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[Federal Register: June 29, 2010 (Volume 75, Number 124)]
[Rules and Regulations]               
[Page 37288-37291]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29jn10-2]                         

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Doc. No. AO-FV-08-0174; AMS-FV-08-0085; FV08-920-3]

 
Kiwifruit Grown in California; Order Amending Marketing Order No. 
920

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule amends Marketing Order No. 920 (order), which 
regulates the handling of kiwifruit grown in California. The amendments 
are based on proposals by the Kiwifruit Administrative Committee 
(committee), which is responsible for local administration of the 
order. The amendments will redefine the grower districts into which the 
production area is divided and reallocate committee membership among 
the districts, revise the deadline for committee nominations, and 
revise committee meeting and voting procedures. The amendments were 
approved by kiwifruit growers in a referendum conducted from March 12 
through March 26, 2010. The amendments are intended to improve the 
operation and administration of the California kiwifruit marketing 
order program. Proposed amendments that failed in referendum and are 
not effectuated in this final order include revising committee member 
terms of office, authorizing the Secretary to fill committee vacancies 
based upon committee recommendations, authorizing research and 
promotion programs and accepting voluntary contributions for such 
programs, and allowing substitute alternates to represent absent 
members at committee meetings.

DATES: This rule is effective July 29, 2010, except for Sec. Sec.  
920.12 and 920.20, which are effective August 1, 2010.

FOR FURTHER INFORMATION CONTACT: Laurel May or Kathleen M. 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, E-mail: 
Laurel.May@ams.usda.gov or Kathy.Finn@ams.usda.gov.
    Small businesses may request information on this proceeding by 
contacting Antoinette Carter, 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, E-mail: Anotoinette.Carter@ams.usda.gov.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding include a 
Notice of Hearing issued on November 13, 2008, and published in the 
November 19, 2008, issue of the Federal Register (73 FR 69588); a 
Recommended Decision issued on November 5, 2009, and published in the 
November 12, 2009, issue of the Federal Register (74 FR 58216); and a 
Secretary's Decision and Referendum Order issued on February 17, 2010, 
and published in the February 23, 2010, issue of the Federal Register 
(75 FR 7981).
    This action is governed by the provisions of sections 556 and 557 
of title 5 of the United States Code and is therefore excluded from the 
requirements of Executive Order 12866.

[[Page 37289]]

Preliminary Statement

    This final rule was formulated on the record of a public hearing 
held on December 9, 2008, in Modesto, California. Notice of this 
hearing was issued on November 13, 2008, and published in the Federal 
Register on November 19, 2008 (73 FR 69588). The hearing was held to 
consider the proposed amendment of Marketing Order No. 920, regulating 
the handling of kiwifruit grown in California. The hearing was held 
pursuant to the provisions of the Agricultural Marketing Agreement Act 
of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the 
``Act,'' and the applicable rules of practice and procedure governing 
the formulation of marketing agreements and orders (7 CFR part 900).
    The Notice of Hearing described several amendment proposals 
submitted by the committee. Upon the basis of evidence introduced at 
the hearing and the record thereof, the Administrator of the 
Agricultural Marketing Service (AMS) on November 5, 2009, filed with 
the Hearing Clerk, U.S. Department of Agriculture, a Recommended 
Decision and Opportunity to File Written Exceptions thereto by December 
14, 2009. No exceptions were filed.
    A Secretary's Decision and Referendum Order was issued on February 
17, 2010, directing that a referendum be conducted during the period 
March 12 through March 26, 2010, among California kiwifruit growers to 
determine whether they favored the proposed amendments to the order. To 
become effective, the amendments had to be approved by at least two-
thirds of those growers voting or by voters representing at least two-
thirds of the volume of kiwifruit represented by voters voting in the 
referendum. Voters voting in the referendum favored three of the seven 
proposed amendments.
    The amendments favored by voters and included in this order will:
    1. Redefine the grower districts into which the production area is 
divided and reallocate committee membership among the districts;
    2. Require that committee member nomination meetings be held by 
June 1 of each year in which nominations are to be made; and
    3. Authorize the committee to conduct business meetings by 
telephone or other means of communication, specify that votes cast 
during telephone meetings shall be taken by roll call, and specify that 
videoconferences shall be considered assembled meetings.
    Four amendments pertaining to: Revision of the beginning and ending 
dates of all committee member terms of office, the filling of mid-term 
committee vacancies, authority for research and marketing programs, and 
allowing substitute alternates to represent absent members at committee 
meetings failed to obtain the requisite level of support needed to pass 
in referendum.
    The Agricultural Marketing Service (AMS) also proposed to make such 
changes as may be necessary to the order so that all of the orders' 
provisions conform to the effectuated amendments. AMS is making a 
clarifying conforming change to the order language in Sec.  920.20 that 
cross references Sec.  920.31(l).
    A marketing agreement reflecting amendments to the order was 
subsequently mailed to all kiwifruit handlers in the production area 
for their approval. The marketing agreement was not approved by 
handlers representing at least 50 percent of the volume of kiwifruit 
handled by all handlers during the representative period of August 1, 
2008, through July 31, 2009.

