[Federal Register Volume 71, Number 35 (Wednesday, February 22, 2006)]
[Proposed Rules]
[Pages 8994-9002]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-1583]


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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. 71, No. 35 / Wednesday, February 22, 2006 / 
Proposed Rules  

[[Page 8994]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Docket No. AO-90-A7; FV05-916-1]


Nectarines and Peaches Grown in California; Secretary's Decision 
and Referenda Order on Proposed Amendments to Marketing Agreement Nos. 
124 and 85 and Order Nos. 916 and 917

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule and referenda order.

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SUMMARY: This decision proposes amendments to Marketing Agreement Nos. 
124 and 85 and Order Nos. 916 and 917 (orders), which regulate the 
handling of nectarines and peaches grown in California, and provides 
growers with the opportunity to vote in referenda to determine if they 
favor the changes. The amendments are based on those proposed by the 
Nectarine Administrative Committee (NAC), the Peach Commodity Committee 
(PCC), and the Control Committee (part of M.O. No. 917) (Committees), 
which are responsible for local administration of orders 916 and 917. 
The proposed amendments to order 917 only apply to peaches. The 
proposed amendments would: update definitions for ``handle'', 
``grower'', and add a definition for ``pure grower'' to both orders; 
increase committee membership of the NAC from eight to thirteen members 
and modify sections of order 916 to conform to the increased 
membership; eliminate the Shippers Advisory Committee in order 916; 
allow the Control Committee under order 917 to be suspended if the 
provisions of one commodity are suspended and transfer applicable 
duties and responsibilities to the remaining Commodity Committee; 
authorize interest and late payment charges on assessments paid late in 
both orders; and other related amendments. The proposed amendments are 
intended to streamline and improve the administration, operation, and 
functioning of the orders.

DATES: The referenda will be conducted from March 6 to 24, 2006. The 
representative periods for the purpose of the referenda for both 
nectarines and peaches are March 1, 2005, through February 28, 2006.

FOR FURTHER INFORMATION CONTACT: Melissa Schmaedick, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. 
Box 1035, Moab, Utah; telephone: (435) 259-7988, Fax: (435) 259-4945; 
or Kathleen M. Finn, 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.
    Small businesses may request information on this proceeding 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.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice 
of Hearing issued on January 25, 2005 and published in the January 28, 
2005 issue of the Federal Register (70 FR 4041), and a Recommended 
Decision issued on November 18, 2005, and published in the November 29, 
2005, issue of the Federal Register (70 FR 71734).
    This 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

    The proposed amendments are based on the record of a public hearing 
held on February 15 and 16, 2005, in Fresno, California. The hearing 
was held to consider the proposed amendment of the orders. The hearing 
was held 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 
marketing orders (7 CFR part 900). The notice of hearing contained 
numerous proposed order changes jointly proposed by the Nectarine 
Administrative Committee, the Peach Commodity Committee, and the 
Control Committee (order 917), which are responsible for local 
administration of orders 916 and 917. Marketing order 917 regulates 
both California pears and peaches. However, the proposed amendments to 
order 917 only apply to peaches. The pear provisions of the order have 
been suspended since 1994. Because the Pear Commodity Committee and the 
pear provisions are suspended, the Pear Commodity Committee did not 
participate in any amendment discussions.
    The proposed amendments to marketing orders 916 and 917 would:
    1. Allow hybrid fruit that exhibits the characteristics of 
nectarines or peaches and is subject to cultural practices common to 
such fruit be subject to marketing order regulations under both orders.
    2. Specify that the act of packing be considered a handling 
function under both orders.
    3. Change the marketing season for nectarines from May 1 through 
November 30 to April 1 through November 30.
    4. Allow the duties and responsibilities of the Control Committee 
under order 917 to be transferred to one Commodity Committee if the 
provisions for the other commodity are suspended.
    5. Increase membership on the NAC from eight to thirteen members 
and revise the procedures that constitute quorum and voting 
requirements to conform to the increased committee size. The proposal 
would also add to both orders that the Committees may vote by facsimile 
and set forth voting requirements for video conferencing.
    6. Eliminate the Shippers' Advisory Committee under the nectarine 
order.
    7. Modify the definition of grower under both orders to clarify 
that officers of grower corporations are eligible to serve as committee 
grower members.
    8. Add a definition of ``pure grower'' for purposes of eligibility 
for membership on the Committees. This proposal would also allow 
alternative methods to conduct nominations, change the date for holding 
nominations, authorize positions for pure growers and add tenure 
requirements for Committee members.

[[Page 8995]]

    9. Authorize nominees to state their willingness to serve on the 
Committees prior to the selection.
    10. Change the district boundaries under the nectarine order and 
redefine the peach districts.
    11. Change the names and the composition of the districts of the 
Peach Commodity Committee.
    12. Allow for interest and/or late payments for assessments not 
paid timely under both orders and authorize the Peach Commodity 
Committee to borrow money.
    13. Clarify that subcommittees may be established by the Peach 
Commodity Committee.
    The Fruit and Vegetable Programs of AMS proposed to allow such 
changes as may be necessary to the orders, if any of the proposed 
changes are adopted, so that all of the orders' provisions conform to 
the effectuated amendments. None were deemed necessary.
    One proposed amendment was not recommended for adoption. That 
amendment would have provided authority to recommend different 
regulations for different market destinations of the products.
    Upon the basis of evidence introduced at the hearing and the record 
thereof, the Administrator of AMS on November 18, 2005, filed with the 
Hearing Clerk, U.S. Department of Agriculture, a Recommended Decision 
and Opportunity to File Written Exceptions thereto by December 19, 
2005.
    One exception was filed on behalf of the proponents during the 
exception period. The exception expressed general support for the 
proposals, including modifications to those proposals recommended by 
USDA in its recommended decision. This decision adopts these amendments 
as proposed in the recommended decision.

