Grapes Grown in a Designated Area of Southeastern California; Decreased Assessment Rate, 8802-8804 [2018-04010]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 83, Number 41 (Thursday, March 1, 2018)]
[Proposed Rules]
[Pages 8802-8804]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-04010]


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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. 83, No. 41 / Thursday, March 1, 2018 / 
Proposed Rules

[[Page 8802]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Doc. No. AMS-SC-17-0082; SC18-925-1 PR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
California Desert Grape Administrative Committee (Committee) to 
decrease the assessment rate established for the 2018 fiscal period and 
subsequent fiscal periods. This proposed rule also makes administrative 
revisions to the subpart headings to bring the language into 
conformance with the Office of Federal Register requirements.

DATES: Comments must be received by April 2, 2018.

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, 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. Comments should reference the document 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: Maria Stobbe, Marketing Specialist or 
Jeffrey Smutny, Regional Director, California Marketing Field Office, 
Marketing Order and Agreement Division, Specialty Crops Program, AMS, 
USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or Email: 
[email protected] or [email protected].
    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: [email protected].

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 Agreement No. 925 and Order No. 925, as amended (7 CFR part 
925), regulating the handling of grapes grown in a designated area of 
southeastern California. Part 925 (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 grapes operating within the area of production, and a 
member of the public.
    The Department of Agriculture (USDA) is issuing this 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 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'[thinsp]'' (February 2, 2017).
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the 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. Assessment fees charged to grape handlers are used by the 
Committee to fund reasonable and necessary expenses of the program. It 
is intended that the assessment rate as proposed herein would be 
applicable to all assessable grapes beginning on January 1, 2018, 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 decrease the assessment rate for the 2018 
and subsequent fiscal periods from $0.030 to $0.020 per 18-pound lug of 
grapes handled.
    The 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, and a member of the public. 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 2016 and subsequent fiscal periods the Committee 
recommended, and USDA approved, an assessment rate

[[Page 8803]]

of $0.030 per 18-pound lug of grapes. That rate would continue in 
effect 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 30, 2017 and unanimously recommended 
2018 fiscal year expenditures of $119,000, with an estimated cash 
reserve of $115,000, and an assessment rate of $0.020 per 18-pound lug 
of grapes. In comparison, last fiscal year's budgeted expenditures were 
$108,500. The assessment rate of $.020 is $0.010 lower than the rate 
currently in effect. The 2017 crop, at the higher assessment rate 
currently in effect, provided more income than required to cover 
expenses, resulting in an estimated cash reserve of $140,000. The cash 
reserves are sufficient to supplement this fiscal year's revenues at an 
assessment rate of $0.020 per 18-pound lug of grapes to fully fund the 
recommended 2018 budgeted expenditures.
    The major expenditures recommended by the Committee for the 2018 
fiscal year include $65,000 for management and compliance services, 
$25,500 in office expenditures, and $28,500 for research. Budgeted 
expenses for these items in fiscal year 2017 were $50,000 for 
management and compliance services, $28,330 in office expenditures, and 
$28,500 for research.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, expected shipments of grapes in the 
production area, and the level of funds in the authorized reserve. 
Grape shipments for fiscal year 2018 are estimated at 4,700,000 18-
pound lugs, which should provide $94,000 in assessment income. Income 
derived from handler assessments, along with interest income and funds 
from the Committee's authorized reserve, would be adequate to cover 
budgeted expenses. Funds in the reserve (currently $140,000) would be 
reduced by $25,000 and would be within the maximum permitted by the 
Order. Section 925.42(a)(2) authorizes the Committee to carry over 
excess funds into subsequent fiscal years provided that funds in the 
reserve not exceed approximately one fiscal period's expenses. The 
Committee may utilize the reserve funds to defray expenses during any 
fiscal period. The Committee proposes to utilize approximately $25,000 
of its carry-over reserve funds to fully fund the fiscal year 2018 
proposed budget, while assessing the new fiscal year 2018 crop at the 
proposed lower rate; thereby maintaining the carry-over reserve fund 
within the authorized limit allowed by the Order.
    The proposed assessment rate would 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 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 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 budget for fiscal year 2018 
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 38 producers of grapes in the production 
area and approximately 14 handlers subject to regulation under the 
Order. Small agricultural producers are defined by the Small Business 
Administration (SBA) as those having annual receipts less than 
$750,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $7,500,000 (13 CFR 121.201).
    Eleven of the 14 handlers subject to the Order have annual grape 
sales of less than $7,500,000, according to USDA Market News Service 
and Committee data. In addition, information from the Committee and 
USDA's Market News indicates that at least ten of 38 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 ten 
of the producers could be classified as small entities under the SBA's 
definitions.
    This proposal would decrease the assessment rate collected from 
handlers for the 2018 and subsequent fiscal periods from $0.030 to 
$0.020 per 18-pound lug of grapes. The Committee unanimously 
recommended fiscal year 2018 expenditures of $119,000 and an assessment 
rate of $0.020 per 18-pound lug. The proposed assessment rate of $0.020 
is $0.010 lower than the 2017 rate. The quantity of assessable 
commodity for the 2018 fiscal year is estimated at 4,700,000 18-pound 
lugs. Thus, the $0.020 rate should provide $94,000 in assessment 
income. That amount plus the use of reserve funds of $25,000 should be 
adequate to meet this 2018 fiscal year's expenses. Income derived from 
handler assessments, along with interest income and funds from the 
Committee's authorized reserve, would be adequate to cover budgeted 
expenses.
    The major expenditures recommended by the Committee for the 2018 
fiscal year include $65,000 for management and compliance services, 
$25,500 in office expenditures, and $28,500 for research. Budgeted 
expenses for these items in 2017 were $50,000 for management and 
compliance services, $28,330 in office expenditures, and $28,500 for 
research.
    Funds in the reserve (currently $140,000) would be reduced by 
$25,000 to be within the maximum permitted by the Order. Section 925.42 
provides the Committee authority to carry over excess funds into 
subsequent fiscal years provided that funds in the reserve do not 
exceed approximately one fiscal period's expenses. The Committee is 
authorized to utilize the excess funds to defray expenses during any 
fiscal period. The Committee proposes to utilize approximately $25,000 
of its carry-over reserve funds to fully fund the 2018 proposed budget, 
while assessing the new 2018 crop at the proposed lower rate; thereby 
maintaining the carry-over reserve fund within the authorized limit 
stated in the Order, approximately one fiscal period's expenses.
    Prior to arriving at this budget and assessment rate, the Committee 
considered various options, such as maintaining the current assessment 
rate and expenditure levels. Alternative expenditure levels were 
discussed by the Committee, based upon the relative value of various 
activities to the grape

