83 FR 53402 - Raisins Produced From Grapes Grown in California; Increased Assessment Rate

DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

Federal Register Volume 83, Issue 205 (October 23, 2018)

This proposed rule would implement a recommendation from the Raisin Administrative Committee (Committee) to increase the assessment rate established for the 2018-19 and subsequent crop years. The assessment rate would remain in effect indefinitely unless modified, suspended, or terminated.

[Federal Register Volume 83, Number 205 (Tuesday, October 23, 2018)]
[Proposed Rules]
[Pages 53402-53404]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-23091]


========================================================================
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.

========================================================================


Federal Register / Vol. 83, No. 205 / Tuesday, October 23, 2018 / 
Proposed Rules

[[Page 53402]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Doc. No. AMS-SC-18-0069; SC18-989-1 PR]


Raisins Produced From Grapes Grown in California; Increased 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule would implement a recommendation from the 
Raisin Administrative Committee (Committee) to increase the assessment 
rate established for the 2018-19 and subsequent crop years. The 
assessment rate would remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Comments must be received by November 23, 2018.

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, Specialty Crops 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 document 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 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 the comments will be made public on the internet at 
the address provided above.

FOR FURTHER INFORMATION CONTACT: Kathie Notoro, Marketing Specialist, 
or Terry Vawter, Acting Regional Director, California Marketing Field 
Office, Marketing Order and Agreement Division, Specialty Crops 
Program, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906; or 
Email: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, 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 action, pursuant to 5 U.S.C. 553, 
proposes an amendment to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This proposed rule is issued under 
Marketing Order No. 989, as amended (7 CFR part 989), regulating the 
handling of raisins produced from grapes grown in California. Part 989 
(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 producers and handlers of 
raisins operating within the area of production, and a public member.
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 13563 and 13175. This proposed 
rule falls within a category of regulatory actions that the Office of 
Management and Budget (OMB) exempted from Executive Order 12866 review. 
Additionally, because this proposed rule does not meet the definition 
of a significant regulatory action, it does not trigger the 
requirements contained in Executive Order 13771. See OMB's Memorandum 
titled ``Interim Guidance Implementing Section 2 of the Executive Order 
of January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs''' (February 2, 2017).
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the Order now in effect, California raisin 
handlers are subject to assessments. Funds to administer the Order are 
derived from such assessments. It is intended that the assessment rate 
would be applicable to all assessable raisins for the 2018-19 crop 
year, 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.
    The 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 are 
familiar with the Committee's needs and with the costs of goods and 
services in their local area, and are, in a position to formulate an 
appropriate budget and assessment rate. The assessment rate is 
formulated and discussed in a public meeting. Therefore, all directly 
affected persons have an opportunity to participate and provide input.
    This proposed rule would increase the assessment rate from $17.00 
to $22.00 per ton for the 2018-19 and subsequent crop years. The 
current rate was published in the Federal Register during the 2015-16 
crop year to reduce the Committee's monetary reserve to a level that it 
determined to be appropriate under the Order. The proposed higher rate 
is a result of a smaller crop forecast due to early spring rain damage 
to the vines. The 2018-19 crop is anticipated to be 275,000 tons, down 
from the 300,000 tons recorded the previous crop year.
    The Committee met on June 27, 2018 to consider the Committee's 
projected 2018-19 budget and the Order's continuing assessment rate. 
The Committee unanimously recommended

[[Page 53403]]

