[Federal Register Volume 78, Number 6 (Wednesday, January 9, 2013)]
[Rules and Regulations]
[Pages 1715-1718]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-00190]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 925
[Doc. No. AMS-FV-11-0090; FV 12-925-1 FR]
Grapes Grown in Designated Area of Southeastern California;
Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule increases the assessment rate established for the
California Desert Grape Administrative Committee (Committee) for the
2012 and subsequent fiscal periods from $0.0125 to $0.0150 per 18-pound
lug of grapes handled. The Committee locally administers the marketing
order, which regulates the handling of grapes grown in a designated
area of southeastern California. Assessments upon grape handlers are
used by the Committee to fund reasonable and necessary expenses of the
program. The fiscal period began January 1 and ends December 31. The
assessment rate will remain in effect indefinitely unless modified,
suspended or terminated.
DATES: Effective Date: January 10, 2013.
FOR FURTHER INFORMATION CONTACT: Kathie M. Notoro, Marketing
Specialist, or Kurt J. Kimmel, Regional Director, California Marketing
Field Office, Marketing Order and Agreement Division, Fruit and
Vegetable Program, AMS, USDA; Telephone: (559) 487-5901, Fax: (559)
487-5906, or Email: Kathie.Notoro@ams.usda.gov or
Kurt.Kimmel@ams.usda.gov.
Small businesses may request information on complying with this
regulation by contacting Laurel May, Marketing Order and Agreement
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence
SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491,
Fax: (202) 720-8938, or Email: Laurel.May@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order
No. 925, as amended (7 CFR part 925), regulating the handling of grapes
grown in a designated area of southeastern California, hereinafter
referred to as the ``order.'' The order is effective under the
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674), hereinafter referred to as the ``Act.''
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Order 12866.
[[Page 1716]]
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the marketing order now in effect, grape handlers
in a designated area of southeastern California are subject to
assessments. Funds to administer the order are derived from such
assessments. It is intended that the assessment rate as issued herein
is applicable to all assessable grapes beginning on January 1, 2012,
and continue until amended, suspended, or terminated.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. Such
handler is afforded the opportunity for a hearing on the petition.
After the hearing, USDA would rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This rule increases the assessment rate established for the
Committee for the 2012 and subsequent fiscal periods from $0.0125 to
$0.0150 per 18-pound lug of grapes.
The grape order provides authority for the Committee, with the
approval of USDA, to formulate an annual budget of expenses and collect
assessments from handlers to administer the program. The members of the
Committee are producers and handlers of grapes grown in a designated
area of southeastern California. They are familiar with the Committee's
needs and with the costs for goods and services in their local area and
are thus in a position to formulate an appropriate budget and
assessment rate. The assessment rate is formulated and discussed in a
public meeting. Thus, all directly affected persons have an opportunity
to participate and provide input.
For the 2011 and subsequent fiscal periods, the Committee
recommended, and the USDA approved, an assessment rate that would
continue in effect from fiscal period to fiscal period unless modified,
suspended, or terminated by USDA upon recommendation and information
submitted by the Committee or other information available to USDA.
The Committee met on November 3, 2011, and unanimously recommended
2012 expenditures of $95,500 and an assessment rate of $0.0150 per 18-
pound lug of grapes handled. In comparison, last year's budgeted
expenditures were $89,616. The assessment rate of $0.0150 per 18-pound
lug of grapes handled recommended by the Committee is $0.0025 higher
than the $0.0125 rate currently in effect. The higher assessment rate
is necessary to cover the Committee's budgeted expenses which include
an increase in research and general office expenses. While the
Committee's crop estimate of 5.8 million, 18-pound lugs is higher than
the 5.4 million, 18-pound lugs handled last year, the higher assessment
will generate $87,000 of revenue. This revenue plus the operating
reserve should be sufficient to cover the increase in anticipated
expenses.
The major expenditures recommended by the Committee for the 2012
fiscal period include $15,500 for research, $17,500 for general office
expenses, and $62,500 for management and compliance expenses. The
$15,500 research project is a for a new vine study proposed by the
University of California Riverside. In comparison, major expenditures
for the 2011 fiscal period included $10,000 for research, $15,616 for
general office expenses, and $64,000 management and compliance
expenses.
