This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

70683 

Vol. 71, No. 234 

Wednesday, December 6, 2006 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 981 

[Docket No. FV06–981–1 PR] 

Almonds Grown in California; 

Outgoing Quality Control 

Requirements and Request for 

Approval of New Information 

Collection 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule invites 

comments on adding outgoing quality 

control requirements under the 

administrative rules and regulations of 

the California almond marketing order 

(order). The order regulates the handling 

of almonds grown in California and is 

administered locally by the Almond 

Board of California (Board). This 

proposed rule provides for a mandatory 

program under the order to reduce the 

potential for Salmonella bacteria in 

almonds. This action would help ensure 

that quality almonds are available for 

human consumption. This proposal also 

announces the Agricultural Marketing 

Service’s (AMS) intention to request 

approval of a new information 

collection issued under the order. 

DATES: Comments must be received by 

January 22, 2007. Pursuant to the 

Paperwork Reduction Act, comments on 

information collection burden that 

would result from this proposal must be 

received by February 5, 2007. 

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, E-mail: 

moab.docketclerk@usda.gov. or Internet: 

http://www.regulations.gov. All 

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.ams.usda.gov/fv/ 

moab.html. 

FOR FURTHER INFORMATION CONTACT: 

Maureen T. Pello, Assistant Regional 

Manager, 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: 

Maureen.Pello@usda.gov. or 

Kurt.Kimmel@usda.gov. 

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: 

Jay.Guerber@usda.gov. 

SUPPLEMENTARY INFORMATION: This 

proposed rule is issued under Marketing 

Order No. 981, as amended (7 CFR part 

981), regulating the handling of almonds 

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 is not intended to 

have retroactive effect. 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 proposed rule invites comments 

on adding outgoing quality control 

requirements under the administrative 

rules and regulations of the order. This 

rule provides for a mandatory program 

to reduce the potential for Salmonella 

bacteria in almonds. This action would 

help ensure that quality almonds are 

available for human consumption. This 

action was unanimously recommended 

by the Board at a meeting on August 22, 

2006. This proposal also announces 

AMS’s intention to request approval of 

a new information collection issued 

under the order. 

Section 981.42(b) of the order 

provides authority for the Board to 

establish, with approval of the 

Secretary, such minimum quality and 

inspection requirements applicable to 

almonds to be handled or to be 

processed into manufactured product, 

as will contribute to orderly marketing 

or be in the public interest. In such crop 

year, no handler shall handle or process 

almonds into manufactured items or 

products unless they meet the 

applicable requirements as evidenced 

by certification acceptable to the Board. 

The Board, with approval of the 

Secretary, may establish rules and 

regulations necessary and incidental to 

the administration of this provision. 

Salmonella Outbreaks Linked to 

Almonds 

In 2001, a Salmonella outbreak was 

identified in Canada, which was linked 

to a specific retailer, traced back to raw 

almonds sold in bulk bins, and 

ultimately traced back to the handler 

and the grower. The Salmonella strain 

was extremely unusual and had not 

previously been associated with 

contamination in a non-animal product. 

Three orchards where the almonds were 

produced were identified, and samples 

gathered from the orchards contained 

Salmonella. With oversight by the 

California Department of Health 

Services (CDHS), procedures were 

implemented by the grower, huller/ 


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70684 Federal Register / Vol. 71, No. 234 / Wednesday, December 6, 2006 / Proposed Rules 

1 Journal of Food Protection, Vol. 69, No. 7, 2006, 

Pages 1594–1599. 

sheller, and handler to specify how the 

almonds from those orchards were to be 

processed using a treatment to reduce 

the potential for Salmonella before the 

almonds were moved into commercial 

channels. The Board initiated an 

extensive research program to help 

understand the occurrence of 

Salmonella in almond orchards. 

