[Federal Register Volume 59, Number 39 (Monday, February 28, 1994)]
[Unknown Section]
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From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4609]


[Federal Register: February 28, 1994]


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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

7 CFR Part 982

[Docket No. AO-205-A7; FV94-982-1]


Filberts/Hazelnuts Grown in Oregon and Washington; Hearing on 
Proposed Further Amendment of Marketing Agreement and Order No. 982, 
Both as Amended

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Notice of public hearing on proposed rulemaking.

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SUMMARY: Notice is hereby given of a public hearing to consider 
amending Marketing Agreement and Order No. 982 (order). The order 
regulates the handling of filberts/hazelnuts grown in Oregon and 
Washington. The purpose of the hearing is to receive evidence on 
proposals to amend provisions of the order. The proposed amendments 
would make changes in order provisions regarding: Volume control; 
nomination and membership of the Filbert/Hazelnut Marketing Board 
(Board); collecting assessments; and the administration and operation 
of the program. The proposed amendments were submitted by the Board, 
the agency responsible for local administration of the order, to make 
the order more consistent with current industry conditions and needs. 
The Fruit and Vegetable Division, Agricultural Marketing Service (AMS), 
proposes other conforming and necessary changes.

DATES: The hearing will begin at 9 a.m. in Newberg, Oregon, on March 8, 
1994, and if necessary, it will continue the next day.

ADDRESSES: The hearing will take place at the Shiloh Inn, 501 Sitka 
Avenue in Newberg, Oregon.

FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson, Marketing 
Specialist, Northwest Marketing Field Office, Fruit and Vegetable 
Division, Agricultural Marketing Service, USDA, 1220 SW Third Ave., 
room 369, Portland, OR 97204; telephone (503) 326-2724, FAX (503) 326-
7440; or Tom Tichenor, Marketing Order Administration Branch, Fruit and 
Vegetable Division, AMS, USDA, room 2524-S, Washington, DC 20250-0200; 
telephone: (202) 720-6862, FAX (202) 720-5698.

