[Federal Register Volume 72, Number 118 (Wednesday, June 20, 2007)]
[Proposed Rules]
[Pages 33919-33922]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-11822]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Docket No. AMS-FV-07-0053; FV07-916/917-5 PR]


Nectarines and Peaches Grown in California; Decreased Assessment 
Rates

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would decrease the assessment rates established for 
the Nectarine Administrative Committee and the Peach Commodity 
Committee (committees) for the 2007-08 and subsequent fiscal periods 
from $0.21 to $0.06 per 25-pound container or container equivalent of 
nectarines and peaches handled. The committees locally administer the 
marketing orders that regulate the handling of nectarines and peaches 
grown in California. Assessments upon nectarine and peach handlers are 
used by the committees to fund reasonable and necessary expenses of the 
programs. The fiscal period runs from March 1 through the last day of 
February. The assessment rates would remain in effect indefinitely 
unless modified, suspended, or terminated.

DATES: Comments must be received by July 2, 2007.

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; or Internet: http://www.regulations.gov. 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.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Jennifer Garcia, Marketing Specialist, 
or Kurt 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 
Nos. 916 and 917, both as amended (7 CFR parts 916 and 917), regulating 
the handling of nectarines and peaches grown in California, 
respectively, hereinafter referred to as the ``orders.'' The orders are 
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.

[[Page 33920]]

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing orders now in effect, California 
nectarine and peach handlers are subject to assessments. Funds to 
administer the orders are derived from such assessments. It is intended 
that the assessment rates as proposed herein would be applicable to all 
assessable nectarines and peaches beginning on March 1, 2007, and 
continue until amended, suspended, or terminated. 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. Such 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing USDA would rule on the petition. The Act provides 
that the district court of the United States in any district in which 
the handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction to review USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This rule would decrease the assessment rates established for the 
Nectarine Administrative Committee (NAC) and the Peach Commodity 
Committee (PCC) for the 2007-08 and subsequent fiscal periods from 
$0.21 to $0.06 per 25-pound container or container equivalent of 
nectarines and peaches handled.
    The nectarine and peach marketing orders provide authority for the 
committees, with the approval of USDA, to formulate annual budgets of 
expenses and collect assessments from handlers to administer the 
programs. The members of NAC and PCC are producers of California 
nectarines and peaches, respectively. They are familiar with the 
committees' needs, and with the costs for goods and services in their 
local area and are, therefore, in a position to formulate appropriate 
budgets and assessment rates. The assessment rates are formulated and 
discussed in public meetings. Thus, all directly affected persons have 
an opportunity to participate and provide input.

NAC Assessment and Expenses

    For the 2006-07 fiscal period, the NAC recommended, and USDA 
approved, an assessment rate of $0.21 per 25-pound container or 
container equivalent of nectarines that would continue in effect from 
fiscal period to fiscal period unless modified, suspended, or 
terminated by USDA upon recommendation and information submitted by the 
committee or other information available to USDA.
    The NAC met on May 1, 2007, and unanimously recommended 2007-08 
expenditures of $1,446,654 and an assessment rate of $0.06 per 25-pound 
container or container equivalent of nectarines. In comparison, the 
budgeted expenditures for the 2006-07 fiscal period were $4,473,764. 
The proposed assessment rate of $0.06 per 25-pound container or 
container equivalent of nectarines is $0.15 lower than the rate 
currently in effect. Combining expected assessment revenue of 
$1,140,000 with the $322,051 carryover available from the 2006-07 
fiscal period and other income such as interest and research grants 
should be adequate to meet committee needs. The proposed assessment 
rate is also likely to provide a $127,133 reserve, which may be used to 
cover administrative expenses prior to the beginning of the 2008-09 
shipping season as provided in the order (Sec.  916.42).
    The NAC recommended a substantially reduced 2007-08 fiscal period 
budget and assessment rate because promotional activities, as well as 
portions of the committee's administrative and inspection programs, 
have been discontinued. A new California State marketing program that 
will conduct such activities has been implemented. An interim final 
rule discussing this subject was published on April 16, 2007, in the 
Federal Register at 72 FR 18847.
    Expenditures recommended by the NAC for the 2007-08 fiscal period 
include $262,444 for administration, $37,476 for inspection and 
compliance, $196,147 for production research, and $950,587 for consumer 
and category research. Budgeted expenses for these items in 2006-07 
were $567,856 for administration; $1,070,832 for inspection; $201,702 
for production research; and $2,633,374 for promotions, which included 
consumer and category research.
    The NAC 2007-08 fiscal period assessment rate was derived after 
considering anticipated fiscal year expenses; estimated assessable 
nectarines of 19,000,000 25-pound containers or container equivalents; 
the estimated income from other sources, such as interest; and the need 
for an adequate financial reserve to carry the NAC into the 2008-09 
fiscal period. Therefore, the NAC recommended an assessment rate of 
$0.06 per 25-pound container or container equivalent.

