81 FR 44761 - Raisins Produced From Grapes Grown in California; Order Amending Marketing Order 989

DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

Federal Register Volume 81, Issue 132 (July 11, 2016)

This final rule amends Marketing Order No. 989 (order), which regulates the handling of raisins produced from grapes grown in California. The amendments approved by producers in the referendum were proposed by the Raisin Administrative Committee (Committee) which is comprised of producers and handlers of raisins and responsible for the local administration of the order. The changes will allow the Committee to borrow from a commercial lending institution and authorize the establishment of a monetary reserve equal to up to one year's budgeted expenses. Allowing the Committee to utilize these customary business practices will help improve administration of the order.

[Federal Register Volume 81, Number 132 (Monday, July 11, 2016)]
[Rules and Regulations]
[Pages 44761-44764]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-16335]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Doc. No. AMS-FV-14-0069; FV-14-989-2 FR]


Raisins Produced From Grapes Grown in California; Order Amending 
Marketing Order 989

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule amends Marketing Order No. 989 (order), which 
regulates the handling of raisins produced from grapes grown in 
California. The amendments approved by producers in the referendum were 
proposed by the Raisin Administrative Committee (Committee) which is 
comprised of producers and handlers of raisins and responsible for the 
local administration of the order. The changes will allow the Committee 
to borrow from a commercial lending institution and authorize the 
establishment of a monetary reserve equal to up to one year's budgeted 
expenses. Allowing the Committee to utilize these customary business 
practices will help improve administration of the order.

DATES: This rule is effective July 12, 2016.

FOR FURTHER INFORMATION CONTACT: Geronimo Quinones, Marketing 
Specialist, or Michelle P. Sharrow, Rulemaking Branch Chief, Marketing 
Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 
Independence Avenue SW., Stop 0237, Washington, DC 20250-0237; 
Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email: 
[email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Antoinette Carter, Marketing Order and 
Agreement Division, Specialty Crops Program, AMS, USDA, 1400 
Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; 
Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email: 
[email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 989, both as amended (7 CFR part 989), 
regulating the handling of raisins produced from grapes grown in 
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-

[[Page 44762]]

674), hereinafter referred to as the ``Act.'' 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 rule in 
conformance with Executive Orders 12866, 13563, and 13175.
    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 raisins produced in California.
    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. 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 not later than 20 days after the date of 
the entry of the ruling.
    Section 1504 of the Food, Conservation, and Energy Act of 2008 
(2008 Farm Bill) (Pub. L. 110-246) amended section 18c(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 18c(17) of the Act and additional 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 
based on the nature and complexity of the proposed amendments, the 
potential regulatory and economic impacts on affected entities, and any 
other relevant matters.
    AMS considered the nature and complexity of the proposed 
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 proposed amendments were unanimously recommended by the 
Committee following deliberations at a public meeting held on October 
2, 2014.
    A proposed rule soliciting comments on the proposed amendments was 
issued on October 13, 2015, and published in the Federal Register on 
October 16, 2015 (80 FR 62506). Two comments were received. One comment 
was in support of the amendments. The second comment asked questions 
about one of the proposals, which were addressed in the proposed rule 
and referendum order which was issued on February 22, 2016, and 
published in the Federal Register on March 7, 2016 (81 FR 11678). This 
document also directed that a referendum among raisin producers be 
conducted during the period of March 9, 2016 through March 23, 2016, 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 producers voting, or two-thirds of the volume of raisins 
represented by voters in the referendum. Both of the amendments were 
passed by 94 percent of the producers voting and by 93 percent of the 
volume represented, which exceeds the required two-thirds approval of 
the producers voting in the referendum or two-thirds of the volume 
represented in the referendum.
    The amendments included in this final rule will authorize the 
Committee to: (1) Borrow from a commercial lending institution; and (2) 
Establish a monetary reserve fund equal to up to one year's fiscal 
expenses.

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 action 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 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 3,000 producers of California raisins and 
approximately 28 handlers subject to regulation under the marketing 
order. The Small Business Administration defines small agricultural 
producers as those having annual receipts of less than $750,000 and 
defines small agricultural service firms as those whose annual receipts 
are less than $7,500,000 (13 CFR 121.201). Based upon information 
provided by the Committee, it may be concluded that a majority of 
producers and approximately 18 California raisin handlers may be 
classified as small entities.
    The amendments will authorize the Committee to borrow from 
commercial lending institutions and establish a monetary reserve fund 
equal to one year's budgeted expenses. This will help to ensure proper 
management and funding of the program.
    The Committee's proposed amendments were unanimously recommended at 
a public meeting on October 2, 2014.
    The Committee reviewed and identified a yearly budget that would be 
necessary to continue program operations in the absence of a reserve 
pool. Based on this budget, the Committee believes a monetary reserve 
of approximately $2 million will be sufficient to continue operations. 
The anticipated $2 million to be accumulated in a monetary reserve will 
not be accrued in one crop year. It will be spread over several years, 
depending on expenses, assessment revenue, and excess handler 
assessments accrued in each crop year. For example: If excess annual 
handler assessments amount to $400,000, it would take five years to 
accrue $2 million. Currently, the average excess handler assessments 
paid yearly over the last six years has been $861,622. During the time 
in which the monetary reserve fund would be accumulated, the Committee 
will seek funding from a commercial lending institution.
    While this action will result in a temporary increase in handler 
costs, these costs will be uniform on all handlers and proportional to 
the size of their businesses. However, these costs are expected to be 
offset by the benefits derived from operation of the order. 
Additionally, these costs will help to ensure that the Committee has 
sufficient funds to meet its financial obligations. Such stability is 
expected to allow the Committee to conduct programs that will benefit 
all entities, regardless of size. California raisin producers should 
see an improved business environment and a more sustainable business 
model because of the improved business efficiency.
    Alternatives were considered to these proposals, including making 
no changes at this time. However, the Committee believes it is 
beneficial to have the

