Proposed Rule2021-25116
Increased Assessment Rate for Texas Oranges and Grapefruit
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 18, 2021
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
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.
Full Text
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<title>Federal Register, Volume 86 Issue 220 (Thursday, November 18, 2021)</title>
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[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 [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-25116]
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Proposed Rules
Federal Register
________________________________________________________________________
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: <a href="http://www.regulations.gov">http://www.regulations.gov</a>. 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: <a href="http://www.regulations.gov">http://www.regulations.gov</a>. 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:
<a href="/cdn-cgi/l/email-protection#39785b505e585055177a585449564a794c4a5d58175e564f"><span class="__cf_email__" data-cfemail="f0b192999791999cdeb3919d809f83b085839491de979f86">[email protected]</span></a> or <a href="/cdn-cgi/l/email-protection#6a29021803191e030b0444240319190f042a1f190e0b440d051c"><span class="__cf_email__" data-cfemail="32715a405b41465b535c1c7c5b4141575c72474156531c555d44">[email protected]</span></a>.
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: <a href="/cdn-cgi/l/email-protection#35675c565d5447511b795a42504775404651541b525a43"><span class="__cf_email__" data-cfemail="3d6f545e555c4f591371524a584f7d484e595c135a524b">[email protected]</span></a>.
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: <a href="http://www.ams.usda.gov/rules-regulations/moa/small-businesses">http://www.ams.usda.gov/rules-regulations/moa/small-businesses</a>. 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
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