[Federal Register Volume 82, Number 120 (Friday, June 23, 2017)]
[Proposed Rules]
[Pages 28589-28592]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-13173]


 ========================================================================
 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. 82, No. 120 / Friday, June 23, 2017 / 
Proposed Rules  

[[Page 28589]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 925 and 944

[Doc. No. AMS-SC-16-0009, SC16-925-2 PR]


Grapes Grown in a Designated Area of Southeastern California and 
Imported Table Grapes; Removing Varietal Exemptions

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 remove 
varietal exemptions from the regulations established under the 
California table grape marketing order (order) and the table grape 
import regulation (import regulation). The order regulates the handling 
of table grapes grown in a designated area of southeastern California 
and is administered locally by the Committee. The import regulation is 
authorized under section 8e of the Agricultural Marketing Agreement Act 
of 1937, as amended, and regulates the importation of table grapes into 
the United States. In conjunction with this proposed rule, 
administrative exemptions that were previously granted for other 
varieties of imported grapes, including those that are genetically 
related to the four varieties exempted under the order's regulations 
and import regulation, would be removed.

DATES: Comments must be received by August 22, 2017.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. 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. All 
comments should reference the document 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 proposal 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 Richard Lower, 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, 
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.''
    This proposed rule is also issued under section 8e of the Act, 
which provides that whenever certain specified commodities, including 
table grapes, are regulated under a Federal marketing order, imports of 
those commodities into the United States are prohibited unless they 
meet the same or comparable quality, grade, size, and maturity 
requirements as those in effect for the domestically produced 
commodities.
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 12866, 13563, and 13175. 
Additionally, because this rule does not meet the definition of a 
significant regulatory action it does not trigger the requirements 
contained in Executive Order 13771. See the Office of Management and 
Budget's (OMB) Memorandum titled ``Interim Guidance Implementing 
Section 2 of the Executive Order of January 30, 2017, titled `Reducing 
Regulation and Controlling Regulatory Costs'[thinsp]'' (February 2, 
2017).
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This action is not intended to have retroactive 
effect.
    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 a petition with USDA 
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. A 
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.
    There are no administrative procedures which must be exhausted 
prior to any judicial challenge to the provisions of import regulations 
issued under section 8e of the Act.
    Under the terms of the order, fresh market shipments of Vitis 
vinifera table grape varieties, including hybrids, from the production 
area are required to be inspected and are subject to grade, size, 
quality, maturity, pack, and container requirements during the period 
April 10 through July 10 (regulatory period) each year. Such shipments 
must be certified as meeting the order's requirements. Pursuant to 
section 8e of the Act, table grapes imported into the United States 
during the regulatory period must also be inspected and certified as 
meeting the grade, size, quality, and maturity standards contained in 
the import regulation.
    Historically, four varieties of grapes have been exempted from 
requirements

[[Page 28590]]

