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[Federal Register Volume 78, Number 93 (Tuesday, May 14, 2013)]
[Proposed Rules]
[Pages 28147-28149]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-11386]

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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 78, No. 93 / Tuesday, May 14, 2013 / Proposed 
Rules

[[Page 28147]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Doc. No. AMS-FV-13-0005; FV13-925-1 PR]

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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would increase the assessment rate 
established for the California Desert Grape Administrative Committee 
(Committee) for the 2013 and subsequent fiscal periods from $0.0150 to 
$0.0165 per 18-pound lug of grapes handled. The Committee locally 
administers the marketing order that 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 begins January 1 
and ends December 31. The assessment rate would remain in effect 
indefinitely unless modified, suspended or terminated.

DATES: Comments must be received by May 29, 2013.

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, Fruit and Vegetable 
Program, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, 
Washington, DC 20250-0237; Fax: (202) 720-8938; or Internet: http://www.regulations.gov. Comments should reference the docket number and 
the date and page number of this issue of the Federal Register and will 
be available for public inspection in the Office of the Docket Clerk 
during regular business hours, or can be viewed at: http://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 comments will be made public on the Internet at 
the address provided above.

FOR FURTHER INFORMATION CONTACT: Kathie M. Notoro, Marketing 
Specialist, or Martin Engeler, Regional Director, California Marketing 
Field Office, Marketing Order and Agreement Division, Fruit and 
Vegetable Program, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 
487-5906, or Email: Kathie.Notoro@ams.usda.gov or 
Martin.Engeler@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: Jeffrey.Smutny@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This proposed 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 proposed rule 
in conformance with Executive Order 12866.
    This proposed 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 proposed herein 
would be applicable to all assessable grapes beginning on January 1, 
2013, 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 proposed rule would increase the assessment rate established 
for the Committee for the 2013 and subsequent fiscal periods from 
$0.0150 to $0.0165 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 2012 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 based upon a recommendation and 
information submitted by the Committee or other information available 
to USDA.
    The Committee met on March 4, 2013, and unanimously recommended 
2013 expenditures of $100,000 and an assessment rate of $0.0165 per 18-
pound lug of grapes handled. In comparison, last year's budgeted 
expenditures were $95,500. The assessment rate of $0.0165 is $0.0015 
higher than the $0.0150 rate currently in effect. The Committee also 
estimated shipments for the 2013 season to be 5,800,000 lugs. The 
higher assessment rate, applied to estimated

[[Page 28148]]

shipments of 5,800,000 lugs, would generate $95,700 in revenue, which 
is slightly less than the budgeted expenses. However, combining this 
revenue with $4,300 from financial operating reserves would provide 
sufficient revenue to cover the Committee's budgeted expenses.
    The major expenditures recommended by the Committee for the 2013 
fiscal period include $15,500 for research, $17,000 for general office 
expenses, and $67,500 for management and compliance expenses. In 
comparison, major expenditures for the 2012 fiscal period included 
$15,500 for research, $17,500 for general office expenses, and $62,500 
for management and compliance expenses.
    The assessment rate recommended by the Committee was derived by 
evaluating several factors, including estimated shipments for the 2013 
season, budgeted expenses, and the level of available financial 
reserves. The Committee determined that it could utilize $4,300 from 
its financial reserves and still maintain the reserves at an acceptable 
level. The remaining $95,700 necessary to meet budgeted expenses would 
need to be raised through assessments. Thus, dividing the $95,700 in 
necessary assessment revenue by 2013 estimated shipments of 5,800,000 
lugs results in an assessment rate of $0.0165.
    Reserve funds by the end of 2013 are projected at $53,972, which is 
well within the amount authorized under the order. Section 925.41 of 
the order permits the Committee to maintain approximately one fiscal 
period's expenses in reserve.
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA based upon a 
recommendation and information submitted by the Committee or other 
available information.
    Although this assessment rate would be in effect for an indefinite 
period, the Committee would 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 would evaluate the 
Committee recommendations and other available information to determine 
whether modification of the assessment rate is needed. Further 
rulemaking would be undertaken as necessary. The Committee's 2013 
budget and those for subsequent fiscal periods would be reviewed and, 
as appropriate, approved by USDA.

