[Federal Register Volume 73, Number 163 (Thursday, August 21, 2008)]
[Rules and Regulations]
[Pages 49307-49310]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-19399]



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 Rules and Regulations
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  Federal Register / Vol. 73, No. 163 / Thursday, August 21, 2008 / 
Rules and Regulations  

[[Page 49307]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 900

[Docket No. AMS-FV-08-0061; FV08-900-1 FR]


Amendment of General Regulations for Fruit, Vegetable and Nut 
Marketing Agreements and Marketing Orders; Addition of Supplemental 
Rules of Practice for Amendatory Formal Rulemaking Proceedings

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule amends the general regulations for federal fruit, 
vegetable and nut marketing agreements and marketing orders by 
establishing supplemental rules of practice for amendatory formal 
rulemaking proceedings in accordance with section 1504 of the Food, 
Conservation and Energy Act of 2008 (2008 Farm Bill). The supplemental 
rules of practice add procedures to the rulemaking process relating to 
amendments to fruit, vegetable and nut marketing agreements and 
marketing orders; authorize the Department of Agriculture (USDA) to 
impose assessments on affected industries to supplement funds necessary 
to improve or expedite an amendatory hearing process; and authorize the 
use of informal rulemaking (5 U.S.C. 553) to amend such agreements and 
orders. Section 1504 of the 2008 Farm Bill also applies to amendments 
of federal milk marketing agreements and orders. The supplemental rules 
of practice for federal milk marketing agreements and orders are 
addressed in a separate rulemaking document.

DATES: Effective Date: August 21, 2008.

FOR FURTHER INFORMATION CONTACT: Kathleen 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, or E-mail: 
[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 the general 
regulations for federal marketing agreements and orders (7 CFR part 
900), effective under the Agricultural Marketing Agreement Act of 1937, 
as amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
    The Act provides authority for federal marketing agreement and 
order programs for various fruits, vegetables and nuts. Marketing 
agreements and orders can contain provisions that: Maintain the high 
quality of produce that is on the market; standardize packages and 
containers; regulate the flow of product to market; establish reserve 
pools for storable commodities; and authorize production research, 
marketing research and development, and advertising.

Background

    Currently, the provisions of 556 and 557 of Title 5 of the United 
States Code (formal rulemaking; 5 U.S.C. 556-557) are followed for 
initiating, as well as amending federal marketing agreements and 
orders. Section 557 requires that the rulemaking proceeding, including 
agency decisions, be conducted on the record.
    Following the provisions of 5 U.S.C. 556-557 and part 900 of the 
general regulations, which includes the rules of practice for formal 
rulemaking, a request for a hearing on the proposal to initiate or 
amend an agreement or order is sent to the Administrator of the 
Agricultural Marketing Service (AMS). When an amendment is requested, a 
request typically comes from a marketing agreement or order committee 
or board and includes a statement regarding the degree of industry 
support for the proposal and the conditions the program or amendment to 
the program are intended to address. AMS reviews the request and 
supporting documents, as well as any alternative proposals from 
interested parties and, if appropriate, a notice of public hearing is 
issued and published in the Federal Register.
    A USDA Administrative Law Judge presides at a public hearing and a 
record is compiled of the testimony of proponents, opponents, and other 
interested persons. Proposed findings and conclusions, and written 
arguments or briefs may be filed with USDA after the hearing.
    A recommended decision is issued by AMS based on hearing evidence. 
Persons are allowed to file exceptions to the recommended decision for 
a set period of time.
    After consideration of all exceptions to the recommended decision, 
USDA prepares a Secretary's (final) decision. If the decision is made 
to issue or amend a marketing order, a grower referendum to implement a 
marketing order is held on the proposal. While producers are voting, 
copies of a companion marketing agreement are sent to handlers for 
their signature, when such an agreement exists. Through their 
signatures on the agreement, handlers indicate their intention to abide 
by the terms of the program. For a stand-alone marketing agreement, a 
handler sign-up would be conducted in lieu of a producer referendum for 
promulgation or amendment of a marketing agreement.
    Under a proposed marketing order or an amendment to the order, if 
at least two-thirds of the growers voting by number or by volume 
approve the proposal, a marketing order or amendment is issued, which 
is binding on handlers in the designated production area. For marketing 
agreements, only the signatory handlers are bound by the terms of the 
agreement.
    This process typically takes 18 to 24 months to complete, depending 
on the complexity of the proposal and the size of the industry, and is 
applicable to both proposed programs and amendments to programs.
    Marketing orders are locally administered by committees or boards 
made up of growers and/or handlers, and often a member of the public. 
Marketing agreements are locally

