[Federal Register Volume 81, Number 121 (Thursday, June 23, 2016)]
[Rules and Regulations]
[Pages 40781-40783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-14824]



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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Doc. No. AMS-SC-15-0077; SC16-925-1 FR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation from the California 
Desert Grape Administrative Committee (Committee) for an increase of 
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 
and handled 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 will 
remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective June 24, 2016.

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 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 Orders 12866, 13563, and 13175.
    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 
will 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 rule increases 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 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 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 million, 18-pound lugs, 
which is lower than the 5.8 million, 18-pound lugs handled last year. 
The Committee also recommended carrying over a financial reserve of 
$47,500, which would increase to $54,000, at the end of the fiscal 
period. 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 million, 18-pound lugs, is expected to 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 and research expenses.
    The assessment rate recommended by the Committee was derived by 
evaluating several factors, including estimated shipments for the 2016 
season, proposed expenses, and the level of available financial 
reserves. The Committee determined that the $0.0300 assessment rate 
should 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 $54,000. The 
reserve would be well within the reserve amount authorized under the 
order. Section 925.41 of the order permits the Committee to maintain 
approximately one fiscal period's expenses in reserve.

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    The assessment rate established in this rule 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's 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 
2016 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 small 
entities acting on their own behalf.
    There are approximately 12 handlers of southeastern California 
grapes who are subject to regulation under the marketing order and 
about 38 grape producers in the production area. Small agricultural 
service firms are defined by the Small Business Administration 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(13 CFR 121.201).
    Seven of the 12 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 nine of the 38 producers 
have annual receipts of less than $750,000. Based on the foregoing, it 
may be concluded that slightly more than half of the grape handlers and 
a minority of the grape producers could be classified as small 
entities.
    This rule increases 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 assessment rate of $0.0300 is 
$0.0050 higher than the 2015 rate. The quantity of assessable grapes 
for the 2016 season is estimated at 5 million, 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 and assessment rate, a 
subcommittee met to discuss this matter for the purpose of making a 
recommendation to the Committee. The Committee considered alternative 
expenditures and assessment rates, to include not increasing the 
$0.0250 assessment rate. Based on a crop estimate of 5 million, 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 $54,000. This amount is 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 will be 0.13 
percent for the 2016 season ($0.0300 divided by $22.75 per 18-pound 
lug).
    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. However, these costs 
are 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.
    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, Generic Fruit 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 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. As noted in the 
initial regulatory flexibility analysis, USDA has not identified any 
relevant Federal rules that duplicate, overlap, or conflict with this 
final rule.
    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.
    A proposed rule concerning this action was published in the Federal 
Register on March 10, 2016 (81 FR 12605). Copies of the proposed rule 
were also provided 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

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ending March 25, 2016, 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: 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.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, as herein 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 2016 
fiscal period began on January 1, 2016, and the marketing 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. Also, a 15-day comment period was provided for in the proposed 
rule and no comments were received.

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:

    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: June 17, 2016.
Elanor Starmer,
Administrator, Agricultural Marketing Service.
[FR Doc. 2016-14824 Filed 6-22-16; 8:45 am]
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