Watermelon Research and Promotion Plan; Increased Assessment Rate

<RULE> DEPARTMENT OF AGRICULTURE <SUBAGY>Agricultural Marketing Service</SUBAGY> <CFR>7 CFR Part 1210</CFR> <DEPDOC>[Doc. No. AMS-SC-24-0020]</DEPDOC> <SUBJECT>Watermelon Research and Promotion Plan; Increased Assessment Rate</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Agricultural Marketing Service (AMS), Department of Agriculture (USDA). <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This final rule implements a recommendation from the National Watermelon Promotion Board to increase the assessment rate from six cents per hundredweight to nine cents per hundredweight. Domestic watermelon producers of 10 acres or more and domestic first handlers of watermelons will each pay four and a half cents per hundredweight, and importers of 150,000 pounds or more annually of watermelons will pay nine cents per hundredweight. This final rule also amends current regulatory language to correct non-substantive and typographical errors. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This rule is effective January 22, 2025. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> William Hodges, Marketing Specialist, Mid-Atlantic Region Branch, Market Development Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, Room 1406-S, STOP 0244, Washington, DC 20250-0244; Telephone: (443) 571-8456; or Email: <E T="03">William.Hodges2@usda.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> This final rule affecting the Watermelon Research and Promotion Plan (7 CFR part 1210) (Plan) is authorized under the Watermelon Research and Promotion Act (7 U.S.C. 4901-4916) (Act). <HD SOURCE="HD1">Executive Orders 12866, 13563, and 14094</HD> USDA is issuing this 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 rule is not a significant regulatory action within the meaning of Executive Order 12866. Accordingly, this action has not been reviewed by the Office of Management and Budget under sec. 6 of the Executive order. <HD SOURCE="HD1">Executive Order 13175</HD> This action was reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, which requires agencies to consider whether their rulemaking actions will have Tribal implications. AMS has determined that this rule is unlikely to have substantial direct effects on one or more Indian Tribes, or the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. <HD SOURCE="HD1">Executive Order 12988</HD> This rule was reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. The Act provides that it shall not affect or preempt any other Federal or State law authorizing promotion or research relating to an agricultural commodity. Under sec. 1650 of the Act (7 U.S.C. 4909), a person may file a written petition with the Secretary of Agriculture (Secretary) if they believe that the Plan, any provision of the Plan, or any obligation imposed in connection with the Plan, is not in accordance with the law. In any petition, the person may request a modification of the Plan or an exemption from the Plan. The petitioner will have the opportunity for a hearing on the petition. Afterwards, an Administrative Law Judge (ALJ) will issue a decision. If the petitioner disagrees with the ALJ's ruling, the petitioner has 30 days to appeal to the Judicial Officer, who will issue a ruling on behalf of the Secretary. If the petitioner disagrees with the Secretary's ruling, the petitioner may file, within 20 days, an appeal in the U.S. District Court for the district where the petitioner resides or conducts business. <HD SOURCE="HD1">Background</HD> Under the Plan, the National Watermelon Promotion Board (Board) administers a nationally coordinated program of research, development, advertising, and promotion designed to strengthen the position of watermelons in the marketplace, and to establish, maintain, and expand markets for watermelons. To administer the program, §§ 1210.328 and 1210.341 of the Plan authorize the Board, with the approval of AMS, to formulate an annual budget of expenses and collect assessments on domestic producers growing 10 acres or more of watermelons, domestic first handlers of watermelons, and importers of 150,000 or more pounds of watermelons per year. The Board is familiar with both the program's needs and the rising costs of research and promotion initiatives and is able to formulate an appropriate budget and assessment rate. This final rule increases the assessment rate from six to nine cents per hundredweight of watermelons. Domestic watermelon producers of 10 acres or more and domestic first handlers of watermelons will each pay four and a half cents per hundredweight, and importers of 150,000 pounds or more annually of watermelons will pay nine cents per hundredweight. The Plan specifies that handlers are responsible for collecting and submitting both the producer and handler assessments to the Board, reporting their handling of watermelons, and maintaining records necessary to verify their reporting(s). Importers are responsible for payment of assessments to the Board on watermelons imported into the United States through the U.S. Customs Service and Border Protection. <HD SOURCE="HD1">Adjustment to the Assessment Rate</HD> This final rule amends § 1210.515 of the Plan by increasing the assessment rate from six cents per hundredweight to nine cents per hundredweight. The assessment on domestic watermelon producers of 10 acres or more and domestic first handlers of watermelons increases from three cents per hundredweight to four and a half cents per hundredweight, and the assessment on importers of 150,000 pounds or more annually of watermelons increases from six cents per hundredweight to nine cents per hundredweight. The Board recommended increasing the assessment rate to address inflation's impact on buying power while maintaining competitiveness in the marketplace. The Board discussed this recommendation over several months at various State and regional watermelon association meetings in addition to presenting at a public town hall meeting on February 23, 2024, at the National Watermelon Association's (NWA) annual convention. The Board sent out postcards to all industry contacts in their database to invite them to the NWA town hall meeting and provide information on the potential assessment increase. The Board met on February 24, 2024, and voted unanimously to propose the assessment increase. Board members present for the vote represented domestic producers, first handlers, and importers. Since the Board's inception in 1989, the Board only raised the assessment rate one other time, in 2008. From 2008 to 2023, according to the Board, the United States experienced inflation of 43.7%, which equates to 2.3% when compounded annually. This dollar devaluation translates to a loss in buying power of roughly 30% since the previous assessment increase was instituted. The erosion of buying power and continued inflationary pressure on funds limits the Board's research and promotion activities. The raised assessment rate further supports the Board's goal of a balanced budget beginning in 2025, while still allowing for increased research and promotion of watermelon across the Board's communication, marketing, foodservice, and research committees. Section 1210.341 of the Plan states, in part, that in the case of an importer, the assessment shall be equal to the combined rate for domestic producers and handlers and shall be paid by the importer at the time of entry of the watermelons into the United States. Accordingly, with the increased assessment rate of nine cents per hundredweight, domestic watermelon producers of 10 acres or more and domestic first handlers of watermelons will each pay four and a half cents per hundredweight, and importers of 150,000 pounds or more annually of watermelons will pay nine cents per hundredweight. This assessment increase is consistent with sec. 1647(f) of the Act (7 U.S.C. 4906(f)), that permits changes in the assessment rate through notice and comment procedures. Section 1210.341(b) of the Plan states that assessment rates shall be fixed by the Secretary in accordance with sec. 1647(f) of the Act (7 U.S.C. 4906(f)). Further, not more than one assessment on a producer, handler, or importer may be collected on any lot of watermelons. Accordingly, the final rule revises § 1210.515(a) of the Plan to reflect the recommendation of the Board as it relates to assessments. <HD SOURCE="HD1">Amending Regulatory Language</HD> The final rule also includes changes to § 1210.515(b) of the Plan to amend language and make non-substantive corrections to the text. These edits are administrative changes and will have no impact on the assessment rate. This final rule amends the misspelling of “scheudle” to “schedule”; amends “U.S. Customs Service (USCS)” to “U.S. Customs Service and Border Protection (Customs)”; amends “USCS” to “Customs”, and amends “of any other” to “or any othe ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 33k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━