Raisins Produced From Grapes Grown in California; Recommended Decision and Opportunity To File Written Exceptions to Proposed Amendment of Marketing Order No. 989, 74851-74866 [2024-20079]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 89, Number 178 (Friday, September 13, 2024)]
[Proposed Rules]
[Pages 74851-74866]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-20079]


========================================================================
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.

========================================================================


Federal Register / Vol. 89, No. 178 / Friday, September 13, 2024 / 
Proposed Rules

[[Page 74851]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Doc. No. AMS-SC-23-0039; 23-J-0080]


Raisins Produced From Grapes Grown in California; Recommended 
Decision and Opportunity To File Written Exceptions to Proposed 
Amendment of Marketing Order No. 989

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule and opportunity to file exceptions.

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

SUMMARY: This recommended decision proposes to amend Marketing Order 
No. 989 (Order), which regulates the handling of raisins produced from 
grapes grown in California. The Raisin Administrative Committee, which 
locally administers the Order, recommended amendments that would reduce 
Committee size, eliminate the designated cooperative bargaining 
association member seat, lower quorum requirements, remove producer 
district representation, remove the requirement for separate member and 
alternate nominations for independent and small cooperative producers, 
remove factors for establishing marketing policy, add language to 
clarify the quality of reconditioned raisins, add authority to accept 
voluntary contributions, and add language regarding ownership of 
intellectual property. In addition, the Agricultural Marketing Service 
(AMS) may make any such changes to the Order as may be necessary to 
conform to any amendment that may result from the hearing. This 
recommended decision invites written exceptions on the proposed 
amendments.

DATES: Written exceptions must be filed by October 15, 2024.

ADDRESSES: Written exceptions should be filed with the Hearing Clerk, 
U.S. Department of Agriculture, Room 1031-S, Washington, DC 20250-9200; 
Fax: (202) 720-9776 or via the internet at https://www.regulations.gov. 
All comments should reference the docket number and the date and page 
number of this issue of the Federal Register. Comments will be made 
available for public inspection in the Office of the Hearing Clerk 
during regular business hours or can be viewed at https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Christy Pankey, Marketing Specialist, 
or Matthew Pavone, Chief, Rulemaking Services Branch, Market 
Development Division, Specialty Crops Program, AMS, USDA, 1400 
Independence Avenue SW, Stop 0237, Washington, DC 20250-0237; 
Telephone: (202) 720-8085, or Email: [email protected] or 
[email protected].
    Small businesses may request information on this proceeding by 
contacting Richard E. Lower, Market Development Division, Specialty 
Crops Program, AMS, USDA, 1400 Independence Avenue SW, Stop 0237, 
Washington, DC 20250-0237; Telephone: (202) 720-8085, or Email: 
[email protected].

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice 
of Hearing published in the January 12, 2024, issue of the Federal 
Register (89 FR 2178).
    This recommended decision is in conformance with the provisions of 
sections 556 and 557 of title 5 of the United States Code and, 
therefore, is excluded from the requirements of Executive Orders 12866, 
13563, and 14094.
    Notice of this rulemaking action was provided to Tribal governments 
through the Department of Agriculture's (USDA) Office of Tribal 
Relations.

Preliminary Statement

    Notice is hereby given of the filing with the United States 
Department of Agriculture's Office of the Hearing Clerk of this 
recommended decision with respect to the proposed amendments to 7 CFR 
part 989 (``Marketing Order 989'' or ``Order'') regulating the handling 
of raisins produced from grapes grown in California and the opportunity 
to file written exceptions thereto. Copies of this decision can be 
obtained from Christy Pankey, whose address is listed above.
    This recommended decision is issued pursuant to the provisions of 
the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 
601-674), hereinafter referred to as the ``Act,'' and the applicable 
rules of practice and procedure governing the formulation and amendment 
of marketing agreements and orders (7 CFR part 900).
    The proposed amendments are based on the record of a public hearing 
on February 13 and 14, 2024 at the office of the Raisin Administrative 
Committee, 2445 Capitol Street, Suite 200, Fresno, California 93721. 
Notice of this hearing was published in the Federal Register on January 
12, 2024 (89 FR 2178). The notice of hearing contained four proposals 
submitted to the Agricultural Marketing Service (AMS) by the Raisin 
Administrative Committee (Committee). AMS also proposed to make changes 
as appropriate based on the results of the hearing.
    On October 20, 2022, the Committee recommended to AMS three 
proposals that would: (1) amend Committee size, composition, producer 
representation, and quorum requirements; (2) amend nomination 
procedures for small cooperative and independent producers; (3) remove 
two factors considered in the development of the annual marketing 
policy; and add language to clarify the quality of reconditioned 
raisins. The Committee voted on the above proposed amendments, 20 in 
favor and 10 opposed, at its August 17, 2022, meeting. On August 16, 
2023, the Committee also voted to recommend to AMS the inclusion of two 
additional amendments that would add authority to accept voluntary 
contributions and add language regarding Committee ownership of 
intellectual property. These two amendments are hereinafter referred to 
as Proposal No. 4. AMS received the Committee's unanimous 
recommendation for those two amendments on August 21, 2023.
    After reviewing all aforementioned proposals and other information 
submitted by the Committee, AMS decided to schedule this matter for a 
hearing.
    Under Proposal No. 1, membership size would be reduced from 47 to 
21 members and alternates, the designated cooperative bargaining 
association member seat would be eliminated, quorum requirements would 
be lowered from 25 to 14, producer district representation would be 
removed, and a designated seat for an unaffiliated independent producer 
member would

[[Page 74852]]

be added. Specifically, producer member seats would be decreased from 
35 to 12 and handler member seats would be decreased from 10 to 8.
    Proposal No. 2 entails removing the requirement for industry 
candidates to be nominated as either a member or an alternate. Proposal 
No. 3 would remove factor ``4'' and part of factor ``5'' from 
considerations when developing the marketing policy and add language 
clarifying that successfully reconditioned raisins are ``standard 
raisins.''
    Proposal No. 4 would enable the Committee to accept voluntary 
contributions and add language regarding ownership of and rights to 
intellectual property.
    AMS also proposed to make any such changes as may be necessary to 
the Order to conform to any amendment that may be adopted, or to 
correct minor inconsistencies and typographical errors.
    Ten witnesses testified at the hearing: three independent small 
producers, two independent small handlers, one independent large 
handler, one marketing cooperative small producer, one bargaining 
association small producer, one Committee staff member, and one witness 
from USDA. Eight industry witnesses supported all four proposals. One 
witness, representing the Raisin Bargaining Association (RBA), opposed 
the elimination of the designated cooperative bargaining association 
member seat under Proposal No. 1. The USDA witness remained neutral.
    The Committee is the largest among all marketing order Committees 
and boards, with 47 members and 47 alternates, for a total of 94 
positions. After two years of ongoing discussion and deliberation, the 
Committee recommended AMS reduce its size after determining that a 
substantial decline in the California raisin industry and the removal 
of volume regulation authority in 2018 has resulted in a high 
percentage of Committee vacancies and low attendance at Committee 
meetings.
    Proponents at the hearing testified that Proposals No. 1 and 2 are 
expected to reduce Committee vacancies, improve participation, provide 
a cost savings to the program, increase administrative efficiency, and 
continue to provide fair representation while better aligning Committee 
membership with the overall size of the California raisin industry.
    The witness representing the RBA contended that the removal of the 
designated cooperative bargaining association member seat, as 
recommended by Proposal No. 1, would further diminish the RBA's ability 
to act on the behalf of raisin producers. Further, the witness 
testified that without the cooperative bargaining association seat 
small producers would not be afforded a voice on the Committee.
    Proponents of Proposal No. 1 testified, however, that a designated 
seat for the RBA is no longer warranted. The proponents believe that, 
were the designated cooperative bargaining association seat retained as 
part of the proposed restructuring, it would provide an outsized 
influence on the reduced Committee. Furthermore, proponents affirmed 
that both small producers and RBA producers would retain a voice 
without the designated cooperative bargaining association member seat 
and would continue to be represented on the Committee through allocated 
seats.
    Witnesses supported Proposals No. 2-4.
    Based on the hearing record, this initial decision recommends 
amending the Order to incorporate Proposals No. 1-4, as they are likely 
to address industry concerns without imposing undue burdens on small 
businesses upon implementation.
    At the conclusion of the hearing, the Administrative Law Judge 
established a deadline of 20 business days from the date the transcript 
corrections were made available on the AMS website (May 1, 2024) for 
interested persons to file proposed findings and conclusions or written 
arguments and briefs based on the evidence received at the hearing. No 
briefs were filed.

Material Issues

    The material issues presented on the record of hearing are as 
follows:
    1. Whether to:
    i. Amend Sec.  989.26 to reduce Committee membership size from 47 
to 21 members and alternates. Corresponding changes would be made to 
Sec.  989.126.
    ii. Amend Sec.  989.26 to remove the designated cooperative 
bargaining association seat. Corresponding changes would remove 
references to the designated cooperative bargaining association 
position in Sec.  989.30.
    iii Amend Sec. Sec.  989.26(c) and 989.126(a)(1) to remove producer 
district representation and add an unaffiliated independent producer 
member seat. Corresponding changes would remove Sec. Sec.  989.22 and 
989.122, and references to producer districts in Sec. Sec.  
989.29(b)(2), 989.126(a) and 989.129.
    iv. Amend Sec.  989.38 to lower quorum requirements from 25 to 14.
    2. Whether to amend Sec.  989.29 to eliminate the requirement for 
separate nominations for independent producers or producers affiliated 
with small cooperative marketing associations.
    3. Whether to remove paragraph (a)(4) and the last part of 
paragraph (a)(5) from Sec.  989.54, and to amend Sec. Sec.  989.24 and 
989.58 by adding language that would clarify that raisins that have 
been reconditioned, inspected, and certified as meeting the minimum 
grade shall be classified as standard raisins.
    4. Whether to add Sec. Sec.  989.63 and 989.64 to establish 
authorities regarding the acceptance of voluntary contributions, 
ownership rights of intellectual property, and the collection of rents/
royalties from such intellectual property.
    5. Whether any conforming changes need to be made as a result of 
the above proposed amendments. Conforming changes may also include 
correction of non-substantive, typographical errors.

