SUPPLEMENTARY INFORMATION:

Prior documents in this proceeding: a Notice of Hearing published in the January 12, 2024, issue of the Federal Register (89 FR 2178); a Recommended Decision and Opportunity to File Written Exceptions published in the September 13, 2024, issue of the Federal Register (89 FR 74851); and a Secretary's Decision and Referendum Order published in the December 11, 2025, issue of the Federal Register (90 FR 57384).

This action is governed by the provisions of sections 556 and 557 of title 5 of the United States Code and, therefore, is excluded from the requirements of Executive Orders 12866 and 14192.

Notice of this rulemaking action was provided to Tribal Governments through the USDA Office of Tribal Relations.

Preliminary Statement

This action finalizes amendments to regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This 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 final rule was formulated on the record of a public hearing held at the office of the Raisin Administrative Committee (Committee), 2445 Capitol Street, Suite 200, Fresno, California 93721, on February 13 and 14, 2024. The hearing was conducted pursuant to the provisions of the Act, and the applicable rules of practice and procedure governing the formulation of marketing agreements and orders (7 CFR part 900). Notice of this hearing was published in the Federal Register on January 12, 2024 (89 FR 2178) and provided an outline of each of the four amendatory proposals to the Order.

Upon the basis of evidence introduced at the hearing and the record thereof, on September 16, 2024, the Administrator of the Agricultural Marketing Service (AMS) filed with the Hearing Clerk, USDA, a Recommended Decision and Opportunity to File Written Exceptions thereto by October 15, 2024. AMS published a copy of the Recommended Decision and Opportunity to File Written Exceptions in the Federal Register on September 13, 2024 (89 FR 74851). Three exceptions were filed. These exceptions opposed the removal of the designated cooperative bargaining association seat from the Committee membership.

AMS published the Secretary's Decision and Referendum Order in the Federal Register on December 11, 2025 (90 FR 57384), directing that a referendum be conducted during the period of January 12 through January 30, 2026, among eligible California raisin growers to determine whether they favored the amendments to the Order. To become effective, per the Order, the proposed amendments noted below required approval by at least two-thirds of producers voting, or by at least two-thirds of the volume of raisins represented by voters voting in the referendum.

The amendments to reduce the Committee membership size from 47 to 21, remove producer district representation and add an unaffiliated producer member seat, eliminate the designated cooperative bargaining association member seat, and lower quorum requirements from 25 to 14 were favored by 76.25 percent of the growers voting in the referendum, representing 82.66 percent of the total volume of raisins produced by those voting.

The amendment to remove the requirement for separate member and alternate member position nominations for independent and small cooperative producers was favored by 67.50 percent of the growers voting in the referendum, representing 81.65 percent of the total volume of raisins produced by those voting.

The amendments to remove factor 4 and part of factor 5 from the Committee's considerations for establishing marketing policy and add language to clarify the quality of reconditioned raisins as standard raisins were favored by 81.25 percent of the growers voting in the referendum, representing 91.99 percent of the total volume of raisins produced by those voting. ( printed page 64602)

The amendments to add authority to accept voluntary contributions and add language regarding ownership of intellectual property were favored by 72.97 percent of the growers voting in the referendum, representing 87.75 percent of the total volume of raisins produced by those voting.

All proposed amendments exceeded the two-thirds requirement. Accordingly, the amendments favored by voters included in this final rule will reduce Committee membership size from 47 to 21, remove producer district representation, add an unaffiliated producer member seat, eliminate the designated cooperative bargaining association seat, and lower quorum requirements from 25 to 14; remove the requirement for separate member and alternate member position nominations for independent and small cooperative producers; remove factor 4 and part of factor 5 for establishing marketing policy, and add language clarifying the quality of reconditioned raisins; and add authority to accept voluntary contributions and add language regarding ownership of intellectual property.

