[Federal Register Volume 80, Number 170 (Wednesday, September 2, 2015)]
[Proposed Rules]
[Pages 53022-53024]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-21850]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Doc. No. AMS-FV-15-0032; FV15-989-2 PR]


Raisins Produced From Grapes Grown in California; Increased 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Raisin Administrative Committee (committee) to increase the assessment 
rate established for the 2015-16 and subsequent crop years from $14.00 
to $17.00 per ton of California raisins handled under the marketing 
order (order). The committee locally administers the order and is 
comprised of producers and handlers of raisins operating within the 
area of production. Assessments upon raisin handlers are used by the 
committee to fund reasonable and necessary expenses of the program. The 
crop year begins August 1 and ends July 31. The assessment rate would 
remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Comments must be received by October 2, 2015.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Fruit and Vegetable 
Program, 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. All comments submitted in response to this 
proposed rule will be included in the record and will be made available 
to the public. Please be advised that the identity of the individuals 
or entities submitting the comments will be made public on the Internet 
at the address provided above.

FOR FURTHER INFORMATION CONTACT: Maria Stobbe, 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 proposed rule is issued under Marketing 
Agreement and Order No. 989, both as amended (7 CFR part 989), 
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 proposed rule 
in conformance with Executive Orders 12866, 13563, and 13175.
    This proposed 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 assessments. It is intended that 
the assessment rate as proposed herein would be applicable to all 
assessable raisins beginning on August 1, 2015, and 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 proposed rule would increase the assessment rate established 
by the committee for the 2015-16 and

[[Page 53023]]

subsequent crop years from $14.00 to $17.00 per ton of California 
raisins acquired by handlers.
    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 to 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 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 2010-11 and subsequent crop years, the committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from crop year to crop year 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 June 11, 2015, and recommended an assessment 
rate increase from $14.00 per ton to $17.00 per ton by a unanimous 
vote. At this meeting, the committee also recommended a budget for the 
2015-16 crop year, with recommended expenses and contingency reserve 
totaling $5,832,496. The vote on this recommendation was also 
unanimous. The proposed assessment rate of $17.00 per ton is expected 
to generate assessment income of $5,832,496, which would be sufficient 
to fund the recommended 2015-16 expenses.
    As previously stated, the committee's recommended budget for the 
2015-16 crop year is $5,832,496, and the recommended assessment rate is 
$17.00 per ton, which is $3.00 per ton higher than the rate currently 
in effect.
    The major expenditures recommended by the committee for the 2015-16 
crop year include: Salaries and employee-related costs of $1,402,906; 
administration costs of $610,000; compliance activities of $30,000; 
research and studies of $129,000; operation and maintenance of the 
generic marketing programs of $3,520,178; and a contingency of 
$355,503. Subtracted from these expenses is $215,091, which represents 
reimbursable costs for the shared management of the State marketing 
program.
    In comparison, last year's approved budgeted expenditures included: 
Salaries and employee-related costs of $1,337,100; administration costs 
of $493,500; compliance activities of $30,000; research and studies of 
$85,000; operation and maintenance of the generic marketing programs of 
$3,296,800; and a contingency of $100,000. Reimbursable costs for the 
shared management of the State marketing program of $166,860 were 
subtracted, resulting in a total approved budget for the 2014-15 crop 
year of $5,175,540.
    The committee believes that more funds should be spent in promoting 
raisins internationally, including China. For that reason, budgeted 
expenses in those endeavors have been increased: Research and studies 
increased from $85,000 for the 2014-15 crop year to $129,000 for the 
2015-16 crop year; and operation and maintenance of generic marketing 
programs increased from $3,296,800 for the 2014-15 crop year to 
$3,520,178 for the 2015-16 crop year. In addition, the committee 
included a contingency fund for unexpected expenses and opportunities 
that may occur during the year.
    The quantity of assessable raisins for 2015-16 crop year was 
estimated to be 343,088 tons. At the recommended assessment rate of 
$17.00 per ton, the anticipated assessment income would be $5,832,496. 
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 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 
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 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 2015-16 budget, and those 
for subsequent crop years, would be reviewed and, as appropriate, 
approved by USDA.