Findings and Conclusions

    The following findings and conclusions on the material issues are 
based on evidence presented at the hearing and the record thereof.

Material Issue No. 1--Committee Membership Size and Composition, 
Producer District Representation, and Quorum Requirements

    Section 989.26 ``Establishment and membership'' should be amended 
to reduce the number of Committee members from 47 to 21. This amendment 
would decrease the number of producer members from 35 to 12 and handler 
members from 10 to 8. Further, Sec.  989.26 should be amended to 
eliminate the designated cooperative bargaining association member 
position. The public member position would remain unchanged. 
Corresponding changes would reapportion producer and handler members in 
Sec.  989.126 and remove the references to the cooperative bargaining 
association and cooperative bargaining association(s) officers or 
employees in Sec.  989.30.
    Additionally, Sec. Sec.  989.26(c) and 989.126(a) should be amended 
to remove producer districts and to designate one unaffiliated 
independent producer member and alternate position on the Committee. 
This change would combine nominations for the current three districts 
into a single ballot for independent producer members and alternates 
and include an additional nomination for an unaffiliated independent 
producer member and alternate position. Corresponding changes would 
remove Sec. Sec.  989.22 and 989.122, and references to producer 
districts in Sec. Sec.  989.29(b)(2), 989.126(a) and 989.129.

[[Page 74853]]

    Finally, Sec.  989.38 ``Procedure'' should be amended to lower 
quorum requirements from 25 to 14.
    The evidence of record is that the Committee has experienced an 
increase in Committee vacancies due to a substantial decline in the 
size of the California raisin industry. Lower levels of engagement from 
industry members have also been observed since the removal of volume 
regulation authority from the Order in 2018. The record further shows 
that the raisin industry's decline is a result of volatile producer 
returns over the past two decades, and that industry members lost 
interest in attending Committee meetings after volume regulation 
authority was removed in 2018.
    The Committee believes reducing Committee size and reapportioning 
membership, including the elimination of the designated cooperative 
bargaining association member seat and the removal of producer 
districts, would reduce Committee vacancies and improve attendance, 
provide a cost savings, increase administrative efficiencies, provide 
fair representation, and balance Committee membership with the overall 
size of the California raisin industry. The amendment to lower quorum 
requirements to align with the reduced Committee size would also aid in 
achieving those goals.
    Currently, Sec.  989.26 provides that Committee membership consist 
of 47 members, of whom 35 shall represent producers, 10 shall represent 
handlers, 1 shall represent the cooperative bargaining association, and 
1 shall be a public member. For each member of the Committee there 
shall be an alternate member who shall have the same qualifications as 
the member for whom they represent as an alternate. The industry is 
comprised of three marketing segments: independent producers and 
handlers, a cooperative marketing association--Sun-Maid Growers of 
California (Sun-Maid), and a cooperative bargaining association--the 
Raisin Bargaining Association (RBA). Member representation, excluding 
all designated seats, is based on a proportional share system. 
Witnesses testified that this system ensures fair representation on the 
Committee by allocating producer and handler seats based on each 
marketing segment's proportional share or contribution to total raisin 
acquisitions. The designated cooperative bargaining association member 
and public member seats are not based on proportional shares. Section 
989.26(e) provides the cooperative bargaining association member shall 
be selected from the cooperative bargaining association(s) and the 
public member shall be nominated by Committee members.
    Proposal No. 1 would reduce the size of the Committee from 47 to 21 
members. In addition, the proposal includes the elimination of the 
designated cooperative bargaining association member seat, the addition 
of an unaffiliated independent producer member seat, removal of 
producer districts, and lowering Committee quorum requirements. The 
proportional share system and requirement that each member have an 
alternate would remain unchanged. The restructured Committee would 
consist of the following:
     twelve (12) producer member seats (reduced from 35), of 
which one independent producer member seat would be allocated to an 
unaffiliated independent producer,
     eight (8) handler members seats (reduced from 10), and
     one (1) public member.
    In addition, the quorum requirement would be reduced from 25 to 14.
    The record shows the decline in the industry, the high percentage 
of Committee vacancies, and low attendance rates substantiate the 
proposed amendment to reduce Committee size. Several witnesses 
testified that the decline in the crop size and the number of producers 
has made it increasingly difficult to fill Committee seats. This has 
led to a number of issues with the Committee's ability to effectively 
administer the program due to the large number of vacancies and low 
attendance.

Industry Decline

    The economic viability of raisins produced from grapes grown in 
California has been on an unsustainable path for many years. Several 
witnesses testified to the significant decrease in raisin bearing 
acres, from 225,000 to 98,000, and the number of raisin producers, from 
3,500 to 1,500, due to industry instability over the past two decades. 
Hearing evidence shows the decline is attributable to the various 
challenges the California raisin industry has faced since its peak in 
2000 and to the different strategies that raisin producers have 
employed in an effort to mitigate the financial strain posed by such 
challenges. The record shows these challenges, including 
overproduction, foreign competition, changing consumer preferences, and 
overall high production costs have negatively impacted producer 
returns.
    Overproduction and foreign competition have created a challenging 
environment for raisin producers, impacting their ability to achieve 
favorable returns. Hearing evidence shows gradual increases in raisin 
production by foreign countries, who benefit from low production costs 
and government subsidies, diminished the California raisin industry's 
world market share and depressed prices for domestic handlers and 
producers. Witnesses testified that the California raisin industry lost 
its pricing power in global markets after raisin production in foreign 
countries such as Turkey, Uzbekistan, and Afghanistan surpassed U.S. 
production and drove the prices of raisins down. For the California 
raisin industry, some export markets such as Europe, where the industry 
had established a strong foothold, are no longer available to U.S. 
raisin handlers because they cannot compete due to higher shipping 
costs. Further, one witness testified that until the 2000's, the 
industry remained competitive despite increases in foreign production. 
Domestic raisin producers, however, experienced a sharp downturn in 
profitability after a four-year period of large crops that resulted in 
a tremendous surplus, market oversaturation, and reduced pricing. Thus, 
the California raisin industry, which once dominated the global market 
by producing over 50 percent of the world's supply in the 1990s, now 
accounts for approximately just 8 percent of the world market share 
today.
    The hearing record also shows consumer preferences have shifted 
away from raisins, furthering the decline in raisin demand. One witness 
testified that raisins are not as popular with younger generations, 
such as Millennials and Generation Z. Such changes in consumer 
preferences have contributed to decreases in demand and lower sales and 
revenue for producers, leading to declining production levels and 
diminished returns.
    High production costs due to drought, labor shortage, and other 
factors have also contributed to less than favorable returns for raisin 
producers. Witnesses testified to rising labor costs, such as double-
digit wage inflation mandated by the State of California, and labor 
shortages, particularly during harvest. These factors require producers 
to offer higher wages to attract or retain workers, and have 
systemically increased the cost of raisin production. In addition, 
rising input costs related to irrigation, fertilizer, environmental 
regulation, taxation, and multiple years of drought have also driven 
the cost of production higher. As such, cost increases have made raisin 
production more expensive, leading some producers to scale back or 
abandon raisin production altogether.

[[Page 74854]]

    The record shows that the myriad of challenges faced by the 
California raisin industry has pushed many raisin producers to either 
sell their land or transition to more profitable crops. One witness 
testified that among the largest factors contributing to the industry's 
decline is producers pulling out vineyards due to insufficient producer 
returns. Another witness testified that the California raisin industry 
has shrunk over the years due to higher-value crops replacing raisins 
on farmland in the production area. The record suggests raisin 
producers have used these tactics, and other strategies, such as 
cutting production costs that inevitably led to greater decreases in 
production, to optimize returns. Overall, the increase in Committee 
vacancies and low attendance at meetings is attributable to the 
decrease in raisin production, and the number of raisin producers, as a 
result of declining demand, high production costs, and low grower 
returns.
    The record shows the decline in the California raisin industry has 
directly impacted the number of Committee vacancies as there are fewer 
producers in industry to draw from. Further, low attendance rates at 
Committee meetings are attributable to both the increase in Committee 
vacancies and to raisin producers becoming uninterested in Committee 
operations after the removal of volume regulation authority from the 
Order. The record further indicates that the Committee is the largest 
of all marketing orders, comprising 47 members and 47 alternates. 
However, witnesses testified that the Committee has increasingly 
struggled to fill member positions due to the significant decline in 
the number of producers and bearing acres in the past 20 years, and 
that this difficulty arises because the Committee did not downsize in 
response to the shrinking industry, leading to a rise in vacancies.

Committee Vacancies

    Record evidence includes a data table from the Committee that 
highlights low levels of attendance and high vacancies during Committee 
meetings. The Committee's data, illustrated in Table 1, a replication 
of exhibit 16 from the hearing, shows the attendance history for full 
Committee meetings conducted between August 2019 and June 2023. The 
Committee held 23 Committee meetings during this period, which appears 
in column 1. The date each meeting was held appears in column 2. The 
percentage of members present at each meeting appears in column 3 and 
is computed by dividing the total number of members voting at each 
meeting, which appears in column 4, by the total number of Committee 
seats (47). The total number of members in attendance at each meeting 
appears in column 5. The total number of alternate members voting at 
each meeting appears in column 6. The total number of alternates in 
attendance at each meeting appears in column 7, and the total number of 
vacant seats at each meeting appears in column 8. Witnesses testified 
that all Committee meetings are held in-person with an option for 
members and alternates to participate either by conference call or 
video.
BILLING CODE P

[[Page 74855]]

[GRAPHIC] [TIFF OMITTED] TP13SE24.044

BILLING CODE C
    Column 8 in Table 1 illustrates a gradual increase in Committee 
vacancies, from 14 to 21, for full Committee meetings held between 
August 2019 and June 2023. The Table further shows an average of 17 
positions have remained vacant for approximately 4 years.