Small Business Considerations

    Pursuant to the 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 so that small businesses will not be 
unduly or disproportionately burdened. 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.
    Small agricultural growers are defined by the Small Business 
Administration (SBA)(13 CFR 121.201) as those having annual receipts of 
less than $750,000. Small agricultural service firms, which include 
handlers regulated under the order, were defined at the time of the 
hearing as those with annual receipts of less than $5,000,000. The 
definition of small agricultural service firm has subsequently changed 
to one with annual receipts of $6,000,000.
    According to the record, there are approximately 207 California 
nectarine and peach handlers (combined) and approximately 1,500 growers 
(combined nectarines and peaches) in the production area, the State of 
California. A majority of these handlers and growers may be classified 
as small entities.
    Based on calculations made by the Peach and Nectarine Committees' 
staff, witnesses indicated that about 26 handlers (13 percent) would 
qualify as large business entities under the SBA definition of a large 
agricultural service firm ($5,000,000). For the 2004 season, it was 
estimated that the average handler price received was eight dollars per 
container or container equivalent of nectarines or peaches. Thus, a 
handler would have to ship at least 625,000 containers to have annual 
receipts of 5 million dollars. Given data on shipments presented at the 
hearing and the estimated 8 dollar average handler price received 
during the 2004 season, small handlers represented approximately 87 
percent of all the handlers within the industry. Under the 6 million 
dollar definition, more than 87 percent of handlers would qualify as 
small handler entities.
    Record evidence also indicated that less than 20 percent of the 
combined number of California nectarine and peach growers could be 
defined as other than small entities. The Committees estimated that the 
average 2004 grower price received for nectarines and peaches was 5 
dollars per container or a container equivalent. A grower would have to 
produce at least 150,000 containers of nectarines and peaches to have 
annual receipts of 750,000 dollars. Given data maintained by the 
Committees' staff and the 5 dollar estimated average grower price 
received during the 2004 season, the staff estimates that more than 80 
percent of growers can be classified as small growers.
    Evidence presented at the hearing indicates an average 2004 grower 
price of 5 dollars per container or container equivalent for both 
nectarines and peaches, and a combined pack-out of approximately 
40,422,900 containers. Thus, the value of the 2004 pack-out is 
estimated to be $202,114,500. Dividing this total estimated grower 
revenue by the estimated number of combined nectarine and peach growers 
(1,500) yields an estimate of 2004 average revenue per grower of about 
$134,743. Because many growers produce both commodities, industry 
nectarine and peach production statistics were presented at the hearing 
as combined totals.
    National Agricultural Statistical Service (NASS) data presented at 
the hearing provides the following production profile for California 
nectarines and peaches, respectively (all numbers are two-year averages 
for the 2003 crop year and preliminary data for 2004): bearing acres, 
36,500 of nectarines and 37,000 of peaches; yield per acre of utilized 
production, 7.19 tons and 10.84 tons; annual utilized production, 
262,500 tons and 401,000 tons. Utilized production of both nectarines 
and peaches was less than total production in 2004; utilized production 
data was therefore used in the computation. Two-year (2003 and 2004) 
average grower prices per ton for nectarines and peaches were $391 and 
$309.50 respectively. However, $309.50 is the peach price per ton for 
both fresh and processed uses. Approximately one third of California 
freestone peaches are sold for processing at a price lower than growers 
receive for fresh market sales. Therefore, a better estimate of the 
price per ton for fresh peach sales is to use the U.S. estimated grower 
price for fresh peaches of 27 cents per pound ($540 per ton) for 2003, 
the most recent year for which a U.S. fresh peach price was available 
from the Economic Research Service of the USDA.
    This NASS and ERS data is used to compute an additional estimate of 
average annual sales revenue per producer. By assuming that growers of 
nectarines are also growers of peaches, the 2004 average acreage for 
these crops (dividing the sum of nectarine and peach bearing acres by 
2) is equal to 36,750 acres. Dividing this number by the number of 
combined peach and nectarine growers reported by CTFA (1,500) yields an 
estimate of 24.5 acres as the average size of a sample nectarine or 
peach farm in 2004. If the sample farm's acreage was split evenly 
between nectarines and peaches (12.5 acres of each fruit) and 
production yields equal to the statewide average (reported above), that 
farm would have produced and sold 89.88 tons of nectarines and 134.42 
tons of peaches. The value of production for that sample farm would 
have been $35,143 for nectarines and $72,587 for peaches, or $107,730 
total.

[[Page 8996]]

