[Federal Register Volume 71, Number 191 (Tuesday, October 3, 2006)]
[Rules and Regulations]
[Pages 58246-58249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-16279]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Docket No. FV06-920-1 IFR]


Kiwifruit Grown in California; Relaxation of Container Marking 
Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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

SUMMARY: This rule relaxes the container marking requirements for 
kiwifruit covered under the California kiwifruit marketing order 
(order). The order regulates the handling of kiwifruit grown in 
California and is administered locally by the Kiwifruit Administrative 
Committee (Committee). Currently, kiwifruit that has been inspected, 
meets applicable grade and size requirements, and is subsequently 
placed into new containers must, be positive lot identified, which 
requires reinspection. This rule establishes procedures for handlers to 
ship such kiwifruit without positive lot identification (PLI), and 
announces the Agricultural Marketing Service's intention to request 
emergency approval by the Office of Management and Budget (OMB) of a 
new information collection. This rule is intended to reduce handler 
inspection costs and facilitate the marketing of kiwifruit.

DATES: Effective October 4, 2006. Pursuant to the Paperwork Reduction 
Act, comments on the information collection burden that will result 
from this rule must be received by December 4, 2006 which will be 
considered prior to issuance of a final rule.

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

FOR FURTHER INFORMATION CONTACT: Shereen Marino, Marketing Specialist, 
or Kurt J. Kimmel, Regional Manager, California Marketing Field Office, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, telephone: (559) 487-5901, Fax: (559) 487-5906, or E-mail: 
[email protected], or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 
720-2491, Fax: (202) 720-8938, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 920 as amended (7 CFR part 920), regulating the handling of 
kiwifruit grown in California, hereinafter referred to as the 
``order.'' The order is effective under the Agricultural Marketing 
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter 
referred to as the ``Act.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. A 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing, USDA would rule on the petition. The Act provides 
that the district court of the United States in any district in which 
the handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction to review USDA's ruling on the petition, 
provided an action is filed

[[Page 58247]]

not later than 20 days after the date of the entry of the ruling.
    This rule relaxes the container marking requirements for kiwifruit 
covered under the order. Currently, kiwifruit that has been inspected, 
meets applicable grade and size requirements, and is subsequently 
placed into new containers, must be positive lot identified, which 
requires reinspection. This rule establishes procedures for handlers to 
ship such kiwifruit without PLI. This rule is intended to reduce 
handler inspection costs and facilitate the marketing of kiwifruit. The 
Committee unanimously recommended this change at its April 6, 2006, 
meeting.
    Section 920.52(a) of the order provides authority for grade, size, 
pack, container, and container marking requirements for shipments of 
fresh kiwifruit. Section 920.55 of the order requires inspection and 
certification of kiwifruit prior to shipment by Federal or Federal-
State Inspection Service (FSIS). Section 920.302 of the order's 
regulations specifies applicable grade, size, pack, and container 
requirements and Sec.  920.303 specifies applicable container marking 
requirements.
    Paragraph (d) of Sec.  920.303 requires that containers of 
kiwifruit be positive lot identified prior to shipment. PLI helps to 
ensure that a specific load or lot of kiwifruit can be linked to an 
inspection certificate and provides verification that the fruit was 
inspected. No less than 75 percent of the containers of kiwifruit on a 
pallet must be marked with a lot stamp number corresponding to the lot 
inspection conducted by the FSIS. This lot stamp number is a PLI number 
that can be matched to an inspection certificate. Individual consumer 
packages within a master container, and containers being directly 
loaded into a vehicle for export under FSIS supervision are exempt from 
PLI. Individual consumer packages placed directly on a pallet, and 
plastic containers of kiwifruit must be positive lot identified.
    Currently, kiwifruit that has been inspected and certified, and is 
subsequently placed into new containers, must be positive lot 
identified. When such kiwifruit is placed into new containers, the PLI 
mark on the container is lost and thus the lot is not easily 
identified. The new containers must be reinspected and marked with a 
new PLI number. Reinspection costs for such kiwifruit account for 
roughly 20 percent of annual inspection costs for handlers.
    In an effort to reduce handler costs, the Committee recommended 
establishing procedures for handlers to ship previously inspected 
kiwifruit placed in new containers without PLI. Handlers will have the 
option of having such kiwifruit reinspected and marked with a PLI 
number or requesting a verification number under a new verification 
process. Such kiwifruit must be of the same grade and size as 
originally inspected. The handler must contact the FSIS to obtain a 
verification number prior to shipment, and plainly mark one end of each 
container with the letter ``R'' and the verification number. The letter 
``R'' and the verification number must not be less than one-half inch 
in height. The handler must submit a Kiwifruit Verification Form to the 
FSIS within 3 business days of such request, and provide the following 
information from the original inspection: (i) The positive lot 
identification numbers; (ii) the identity of the handler; (iii) the 
inspection certificate numbers; (iv) the grade and size of the 
kiwifruit; (v) the number and type of containers; and (v) the handler's 
brand; and the following information on the kiwifruit placed into new 
containers: (i) The number and type of containers; and (ii) the 
applicable brand. The verification number will be linked to the PLI 
number, thus providing a method to trace the fruit back to the original 
inspection certificate. The FSIS will maintain the Kiwifruit 
Verification Forms. The Committee will make use of completed forms to 
audit handlers as needed to ensure compliance, pursuant to authority 
provided in Sec.  920.61.
    Accordingly, a new paragraph (f) is added to Sec.  920.303 that 
establishes the verification procedures described above. Additionally, 
a new sentence is added to the beginning of paragraph (d) in that 
section to clarify that except as provided in the new paragraph (f), 
containers of kiwifruit must be positive lot identified prior to 
shipment in accordance with specified requirements. Paragraph (d) is 
modified further for clarification purposes to change the term ``lot 
stamp number'' to ``positive lot identified,'' and to change the term 
``plastic container'' to ``reusable plastic container.''