Low Attendance

    The increase in Committee vacancies has also contributed to low 
attendance rates. Full Committee meetings with low attendance, between 
26 to 28 members present, are highlighted in column 4 of Table 1. 
Dividing the number of highlighted cells (7) by the number of full 
Committee meetings held (23) equates to an average low attendance rate 
of 30 percent for full Committee meetings held between August 2019 to 
June 2023.
    Witnesses testified that for much of that time, initial member 
attendance at meetings was approximately 60 percent for full members 
and roughly 25 percent for alternates. These percentages suggest

[[Page 74856]]

that not only are there fewer producers in the industry, but those that 
remain are likely less interested in committing to long-term Committee 
service when faced with economic uncertainty and instability due to 
volatile producer returns.

Removal of Volume Regulation

    On November 26, 2018, USDA removed all volume regulation and 
reserve pool authority after the United States Supreme Court, in Horne 
v. USDA, ruled that the application of the Order's reserve pool 
authority to the Horne's raisin operation was a taking under the Fifth 
Amendment to the United States Constitution.
    Attendance rates started to decline when the industry removed the 
authority for volume regulation from the Order. Record evidence shows 
that Committee meetings were once filled with members when volume 
regulation was in effect. Witnesses testified that staff did not have 
to make phone calls and send text messages to get people into meetings 
because there were so many Committee actions that affected producers' 
and handlers' bottom-line. Members and alternates wanted to have their 
opinions heard and to vote on specific volume regulations and reserve 
pool recommendations and the economic repercussions that would result 
from them. Historically, given the impact that volume regulation had on 
the industry, Committee membership was intentionally established as the 
largest of all marketing orders with 47 members and 47 alternates to 
ensure equitable representation during the establishment of free and 
reserve percentages in Committee meetings.
    Prior to its removal, volume regulation authorized the Committee to 
establish free and reserve percentages based on production levels and 
trade demand as a way to stabilize surplus by controlling the supply of 
California raisins. Under this regulation, a portion of total raisins 
produced would be free for handlers to acquire and dispose of in 
approved market channels, and the other portion would be held in 
reserve pools by the Committee. This prevented oversupply and volatile 
fluctuations in the market allowing raisin producers to sell a portion 
of their crop at a return above the cost of production. The other 
portion held in reserves was disposed by the Committee in different 
outlets under various reserve programs. Proceeds from the disposal of 
raisins held in reserves would be distributed to raisin producers when 
sold.
    The contention with volume regulation stemmed from the disposal of 
raisins held in reserve. The hearing record shows that raisin producers 
were not satisfied with the process whereby reserve raisins were sold 
in export channels. One witness testified that hundreds and hundreds of 
people attended meetings when volume regulation was being considered, 
but after the United States Supreme Court ruling that the reserve 
system was a taking, and the Order was subsequently amended to remove 
volume regulation authority, producers lost interest in attending 
meetings because there was no reserve program to discuss and vote on.

Quorum Requirements

    Committee vacancies also increase the difficulty in achieving 
quorum at meetings with fewer members. Witnesses testified that the 
Committee often struggles to make quorum and staff must make phone 
calls to members the day of meetings to get attendance rates up. 
Further, record evidence shows one instance when quorum requirements 
were not met during the period shown on Table 1.
    Currently under the Order, the quorum requirement is 25. It is a 
fixed number and is based on the number of Committee positions expected 
to be filled. Thus, unfilled Committee seats make it more difficult to 
reach quorum and increases the probability that quorum requirements may 
not be met when attendance levels are low. One witness testified that 
there were several meetings where they were barely enough members 
present to constitute a quorum and conduct Committee business. Another 
witness testified that the majority of vacant seats are allocated to 
independent producer alternates, and if these seats are not filled, the 
absence of a full member at a meeting increases the likelihood of not 
meeting quorum requirements due to there being no alternate to fill in 
for the absent member.
    The record shows the Committee continued to struggle meeting quorum 
requirements despite ramping up outreach efforts. Witnesses testified 
that when quorum is not met, it reduces administrative effectiveness 
and efficiency and increases nonproductive costs, such as expenses 
associated with member travel and staff hours because full Committee 
meetings must be delayed and rescheduled.

Amendment 1--Reducing Committee Size

    Reducing Committee size and reapportioning membership, including 
the elimination of the designated cooperative bargaining association 
member seat and the removal of producer districts, along with lowering 
quorum requirements, would address the current issues concerning 
Committee vacancies, low attendance, and meeting quorum. Further, it 
would provide a cost savings, increase administrative efficiencies, 
continue to provide fair representation, and balance Committee 
membership with the overall size of the California raisin industry.
    Decreasing the number of Committee seats would reduce the 
likelihood of position vacancies by making it easier to fill each seat. 
Table 1 shows an average of 41 members currently attend Committee 
meetings. Column 5 shows 30 full Committee members on average attend 
Committee meetings and column 7 shows an average of 11 alternate 
members, for a total of 41 members on average. Witnesses testified that 
reducing the committee size may help reduce Committee vacancies. Based 
on the current averages in Table 1, the Committee would have less 
difficulty filling 21 member and alternate seats.

Amendment 2--Lowering Quorum Requirements

    This proposal also reduces quorum requirements from 25 to 14. 
Reducing quorum requirements is necessary to effectuate the proposed 
amendment, if implemented. The proposed quorum is 67 percent of voting 
membership (14 divided by 21 multiplied by 100). This is slightly 
higher than the current quorum which is 53 percent of voting membership 
(25 divided by 47 multiplied by 100). Witnesses testified that the 
higher voting percentage will provide for fair representation by 
ensuring both producer and handler members are in attendance at 
meetings to vote on formal recommendations. This also promotes 
transparency and representation by ensuring no single segment can 
dictate Committee operations and that all perspectives of the industry 
are considered when decisions are made. In addition, the probability of 
not meeting quorum requirements is also reduced with the smaller 
Committee, increasing administrative efficiencies, and providing a cost 
savings by decreasing the number of delayed and rescheduled meetings 
due to low attendance.
    A reduced Committee size would also increase competitiveness in 
nominations and reduce nepotism. Witnesses testified that much of the 
industry is vertically integrated, where producers own or are employed 
by a packinghouse, making them handler-affiliated. In these situations, 
such a producer could occupy a producer or handler member seat, and in 
many instances it's a family member that

[[Page 74857]]

occupies the other seat. Thus, a smaller Committee size would reduce 
the chances of multiple family members serving due to increased 
competitiveness.

Amendment 3--Removing Producer Districts

    Witnesses testified that many independent producer seats are filled 
with handler-affiliated producers and the addition of the unaffiliated 
independent producer member seat ensures fair representation by having 
a ``true'' producer on the Committee.
    The evidence of record is that an unaffiliated independent producer 
member is a producer that has no ownership interest in a packinghouse. 
Such a producer would have no proprietary or employment affiliation to 
any cooperative marketing association, cooperative bargaining 
association, or a handler. In addition, in the event there are no 
qualified candidates to fill the unaffiliated independent producer 
member or alternate seats, this proposal also adds language to Sec.  
989.26 that ensures the designated unaffiliated member, and alternate 
seats are filled by any independent producer candidates not otherwise 
slated.
    The removal of producer districts also ensures equitable 
representation on the Committee. Currently under the Order, three 
independent producer districts exist. All counties north of Fresno 
County, California, are represented in District No. 1, all counties 
south of Fresno County, California, are represented in District No. 2, 
and all of Fresno County, California, is represented in District No. 3. 
Independent producer members are apportioned as follows; one producer 
member each for Districts No. 1 and 2, and the remaining producer 
members to which independent and small cooperative producers are 
entitled in District No. 3. Separate nomination ballots are mailed to 
all three districts.
    The record shows the decline in industry has directly impacted 
independent producer member nominations, leaving fewer eligible 
producers in some of the designated producer districts. Witnesses 
testified that the industry had more active producers competing for 
nominations before the decline. Witnesses further testified that the 
candidacy pool for independent producers has decreased, leading to 
continuous nominations of the same producers in Districts 1 and 2, 
resulting in inequitable representation in producer districts. One 
witness, identifying as a small producer, testified that this gives an 
unfair advantage to those much smaller producing regions by providing 
automatic seats. This results in an imbalance where industry members in 
the larger District 3 have less representation, as they must compete 
for seats on the Committee. Meanwhile, producers in the smaller 
Districts 1 and 2 face less competition for a seat, giving them greater 
representation on the Committee that is disproportionate to their 
district size.
    This proposed amendment would remove the requirement that 
independent producer members represent districts and would combine 
nominations for the three producer districts into one ballot instead of 
three individual ballots mailed to each district.
    The record shows combining producer districts ensures fair 
representation. Witnesses testified that the removal of producer 
districts would increase competitiveness, allowing for a fair 
nomination process. This is because combining districts would expand 
the candidacy pool for each producer member position by increasing 
competition for nominations and would ensure all independent and small 
cooperative producers have an equal opportunity to be nominated. 
Combining districts would also lead to a reduced administrative burden 
and cost savings by reducing the number of separate nomination meetings 
required to be held and eliminating the tabulation of separate ballots 
for each district.
    Further, this proposal would ensure independent producer member 
seats are filled in the event producer districts become too small to 
function adequately due to the significant decline in the number of 
producers in industry.

