Grapes Grown in a Designated Area of Southeastern California; Temporary Suspension of Continuing Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Docket No. FV98-925-1 IFR]

Grapes Grown in a Designated Area of Southeastern California;

Temporary Suspension of Continuing Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule suspends the continuing assessment rate for the

California Desert Grape Administrative Committee (Committee) under

Marketing Order No. 925 for the 1998 fiscal period. The fiscal period

begins January 1 and ends December 31. The Committee is responsible for

local administration of the marketing order, and recommended that no

handler assessments be collected in 1998. It made this recommendation

because it has enough reserve funds to cover 1998 fiscal year expenses

and expenses expected during the first several months of fiscal year

1999, and to keep its operating reserve within the maximum permitted

under the marketing order. The assessment rate will apply again during

fiscal year 1999 to cover expenses and to replenish the Committee's

reserve funds. That rate will continue in effect indefinitely unless

modified, suspended, or terminated.

DATES: Effective January 2, 1998. Comments received by March 2, 1998

will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments

concerning this rule. Comments must be sent in triplicate to the Docket

Clerk, Fruit and Vegetable Programs, AMS, USDA, Room 2525-S, P.O. Box

96456, Washington, DC 20090-6456; Fax: (202) 205-6632. 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.

FOR FURTHER INFORMATION CONTACT: Diane Purvis, Marketing Assistant, or

Rose Aguayo, Marketing Specialist, California Marketing Field Office,

Fruit and Vegetable Programs, AMS, USDA, 2202 Monterey Street, Suite

102B, Fresno, California 93721; telephone: (209) 487-5901, Fax: (209)

487-5906; or George Kelhart, Marketing Order

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Administrative Branch, Fruit and Vegetable Programs, AMS, USDA, Room

2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202)

720-2491, Fax: (202) 205-6632. Small businesses may request information

on compliance with this regulation by contacting Jay Guerber, Marketing

Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA,

Room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone:

(202) 720-2491, Fax: (202) 205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement and Order No. 925 (7 CFR part 925) regulating the handling of

grapes grown in a designated area of southeastern California,

hereinafter referred to as the ``order.'' The marketing agreement and

order are 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 (Department) 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. In 1997, an assessment rate of

$.01 per lug of grapes was fixed by the Secretary to continue in effect

indefinitely unless modified, suspended, or terminated. This action

suspends that assessment rate for the 1998 fiscal year. The assessment

rate again will apply in fiscal year 1999, and it will be applicable to

all assessable grapes beginning January 1, 1999, and continue in effect

until amended, suspended, or 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 the Secretary 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 the Secretary 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 the

Secretary'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 temporarily suspends Sec. 925.215 of the order's rules

and regulations. Section 925.215 established an assessment rate of

$0.01 per lug for fiscal period 1997 and subsequent fiscal periods.

Continuous assessment rates remain in effect from fiscal period to

fiscal period indefinitely unless modified, suspended, or terminated by

the Secretary. This rule suspends the $0.01 assessment rate for the

1998 fiscal period.

Section 925.41 of the grape marketing order provides authority for

the Committee, with the approval of the Department, to formulate an

annual budget of expenses and collect assessments from handlers to

administer the program. In addition, Sec. 925.42 authorizes the use of

reserve funds to cover program expenses. 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. Recommendations concerning the assessment

rate are formulated and discussed in a public meeting. Thus, all

directly affected persons have an opportunity to participate and

provide input.

The Committee met on November 12, 1997, and unanimously recommended

to carry over the 1997 reserve fund of almost $190,000, to adopt a

budget of $160,619, and to suspend the assessment rate of $0.01 per lug

of grapes for the 1998 fiscal period. The Committee determined that

sufficient funds would be available to meet the expected 1998 fiscal

period expenses, and to cover anticipated expenses during the first few

months of fiscal year 1999, before handler assessments are collected.

The Committee discussed alternatives to this rule, including not

suspending the assessment rate, but concluded that an assessment rate

will not be necessary as there will be sufficient reserve funds and

interest income to meet the 1998 fiscal period expenses, and early

season expenses in 1999. Also, the Committee recommended that the major

expenditures for the 1998 fiscal period should include $100,000 for

research, $25,000 for the sheriff's patrol, and $9,109 for the

manager's salary. Budgeted expenses for these items in 1997 were

$100,000 for research, $25,000 for compliance purposes, and $8,675 for

the manager's salary. Funds in the reserve will be kept within the

maximum permitted by the order (approximately one fiscal period's

expenses).

