[Federal Register Volume 67, Number 7 (Thursday, January 10, 2002)]
[Proposed Rules]
[Pages 1315-1317]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-576]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 67, No. 7 / Thursday, January 10, 2002 / 
Proposed Rules  

[[Page 1315]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Docket No. FV02-925-1 PR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate established for 
the California Desert Grape Administrative Committee (Committee) for 
the 2002 and subsequent fiscal periods from $0.01 to $0.015 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. Authorization to assess 
grape handlers enables the Committee to incur expenses that are 
reasonable and necessary to administer the program. The fiscal period 
begins January 1 and ends December 31. The assessment rate would remain 
in effect indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by February 11, 2002.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; Fax: 
(202) 720-8938, or E-mail: [email protected]. 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, or can be 
viewed at: http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Rose Aguayo, Marketing Specialist or 
Kurt Kimmel, Regional Manager, California Marketing Field Office, Fruit 
and Vegetable Programs, AMS, USDA, 2202 Monterey Street, Suite 102B, 
Fresno, California 93721; telephone: (559) 487-5901, Fax: (559) 487-
5906; or George Kelhart, Technical Advisor, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room 
2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202) 
720-2491, Fax: (202) 720-8938.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 
96456, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 
720-8938, or e-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 925, both 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.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, California 
grape handlers are subject to assessments. Funds to administer the 
order are derived from such assessments. It is intended that the 
assessment rate as proposed herein would be applicable to all 
assessable grapes beginning on January 1, 2002, and continue until 
amended, suspended, or terminated. This 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 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 would increase the assessment rate established for the 
Committee for the 2002 and subsequent fiscal periods from $0.01 to 
$0.015 per 18-pound lug of grapes.
    The grape marketing 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 California 
grapes. 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 1997 and subsequent fiscal periods, the Committee 
recommended, and 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 5, 2001, and estimated a January 2002 
beginning reserve of approximately $124,800, and unanimously 
recommended expenditures of $195,215 and an assessment rate of $0.015 
per 18-pound lug of grapes for the 2002 fiscal period. In comparison, 
last year's budgeted expenditures were $186,023. The assessment rate of 
$0.015 is $0.005 higher than the rate currently in effect. The higher 
assessment rate is needed to offset increases in salaries and to keep 
the operating reserve at an adequate level.

[[Page 1316]]

