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[Federal Register Volume 90, Number 9 (Wednesday, January 15, 2025)]
[Proposed Rules]
[Pages 3720-3723]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-00193]

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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 90, No. 9 / Wednesday, January 15, 2025 / 
Proposed Rules

[[Page 3720]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 906

[Doc. No. AMS-SC-24-0046]

Oranges and Grapefruit Grown in Lower Rio Grande Valley in Texas; 
Increased Assessment Rate

AGENCY: Agricultural Marketing Service, Department of Agriculture 
(USDA).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Texas Valley Citrus Committee (Committee) to increase the assessment 
rate established for the 2024-2025 and subsequent fiscal periods from 
$0.03 to $0.04 per 7/10-bushel carton or equivalent of oranges and 
grapefruit grown in Texas. The proposed assessment rate would remain in 
effect indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by February 14, 2025.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments can be sent to the Docket 
Clerk, Market Development Division, Specialty Crops Program, AMS, USDA, 
1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237. 
Comments can also be sent to the Docket Clerk electronically by Email: 
[email protected] or via the internet at: https://www.regulations.gov. Comments should reference the document number and 
the date and page number of this issue of the Federal Register. 
Comments submitted in response to this proposed rule will be included 
in the record, will be made available to the public and can be viewed 
at: https://www.regulations.gov. Please be advised that the identity of 
the individuals or entities submitting the comments will be made public 
on the internet at the address provided above.

FOR FURTHER INFORMATION CONTACT: Delaney Fuhrmeister, Marketing 
Specialist, or Christian D. Nissen, Chief, Southeast Region Branch, 
Market Development Division, Specialty Crops Program, AMS, USDA; 
telephone: (863) 324-3375 or email: [email protected] or 
[email protected].
    Small businesses may request information on complying with this 
regulation by contacting Antoinette Carter, Market Development 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW, STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-8085, or 
email: [email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
proposes to amend regulations issued to carry out a marketing order as 
defined in 7 CFR 900.2(j). This proposed rule is issued under Marketing 
Order No. 906 as amended (7 CFR part 906), regulating the handling of 
oranges and grapefruit grown in the Lower Rio Grande Valley in Texas. 
Part 906 (referred to as ``the Order'') is effective under the 
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674), hereinafter referred to as the ``Act.'' The Committee locally 
administers the Order and is comprised of producers and handlers of 
oranges and grapefruit operating within the area of production.
    The Agricultural Marketing Service (AMS) is issuing this proposed 
rule in conformance with Executive Orders 12866, 13563, and 14094. 
Executive Orders 12866 and 13563 direct agencies to assess all costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). Executive Order 13563 
emphasizes the importance of quantifying both costs and benefits, 
reducing costs, harmonizing rules, and promoting flexibility. Executive 
Order 14094 reaffirms, supplements and updates Executive Order 12866 
and further directs agencies to solicit and consider input from a wide 
range of affected and interested parties through a variety of means. 
This proposed action falls within a category of regulatory actions that 
the Office of Management and Budget (OMB) exempted from Executive Order 
12866 review.
    This proposed rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which 
requires Federal agencies to consider whether their rulemaking actions 
would have Tribal implications. AMS has determined that this proposed 
rule is unlikely to have substantial direct effects on one or more 
Indian Tribes, on the relationship between the Federal Government and 
Indian Tribes, or on the distribution of power and responsibilities 
between the Federal Government and Indian Tribes.
    This proposed rule has been reviewed under Executive Order 12988--
Civil Justice Reform. Under the Order now in effect, Texas orange and 
grapefruit handlers are subject to assessments. Funds to administer the 
Order are derived from such assessments. It is intended that the 
proposed assessment rate would be applicable to all assessable Texas 
citrus for the 2024-2025 fiscal period, and continue until amended, 
suspended, or terminated.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with the U.S. Department 
of Agriculture (USDA) a petition stating that the order, any provision 
of the order, or any obligation imposed in connection with the order is 
not in accordance with law and request a modification of the order or 
to be exempted therefrom. Such handler is afforded the opportunity for 
a hearing on the petition. After the hearing, USDA would rule on the 
petition. The Act provides that the district court of the United States 
in any district in which the handler is an inhabitant, or has his or 
her principal place of business, has jurisdiction to review USDA's 
ruling on the petition, provided an action is filed not later than 20 
days after the date of the entry of the ruling.
    This proposed rule would increase the assessment rate for Texas 
oranges and grapefruit handled under the Order from $0.03 to $0.04 per 
7/10-bushel carton or equivalent for the 2024-2025 fiscal period and 
subsequent fiscal periods.
    Sections 906.33 and 906.34 of the Order authorize the Committee, 
with the

