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[Federal Register Volume 80, Number 41 (Tuesday, March 3, 2015)]
[Proposed Rules]
[Pages 11335-11346]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-04085]

[[Page 11335]]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 905

[Doc. No. AO-13-0163; AMS-FV-12-0069; FV13-905-1]

Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida; 
Recommended Decision and Opportunity To File Written Exceptions to 
Proposed Amendments to Marketing Order No. 905

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule and opportunity to file exceptions.

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SUMMARY: This recommended decision proposes amendments to Marketing 
Order No. 905 (order), which regulates the handling of oranges, 
grapefruit, tangerines, and tangelos (citrus) grown in Florida. Nine 
amendments are proposed by the Citrus Administrative Committee 
(Committee), which is responsible for local administration of the 
order. These proposed amendments would: Authorize regulation of new 
varieties and hybrids of citrus fruit, authorize the regulation of 
intrastate shipments of fruit, revise the process for redistricting the 
production area, change the term of office and tenure requirements for 
Committee members, authorize mail balloting procedures for Committee 
membership nominations, increase the capacity of financial reserve 
funds, authorize pack and container requirements for domestic shipments 
and authorize different regulations for different markets, eliminate 
the use of separate acceptance statements in the nomination process, 
and require handlers to register with the Committee. These proposed 
amendments are intended to improve the operation and administration of 
the order.

DATES: Written exceptions must be filed by April 2, 2015.

ADDRESSES: Written exceptions should be filed with the Hearing Clerk, 
U.S. Department of Agriculture, Room 1081-S, Washington, DC 20250-9200; 
Fax: (202) 720-9776 or via the Internet at http://www.regulations.gov. 
All comments should reference the docket number and the date and page 
number of this issue of the Federal Register. Comments will be made 
available for public inspection in the Office of the Hearing Clerk 
during regular business hours, or can be viewed at: http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Melissa Schmaedick, Marketing Order 
and Agreement Division, Fruit and Vegetable Program, AMS, USDA, Post 
Office Box 952, Moab, UT 84532; Telephone: (202) 557-4783, Fax: (435) 
259-1502, or Michelle Sharrow, 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: Melissa.Schmaedick@ams.usda.gov or 
Michelle.Sharrow@ams.usda.gov.
    Small businesses may request information on this proceeding 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: Prior documents in this proceeding: Notice 
of Hearing issued on March 28, 2013, and published in the March 28, 
2013, issue of the Federal Register (78 FR 18899).
    This action is governed by the provisions of sections 556 and 557 
of title 5 of the United States Code and is therefore excluded from the 
requirements of Executive Orders 12866, 13563, and 13175.

Preliminary Statement

    Notice is hereby given of the filing with the Hearing Clerk of this 
recommended decision with respect to the proposed amendments to 
Marketing Order 905 regulating the handling of oranges, grapefruit, 
tangerines, and tangelos grown in Florida, and the opportunity to file 
written exceptions thereto. Copies of this decision can be obtained 
from Melissa Schmaedick, whose address is listed above.
    This recommended decision is issued pursuant to the provisions of 
the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 
601-674), hereinafter referred to as the ``Act,'' and the applicable 
rules of practice and procedure governing the formulation of marketing 
agreements and orders (7 CFR part 900).
    The proposed amendments are based on the record of a public hearing 
held on April 24, 2013, in Winter Haven, Florida. Notice of this 
hearing was published in the Federal Register on March 28, 2013 (78 FR 
18899). The notice of hearing contained nine proposals submitted by the 
Committee.
    The proposed amendments were recommended by the Committee following 
deliberations at a public meeting on July 17, 2012, and were submitted 
to the Agricultural Marketing Service (AMS) on October 25, 2012. After 
reviewing the recommendation and other information submitted by the 
Committee, AMS decided to proceed with the formal rulemaking process 
and schedule the matter for hearing.
    The Committee's proposed amendments to the order would: (1) 
Authorize regulation of new varieties and hybrids of citrus fruit; (2) 
authorize the regulation of intrastate shipments of fruit; (3) revise 
the process for redistricting the production area; (4) change the term 
of office and tenure requirements for Committee members; (5) authorize 
mail balloting procedures for Committee membership nominations; (6) 
increase the capacity of financial reserve funds; (7) authorize pack 
and container requirements for domestic shipments and authorize 
different regulations for different markets; (8) eliminate the use of 
separate acceptance statements in the nomination process; and (9) 
require handlers to register with the Committee.
    The Department of Agriculture (USDA) also proposed to make such 
changes to the order as may be necessary, if any of the proposed 
changes are adopted, so that all of the order's provisions conform to 
the effectuated amendments.
    Ten industry witnesses testified at the hearing. The witnesses 
represented citrus producers and handlers in the production area, as 
well as the Committee, and they all supported the proposed amendments. 
The witnesses emphasized the need to restructure Committee 
representation and administration as well as equip the industry with 
more tools to address the changing needs of fresh Florida citrus.
    Witnesses offered testimony supporting the recommendation to 
authorize the regulation of new varieties and hybrids of citrus fruit. 
According to testimony, new varieties and hybrids could address the 
disease concerns of the industry and increase consumer demand for fresh 
citrus through the development of varieties with new characteristics.
    Witnesses testified in support of streamlining the order by 
allowing mail ballots for Committee membership nominations, eliminating 
the use of separate acceptance statements in the nomination process, 
and changing the term of office and tenure requirements for Committee 
members to lengthen their terms of service. Witnesses stated that these 
three proposals would result in cost savings to the Committee and time 
savings for industry members. Moreover, longer term limits and overall 
tenure would contribute to stability in

[[Page 11336]]

the administration of the order. The proposal to allow for greater 
financial reserves was supported by witnesses who indicated that 
additional reserves would result in less fluctuation in assessments and 
provide year-over-year budget stability.
    Witnesses favored two proposals that would add authority to the 
order to regulate intrastate Florida citrus shipments in the event the 
Florida Department of Citrus discontinues or modifies its regulation of 
the fresh segment. This proposal was largely supported as a 
precautionary measure, with witnesses clearly stating that the 
authority would not be implemented unless Florida state regulations are 
not in effect. Witnesses also supported a similar proposal that would 
allow the Committee to develop different pack and container regulations 
for different markets, including the intrastate market.
    Witnesses also supported the proposed amendment to modify the 
redistricting criteria and allow redistricting to occur more often than 
once every five years, as currently provided for under the order. The 
new criteria would give the Committee a clearer picture of production 
trends within the fresh citrus segment of the Florida citrus industry 
and allow the Committee to respond as necessary to best represent the 
fresh industry's interests.
    Finally, witness testimony supported adding authority to require 
handler registration. Witnesses stated that handler registration would 
be helpful for two reasons: To assist in compliance and to provide the 
Committee with accurate handler information.
    At the conclusion of the hearing, the Administrative Law Judge 
established a deadline of July 1, 2013, for interested persons to file 
proposed findings and conclusions or written arguments and briefs based 
on the evidence received at the hearing. One brief was filed.

Material Issues

    The material issues presented on the record of hearing are as 
follows:
    1. Whether to amend the definitions of ``fruit'' and ``variety'' in 
Sec.  905.4 and Sec.  905.5 to update terminology and authorize 
regulation of additional varieties and hybrids of citrus.
    2. Whether to amend the definition of ``handle or ship'' in Sec.  
905.9 to authorize regulation of intrastate shipments.
    3. Whether to amend Sec.  905.14 to revise the process for 
redistricting the production area.
    4. Whether to amend Sec.  905.20 to change the term of office of 
Committee members from one to two years, and change the tenure 
requirements for Committee members from three to four years.
    5. Whether to amend Sec.  905.22 to authorize mail balloting 
procedures for Committee membership nominations.
    6. Whether to amend Sec.  905.42 to authorize the Committee to 
increase the capacity of its financial reserve funds from approximately 
six months of a fiscal period's expenses to approximately two years' 
fiscal periods' expenses.
    7. Whether to amend Sec.  905.52 to authorize pack and container 
requirements for domestic shipments and authorize different regulations 
for different markets.
    8. Whether to amend Sec.  905.28 to eliminate the use of separate 
acceptance statements in the nomination process.
    9. Whether to amend Sec.  905.7 to require handlers to register 
with the Committee.

Findings and Conclusions

    The following findings and conclusions on the material issues are 
based on evidence presented at the hearing and the record thereof.

