[Federal Register Volume 60, Number 54 (Tuesday, March 21, 1995)]
[Proposed Rules]
[Pages 14914-14918]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-6909]



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 Proposed Rules
                                                 Federal Register
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 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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 

  Federal Register / Vol. 60, No. 54 / Tuesday, March 21, 1995 / 
Proposed Rules  
[[Page 14914]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 927

[Docket Nos. AO-99-A-6; FV-92-065]


Winter Pears Grown in Oregon, Washington, and California; 
Recommended Decision and Opportunity to File Written Exceptions to 
Proposed Further Amendment of Marketing Agreement and Order No. 927

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule and opportunity to file exceptions.

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SUMMARY: This recommended decision invites written exceptions on 
proposed amendments to the marketing agreement and order for winter 
pears grown in the States of Oregon, Washington, and California. The 
proposed amendments would redefine ``ship or handle'' to include 
shipments of winter pears within the production area, update the 
definition of ``export market'' to recognize that there are now 50 
states in the United States, authorize the Winter Pear Control 
Committee (WPCC) to accept voluntary contributions and how such funds 
may be used, and revise the authority for exempting certain shipments 
from regulation. These proposed amendments are designed to improve the 
administration, operation and functioning of the winter pear marketing 
order program.

DATES: Written exceptions must be filed by April 20, 1995.

ADDRESSES: Written exceptions should be filed with the Hearing Clerk, 
U.S. Department of Agriculture, room 1079-S, Washington, DC 20250-9200, 
Facsimile number (202) 720-9776. Four copies of all written exceptions 
should be submitted and they should reference the docket numbers and 
the date and page number of this issue of the Federal Register. 
Exceptions will be made available for public inspection in the Office 
of the Hearing Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Kenneth Johnson or Britthany Beadle, 
Marketing Specialists, Marketing Order Administration Branch, Fruit and 
Vegetable Division, AMS, USDA, Room 2523-S, Washington, D.C. 20250-
0200; telephone: (202) 720-5127; or Teresa Hutchinson, Northwest 
Marketing Field Office, Marketing Order Administration Branch, Fruit 
and Vegetable Division, AMS, USDA, 1220 S.W. Third Avenue, Room 369, 
Portland, Oregon, 97204; telephone: (503) 326-2725.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice 
of Hearing issued on November 16, 1992, and published in the November 
20, 1992, issue of the Federal Register (57 FR 54728).
    This administrative 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.
    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 the amendments.
    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 or her 
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.

Preliminary Statement

    Notice is hereby given of the filing with the Hearing Clerk of this 
recommended decision with respect to the proposed further amendment of 
Marketing Agreement and Order No. 927, regulating the handling of 
winter pears grown in Oregon, Washington, and California, and the 
opportunity to file written exceptions thereto. Copies of this decision 
can be obtained from Kenneth G. Johnson, Britthany Beadle or Teresa 
Hutchinson whose addresses are listed above.
    This action is issued pursuant to the provisions of the 
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601 
et seq.), hereinafter referred to as the ``Act,'' and the applicable 
rules of practice and procedure governing the formulation of marketing 
agreements and orders (7 CFR Part 900).
    The proposed amendment of Marketing Agreement and Order No. 927 is 
based on the record of a public hearing held in Portland, Oregon, on 
December 2, 1992. Notice of this hearing was published in the Federal 
Register on November 20, 1992. The notice of hearing contained several 
proposals submitted by the WPCC, which locally administers the order.
    The proposed amendments would: (1) Redefine ``ship or handle'' to 
include shipments of winter pears within the production area; (2) 
update the definition of ``export market'' to recognize that there are 
now 50 states in the United States; (3) authorize the WPCC to accept 
voluntary contributions and how such funds may be used; and (4) revise 
the authority for exempting certain shipments from regulation.
    The notice of hearing also included proposals by the Fruit and 
Vegetable Division, Agricultural Marketing Service (AMS), U.S. 
Department of Agriculture (Department), to make such changes as are 
necessary to the order, if any or all of the above amendments are 
adopted, so that all of its provisions conform with the proposed 
amendment. The Department also proposed revising the language in 
several sections of the order.
    Interested persons had until January 15, 1993, to file proposed 
findings and conclusions, and written arguments or briefs based on the 
evidence received at the hearing. No such documents were received. 
[[Page 14915]] 

