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.

Proposed Rules Federal Register

30782 

Vol. 78, No. 100 

Thursday, May 23, 2013 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 915 

[Doc. No. AMS–FV–12–0067; FV13–915–1 

PR] 

Avocados Grown in South Florida; 

Change in Minimum Grade 

Requirements 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule invites 

comments on an increase to the 

minimum grade requirements currently 

prescribed under the Florida avocado 

marketing order (order). The order 

regulates the handling of avocados 

grown in South Florida, and is 

administered locally by the Avocado 

Administrative Committee (Committee). 

This action would increase the current 

minimum grade requirement from a U.S. 

No. 2 to a U.S. Combination grade for 

avocados shipped to destinations 

outside the production area. Increasing 

the minimum grade requirement would 

align marketing order regulations with 

current industry practices to the benefit 

of growers, handlers, and consumers. 

DATES: Comments must be received by 

June 24, 2013. 

ADDRESSES: Interested persons are 

invited to submit written comments 

concerning this proposal. Comments 

must be sent to the Docket Clerk, 

Marketing Order and Agreement 

Division, Fruit and Vegetable Program, 

AMS, USDA, 1400 Independence 

Avenue SW., STOP 0237, Washington, 

DC 20250–0237; Fax: (202) 720–8938; or 

Internet: http://www.regulations.gov. All 

comments should reference the 

document number and the date and 

page number of this issue of the Federal 

Register and will be made 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 proposal 

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 

comments will be made public on the 

Internet at the address provided above. 

FOR FURTHER INFORMATION CONTACT: 

Doris Jamieson, Marketing Specialist or 

Christian D. Nissen, Regional Director, 

Southeast Marketing Field Office, 

Marketing Order and Agreement 

Division, Fruit and Vegetable Program, 

AMS, USDA; Telephone: (863) 324– 

3375, Fax: (863) 325–7893, or Email: 

Doris.Jamieson@ams.usda.gov or 

Christian.Nissen@ams.usda.gov. 

Small businesses may request 

information on complying with this 

regulation by contacting Jeffrey Smutny, 

Marketing Order and Agreement 

Division, Fruit and Vegetable Program, 

AMS, USDA, 1400 Independence 

Avenue SW., STOP 0237, Washington, 

DC 20250–0237; Telephone: (202) 720– 

2491, Fax: (202) 720–8938, or Email: 

Jeffrey.Smutny@ams.usda.gov. 

SUPPLEMENTARY INFORMATION: This 

proposal is issued under Marketing 

Order No. 915, as amended (7 CFR part 

915), regulating the handling of 

avocados grown in South Florida, 

hereinafter referred to as the ‘‘order.’’ 

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 Department of Agriculture 

(USDA) is issuing this proposed rule in 

conformance with Executive Order 

12866. 

This proposal has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. This proposed rule is 

not intended to have retroactive effect. 

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. A 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 proposal invites comments on 

revisions to the minimum grade 

requirements currently prescribed under 

the order. This proposal would increase 

the current minimum grade requirement 

from a U.S. No. 2 to a U.S. Combination 

grade for avocados shipped to 

destinations outside the production area 

and was recommended by the 

Committee at a meeting on October 10, 

2012. 

Section 915.51 of the order provides, 

in part, authority to issue regulations 

establishing specific grade requirements 

for avocados. Section 915.52 of the 

order provides authority for the 

modification, suspension or termination 

of established regulations. 

Section 915.306 of the order’s 

container and pack regulations prescribe 

grade, pack, and container marking 

requirements for Florida avocados. 

Paragraph (a)(1) of that section 

prescribes, in part, that no handler shall 

handle any variety of avocados grown in 

the production area unless such 

avocados grade at least U.S. No. 2. 

While marketing order regulations 

specify a minimum grade requirement 

of a U.S. No. 2, it is standard industry 

practice to ship avocados to destinations 

outside the production area at the 

higher grade of a U.S. Combination, 

especially at the beginning of the 

season. The minimum requirement for a 

U.S. Combination grade provides that at 

least 60 percent of the fruit in the pack 

must meet the U.S. No. 1 grade and the 

remaining fruit must meet at least a U.S. 