The Board also initiated an education 

program for the industry regarding Good 

Agricultural Practices (GAP’s), Good 

Manufacturing Practices (GMP’s), and 

Sanitation Standard Operating 

Procedures (SSOP’s). GAP’s provide 

guidelines to growers on how to 

minimize potential biological hazards 

during the production and harvesting of 

almonds. GMP’s define procedures to be 

used by handlers to allow almonds to be 

processed, packed, and sold under 

sanitary conditions. SSOP’s help to 

ensure a clean and sanitary environment 

in the packing facility. Together, these 

practices and procedures provide a 

framework for a Hazard Analysis 

Critical Control Point (HACCP) program 

for the industry to proactively eliminate 

or minimize potential sources of 

Salmonella contamination. 

In the spring of 2004, a second 

Salmonella outbreak occurred in Oregon 

that was linked to raw almonds 

purchased at a particular retailer. The 

Salmonella strain was very similar to 

that identified in 2001. One handler had 

been the supplier to the retailer, and the 

handler initiated a voluntary recall of 5 

million pounds of almonds sold in the 

U.S. The Food and Drug Administration 

(FDA) subsequently announced that the 

almonds had been exported to eight 

countries. The handler then initiated a 

full recall of the 6 suspect almonds 

produced, packed, and shipped, 

increasing the recall to approximately 

15 million pounds. 

In the summer of 2004, the Board 

unanimously approved a voluntary 

action plan that called for treating all 

almonds to reduce the potential for 

Salmonella. Handlers were encouraged 

to treat the almonds prior to shipment, 

or ship the almonds to a manufacturer 

who agreed to treat the almonds. The 

Board continued to fund research on 

various technologies that could be used 

to help reduce the potential for 

Salmonella in almonds. 

Board Recommendation for a 

Mandatory Treatment Program 

To further its efforts in providing a 

high quality product to consumers, in 

August 2006, the Board recommended 

that a mandatory treatment program be 

implemented under the order, pursuant 

to authority provided in § 981.42(b). 

Specifically, handlers would have to 

subject their almonds to a process that 

achieves a minimum 4-log reduction in 

Salmonella bacteria prior to shipment. 

The program would provide for an 

exemption for handlers who ship 

untreated almonds under a direct 

verifiable (DV) program to 

manufacturers within the U.S., Canada, 

or Mexico who agree to treat the 

almonds accordingly. The program 

would also provide for an exemption for 

handlers who ship untreated almonds to 

locations outside of the U.S., Canada, or 

Mexico. All containers of untreated 

almonds shipped under the two 

exemptions would have to be 

prominently identified with the term 

‘‘unpasteurized.’’ The program would 

become effective for the 2007–08 crop 

year which begins on August 1, 2007. 

Specific Parameters of Proposed 

Mandatory Program 

Under the Board’s proposal, handlers 

would have to subject their almonds to 

a treatment process or processes that 

achieve in total a minimum 4-log 

reduction of Salmonella bacteria, or 

ship their almonds under one of the two 

exemptions cited above. The proposal 

would only affect those who meet the 

definition of ‘‘handler’’ in § 981.13 of 

the order (thus exempting growers 

selling through roadside stands). Log 

reduction describes how much bacterial 

contamination is reduced by a treatment 

process. A 4-log reduction decreases 

bacteria by a factor of 10,000 (4 zeros). 

One treatment process that 

independently achieved a minimum 4- 

log reduction could be used, or a 

combination of different treatments 

could be used that collectively achieve 

a minimum 4-log reduction (‘‘hurdle’’

technologies). 

The Board initially supported a 5-log 

reduction, which is FDA’s performance 

standard. However, the Board 

subsequently funded research with the 

University of California, Davis, in 

conjunction with Rutgers University, 

whereby a risk assessment model was 

developed using data from the two 

Salmonella outbreaks, as well as data 

from an industry pathogen survey.1 The 

risk assessment model demonstrated 

that a minimum 4-log reduction could 

provide an appropriate level of 

consumer protection. Thus, the Board 

concluded that a 4-log reduction was an 

appropriate standard for almonds. 

Treatment Processes 

Acceptable treatment processes for 

handlers would have to utilize 

technologies that have been determined 

to achieve a minimum 4-log reduction 

of Salmonella bacteria in almonds, 

pursuant to a letter of determination 

issued by the FDA, or acceptance by a 

scientific review panel as identified by 

the Board (known as the Technical 

Expert Review Panel, or TERP). 