Small Business Considerations

    In accordance with the provisions of the Regulatory Flexibility Act 
(RFA), the Administrator of the AMS has determined that this action 
would not have a significant economic impact on a substantial number of 
small entities. Small agricultural producers have been defined by the 
Small Business Administration (SBA) (13 CFR 121.601) as those having 
annual receipts of less than $500,000. Small agricultural service 
firms, which include handlers regulated under the order, are defined as 
those with annual receipts of less than $5,000,000.
    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. Interested persons were 
invited to present evidence at the hearing on the probable regulatory 
and informational impact of the proposed amendments on small 
businesses. The record indicates that handlers would not be unduly 
burdened by any additional regulatory requirements, including those 
pertaining to reporting and recordkeeping, that might result from this 
proceeding.
    During the 1991-92 crop year, 88 handlers were regulated under 
Marketing Order No. 927. In addition, there were about 1,650 producers 
of winter pears in the production area. Marketing orders and amendments 
thereto are unique in that they are normally brought about through 
group action of essentially small entities for their own benefit. Thus, 
both the RFA and the Act are compatible with respect to small entities.
    All of the changes in the amendments are designed to enhance the 
administration and functioning of the marketing agreement and order 
which would benefit the industry. If implemented, these amendments 
might impose some costs on affected handlers and producers. However, 
the added burden on small entities, if present at all, would not be 
significant because the benefits of the proposed amendments are 
expected to outweigh the costs.
    In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C. 
35), any change in the reporting and recordkeeping provisions that may 
result from the proposed amendments would be submitted to the Office of 
Management and Budget (OMB). The provisions would not be effective 
until receiving OMB approval.

Material Issues

    The material issues of record addressed in this decision are as 
follows: (1) Whether to redefine ``ship or handle'' to include 
shipments of winter pears within the production area; (2) whether the 
definition of ``export market'' should be updated to recognize that 
there are now 50 states in the United States; (3) whether the WPCC 
should be authorized to accept voluntary contributions and how such 
funds may be used; and (4) whether to revise authority for exempting 
certain shipments from regulation.