Small Business Considerations

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C 601-612), AMS has considered the 
economic impact of this action on small entities. Accordingly, the 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 so that small businesses will not be 
unduly or disproportionately burdened. Small agricultural service 
firms, which include handlers regulated under the order, have been 
defined by the Small Business Administration (SBA) (13 CFR 121.201) as 
those having annual receipts of less than $7,000,000. Small 
agricultural growers have been defined as those with annual receipts of 
less than $750,000.
    There are approximately 30 handlers of kiwifruit subject to 
regulation under the order and approximately 220 growers of kiwifruit 
in the regulated area. Information provided at the hearing indicates 
that the majority of the handlers would be considered small 
agricultural service firms. Hearing testimony also suggests that the 
majority of growers would be considered small entities according to the 
SBA's definition.
    The order regulates the handling of kiwifruit grown in the State of 
California. Total bearing kiwifruit acreage has declined from a peak of 
approximately 7,300 acres in 1992-93 to about 4,000 acres in 2007-08. 
Approximately 24,500 tons of kiwifruit were produced in California 
during the 2007-08 season--a decline of approximately 27,800 tons 
compared to the 1992-93 season. According to evidence provided at the 
hearing, approximately 30 percent of the 2007-08 California kiwifruit 
crop was shipped to export markets, including Canada, Mexico, Central 
American, and Asian destinations.
    Under the order, outgoing grade, size, pack, and container 
regulations are established for kiwifruit shipments; and shipping and 
inventory information is collected. Program activities administered by 
the committee are designed to support large and small kiwifruit growers 
and handlers. The 12-member committee is comprised of eleven grower 
representatives from the production area, as well as a public member. 
Committee meetings in which regulatory recommendations and other 
decisions are made are open to the public. All members are able to 
participate in committee deliberations, and each committee member has 
an equal vote. Others in attendance at meetings are also allowed to 
express their views.
    The committee appointed an amendment subcommittee to consider 
possible order revisions. The subcommittee developed a list of proposed 
amendments to the order, which was then presented to the committee. The 
committee met to review and discuss the subcommittee's proposals at its 
meetings on January 30, 2008, April 22, 2008, and July 9, 2008. At 
those meetings, the committee voted unanimously to support the proposed 
amendments that were forwarded to AMS and subsequently considered at 
the hearing. The hearing to receive evidence on the proposed changes 
was open to the public and all interested parties were invited and 
encouraged to participate and provide their views.
    The amendments are intended to provide the committee and the 
industry with additional flexibility in administering the order and 
producing and marketing California kiwifruit. Record evidence indicates 
that the proposals are intended to benefit all growers and handlers 
under the order, regardless of size.

Amendment 1--Districts and Representation

    The amendment to redefine the districts into which the production 
area is divided and provide for the allocation of committee membership 
positions between the districts will not have a differential impact 
upon small and large entities. Such allocation will be based upon five-
year production averages, or

[[Page 37290]]

upon another basis approved by the Secretary.
    At the time the order was promulgated, kiwifruit acreage was more 
widespread throughout California and there were many more growers 
involved in kiwifruit production. The order originally provided for 
eight grower districts within the production area, with one membership 
seat apportioned to each district, and an additional seat reallocated 
annually to each of the three districts with the highest production in 
the preceding year. The structure was designed to afford equitable 
representation for all districts on the committee.
    Planted acreage has been gradually concentrated into two main 
regions in recent years. That, and the decline in the number of growers 
over time, prompted consolidation of the districts and reallocation of 
grower seats to better reflect the current composition of the industry. 
Under the amended order, the production area will be divided into three 
grower districts, and committee membership will be allocated 
proportionately among the districts based upon the previous five years' 
average production for each district. The committee may recommend 
membership allocation on an alternative basis with the Secretary's 
approval. The revisions will ensure that the interests of all large and 
small entities are represented appropriately during committee 
deliberations.