This figure is lower than the $134,743 estimate using industry data. 
However, both computations confirm that the average nectarine or peach 
grower qualifies as a small grower under the SBA definition.
    The proposed amendments would: update definitions and districts in 
both orders; increase membership of the Nectarine Administrative 
Committee from 8 to 13 members and modify sections of the order to 
conform to the increased membership; eliminate the Shippers Advisory 
Committee (M.O. No. 916); allow the Control Committee under M.O. No. 
917 to be suspended if the provisions of one commodity are suspended 
and transfer applicable duties and responsibilities to the remaining 
Commodity Committee; and authorize interest and late payment charges on 
assessments that are paid late.
    All of the proposals are intended to streamline and improve the 
administration, operation, and functioning of the programs. Many of the 
proposed amendments would up-date the language of these two orders, 
thus better representing, and conforming with, current practices in 
these industries. The proposed amendments are not expected to result in 
any significant cost increases for growers or handlers. More efficient 
administration of program activities may result in cost savings for the 
Peach and Nectarine Committees.
    Proposal 1 would amend the order to allow hybrid fruit that 
exhibits the characteristics of nectarines or peaches and is subject to 
cultural practices common to nectarines and peaches to be subject to 
marketing order regulations. This proposed amendment provides a 
procedure for the Committees to recommend to USDA the specific hybrids 
to be included under the definitions and subject to order provisions.
    The cultivation of hybrid fruit has been a practice of the 
nectarine and peach industries. The improvement in breeding technology 
provides for the development of fruit and fruit trees with more 
favorable characteristics, such as disease resistance. As breeding 
technology becomes more sophisticated, it is anticipated that 
nectarines and peaches will be crossbred with other tree fruit, such as 
apricots and plums.
    The proposal would require that all hybrids for which regulation is 
contemplated would need to be recommended to USDA by the Committees. If 
this amendment is adopted, the Committees would identify hybrids 
currently in production that have characteristics of nectarines or 
peaches. The characteristics of the fruit would help determine whether 
the hybrid should be regulated. The Committees would also consider the 
cultural practices used on that specific hybrid, as cultural practices 
differ among various fruit trees. USDA would then proceed with 
rulemaking, as appropriate, as to what hybrids would be included under 
the order.
    The proposed amendment would provide flexibility in including 
hybrids as they are developed and provides sufficient safeguards to 
ensure compliance of order provisions. Incorporating specific reference 
to hybrid fruit into the definitions of ``nectarine'' and ``peach'' is 
not expected to result in any significant increase in costs to growers 
or handlers. There may be slight increases in the administration costs 
of the nectarine and peach orders in terms of program oversight, but it 
is expected that any increases would be offset by the benefits of 
including hybrids under the orders' provisions.
    Proposal 2 would specify that the act of ``packing'' nectarines and 
peaches would be a handling function under the orders. Most packers 
already assume all of the responsibilities of a handler, except the 
selling of the fruit and thus, this proposal is not expected to result 
in any significant increases in costs and would likely result in 
efficiencies that would benefit the administration of marketing orders 
916 and 917.
    Proposal 3, which seeks to extend the marketing season for 
nectarines, would more accurately reflect the nectarine industry's 
current production and marketing season and would conform to current 
handling regulations. The proposed amendment would change the current 
marketing season from May 1 through November 30 to April 1 through 
November 30. According to record evidence, aligning the marketing year 
with current production would not result in any increases in costs.
    Proposal 4 would allow for the temporary suspension of the Control 
Committee, the oversight committee for peaches and pears under 
marketing order 917, when one of the commodity programs is suspended. 
Since the pear program has been suspended, the duties of the Control 
Committee have been lessened, as there is only one Commodity Committee 
that is active under the marketing order program. In the Pear Commodity 
Committee's absence, the Peach Commodity Committee has continued to 
operate in conjunction with the Control Committee. The proposed 
amendment would also allow the Control Committee to become active again 
if both commodity groups were to become active under the order. This 
amendment is not expected to result in any increases in costs to 
growers or handlers.
    Proposal 5 would increase the membership on the NAC from eight to 
thirteen members and revise quorum requirements. Proposal 5 would also 
provide for voting by facsimile and holding meetings via video 
teleconference for both the Nectarine and Peach Commodity Committees. 
Record evidence indicated that these amendments were necessary in order 
to update the business practices of the Nectarine and Peach Committees 
to include current day technology. The increase in Committee members 
from 8 to 13 would allow for greater industry participation and would 
provide for a larger pool of committee members to attend meetings and 
meet quorum requirements. This amendment is not expected to result in 
any significant increases in costs to growers or handlers.
    Regarding the increase in committee membership, this proposal would 
benefit growers by allowing more growers to be appointed to the 
Committee, thereby increasing industry participation in the marketing 
order program functions.
    Regarding the use of facsimile and video teleconference, this 
provision would allow both the Nectarine and Peach Committees to take 
advantage of technology that is available currently, but was not known 
when the orders were promulgated. Amendments proposed under this 
material issue are not expected to result in any significant increases 
in costs to growers or handlers.
    Proposal 6 would eliminate the Shipper's Advisory Committee under 
the nectarine marketing order and bring the language of the order into 
conformance with current day operations of the program. Record evidence 
indicates that the Shipper's Advisory Committee has not been active for 
over 30 years and, while it once served a function under the marketing 
order program, it is no longer necessary. This amendment is not 
expected to result in any increases in costs to growers or handlers.
    Proposal 7 would modify the definition of grower to specify that 
both employees of growers and corporate officers of growers are 
eligible to serve on the Nectarine and Peach Committees in grower 
positions. This proposed amendment would be a clarifying change and 
would bring the language of the order into conformance with current-day 
operations of the program. This amendment is not expected to

