[Federal Register Volume 71, Number 140 (Friday, July 21, 2006)]
[Rules and Regulations]
[Pages 41345-41353]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-11600]



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  Federal Register / Vol. 71, No. 140 / Friday, July 21, 2006 / Rules 
and Regulations  

[[Page 41345]]



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; Order Amending 
Marketing Order Nos. 916 and 917

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule amends Marketing Orders Nos. 916 and 917 (orders), 
which regulate the handling of nectarines and peaches grown in 
California. 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 
amendments to order 917 only apply to peaches. The 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. 
With the exception of the proposal to allow the Peach Commodity 
Committee to borrow funds, all of the proposals were favored by 
nectarine and peach growers in a mail referendum, held March 6 through 
24, 2006. The amendments are intended to streamline and improve the 
administration, operation, and functioning of the orders.

DATES: Effective January 1, 2007, the suspension of the regulatory text 
for Sec. Sec.  917.4, 917.18, and 917.25 that were suspended effective 
April 4, 1994, at 59 FR 10055, March 3 1994, is lifted.
    This rule is effective August 21, 2006, for Sec. Sec.  916.15 and 
916.41 of Marketing Order 916 and Sec. Sec.  917.29, 917.35, and 917.37 
of Marketing Order 917. For Sec. Sec.  916.5, 916.9, 916.11, 916.12, 
916.16, 916.20, 916.22, 916.25 and 916.32 of Marketing Order 916, and 
Sec. Sec.  917.4, 917.5, 917.6, 917.8, 917.14, 917.18, 917.22, 917.24 
and 917.25 of Marketing Order 917, this rule is effective January 1, 
2007.
    Effective January 1, 2007, certain regulatory text of Sec. Sec.  
917.4, 917.18, and 917.25 are suspended.

FOR FURTHER INFORMATION CONTACT: Melissa Schmaedick, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, Agricultural 
Marketing Service, USDA, Post Office Box 1035, Moab, UT 84532, 
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); Recommended Decision 
and Opportunity to File Written Exceptions issued on November 18, 2005, 
and published in the November 29, 2005, issue of the Federal Register 
(70 FR 71734); and Secretary's Decision and Referendum Order issued on 
February 15, 2006, and published in the February 22, 2006 issue of the 
Federal Register (71 FR 8994).
    This action is governed by the provisions of sections 556 and 557 
of title 5 of the United States Code and is therefore excluded from the 
requirements of Executive Order 12866.

Preliminary Statement

    This final rule was formulated on the record of a public hearing 
held on February 15 and 16, 2005, in Fresno, California. Notice of this 
hearing was issued January 25, 2005 and published in the Federal 
Register on January 28, 2005 (70 FR 4041). The hearing was held to 
consider the proposed amendment of Marketing Orders 916 and 917, 
hereinafter referred to 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 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 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.
    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.
    A Secretary's Decision and Referendum Order was issued on February 
15, 2006, directing that a referendum be conducted during the period 
March 6 through March 24, 2006, among peach and nectarine growers to

[[Page 41346]]

determine whether they favored the proposed amendments to the orders. 
To become effective, the amendments had to be approved by at least two-
thirds of those producers voting or by voters representing at least 
two-thirds of the volume of peaches or nectarines represented by voters 
voting in the referendum. Voters voting in the referendum favored all 
but one of the amendments proposed by the Committees.
    The amendments favored by voters and included in this order will:
    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.
    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.
    13. Clarify that subcommittees may be established by the Peach 
Commodity Committee.
    The proposal to authorize the Peach Commodity Committee to borrow 
money failed to obtain the requisite number of votes needed, in number 
or in volume, to pass.
    AMS also proposed to allow such changes as may be necessary to the 
orders so that all of the orders' provisions conform to the effectuated 
amendments. None were deemed necessary.
    The amended marketing agreement was subsequently mailed to all 
peach and nectarine handlers in the production area for their approval. 
The marketing agreements were not approved by handlers representing at 
least 50 percent of the volume of peaches or nectarines handled by all 
handlers during the representative period of March 1, 2005, through 
February 28, 2006.