No. 2 grade. Handlers have voluntarily 

shipped the higher grade fruit in order 

to get the best price for growers and to 

provide quality fruit to consumers. 

During the first four months of the 

2012–13 season, shipments of U.S. No. 

2 grade fruit were 13 percent higher 

than shipments during the comparable 

period of the previous season. Buyers 

were reluctant to pay a higher price for 

the better grade fruit when they could 

purchase the lower grade fruit for less. 

This negatively affected the price of the 

U.S. Combination grade fruit and 

resulted in the loss of sales of the higher 

grade fruit. 

During several meetings, Committee 

members expressed concern that 


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Federal Register / Vol. 78, No. 100 / Thursday, May 23, 2013 / Proposed Rules 30783 

shipments of the U.S. No. 2 grade fruit 

may continue to increase and further 

impact price. Further, the Florida 

avocado industry has established a 

reputation for providing consumers 

with high quality fruit and the 

Committee believes shipping U.S. No. 2 

grade fruit outside the production area 

could lower that standard. 

As the majority of handlers are 

currently shipping at the higher grade, 

it is not anticipated that this change 

would reduce overall shipments. Even 

though there was an increase in 

shipments of U.S. No. 2 grade fruit to 

destinations outside the production area 

during the 2012–13 season, Committee 

data indicates total shipments of U.S. 

No. 2 grade fruit represented only about 

one percent of total shipments this 

season, which were over 1.1 million 55- 

pound bushel containers. 

Consequently, the Committee 

recommended increasing the minimum 

grade requirement to a U.S. 

Combination for avocados shipped to 

destinations outside the production 

area. Fruit shipped within the 

production area would continue to be 

required to meet the current minimum 

grade of a U.S. No. 2, which would 

provide an outlet for U.S. No. 2 grade 

not utilized in the U.S. Combination 

pack. This proposal would align 

marketing order regulations with 

current industry practices to the benefit 

of growers, handlers, and consumers. 

This proposal would help maintain the 

industry’s reputation for providing 

consumers with high quality avocados 

from Florida, while continuing to 

provide handlers with an outlet for their 

U.S. No. 2 fruit. 

One member of the Committee voted 

against the recommendation. He stated 

the minimum grade requirement should 

be increased, but only during the 

beginning of the season when domestic 

production was minimal. He believed 

that when imports begin arriving in 

October, the minimum grade should 

revert back to a U.S. No. 2 in order for 

the Florida avocado industry to compete 

with imported fruit. However, the 

majority of the Committee agreed the 

quality of the fruit was the most 

important issue and shipping the lower 

grade fruit lowered that high standard 

established by the Florida avocado 

industry. Other members of the 

Committee also commented that they 

believe increasing the minimum grade 

for Florida avocados would cause 

imported fruit quality to improve in 

order to match the higher quality 

standard set by the Florida avocado 

industry. 

Section 8e of the Act provides that 

when certain domestically produced 

commodities, including avocados, are 

regulated under a Federal marketing 

order, imports of that commodity must 

meet the same or comparable grade, 

size, quality, and maturity requirements. 

The changes proposed in this rule 

would apply only to shipments outside 

the production area. The current, less 

restrictive regulations would continue 

to apply to shipments within the 

production area and to imported 

avocadoes. A clarification will be made 

to the import regulation in a separate 

action. 

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 

action 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 

business subject to such actions in order 

that small businesses will not be unduly 

or disproportionately burdened. 

Marketing orders issued pursuant to the 

Act, and 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 approximately 30 handlers 

of Florida avocados subject to regulation 

under the order and approximately 300 

producers of avocados in the production 

area. Small agricultural service firms, 

which include avocado handlers, are 

defined by the Small Business 

Administration (SBA) as those whose 

annual receipts are less than $7,000,000, 

and small agricultural producers are 

defined as those having annual receipts 

less than $750,000 (13 CFR 121.201). 