[[Page 49308]]

administered by a committee or board made up of signatories to the 
marketing agreement. Committees and boards have regularly scheduled 
meetings to discuss industry conditions that the agreement or order can 
address, as well as to conduct administrative matters, such as 
committee or board nominations, and development of budgets and 
necessary assessments to administer the programs. Also, it is during 
such regularly scheduled meetings that amendments to a marketing 
agreement or order are considered. As discussed subsequently, it is at 
this time a pre-hearing information session typically would be 
conducted.
    Section 608c(17) of the Act provides that the provisions for 
promulgating a marketing agreement or order are also applicable to 
amendments to agreements or orders. Industries regulated under 
marketing agreements and orders may find the need to amend the 
agreements or orders if changes in the market or marketing problems 
experienced in the industries warrant such revision. In other 
instances, amendments can also be made to clarify and update order 
provisions.
    When needed, the committees and boards can recommend marketing 
agreement and order implementing regulations, such as seasonal 
regulations to establish grade and size requirements or the 
establishment of assessment rates. Regulations must be based on the 
authority in the agreement or order. These regulations are implemented 
through informal rulemaking procedures, as provided under Sec.  553 of 
Title 5 of the United States Code (5 U.S.C. 553). This section of Title 
5 provides for notice and comment rulemaking. It requires, in part, 
that notices of proposed rulemaking be published in the Federal 
Register, and that interested parties be provided an opportunity to 
comment on the proposal. After consideration of the relevant matter 
presented, a final rule is issued. Typically, informal rulemaking is 
accomplished within 90 days.
    There are currently 32 active fruit, vegetable and nut marketing 
orders, many with companion marketing agreements. Presently, there are 
no stand-alone marketing agreement programs.

The 2008 Farm Bill and Supplemental Rules of Practice To Amend 
Marketing Agreements and Orders

    Section 1504 of the 2008 Farm Bill (H.R. 6124, Pub. L. 110-246) 
made changes to section 18c(17) of the Act, which, in turn, requires 
the addition of supplemental rules of practice to 7 CFR part 900. For 
amendments to fruit, vegetable and nut marketing agreements and orders, 
the supplemental rules of practice: add certain rulemaking procedures 
for amending marketing agreements and orders; authorize USDA to impose 
assessments on affected industries to supplement funds necessary to 
improve or expedite the amendatory hearing process; and authorize the 
use of informal rulemaking (5 U.S.C 553) to amend such agreements and 
orders, when determined appropriate.
    Sections 900.1 through 900.18 of the general regulations of part 
900 set forth the rules of practice and procedure governing proceedings 
to formulate marketing agreements and orders. As stated previously, the 
Act provides that provisions for initiating marketing agreements and 
orders are also applicable to amendments to agreements and orders. This 
final rule amends part 900 by adding supplemental rules of practice 
regarding amendments to fruit, vegetable and nut marketing agreements 
and orders to conform to the 2008 Farm Bill. This rule will add new 
sections 900.36 through 900.43.
    A new Sec.  900.36 is added to include standard language to a new 
subpart stating that words in the singular form will be deemed to 
import the plural, and vice versa, as the case may demand.
    A new Sec.  900.37 is added to set forth that the definitions in 
the Act and in Sec.  900.2 of this part apply to these supplemental 
rules of practice.

Pre-Hearing Information Session

    A new Sec.  900.38 is added to provide that a pre-hearing 
information session may be held either before or after a submission to 
amend an agreement or order is submitted to USDA. The 2008 Farm Bill 
provides for the establishment of pre-hearing information session 
specifications. Pre-hearing information sessions may be conducted when 
an industry is considering amending a marketing agreement or order. 
Such sessions are intended to assist in the conduct of the overall 
amendatory formal rulemaking process. The sessions may be held by a 
marketing agreement or order committee or board. A pre-hearing 
information session may also be held by the Secretary. The sessions may 
be held either prior or subsequent to a submission of a proposal under 
Sec.  900.3 of this part.
    Currently, fruit, vegetable and nut marketing order committees and 
boards, with USDA representatives in attendance, conduct regularly 
scheduled meetings to discuss changes and challenges facing the 
industry and ways amendments to marketing orders can address those 
issues. There are currently no stand-alone marketing agreement programs 
under section 608b of the Act. The meetings are also conducted to 
discuss administrative matters, such as annual budgets and necessary 
assessments. When a committee or board considers amendments to a 
marketing order, there is usually a subcommittee selected to consider 
the benefit of any amendments. The subcommittee meets in a public forum 
to formulate proposed amendments and presents such proposed amendments 
to the full committee or board. The full committee or board votes on 
whether to pursue amendment of the order, also in a forum open to the 
public.
    Further, any proposals received by entities not directly associated 
with a committee or board may be referred by the Secretary to the 
applicable committee or board for their consideration.

