AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Proposed rule.

SUMMARY:

This proposed rule invites comments on a recommendation from the Citrus Administrative Committee (Committee) to establish reporting requirements under the Federal marketing order for oranges, grapefruit, tangerines, and pummelos grown in Florida. This action would require Florida citrus handlers who handle citrus grown within the production area to register with the Committee. This proposal also announces the Agricultural Marketing Service's (AMS) intention to request approval from the Office of Management and Budget (OMB) of a new information collection.

DATES:

Comments must be received by July 6, 2020. Pursuant to the Paperwork Reduction Act, comments on the information collection burden must be received by July 6, 2020.

ADDRESSES:

Interested persons are invited to submit written comments concerning this proposal. Comments must be sent to the Docket Clerk, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Fax: (202) 720-8938; or internet: https://www.regulations.gov. All comments should reference the document number and the date and page number of this issue of the Federal Register and will be made available for public inspection in the Office of the Docket Clerk during regular business hours, or can be viewed at: https://www.regulations.gov. All comments submitted in response to this proposal will be included in the record and will be made available to the public. Please be advised that the identity of the individuals or entities submitting the comments will be made public on the internet at the address provided above.

FOR FURTHER INFORMATION CONTACT:

Jennie M. Varela, Marketing Specialist, or Christian D. Nissen, Regional Director, Southeast Marketing Field Office, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 291-8614, or Email: Jennie.Varela@usda.gov or Christian.Nissen@usda.gov.

Small businesses may request information on complying with this regulation by contacting Richard Lower, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email: Richard.Lower@usda.gov.

SUPPLEMENTARY INFORMATION:

This action, pursuant to 5 U.S.C. 553, proposes an amendment to 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. 905, as amended (7 CFR part 905), regulating the handling of oranges, grapefruit, tangerines, and pummelos grown in Florida. Part 905 (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 citrus operating within the area of production, and a public member.

The Department of Agriculture (USDA) is issuing this proposed rule in conformance with Executive Orders 13563 and 13175. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review. Additionally, because this proposed rule does not meet the definition of a significant regulatory action, it does not trigger the requirements contained in Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017).

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. This proposed rule is not intended to have retroactive effect.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to a marketing order may file with USDA a petition stating that the marketing order, any provision of the marketing order, or any obligation imposed in connection with the marketing order, is not in accordance with law and request a modification of the marketing order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This proposed rule would establish handler reporting requirements under the Order. This action would require Florida citrus handers to register annually with the Committee. This would allow the Committee to verify citrus handler information and would assist with the administration of the Order, including compliance. These changes were unanimously recommended by the Committee at a public meeting on November 14, 2019.

Section 905.7 of the Order provides the authority to require handlers to be registered with the Committee pursuant to rules recommended by the Committee and approved by the Secretary. This proposed rule would use this authority to establish a new § 905.107 in the administrative provisions of the Order, which would require Florida citrus handlers to be registered with the Committee at the beginning of each fiscal year and establish the requirements for registration. It would also require that handlers must be registered and obtain the Committee's certification as a registered handler to ship any citrus outside the production area.

A final rule published in the Federal Register on March 1, 2016, (81 FR 10451) amended the Order to, in part, provide the authority to the Committee to require handlers to register with the Committee. Based on the formal rulemaking hearing record, the Committee recommended this action to provide an accurate and timely record of handlers for the purposes of fostering more efficient communication with handlers and strengthening the compliance provisions of the Order. The addition of this proposed authority, along with the other amendments included in the 2016 amendatory action, were supported by 96 percent of the growers voting and by 99 percent of the volume voted in the amendatory grower referendum.

The Committee met on November 14, 2019, and discussed establishing a requirement for handlers to register with the Committee under the Order. The issue had been raised over the course of previous meetings and Committee members recognized the need to maintain an accurate list of handlers in operation for the purposes of administering the Order and communicating with the industry. The Committee believes requiring handlers to register with the Committee at the beginning of each fiscal period would provide current and accurate handler information, improve communication between the Committee and the handlers, and assist with administering the Order, including compliance.

Currently, the Committee depends on third-party handler data from the Florida Department of Agriculture and Consumer Services (FDACS). FDACS licenses handlers pursuant to a State program and carries out the inspections required by the Order. The Committee contracts with FDACS annually to provide handler data and shipment information used to calculate handler assessments. However, given the continuing changes in the industry, and the timing of when this information is collected by FDACS, it is not always current and accurate.