[[Page 8997]]

result in any increases in costs to growers or handlers.
    Proposal 8 would add a definition for pure grower to both the 
nectarine and peach orders. If implemented, pure growers would be 
defined as growers that grow their own product (and are not employees 
or officers of a packing business) or, that grow and pack primarily 
their own product. If they do pack for other growers, the total 
production packed from other growers cannot exceed 25 percent of the 
total production packed for that marketing season for that pure 
grower's packing facility. Pure growers, who only pack a limited amount 
of fruit for other growers, are still essentially dependent on their 
own production, which is the essential component of being a pure 
grower.
    Proposal 8 would also modify the current nomination procedures for 
the Committees, as well as modify the deadline for conducting the 
nominations, add a 50-percent pure grower membership requirement for 
the Committees and establish tenure requirements for members. According 
to the hearing record, nomination procedures would be modified to 
provide for mailings of ballots and would change the beginning date of 
the nomination period from February 15 to January 31. The change in the 
beginning date would be necessary in order to provide extra time for 
the mailing of ballots.
    While some increases in administration costs could arise as a 
result of the mailing of ballots, record evidence indicates that the 
benefit of increased industry participation would merit that expense.
    Proposal 9 would modify the current acceptance procedure for 
persons nominated to serve on the Nectarine and Peach Committees. 
Currently, the acceptance procedure for persons nominated and selected 
to serve on the Committees involves a two-step process. If this 
amendment were implemented, the two steps could be combined into one, 
thus resulting in less paperwork, a shorter acceptance procedure and 
improved efficiency in the acceptance process. This amendment is not 
expected to result in any increases in costs to growers or handlers.
    Proposal 10 would modify the Fresno and Tulare districts under the 
peach marketing order by moving Kings County from the Fresno district 
to the Tulare district and by including all of Tulare County in the 
Tulare district, and would also modify district boundaries under the 
nectarine order. This change would also serve as the basis for 
modifying committee representation for the Tulare district under the 
peach order, as discussed under Proposal 11. These amendments are not 
expected to result in any significant increases in costs to growers or 
handlers.
    Proposal 11 would modify the names of the peach producing districts 
under that marketing order and change district representation on the 
Peach Commodity Committee to reflect the modified districts discussed 
under Proposal 10. This proposal would provide for more accurate 
representation of current-day peach production. This amendment is not 
expected to result in any significant increases in costs to growers or 
handlers.
    Proposal 12 would provide for interest and penalty provisions for 
late payment of assessments to be added to both the nectarine and peach 
orders and would authorize the borrowing of funds for administration of 
the peach order. These amendments would strengthen the assessment 
collection functions of the orders and, in the case of peaches, allow 
access to additional funds. The implementation of interest and late 
payments would serve as an incentive for handlers to pay their 
assessments in a timely manner. The authority to borrow funds under 
marketing order 917 would allow the Control and Peach Committees access 
to additional funds to administer the order when the carry forward of 
assessment monies is inadequate. While these amendments are expected to 
result in some costs under the marketing orders, the more timely 
assessment payments and the authority to borrow funds (for peaches) are 
expected to benefit the industries.
    Lastly, Proposal 14 would clarify that ``other committees'' 
established by the Peach Committee would be referred to as 
``subcommittees.'' This amendment is not expected to result in any 
increases in costs to growers or handlers.
    The proposals put forth at the hearing would streamline program 
operations, but are not expected to result in a significant change in 
industry production, handling or distribution activities. In discussing 
the impacts of the proposed amendments on growers and handlers, record 
evidence indicates that the changes are expected to be positive because 
the administration of the programs would be more efficient, and 
therefore more effective, in executing Committee duties and 
responsibilities. There would be no significant cost impact on either 
small or large growers or handlers.
    Interested persons were invited to present evidence at the hearing 
on the probable regulatory and informational impact of the proposed 
amendments to the order on small entities. The record evidence is that 
the amendments are designed to increase efficiency in the functioning 
of the orders.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this proposed rule. These amendments are 
designed to enhance the administration and functioning of marketing 
orders 916 and 917 to the benefit the California nectarine and peach 
industries.

Paperwork Reduction Act

    Current information collection requirements for Parts 916 and 917 
have been previously approved by the Office of Management and Budget 
(OMB) under OMB number 0581-0189, ``Generic Fruit Crops.'' The proposed 
changes would have an insignificant impact on total burden hours 
currently approved under this information collection.
    Specifically, the proposed amendment to increase the Nectarine 
Administrative Committee (committee) from 8 to 13 members would require 
an additional 5 members and 5 alternates to complete existing 
confidential background and acceptance statements every 2 years. 
Increasing committee members from 16 (8 members and 8 alternates) to 26 
(13 members and 13 alternates) would result in an increase of .43 
burden hours, or 26 minutes. In addition, because the Shipper's 
Advisory Committee is being recommended to be abolished, form FV-75, 
``Confidential California Tree Fruit Agreement Questionnaire'', which 
is currently approved under OMB No. 0581-0189 for 1.99 burden hours, 
would no longer be needed. Removing this form would result in an 
overall decrease of 1.56 burden hours.
    Also, the proposal would authorize nominees under the nectarine 
order to state their willingness to serve on the committee prior to 
their selection, which would result in the combining of Confidential 
Background statement and the acceptance statement, which are already 
approved by OMB. There would be no change in the burden hours by 
combining these forms.
    The Peach Commodity Committee proposed to amend the provisions 
relating to the Control Committee under marketing order 917 to allow 
the duties and responsibilities of the Control Committee to be 
transferred to one commodity committee if the provisions of the other 
commodity committee are suspended. If this change was implemented, and 
the Peach Commodity Committee was to assume the duties and 
responsibilities of the Control Committee, some forms used by the 
Control Committee would require a

[[Page 8998]]

modification in the name of the committee using those forms. However, 
the functioning of the forms and the current burden would remain the 
same.
    In addition, any changes to forms, or increased burden generated in 
nominating and selecting pure growers on the Committees would be 
submitted to OMB for approval prior to implementation.
    AMS is committed to compliance with the Government Paperwork 
Elimination Act (GPEA), which requires Government agencies in general 
to provide the public the option of submitting information or 
transacting business electronically to the maximum extent possible.
    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. Witnesses stated 
that existing forms could be adequately modified to serve the needs of 
the Nectarine and Peach Commodity Committees.

