[Federal Register Volume 87, Number 116 (Thursday, June 16, 2022)]
[Rules and Regulations]
[Pages 36211-36213]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-13005]



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 Rules and Regulations
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  Federal Register / Vol. 87, No. 116 / Thursday, June 16, 2022 / Rules 
and Regulations  

[[Page 36211]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

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


Amendments to the Marketing Order of Grapes Grown in Southeastern 
California

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule amends Marketing Order No. 925, which 
regulates the handling of grapes grown in a designated area of 
southeastern California. The amendments change the California Desert 
Grape Administrative Committee's (Committee) size, and its quorum and 
voting requirements.

DATES: Effective July 18, 2022.

FOR FURTHER INFORMATION CONTACT: Pushpa Kathir, Marketing Specialist, 
Rulemaking Services Branch, Market Development 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, Market Development 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, 
finalizes amendments to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This final 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. 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 Department of Agriculture (USDA) is issuing this final 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 final 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. The Agriculture 
Marketing Service (AMS) has determined this final 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 rule has 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 the 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 the proposed amendments, the potential 
regulatory and economic impacts on affected entities, and any other 
relevant matters.
    AMS has considered the nature and complexity of the amendments, the 
potential regulatory and economic impacts on affected entities, and 
other relevant matters, and determined that amending the Order as 
proposed by the Committee could appropriately be accomplished through 
informal rulemaking.
    The Committee unanimously recommended the amendments following 
deliberations at the public meeting held on April 13, 2021. This final 
rule will amend the Order by changing the Committee's size, as well as 
its quorum and voting requirements.
    AMS published the initial proposed rule in the Federal Register on 
August 13, 2021 (86 FR 44644) to solicit comments on the proposals. 
After reviewing the comments, AMS republished the proposed rule without

[[Page 36212]]

change along with the referendum order in the Federal Register on 
January 25, 2022 (87 FR 3699). That document directed that a referendum 
among grape producers in southeastern California be conducted February 
14, 2022, through March 4, 2022, to determine whether they favored the 
proposals. To become effective, the amendments had to be approved by 
either two-thirds of the producers voting in the referendum or by those 
representing at least two-thirds of the volume of table grapes produced 
by those voting in the referendum.
    The results of the referendum show that 100 percent of the eligible 
producers who voted and 100 percent of the volume voted favored both 
amendments. Thus, both amendments were passed and will change the 
Committee's size, and quorum and voting requirements.

Final 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 final 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 so that small businesses will not be 
unduly or disproportionately burdened. Marketing Orders issued pursuant 
to the Act, and rules issued thereunder, are unique in that they are 
brought about through group action of essentially small entities acting 
on their behalf.
    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.
    The Committee reports that there are 18 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 (18) yields an average crop value 
per producer of $2.035 million, well below the SBA small farm size 
threshold of $3,500,000. 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 small 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 the amendments, as effectuated by this 
final rule, will not have a significant impact on a substantial number 
of small businesses. Rather, large and small entities alike are 
expected to benefit from the Committee's improved ability to address 
important issues of interest to all on a timely basis. The reduced 
number of seats on the Committee, and the reduced quorum and voting 
requirements, will not require any significant changes in producer or 
handler business operations, and no significant industry educational 
effort will be needed. Producers and handlers, large and small alike, 
will incur no additional costs. No small businesses will be unduly or 
disproportionately burdened.
    The amendments to the California desert grape marketing order 
reduces the number of member and alternate seats on the California 
Desert Grape Administrative Committee from 12 to 10 and reduces the 
quorum and voting requirements from 8 to 6 members. The 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. No economic impact is expected from 
these amendments because they will not establish any new regulatory 
requirements on handlers, nor will they have any assessment or funding 
implications. There will be no change in financial costs, reporting, or 
recordkeeping requirements as a result of this action.
    Alternatives to this action, including making no changes at this 
time, were considered by the Committee. Due to changes in the industry, 
AMS believes the action is justified and necessary to ensure the 
Committee's ability to locally administer the program. Reducing the 
size of the Committee will enable it to satisfy membership and quorum 
requirements fully, thereby ensuring a more efficient and orderly flow 
of business.

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 action will impose no additional reporting or recordkeeping 
requirements on either small or large grape handlers in southeastern 
California. 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 meetings 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.
    A proposed rule concerning this action was published in the Federal 
Register on August 13, 2021 (86 FR 44644). Copies of the rule were 
mailed to all table grapes handlers in southeastern California. The 
proposed rule was made available through the internet by USDA and the 
Office of the Federal Register. A 60-day comment period ending October 
12, 2021, was provided to allow interested persons to

[[Page 36213]]

respond to the proposal. Two comments were received during the comment 
period, both of which were in support of the proposed amendments. 
However, one commentor was concerned that the restructuring of the 
Committee might limit the participation of interested parties in the 
industry. Further, the commentor suggested adding a requirement for 
periodic review of the Committee structure to the regulations.
    A proposed rule and referendum order were then published on January 
25, 2022 (87 FR 3699). That document directed that a referendum among 
table grape producers in southeastern California be conducted during 
the period of February 14, 2022, through March 4, 2022, to determine 
whether they favored the proposed amendments to the Order. To become 
effective, the amendments had to be approved by at least two-thirds of 
the growers voting, or two-thirds of the volume of table grapes 
represented by voters in the referendum. The results show that 100 
percent of the eligible producers who voted and 100 percent of the 
volume voted favored both amendments.
    The producer vote met the requirement of being favored by two-
thirds of the producers voting, or by two-thirds of the volume voted in 
the referendum for both amendments. Both amendments were passed.
    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.

Order Amending the Order Regulating the Handling of Table Grapes Grown 
in Southeastern California

Findings and Determinations

    The findings hereinafter set forth are supplementary to the 
findings and determinations which 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 amended, and as hereby further amended 
and all the terms and conditions thereof, will tend to effectuate the 
declared policy of the Act;
    2. Marketing Order 925, as amended, and as hereby further amended, 
regulates the handling of grapes grown in southeastern California and 
is applicable only to persons in the respective classes of commercial 
and industrial activity specified in the Order;
    3. Marketing Order 925, as amended, as hereby further 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 amended, and as hereby further 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.
    It is hereby determined that:
    1. The issuance of this amendatory Order, amending the aforesaid 
Order, is favored, or approved by producers representing at least two-
thirds of the volume of table grapes produced by those voting in a 
referendum on the question of approval and who, during the period of 
January 1, 2021, through December 31, 2021, have been engaged within 
the production area in the production of such table grapes.
    2. The issuance of this amendatory Order advances the interests of 
growers of table grapes in the production area pursuant to the declared 
policy of the Act.

Order Relative to Handling

    It is therefore ordered, that on and after the effective date 
hereof, all handling of grapes grown in Southeastern California shall 
be in conformity to, and in compliance with, the terms and conditions 
of the said Order as hereby proposed to be amended as follows:
    The provisions amending the Order contained in the proposed rule 
and referendum order, published in the Federal Register (87 FR 3699) on 
January 25, 2022, will be and are the terms and provisions of this 
order amending the Order and are set forth in full herein.

List of Subjects in 7 CFR Part 925

    Grapes, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service is amending 7 CFR part 925 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 of the members 
and their alternates shall be producers, or officers or employees of 
producers (producer members). Four of the 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 member and one handler member, and 
any action of the committee shall require at least six concurring 
votes;
* * * * *

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2022-13005 Filed 6-15-22; 8:45 am]
BILLING CODE 3410-02-P