2015-13647. Grapes Grown in a Designated Area of Southeastern California; Proposed Amendments to Marketing Order

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Proposed rule.

SUMMARY:

This rulemaking invites comments on three proposed amendments to Marketing Order No. 925 (order), which regulates the handling of table grapes grown in a designated area of southeastern California. Two amendments are based on proposals made by the California Desert Grape Administrative Committee (Committee), which is responsible for the local administration of the order. These proposed amendments would increase term lengths for Committee members and alternates from one to four fiscal periods and would allow new members and alternates to agree to accept their nominations prior to selection. The proposals are intended to increase the Committee's effectiveness and bolster industry participation in Committee activities.

In addition to the Committee's proposals, the Agricultural Marketing Service (AMS) proposes an amendment that would add authority for periodic continuance referenda to allow producers to indicate whether or not there exists continuing support for the order.

DATES:

Comments must be received by August 4, 2015.

ADDRESSES:

Written comments should be submitted to the Docket Clerk, Marketing Order and Agreement Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; Fax: [phone]; or Internet: http://www.regulations.gov. All comments should reference the document number and the date and page number of this issue of the Federal Register. All comments submitted in response to this proposed rule will be included in the record and will be made available for public inspection in the Office of the Docket Clerk during regular business hours, or can be viewed at: http://www.regulations.gov. 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:

Geronimo Quinones, Marketing Specialist, or Michelle P. Sharrow, Rulemaking Branch Chief, Marketing Order and Agreement Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence Avenue SW., Stop 0237, Washington, DC 20250-0237; Telephone: [phone], Fax: [phone], or Email: [e-mail] or [e-mail].

Small businesses may request information on complying with this regulation by contacting Jeffrey Smutny, Marketing Order and Agreement Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: [phone], Fax: [phone], or Email: [e-mail].

SUPPLEMENTARY INFORMATION:

This proposal is issued under Marketing Order No. 925, as amended (7 CFR part 925), regulating the handling of table 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.” Section 608c(17) of the Act and the applicable rules of practice and procedure governing the formulation of marketing agreements and orders (7 CFR part 900) authorizes amendment of the order through this informal rulemaking action. AMS will consider comments received in response to this rule, and based on all the information available, will determine if order amendment is warranted. If AMS determines amendment of the order is warranted, a subsequent proposed rule and referendum order would be issued and producers would be allowed to vote for or against the proposed order amendments. AMS would then issue a final rule effectuating any amendments approved by producers in the referendum.

The Department of Agriculture (USDA) is issuing this proposed rule in conformance with Executive Orders 12866, 13563, and 13175.

This proposal has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect. This rule shall not be deemed to preclude, preempt, or supersede any State program covering table grapes grown in southeastern California.

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.

Section 1504 of the Food, Conservation, and Energy Act of 2008 (2008 Farm Bill) (Pub. L. 110-246) amended section 18c(17) of the Act, which in turn required the addition of supplemental rules of practice to 7 CFR part 900 (73 FR 49307; August 21, 2008). The amendment of section 18c(17) of the Act and additional supplemental rules of practice authorize the use of informal rulemaking (5 U.S.C. 553) to amend Federal fruit, vegetable, and nut marketing agreements and orders. USDA may use informal rulemaking to amend marketing orders based on the nature and complexity of the proposed amendments, the potential regulatory and economic impacts on affected entities, and any other relevant matters.

AMS has considered these factors and has determined that the amendment proposals are not unduly complex and the nature of the proposed amendments is appropriate for utilizing the informal rulemaking process to amend the order. A discussion of the potential regulatory and economic impacts on affected entities is discussed later in the “Initial Regulatory Flexibility Analysis” section of this rule.

Two of the proposed amendments were unanimously recommended by the Committee following deliberations at a public meeting held on November 5, 2013. The Committee's proposed amendments would amend the marketing order by: (1) Increasing the length of the term of office for Committee members and alternates from one to four fiscal periods; and (2) allowing new members and alternates to agree to accept their nominations prior to selection.

In addition to these proposed amendments, AMS proposes to add authority to provide for periodic continuance referenda. AMS has determined that continuance referenda are an effective means to allow the industry to indicate whether or not there exists continuing support for the marketing order. AMS would also consider all other relevant information concerning the operation of the order and the relative benefits and disadvantages to the industry.