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this action on small entities. Accordingly, AMS has 
prepared this initial regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 37 handlers of kiwifruit subject to 
regulation under the marketing order and approximately 220 growers in 
the production area. Small agricultural service firms are defined by 
the Small Business Administration (13 CFR 121.201) as those whose 
annual receipts are less than $6,500,000, and small agricultural 
producers are defined as those whose annual receipts are less than 
$750,000. None of the 37 handlers subject to regulation have annual 
kiwifruit sales of $6,500,000. In addition, six growers subject to 
regulation have annual sales exceeding $750,000. Therefore, all of the 
kiwifruit handlers and a majority of the growers may be classified as 
small entities.
    This rule relaxes the container marking requirements currently 
specified in Sec.  920.303. Currently, kiwifruit that has been 
inspected, meets applicable grade and size requirements, and is 
subsequently placed into new containers must be positive lot 
identified, which requires reinspection. This rule establishes 
procedures for handlers to ship such kiwifruit without PLI. This rule 
adds a new paragraph (f) to Sec.  920.303 that establishes the 
verification procedures. Handlers must obtain a verification number 
from the FSIS, mark their new containers with such number and the 
letter ``R,'' and submit a Kiwifruit Verification Form to the FSIS. The 
verification number can be linked to the original PLI number, thereby 
providing a method to trace the fruit back to the original inspection 
certificate. This action is intended to reduce handler inspection costs 
and facilitate the marketing of kiwifruit. This rule also makes minor 
modifications to paragraph (d) of Sec.  920.303 for clarification 
purposes. Authority for this action is provided in Sec. Sec.  
902.52(a)(3) and 920.55 of the order.
    The impact of this change on handlers was discussed by the 
Committee. Reinspection costs due to current PLI requirements account 
for roughly 20 percent of annual inspection costs for the industry. 
Additionally, an average of 20 percent of the crop is placed into new 
containers annually. The following table shows inspection costs for in-
line inspection, lot inspection, and kiwifruit placed into new 
containers for 2001 to 2005.