SUPPLEMENTARY INFORMATION: This administrative action is taken pursuant 
to the Agricultural Marketing Agreement Act of 1937, as amended (7 
U.S.C. 601-674), hereinafter referred to as the ``Act.'' This action 
also is governed by the provisions of Secs. 556 and 557 of Title 5 of 
the United States Code and, therefore, is excluded from the 
requirements of Executive Order 12866.
    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 business. Interested persons are invited to present evidence at 
the hearing on the possible regulatory and informational impact of the 
proposals on small businesses.
    The amendments proposed herein have been reviewed under Executive 
Order 12778, Civil Justice Reform. They are not intended to have 
retroactive effect. If adopted, the proposed amendments would 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 requesting 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 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 principal 
place of business, has jurisdiction in equity to review the Secretary's 
ruling on the petition, provided a bill in equity is filed not later 
than 20 days after date of the entry of the ruling.
    The hearing is called pursuant to the provisions of the Act and the 
applicable rules of practice and procedure governing the formulation of 
marketing agreements and orders (7 CFR Part 900).
    The Board proposes several amendments to the order's volume control 
provisions. The Board recommends an amendment that would expand the 
primary (domestic) market by adding Hawaii to the distribution area 
that currently is the continental United States (including Alaska) 
(Sec. 982.16). In addition, the Board proposes an amendment that would 
allow the Board, with the approval of the Secretary of Agriculture, to 
make future changes in the primary market's distribution area 
(Sec. 982.16). The Board proposes another amendment designed to provide 
the Board with additional flexibility to release up to 15 percent of 
the average volume acquired by the trade for the primary market for the 
preceding three years' rather than the mandatory 15 percent release 
specified in the current order (Sec. 982.40). The Board recommends an 
amendment that would allow the Board to establish identification 
standards for inspected and certified lots of hazelnuts rather than the 
current order requirement which specifies seals, stamps, tags or other 
identification (Sec. 982.46).
    The Board recommends several proposed amendments regarding 
nomination and Board membership. The Board proposes an amendment to 
change the length of the term of office to two years from the current 
one-year period with a corresponding change limiting the consecutive 
terms to three two-year terms rather than the current six consecutive 
one-year terms (Sec. 982.33). A corresponding amendment would establish 
the qualifications for nominating handler Board members based on the 
handlers' previous two years' volume handled rather than the previous 
one year volume handled, as currently required (Sec. 982.30). 
Similarly, the Board recommends a conforming change to the 
qualification period for weighing handler votes to the previous two 
marketing years rather than the previous one year marketing year 
(Sec. 982.32). The Board proposes that a change be made in the voting 
procedures when calculating handler voting qualifications by changing 
the minimum weighted volume to one ton rather than the current one 
percent (Sec. 982.32). The Board also proposes that a clarification be 
added to voting procedures to make it clear that eligible handlers vote 
for only one member and one alternate member (Sec. 982.32).
    The Board recommends several amendments to the administrative 
procedures and operations of the order's programs. The Board recommends 
changing the name of the regulated product from ``filberts'' or 
``filberts/hazelnuts'' to the single name ``hazelnuts'' (Sec. 982.4). 
Another amendment would allow telephone votes taken by the Board to 
remain unconfirmed until the next Board meeting rather than being 
confirmed in writing by individual members immediately after the vote 
(Sec. 982.37). Also, the Board proposes an amendment to remove the 
requirement that ``verbatim'' reports be made of Board proceedings on 
marketing policy meetings (Sec. 982.39). One amendment would remove an 
incorrect word in the current order language which determines handler 
credit for ungraded product (Sec. 982.51). The Board has recommended an 
amendment which would provide that, when the Board establishes bonding 
rates for handlers who temporarily defer meeting their restricted 
obligations, the Board would use the estimated value of restricted 
credits rather than the estimated product value of a handler's deferred 
restricted obligation (Sec. 982.54). Further, the Board recommends that 
defaulted bond payments should be used by the Board to purchase excess 
restricted credits from handlers rather than purchasing certified 
merchantable product which has already met restricted obligations 
(Sec. 982.54). Also, the Board recommends a corresponding change that 
such restricted credits should be used by the handlers to liquidate 
their restricted obligation rather than be disposed of as restricted 
product (Sec. 982.54).
    The Board proposes two amendments to the assessment provision to 
allow the Board to accept advance assessment payments (and provide 
discounts to those handlers who make advanced payments) and borrow 
money. Advance payments and borrowed moneys would be used only for 
meeting administrative obligations before current year assessment 
payments are available (Sec. 982.61). The Board also proposes a new 
provision that would allow the Board to accept voluntary contributions 
from willing individuals. Such contributions would be used only for 
production research, marketing research and development, and marketing 
promotion, including paid advertising (new Sec. 982.63).
    Finally, the Board proposes that a clarification be added to the 
exemption provision of the order to make it perfectly clear that mail 
order sales to destinations outside the area of production are not 
exempt from order requirements (Sec. 982.57).
    These proposals were submitted by the Board which works with the 
Department in administering the order. The Fruit and Vegetable 
Division, AMS, proposes conforming changes to further clarify and 
assure consistency with existing provisions of the order. The Board's 
proposed amendments have not received the approval of the Secretary of 
Agriculture.
    The public hearing is held for the purpose of: (1) Receiving 
evidence about the economic and marketing conditions which relate to 
the proposed amendments of the order; (2) determining whether there is 
a need for the proposed amendments to the order; and (3) 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 and should have prepared testimony available for 
presentation at the hearing.
    From the time this hearing notice is issued and until the issuance 
of a final decision in this proceeding, Department 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 in the 
following organizational units: Office of the Secretary of Agriculture; 
Office of the Administrator, AMS; Office of the General Counsel, except 
designated employees of the Office of General Counsel assigned to 
represent the Board in this rulemaking proceeding; and the Fruit and 
Vegetable Division, AMS.
    Procedural matters are not subject to the above prohibition and may 
be discussed at any time.

List of Subjects in 7 CFR Part 982

    Filberts, Hazelnuts, Marketing agreements, Nuts, Reporting and 
recordkeeping requirements.

