[Federal Register: May 3, 2007 (Volume 72, Number 85)]
[Proposed Rules]
[Page 24551-24553]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03my07-11]
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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.
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[[Page 24551]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 925
[Docket No. AMS-FV-07-0029; FV07-925-2 PR]
Grapes Grown in a Designated Area of Southeastern California;
Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule would increase the assessment rate established for
the California Desert Grape Administrative Committee (committee) for
the 2007 and subsequent fiscal periods from $0.0175 to $0.0200 per 18-
pound lug of grapes handled. The committee locally administers the
marketing order, which regulates the handling of grapes grown in a
designated area of southeastern California. Assessments upon desert
grape handlers are used by the committee to fund reasonable and
necessary expenses of the program. The fiscal period began January 1
and ends December 31. The assessment rate would remain in effect
indefinitely unless modified, suspended, or terminated.
DATES: Comments must be received by June 4, 2007.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
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 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, or can be viewed at: http://www.regulations.gov
.
FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Program Analyst, or
Kurt J. Kimmel, Regional Manager, California Marketing Field Office,
Fruit and Vegetable Programs, AMS, USDA; Telephone: (559) 487-5901,
Fax: (559) 487-5906, or E-mail:
Toni.Sasselli@usda.gov or Kurt.Kimmel@usda.gov.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202)
720-2491, Fax: (202) 720-8938, or E-mail: Jay.Guerber@usda.gov.
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 a designated area of
southeastern 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. 601-674), hereinafter referred to as the
``Act.''
The Department of Agriculture (USDA) 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. It is intended that the
assessment rate as proposed herein would be applicable to all
assessable grapes beginning on January 1, 2007, and continue 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 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.
This rule would increase the assessment rate established for the
committee for the 2007 and subsequent fiscal periods from $0.0175 to
$0.0200 per 18-pound lug of grapes.
The California grape marketing 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 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.
The assessment rate is formulated and discussed in a public meeting.
Thus, all directly affected persons have an opportunity to participate
and provide input.
For the 2005 and subsequent fiscal periods, the committee
recommended, and USDA approved, an assessment rate that would continue
in effect from fiscal period to fiscal period unless modified,
suspended, or terminated by USDA upon recommendation and information
submitted by the committee or other information available to USDA.
The committee met on February 6, 2007, and unanimously recommended
expenditures of $160,768 and an assessment rate of $0.0200 per 18-pound
lug of grapes for the 2007 fiscal period. In comparison, last year's
budgeted expenditures were $131,318. The assessment rate of $0.0200 is
$0.0025 higher than the rate currently in effect. The increased
assessment rate is needed to permit the committee to fund a research
project on Vineyard Mealy Bugs and to ensure that an adequate carryover
of reserve funds is available for the 2008 fiscal year.
The major expenditures recommended by the committee for the 2007
fiscal period include $18,000 for research, $5,000 for compliance
[[Page 24552]]
activities, $109,068 for salaries and payroll expenses, and $28,700 for
other expenses. In comparison, budgeted expenses for these items in
2006 were $5,000 for compliance activities, $103,668 for salaries and
payroll expenses, and $22,650 for other expenses. The committee did not
budget for research projects in 2006.
The assessment rate recommended by the committee was derived by
subtracting the committee's total available funds from their
anticipated 2007 expenses and dividing the remainder by the estimated
2007 shipments. The total anticipated 2007 expenses are $160,768, and
the desired ending reserve is $39,432. The available carry-in funds are
$70,000, and the anticipated interest income is $200. The 2007
estimated shipments are 6.5 million 18-pound lugs.
Based on this calculation, (($160,768 + $39,432) - ($70,000 +
$200)) / ( 6.5 million = $0.0200, the $0.0200 assessment rate would
provide sufficient funds to meet anticipated expenses of $160,768 and
would allow for an adequate December 2007 ending reserve of $39,432.
Thus, the December 2007 ending reserve would be kept within the maximum
permitted by the order, approximately one fiscal period's expenses, as
required under Sec. 925.41 of the order. It would also be adequate to
cover early-season (2008) expenses before assessment income is
received.
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
fiscal period 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 2007 budget and those for
subsequent fiscal periods would be reviewed and, as appropriate,
approved by USDA.