Material Issue Number 1--Definitions of ``Fruit'' and ``Variety''

    Sections 905.4, Fruit, and 905.5, Variety, should be amended to 
update order terminology and authorize regulation of additional 
varieties and hybrids of citrus.
    The proposal to authorize regulation of new varieties and hybrids 
of citrus fruit would assist the industry in addressing declines in 
production caused by diseases. Research and development of disease-
resistant hybrids may improve the health of Florida's fresh citrus 
industry. In addition, the industry would be better able to meet 
consumer preferences as new and improved fruit becomes available for 
commercial production.
    In order to regulate newly developed citrus varieties and hybrids, 
authority must be added to the order. While the order currently 
authorizes regulation of specific hybrid fruit included in the 
definitions, it does not authorize regulation of new hybrids.
    The proposal to amend the definitions of ``fruit'' and ``variety'' 
would revise order language to reflect terminology currently being used 
in the industry. The order currently lists varieties that are no longer 
commercially viable. Amendments to the definitions would remove those 
varieties and group other varieties under sub-definitions currently 
used within the industry.
    The order currently identifies six types of citrus fruit that have 
varieties that can be regulated under the order. These are: Citrus 
sinensis, Osbeck, commonly called ``oranges;'' Citrus paradisi, 
MacFadyen, commonly called ``grapefruit;'' Citrus nobilis deliciosa, 
commonly called ``tangerines;'' Temple oranges; tangelos; and Honey 
tangerines.
    The proposed amendment would revise this list by moving Temple 
oranges, tangelos and Honey tangerines under the modified definition of 
``variety,'' and adding pummelos (Citrus maxima merr) as a new type. 
Additionally, authority would be added to regulate varieties of any 
hybrid fruit developed from the parent fruits of oranges, grapefruit, 
tangerines, and pummelos.
    The definition of ``varieties'' currently identifies twelve 
classifications or groupings of varieties regulated under the order. 
These include: ``round oranges;'' late maturing oranges of the Valencia 
type; Temple oranges; Marsh and other seedless grapefruit, excluding 
pink grapefruit; Duncan and other seeded grapefruit, excluding pink 
grapefruit; Pink seedless grapefruit; Pink seeded grapefruit; tangelos; 
Dancy and similar tangerines, excluding Robinson and Honey tangerines; 
Robinson tangerines; Honey tangerines; and Navel oranges.
    The proposed modification of this definition would re-organize the 
existing list and add new varieties as follows: Oranges, with sub-
groupings for early and midseason oranges, Valencia, Lue Gim Gong, or 
similar late maturing oranges of the Valencia type, and navel oranges; 
Grapefruit, red grapefruit and all shades of color and white 
grapefruit; Tangerines and mandarins, with sub-groupings for Dancy, 
Robinson, Honey, Fall-Glo, Early Pride, Sunburst, and W-Murcott 
tangerines, and tangors; and pummelos, including Hirado Buntan and 
other pink seeded pummelos. Currently regulated citrus hybrids would 
also be included, specifically: Tangelos, including Orlando and 
Minneola tangelos, and Temple oranges.
    A new sub-paragraph would be added to authorize regulation of any 
new varieties of citrus fruits specified in 905.4, Fruit, including 
hybrids of those fruit. Any new hybrid variety subject to regulation 
would be required to exhibit similar characteristics and be subject to 
cultural practices common to existing regulated varieties.
    According to the record, the Florida citrus industry believes that 
newly-developed hybrids are necessary for the recovery and long-term 
health of the industry. The industry is funding the development of new 
varieties and hybrids and has developed a plan for field testing. The 
industry hopes to begin producing new varieties and

[[Page 11337]]

hybrids in the next few seasons. According to the witnesses, there is 
great anticipation within the fresh segment of the Florida citrus 
industry for the introduction of new varieties and hybrids that will 
reverse the decline of the Florida citrus industry.
    Witnesses explained that many of the varieties that have been the 
mainstay of the Florida fresh citrus industry have either succumbed to 
pest and disease challenges, or reached a point of market obsolescence. 
Furthermore, for the past decade, the Florida citrus industry has been 
contracting due to the loss of bearing trees and production, which has 
been brought about by the effects of two diseases, citrus canker and 
greening, and natural disasters, such as hurricanes. Also, the 
percentage of Florida's citrus crop utilized for fresh shipment has 
decreased to approximately nine percent of the total volume of citrus 
produced in Florida.
    According to the record, during the past ten years, the number of 
bearing citrus trees has declined by 29 percent, while production has 
declined by 42 percent, and fresh utilization has declined by 45 
percent. In addition, the value of the juice produced by fresh fruit 
varieties has continued to decline, which has further depressed the 
fresh citrus sector.
    Witnesses gave examples of changes in consumer preferences that 
have also impacted the fresh Florida citrus industry. According to the 
record, Robinson and Dancy tangerines were the preferred varieties of 
tangerines by consumers thirty years ago. Over time, these varieties 
fell out of favor and were replaced by the Fall-Glo, Sunburst and Honey 
varieties because of their sweeter flavor. Consumers are now losing 
interest in these varieties and are showing a preference for easy-peel, 
seedless varieties.
    These competitive varieties are grown in areas outside of Florida, 
such as California and Spain, and are currently not suitable for 
production in the state. As a result, the Florida fresh citrus industry 
is in the process of developing easy-peel, seedless varieties that will 
grow in the production area. The new fruit will likely be a hybrid 
fruit currently not regulated under the order. Witnesses explained that 
the order should be amended to authorize regulation of hybrid fruit so 
that this new variety can be regulated once it is ready for commercial 
production.
    Researchers from the University of Florida (UF) testifying at the 
hearing stated that much research and development of new citrus fruit 
has been done to improve the competitiveness of the Florida citrus 
industry. According to the record, this research has resulted in the 
development and release of as many as ten new citrus fruits providing 
improvements such as sweeter oranges with earlier or later maturity and 
improved color and flavor attributes found in other citrus. In 
addition, research is focused on generating new and unique hybrids that 
may revitalize consumer interest in fresh Florida citrus. Two examples 
given by one witness from UF are the Sugar Belle mandarin hybrid and 
the Valquarius sweet orange, which are starting to be produced for the 
juice industry.
    According to the record, varieties developed by the UF Citrus 
Breeding Program are being released into a ``fast-track'' testing 
program where a limited numbers of trees are grown on a test basis by 
interested growers. Fruit from the test trees cannot be sold.
    Once the new varieties have been assessed for their potential value 
and growers plant sufficient numbers of trees to produce a supply of 
fruit for marketing through ordinary commercial channels, 
commercialization will proceed. Once a new variety becomes commercially 
viable, its inclusion under the order is likely to be considered by the 
Committee. Without the authority to regulate hybrid citrus fruit, the 
Committee would not be able to recommend the new fruit's inclusion 
under the marketing order.
    One example of a new fruit that is currently in the test phase is 
the ``UF914.'' This is a hybrid of pummelo and grapefruit that 
resembles ordinary grapefruit in appearance, but is much larger. 
According to the record, it generally has higher sugar levels and lower 
acidity than an ordinary grapefruit, yet retains the red pigmentation, 
flavor and aroma of a grapefruit.
    A critically important attribute of this particular variety is its 
extremely low content of furanocoumarins, those chemicals contained in 
ordinary grapefruit that are responsible for the so-called ``grapefruit 
juice effect'', or a negative interaction between grapefruit juice and 
prescription medication, and subsequent medical recommendations for 
limited grapefruit consumption. As a consequence of its unique chemical 
composition, there could be substantial consumer demand for this 
variety. If this fruit were to be produced on a commercial scale, its 
inclusion under the order would be important to ensure and maintain 
quality and consistency of product in the market.
    Researchers from the UF further explained that while new varieties 
will likely present marketing opportunities, they may also have new and 
unique quality attributes. Witnesses concluded that the success of 
these new varieties, as well as the future of Florida's fresh citrus 
industry, would be better secured by ensuring that new varieties will 
be required to meet quality standards.
    In general, witnesses testifying in support of Material Issue 
Number One stated that, when new varieties and hybrids are available to 
the Florida citrus industry, it will be important that the marketing 
order contains the authority to regulate quality and size standards, 
and that its language be inclusive of all varieties likely to emerge 
from the breeding programs. The ability to regulate these varieties 
will ensure that the quality and consistency of fruit entering channels 
of trade will meet consumer demand, compete with product from global 
production areas, and ensure a fair economic return for Florida fresh 
citrus growers and handlers.
    Two corrections to the proposed regulatory language were offered by 
a witness testifying from the UF Citrus Breeding Program. These 
corrections include: Correcting the Latin binomial for pummelo from 
``Citrus grandis'' to ``Citrus maxima Merr,'' as listed in the Notice 
of Hearing; and, correcting the spelling of the previously listed 
``Poncirus trifoliate'' to read ``Poncirus trifoliata.'' These 
corrections have been accepted and are incorporated into the revised 
definition of Sec.  905.4, Fruit, below.
    No testimony opposing the proposed amendment was given at the 
hearing. For the reasons stated above, it is recommended that 
Sec. Sec.  905.4, Fruit, and 905.5, Variety, be amended to update 
terminology and authorize regulation of additional varieties and 
hybrids of citrus as proposed and corrected.
    A conforming change is needed in the title of 7 CFR part 905. It is 
proposed to be revised to ``ORANGES, GRAPEFRUIT, TANGERINES, AND 
PUMMELOS GROWN IN FLORIDA'' to reflect the proposed addition of 
pummelos as a regulated fruit and the inclusion of tangelos as a 
regulated hybrid variety.

