[Federal Register Volume 76, Number 74 (Monday, April 18, 2011)]
[Rules and Regulations]
[Pages 21620-21622]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9307]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Doc. No. AMS-FV-10-0104; FV11-925-1 FR]


Grapes Grown in Designated Area of Southeastern California; 
Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule increases the assessment rate established for the 
California Desert Grape Administrative Committee (Committee) for the 
2011 and subsequent fiscal periods from $0.01 to $0.0125 per 18-pound 
lug of grapes handled. The Committee locally administers the marketing 
order, which regulates the handling of grapes grown in a designated 
area of southeastern California. Assessments upon grape handlers are 
used by the Committee to fund reasonable and necessary expenses of the 
program. The fiscal period began January 1 and ends December 31. The 
assessment rate will remain in effect indefinitely unless modified, 
suspended or terminated.

DATES: Effective Date: April 19, 2011.

FOR FURTHER INFORMATION CONTACT: Jerry L. Simmons, Marketing 
Specialist, or Kurt J. Kimmel, Regional Manager, California Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 
487-5906, or E-mail: <a href="/cdn-cgi/l/email-protection#4f052a3d3d36611c26222220213c0f2e223c613a3c2b2e61282039"><span class="__cf_email__" data-cfemail="eea48b9c9c97c0bd87838381809dae8f839dc09b9d8a8fc0898198">[email protected]</span></a> or 
<a href="/cdn-cgi/l/email-protection#43083631376d082a2e2e262f03222e306d363027226d242c35"><span class="__cf_email__" data-cfemail="b8f3cdcacc96f3d1d5d5ddd4f8d9d5cb96cdcbdcd996dfd7ce">[email protected]</span></a>.
    Small businesses may request information on complying with this 
regulation by contacting Antoinette Carter, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 
Independence Ave., SW., STOP 0237, Washington, DC 20250-0237; 
Telephone: (202) 720-2491, Fax: (202) 720-8938, or E-mail: 
<a href="/cdn-cgi/l/email-protection#eeaf809a8187808b9a9a8bc0ad8f9c9a8b9cae8f839dc09b9d8a8fc0898198"><span class="__cf_email__" data-cfemail="dd9cb3a9b2b4b3b8a9a9b8f39ebcafa9b8af9dbcb0aef3a8aeb9bcf3bab2ab">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This 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.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing 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 issued herein 
will be applicable to all assessable grapes beginning on January 1, 
2011, 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 increases the assessment rate established for the 
Committee for the 2011 and subsequent fiscal periods from $0.01 to 
$0.0125 per 18-pound lug of grapes.
    The grape 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. 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 2009 and subsequent fiscal periods, the Committee 
recommended, and the 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 October 21, 2010, and unanimously recommended 
2011 expenditures of $89,616 and an assessment rate of $0.0125 per 18-
pound lug of grapes handled. In comparison, last year's budgeted 
expenditures were $73,666. The assessment rate of $0.0125 is $0.0025 
higher than the rate currently in effect. The Committee recommended a 
higher assessment rate to offset the 2011 budget increases in research, 
general office expenses, management and compliance expenses, as well as 
a decreased crop estimate. The Committee estimated a decreased 2011 
crop of 6,000,000 18-pound lugs of grapes handled, which is about 
604,951 18-pound lugs fewer than the 6,604,951 18-pound lugs handled 
during the 2010 fiscal period. Based on increases in expenses and a 
decreased crop estimate, the Committee unanimously recommended that the 
assessment rate of $0.01 currently in effect be increased by $0.0025. 
Income derived from handler assessments, along with funds from the 
Committee's authorized reserve, should be adequate to cover budgeted 
expenses.
    The major expenditures recommended by the Committee for the 2011 
fiscal period include $10,000 for research, $15,616 for general office 
expenses, and $64,000 for management and compliance expenses. The 
$10,000 research project is a for a new vine study proposed by the 
University of California Riverside. In comparison, major expenditures 
for the 2010 fiscal period included no funds for research, $13,666 for 
general office expenses, and

[[Page 21621]]