Findings and Conclusions

    The findings and conclusions on the material issues, all of which 
are based on evidence adduced at the hearing and the record thereof, 
are:
    (1) Section 927.8, Ship or Handle, of the winter pear marketing 
order should be amended to cover shipments of winter pears within the 
production area, as well as interstate shipments.
    Record evidence indicates that the intent of the proposal is to 
provide that shipments of winter pears within the production area be 
regulated the same as shipments marketed outside the production area. 
Currently, the order authorizes grade, size, and quality regulations 
and inspection and reporting requirements for fresh winter pears. 
While, no grade, quality or size requirements have been issued under 
the order since the 1979 marketing season, handlers who ship winter 
pears outside the production area are required to comply with reporting 
and recordkeeping requirements and pay assessments on those shipments. 
Handlers who ship winter pears within the production area are not 
required to comply with such requirements. The WPCC has considered 
reestablishing grade and size requirements for winter pear shipments in 
order to ensure the acceptability of such shipments. The WPCC 
recommended that winter pear shipments within the production area be 
regulated in the same manner as interstate shipments in order to 
improve the effectiveness of the marketing order. Regulation of winter 
pears within the marketing area will help to enhance the orderly 
marketing of winter pears. The record evidence supports this change in 
the definition of the term ``ship or handle'' to make shipments of 
winter pears within the production area subject to all order 
requirements.
    In 1985, marketing order No. 927 was amended to provide for 
research and promotion activities, including paid advertising. Until 
then, the Oregon, Washington, California Pear Bureau (Bureau) 
represented the northwest winter pear industry in its market 
development and promotion and advertising programs throughout world 
markets. The Bureau's purpose was to conduct those activities necessary 
to assure the continued success of the industry.
    According to record evidence, the assessments to conduct these 
activities and membership in the Bureau were voluntary. These voluntary 
assessments were paid by handlers on winter pears marketed both within 
and outside of the production area.
    The WPCC has the responsibility for collecting mandatory 
assessments on interstate winter pear shipments. The WPCC provides 
funds for its research and promotion activities and is responsible for 
oversight of such projects. Currently, the Bureau manages the WPCC's 
research and promotion activities. There is a contractual agreement 
between the WPCC and the Bureau for these purposes. The record 
indicates that this arrangement has proven beneficial, and the WPCC 
continues to utilize the Bureau which has over 60 years of experience 
in trade relations to conduct its marketing, promotion and advertising 
activities.
    Other WPCC activities include collection of various statistical 
information, and post- and pre-harvest research programs to improve 
cultural practices. The statistical information collected is used by 
the WPCC to target potential markets to increase sales of winter pears. 
Research results to improve cultural and handling practices are 
distributed throughout the winter pear industry. Handlers pay 
assessments only on shipments of winter pears to destinations outside 
the production area, since the order currently provides no authority 
for assessments on shipments of winter pears within the production 
area. Currently, handlers of winter pears shipped within the production 
area may benefit from the WPCC's activities without absorbing any of 
the costs to conduct these programs. Handlers making shipments of 
winter pears within the production area are currently exempted from 
paying assessments.
    According to record testimony, it is appropriate that assessments 
be paid on winter pear shipments within the production area to support 
production and marketing research and promotion projects. Approximately 
15 percent (347,647 cartons out of 2,267,582 cartons for 1991) of the 
winter pears marketed within the production area are sold in the State 
in which they are grown.
    Record evidence indicates that many of the pears initially shipped 
to intrastate destinations ultimately enter interstate commerce. 
According to record testimony, an estimated 70 to 80 
[[Page 14916]] percent of the pears sold at retail in Las Vegas, 
Nevada, and Arizona are moved there from distributors in southern 
California either by wholesalers or the retailer's own distribution 
system. Similar estimates are made for pears sold at retail in the 
Reno/Lake Tahoe area of central Nevada, with service from the Bay Area 
and/or Sacramento. Hawaii is also serviced by wholesalers in the 
California seaports. The WPCC believes and the evidence supports that 
many of these shipments originate from sources in the production area. 
Promotions paid for with mandatory assessments on interstate shipments 
are conducted in all of these production areas.
    At the hearing, witnesses for the WPCC offered a modification of 
the proposal as it appeared in the hearing notice. These witnesses 
testified that the term ``handle'' should not include the 
transportation of winter pear shipments within the production area from 
the orchard where grown to a packing facility located within the 
production area for preparation for market. The intent of this proposal 
is that winter pears transported within the production area for 
purposes of preparation for market would not be subject to assessment 
or any other order requirements since they would not yet have been 
handled. All other winter pears placed in interstate commerce or 
marketed within the production area would be subject to regulation, 
unless otherwise exempt under other provisions of the order.
    Record testimony also supported adding the definition of 
``consign'' to the definition of ``ship or handle''. The record 
indicates that ``consign'' is defined as an agreement between a buyer 
and seller for the transport of product to be marketed with no previous 
determination of the return of the product. It is the responsibility of 
the buyer to market the product and return to the seller the proceeds. 
This should be included as ``handling'' because the ``agent'' or 
``handler'' who receives the commodity is engaged in the buying, 
selling and distributing of the commodity for market. The record also 
indicates that the words ``handle for shipment'' should be deleted from 
the definition of the term ``ship or handle'' because they are 
redundant and not necessary.
    Section 927.10, Production area, should be changed from ``area'' to 
``production area''. This is a conforming amendment to clarify those 
areas that comprise the production area under the marketing order.
    Section 927.41, Assessments, should be amended to remove any 
reference to a specific State. Record testimony indicates that this is 
a conforming amendment to provide the necessary language to comply with 
the intent of the proposal to regulate winter pear shipments within and 
outside the production area. This section should also be amended to 
remove the words ``upon billing''. Record testimony indicates that 
current procedures to collect assessments do not entail billing. The 
WPCC does not bill handlers for assessments due. Rather, handlers pay 
their assessments every two weeks when they submit handler statements 
of winter pear shipments to the WPCC.
    Section 927.52, Prerequisites to Control Committee recommendations, 
should be amended to provide conforming language updating the marketing 
order. Presently, the marketing order specifies a basis of one vote for 
each 25,000 boxes (except 2,500 boxes for Forelle and Seckel varieties) 
of the average quantity of such variety produced in the particular 
district and shipped therefrom during the immediately preceding three 
fiscal periods to destinations outside the State in which produced. As 
such, only interstate shipments of winter pears are used as a criteria 
to determine voting procedures. Record evidence supports the inclusion 
of shipments within the production area in the tonnage vote during WPCC 
meetings. This action is necessary to provide representation based on 
all winter pears handled, consistent with order provisions. The 
proposed amendment to the order has been modified for clarity.
    (2) Section 927.12, Export Market, should be amended to update that 
provision of the marketing order. The marketing order currently 
provides that ``export market'' means any destination which is not 
within the 48 states, or the District of Columbia, of the United 
States. Record testimony indicates that this section of the marketing 
order should be updated to reflect that the United States is made up of 
50 states.
    (3) Section 927.45, Contributions, should be added to the marketing 
order to authorize the WPCC to receive voluntary contributions. Record 
evidence indicates that marketing promotion and research projects for 
winter pears should directly benefit growers of that commodity and 
secondarily benefit other groups and businesses whose interests are 
allied with the production and marketing of winter pears. These groups 
frequently desire to make contributions or donations to help defray the 
costs of such projects. Record testimony indicates that voluntary 
contributions could include money, information or anything of value. 
Such contributions should be received by the WPCC free from any 
encumbrances by the donor and under the complete control of the WPCC. 
The WPCC should not receive a voluntary contribution from any person if 
that contribution could represent a conflict of interest. Handlers 
under the order would be allowed to make voluntary contributions to the 
WPCC.
    Record testimony indicated that the provision to accept voluntary 
contributions as currently provided in the notice of hearing is too 
restrictive. According to the proposal included in the hearing notice, 
the WPCC would be prohibited from accepting funds for any purposes 
other than research and development. However, record testimony 
indicates that contributions might be provided for activities other 
than research and promotion projects including paid advertising. Record 
testimony indicates that the WPCC should be authorized to receive 
voluntary contributions for any purpose authorized under the order.
    Witnesses testified at the hearing that a person making a voluntary 
contribution to the WPCC should be able to specify its use for a 
particular authorized activity. However, the WPCC should be free to 
receive and use such contributions, subject to the provisions of the 
order, without any encumbrances upon the donor. The acceptance of 
voluntary contributions with encumbrances by the donor could, at a 
minimum, give rise to the appearance of improprieties. Accordingly, 
this recommendation is not included in the proposed amendment.
    Section 927.47, Research and Development, should be changed to 
include conforming language that provides for the acceptance and use of 
voluntary contributions. The marketing order currently provides that 
research and development projects shall be paid from funds collected 
pursuant to Sec. 927.41. This proposed amendment would allow funds 
collected from voluntary contributions pursuant to Sec. 927.45 to also 
pay for such projects.
    (4) Section 927.65, Exemption from regulation, should be amended to 
include additional types of winter pear shipments that may be exempt 
from regulation under the marketing order. Record testimony suggested 
additional language should be added to the proposed order amendments to 
provide exemptions to allow the WPCC, with the approval of the 
Secretary, to establish regulations that exempt from any or all 
requirements pursuant to this part quantities of pears or of types of 
pear shipments that do not interfere with the objectives of the order. 
These proposed [[Page 14917]] provisions would be in addition to the 
proposed amendments in the notice of hearing. Record testimony 
indicates that the overall intent of this amendatory action is to 
enable the exemption of shipments that do not impact fresh commercial 
shipments. Record testimony indicated further that Sec. 927.65, 
``Exemptions from regulation'', would be reviewed by the WPCC annually, 
and that the WPCC would have the flexibility of including and or 
adjusting requirements, subject to the approval of the Secretary, 
depending on the circumstances of any given year.