Civil Justice Reform

    The amendments to Marketing Agreement Nos. 124 and 85 and Order 
Nos. 916 and 917 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 this proposal.
    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.

Findings and Conclusions

    The material issues, findings and conclusions, rulings, and general 
findings and determinations included in the Recommended Decision set 
forth in the November 29, 2005, issue of the Federal Register are 
hereby approved and adopted.

Marketing Agreements and Orders

    Annexed hereto and made a part hereof is the document entitled 
``Order Amending the Orders Regulating the Handling of Nectarines and 
Peaches Grown in California.'' This document has been decided upon as 
the detailed and appropriate means of effectuating the foregoing 
findings and conclusions.
    It is hereby ordered, That this entire decision be published in the 
Federal Register.

Referenda Order

    It is hereby directed that referenda be conducted in accordance 
with the procedure for the conduct of referenda (7 CFR 900.400 et seq.) 
to determine whether the annexed order amending the orders regulating 
the handling of nectarines and peaches grown in California is approved 
or favored by growers, as defined under the terms of the orders, who 
during a representative period were engaged in the production of 
nectarines and peaches in the production areas.
    The representative period for the conduct of such referenda is 
hereby determined to be March 1, 2005 through February 28, 2006.
    The agents of the Secretary to conduct such referenda are hereby 
designated to be Laurel May and Kurt Kimmel, California Marketing Field 
Office, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, 2202 Monterey Street, Suite 102B, Fresno, 
California 93721; telephone (559) 487-5901.

    Dated: February 15, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.

Order Amending the Orders Regulating the Handling of Nectarines and 
Peaches Grown in California \1\
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    \1\ These orders shall not become effective unless and until the 
requirements of Sec.  900.14 of the rules of practice and procedure 
governing proceedings to formulate marketing agreements and 
marketing orders have been met.
---------------------------------------------------------------------------

Findings and Determinations

    The findings hereinafter set forth are supplementary to the 
findings and determinations which were previously made in connection 
with the issuance of the marketing agreements and orders; and all said 
previous findings and determinations are hereby ratified and affirmed, 
except insofar as such findings and determinations may be in conflict 
with the findings and determinations set forth herein.
(a) Findings and Determinations Upon the Basis of the Hearing Record
    Pursuant to the provisions of the Agricultural Marketing Agreement 
Act of 1937, as amended (7 U.S.C. 601 et seq.), and the applicable 
rules of practice and procedure effective thereunder (7 CFR part 900), 
a public hearing was held upon the proposed amendments to the Marketing 
Agreement Nos. 124 and 85 and Order Nos. 916 and 917 (7 CFR parts 916 
and 917), regulating the handling of nectarines and peaches grown in 
California, respectively. Upon the basis of the evidence introduced at 
such hearing and the record thereof, it is found that:
    (1) The marketing agreements and orders, 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;
    (2) The marketing agreements and orders, as amended, and as hereby 
proposed to be further amended, regulate the handling of nectarines and 
peaches grown in the production areas in the same manner as, and are 
applicable only to, persons in the respective classes of commercial and 
industrial activity specified in the marketing agreements and orders 
upon which a hearing has been held;
    (3) The marketing agreements and orders, as amended, and as hereby 
proposed to be further amended, are limited in their application to the 
smallest regional production areas which are practicable, consistent 
with carrying out the declared policy of the Act, and the issuance of 
several orders applicable to subdivisions of the production areas would 
not effectively carry out the declared policy of the Act;
    (4) The marketing agreements and orders, as amended, and as hereby 
proposed to be further amended, prescribe, insofar as practicable, such 
different terms applicable to different parts of the production areas 
as are necessary to give due recognition to the differences in the 
production and marketing of nectarines and peaches grown in the 
production areas; and
    (5) All handling of nectarines and peaches grown in the production 
area as defined in the marketing agreements and orders is in the 
current of interstate or foreign commerce or directly burdens, 
obstructs, or affects such commerce.

[[Page 8999]]

Order Relative to Handling

    It is therefore ordered, That on and after the effective date 
hereof, all handling of nectarines and peaches grown in California 
shall be in conformity to, and in compliance with, the terms and 
conditions of the said order as hereby proposed to be amended as 
follows:
    The provisions of the proposed marketing agreements and order 
amending the orders contained in the Recommended Decision issued by the 
Administrator on November 18, 2005, and published in the Federal 
Register on November 29, 2005, will be and are the terms and provisions 
of this order amending the orders and are set forth in full herein.

List of Subjects

7 CFR Part 916

    Marketing agreements, Nectarines, Reporting and recordkeeping 
requirements.

7 CFR Part 917

    Marketing agreements, Peaches, Pears, Reporting and recordkeeping 
requirements.

    1. The authority citation for 7 CFR part 916 continues to read as 
follows:

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

PART 916--NECTARINES GROWN IN CALIFORNIA

    2. Revise Sec.  916.5 to read as follows:


Sec.  916.5  Nectarines.

    Nectarines means: (a) All varieties of nectarines grown in the 
production area; and
    (b) Hybrids grown in the production area that exhibit the 
characteristics of a nectarine and are subject to cultural practices 
common to nectarines, as recommended by the committee and approved by 
the Secretary.
    3. Revise Sec.  916.9 to read as follows:


Sec.  916.9  Grower.

    Grower is synonymous with producer and means any person who 
produces nectarines for market in fresh form, and who has a proprietary 
interest therein. Employees of growers and officers of corporations 
actively engaged in growing nectarines are eligible to serve in grower 
positions on the committee.
    4. Revise Sec.  916.11 to read as follows:


Sec.  916.11  Handle.