Although this assessment rate suspension only is effective for the

1998 fiscal 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 continuing assessment

rate. The dates and times of Committee meetings are available from the

Committee or the Department. Committee meetings are open to the public

and interested persons may express their views at these meetings. The

Department 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 1998 budget has been approved; and those for subsequent

fiscal periods will be reviewed and, as appropriate, approved by the

Department.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Agricultural Marketing Service (AMS) has considered the

economic impact of this action 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. Thus, both statutes have small

entity orientation and compatibility.

There are approximately 27 handlers of California grapes subject to

regulation under the marketing order and approximately 80 producers in

the production area. Small agricultural producers are defined by the

Small Business Administration (13 CFR 121.601) as those whose annual

receipts are less than $500,000, and small agricultural service firms

are defined as those whose annual receipts are less than $5,000,000.

Ten of the 27 handlers subject to regulation have annual grape sales of

at least $5,000,000, excluding receipts from any other sources. The

remaining 17 handlers have annual receipts less than $5,000,000,

excluding receipts from other sources. In addition, 70 of the 80

producers subject to regulation have annual sales of at least $500,000.

The remaining 10 producers

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have annual sales less than $500,000, excluding receipts from any other

sources. Therefore, a majority of handlers and a minority of producers

are classified as small entities.

This rule suspends Sec. 925.215 of the order's rules and

regulations, which established an assessment rate of $0.01 per lug for

fiscal period 1997 and subsequent fiscal periods. This suspension will

be in effect for the 1998 fiscal period.

The Committee discussed alternatives to this rule, including not

suspending the assessment rate, but concluded that no assessment rate

will be necessary as there will be sufficient funds in the reserve and

interest income to meet the 1998 fiscal period's expenses, and expenses

for the first several months of fiscal year 1999. Also, the Committee

recommended that the major expenditures for the 1998 fiscal period

should include $100,000 for research, $25,000 for the sheriff's patrol,

and $9,109 for the manager's salary. Budgeted expenses for these items

in 1997 were $100,000 for research, $25,000 for compliance purposes,

and $8,675 for the manager's salary. Funds in the reserve will be kept

within the maximum permitted by the order (approximately one fiscal

period's expenses).

Handler costs will be reduced during the 1998 fiscal year, as

assessments will not be collected. The Committee's meeting was widely

publicized throughout the 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

12, 1997, 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 information on the regulatory and

informational impacts of this action on small businesses.

This action will not impose any additional reporting or

recordkeeping requirements on either small or large 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.

The Department has not identified any relevant Federal rules that

duplicate, overlap, or conflict with this rule.

After consideration of all relevant matter presented, including the

information and recommendation submitted by the Committee and other

available information, it is hereby found that the continuing

assessment rate on handlers during the 1998 fiscal period no longer

tends to effectuate the declared policy of the Act. The suspension

shall continue only through December 31, 1998, at which time it shall

terminate and the suspended assessment rate specified in section

925.215 will apply again beginning January 1, 1999.

Pursuant to 5 U.S.C. 553, it is also found and determined upon good

cause that it is impracticable, unnecessary, and contrary to the public

interest to give preliminary notice prior to putting this rule into

effect, and that good cause exists for not postponing the effective

date of this rule until 30 days after publication in the Federal

Register because: (1) This action relieves restrictions on handlers by

suspending the assessment rate on handlers during the 1998 fiscal

period; (2) the 1998 fiscal period begins on January 1, 1998, and this

action should be effective as soon as possible to inform handlers that

the Secretary concurs with the Committee's recommendation; (3) handlers

are aware of this action which was unanimously recommended by the

Committee at a public meeting; and (4) this interim final rule provides

a 60-day comment period, and all comments timely received will be

considered prior to finalization of this rule.

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

amended as follows:

PART 925--GRAPES GROWN IN A DESIGNATED AREA OF SOUTHEASTERN

CALIFORNIA

1. The authority citation for 7 CFR part 925 continues to read as

follows:

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

Sec. 925.215 [Suspended]

2. In Part 925, Sec. 925.215 is suspended in its entirety effective

January 1, 1998, through December 31, 1998.

Dated: December 23, 1997.

Sharon Bomer Lauritsen,

Acting Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 97-34094 Filed 12-30-97; 8:45 am]

BILLING CODE 3410-02-P