PART 982--FILBERTS/HAZELNUTS GROWN IN OREGON AND WASHINGTON

    1. The authority citation for 7 CFR part 982 continues to read as 
follows:

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

    2. Testimony is invited on the following proposals or appropriate 
alternatives or modifications to such proposals: Proposals Submitted By 
The Filbert/Hazelnut Marketing Board.

Proposal No. 1

    In part 982, all references to ``filbert(s)'', ``filbert(s) 
(hazelnut(s)'' or ``filbert(s)/hazelnut(s)'' are revised to read 
``hazelnut(s)''.
    Revise Sec. 982.4 to read as follows:


Sec. 982.4  Hazelnuts.

    Hazelnuts means hazelnuts or filberts produced in the States of 
Oregon and Washington from trees of the genus Corylus.

Proposal No. 2

    Revise Sec. 982.16 to read as follows:


Sec. 982.16  Inshell Trade Acquisitions.

    Inshell trade acquisitions means the quantity of inshell hazelnuts 
acquired by the trade from all handlers during a marketing year for 
distribution in the United States and such other distribution areas as 
may be recommended by the Board and established by the Secretary.

Proposal No. 3

    In Sec. 982.30, revise paragraphs (a) and (b) to read as follows:


Sec. 982.30  Establishment and membership.

    (a) There is hereby established a Hazelnut Marketing Board 
consisting of 10 members, each of whom shall have an alternate member, 
to administer the terms and provisions of this part. Each member and 
alternate shall meet the same eligibility qualifications. The 10 member 
positions shall be allocated as follows:
    (b) * * *
    (1) One member shall be nominated by the handler who handled the 
largest volume of hazelnuts during the two marketing years preceding 
the marketing year in which nominations are made;
    (2) One member shall be nominated by the handler who handled the 
second largest volume of hazelnuts during the two marketing years 
preceding the marketing year in which nominations are made;
    (3) One member shall be nominated by the handler who handled the 
third largest volume of hazelnuts during the two marketing years 
preceding the marketing year in which nominations are made;
* * * * *
    In Sec. 982.32, revise paragraphs (a), (b), (c) and (f) to read as 
follows:


Sec. 982.32  Initial members and nomination of successor members.

    (a) Members and alternate members of the Board serving immediately 
prior to the effective date of this amended subpart shall continue to 
serve on the Board until their respective successors have been 
selected.
    (b) Nominations for successor handler members and alternate members 
specified in Sec. 982.30(b)(1) through (3) shall be made by the 
largest, second largest, and third largest handler determined according 
to the tonnage of certified merchantable hazelnuts and, when shelled 
hazelnut grade and size regulations are in effect, the inshell 
equivalent of certified shelled hazelnuts (computed to the nearest 
whole ton) recorded by the Board as handled by each such handler during 
the two marketing years preceding the marketing year in which 
nominations are made.
    (c) Nominations for successor handler member and alternate member 
positions specified in Sec. 982.30(b)(4) shall be made by the handlers 
in that category by mail ballot. All votes cast shall be weighted 
according to the tonnage of certified merchantable hazelnuts and, when 
shelled hazelnut grade and size regulations are in effect, the inshell 
equivalent of certified shelled hazelnuts (computed to the nearest 
whole ton) recorded by the Board as handled by each handler during the 
two marketing years preceding the marketing year in which nominations 
are made. If less than one ton is recorded for any such handler, the 
vote shall be weighted as one ton. Voting will be by position, and each 
eligible handler can vote for a member and an alternate member. The 
person receiving the highest number of weighted votes for each position 
shall be the nominee, for the respective position.
* * * * *
    (f) Nominations received in the foregoing manner by the Board for 
all handler and grower member and alternate member positions shall be 
certified and sent to the Secretary at least 60 days prior to the 
beginning of each two-year term of office, together with all necessary 
data and other information deemed by the Board to be pertinent or 
requested by the Secretary. If nominations are not made within the time 
and manner specified in this subpart, the Secretary may, without regard 
to nominations, select the Board members and alternates on the basis of 
the representation provided for in this subpart.
* * * * *
    In Sec. 982.33, revise paragraph (b) to read as follows:


Sec. 982.33  Selection and term of office.