Proposal Submission Requirements

    A new Sec.  900.39 is added to specify submission requirements for 
proposals to amend marketing agreements and orders. Currently, Fruit 
and Vegetable Programs, AMS requests that any proposal to initiate a 
new marketing agreement or order or to amend a marketing agreement or 
order include detailed explanations of: the purpose of the proposal; 
the problem the proposal is designed to address; the current 
requirements or industry practices relative to the proposal; the 
expected impacts on producers, handlers and consumers; how the proposal 
would tend to improve returns to producers; the expected effects on 
small businesses; whether the proposal would increase or decrease costs 
to producers, handlers, committees and/or USDA; how the proposal would 
be implemented; and how compliance would be effected with the proposal.
    USDA has determined over time that a proposal that includes a 
discussion of the above topics assists in the implementation of a new 
marketing agreement or order and amendments to marketing agreements or 
orders. To effectuate a new marketing agreement or order or an 
amendment to an established agreement or order, USDA is required to 
make a ruling on certain findings, conclusions or exceptions relating 
to such proposals. The proposal submission requirement in the 
supplemental rules of practice will assist industries in preparation of 
their proposals for amendments to a current marketing agreement or 
order.

[[Page 49309]]

Written Testimony and Data Request Requirements

    A new Sec.  900.40 is added to provide requirements for written 
testimony submitted as an exhibit at an amendatory fruit, vegetable or 
nut rulemaking hearing and requirements for USDA data requests to be 
used at such a hearing.
    Currently, witnesses at hearings regarding proposed new or amended 
marketing agreements or orders are not required to supply written 
testimony prior to testifying. However, any documentation supplied 
during the hearing must be submitted in quadruplicate when prepared as 
an exhibit under current section 900.8(d)(4). Written testimony and 
exhibits received prior to, or at the time of, the testimony are useful 
for USDA participants whose role includes gathering sufficient 
information to make a determination as to the merits of a proposal.
    However, it is not always practical to have written testimony. For 
example, a witness may want to testify on previous testimony by one or 
more witnesses. This provision should not impede witness testimony in 
this regard. In order to assist USDA participants, the new Sec.  900.40 
requires that testimony prepared as an exhibit and any other exhibits 
be made available to USDA on the day of appearance at the hearing, to 
the extent practicable.
    The 2008 Farm Bill provides that the supplemental rules of practice 
establish requirements for requests for preparation of USDA data prior 
to a hearing. Currently, in most hearings, USDA assembles appropriate 
economic data and a USDA economist testifies to the sources and 
relevance of the data. Rarely, if ever, has data been requested of USDA 
from the industry prior to an amendatory hearing for fruit, vegetable 
and nut marketing agreements and orders. However, in the event such 
requests do occur, Sec.  900.40 sets forth that any request for 
preparation of USDA data should be made at least 10 days before the 
beginning of the hearing. This period of time is reasonable considering 
the need to prepare such data.

Electronic Document Submission

    A new Sec.  900.41 is added to allow for the submission of 
electronic documents in proceedings to amend marketing agreements and 
orders. The current rules of practice in part 900 require that four 
copies of all documents related to proposed new and amended marketing 
agreements and orders be filed with the hearing clerk. With new 
technologies currently available, most documents in these proceedings 
are also filed electronically with AMS. The 2008 Farm Bill requires 
that electronic submission standards be established. Therefore, Sec.  
900.41 sets forth that when possible, all documents filed with the 
hearing clerk shall also be submitted electronically to the Fruit and 
Vegetable Programs, AMS and reference the docket number of the 
proceeding. The provision sets forth that instructions for electronic 
filing with AMS will be provided in each appropriate Federal Register 
publication regarding the proceeding. This will simplify electronic 
filing for all interested parties.