[[Page 3721]]

approval of AMS, to formulate an annual budget of expenses and collect 
assessments from handlers to administer the program. The members of the 
Committee are familiar with the Committee's needs and with the costs of 
goods and services in their local area and can formulate an appropriate 
budget and assessment rate. The assessment rate is formulated and 
discussed in a public meeting, and all directly affected persons have 
an opportunity to participate and provide input.
    For the 2022-23 and subsequent fiscal periods, the Committee 
recommended, and AMS approved, an assessment rate of $0.03 per 7/10-
bushel carton or equivalent of Texas citrus within the production area. 
That rate continues in effect from fiscal period to fiscal period until 
modified, suspended, or terminated by AMS upon recommendation and 
information submitted by the Committee or other information available 
to AMS.
    The Committee met on June 18, 2024, and unanimously recommended 
2024-2025 fiscal period expenditures of $134,970 and an increased 
assessment rate of $0.04 per 7/10-bushel carton or equivalent of Texas 
oranges and grapefruit handled for 2024-2025 fiscal periods. The 
budgeted expenditures remain unchanged compared to last year's 
recommended expenditures. The proposed assessment rate of $0.04 is 
$0.01 higher than the rate currently in effect. The Committee 
recommended increasing the assessment rate to cover expenses for the 
current fiscal year and replenish reserves. The Committee estimates 
shipments for the 2024-2025 fiscal period to be around 4,000,000 7/10-
bushel cartons or equivalents, similar to the 3,976,000 7/10-bushel 
cartons or equivalents handled in the 2023-2024 fiscal period.
    The major expenditures recommended by the Committee for the 2024-
2025 fiscal period include $66,220 for management expenses, $50,000 for 
compliance, and $18,750 for general administrative expenses, the same 
as budgeted for these items during the 2023-2024 fiscal period.
    At the current assessment rate of $0.03, the expected 4,000,000 7/
10-bushel cartons or equivalents would generate $120,000 in assessment 
revenue (4,000,000 7/10-bushel cartons or equivalents multiplied by 
$0.03 assessment rate), which would not cover budgeted expenses. 
Further, shipments from the 2023-2024 fiscal period were approximately 
4,000,000 7/10-bushel cartons or equivalents of citrus, which was well 
below the estimated crop of 5,000,000 7/10-bushel cartons or 
equivalents. The smaller crop forced the Committee to use the remainder 
of their reserves to help cover 2023-2024 fiscal period expenses. 
Consequently, the Committee recommended increasing the assessment rate 
to meet necessary expenses and restore reserves. By increasing the 
assessment rate from $0.03 to $0.04, assessment income would generate 
$160,000 in assessment revenue (4,000,000 7/10-bushel cartons or 
equivalents multiplied by $0.04 assessment rate). This amount should be 
appropriate to ensure the Committee has sufficient revenue to fully 
fund its recommended 2024-2025 budgeted expenditures and replenish the 
Committee's reserve funds.
    The Committee derived the recommended assessment rate by reviewing 
anticipated expenses, the estimated volume of assessable Texas citrus, 
and the level of funds available in the financial reserve. Income 
generated from handler assessments should be sufficient to meet the 
