[Federal Register Volume 72, Number 85 (Thursday, May 3, 2007)]
[Proposed Rules]
[Pages 24551-24553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-8458]


 ========================================================================
 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. 72, No. 85 / Thursday, May 3, 2007 / Proposed 
Rules  

[[Page 24551]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Docket No. AMS-FV-07-0029; FV07-925-2 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 2007 and subsequent fiscal periods from $0.0175 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 desert 
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 would remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by June 4, 2007.

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, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or Internet: http://www.regulations.gov. 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.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Program Analyst, or 
Kurt J. Kimmel, Regional Manager, California Marketing Field Office, 
Fruit and Vegetable Programs, AMS, USDA; Telephone: (559) 487-5901, 
Fax: (559) 487-5906, or E-mail: [email protected] or 
[email protected].
    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. 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, 2007, 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 2007 and subsequent fiscal periods from $0.0175 to 
$0.0200 per 18-pound lug of grapes.
    The California 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 2005 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 February 6, 2007, and unanimously recommended 
expenditures of $160,768 and an assessment rate of $0.0200 per 18-pound 
lug of grapes for the 2007 fiscal period. In comparison, last year's 
budgeted expenditures were $131,318. The assessment rate of $0.0200 is 
$0.0025 higher than the rate currently in effect. The increased 
assessment rate is needed to permit the committee to fund a research 
project on Vineyard Mealy Bugs and to ensure that an adequate carryover 
of reserve funds is available for the 2008 fiscal year.
    The major expenditures recommended by the committee for the 2007 
fiscal period include $18,000 for research, $5,000 for compliance

[[Page 24552]]

activities, $109,068 for salaries and payroll expenses, and $28,700 for 
other expenses. In comparison, budgeted expenses for these items in 
2006 were $5,000 for compliance activities, $103,668 for salaries and 
payroll expenses, and $22,650 for other expenses. The committee did not 
budget for research projects in 2006.
    The assessment rate recommended by the committee was derived by 
subtracting the committee's total available funds from their 
anticipated 2007 expenses and dividing the remainder by the estimated 
2007 shipments. The total anticipated 2007 expenses are $160,768, and 
the desired ending reserve is $39,432. The available carry-in funds are 
$70,000, and the anticipated interest income is $200. The 2007 
estimated shipments are 6.5 million 18-pound lugs.
    Based on this calculation, (($160,768 + $39,432) - ($70,000 + 
$200)) / ( 6.5 million = $0.0200, the $0.0200 assessment rate would 
provide sufficient funds to meet anticipated expenses of $160,768 and 
would allow for an adequate December 2007 ending reserve of $39,432. 
Thus, the December 2007 ending reserve would be kept within the maximum 
permitted by the order, approximately one fiscal period's expenses, as 
required under Sec.  925.41 of the order. It would also be adequate to 
cover early-season (2008) expenses before assessment income is 
received.
    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 2007 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 50 producers of grapes in the production 
area and approximately 20 handlers subject to regulation under the 
marketing order. The Small Business Administration (13 CFR 121.201) 
defines small agricultural producers as those having annual receipts 
less than $750,000 and small agricultural service firms are defined as 
those whose annual receipts are less than $6,500,000.
    Last year, six of the 20 handlers subject to regulation had annual 
grape sales of at least $6,500,000. In addition, 10 of the 50 producers 
had annual sales of at least $750,000. Therefore, a majority of 
handlers and producers may be classified as small entities.
    This rule would increase the assessment rate established for the 
committee and collected from handlers for the 2007 and subsequent 
fiscal periods from $0.0175 to $0.0200 per 18-pound lug of grapes. The 
committee unanimously recommended expenditures of $160,768 and an 
assessment rate of $0.0200 per 18-pound lug of grapes for the 2007 
fiscal period. The proposed assessment rate of $0.0200 is $0.0025 
higher than the 2006 rate. The number of assessable grapes is estimated 
at 6.5 million 18-pound lugs. Thus, the $0.0200 rate should provide 
$130,000 in assessment income. Income derived from handler assessments, 
along with interest income and funds from the committee's authorized 
carry-in reserve should be adequate to cover budgeted expenses.
    The major expenditures recommended by the committee for the 2007 
fiscal period include $18,000 for research, $5,000 for compliance 
activities, $109,068 for salaries and payroll expenses, and $28,700 for 
other expenses. In comparison, budgeted expenses for these items in 
2006 were $5,000 for compliance activities, $103,668 for salaries and 
payroll expenses, and $22,650 for other expenses. The committee did not 
budget for research projects in 2006.
    The committee reviewed and unanimously recommended 2007 
expenditures of $160,768, which included an increase due to a new 
research project. Prior to arriving at this budget, the committee 
considered alternative expenditure and assessment rate levels, but 
ultimately decided that the recommended levels were reasonable to 
properly administer the order.
    The assessment rate recommended by the committee was derived by the 
following formula: Anticipated expenses ($160,768) plus desired 2007 
ending reserve ($39,432), minus the 2007 beginning reserve ($70,000) 
and the anticipated interest income ($200), divided by total shipments 
(6.5 million 18-pound lugs), equals the recommended assessment rate 
($0.0200 per 18-pound lug).
    This rate would provide sufficient funds in combination with 
interest and reserve funds to meet the anticipated expenses of $160,768 
and result in a December 2007 ending reserve of $39,432, which is 
acceptable to the committee. Thus, the December 2007 ending reserve 
would be kept within the maximum permitted by the order, approximately 
one fiscal period's expense, as required under Sec.  925.41 of the 
order.
    A review of historical information and preliminary information 
pertaining to the 2007 fiscal period indicates that the on-vine grower 
price for the season could range between $5.00 and $9.00 per 18-pound 
lug of grapes. Therefore, the estimated assessment revenue for the 2007 
fiscal period as a percentage of total grower revenue could range 
between 0.2 and 0.4 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 February 
6, 2007, 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.

[[Page 24553]]

    This proposed rule would impose 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.
    The AMS is committed to complying with the E-Government Act, to 
promote the use of the Internet and other technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    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 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 2007 fiscal period began on January 1, 2007, and the 
marketing order requires that the rate of assessment for each fiscal 
period apply to all assessable grapes handled during such period; (2) 
the industry could be shipping grapes beginning April 20, 2007; (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 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, 2007, an assessment rate of $0.0200 per 18-
pound lug is established for grapes grown in a designated area of 
southeastern California.

    Dated: April 27, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E7-8458 Filed 5-2-07; 8:45 am]
BILLING CODE 3410-02-P