* * * * *
    (b) Term of office. The term of office of Board members and their 
alternates shall be for two years beginning on July 1 and ending on 
June 30, but they shall serve until their respective successors are 
selected and have qualified: Provided, That beginning with the 199__-
9__ marketing year, no member shall serve more than three consecutive 
two-year terms as member and no alternate member shall serve more than 
three consecutive two-year terms as alternate unless specifically 
exempted by the Secretary. Nomination elections for all Board grower 
and handler member and alternate positions shall be held every two 
years.
* * * * *

Proposal No. 4

    In Sec. 982.37, revise paragraph (b) to read as follows:


Sec. 982.37  Procedure.

* * * * *
    (b) The Board may vote by mail, telephone, telegraph, or other 
means of communication: Provided, That any votes (except mail votes) so 
cast shall be confirmed at the next regularly scheduled meeting. When 
any proposition is submitted for voting by any such method, its 
adoption shall require 10 concurring votes.
* * * * *

Proposal No. 5

    In Sec. 982.39, revise paragraph (i) to read as follows:


Sec. 982.39  Duties.

* * * * *
    (i) To furnish to the Secretary a report of the proceedings of each 
meeting of the Board held for the purpose of making marketing policy 
recommendations.

Proposal No. 6

    In Sec. 982.40, revise paragraph (c)(2) to read as follows:


Sec. 982.40  Marketing policy and volume regulation.

* * * * *
    (c) * * *
    (1) * * * (2) Interim final and final percentages. On or before 
November 15, the Board shall meet to recommend to the Secretary the 
interim final and final free and restricted percentages, including the 
portion of the restricted supply that may be shelled or exported. The 
interim final percentages shall release 100 percent of the inshell 
trade demand previously computed by the Board for the marketing year. 
The final free and restricted percentages may release up to an 
additional 15 percent of the average of the preceding three years' 
trade acquisitions of inshell hazelnuts for desirable carryout. If the 
trade acquisitions during any or all of these years were abnormal, the 
Board may use a prior year or years in determining this three-year 
average. The final free and restricted percentages shall become 
effective 30 days prior to the end of the marketing year, or earlier as 
may be recommended by the Board and approved by the Secretary. The 
recommendations to the Secretary shall include the following:
* * * * *

Proposal No. 7

    In Sec. 982.46, revise paragraph (b) to read as follows:


Sec. 982.46  Inspection and certification.

* * * * *
    (b) All hazelnuts so inspected and certified shall be identified as 
prescribed by the Board. Such identification shall be affixed to the 
hazelnut containers by the handler under direction and supervision of 
the Board or the Federal-State Inspection Service, and shall not be 
removed or altered by any person except as directed by the Board.
* * * * *

Proposal No. 8

    Revise Sec. 982.51 by removing the word ``percent'' at the end of 
the first sentence of paragraph (a).

Proposal No. 9

    In Sec. 982.52, revise paragraph (b) to read as follows:


Sec. 982.52  Disposition of restricted hazelnuts.

* * * * *
    (b) Export. Sales of certified merchantable restricted hazelnuts 
for shipment to destinations outside the United States and such other 
distribution areas as may be recommended by the Board and established 
by the Secretary shall be made only by the Board. Any handler desiring 
to export any part or all of that handler's certified merchantable 
restricted hazelnuts shall deliver to the Board the certified 
merchantable restricted hazelnuts to be exported, but the Board shall 
be obligated to sell in export only such quantities for which it may be 
able to find satisfactory export outlets. Any hazelnuts so delivered 
for export which the Board is unable to export shall be returned to the 
handler delivering them. Sales for export shall be made by the Board 
only on execution of an agreement to prevent reimportation into the 
area designated in Sec. 982.16. A handler may be permitted to act as an 
agent of the Board, upon such terms and conditions as the board may 
specify, in negotiating export sales, and when so acting shall be 
entitled to receive a selling commission as authorized by the Board. 
The proceeds of all export sales, after deducting all expenses actually 
and necessarily incurred, shall be paid to the handler whose certified 
merchantable restricted hazelnuts are so sold by the Board.
* * * * *

Proposal No. 10

    In Sec. 982.54, revise paragraphs (b), (c), (d), (e) and (f) to 
read as follows:


Sec. 982.54  Deferment of restricted obligation.