Committee's estimated program expenditures of $134,970. Funds available 
in the financial reserve (currently about $0) would be kept within the 
maximum permitted by the Order (approximately one fiscal period's 
expenses as authorized in Sec.  906.35).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by AMS upon recommendation 
and information submitted by the Committee or other available 
information. Although this assessment rate would be in effect for an 
indefinite period, the Committee will continue to meet prior to or 
during each fiscal period to recommend a budget of expenses and 
consider recommendations for modification of the assessment rate. The 
dates and times of Committee meetings are available from the Committee 
or AMS. Committee meetings are open to the public and interested 
persons may express their views at these meetings. AMS would evaluate 
Committee recommendations and other available information to determine 
whether modification of the assessment rate is needed. Further 
rulemaking would be undertaken as necessary. The Committee's 2024-2025 
fiscal period budget, and those for subsequent fiscal periods, will be 
reviewed and, as appropriate, approved by AMS.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of 
this proposed rule on small entities. Accordingly, AMS has prepared 
this initial regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf.
    There are approximately 17 handlers of Texas oranges and grapefruit 
subject to regulation under the Order and approximately 75 orange and 
grapefruit producers in the regulated area. At the time this analysis 
was prepared, the Small Business Administration (SBA) defined small 
agricultural producers as those having annual receipts equal to or less 
than $4 million for orange producers (North American Industry 
Classification System (NAICS) code 111310), and $4.25 million for other 
citrus producers (including grapefruit) (NAICS code 111320). Small 
agricultural service firms, including handlers, are defined as those 
whose annual receipts are equal to or less than $34 million (NAICS code 
115114) (13 CFR 121.201).
    According to data from the National Agricultural Statistics Service 
(NASS), the producer prices for U.S. fresh oranges and grapefruit were 
$11.63 and $15.63 per carton, respectively. The prices for U.S. fresh 
oranges and grapefruit are used for this RFA because NASS does not 
publish fresh citrus prices for Texas. Based on data provided by the 
Committee, the number of orange and grapefruit 7/10-bushel cartons or 
equivalents shipped in the 2023-2024 season were 1,462,800 and 
2,513,258, respectively.
    Using the producer prices, shipment data, and the total number of 
Texas orange and grapefruit producers, and assuming a normal 
distribution, the majority of producers have estimated average annual 
receipts of significantly less than the SBA threshold of $4 million 
($11.63 multiplied by 1,462,800 cartons plus $15.63 multiplied by 
2,513,258 cartons equals $112,564,041, divided by 75 producers equals 
$750,594 per producer).
    In addition, based on the NASS data, the average prices of fresh 
U.S. oranges and grapefruit handled for 2023-2024 were $18.40 and 
$23.05, respectively. Using the same shipment data from the Committee, 
the number of orange and grapefruit cartons shipped in the 2023-2024 
season, and assuming a normal distribution, the majority of Texas 
orange and grapefruit handlers have