According to Committee data and 

information from the National 

Agricultural Statistical Service, the 

average price for Florida avocados 

during the 2011–12 season was 

approximately $20.79 per 55-pound 

bushel container and total shipments 

were slightly higher than 1.2 million 55- 

pound bushels. Using the average price 

and shipment information provided by 

the Committee, the majority of avocado 

handlers could be considered small 

businesses under SBA’s definition. In 

addition, based on avocado production, 

producer prices, and the total number of 

Florida avocado producers, the average 

annual producer revenue is less than 

$750,000. Consequently, the majority of 

avocado handlers and producers may be 

classified as small entities. 

This proposal would increase the 

minimum grade requirements currently 

prescribed for Florida avocados under 

§ 915.306 of the order. This proposed 

change would increase the minimum 

grade from a U.S. No. 2 to a U.S. 

Combination grade for avocados 

shipped to destinations outside the 

production area and would align 

marketing order regulations to current 

industry practices. This proposal was 

recommended by the Committee at a 

meeting on October 10, 2012. Authority 

for this action is provided in §§ 915.51 

and 915.52 of the order. 

Any additional costs that would be 

associated with this change are 

anticipated to be minimal. The order 

does require that all containers be 

marked with the grade of fruit in the 

container. However, the vast majority of 

handlers are currently shipping at the 

higher grade requirement, and marking 

their containers accordingly. Further, 

any containers pre-stamped with a U.S. 

No. 2 that a handler may already have 

could be used in the production area. 

As previously stated, the volume of 

U.S. No. 2 grade Florida avocados 

shipped during a season represents less 

than one percent of total annual 

shipments. In addition, the U.S. 

Combination grade requires that at least 

60 percent of the fruit in the pack be a 

U.S. No. 1 grade and the remaining fruit 

must meet a U.S. No. 2 grade. 

Consequently, U.S. No. 2 fruit can be 

utilized in the U.S. Combination pack. 

Further, if this rule is implemented, 

U.S. No. 2 grade avocados could still be 

shipped to destinations within the 

production area. Therefore, 

implementation of this proposed rule is 

not expected to impact the overall 

volume of U.S. No. 2 fruit being utilized 

as adequate uses for such fruit would 

continue to exist. 

Increasing the minimum grade 

requirement would align marketing 

order requirements with current 

industry practices. Consumers would 

benefit as a result of the higher quality 

pack available in the marketplace. It 

would also build consumer confidence 

and improve grower returns. The 

benefits of this proposed rule are not 

expected to be disproportionately 

greater or less for small handlers or 

growers than for large entities. 

The Committee considered 

alternatives to this recommended 

change. The Committee discussed 

increasing the minimum grade to U.S. 

Combination grade during the early part 

of the season and then reverting back to 

the minimum grade requirement of a 

U.S. No. 2 in October when imported 

fruit typically begins arriving in the U.S. 

There was concern that having the 

higher grade requirements in effect 

when imports begin arriving would 


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30784 Federal Register / Vol. 78, No. 100 / Thursday, May 23, 2013 / Proposed Rules 

make it difficult for the domestic 

industry to compete. However, the 

Committee agreed the quality of the fruit 

was the most important issue and 

shipping the lower grade fruit lowered 

that high standard established by the 

Florida avocado industry. Also, 

Committee members stated that they 

believe increasing the minimum grade 

for Florida avocados shipped outside 

the production area for the entire season 

would result in improved quality of 

both domestic and imported avocados, 

as imports would likely strive to match 

the quality standards set by the Florida 

avocado industry. Therefore, this 

alternative was rejected. 

The Committee also considered 

changing the minimum grade 

requirements for all Florida avocados 

handled, regardless of market 

destination. However, maintaining the 

current minimum grade requirement for 

avocados shipped to destinations within 

the production area provides an outlet 

for U.S. No. 2 grade fruit not utilized in 

the higher grade packs. Therefore, the 

Committee also rejected this alternative. 