Material Issue Number 2--Intrastate Shipments

    Section 905.9, the definition of ``handle or ship,'' should be 
amended to authorize regulation of fresh Florida citrus handled and 
shipped within the production area. This section should be further 
modified to state that any regulations or requirements implemented as a 
result of this new authority would not conflict with

[[Page 11338]]

Florida state statutes or regulations in effect thereunder.
    The order currently regulates the grade and size of fresh Florida 
citrus handled and shipped to points outside of the production area, 
including exports, but does not regulate shipments within the state of 
Florida. Fresh citrus fruit handled and shipped within the state are 
currently regulated by the Florida Citrus Commission under the Florida 
Department of Citrus rules, Chapter 20.
    Witnesses explained that adding authority for intrastate shipments 
under the Federal marketing order would create one comprehensive 
program for regulating fresh Florida citrus in the event that the 
Florida state program were to stop regulating fresh citrus shipments. 
Witnesses further explained that this additional authority is being 
proposed as a precautionary measure and that the industry does not 
intend to implement this new authority while the Florida state program 
is in effect.
    According to the record, the Committee spent approximately one and 
a half years thoroughly reviewing and considering this proposal. This 
proposal has been discussed by industry organizations and with two 
members of the Florida Citrus Commission, the group that oversees all 
Florida state citrus regulation. Witnesses stated that the proposal has 
industry support and, by design, would not conflict with state 
regulations.
    According to the record, all witnesses who included remarks in 
their testimony about this proposal supported it as a precautionary 
measure for future use in the event that the State program no longer 
regulated fresh citrus shipments. Witnesses testifying in support of 
this proposal included individuals that serve or work closely with 
Florida state citrus regulatory programs. These witnesses stated that 
the Florida Citrus Commission is aware of this proposal and does not 
oppose it.
    Witnesses also explained that the proposal to allow for different 
handling regulations for different market destinations under the order, 
further discussed in Material Issue 8, complemented the industry's 
effort to streamline regulation within Florida's fresh citrus industry. 
According to the record, the two proposals would result in a 
coordination of regulation under the Federal and State programs, and 
would provide an added authority under the order to regulate fresh 
shipments in the state of Florida in the event that the Florida Citrus 
Commission stopped regulating them. These proposals would streamline 
handling operations under both programs and would provide continuity in 
regulation.
    No testimony or evidence opposing this proposal was provided at the 
hearing. For the reasons stated above, it is recommended that Sec.  
905.9, the definition of ``handle or ship,'' be amended to authorize 
regulation of fresh Florida citrus handled and shipped within the 
production area.

Material Issue Number 3--Redistricting

    Section 905.14, Redistricting, should be amended to revise the 
process for redistricting the production area. This amendment would 
provide flexibility within the order allowing for the redefining of 
grower districts within the production area when warranted by relevant 
factors.
    Under the order, the Committee is authorized to consider 
redistricting every five years. Any recommendation to redistrict must 
include an analysis of the following factors: (1) The volume of fruit 
shipped from each district; (2) the volume of fruit produced in each 
district; (3) the total number of acres of citrus grown in each 
district; and (4) other relevant factors. The order further requires 
that any redistricting must retain a minimum of eight, but no more than 
nine, grower membership positions on the Committee.
    According to the record, the proposed amendment would modify three 
of the four factors used in assessing the need to change district 
boundaries and remove time restrictions, thereby increasing 
flexibility. Specifically, the amendment would change the assessment of 
total volume of fruit shipped from each district to the number of 
bearing trees in each district. It would also change the assessment of 
total volume of fruit produced in each district to the total volume of 
fresh fruit produced in each district. Finally, the consideration of 
total number of acres in each district would change to total number of 
bearing trees per district. The last remaining factor currently 
included in the order--other relevant factors when conditions warrant--
would not be changed.
    The proposed amendment would also remove the restriction on 
redistricting any more frequently than every five years. If 
implemented, the proposed modification to the order would allow for 
redistricting as needed when the above factors indicate that a change 
in district boundaries would be beneficial.
    Witnesses explained that, due to the major declines in bearing tree 
numbers, production, and fresh shipments the Florida citrus industry 
has experienced over the past decade, this proposal would allow the 
Committee to determine the need for changes in grower districts on a 
timely basis using information that more accurately represents 
production trends within the fresh citrus industry.
    For example, given the increased loss of trees per acre due to 
disease and natural disasters, the current guideline for calculating 
grower districts using acreage is no longer applicable. According to 
the record, when calculating production capacity within a county or 
grower district, the new industry standard is to consider bearing 
trees, not acreage. Due to heavy tree losses within producing groves, 
acreage is not a reliable indicator of production. Record evidence 
indicates that many groves have anywhere from 10 percent to as much as 
or more than 50 percent of their grove acreage with non-bearing trees 
or no trees at all. Therefore, acreage count as an indicator of 
production can be misleading. For this reason, the Committee is 
recommending the usage of bearing trees per district rather than 
acreage per district.
    Witnesses also explained that the Florida Agricultural Statistical 
Service conducts a tree census every other year. With this information, 
the Committee would have accurate and timely information on bearing 
trees, by variety and county, to utilize in their redistricting 
evaluations.
    Witnesses stated that the importance of identifying and assessing 
the volume of fresh production per district is paramount to 
understanding trends within the fresh segment of the Florida citrus 
industry. According to record evidence, the Florida citrus industry 
utilizes 90 percent or more of its annual crop to produce processed 
products. Witnesses explained it is important to identify where the 
remaining 10 percent of fresh citrus is being produced and handled so 
that the Committee can assign Committee representation or re-designate 
districts based on the true distribution of fresh citrus production.
    Witnesses explained that calculating the volume of fresh citrus 
produced per district can be accomplished by identifying the number of 
fresh citrus variety trees in each district and multiplying that number 
by the average yield per tree of those varieties. Witnesses identified 
``fresh citrus varieties'' as those varieties that return to the grower 
an on-tree value that exceeds the cost of production. These varieties 
currently would include Navel oranges, red and white grapefruit, 
specialty citrus varieties, Fall-Glo tangerines, Sunburst tangerines, 
tangelos, and Honey tangerines.
    Finally, witnesses stated that the proposed amendments would allow 
the

[[Page 11339]]

Committee the flexibility to adjust grower districts to reflect shifts 
in the production of fresh varieties and fresh volume of Florida 
citrus. Given industry concerns over the continued loss of trees and 
reduction in fresh volume, the Committee's ability to react to such 
changes in a timely manner is important to administer the marketing 
order program effectively.
    No testimony opposing this proposal was presented at the hearing. 
For the reasons stated above, it is recommended that Sec.  905.14, 
Redistricting, be amended to revise the process for redistricting the 
production area. This amendment would provide flexibility within the 
order to allow for the redefining of grower districts within the 
production area when relevant factors warrant redistricting.