    Handle and ship are synonymous and mean to pack, sell, consign, 
deliver, or transport nectarines, or to cause nectarines to be packed, 
sold, consigned, delivered, or transported, between the production area 
and any point outside thereof, or within the production area: Provided, 
That the term handle shall not include the sale of nectarines on the 
tree, the transportation within the production area of nectarines from 
the orchard where grown to a packing facility located within such area 
for preparation for market, or the delivery of such nectarines to such 
packing facility for such preparation.
    5. Revise paragraphs (a) and (b) of Sec.  916.12 to read as 
follows:


Sec.  916.12  District.

* * * * *
    (a) District 1 shall include the counties of Madera and Fresno.
    (b) District 2 shall include the counties of Kings and Tulare.
* * * * *
    6. Revise Sec.  916.15 to read as follows:


Sec.  916.15  Marketing season.

    Marketing season means the period beginning on April 1 and ending 
on November 30 of any year.
    7. Add a new Sec.  916.16 to read as follows:


Sec.  916.16  Pure Grower or Pure Producer.

    (a) Pure grower means any grower: (1) Who produces his or her own 
product (and is not an employee or officer of a packing business); or
    (2) Who produces and handles his or her own product; Provided, That 
a pure grower can pack the production of other growers as long as the 
production packed does not exceed 25 percent of the total production 
packed for that marketing year for that pure grower's packing facility. 
Pure grower is synonymous with pure producer.
    (b) The committee may establish, with the approval of the 
Secretary, rules and regulations for the implementation and operation 
of this section.
    8. Revise Sec.  916.20 to read as follows:


Sec.  916.20  Establishment and membership.

    There is hereby established a Nectarine Administrative Committee 
consisting of thirteen members, each of whom shall have an alternate 
who shall have the same qualifications as the member for whom he/she is 
an alternate. The members and their alternates shall be growers or 
authorized employees of growers. Six of the members and their 
respective alternates shall be growers of nectarines in District 1. 
Four members and their respective alternates shall be growers of 
nectarines in District 2; two of the members and their respective 
alternates shall be growers of nectarines in District 3; and one member 
and his/her alternate shall be growers of nectarines in District 4; 
Provided, That at least 50% of the nominees from each representation 
area shall be pure growers. Furthermore, no person shall serve more 
than three consecutive two-year terms of office or a total of six 
consecutive years; Provided further, That an appointment to fill less 
than a two year term of office, or serving one term as an alternate, 
shall not be included in determining the three consecutive terms of 
office; Provided further, That time served prior to the effective date 
of this section shall not be counted toward consecutive term limits.
    9. Revise paragraph (b) of Sec.  916.22 to read as follows:


Sec.  916.22  Nomination.

* * * * *
    (b) Successor members. (1) The committee shall appoint a nominating 
committee, which will hold or cause to be held, not later than January 
31 of each odd numbered year, a nomination procedure or a meeting or 
meetings of growers in each district for the purpose of designating 
nominees for successor members and alternate members of the committee. 
Meetings may be supervised by the nominating committee that shall 
prescribe such procedure as shall be reasonable and fair to all persons 
concerned. After the nomination procedure or meetings have concluded, 
the nominating committee by February 15 will verify consent to place 
the nominee's name on the ballot and will cause a ballot listing all of 
the nominees for a given district to be mailed to all growers within 
the district. Members and their alternates will be chosen based on a 
descending ranking of votes received. Once ballots have been tabulated, 
the Nectarine Administrative Committee will announce to the growers the 
nominees that have been selected and recommended to the Secretary.
    (2) Nominations may only be by growers, or by duly authorized 
employees. At meetings, only growers who are present at such nomination 
meetings may participate in the nomination of nominees for members and 
their alternates. All known growers will then receive a ballot for the 
nominees in the district in which they produce and are entitled to vote 
accordingly. A grower who produces in multiple districts is allowed to 
vote only in one district, and may exchange his/her ballot for that of 
the nominees in another district provided the grower is producing in 
the district for which he/she wants to participate. Employees of such 
grower shall be eligible for membership as principal or alternate to 
fill only one position on the committee.
    (3) A particular grower, including authorized employees of such 
grower,

[[Page 9000]]

shall be eligible for membership as principal or alternate to fill only 
one position on the committee.
    10. Revise Sec.  916.25 to read as follows:


Sec.  916.25  Acceptance.

    Each person to be selected by the Secretary as a member or as an 
alternate member of the committee shall, prior to such selection, 
qualify by advising the Secretary that he/she agrees to serve in the 
position for which nominated for selection.
    11. Revise Sec.  916.32 to read as follows:


Sec.  916.32  Procedure.

    (a) Nine members of the committee, or alternates acting for 
members, shall constitute a quorum and any action of the committee 
shall require the concurring vote of the majority of those present: 
Provided, That actions of the committee with respect to expenses and 
assessments, or recommendations for regulations pursuant to Sec. Sec.  
916.50 to 916.55, shall require at least nine concurring votes.
    (b) The committee may vote by telephone, telegraph, or other means 
of communication, such as facsimile, and any votes so cast shall be 
confirmed promptly in writing: Provided, That if an assembled meeting 
is held, all votes shall be cast in person. A videoconference shall be 
considered an assembled meeting and all votes shall be considered as 
cast in person.
    12. Remove Sec.  916.37.
    13. Add three new sentences at the end of paragraph (b) of Sec.  
916.41 to read as follows:


Sec.  916.41  Assessments.