established under the order and the import regulation because these 
varieties were not grown within the regulated production area. The 
Emperor, Calmeria, Almeria, and Ribier varieties were first exempted 
from regulation under the order for the 1983 marketing period (48 FR 
16025; April 4, 1983). The import regulation provides that imported 
grapes must meet the same or comparable grade, size, quality, and 
maturity requirements as domestic grapes regulated under the order.
    The varietal exemptions were made effective in both the order's 
regulations and the import regulation on a continuing basis in 1985 (50 
FR 18849; May 3, 1985). Subsequently, sixteen other grape varieties 
genetically related to one or more of the four exempted varieties were 
subject to administrative exemptions from regulation under the import 
regulation because they were not grown in the production area.
    The order regulates all vinifera species of table grapes, including 
the exempted varieties. Accordingly, the proposed rule would update the 
order's regulations to remove all varietal exemptions including the 
original varietal exemptions and subsequent administrative exemptions. 
Pursuant to section 8(e), corresponding updates would also be made to 
the import regulations.
    The Committee believes it is important that table grapes marketed 
in the U.S. during the regulatory period are of a consistently high 
quality, grade, size, and maturity. Updating the regulations to remove 
outdated varietal exemptions will improve the marketing of table 
grapes; better meet the needs of consumers; increase returns to 
growers, handlers, and importers; and foster repeat purchases by 
consumers.
    Section 925.6 of the order defines varieties to mean and to include 
all classifications or subdivisions of Vitis vinifera table grapes.
    Section 925.52(a)(1) of the order provides authority to regulate 
the handling of any grade, size, quality, maturity, or pack of any and 
all grape varieties during any period. Section 925.53 provides 
authority for the Committee to recommend to USDA changes to regulations 
issued pursuant to Sec.  925.52.
    Section 925.55 of the order specifies that when grapes are 
regulated pursuant to Sec.  925.52, such grapes must be inspected by 
the Federal or Federal-State Inspection Service and certified to ensure 
they meet applicable requirements.
    Section 925.304 of the order's administrative rules and regulations 
specifies the grade, size, quality, maturity, pack, and container 
requirements for shipments of all varieties of Vitis vinifera table 
grapes from the production area from April 10 through July 10 each 
year. Section 925.304 also contains the regulatory exemption for the 
Emperor, Calmeria, Almeria, and Ribier varieties.
    The corresponding grade, size, quality, and maturity requirements 
for imported table grapes are contained in 7 CFR 944.503, which also 
specifies the regulatory exemption for the Emperor, Calmeria, Almeria, 
and Ribier varieties.
    In the early 1980s, when the order and import regulation were 
established, there were fewer grape varieties grown in the production 
area. The distinct characteristics of individual table grape varieties 
were recognized by consumers, and grapes were marketed accordingly. 
Regulatory exemptions were provided for the handling of certain 
varieties that were not grown in the production area but imported into 
the United States to satisfy market demand. Progeny and genetically-
related hybrids of those exempted varieties were also exempted 
administratively because they were not being grown in the production 
area.
    As a result of extensive breeding programs, the number of different 
grape varieties cultivated in the production area has expanded. Now, 
varieties administratively exempted from the import regulation, such as 
the Red Globe variety, are being grown in the production area.
    In addition, as a result of the extensive breeding programs 
introducing new hybrids, the distinguishing characteristics of each 
variety have become less pronounced. Table grapes are now typically 
marketed by color and presence or absence of seeds, rather than by 
specific variety, such as ``red seedless'' instead of ``Emperor'', 
``green seeded'' instead of ``Calmeria'' or ``Almeria'', or ``black 
seeded'' grapes instead of ``Ribier''.
    According to a March 2011 consumer research study sponsored by the 
Desert Grape Growers League of California entitled, ``Consumer 
Awareness of Grape Varieties Online Study,'' the presence or absence of 
seeds, overall appearance, and price are the dominant factors in grape 
purchases by retail customers. Most customers surveyed could not name a 
single grape variety without prompting. A copy of this study can be 
obtained by contacting the Committee or the USDA contact persons listed 
in the FOR FURTHER INFORMATION CONTACT section of this proposed rule.
    To update the regulations to reflect changes in production in the 
production area, as well as changes in consumer understanding about 
table grapes and consumer considerations when purchasing them, the 
Committee recommended at its meeting on November 12, 2015, that the 
order's administrative rules and regulations be updated to remove 
exemptions provided for the Emperor, Calmeria, Almeria, and Ribier 
varieties. Under the proposed rule, all table grapes handled in the 
production area during the regulatory period would be subject to the 
grade, size, quality, maturity, pack, and container requirements 
specified in the order and would be subject to inspection and 
certification requirements, regardless of variety. The Committee 
believes that ensuring consistently high quality grade, size, and 
maturity, as verified through inspection and certification, would 
encourage repeat purchases by consumers, thereby increasing returns to 
producers and handlers.
    As required under section 8e of the Act, varietal exemptions would 
likewise no longer apply to imported grapes. Accordingly, all table 
grapes offered for importation into the United States during the 
regulatory period would be subject to the grade, size, quality, and 
maturity regulations specified in the import regulation and would be 
subject to inspection and certification requirements.
    The proposed rule would modify the introductory paragraph of Sec.  
925.304--California Desert Grape Regulation 6--of the order's 
regulations by removing the four historically exempt varieties: 
Emperor, Calmeria, Almeria, and Ribier. Additionally, Sec.  
944.503(a)(1) of the import regulation would be modified by removing 
the exemptions for Emperor, Calmeria, Almeria, and Ribier varieties 
from the import regulation. In conjunction with these actions, 
administrative exemptions for imported varieties, including Italia 
Pirovano (Blanca Italia), Christmas Rose, Muscatel, Barlinka, Dauphine, 
Kyoho, Waltham Cross, Alphonse Lavallee, Bien Donne, Bonnoir (Bonheur), 
La Rochelle, Queen, Rouge, Sonita, Tokay and Red Globe, would be 
removed.

