[Federal Register Volume 83, Number 90 (Wednesday, May 9, 2018)]
[Rules and Regulations]
[Pages 21165-21167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-09817]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 
 ========================================================================
 

  Federal Register / Vol. 83, No. 90 / Wednesday, May 9, 2018 / Rules 
and Regulations  

[[Page 21165]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Doc. No. AMS-SC-17-0082; SC18-925-1 FR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule implements a recommendation from the California 
Desert Grape Administrative Committee (Committee) to decrease the 
assessment rate established for the 2018 fiscal period for grapes grown 
in a designated area of southeastern California. The assessment rate 
will remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective June 8, 2018.

FOR FURTHER INFORMATION CONTACT: Maria Stobbe, 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 action, pursuant to 5 U.S.C. 553, 
amends regulations issued to carry out a marketing order as defined in 
7 CFR 900.2(j). This rule is issued under Marketing Agreement and Order 
No. 925, as amended (7 CFR part 925), regulating the handling of grapes 
grown in a designated area of southeastern California. Part 925 
(referred to as 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 Committee locally 
administers the Order and is comprised of producers and handlers of 
grapes operating within the area of production, and a member of the 
public.
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 13563 and 13175. This action falls 
within a category of regulatory actions that the Office of Management 
and Budget (OMB) exempted from Executive Order 12866 review. 
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 OMB's Memorandum titled 
``Interim Guidance Implementing Section 2 of the Executive Order of 
January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs' '' (February 2, 2017).
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the 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 established herein would be 
applicable to all assessable grapes beginning on January 1, 2018, 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 decreases the assessment rate established for the 2018 
and subsequent fiscal periods from $0.030 to $0.020 per 18-pound lug of 
grapes handled.
    The 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, and a member of the public. 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 2016 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal period to fiscal period 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 November 30, 2017, and unanimously recommended 
2018 fiscal year expenditures of $119,000, with an estimated cash 
reserve of $115,000, and an assessment rate of $0.020 per 18-pound lug 
of grapes. In comparison, last fiscal year's budgeted expenditures were 
$108,500. The assessment rate of $0.020 is $0.010 lower than the rate 
currently in effect. The 2017 crop, at the higher assessment rate 
currently in effect, provided more income than required to cover 
expenses, resulting in an estimated financial reserve of $140,000. The 
financial reserves are sufficient to supplement this fiscal year's 
revenues at an assessment rate of $0.020 per 18-pound lug of grapes to 
fully fund the recommended 2018 budgeted expenditures.
    The major expenditures recommended by the Committee for the

[[Page 21166]]