Amendment 2--Nominations

    The amendment specifying that grower nomination meetings be held by 
June 1 of each nomination year will have no economic impact upon 
growers or handlers of any size. Historically, the order required that 
nomination meetings be held by July 15 of each year, but that deadline 
did not allow for timely processing of the nominations and selections 
of new members prior to the August 1 beginning of the terms of office. 
In recent years, the committee has been conducting nomination meetings 
earlier than prescribed by the order. This amendment codifies what has 
become normal practice.

Amendment 3--Meeting and Voting Procedures

    The amendment authorizing the committee to meet by telephone or 
other means of communication is expected to benefit growers and 
handlers of all sizes by improving committee efficiencies and 
encouraging greater participation in industry deliberations. The 
amendment is not expected to result in any significant increased costs 
to producers or handlers.
    Under this amendment, video conference meetings will be considered 
assembled meetings and votes taken at such meetings will be considered 
in-person. Votes by telephone or other types of non-assembled meetings 
will be by roll call.
    This amendment will provide the committee with greater flexibility 
in scheduling meetings and will be consistent with current practices in 
other kiwi industry settings. The use of telephone and other means of 
communication will allow greater access to committee meetings for 
members as well as other interested persons. Additionally, 
administration of the order will be improved as urgent committee 
business can be addressed in a timely manner.
    Interested persons were invited to present evidence at the hearing 
on the probable regulatory and informational impact of the proposed 
amendments to the order on small entities. The record evidence 
indicates that the proposed amendments are intended to benefit all 
producers and handlers under the order, regardless of size. 
Furthermore, the record shows that any costs associated with 
implementing regulations will be outweighed by the benefits expected to 
accrue to the California kiwifruit industry.

Paperwork Reduction Act

    Current information collection requirements for Part 920 are 
currently approved by the Office of Management and Budget (OMB) under 
OMB number 0581-0189, ``Generic OMB Fruit Crops.'' No changes in those 
requirements as a result of this proceeding are needed. Should any 
changes become necessary, they will be submitted to OMB for approval.
    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.

Civil Justice Reform

    The amendments to Marketing Order 920 stated herein have been 
reviewed under Executive Order 12988, Civil Justice Reform. They are 
not intended to have retroactive effect.
    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. A 
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 Sates 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 no later than 20 days after the date of the 
entry of the ruling.

Order Amending the Order Regulating Kiwifruit Grown in California

Findings and Determinations

    The findings and determinations set forth hereinafter are 
supplementary and in addition to the findings and determinations 
previously made in connection with the issuance of the order; and all 
of said previous findings and determinations are hereby ratified and 
affirmed, except as such findings and determinations may be in conflict 
with the findings and determinations set forth herein.
(a) Findings and Determinations Upon the Basis of the Hearing Record
    Pursuant to the provisions of the Agricultural Marketing Agreement 
Act of 1937, as amended (7 U.S.C. 601-674) and the applicable rules of 
practice and procedure effective thereunder (7 CFR part 900), a public 
hearing was held upon the proposed amendments to Marketing Order No. 
920 (7 CFR part 920), regulating the handling of kiwifruit grown in 
California.
    Upon the basis of the evidence introduced at such hearing and the 
record thereof it is found that:
    (1) The marketing order, as amended, and as hereby further amended, 
and all of the terms and conditions thereof, will tend to effectuate 
the declared policy of the Act;
    (2) The marketing order, as amended, and as hereby further amended, 
regulates the handling of kiwifruit grown in the production area in the 
same manner as, and is applicable only to persons in the respective 
classes of, commercial and industrial activity specified in the 
marketing order upon which hearings have been held;
    (3) The marketing order, as amended, and as hereby further amended, 
is limited in application to the smallest regional production area 
which is

