[Federal Register Volume 62, Number 115 (Monday, June 16, 1997)]
[Proposed Rules]
[Pages 32548-32552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-15663]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 927

[Docket Nos. AO-99-A7; FV96-927-1]


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 Oregon, Washington, and California. The proposed 
amendments would remove the State of California from the order and make 
related changes to provisions concerning the production area, 
districts, and establishment and membership of the Winter Pear Control 
Committee (Committee). Another amendment would allow the use of 
telecopiers or other electronic means in Committee voting procedures. 
The proposed amendments are intended to improve the administration, 
operation and functioning of the order.

DATES: Written exceptions must be filed by June 26, 1997.

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: Kathleen M. Finn, Marketing 
Specialist, Marketing Order Administration Branch, Fruit and Vegetable 
Division, AMS, USDA, room 2523-S, Washington, DC 20250-0200; telephone: 
(202) 720-2491, or FAX (202) 720-5698; or Teresa Hutchinson, Marketing 
Specialist, Northwest Marketing Field Office, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, 1220 
S.W. Third Avenue, room 369, Portland, OR 97204-2807; telephone (509) 
326-2724 or FAX (509) 326-7440. Small businesses may request 
information on compliance with this regulation by contacting: Jay 
Guerber, Marketing Order Administration Branch, Fruit and Vegetable 
Division, AMS, USDA, P.O. Box 96456, room 2523-S, Washington, DC 20090-
6456; telephone (202) 720-2491; Fax (202) 720-5698.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice 
of Hearing issued on June 24, 1996, and published in the June 26, 1996, 
issue of the Federal Register (61 FR 33047).
    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.

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 Kathleen M. Finn 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 Sacramento, California, 
on July 9, 1996, and in Portland, Oregon, on July 10, 1996. Notice of 
this hearing was published in the Federal Register on June 26, 1996. 
The notice of hearing contained proposals submitted by the Winter Pear 
Control Committee (Committee), which locally administers the order.
    The Committee's proposed amendments would: (1) Revise the 
definition of ``production area'' to mean only the States of Oregon and 
Washington; (2) revise ``district'' by removing California, leaving 
only those districts designated in the States of Oregon and Washington; 
(3) revise ``establishment and membership'' of the Committee to be 
consistent with the reduction in size of the regulated production area; 
(4) revise ``procedure of Control Committee'', ``(a) Quorum and 
voting'', so that the number of members needed for a quorum is 
consistent with the revised Committee representation, and amend ``(b) 
mail

[[Page 32549]]

voting'', to allow for the use of telecopiers and other electronic 
means; and (5) revise the definition of ``pears'' to exclude pears 
produced in California.
    The Notice of Hearing also included a proposal by the Fruit and 
Vegetable Division, Agricultural Marketing Service (AMS), U.S. 
Department of Agriculture, 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.
    At the conclusion of the hearing, the Administrative Law Judge 
fixed August 16, 1996, as the final date for interested persons to file 
proposed findings and conclusions or written arguments and briefs based 
on the evidence received at the hearing. No briefs were received.

Small Business Considerations

    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. Accordingly, AMS has 
prepared this initial regulatory flexibility analysis.
    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. 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.
    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 1995-96 crop year, approximately 100 handlers were 
regulated under Marketing Order No. 927. In addition, there were about 
1,800 producers of winter pears in the production area. Production for 
the 1995-96 season showed that 15,316,776 standard boxes were produced 
in Oregon and Washington, while California produced 434,380 standard 
boxes.
    The Act requires the application of uniform rules on regulated 
handlers. 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.
    The proposed amendment to remove the State of California would 
allow the Northwest winter pear industry to operate more efficiently. 
There are approximately 60 growers and 19 handlers of winter pears in 
California who have asked to be removed from the marketing order since 
the harvesting and marketing seasons for California pears are different 
than those for pears grown in Oregon and Washington. Production for the 
1995-96 season showed that 15,316,776 standard boxes were produced in 
Oregon and Washington, while California produced 434,380 standard 
boxes. Revenue generated from assessments collected in 1995-96 would be 
$175,923 from California compared to $6,203,295 from Oregon and 
Washington.
    Record evidence indicated that during the 1994-95 crop year winter 
pears were assessed at $.43 per standard box. According to preliminary 
figures in the record, returns to handlers per standard box for that 
year were $8.31. The assessment rate is about 5 percent of the 
preliminary returns.
    California growers believe they are funding promotion programs that 
are in direct competition with their own product. Record evidence 
showed that there would not be any additional burden imposed on 
handlers if such an amendment was implemented. In fact, handlers in the 
State of California would be relieved of any regulatory burden. Those 
in Oregon and Washington could continue to benefit from operation of 
the program. There are currently 1700 winter pear growers and 93 winter 
pear handlers in Oregon and Washington producing over 15 million 
standard boxes of pears annually. In California, there are 
approximately 60 winter pear growers and 19 handlers of winter pears 
producing over 400,000 standard boxes of pears annually.
    Record evidence also showed that the collection of information 
under the marketing order would not be effected if California was 
removed from the marketing order. A witness testified that there are 
alternatives that would replace the current information that is being 
collected from the State of California, if it is needed. Accordingly, 
this action would not impose any additional reporting or recordkeeping 
requirements on either small or large pear handlers. 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.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap or conflict with this proposed rule.
    The proposal to allow Committee members to vote by telecopiers or 
other electronic means would provide members with the option to use 
these methods if available when voting on an action is to be done 
quickly. This would allow Committee members to vote without assembling 
at a meeting place and, therefore, reduce administrative costs and act 
quickly on a recommendation that needs the Committee's attention. 
``Other electronic means'' includes the use of modems, video and 
teleconferencing. The term is flexible to allow for the use of new 
technologies by the Committee for voting.
    The additional proposals are changes that would need to be made to 
the marketing order to reflect the removal of the State of California.
    All of these changes are designed to enhance the administration and 
functioning of the marketing agreement and order to the benefit of the 
industry.
    The amendments proposed herein have been reviewed under Executive 
Order 12988, 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 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.

[[Page 32550]]

Material Issues

    The material issues of record addressed in this decision are as 
follows:
    (1) Whether to revise the definition of ``production area'' to mean 
only the States of Oregon and Washington;
    (2) Whether to revise ``district'' by removing California, leaving 
only those districts designated in the States of Oregon and Washington;
    (3) Whether to revise ``establishment and membership'' of the 
Committee to be consistent with the reduction in size of the regulated 
production area;
    (4) Whether to revise ``procedure of Control Committee,'' ``(a) 
quorum and voting'', so that the number of members needed for a quorum 
is consistent with Committee representation, and amend ``(b) mail 
voting'', to allow for the use of telecopiers and other electronic 
means; and
    (5) Whether to revise the definition of ``pears'' to exclude pears 
produced in California.

Findings and Conclusions

    The findings and conclusions on the material issues, all of which 
are based on evidence presented at the hearing and the record thereof, 
are:

Material Issue Number 1

    The definition of production area under Sec. 927.10 should be 
amended by removing the State of California from the production area. 
The new production area would include only the States of Oregon and 
Washington.
    Currently, Sec. 927.10 defines the production area to include the 
States of Oregon, Washington and California. The winter pear marketing 
order has been in effect since the early 1930's. Record evidence showed 
that the primary operations of the marketing order have changed since 
the inception of the order from establishing minimum quality 
requirements within the industry to primarily providing an extensive 
promotion and research program.
    Record evidence indicated that there is also a Pear Bureau (Bureau) 
that works in conjunction with the marketing order. The Bureau has been 
in existence for 60 years. Its purpose is to represent the winter pear 
industry in Oregon, Washington and California, and the Bartlett 
industry in Oregon and Washington, in market development and promotion 
and advertising throughout the international marketplace. The Bureau, 
through contractual agreement, is responsible for conducting market 
development and paid advertising activities authorized by the 
Committee.
    Currently, Sec. 927.4 of the order defines the varietal types of 
pears that are covered under the order to be the Beurre, D'Anjou, 
Beurre Bosc, Winter Nelis, and Doyenne du Comice varieties of pears 
grown in Oregon, Washington, and California. Also, the Forelle and 
Seckel varieties that are grown in Washington and Oregon are covered by 
the order. The major variety grown in California that is covered under 
the marketing order is the Beurre Bosc pear. The marketing order does 
not cover Bartlett pears, however there are programs conducted for 
Northwest Bartlett pears by the Bureau.
    Record evidence showed that California Bartlett pears are included 
under a California pear promotion program and therefore, are not part 
of the Bureau's programs. In the past, the California Bartlett industry 
has been encouraged to be represented by the Bureau but they have not 
wished to be part of the Bureau. Record evidence indicated that Oregon, 
Washington and California winter pear handlers work in conjunction with 
each other to market most varieties of winter pears, but are segregated 
where Bartlett pears are concerned. A witness testified that California 
winter pear and Bartlett pear growers question why they should pay 
assessments promoting winter pears as well as Northwest Bartlett pears.
    Record evidence also indicated that the harvest and marketing 
seasons are different for California pears and Northwest pears (i.e., 
those grown in Oregon and Washington). Winter pears grown in California 
are typically harvested and marketed from late July through October 
although the season sometimes extends into November. Northwest pears 
are harvested and marketed beginning late in September and continuing 
through the following June.
    Record evidence showed that the timing of the promotional 
activities for winter pears are not as effective for California 
handlers of winter pears. For example, the majority of Bosc promotional 
activities conducted under the order are scheduled to commence in 
September or October each season. Bosc pears produced in the Greater 
Sacramento District of California are typically harvested and shipped 
by August. Therefore, California handlers are not able to take 
advantage of such promotional activities.
    Record evidence also indicated that the pesticide research programs 
conducted under the marketing order may not benefit the California 
grower or handler. The Committee has assessed additional money to 
retain the registration of post-harvest fungicides, Ethoxyquin and 
Sodium O-Phenyl phenate (SOPP). These two materials may not be used by 
California shippers because of State regulatory differences. However, 
the California handler is still required to pay such assessment.
    Record evidence showed that there are currently 1,700 winter pear 
growers in Oregon and Washington and 60 growers of winter pears in 
California. There are also 93 handlers of winter pears in Oregon and 
Washington and 19 handlers of winter pears in California. Production 
for the 1995-96 season showed that 15,316,776 standard boxes were 
produced in Oregon and Washington, while California produced 434,380 
standard boxes. Revenue generated from assessments collected in 1995-96 
would be $175,923 from California and $6,203,295 from Oregon and 
Washington, for a total of $6,379,218. Record evidence showed that the 
loss of revenue would be approximately 2.76 percent of the total 
current assessment income if California was excluded from the 
production area. A proponent testified that this loss of revenue to the 
total program would be relatively insignificant. Such a loss would not 
effect the current level of promotional and research activities and 
would not adversely effect the Northwest pear industry.
    Record evidence showed that the production area of Oregon and 
Washington is the smallest practicable area which should be regulated 
under the marketing order for winter pears.

Material Issue Number 2

    Section 927.11 should be amended by deleting paragraph (e) which 
specifies the district of the State of California. Section 927.11 
states the districts to be covered under the marketing order. The 
districts are specified under the order for purposes of representation 
on the Committee. If California is removed from the production area as 
proposed by the proponents, such a change would have to be made to this 
section to reflect the amendment.

Material Issue Number 3

    Section 927.20 should be amended by decreasing the number of 
Committee members from 14 members to 12 members. Also, the number of 
grower and handler members on the Committee would be decreased from 
seven members to six members for each category. Currently, the district 
of California is represented by one grower member and one handler 
member on the Committee. Since the proposed amendment would remove the 
State of California from coverage under the marketing order, record 
evidence also

[[Page 32551]]

supports decreasing the Committee membership by the two California 
members. A corresponding change would be made in the number of grower 
and handler members. The number would be decreased from seven to six 
members for each category. If California is removed from the production 
area as proposed by the proponents, such a change would have to be made 
to this section to reflect the amendment.

Material Issue Number 4

    Section 927.33 should be amended by revising paragraph (a) to 
reflect the number of Committee members that need to be present for a 
quorum. Also, paragraph (b) should be revised by allowing for the use 
of telecopiers when Committee members need to vote on an action.
    Currently, Sec. 927.33(a) states that 10 members need to be present 
to constitute a quorum. Record evidence supports decreasing the quorum 
size to reflect the change in the Committee membership due to the 
removal of California. The amendment would decrease the quorum size to 
nine members. If California is removed from the production area as 
proposed by the proponents, such a change should be made to this 
section to reflect the amendment.
    Section 927.33(b) states that the Committee may provide for members 
to vote by mail, telephone, or telegraph, upon due notice to all 
members. Record evidence supported adding the use of telecopiers as a 
method of voting by Committee members. This would allow the Committee 
to vote without being assembled at a meeting place and, therefore, 
reduce administrative costs and act quickly on a recommendation that 
needs the Committee's attention. ``Other electronic means'' is 
envisioned to include the use of modems, video and teleconferencing. 
The term is flexible to allow for the use of new technologies by the 
Committee for voting.

Material Issue Number 5

    Section 927.4 should be amended by deleting the reference to the 
State of California. Currently, Sec. 927.4 lists the varieties of pears 
that are covered under the marketing order. Record evidence showed that 
Forelle and Seckel pear varieties are exclusively grown in Oregon and 
Washington and are referenced as such under Sec. 927.4. Other pear 
varieties are listed and are specified as being grown in the States of 
Oregon, Washington and California. If California is removed from the 
production area as proposed by the proponents, such a change would have 
to be made to this section to reflect the amendment.
    The Notice of Hearing also included a proposal by the Fruit and 
Vegetable Division, Agricultural Marketing Service (AMS) 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. One proposed amendment has been made deleting 
California from the title of the marketing order.

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, would 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 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 order and 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 Oregon and Washington 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.
    Ten days has been determined to be an appropriate comment period 
for this rule because: (1) The fiscal period of the marketing order 
begins on July 1, 1997, and shipments of winter pears for the 1997-98 
season begin in July. It would be difficult for the committee to 
administer this amendment part-way into the season, especially after 
shipments have begun. In addition, making this amendment effective as 
close to the beginning of the annual pear shipments would be more 
equitable to all handlers; (2) these issues were presented at a public 
hearing before an administrative law judge and no opposing testimony 
was presented; and (3) any comments received will be considered and a 
producer referendum will be conducted prior to finalization of this 
rule.

List of Subjects in 7 CFR Part 927

    Marketing agreements, Pears, Reporting and recordkeeping 
requirements.

Recommended Further Amendment of the Marketing Agreement and Order

    For the reasons set forth in the preamble, 7 CFR part 927 is 
proposed to be amended as follows:
    1. The authority citation for 7 CFR part 927 continues to read as 
follows:

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

PART 927--[AMENDED]

    2. The part heading is revised to read as follows:

PART 927--WINTER PEARS GROWN IN OREGON AND WASHINGTON

    3. Section 927.4 is revised to read as follows:


Sec. 927.4  Pears.

    Pears means and includes any and all of the Beurre D'Anjou, Beurre 
Bosc, Winter Nelis, Doyenne du Comice, Forelle, and Seckel varieties of 
pears, and any other winter pear varieties or subvarieties that are 
recognized by the Control Committee and approved by the Secretary.
    4. Section 927.10 is revised to read as follows:


Sec. 927.10  Production area.

    Production area means and includes the States of Oregon and 
Washington.


Sec. 927.11  [Amended]

    5. In Sec. 927.11, paragraph (e) is removed.


Sec. 927.20  [Amended]

    6. Section 927.20 is amended by removing the number ``14'' in the 
first sentence and adding in its place the number ``12'', and removing 
the word ``seven'' each time it appears in the third sentence and 
adding in its place the word ``six''.

[[Page 32552]]

Sec. 927.33  [Amended]

    7. In Sec. 927.33, paragraph (a) is amended by removing the word 
``ten'' in the first sentence and adding in its place the word 
``nine''; and adding the words ``telecopier or other electronic 
means,'' and a comma after the word ``mail'' in paragraph (b) first 
sentence.

    Dated: June 9, 1997.
Lon Hatamiya,
Administrator, Agricultural Marketing Service.
[FR Doc. 97-15663 Filed 6-13-97; 8:45 am]
BILLING CODE 3410-02-P