Small Business Consideration

    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 final 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 $6,500,000.
    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 8 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 6.5 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, respectively;

[[Page 41347]]

annual utilized production, 262,500 tons and 401,000 tons, 
respectively. 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 derived by using 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. 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 amendments will: 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 amendments are intended to streamline and improve the 
administration, operation, and functioning of the programs. Many of the 
amendments will update the language of these two orders, thus better 
representing, and conforming with, current practices in these 
industries. The 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 will 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 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 will require that all hybrids for which regulation is 
contemplated will need to be recommended to USDA by the Committees. The 
Committees will identify hybrids currently in production that have 
characteristics of nectarines or peaches. The characteristics of the 
fruit will help determine whether the hybrid should be regulated. The 
Committees will 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 amendment will 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 will specify that the act of ``packing'' nectarines and 
peaches is 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 amendment is not expected to result in any 
significant increases in costs and will likely result in efficiencies 
that will benefit the administration of marketing orders 916 and 917.
    Proposal 3 will extend the marketing season for nectarines to more 
accurately reflect the nectarine industry's current production and 
marketing season and will conform to current handling regulations. The 
amendment will 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 will not 
result in any increases in costs.
    Proposal 4 will 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 amendment will 
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 will increase the membership on the NAC from eight to 
thirteen members and revise quorum requirements. Proposal 5 will 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 will allow for greater industry participation and will 
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

[[Page 41348]]

increases in costs to growers or handlers.
    Regarding the increase in committee membership, this proposal will 
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 will 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 under this material issue 
are not expected to result in any significant increases in costs to 
growers or handlers.
    Proposal 6 will 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 will 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 amendment will be a clarifying change and will bring 
the language of the order into conformance with current-day operations 
of the program. This amendment is not expected to result in any 
increases in costs to growers or handlers.
    Proposal 8 will add a definition for pure grower to both the 
nectarine and peach orders. When implemented, pure growers will 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 primarily dependent on their own 
production, which is the essential component of being a pure grower.
    Proposal 8 will 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 will be modified to 
provide for mailings of ballots and will change the beginning date of 
the nomination period from February 15 to January 31. The change in the 
beginning date is 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 will 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. When implemented, the two 
steps will 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 will 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 will also modify district boundaries under the 
nectarine order. This change will 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 will 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 amendment will 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 will provide for interest and penalty provisions for 
late payment of assessments to be added to both the nectarine and peach 
orders. This amendment will strengthen the assessment collection 
functions of the orders. The implementation of interest and late 
payments will serve as an incentive for handlers to pay their 
assessments in a timely manner. While this amendment is expected to 
result in some costs under the marketing orders, the more timely 
assessment payments are expected to benefit the industries.
    Lastly, Proposal 14 will 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 will 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 amendments on growers and handlers, record evidence 
indicates that the changes are expected to be positive because the 
administration of the programs will be more efficient, and therefore 
more effective, in executing Committee duties and responsibilities. 
There will 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 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 rule. These amendments are designed to 
enhance the administration and functioning of marketing orders 916 and 
917 to benefit the California nectarine and peach industries.
    Committee meetings regarding these amendments as well as the 
hearing dates were widely publicized throughout the peach and nectarine 
industries, and all interested persons were invited to attend the 
meetings and the hearing and participate in Committee deliberations on 
all issues. All Committee meetings and the hearing were public forums 
and all entities, both large and small, were able to express views on 
these issues.