Initial 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 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 
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 41 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 $7,000,000, according to Committee and USDA 
data. In addition, it is estimated that ten of the 41 producers have 
annual receipts of less than $750,000. Based on the foregoing, it may 
be concluded that a majority of grape handlers regulated under the 
order, and about 10 of the producers could be classified as small 
entities under the Small Business Administration definitions.
    This proposal would increase the assessment rate established for 
the Committee and collected from handlers for the 2013 and subsequent 
fiscal periods. The Committee unanimously recommended an assessment 
rate of $0.0165 per 18-pound lug of grapes handled, and 2013 
expenditures of $100,000. The proposed assessment rate of $0.0165 is 
$0.0015 higher than the 2012 rate currently in effect. The quantity of 
assessable grapes for the 2013 season is estimated at 5,800,000 18-
pound lugs. Thus, the $0.0165 rate should generate $95,700 in income. 
Combined with $4,300 from financial reserves, this should provide 
adequate revenue to meet the 2013 fiscal period expenses. In addition, 
reserve funds at the end of the year are projected to be $53,972, which 
is well within the order's limitation of approximately one fiscal 
period's expenses.
    The major expenditures recommended by the Committee for the 2013 
fiscal period include $15,500 for research, $17,000 for general office 
expenses, and $67,500 for management and compliance expenses. In 
comparison, major expenditures for the 2012 fiscal period included 
$15,500 for research, $17,500 for general office expenses, and $62,500 
for management and compliance expenses.
    Prior to arriving at this budget, the Committee considered 
alternative expenditures and assessment rates, including not increasing 
the $0.0150 assessment rate currently in effect. Based on a crop 
estimate of 5,800,000 18-pound lugs, the Committee ultimately 
determined that revenue generated from an assessment rate of $0.0165, 
combined with funds from the financial reserve, would adequately cover 
increased expenses while providing an adequate 2013 ending reserve.
    A review of historical crop and price information, as well as 
preliminary information pertaining to the upcoming fiscal period 
indicates that the producer price for the 2013 season could average 
about $8.00 per 18-pound lug of grapes handled for Southeastern 
California grapes. Utilizing this estimate and the proposed assessment 
rate of $0.0165, estimated assessment revenue as a percentage of total 
estimated producer revenue would be 0.20 percent for the 2013 season 
($0.0165 divided by $8.00 per 18-pound lug). Thus, the assessment 
revenue should be well below 1 percent of estimated producer revenue in 
2013.
    This proposal would increase 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 
would be 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 March 4, 2013, meeting was a public meeting 
and all entities, both large and small, were able to express views on 
this issue. Finally, interested persons are invited to submit comments 
on this proposed rule, including the regulatory and informational 
impacts of this action on small businesses.
    In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C.

[[Page 28149]]

Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0189. No changes in those requirements as a 
result of this action are necessary. 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 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.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreement and orders may be viewed at: 
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about 
the compliance guide should be sent to Jeffrey Smutny at the 
previously-mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    A 15-day comment period is provided to allow interested persons to 
respond to this proposed rule. Fifteen days is deemed appropriate 
because: (1) The 2013 fiscal period began on January 1, 2013, and the 
order requires that the rate of assessment for each fiscal period apply 
to all assessable grapes handled during such fiscal period; (2) the 
Committee needs to have sufficient funds to pay its expenses, which are 
incurred on a continuous basis; and (3) handlers are aware of this 
action, which was unanimously recommended by the Committee at a public 
meeting and is similar to other assessment rate actions issued in past 
years.

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 
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. Section 925.215 is revised to read as follows:

Sec.  925.215  Assessment rate.

    On and after January 1, 2013, an assessment rate of $0.0165 per 18-
pound lug is established for grapes grown in a designated area of 
southeastern California.

    Dated: May 8, 2013.
Rex Barnes,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2013-11386 Filed 5-13-13; 8:45 am]
BILLING CODE 3410-02-P
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