PCC Assessment and Expenses

    For the 2006-07 fiscal period, the PCC recommended, and USDA 
approved, an assessment rate of $0.21 per 25-pound container or 
container equivalent of peaches that would continue in effect from 
fiscal period to fiscal period unless modified, suspended, or 
terminated by USDA upon recommendation and information submitted by the 
committee or other information available to USDA.
    The PCC met on May 1, 2007, and recommended 2007-08 expenditures of 
$1,486,971 and an assessment rate of $0.06 per 25-pound container or 
container equivalent of peaches. In comparison, budgeted expenditures 
for the 2006-07 fiscal period were $4,988,914. The proposed assessment 
rate of $0.06 per 25-pound container or container equivalent of peaches 
is $0.15 lower than the rate currently in effect. Combining expected 
assessment revenues of $1,200,000 with the $420,386 carryover available 
from the 2006-07 fiscal period and other income such as interest and 
research grants should be adequate to meet committee needs. The 
proposed assessment rate is also likely to provide a $188,222 reserve, 
which may be used to cover administrative expenses prior to the 
beginning of the 2008-09 shipping season as provided in the order 
(Sec.  917.38).
    The PCC recommended a substantially reduced 2007-08 fiscal period 
budget and assessment rate because promotional activities, as well as 
portions of the committee's administrative and inspection programs, 
have been discontinued. A new California State marketing program that 
will conduct such activities has been implemented. An interim final 
rule discussing this subject was published on April 16, 2007, in the 
Federal Register at 72 FR 18847.
    Expenditures recommended by the PCC for the 2007-08 fiscal period 
include $267,025 for administration, $87,693 for inspection and 
compliance, $196,149 for production research, and $936,104 for consumer 
and category research. Budgeted expenses for these items in 2006-07 
were $936,104 for administration; $1,299,211 for inspection; $210,718 
for production research; and $2,849,961 for promotions, which included 
consumer and category research.

[[Page 33921]]

    The PCC 2007-08 fiscal period assessment rate was derived after 
considering anticipated fiscal year expenses; estimated assessable 
peaches of 20,000,000 25-pound containers or container equivalents; the 
estimated income from other sources, such as interest; and the need for 
an adequate financial reserve to carry the PCC into the 2008-09 fiscal 
period. Therefore, the PCC recommended an assessment rate of $0.06 per 
25-pound container or container equivalent.

Continuance of Assessment Rates

    The proposed assessment rates would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA upon recommendation 
and information submitted by the committees or other available 
information.
    Although these assessment rates would be in effect for an 
indefinite period, the committees would continue to meet prior to or 
during each fiscal period to recommend budgets of expenses and consider 
recommendations for modification of the assessment rates. The dates and 
times of committee meetings are available from the committees' Web site 
at http://www.eatcaliforniafruit.com or USDA. Committee meetings are 
open to the public and interested persons may express their views at 
these meetings. USDA would evaluate the committees' recommendations and 
other available information to determine whether modification of the 
assessment rate for each committee is needed. Further rulemaking would 
be undertaken as necessary. The committees' 2007-08 fiscal period 
budgets and those for subsequent fiscal periods would be reviewed and, 
as appropriate, approved by USDA.

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 rule 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.
    There are approximately 676 producers of nectarines and peaches in 
the production area and approximately 175 handlers subject to 
regulation under the orders. Small agricultural producers are defined 
by the Small Business Administration (13 CFR 121.201) as those having 
annual receipts of less than $750,000, and small agricultural service 
firms are defined as those whose annual receipts are less than 
$6,500,000.
    According to the committees' staff, approximately 85 percent of all 
the handlers within the industry may be classified as small entities. 
For the 2006 marketing season, staff estimated that the average handler 
price received was $9.00 per container or container equivalent of 
nectarines or peaches. A handler would have to ship at least 722,223 
containers to have annual receipts of $6,500,000.
    Also, the committees' staff has estimated that more than 90 percent 
of all the producers in the industry may be classified as small 
entities. For the 2006 marketing season, staff estimated the average 
producer price received was $4.50 per container or container equivalent 
for nectarines and peaches. A producer would have to produce at least 
166,667 containers of nectarines and peaches to have annual receipts of 
$750,000.
    With an average producer price of $4.50 per container or container 
equivalent, and a combined packout of nectarines and peaches of 
36,388,996 containers, the value of the 2006 packout is estimated to be 
$163,750,482. Dividing this total estimated grower revenue figure by 
the estimated number of producers (676) yields an estimate of average 
revenue per producer of about $242,234 from the sales of peaches and 
nectarines.
    This rule would decrease the assessment rates established for NAC 
and PCC for the 2007-08 and subsequent fiscal periods from $0.21 to 
$0.06 per 25-pound container or container equivalent of nectarines or 
peaches.
    The NAC recommended 2007-08 fiscal period expenditures of 
$1,446,654 for nectarines and an assessment rate of $0.06 per 25-pound 
container or container equivalent of nectarines. The PCC recommended 
2007-08 fiscal period expenditures of $1,486,971 for peaches and an 
assessment rate of $0.06 per 25-pound container or container equivalent 
of peaches. The proposed assessment rates of $0.06 are $0.15 lower than 
the rates currently in effect.

