[Federal Register Volume 72, Number 153 (Thursday, August 9, 2007)]
[Rules and Regulations]
[Pages 44725-44728]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-15393]



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  Federal Register / Vol. 72, No. 153 / Thursday, August 9, 2007 / 
Rules and Regulations  

[[Page 44725]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

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


Nectarines and Peaches Grown in California; Decreased Assessment 
Rates

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This rule decreases 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 will remain in effect indefinitely 
unless modified, suspended, or terminated.

DATES: Effective August 10, 2007.

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 final 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.
    This final 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 will 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 decreases 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 will 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 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 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). Funds in the reserve will be kept within the 
maximum

[[Page 44726]]

permitted by the order, approximately one year's expenses.
    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 the implementation of this marketing program 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 will 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 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 
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). Funds 
in the reserve will be kept within the maximum permitted by the order, 
approximately one year's expenses.
    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 the implementation of this marketing program 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.
    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.
    The assessment rates established in this rule will 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 will be in effect for an indefinite 
period, the committees will 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 will evaluate the committees' recommendations and 
other available information to determine whether modification of the 
assessment rate for each committee is needed. Further rulemaking will 
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.

Final 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 final regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and 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.

[[Page 44727]]

    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 decreases 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 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 assessment rates to $0.06 
per 25-pound container or container equivalent. This will 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 decreases 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 will 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.
    This rule imposes 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 proposed rule concerning this action was published in the Federal 
Register on June 20, 2007 (72 FR 33919). Copies of the proposed rule 
were distributed via the committees' Web site. In addition, the rule 
was made available through the Internet by USDA and the Office of the 
Federal Register. A 10-day comment period which ended July 2, 2007, was 
provided for interested persons to respond to the proposal. One comment 
supporting the proposal was received.
    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.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the committees and 
other available information, it is hereby found that this 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 that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register 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) this rule decreases the assessment rates for assessable 
nectarines and peaches beginning with the 2007-08 fiscal period; and 
(3) handlers are aware of this action, which

[[Page 44728]]

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. Also, a 10-day comment period was 
provided for in the proposed rule.

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, 7 CFR parts 916 and 917 are 
amended as follows:
0
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

0
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--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA

0
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: August 2, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E7-15393 Filed 8-8-07; 8:45 am]
BILLING CODE 3410-02-P