[Federal Register Volume 61, Number 162 (Tuesday, August 20, 1996)]
[Rules and Regulations]
[Pages 42990-42991]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21120]



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DEPARTMENT OF AGRICULTURE
7 CFR Part 981

[Docket No. FV96-981-3IFR]


Almonds Grown in California; Change in Quality Control 
Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule changes the quality control 
requirements currently prescribed under the California almond marketing 
order. The marketing order regulates the handling of almonds grown in 
California and is administered locally by the Almond Board of 
California (Board). This rule removes the exemption from inspection for 
the Peerless variety of almonds sold inshell. This change is needed to 
bring the administrative rules and regulations into conformance with 
amendments to the marketing order recently approved by a majority vote 
of producers. In addition, this change will better reflect current 
industry practices because most almonds are already inspected, 
including the Peerless variety.

DATES: Effective August 21, 1996; comments received by September 19, 
1996 will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent in triplicate to the Docket 
Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S, P.O. Box 
96456, Washington, DC 20090-6456, Fax # (202) 720-5698. All comments 
should reference the docket number and the date and page number of this 
issue of the Federal Register and will be made available for public 
inspection in the Office of the Docket Clerk during regular business 
hours.

FOR FURTHER INFORMATION CONTACT: Kathleen M. Finn, Marketing 
Specialist, Marketing Order Administration Branch, F&V, AMS, USDA, room 
2522-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202) 
720-1509, Fax # (202) 720-5698; or Martin Engeler, California Marketing 
Field Office, Marketing Order Administration Branch, F&V, AMS, USDA, 
2202 Monterey Street, suite 102B, Fresno, California 93721; telephone: 
(209) 487-5901, Fax # (209) 487-5906.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 981 (7 CFR Part 981), as amended, regulating the handling of 
almonds grown in California, hereinafter referred to as the ``order.'' 
This 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 (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
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 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 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 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 to review the Secretary's 
ruling on the petition, provided an action is filed not later than 20 
days after date of the entry of the ruling.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this action on small entities.
    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 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 115 handlers of almonds who are subject to 
regulation under the order and approximately 7,000 producers of almonds 
in the regulated area. Small agricultural service firms, which includes 
handlers, have been defined by the Small Business Administration (13 
CFR 121.601) as those having annual receipts of less than $5,000,000, 
and small agricultural producers are defined as those having annual 
receipts of less than $500,000. The majority of handlers and producers 
of California almonds may be classified as small entities. Interested 
persons are invited to submit information on the regulatory and 
informational impacts of this action on small businesses.
    This rule modifies language in the order's administrative rules and 
regulations to remove an exemption from inspection for the Peerless 
variety of almonds sold inshell as bleaching stock. It also modifies 
the definition of adjusted kernel weight so that adjusted kernel weight 
for the Peerless variety is based on actual weight, consistent with 
other almonds, rather than calculated with a predetermined conversion 
factor known as a shelling ratio. The majority of handlers already have 
all almonds inspected, including the Peerless variety. Therefore, this 
rule will better reflect current industry practice. In addition, this 
rule is needed to bring the administrative rules and regulations into 
conformance with amendments to the marketing order recently approved by 
a majority vote of producers. Since virtually all of the Peerless 
almonds sold inshell are currently inspected, there is little or no 
impact expected on small businesses.
    Therefore, the AMS has determined that this action will not have a 
significant economic impact on a substantial number of small entities.
    The almond marketing order authorizes quality control provisions 
which include a requirement that almonds must be inspected prior to 
processing to determine the percentage of inedible kernels in each lot, 
and to determine the adjusted kernel weight of almonds in each lot. 
Inedible kernels are reported to individual handlers and the Board, and 
handlers are required to dispose of a quantity of almonds equal to 
their inedible obligation as determined by the inspection. Inedible 
kernels are disposed of to non-human consumption outlets for such uses 
as animal feed or crushing into oil. Adjusted kernel weight is reported 
to handlers by the Federal-State Inspection Service (FSIS). Handlers 
are then required to report adjusted kernel weight to the Board, who 
uses the information to report industry statistics.
    The rules and regulations under the marketing order currently 
exempt from inspection the Peerless variety of almonds used as 
bleaching stock and sold inshell. When the quality control regulations 
were initially implemented, it was determined there was no need to 
establish the percentage of inedible kernels of almonds sold inshell, 
which at that time were predominately of the Peerless variety, because 
inedible kernels could not be removed from

[[Page 42991]]

product sold inshell and thus could not be disposed of in non-human 
consumption outlets. Therefore, inshell almonds, including Peerless, 
are exempt from meeting the inedible disposition obligation. However, 
in order to determine the kernel weight of Peerless almonds sold 
inshell for reporting to the Board, a predetermined shelling ratio 
contained in the marketing order has been used in the absence of 
inspection. This shelling ratio converted the weight of inshell almonds 
to a shelled weight, or kernel weight. Over time, the total quantity 
and varieties of all almonds sold inshell have increased, while 
Peerless bleaching stock sales have declined. There has also been an 
increased desire and need to obtain an accurate product weight for 
growers, handlers, and the Board. Thus, it has become common industry 
practice to have inspections performed on Peerless almonds sold 
inshell, as with other varieties sold inshell, regardless of the 
inspection exemption.
    Consistent with the Act, the almond marketing order was recently 
amended by a majority vote of producers to require that the weight of 
inshell almonds be determined by weighing a representative sample of 
such almonds. Previously, predetermined shelling ratios were used to 
determine the kernel weight. Thus, the shelling ratios were removed 
from the order. The purpose of the quality control amendments was to 
reflect current industry practices as referenced above, and to provide 
more accurate information for reporting purposes.
    The amendments to the order necessitate conforming changes to the 
administrative rules and regulations. Section 981.442 of the quality 
control regulations is revised to remove an inspection exemption for 
Peerless inshell almonds. Thus, all almonds, regardless of form or 
variety, will be inspected.
    In addition, Sec. 981.401 is revised to remove the exemption for 
Peerless almonds from the definition of adjusted kernel weight. 
Currently, the adjusted kernel weight of Peerless inshell almonds is 
based on a predetermined weight contained in the shelling ratio table 
that was removed from the marketing order. Since Peerless inshell 
almonds will be required to have inspection, the actual kernel weight 
will be determined, thus providing an accurate weight.
    After consideration of all relevant material presented, including 
the Board's recommendation, and other information, it is found that 
this interim final rule, as hereinafter set forth, will tend to 
effectuate the declared policy of the Act.
    This rule invites comments on a change to the quality control 
requirements currently prescribed under the California almond marketing 
order. Any comments received will be considered prior to finalization 
of this rule.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register 
because: (1) The marketing order amendments prompting these changes 
were implemented on July 1, 1996; (2) related issues were discussed in 
amendatory proceedings to the marketing order (including a public 
hearing) and amendments to the order were subsequently approved by 
producers; (3) the Board unanimously recommended these changes at a 
public meeting and interested parties had an opportunity to provide 
input; and (4) this rule provides a 30-day comment period and any 
comments received will be considered prior to finalization of this 
rule.

List of Subjects in 7 CFR Part 981

    Almonds, Marketing agreements, Nuts, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 981 is 
amended as follows:

PART 981--ALMONDS GROWN IN CALIFORNIA

    1. The authority citation for 7 CFR part 981 continues to read as 
follows:

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


Sec. 981.401  [Amended]

    2. In Sec. 981.401, the first sentence in paragraph (a) is amended 
by removing the words ``Except for Peerless bleaching stock,'' and 
capitalizing the first letter in the word ``adjusted'', and by removing 
the last sentence; and by amending the first sentence in paragraph (b) 
by removing the words ``Except for Peerless bleaching stock,'' and 
capitalizing the first letter of the word ``the''.
    3. In Sec. 981.442, paragraph (a)(1), the first sentence is amended 
by removing the words ``, except lots of Peerless variety designated as 
bleaching stock,'' and in paragraph (a)(4), the last sentence is 
revised to read as follows:


Sec. 981.442  Quality Control.

    (a) * * *
    (4) * * * For any almonds sold inshell, the weight may be reported 
to the Board and the disposition obligation for that variety reduced 
proportionately.
* * * * *
    Dated: August 14, 1996.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 96-21120 Filed 8-19-96; 8:45 am]
BILLING CODE 3410-02-P