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 changes 
would have an insignificant impact on total burden hours currently 
approved under this information collection.
    Specifically, the amendment to increase the Nectarine 
Administrative Committee (committee) from 8 to 13 members would require 
an additional 5 members and 5 alternates to complete

[[Page 41349]]

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 amendment will 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 amendment to allow the duties and responsibilities of the 
Control Committee, under marketing order 917, to be transferred to one 
commodity committee if the provisions of the other commodity committee 
are suspended will also result in minimal changes to paperwork 
requirements under this program. If this authority is effectuated, 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 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 Orders 916 and 917 stated herein have 
been reviewed under Executive Order 12988, Civil Justice Reform. They 
are not intended to have retroactive effect. The amendments will 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.

Order Amending the Orders Regulating Peaches and Nectarines Grown in 
California

Findings and Determinations

    The findings and determinations set forth hereinafter are 
supplementary and in addition to the findings and determination 
previously made in connection with the issuance of the order; and all 
of said previous findings and determinations are hereby ratified and 
affirmed, except 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 
Marketing Order Nos. 916 and 917 (7 CFR parts 916 and 917), regulating 
the handling of peaches and nectarines grown in California.
    Upon the basis of the evidence introduced at such hearing and the 
record thereof it is found that:
    (1) The marketing orders, as amended, and as hereby further 
amended, and all of the terms and conditions thereof, will tend to 
effectuate the declared policy of the Act;
    (2) The marketing orders, as amended, and as hereby further 
amended, regulate the handling of peaches and nectarines 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 upon which hearings have been held;
    (3) The marketing orders, as amended, and as hereby further 
amended, are limited in 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;
    (4) The marketing orders, as amended, and as hereby further 
amended, prescribes, insofar as practicable, such different terms 
applicable to different parts of the production area as are necessary 
to give due recognition to the differences in the production and 
marketing of peaches and nectarines grown in the production area; and
    (5) All handling of peaches and nectarines grown in the production 
area is in the current of interstate or foreign commerce or directly 
burdens, obstructs, or affects such commerce.
    (b) Additional findings. The effective date for amendments to 
sections 916.15, 916.32(b), 916.37 (removal of provision) and 916.41, 
of Marketing Order 916, and Sec. Sec.  917.29, 917.35, and 917.37 of 
Marketing Order 917, shall be 30 days after publication in the Federal 
Register.
    The amendments to Sec. Sec.  916.5, 916.9, 916.11, 916.12, 916.16, 
916.20, 916.22, 916.25 and 916.32(a) of Marketing Order 916, and 
Sec. Sec.  917.4, 917.5, 917.6, 917.8, 917.14, 917.18, 917.22, 917.24 
and 917.25 of Marketing Order 917, shall be effective on January 1, 
2007. These sections contain provisions for incorporating hybrids into 
the definition of peach and nectarine, including the act of packing as 
part of handling functions, and nominating and seating committee 
members. The amendments to these sections should be implemented to 
coincide with the beginning of a new crop year.
    (b) Determinations. It is hereby determined that:
    (1) Handlers (excluding cooperative associations of producers who 
are not engaged in processing, distributing, or shipping peaches or 
nectarines covered by the orders as hereby amended) who, during the 
period March 1, 2005, through February 28, 2006, handled 50 percent or 
more of the volume of such

[[Page 41350]]

peaches or nectarines covered by said orders, as hereby amended, have 
not signed an amended marketing agreement; and,
    (2) The issuance of this amendatory order, further amending the 
aforesaid orders, is favored or approved by at least two-thirds of the 
producers who participated in a referendum on the question of approval 
and who, during the period of March 1, 2005, through February 28, 2006 
(which has been deemed to be a representative period), have been 
engaged within the production area in the production of such peaches or 
nectarines, such producers having also produced for market at least 
two-thirds of the volume of such commodity represented in the 
referendum.
    (3) In the absence of a signed marketing agreement, the issuance of 
this amendatory order is the only practical means pursuant to the 
declared policy of the Act of advancing the interests of producers of 
peaches and nectarines in the production area.