Amendment 4--Eliminating Cooperative Bargaining Association Member Seat

    This proposal would also eliminate the designated cooperative 
bargaining association member seat from the restructured Committee. 
Some witnesses testified that the designated cooperative bargaining 
association member seat is no longer warranted after volume regulation 
was removed from the Order. Further, due to a significant decline in 
the RBA's raisin acquisition totals, a designated member seat would 
provide the RBA an outsized influence and perpetuate unequal 
representation on the Committee.
    The evidence of record is that on August 14, 2022, the Committee 
voted 20 in support and 10 opposed on Proposals No. 1-3 and voted 
unanimously in favor of Proposal No. 4 when it was considered on August 
16, 2023. Based on testimony, eight of the ten members voting in 
opposition represented the RBA. Those members disagreed with the 
removal of the designated cooperative bargaining association member 
seat, but supported all other amendments proposed. One witness, 
representing the RBA, testified in opposition to the elimination of the 
designated cooperative bargaining association member seat at the 
hearing.
    The RBA was established to provide California raisin producers with 
collective bargaining power when negotiating prices with handlers. 
Witnesses testified that, since the late 1940's, the industry was 
plagued with huge swings in production and low producer returns which 
led to the formation of the RBA. Under the RBA, producers leverage 
their collective strength to negotiate fair prices and ensure economic 
stability.
    The record shows that successful collective bargaining requires 
strong industry representation and confidential pricing agreements. The 
witness representing the RBA testified that at one time the RBA 
represented approximately 40 percent of total raisin acquisitions, 
reflecting large industry representation. Several witnesses testified 
that the RBA manager was the only person who knew which handlers signed 
the pricing agreement, ensuring confidentiality. This would prevent 
free riders from benefiting from the RBA's agreements.
    In 1967, volume regulation and Committee size were amended to 
provide inclusion and representation for the newly formed cooperative 
bargaining association, established in 1966. Committee size was 
increased by one member to represent the RBA because the preponderance 
of evidence, at that time, indicated the cooperative bargaining 
association had become a major entity in the raisin industry and should 
directly participate in marketing decisions.
    Volume regulation was also modified to establish preliminary free 
percentages at an earlier date to give certainty as to the quantity to 
be released in free tonnage outlets, and to provide a basis for 
producers and handlers to negotiate an appropriate field price. 
Witnesses testified that the designated cooperative bargaining 
association member seat was reserved exclusively for the managerial 
officer of the RBA due to confidentiality of RBA pricing agreements and 
volume regulation.
    Under volume regulation, not less than 65 percent of desirable free 
tonnage was released until the Committee had determined that field 
prices were firmly established, and open price contracts have been 
closed. Thus, a portion of free

[[Page 74858]]

tonnage was withheld until field prices were established, and the RBA 
manager was the only person that could supply the information as to 
whether or not the RBA had successfully bargained for a price.
    The Committee also used the established field price negotiated by 
the RBA as a ``base price'' for export programs, such as the Raisin-
Back or Cash-Back program. Witnesses testified, however, that these 
programs no longer exist after volume regulation authority was removed 
from the Order and, therefore, the environment in which the RBA manager 
was necessary to participate in Committee deliberations on volume 
regulation no longer exists.
    Further, the record shows the RBA has diminished in influence due 
to a decline in membership and raisin acquisition totals. Such a 
decline in acquisition totals no longer warrants a designated seat 
based on proportional acquisition totals. The witness representing the 
RBA explained that the RBA faced many challenges with membership, such 
as compliance issues and contract violations, and has lost membership 
in part due to the substantial decline in the number of producers and 
acreage industrywide. The witness testified that one of the biggest 
factors contributing to low RBA membership is producers pulling raisin 
acreage out of production due to insufficient returns over the past 7 
to 10 years, which has weakened representation and diminished raisin 
acquisitions under the RBA.
    The record also shows the RBA faced difficulty negotiating prices 
due to foreign competitors depressing the price of raisins. The RBA 
witness testified to economic hardships due to foreign competition with 
production costs that are 20 to 30 percent lower. This weakens the 
RBA's position to bargain because foreign countries are selling raisins 
at a lower price due to their low production costs. The witness further 
explained that if the RBA cannot get a fair price, it is disastrous for 
raisin producers and further accelerates the rate that producer pull 
raisins out of production. Additionally, the witness explained that 
more RBA members and increased member tonnage would provide greater 
leverage to negotiate, but overall acquisition totals have gone down. 
The record shows total RBA raisin acquisitions declined from 30 percent 
of the total industry acquisitions to 12.5 percent in the past 8 years.
    Overall, witnesses testified that the elimination of the designated 
cooperative bargaining association seat would provide fair and 
equitable representation on the Committee because membership would be 
based on a proportional share system. The record further shows that RBA 
producers will maintain seats on the Committee based on their 
proportional share of total acquisitions and could gain more seats if 
their total raisin acquisitions were to increase. This means that each 
industry marketing segment represented would be equal or proportionate 
to total raisins produced and/or acquired. Thus, the number of seats 
allocated to the RBA would be solely based on their share of total 
raisin acquisitions, similarly to other industry groups on the 
Committee. Further, if the cooperative bargaining association 
designated seat were to remain in the restructured Committee, it would 
provide an outsized or unequal representation because the cooperative 
bargaining association would be over-represented proportionally to the 
other industry segments on the Committee.
    The witness representing the RBA contended that if the designated 
seat is eliminated, it would further diminish RBA's ability to work on 
the behalf of raisin producers, that the Committee structure would be 
too overladen with handler representation because the cooperative 
marketing association, Sun-Maid, would have 50 percent representation 
on the Committee, and that the RBA should continue to be involved in 
marketing discussions because they represent independent small 
producers. The designated cooperative bargaining association member 
seat, however, is not justified based on record evidence. With the 
removal of volume regulation authority from the Order and the decline 
in RBA member representation and acquisition totals, the cooperative 
bargaining association no longer warrants a designated seat.
    Additionally, the record shows that much of the industry is 
vertically integrated, with many entities engaged as both a producer 
and a handler. The proposed restructured Committee accounts for and 
reflects these changes in industry composition over the years and the 
addition of the unaffiliated independent producer member seat would 
ensure independent producers have a voice on the Committee. The seat 
also helps to ensure the majority of Committee members represent 
producers and that there isn't an unfair balance favoring handler 
representation on the Committee. Finally, all Committee meetings are 
open to the public and the RBA could continue to participate in 
Committee deliberations through allocated producer member seats.
    The RBA witness discussed two alternatives for a new Committee size 
and structure on the record. The witness suggested that Committee size 
should not be based on acquisition totals, that every handler should 
have a seat, and each segment of producers would choose how many 
producer representatives would serve on the Committee. AMS does not 
consider this a viable alternative because the witness did not provide 
any specifics for a proposed restructuring of the Committee. Further, 
since there are approximately 17 handlers, the alternative would likely 
result in a Committee size larger than the current size of the 
Committee. The second alternative proposed by the witness included 
keeping the designated seat for a total of 22 members and alternates. 
This is also not a viable alternative because the designated seat would 
provide the RBA with unequitable representation on the Committee 
because the seat would not be based on any proportional share of 
industry acquisitions.
    Additionally, the hearing record shows that the Committee discussed 
several alternatives to the proposed Committee structure over several 
years before ultimately deciding 21 members and alternates would be an 
appropriate Committee size. Witnesses testified the Rulemaking 
Workgroup and Administrative Issues Subcommittee held in-depth 
discussions and reviewed a multitude of scenarios, proposals, and 
several reduction options, including 70, 60, and 50 percent size 
reductions in approximately 12 meetings between January 2020 and July 
2023. Finally, one witness testified that the Committee size of 47 
members and alternates was established in an era in the late 1940s when 
industry had approximately 5,000 to 7,000 producers. The current 
proposal to reduce the Committee size, given the diminished industry 
make-up, would actually create a Committee that is more representative 
of producers than as compared to the Committee historically. Thus, the 
proposed amendments discussed under Material Issue 1 would better align 
Committee membership with the overall size and configuration of the 
current California raisin industry by ensuring Committee composition is 
balanced with the size and needs of the industry.
    For the reason stated above, Sec.  989.26 ``Establishment and 
membership'' should be amended to reduce the number of Committee 
members from 47 to 21. Further, Sec.  989.26 should be amended to 
eliminate the designated cooperative bargaining association member 
position. Sections 989.26(c) and 989.126(a)(1) should be amended to 
remove producer districts and to add a

[[Page 74859]]

new designated seat for an unaffiliated independent producer member, 
and Sec.  989.38 ``Procedure'' should be amended to lower quorum 
requirements from 25 to 14.