AMS also recommended necessary changes to the Order to conform to the amendments adopted or to correct minor inconsistencies and typographical errors. Specifically, AMS revised § 989.129 to replace the word “ballot” with “vote.” AMS revised § 989.129 to revert the regulatory text to its original form prior to the 2018 amendment (October 26, 2018; 83 FR 53965), which separated nomination procedures for independent producers or producers affiliated with small cooperative marketing associations. This conforming change aligns with the Committee's proposal to remove the requirement that independent and small cooperative producers must be nominated separately for either a member or alternate member position. In addition, witnesses at the hearing testified in support of the amendment to remove separate nominations for small cooperative and independent producers, stating that separate nomination procedures discouraged participation rather than encouraged it, and that the separate nominations would no longer be necessary with a smaller Committee size. The regulatory text included in this final rule reflects this conforming change.

The amended marketing agreement was subsequently mailed to all raisin handlers in the production area for their approval. The amended marketing agreement was not approved by handlers representing more than 50 percent of the volume of raisins handled by all handlers during the August 1, 2024, through July 31, 2025, representative period. Consequently, a companion handler agreement will not be established.

Small Business Considerations

Pursuant to the requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of this final 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 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 typically small entities acting on their own behalf.

According to the hearing transcript, there are approximately 1,500 producers of California raisins. According to the National Agricultural Statistical Service (NASS) data presented at the hearing, the total value of production for the 2022-2023 crop year of raisins was $381,780,000. Taking the total value of production for raisins and dividing it by the total number of raisin producers provides a return per producer of $254,520 ($381,780,000 production volume divided by 1,500 producers). Small agricultural producers of raisins are defined by the Small Business Administration (SBA) as those having annual receipts equal to or less than $4 million (NAICS code 111332, Grape Vineyards) (13 CFR 121.201). Therefore, a majority of raisin producers would be considered small entities under SBA's standards.

According to the hearing record, there were 17 handlers for the 2022-2023 crop year. Small agricultural service firms are defined as those whose annual receipts are equal to or less than $34 million (NAICS code 115114, Postharvest Crop Activities) (13 CFR 121.201). To make a similar computation for handlers, the first step is to estimate a representative handler price received per pound for packaged raisins. Recent USDA purchases under the Commodity Procurement Program provide such an estimate. For the most recent raisin crop year used by the Committee, the 2022-2023 crop year average price paid for packaged raisins purchased by the USDA for food assistance programs was $1.56 per pound. The annual receipts for handlers can be calculated by taking the USDA average purchase price and multiplying it by the total number of shipments as reported by the Committee for the 2022-2023 crop year ($1.56 multiplied by 414,898,000 pounds) which equals $647,240,880. Taking the calculation for the annual receipts by handlers and dividing by the number of handlers provides an estimated annual receipt per handler ($647,240,880 divided by 17 handlers), which equals $38,072,993. Based on the SBA definition of an agricultural service firm having less than $34 million in annual receipts, there is a mix of both large and small raisin handlers.

The production area regulated under the Order covers the State of California. Acreage devoted to raisin production in the production area has declined in recent years. According to data presented at the hearing, bearing acreage for raisins reached a high of 280,000 acres during the 2000-2001 crop year. Since then, bearing acreage for raisins has decreased almost 53 percent to 133,000 acres in 2021-2022. Total production of raisins reached a high during the 2000-2001 crop year of 2,921,000 tons (green tons) but has decreased 65 percent to a total production of raisins of 1,010,000 tons in 2021-2022.

During the hearing held on February 13 and 14, 2024, interested persons were invited to present evidence on the probable regulatory and informational impact of the proposed amendments to the Order on small businesses. The evidence presented at the hearing showed that none of the proposed amendments would have any burdensome effects on small agricultural producers or firms.

Material Issues

This action amends the Order to reduce the Committee membership size from 47 to 21, remove producer district representation and add an unaffiliated producer member seat, eliminate the designated cooperative bargaining association member seat, and lower quorum requirements from 25 to 14; remove the requirement for separate member and alternate member position nominations for independent and small cooperative producers; remove factor 4 and part of factor 5 for establishing marketing policy and add language clarifying the quality of reconditioned raisins; and add authority to accept voluntary contributions and language regarding ownership of intellectual property. In addition, this action makes necessary changes to the Order to conform to the amendments adopted.