Material Issue Number 4--Term of Office

    Section 905.20, Term of office, should be amended to change the 
term of office of Committee members from one to two years, and change 
the tenure limits for Committee members from three to four years. This 
proposed change would provide more continuity in the administration of 
the order and would result in cost savings and efficiencies from fewer 
elections.
    The order currently limits the term of office for Committee members 
and alternate members to one year, with the number of consecutive 
terms, or tenure, that a member or alternate can serve in their 
position limited to three terms. Therefore, the longest a Committee 
member can serve before being required to take a break in service is 
three years. The proposed amendment would lengthen this time to a total 
of four years, or a limit of two consecutive two-year terms.
    Witnesses explained that the current requirements under the order 
disrupt the administration of the order. Each year nominations and new 
selections occur. The annual nomination process not only disrupts the 
work of the Committee, but it also requires time and resources from 
handlers and growers to participate in nominations and from the 
Committee to conduct them. Witnesses stated that changing the 
nomination process to a bi-annual occurrence would allow Committee 
members to work for two years without interruption, which would also 
reduce costs associated with conducting and participating in 
nominations. The overall effect would be an increase in administrative 
efficiencies and stability.
    Regarding the need for increased continuity in leadership, 
witnesses explained that the production of fresh Florida citrus is 
rapidly changing. According to the record, in the last 10 seasons the 
fresh citrus industry has experienced production declines of 50 percent 
and shipment declines of 40 percent. Witnesses stated that it will be 
important to have continuity in leadership and representation as the 
industry addresses the issues of disease and development of new, 
consumer-friendly citrus varieties to bolster production and market 
demand.
    No testimony opposing this proposal was provided at the hearing. 
For the reasons stated above, it is recommended that Sec.  905.20, Term 
of office, be amended to change the term of office of Committee members 
from one to two years, and change the tenure limit for Committee 
members from three to four years. This proposed change would provide 
more continuity in the administration of the order and would result in 
cost savings and efficiencies with fewer nomination meetings to 
conduct.

Material Issue Number 5--Mail Balloting

    Section 905.22, Nominations, should be amended to authorize the use 
of mail ballots in conducting Committee membership nominations. In 
addition, this section should be amended to provide that the nomination 
process occur in the month of June to allow ample time for the 
distribution and collection of mail ballots.
    The order currently does not allow for voting by mail during the 
nomination process; all votes must be cast in person or, in the case of 
handlers, by proxy, at annual nomination meetings. For grower 
nominations, meetings are held at set locations within each of the 
three grower districts. Growers are entitled to one vote for each 
nominee in each of the districts in which he or she is a producer. 
Shipper nominations are held at the Florida Department of Citrus 
headquarters. Shippers may vote by proxy, and each shipper's vote is 
weighted by the volume of fruit handled by them during the then current 
fiscal period. The nomination process occurs in the month of July.
    If implemented, this amendment would simplify the nomination and 
voting process and would increase industry participation, specifically 
grower participation. This amendment would also make the nomination 
process more efficient and economical by eliminating the Committee's 
expenses associated with holding a nomination meeting. Lastly, this 
change would reduce financial and other burdens currently required of 
growers commuting to vote.
    Witnesses stated that the current process can limit grower 
participation due to time and travel requirements to attend nominating 
meetings. Given that the state of Florida production area is divided 
into three grower districts, each of these districts covers a large 
geographic area.
    According to witnesses, the burdens of commuting to a nomination 
meeting have led to poor voter turnout. A considerable number of 
growers do not live within an easily commutable radius of the 
nomination meeting locations. Time spent commuting to nomination 
meetings can be costly in terms of lost wages, time spent away from the 
workplace, and fuel costs for travel to and from the nomination 
meetings.
    The Committee anticipates that this change will foster increased 
participation. By allowing voting by mail or other means, participation 
should increase, and the level of diversity among the members involved 
in the nomination process may increase as well. According to the 
record, the Committee believes that it will realize cost savings from 
conducting the nominations of members and alternate members by mail or 
other means. As presented earlier, this measure is coupled with the 
proposal to extend the term of office from a one-year term to a two-
year term, which would decrease administrative and travel costs 
associated with nomination meetings. However, if there is any cost 
increase, it would be outweighed by the benefit of increased 
participation and involvement.
    The Committee further proposed that the nomination process take 
place in the month of June in order to allow extra time for the mailing 
and receipt of mail ballots. The expense of mailing the ballots would 
be outweighed by the savings in travel and time-related costs of 
industry members no longer needing to travel to nomination meetings.
    No testimony opposing the proposed amendment was given at the 
hearing. For the reasons stated above, it is recommended that Sec.  
905.22, Nominations, be amended to authorize the use of mail ballots in 
conducting Committee membership nominations and to conduct nominations 
in June.

Material Issue Number 6--Financial Reserve Fund

    Section 905.42, Handler's accounts, should be amended to authorize 
the Committee to increase the capacity of its financial reserve funds 
from approximately six months of a fiscal period's expenses to 
approximately two years' fiscal periods' expenses.

[[Page 11340]]

    The order currently provides authority to hold in reserve funds 
equal to approximately one-half of one fiscal period's expenses. 
According to witnesses, this limits the Committee's flexibility to 
develop and implement projects requiring advertising, promotion or 
research without raising the assessment rate during the season. The 
proposed amendment would allow the Committee to increase their reserves 
up to two fiscal periods' expenses. The larger reserve fund would 
provide greater flexibility in the administration of the marketing 
order program and promote assessment rate stability.
    Assessment revenue funds the Committee's administrative, research, 
and promotion activities. As production has declined over time, the 
Committee has had to either increase the assessment rate to generate 
more revenue, or rely on its reserves to fund some of its activities. 
This has caused the assessment rate to fluctuate substantially over 
time. The Committee's proposal to raise the reserve cap to two fiscal 
periods' expenses would reduce assessment rate fluctuation and make 
more funds available for the Committee to use in fiscal years when 
assessment revenue isn't sufficient to cover expenses.
    According to the record, the Committee's fiscal year begins on 
August 1 and ends on July 31 of the following year. The shipping season 
for Florida fresh citrus begins in September and lasts about eight 
months, with approximately 87 percent of the volume being shipped in 
six months. The volume of regulated fresh citrus declined 17 percent in 
the last five seasons, and 41 percent in the last decade. Committee 
data indicates that 2013-2014 fresh shipments from Florida are 
projected to decrease another 10 percent from last season. Moreover, 
the 2013-2014 crop year projection of fresh shipments of 13.2 million 
boxes will be the lowest since the 1919-1920 season.
    Witnesses explained that the Committee has tried to avoid 
assessment increases each year, and would rather establish an 
assessment rate that would fully fund its operations and build its 
reserves to handle the fluctuations in fresh shipments. However, with 
the current assessment rate and reserve threshold combination, reserves 
are being drawn down faster than they are being replenished year-over-
year. Without raising the cap on reserves, witnesses stated that it 
will become increasingly difficult for the Committee to avoid annual 
increases in the assessment rate.
    Witnesses testifying in favor of this proposal stated that raising 
the assessment rate to a level that would properly fund the Committee's 
operations and simultaneously build ample reserves to handle production 
fluctuations can only be achieved by increasing the amount of reserves 
the Committee is allowed to carry over from one fiscal year to the 
next.
    According to the record, the Committee did consider a proposal that 
would increase the reserve threshold from one half year to one fiscal 
period's expenses. However, this option was ultimately rejected because 
current fluctuations in regulated shipments indicate that the 
Committee's reserve needs are greater than one year's annual expenses. 
Witnesses explained that it has been the Committee's practice to hold 
excess assessments during the past few fiscal years to ensure that 
there would be ample reserves to fully fund their operations.
    Witnesses further stated that the proposal to increase the reserve 
threshold to two fiscal periods' worth of Committee expenses is 
essential to the Committee's financial stability moving forward, until 
fluctuations in production can be remedied through the development of 
disease-resistant citrus and new plantings of varieties with the 
characteristics desired by consumers of fresh Florida citrus.
    Lastly, if the proposed amendment to increase the reserve fund were 
approved, witnesses stated that the Committee should begin building the 
reserves immediately.
    No testimony opposing the proposed amendment was presented at the 
hearing. For the reasons stated above, it is recommended that Section 
905.42, Handler's accounts, be amended to authorize the Committee to 
increase the capacity of its financial reserve funds from approximately 
six months of a fiscal period's expenses to approximately two fiscal 
periods' expenses.

