[Federal Register Volume 74, Number 116 (Thursday, June 18, 2009)]
[Rules and Regulations]
[Pages 28869-28872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-14280]



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  Federal Register / Vol. 74, No. 116 / Thursday, June 18, 2009 / Rules 
and Regulations  

[[Page 28869]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Doc. No. AMS-FV-09-0013; FV09-916/917-2 IFR]


Nectarines and Peaches Grown in California; Decreased Assessment 
Rates

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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

SUMMARY: This rule decreases the assessment rates established for the 
Nectarine Administrative Committee and the Peach Commodity Committee 
(Committees) for the 2009-10 and subsequent fiscal periods. The 
Nectarine Administrative Committee (NAC) program decreased its 
assessment rate from $0.06 to $0.0175 per 25-pound container or 
container equivalent of nectarines handled. The Peach Commodity 
Committee (PCC) program decreased its assessment rate from $0.06 to 
$0.0025 per 25-pound container or container equivalent of peaches 
handled. The Committees locally administer the marketing orders which 
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 periods run from March 1 through the last day of February. 
The assessment rates will remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Effective June 19, 2009. Comments received by August 17, 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 document 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. All comments submitted in response to this rule 
will be included in the record and will be made available to the 
public. Please be advised that the identity of the individuals or 
entities submitting the comments will be made public on the Internet at 
the address provided above.

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.
    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 issued herein will be applicable to all 
assessable nectarines and peaches beginning on March 1, 2009, 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 NAC 
program for the 2009-10 and subsequent fiscal periods from $0.06 to 
$0.0175 per 25-pound container or container equivalent of nectarines 
and for the PCC program for the 2009-10 and subsequent fiscal periods 
from $0.06 to $0.0025 per 25-pound container or container equivalent of 
peaches.
    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

[[Page 28870]]

opportunity to participate and provide input.

NAC Assessment and Expenses

    For the 2009-10 and subsequent fiscal periods, the NAC recommended, 
and USDA approved, an assessment rate 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 February 19, 2009, and unanimously recommended 2009-
10 expenditures of $1,797,290.20 and an assessment rate of $0.0175 per 
25-pound container or container equivalent of nectarines. In 
comparison, the budgeted expenditures for the 2008-09 fiscal period 
were $1,660,543. The assessment rate of $0.0175 per 25-pound container 
or container equivalent of nectarines is $0.0425 lower than the rate 
currently in effect. The NAC recommended a lower assessment rate to 
reduce the current reserve. The NAC also recommended a decrease in 
promotional activities for 2009.
    The major expenditures recommended by the NAC for the 2009-10 
fiscal period include $319,965.32 for administration, $349,447.55 for 
production research, and $1,127,877.33 for domestic and international 
programs (promotional activities). In comparison, budgeted expenses for 
these items in 2008-09 were $330,025 for administration, $225,678 for 
production research, $1,071,574 for domestic and international programs 
and $33,266 for inspection and compliance activities.
    The NAC 2009-10 fiscal period assessment rate was derived after 
considering anticipated fiscal period expenses; estimated assessable 
nectarines 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 NAC into the 2010-11 
fiscal period. Therefore, the NAC recommended an assessment rate of 
$0.0175 per 25-pound container or container equivalent.
    Combining expected assessment revenue of $350,000.00 with the 
$1,071,398.90 carryover available from the 2008-09 fiscal period and 
other income of $930,911, which includes interest and grants, should be 
adequate to meet Committee needs. The assessment rate is expected to 
decrease the reserve to $205,019.70, which may be used to cover 
administrative expenses prior to the beginning of the 2010-11 shipping 
season as provided in the order (Sec.  916.42).

