[Federal Register Volume 86, Number 154 (Friday, August 13, 2021)]
[Proposed Rules]
[Pages 44644-44647]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-17233]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Doc. No.: AMS-SC-21-0049; SC21-925-2 PR]


Amendments to the Marketing Order of Grapes Grown in a 
Southeastern California

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule invites comments on proposed amendments to Marketing 
Order No. 925, which regulates the handling of grapes grown in a 
designated area of southeastern California. Proposed amendments would 
change the California Desert

[[Page 44645]]

Grape Administrative Committee's (Committee) size, and its quorum and 
voting requirements.

DATES: Comments must be received by October 12, 2021.

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; or submitted to internet: https://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 made available 
for public inspection in the Office of the Docket Clerk during regular 
business hours, or can be viewed at: https://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: Pushpa Kathir, Marketing Specialist, 
or Matthew Pavone, Chief, Rulemaking Services Branch, Marketing Order 
and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 
Independence Avenue SW, Stop 0237, Washington, DC 20250-0237; 
Telephone: (202) 720-2491, [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, or 
Email: [email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
proposes amendments to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This proposal 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. 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 grape producers and handlers 
operating within the area of production, and a public member.
    Section 8c(17) of the Act (7 U.S.C 608c(17)) and the applicable 
rules of practice and procedure governing the formulation of marketing 
agreements and orders (7 CFR part 900) authorize amendment of the Order 
through this informal rulemaking action. The Agricultural Marketing 
Service (AMS) will consider comments received in response to this 
proposed rule and, based on all the information available, will 
determine if the Order amendment is warranted. If AMS determines 
amendment of the Order is warranted, a subsequent proposed rule and 
notice of referendum would be issued and producers would be allowed to 
vote for or against the proposed amendments. AMS would then issue a 
final rule effectuating any amendments approved by producers in the 
referendum.
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 12866 and 13563. Executive Orders 
12866 and 13563 direct agencies to assess all costs and benefits of 
available regulatory alternatives and, if regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
distributive impacts and equity). Executive Order 13563 emphasizes the 
importance of quantifying both costs and benefits, reducing costs, 
harmonizing rules, and promoting flexibility. This action falls within 
a category of regulatory actions that the Office of Management and 
Budget (OMB) exempted from Executive Order 12866 review.
    In addition, this proposed rule has been reviewed under Executive 
Order 13175--Consultation and Coordination with Indian Tribal 
Governments, which requires agencies to consider whether their 
rulemaking actions would have tribal implications. AMS has determined 
this proposed rule is unlikely to have substantial direct effects on 
one or more Indian tribes, on the relationship between the Federal 
Government and Indian tribes, or on the distribution of power and 
responsibilities between the Federal Government and Indian tribes.
    This proposal has also been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect. This rule shall not be deemed to preclude, preempt, or 
supersede any State program covering grapes grown in a designated area 
of Southeastern California.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 8c(15)(A) of the 
Act (7 U.S.C. 608(15)(A)), 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. 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 no later than 20 days 
after the date of entry of the ruling.
    Section 1504 of the Food, Conservation, and Energy Act of 2008 
(2008 Farm Bill) (Pub. L. 110-246) amended section 8c(17) of the Act, 
which in turn required the addition of supplemental rules of practice 
to 7 CFR part 900 (73 FR 49307; August 21, 2008). The amendment of 
section 8c(17) of the Act and supplemental rules of practice authorize 
the use of informal rulemaking (5 U.S.C. 553) to amend Federal fruit, 
vegetable, and nut marketing agreements and orders. USDA may use 
informal rulemaking to amend marketing orders depending upon the nature 
and complexity of proposed amendments, potential regulatory and 
economic impacts on affected entities, and any other relevant matters.
    AMS has considered these factors and has determined that amendments 
proposed herein are not unduly complex and the nature of proposed 
amendments is appropriate for utilizing the informal rulemaking process 
to amend the Order. A discussion of the potential regulatory and 
economic impacts on affected entities is discussed later in the 
``Initial Regulatory Flexibility Analysis'' section of this proposed 
rule.
    The Committee unanimously recommended amendments following 
deliberations at the public meeting held on April 13, 2021. Proposals 
would amend the Order by changing the Committee's size, as well as its 
quorum and voting requirements.