Industry Assessments

    The 2008 Farm Bill provides for industry assessments. A new Sec.  
900.42 is added to allow USDA to assess handlers for costs associated 
with proceedings to amend fruit, vegetable and nut marketing agreements 
and orders, if it is determined necessary to improve or expedite the 
rulemaking proceeding. Currently, administrative costs associated with 
formal rulemaking are paid for by AMS. These costs include hiring a 
court reporter, a hearing examiner, legal counsel, and associated 
travel costs. Some of these costs could increase if it was determined 
necessary to improve or expedite the proceeding. For example, court 
reporting costs could increase in order to receive the transcripts at 
an earlier date than normal.
    Section 900.42 states that if USDA determines it is necessary to 
improve or expedite an amendment proceeding, USDA may impose an 
assessment on a marketing agreement's or order's handlers affected by 
an amendment proceeding to supplement funds for costs associated with 
such, including, but not limited to, court reporters, hearing 
examiners, legal counsel, hearing venue and associated travel for USDA 
officials. The assessments would only be incurred by handlers regulated 
by the program being amended.

Use of Informal Rulemaking

    A new Sec.  900.43 is added to allow the use of informal rulemaking 
procedures (5 U.S.C. 553) to amend fruit, vegetable and nut marketing 
agreements and orders and to set forth parameters that USDA will 
consider when determining whether this process is appropriate. Prior to 
the 2008 Farm Bill, the Act required that all proposals to initiate a 
new or amend a current marketing agreement or order were to be 
conducted through formal rulemaking under Sec. Sec.  556 and 557 of 
title 5 of the United States Code. However, the 2008 Farm Bill modified 
the authority as to how amendments to marketing agreements and orders 
can be conducted. It provides that authority under Sec.  553 of the 
United States Code covering informal rulemaking procedures can be an 
option for amending a fruit, vegetable and nut agreement or order.
    Currently, informal rulemaking procedures are used to establish 
implementing regulations authorized by marketing agreements and orders. 
The timeframe for completion of informal rulemaking actions is usually 
about 90 days, as opposed to formal rulemaking that, because of the 
procedural requirements including holding a public hearing and grower 
referenda, generally has a timeframe of 18 to 24 months.
    In accordance with the 2008 Farm Bill, section 900.43 will allow 
the option of using informal rulemaking to amend fruit, vegetable and 
nut marketing agreements and orders. In considering whether informal 
rulemaking will be used to amend a fruit, vegetable or nut marketing 
agreement or order, USDA will consider: The nature and complexity of 
the proposal; the potential regulatory and economic impacts on affected 
entities; and any other relevant matters.

Final Action

    In accordance with the 2008 Farm Bill, this final rule establishes 
supplemental rules of practice regarding amendments to fruit, vegetable 
and nut marketing agreements and orders.
    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.
    Further, a small business guide on complying with fruit, vegetable, 
and nut marketing agreements and orders may be viewed at: http://www.ams.USDA.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide. Any questions about the compliance guide should be sent to 
Jay Guerber at the previously mentioned address in the FOR FURTHER 
INFORMATION CONTACT section.
    Subtitle F of Title I of the 2008 Farm Bill provides that the 
promulgation of these regulations shall be made without regard to the 
Paperwork Reduction Act (44 U.S.C. Chapter 35), the Statement of Policy 
of the Secretary of Agriculture, effective July 24, 1971 (36 FR 13804), 
and the notice and comment provisions

[[Page 49310]]

of section 553 of Title 5, United States Code.
    This rule relates to internal agency management. Therefore, this 
rule is exempt from the provisions of Executive Orders 12866 and 12988, 
and for this same reason the notice of proposed rulemaking and 
opportunity for comment are also not required, as this rule may be 
effective less than 30 days after publication in the Federal Register. 
In addition, under 5 U.S.C. 804, this rule is not subject to 
congressional review under the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 104-121). Finally, this rule is not a 
rule as defined by the Regulatory Flexibility Act (5 U.S.C. 601-612) 
(RFA). Therefore, this rule is exempt from the requirements of the RFA.
    It is hereby found that this rule, as hereinafter set forth, will 
tend to effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 900

    Administrative practice and procedures, Freedom of information, 
Fruit, vegetable, and nut marketing agreements and orders, Reporting 
and recordkeeping requirements.