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 Office of 

Management and Budget (OMB) and 

assigned OMB No. 0581–0189, Generic 

Fruit Crops. No changes in those 

requirements as a result of this action 

are necessary. Should any changes 

become necessary, they would be 

submitted to OMB for approval. 

This proposed rule would increase 

the minimum grade requirement under 

the Florida avocado marketing order. 

Accordingly, this action 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. 

USDA has not identified any relevant 

Federal rules that duplicate, overlap or 

conflict with this proposed rule. 

In addition, 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 

October 10, 2012, 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. 

A small business guide on complying 

with fruit, vegetable, and specialty crop 

marketing agreements and orders may 

be viewed at: www.ams.usda.gov/ 

MarketingOrdersSmallBusinessGuide. 

Any questions about the compliance 

guide should be sent to Jeffrey Smutny 

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 proposal. Thirty days is deemed 

appropriate so this change would be in 

place by May when handlers begin 

shipping. This would also give handlers 

advanced notice of the increased grade 

requirement before the season begins. 

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, Reporting and 

recordkeeping requirements. 

For the reasons set forth in the 

preamble, 7 CFR part 915 is proposed to 

be amended as follows: 

PART 915—AVOCADOS GROWN IN 

SOUTH FLORIDA 

■ 1. The authority citation for 7 CFR 

part 915 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

■ 2. In § 915.306, paragraph (a)(1) is 

revised to read as follows: 

§ 915.306 Florida avocado grade, pack and 

container marking regulation. 

(a) * * * 

(1) Such avocados grade at least U.S. 

Combination, except that avocadoes 

handled to destinations within the 

production area grade U.S. No. 2 and 

except further that such avocados may 

be placed in containers with avocados 

of dissimilar varietal characteristics. 

* * * * * 

Dated: May 17, 2013. 

Rex A. Barnes, 

Associate Administrator, Agricultural 

Marketing Service. 

[FR Doc. 2013–12239 Filed 5–22–13; 8:45 am] 

BILLING CODE 3410–02–P 

FEDERAL HOUSING FINANCE 

AGENCY 

12 CFR Parts 1267, 1269, and 1270 

RIN 2590–AA40 

Removal of References to Credit 

Ratings in Certain Regulations 

Governing the Federal Home Loan 

Banks 

AGENCY: Federal Housing Finance 

Agency. 

ACTION: Notice of proposed rulemaking; 

request for comment. 

SUMMARY: Section 939A of the DoddFrank Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act) 

requires Federal agencies to review 

regulations that require the use of an 

assessment of the credit-worthiness of a 

security or money market instrument 

and any references to, or requirements 

in, such regulations regarding credit 

ratings issued by credit rating 

organizations registered with the 

Securities and Exchange Commission 

(SEC) as nationally recognized statistical 

rating organizations (NRSROs), and to 

remove such references or requirements. 

To implement this provision, the 

Federal Housing Finance Agency 

(FHFA) is proposing to remove a 

number of references and requirements 

in certain safety and soundness 

regulations affecting the Federal Home 

Loan Banks (Banks) and to adopt new 

provisions that would require the Banks 

to apply internal analytic standards and 

criteria to determine the credit quality 

of a security or obligation, subject to 

FHFA oversight and review through the 

examination and supervisory process. 

FHFA will undertake separate 

rulemakings to remove NRSRO 

references and requirements contained 

in the capital regulations applicable to 

the Banks and in the regulations 

governing the Banks’ acquired member 

asset (AMA) programs. 

DATES: Comments on the proposed rule 

must be received on or before July 22, 

2013. 

ADDRESSES: You may submit your 

comments on the proposed rule, 

identified by regulatory information 

number (RIN) 2590–AA40 by any of the 

following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. If 

you submit your comments to the 

Federal eRulemaking Portal, please also 

send it by email to FHFA at 

RegComments@FHFA.gov to ensure 

timely receipt by the agency. Please 

include ‘‘RIN 2590–AA40’’ in the 

subject line of the message. 


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