Order Relative to Handling of Peaches and Nectarines Grown in 
California

    It is therefore ordered, That on and after the effective dates 
hereof, all handling of peaches and nectarines grown in California 
shall be in conformity to, and in compliance with, the terms and 
conditions of the said orders as hereby amended as follows:
    The provisions of the proposed order amending the order contained 
in the Recommended Decision issued by the Administrator on November 18, 
2005, and published in the Federal Register on November 29, 2005, (70 
FR 71733) shall be and are the terms and provisions of this order 
amending the order and 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.

0
For the reasons set forth in the preamble, Title 7 of Chapter XI of the 
Code of Federal Regulations is amended by revising parts 916 and 917 to 
read as follows:
0
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

0
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.
0
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.

0
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.

0
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.
* * * * *

0
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.

0
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.

0
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.

0
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

[[Page 41351]]

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, shall be eligible for membership as principal or alternate to 
fill only one position on the committee.

0
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.

0
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.

0
12. Remove Sec.  916.37.

0
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

0
14. The authority citation for part 917 continues to read as follows:

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


0
15. In Sec.  917.4, the suspension of March 3, 1994 (59 FR 10055), is 
lifted effective January 1, 2007.

0
16. 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.

0
17. In Sec.  917.4, the words ``and (c) All varieties of pears except 
Beurre Hardy, Beurre D'Anjou, Bosc, Winter Nelis, Doyenne du Comice, 
Beurre Easter, and Beurre Clairgeau'' are suspended effective January 
1, 2007.

0
18. 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.
0
19. 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.
0
20. 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.

0
21. In Sec.  917.14, paragraphs (n) and (o) are revised 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.
* * * * *

0
22. In Sec.  917.18, the suspension of March 3, 1994 (59 FR 10055), is 
lifted effective January 1, 2007.

0
23. Section 917.18 is amended by revising the fourth and sixth 
sentences of paragraph (a), and revising paragraph (b) to read as 
follows:


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

* * * * *
    (a) * * * In the event provisions of this part are terminated or 
suspended as to any fruit, nominations of members to the Control 
Committee shall be

[[Page 41352]]

composed of representatives of any remaining fruit. * * * In the event 
provisions of this part are terminated or 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 terminated or 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.

0
24. In Sec.  917.18, paragraph (a), the words ``The number of remaining 
members which each respective commodity committee 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 or 
suspended as to any fruit, nominations of members to the Control 
Committee shall be composed of representatives of any remaining fruit. 
The apportionment shall be determined as aforesaid. In the event 
provisions of this part are terminated or 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 terminated or 
suspended.'' are suspended effective January 1, 2007.

0
25. 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 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.

0
26. Section 917.24 is amended as follows:
0
a. Amend the first sentence of paragraph (a) by removing the phrase 
``February 15'' and adding in its place the phrase ``January 31 for 
peaches and not later than February 15 for pears'';
0
b. Amend paragraph (b) by adding the phrase ``and alternates'' to the 
end of the first sentence after the phrase ``commodity committee 
members'' and adding three new sentences at the end of the paragraph to 
read as follows;
0
c. Amend paragraph (c) by adding a new sentence at the end of the 
paragraph to read as follows; and
0
d. Add a new paragraph (d) to read as follows:


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

    (a) * * *
    (b) * * * 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) * * * 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.

0
27. In Sec.  917.25, suspension of the words ``Sec.  917.21 through'' 
that were suspended at 59 FR 10055, March 3, 1994, is lifted effective 
January 1, 2007.

0
28. Amend Sec.  917.25 by redesignating the introductory text as 
paragraph (a) and adding a new paragraph (b) to read as follows:


Sec.  917.25  Acceptance.

* * * * *
    (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.

0
29. In Sec.  917.25 paragraph (a), the words ``Sec.  917.21 through'' 
are suspended effective January 1, 2007.

0
30. 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.

0
31. 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.
* * * * *

0
32. 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

[[Page 41353]]

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.
    (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.

    Dated: July 17, 2006.
Lloyd. C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-11600 Filed 7-20-06; 8:45 am]
BILLING CODE 3410-02-P