[Federal Register Volume 68, Number 6 (Thursday, January 9, 2003)]
[Rules and Regulations]
[Pages 1143-1145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-455]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 Prices of new books are listed in the first FEDERAL REGISTER issue of each 
 week.
 
 ========================================================================
 

  Federal Register / Vol. 68, No. 6 / Thursday, January 9, 2003 / Rules 
and Regulations  

[[Page 1143]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Docket No. FV02-989-7 FR]


Raisins Produced From Grapes Grown in California; Increased 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This rule increases the assessment rate established for the 
Raisin Administrative Committee (Committee) for the 2002-03 and 
subsequent crop years from $6.50 to $8.00 per ton of free tonnage 
raisins acquired by handlers, and reserve tonnage raisins released or 
sold to handlers for use in free tonnage outlets. The Committee locally 
administers the Federal marketing order which regulates the handling of 
raisins produced from grapes grown in California (order). Authorization 
to assess raisin handlers enables the Committee to incur expenses that 
are reasonable and necessary to administer the program. The crop year 
runs from August 1 through July 31. The assessment rate will remain in 
effect indefinitely unless modified, suspended, or terminated.

EFFECTIVE DATE: January 10, 2003.

FOR FURTHER INFORMATION CONTACT: Maureen T. Pello, Senior Marketing 
Specialist, California Marketing Field Office, Marketing Order 
Administration Branch, 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, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 
20250-0237; 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, 1400 Independence 
Avenue, SW., STOP 0237, Washington, DC 20250-0237; 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. 989 (7 CFR part 989), both as amended, 
regulating the handling of raisins produced from grapes grown in 
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 
raisin handlers are subject to assessments. Funds to administer the 
order are derived from such assessments. It is intended that the 
assessment rate as issued herein will be applicable to all assessable 
raisins beginning on August 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 increases the assessment rate established for the 
Committee for the 2002-03 and subsequent crop years from $6.50 to $8.00 
per ton of free tonnage raisins acquired by handlers, and reserve 
tonnage raisins released or sold to handlers for use in free tonnage 
outlets. The order authorizes volume control provisions that establish 
free and reserve percentages for raisins acquired by handlers. Free 
tonnage raisins may be sold by handlers to any outlet, and reserve 
tonnage raisins are held by handlers for the account of the Committee 
or released or sold to handlers for sale to free tonnage outlets. 
Reserve raisins held for the account of the Committee are not 
assessable. With projected assessable tonnage about 81,000 tons less 
than last year's assessable tonnage, sufficient income should be 
generated at the higher assessment rate for the Committee to meet its 
anticipated expenses. This action was recommended by the Committee at a 
meeting on July 24, 2002.
    Sections 989.79 and 989.80, respectively, of the order provide 
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 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 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.
    A continuous assessment rate of $6.50 per ton has been in effect 
since the 2000-01 crop year. For the 2002-03 crop year, the Committee 
recommended increasing the assessment rate to $8.00 per ton of 
assessable raisins to cover recommended administrative expenditures of 
$1,912,000. This compares to budgeted expenses of $2,080,000 for the 
2001-02 crop year. Major expenditures include $663,000 for export 
program administration and related activities, $500,000 for salaries, 
$164,800 for contingencies, and

[[Page 1144]]

$160,000 for compliance activities. Budgeted expenses for these items 
in 2001-02 were $662,500, $500,000, $303,500, and $220,000, 
respectively.
    The recommended $8.00 per ton assessment rate was derived by 
dividing the $1,912,000 in anticipated expenses by an estimated 239,000 
tons of assessable raisins. The Committee recommended increasing its 
assessment rate because the projected 2002-03 assessable tonnage of 
239,000 tons is 81,000 tons lower than last year's assessable tonnage. 
Sufficient income should be generated at the higher assessment rate for 
the Committee to meet its anticipated expenses. Pursuant to Sec.  
989.81(a) of the order, any unexpended assessment funds from the crop 
year must be credited or refunded to the handlers from whom collected.
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by USDA 
upon recommendation and other 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 
crop year 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 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 2002-03 budget and those 
for subsequent crop years would be reviewed and, as appropriate, 
approved by USDA.