The assessment rate recommended by the Committee was derived by the
following formula: Anticipated 2012 expenses ($95,500) plus the desired
2012 ending reserve ($70,000), minus the anticipated 2012 beginning
reserve ($78,500), divided by the estimated 2012 shipments (5.8
million, 18-pound lugs) equals $0.0150 per lug.
Income generated through the $0.0150 assessment ($87,000) plus
anticipated carry-in reserve funds ($78,500) should be sufficient to
meet anticipated expenses ($95,500). Reserve funds by the end of 2012
are projected at $70,000 or about one fiscal period's expenses. Section
925.41 of the order permits the Committee to maintain about one fiscal
period's expenses in reserve.
The assessment rate established in this rule will continue in
effect indefinitely unless modified, suspended, or terminated by USDA
upon recommendation and information submitted by the Committee or other
available information.
Although this assessment rate will be in effect for an indefinite
period, the Committee will continue to meet prior to or during each
fiscal period to recommend a budget of expenses and consider
recommendations for modification of the assessment rate. The dates and
times of Committee meetings are available from the Committee or USDA.
Committee meetings are open to the public and interested persons may
express their views at these meetings. USDA will evaluate the Committee
recommendations and other available information to determine whether
modification of the assessment rate is needed. Further rulemaking will
be undertaken as necessary. The Committee's 2012 budget and those for
subsequent fiscal periods will be reviewed and, as appropriate,
approved by USDA.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS)
has considered the economic impact of this rule on small entities.
Accordingly, AMS has prepared this final regulatory flexibility
analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and the rules issued thereunder, are unique in
that they are brought about through group action of essentially small
entities acting on their own behalf.
There are approximately 13 handlers of southeastern California
grapes who are subject to regulation under the order and about 41 grape
producers in the production area. Small agricultural service firms are
defined by the Small Business Administration (13 CFR 121.201) as those
having annual receipts of less than $7,000,000, and small agricultural
producers are defined as those whose annual receipts are less than
$750,000. Nine of the 13 handlers subject to regulation have annual
grape sales of less than $7 million. Based on data from the National
Agricultural Statistics Service (NASS) and the Committee, the crop
value for the 2011 season was about $46,574,000. Dividing this figure
by the number of producers (41) yields an average annual producer
revenue estimate of about $1,135,951. However, according to the
Committee, at least 10 of 41 producers would be considered small
businesses under the Small Business Administration threshold of
$750,000. Based on the foregoing, it may be concluded that a majority
of grape handlers and at least ten of the producers could be classified
as small entities.
This rule increases the assessment rate established for the
Committee and
[[Page 1717]]
collected from handlers for the 2012 and subsequent fiscal periods from
$0.0125 to $0.0150 per 18-pound lug of grapes. The Committee
unanimously recommended 2012 expenditures of $95,500 and an assessment
rate of $0.0150 per 18-pound lug of grapes handled. The assessment rate
of $0.0150 is $0.0025 higher than the 2011 rate currently in effect.
The higher assessment rate is necessary to cover the Committee's
budgeted expenses, including increases in research and general office
expenses. While the Committee's crop estimate of 5.8 million, 18-pound
lugs is higher than the 5.4 million, 18-pound lugs handled last year,
the higher rate will generate $87,000 of revenue. This revenue plus the
operating reserve should be sufficient to cover the increase in
anticipated expenses. Reserve funds by the end of 2012 are projected at
$70,000 or about one fiscal period's expenses.
The major expenditures recommended by the Committee for the 2012
fiscal period include $15,500 for research, $17,500 for general office
expenses, and $62,500 for management and compliance expenses. The
$15,500 research project is a for a new vine study proposed by the
University of California Riverside. In comparison, major expenditures
for the 2011 fiscal period included $10,000 for research, $15,616 for
general office expenses, and $64,000 management and compliance
expenses.
The assessment rate recommended by the Committee was derived by the
following formula: Anticipated 2012 expenses ($95,500) plus the desired
2012 ending reserve ($70,000), minus the anticipated 2012 beginning
reserve ($78,500), divided by the estimated 2012 shipments (5.8
million, 18-pound lugs) equals $0.0150 per lug.