Proposal Number 1—Term of Office

Section 925.21 of the order provides that terms of office for Committee members and alternates is one fiscal period. The nomination and selection process for the 12 members and 12 alternates is conducted annually and may take a number of months to complete.

This proposal would amend § 925.21 by increasing the length of the term of office for Committee members and alternates from one to four fiscal periods. The proposed change would provide more time for new members and alternates to learn the details of the Committee's operations and business during their tenure. In addition, because the industry is relatively small with a limited number of qualified candidates available to fill positions, longer terms would eliminate the annual turnover of the Committee and the perennial need for new members and alternates. If this amendment is adopted, members and alternate members would be selected for a four-year term of office beginning with the first term after the amendments become effective.

For the reasons stated above, it is proposed that § 925.21 be modified to increase the length of the term of office for Committee members and alternates from one to four fiscal periods.

Proposal Number 2—Qualification and Acceptance

This proposal would modify § 925.25 to allow new members and alternates to agree to accept their nominations prior to selection for the Committee by the Secretary.

Currently, Committee members and alternates are nominated by their peers to serve and are then selected by the Secretary. After the selections are made, Committee members and alternates are required to formally accept the appointment by signing and submitting an acceptance letter indicating they are willing to serve. The Committee believes this final step in the selection process is redundant and not efficient. The order provision would be revised to specify that before a person is selected as a member or alternate member of the Committee, that person must complete a questionnaire outlining their qualifications. The proposal would eliminate the requirement to complete and submit a separate acceptance letter after being nominated. Because the nominee qualifications questionnaire already includes a statement indicating the person is willing to serve on the Committee, if selected by the Secretary, AMS modified the proposed regulatory text originally submitted by the Committee.

For the reasons stated above, it is proposed that § 925.25 be revised to remove the requirement to file a written acceptance with the Secretary after being notified of selection.

Proposal Number 3—Continuance Referenda

AMS proposes an amendment to § 925.63, Termination, to require that continuance referenda be conducted every six years to gauge industry support for the order. Currently, there is no provision in the marketing order that requires periodic continuance referenda. Continuance referenda provide an industry with a means to measure grower support for the marketing order program. Since marketing orders benefit growers, it follows that they should be afforded the opportunity to express whether they support the programs on a periodic basis. Under this proposal, the Department would consider termination of the order if less than two-thirds of the producers voting in the referendum or producers of less than two-thirds of the volume of table grapes represented in the referendum favor continuance. In evaluating the merits of continuance versus termination, USDA would not only consider the results of the referendum. The Department would also consider all other relevant information concerning the operation of the order and its relative benefits and disadvantages in order to determine whether continued operation of the order would tend to effectuate the declared policy of the Act.

Therefore, it is recommended that § 925.63—Termination, be amended by redesignating paragraph (c) as paragraph (d) and adding a new paragraph (c) to provide that a continuance referendum shall be conducted six years after the amendment becomes effective and every six years thereafter. The new paragraph (c) of § 925.63 should further specify that the Department may terminate the order if continuance is not favored by two-thirds of the growers participating in the referendum, or voters representing two-thirds of the production volume represented in the referendum.

Initial Regulatory Flexibility Analysis

Pursuant to the 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 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 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 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 15 handlers of southeastern California table grapes who are subject to regulation under the marketing order and approximately 41 grape producers in the production area. Small agricultural service firms are defined by the Small Business Administration (SBA) as those having annual receipts of less than $7,000,000, and small agricultural producers are defined as those whose annual receipts are less than $750,000 (13 CFR 121.201).

Ten of the 15 handlers subject to regulation have annual grape sales of less than $7,000,000 according to USDA Market News Service and Committee data. Based on information from the Committee and USDA's Market News Service, it is estimated that at least 10 of the 41 producers have annual receipts of less than $750,000. Thus, it may be concluded that a majority of grape handlers regulated under the order and about 10 of the producers could be classified as small entities under SBA definitions.

The amendments proposed by the Committee would provide authority to increase the term length for members and alternates from one to four fiscal periods under the Federal marketing order for California table grapes. They also would allow new members and alternates of the Committee to agree to accept their nominations before the selection process begins. An amendment proposed by AMS would provide for continuance referenda every six years.

