[Federal Register Volume 84, Number 25 (Wednesday, February 6, 2019)]
[Rules and Regulations]
[Pages 2049-2051]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-01139]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Doc. No. AMS-SC-18-0069; SC18-989-1 FR]


Raisins Produced From Grapes Grown in California; Increased 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation from the Raisin 
Administrative Committee (Committee) to increase the assessment rate 
established for the 2018-19 and subsequent crop years. The assessment 
rate will remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective February 7, 2019.

FOR FURTHER INFORMATION CONTACT: Kathie Notoro, Marketing Specialist, 
or Terry Vawter, Acting 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 Order No. 989, as 
amended (7 CFR part 989), regulating the handling of raisins produced 
from grapes grown in California. Part 989 (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 raisins operating within the area of 
production, and a public member.
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 13563 and 13175. This rule 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, California raisin 
handlers are subject to assessments. Funds to administer the Order are 
derived from such assessments. It is intended that the assessment rate 
is applicable to all assessable raisins for the 2018-19 crop year, 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.
    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 are 
familiar with the Committee's needs and with the costs of goods and 
services in their local area, and are in a position to formulate an

[[Page 2050]]

appropriate budget and assessment rate. The assessment rate is 
formulated and discussed in a public meeting. Therefore, all directly 
affected persons have an opportunity to participate and provide input.
    This rule increases the assessment rate from $17.00 to $22.00 per 
ton of raisins for the 2018-19 and subsequent crop years. The current 
rate was published in the Federal Register during the 2015-16 crop year 
and was designed to reduce the Committee's monetary reserve to a level 
that is appropriate under the Order. The higher rate is a result of a 
smaller crop forecast due to early spring rain damage to the vines. The 
2018-19 crop is anticipated to be 275,000 tons, down from the 300,000 
tons recorded the previous crop year.
    The Committee met on June 27, 2018 and unanimously recommended 
2018-19 expenditures of $5,189,600 and an assessment rate of $22.00 per 
ton of raisins. The major expenditures recommended by the Committee for 
the 2018-19 crop year include salaries and employee-related costs of 
$1,187,200; administration costs of $440,400; compliance activities of 
$60,000; research and study costs of $40,000; and promotion related 
costs of $3,637,000. Subtracted from these expenses is $175,000, which 
represents reimbursable costs for the shared management of the State 
marketing raisin program. Budgeted expenditures for these items in 
2017-18 were $1,306,150; $505,600; $48,000; $35,000; and $3,577,178, 
respectively.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, expected shipments of 275,000 tons, 
and the amount of funds available in the authorized reserve. Income 
derived from handler assessments calculated at $6,050,000 (275,000 x 
$22.00), should be adequate to cover budgeted expenses of $5,189,600. 
The remaining $860,400 would be added to the Committee's authorized 
reserve.
    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 in effect for an indefinite 
period, the Committee will 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 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 2018-19 budget and those 
for subsequent crop years 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 2,600 producers of California raisins and 
approximately 16 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.)
    According to the National Agricultural Statistics Service (NASS), 
data for the most-recently completed crop year (2017) shows that about 
8.03 tons of raisins were produced per acre. The 2017 producer price 
published by NASS was $1,670 per ton. Thus, the value of raisin 
production per acre averaged about $13,410.10 (8.03 tons times $1,670 
per ton). At that average price, a producer would have to farm nearly 
56 acres to receive an annual income from raisins of $750,000 ($750,000 
divided by $13,410.10 per acre equals 55.93 acres). According to the 
Committee, the majority of California raisin producers farm less than 
56 acres.
    In addition, according to data from the Committee, six of the 
sixteen California raisin handlers have receipts of less than 
$7,500,000 and may also be considered small entities. Thus, the 
majority of producers of California raisins may be classified as small 
entities, while the majority of handlers may be classified as large 
entities.
    This rule increases the assessment rate collected from handlers for 
the 2018-19 and subsequent crop years from $17.00 to $22.00 per ton of 
assessable raisins acquired by handlers. The Committee unanimously 
recommended 2018-19 expenditures of $5,189,600 and an assessment rate 
of $22.00 per ton of assessable raisins. The assessment rate of $22.00 
is $5.00 higher than the rate currently in effect. The quantity of 
assessable raisins for the 2018-19 crop year is estimated at 275,000 
tons. Thus, the $22.00 rate should provide $6,050,000 in assessment 
income (275,000 x $22.00). Income derived from handler assessments, 
should be adequate to cover budgeted expenses. The remaining $860,400 
would be added to the Committee's authorized reserve.
    The major expenditures recommended by the Committee for the 2018-19 
crop year include: Salaries and employee-related costs of $1,187,200; 
administration costs of $440,400; compliance activities of $60,000; 
research and study costs of $40,000; and promotion related costs of 
$3,637,000. Budgeted expenditures for these items in 2017-18 were 
$1,306,150; $505,600; $48,000; $35,000; and $3,577,178, respectively. 
The total budget approved for the 2017-18 crop year was $5,296,928.
    The increased assessment rate is necessary to cover the decrease in 
estimated crop size tonnage from 300,000 tons in 2017-18 to 275,000 
tons in 2018-19 while also helping to maintain the Committee's 
activities at current levels avoiding a reduction in the program's 
effectiveness, and keeping the monetary reserve to a level that is 
appropriate under the Order.
    Prior to arriving at this budget and assessment rate, the Committee 
considered information from the Audit Subcommittee which met on June 
13, 2018, and discussed alternative spending levels. The recommendation 
was discussed by the Committee on June 27, 2018, and the Committee 
ultimately decided that the recommended budget and assessment rate were 
reasonable and necessary to properly administer the Order.
    A review of historical and preliminary information pertaining to 
the upcoming crop year indicates that the producer price for the 2017-
18 crop year was approximately $1,670.00 per ton of raisins. Utilizing 
that price, the estimated crop size of 275,000 tons, and the assessment 
rate of $22.00 per ton, the estimated assessment revenue for

[[Page 2051]]

the 2018-19 crop year as a percentage of total producer revenue is 
approximately 0.013 percent (assessment revenue of $6,050,000 divided 
by total producer revenue $459,250,000).
    This action increases 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, these costs would 
be offset by the benefits derived from the operation of the Order.
    The meetings of the Audit Subcommittee and the Committee were 
widely publicized throughout the California raisin industry. 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 13, 2018, and June 27, 
2018, meetings, respectively, were public meetings, 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 OMB and assigned OMB No. 0581-0178 Vegetable 
and Specialty Crops. No changes in those requirements are necessary 
because of this action. Should any changes become necessary, they would 
be submitted to OMB for approval.
    This final rule does not impose any 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. 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 October 23, 2018 (83 FR 53402). Copies of the proposed rule 
were provided to all raisin handlers. The proposal was also made 
available through the internet by USDA and the Office of the Federal 
Register. A 30-day comment period ending November 23, 2018, was 
provided for interested persons to respond to the proposal. No comments 
were received. Accordingly, no changes will be made to the rule as 
proposed.
    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, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.

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 
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, 2018, an assessment rate of $22.00 per ton 
is established for assessable raisins produced from grapes grown in 
California.

    Dated: January 31, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2019-01139 Filed 2-5-19; 8:45 am]
 BILLING CODE 3410-02-P