[[Page 58248]]



----------------------------------------------------------------------------------------------------------------
                                                                                            New
                            Year                                In-line        Lot       containers   Total cost
----------------------------------------------------------------------------------------------------------------
2001-02.....................................................     $107,702      $15,254      $38,411     $161,367
2002-03.....................................................       96,376       24,866       35,521      156,763
2003-04.....................................................      111,228       12,064       29,197      152,489
2004-05.....................................................      129,197       24,319       31,415      184,931
----------------------------------------------------------------------------------------------------------------

    This change reduces inspection costs because handlers have the 
option of using the new verification process instead of having 
kiwifruit reinspected to conform to PLI requirements. Additionally, 
reinspection can delay shipments because kiwifruit cannot be shipped 
until reinspection has been completed by the FSIS.
    The Committee considered the alternative of maintaining the status 
quo, but this was not viable. As an option to reinspection, identity of 
the lot can be achieved through the verification number, which provides 
a trace back to the original inspection certificate. Additionally, such 
kiwifruit has already met the minimum requirements of the marketing 
order. It is anticipated that the rule provides a cost savings to 
handlers.
    This action imposes an additional reporting and recordkeeping 
burden on California kiwifruit handlers. This action requires a new 
Committee form that must be completed by handlers and provided to the 
FSIS. The information collection requirement is discussed later in this 
document. 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. Finally, USDA has 
not identified any relevant Federal rules that duplicate, overlap, or 
conflict with this rule.
    In addition, the Committee's meeting was widely publicized 
throughout the kiwifruit industry and all interested persons were 
invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the April 6, 
2006, meeting was a public meeting and all entities, both large and 
small, were encouraged to express their views on these issues. Finally, 
interested persons are invited to submit information on the regulatory 
and informational impacts of this action on small businesses.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance 
guide should be sent to Jay Guerber at the previously mentioned address 
in the FOR FURTHER INFORMATION CONTACT section.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), this notice announces that AMS is requesting emergency 
approval from the Office of Management and Budget (OMB) for a new 
information collection request under OMB No. 0581-NEW. Upon approval by 
OMB, this collection will be merged with the forms currently approved 
for use under OMB No. 0581-0189, ``Generic OMB Fruit Crops.'' The 
emergency request was necessary because insufficient time was available 
to follow normal clearance procedures.
    Title: Kiwifruit Grown in California, Marketing Order No. 920.
    OMB No.: 0581-NEW.
    Expiration Date of Approval: Emergency request.
    Type of Request: New collection.
    Abstract: The information collection requirement in this request is 
essential to provide handlers with a procedure to ship kiwifruit that 
has been inspected, meets applicable grade and size requirements, and 
is subsequently placed into new containers without PLI.
    On April 6, 2006, the Committee unanimously recommended relaxing 
the container marking requirements prescribed under the order. 
Currently, kiwifruit that has been inspected, meets applicable grade 
and size requirements, and is subsequently placed into new containers 
must be positive lot identified, which requires reinspection. This rule 
establishes procedures for handlers to ship such kiwifruit without PLI. 
Kiwifruit handlers must submit a new Kiwifruit Verification Form to the 
FSIS and report information prior to shipment. On this form, handlers 
must report information from the original inspection certificate (PLI 
and inspection certification numbers, handler name, grade and size, 
number and type of containers, and brand), and information for such 
kiwifruit placed into new containers (number and type of container, and 
brand). The FSIS will assign verification numbers for lots of such 
kiwifruit in order to provide a trace back to the original inspection 
certificate. This action is intended to reduce handler inspection costs 
and facilitate the marketing of kiwifruit.
    The information collected is used only by authorized 
representatives of USDA, including AMS, Fruit and Vegetable Programs 
regional and headquarters' staff, and authorized employees and agents 
of the Committee. Authorized Committee employees, agents, and the 
industry are the primary users of the information and AMS is the 
secondary user.

Kiwifruit Verification Form

    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to be no more than .25 hour per response.
    Respondents: Kiwifruit handlers.
    Estimated Number of Respondents: 30.
    Estimated Number of Responses per Respondent: 150.
    Estimated Total Annual Burden on Respondents: 1,125 hours.
    Comments: Comments are invited on: (1) Whether the collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
collection of information, including the validity of the methodology 
and assumptions used; (3) ways to enhance the quality, utility, and 
clarity of the information to be collected; and (4) ways to minimize 
the burden of the collection of information on those who are to 
respond, including the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    Comments should reference OMB No. 0581-NEW and the California 
kiwifruit marketing order, and be sent to the USDA in care of the 
Docket Clerk at the previously mentioned address. All comments received 
will be available for public inspection during regular business hours 
at the same address.
    All responses to this notice will be summarized and included in the 
request for OMB approval. All comments will also become a matter of 
public record. As previously mentioned, because there was insufficient 
time for a normal clearance procedure and prompt implementation is 
needed, AMS is requesting emergency approval for the use of this form 
by October 11, 2006, because the season began August 1. As previously 
mentioned, upon OMB