    The expenditures recommended by the Committee for the 2002 fiscal 
period include $100,000 for research, $28,200 for compliance 
activities, $41,000 for salaries, and $26,015 for other expenses. 
Budgeted expenses for these items in 2001 were $100,000, $35,200, 
$15,000, and $35,823, respectively.
    The assessment rate recommended by the Committee was chosen because 
it will provide $142,500 in assessment income (9.5 million lugs  x  
$.015 per lug) and, when $2,000 in interest income and $50,715 of its 
reserves are used for approved expenses, allow the Committee to end the 
2002 fiscal period with a $74,085 reserve. The current rate of $.01 per 
lug would only generate $95,000 in assessment income, and require the 
Committee to use the $2,000 in interest and $98,215 of its reserves to 
cover its anticipated expenses. This would result in an ending reserve 
of $26,585, which was not acceptable to the Committee. The December 
2002 ending reserve funds (estimated to be $74,085) with the new 
assessment rate would be kept within the maximum permitted by the 
order, approximately one fiscal period's expenses (Sec. 925.42).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA upon recommendation 
and information submitted by the Committee or other available 
information.
    Although this assessment rate would be in effect for an indefinite 
period, the Committee would continue to meet prior to or during each 
fiscal period to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA would evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking would 
be undertaken as necessary. The Committee's 2002 budget and those for 
subsequent fiscal periods would be reviewed and, as appropriate, 
approved by USDA.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule on small entities. Accordingly, AMS has 
prepared this initial regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
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 80 producers of grapes in the production 
area and approximately 26 handlers subject to regulation under the 
marketing order. Small agricultural producers are defined by the Small 
Business Administration (13 CFR 121.201) as those having annual 
receipts less than $750,000, and small agricultural service firms are 
defined as those whose annual receipts are less than $5,000,000.
    Last year about 69 percent of the handlers could be considered 
small businesses under SBA's definition and about 31 percent could be 
considered large businesses. It is estimated that about 88 percent of 
the producers have annual receipts less than $750,000. Therefore, the 
majority of handlers and producers of grapes may be classified as small 
entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 2002 and subsequent 
fiscal periods from $0.01 to $0.015 per 18-pound lug of grapes. The 
Committee unanimously recommended expenditures of $195,215 and an 
assessment rate of $0.015 per 18-pound lug of grapes for the 2002 
fiscal period. The proposed assessment rate of $0.015 is $0.005 higher 
than the 2001 rate. The volume of assessable grapes is estimated at 9.5 
million 18-pound lugs. Thus, the $0.015 rate should provide $142,500 in 
assessment income. Income derived from handler assessments, along with 
interest income and funds from the Committee's authorized reserves 
should be adequate to cover budgeted expenses.
    The expenditures recommended by the Committee for the 2002 fiscal 
period include $100,000 for research, $28,200 for compliance 
activities, $41,000 for salaries, and $26,015 for other expenses. 
Budgeted expenses for these items in 2001 were $100,000, $35,200, 
$15,000, and $35,823, respectively.
    Prior to arriving at this budget, the Committee considered 
alternative expenditure levels, but ultimately decided that the 
recommended levels were reasonable to properly administer the order. 
The assessment rate recommended by the Committee was derived using the 
following formula: Anticipated expenses ($195,215), plus the desired 
2002 ending reserve ($74,085), minus the 2002 beginning reserve 
($124,800), minus the anticipated interest income ($2,000), divided by 
the total estimated 2002 shipments (9.5 million 18-pound lugs). This 
calculation results in the $0.015 assessment rate. This rate would 
provide sufficient funds in combination with interest and reserve funds 
to meet the anticipated expenses of $195,215 and result in a December 
2002 ending reserve of $74,085, which is acceptable to the Committee. 
The December 2002 ending reserve funds (estimated to be $74,085) would 
be kept within the maximum permitted by the order, approximately one 
fiscal period's expenses (Sec. 925.41).
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the on-vine 
grower price for the 2002 season could range between $5.00 and $9.00 
per 18-pound lug of grapes. Therefore, the estimated assessment revenue 
for the 2002 fiscal period as a percentage of total grower revenue 
could range between 0.2 and 0.3 percent.
    This action would increase 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 
would be offset by the benefits derived by the operation of the 
marketing order.
    In addition, the Committee's meeting was widely publicized 
throughout the grape production area and all interested persons were 
invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the November 
5, 2001, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue. Finally, interested 
persons are invited to submit information on the regulatory and 
informational impacts of this action on small businesses.
    This proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large production area 
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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    A small business guide on complying with fruit, vegetable, and 
specialty crop

[[Page 1317]]

marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance guide 
should be sent to Jay Guerber at the previously mentioned address in 
the FOR FURTHER INFORMATION CONTACT section.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: (1) The 2002 fiscal period begins on January 1, 2002, and the 
marketing 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; 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 in past years.

List of Subjects in 7 CFR Part 925

    Grapes, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 925 is 
proposed to be amended as follows:

PART 925--GRAPES GROWN IN A DESIGNATED AREA OF SOUTHEASTERN 
CALIFORNIA

    1. The authority citation for 7 CFR part 925 continues to read as 
follows:

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

    2. Section 925.215 is revised to read as follows:


Sec. 925.215  Assessment rate.

    On and after January 1, 2002, an assessment rate of $0.015 per lug 
is established for grapes grown in a designated area of southeastern 
California.

    Dated: January 3, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-576 Filed 1-9-02; 8:45 am]
BILLING CODE 3410-02-P