Material Issue Number 7--Regulation of Shipments

    Section 905.52, Issuance of regulations, should be amended to 
authorize pack and container requirements for domestic shipments and 
authorize different regulations for different markets. Additionally, in 
the event that the State of Florida opted to no longer regulate 
intrastate fresh citrus shipments, this amendment would also allow for 
such shipments to be regulated under the Federal marketing order.
    The order currently regulates the size, capacity, weight, 
dimensions, marking, or pack of containers used for fresh citrus export 
shipments, provided that the container is not prohibited under Chapter 
601 of the Florida Statutes. The Committee recommends that the order be 
amended to allow for the establishment of such regulation for both 
export and interstate shipments, and that these requirements may be 
different for different market destinations. By adding this authority, 
the Committee could recognize and meet the differing demands of 
customers and consumers domestically and abroad. Witnesses explained 
that having the flexibility to meet differing demands is important in 
maintaining current markets and creating new markets for any new 
varieties developed in the future.
    The regulation of pack and containers for intrastate shipments 
falls under the authorities outlined in Chapter 20 of the Florida 
statutes. Changes to these regulations are developed by the Florida 
fresh citrus industry and presented to the Florida Citrus Commission 
for their approval. The Florida Citrus Commission oversees state 
regulation for both the fresh and processed segments of the state's 
citrus industry.
    According to the record, intrastate markets have been recognized by 
the Florida citrus industry as being unique from the interstate and 
export markets in that much of the in-state fruit is sold locally by 
fruit stands and gift-fruit shippers. Typically, this fruit is sold in 
bins and ten-box containers so that the consumer may choose their own 
fruit. This is different from interstate or export shipments, which are 
typically packed and sold in cartons or bags. Intrastate shipments of 
fresh Florida citrus represent roughly six percent of the industry's 
total fresh shipments.
    The Committee recommends amending the order to provide authority to 
regulate intrastate shipments of fresh citrus in the event that the 
State of Florida ceases to regulate them. This amendment would allow 
for orderly marketing of fresh citrus to continue if state regulations 
were no longer in effect. Witnesses explained that this amendment was 
proposed as a precautionary measure and that the Committee's 
recommendation had been discussed openly with the Florida Citrus 
Commission. No opposition was expressed.
    USDA recommends modifying the proposed amendatory text published in 
the Notice of Hearing. USDA's modifications simplify the proposed 
amendatory text to more clearly state the intent of the Committee's 
recommendation and that which was supported by witness testimony. The 
modified language is included here below.

[[Page 11341]]

    No testimony opposing the proposed amendment was given at the 
hearing. For the reasons stated above, it is recommended that Sec.  
905.52, Issuance of regulations, be amended to: Authorize different 
regulations for different market destinations; allow for the regulation 
of pack and container requirements for interstate shipments; and, in 
the absence of state regulation, allow for the establishment of 
requirements for intrastate shipments. Any regulation implemented under 
this authority would not conflict with Florida state statutes or 
regulation in effect thereunder.

Material Issue Number 8--Nomination Acceptance

    Section 905.28, Qualifications and acceptance, should be modified 
to allow the Committee nominee acceptance statement and the background 
statement to be combined into one form.
    The order currently requires each member and alternate to complete 
an acceptance letter in addition to the background statement when 
nominated to serve on the Committee.
    This proposal would combine the separate acceptance and background 
statements into one form. Nominees agreeing to serve on the Committee 
would complete a background statement that would also include a 
statement of acceptance. If implemented, this proposal would reduce 
paperwork associated with the nomination process and result in time 
savings for nominees filling out the forms.
    No testimony opposing the proposed amendment was given at the 
hearing. For the reasons stated above, it is recommended that Sec.  
905.28, Qualifications and acceptance, be amended to allow the 
acceptance statement and the background statement to be combined into 
one form.

Material Issue Number 9--Handler Registration

    Section 905.7, Handler, should be amended to require handlers to 
register with the Committee. This amendment would require handlers who 
intend to handle fresh citrus to provide the Committee with their 
contact information at the beginning of each crop year. This would 
assist in administering the compliance provisions of the order.
    The order does not currently require handlers to register with the 
Committee. At the beginning of each crop year, the Committee receives a 
manifest of handlers who are handling fresh citrus from the state 
Department of Agriculture and Consumer Service. The information is 
gathered by the state of Florida through the state's dealer license 
requirements and through product inspection and certification. The 
Committee then uses this manifest for compliance purposes and to 
generate their assessment billings.
    According to the record, the State of Florida Department of Citrus, 
Chapter 601, Florida Statutes, Florida Citrus Code 601.4, requires each 
packing house or handler that prepares Florida citrus for the fresh 
market in Florida to register annually with the Florida Department of 
Agriculture through the Division of Fruit and Vegetables (Division). In 
addition, Section 601.56, Florida Statutes, also referred to as the 
Florida Citrus Code, requires Florida citrus handlers to be approved by 
the Department of Citrus for a citrus fruit dealer's license.
    Under the order, Sec.  905.53, Inspection and certification, 
requires each lot of fresh citrus handled to be inspected by the 
Division. The Division certifies that the lot of fruit meets all 
applicable minimum grade and size requirements of the order. The 
Committee contracts annually with the Division to furnish the 
Committee, by month, information on each handler's regulated shipments, 
both interstate and export. This information allows the Committee to 
calculate each handler's assessment, as well as monitor compliance with 
grade and size regulation of fresh Florida citrus shipments.
    Witnesses explained that while the Committee has not experienced 
major compliance issues in the past, adding authority for it to require 
handler registration would provide the Committee with a timely and 
accurate list of handlers who intend to handle fresh citrus each crop 
year. Witnesses further explained that in the event the Florida state 
program were to stop regulating fresh citrus shipments the Committee 
would be able to gather necessary information through a handler 
registration requirement to continue monitoring handler compliance 
under the program.
    According to the record, the Committee monitors compliance (for 
both adherence to the order's grade and size requirements and 
assessment payments) through provisions of both its compliance and 
internal controls plans. There are procedures in both to ensure that 
handlers are fully informed of any violations and are given time to 
take corrective actions.
    Witnesses explained that, in the very limited cases of minimum 
grade and size regulation violations, the majority of the reported 
violations involved less than a full pallet of fruit each, which would 
be equivalent to 54 cartons of citrus. Furthermore, most of the 
violations have been clerical errors made by the handlers' shipping 
departments. In the last few seasons, with most shippers using bar 
coding systems for loading trucks or containers, these violations have 
almost been eliminated. The Committee has not experienced many late or 
uncollectible assessments. Nonetheless, witnesses advocated the need to 
implement a handler registration requirement. This authority would 
provide the Committee with a timely and accurate list of handlers 
handling fresh citrus each crop year for the purposes of compliance and 
communication.
    Witnesses explained that, if the amendment was approved, the 
Committee would have the authority to develop a handler registration 
form along with other guidelines to implement the collection of 
information. The handler registration form would likely require contact 
information along with other pertinent information deemed necessary for 
the operation of the order. Completed handler registration forms would 
provide accurate contact information that would improve the 
effectiveness of communications between handlers and the Committee, and 
assist in administering the compliance provisions of the order. Other 
than the time required to complete the registration form, witnesses 
stated that this proposal would not require handlers to bear any 
additional costs. Witnesses also stated that this proposal is not 
controversial and has support within the industry.
    No testimony opposing the proposed amendment was given at the 
hearing. For the reasons stated above, it is recommended that Sec.  
905.7, Handler, be amended to require handler registration.

Small Business Considerations

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA), 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 
businesses subject to such actions so that small businesses will not be 
unduly or disproportionately burdened. Marketing orders and amendments 
thereto are unique in that they are normally brought about through 
group action of essentially small entities for their own benefit.
    According to the 2007 US Census of Agriculture, the number of 
citrus growers in Florida was 6,061. According to the National 
Agriculture Statistic

[[Page 11342]]

