[Federal Register Volume 78, Number 127 (Tuesday, July 2, 2013)]
[Rules and Regulations]
[Pages 39548-39551]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-15621]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Doc. No. AMS-FV-13-0005; FV13-925-1 FR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule increases the assessment rate established for the 
California Desert Grape Administrative Committee (Committee) for the 
2013 and subsequent fiscal periods from $0.0150 to $0.0165 per 18-pound 
lug of grapes handled. The Committee locally administers the marketing 
order that regulates the handling of grapes grown in a designated area 
of southeastern California. Assessments upon grape handlers are used by 
the Committee to fund reasonable and necessary expenses of the program. 
The fiscal period begins January 1 and ends December 31. The assessment 
rate will remain in effect indefinitely unless modified, suspended or 
terminated.

DATES: Effective July 3, 2013.

[[Page 39549]]


FOR FURTHER INFORMATION CONTACT: Kathie M. Notoro, Marketing 
Specialist, or Martin Engeler, Regional Director, California Marketing 
Field Office, Marketing Order and Agreement Division, Fruit and 
Vegetable Program, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 
487-5906, or Email: [email protected] or 
[email protected]. Small businesses may request information 
on complying with this regulation by contacting Jeffrey Smutny, 
Marketing Order and Agreement Division, Fruit and Vegetable Program, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email: 
[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.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, grape handlers 
in a designated area of southeastern California are subject to 
assessments. Funds to administer the order are derived from such 
assessments. It is intended that the assessment rate as issued herein 
is applicable to all assessable grapes beginning on January 1, 2013, 
and will continue until amended, suspended, or terminated.
    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 2013 and subsequent fiscal periods from $0.0150 to 
$0.0165 per 18-pound lug of grapes handled.
    The grape 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 grapes grown in a designated 
area of southeastern California. 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 2012 and subsequent fiscal periods, the Committee 
recommended, and the USDA approved, an assessment rate that would 
continue in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by USDA based upon a recommendation and 
information submitted by the Committee or other information available 
to USDA.
    The Committee met on March 4, 2013, and unanimously recommended 
2013 expenditures of $100,000 and an assessment rate of $0.0165 per 18-
pound lug of grapes handled. In comparison, last year's budgeted 
expenditures were $95,500. The recommended assessment rate is $0.0015 
higher than the $0.0150 rate currently in effect. The Committee also 
estimated shipments for the 2013 season to be 5,800,000 lugs. The 
higher assessment rate, applied to estimated shipments of 5,800,000 
lugs, is expected to generate $95,700 in revenue, which is slightly 
less than the budgeted expenses. However, combining this revenue with 
$4,300 from financial operating reserves will provide sufficient 
revenue to cover the Committee's budgeted expenses.
    The major expenditures recommended by the Committee for the 2013 
fiscal period include $15,500 for research, $17,000 for general office 
expenses, and $67,500 for management and compliance expenses. In 
comparison, major expenditures for the 2012 fiscal period included 
$15,500 for research, $17,500 for general office expenses, and $62,500 
for management and compliance expenses.
    The assessment rate recommended by the Committee was derived by 
evaluating several factors, including estimated shipments for the 2013 
season, budgeted expenses, and the level of available financial 
reserves. The Committee determined that it could utilize $4,300 from 
its financial reserves and still maintain the reserves at an acceptable 
level. The remaining $95,700 necessary to meet budgeted expenses will 
need to be raised through assessments. Thus, dividing the $95,700 in 
necessary assessment revenue by 2013 estimated shipments of 5,800,000 
lugs results in an assessment rate of $0.0165.
    Reserve funds by the end of 2013 are projected at $53,972, which is 
well within the amount authorized under the order. Section 925.41 of 
the order permits the Committee to maintain approximately one fiscal 
period's expenses in reserve.
    The assessment rate will continue in effect indefinitely unless 
modified, suspended, or terminated by USDA based upon a recommendation 
and 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 
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 will evaluate the 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 2013 budget and those for 
subsequent fiscal periods will be reviewed and, as appropriate, 
approved by USDA.