PCC Assessment and Expenses

    For the 2009-10 and subsequent fiscal periods, the PCC recommended, 
and USDA approved, an assessment rate 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 February 19, 2009, and recommended 2009-10 
expenditures of $1,885,250 and an assessment rate of $0.0025 per 25-
pound container or container equivalent of peaches. In comparison, 
budgeted expenditures for the 2008-09 fiscal period were $1,672,090. 
The assessment rate of $0.0025 per 25-pound container or container 
equivalent of peaches is $0.0575 lower than the rate currently in 
effect. The PCC recommended a lower assessment rate to reduce the 
current reserve. The PCC also recommended a decrease in promotional 
activities for 2009.
    The major expenditures recommended by the PCC for the 2009-10 
fiscal period include $334,058 for administration, $366,920 for 
production research, and $1,184,272 for domestic and international 
programs. In comparison, budgeted expenses for these items in 2008-09 
were $348,078 for administration, $4,029 for inspection, $225,678 for 
production research, $1,057,078 for domestic and international programs 
(promotional activities), and $37,227 for inspection and compliance 
activities.
    The PCC 2009-10 fiscal period assessment rate was derived after 
considering anticipated fiscal period expenses; estimated assessable 
peaches of 21,000,000 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 2010-11 fiscal 
period. Therefore, the PCC recommended an assessment rate of $0.0025 
per 25-pound container or container equivalent.
    Combining expected assessment revenues of $52,500 with the 
$1,597,291 carryover available from the 2008-09 fiscal period and other 
income of $614,276, which includes interest and grants, should be 
adequate to meet Committee needs. The assessment rate is expected to 
decrease the reserve to $326,317, which may be used to cover 
administrative expenses prior to the beginning of the 2010-11 shipping 
season as provided in the order (Sec.  917.38).

Continuing Assessment Rates

    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 are 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' 2009-10 fiscal period 
budgets and those for subsequent fiscal periods will be reviewed and, 
as appropriate, approved by USDA.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA)(5 U.S.C. 601-612), 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. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 120 California nectarine and peach handlers 
subject to regulation under the orders covering nectarines and peaches 
grown in California, and about 550 producers of these fruits in 
California. Small agricultural service firms, which include handlers, 
are defined by the Small Business Administration (SBA) (13 CFR 121.201) 
as those whose annual receipts are less than $7,000,000. Small 
agricultural producers are defined by the SBA as those having annual 
receipts

[[Page 28871]]

of less than $750,000. A majority of these handlers and producers may 
be classified as small entities.
    The Committees' staff has estimated that there are fewer than 30 
handlers in the industry who would not be considered small entities. 
For the 2008 season, the Committees' 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 777,778 
containers to have annual receipts of $7,000,000. Given data on 
shipments maintained by the Committees' staff and the average handler 
price received during the 2008 season, the Committees' staff estimates 
that small handlers represent approximately 78 percent of all the 
handlers within the industry.
    The Committees' staff has also estimated that fewer than 60 
producers in the industry would not be considered small entities. For 
the 2008 season, the Committees estimated the average producer price 
received was $4.25 per container or container equivalent for nectarines 
and peaches. A producer would have to produce at least 176,471 
containers of nectarines and peaches to have annual receipts of 
$750,000. Given data maintained by the Committees' staff and the 
average producer price received during the 2008 season, the Committees' 
staff estimates that small producers represent more than 88 percent of 
the producers within the industry.
    With an average producer price of $4.25 per container or container 
equivalent, and a combined packout of nectarines and peaches of 
45,543,561 containers, the value of the 2008 packout is estimated to be 
$193,560,134. Dividing this total estimated producer revenue figure by 
the estimated number of producers (550) yields an estimate of average 
revenue per producer of about $351,928 from the sales of peaches and 
nectarines.
    The nectarine and peach marketing orders provide authority for the 
Committees, with the approval of USDA, to formulate an annual budget of 
expenses and collect assessments from handlers to administer the 
programs. The members of the NAC and PCC are producers of California 
nectarines and peaches, respectively.
    This rule decreases the assessment rates established for the NAC 
for the 2009-10 and subsequent fiscal periods from $0.06 to $0.0175 per 
25-pound container or container equivalent of nectarines and for the 
PCC for the 2009-10 and subsequent fiscal periods from $0.06 to $0.0025 
per 25-pound container or container equivalent of peaches.
    The NAC recommended 2009-10 fiscal period expenditures of 
$1,797,290.20 for nectarines and an assessment rate of $0.0175 per 25-
pound container or container equivalent of nectarines. The assessment 
rate of $0.0175 is $0.0425 lower than the rate currently in effect. The 
PCC recommended 2009-10 fiscal period expenditures of $1,885,250 for 
peaches and an assessment rate of $0.0025 per 25-pound container or 
container equivalent of peaches. The assessment rate of $0.0025 is 
$0.0575 lower than the rate currently in effect.