Proposal 1--Reduce Committee Size

    Sec.  925.20 provides that the Committee consists of 12 members 
and, for each member of the Committee, there must be an alternate who 
has the same qualifications as the member. This proposal would amend 
Sec.  925.20 by reducing the size of the Committee from 12 to 10 
members. The requirement that

[[Page 44646]]

each member has an alternate with the same qualifications as the member 
would remain unchanged. Four members and their alternates would be 
producers, officers, or employees of producers (producer members). Four 
members and their alternates would be handlers, officers, or employees 
of handlers (handler members). One member and alternate would be either 
a producer, handler, or officer or employee thereof. One member and 
alternate would represent the public.
    Since promulgation of the Order in 1980, the California table grape 
industry has seen reductions of about 55% of its producers and 58% of 
registered handlers. Natural industry consolidation and land 
development pressure have also contributed to this decline. Decreasing 
the Committee's size from 12 members to 10 members would make Committee 
membership more reflective of today's industry and enable the Committee 
to fill all its member positions without difficulty.

Proposal 2--Revise Quorum and Voting Requirements

    Currently, Sec.  925.30 states that eight members of the Committee 
shall constitute a quorum, and any action of the committee shall 
require at least eight concurring votes.
    The proposed change would modify Sec.  925.30 to allow six members 
to constitute a quorum including at a minimum one producer member and 
one handler member, with six concurring votes required to pass any 
motion or approve any Committee action. The Committee is experiencing 
difficulties filling all seats and obtaining a quorum at meetings to 
conduct business activities. Adjusting current requirements would 
enable the Committee to operate fully mitigating the risk of not 
establishing a quorum during scheduled meetings and not having the 
required votes to pass any action. These changes would help to 
streamline the Committee's operations and increase its effectiveness.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), 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 so that small businesses will not be 
unduly or disproportionately burdened.
    Small agricultural producers have been defined by the Small 
Business Administration (SBA) (13 CFR 121.201) as those having annual 
receipts of no more than $1,000,000. Small agricultural service firms 
(handlers) are defined as those with annual receipts of no more than 
$30,000,000.
    Proposed amendments to the California desert grape marketing order 
would reduce the number of member and alternate seats on the California 
Desert Grape Administrative Committee from 12 to 10 and reduce quorum 
and voting requirements from 8 to 6 members. These amendments are 
necessary to reflect the industry's consolidation. Since the 
promulgation of the marketing order in 1980, the California desert 
grape industry has lost roughly 55 percent of its producers and 58 
percent of the registered handlers.
    The Committee reports that there are 21 producers and 10 handlers 
of table grapes in the marketing order production region. The Committee 
packout reports show that average annual packout for 2018 through 2020 
was 3.2127 million 18-pound containers, equivalent to 28,914 tons. The 
3-year average of California fresh table grape prices was $1,267 per 
ton. Multiplying quantity times price yields an annual average crop 
value estimate of $36.634 million. Dividing the average crop value 
estimate by the number of producers (21) yields an average crop value 
per producer of $1.744 million, moderately larger than the SBA small 
farm size threshold of $1,000,000. Therefore, using the estimated 
prices, packout volume, and number of producers, and assuming a normal 
bell-curve distribution of receipts among producers, AMS estimates the 
majority of producers would qualify as large businesses under the SBA 
definition.
    Dividing the average crop value of $36.634 million by the number of 
handers (10) yields a per-handler estimate of $3.663 million, well 
below the SBA small business threshold of $30,000,000 in annual 
receipts. However, that computation measures handler annual receipts 
using producer-level crop value data, since AMS is unable to locate an 
estimate of a hander margin. A range of handler margin estimates would 
be 30 to 40 percent above the grower price. Applying those two 
percentages, a range of handler annual receipts estimates would be $4.8 
to $5.1 million, still well below $30,000,000. Therefore, using these 
estimated prices, utilization volume, handler margin estimates and 
number of handlers, and assuming a normal bell-curve distribution of 
receipts among handlers, AMS estimates that the majority of handlers 
would meet the SBA definition of small businesses.
    AMS has determined that these proposed amendments would not have a 
significant impact on a substantial number of small businesses. Rather, 
large and small entities alike would be expected to benefit from the 
Committee's improved ability to address important issues of interest to 
all on a timely basis. The proposed reduction in the number of seats on 
the Committee, and the reduced quorum and voting requirements, would 
not require any significant changes in producer or handler business 
operations, and no significant industry educational effort would be 
needed. Producers and handlers, large and small alike, would incur no 
additional costs. No small businesses would be unduly or 
disproportionately burdened.