The Committee's proposed amendments were unanimously recommended at a public meeting on November 5, 2013. If these proposals are approved in referendum, there would be no direct financial effects on producers or handlers. However, eliminating the need to complete the election process every year would save considerable amounts of time and reduce expenses for the industry and the Committee. In addition, eliminating the acceptance letter would reduce paperwork and the time spent completing it.

The Committee believes these changes represent the needs of the Committee and industry. No economic impact is expected if the amendments are approved because they would not establish any regulatory requirements on handlers, nor do they contain any assessment or funding implications. There would be no change in financial costs, reporting, or recordkeeping requirements if either of these proposals is approved.

AMS' proposal to add a provision for continuance referenda is expected to afford producers the opportunity to indicate continuing support for the order and its programs. Support for the program is expected to benefit all producers and handlers by ensuring that the program continues to meet the industry's needs.

Alternatives to these proposals, including making no changes at this time, were considered. However, the Committee believes it would be beneficial to streamline the nomination and selection process to reduce the costs required for completing the process annually and to provide new members and alternates with more time to learn the details of the Committee's operations and business during their tenure.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the termination of the Letter of Acceptance was previously submitted to and approved by the Office of Management and Budget (OMB). As a result, the current number of hours associated with OMB No. 0581-0189, Generic Fruit Crops, would remain the same: 7,786.71 hours.

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. In addition, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

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.

The Committee's meeting was widely publicized throughout the California table grape production area. All interested persons were invited to attend the meeting and encouraged to participate in Committee deliberations on all issues. Like all Committee meetings, the November 5, 2013, meeting was public, and all entities, both large and small, were encouraged to express their views on these proposals.

Finally, interested persons are invited to submit comments on the proposed amendments to the order, including comments on the regulatory and informational impacts of this action on small businesses.

Following analysis of any comments received on the amendments proposed in this rule, AMS will evaluate all available information and determine whether to proceed. If appropriate, a proposed rule and referendum order would be issued, and producers would be provided the opportunity to vote for or against the proposed amendments. Information about the referendum, including dates and voter eligibility requirements, would be published in a future issue of the Federal Register. A final rule would then be issued to effectuate any amendments favored by producers participating in the referendum.

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/​MarketingOrdersSmallBusinessGuide. Any questions about the compliance guide should be sent to Jeffrey Smutny at his previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

General Findings

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

1. The marketing order as hereby proposed to be amended and all of the terms and conditions thereof, would tend to effectuate the declared policy of the Act;

2. The marketing order as hereby proposed to be amended regulates the handling of table grapes grown in a designated area of southeastern California 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;

3. The marketing order as hereby proposed to be amended is limited in application to the smallest regional production area which 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 marketing order as hereby proposed to be 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 table grapes produced or packed in the production area; and

5. All handling of table grapes produced or packed in the production area as defined in the marketing order is in the current of interstate or foreign commerce or directly burdens, obstructs, or affects such commerce.

A 60-day comment period is provided to allow interested persons to respond to these proposals. Any comments received on the amendments proposed in this rule will be analyzed, and if AMS determines to proceed based on all the information presented, a producer referendum would be conducted to determine producer support for the proposed amendments. If appropriate, a final rule would then be issued to effectuate the amendments favored by producers participating in the referendum.

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. Revise the first sentence of 925.21 to read as follows:

§ 925.21

Term of office.

The term of office of the members and alternates shall be four fiscal periods.* * *

3. Revise 925.25 to read as follows:

§ 925.25

Qualification and acceptance.

Any person selected as a member or alternate member of the Committee shall, prior to such selection, qualify by filing a qualifications questionnaire advising the Secretary that he or she agrees to serve in the position for which nominated.

4. Amend 925.63 by redesignating paragraph (c) as (d) and adding a new paragraph (c) to read as follows:

§ 925.63

Termination.

* * * * *

(c) Within six years of the effective date of this part the Secretary shall conduct a referendum to ascertain whether continuance of this part is favored by producers. Subsequent referenda to ascertain continuance shall be conducted every six years thereafter. The Secretary may terminate the provisions of this part at the end of any fiscal period in which the Secretary has found that continuance of this part is not favored by a two thirds majority of voting producers, or a two thirds majority of volume represented thereby, who, during a representative period determined by the Secretary, have been engaged in the production for market of table grapes in the production area. Such termination shall be announced on or before the end of the production year.

* * * * *

Dated: June 1, 2015.

Rex A. Barnes,

Associate Administrator, Agricultural Marketing Service.