* * * * *
    (b) * * * Furthermore, any assessment not paid by a handler within 
a period of time prescribed by the committee may be subject to an 
interest or late payment charge, or both. The period of time, rate of 
interest and late payment charge shall be as recommended by the 
committee and approved by the Secretary. Subsequent to such approval, 
all assessments not paid within the prescribed period of time shall be 
subject to an interest or late payment charge or both.

PART 917--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA

    14. The authority citation for part 917 continues to read as 
follows:

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

    15. Revise Sec.  917.4 to read as follows:


Sec.  917.4  Fruit.

    Fruit means the edible product of the following kinds of trees:
    (a) All varieties of peaches grown in the production area;
    (b) All hybrids grown in the production area exhibiting the 
characteristics of a peach and subject to cultural practices common to 
peaches as recommended by the committee and approved by the Secretary; 
and
    (c) All varieties of pears except Beurre Hardy, Beurre D'Anjou, 
Bosc, Winter Nelis, Doyenne du Comice, Beurre Easter, and Beurre 
Clairgeau.
    16. Revise Sec.  917.5 to read as follows:


Sec.  917.5  Grower.

    Grower is synonymous with producer and means any person who 
produces fruit for market in fresh form, and who has a proprietary 
interest therein. Employees of growers and officers of corporations 
actively engaged in growing peaches are eligible to serve in grower 
positions on the committee.
    17. Revise Sec.  917.6 to read as follows:


Sec.  917.6  Handle.

    Handle and ship are synonymous and mean to sell, consign, deliver 
or transport fruit or to cause fruit to be sold, consigned, delivered 
or transported between the production area and any point outside 
thereof, or within the production area: Provided, That for peaches, 
packing or causing the fruit to be packed also constitutes handling; 
Provided further, That the term handle shall not include the sale of 
fruit on the tree, the transportation within the production area of 
fruit from the orchard where grown to a packing facility located within 
such area for preparation for market, or the delivery of such fruit to 
such packing facility for such preparation.
    18. Add a new Sec.  917.8 to read as follows:


Sec.  917.8  Pure grower or pure producer.

    (a) For peaches, pure grower means any grower:
    (1) Who produces his or her own product (and is not an employee or 
officer of a packing business); or
    (2) Who produces and handles his or her own product; Provided, That 
a pure producer can pack the production of other growers as long as the 
production packed does not exceed 25 percent of the total production 
packed for that marketing year by that pure grower's packing facility. 
Pure grower is synonymous with pure producer.
    (b) The committee may establish, with the approval of the 
Secretary, rules and regulations for the implementation and operation 
of this section.
    19. Revise paragraphs (n) and (o) of Sec.  917.14 to read as 
follows:


Sec.  917.14  District.

* * * * *
    (n) Fresno District includes and consists of Madera County, Fresno 
County, and Mono County.
    (o) Tulare District includes and consists of Tulare County and 
Kings County.
* * * * *
    20. Revise Sec.  917.18 to read as follows:


Sec.  917.18  Nomination of commodity committee members of the Control 
Committee.

    Nominations for the 13 members of the Control Committee to 
represent the commodity committees shall be made in the following 
manner:
    (a) A nomination for one member shall be made by each commodity 
committee selected pursuant to Sec.  917.25. Nominations for the 
remaining members shall be made by the respective commodity committees 
as provided in this section. The number of remaining members which each 
respective commodity shall be entitled to nominate shall be based upon 
the proportion that the previous three fiscal periods' shipments of the 
respective fruit is of the total shipments of all fruit to which this 
part is applicable during such periods. In the event provisions of this 
part are terminated as to any fruit, the members of the commodity 
committee of the remaining fruit shall have all of the powers, duties, 
and functions given to the Control Committee under this part and 
sections of this part pertaining to the designation of the Control 
Committee shall be terminated. In the event provisions of this part are 
suspended as to any fruit, the members of the commodity committee of 
the remaining fruit shall have all the powers, duties, and functions 
given to the Control Committee under this part and sections of this 
part pertaining to the designation of the Control Committee shall be 
suspended.
    (b) A person nominated by any commodity committee for membership on 
the Control Committee shall be an individual person who is a member or 
alternate member of the commodity committee that nominates him/her. 
Each member of each commodity committee shall have only one vote in the 
selection of nominees for membership on the Control Committee.
    21. Revise Sec.  917.22 to read as follows:


Sec.  917.22  Nomination of Peach Commodity Committee members.

    Nominations for membership on the Peach Commodity Committee shall 
be made by growers of peaches in the

[[Page 9001]]

respective representation areas, as follows:
    (a) District 1 composed of the Fresno District: seven nominees.
    (b) District 2 composed of the Tulare District: three nominees.
    (c) District 3 composed of the Tehachapi District and Kern 
District: one nominee.
    (d) District 5 composed of the South Coast District and Southern 
California District: one nominee.
    (e) District 4 composed of the Stanislaus District, Stockton 
District and all of the production area not included in paragraphs (a) 
through (d) of this section: one nominee.
    22. Revise Sec.  917.24 to read as follows:


Sec.  917.24  Procedure for nominating members of various commodity 
committees.