Rulings on Briefs of Interested Persons

    The presiding officer at the hearing set January 15, 1993, as the 
final date for filing briefs with respect to the evidence presented at 
the hearing and the conclusions which should be drawn therefrom. No 
briefs were received.

General Findings

    (1) The findings hereinafter set forth are supplementary to the 
previous findings and determinations which were made in connection with 
the issuance of the marketing agreement and order and each previously 
issued amendment thereto. Except insofar as such findings and 
determinations may be in conflict with the findings and determinations 
set forth herein, all of the said prior findings and determinations are 
hereby ratified and affirmed;
    (2) The marketing agreement and order, as amended, and as hereby 
proposed to be further amended, and all of the terms and conditions 
thereof, will tend to effectuate the declared policy of the Act;
    (3) The marketing agreement and order, as amended, and as hereby 
proposed to be further amended, regulate the handling of winter pears 
grown in the production area in the same manner as, and are applicable 
only to, persons in the respective classes of commercial and industrial 
activity specified in the marketing agreement and order upon which a 
hearing has been held;
    (4) The marketing agreement and order, as amended, and as hereby 
proposed to be further amended, are limited in their 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 subdivision of the production area would 
not effectively carry out the declared policy of the Act; and
    (5) All handling of winter pears grown in the production area as 
defined in the marketing agreement and order, as amended, and as hereby 
proposed to be further amended, is in the current of interstate or 
foreign commerce or directly burdens, obstructs, or affects such 
commerce.

