committee 
considered maintaining the current assessment rate of $0.45. The 
Committee ultimately determined that leaving the assessment unchanged 
would not

[[Page 24072]]

generate sufficient revenue to meet the Committee's 2022-23 
expenditures of $268,484. Therefore, the Committee rejected the idea of 
maintaining the current assessment rate.
    A review of historical information and preliminary information 
pertaining to the upcoming season indicates that the grower price for 
the 2022-23 season should be around $22.50 per 55-pound container or 
equivalent of avocados. The proposed assessment rate of $0.50 per 55-
pound container or equivalent of avocados represents 2.2 percent of the 
$22.50 estimated average grower price ($0.50 divided by $22.50 x 100).
    This action would increase the assessment obligation imposed on 
handlers. While assessments impose additional costs on handlers, the 
costs are minimal and uniform on all handlers, and some of the costs 
may be passed on to growers. However, these costs are expected to be 
offset by the benefits derived by the operation of the Order.
    The Committee's meeting was widely publicized throughout the 
Florida avocado industry and all interested persons were invited to 
attend the meeting and participate in Committee deliberations on all 
issues. Like all Committee meetings, the January 12, 2022, 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 OMB and assigned OMB No. 0581-0189 Fruit Crops. 
No changes in those 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 Florida avocado 
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.
    AMS 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: 
https://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 915

    Avocados, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service proposes to amend 7 CFR part 915 as follows:

PART 915--AVOCADOS GROWN IN SOUTH FLORIDA

0
1. The authority citation for part 915 continues to read as follows:

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

0
2. Section 915.235 is revised to read as follows:


Sec.  915.235   Assessment rate.

    On and after April 1, 2022, an assessment rate of $0.50 per 55-
pound container or equivalent is established for avocados grown in 
South Florida.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2022-08606 Filed 4-21-22; 8:45 am]
BILLING CODE 3410-02-P