Material Issue No. 2--Nomination Procedures for Independent and Small 
Cooperative Producers

    Section 989.29 ``Initial members and nomination of successor 
members'' should be amended to eliminate the requirement for separate 
nominations for independent producers or producers affiliated with 
small cooperative marketing associations. Currently no small 
cooperative marketing association exists within industry. This proposed 
amendment would remove the requirement that independent producers must 
be nominated specifically for either a full Committee seat or an 
alternate member seat. Further, in addition to the proposed amendment 
that would remove producer district representation by combining 
nominees for three separate districts into a single ballot, this 
amendment would eliminate the separate tabulation procedures for full 
member and alternate member nominations. The notification of nomination 
meetings would remain unchanged.
    The evidence of record is that the Order was amended in 2018 to 
require separate nomination procedures as a method to increase 
independent producer nominations by ensuring independent producers 
interested in serving only as an alternate were not nominated as full 
members. At that time, the Committee believed providing this additional 
flexibility for independent producer nominations would encourage 
participation. However, a witness testified that separate nominations 
actually discouraged participation on the Committee. Witnesses 
testified that the number of alternate members attending meetings 
declined because nominees may have been under the notion that 
alternates did not need to attend every meeting, fueling low attendance 
rates and absenteeism.
    The record further shows that the number of independent producers 
nominated did not increase but instead declined, evidenced by the 
increase in the number of vacant alternate positions shown in table 1 
column 8. Witnesses testified that both full members and alternate 
members should attend meetings to stay informed on industry issues that 
may require a future vote, and that reverting back to the original 
nomination procedures for independent producers would streamline the 
nomination process and ensure alternate seats are filled. The proposed 
nomination process would be streamlined because there would be one 
tabulation of votes instead of two separate tabulations, one for full 
members and one for alternate members. The Committee also believes that 
nominations would not be necessary with a smaller Committee size 
because with fewer seats, competitiveness in nominations would 
increase. Additionally, current average attendance rates in Table 1 
show approximately 41 members would likely be able to serve. Table 1 
column 5 shows 30 full Committee members on average attend Committee 
meetings and column 7 shows an average of 11 alternate members, for a 
total of 41 members on average.
    This proposed amendment would remove language describing separate 
nomination procedures and add language stipulating one tabulation of 
ballots according to the highest number of votes for full member and 
alternate seats. With this revised process, an independent producer 
receiving the highest number of votes would be designated as the first 
independent producer member nominee. The producer receiving the second 
highest number of votes would be designated as the second independent 
producer member nominee. This tabulation process would continue until 
all independent producer member seats are nominated. The nominee then 
receiving the next highest number of votes would be designated as an 
alternate member nominee, with this process continuing until all seats 
are filled.
    For the reasons stated above, Sec.  989.29 ``Initial members and 
nomination of successor members'' should be amended to eliminate the 
requirement for separate nominations for independent producers or 
producers affiliated with small cooperative marketing associations.

Material Issue No. 3--Marketing Policy and Quality Standards for 
Reconditioned Raisins

    Section 989.54(a) ``Marketing Policy'' should be amended to remove 
factor number 4 ``An estimated desirable carryout at the end of the 
crop year;'' and the last part of factor number 5 ``, considering the 
estimated world raisin supply and demand situation.''
    Sections 989.24 ``Standard raisins, off-grade raisins, other 
failing raisins, and raisin residual material'' and 989.58 ``Natural 
condition raisins'' should be amended to add language clarifying the 
quality of successfully reconditioned raisins as standard raisins. This 
would add language that clarifies that successfully reconditioned 
raisins that meet the Order's minimum grade, quality, and condition 
standards are ``standard raisins.''

Marketing Policy

    The evidence of record is that factor number 4 and the latter 
portion of factor number 5 are no longer necessary factors to consider 
in the development of the annual marketing policy due to the removal of 
volume regulation authority from the Order. Additionally, the record 
shows the report relied upon to determine the estimated world raisin 
supply and demand under factor 5 is no longer published and that it 
would be cost prohibitive to solicit similar information from other 
sources. The Committee believes that factor 4 and part of factor 5 are 
market determinants no longer considered by the Committee and removal 
would increase administrative efficiencies by lessening the 
administrative burden and costs associated with researching and 
assembling data that is not needed.
    The record shows factor number 4 and part of factor number 5 are 
unnecessary marketing policy considerations without volume regulation. 
Witnesses testified that the Committee has not considered a ``desirable 
carryout'' listed under Factor 4 since 2019. This is because the 
``desirable carryout'' is the free tonnage inventory at the end of a 
crop year that would be considered desirable to carry over into the 
succeeding crop year to maintain continuity of sales until new crop 
raisins had become available. Witnesses also testified that the 
information for the latter part of factor 5 was obtained from USDA's 
National Agricultural Statistics Service (NASS). NASS, however, 
discontinued its ``Raisins: World Market and Trade Report'', in 2019. 
Further, the consideration of world raisin supply and demand was 
primarily to aid in the estimation of probable export market 
requirements for reserve raisins during a crop year under volume 
regulation. The Committee no longer establishes free and reserve 
tonnage percentages, thus factor number 4 ``An estimated desirable 
carryout at the end of the crop year;'' and the last part of factor 
number 5 ``, considering the estimated world raisin supply and demand 
situation'' are unnecessary under the current administration of the 
Order.
    Additionally, record evidence shows that reports on world supply 
and demand may be obtained from other sources. Witnesses testified 
however, that such reports are expensive and, again, unnecessary after 
the removal of volume regulation authority from the

[[Page 74860]]

Order. Removing factor 4 and the latter part of factor 5 would allow 
the Committee to focus on pertinent factors to be considered in 
formulating its marketing policy, instead of considering factors the 
Committee believes are unnecessary, thereby reducing administrative 
burden and increasing efficiency. For the reasons stated above, Sec.  
989.54(a) ``Marketing Policy'' factor number 4 ``An estimated desirable 
carryout at the end of the crop year;'' and the latter part of factor 
number 5 ``, considering the estimated world raisin supply and demand 
situation'' should be removed.

Reconditioned Raisins

    The evidence of record is that negative impressions about 
reconditioned raisins has adversely impacted the sales of such 
reconditioned fruit. Successfully reconditioned raisins meeting minimum 
grade, quality, and condition standards under the Order, however, 
should not be differentiated from other standard raisins. The Committee 
believes the additional language clarifying the quality of 
reconditioned raisins as standard raisins would improve efficiencies by 
streamlining the sales process. Further, this language would help to 
overcome existing obstacles experienced in the marketing of California 
raisins and achieve increased sales and sustained growth.
    To dispel misconceptions about the quality of reconditioned 
raisins, this proposal would add a paragraph to Sec.  989.58 explaining 
that all raisins which have been inspected and certified as meeting the 
minimum grade, quality, and condition standards, whether upon incoming 
inspection or upon later inspection after reconditioning, shall be 
determined to be standard raisins, labeled accordingly, and shall be 
eligible for commercial disposition as natural condition raisins or 
packed raisins in normal outlets. Further Sec.  989.24(b) would be 
amended to clarify that off-grade raisins successfully reconditioned 
are standard raisins.
    The record shows that handlers are adjusting to the decline in 
raisin production over the past two decades by optimizing sales to meet 
customer demand. One witness testified there is a greater need to 
eliminate the differentiation and stigma associated with reconditioned 
raisins because the volume of production has declined. There is a 
negative impression in the raisin market that the quality of 
reconditioned raisins that have been reworked and reinspected to meet 
the Order's minimum grade requirements, however, is somehow diminished. 
This is evidenced by past sale specifications, from both government and 
outside customer requests, that the product cannot be reconditioned 
fruit.
    Negative impressions associated with reconditioned raisins often 
revolve around concerns regarding their perceived inferior quality 
compared to non-reconditioned raisins that meet minimum grade 
requirements. The record shows, however, that reconditioning is the 
process of removing defective raisins from a lot, with the end result 
being a lot comprised of natural condition raisins that meet the 
Order's requirements. Currently, raisins that fail incoming 
inspections, or other off-grade raisins, are either disposed in 
eligible non-normal outlets, returned to the producer, or 
reconditioned. Witnesses testified that most off-grade raisins are 
reconditioned by the handler, but sometimes they are returned to 
producers for reconditioning.
    Witnesses further testified that the negative label attached to 
reconditioned raisins stems from the misconception about the 
reconditioning process and final product. Witnesses explained that 
handlers apply different reconditioning processes, ranging from 
minimally invasive to more intense processes. Such processes are highly 
dependent on the defects identified within a specified lot. Minimal 
processes include shaking or vibrating raisins on a conveyor system to 
remove foreign material or drying raisins with excessive moisture on 
trays to an acceptable level. A more intense process includes washing 
and drying to remove moldy or fermented raisins. During this process 
raisins are placed in a hot water bath that travels along augers and 
mold belts, removing defective raisins. Raisins that remain are then 
transferred to a tray and re-dried. Essentially, all reconditioning 
processes remove defective raisins to improve the grade and quality of 
the lot to meet incoming inspection requirements. Further, off-grade 
raisins returned to the producer and reconditioned by them before being 
shipped back to the handler are not classified as reconditioned 
raisins. Witnesses testified that raisins reconditioned on producer 
premises have no designation that the lot was reconditioned, thus 
including language that clarifies that successfully reconditioned 
raisins are standard raisins provides for fair marketing practices. 
Further, the record shows that reconditioning techniques have improved 
over the years.
    Witnesses also testified that the negative misconception of 
reconditioned raisins is from an outdated categorization for 
reconditioned fruit when volume regulation was authorized under the 
Order. Under volume regulation, raisins reconditioned by handlers were 
held in a separate reserve pool, and at that time, handlers didn't 
always successfully recondition product held in the pool. Witnesses 
testified that today, processors must ensure raisins meet the Order's 
minimum grade requirements, because outlets under volume regulation 
were removed from the Order and no reserve pool for reconditioned 
raisins currently exists.
    The record shows the addition of clarifying language to the Order 
would help to dispel the negative perception associated with 
reconditioned raisins, streamlining the sales of such fruit by reducing 
unnecessary friction points in the purchase of reconditioned raisins. 
Additionally, the USDA specifications for commodity purchases no longer 
distinguish between reconditioned and non-reconditioned raisins that 
meet minimum grade requirements. For the reasons stated above, 
Sec. Sec.  989.24 ``Standard raisins, off-grade raisins, other failing 
raisins, and raisin residual material'' and 989.58 ``Natural condition 
raisins'' should be amended to add language clarifying the quality of 
successfully reconditioned raisins as standard raisins.