[[Page 44763]]

means and funds necessary to effectively administer the program.

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 the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0178, ``Vegetable and Specialty Crops.'' 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.
    These amendments will not impose any additional reporting or 
recordkeeping requirements on either small or large California raisin 
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. In addition, USDA 
has not identified any relevant Federal rules that duplicate, overlap, 
or conflict with this 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.
    The Committee's meeting was widely publicized throughout the 
California raisin production area. All interested persons were invited 
to attend the meeting and encouraged to participate in Committee 
deliberations on all issues. Like all Committee meetings, the October 
2, 2014, meeting was public, and all entities, both large and small, 
were encouraged to express their views on these proposals.
    A proposed rule concerning this action was published in the Federal 
Register on October 16, 2015 (80 FR 62506). Copies of the rule were 
mailed or sent via facsimile to all committee members and raisin 
handlers. Finally, the rule was made available through the Internet by 
USDA and the Office of the Federal Register. A 60-day comment period 
ending December 15, 2015, was provided to allow interested persons to 
respond to the proposals. Two comments were received. One comment was 
in support of the proposal. The second comment stated that the term 
``commercial lending institution'' is vague and asked for the name of 
the institution and clarification regarding what constitutes a 
shortage. The comment also stated that the lending arrangement should 
be discussed openly. To clarify, as used in the proposal, a shortage 
would exist when the Committee's cash flow needs exceed the amount of 
cash available from handler assessments. Regarding open discussion, the 
Committee establishes a budget and assessment rate annually in meetings 
that are open to the public. During these meetings, the Committee would 
discuss any shortages and any available commercial lending 
opportunities. No changes were made to the proposed amendments as a 
result of the comments received.
    A proposed rule and referendum order was then issued on February 
22, 2016, and published in the Federal Register on March 7, 2016 (81 FR 
11678). This document directed that a referendum among raisin producers 
be conducted during the period of March 9, 2016, through March 23, 
2016, 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 producers voting, or two-thirds of the volume 
of raisins represented by voters in the referendum. Both of the 
amendments were passed by 94 percent of the producers voting and by 93 
percent of the volume represented, which exceeds the required two-
thirds approval of the producers voting in the referendum or two-thirds 
of the volume represented in the referendum.
    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.

Order Amending the Order Regulating the Handling of Raisins Produced 
From Grapes Grown in California

(a) Findings and Determinations Upon the Basis of the Rulemaking Record

    The findings hereinafter set forth are supplementary to the 
findings and determinations which were previously made in connection 
with the issuance of the marketing order; 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. The marketing order, as amended, and all of the terms and 
conditions thereof, will tend to effectuate the declared policy of the 
Act;
    2. The marketing order, as amended, and as hereby further amended, 
regulates the handling of raisins produced from grapes grown in 
California in the same manner as, and is applicable only to, persons in 
the respective classes of commercial and industrial activity specified 
in the marketing order;
    3. The marketing order, as 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 orders applicable to subdivisions of the production area would 
not effectively carry out the declared policy of the Act;
    4. The marketing order, as 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 raisins produced or 
packed in the production area; and
    5. All handling of raisins produced in the production area as 
defined in the marketing order is in the current of interstate or 
foreign commerce or directly burdens, obstructs, or affects such 
commerce.

(b) Additional Findings

    It is necessary and in the public interest to make these amendments 
effective not later than one day after publication in the Federal 
Register. A later effective date would unnecessarily delay 
implementation of the amendments. These amendments should be in place 
as soon as possible so the Committee may begin the process of 
identifying a commercial lending institution if cash flow shortages are 
identified during their annual budget meeting which will occur prior to 
the start of their next crop year (August 1, 2016). In view of the 
foregoing, it is hereby found and determined that good cause exists for 
making these amendments effective one day after publication in the 
Federal Register and that it would be contrary to the public interest 
to delay the effective date for 30 days after publication in the 
Federal Register. (Sec. 553(d), Administrative Procedure Act; 5 U.S.C. 
551-559.)

