[Federal Register Volume 70, Number 231 (Friday, December 2, 2005)]
[Rules and Regulations]
[Pages 72195-72196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-23552]



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  Federal Register / Vol. 70, No. 231 / Friday, December 2, 2005 / 
Rules and Regulations  

[[Page 72195]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Docket No. FV05-984-1 FIR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule suspending the 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 that addresses a change in industry structure affecting 
cooperative marketing association related positions. This allows 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.

EFFECTIVE DATE: January 3, 2006.

FOR FURTHER INFORMATION CONTACT: Martin Engeler, Senior Marketing 
Specialist, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, 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.''
    USDA 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 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 continues in effect an action that suspended a provision 
of the order pertaining to the eligibility of members to serve on the 
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 that addresses a change in the 
industry structure affecting cooperative marketing association related 
positions. This allows 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).
    Prior to implementation of the interim final rule, Sec.  984.38 of 
the order provided, 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.

[[Page 72196]]

    In order to address this change, Sec.  984.38 of the order needed 
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 reviewed the 
recommendation and determined that suspending Sec.  984.38 of the order 
regarding eligibility requirements of Board members would accomplish 
that objective. As previously discussed, Sec.  984.38 provided 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 were not suspended, four of the 
Board members that represented the cooperative would be 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 enables 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 continues to suspend 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.

Final 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 rule on small entities. 
Accordingly, AMS has prepared this final 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 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).
    Current industry information from the Board indicates that 35 of 
the 50 walnut handlers, or 70 percent, shipped less than $6,000,000 
worth of walnuts and could be considered small businesses by the Small 
Business Administration. In addition, is it estimated that less than 1 
percent of walnut producers 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 continues in effect an action that suspended provisions 
of the order pertaining to eligibility of members to serve on the 
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 were 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 enables 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 continues to suspend order language pertaining to 
membership eligibility on the 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.
    An interim final rule concerning this action was published in the 
Federal Register on August 26, 2005 (70 FR 50151). Copies of the rule 
were also mailed or sent via facsimile to all Walnut handlers. In 
addition, the rule was made available through the Internet by USDA and 
the Office of the Federal Register. That rule provided for a 60-day 
comment period which ended October 25, 2005. No comments were received.
    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.
    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.

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
Accordingly, the interim final rule amending 7 CFR part 984 which was 
published at 70 FR 50151 on August 26, 2005, is adopted as a final rule 
without change.

    Dated: November 22, 2005.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 05-23552 Filed 12-1-05; 8:45 am]
BILLING CODE 3410-02-P