Service (NASS) Citrus Fruit Report, published September 19, 2012, the 
total number of acres used in citrus production in Florida was 495,100 
for the 2011/12 season. Based on the number of citrus growers from the 
US Census of Agriculture and the total acres used for citrus production 
from NASS, the average citrus farm size is 81.7 acres. NASS also 
reported the total value of production for Florida citrus at 
$1,804,484,000. Taking the total value of production for Florida citrus 
and dividing it by the total number of acres used for citrus production 
provides a return per acre of $3,644.69. A small grower as defined by 
the Small Business Administration (SBA) (13 CFR 121.201) is one that 
grosses less than $750,000 annually. Multiplying the return per acre of 
$3,644.69 by the average citrus farm size of 81.7 acres, yields an 
average return of $297,720.51. Therefore, a majority of Florida citrus 
producers are considered small entities under SBA's standards.
    According to the industry, there were 44 handlers for the 2011/12 
season, down 25 percent from the 2002/03 season. A small agricultural 
service firm as defined by the SBA is one that grosses less than 
$7,000,000 annually. Twenty one handlers would be considered a small 
entity under SBA's standards. A majority of handlers are considered 
large entities under SBA's standards.
    The production area regulated under the order covers the portion of 
the state of Florida which is bound by the Suwannee River, the Georgia 
Border, the Atlantic Ocean, and the Gulf of Mexico. Acreage devoted to 
citrus production in the regulated area has declined in recent years.
    According to data presented at the hearing, bearing acreage for 
oranges reached a high of 605,000 acres during the 2000/01 crop year. 
Since then, bearing acreage for oranges has decreased 28 percent. For 
grapefruit, bearing acreage reached a high of 107,800 acres during the 
2000/01 crop year. Since the 2000/01 crop year, bearing acreage for 
grapefruit has decreased 58 percent. For tangelos, bearing acreage 
reached a high for the 2000/01 crop year of 10,800 acres for Florida. 
Since the 2000/01 crop year, bearing acreage for tangelos has decreased 
62 percent. For tangerines and mandarins, bearing acreage reached a 
high for the 2000/01 crop year of 25,500 acres. Since the 2000/01 crop 
year, bearing acreage for tangerines and mandarins has decreased 53 
percent.
    According to data presented at the hearing, the total utilized 
production for oranges reached a high during the 2003/04 crop year of 
242 million boxes. Since the 2000/01 crop year, total utilized 
production for oranges has decreased 34 percent. For grapefruit, the 
total utilized production reached a high during the 2001/02 crop year 
of 46.7 million boxes. Since the 2000/01 crop year, total utilized 
production for grapefruit has decreased 59 percent. For tangelos, the 
total utilized production reached a high during the 2002/03 crop year 
of 2.4 million boxes. Since the 2000/01 crop year, total utilized 
production for tangelos has decreased 45 percent. For tangerines and 
mandarins, the total utilized production reached a high during the 
2001/02 crop year of 6.6 million boxes. Since the 2000/01 crop year, 
total utilized production for tangerines and mandarins has decreased 23 
percent.
    During the hearing held on April 24, 2013, interested persons were 
invited to present evidence at the hearing on the probable regulatory 
and informational impact of the proposed amendments to the order on 
small businesses. The evidence presented at the hearing shows that none 
of the proposed amendments would have any burdensome effects on small 
agricultural producers or firms.

Material Issue Number 1--Definitions of ``Fruit'' and ``Variety''

    The proposal described in Material Issue 1 would amend the 
definitions of ``fruit'' and ``variety'' in Sec.  905.4 and Sec.  905.5 
to update terminology and authorize regulation of additional varieties 
and hybrids of citrus.
    Currently, the New Varieties Development and Management 
Corporations, a non-profit research organization, is actively working 
to identify, acquire and sub-license promising citrus varieties and 
hybrids for the Florida citrus grower. In order to regulate these new 
varieties and hybrids, the definitions of fruit and variety must be 
amended so that these new varieties and hybrids can be regulated under 
the order.
    Witnesses supported this proposal and stated that Florida growers 
have invested heavily and steadily in the development of new citrus 
varieties to meet changing demand and consumer preferences. Witnesses 
stated that it is imperative that the order be amended to keep pace 
with a rapidly changing industry and maximize its relevance and utility 
to the industry. No significant impact on small business entities is 
anticipated from this proposed change.

Material Issue Number 2--Intrastate Shipments

    The proposal described in Material Issue 2 would amend the 
definition of ``handle or ship'' in Sec.  905.9 to authorize regulation 
of intrastate shipments.
    Currently, the Florida Citrus Commission, under the Florida 
Department of Citrus Rules Chapter 20, regulates the grade and size of 
intrastate shipments, while the Federal order regulates all interstate 
shipments and exports of fresh citrus. If the proposed amendment were 
implemented, authority to regulate intrastate shipments would be added 
to the Federal order. This amendment would allow for the eventual 
regulation of all fresh citrus shipments under the order if intrastate 
shipments were no longer regulated by the Florida Department of Citrus.
    Witnesses explained that adding the authority to regulate 
intrastate shipments to the order would be a precautionary measure. If 
the Florida Department of Citrus were to stop regulating fresh citrus 
shipments, having the authority to do so under the Federal order would 
facilitate a streamlined transition of regulation from one program to 
the other. Such a transition would benefit growers and handlers as 
shipments of fresh citrus could continue without interruption.
    Witnesses anticipated that handlers would incur little to no 
additional costs as a result of the proposed amendment. As currently 
proposed, the amendment would simply add an authority to the order. 
This authority would not be implemented unless warranted by other 
factors. If implemented, handlers of intrastate fresh citrus shipments 
would be subject to assessments under the order. However, the Florida 
Department of Citrus already collects assessments on intrastate 
shipments. Therefore, the cost of assessments collected on intrastate 
shipments, whether under the State or Federal program, would continue. 
In conclusion, it is determined that the benefits of adding the 
authority to regulate intrastate shipments of fresh citrus to the order 
would outweigh any costs.

Material Issue Number 3--Redistricting

    The proposal described in Material Issue 3 would amend Sec.  905.14 
to revise the process for redistricting the production area.
    The proposed amendment would grant flexibility to the Committee in 
redefining grower districts within the production area when the 
criteria and relevant factors within the production area warrant 
redistricting. Disease and

[[Page 11343]]

natural disasters over the past decade have significantly affected 
bearing acreage. The proposed amendment would allow the Committee at 
any time, subject to the approval of the Secretary, to base their 
determination of grower districts on the number of bearing trees, 
volume of fresh fruit, total number of citrus acres, and other relevant 
factors when conditions warrant redistricting.
    According to a witness, the proposed amendment would give the 
Committee, in future seasons, the flexibility to adjust grower 
districts to reflect the shift in production of fresh varieties and 
fresh volume. In addition, the Committee would be able to adjust grower 
districts based on the number of trees lost to disease and natural 
disasters. Thus, it is not expected that this proposal would result in 
any additional costs to growers or handlers.

Material Issue Number 4--Term of Office

    The proposal described in Material Issue 4 would amend Sec.  905.20 
to change the term of office of Committee members from one to two 
years, and change the tenure limits for Committee members from three to 
four years.
    According to a witness, a two-year term would allow for biennial 
nomination meetings, which would provide administrative efficiencies 
and stability. The current one-year term of office is administratively 
inefficient and requires additional Committee resources. Moreover, 
limiting terms to one year results in an annual effort to nominate and 
appoint new members. This process is costly to the Committee and 
requires time and resources for industry members to participate. A two-
year term would reduce these costs. For the reasons described above, it 
is determined that the proposed amendment would benefit industry 
participants and improve administration of the order. The costs of 
implementing this proposal would be minimal, if any.

Material Issue Number 5--Mail Balloting

    The proposal described in Material Issue 5 would amend Sec.  905.22 
to authorize mail balloting procedures for Committee membership 
nominations. Nomination meetings have low participation rates due to 
time, travel, and administrative costs.
    The proposed amendment would allow the Committee to conduct the 
nomination and/or election of members and alternates by mail or other 
means according to the rules and regulations recommended by the 
Committee and approved by the Secretary. Currently, the Committee holds 
grower nomination meetings in each of the three grower districts and 
one shipper nomination meeting annually. Witnesses indicated that 
attending these meetings is costly due to travel expenses and time away 
from their growing or handling operations. While the proposed amendment 
would result in some increased expenses for printing and mailing of 
ballot materials, witnesses indicated that the potential savings to 
growers and handlers far exceed those costs.
    Moreover, witnesses indicated that the additional benefit of 
increased participation in the nomination process as a result of 
materials being sent to all interested parties would outweigh the costs 
of conducting nominations by mail. This would be particularly true in 
the case of small business entities that have fewer resources and 
relatively less flexibility in managing their businesses compared to 
larger businesses. For these reasons, it is determined that the cost 
savings, increased participation, and other benefits gained from 
conducting nomination meetings via mail would outweigh the potential 
costs of implementing this proposal.