Material Issue No. 4--Contribution Authority and Patent/Trademark 
Authority

    Sections Sec. Sec.  989.63 ``Contributions'' and 989.64 ``Patents, 
copyrights, trademarks, inventions, product formulations, and 
publications'' should be added to establish authority to accept 
voluntary contributions and authority related to the ownership of, and 
rights to, intellectual property and the collection of rents/royalties 
from the same. This new authority would also provide directions for 
disposition of any intellectual property developed through funds 
received by the Committee should the Order be terminated.
    This would allow the Committee to accept voluntary contributions 
that would be free from any encumbrances by the donor, and to develop 
intellectual property, including patents, copyrights, trademarks, 
inventions, product formulations, or publications, through the use of 
Order funds. Additionally, such funds, including funds received from 
the licensing or use of intellectual property developed, shall only be 
used to pay expenses authorized under the Order. Further, all 
intellectual property developed through the use of funds received by 
the Committee would be the property of the U.S. government. Ownership 
and related rights of

[[Page 74861]]

intellectual property developed through funds collected by the 
Committee and funds contributed by another organization or person, 
would be determined by agreement between the Committee and the person 
or organization contributing funds towards the development of such 
intellectual property stipulating the above. Similarly, should any 
intellectual property be licensed to the Committee, the related rights 
to such licensure would be determined by agreement between the 
Committee and the person or organization permitting licensure. The 
Committee believes the addition of authorities to receive voluntary 
contributions and to develop intellectual property under the Order 
would generate revenue for the industry through the marketing of 
California raisins and provide funding for additional research and 
promotion and other activities under the Order.
    The evidence of record is that the Committee may soon enter into a 
sublicensing agreement with the California Department of Food and 
Agriculture (CDFA) for intellectual property rights to the California 
Dancing Raisins after film producers interested in remaking a movie 
about the characters contacted the Committee.
    The CDFA is the owner of the intellectual property rights to the 
California Dancing Raisins. Witnesses testified that the characters 
were developed under the California State Marketing Order by the 
California Raisin Marketing Board (CRMB). The CRMB, however, was 
subsequently terminated and ownership of all intellectual property 
under the CRMB reverted to the State of California. The CDFA is 
currently seeking to sublicense, or transfer, the characters, and other 
intellectual property, to the Committee. Such arrangement would be by a 
separate agreement between the parties.
    Witnesses testified that voluntary contribution authority would 
allow the Committee to receive funds if the characters were to be 
sublicensed in the future. Currently, the Order does not include 
provisions that enable the Committee to receive and use funds, such as 
donations, gifts, or contributions from individuals, businesses, or 
other entities. This proposed amendment would provide the authority to 
accept voluntary contributions, such as rents, royalties, residual 
payments, or other income from the rental, sales, leasing, franchising, 
or other uses of intellectual property. Witnesses also testified that 
the amendments would solidify the authority to use the characters and 
avoid future litigation.
    The record shows that the addition of voluntary contributions and 
intellectual property is not uncommon. Witnesses testified that most 
marketing orders have developed their own logos and sublicense them out 
for use. Further, many research and promotion programs include language 
pertaining to voluntary contributions. Witnesses also testified that 
the addition of voluntary contributions and intellectual property 
rights has the broadest of industry support with almost total 
unanimity.
    Additionally, the proposed amendments would not only be used for 
the California Dancing Raisins specifically, but it would also create 
the opportunity for the industry to benefit from the development of 
intellectual property moving forward. The language related to the 
ownership and rights of intellectual property developed under the Order 
would provide that the Committee may develop intellectual property in 
the future. This may lead to brand recognition, increases in consumer 
demand, better returns, and greater market share, making California 
raisins more competitive worldwide.
    For the reason stated above, Sec. Sec.  989.63 ``Contributions'' 
and 989.64 ``Patents, copyrights, trademarks, inventions, product 
formulations, and publications'' should be added to establish authority 
to accept voluntary contributions and authority related to the 
ownership of, and rights to, intellectual property and the collection 
of rents/royalties from the same.

Material Issue No. 5--USDA Conforming Change

    Based on record evidence, USDA is recommending the following 
conforming change to the Order; revise Sec.  989.129 to replace the 
word ``ballot'' with ``vote.'' USDA is also recommending minor 
punctuation changes to Sec.  989.64 for clarity and readability.
    USDA proposes to revise Sec.  989.129 to replace the word 
``ballot'' with ``vote.'' The word ``ballot'' replaced ``vote'' as part 
of the Order amendment in 2018 that separated nomination procedures for 
independent producers. Material issue No. 2 proposes to undo the 
requirement for separate nomination procedures. This proposal would 
revert the text back to its original language before separate 
nominations were implemented in the 2018 amendment.
    USDA proposes to make minor punctuation changes to Sec.  989.64 for 
clarity and readability. These changes would not change the meaning of 
the section. USDA proposes to add a semicolon after the last reference 
to ``Committee'' in Sec.  989.64(a) and delete the comma after 
``publication'' in Sec.  989.64(d).

Small Business Considerations

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA), 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 so that small businesses will not be 
unduly or disproportionately burdened. Marketing orders and amendments 
thereto are unique in that they are normally brought about through 
group action of essentially small entities for their own benefit.
    According to the hearing transcript, there are approximately 1,500 
producers of California raisins. According to NASS data presented at 
the hearing, the total value of production for the 2022/23 crop year of 
raisins was $381,780,000. Taking the total value of production for 
raisins and dividing it by the total number of raisin producers 
provides a return per producer of $254,520. Small agricultural 
producers of raisins are defined by the Small Business Administration 
(SBA) as those having annual receipts equal to or less than $4.0 
million (NAICS code 111332, Grape Vineyards) (13 CFR 121.201). 
Therefore, a majority of raisin producers would be considered small 
entities under SBA's standards.
    According to the record, there were 17 handlers for the 2022-2023 
crop year. Small agricultural service firms are defined as those whose 
annual receipts are equal to or less than $34.0 million (NAICS code 
115114, Postharvest Crop Activities) (13 CFR 121.201). To make a 
similar computation for handlers, the first step is to estimate a 
representative handler price received per pound for packaged raisins. 
Recent USDA purchases under the Commodity Procurement Program provide 
such an estimate. For the most recent raisin crop year used by the 
Committee (August 2022-July 2023), the average price paid for packaged 
raisins purchased by the USDA for food assistance programs was $1.56 
per pound. The annual receipts for handlers can be calculated by taking 
the USDA average purchase price and multiplying it by the total number 
of shipments as reported by the Committee for the 2022-2023 crop year 
($1.56 x 414,898,000 LB) which equals $647,240,880. Taking the 
calculation for the annual receipts by handlers and dividing by the 
number of handlers provides an estimated annual receipt per handler 
($647,240,880 divided by 17), which equals $38,072,993. Based on

[[Page 74862]]

the SBA definition of an agricultural service firm having less than $34 
million in annual receipts, there is a mix of both large and small 
raisin handlers.
    The production area regulated under the Order covers the State of 
California. Acreage devoted to raisin production in the production area 
has declined in recent years. According to data presented at the 
hearing, bearing acreage for raisins reached a high of 280,000 acres 
during the 2000-2001 crop year. Since then, bearing acreage for raisins 
has decreased almost 53 percent to 133,000 in 2021-2022. Total 
production of raisins reached a high during the 2000-2001 crop year of 
2,921,000 tons (green tons) but has decreased 65 percent to a total 
production of raisins of 1,010,000 tons in 2021-2022.
    During the hearing held February 13 and 14, 2024, interested 
persons were invited to present evidence at the hearing on the probable 
regulatory and informational impact of the proposed amendments to the 
Order on small businesses. The evidence presented at the hearing shows 
that none of the proposed amendments would have any burdensome effects 
on small agricultural producers or firms.

Estimated Economic Impact of Amending Committee Membership Size and 
Composition

    The proposal described under Material Issue No. 1 would amend Sec.  
989.26 by reducing Committee membership from 47 to 21 members. 
Corresponding changes would also be made to Sec.  989.126. The proposal 
would also remove producer district representation in Sec.  989.26(c) 
and add an unaffiliated independent producer member seat to Sec.  
989.126(a)(1). Corresponding changes would also remove Sec. Sec.  
989.22 and 989.122 and references to producer districts in Sec. Sec.  
989.29(b)(2), 989.126(a), and 989.129. In addition, Proposal No. 1 
would eliminate the designated bargaining association seat in Sec.  
989.26. Corresponding changes would also remove the reference to the 
bargaining association position in Sec.  989.30. Lastly, Proposal No. 1 
would amend Sec.  989.26 by lowering quorum requirements from 25 to 14.
    Witnesses supported this proposal and stated that reducing the size 
of the Committee would make conducting business more efficient. These 
witnesses' statements are supported by the data collected by NASS 
showing that bearing acreage for raisins has decreased almost 53 
percent since the 2000-2001 season.
    Currently, the Committee is structured to have 47 members and 47 
alternates, where quorum is met when at least 25 members attend. A 
witness testified that, from April 2019 through June 2023, Committee 
meeting participation averages only 33 out of the 47 members in 
attendance. Witnesses testified that the number of raisin producers has 
declined from approximately 3,500 during the 2000-2001 season to 
approximately 1,500 during the 2022-2023 season. Reducing the number of 
members on the Committee will bring representation into balance with 
the overall size of the industry.
    For the reasons described above, it is determined that the proposed 
amendment would benefit industry participants and improve 
administration of the order. The costs of implementing this proposal 
would be minimal, if any, and may even create efficiencies that would 
reduce administrative costs.