The FDA reviews studies utilizing 

specific protocols and treatment 

parameters, and issues a letter of 

determination when it determines that a 

process has sufficiently demonstrated 

its effectiveness to achieve a 5-log 

reduction of Salmonella in almonds. To 

date, FDA has issued letters of 

determination for propylene oxide 

(PPO), oil roasting, blanching, and for a 

moist heat process. 

The TERP would evaluate various 

treatment technologies against specific 

criteria, based on recommendations 

provided by the National Advisory 

Committee on Microbiological Criteria 

in Food (NACMCF). The NACMCF was 

formed in 1988 under Departmental 

Regulation 1043–28, and provides 

impartial, scientific advice to Federal 

food safety agencies for use in the 

development of an integrated national 

food safety systems approach from farm 

to final consumption to assure the safety 

of domestic, imported, and exported 

foods. It is co-sponsored by USDA’s 

Food Safety and Inspection Service, the 

FDA, the Center for Disease Control and 

Prevention, the National Marine 

Fisheries Service, and the Department of 

Defense Veterinary Service Activity. 

While the TERP would not 

‘‘recommend’’ or ‘‘approve’’

technologies, its review would ensure 

that technologies utilized by the 

industry have been evaluated against 

specific science-based criteria 

demonstrating the technology’s ability 

to deliver a lethal treatment for 

Salmonella in almonds. Documentation 

and data would be provided to the TERP 

(by a company pursuing TERP 

acceptance for its technology) for review 

to ensure that the proposed technologies 

are consistently achieving the minimum 

4-log reduction. 

The TERP, initially formed by the 

Board in the fall of 2004 to review 

treatment technologies, consists of four 

scientists, with a representative from the 

FDA serving as an ex-officio member. 

The TERP has been evaluating various 

technologies and treatments for the 

almond industry, and to date, the TERP 

has accepted steam and moist heat 

treatments as acceptable for achieving 

the Board’s Salmonella reduction goals. 

Membership on the TERP would be 

approved annually by the Board prior to 

the beginning of each crop year, or more 

frequently if needed during the crop 


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Federal Register / Vol. 71, No. 234 / Wednesday, December 6, 2006 / Proposed Rules 70685 

year, for example, to fill a vacancy on 

the panel. 

On-Site Versus Off-Site Treatment 

Under the Board’s proposal, unless 

handlers shipped their almonds to a 

Board-approved DV user (described 

later in this document), or shipped their 

almonds to locations outside of the U.S., 

Canada, or Mexico, handlers would 

have to subject their almonds to a 

treatment process or processes prior to 

shipment either at their handling 

facility (on-site), or at an off-site 

treatment facility located within the 

production area (California). An off-site 

facility may or may not be affiliated 

with another handler. Transportation of 

almonds by a handler to an off-site 

treatment facility would not be 

considered a shipment. 

Validation by Process Authorities 

Handlers could only use, or transport 

their almonds to off-site treatment 

facilities that use treatment processes 

that have been ‘‘validated’’ by a Boardapproved process authority. Validation 

means that the treatment technology 

and equipment utilized have been 

demonstrated to achieve the minimum 

4-log reduction. The use of process 

authorities is modeled after process 

authorities as cited in the ‘‘Guide to 

Inspections of Low Acid Canned Food 

Manufacturers’’ (Guide) (http:// 

www.fda.gov). Treatment technology 

and equipment that have been modified 

to the point where operating parameters 

such as time, temperature, or volume, 

change must be revalidated. 

For purposes of this document, a 

process authority is a person or an 

organization that has expert knowledge 

of appropriate processes for the 

treatment of almonds as described 

above, and meets other criteria as 

specified by the Board. Such criteria 

would include, but not be limited to, the 

following: (1) Knowledge about the 

equipment used for the treatment 

process; (2) experience in conducting 

appropriate studies to determine the 

ability of the equipment to deliver the 

appropriate treatment (such as heat 

penetration or heat distribution studies); 

and (3) the ability to determine that 

sufficient data has been gathered to 

identify the critical factors needed to 

ensure the quality of the final product. 

