Grapes Grown in a Designated Area of Southeastern California; Decreased Assessment Rate, 8141-8143 [E9-3850]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 74, Number 35 (Tuesday, February 24, 2009)]
[Rules and Regulations]
[Pages 8141-8143]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-3850]



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Federal Register / Vol. 74, No. 35 / Tuesday, February 24, 2009 / 
Rules and Regulations

[[Page 8141]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Doc. No. AMS-FV-08-0107; FV09-925-2 IFR]


Grapes Grown in a Designated Area of Southeastern California; 
Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: This rule decreases the assessment rate established for the 
California Desert Grape Administrative Committee (Committee) for the 
2009 and subsequent fiscal periods from $0.02 to $0.01 per 18-pound lug 
of grapes handled. The Committee locally administers the marketing 
order which regulates the handling of grapes grown in a designated area 
of southeastern California. Assessments upon desert grape handlers are 
used by the Committee to fund reasonable and necessary expenses of the 
program. The fiscal period begins January 1 and ends December 31. The 
assessment rate will remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Effective February 25, 2009. Comments received by April 27, 
2009, will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or Internet: https://
www.regulations.gov. Comments should reference the docket number and 
the date and page number of this issue of the Federal Register and will 
be 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 rule 
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: Jennifer Garcia, Marketing Specialist, 
or Kurt J. Kimmel, Regional Manager, California Marketing Field Office, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or E-mail: 
Jennifer.Garcia@ams.usda.gov or Kurt.Kimmel@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 
720-2491, Fax: (202) 720-8938, or E-mail: Jay.Guerber@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 925, as amended (7 CFR part 925), regulating the handling of grapes 
grown in a designated area of southeastern California, hereinafter 
referred to as the ``order.'' The order is effective under the 
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, California 
grape handlers are subject to assessments. Funds to administer the 
order are derived from such assessments. It is intended that the 
assessment rate as issued herein will be applicable to all assessable 
grapes beginning on January 1, 2009, and continue until amended, 
suspended, or terminated. This rule will not preempt any State or local 
laws, regulations, or policies, unless they present an irreconcilable 
conflict with this rule.
    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. 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 rule decreases the assessment rate established for the 
Committee for the 2009 and subsequent fiscal periods from $0.02 to 
$0.01 per 18-pound lug of grapes.
    The grape marketing order provides authority for the Committee, 
with the approval of USDA, to formulate an annual budget of expenses 
and collect assessments from handlers to administer the program. The 
members of the Committee are producers and handlers of California 
grapes. They are familiar with the Committee's needs and with the costs 
for goods and services in their local area, and are thus in a position 
to formulate an appropriate budget and assessment rate. The assessment 
rate is formulated and discussed in a public meeting. Thus, all 
directly affected persons have an opportunity to participate and 
provide input.
    For the 2007 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from crop year to crop year unless modified, suspended, or 
terminated by USDA upon recommendation and information submitted by the 
Committee or other information available to USDA.
    The Committee met on November 14, 2008, and unanimously recommended 
2009 expenditures of $77,692 and an assessment rate of $0.01 per 18-
pound lug of grapes. In comparison, last year's budgeted expenditures 
were $133,254. The assessment rate of $0.01 is one-half of the rate 
currently in effect. The

[[Page 8142]]

Committee recommended a lower assessment rate due to a significant 
decrease in management and administrative expenses for 2009.
    The major expenditures recommended by the Committee for the 2009 
fiscal period include $10,500 for compliance activities, $53,000 for 
salaries and payroll expenses, and $14,192 for other administrative 
expenses. In comparison, budgeted expenses for these items in 2008 were 
$5,000 for compliance activities, $61,000 for salaries, $18,000 for 
research, and $49,254 for other administrative expenses. The assessment 
rate recommended by the Committee was derived by the following formula: 
Anticipated 2009 expenses ($77,692) plus the desired 2009 ending 
reserve ($88,534), minus the 2009 beginning reserve ($100,226) plus 
anticipated interest income ($1,000), divided by the estimated 2009 
shipments (6.5 million 18-pound lugs).
    Income generated through the $.01 assessment rate ($65,000) plus 
interest income ($1,000) and reserve funds ($11,692) should be 
sufficient to meet anticipated expenses of ($77,692). Reserve funds by 
the end of 2009 are projected at $88,534 or about $10,800 over the 
Committee's 2009 expenses. Section 925.41 of the order permits the 
Committee to maintain approximately one fiscal period's expenses in 
reserve. The Committee plans to continue using reserve funds to help 
meet its expenses and bring the reserve to a level lower than its 
expenses.
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by USDA 
upon recommendation and information submitted by the Committee or other 
available information.
    Although this assessment rate is effective 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 USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA will evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking will 
be undertaken as necessary. The Committee's 2009 budget and those for 
subsequent fiscal periods will be reviewed and, as appropriate, 
approved by USDA.