Initial Regulatory Flexibility Analysis
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 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 50 producers of grapes in the production
area and approximately 20 handlers subject to regulation under the
marketing order. The Small Business Administration (13 CFR 121.201)
defines small agricultural producers as those having annual receipts
less than $750,000 and small agricultural service firms are defined as
those whose annual receipts are less than $6,500,000.
Last year, six of the 20 handlers subject to regulation had annual
grape sales of at least $6,500,000. In addition, 10 of the 50 producers
had annual sales of at least $750,000. Therefore, a majority of
handlers and producers may be classified as small entities.
This rule would increase the assessment rate established for the
committee and collected from handlers for the 2007 and subsequent
fiscal periods from $0.0175 to $0.0200 per 18-pound lug of grapes. The
committee unanimously recommended expenditures of $160,768 and an
assessment rate of $0.0200 per 18-pound lug of grapes for the 2007
fiscal period. The proposed assessment rate of $0.0200 is $0.0025
higher than the 2006 rate. The number of assessable grapes is estimated
at 6.5 million 18-pound lugs. Thus, the $0.0200 rate should provide
$130,000 in assessment income. Income derived from handler assessments,
along with interest income and funds from the committee's authorized
carry-in reserve should be adequate to cover budgeted expenses.
The major expenditures recommended by the committee for the 2007
fiscal period include $18,000 for research, $5,000 for compliance
activities, $109,068 for salaries and payroll expenses, and $28,700 for
other expenses. In comparison, budgeted expenses for these items in
2006 were $5,000 for compliance activities, $103,668 for salaries and
payroll expenses, and $22,650 for other expenses. The committee did not
budget for research projects in 2006.
The committee reviewed and unanimously recommended 2007
expenditures of $160,768, which included an increase due to a new
research project. Prior to arriving at this budget, the committee
considered alternative expenditure and assessment rate levels, but
ultimately decided that the recommended levels were reasonable to
properly administer the order.
The assessment rate recommended by the committee was derived by the
following formula: Anticipated expenses ($160,768) plus desired 2007
ending reserve ($39,432), minus the 2007 beginning reserve ($70,000)
and the anticipated interest income ($200), divided by total shipments
(6.5 million 18-pound lugs), equals the recommended assessment rate
($0.0200 per 18-pound lug).
This rate would provide sufficient funds in combination with
interest and reserve funds to meet the anticipated expenses of $160,768
and result in a December 2007 ending reserve of $39,432, which is
acceptable to the committee. Thus, the December 2007 ending reserve
would be kept within the maximum permitted by the order, approximately
one fiscal period's expense, as required under Sec. 925.41 of the
order.
A review of historical information and preliminary information
pertaining to the 2007 fiscal period indicates that the on-vine grower
price for the season could range between $5.00 and $9.00 per 18-pound
lug of grapes. Therefore, the estimated assessment revenue for the 2007
fiscal period as a percentage of total grower revenue could range
between 0.2 and 0.4 percent.
This 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. Some of the
additional costs may be passed on to producers. However, these costs
would be offset by the benefits derived by the operation of the
marketing order.
In addition, the committee's meeting was widely publicized
throughout the grape production area and all interested persons were
invited to attend the meeting and participate in committee
deliberations on all issues. Like all committee meetings, the February
6, 2007, 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.
[[Page 24553]]
This proposed rule would impose 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 AMS is committed to complying with the E-Government Act, to
promote the use of the Internet and other 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 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/fv/moab.html.
Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
A 30-day comment period is provided to allow interested persons to
respond to this proposed rule. Thirty days is deemed appropriate
because: (1) The 2007 fiscal period began on January 1, 2007, and the
marketing order requires that the rate of assessment for each fiscal
period apply to all assessable grapes handled during such period; (2)
the industry could be shipping grapes beginning April 20, 2007; (3) the
committee needs to have sufficient funds to pay its expenses which are
incurred on a continuous basis; and (4) handlers are aware of this
action which was unanimously recommended by the committee at a public
meeting and is similar to other assessment rate actions issued in past
years.
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
proposed to be 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.
2. Section 925.215 is revised to read as follows:
Sec. 925.215 Assessment rate.
On and after January 1, 2007, an assessment rate of $0.0200 per 18-
pound lug is established for grapes grown in a designated area of
southeastern California.
Dated: April 27, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E7-8458 Filed 5-2-07; 8:45 am]
BILLING CODE 3410-02-P