Material Issue Number 6--Financial Reserves Fund

    The proposal described in Material Issue 6 would amend Sec.  905.42 
to authorize the Committee to increase the capacity of its financial 
reserve funds from approximately six months of a fiscal period's 
expenses to approximately two fiscal periods' expenses. Such reserve 
funds could be used to cover any expenses authorized by the Committee 
or to cover necessary liquidation expenses if the order is terminated.
    The proposed amendment would allow the Committee to increase their 
reserves up to two fiscal periods' expenses. Currently, reserves are 
capped at approximately one half of one year's expenses. Witnesses 
explained that the current cap on reserves is too restrictive and could 
limit the Committee's ability to develop and implement projects 
requiring advertising, promotion or research without raising the 
assessment rate during the season.
    As discussed earlier in this recommended decision, witnesses 
considered the need to develop and promote new hybrid varieties and 
markets to be essential to reviving the health of the fresh citrus 
sector. According to them, not increasing the reserve cap would inhibit 
the Committee's ability to address these needs.
    Also, without the proposed amendment it would become more difficult 
for the Committee to avoid assessment rate increases annually or during 
a season. According to the record, the proposed amendment would also 
provide greater stability in the administration of the order's 
assessment rate. Under the current reserve limit, the Committee would 
need to increase the assessment rate mid-season if the need for 
additional revenues for research or promotion activities occurs after 
the assessment rate and budget are finalized. Increasing the assessment 
rate mid-season confuses industry members and creates additional 
burdens in administering the order.
    For the reasons discussed above, it is determined that the benefits 
of increasing the maximum level of funds that can be held in the 
financial reserves would outweigh the costs.

Material Issue Number 7--Regulation of Shipments

    The proposal described in Material Issue 7 would amend Sec.  905.52 
to: Authorize different regulations for different market destinations; 
allow for the regulation of pack and container requirements for 
interstate shipments; and, in the absence of state regulation, allow 
for the establishment of requirements for intrastate shipments.
    This would allow shippers to meet varying customer demands in 
different market destinations. In addition, the proposed amendment 
would allow regulation and orderly marketing to continue for intrastate 
shipments if Florida State fresh citrus regulations were discontinued. 
This authority will not be implemented unless state regulations were no 
longer in effect.
    The proposed amendment to regulate containers and establish quality 
standards for the production area would not have any adverse effects on 
small businesses if approved. Continued orderly marketing of fresh 
citrus shipments within the State of Florida would equally benefit all 
segments of the industry and consumers by maintaining quality standards 
and consistency.

Material Issue Number 8--Nomination Acceptance

    The proposal described in Material Issue 8 would Amend Sec.  905.28 
to eliminate the use of separate acceptance statements in the 
nomination process. Currently, nominees complete both background and 
acceptance statements when they are nominated. The elimination of the 
acceptance statement would reduce paperwork and administrative costs. 
Therefore, it is determined that the proposed amendment would benefit 
both large

[[Page 11344]]

and small-scale fresh citrus businesses, and would reduce costs and 
improve the administration of the order.

Material Issue Number 9--Handler Registration

    The proposal described in Material Issue 9 would Amend Sec.  905.7 
to require handlers to register with the Committee. Currently, the 
Florida Department of Agriculture and Consumer Services, Division of 
Fruit and Vegetables has a registration program for handlers of Florida 
citrus. The Committee contracts annually with the Division to obtain 
information on each handler's regulated shipments, both interstate and 
export, on a monthly basis.
    A handler registration form would serve as an efficient means for 
obtaining handler information that would improve communication between 
the Committee and handlers. It would also assist the Committee in 
monitoring and enforcing compliance. If a handler were to not comply 
with regulations in effect under the order, the Committee would have 
that handler's contact information on file to begin the compliance 
enforcement process. Moreover, if a handler failed to respond to 
compliance enforcement requests, the Committee could revoke a handler's 
registration. Without the registration, a handler would not be able to 
ship citrus subject to order regulation.
    Witnesses stated that while a handler registration program may 
result in additional administrative costs, the benefits of this 
proposed amendment would outweigh those costs. Also, the proposal would 
not disproportionately disadvantage small-sized businesses as all 
handlers, regardless of size, would be required to register with the 
Committee. Furthermore, the new requirement would not result in a 
direct cost to handlers as the cost of administering a handler 
registration program would be borne by the Committee.
    For these reasons, it is determined that the benefits of requiring 
handlers to register with the Committee would be greater than the 
costs.
    Interested persons were invited to present evidence at the hearing 
on the probable regulatory and informational impact of the proposed 
amendments to the order on small entities. The record evidence 
indicates that implementation of the proposals to authorize regulation 
of new varieties and hybrids of citrus fruit; authorize the regulation 
of intrastate shipments of fruit; revise the process for redistricting 
the production area; change the term of office and tenure requirements 
for Committee members; authorize mail balloting procedures for 
Committee membership nominations; increase the capacity of financial 
reserve funds; authorize pack and container requirements for intrastate 
shipments and authorize different regulations for different markets; 
eliminate the use of separate acceptance statements in the nomination 
process; and, require handlers to register with the Committee would 
improve the operation of the order and are not anticipated to impact 
small businesses disproportionately.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this proposed rule. These amendments are 
intended to improve the operation and administration of the order and 
to assist in the marketing of fresh Florida citrus.
    Committee meetings regarding these proposals, as well as the 
hearing date and location, were widely publicized throughout the 
Florida citrus industry, and all interested persons were invited to 
attend the meetings and the hearing to participate in Committee 
deliberations on all issues. All Committee meetings and the hearing 
were public forums and all entities, both large and small, were able to 
express views on these issues. Finally, interested persons are invited 
to submit information on the regulatory and informational impacts of 
this action on small businesses.
    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.

Paperwork Reduction Act

    Current information collection requirements for Part 905 are 
approved by the Office of Management and Budget (OMB), under OMB Number 
0581-0189--``Generic OMB Fruit Crops.'' In accordance with the 
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the termination 
of the Letter of Acceptance has been submitted to the Office of 
Management and Budget (OMB) for approval. The Letter of Acceptance has 
no time or cost burden associated with it due to the fact that handlers 
simply sign the form upon accepting nomination to the Committee. As a 
result, the current number of hours associated with OMB No. 0581-0189, 
Generic Fruit Crops, would remain the same: 7,786.71 hours.
    No other changes in these requirements are anticipated as a result 
of this proceeding. Should any such changes become necessary, they 
would be submitted to OMB for approval.
    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.

Civil Justice Reform

    The amendments to the order proposed herein have been reviewed 
under Executive Order 12988, Civil Justice Reform. They are not 
intended to have retroactive effect. If adopted, the proposed 
amendments would not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
proposal.
    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 no later than 20 days after the date of 
entry of the ruling.

Rulings on Briefs of Interested Persons

    Briefs, proposed findings and conclusions, and the evidence in the 
record were considered in making the findings and conclusions set forth 
in this recommended decision. To the extent that the suggested findings 
and conclusions filed by interested persons are inconsistent with the 
findings and conclusions of this recommended decision, the requests to 
make such findings or to reach such conclusions are denied.

General Findings

    The findings hereinafter set forth are supplementary to the 
findings and determinations which were previously made in connection 
with the issuance of the marketing agreement and order; and all said 
previous findings and determinations are hereby ratified and affirmed, 
except insofar as such findings and determinations may be in conflict 
with the findings and determinations set forth herein.
    (1) The marketing order, as amended, and as hereby proposed to be 
further

[[Page 11345]]

amended, and all of the terms and conditions thereof, would tend to 
effectuate the declared policy of the Act;
    (2) The marketing order, as amended, and as hereby proposed to be 
further amended, regulates the handling of fresh citrus grown in the 
production area (Florida) in the same manner as, and is applicable only 
to, persons in the respective classes of commercial and industrial 
activity specified in the marketing order upon which a hearing has been 
held;
    (3) The marketing order, as amended, and as hereby proposed to be 
further amended, is limited in its application to the smallest regional 
production area which is practicable, consistent with carrying out the 
declared policy of the Act, and the issuance of several orders 
applicable to subdivisions of the production area would not effectively 
carry out the declared policy of the Act;
    (4) The marketing order, as amended, and as hereby proposed to be 
further amended, prescribes, insofar as practicable, such different 
terms applicable to different parts of the production area as are 
necessary to give due recognition to the differences in the production 
and marketing of fresh citrus grown in the production area; and
    (5) All handling of fresh citrus grown in the production area as 
defined in the marketing order is in the current of interstate or 
foreign commerce or directly burdens, obstructs, or affects such 
commerce.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposal. Thirty days is deemed appropriate because 
these proposed changes have already been widely publicized and the 
Committee and industry would like to avail themselves of the 
opportunity to implement the changes as soon as possible. All written 
exceptions received within the comment period will be considered and a 
grower referendum will be conducted before any of these proposals are 
implemented.