On an annual basis, process authorities 

would have to submit an application to 

the Board on ABC Form No. 51, 

‘‘Application for Process Authority for 

Almonds,’’ and be approved by the 

Board’s TERP. Should the applicant 

disagree with the TERP’s decision, it 

could appeal the decision in writing to 

the Board, and ultimately to USDA. 

Compliance and Verification Program 

Treatment Plans 

To ensure compliance with the 

mandatory program, handlers would be 

subject to verification by the Federal or 

Federal-State Inspection Service 

(inspection agency). Handlers could use 

either an on-site (traditional) or an 

audit-based verification program. Each 

handler would decide which 

verification program would be the most 

cost-effective for his or her operation. 

All handlers would be required to 

submit a treatment plan to the Board for 

the upcoming crop year by May 31. The 

crop year runs from August 1 through 

July 31 of the subsequent year. 

However, for the 2007–08 crop year, 

which would be the first year that the 

mandatory program was in effect, 

handlers would have to submit their 

treatment plans by May 1, 2007. The 

plan would be reviewed by the Board in 

conjunction with the inspection agency 

to ensure such plans were complete and 

auditable. The plan would be approved 

by the Board and must address specific 

parameters for the handler to ship 

almonds. Such parameters would 

include, but not be limited to, the 

following: (1) The location of treatment 

plant; (2) the name and address of offsite treatment facility (custom 

processor), if appropriate; (3) a 

statement regarding whether treatment 

processes have been accepted by the 

TERP and/or ‘‘determined’’ by the FDA; 

(4) a statement regarding validation of 

treatment technology and equipment by 

a Board-approved process authority; (5) 

a statement whether untreated almonds 

would be exported; (6) a statement 

whether the handler would use the DV 

program; (7) a description or flow chart 

explaining how raw, untreated almonds 

enter and flow through the handler 

facility, and how the product would 

flow through the treatment process, 

including post treatment, packing, and/ 

or storage; (8) a list of all treatments that 

would be used on the almonds 

(including, for example, number of 

blanching lines, etc.); (9) a description 

of how treated product would be 

differentiated and segregated from 

untreated product to ensure 

maintenance of treated product 

integrity; (10) a list of procedures 

regarding how interhandler transfers 

would be tracked; and (11) an 

explanation by handlers using a 

combination of processes to achieve a 

minimum 4-log reduction, that the 

processes occur in an appropriate 

sequence in sufficiently close proximity 

to ensure that the integrity of the treated 

product is maintained between 

processes. 

Almonds sent by a handler for 

treatment to an off-site facility affiliated 

with another handler would be subject 

to the approved treatment plan utilized 

at that off-site facility. Handlers would 

have to follow their own approved 

treatment plans for almonds sent to an 

off-site facility that is not affiliated with 

another handler. 

On-Site Verification Program 

Under an on-site verification program, 

handlers would cause the inspection 

agency to verify that their almonds had 

been subjected to an acceptable 

treatment process that had been 

validated by a Board-approved process 

authority. Such handlers would have to 

submit, or cause to be submitted, a 

verification report to the Board. The 

inspection agency would have to 

physically observe the treatment process 

to issue such a report. It would be the 

handler’s responsibility to arrange for 

inspection agency verification. An onsite program would be comparable to a 

traditional in-line or lot inspection 

program. 

Audit-Based Verification Program 

Under an audit-based verification 

program, handlers would be subject to 

periodic audits conducted by the 

inspection agency. The inspection 

agency would verify that handlers were 

following their approved treatment 

plans. Audit frequency would be tied to 

handler performance. Handlers would 

be provided with written audit reports 

specifying deficiencies. Handlers who 

do not comply with an audit-based 

verification program would be required 

to revert to an on-site verification 

program. Audit reports would be 

provided to the Board to facilitate 

program compliance. 

Interhandler Transfers 

Interhandler transfers of almonds may 

or may not be treated prior to transfer. 