[[Page 8804]]

industry. The Committee ultimately determined that 2018 expenditures of 
$119,000 were appropriate, and the recommended assessment rate and the 
use of $25,000 from the carry-over financial reserves would provide 
sufficient revenue to meet its expenses.
    A review of historical crop and price information, as well as 
preliminary information pertaining to the upcoming fiscal period, 
indicates that the shipping point price for the 2017 season averaged 
about $21.62 per 18-pound lug of California desert grapes handled. If 
the 2018 price is similar to the 2017 price, estimated assessment 
revenue as a percentage of total estimated handler revenue would be 
0.09 percent for the 2018 season ($0.020 divided by $21.62 per 18-pound 
lug).
    This action would decrease 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 would reduce the burden on handlers, and may reduce the 
burden on producers. In addition, the Committee's meeting was widely 
publicized throughout the production area. The grape industry and all 
interested persons were invited to attend the meeting and participate 
in Committee deliberations on all issues. Like all Committee meetings, 
the November 30, 2017, 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. No changes 
in those requirements are necessary as a result of this action. 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 southeastern 
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/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 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 rule.

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 part 925 continues to read as follows:

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

0
2. Sections 925.1 through 925.69 are designated as subpart A under a 
heading to read as follows:

Subpart A--Order Regulating Handling [Subpart Redesignated as 
Subpart B and Amended]

0
3. Redesignate ``Subpart--Rules and Regulations'' as subpart B and 
revise the heading to read as follows:

Subpart B--Administrative Requirements [Subpart Redesignated as 
Subpart C]

0
4. Redesignate ``Subpart--Assessment Rates'' as ``Subpart C Assessment 
Rates''.
0
5. Section 925.215 is revised to read as follows:


Sec.  925.215   Assessment rate.

    On and after January 1, 2018, an assessment rate of $0.020 per 18-
pound lug is established for grapes grown in a designated area of 
southeastern California.

    Dated: February 22, 2018.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2018-04010 Filed 2-28-18; 8:45 am]
 BILLING CODE 3410-02-P