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 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 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and 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 14 handlers of southeastern California 
grapes who are subject to regulation under the order and about 50 grape 
producers in the production area. Small agricultural service firms are 
defined by the Small Business Administration (13 CFR 121.201) as those 
having annual receipts of less than $7,000,000, and small agricultural 
producers are defined as those whose annual receipts are less than 
$750,000. Nine of the 14 handlers subject to regulation have annual 
grape sales of less than $7 million. Based on data from the National 
Agricultural Statistics Service (NASS) and the Committee, the average 
crop value for 2008 is about $53,040,000. Dividing this figure by the 
number of producers (50) yields an average annual producer revenue 
estimate of about $1,060,800, which is above the SBA threshold of 
$750,000. Based on the foregoing, it may be concluded that a majority 
of grape handlers and none of the producers may be classified as small 
entities.
    This rule decreases the assessment rate established for the 
Committee and collected from handlers for the 2009 and subsequent 
fiscal periods from $0.02 to $0.01 per 18-pound lug of grapes. The 
Committee unanimously recommended expenditures of $77,692 and an 
assessment rate of $0.01 per 18-pound lug of grapes for the 2009 fiscal 
period. The assessment rate of $0.01 is one-half of the rate currently 
in effect. The number of assessable grapes is estimated at 6.5 million 
18-pound lug of grapes. Thus, the $0.01 rate should provide $65,000 in 
assessment income. Income derived from handler assessments, along with 
interest income and funds from the Committee's authorized reserve will 
be adequate to cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2009 
fiscal period include $10,500 for compliance activities, $53,000 for 
salaries and payroll expenses, and $14,192 for other administrative 
expenses. In comparison, budgeted expenses for these items in 2008 were 
$5,000 for compliance activities, $61,000 for salaries, $18,000 for 
research, and $49,254 for other administrative expenses.
    Decreases in management and administrative expenses are the result 
of management services, office rental fees and utilities being shared 
by the Committee and the California Date Administrative Committee 
(CDAC). In 2008, the Committee and the CDAC agreed to share management 
and administrative costs in order to streamline expenses for both 
programs. Additionally, the Committee recommended not renewing its 
budget for research in 2009 given that there were no pending research 
proposals at the time the budget was reviewed.
    Prior to arriving at this budget, the Committee considered 
alternative expenditure and assessment rate levels, but ultimately 
decided that the recommended levels were reasonable to properly 
administer the order.
    The assessment rate recommended by the Committee was derived by the 
following formula: anticipated 2009 expenses ($77,692) plus the desired 
2009 ending reserve ($88,534), minus the 2009 beginning reserve 
($100,226) plus anticipated interest income ($1,000), divided by the 
estimated 2009 shipments (6.5 million 18-pound lugs).
    This rate should provide sufficient funds in combination with 
interest and reserve funds to meet the anticipated expenses of $77,692 
and result in a December 2009 ending reserve of $88,534. This figure is 
about $10,800 over the Committee's 2009 expenses. Section 925.41 of the 
order permits the Committee to maintain approximately one fiscal 
period's expenses in reserve. The Committee plans to continue using 
reserve funds to help meet its expenses and bring the reserve to a 
level lower than its expenses.
    To calculate the percentage of grower revenue represented by the 
assessment rate for 2008, the assessment rate of $0.02 per 18-pound lug 
is divided by the estimated average grower price (according to the 
NASS). This results in estimated assessment revenue for the 2008 season 
as a percentage of grower revenue of .245 percent ($0.02 divided by 
$8.16 per 18-pound lug). NASS data for 2009 is not yet available. 
However, applying the same calculations above using the average grower 
price for 2006-08 would result in estimated assessment revenue as a 
percentage of total grower revenue of .13 percent for the 2009

[[Page 8143]]

season ($0.01 divided by $7.77 per 18-pound lug). Thus, the assessment 
revenue should be well below 1 percent of estimated grower revenue in 
2009.
    This action decreases 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, decreasing the 
assessment rate reduces the burden on handlers, and may reduce the 
burden on producers. In addition, the Committee's meeting was widely 
publicized throughout the grape production area and all interested 
persons were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the November 
14, 2008, 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 interim final rule, 
including the regulatory and informational impacts of this action on 
small businesses.
    This action imposes no additional reporting or recordkeeping 
requirements on either small or large California grape handlers. As 
with all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http:/
/www.ams.usda.gov/AMSv1.0/
ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBus
inessGuide. Any questions about the compliance guide should be sent to 
Jay Guerber at the previously mentioned address in the FOR FURTHER 
INFORMATION CONTACT section.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect, and that good cause exists for not postponing the effective 
date of this rule until 30 days after publication in the Federal 
Register because: (1) The 2009 fiscal period began on January 1, 2009, 
and the marketing order requires that the rate of assessment for each 
fiscal period apply to all assessable grapes handled during such 
period; (2) the action decreases the assessment rate for assessable 
grapes beginning with the 2009 fiscal period; (3) handlers are aware of 
this action which was unanimously recommended by the Committee at a 
public meeting and is similar to other assessment rate actions issued 
in past years; and (4) this interim final rule provides a 60-day 
comment period, and all comments timely received will be considered 
prior to finalization of this rule.

List of Subjects in 7 CFR Part 925

    Grapes, Marketing agreements, Reporting and recordkeeping 
requirements.


0
For the reasons set forth in the preamble, 7 CFR part 925 is amended as 
follows:

PART 925--GRAPES GROWN IN A DESIGNATED AREA OF SOUTHEASTERN 
CALIFORNIA

0
1. The authority citation for 7 CFR part 925 continues to read as 
follows:

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


0
2. Section 925.215 is revised to read as follows:


Sec.  925.215  Assessment rate.

    On and after January 1, 2009, an assessment rate of $0.01 per 18-
pound lug is established for grapes grown in a designated area of 
southeastern California.

    Dated: February 18, 2009.
Robert C. Keeney,
Acting Associate Administrator.
[FR Doc. E9-3850 Filed 2-23-09; 8:45 am]
BILLING CODE 3410-02-P