[Federal Register: March 8, 2005 (Volume 70, Number 44)]
[Rules and Regulations]
[Page 11112-11114]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08mr05-2]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Docket No. FV05-925-1 FR]


Grapes Grown in a 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
2005 and subsequent fiscal periods from $0.015 to $0.0175 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. Authorization to assess grape handlers
enables the committee to incur expenses that are reasonable and
necessary to administer 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.

EFFECTIVE DATE: March 9, 2005.

FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Program Analyst or
Terry Vawter, Marketing Specialist, Marketing Field Office, Fruit and
Vegetable Programs, AMS, USDA, 2202 Monterey Street, Suite 102B,
Fresno, California 93721; Telephone: (559) 487-5901; Fax: (559) 487-
5906; or George Kelhart, Technical Advisor, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400
Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237;
Telephone: (202) 720-2491; Fax: (202) 720-8938.
    Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202)
720-2491; Fax: (202) 720-8938; or e-mail: Jay.Guerber@usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 925, both 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, California
grape handlers 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, 2005, and continue until amended,
suspended, or

[[Page 11113]]

terminated. This rule will not preempt any State or local laws,
regulations, or policies, unless they present an irreconcilable
conflict with this rule.
    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 2005 and subsequent fiscal periods from $0.015 to
$0.0175 per 18-pound lug of grapes handled.
    The grape marketing 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 California
grapes. 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 2002 and subsequent fiscal periods, the committee
recommended, and 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 November 9, 2004, and unanimously recommended
expenditures of $210,691 and an assessment rate of $0.0175 per 18-pound
lug of grapes for the 2005 fiscal period. In comparison, last year's
budgeted expenditures were $188,091. The assessment rate of $0.0175 is
$0.0025 higher than the rate in effect during the 2004 fiscal period.
The income from the increased assessment rate, together with interest
income and reserve funds is necessary to ensure that sufficient funds
are available to offset an increase in salaries and research programs
in 2005, and ensure that an adequate carryover of reserve funds is
available for the 2006 fiscal period.
    The expenditures recommended by the committee for the 2005 fiscal
period include $125,000 for research, $5,000 for compliance activities,
$45,500 for salaries and payroll expenses, and $32,191 for other
expenses. Budgeted expenses for these items in 2004 were $100,000 for
research, $10,000 for compliance activities, $43,500 for salaries, and
$34,591 for other expenses.
    The assessment rate recommended by the committee was derived using
the following formula: Total shipments (8.5 million 18-pound lugs)
times the recommended assessment rate ($0.0175 per 18-pound lug), plus
anticipated interest income ($300) and the 2005 beginning reserve
($78,000), minus the anticipated expenses ($210,691), leaving a 2005
ending reserve of $16,359.
    Based on this calculation, assessment income, interest income, and
funds from the committee's reserve will provide sufficient income to
meet the 2005 anticipated expenses of $210,691, and will also leave an
adequate December 2005 ending reserve of $16,359. At this level, the
December 2005 ending reserve will be within the maximum permitted by
the order of one fiscal period's expenses (Sec.  925.41).
    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 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 2005 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), 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. Thus, both statutes have small
entity orientation and compatibility.
    There are approximately 50 producers of grapes in the production
area and approximately 20 handlers subject to regulation under the
marketing order. Small agricultural producers are defined by the Small
Business Administration (13 CFR 121.201) as those having annual
receipts of less than $750,000 and small agricultural service firms are
defined as those whose annual receipts are less than $5,000,000.
    Last year, 8 of the 20 handlers subject to regulation had annual
grape sales of at least $5,000,000. In addition, 10 of the 50 producers
had annual sales of at least $750,000. Therefore, a majority of
handlers and producers may be classified as small entities.
    This rule increases the assessment rate established for the
committee and collected from handlers for the 2005 and subsequent
fiscal periods from $0.015 to $0.0175 per 18-pound lug of grapes. The
committee unanimously recommended expenditures of $210,691 and an
assessment rate of $0.0175 per 18-pound lug of grapes for the 2005
fiscal period. The assessment rate of $0.0175 is $0.0025 higher than
the 2004 rate. The number of assessable grapes is estimated at 8.5
million 18-pound lugs. Thus, the $0.0175 rate should provide $148,750
in assessment income. Income derived from handler assessments, along
with interest income and funds from the committee's authorized carry-in
reserves should be adequate to cover budgeted expenses in 2005.
    The expenditures recommended by the committee for the 2005 fiscal
period include $125,000 for research, $5,000 for compliance activities,
$45,500 for salaries and payroll expenses, and $32,191 for other
expenses. Budgeted expenses for these items in 2004 were $100,000 for
research, $10,000 for compliance activities, $43,500 for salaries, and
$34,591 for other expenses.

[[Page 11114]]

    The committee reviewed and unanimously recommended 2005
expenditures of $210,691 which included increases in salaries and
research programs. Prior to arriving at this budget, the committee
considered alternative expenditure and assessment rate levels, but
ultimately decided that the recommended levels were reasonable to
properly administer the order.
    The assessment rate recommended by the committee was derived by the
following formula: Total shipments (8.5 million 18-pound lugs) times
the recommended assessment rate ($0.0175 per 18-pound lug), plus the
anticipated interest income ($300) and the 2005 beginning reserve
($78,000), minus the anticipated expenses ($210,691), results in a 2005
ending reserve of $16,359.
    This increased assessment rate will provide sufficient funds in
combination with interest and reserve funds to meet the anticipated
expenses of $210,691 and result in a December 2005 ending reserve of
$16,359, which is acceptable to the committee. This reserve fund level
is within the maximum permitted by the order of approximately one
fiscal period's expenses.
    A review of historical information and preliminary information
pertaining to the upcoming fiscal period indicates that the on-vine
grower price for the 2005 season could range between $5.00 and $9.00
per 18-pound lug of grapes. Therefore, the estimated assessment revenue
for the 2005 fiscal period as a percentage of total grower revenue
could range between approximately 0.2 and 0.4 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 marketing
order. In addition, the committee's meeting was widely publicized
throughout the California grape industry and all interested persons
were invited to attend the meeting and participate in committee
deliberations on all issues. Like all committee meetings, the November
9, 2004, 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 desert 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.
    USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
    A proposed rule concerning this action was published in the Federal
Register on January 11, 2005 (70 FR 1837). Copies of the proposed rule
were also mailed or sent via facsimile to all desert 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
on February 10, 2005, 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/fv/moab.html.
 Any questions about the compliance

guide should be sent to Jay Guerber 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
committee needs to have sufficient funds to pay its expenses which are
incurred on a continuous basis; (2) the 2005 fiscal period began on
January 1, 2005, and the order requires that the rate of assessment for
each fiscal period apply to all assessable desert grapes handled during
such fiscal period; (3) handlers are aware of this action which was
unanimously recommended by the committee at a public meeting; and (4) a
30-day comment period was provided for in the proposed rule, and no
comments were received.

List of Subjects in 7 CFR Part 925

    Grapes, Marketing agreements, Reporting and recordkeeping
requirements.


0
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, 2005, an assessment rate of $0.0175 per 18-
pound lug is established for grapes grown in a designated area of
southeastern California.

    Dated: March 2, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-4449 Filed 3-7-05; 8:45 am]

BILLING CODE 3410-02-P