Marketing Order for Raisins Produced From Grapes Grown in California (M.O. No. 989); Hearing

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Notification of hearing on proposed rulemaking.

SUMMARY:

Notice is hereby given of a public hearing to receive evidence on proposals recommended by the Raisin Administrative Committee (Committee) to amend Federal Marketing Order No. 989 (Order). The proposed amendments would reduce Committee membership, eliminate the designated cooperative bargaining association member seat, lower quorum requirements, remove producer district representation, remove the requirement for separate member and alternate nominations, remove factors for establishing marketing policy, add language to clarify the quality of reconditioned raisins, add authority to accept voluntary contributions, and add language regarding ownership of intellectual property. The Committee recommended the proposed amendments after determining a significant reduction in the size of the industry has made it increasingly difficult to fill Committee positions and conduct business. The Agricultural Marketing Service (AMS) also proposes to make additional changes to the Order as may be necessary to conform to any amendatory changes that result from the hearing.

DATES:

The hearing will be held February 13–14, 2024, from 9:00 a.m. to 5:00 p.m. Pacific Time (PT) and, if deemed necessary by the presiding administrative law judge, will continue until such time or day as determined by the judge.

ADDRESSES:

The hearing will be held at the office of the Raisin Administrative Committee, 2445 Capitol Street, Suite 200, Fresno, California 93721.

FOR FURTHER INFORMATION CONTACT:

Christy Pankey, Marketing Specialist, or Matthew Pavone, Chief, Rulemaking Services Branch, Market Development Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, Stop 0237, Washington, DC 20250–0237; Telephone: (202) 720–8085, or Email: Christy.Pankey@usda.gov or Matthew.Pavone@usda.gov.

Small businesses may request information on this proceeding by contacting Richard E. Lower, Market Development Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, Stop 0237, Washington, DC 20250–0237; Telephone: (202) 720–8085, or Email: Richard.Lower@usda.gov.

SUPPLEMENTARY INFORMATION:

This administrative action is instituted pursuant to the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601–674), hereinafter referred to as the “Act,” and the applicable rules of practice and procedure governing amendments to marketing agreements and orders (7 CFR part 900). 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 Order 12866, 13563 and 14094. AMS provided notice of the hearing to Tribal Governments through the U.S. Department of Agriculture's (USDA) Office of Tribal Relations.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) seeks to ensure that within the statutory authority of a program, the regulatory and informational requirements are tailored to the size and nature of small businesses. Interested persons are invited to present evidence at the hearing on the possible regulatory and informational impacts of the proposals on small businesses.

The amendments proposed herein have been reviewed under Executive Order 12988, Civil Justice Reform. They are not intended to have retroactive effect.

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 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. 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 the entry of the ruling.

The Raisin Administrative Committee (Committee) is established under provisions of the Federal Marketing Order No. 989 (Order), which regulates the handling of raisins produced from grapes grown in California. The Order stipulates that the Committee may recommend to the Secretary amendments to the Order, and subject to USDA's approval, shall establish rules and procedures as may be necessary to accomplish the purposes of the Act and the efficient administration of the Order.

On October 20, 2022, the Committee recommended to USDA proposals to amend Committee size, composition, producer representation, and quorum requirements; to amend nomination procedures for small cooperative and independent producers; to remove two factors for establishing marketing policy, and to add language to clarify the quality of reconditioned raisins. The Committee voted on the above proposed amendments, 20 in favor and 10 opposed, at its August 17, 2022, meeting. On August 16, 2023, the Committee also voted to recommend to USDA the inclusion of additional proposals that would add authority to accept voluntary contributions and add language regarding Committee ownership of intellectual property. AMS received the Committee's unanimous proposal for those two recommendations on August 21, 2023.

After reviewing the proposals and other information submitted by the Committee, USDA has decided to schedule this matter for a public hearing. Testimony is invited on the following proposals or appropriate alternatives or modifications to such proposals as summarized below. These proposals submitted by the Committee have not received the approval of USDA.

Proposal 1—Amend Committee Membership Size and Composition, Lower Quorum Requirements, and Remove Producer District Representation

The Committee recommended reducing the Committee's size and lowering quorum requirements after determining that a substantial reduction in the size of the California raisin industry over the past 20 years has made it increasingly difficult to fill Committee positions and at times meet quorum requirements. Further, the Committee recommended the elimination of the member and alternate position dedicated to the cooperative bargaining association, removal of producer district representation, and the addition of an unaffiliated producer member seat. The Committee believes the designated cooperative bargaining association position is no longer warranted after a substantial decrease in total raisin acquisitions. The amendments proposed are as follows:

• Amend § 989.26 by reducing Committee membership from 47 to 21 members. Corresponding changes would also be made to § 989.126.
• Remove producer district representation in § 989.26(c), and add an unaffiliated producer member seat to § 989.126(a)(1). Corresponding changes would also remove §§ 989.22 and 989.122, and references to producer districts in §§ 989.29(b)(2), 989.126(a) and 989.129.
• Remove the designated bargaining association seat in § 989.26. Corresponding changes would also remove the reference to the bargaining association position in § 989.30.
• Amend § 989.38 by lowering quorum requirements from 25 to 14.

Proposal 2—Remove Separate Nomination Procedures for Independent and Small Cooperative Producers

Separate nomination procedures for independent producers or producers affiliated with small cooperative marketing associations' member and alternate positions were added to the Order in 2018 due to the number of vacancies on the Committee, and to encourage participation by alternate members. However, the Committee now recommends eliminating the requirement that independent and small cooperative producers must be nominated separately for either a member or alternate position as it would not be necessary with a reduced Committee size. The amendment proposed is as follows:

• Amend § 989.29 to eliminate the requirement for separate nominations for independent producers or producers affiliated with small cooperative marketing associations.