During the above-mentioned Committee meetings, participants discussed that consolidation and other changes within the Florida citrus handler community have made it difficult for the Committee to maintain accurate information. Implementing the proposed handler registration in the Order would assist the Committee in its administration of the Order by updating handler contact information each fiscal period.

In recent years, citrus greening has significantly reduced Florida's fresh citrus production. For fiscal year 2012-2013, Committee data indicate fresh citrus production totaled 5.9 million boxes and was being handled by 45 handler businesses. By fiscal year 2018-2019, fresh citrus production dropped to 4.5 million boxes handled by approximately 20 handlers. These numbers obtained from the Committee represent a 24-percent decline in fresh production and a 60-percent decline in the number of handlers over a five-year period.

Due to the rapid consolidation and changing resources within the fresh citrus industry, the Committee is concerned that FDACS may, at some point, stop collecting and providing handler information. Implementing a handler registration requirement would serve as an efficient means to obtain accurate and timely handler data and assist the Committee in administering the Order relying on its own information and resources.

In accordance with the proposed registered handler requirements, handlers would need to apply for registration with the Committee prior to beginning of each fiscal year on forms provided by the Committee. The application would require handler information, including: The address for each packing facility; contact information (including telephone and email if available); and handler business classification as an individual, partnership, corporation or cooperative. Handlers would need to submit this form to the Committee no later than August 1 of each fiscal period.

To meet the requirements to become a registered handler, the handler's facilities would need to be in the production area in permanent, nonportable buildings with nonportable equipment for grading, sizing, washing and packing Florida-grown citrus. Additionally, each handler would be annually inspected by Committee staff or its authorized agents to verify compliance with these requirements. The Committee indicated all current handlers already meet these criteria. Committee staff would also verify that all assessments, reporting, and any other Order requirements have been met by the handler prior to approval of the application. If the applicant meets all of the above criteria, the applicant would be certified as a registered handler and be notified in writing by email or mail.

The Committee also agreed that the registered handler requirement would assist with administering compliance under the Order, including encouraging the timely payment of assessments. While the Committee and industry are not currently experiencing major compliance issues, given the ongoing changes to the industry and resource allocation, the Committee believes unforeseen compliance issues may arise. The handler registration requirement would serve as a preemptive measure for compliance and enforcement.

With this proposed change, the Committee would be able to cancel or deny a handler's registration certification, for good cause, with approval of Secretary. Should the handler fail to pay assessments within 90 days of the date of invoice, fail to provide required reports, or no longer have adequate facilities, the Committee would have the authority to cancel a registered handler's certification with the approval of the Secretary. Under the Committee's compliance plan, Committee staff currently refers cases of nonpayment of assessments to USDA for possible enforcement action at 60 days after the invoice is issued. The Committee determined that allowing an additional 30 days before cancellation of registration would afford handlers sufficient notice and opportunity to comply with the assessment requirements. The enforcement process for failure to submit required reports is similar.

Should a handler ship fruit without inspection, the handler's certification would be cancelled for a minimum of two weeks. In this type of situation where there is no opportunity to correct the violation, the Committee determined that a brief cancellation of certification was the most appropriate penalty. Handlers could remain in business but would not be able to ship regulated citrus out of State. The time period of cancellation could be extended, up to the maximum of the remainder of the shipping season, with the approval of the Secretary, if the violation were more serious or repetitive.

If a handler's certification is cancelled, the Committee would notify the handler in writing outlining the effective date and the reason(s) for the cancellation. If the handler corrects the deficiencies which resulted in cancellation, and notifies the Committee in writing of the correction, the Committee would recertify the handler after verification of compliance. If the handler opts to appeal the cancellation, the handler may do so by appealing to the Secretary.

If a handler is not certified as a registered handler, inspection certificates issued for lots handled by that handler would include a statement to that effect. The inspection certificate for all such lots would read “Fails to meet the requirements of Marketing Order 905 because the handler is not a registered handler.” These failing certificates would be issued, regardless of the grade, size or container of the citrus inspected. The Committee would keep FDACS apprised of each handler's certification status.

The FDACS Office of Agricultural Law Enforcement releases citrus shipments for interstate commerce only if the inspection certificates indicate the shipments meet the Order's requirements. Thus, if the proposal is implemented, handlers not certified as a registered handler by the Committee would not be able to ship regulated citrus outside of the regulated area. This proposed action should serve as a strong tool to encourage compliance with the Order requirements, helping the industry to avoid potential compliance issues moving forward, or to address compliance issues without having to move to other enforcement actions.

Any handler who is denied a registered handler certificate or has a registered handler certificate cancelled would be able to appeal to the Secretary for consideration. An appeal would have to be submitted in writing to the Secretary within 90 days of the denial. After the appeal request is reviewed and considered by the Secretary, the handler would be notified of the Secretary's decision in writing.

This proposed action would require that all Florida citrus handlers register with the Committee annually. Establishing this handler registration requirement would help facilitate operations under the Order and assist with compliance, including ensuring that product is correctly inspected, and assessments are paid in a timely manner.

Initial Regulatory Flexibility Analysis

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of 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 through group action of essentially small entities acting on their own behalf.

There are approximately 20 handlers of Florida citrus who are subject to regulation under the Order and approximately 500 citrus producers in the regulated area. Small agricultural service firms are defined by the Small Business Administration (SBA) as those having annual receipts of less than $30,000,000, and small agricultural producers are defined as those having annual receipts of less than $1,000,000 (13 CFR 121.201).

According to data from the National Agricultural Statistics Service (NASS), the industry, and the Committee, the weighted average free on board price for fresh Florida citrus for the 2018-19 season was approximately $16.69 per carton with total shipments of around 9 million cartons. Using the number of handlers, and assuming a normal bell-curve distribution, the majority of handlers have average annual receipts of less than $30,000,000 ($16.69 times 9,023,704 cartons equals $150,605,620 divided by 20 handlers equals $7,530,281 per handler).

In addition, based on the NASS data, the weighted average grower price for the 2018-19 season was estimated at $11.05 per carton of fresh citrus. Based on grower price, shipment data, and the total number of Florida citrus growers, and assuming a normal bell-curve distribution, the average annual grower revenue is below $1,000,000 ($11.05 × 9,023,704 million cartons equals $99,711,929 divided by 500 growers equals $199,424 per grower). Thus, the majority of Florida citrus handlers and growers may be classified as small entities.

This proposed rule would establish handler reporting requirements in the Order. This action would require Florida citrus handlers to register annually with the Committee. This would allow the Committee to collect information to verify who is handling Florida citrus and would be used to assist with administering the Order, including compliance. This proposal would establish a new § 905.107 in Subpart B, Administrative Requirements, of the Order using the authority provided in § 905.7.

It is not anticipated that this change would result in any significant cost to the industry. Requiring handlers to register with the Committee would impose an increase in the reporting burden on all Florida citrus handlers. However, the information requested is readily available and would only be required to be submitted once a year. Regarding the other requirements to qualify as a registered handler, such as nonportable buildings and having the necessary equipment to prepare fruit for market, all current handlers already meet these requirements. Consequently, no additional cost would be needed to comply with the requirements to be a registered handler.

Should a handler fall out of compliance with Order requirements and lose its registered handler status, there could be some cost relative to not being able to ship regulated citrus outside of the regulated area. However, such a handler would still be able to market fruit within the regulated area and be able to address and rectify the problems that resulted in the cancellation of its registered handler status. Therefore, these costs should be minimal, and only impact handlers that have failed to comply with requirements.

This proposed action would assist the Committee in administering compliance with the Order, including the timely collection of assessments. The benefits of this proposed rule are expected to be equally available to all citrus growers and handlers, regardless of their size.

The Committee discussed the alternative of not establishing a registered handler requirement but determined that obtaining current and accurate handler information and having another enforcement tool under the Order are important.

The Committee considered multiple options regarding the potential problem of a handler shipping fruit without inspection. The Committee discussed cancelling a handler's certification indefinitely or for the rest of the fiscal period. However, the Committee recognized that there could be varying degrees of noncompliance with the inspection requirement. The Committee determined that the two-week cancellation minimum would serve as an appropriate deterrent and afford the Committee the flexibility to extend that period up to the maximum of the end of the shipping season, if the handler repeatedly violates the inspection requirements or any other requirements of the Order.

