Grapes Grown in a Designated Area of Southeastern California; Increased Assessment Rate, 17940-17942 [2014-07012]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 79, Number 61 (Monday, March 31, 2014)]
[Proposed Rules]
[Pages 17940-17942]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-07012]


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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. 79, No. 61 / Monday, March 31, 2014 / 
Proposed Rules

[[Page 17940]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Doc. No. AMS-FV-14-0010; FV14-925-1 PR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would increase the assessment rate 
established for the California Desert Grape Administrative Committee 
(Committee) for the 2014 and subsequent fiscal periods from $0.0165 to 
$0.0200 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 
grape handlers are used by the Committee to fund reasonable and 
necessary expenses of the program. The fiscal period began on January 1 
and ends December 31. The assessment rate would remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by April 15, 2014.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Fruit and Vegetable 
Program, 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 
proposed 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: Kathie M. Notoro, Marketing 
Specialist, or Martin Engeler, Regional Director, California Marketing 
Field Office, Marketing Order and Agreement Division, Fruit and 
Vegetable Program, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 
487-5906, or Email: Kathie.Notoro@ams.usda.gov or 
Martin.Engeler@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation 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: This proposed 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 proposed rule 
in conformance with Executive Orders 12866, 13563, and 13175.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the marketing order now in effect, grape 
handlers in a designated area of southeastern California are subject to 
assessments. Funds to administer the order are derived from such 
assessments. It is intended that the assessment rate as proposed herein 
would be applicable to all assessable grapes beginning on January 1, 
2014, 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 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 established 
for the Committee for the 2014 and subsequent fiscal periods from 
$0.0165 to $0.0200 per 18-pound lug of grapes handled.
    The grape 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 grapes grown in a designated 
area of southeastern California. They are familiar with the Committee's 
needs and with the costs of 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 2014 and subsequent fiscal periods, the Committee 
recommended, and the USDA approved, an assessment rate that would 
continue in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by USDA based upon recommendation and 
information submitted by the Committee or other information available 
to USDA.
    The Committee met on November 5, 2013, and unanimously recommended 
2014 expenditures of $110,000, and an assessment rate of $0.0200 per 
18-pound lug of grapes handled. In comparison, last year's budgeted 
expenditures were $100,000. The Committee recommended a crop estimate 
of 5,500,000 18-pound lugs, which is lower than the 5,800,000 18-pound 
lugs handled last year. The Committee also recommended carrying over a 
financial reserve of $49,000,

[[Page 17941]]