2018 fiscal year include $65,000 for management and compliance 
services, $25,500 in office expenditures, and $28,500 for research. 
Budgeted expenses for these items in fiscal year 2017 were $50,000 for 
management and compliance services, $28,330 in office expenditures, and 
$28,500 for research.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, expected shipments of grapes in the 
production area, and the level of funds in the authorized reserve. 
Grape shipments for the year are estimated at 4.7 million 18-pound 
lugs, which should provide $94,000 in assessment income. Income derived 
from handler assessments, along with interest income and funds from the 
Committee's authorized reserve, should be adequate to cover budgeted 
expenses. Funds in the reserve (currently $140,000) would be kept 
within the maximum permitted by the Order (approximately one fiscal 
period's expenses as stated in Sec.  925.42(a)(2)). The Committee would 
utilize approximately $25,000 of its reserve funds to fully fund the 
recommended 2018 fiscal year budget, while assessing the new 2018 
fiscal year crop at the lower rate.
    The assessment rate established in this rule will 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 will be effective 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 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 budget for fiscal year 2018 
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 38 producers of grapes in the production 
area and approximately 14 handlers subject to regulation under the 
Marketing Order. Small agricultural producers are defined by the Small 
Business Administration (SBA) as those having annual receipts less than 
$750,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $7,500,000 (13 CFR 121.201).
    Eleven of the 14 handlers subject to the Marketing Order 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 shipping point pricing data indicates 
that at least ten of the 38 producers have annual receipts of less than 
$750,000. Thus, it may be concluded that a majority of the grape 
handlers regulated under the Marketing Order and at least ten of the 
producers could be classified as small entities under the SBA's 
definitions.
    This rule decreases the assessment rate collected from handlers for 
the 2018 and subsequent fiscal periods from $0.030 to $0.020 per 18-
pound lug of grapes. The Committee unanimously recommended fiscal year 
2018 expenditures of $119,000 and an assessment rate of $0.020 per 18-
pound lug. The assessment rate of $0.020 is $0.010 lower than the 2017 
rate. The quantity of assessable commodity for the 2018 fiscal year is 
estimated at 4.7 million 18-pound lugs. Thus, the $0.020 rate should 
provide $94,000 in assessment income. Assessment income, interest 
income, plus the use of $25,000 in reserve funds, should be adequate to 
meet this 2018 fiscal year's expenses.
    The major expenditures recommended by the Committee for the 2018 
fiscal year include $65,000 for management and compliance services, 
$25,500 in office expenditures, and $28,500 for research. Budgeted 
expenses for these items in 2017 were $50,000 for management and 
compliance services, $28,330 in office expenditures, and $28,500 for 
research.
    Prior to arriving at this budget and assessment rate, the Committee 
considered various options, such as maintaining the current assessment 
rate and expenditure levels. Alternative expenditure levels were 
discussed by the Committee, based upon the relative value of various 
activities to the grape industry. The Committee ultimately determined 
that 2018 expenditures of $119,000 were appropriate, and the 
recommended assessment rate and the use of $25,000 from the carry over 
financial reserves should provide sufficient revenue to meet its 
expenses.
    A review of historical crop and price information, indicates that 
the shipping point price for the 2017 season averaged about $21.62 per 
18-pound lug of California desert grapes handled. If the 2018 price is 
similar to the 2017 price, estimated assessment revenue as a percentage 
of total estimated handler revenue would be 0.09 percent for the 2018 
season ($0.020 divided by $21.62 per 18-pound lug).
    This action decreases the assessment obligation imposed on 
handlers. Assessments are applied uniformly on all handlers, and some 
of the costs may be passed on to producers. However, decreasing the 
assessment rate reduces the burden on handlers, and may reduce the 
burden on producers. In addition, the Committee's meeting was widely 
publicized throughout the production area. The grape industry and all 
interested persons were invited to attend the meeting and participate 
in Committee deliberations on all issues. Like all Committee meetings, 
the November 30, 2017, 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 OMB and assigned OMB No. 0581-0189, Generic 
Fruit Crops. No changes in those requirements are necessary as a result 
of this action. 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 southeastern 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 mentioned in the 
initial regulatory flexibility analysis, USDA has not identified any 
relevant Federal rules that duplicate, overlap, or conflict with this 
final rule.

[[Page 21167]]

    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 March 1, 2018 (83 FR 8802). 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 30-day comment period ending April 2, 
2018, was provided for interested persons to respond to the proposal. 
One comment was received in support of the decreased assessment rate. 
The commenter stated that a decreased assessment rate should result in 
lower costs to the industry and ultimately to the consumer. No changes 
will be made to the rule as proposed based on the comments received. 
The proposal contained administrative revisions to the Order's subpart 
headings to bring the language into conformance with the Office of 
Federal Register requirements. These revisions are not included in this 
rule as they were included in a technical amendment final rule 
published in the Federal Register on April 6, 2018 (83 FR 14736).
    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.
    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 will tend to 
effectuate the declared policy of the Act.

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 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, 2018, an assessment rate of $0.020 per 18-
pound lug is established for grapes grown in a designated area of 
southeastern California.

    Dated: May 3, 2018
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2018-09817 Filed 5-8-18; 8:45 am]
 BILLING CODE 3410-02-P