[[Page 58249]]

approval, this collection will be merged with the forms currently 
approved for use under OMB No. 0581-0189 ``Generic OMB Fruit Crops.''
    The AMS is committed to complying with the E-Government Act, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.
    In summary, this rule establishes procedures for handlers to ship 
kiwifruit that has been inspected, meets applicable grade and size 
requirements, and is subsequently placed into new containers without 
PLI. This rule is intended to reduce handler inspection costs and 
facilitate the marketing of kiwifruit. The additional reporting 
requirement will contribute to the efficient operation of the program 
and assist in ensuring handler compliance with marketing order 
provisions. Any comments received will be considered prior to 
finalization of this rule.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
this interim final rule, as hereinafter set forth, will tend to 
effectuate the declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined in good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and good cause exists for not postponing the effective date of 
this rule until 30 days after publication in the Federal Register 
because: (1) This rule should be in place as soon as possible because 
the 2006-07 season began on August 1, 2006, and handlers will begin 
shipping kiwifruit by mid-September; (2) the Committee unanimously 
recommended this change at a public meeting and all interested parties 
had an opportunity to provide input; (3) this rule relaxes requirements 
currently in effect and kiwifruit producers and handlers are aware of 
this rule and need no additional time to comply with the relaxed 
requirements; (4) this rule provides a 60-day comment period and any 
comments received will be considered prior to finalization of this 
rule.

List of Subjects in 7 CFR Part 920

    Kiwifruit, Marketing agreements, Reporting and recordkeeping 
requirements.


0
For the reasons set forth in the preamble, 7 CFR part 920 is amended as 
follows:

PART 920--KIWIFRUIT GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 920 continues to read as 
follows:

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

0
2. In Sec.  920.303, revise paragraph (d), and add a new paragraph (f) 
to read as follows:


Sec.  920.303  Container marking regulations.

* * * * *
    (d) Except as provided in paragraph (f) of this section, containers 
of kiwifruit must be positive lot identified prior to shipment in 
accordance with the following requirements. All exposed or outside 
containers of kiwifruit, but not less than 75 percent of the total 
containers on the pallet, shall be positive lot identified with a plain 
mark corresponding to the lot inspection conducted by an authorized 
inspector, except for individual consumer packages within a master 
container and containers that are being directly loaded into a vehicle 
for export shipment under the supervision of the Federal or Federal-
State Inspection Service. Individual consumer packages of kiwifruit 
placed directly on a pallet shall have all outside or exposed packages 
on a pallet positive lot identified with a plain mark corresponding to 
the lot inspection conducted by an authorized inspector or have one 
inspection label placed on each side of the pallet. Reusable plastic 
containers of kiwifruit, placed on a pallet, shall be positive lot 
identified in accordance with Federal or Federal-State Inspection 
Service procedures and shall have required information on the cards of 
the individual containers, as provided in this section of the 
regulations.
* * * * *
    (f) Kiwifruit that has been inspected and certified, and is 
subsequently placed into new containers, does not have to be positive 
lot identified, as prescribed in paragraph (d) of this section: 
Provided, That:
    (1) Such kiwifruit is of the same grade and size as originally 
inspected; and
    (2) The handler requests a verification number from the Federal or 
Federal-State Inspection Service prior to shipment; plainly marks one 
end of each container with such number and the letter ``R,'' both of 
which shall be at least one-half inch in height; and submits a 
Kiwifruit Verification Form to the Federal or Federal-State Inspection 
Service within 3 business days of such request. The handler shall 
provide the following information on the Kiwifruit Verification Form.
    (i) From the original inspection:
    (A) The positive lot identification numbers;
    (B) The identity of the handler;
    (C) The inspection certificate numbers;
    (D) The grade and size of the kiwifruit;
    (E) The number and type of containers; and
    (F) The handler's brand; and
    (ii) On the kiwifruit placed into new containers:
    (A) The number and type of containers; and
    (B) The applicable brand.

    Dated: September 27, 2006.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
 [FR Doc. E6-16279 Filed 10-2-06; 8:45 am]
BILLING CODE 3410-02-P