Initial 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 proposed 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 
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 small 
entities acting on their own behalf.
    There are approximately 3,000 producers of California raisins and 
approximately 28 handlers subject to regulation under the marketing 
order. The Small Business Administration defines small agricultural 
producers as those having annual receipts less than $750,000, and 
defines small agricultural service firms as those whose annual receipts 
are less than $7,000,000. (13 CFR 121.201.)
    Based upon shipment data and other information provided by the 
committee, it may be concluded that a majority of producers and 
approximately 18 handlers of California raisins may be classified as 
small entities.
    This proposed rule would increase the assessment rate established 
for the committee and collected from handlers for the 2015-16 and 
subsequent crop years from $14.00 to $17.00 per ton of assessable 
raisins acquired by handlers.
    The committee reviewed and identified the expenses that would be 
reasonable and necessary to continue program operations during the 
2015-16 crop year. The resulting recommended budget totals $5,832,496 
for the 2015-16 crop year. This represents an overall increase from the 
2014-15 budget, which totaled $5,175,540. The 2015-16 budget includes 
additional proposed expenditures to fund increased promotional programs 
in export markets, and a contingency fund of $355,503, which provides a 
safety net to cover unexpected expenses and opportunities that present 
themselves during the 2015-16 crop year.
    The quantity of assessable raisins for 2015-16 crop year was 
estimated to be 343,088 tons. At the recommended assessment rate of 
$17.00 per ton, the anticipated assessment income would be $5,832,496. 
Sufficient income should

[[Page 53024]]

be generated at the higher assessment rate for the committee to meet 
its anticipated expenses.
    The major expenditures recommended by the committee for the 2015-16 
crop year include: Salaries and employee-related costs of $1,402,906; 
administration costs of $610,000; compliance activities of $30,000; 
research of $129,000; operation and maintenance of generic marketing 
programs of $3,520,178; and a contingency of $355,503.
    In comparison, last year's approved budgeted expenditures included: 
Salaries and employee-related costs of $1,337,100; administration costs 
of $493,500; compliance activities of $30,000; research of $85,000; 
operation and maintenance of generic marketing programs of $3,296,800; 
and a contingency of $100,000. The total budget approved for the 2014-
15 crop year was $5,175,540.
    The committee believes that more funds should be spent in promoting 
raisins internationally, including China. For that reason, expenses for 
research and promotion activities have been increased: Operation and 
maintenance of generic marketing programs increased from $3,296,800 for 
the 2014-15 crop year to $3,520,178 for the 2015-16 crop year, and 
research has increased from $85,000 for the 2014-15 crop year to 
$129,000 for the 2015-16 crop year. In order to fund these additional 
proposed expenditures, the committee recommended an increased 
assessment rate.
    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.
    Prior to arriving at this budget and assessment rate, the committee 
considered information from various sources, such as the committee's 
Audit and Marketing Subcommittees. Alternative spending levels were 
discussed by the Marketing and Audit Subcommittees, which met on June 
8, 2015 and June 11, 2015, to review the committee's financial 
operations.
    The committee ultimately decided that the recommended budget and 
assessment rate were reasonable and necessary to properly administer 
the order.
    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. With a $17.00 assessment 
rate, assessment revenue would be expected to remain at less than one 
percent of grower revenue.
    Regarding the impact of this action on affected entities, this 
action would increase the assessment obligation imposed on handlers. 
While increased assessments impose additional costs on handlers 
regulated under the order, the rates are uniform on all handlers, and 
proportional to the size of their businesses. It is expected that these 
costs would be offset by the benefits derived from the operation of the 
order.
    In addition, the meetings of the Audit and Marketing Subcommittees, 
and the full committee were widely publicized throughout the California 
raisin industry, and all interested persons were invited to attend the 
meetings and encouraged to participate in committee deliberations on 
all issues. Like all subcommittee and committee meetings, the June 8, 
2015 and June 11, 2015, meetings were public meetings, and all 
entities, both large and small, were able to express views on this 
issue. Finally, interested persons are invited to submit comments on 
this proposed rule, including the regulatory and informational impacts 
of this action on small businesses.
    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. 0581-0178, ``Vegetable and Specialty Crops.'' 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 proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large California 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.
    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 small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://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.
    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 2015-16 crop year begins on August 1, 2015, and the 
order requires the rate of assessment for each crop year to apply to 
all assessable raisins handled during the crop year; (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.

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 
proposed to be amended as follows:

PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 989 continues to read as 
follows:

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

0
2. Section 989.347 is revised to read as follows:


Sec.  989.347  Assessment rate.

    On and after August 1, 2015, an assessment rate of $17.00 per ton 
is established for assessable raisins produced from grapes grown in 
California.

    Dated: August 28, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2015-21850 Filed 9-1-15; 8:45 am]
BILLING CODE P