[Federal Register Volume 73, Number 235 (Friday, December 5, 2008)]
[Rules and Regulations]
[Pages 73995-73997]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-28673]



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  Federal Register / Vol. 73, No. 235 / Friday, December 5, 2008 / 
Rules and Regulations  

[[Page 73995]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Docket No. AMS-FV-08-0091; FV09-984-1 IFR]


Walnuts Grown in California; Changes to Regulations Governing 
Board Nominations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule revises the administrative rules and regulations 
governing nominations for the California Walnut Board (Board). The 
Board locally administers the marketing order that regulates the 
handling of walnuts grown in California (order). This rule removes 
references to independent handlers, revises specifications under which 
groups of growers may submit nominations for certain grower positions 
on the Board, and corrects numerical references to other sections of 
the order. This change is needed to bring the administrative rules and 
regulations into conformance with recently enacted amendments to the 
order concerning Board structure and nomination procedures.

DATES: Effective December 6, 2008. Comments received by February 3, 
2009 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; 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 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: Martin J. Engeler, Senior 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. 984, as amended (7 CFR part 984), regulating the handling of 
walnuts 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 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 revises the administrative rules and regulations 
governing Board nominations by removing references to ``independent'' 
handlers, adding language specifying that groups of growers who 
marketed an aggregate of at least 500 tons of walnuts through handlers 
that handled less than 35% of the prior year's crop may submit 
nominations for grower positions on the ballots, and correcting 
references to order sections that were renumbered as a result of recent 
order amendments.
    Section 984.35 of the California walnut marketing order provides 
for the allocation of grower and handler positions on the Board. 
Historically, some members represented the interests of a major 
industry cooperative, and some members represented independent 
interests. Some members represented the interests of certain production 
area districts, and some served the industry ``at large.'' Recently, 
the structure of the industry changed when the major cooperative 
handler became a publicly-traded corporation. Subsequently, the 
industry approved amendments to the order that restructured the Board 
to reflect the changes to the industry's structure. Language specifying 
membership allocation between cooperative and independent interests was 
removed from the order because all production area walnut handlers are 
now considered independent. Alternative membership allocation 
provisions were added to the order. Board membership positions are now 
allocated between growers and handlers, the specific Districts within 
the production area, and grower positions with no District affiliation 
(``at large'' positions). In the event that one industry handler 
handles 35 percent or more of the crop, such handler--and growers 
affiliated with such handler--are entitled to a given number of Board 
positions. As a result of the amendments, some sections of the order 
were renumbered.
    Section 984.37 of the order provides authority for the Board, with 
the approval of USDA, to make changes to the Board nomination 
procedures

[[Page 73996]]

specified in the order. The procedures are contained in the order's 
administrative rules and regulations. Currently, Sec.  984.437 of the 
regulations specifies that if the ``at large'' grower position on the 
Board is assigned to represent independent growers, groups of ten or 
more growers who marketed a combined volume of 500 or more tons of 
walnuts through independent handlers in the prior year may propose a 
nominee for the ballot. The current regulations also specify that 
groups of ten or more growers from each district who marketed an 
aggregate of 500 or more tons of walnuts through independent handlers 
in the prior year may propose nominees for the independent grower 
positions in their districts.
    The amended order no longer differentiates between cooperative and 
independent entities, and Board positions are no longer apportioned to 
represent either cooperative or independent entities. References in the 
order to independent handlers have been removed from the provisions 
specifying Board nominations. This rule makes changes to Sec.  
984.437(a) and (b) of the administrative rules and regulations by 
removing references to independent handlers. Changes are also made to 
those paragraphs to specify that groups of ten or more growers who 
marketed an aggregate of at least 500 tons of walnuts through handlers 
that handled less than 35 percent of the prior year's crop may nominate 
growers to serve in the ``at large'' grower positions. This rule also 
revises the regulations to specify that groups of ten or more growers 
from each district who marketed an aggregate of at least 500 tons of 
walnuts through handlers that handled less than 35 percent of the prior 
year's crop may nominate growers to represent each district. Finally, 
this rule also revises certain references to renumbered order 
provisions in the regulations that are no longer correct.
    This rule was unanimously recommended by the Board at its meeting 
on September 12, 2008.