The Committee also discussed several options regarding the proposed appeals process, ranging from 30 days to appeal to an open-ended process, and whether Committee members should review appeals themselves. After discussion, the Committee determined that a 90-day period from the date of denial or cancellation would allow the handler sufficient time to contact the Committee staff and resolve the issue in a timely manner. To maintain confidentiality of information, the Committee also agreed that members themselves would not be involved in the appeal review process. The Committee agreed that an appeal could be made to the Secretary. Thus, the alternatives were rejected.

This proposal would establish one new reporting requirement for handlers and would require one new Committee form. Therefore, this proposed rule would impose an increase in the reporting burden for all handlers, which is discussed in the Paperwork Reduction Act section of this document.

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. USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

The 2019 Committee meeting was widely publicized throughout the citrus industry, and all interested persons were invited to attend the meeting and participate in Committee deliberations. Like all Committee meetings, the November 14, 2019 meeting was a public meeting, and all entities, both large and small, were able to express their views on this issue, and both producer and handler Committee members were able to assist in the development of the recommended form and procedures submitted to USDA. Interested persons are invited to submit comments on this proposed rule, including the regulatory and information collection impacts of this action on small businesses.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: https://www.ams.usda.gov/​rules-regulations/​moa/​small-businesses. Any questions about the compliance guide should be sent to Richard Lower at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

A 60-day comment period is provided to allow interested persons to respond to this proposal. All written comments timely received will be considered before a final determination is made on this matter.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), this notice announces AMS's intent to request approval from OMB for a new information collection under OMB No. 0581-NEW. The new form will be merged with the forms currently approved under OMB No. 0581-0189 Fruit Crops.

This proposed rule would create a new form for Florida citrus handlers, titled Application for Registration as Fresh Citrus Handler.

Title: Oranges, Grapefruit, Tangerines, and Pummelos Grown in Florida; Marketing Order No. 905.

OMB Number: 0581-NEW.

Type of Request: New Collection.

Abstract: The information requirements in this request are essential to carry out the intent of the Act to provide the respondents the type of service they request, and to administer the Federal marketing order for oranges, grapefruit, tangerines, and pummelos grown in Florida. USDA is responsible for overseeing the Order regulating the handling of Florida citrus. The Order is effective under the Act.

The Committee unanimously recommended that Florida citrus handlers subject to the Order provide the Committee with location and contact information at the beginning of each fiscal period. This form, titled “Application for Registration as Fresh Citrus Handler” would be submitted directly to the Committee once each year no later than August 1. The report would provide the Committee with information on each handler location, the type of business, and the names and contact information of individuals having a financial interest in each business.

The Order authorizes the Committee to collect certain information from handlers. The information collected would only be used by authorized representatives of the USDA, including the AMS Specialty Crops Program regional and headquarters staff, and authorized employees of the Committee. All proprietary information would be kept confidential in accordance with the Act and the Order.

The proposed request for new information collection under the Order is as follows:

Application for Registration as Fresh Citrus Handler

Estimate of Burden: Public reporting burden for this collection of information is estimated to be an average of 0.165 hours per response.

Respondents: Handlers subject to the marketing order regulating oranges, grapefruit, tangerines, and pummelos grown in Florida.

Estimated Number of Respondents: 20.

Estimated Number of Responses per Respondent: 1.

Estimated Total Annual Responses: 20.

Estimated Total Annual Burden on Respondents: 3.3 hours.

Comments are invited on: (1) Whether the proposed collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility; (2) the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

Comments should reference OMB No. 0581-NEW and the Marketing Order for Oranges, Grapefruit, Tangerines, and Pummelos Grown in Florida and should be sent to the USDA in care of the Docket Clerk at the previously mentioned address or at https://www.regulations.gov.

All responses to this notice will be summarized and included in the request for OMB approval. All comments received will become a matter of public record and will be available for public inspection during regular business hours at the address of the Docket Clerk or at https://www.regulations.gov.

If this proposed rule is finalized, this information collection will be merged with the forms currently approved under OMB No. 0581-0189, Fruit Crops.

List of Subjects 7 CFR Part 905

• Grapefruit
• Marketing agreements
• Oranges
• Pummelos
• Reporting and recordkeeping requirements
• Tangerines

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

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

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

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

2. Add § 905.107 to read as follows: