[Federal Register Volume 70, Number 165 (Friday, August 26, 2005)]
[Rules and Regulations]
[Pages 50151-50153]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-17055]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Docket No. FV05-984-1 IFR]


Walnuts Grown in California; Suspension of Provision Regarding 
Eligibility of Walnut Marketing Board Members

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule suspends a provision of the walnut marketing order 
(order) pertaining to eligibility of members to serve on the Walnut 
Marketing Board (Board). The order regulates the handling of walnuts 
grown in California, and the Board is responsible for local 
administration of the order. This action is an interim measure to 
address a change in industry structure affecting cooperative marketing 
association related positions. This will allow the Board to continue to 
represent the industry's interests while the order is amended to 
reflect the change in industry structure. The Board unanimously 
recommended a suspension action by mail balloting in early July, 2005.

DATES: Effective August 29, 2005; comments received by October 25, 2005 
will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning the proposal to: Docket Clerk, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 
Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Fax: 
(202) 720-8938, E-mail: [email protected], or Internet: http://www.regulations.gov. Comments should reference the docket number and 
the date and page number of this issue of Federal Register and will be 
made available for public inspection in the Office of the Docket Clerk 
during

[[Page 50152]]

regular business hours, or can be viewed at: http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Martin Engeler, Senior Marketing 
Specialist, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, 2202 Monterey Street, Suite 102-B, Fresno, 
California 93721; Telephone: (559) 487-5901, Fax: (559) 487-5906; or 
Kathleen M. Finn, Formal Rulemaking Team Leader, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 
Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; 
telephone: (202) 720-2491, or Fax: (202) 720-8938.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 984, both as amended (7 CFR part 984), 
hereinafter referred to as the ``order'', regulating the handling of 
walnuts grown in the State of California. The marketing agreement and 
order are effective pursuant to 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 (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. This proposal is not intended to have retroactive 
effect. This proposed rule will not preempt any State or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this proposed 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 USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. A 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing USDA 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 USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This rule suspends a provision of the walnut marketing order 
(order) pertaining to eligibility of members to serve on the Walnut 
Marketing Board (Board). The order regulates the handling of walnuts 
grown in California, and the Board is responsible for local 
administration of the order. This action is an interim measure to 
address a change in industry structure affecting cooperative marketing 
association related positions. This will allow the Board to continue to 
represent the industry's interests while the order is amended to 
reflect the change in industry structure. The Board unanimously 
recommended a suspension action by mail balloting in early July, 2005.
    Section 984.35 of the order establishes the Board as the 
administrative body appointed by USDA to administer the order. That 
section also specifies composition of the Board, and allocates seats to 
cooperative and independent growers and handlers. The Board is 
comprised of ten members and ten alternate members. Two members 
represent handlers that are cooperative marketing associations of 
growers (cooperative handlers), and two members represent growers who 
market their walnuts through cooperative handlers. Two members 
represent handlers that are not cooperative marketing associations of 
growers (independent handlers), and two members represent growers that 
market their walnuts through independent handlers. One member 
represents growers that market their walnuts through either cooperative 
or independent handlers, whichever category handled over fifty percent 
of the walnuts handled by all handlers in the industry in the 
immediately preceding two marketing years. In recent years, this Board 
position has been allocated to the independent category. One member 
represents neither growers nor handlers (public member).
    Section 984.38 of the order provides, in part, that no person shall 
be selected or continue to serve as a member or alternate member of the 
Board unless that person is engaged in the business of the group he or 
she was nominated to represent.
    A change recently occurred in the walnut industry that impacts 
composition of the Board. A large cooperative marketing association 
recently converted to a publicly held corporation. The former 
cooperative association held two grower and two handler positions on 
the Board.
    In order to address this change, section 984.38 of the order needs 
to be suspended to allow a representative Board to continue in place 
while the order is amended to reflect the new industry structure. 
Therefore, the Board recommended through a mail ballot vote in early 
July, 2005, to suspend the order provision. USDA has reviewed the 
recommendation and has determined that suspending Sec.  984.38 of the 
order regarding eligibility requirements of Board members will 
accomplish that objective. As previously discussed, Sec.  984.38 
provides that no person shall be selected or continue to serve as a 
member or alternate member of the Board unless that person is engaged 
in the business of the group he or she was nominated to represent.
    If the eligibility requirements are not suspended, four of the 
Board members that represented the cooperative become ineligible to 
serve on the Board. However, these members continue to represent a 
significant portion of the industry. Suspending the order provision 
regarding eligibility of Board members allows a complete Board to 
remain in place. This action will enable a Board that is representative 
of the walnut industry to continue to administer the order without 
disruption while the order is being amended to reflect changes in the 
industry structure.
    This action suspends Sec.  984.38 of the order entitled 
``Eligibility''. This action is in the best interest of handlers and 
growers in the California walnut industry as the industry transitions 
through a structural change.

Initial Regulatory Flexibility Act

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has 
considered the economic impact of this proposal 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. 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 5,000 producers of walnuts in the 
production

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area and 50 walnut handlers subject to regulation under the marketing 
order. Small agricultural service firms are defined as those whose 
annual receipts are less than $6,000,000 and small agricultural 
producers have been defined by the Small Business Administration as 
those having annual receipts less than $750,000 (13 CFR 121.201).
    Industry information from the Walnut Marketing Board indicates that 
36 of the 50 walnut handlers, or 72%, shipped less than $6,000,000 
worth of walnuts and could be considered small businesses by the Small 
Business Administration. In addition, only an estimated 60 producers, 
or 1.2%, have annual receipts in excess of $750,000. Based on the 
foregoing, the majority of walnut producers and handlers regulated 
under the marketing order may be classified as small entities.
    This rule suspends provisions of the walnut marketing order (order) 
pertaining to eligibility of members to serve on the Walnut Marketing 
Board (Board). The order regulates the handling of walnuts grown in 
California, and the Board is responsible for local administration of 
the order. Specifically, this action suspends Sec.  984.38 of the order 
entitled ``Eligibility''.
    Due to structural changes in the industry, the order provisions 
regarding Board composition no longer accurately reflect the industry 
composition. If the eligibility requirements are not suspended, four of 
the Board members that represented the cooperative become ineligible to 
serve on the Board. However, these members continue to represent a 
significant portion of the industry. Suspending the order provision 
regarding eligibility of Board members allows a complete Board to 
remain in place. This action will enable a Board that still represents 
the walnut industry to continue to administer the order without 
disruption while the order is being amended to reflect changes in the 
industry structure. The Board unanimously recommended suspending order 
language by mail balloting in early July, 2005.
    Alternatives to this action were considered. One alternative was to 
remove the former cooperative members from the Board, which would 
result in a 6-member Board. This was not considered a preferred option 
because it would limit the size of the Board.
    This rule suspends order language pertaining to membership 
eligibility on the Walnut Marketing Board. Accordingly, this action 
does not impose any additional reporting or recordkeeping requirements, 
or any other costs, on either small or large walnut 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. In addition, USDA 
has not identified any relevant Federal rules that duplicate, overlap, 
or conflict with this rule. Finally, interested persons are invited to 
submit information on the regulatory and informational impacts of this 
action on small businesses.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at the 
following Web site: http://www.ams.usda.gov/fv/moab.html. Any questions 
about the compliance guide should be sent to Jay Guerber at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    This rule invites comments on suspending order provisions regarding 
eligibility of Board members under the California walnut marketing 
order. Any comments received will be considered prior to finalization 
of this rule.
    After consideration of all relevant material presented, including 
the Board's recommendation, and other information, it is found that the 
order language being suspended, as hereinafter set forth, no longer 
tends to effectuate the declared policy of the Act.
    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 Board unanimously recommended these changes; (2) these 
changes are needed to allow a representative Board to remain in place 
to administer the order; and (3) this rule provides a 60-day comment 
period and any comments timely received will be considered prior to 
finalization of this rule.

List of Subjects in 7 CFR Part 984

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


0
For the reasons set forth in the preamble, 7 CFR part 984 is amended as 
follows:

PART 984--WALNUTS GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 984 continues to read as 
follows:

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

0
2. In part 984, Sec.  984.38 is suspended indefinitely.

    Dated: August 23, 2005.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 05-17055 Filed 8-23-05; 4:46 pm]
BILLING CODE 3410-02-P