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.

[[Page 28591]]

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. Import 
regulations issued under the Act are based on those established under 
Federal marketing orders.
    Currently, there are approximately 12 handlers of southeastern 
California grapes who are subject to regulation under the order and 
about 38 table grape producers in the production area. Additionally, 
there are approximately 135 importers of grapes. 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. According to the Committee's inspection 
reports, seven of the 12 handlers subject to regulation have annual 
grape sales of less than $7.5 million. In addition, the Committee 
estimates that at least nine of the 38 producers have annual receipts 
of less than $750,000 and would be considered small businesses under 
the Small Business Administration threshold of $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.
    Chile, Mexico, and Peru are the major countries that export table 
grapes to the United States. According to the 2015 data from the U.S. 
Department of Agriculture, Foreign Agricultural Service, shipments of 
table grapes imported into the United States from Chile were valued at 
$805,226,000; from Mexico were valued at $329,494,000; and those from 
Peru were valued at $204,349,000. The total value of table grapes 
imported into the United States in 2015 was $1,344,077,000. When this 
value is divided by the total number of importers (135), it is 
estimated that the average grape importer received over $9.9 million in 
revenue from the sale of grapes. Therefore, it may be concluded that 
the average table grape importer is not classified as a small entity.
    This rule would remove the varietal exemptions from the 
introductory paragraph of Sec.  925.304 of the regulations of the 
California desert grape marketing order and from Sec.  944.503(a)(1) of 
the table grape import regulation. Authority for the change to the 
California desert grape order is provided in Sec. Sec.  925.52(a)(1) 
and 925.53. Authority for the change to the table grape import 
regulation is provided in section 8e of the Act.
    In conjunction with this action, administrative regulatory 
exemptions previously granted for other imported Vitis vinifera table 
grapes, including any varieties that are genetically related to the 
four exempted varieties, such as Italia Pirovano (Blanca Italia), 
Christmas Rose, Muscatel, Barlinka, Dauphine, Kyoho, Waltham Cross, 
Alphonse Lavallee, Bien Donne, Bonnoir (Bonheur), La Rochelle, Queen, 
Rouge, Sonita, Tokay and Red Globe, would also be removed. Removing the 
exemptions is expected to ensure that all table grapes marketed during 
the regulatory period are of consistent high quality, grade, size, and 
maturity, which is expected to improve returns for domestic producers, 
handlers, and importers due to increased purchases by consumers.
    The majority of grapes imported into the United States are from 
Chile. Recent data indicate total imports of grapes from Chile average 
approximately 352,102.2 metric tons annually. Of this amount, the 
quantity of exempt varieties of Chilean grapes imported during the 
regulatory period averages approximately 8,164.7 metric tons, which 
represents less than four percent of the grapes imported from Chile. Of 
these exempt shipments, the majority (81 percent, based on a ten-year 
average) are of the Red Globe variety, which is now grown in the 
production area. All other exempt varieties are of the varietal types 
also grown in the production area.
    As a result of the proposed changes, all table grapes grown in the 
production area or imported into the United States during the 
regulatory period would be subject to inspection and certification 
requirements, as established under the order. Fees for inspection and 
certification, which are performed by USDA's Federal or Federal-State 
Inspection Service, are typically 3.8 cents per package. This estimated 
increase in costs would represent only a small percentage of the value 
of the grapes. Grape prices can vary significantly, ranging from $6 to 
$44 per package. The inspection cost per package represents less than 
two-tenths of one percent of the midpoint of the range of prices per 
package ($25).
    In addition, some of the exempted varieties are currently being 
inspected on a voluntary basis to meet buyer requirements, but the 
quantity is unknown. For those products, the proposed changes would 
result in no increased cost.
    The benefits of removing the exemptions, as discussed below, are 
expected to outweigh any additional costs incurred by handlers and 
importers.
    According to industry research, table grape consumers make 
purchases based upon the quality characteristics of the grapes. 
Consumers are more likely to make repeat purchases following 
satisfactory experiences with previous purchases. Rather than selecting 
grapes by variety, consumers purchase varietal types that will meet 
their needs, such as ``red seedless'' or ``black seeded'' grapes. 
Therefore, the Committee believes that it is important to ensure that 
all table grapes shipped or imported during the regulatory period are 
of consistent high quality, regardless of variety. It is expected that 
removing the regulatory exemptions will ensure that all table grapes 
marketed in the United States during the regulatory period will be of a 
consistent quality, better meeting the needs of consumers and fostering 
repeat purchases, thus increasing the demand for grapes and increasing 
returns to producers, handlers, and importers.
    The Committee considered alternatives to this action, including 
maintaining the current varietal exemptions. However, the Committee 
anticipates that subjecting all grape varieties and variety types grown 
in the production area to the requirements under the order and the 
import regulation would best ensure that consumers receive quality 
grapes, which in turn would provide producers, handlers, and importers 
with higher returns.
    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.
    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 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 not impose any additional reporting or 
recordkeeping requirements on either small or large grape handlers or 
importers. 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. In addition, USDA 
has not identified any relevant Federal rules that duplicate, overlap, 
or conflict with this rule.