which would increase to $59,000 if the contingency fund was not 
expended. The assessment rate of $0.0200 per 18-pound lug of grapes 
handled recommended by the Committee is $0.0035 higher than the $0.0165 
rate currently in effect. The higher assessment rate, applied to 
shipments of 5,500,000 18-pound lugs, would generate $110,000 in 
revenue and be sufficient to cover the anticipated expenses.
    The major expenditures recommended by the Committee for the 2014 
fiscal period include $15,500 for research, $22,000 for general office 
expenses, $62,500 for management and compliance expenses, and $10,000 
for a contingency reserve. The $15,500 research project is a 
continuation of a vine study in progress by the University of 
California, Riverside. In comparison, major expenditures for the 2013 
fiscal period included $15,500 for research, $17,000 for general office 
expenses, and $67,500 for management and compliance expenses. Overall 
2014 expenditures include a decrease in management and compliance 
expenses, an increase in general office expenses, and additional funds 
for the contingency reserve.
    The assessment rate recommended by the Committee was derived by 
evaluating several factors, including estimated shipments for the 2014 
season, budgeted expenses, and the level of available financial 
reserves. The Committee determined that the $0.0200 assessment rate 
would generate $110,000 in revenue to cover the budgeted expenses of 
$110,000.
    Reserve funds by the end of 2014 are projected to be $49,000 if the 
$10,000 added to the contingency fund is expended or $59,000 if it is 
not expended. Both amounts are well within the amount authorized under 
the order. Section 925.41 of the order permits the Committee to 
maintain approximately one fiscal period's expenses in reserve.
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA based upon a 
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 would 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 would evaluate the 
Committee's 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 
2014 budget and those for subsequent fiscal periods would 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 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 15 handlers of southeastern California 
grapes who are subject to regulation under the marketing order and 
about 41 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. Ten of the 15 handlers subject to regulation 
have annual grape sales of less than $7,000,000, according to USDA 
Market News Service and Committee data. Based on information from the 
Committee and USDA's Market News, it is estimated that at least 10 of 
41 producers have annual receipts of less than $750,000. Thus, it may 
be concluded that a majority of the grape handlers regulated under the 
order and about 10 of the producers could be classified as small 
entities under the Small Business Administration's definitions.
    This proposed rule would increase the assessment rate established 
for the Committee and collected from handlers for the 2014 and 
subsequent fiscal periods from $0.0165 to $0.0200 per 18-pound lug of 
grapes. The Committee unanimously recommended 2014 expenditures of 
$110,000, and an assessment rate of $0.0200 per 18-pound lug of grapes 
handled. The proposed assessment rate of $0.0200 is $0.0035 higher than 
the 2013 rate currently in effect. The quantity of assessable grapes 
for the 2014 season is estimated at 5,500,000 18-pound lugs. Thus, the 
$0.0200 rate should generate $110,000 in income. In addition, reserve 
funds at the end of the year are projected to be $49,000, which is well 
within the order's limitation of approximately one fiscal period's 
expenses.
    The major expenditures recommended by the Committee for the 2014 
fiscal period include $15,500 for research, $22,000 for general office 
expenses, $62,500 for management and compliance expenses, and $10,000 
for the contingency reserve. In comparison, major expenditures for the 
2013 fiscal period included $15,500 for research, $17,000 for general 
office expenses, and $67,500 for management and compliance expenses. 
Overall expenditures included a decrease in management and compliance 
expenses, an increase in general office expenses, and funding of a 
contingency reserve.
    Prior to arriving at this budget, the Committee considered 
alternative expenditures and assessment rates, to include not 
increasing the $0.0165 assessment rate currently in effect. Based on a 
crop estimate of 5,500,000 18-pound lugs, the Committee ultimately 
determined that increasing the assessment rate to $0.0200 would 
generate sufficient funds to cover budgeted expenses. Reserve funds at 
the end of the 2014 fiscal period are projected to be $49,000 if the 
$10,000 contingency fund is expended or $59,000 if it is not expended. 
These amounts are well within the amount authorized under the order.
    A review of historical crop and price information, as well as 
preliminary information pertaining to the upcoming fiscal period, 
indicates that the producer price for the 2013 season averaged about 
$16.20 per 18-pound lug of California grapes handled. Utilizing the 
estimate and the proposed assessment rate of $0.0200, estimated 
assessment revenue as a percentage of total estimated producer revenue 
would be 0.12 percent for the 2014 season ($0.0200 divided by $16.20 
per 18-pound lug). Thus, the assessment revenue should be well below 1 
percent of estimated producer revenue in 2014.
    This action would increase the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to producers. However, these costs 
would be offset by the benefits derived from the operation

[[Page 17942]]

of the marketing order. In addition, the Executive Subcommittee and the 
Committee's meetings were widely publicized throughout the grape 
production area and all interested persons were invited to attend and 
participate in Committee deliberations on all issues. Like all 
Committee meetings, the November 5, 2013, 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 informational 
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 the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0189. No changes in those requirements as a 
result of this action are necessary. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This proposed rule would impose 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 action.
    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/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Jeffrey Smutny at the 
previously-mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    A 15-day comment period is provided to allow interested persons to 
respond to this proposed rule. Fifteen days is deemed appropriate 
because: (1) The 2014 fiscal period began on January 1, 2014, and the 
order requires that the rate of assessment for each fiscal period apply 
to all assessable grapes handled during such fiscal period; (2) the 
Committee needs to have sufficient funds to pay its expenses, which are 
incurred on a continuous basis; and (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.

List of Subjects in 7 CFR Part 925

    Grapes, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 925 is 
proposed to be 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, 2014, an assessment rate of $0.0200 per 18-
pound lug is established for grapes grown in a designated area of 
southeastern California.

    Dated: March 12, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-07012 Filed 3-28-14; 8:45 am]
BILLING CODE 3410-02-P