[Federal Register Volume 59, Number 209 (Monday, October 31, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26908]


[[Page Unknown]]

[Federal Register: October 31, 1994]


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DEPARTMENT OF AGRICULTURE
7 CFR Part 989

[Docket No. FV94-989-5IFR]

 

Raisins Produced From Grapes Grown in California; Expenses and 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule authorizes expenditures and 
establishes an assessment rate under Marketing Order No. 989 for the 
1994-95 crop year. Authorization of this budget enables the Raisin 
Administrative Committee (Committee) to incur expenses that are 
reasonable and necessary to administer the program. Funds to administer 
this program are derived from assessments on handlers.

DATES: Effective Dates: August 1, 1994, through July 31, 1995.
    Comments: Comments received by December 30, 1994, will be 
considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this action. Comments must be sent in triplicate to the 
Docket Clerk, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456, 
room 2523-S, Washington, DC 20090-6456, FAX 202-720-5698. Comments 
should reference the docket number and the date and page number of this 
issue of the Federal Register and will be available for public 
inspection in the Office of the Docket Clerk during regular business 
hours.

FOR FURTHER INFORMATION CONTACT: Martha Sue Clark, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O. 
Box 96456, room 2523-S, Washington, DC 20090-6456, telephone 202-720-
9918, or Richard P. Van Diest, California Marketing Field Office, Fruit 
and Vegetable Division, AMS, USDA, suite 102B, 2202 Monterey Street, 
Fresno, CA 93721, telephone 209-487-5901.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 989 (7 CFR part 989), regulating the handling 
of raisins produced from grapes grown in California. The marketing 
agreement and order are 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 (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This interim final rule has been reviewed under Executive Order 
12778, Civil Justice Reform. Under the provisions of the marketing 
order now in effect, California raisins are subject to assessments. It 
is intended that the assessment rate as issued herein will be 
applicable to all assessable raisins handled during the 1994-95 crop 
year, which began August 1, 1994, and ends July 31, 1995. This interim 
final rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    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 the Secretary 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 requesting 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 the Secretary 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 in equity to review 
the Secretary's ruling on the petition, provided a bill in equity is 
filed not later than 20 days after the date of the entry of the ruling.
    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA), the Administrator of the Agricultural Marketing 
Service (AMS) has considered the economic impact of this rule on small 
entities.
    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. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 5,000 producers of California raisins under 
this marketing order, and approximately 20 handlers. Small agricultural 
producers have been defined by the Small Business Administration (13 
CFR 121.601) as those having annual receipts of less than $500,000, and 
small agricultural service firms are defined as those whose annual 
receipts are less than $5,000,000. A majority of California raisin 
producers and a minority of handlers may be classified as small 
entities.
    The budget of expenses for the 1994-95 crop year was prepared by 
the Committee, the agency responsible for local administration of the 
marketing order, and submitted to the Department for approval. The 
members of the Committee are producers and handlers of California 
raisins. 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. The budget was formulated 
and discussed in a public meeting. Thus, all directly affected persons 
have had an opportunity to participate and provide input.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected acquisitions of California 
raisins. Because that rate will be applied to actual acquisitions, it 
must be established at a rate that will provide sufficient income to 
pay the Committee's expenses.
    The Committee, with headquarters in Fresno, California, met August 
15, 1994, and unanimously recommended a 1994-95 budget of $1,324,000, 
which is $744,940 more than the previous year. Budget items for 1994-95 
which have increased compared to those budgeted for 1993-94 (in 
parentheses) are: Office salaries, $123,000 ($90,000), fieldman 
salaries, $44,000 ($42,600), Payroll taxes, $30,000 ($27,500), employer 
retirement contribution, $20,000 ($18,200), general insurance, $8,000 
($6,000), group medical insurance, $40,000 ($37,000), rent, $43,000 
($17,900), telephone, $15,000 ($4,000), postage, $20,000 ($12,000), 
office supplies, $30,000 ($20,000), repairs and maintenance, $10,000 
($5,000), audit fees, $20,000 ($3,600), office travel, $14,000 
($12,000), Committee meeting expenses, $7,500 ($5,000), miscellaneous 
expense, $15,000 ($10,000), objective measurement survey, $14,750 
($14,000), and reserve for contingencies, $142,400 ($55,810). The 
Committee also recommended employee benefit expenses of $2,500 and 
export program funding of $50,000 for travel and $350,000 for foreign 
program administration, for which no funding was recommended last year.
    The Committee also provided for $1,652,750 for certain expenses 
likely to be incurred in connection with the 1994-95 raisin reserve 
pools for Natural (sun-dried) Seedless and Zante Currant raisins. Pool 
expenses are deducted from proceeds obtained from the sale of reserve 
raisins. These proposed expenses are $766,150 more than the $886,600 
for 1993-94 reserve pool expenses.
    The larger administrative and reserve pool expenses result from the 
Committee's takeover of certain industry export marketing activities 
and the fact that the Natural (sun-dried) Seedless raisin crop is 
expected to be significantly larger than last year. This large crop, 
and the pooling of Zante Currant raisins for the first time in many 
years, will result in a larger quantity to be pooled and increased 
costs. Reserve pool expenditures are reviewed annually by the 
Department.
    A California State raisin marketing order was terminated earlier 
this year. Its administrative agency, the California Raisin Advisory 
Board (CALRAB), formerly conducted marketing promotion and paid 