    (a) The Control Committee shall hold or cause to be held not later 
than January 31 for peaches and not later than February 15 for pears of 
each odd numbered year a nomination procedure or a meeting or meetings 
of the growers of the fruits in each representation area set forth in 
Sec. Sec.  917.21 and 917.22 for purposes of designating nominees for 
successor members and alternate members of the commodity committees. 
These meetings shall be supervised by the Control Committee, which 
shall prescribe such procedure as shall be reasonable and fair to all 
persons concerned.
    (b) With respect to each commodity committee only growers of the 
particular fruit who are present at such nomination meetings or 
represented at such meetings by duly authorized employees may 
participate in the nomination and election of nominees for commodity 
committee members and alternates. For peaches, those who may receive 
nomination forms if the nominations are conducted via a mail process 
may also participate in the nomination and election of nominees for 
Peach Commodity Committee members and alternates. All peach growers, or 
authorized employees, will receive a ballot for the nominees in the 
district in which they produce and are entitled to vote accordingly. A 
peach grower who produces in multiple districts is allowed to vote only 
in one district, and may exchange his/her ballot for that of nominees 
in another district provided the grower is producing in the district 
for which he/she wants to participate. For both commodity committees, 
each such grower, including employees of such grower, shall be entitled 
to cast but one vote for each position to be filled for the 
representation area in which he/she produces such fruit.
    (c) A particular grower, including employees of such growers, shall 
be eligible for membership as principle or alternate to fill only one 
position on a commodity committee. A grower nominated for membership on 
the Pear Commodity Committee must have produced at least 51 percent of 
the pears shipped by him/her during the previous fiscal period, or he/
she must represent an organization that produced at least 51 percent of 
the pears shipped by it during such period. The members and alternates 
of the Peach Commodity Committee shall be growers, or shall be 
authorized employees of such growers and at least 50% of the nominees 
from each representation area shall be pure growers.
    (d) For peaches, no person shall serve more than three (3) 
consecutive two-year terms of office or a total of six (6) consecutive 
years; Provided, That an appointment to fill less than a two year term 
of office, or serving one (1) term as an alternate, shall not be 
included in determining the (3) consecutive terms of office; Provided 
further, That time served prior to the effective date of this section 
shall not be counted toward consecutive term limits. The members shall 
serve until their respective successors are selected and have 
qualified.
    23. Revise Sec.  917.25 to read as follows:


Sec.  917.25  Acceptance.

    (a) The Secretary shall select the members of each commodity 
committee, except for the Peach Commodity Committee, from nominations 
made by growers, as provided in Sec. Sec.  917.21 through 917.24, or 
from among other eligible persons. Any person selected as a member of 
the Pear Commodity Committee shall qualify by filing with the Secretary 
a written acceptance of the appointment.
    (b) For the Peach Commodity Committee, each person to be selected 
by the Secretary as a member or as an alternate member of the committee 
shall, prior to such selection, qualify by advising the Secretary that 
he/she agrees to serve in the position for which nominated for 
selection.
    24. Revise paragraph (d) of Sec.  917.29 to read as follows:


Sec.  917.29  Organization of committees.

* * * * *
    (d) The Control Committee or any commodity committee may, upon due 
notice to all of the members of the respective committee, vote by 
letter, telegraph or telephone: Provided, That any member voting by 
telephone shall promptly thereafter confirm in writing his/her vote so 
cast. The Peach Commodity Committee may, upon due notice to all of the 
members of the respective committee, vote by letter, telegraph, 
telephone, facsimile, video teleconference, or any other means of 
communication recommended by the committee and approved by the 
Secretary; Provided, That any member voting by telephone shall promptly 
thereafter confirm in writing his/her vote so cast.
    25. Add a sentence at the end of paragraph (d) of Sec.  917.35 to 
read as follows:


Sec.  917.35  Powers and duties of each commodity committee.

* * * * *
    (d) * * * To establish subcommittees to aid the Peach Commodity 
Committee in the performance of its duties under this part as may be 
deemed advisable.
* * * * *
    26. Revise Sec.  917.37 to read as follows:


Sec.  917.37  Assessments.

    (a) As his/her pro rata share of the expenses which the Secretary 
finds are reasonable and are likely to be incurred by the commodity 
committees during a fiscal period, each handler shall pay to the 
Control Committee, upon demand, assessments on all fruit handled by 
him/her. The payment of assessments for the maintenance and functioning 
of the committees may be required under this part throughout the period 
it is in effect irrespective of whether particular provisions thereof 
are suspended or become inoperative.
    (b) The Secretary shall fix the respective rate of assessment, 
which handlers shall pay with respect to each fruit during each fiscal 
period in an amount designed to secure sufficient funds to cover the 
respective expenses, which may be incurred during such period. At any 
time during or after the fiscal period, the Secretary may increase the 
rates of assessment in order to secure funds to cover any later 
findings by the Secretary relative to such expenses, and such increase 
shall apply to all fruit shipped during the fiscal period. Furthermore, 
any assessment not paid by a peach handler within a period of time 
prescribed by the Control Committee may be subject to an interest or 
late payment charge, or both. The period of time, rate of interest and 
late payment charge shall be as recommended by the committee and 
approved by the Secretary. Subsequent to such approval, all assessments 
for peaches not paid within the prescribed period of time shall be 
subject to an interest or late payment charge or both.

[[Page 9002]]

    (c) In order to provide funds to carry out the functions of the 
commodity committee prior to commencement of shipments in any season, 
shippers may make advance payments of assessments, which advance 
payments shall be credited to such shippers and the assessments of such 
shippers shall be adjusted so that such assessments are based upon the 
quantity of fruit shipped by such shippers during such season. Any 
shipper who ships fruit for the account of a grower may deduct, from 
the account of sale covering such shipment or shipments, the amount of 
assessments levied on said fruit shipped for the account of such 
grower. The Control Committee may also borrow money for such purposes 
for peaches.

[FR Doc. 06-1583 Filed 2-21-06; 8:45 am]
BILLING CODE 3410-02-P