(c) Determinations

    It is hereby determined that:
    1. Handlers (excluding cooperative associations of producers who 
are not engaged in processing, distributing, or shipping of raisins 
covered under the order) who during the period August 1, 2014, through 
July 31, 2015, handled not less than 50 percent of the volume of such 
raisins covered by said order, as

[[Page 44764]]

hereby amended, have signed an amended marketing agreement; and
    2. The issuance of this amendatory order, amending the aforesaid 
order, is favored or approved by at least two-thirds of the producers 
who participated in a referendum on the question of approval and who, 
during the period of August 31, 2014, through July 31, 2015, have been 
engaged within the production area in the production of such raisins, 
such producers having also produced for market at least two-thirds of 
the volume of such commodity represented in the referendum.
    3. The issuance of this amendatory order together with a signed 
marketing agreement advances the interests of growers of raisins 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 raisins produced from grapes grown in 
California shall be in conformity to, and in compliance with, the terms 
and conditions of the said order as hereby amended as follows:
    The provisions of the proposed marketing order amending the order 
contained in the proposed rule issued by the Associate Administrator on 
October 13, 2015, and published in the Federal Register on October 16, 
2015 (80 FR 62506), shall 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 989

    Raisins, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 989 is 
amended as follows:

PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 989 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

0
2. Revise paragraph (c) of Sec.  989.80 to read as follows:


Sec.  989.80  Assessments.

* * * * *
    (c) During any crop year or any portion of a crop year for which 
volume percentages are not effective for a varietal type, all standard 
raisins of that varietal type acquired by handlers during such period 
shall be free tonnage for purposes of levying assessments pursuant to 
this section. The Secretary shall fix the rate of assessment to be paid 
by all handlers on the basis of a specified rate per ton. At any time 
during or after a crop year, the Secretary may increase the rate of 
assessment to obtain sufficient funds to cover any later finding by the 
Secretary relative to the expenses of the committee. Each handler shall 
pay such additional assessment to the committee upon demand. In order 
to provide funds to carry out the functions of the committee, the 
committee may accept advance payments from any handler to be credited 
toward such assessments as may be levied pursuant to this section 
against such handler during the crop year. In the event cash flow needs 
of the committee are above cash available generated by handler 
assessments, the committee may borrow from a commercial lending 
institution. The payment of assessments for the maintenance and 
functioning of the committee, and for such purposes as the Secretary 
may pursuant to this subpart determine to be appropriate, may be 
required under this part throughout the period it is in effect, 
irrespective of whether particular provisions thereof are suspended or 
become inoperative.
* * * * *

0
3. Revise paragraph (a) of Sec.  989.81 to read as follows:


Sec.  989.81  Accounting.

    (a) If, at the end of the crop year, the assessments collected are 
in excess of expenses incurred, such excess shall be accounted for in 
accordance with one of the following:
    (1) If such excess is not retained in a reserve, as provided in 
paragraph (a)(2) of this section, it shall be refunded proportionately 
to the persons from whom collected in accordance with Sec.  989.80; 
Provided, That any sum paid by a person in excess of his or her pro 
rata share of expenses during any crop year may be applied by the 
committee at the end of such crop year as credit for such person, 
toward the committee's administrative operations for the following crop 
year; Provided further, That the committee may credit the excess to any 
outstanding obligations due the committee from such person.
    (2) The committee may carry over such excess funds into subsequent 
crop years as a reserve; Provided, That funds already in the reserve do 
not exceed one crop year's budgeted expenses as averaged over the past 
six years. In the event that funds exceed one crop year's expenses, 
funds in excess of one crop year's budgeted expenses shall be 
distributed in accordance with paragraph (a)(1) of this section. Such 
funds may be used:
    (i) To defray essential administrative expenses (i.e., staff wages/
salaries and related benefits, office rent, utilities, postage, 
insurance, legal expenses, audit costs, consulting, Web site operation 
and maintenance, office supplies, repairs and maintenance, equipment 
leases, domestic staff travel and committee mileage reimbursement, 
international committee travel, international staff travel, bank 
charges, computer software and programming, costs of compliance 
activities, and other similar essential administrative expenses) 
exclusive of promotional expenses during any crop year, prior to the 
time assessment income is sufficient to cover such expenses;
    (ii) To cover deficits incurred during any period when assessment 
income is less than expenses;
    (iii) To defray expenses incurred during any period when any or all 
provisions of this part are suspended;
    (iv) To meet any other such expenses recommended by the committee 
and approved by the Secretary; and
    (v) To cover the necessary expenses of liquidation in the event of 
termination of this part. Upon such termination, any funds not required 
to defray the necessary expenses of liquidation shall be disposed of in 
such manner as the Secretary may determine to be appropriate; Provided, 
That to the extent practicable, such funds shall be returned pro rata 
to the persons from whom such funds were collected.
* * * * *

    Dated: July 5, 2016.
Elanor Starmer,
Administrator, Agricultural Marketing Service.
[FR Doc. 2016-16335 Filed 7-8-16; 8:45 am]
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