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 
businesses 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

[[Page 39550]]

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 41 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 $7,000,000, according to Committee and USDA 
data. In addition, it is estimated that ten of the 41 producers have 
annual receipts of less than $750,000. Based on the foregoing, it may 
be concluded that a majority of grape handlers regulated under the 
order, and about ten of the producers could be classified as small 
entities under the Small Business Administration definitions.
    This rule increases the assessment rate established for the 
Committee and collected from handlers for the 2013 and subsequent 
fiscal periods. The Committee unanimously recommended an assessment 
rate of $0.0165 per 18-pound lug of grapes handled, and 2013 
expenditures of $100,000. The assessment rate of $0.0165 is $0.0015 
higher than the 2012 rate currently in effect. The quantity of 
assessable grapes for the 2013 season is estimated at 5,800,000 18-
pound lugs. Thus, the $0.0165 rate should generate $95,700 in income. 
Combined with $4,300 from financial reserves, this should provide 
adequate revenue to meet the 2013 fiscal period expenses. In addition, 
reserve funds at the end of the year are projected to be $53,972, which 
is well within the order's limitation of approximately one fiscal 
period's expenses.
    The major expenditures recommended by the Committee for the 2013 
fiscal period include $15,500 for research, $17,000 for general office 
expenses, and $67,500 for management and compliance expenses. In 
comparison, major expenditures for the 2012 fiscal period included 
$15,500 for research, $17,500 for general office expenses, and $62,500 
for management and compliance expenses.
    Prior to arriving at this budget, the Committee considered 
alternative expenditures and assessment rates, including not increasing 
the $0.0150 assessment rate currently in effect. Based on a crop 
estimate of 5,800,000 18-pound lugs, the Committee ultimately 
determined that revenue generated from an assessment rate of $0.0165, 
combined with funds from the financial reserve, should adequately cover 
increased expenses while providing an adequate 2013 ending financial 
reserve.
    A review of historical crop and price information, as well as 
preliminary information pertaining to the 2013 season indicates that 
the producer price for southeastern California grapes for the 2013 
season could average about $8.00 per 18-pound lug. Utilizing this 
estimate and the assessment rate of $0.0165, estimated assessment 
revenue as a percentage of total estimated producer revenue should be 
0.20 percent for the 2013 season ($0.0165 divided by $8.00 per 18-pound 
lug). Thus, the assessment revenue should be well below 1 percent of 
estimated producer revenue in 2013.
    This action increases 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 
should be offset by the benefits derived by the operation of the order. 
In addition, the Committee's meeting was widely publicized throughout 
the grape production area and all interested persons were invited to 
attend and participate in Committee deliberations on all issues. Like 
all Committee meetings, the March 4, 2013, meeting was a public meeting 
and all entities, both large and small, were able to express views on 
this issue.
    In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0189. No changes in those requirements as a 
result of this action are necessary. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This rule 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.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the internet and other information 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 action.
    A proposed rule concerning this action was published in the Federal 
Register on May 14, 2013 (78 FR 28147). Copies of the proposed rule 
were also mailed or sent via facsimile to all grape handlers. Finally, 
the proposal was made available through the internet by USDA and the 
Office of the Federal Register. A 15-day comment period ending May 29, 
2013, was provided for interested persons to respond to the proposal. 
No comments were received.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about 
the compliance guide should be sent to Jeffrey Smutny 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 and other 
available information provided, 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 that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because: (1) The 2013 
fiscal period began on January 1, 2013, and the marketing order 
requires that the assessment rate 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. Also, a 
15-day comment period was provided for in the proposed rule.

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 
amended as follows:

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

0
1. The authority citation for 7 CFR part 925 continues to read as 
follows:


[[Page 39551]]


    Authority: 7 U.S.C. 601-674.
0
2. Section 925.215 is revised to read as follows:


Sec.  925.215  Assessment rate.

    On and after January 1, 2013, an assessment rate of $0.0165 per 18-
pound lug is established for grapes grown in a designated area of 
southeastern California.

    Dated: June 25, 2013.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2013-15621 Filed 7-1-13; 8:45 am]
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