advertising activities here and abroad for the California raisin 
industry.
    The Committee is taking over the funding and administration of the 
Market Promotion Program (MPP). The MPP, administered by the 
Department's Foreign Agricultural Service (FAS), encourages the 
development, maintenance, and expansion of export markets for 
agricultural commodities like raisins.
    Recently, the FAS redirected MPP funds allocated to CALRAB for 
foreign promotion and advertising to the Committee which desires to use 
the funds to continue the industry's strong overseas promotion and 
advertising activities. To receive the full allocation ($4,479,549), 
the Committee must be able to show that it plans to spend, from 
industry sources, an amount equal to 50 percent of that allotment 
($2,239,975). This spending can be for administration or promotion. The 
Committee recommended that the increased spending necessary to meet the 
required MPP matching figure be funded through increased handler 
assessments, reserve pool funds, and merchandising incentive program 
funds.
    Under the marketing order's volume regulation provisions, marketing 
percentages (free and reserve) for a varietal type can be implemented 
to stabilize supplies. The free percentage prescribes the portion of 
the crop that can be shipped immediately to any market. The reserve 
percentage prescribes the portion of the crop to be held for later 
shipment. Reserve raisins are held in a reserve pool by handlers for 
the account of the Committee. Funds generated from the sales of reserve 
raisins, after deduction of reserve pool expenses, are distributed 
equally to equity holders in the pool (producers).
    A Committee implemented merchandising incentive program promotes 
the consumption of California raisins in foreign markets. For various 
countries, cash rebates and advertising/promotion incentives are 
offered to qualifying importers. Funds used to pay the incentives are 
derived from reserve pool sales.
    The Committee's MPP match of $2,239,775 will be made up of 
$1,249,775 in Committee domestic and overseas administration costs and 
$990,000 in industry market promotion funds. Domestic administration 
costs include $283,560 in employee salaries and benefits and $252,215 
for MPP overhead costs. The overhead costs include expenditures for 
Committee staff to travel overseas ($100,000), Committee delegation 
trips ($50,000), rent ($28,500), insurance ($1,600), telephone 
($7,500), postage ($6,000), office supplies, ($2,500), repairs and 
maintenance ($2,000), audit fees ($15,000), local travel ($3,000), 
equipment ($5,000), and miscellaneous expenses ($31,715).
    The overseas costs of $714,000 include funding for the Committee's 
overseas marketing representatives and their staffs for nine countries 
(United Kingdom, Germany, Japan, Singapore, Philippines, Thailand, 
Malaysia, China, and Hong Kong). The costs include salaries and 
benefits, travel, office rent, office supplies, utilities, and postage. 
The representatives will handle the administration and day-to-day 
details of the marketing activities conducted in these countries.
    The domestic and overseas administrative and overhead costs for the 
MPP will be paid with handler administrative assessments and reserve 
pool proceeds. Most of the major expense items for the MPP (employees 
salaries and benefits, domestic and overseas travel, and office rent) 
will be shared equally between administrative and reserve pool funds.
    A total of $1,442,325 is presently available for the Committee's 
merchandising incentive program. Of that amount, a total of $990,000 
will qualify for the MPP match. The Committee plans to use these funds 
for authorized promotion activities in Japan.
    The Committee unanimously recommended an assessment rate of $4.00 
per ton, which is $2.20 more than last year. This rate, when applied to 
anticipated acquisitions of 331,000 tons, will yield $1,324,000 in 
assessment income, which will be adequate to cover anticipated 
administrative expenses. Any unexpended assessment funds from the crop 
year are required to be credited or refunded to the handlers from whom 
collected.
    While this action will impose some additional costs on handlers and 
producers, the costs on handlers are in the form of uniform 
assessments, and those on producers will be shared equally by all 
equity holders in the 1994-95 reserve pool for Natural (sun-dried) 
Seedless raisins. However, these costs will be offset by the benefits 
derived by the operation of the marketing order. Therefore, the 
Administrator of the AMS has determined that this action will not have 
a significant economic impact on a substantial number of small 
entities.
    After consideration of all relevant matter presented, including the 
information and recommendations 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 upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this action until 30 days after publication in the Federal Register 
because:
    (1) The Committee needs to have sufficient funds to pay its 
expenses which are incurred on a continuous basis;
    (2) the crop year began on August 1, 1994, and the marketing order 
requires that the rate of assessment for the crop year apply to all 
assessable raisins handled during the crop year;
    (3) handlers are aware of this action which was unanimously 
recommended by the Committee at a public meeting and it is similar to 
other budget actions issued in past years; and
    (4) this interim final rule provides a 60-day comment period, and 
all comments timely received will be considered prior to finalization 
of this action.

List of Subjects in 7 CFR Part 989

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

    For the reasons set forth in the preamble, 7 CFR part 989 is 
amended as follows:

PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA

    1. The authority citation for 7 CFR Part 989 continues to read as 
follows:

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

    2. A new Sec. 989.345 is added to read as follows:

    Note: This section will not appear in the Code of Federal 
Regulations.


Sec. 989.345  Expenses and assessment rate.

    Expenses of $1,324,000 by the Raisin Administrative Committee are 
authorized, and an assessment rate of $4.00 per ton of assessable 
California raisins is established for the crop year ending July 31, 
1995. Any unexpended funds from that crop year shall be credited or 
refunded to the handler from whom collected.

    Dated: October 25, 1994.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 94-26908 Filed 10-28-94; 8:45 am]
BILLING CODE 3410-02-P