[Federal Register Volume 81, Number 47 (Thursday, March 10, 2016)]
[Proposed Rules]
[Pages 12605-12607]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-05420]


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 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. 81, No. 47 / Thursday, March 10, 2016 / 
Proposed Rules  

[[Page 12605]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Doc. No. AMS-SC-15-0077; SC16-925-1 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 proposed rule would implement a recommendation from the 
California Desert Grape Administrative Committee (Committee) to 
increase the assessment rate established for the 2016 and subsequent 
fiscal periods from $0.0250 to $0.0300 per 18-pound lug of grapes 
handled under the marketing order (order). The Committee locally 
administers the order, and is comprised of producers and handlers 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 
began on 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 March 25, 2016.

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, Specialty Crops 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: Kathie Notoro, Marketing Specialist, 
or Jeffrey Smutny, Regional Director, California Marketing Field 
Office, Marketing Order and Agreement Division, Specialty Crops 
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 Antoinette Carter, Marketing Order and 
Agreement Division, Specialty Crops 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 
Order No. 925, as amended (7 CFR part 925), regulating the handling of 
grapes grown in a designated area of southeastern California. 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, 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 proposed herein 
would be applicable to all assessable grapes beginning on January 1, 
2016, 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 
for the Committee for the 2016 and subsequent fiscal periods from 
$0.0250 to $0.0300 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 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.
    For the 2015 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 recommendation and 
information submitted by the Committee or other information available 
to USDA.
    The Committee met on November 12, 2015, and unanimously recommended 
2016 expenditures of $143,500, a contingency reserve fund of $6,500, 
and an assessment rate of $0.0300 per 18-pound lug of grapes handled. 
In comparison, last year's budgeted expenditures were $135,500. The 
Committee recommended a crop estimate of 5,000,000 18-pound lugs, which 
is lower than the 5,800,000 18-

[[Page 12606]]

pound lugs handled last year. The Committee also recommended carrying 
over a financial reserve of $47,500, which would increase to $54,000 if 
the contingency fund is not expended. The assessment rate of $0.0300 
per 18-pound lug of grapes handled recommended by the Committee is 
$0.0050 higher than the $0.0250 rate currently in effect. The higher 
assessment rate, applied to shipments of 5,000,000 18-pound lugs, would 
generate $150,000 in revenue and be sufficient to cover anticipated 
expenses.
    The major expenditures recommended by the Committee for the 2016 
fiscal period include $28,500 for research, $20,080 for office 
expenses, $56,500 for management and compliance expenses, $25,000 for 
consultation services, and $6,500 for a contingency reserve. The 
$28,500 research project is a continuation of a vine study in progress 
by the University of California, Riverside. In comparison, major 
expenditures for the 2015 fiscal period included $15,500 for research, 
$17,000 for general office expenses, $62,750 for management and 
compliance expenses, $25,000 for consultation services, and $9,500 for 
a contingency reserve. Overall 2016 expenditures include a decrease in 
management and compliance expenses, and increases in office expenses, 
and research expenses.
    The assessment rate recommended by the Committee was derived by 
evaluating several factors, including estimated shipments for the 2016 
season, budgeted expenses, and the level of available financial 
reserves. The Committee determined that the $0.0300 assessment rate 
would generate $150,000 in revenue to cover the budgeted expenses of 
$143,500, and a contingency reserve fund of $6,500.
    Reserve funds by the end of 2016 are projected to be $47,500 if the 
$6,500 added to the contingency fund is expended or $54,000 if it is 
not expended. Both amounts are 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 proposed assessment rate would 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 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 the 
Committee's 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 
2016 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) (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 13 handlers of southeastern California 
grapes who are subject to regulation under the marketing 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 $7,500,000, and 
small agricultural producers are defined as those whose annual receipts 
are less than $750,000. Ten of the 13 handlers subject to regulation 
have annual grape sales of less than $7,500,000, according to USDA 
Market News Service and Committee data. In addition, information from 
the Committee and USDA's Market News indicates that at least 10 of 41 
producers have annual receipts of less than $750,000. Thus, it may be 
concluded that a majority of the grape handlers regulated under the 
order and about 10 of the producers could be classified as small 
entities under the Small Business Administration's definitions.
    This proposed rule would increase the assessment rate established 
for the Committee and collected from handlers for the 2016 and 
subsequent fiscal periods from $0.0250 to $0.0300 per 18-pound lug of 
grapes. The Committee unanimously recommended 2016 expenditures of 
$143,500, a contingency reserve fund of $6,500, and an assessment rate 
of $0.0300 per 18-pound lug of grapes handled. The proposed assessment 
rate of $0.0300 is $0.0050 higher than the 2015 rate currently in 
effect. The quantity of assessable grapes for the 2016 season is 
estimated at 5,000,000 18-pound lugs. Thus, the $0.0300 rate should 
generate $150,000 in income. In addition, reserve funds at the end of 
the year are projected to be $54,000, which is well within the order's 
limitation of approximately one fiscal period's expenses.
    The major expenditures recommended by the Committee for the 2016 
fiscal period include $28,500 for research, $20,080 for general office 
expenses, $56,500 for management and compliance expenses, $25,000 for 
consultation services and $6,500 for the contingency reserve. In 
comparison, major expenditures for the 2015 fiscal period included 
$15,500 for research, $17,000 for general office expenses, $62,750 for 
management and compliance expenses, $25,000 for consultation services, 
and $9,500 for a contingency reserve. Overall 2016 expenditures include 
a decrease in management and compliance expenses, and increases in 
general office expenses, and research expenses.
    Prior to arriving at this budget, the Committee considered 
alternative expenditures and assessment rates, to include not 
increasing the $0.0250 assessment rate currently in effect. Based on a 
crop estimate of 5,000,000 18-pound lugs, the Committee ultimately 
determined that increasing the assessment rate to $0.0300 would 
generate sufficient funds to cover budgeted expenses. Reserve funds at 
the end of the 2016 fiscal period are projected to be $47,500 if the 
$6,500 contingency fund is expended or $54,000 if it is not expended. 
These amounts are well within the amount authorized under the order.
    A review of historical crop and price information, as well as 
preliminary information pertaining to the upcoming fiscal period, 
indicates that the shipping point price for the 2015 season averaged 
about $22.75 per 18-pound lug of California desert grapes handled. If 
the 2016 price is similar to the 2015 price, estimated assessment 
revenue as a percentage of total estimated handler revenue would be 
0.13 percent for the 2016 season ($0.0300 divided by $22.75 per 18-
pound lug).
    This action would increase the assessment obligation imposed on 
handlers. While assessments impose

[[Page 12607]]

some additional costs on handlers, the costs are minimal and uniform on 
all handlers. However, these costs would be offset by the benefits 
derived from 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 and 
participate in Committee deliberations on all issues. Like all 
Committee meetings, the November 12, 2015, 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 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. 0581-0189. 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 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.
    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/rules-regulations/moa/small-businesses. Any questions 
about the compliance guide should be sent to Antoinette Carter at the 
previously-mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    A 15-day comment period is provided to allow interested persons to 
respond to this proposed rule. Fifteen days is deemed appropriate 
because: (1) The 2016 fiscal period begins on January 1, 2016, and the 
order requires that the rate of assessment 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.

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

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

    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, 2016, an assessment rate of $0.0300 per 18-
pound lug is established for grapes grown in a designated area of 
southeastern California.

    Dated: March 3, 2016.
Elanor Starmer,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2016-05420 Filed 3-9-16; 8:45 am]
 BILLING CODE P