Recommended Further Amendment of the Marketing Agreement and Order

    The following amendment of the marketing agreement and order, both 
as amended, is recommended as the detailed means by which the foregoing 
conclusions may be carried out:

List of Subjects in 7 CFR Part 927

    Marketing agreements, Pears, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the following provisions 
in Title 7, Part 927, are proposed to be amended as follows:

PART 927--WINTER PEARS GROWN IN OREGON, WASHINGTON, AND CALIFORNIA

    1. The authority citation for 7 CFR Part 927 continues to read as 
follows:

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

    2. Section 927.8 is revised to read as follows:


Sec. 927.8  Ship or handle.

    Ship or handle means to sell, deliver, consign or transport pears, 
within the production area or between the production area and any point 
outside thereof: Provided, That the term ``handle'' shall not include 
the transportation of winter pear shipments within the production area 
from the orchard where grown to a packing facility located within the 
production area for preparation for market.
    3. Section 927.10 is revised to read as follows:


Sec. 927.10  Production area.

    Production area means and includes the States of Oregon, 
Washington, and California.
    4. Section 927.12 is revised to read as follows:


Sec. 927.12  Export market.

    Export market means any destination which is not within the 50 
states, or the District of Columbia, of the United States.
    5. In Sec. 927.41, paragraph (a) is revised to read as follows:


Sec. 927.41  Assessments.

    (a) Assessments will be levied only upon handlers who first handle 
pears. Each handler shall pay assessments on all pears handled by such 
handler as the pro rata share of the expenses which the Secretary finds 
are reasonable and likely to be incurred by the Control Committee 
during a fiscal period. The payment of assessments for the maintenance 
and functioning of the Control Committee may be required under this 
part throughout the period such assessments are payable irrespective of 
whether particular provisions thereof are suspended or become 
inoperative.
* * * * *
    6. Section 927.45 is added to read as follows:


Sec. 927.45  Contributions.

    The Control Committee may accept voluntary contributions but these 
shall only be used to pay expenses incurred pursuant to Sec. 927.47. 
Furthermore, such contributions shall be free from any encumbrances by 
the donor and the Control Committee shall retain complete control of 
their use.
    7. Section 927.47 is revised to read as follows:


Sec. 927.47  Research and development.

    The Control Committee, with the approval of the Secretary, may 
establish or provide for the establishment of production research, or 
marketing research and development projects designed to assist, 
improve, or promote the marketing, distribution, and consumption of 
pears. Such projects may provide for any form of marketing promotion, 
including paid advertising. The expense of such projects shall be paid 
from funds collected pursuant to Secs. 927.41 and 927.45. Expenditures 
for a particular variety of pears shall approximate the amount of 
assessments and voluntary contributions collected for that variety of 
pears.
    8. In Sec. 927.52, paragraph (b)(1) is revised to read as follows:


Sec. 927.52  Prerequisites to Control Committee recommendations.

* * * * *
    (b) * * *
    (1) The basis of one vote for each 25,000 boxes (except 2,500 boxes 
for Forelle and Seckel varieties) of the average quantity of such 
variety produced in the particular district and shipped therefrom 
during the immediately preceding three fiscal periods; or
* * * * *
    9. In Sec. 927.65, paragraph (b) is revised to read as follows:


Sec. 927.65  Exemption from regulation.

* * * * *
    (b) The Control Committee may prescribe rules and regulations, to 
become effective upon the approval of the Secretary, whereby quantities 
of pears or types of pear shipments may be [[Page 14918]] exempted from 
any or all provisions of this subpart.
* * * * *
    Dated: March 15, 1995.
Lon Hatamiya,
Administrator.
[FR Doc. 95-6909 Filed 3-20-95; 8:45 am]
BILLING CODE 3410-02-P