[Federal Register Volume 74, Number 141 (Friday, July 24, 2009)]
[Rules and Regulations]
[Pages 36603-36604]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-17602]



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 Rules and Regulations
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  Federal Register / Vol. 74, No. 141 / Friday, July 24, 2009 / Rules 
and Regulations  

[[Page 36603]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Doc. No. AMS-FV-08-0107; FV09-925-2 FIR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Affirmation of interim final rule as final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule that decreased the 
assessment rate established for the California Desert Grape 
Administrative Committee (Committee), for the 2009 and subsequent 
fiscal periods from $0.02 to $0.01 per 18-pound lug of grapes handled. 
The Committee locally administers the marketing order for grapes grown 
in a designated area of southeastern California (order). The interim 
final rule was necessary to align the Committee's expected revenue with 
decreases in its proposed budget for the 2009 fiscal period, which 
began on January 1.

DATES: Effective Date: Effective July 27, 2009.

FOR FURTHER INFORMATION CONTACT: Jennifer Robinson, Marketing 
Specialist, or Kurt J. Kimmel, Regional Manager, California Marketing 
Field Office, Marketing Order Administration Branch, 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 obtain information on complying with this and 
other marketing order regulations by viewing a guide at the following 
Web site: http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide; or 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 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 Order 12866.
    Under the order, California desert grape handlers are subject to 
assessments, which provide funds to administer the order. Assessment 
rates issued under the order are intended to be applicable to all 
assessable desert grapes for the entire fiscal period, and continue 
indefinitely until amended, suspended, or terminated. The Committee's 
fiscal period begins on January 1, and ends on December 31.
    In an interim final rule published in the Federal Register on 
February 24, 2009, and effective on February 25, 2009 (74 FR 8141, Doc. 
No. AMS-FV-08-0107; FV08-932-2 IFR), Sec.  925.215 was amended by 
decreasing the assessment rate established for the Committee for the 
2009 and subsequent fiscal periods from $0.02 to $0.01 per 18-pound lug 
or equivalent of desert grapes. The decrease in the per-unit assessment 
rate was possible due to significant decreases in budgeted management 
and administrative expenses for 2009.

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 
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.
    There are approximately 14 handlers of southeastern California 
grapes who are subject to regulation under the order and about 50 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. Nine of the 14 handlers subject to regulation have annual 
grape sales of less than $7 million. Based on data from the National 
Agricultural Statistics Service (NASS) and the Committee, the average 
crop value for 2008 is about $53,040,000. Dividing this figure by the 
number of producers (50) yields an average annual producer revenue 
estimate of about $1,060,800, which is above the SBA threshold of 
$750,000. Based on the foregoing, it may be concluded that a majority 
of grape handlers and none of the producers may be classified as small 
entities.
    This rule continues in effect the action that decreased the 
assessment rate established for the Committee and collected from 
handlers for the 2009 and subsequent fiscal periods from $0.02 to $0.01 
per 18-pound lug of grapes. The Committee unanimously recommended 
expenditures of $77,692 and an assessment rate of $0.01 per 18-pound 
lug of grapes for the 2009 fiscal period. The assessment rate of $0.01 
is one-half of the rate currently in effect. The number of assessable 
grapes is estimated at 6.5 million 18-pound lug of grapes. Thus, the 
$0.01 rate should provide $65,000 in assessment income. Income derived 
from handler assessments, along with interest income and funds from the 
Committee's authorized reserve will be adequate to cover budgeted 
expenses.
    The major expenditures recommended by the Committee for the 2009 
fiscal period include $10,500 for compliance activities, $53,000 for 
salaries and payroll expenses, and

[[Page 36604]]

$14,192 for other administrative expenses. In comparison, budgeted 
expenses for these items in 2008 were $5,000 for compliance activities, 
$61,000 for salaries, $18,000 for research, and $49,254 for other 
administrative expenses.
    Decreases in management and administrative expenses are the result 
of management services, office rental fees and utilities being shared 
by the Committee and the California Date Administrative Committee 
(CDAC). In 2008, the Committee and the CDAC agreed to share management 
and administrative costs in order to streamline expenses for both 
programs. Additionally, the Committee recommended not renewing its 
budget for research in 2009 given that there were no pending research 
proposals at the time the budget was reviewed.
    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 2009 expenses 
($77,692) plus the desired 2009 ending reserve ($88,534), minus the 
2009 beginning reserve ($100,226) plus anticipated interest income 
($1,000), divided by the estimated 2009 shipments (6.5 million 18-pound 
lugs).
    This rate should provide sufficient funds in combination with 
interest and reserve funds to meet the anticipated expenses of $77,692 
and result in a December 2009 ending reserve of $88,534. This figure is 
about $10,800 over the Committee's 2009 expenses. Section 925.41 of the 
order permits the Committee to maintain approximately one fiscal 
period's expenses in reserve. The Committee plans to continue using 
reserve funds to help meet its expenses and bring the reserve to a 
level lower than its expenses.
    To calculate the percentage of grower revenue represented by the 
assessment rate for 2008, the assessment rate of $0.02 per 18-pound lug 
is divided by the estimated average grower price (according to the 
NASS). This results in estimated assessment revenue for the 2008 season 
as a percentage of grower revenue of .245 percent ($0.02 divided by 
$8.16 per 18-pound lug). NASS data for 2009 is not yet available. 
However, applying the same calculations above using the average grower 
price for 2006-08 would result in estimated assessment revenue as a 
percentage of total grower revenue of .13 percent for the 2009 season 
($0.01 divided by $7.77 per 18-pound lug). Thus, the assessment revenue 
should be well below 1 percent of estimated grower revenue in 2009.
    This rule continues in effect the action that decreased the 
assessment obligation imposed on handlers. Assessments are applied 
uniformly on all handlers, and some of the costs may be passed on to 
producers. However, decreasing the assessment rate reduces the burden 
on handlers, and may reduce the burden on producers. 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 14, 2008, meeting was a public 
meeting and all entities, both large and small, were able to express 
views on this issue.
    This action imposes 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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    Comments on the interim final rule were required to be received on 
or before April 27, 2009. No comments were received. Therefore, for the 
reasons given in the interim final rule, we are adopting the interim 
final rule as a final rule, without change.
    To view the interim final rule, go to http://www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=AMS-FV-08-0107.
    This action also affirms information contained in the interim final 
rule concerning Executive Orders 12866 and 12988, the Paperwork 
Reduction Act (44 U.S.C. Chapter 35), and the E-Gov Act (44 U.S.C. 
101).
    After consideration of all relevant material presented, it is found 
that finalizing the interim final rule, without change, as published in 
the Federal Register (74 FR 8141, February 24, 2009) will tend to 
effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 925

    Grapes, Marketing agreements, Reporting and recordkeeping 
requirements.

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

0
Accordingly, the interim final rule amending 7 CFR part 925, which was 
published at 74 FR 8141 on February 24, 2009, is adopted as a final 
rule, without change.

    Dated: July 20, 2009.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. E9-17602 Filed 7-23-09; 8:45 am]
BILLING CODE 3410-02-P