Analysis of NAC Budget

    The quantity of assessable nectarines for the 2009-10 fiscal period 
is estimated at 20,000,000 25-pound containers or container 
equivalents. Thus, the $0.0175 rate should provide $350,000.00 in 
assessment income. Income derived from handler assessments, along with 
income from other sources and funds from the NAC's reserve, will be 
adequate to cover budgeted expenses.
    The major expenditures recommended by the NAC for the 2009-10 
fiscal period include $319,965.32 for administration, $349,447.55 for 
production research, and $1,127,877.33 for domestic and international 
programs. Budgeted expenses in 2008-09 were $330,025 for 
administration, $225,678 for production research, $1,071,574 for 
domestic and international programs (promotional activities), and 
$33,266 for inspection and compliance activities.
    The NAC recommended a lower assessment rate to reduce the current 
reserve. The NAC also recommended a decrease in promotional activities 
for 2009. Income generated from the lower assessment rate combined with 
reserve funds should be adequate to cover anticipated 2009 expenses.

Analysis of PCC Budget

    The quantity of assessable peaches for the 2009-10 fiscal period is 
estimated at 21,000,000 25-pound containers or container equivalents. 
Thus, the $0.0025 rate should provide $52,500 in assessment income.
    The major expenditures recommended by PCC for the 2009-10 fiscal 
period include $334,058 for administration, $366,920 for production 
research, and $1,184,272 for domestic and international programs. 
Budgeted expenses in 2008-09 were $348,078 for administration, $4,029 
for inspection, $225,678 for production research, $1,057,078 for 
domestic and international programs (promotional activities), and 
$37,227 for inspection and compliance activities.
    The PCC recommended a lower assessment rate to reduce the current 
reserve. The PCC also recommended a decrease in promotional activities 
for 2009. Income generated from the lower assessment rate combined with 
reserve funds should be adequate to cover anticipated 2009 expenses.

Considerations in Determining Expenses and Assessment Rates

    Prior to arriving at these budgets, the Committees considered 
alternative expenditure and assessment rate levels, but ultimately 
decided that the recommended levels were reasonable to properly 
administer the orders.
    Each of the Committees then reviewed the proposed expenses; the 
total estimated assessable 25-pound containers or container 
equivalents; and the estimated income from other sources, such as 
interest income, prior to recommending a final assessment rate. The NAC 
decided that an assessment rate of $0.0175 per 25-pound container or 
container equivalent will allow it to meet its 2009-10 fiscal period 
expenses and carryover an operating reserve of about $205,019.70 which 
is in line with the Committee's financial needs. The PCC decided that 
an assessment rate of $0.0025 per 25-pound container or container 
equivalent will allow it to meet its 2009-10 fiscal period expenses and 
carryover an operating reserve of $326,317. These assessment rates will 
allow them to meet their 2009-10 fiscal period expenses and carryover 
necessary reserves to finance operations before 2010-11 fiscal period 
assessments are collected.
    A review of historical and preliminary information pertaining to 
the upcoming fiscal period indicates that the producer 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 producer revenue could range between 0.04 and 0.22 
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 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

[[Page 28872]]

encouraged to participate in the Committees' deliberations on all 
issues. Like all Committee meetings, the February 19, 2009, 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 action 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.
    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.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee 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 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 2009-10 fiscal period began March 1, 2009, 
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 Committees need to have sufficient 
funds to pay its expenses which are incurred on a continuous basis; (3) 
handlers are aware of this action which was recommended by the 
Committees at public meetings and is similar to other assessment rate 
actions issued in past years; and (4) this interim final rule provides 
a 60-day comment period, and all comments timely received will be 
considered prior to finalization of this 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, 2009, an assessment rate of $0.0175 per 25-
pound container or container equivalent of nectarines is established 
for California nectarines.

PART 917--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, 2009 an assessment rate of $0.0025 per 25-
pound container or container equivalent of peaches is established for 
California peaches.

    Dated: June 12, 2009.
Craig Morris,
Acting Associate Administrator.
[FR Doc. E9-14280 Filed 6-17-09; 8:45 am]
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