[[Page 37291]]

practicable, consistent with carrying out the declared policy of the 
Act, and the issuance of several orders applicable to subdivision of 
the production area would not effectively carry out the declared policy 
of the Act;
    (4) The marketing order, as amended, and as hereby further amended, 
prescribes, insofar as practicable, such different terms applicable to 
different parts of the production area as are necessary to give due 
recognition to the differences in the production and marketing of 
kiwifruit grown in the production area; and
    (5) All handling of kiwifruit grown in the production area is in 
the current of interstate or foreign commerce or directly burdens, 
obstructs, or affects such commerce.
(b) Determinations
    It is hereby determined that:
    (1) Handlers (excluding cooperative associations of growers who are 
not engaged in processing, distributing, or shipping kiwifruit covered 
by the order as hereby amended) who, during the period August 1, 2008, 
through July 31, 2009, handled 50 percent or more of the volume of such 
kiwifruit covered by the order, as hereby amended, have not signed an 
amended marketing agreement; and
    (2) The issuance of this amendatory order, further amending the 
aforesaid order, is favored or approved by at least two-thirds of the 
growers who participated in a referendum and who, during the period 
August 1, 2008, through July 31, 2009 (which has been determined to be 
a representative period), have been engaged within the production area 
in the production of kiwifruit for market, such producers having also 
produced for market at least two-thirds of the volume of such commodity 
represented in the referendum.
    (3) In the absence of a signed marketing agreement, the issuance of 
this amendatory order is the only practical means pursuant to the 
declared policy of the Act of advancing the interests of kiwifruit 
growers in the production area.

Order Relative to Handling of Kiwifruit Grown in California

    It is therefore ordered, That on and after the effective date 
hereof, all handling of kiwifruit grown in California shall be in 
conformity to, and in compliance with, the terms and conditions of the 
said order as hereby amended as follows:
    Certain provisions of proposals contained in Material Issue numbers 
1, 2, and 4 of the proposed order amending the order contained in the 
Recommended Decision issued by the Administrator on November 5, 2009, 
and published in the Federal Register on November 12, 2009, shall be 
and are the terms and provisions of this order amending the order and 
set forth in full herein.

List of Subjects in 7 CFR Part 920

    Kiwifruit, Marketing agreements, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, 7 CFR Part 920 is amended as 
follows:

PART 920--KIWIFRUIT GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 920 continues to read as 
follows:

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

0
2. Revise Sec.  920.12 to read as follows:

Sec.  920.12  District

    District means the applicable one of the following described 
subdivisions of the production area or such other subdivision as may be 
prescribed pursuant to Sec.  920.31:
    (a) District 1 shall include Butte, Sutter, and Yuba Counties.
    (b) District 2 shall include Tulare County.
    (c) District 3 shall include all counties within the production 
area not included in Districts 1 and 2.

0
3. Revise Sec.  920.20 to read as follows:

Sec.  920.20  Establishment and membership.

    There is hereby established a Kiwifruit Administrative Committee 
consisting of 12 members, each of whom shall have an alternate who 
shall have the same qualifications as the member for whom he or she is 
an alternate. The 12-member committee shall be made up of the 
following: One public member (and alternate), and eleven members (and 
alternates). With the exception of the public member and alternate, all 
members and their respective alternates shall be growers or employees 
of growers. In accordance with Sec.  920.31(l), district representation 
on the committee shall be based upon the previous five-year average 
production in the district and shall be established so as to provide an 
equitable relationship between membership and districts. The committee 
may, with the approval of the Secretary, provide such other allocation 
of membership as may be necessary to assure equitable representation.

0
4. In Sec.  920.22, revise the first sentence of paragraph (a) to read 
as follows:

Sec.  920.22  Nomination.

    (a) Except as provided in paragraph (b) of this section, the 
committee shall hold, or cause to be held, not later than June 1 of 
each year in which nominations are made, or such other date as may be 
specified by the Secretary, a meeting or meetings of growers in each 
district for the purpose of designating nominees to serve as grower 
members and alternates on the committee. * * *
* * * * *

0
5. Revise paragraph (b) of Sec.  920.32 to read as follows:

Sec.  920.32  Procedure.

* * * * *
    (b) Committee meetings may be assembled or held by telephone, video 
conference, or other means of communication. The committee may vote by 
telephone, facsimile, or other means of communication. Votes by members 
or alternates present at assembled meetings shall be cast in person. 
Votes by members or alternates participating by telephone or other 
means of communication shall be by roll call; Provided, That a video 
conference shall be considered an assembled meeting, and votes by those 
participating through video conference shall be considered as cast in 
person.

    Dated: June 24, 2010.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. 2010-15744 Filed 6-28-10; 8:45 am]
BILLING CODE 3410-02-P
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