Proposal 3—Update Marketing Policy and Quality Standards for Reconditioned Raisins

The Committee recommended removing factor number 4, “An estimated desirable carryout at the end of the crop year;” and part of factor number 5, “, considering the estimated world raisin supply and demand situation” from the Committee's marketing policy considerations. The Committee determined that factor 4 is no longer necessary since the Order no longer regulates volume, the authority for which was removed in 2018. Factor number 5 will continue to be part of the marketing policy. However, consideration of part of factor number 5 relied on USDA's National Agricultural Statistic Service (NASS) “Raisins: World Market and Trade Report” to determine the estimated world raisin supply and demand situation. NASS no longer publishes the report, and the Committee found it would be cost prohibitive to acquire such information by other means.

Additionally, the Committee recommended adding language to §§ 989.24 and 989.58 clarifying that the quality of reconditioned raisins is the same as that of standard fruit. The Committee believes that there is a negative impression in the raisin market that the quality of reconditioned raisins that have been reworked and reinspected is somehow diminished. The Committee believes that the proposed language will help to dispel this negative impression, stating that natural condition raisins are any raisins that have been inspected and meet the Order's minimum requirements, which would include reconditioned fruit. The amendments proposed are as follows:

• In § 989.54(a), remove factor number 4 “An estimated desirable carryout at the end of the crop year;” and the last part of factor number 5 “, considering the estimated world raisin supply and demand situation.”
• Amend §§ 989.24 and 989.58 by adding language to clarify the quality of reconditioned raisins as standard raisins.

Proposal 4—Add Contribution Authority and Patent/Trademark Authority

The Committee recommended the addition of authority to accept voluntary contributions, and recommended adding language that would establish provisions for the collection of voluntary contributions by the Committee. The Committee further recommended the addition of authority related to Committee ownership of and rights to intellectual property, including authority to collect royalties from intellectual property. The amendments proposed are as follows:

• Add § 989.63 to establish the authority to accept voluntary contributions.
• Add § 989.64 to establish authority related to ownership of and rights to intellectual property and add authority for the collection of rents/royalties from the same.

In addition to the proposed amendments submitted by the Committee, AMS proposes to make any such conforming changes to the Order as may be necessary to conform to any amendment that may result from the proposals, or to correct minor inconsistencies and typographical errors.

USDA will oversee this formal rulemaking proceeding. The issuance of this notice of public hearing is the first of several steps in the amendatory rulemaking process, including the issuance of a Recommended Decision, public comment period, Secretary's Decision, and if the prior steps prove favorable, a grower referendum.

At the hearing, interested persons may provide testimony in support of or in opposition to the proposed amendments. Interested persons are invited to testify on the possible regulatory and informational impacts of the proposed amendments on small businesses.

Interested persons will also be provided the opportunity to file briefs in support of or in opposition to the proposed amendments after the hearing, as well as file exceptions to any Recommended Decision that may be issued. Finally, any proposed amendments will be required to be approved in a grower referendum before they can be implemented.

USDA will hold the public hearing for the purposes of: (i) receiving evidence about the economic and marketing conditions which relate to the proposed amendments of the Order; (ii) determining whether there is a need for the proposed amendments to the Order; (iii) determining if there are other alternatives to the proposed amendments or duplicates of the proposed amendments; and (iv) determining whether the proposed amendments or appropriate modifications thereof will tend to effectuate the declared policy of the Act.

All persons wishing to submit written material as evidence at the hearing should be prepared to submit four copies of such material at the hearing. Four copies of prepared testimony for presentation at the hearing should also be made available. To the extent practicable, eight additional copies of evidentiary exhibits and testimony prepared as an exhibit should be made available to USDA representatives on the day of appearance at the hearing. Any requests for preparation of USDA data for this rulemaking hearing should be made at least 10 days prior to the beginning of the hearing.

From the time the notice of hearing is issued until the issuance of a final decision in this proceeding, USDA employees involved in the decisional process are prohibited from discussing the merits of the hearing issues on an ex parte basis with any person having an interest in the proceeding. The prohibition applies to employees who are or may reasonably be expected to be involved in the decisional process of the proceeding in the following organizational units: Office of the Secretary of Agriculture; Office of the Administrator, AMS; Office of the General Counsel; and the Specialty Crops Program, AMS. Procedural matters are not subject to the above prohibition and may be discussed at any time.

Testimony is invited on the recommended proposals to amend 7 CFR part 989, or appropriate alternatives or modifications to such proposals, as follows:

List of Subjects in 7 CFR Part 989

• Grapes
• Marketing agreements
• Raisins
• Reporting and recordkeeping requirements

PART 989—RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA

1. The authority citation for part 989 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. Remove and reserve § 989.22.

3. Amend § 989.24 by revising paragraph (b) to read as follows:

4. Revise § 989.26 to read as follows:

5. Amend § 989.29 by revising paragraphs (a) and (b)(1) and (2) to read as follows:

6. Revise § 989.30 to read as follows:

7. Amend § 989.38 by removing the numeral “25” and adding in its place the numeral “14”.

8. Amend § 989.54 by:

a. Removing paragraph (a)(4);

b. Redesignating paragraphs (a)(5) through (9) as paragraphs (a)(4) through (8), respectively; and

c. In redesignated paragraph (a)(4), removing the text “, considering the estimated world raisin supply and demand situation”.

9. Amend § 989.58 by adding paragraph (g) to read as follows:

10. Add § 989.63 to read as follows:

11. Add § 989.64 to read as follows:

12. Remove and reserve § 989.122.

13. Revise § 989.126 to read as follows:

13. Revise § 989.129 to read as follows: