[Federal Register Volume 79, Number 92 (Tuesday, May 13, 2014)]
[Rules and Regulations]
[Pages 27159-27161]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10988]



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Rules and Regulations
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Federal Register / Vol. 79, No. 92 / Tuesday, May 13, 2014 / Rules 
and Regulations

[[Page 27159]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

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


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule increases the assessment rate established for the 
California Desert Grape Administrative Committee (Committee) for the 
2014 and subsequent fiscal periods from $0.0165 to $0.0200 per 18-pound 
lug of grapes handled. The Committee locally administers the marketing 
order, which regulates the handling of grapes grown in a designated 
area of southeastern California. Assessments upon grape handlers are 
used by the Committee to fund reasonable and necessary expenses of the 
program. The fiscal period began on January 1 and ends on December 31. 
The assessment rate will remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Effective Date: May 14, 2014.

FOR FURTHER INFORMATION CONTACT: Kathie M. Notoro, Marketing 
Specialist, or Martin Engeler, Regional Director, California Marketing 
Field Office, Marketing Order and Agreement Division, Fruit and 
Vegetable Program, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 
487-5906, or Email: Kathie.Notoro@ams.usda.gov or 
Martin.Engeler@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: Jeffrey.Smutny@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This 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 Orders 12866, 13563, and 13175.
    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, 2014, 
and will 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 2014 and subsequent fiscal periods from $0.0165 to 
$0.0200 per 18-pound lug of grapes handled.
    The grape order provides authority for the Committee, with the 
approval of USDA, to formulate an annual budget of expenses and collect 
assessments from handlers to administer the program. The members of the 
Committee are producers and handlers of grapes grown in a designated 
area of southeastern California. They are familiar with the Committee's 
needs and with the costs of goods and services in their local area and 
are thus in a position to formulate an appropriate budget and 
assessment rate. The assessment rate is formulated and discussed in a 
public meeting. Thus, all directly affected persons have an opportunity 
to participate and provide input.
    For the 2014 and subsequent fiscal periods, the Committee 
recommended, and the USDA approved, an assessment rate that would 
continue in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by USDA based upon a recommendation and 
information submitted by the Committee or other information available 
to USDA.
    The Committee met on November 5, 2013, and unanimously recommended 
2014 expenditures of $110,000 and an assessment rate of $0.0200 per 18-
pound lug of grapes handled. In comparison, last year's budgeted 
expenditures were $100,000. The Committee recommended a crop estimate 
of 5,500,000 18-pound lugs, which is lower than the 5,800,000 18-pound 
lugs handled last year. The Committee also recommended carrying over a 
financial reserve of $49,000, which would increase to $59,000 if the 
contingency fund was not expended. The assessment rate of $0.0200 per 
18-pound lug of grapes handled is $0.0035 higher than the $0.0165 rate 
currently in effect. The higher assessment rate, applied to shipments 
of 5,500,000 18-pound lugs, is expected to generate $110,000 in revenue 
and should be sufficient to cover the anticipated expenses.
    The major expenditures recommended by the Committee for the 2014 
fiscal period include $15,500 for research, $22,000 for general office 
expenses, $62,500 for management and compliance expenses, and $10,000 
for a contingency reserve. The $15,500 research project is a 
continuation of a vine study in progress by the University of 
California, Riverside. In comparison, major expenditures for the 2013 
fiscal period included $15,500 for research, $17,000 for general office 
expenses, and $67,500 for management and

[[Page 27160]]