0
For the reasons set forth in the preamble, 7 CFR part 900 is amended as 
follows:

PART 900--GENERAL REGULATIONS

0
Accordingly, in part 900, a new subpart is added to read as follows:

Subpart--Supplemental Rules of Practice Governing Proceedings To 
Amend Fruit, Vegetable and Nut Marketing Agreements and Marketing 
Orders

Sec.
900.36 Words in the singular form.
900.37 Definitions.
900.38 Pre-hearing information sessions.
900.39 Proposal submission requirements.
900.40 Written testimony and USDA data request requirements.
900.41 Electronic document submission standards.
900.42 Industry assessments.
900.43 Use of informal rulemaking.

    Authority: 7 U.S.C. 608c(17) and 610.


Sec.  900.36  Words in the singular form.

    Words in this subpart in the singular form shall be deemed to 
import the plural, and vice versa, as the case may demand.


Sec.  900.37  Definitions.

    As used in this subpart, the terms as defined in the Act and in 
Sec.  900.2 of this part shall apply.


Sec.  900.38  Pre-hearing information sessions.

    A pre-hearing information session concerning a proposal to amend a 
fruit, vegetable or nut marketing agreement or order may be held either 
prior or subsequent to submission of a proposal under Sec.  900.3 of 
this part. Such sessions may be held by a marketing agreement or order 
committee or board or by the Secretary.


Sec.  900.39  Proposal submission requirements.

    When a person other than the Secretary makes a proposal to amend a 
fruit, vegetable or nut marketing agreement or order under Sec.  900.3 
of this part, the proposal shall address the following, to the extent 
applicable:
    (a) The purpose of the proposal;
    (b) The problem the proposal is designed to address with 
explanation and quantification;
    (c) The current requirements or industry practices relative to the 
proposal;
    (d) The expected impact on the industry, including producers, 
handlers, and on consumers;
    (e) In the case of marketing orders, an explanation, including 
supporting information and data, of how the proposal would tend to 
improve returns to producers, and in the case of marketing agreements, 
how the proposal impacts the signatories to the agreement;
    (f) The expected effects on small businesses as defined by the 
Regulatory Flexibility Act (5 U.S.C. 601-612);
    (g) A description and quantification of whether the proposal would 
increase or decrease costs to producers, handlers, or others in the 
marketing chain, and to consumers, marketing order committees and 
boards and/or the Secretary;
    (h) A description of how the proposal would be implemented; and
    (i) A description, including quantification, of how compliance with 
the proposal would be effected.


Sec.  900.40  Written testimony and USDA data request requirements.

    In addition to the provisions of Sec.  900.8(b)(4), witnesses at an 
amendatory fruit, vegetable or nut formal rulemaking hearing shall 
make, to the extent practicable, at least 8 copies of their testimony, 
if prepared as an exhibit, and any other exhibits available to USDA 
before testimony is given on the day of appearance at the hearing. 
Industry requests for preparation of USDA data for a rulemaking hearing 
should be made at least 10 days prior to the beginning of the hearing.


Sec.  900.41  Electronic document submission standards.

    To the extent practicable, all documents filed with the hearing 
clerk in a proceeding to amend a fruit, vegetable or nut marketing 
agreement or order shall also be submitted electronically to the 
Agricultural Marketing Service, Fruit and Vegetable Programs, USDA. All 
documents should reference the docket number of the proceeding. 
Instructions for electronic filing shall be provided at the amendatory 
formal rulemaking hearing and in each Federal Register publication 
regarding the amendatory proceeding.


Sec.  900.42  Industry assessments.

    If the Secretary determines it is necessary to improve or expedite 
an amendatory fruit, vegetable or nut formal rulemaking proceeding, 
costs associated with improving or expediting the proceeding may be 
charged to the committees or boards. Such costs shall be paid with 
assessments from the handlers regulated under the marketing order to be 
amended or on signatories to the marketing agreement subject to 
amendment. Such assessments may supplement funds for costs associated 
with, but not limited to, court reporters, hearing examiners, legal 
counsel, hearing venue and associated travel for USDA officials.


Sec.  900.43  Use of informal rulemaking.

    (a) Notwithstanding the provisions of Sec. Sec.  900.1 through 
900.18, and 900.36 through 900.42 of this part, the Secretary may 
determine that informal rulemaking procedures under Sec.  553 of Title 
5, United States Code be used to amend fruit, vegetable or nut 
marketing agreements and marketing orders. In making this 
determination, consideration shall be given to:
    (1) The nature and complexity of the proposal;
    (2) The potential regulatory and economic impacts on affected 
entities; and
    (3) Any other relevant matters.

    Dated: August 18, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-19399 Filed 8-19-08; 8:45 am]
BILLING CODE 3410-02-P