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. The Small Business Administration 
(SBA) defines small agricultural service firms as those whose annual 
receipts are less than $7,000,000, and defines small agricultural 
producers as those whose annual receipts are less than $750,000 (13 CFR 
121.201).
    There are currently 55 handlers of California walnuts subject to 
regulation under the marketing order, and there are approximately 4,000 
growers in the production area. USDA's National Agricultural Statistics 
Service (NASS) reports that California walnuts were harvested from a 
total of 218,000 bearing acres during 2007-08. The average yield for 
the 2007-08 crop was 1.49 tons per acre, which is slightly lower than 
the 1.53 tons per acre average for the previous five years. NASS 
reported the value of the 2007-08 crop at $2,320 per ton, which is 
considerably higher than the previous five year average of $1,384 per 
ton.
    At the time of the 2002 Census of Agriculture, which is the most 
recent information available, approximately 83 percent of California's 
walnut farms were smaller than 100 acres. Forty-seven percent were 
between 1 and 15 acres. A 100-acre farm with an average yield of 1.49 
tons per acre would have been expected to produce about 149 tons of 
walnuts during 2007-08. At $2,320 per ton, that farm's production would 
have had an approximate value of $345,000. Assuming that the majority 
of California's walnut farms are still smaller than 100 acres, it could 
be concluded that the majority of the growers had receipts of less than 
$345,000 in 2007-08. This is well below the SBA threshold of $750,000, 
thus, the majority of California's walnut growers would be considered 
small growers according to SBA's definition.
    According to information supplied by the industry, approximately 
two-thirds of California's walnut handlers shipped merchantable walnuts 
valued under $7,000,000 during the 2007-08 marketing year and would 
therefore be considered small handlers according to the SBA definition.
    This rule revises the administrative rules and regulations 
governing the nomination of Board members. References to independent 
handlers are being removed from the regulations to conform to recent 
amendments to the order. Procedures for the nomination of grower 
members by groups of growers who marketed an aggregate of at least 500 
tons of walnuts through handlers that handled less than 35 percent of 
the prior year's crop are being added. References to renumbered 
sections of the order are being corrected. This action imposes no 
additional cost or burden on growers or handlers of any size.
    The Board unanimously recommended these changes, which were 
necessary to bring the order's administrative rules and regulations 
into conformance with the recently amended order. As such, no 
alternatives were considered practicable.
    The Board's meeting was widely publicized throughout the California 
walnut industry and all interested persons were invited to attend the 
meeting and participate in Board deliberations on all issues. Like all 
Board meetings, the September 12, 2008, meeting was a public meeting 
and all entities, both large and small, 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 rule imposes no additional reporting or recordkeeping 
requirements on either small or large California walnut 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.
    AMS is committed to complying with the E-Government Act, to promote 
the use of 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/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.
    This rule invites comments on changes to the administrative rules 
and regulations currently prescribed under the marketing order for 
California walnuts. Any comments received will be considered prior to 
finalization of this rule.
    After consideration of all relevant matters presented, the 
information and recommendations submitted by the

[[Page 73997]]

Board, 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, upon 
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 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 marketing order amendments prompting 
these changes were implemented on April 2, 2008; (2) related issues 
were discussed in amendatory proceedings (including a public hearing) 
and amendments to the order were subsequently approved by producers; 
(3) the revised regulation should be in effect prior to January 2009, 
when Board nominations will be conducted; (4) the Board unanimously 
recommended these changes at a public meeting and interested parties 
had an opportunity to provide input; and (5) the rule provides a 60-day 
comment period, and any written comments timely received will be 
considered prior to finalization of this rule.

List of Subjects in 7 CFR Part 984

    Walnuts, Marketing agreements, Nuts, Reporting and recordkeeping 
requirements.


0
For the reasons set forth in the preamble, 7 CFR part 984 is amended as 
follows:

PART 984--WALNUTS GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 984 continues to read as 
follows:

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


0
2. In Sec.  984.437, paragraphs (a) and (b) are revised to read as 
follows:


Sec.  984.437  Methods for proposing names of additional candidates to 
be included on walnut growers' nomination ballots.

    (a) With regard to Board grower member positions specified in Sec.  
984.35(a)(5) and (6), any ten or more such growers who marketed an 
aggregate of 500 or more tons of walnuts through handlers who did not 
handle 35% or more of the crop during the marketing year preceding the 
year in which Board nominations are held, may petition the Board to 
include on the nomination ballot the name of an eligible candidate for 
this position, and the name of an eligible candidate to serve as his or 
her alternate. The names of the eligible candidates proposed pursuant 
to this paragraph shall be included on the ballot together with the 
names of any incumbents who are willing to continue serving on the 
Board.
    (b) Any ten or more growers eligible to serve in the grower member 
positions specified in Sec.  984.35(a)(3) and (4) and Sec.  
984.35(b)(4) and (5) and who marketed an aggregate of 500 or more tons 
of walnuts through handlers who did not handle 35% or more of the crop 
during the marketing year preceding the year in which Board nominations 
are held, may petition the Board to include on the nomination ballot 
for a district the name of an eligible candidate for the applicable 
position, and the name of an eligible candidate to serve as his or her 
alternate. The names of the eligible candidates proposed pursuant to 
this paragraph shall be included on the ballot together with the names 
of any incumbents who are willing to continue serving on the Board.
* * * * *

    Dated: November 26, 2008.
James E. Link,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-28673 Filed 12-4-08; 8:45 am]
BILLING CODE 3410-02-P