compliance expenses. Overall 2014 expenditures include a decrease in 
management and compliance expenses, an increase in general office 
expenses, and additional funds for the contingency reserve.
    The assessment rate recommended by the Committee was derived by 
evaluating several factors, including estimated shipments for the 2014 
season, budgeted expenses, and the level of available financial 
reserves. The Committee determined that the $0.0200 assessment rate 
should generate $110,000 in revenue to cover the budgeted expenses of 
$110,000.
    Reserve funds by the end of 2014 are projected to be $49,000 if the 
$10,000 added to the contingency fund is expended or $59,000 if it is 
not expended. Both amounts are well within the amount authorized under 
the order. Section 925.41 of the order permits the Committee to 
maintain approximately one fiscal period's expenses in reserve.
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by USDA 
based upon a recommendation and information submitted by the Committee 
or other available information.
    Although this assessment rate 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's 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 
2014 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 
businesses subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf.
    There are approximately 15 handlers of southeastern California 
grapes who are subject to regulation under the marketing order and 
about 41 grape producers in the production area. Small agricultural 
service firms are defined by the Small Business Administration (13 CFR 
121.201) as those having annual receipts of less than $7,000,000, and 
small agricultural producers are defined as those whose annual receipts 
are less than $750,000. Ten of the 15 handlers subject to regulation 
have annual grape sales of less than $7,000,000, according to USDA 
Market News Service and Committee data. Based on information from the 
Committee and USDA's Market News Service, it is estimated that at least 
10 of the 41 producers have annual receipts of less than $750,000. 
Thus, it may be concluded that a majority of the grape handlers 
regulated under the order and about 10 of the producers could be 
classified as small entities under the Small Business Administration's 
definitions.
    This rule increases the assessment rate established for the 
Committee and collected from handlers for the 2014 and subsequent 
fiscal periods from $0.0165 to $0.0200 per 18-pound lug of grapes. The 
Committee unanimously recommended 2014 expenditures of $110,000 and an 
assessment rate of $0.0200 per 18-pound lug of grapes handled. The 
assessment rate of $0.0200 is $0.0035 higher than the 2013 rate 
currently in effect. The quantity of assessable grapes for the 2014 
season is estimated at 5,500,000 18-pound lugs. Thus, the $0.0200 rate 
should generate $110,000 in income. In addition, reserve funds at the 
end of the year are projected to be $49,000, which is well within the 
order's limitation of approximately one fiscal period's expenses.
    The major expenditures recommended by the Committee for the 2014 
fiscal period include $15,500 for research, $22,000 for general office 
expenses, $62,500 for management and compliance expenses, and $10,000 
for the contingency reserve. In comparison, major expenditures for the 
2013 fiscal period included $15,500 for research, $17,000 for general 
office expenses, and $67,500 for management and compliance expenses. 
Overall expenditures included a decrease in management and compliance 
expenses, an increase in general office expenses, and funding of a 
contingency reserve.
    Prior to arriving at this budget, the Committee considered 
alternative expenditures and assessment rates, including not increasing 
the $0.0165 assessment rate currently in effect. Based on a crop 
estimate of 5,500,000 18-pound lugs, the Committee ultimately 
determined that increasing the assessment rate to $0.0200 would 
generate sufficient funds to cover budgeted expenses. Reserve funds at 
the end of the 2014 fiscal period are projected to be $49,000 if the 
$10,000 contingency fund is expended or $59,000 if it is not expended. 
These amounts are well within the amount authorized under the order.
    A review of historical crop and price information, as well as 
preliminary information pertaining to the upcoming fiscal period, 
indicates that the producer price for the 2013 season averaged about 
$16.20 per 18-pound lug of California grapes handled. Utilizing the 
estimate and the assessment rate of $0.0200, estimated assessment 
revenue as a percentage of total estimated producer revenue would be 
0.12 percent for the 2014 season ($0.0200 divided by $16.20 per 18-
pound lug). Thus, the assessment revenue should be well below 1 percent 
of estimated producer revenue in 2014.
    This action 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 
should be offset by the benefits derived from the operation of the 
marketing order. In addition, the Executive Subcommittee and the 
Committee's meetings were widely publicized throughout the grape 
production area, and all interested persons were invited to attend and 
participate in Committee deliberations on all issues. Like all 
Committee meetings, the November 5, 2013, meeting was a public meeting 
and all entities, both large and small, were able to express views on 
this issue.
    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 Generic Fruit Crops. 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

[[Page 27161]]

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 March 31, 2014 (79 FR 17940). 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 15-day comment period ending on April 
15, 2014, 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: http://www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Jeffrey Smutny at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined 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 2014 
fiscal period began on January 1, 2014, and the order requires that the 
rate of assessment for each fiscal period apply to all assessable 
grapes handled during such fiscal period; (2) the Committee needs to 
have sufficient funds to pay its expenses, which are incurred on a 
continuous basis; (3) handlers are aware of this action, which was 
unanimously recommended by the Committee at a public meeting and is 
similar to other assessment rate actions issued in past years; and (4) 
a 15-day comment period was provided for in the proposed rule, and no 
comments were received.

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.


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


Sec.  925.215  Assessment rate.

    On and after January 1, 2014, an assessment rate of $0.0200 per 18-
pound lug is established for grapes grown in a designated area of 
southeastern California.

    Dated: May 7, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-10988 Filed 5-12-14; 8:45 am]
BILLING CODE 3410-02-P