Estimated Economic Impact of Removing Separate Nomination Procedures

    The proposal described under Material Issue No. 2 would amend Sec.  
989.29 to eliminate the requirement for separate nominations for 
independent producers or producers affiliated with small cooperative 
marketing associations.
    Currently, the Committee has difficulty filling Committee seats 
designated for independent producer members and independent producer 
alternate members. Independent producer alternate member seats have 
gone unfilled for several consecutive years.
    According to witness testimony, the purpose of the proposal is to 
eliminate the requirements for separate nominations for independent 
producers and create greater competition for all Committee positions. 
When the raisin industry had more producers, the Committee believed 
designating separate nominations for independent producers ensured that 
independent producers' concerns were part of Committee discussions. As 
the raisin industry has evolved, separate nominations for independent 
producers have fueled low attendance rates and absenteeism at Committee 
meetings.
    In conclusion, it is determined that the benefits of eliminating 
the requirements for separate nominations for independent producers 
would outweigh any costs associated with the implementation of the 
proposed amendment.

Estimated Economic Impact of Updating Marketing Policy and Quality 
Standards for Reconditioned Raisins

    The proposal described under Material Issue No. 3 would, in Sec.  
989.54(a), remove factor number 4 ``An estimated desirable carryout at 
the end of the crop year;'' and the last part of factor number 5, ``, 
considering the estimated world raisin supply and demand situation''. 
Proposal No. 3 would also amend Sec. Sec.  989.24 and 989.58 by adding 
language to clarify the quality of reconditioned raisins as ``standard 
raisins.''
    Currently, many customers believe reconditioned raisins differ from 
raisins that were not reconditioned, even though both raisins have met 
the same quality standard. The Committee believes that there is an 
impression in the raisin market that the quality level of reconditioned 
raisins is lower than standard raisins. Clarifying standard raisins as 
any raisins that have been inspected and meet the Order's minimum 
requirements, regardless of whether the fruit has been reconditioned or 
not, would remove any negative quality impression that is associated 
with reconditioned raisins.
    According to a witness, the proposed amendment would streamline the 
sales process and would have a positive impact for raisin handlers and 
producers. Currently, USDA does not distinguish between reconditioned 
or standard raisins when purchasing for feeding programs.
    It is determined that the benefits gained from implementing this 
proposal would outweigh additional implementation costs incurred, if 
any.

Estimated Economic Impact for Adding Contribution Authority and Patent/
Trademark Authority

    The proposal described under Material Issue 4 would add Sec.  
989.63 to establish the authority to accept voluntary contributions and 
add Sec.  989.64 to establish authority related to ownership of, and 
rights to, intellectual property and add authority for the collection 
of rents/royalties from the same.
    The Order does not currently allow for the Committee to accept 
voluntary contributions or have ownership of, and rights to, 
intellectual property. This proposal would allow for the Committee to 
generate additional income outside the collection of handler 
assessments.
    According to a witness, the Committee has been approached recently 
with the opportunity to generate revenue from the trademarked Dancing 
Raisins. Adding the authority

[[Page 74863]]

to own, and to exercise the rights of, intellectual property would 
allow the Committee to receive income from patents, copyrights, 
trademarks, inventions, publications, or product formulations. Such 
authority would allow the Committee to collect additional income from 
the Dancing Raisins and any other intellectual property owned or 
controlled by the Committee. The additional income could benefit the 
raisin industry by, for instance, supporting future research as 
determined by the Committee.
    For the reasons described above, it is determined that any 
additional costs incurred for this proposal would be outweighed by the 
increased flexibility for the industry to respond to a changing global 
marketplace.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this proposed rule. These amendments are 
intended to improve the operation and administration of the Order and 
to assist in the marketing of California raisins.
    Committee meetings regarding these proposals, as well as the 
hearing date and location, were widely publicized throughout the 
California raisin industry, and all interested persons were invited to 
attend the meetings and the hearing to participate in Committee 
deliberations on all issues. All Committee meetings, and the hearing, 
were public forums, and all entities, both large and small, were able 
to express views on these issues. Interested persons are invited to 
submit information on the regulatory impacts of this action on small 
businesses.
    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.

Paperwork Reduction Act

    Current information collection requirements that are part of the 
Federal marketing order for California raisins (7 CFR part 984) are 
approved under OMB No. 0581-0178 Vegetables and Specialty Crops. Some 
changes in those requirements are anticipated as a result of this 
proceeding. Such changes would be submitted to OMB for approval.
    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.

Civil Justice Reform

    The amendments to the Order proposed herein have been reviewed 
under Executive Order 12988, Civil Justice Reform. They are not 
intended to have retroactive effect. If adopted, the proposed 
amendments would not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
proposal.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under Sec.  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. 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 no later than 20 days after the date of 
entry of the ruling.

Rulings on Briefs of Interested Persons

    No briefs were filed. Proposed findings and conclusions and the 
evidence in the record were considered in making the findings and 
conclusions set forth in this recommended decision. To the extent that 
the suggested findings and conclusions filed by interested persons are 
inconsistent with the findings and conclusions of this recommended 
decision, the requests to make such findings or to reach such 
conclusions are denied.

General Findings

    The findings hereinafter set forth are supplementary to the 
findings and determinations which were previously made in connection 
with the issuance of the marketing agreement and order and all said 
previous findings and determinations are hereby ratified and affirmed, 
except insofar as such findings and determinations may be in conflict 
with the findings and determinations set forth herein.
    (1) The marketing order, as amended, and as hereby proposed to be 
further amended, and all of the terms and conditions thereof, would 
tend to effectuate the declared policy of the Act;
    (2) The marketing order, as amended, and as hereby proposed to be 
further amended, regulates the handling of raisins produced from grapes 
grown in the production area (California) in the same manner as, and is 
applicable only to, persons in the respective classes of commercial and 
industrial activity specified in the marketing order upon which a 
hearing has been held;
    (3) The marketing order, as amended, and as hereby proposed to be 
further amended, is limited in its application to the smallest regional 
production area which is practicable, consistent with carrying out the 
declared policy of the Act, and the issuance of several orders 
applicable to subdivisions of the production area would not effectively 
carry out the declared policy of the Act;
    (4) The marketing order, as amended, and as hereby proposed to be 
further amended, prescribes, insofar as practicable, such different 
terms applicable to different parts of the production area as are 
necessary to give due recognition to the differences in the production 
and marketing of raisins grown in the production area; and
    (5) All handling of raisins grown in the production area as defined 
in the marketing order is in the current of interstate or foreign 
commerce or directly burdens, obstructs, or affects such commerce.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposal. All written exceptions received within the 
comment period will be considered, and a producer referendum may be 
conducted before any of these proposals are implemented.

List of Subjects in 7 CFR Part 989

    Grapes, Marketing agreements, Raisins, Reporting and recordkeeping 
requirements.

Recommended Further Amendment of the Marketing Order

    For the reasons set out in the preamble, the Agricultural Marketing 
Service proposes to amend 7 CFR part 989 as follows:

PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA

0
1. The authority citation for part 989 continues to read as follows:

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


Sec.  989.22   [Removed and Reserved]

0
2. Remove and reserve Sec.  989.22.
0
3. Amend Sec.  989.24 by revising paragraph (b) to read as follows:


Sec.  989.24   Standard raisins, off-grade raisins, other failing 
raisins, and raisin residual material.

* * * * *

[[Page 74864]]

    (b) Off-grade raisins means raisins which do not meet the then 
effective minimum grade and condition standards for natural condition 
raisins: Provided, That raisins which are certified as off-grade 
raisins shall continue to be such until successfully reconditioned as 
standard raisins or become ``other failing raisins.''
* * * * *
0
4. Revise Sec.  989.26 to read as follows:


Sec.  989.26   Establishment and membership.

    A Raisin Administrative Committee is hereby established consisting 
of 21 members of whom 12 shall represent producers, 8 shall represent 
handlers and 1 shall be a public member.
    (a) The producer members shall be selected as follows:
    (1) Producer members representing the cooperative marketing 
association(s) shall be members of such association(s) engaged in the 
handling of raisins, each of which acquired not less than 10 percent of 
the total raisin acquisitions during the preceding crop year, and those 
members shall be equal to the product, rounded to the nearest whole 
number, obtained by multiplying 12 by the ratio the cooperative 
marketing association(s) raisin acquisitions are to the acquisitions of 
all handlers during the preceding crop year. (2) Producer members 
representing cooperative bargaining association(s) shall be members of 
such association(s), and the number of those members shall be equal to 
the product, rounded to the nearest whole number, obtained by 
multiplying 12 by the ratio the raisins acquired by handlers from 
bargaining association members are to the total acquisitions of all 
handlers during the preceding crop year.
    (3) All other producer members, who shall not be members of a 
cooperative bargaining association(s), cooperative marketing 
association(s) engaged in the handling of raisins which acquired 10 
percent or more of the total acquisitions during the preceding crop 
year, nor sold for cash to cooperative marketing association(s), shall 
represent all producers not defined in paragraphs (a)(1) or (2) of this 
section and shall be selected as designated in the rules and 
regulations.
    (b) The handler members shall be divided into two groups and 
include the following:
    (1) Handler members shall be selected from and represent 
cooperative marketing association(s) engaged in the handling of raisins 
each of which acquired not less than 10 percent of the total raisin 
acquisitions during the preceding crop year, and the number of those 
members shall be equal to the product, rounded to the nearest whole 
number, obtained by multiplying 8 by the ratio of the cooperative 
marketing association(s) raisin acquisitions are to the total 
acquisitions of all handlers during the preceding crop year.
    (2) The remaining handler members shall be selected from and 
represent all other handlers, which would include all independent 
handlers and small cooperative marketing association(s) who acquired 
less than 10 percent of the total raisin acquisitions during the 
preceding crop year. Handler nominees for this group shall be nominated 
by all handlers in the group in a manner determined by the Committee, 
with the approval of the Secretary, and specified in the rules and 
regulations.
    (c) The public member shall be nominated by the Committee and 
selected by the Secretary as public member.
    (d) For each member of the Committee there shall be an alternate 
member who shall have the same qualifications as the member for whom 
they are an alternate.
0
5. Amend Sec.  989.29 by revising paragraphs (a) and (b)(1) and (2) to 
read as follows:


Sec.  989.29   Initial members and nomination of successor members.