[[Page 28592]]

    Further, the Committee's meeting was widely publicized throughout 
the table grape industry, and all interested persons were invited to 
attend the meeting and participate in Committee deliberations. Like all 
Committee meetings, the November 12, 2015, meeting was a public 
meeting. All entities, both large and small, were able to express their 
views on this issue. Interested persons are invited to submit comments 
on this proposed rule, including the regulatory and informational 
impacts of this action on small businesses.
    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 Richard Lower at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this proposed rule.
    A 60-day comment period is provided to allow interested persons to 
respond to this proposal. All written comments received in a timely 
manner will be considered before a final determination is made on this 
matter.

List of Subjects

7 CFR Part 925

    Grapes, Marketing agreements, Reporting and recordkeeping 
requirements.

7 CFR Part 944

    Avocados, Food grades and standards, Grapefruit, Grapes, Imports, 
Kiwifruit, Limes, Olives, Oranges.

    For the reasons set forth above, 7 CFR parts 925 and 944 are 
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 parts 925 and 944 continues to read 
as follows:


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

0
2. In Sec.  925.304, the introductory text is revised to read as 
follows:


Sec.  925.304  California Desert Grape Regulation 6.

    During the period April 10 through July 10 each year, no person 
shall pack or repack any variety of grapes on any Saturday, Sunday, 
Memorial Day, or the observed Independence Day holiday, unless approved 
in accordance with paragraph (e) of this section, nor handle any 
variety of grapes unless such grapes meet the requirements specified in 
this section.
* * * * *

PART 944--FRUITS; IMPORT REGULATIONS

0
3. In Sec.  944.503, revise the introductory text of paragraph (a)(1) 
to read as follows:


Sec.  944.503   Table Grape Import Regulation.

    (a)(1) Pursuant to section 8e of the Act and Part 944--Fruits, 
Import Regulations, and except as provided in paragraphs (a)(1)(iii) 
and (iv) of this section, the importation into the United States of any 
variety of Vinifera species table grapes is prohibited unless such 
grapes meet the minimum grade and size requirements established in 
paragraphs (a)(1)(i) or (ii) of this section.
* * * * *

    Dated: June 20, 2017.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2017-13173 Filed 6-22-17; 8:45 am]
 BILLING CODE 3410-02-P