* * * * *
    (b) Bonding requirement. Such bond or bonds shall, at all times 
during their effective period, be in such amounts that the aggregate 
thereof shall be no less than the total bonding value of the handler's 
deferred restricted obligation. The bonding value shall be the deferred 
restricted obligation poundage multiplied by the applicable bonding 
rate. The cost of such bond or bonds shall be borne by the handler 
filing same.
    (c) Bonding rate. Said bonding rate shall be an amount per pound as 
established by the Board. Such bonding rate shall be based on the 
estimated value of restricted credits for the current marketing year. 
Until bonding rates for a marketing year are fixed, the rates in effect 
for the preceding marketing year shall continue in effect. The Board 
should make any necessary adjustments once such new rates are fixed.
    (d) Restricted credit purchases. Any sums collected through default 
of a handler on the handler's bond shall be used by the Board to 
purchase restricted credits from handlers, who have such restricted 
credits in excess of their needs, and are willing to part with them. 
The Board shall at all times purchase the lowest priced restricted 
credits offered, and the purchases shall be made from the various 
handlers as nearly as practicable in proportion to the quantity of 
their respective offerings of the restricted credits to be purchased.
    (e) Unexpended sums. Any unexpended sums, which have been collected 
by the Board through default of a handler on the handler's bond, 
remaining in the possession of the Board at the end of a marketing 
year, shall be used to reimburse the Board for its expenses, including 
administrative and other costs incurred in the collection of such sums, 
and in the purchase of restricted credits as provided in paragraph (d) 
of this section.
    (f) Transfer of restricted credit purchases. Restricted credits 
purchased as provided for in this section shall be turned over to those 
handlers who have defaulted on their bonds for liquidation of their 
restricted obligation. The quantity delivered to each handler shall be 
that quantity represented by sums collected through default.
* * * * *

Proposal No. 11

    In Sec. 982.57, revise paragraph (b) to read as follows:


Sec. 982.57  Exemptions.

* * * * *
    (b) Sales by growers direct to consumers. Any hazelnut grower may 
sell hazelnuts of such grower's own production free of the regulatory 
and assessment provisions of this part if such grower sells such 
hazelnuts in the area of production directly to end users at such 
grower's ranch or orchard or at roadside stands and farmers' markets. 
The Board, with the approval of the Secretary, may establish such 
rules, regulations, and safeguards and require such reports, 
certifications, and other conditions, as are necessary to ensure that 
such hazelnuts are disposed of only as authorized. Mail order sales to 
destinations outside the area of production are not considered to be 
exempt sales under this part.

Proposal No. 12

    In Sec. 982.58, revise the last sentence of paragraph (a) to read 
as follows:


Sec. 982.58  Research, promotion, and market development.

    (a) * * * The expenses of such projects shall be paid from funds 
collected pursuant to Sec. 982.61, Sec. 982.63, or credited pursuant to 
paragraph (b) of this section.
* * * * *
    Revise Sec. 982.61 by designating the present text as paragraph (a) 
and adding a new paragraph (b) to read as follows:


Sec. 982.61  Assessments.

    (a) * * *
    (b) In order to provide funds for the administration of the 
provisions of this part during the first part of a fiscal period before 
sufficient operating income is available from assessments on the 
current year's shipments, the Board may accept the payment of 
assessments in advance, and may also borrow money for such purpose. 
Further, payment discounts may be authorized by the Board upon the 
approval of the Secretary to handlers making such advance assessment 
payments.
    Add a new Sec. 982.63 to read as follows:


Sec. 982.63  Contributions.

    The Board may accept voluntary contributions but these shall only 
be used to pay expenses incurred pursuant to Sec. 982.58. Furthermore, 
such contributions shall be free from any encumbrances by the donor and 
the Board shall retain complete control of their use.

Proposal No. 13

    The Fruit and Vegetable Division, Agricultural Marketing Service, 
proposes to make such changes to the order as may be necessary to 
conform with any amendment thereto that may result from the hearing.

    Dated: February 24, 1994.
Lon Hatamiya,
Administrator.
[FR Doc. 94-4609 Filed 2-25-94; 8:45 am]
BILLING CODE 3410-02-P