$60,000 management and compliance expenses.
    The assessment rate recommended by the Committee was derived by the 
following formula: Anticipated 2011 expenses ($89,616) plus the desired 
2011 ending reserve ($88,384), minus the 2011 beginning reserve 
($103,000), divided by the estimated 2011 shipments (6,000,000 18-pound 
lugs) equals $0.0125 per lug.
    Income generated through the $0.0125 assessment ($75,000) plus 
carry-in reserve funds ($103,000) should be sufficient to meet 
anticipated expenses ($89,616). Reserve funds by the end of 2011 are 
projected at $88,384 or about one fiscal period's expenses. Section 
925.41 of the order permits the Committee to maintain about one fiscal 
period's expenses in 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 
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 the 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 2011 budget and those for 
subsequent fiscal periods would 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 
business 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 14 handlers of southeastern California 
grapes who are subject to regulation under the order and about 50 grape 
producers in the production area. Small agricultural service firms are 
defined by the Small Business Administration (13 CFR 121.201) as those 
having annual receipts of less than $7,000,000, and small agricultural 
producers are defined as those whose annual receipts are less than 
$750,000. Nine of the 14 handlers subject to regulation have annual 
grape sales of less than $7 million. Based on data from the National 
Agricultural Statistics Service and the Committee, the crop value for 
the 2010 season was about $38,139,629. Dividing this figure by the 
number of producers (50) yields an average annual producer revenue 
estimate of about $762,793. However, according to the Committee, at 
least ten of 50 producers would be considered small businesses under 
the Small Business Administration threshold of $750,000. Based on the 
foregoing, it may be concluded that a majority of grape handlers and at 
least ten of the producers could be classified as small entities.
    This rule increases the assessment rate established for the 
Committee and collected from handlers for the 2011 and subsequent 
fiscal periods from $0.01 to $0.0125 per 18-pound lug of grapes. The 
Committee unanimously recommended 2011 expenditures of $89,616 and an 
assessment rate of $0.0125 per 18-pound lug of grapes handled. The 
assessment rate of $0.0125 is $0.0025 higher than the 2010 rate 
currently in effect. The Committee recommended the higher assessment 
rate of $0.0125 to offset the 2011 budget increases in research, 
general office expenses, management and compliance expenses, and a 
decreased crop estimate. The number of assessable grapes is estimated 
at 6 million 18-pound lugs of grapes. Thus, income generated through 
the $0.0125 assessment ($75,000) plus reserve funds ($103,000) should 
be sufficient to meet anticipated expenses ($89,616). Reserve funds by 
the end of 2011 are projected at $88,384 or about one fiscal period's 
expenses.
    The major expenditures recommended by the Committee for the 2011 
fiscal period include $10,000 for research, $15,616 for general office 
expenses, and $64,000 for management and compliance expenses. The 
$10,000 research project is for a new vine study proposed by the 
University of California Riverside. In comparison, major expenditures 
for the 2010 fiscal period included no funds for research, $13,666 for 
general office expenses, and $60,000 management and compliance 
expenses.
    The assessment rate recommended by the Committee was derived based 
on the Committee's estimates of the available beginning reserve 
($103,000), projected decreased crop size (6 million 18-pound lugs), 
anticipated assessment income ($75,000), anticipated expenses 
($89,616), and the ending 2011 reserve ($88,384).
    The Committee reviewed and unanimously recommended 2011 
expenditures of $89,616, which included increases in research, general 
office expenses, and management and compliance expenses. Prior to 
arriving at this budget, the Committee considered alternative 
expenditures and assessment rates, to include not increasing the $0.01 
assessment rate currently in effect. Based on a decreased 2011 estimate 
crop of 6 million 18-pound lugs, the Committee ultimately determined 
that increasing the assessment rate to $0.0125 combined with funds 
available from the reserve would adequately cover increased expenses 
and provide an adequate 2011 ending financial reserve.
    A review of historical crop and price information, as well as 
preliminary information pertaining to the upcoming fiscal period 
indicates that the 2011 producer price for California grapes could 
average about $5.77 per 18-pound lug. With an assessment rate of 
$0.0125 per 18-pound lug of grapes for the 2011 season, the assessment 
revenue as a percentage of grower revenue would be 0.217 percent, or 
well below one percent.
    This action increases the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to producers. However, these costs 
are offset by the benefits derived by the operation of the order. In 
addition, the Committee's meeting was widely publicized throughout the 
grape production area and all interested persons were invited to attend 
and participate in Committee deliberations on all issues. Like all 
Committee meetings, the October 21, 2010, meeting was a public meeting 
and all entities, both large and small, were able to express views on 
this issue.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large 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

[[Page 21622]]

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 February 9, 2011 (76 FR 7119).
    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 March 11, 2011, was provided for interested 
persons to respond to the proposal. No comments were received.
    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/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Antoinette Carter 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.
    Pursuant to 5 U.S.C. 553, it also found and determined that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because: (1) The 2011 
fiscal period began on January 1, 2011, and the marketing order 
requires that the rate of assessment for each fiscal period apply to 
all assessable grapes handled during the fiscal period; (2) the 
Committee needs to have sufficient funds to meet its expenses which are 
on a continuous basis; and (3) handlers are aware of this action, which 
was recommended by the Committee at a public meeting. Also, a 30-day 
comment period was provided for in the proposed rule.

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 7 CFR 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, 2011, an assessment rate of $0.0125 per 18-
pound lug is established for grapes grown in a designated area of 
southeastern California.

    Dated: April 12, 2011.
David R. Shipman,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2011-9307 Filed 4-15-11; 8:45 am]
BILLING CODE 3410-02-P


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