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 FIR]

Grapes Grown in a Designated Area of Southeastern California;

Temporary Suspension of Continuing Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting, as a

final rule, without change, the provisions of an interim final rule

which suspended the continuing assessment rate for the Desert Grape

Administrative Committee (Committee) under Marketing Order No. 925 for

the 1998 fiscal period. 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.

EFFECTIVE DATE: April 27, 1998.

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, Technical Advisor, 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. 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, both as amended (7 CFR part 925),

regulating the handling of grapes grown in 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 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

continues to suspend 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 continues to temporarily suspend 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 continues to suspend 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 were formulated and discussed in a public meeting. Thus, all

directly affected persons had an opportunity to participate and provide

input.

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

carrying over the 1997 reserve fund of almost $190,000, adopting a

budget of $160,619, and suspending 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 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

[[Page 14602]]

suspending the assessment rate, but concluded that an assessment rate

for 1998 would not be necessary because sufficient reserve funds and

interest income would be available to meet 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; Sec. 925.42).

The temporary suspension of the continuing assessment rate is

effective only for the 1998 fiscal period. The assessment rate of $0.01

per lug will apply again during the 1999 fiscal period, unless

subsequent action to suspend or revise this rate is taken by the

Department.

Prior to the 1999 fiscal period, and prior to or during each

successive fiscal period, the Committee will continue to meet 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 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 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 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 any other sources. In addition, 70 of the 80

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

excluding receipts from any other sources. The remaining 10 producers

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 continues to suspend 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

is 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

is necessary for 1998 because funds in the reserve and interest income

would be adequate to meet 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

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; Sec. 925.42).

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 were invited to submit information on the regulatory and

informational impacts of this action on small businesses.

This action imposes no additional reporting or recordkeeping

requirements on either small or large California 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.

An interim final rule concerning this action was published in the

Federal Register on December 31, 1997 (62 FR 68150). Copies of that

rule were also mailed or sent via facsimile to all grape handlers.

Finally, the interim final rule was made available through the Internet

by the Office of the Federal Register. A 60-day comment period was

provided for interested persons to respond to the interim final rule.

The comment period ended on March 2, 1998, and no comments were

received.

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 a 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 Sec. 925.215

will apply again beginning January 1, 1999.

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

Accordingly, the interim final rule amending 7 CFR part 925 which

was published at 62 FR 68150 on December 31, 1997, is adopted as a

final rule without change.

[[Page 14603]]

Dated: March 20, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 98-7941 Filed 3-25-98; 8:45 am]

BILLING CODE 3410-02-P