Analysis of NAC Budget

    The quantity of assessable nectarines for the 2007-08 fiscal period 
is estimated at 19,000,000 25-pound containers or container 
equivalents. Thus, the $0.06 rate should provide $1,140,000 in 
assessment income.
    The major expenditures recommended by the NAC for the 2007-08 year 
include $262,444 for administration; $37,476 for inspection and 
compliance; $196,147 for production research; and $950,587 for consumer 
and category research, which were previously included in the promotions 
budget. Budgeted expenses for these items in 2006-07 were $567,856, 
$1,070,832, $201,702, and $2,633,374, respectively.
    The NAC recommended a decrease in the assessment rate to meet 
anticipated 2007-08 expenses and provide a financial reserve of 
$127,133, which is needed to fund expenses for the following year until 
assessments for that year are received.

Analysis of PCC Budget

    The quantity of assessable peaches for the 2007-08 fiscal year is 
estimated at 20,000,000 25-pound containers or container equivalents. 
Thus, the $0.06 rate should provide $1,200,000 in assessment income.
    The major expenditures recommended by PCC for the 2007-08 year 
include $267,025 for administration; $87,693 for inspection and 
compliance; $196,149 for production research; and $936,104 for consumer 
and category research, which were previously included in the promotions 
budget. Budgeted expenses for these items in 2006-07 were $629,024, 
$1,299,211, $210,718, and $2,849,961, respectively.
    The PCC recommended a decrease in the assessment rate to meet 
anticipated 2007-08 fiscal period expenses and provide a financial 
reserve of $188,222, which is needed to fund expenses for the following 
year until assessments for that year are received.

Considerations in Determining Expenses and Assessment Rates

    Prior to arriving at these budgets, the committees considered 
information and recommendations from various sources, including, but 
not limited to: Their Executive Committee, their Research Subcommittee, 
their International Programs Subcommittee, their Domestic Promotion 
Subcommittee, and the Nectarine and Peach Estimating Committees. 
Because fewer programs will be conducted under the Federal orders 
during this fiscal year compared to previous years, the committees 
decided the assessment rates should be reduced to prevent the 
accumulation of reserves beyond the levels allowed under the orders. 
Therefore, they recommended decreasing the

[[Page 33922]]

assessment rates to $0.06 per 25-pound container or container 
equivalent. This would allow them to meet their 2007-08 fiscal period 
expenses and carry over necessary reserves to finance operations before 
2008-09 fiscal period assessments are collected.
    A review of historical and preliminary information pertaining to 
the upcoming fiscal period indicates that the grower price for 
nectarines and peaches for the 2007-08 season could range between $6.00 
and $8.00 per 25-pound container or container equivalent. Therefore, 
the estimated assessment revenue for the 2007-08 fiscal period as a 
percentage of total grower revenue could range between .75 and 1 
percent.
    This action would decrease the assessment obligation imposed on 
handlers. Assessments are applied uniformly on all handlers, and some 
of the costs may be passed on to producers. However, decreasing the 
assessment rate would reduce the burden on handlers, and may reduce the 
burden on producers. In addition, the committees' meetings were widely 
publicized throughout the California nectarine and peach industries and 
all interested persons were invited to attend the meetings and were 
encouraged to participate in the committees' deliberations on all 
issues. Like all committee meetings, the May 1, 2007, meetings were 
public meetings and entities of all sizes were able to express views on 
this issue. Finally, interested persons are invited to submit 
information on the regulatory and informational impacts of this action 
on small businesses.
    This proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large handlers. As with 
all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    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.
    A 10-day comment period is provided to allow interested persons to 
respond to this proposed rule. Ten days is deemed appropriate because: 
(1) The 2007-08 fiscal period began on March 1, 2007, and the marketing 
orders require that the rates of assessment for each fiscal period 
apply to all assessable nectarines and peaches handled during such 
fiscal period; (2) the proposed rule would decrease the assessment 
rates for assessable nectarines and peaches beginning with the 2007-08 
fiscal period; and (3) handlers are aware of this action, which was 
discussed by the committees at public meetings and recommended at their 
meetings on May 1, 2007, and is similar to other assessment rate 
actions issued in past years.

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.

    For the reasons set forth in the preamble, 7 CFR parts 916 and 917 
are proposed to be amended as follows:
    1. The authority citation for 7 CFR parts 916 and 917 continues to 
read as follows:

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

PART 916--NECTARINES GROWN IN CALIFORNIA

    2. Section 916.234 is revised to read as follows:


Sec.  916.234  Assessment rate.

    On and after March 1, 2007, an assessment rate of $0.06 per 25-
pound container or container equivalent of nectarines is established 
for California nectarines.

PART 917--PEACHES GROWN IN CALIFORNIA

    3. Section 917.258 is revised to read as follows:


Sec.  917.258  Assessment rate.

    On and after March 1, 2007, an assessment rate of $0.06 per 25-
pound container or container equivalent of peaches is established for 
California peaches.

    Dated: June 13, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
 [FR Doc. E7-11822 Filed 6-19-07; 8:45 am]
BILLING CODE 3410-02-P