Paperwork Reduction Act

    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, Fruit 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 proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large California table 
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.
    The Committee's meetings are widely publicized throughout the 
southeastern California table grape production area. All interested 
persons are invited to attend the meeting and encouraged to participate 
in Committee deliberations on all issues. Like all Committee meetings, 
the April 13, 2021 meeting was public, and all entities, both large and 
small, were encouraged to express their views on the proposals.
    Interested persons are invited to submit comments on the proposed 
amendments to the Order, including comments on the regulatory and 
information collection impacts of this action on small businesses.

[[Page 44647]]

    Following analysis of any comments received on the amendments in 
this proposed rule, AMS will evaluate all available information and 
determine whether to proceed. If appropriate, a proposed rule and 
notice of referendum would be issued, and producers would be provided 
the opportunity to vote for or against the proposed amendments. 
Information about the referendum, including dates and voter eligibility 
requirements, would be published in a future issue of the Federal 
Register. A final rule would then be issued to effectuate any 
amendments favored by producers participating in the referendum.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
https://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.

General Findings

    Findings hereinafter set forth are supplementary to findings and 
determinations that were previously made in connection with the 
issuance of Marketing Order 925; and all said previous findings and 
determinations are hereby ratified and affirmed, except insofar as such 
findings and determinations may be in conflict with the findings and 
determinations set forth herein.
    1. Marketing Order 925, as hereby proposed to be amended, and all 
terms and conditions thereof, would tend to effectuate the declared 
policy of the Act;
    2. Marketing Order 925, as hereby proposed to be amended, regulates 
the handling of grapes grown in southeastern California and is 
applicable only to persons in respective classes of commercial and 
industrial activity specified in the Order;
    3. Marketing Order 925, as hereby proposed to be amended, is 
limited in application to the smallest regional production area which 
is practicable, consistent with carrying out the declared policy of the 
Act, and the issuance of several marketing orders applicable to 
subdivisions of the production area would not effectively carry out the 
declared policy of the Act;
    4. Marketing Order 925, as hereby proposed to be amended, 
prescribes, insofar as practicable, such different terms applicable to 
different parts of the production area as are necessary to give due 
recognition to the differences in the production and marketing of 
grapes produced or packed in the production area; and
    5. All handling of grapes produced or packed in the production 
area, as defined in Marketing Order 925, is in the current of 
interstate or foreign commerce or directly burdens, obstructs, or 
affects such commerce.
    A 60-day comment period is provided to allow interested persons to 
respond to these proposals. Any comments received on amendments 
proposed in this rule will be analyzed, and if AMS determines to 
proceed based on all the information presented, a producer referendum 
would be conducted to determine producer support for the proposed 
amendments. If appropriate, a final rule would then be issued to 
effectuate the amendments favored by producers participating in the 
referendum.

List of Subjects in 7 CFR Part 925

    Grapes, Marketing agreements, Reporting and recordkeeping 
requirements.

    For 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. In Sec.  925.20, revise paragraph (a) to read as follows:


Sec.  925.20   Establishment and membership.

    (a) There is hereby established a California Desert Grape Committee 
consisting of 10 members, each of whom shall have an alternate who 
shall have the same qualifications as the member. Four members and 
their alternates shall be producers, officers or employees of producers 
(producer members). Four members and their alternates shall be 
handlers, or officers or employees of handlers (handler members). One 
member and alternate shall be either a producer or handler, or an 
officer or employee thereof. One member and alternate shall represent 
the public.
* * * * *
0
3. In Sec.  925.30, revise paragraph (a) to read as follows:


Sec.  925.30   Procedure.

    (a) Six members of the committee shall constitute a quorum, 
including at a minimum one producer representative and one handler 
representative, and any action of the committee shall require at least 
six concurring votes;
* * * * *

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2021-17233 Filed 8-12-21; 8:45 am]
BILLING CODE P