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

 
CONTENT
Federal Register, Volume 85 Issue 4 (Tuesday, January 7, 2020)
[Federal Register Volume 85, Number 4 (Tuesday, January 7, 2020)]
[Rules and Regulations]
[Pages 638-640]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-28056]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 922
[Doc. No. AMS-SC-19-0048; SC19-922-1 FR]
Marketing Order Regulating the Handling of Apricots Grown in
Designated Counties in Washington; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule implements 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 will remain in effect indefinitely unless
modified, suspended, or terminated.
DATES: Effective February 6, 2020.
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,
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. 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 rule in
conformance with Executive Orders 13563 and 13175. This final 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, Washington apricot
handlers are subject to assessments. Funds to administer the Order are
derived from such assessments. The assessment rate will 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 a marketing order may file with USDA a
petition stating that the order, any provision of the marketing order,
or any obligation imposed in connection with the marketing order is not
in accordance with law and request a modification of the marketing
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. Committee members
are familiar with the Committee's needs and with the costs of goods and
services in their local area and can formulate an appropriate budget
and assessment rate. The Committee discussed the assessment rate in a
public meeting where all directly affected persons have an opportunity
to participate and provide input.
    This final rule increases the assessment rate from $1.00 to $2.86
per ton of Washington apricots handled for the 2019-2020 and subsequent
fiscal periods. The 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 will 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, the Order's quorum requirement was not met and
the Committee was not able to conduct official business. The following
day, the Committee voted 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 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 $4,000 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 established in this final rule will continue in
effect
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indefinitely unless modified, suspended, or terminated by USDA upon
recommendation and information submitted by the Committee or other
available information.
    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. 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.
Final 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 final 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 so 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
$30,000,000, and small agricultural producers are defined as those
having annual receipts of less than $1,000,000 (13 CFR 121.201).
    According to data from USDA's Market News Service, 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 $30,000,000 ($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 $1,000,000
($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 final rule increases 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 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 $4,000 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 higher 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, 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 have generated enough revenue 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 will 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 will be kept within the amount
authorized in the Order.
    A review of historical data 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
will be between 0.18 and 0.36 percent.
    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 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. Interested persons were invited to submit
comments on this 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. 0581-0189, Fruit
Crops. No changes in those requirements will be necessary because of
this action. Should any changes become necessary, AMS will submit them
to OMB for approval.
    This final rule will 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
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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 October 2, 2019 (84 FR 52384). Copies of the proposed rule
were provided to all Washington apricot 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 November 1, 2019, 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 922
    Apricots, Marketing agreements, Reporting and recordkeeping
requirements.
    For the reasons set forth in the preamble, 7 CFR part 922 is
amended as follows:
PART 922--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: December 20, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2019-28056 Filed 1-6-20; 8:45 am]
 BILLING CODE 3410-02-P