an assessment rate of $22.00 per ton of raisins for the 2018-19 crop 
year. The proposed assessment rate of $22.00 is $5.00 higher than the 
rate currently in effect. Without the proposed increase, anticipated 
assessment revenue would not be sufficient to fund the Committee's 
ongoing administrative functions. The assessment rate increase is 
necessary to maintain the Committee's activities at current levels and 
avoid a reduction in the program's effectiveness.
    For the 2018-19 crop year, the Committee recommended a budget of 
expenses totaling $5,189,600. The proposed assessment rate of $22.00 
per ton is expected to generate assessment income of approximately 
$6,050,000, which would be sufficient to fund the recommended 2018-19 
expenses.
    The major expenditures recommended by the Committee for the 2018-19 
crop year include: Salaries and employee-related costs of $1,187,200; 
administration costs of $440,400; compliance activities of $60,000; 
research and study costs of $40,000; and promotion related costs of 
$3,637,000. Subtracted from these expenses is $175,000, which 
represents reimbursable costs for the shared management of the State 
marketing raisin program. In comparison, last year's approved budgeted 
expenditures included: Salaries and employee-related costs of 
$1,306,150; administration costs of $505,600; compliance activities of 
$48,000; research and study costs of $35,000; and promotion related 
costs of $3,577,178.
    The increased assessment rate is necessary to cover the decrease in 
estimated crop size tonnage from 300,000 tons in 2017-18 to 275,000 
tons in 2018-19. At the recommended assessment rate of $22.00 per ton, 
the anticipated assessment income would be $6,050,000. The remaining 
$860,400 would be added to the authorized reserve.
    The proposed assessment rate would 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 would be in effect for an indefinite 
period, the Committee would continue to meet prior to or during each 
crop year 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 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 budget for subsequent crop 
years 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 
businesses 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 2,600 producers of California raisins and 
approximately 16 handlers subject to regulation under the marketing 
order. Small agricultural producers are defined by the Small Business 
Administration (SBA) as those having annual receipts less than 
$750,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $7,500,000. (13 CFR 121.201.)
    According to the National Agricultural Statistics Service (NASS), 
data for the most-recently completed crop year (2017) shows that about 
8.03 tons of raisins were produced per acre. The 2017 producer price 
published by NASS was $1,670 per ton. Thus, the value of raisin 
production per acre averaged about $13,410.10 (8.03 tons times $1,670 
per ton). At that average price, a producer would have to farm nearly 
56 acres to receive an annual income from raisins of $750,000 ($750,000 
divided by $13,410.10 per acre equals 55.93 acres). According to 
Committee staff, the majority of California raisin producers farm less 
than 56 acres. In addition, according to data from the Committee staff, 
six of the sixteen California raisin handlers have receipts of less 
than $7,500,000 and may also be considered small entities. Thus, the 
majority of producers of California raisins may be classified as small 
entities, while the majority of handlers may be classified as large 
entities.
    This proposed rule would increase the assessment rate collected 
from handlers for the 2018-19 and subsequent crop years from $17.00 to 
$22.00 per ton of assessable raisins acquired by handlers.
    The Committee reviewed and identified the expenses that would be 
reasonable and necessary to continue program operations during the 
2018-19 crop year. The resulting recommended budget totals $5,189,600 
for the 2018-19 crop year, which is an overall decrease from the 2017-
18 crop year budget, which totaled $5,296,928.
    The quantity of assessable raisins for 2018-19 crop year is 
estimated to be 275,000 tons. At the recommended assessment rate of 
$22.00 per ton, the anticipated assessment income would be $6,050,000. 
Sufficient income should be generated at the higher assessment rate for 
the Committee to meet its anticipated expenses.
    The major expenditures recommended by the Committee for the 2018-19 
crop year include: Salaries and employee-related costs of $1,187,200; 
administration costs of $440,400; compliance activities of $60,000; 
research and study costs of $40,000; and promotion related costs of 
$3,637,000.
    In comparison, last year's approved budgeted expenditures included: 
Salaries and employee-related costs of $1,306,150; administration costs 
of $505,600; compliance activities of $48,000; research and study costs 
of $35,000; and promotion related costs of $3,577,178. The total budget 
approved for the 2017-18 crop year was $5,296,928.
    Prior to arriving at this budget and assessment rate, the Committee 
considered information from the Audit Subcommittee which met on June 
13, 2018, and discussed alternative spending levels. The recommendation 
was discussed by the Committee on June 27, 2018, and the Committee 
ultimately decided that the recommended budget and assessment rate were 
reasonable and necessary to properly administer the Order.
    A review of historical and preliminary information pertaining to 
the upcoming crop year indicates that the producer price for the 2017-
18 crop year was approximately $1,670.00 per ton of raisins. Utilizing 
that price, the estimated crop size of 275,000 tons, and the proposed 
assessment rate of $22.00 per ton, the estimated assessment revenue for 
the 2018-19 crop year as a percentage of total producer revenue is 
approximately 0.013 percent (assessment revenue of $6,050,000 divided 
by total producer revenue $459,250,000).

[[Page 53404]]

    This proposed action 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, and some 
of the additional costs may be passed on to producers. However, these 
costs would be offset by the benefits derived from the operation of the 
Order.
    The meetings of the Audit Subcommittee and the Committee were 
widely publicized throughout the California raisin industry. All 
interested persons were invited to attend the meetings and encouraged 
to participate in Committee deliberations on all issues. Like all 
subcommittee and Committee meetings, the June 13, 2018, and June 27, 
2018, meetings, respectively, were public meetings, and all entities, 
both large and small, were able to express views on this issue. 
Interested persons are invited to submit comments on this proposed 
rule, including the regulatory and information collection impacts of 
this action on small businesses.
    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 OMB and assigned OMB No. 0581-0178 Vegetable 
and Specialty Crops. No changes in those requirements would be 
necessary as a result of this action. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This proposed rule would 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.
    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 proposed rule.
    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/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.

List of Subjects in 7 CFR Part 989

    Grapes, Marketing agreements, Raisins, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 989 is 
proposed to be 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. Section 989.347 is revised to read as follows:


Sec.  989.347  Assessment rate.

    On and after August 1, 2018, an assessment rate of $22.00 per ton 
is established for assessable raisins produced from grapes grown in 
California.

     Dated: October 17, 2018.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2018-23091 Filed 10-22-18; 8:45 am]
BILLING CODE 3410-02-P