List of Subjects in 7 CFR Part 905

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

Recommended Further Amendment of the Marketing Order

    For the reasons set out in the preamble, 7 CFR part 905 is proposed 
to be amended as follows:

PART 905--ORANGES, GRAPEFRUIT, TANGERINES, AND PUMMELOS GROWN IN 
FLORIDA

0
1. The authority citation for 7 CFR part 905 continues to read as 
follows:

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

0
2. Revise the heading of part 905 to read as set forth above.
0
3. Revise Sec.  905.4 to read as follows:

Sec.  905.4  Fruit.

    Fruit means any or all varieties of the following types of citrus 
fruits grown in the production area:
    (a) Citrus sinensis, Osbeck, commonly called ``oranges'';
    (b) Citrus paradisi, MacFadyen, commonly called ``grapefruit'';
    (c) Citrus reticulata, commonly called ``tangerines'' or 
``mandarin'';
    (d) Citrus maxima Merr (L.); Osbeck, commonly called ``pummelo''; 
and,
    (e) ``Citrus hybrids'' that are hybrids between or among one or 
more of the four fruits (a) through (d) of this section and the 
following: Trifoliate orange (Poncirus trifoliata), sour orange (C. 
aurantium), lemon (C. limon), lime (C. aurantifolia), citron (C. 
medica), kumquat (Fortunella species), tangelo (C. reticulata x C. 
paradisi or C. grandis), tangor (C. reticulata x C. sinensis), and 
varieties of these species. In addition, citrus hybrids include: 
tangelo (C. reticulata x C. paradisi or C. grandis), tangor (C. 
reticulata x C. sinensis), Temple oranges, and varieties thereof.
0
4. Revise Sec.  905.5 to read as follows:

Sec.  905.5  Variety.

    Variety or varieties means any one or more of the following 
classifications or groupings of fruit:
    (a) Oranges;
    (1) Early and Midseason oranges
    (2) Valencia, Lue Gim Gong, and similar late maturing oranges of 
the Valencia type;
    (3) Navel oranges
    (b) Grapefruit;
    (1) Red Grapefruit, to include all shades of color
    (2) White Grapefruit
    (c) Tangerines and Mandarins;
    (1) Dancy and similar tangerines
    (2) Robinson tangerines
    (3) Honey tangerines
    (4) Fall-Glo tangerines
    (5) US Early Pride tangerines
    (6) Sunburst tangerines
    (7) W-Murcott tangerines
    (8) Tangors
    (d) Pummelos;
    (1) Hirado Buntan and other pink seeded pummelos
    (2) [Reserved].
    (e) Citrus Hybrids;
    (1) Tangelos
    (i) Orlando tangelo
    (ii) Minneola tangelo
    (2) Temple oranges
    (f) Other varieties of citrus fruits specified in Sec.  905.4, 
including hybrids, as recommended and approved by the Secretary: 
Provided, That in order to add any hybrid variety of citrus fruit to be 
regulated under this provision, such variety must exhibit similar 
characteristics and be subject to cultural practices common to existing 
regulated varieties.
0
5. Revise Sec.  905.7 to read as follows:

Sec.  905.7  Handler.

    Handler is synonymous with shipper and means any person (except a 
common or contract carrier transporting fruit for another person) who, 
as owner, agent, or otherwise, handles fruit in fresh form, or causes 
fruit to be handled. Each handler shall be registered with the 
Committee pursuant to rules recommended by the Committee and approved 
by the Secretary.
0
6. Revise Sec.  905.9 to read as follows:

Sec.  905.9  Handle or Ship.

    Handle or ship means to sell, transport, deliver, pack, prepare for 
market, grade, or in any other way to place fruit in the current of 
commerce within the production area or between any point in the 
production area and any point outside thereof.
0
7. Revise Sec.  905.14 to read as follows:

Sec.  905.14  Redistricting.

    The Committee may, with the approval of the Secretary, redefine the 
districts into which the production area is divided or reapportion or 
otherwise change the grower membership of districts, or both: Provided, 
That the membership shall consist of at least eight but not more than 
nine grower members, and any such change shall be based, insofar as 
practicable, upon the respective averages for the immediately preceding 
three fiscal periods of:
    (a) The number of bearing trees in each district;
    (b) the volume of fresh fruit produced in each district;
    (c) the total number of acres of citrus in each district; and
    (d) other relevant factors.
    Each redistricting or reapportionment shall be announced on or 
prior to March 1 preceding the effective fiscal period.
0
8. Revise Sec.  905.20 to read as follows:

Sec.  905.20  Term of Office.

    The term of office of members and alternate members shall begin on 
the first day of August of even-numbered years and continue for two 
years and until their successors are selected and

[[Page 11346]]

have qualified. The consecutive terms of office of a member shall be 
limited to two terms. The terms of office of alternate members shall 
not be so limited. Members, their alternates, and their respective 
successors shall be nominated and selected by the Secretary as provided 
in Sec.  905.22 and Sec.  905.23.
0
9. Revise paragraphs (a)(1) and (b)(1) and add a new paragraph (c) in 
Sec.  905.22 to read as follows:

Sec.  905.22  Nominations.

    (a) Grower members. (1) The Committee shall give public notice of a 
meeting of producers in each district to be held not later than June 
10th of even-numbered years, for the purpose of making nominations for 
grower members and alternate grower members. The Committee, with the 
approval of the Secretary, shall prescribe uniform rules to govern such 
meetings and the balloting thereat. The chairman of each meeting shall 
publicly announce at such meeting the names of the persons nominated, 
and the chairman and secretary of each such meeting shall transmit to 
the Secretary their certification as to the number of votes so cast, 
the names of the persons nominated, and such other information as the 
Secretary may request. All nominations shall be submitted to the 
Secretary on or before the 20th day of June.
* * * * *
    (b) Shipper members. (1) The Committee shall give public notice of 
a meeting for bona fide cooperative marketing organizations which are 
handlers, and a meeting for other handlers who are not so affiliated, 
to be held not later than June 10th of even-numbered years, for the 
purpose of making nominations for shipper members and their alternates. 
The Committee, with the approval of the Secretary, shall prescribe 
uniform rules to govern each such meeting and the balloting thereat. 
The chairperson of each such meeting shall publicly announce at the 
meeting the names of the persons nominated and the chairman and 
secretary of each such meeting shall transmit to the Secretary their 
certification as to the number of votes cast, the weight by volume of 
those shipments voted, and such other information as the Secretary may 
request. All nominations shall be submitted to the Secretary on or 
before the 20th day of June.
* * * * *
    (c) Notwithstanding the provisions of paragraphs (a) and (b) of 
this section, nomination and election of members and alternate members 
to the Committee may be conducted by mail, electronic mail, or other 
means according to rules and regulations recommended by the Committee 
and approved by the Secretary.
0
10. Revise Sec.  905.28 to read as follows:

Sec.  905.28  Qualification and Acceptance.

    Any person nominated to serve as a member or alternate member of 
the Committee shall, prior to selection by the Secretary, qualify by 
filing a written qualification and acceptance statement indicating such 
person's qualifications and willingness to serve in the position for 
which nominated.
0
11. Revise the first sentence of paragraph (a) in Sec.  905.42 to read 
as follows:

Sec.  905.42  Handler's accounts.

    (a) If, at the end of a fiscal period, the assessments collected 
are in excess of expenses incurred, the Committee, with the approval of 
the Secretary, may carry over such excess into subsequent fiscal 
periods as a reserve: Provided, That funds already in the reserve do 
not exceed approximately two fiscal periods' expenses. * * *
* * * * *
0
12. Revise paragraphs (a)(4) and (a)(5), and add a new paragraph (a)(6) 
in Sec.  905.52 to read as follows:

Sec.  905.52  Issuance of regulations.

    (a) * * *
    (4) Establish, prescribe, and fix the size, capacity, weight, 
dimensions, marking (including labels and stamps), or pack of the 
container or containers which may be used in the packaging, 
transportation, sale, shipment, or other handling of fruit.
    (5) Provide requirements that may be different for the handling of 
fruit within the production area, the handling of fruit for export, or 
for the handling of fruit between the production area and any point 
outside thereof within the United States.
    (6) Any regulations or requirements pertaining to intrastate 
shipments shall not be implemented unless Florida statutes and 
regulations regulating such shipments are not in effect.
* * * * *

    Dated: February 23, 2015.
Rex. A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2015-04085 Filed 3-2-15; 8:45 am]
BILLING CODE P
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