The Committee reviewed and unanimously recommended 2012
expenditures of $95,500, which included increases in research and
general office expenses. Prior to arriving at this budget, the
Committee considered alternative expenditures and assessment rates, to
include not increasing the $0.0125 assessment rate currently in effect.
Based on a crop estimate of 5.8 million 18-pound lugs, the Committee
ultimately determined that increasing the assessment rate to $0.0150
combined with funds generated from the reserve should adequately cover
increased expenses and provide an adequate 2012 ending reserve.
A review of historical crop and price information, as well as
preliminary information pertaining to the upcoming fiscal period
indicates that the producer price for the 2012 season could average
about $7.93 per 18-pound lug of grapes handled for California grapes.
To calculate the percentage of producer revenue represented by the
assessment rate for 2011, the assessment rate of $0.0125 per 18-pound
lug is divided by the estimated average producer price of $7.93 per 18-
pound lug. NASS data for 2012 is not yet available. However, applying
these same calculations above using the July 2011 producer price would
result in an estimated assessment revenue as a percentage of total
producer revenue of 0.189 percent for the 2012 season ($0.0150 divided
by $7.93 per 18-pound lug). Thus, the assessment revenue should be well
below the 1 percent of estimated producer revenue in 2012.
This action increases the assessment obligation imposed on
handlers. While assessments impose some additional costs on handlers,
the costs are minimal and uniform on all handlers. Some of the
additional costs may be passed on to producers. However, these costs
will be offset by the benefits derived by the operation of the order.
In addition, the Committee's meeting was widely publicized throughout
the grape production area and all interested persons were invited to
attend and participate in Committee deliberations on all issues. Like
all Committee meetings, the November 3, 2011, meeting was a public
meeting and all entities, both large and small, were able to express
views on this issue.
In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C.
Chapter 35), the order's information collection requirements have been
previously approved by the Office of Management and Budget (OMB) and
assigned OMB No. 0581-0189. No changes in those requirements as a
result of this action are necessary. Should any changes become
necessary, they would be submitted to OMB for approval.
This rule imposes no additional reporting or recordkeeping
requirements on either small or large California grape handlers. As
with all Federal marketing order programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies. As noted in the
initial regulatory flexibility analysis, USDA has not identified any
relevant Federal rules that duplicate, overlap, or conflict with this
final rule.
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.
A proposed rule concerning this action was published in the Federal
Register on July 2, 2012 (77 FR 39184).
Copies of the proposed rule were also mailed or sent via facsimile
to all grape handlers. Finally, the proposal was made available through
the Internet by USDA and the Office of the Federal Register. A 30-day
comment period ending August 1, 2012, was provided for interested
persons to respond to the proposal. No comments were received.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at:
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about
the compliance guide should be sent to Laurel May at the previously-
mentioned address in the FOR FURTHER INFORMATION CONTACT section.
After consideration of all relevant material presented, including
the information and recommendation submitted by the Committee and other
available information, it is hereby found that this rule, as
hereinafter set forth, will tend to effectuate the declared policy of
the Act.
Pursuant to 5 U.S.C. 553, it also found and determined that good
cause exists for not postponing the effective date of this rule until
30 days after publication in the Federal Register because: (1) The 2012
fiscal period began on January 1, 2012, and the marketing order
requires that the rate of assessment for each fiscal period apply to
all assessable grapes handled during the fiscal period; (2) the
Committee needs to have sufficient funds to meet its expenses, which
are incurred on a continuous basis; and (3) handlers are aware of this
action, which was unanimously recommended by the Committee at a public
meeting and is similar to other assessment rate actions issued. Also, a
30-day comment period was provided for in the proposed rule.
List of Subjects in 7 CFR Part 925
Grapes, Marketing agreements, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 925 is
amended as follows:
PART 925--GRAPES GROWN IN A DESIGNATED AREA OF SOUTHEASTERN
CALIFORNIA
0
1. The authority citation for 7 CFR part 925 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
[[Page 1718]]
0
2. Section 925.215 is revised to read as follows:
Sec. 925.215 Assessment rate.
On or after January 1, 2012, an assessment rate of $0.0150 per 18-
pound lug is established for grapes grown in a designated area of
southeastern California.
Dated: January 3, 2013.
Rex A. Barnes,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2013-00190 Filed 1-8-13; 8:45 am]
BILLING CODE 3410-02-P