Final 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 action 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 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 20 handlers of California raisins who are 
subject to regulation under the order and approximately 4,500 raisin 
producers in the regulated area. Small agricultural firms are defined 
by the Small Business Administration (13 CFR 121.201) as those having 
annual receipts of less that $5,000,000, and small agricultural 
producers are defined as those having annual receipts of less than 
$750,000. Thirteen of the 20 handlers subject to regulation have annual 
sales estimated to be at least $5,000,000, and the remaining seven 
handlers have sales less than $5,000,000. No more than seven handlers, 
and a majority of producers, of California raisins may be classified as 
small entities.
    This rule increases the assessment rate established for the 
Committee and collected from handlers for the 2002-03 and subsequent 
crop years from $6.50 to $8.00 per ton of assessable raisins acquired 
by handlers. The Committee recommended 2002-03 expenditures of 
$1,912,000. Major expenditures include $663,000 for export program 
administration and related activities, $500,000 for salaries, $164,800 
for contingencies, and $160,000 for compliance activities. Budgeted 
expenses for these items in 2001-02 were $662,500, $500,000, $303,500, 
and $220,000, respectively. With anticipated assessable tonnage at 
239,000 tons, about 81,000 tons lower than last year's assessable 
tonnage, sufficient income should be generated at the $8.00 per ton 
assessment rate to meet expenses. Pursuant to Sec.  989.81(a) of the 
order, any unexpended assessment funds from the crop year must be 
credited or refunded to the handlers from whom collected.
    The industry considered various alternative assessment rates prior 
to arriving at the $8.00 per ton recommendation. The Committee's Audit 
Subcommittee met on July 24, 2002, to review preliminary budget 
information. The subcommittee was aware that the full Committee would 
be meeting later that day to consider actions that would impact the 
2002 free tonnage percentage and, thus, the quantity of 2002 assessable 
tonnage. The Audit Subcommittee considered assessment rates of $7.50 
and $8.00 per ton based on varying levels of assessable tonnage. 
Ultimately, the full Committee adopted the subcommittee's 
recommendation of $8.00 per ton based on 239,000 tons of assessable 
tonnage.
    A review of statistical data on the California raisin industry 
indicates that assessment revenue has consistently been less than one 
percent of grower revenue in recent years. Although no official 
estimates or data are available for the upcoming season, it is 
anticipated that assessment revenue will likely continue to be less 
than one percent of grower revenue in the 2002-03 crop year, even with 
the increased assessment rate.
    Regarding the impact of this action on affected entities, 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 are offset by the 
benefits derived by the operation of the marketing order.
    Additionally, the Audit Subcommittee and full Committee meetings 
held on July 24, 2002, where this action was deliberated were public 
meetings widely publicized throughout the California raisin industry. 
All interested persons were invited to attend the meetings and 
participate in the industry's deliberations. Finally, all interested 
persons were invited to submit information on the regulatory and 
informational impacts of this action on small businesses.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large raisin 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 proposed rule concerning this action was published in the Federal 
Register on November 21, 2002 (67 FR 70182). Copies of the proposed 
rule were mailed by the Committee staff to all Committee members and 
alternates, the Raisin Bargaining Association, handlers, and 
dehydrators. In addition the rule was made available through the 
Internet by the Office of the Federal Register and USDA. A 10-day 
comment period ending December 2, 2002, was provided for interested 
persons to respond to the proposal.
    One comment was received opposing the proposed increase in the 
assessment rate. The commenter stated that the estimate of assessable 
tonnage used by the Committee was artificially low, improperly 
justifying a higher assessment rate. The commenter argued that issuance 
of the proposed assessment rate at this time would be arbitrary, 
capricious, and not in

[[Page 1145]]

accordance with law because there is no field price for raisins and 
USDA has not approved the Raisin Administrative Committee's 
recommendation for free and reserve tonnage. The commenter also 
suggests that last year's assessment rate could be retained by simply 
increasing the amount of assessable tonnage by 81,000 tons.
    We disagree with the commenter. The issuance of this rule is 
consistent with the order provisions that authorize assessments. The 
Committee derived the $8.00 per ton assessment rate only after 
determining the level of necessary and appropriate administrative 
expenses, and dividing total administrative expenses by assessable 
tonnage. If later estimates indicate that the actual assessable tonnage 
is sufficiently greater than that projected by the Committee on July 
24, 2002, the Committee could recommend that the assessment rate be 
reduced. Upon approval by the Secretary, this lower rate would be 
applied to all assessable 2002-03 crop year raisins. In either case, 
the assessment revenue collected from handlers would be used to fund 
the Committee's approved administrative expenses in accordance with 
Sec. Sec.  989.79 and 989.80.
    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/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.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee, the 
comment received, 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) Handlers 
are already receiving 2002-03 raisin crop from growers; (2) the crop 
year began on August 1, 2002, and the assessment rate applies to all 
raisins received during the 2002-03 and subsequent seasons; (3) the 
Committee needs to have sufficient funds to pay its expenses which are 
incurred on a continuous basis; and (4) handlers are aware of this 
action which was recommended by the Committee at a public meeting. 
Also, a 10-day comment period was provided for in the proposed rule and 
the comment received was considered by USDA in reaching a decision on 
this matter.

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. Section 989.347 is revised to read as follows:


Sec.  989.347  Assessment rate.

    On and after August 1, 2002, an assessment rate of $8.00 per ton is 
established for assessable raisins produced from grapes grown in 
California.

    Dated: January 6, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-455 Filed 1-6-03; 4:34 pm]
BILLING CODE 3410-02-P