The hearing record shows that the amendments will help reduce Committee vacancies, improve attendance, generate cost savings, ( printed page 64603) enhance administrative efficiency, ensure fair representation, and align Committee membership with the overall size of the California raisin industry. The record demonstrates that reducing the Committee membership size from 47 to 21 will make it easier to manage and fill Committee positions, thus improving attendance and lessening the likelihood of prolonged vacancies. This amendment, along with the other amendments to remove producer district representation, add an unaffiliated producer member seat, and eliminate the designated cooperative bargaining association member seat, ensure that the size and composition of the Committee align with the size and structure of the industry and that different stakeholders within the industry have a fair and equitable level of representation on the Committee. Further, with lower quorum requirements, the Committee can make decisions more easily and reduce meeting delays and rescheduling caused by low attendance, improving administrative efficiency and generating cost savings for the Committee.

The record further showed that removing the requirement for separate member and alternate member position nomination procedures for independent and small cooperative producers will enhance administrative efficiency by reducing administrative burden and streamlining the nomination process.

Additionally, removing factors for establishing marketing policy will improve administrative efficiency by removing unnecessary and outdated considerations, allowing the Committee to focus on more relevant matters. Further, the amendment to clarify the quality of reconditioned raisins will dispel negative impressions stemming from misconceptions and clarify the quality of reconditioned fruit, streamlining sales and contribute to improved administrative efficiencies.

Lastly, the addition of voluntary contribution authority and intellectual property language will generate cost savings, as voluntary contributions and revenue from intellectual property can provide additional funding, aside from assessments, that the Committee may use for other activities approved under the Order, such as research and promotion.

These amendments align the Order with current market-driven practices that result in a more efficient industry for producers and handlers of all sizes. AMS has not identified any relevant Federal rules that duplicate, overlap or conflict with this rule. These amendments are intended to improve the operation and administration of the Order and to assist in the marketing of California raisins.

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.

Paperwork Reduction Act

Current information collection requirements that are part of the Federal marketing order for California raisins (7 CFR part 989) are approved under OMB No. 0581-0178 Vegetables and Specialty Crops. Some minor changes in those requirements are anticipated as a result of this proceeding. Changes would remove information no longer applicable. Such changes would be submitted to OMB for approval.

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.

Civil Justice Reform

The amendments to the Order herein have been reviewed under Executive Order 12988, “Civil Justice Reform.” They are not intended to have retroactive effect. The amendments do 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. 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 no later than 20 days after the date of entry of the ruling.

Order Amending the Order Regulating the Handling of Raisin Produced From Grapes Grown in California ^[1]

Findings and Determinations

The findings and determinations hereinafter set forth are supplementary to the findings and determinations that were previously made in connection with the issuance of the 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.

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

Pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), and the applicable rules of practice and procedure effective thereunder (7 CFR part 900), a public hearing was held upon proposed further amendment of Marketing Order No. 989, regulating the handling of raisins produced from grapes grown in California.

Upon the basis of the record, it is found that:

(1) The Order, as amended, and as hereby further amended, and all of the terms and conditions thereof, would tend to effectuate the declared policy of the Act;

(2) The Order, as amended, and as hereby further amended, regulates the handling of raisins produced from grapes grown in the production area 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 upon which a hearing has been held;

(3) The Order, as amended, and as hereby further amended, is limited in its application to the smallest regional production area that 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 Order, as amended, and as hereby further 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 from grapes grown in California; and ( printed page 64604)

(5) All handling of raisins produced from grapes grown in the production area as defined in the Order is in the current of interstate or foreign commerce or directly burdens, obstructs, or affects such commerce.

Order Relative To Handling

It is therefore ordered, that on and after the effective date hereof, all handling of raisins grown in California shall be in conformity to, and in compliance with, the terms and conditions of the said Order, as amended, and as hereby amended as follows:

The provisions of the proposed marketing order amending the Order contained in the Recommended Decision and Opportunity to File Written Exceptions published in the September 13, 2024, issue of the Federal Register (89 FR 74851), and in the Secretary's Decision and Referendum Order (December 11, 2025; 90 FR 57384), will be and are the terms and provisions of this order amending the Order and are set forth in full herein.

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

91 FR 64601