    (a) Initial members. Members and alternate members of the Committee 
serving immediately prior to the effective date of this amended subpart 
shall, if thereafter they are eligible, serve on the Committee until 
April 30, 2026, and until their respective successors have been 
selected and qualified.
    (b) * * *
    (1) The Committee shall notify the cooperative marketing 
association(s) engaged in handling not less than 10 percent of the 
total raisin acquisitions during the preceding crop year, and 
cooperative bargaining association(s), of the date by which nominations 
to fill member and alternate member positions shall be made. The 
Committee shall give reasonable publicity of a meeting or meetings of 
producers who are not members of cooperative bargaining association(s), 
or cooperative marketing association(s) which handled 10 percent or 
more of the total raisin acquisitions during the preceding crop year, 
and of independent handlers and cooperative marketing association(s) 
who handled less than 10 percent of the total raisin acquisitions 
during the preceding crop year, for the purpose of making nominations 
to fill the member and alternate member positions prescribed in Sec.  
989.26 (a)(3) and (b): Provided, That member and alternate member 
nominations by independent handlers and cooperative marketing 
association(s) who acquired less than 10 percent of the total raisin 
acquisitions during the preceding crop year may be made to the 
Committee by mail in lieu of meetings.
    (2)(i) Any producer representing independent producers and 
producers who are affiliated with cooperative marketing association(s) 
handling less than 10 percent of the total raisin acquisitions during 
the preceding crop year must have produced grapes which were made into 
raisins.
    (ii) Each such producer whose name is offered in nomination to 
represent on the Committee independent producers or producers who are 
affiliated with cooperative marketing association(s) handling less than 
10 percent of the total raisin acquisitions during the preceding crop 
year shall be given the opportunity to provide the Committee a short 
statement outlining qualifications and desire to serve if selected. 
These brief statements, together with a ballot and voting instructions, 
shall be mailed to all independent producers and producers who are 
affiliated with cooperative marketing associations handling less than 
10 percent of the total raisin acquisitions during the preceding crop 
year of record with the Committee. The producer candidate receiving the 
highest number of votes shall be designated as the first member nominee 
for a member position in which they qualify, the second highest shall 
be designated as the second member nominee for a member position which 
they qualify, until nominees for all producer member positions have 
been filled. Similarly, after all producer member positions have been 
filled, the producer candidate receiving the highest number of votes 
shall be designated as the first alternate member nominee for a member 
position in which they qualify, the second highest shall be designated 
as the second alternate member nominee for a member position in which 
they qualify, until nominees for all alternate member positions have 
been filled.
    (iii) In the event there are no qualified candidates for any 
designated producer member or alternate member positions, such 
positions may be filled by other producer candidates not otherwise 
nominated for a position.
    (iv) Each independent producer or producer affiliated with 
cooperative marketing association(s) handling less than 10 percent of 
the total raisin acquisitions during the preceding crop year shall cast 
only one vote with respect to each position for which nominations are 
to be made. Write-in candidates shall be accepted. The person receiving 
the most votes with

[[Page 74865]]

respect to each position to be filled, in accordance with paragraph 
(b)(2)(ii) and (iii) of this section, shall be the person to be 
certified to the Secretary as the nominee. The Committee may, subject 
to the approval of the Secretary, establish rules and regulations to 
effectuate this section.
* * * * *
0
6. Revise Sec.  989.30 to read as follows:


Sec.  989.30   Selection.

    The Secretary shall select producer, handler, and public members 
and alternate members in the number specified in Sec.  989.26, as 
applicable, and with the qualifications specified in Sec.  989.27. Such 
selections may be made from nominations certified pursuant to Sec.  
989.29 or from other eligible producers, or handlers.


Sec.  989.38   [Amended]

0
7. Amend Sec.  989.38 by removing the numeral ``25'' and adding in its 
place the numeral ``14''.


Sec.  989.54   [Amended]

0
8. Amend Sec.  989.54 by:
0
a. Removing paragraph (a)(4);
0
b. Redesignating paragraphs (a)(5) through (9) as paragraphs (a)(4) 
through (8), respectively; and
0
c. Removing in newly redesignated paragraph (a)(4), the text ``, 
considering the estimated world raisin supply and demand situation''.
0
9. Amend Sec.  989.58 by adding paragraph (g) to read as follows:


Sec.  989.58   Natural condition raisins.

* * * * *
    (g) Quality reconditioned raisins. All raisins which have been 
inspected and certified as meeting the minimum grade, quality, and 
condition standards established pursuant to this section, whether upon 
incoming inspection or upon later inspection after reconditioning, 
shall be determined to be standard raisins, labelled accordingly, and 
shall be eligible for commercial disposition as natural condition 
raisins or packed raisins in normal outlets.
0
10. Add Sec.  989.63 to read as follows:


Sec.  989.63   Contributions.

    The Committee may accept voluntary contributions: Provided, That 
such contributions shall only be used to pay expenses authorized under 
Sec.  989.79. Furthermore, contributions shall be free from any 
encumbrances by the donor and the Committee shall retain complete 
control of their use.
0
11. Add Sec.  989.64 to read as follows:


Sec.  989.64   Patents, copyrights, trademarks, inventions, product 
formulations, and publications.

    (a) Any patents, copyrights, trademarks, inventions, product 
formulations, and publications developed through the use of funds 
received by the Committee under this subpart shall be the property of 
the U.S. Government, as represented by the Committee, and shall, along 
with any rents, royalties, residual payments, or other income from the 
rental, sales, leasing, franchising, or other uses of such patents, 
copyrights, trademarks, inventions, product formulations, or 
publications, inure to the benefit of the Committee; shall be 
considered income subject to the same fiscal, budget, and audit 
controls as other funds of the Committee; and may be licensed subject 
to approval by the Secretary.
    (b) Upon termination of this subpart, Sec.  989.92 shall apply to 
determine disposition of any property, including patents, copyrights, 
trademarks, inventions, product formulations, and publications 
developed through the use of funds received by the Committee under this 
subpart.
    (c) Should patents, copyrights, trademarks, inventions, product 
formulations, or publications be developed through the use of funds 
collected by the Committee under this subpart and funds contributed by 
another organization or person, ownership and related rights to such 
patents, copyrights, trademarks, inventions, product formulations, or 
publications shall be determined by agreement between the Committee and 
the person or organization contributing funds towards the development 
of such patents, copyrights, inventions, trademarks, product 
formulations, or publications in a manner consistent with paragraph (a) 
of this section.
    (d) Should any patents, copyrights, trademarks, inventions, product 
formulations, or publications be licensed to the Committee by another 
person or organization, the rights and obligations regarding such 
licensed patents, copyrights, trademarks, inventions, product 
formulations, or publications shall be determined by agreement between 
the Committee and the person or organization permitting licensure in a 
manner consistent with paragraph (a) of this section.


Sec.  989.122   [Removed and Reserved]

0
12. Remove and reserve Sec.  989.122.
0
13. Revise Sec.  989.126 to read as follows:


Sec.  989.126   Representation of the Committee.

    (a) Pursuant to Sec.  989.26(a)(3), and commencing with the term of 
office beginning May 1, 2026, apportionment of independent and small 
cooperative producers shall be:
    (1) One producer member, selected from and representing all 
producers, who is unaffiliated with any handler (including, but not 
limited to, ownership, employment, or agent of any handler, and whose 
family members are similarly unaffiliated with any handler); and
    (2) The remaining producer member(s) selected from and representing 
all other independent and small cooperative producers.
    (b) Pursuant to section Sec.  989.26(b)(2), and commencing with the 
term of office beginning May 1, 2026, apportionment of the independent 
and small cooperative marketing association handlers shall be:
    (1) Two members selected from and representing the four handler(s) 
other than major cooperative marketing association handler(s) who 
acquired the largest percentage of the total raisin acquisitions during 
the preceding crop year; and
    (2) The remaining member(s) selected from and representing all 
other handlers, including small cooperative marketing association 
handler(s) and all processors.
0
14. Revise Sec.  989.129 to read as follows:


Sec.  989.129   Voting at nomination meetings.

    Any person (defined in Sec.  989.3 as an individual, partnership, 
corporation, association, or any other business unit) who is engaged, 
in a proprietary capacity, in the production of grapes which are sun-
dried or dehydrated by artificial means to produce raisins and who 
qualifies under the provisions of Sec.  989.29(b)(2) shall be eligible 
to cast one vote for a nominee for each producer member position and 
one vote for a nominee for each producer alternate member position on 
the Committee which is to be filled. Such person must be the one who or 
which: Owns and farms land resulting in his or its ownership of such 
grapes produced thereon; rents and farms land, resulting in his or its 
ownership of all or a portion of such grapes produced thereon; or owns 
land which he or it does not farm and, as rental for such land, obtains 
the ownership of a portion of such grapes or the raisins. In this 
connection, a partnership shall be deemed to include two or more 
persons (including a husband and wife) with respect to land the title 
to which, or leasehold interest

[[Page 74866]]

in which, is vested in them as tenants in common, joint tenants, or 
under community property laws, as community property. In a landlord-
tenant relationship, wherein each of the parties is a producer, each 
such producer shall be entitled to one vote for a nominee for each 
producer member position and one vote for each producer alternate 
member position. Hence, where two persons operate land as landlord and 
tenant on a share-crop basis, each person is entitled to one vote for 
each such position to be filled. Where land is leased on a cash rental 
basis, only the person who is the tenant or cash renter (producer) is 
entitled to vote. A partnership or corporation, when eligible, is 
entitled to cast only one vote for a nominee for each producer position 
to be filled.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-20079 Filed 9-12-24; 8:45 am]
BILLING CODE P