[[Page 3722]]

average annual receipts of less than $34 million ($18.40 multiplied by 
1,462,800 cartons plus $23.05 multiplied by 2,513,258 cartons equals 
$84,846,117, divided by 17 handlers equals $4,990,948 per handler). 
Thus, the majority of Texas orange and grapefruit producers and 
handlers may be classified as small entities.
    This proposal would increase the assessment rate collected from 
handlers for the 2024-2025 fiscal period and subsequent fiscal periods 
from $0.03 to $0.04 per 7/10-bushel carton or equivalent of Texas 
oranges and grapefruit. The Committee unanimously recommended 2024-2025 
expenditures of $134,970 and an assessment rate of $0.04 per 7/10-
bushel carton or equivalent. The recommended assessment rate of $0.04 
is $0.01 higher than the current assessment rate. The 2024-2025 crop 
year is estimated to be 4,000,000 7/10-bushel cartons or equivalents. 
The $0.04 per 7/10-bushel carton or equivalent assessment rate should 
provide $160,000 in assessment income (4,000,000 7/10-bushel cartons or 
equivalents multiplied by $0.04 assessment rate). Income derived from 
handler assessments should be sufficient to cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2024-25 
fiscal period include $66,220 for management expenses, $50,000 for 
compliance, and $18,750 for general administrative expenses. This is 
the same as budgeted for these items during the 2023-2024 fiscal 
period.
    The Committee recommended increasing the assessment rate to meet 
necessary expenses and restore reserves. The reserves were depleted 
when shipments from the 2023-2024 fiscal period were approximately 
4,000,000 7/10-bushel cartons or equivalents, which was well below the 
estimated crop of 5,000,000 7/10-bushel cartons or equivalents. The 
Committee estimates shipments for the 2024-2025 season to be around 
4,000,000 7/10-bushel cartons or equivalents. Given the estimated 
number of shipments, the current assessment rate of $0.03 would 
generate $120,000 in assessment income (4,000,000 7/10-bushel cartons 
or equivalents multiplied by $0.03 assessment rate), which would not 
cover budgeted expenses. By increasing the assessment rate from $0.03 
to $0.04, assessment income would be $160,000 (4,000,000 7/10-bushel 
cartons or equivalents multiplied by $0.04 assessment rate). This 
amount should provide sufficient funds to meet anticipated 2024-2025 
expenses, while adding money to the financial reserve.
    Prior to arriving at this budget and assessment rate 
recommendation, the Committee considered alternatives from the 
Committee staff during a discussion at the June 18, 2024, meeting. 
Staff prepared fifteen different proposed budgets with different 
combinations of assessment rates, estimated shipments, and alternate 
expenditure levels. The Committee determined maintaining expenses and 
estimated shipments of 4,000,000 7/10-bushel cartons or equivalent of 
oranges and grapefruit were representative of the 2024-2025 fiscal 
period, and an assessment rate of $0.04 would cover expenditures and 
add funds to the financial reserve. Consequently, the other 
alternatives were rejected.
    A review of historical and preliminary information pertaining to 
the 2024-2025 fiscal period indicates the average producer price for 
Texas oranges and grapefruit for the 2024-2025 season should be 
approximately $14.15 per 7/10-bushel carton or equivalent. Therefore, 
utilizing the recommended assessment rate of $0.04 per 7/10-bushel 
carton or equivalent, assessment revenue for the 2024 fiscal period as 
a percentage of total producer revenue would be approximately 0.2 
percent ($0.04 divided by $14.15 times 100).
    This proposed rule would increase the assessment obligation imposed 
on handlers. Assessments are applied uniformly on all handlers, and 
some of the costs may be passed on to producers. However, these costs 
are expected be offset by the benefits derived by the operation of the 
Order.
    The Committee's meetings are widely publicized throughout the Texas 
citrus industry and all interested persons are invited to attend the 
meetings and participate in Committee deliberations on all issues. Like 
all Committee meetings, the June 18, 2024, 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 information 
collection impacts of this action on small businesses.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
chapter 35), the Order's information collection requirements have been 
previously approved by OMB and assigned OMB No. 0581-0189, Fruit Crops. 
No changes in those requirements would be necessary because of this 
proposed rule. Should any changes become necessary, they would be 
submitted to OMB for approval.
    This proposed rule would not impose any additional reporting or 
recordkeeping requirements on either small or large Texas citrus 
handlers. As with all Federal marketing order programs, reports and 
forms are periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    AMS has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this proposed rule.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any 
questions about the compliance guide should be sent to Antoinette 
Carter at the previously mentioned address in the FOR FURTHER 
INFORMATION CONTACT section.
    After consideration of all relevant material presented, including 
the information and recommendations submitted by the Committee and 
other available information, AMS has determined that this proposed rule 
is consistent with, and would effectuate the purposes of, the Act.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. All written comments timely received 
will be considered before a final determination is made on this 
proposed rule.

List of Subjects in 7 CFR Part 906

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

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service proposes to amend 7 CFR part 906 as follows:

PART 906--ORANGES AND GRAPEFRUIT GROWN IN LOWER RIO GRANDE VALLEY 
IN TEXAS

0
1. The authority citation for part 906 continues to read as follows:

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

0
2. Section 906.235 is revised to read as follows:

Sec.  906.235  Assessment rate.

    On and after August 1, 2024, an assessment rate of $0.04 per 7/10-
bushel

[[Page 3723]]

carton or equivalent is established for oranges and grapefruit grown in 
the Lower Rio Grande Valley in Texas.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2025-00193 Filed 1-14-25; 8:45 am]
BILLING CODE P
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