Handlers receiving untreated almonds 

from another handler would be 

responsible for treating the product. 

Handlers receiving treated almonds 

from another handler would need to 

have procedures outlined in their 

treatment plan addressing how the 

integrity of the treated almonds would 

be maintained. In all instances 

involving interhandler transfers, it 

would be the responsibility of the 

receiving handler to ensure that the 

almonds are treated prior to shipment 

and to maintain documentation to that 

effect. 

Handler Records 

Handlers would be required to 

maintain records and documentation 


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70686 Federal Register / Vol. 71, No. 234 / Wednesday, December 6, 2006 / Proposed Rules 

that would be subject to audit by the 

inspection agency and the Board for the 

purpose of verifying compliance with 

the regulation. Consistent with § 981.70 

of the order regarding handler records 

and verification, records would have to 

be maintained for 2 full years following 

the end of a crop year. Such records 

would identify lots from the point of 

treatment forward to the point of 

shipment by the handler. Lot 

identification would also provide the 

ability to differentiate treated from 

untreated product. 

Exemptions 

Direct Verifiable Program 

Handlers could ship untreated 

almonds directly to Board-approved 

manufacturers within the U.S., Canada, 

or Mexico for further processing under 

the Direct Verifiable or DV program. The 

Board would issue a DV user code to an 

approved manufacturer. Handlers 

would have to reference this code on all 

documentation accompanying the lot. 

This would help the Board track DV 

shipments and facilitate compliance 

with the program. Handlers would also 

have to identify each container of such 

almonds with the term ‘‘unpasteurized.’’

Container means a box, bin, bag, carton, 

or any other type of receptacle used in 

the packaging or handling of bulk 

almonds. The lettering must be on one 

outside principal display panel, at least 

1⁄2 inch in height, clear and legible. If a 

third party is involved in the 

transaction, the handler must provide 

sufficient documentation to the Board to 

track the shipment from the handler’s 

facility to the approved DV user. 

Manufacturers wanting to participate 

in the DV program would have to 

submit an application annually to the 

Board on ABC Form No. 52, 

‘‘Application for Direct Verifiable (DV) 

Program for Further Processing of 

Untreated Almonds,’’ and be approved 

by the Board’s TERP. Should the 

applicant disagree with the TERP’s 

decision, it could appeal the decision in 

writing to the Board, and ultimately to 

USDA. 

Similar to handlers, manufacturers 

would have to subject the almonds to a 

treatment process or processes using 

technologies that achieve in total a 

minimum 4-log reduction of Salmonella 

bacteria as determined by the FDA or 

accepted by the TERP. Additionally, 

manufacturers could use treatment 

processes that have been ‘‘established’’ 

by a Board-approved process authority. 

‘‘Established’’ means that that the 

process authority would evaluate 

treatment processes and protocols to 

ensure the technology’s ability to 

deliver a lethal treatment for Salmonella 

in almonds and achieve a minimum 4- 

log reduction. The Board recommended 

this option to address manufacturers’ 

concern regarding the process to seek 

TERP acceptance of their treatments, 

which could involve providing data on 

their proprietary processes to the TERP 

(i.e., specific time and temperature data 

for special equipment). 

Manufacturers must also do the 

following: (1) Identify the 

manufacturing locations where 

treatment would occur; (2) have their 

treatment technology and equipment 

validated by a Board-approved process 

authority. Treatment technology and 

equipment that have been modified to 

the point where operating parameters 

such as time, temperature, or volume, 

change must be revalidated; (3) 

maintain all records regarding 

validation and verification of treatment 

methods, processing, and product 

traceability for 2 years, and make such 

records available for review by the 

Board; and (4) ship untreated almonds 

(due, for example, to a manufacturer 

overbuying) to a handler, to another 

approved DV user, to locations outside 

the U.S., Canada, or Mexico (containers 

must remain identified with the term 

unpasteurized), or dispose of such 

almonds in non-edible channels. 

Further, DV users would be audited 

by a Board-approved auditor within 1– 

2 months after the start of treatments, 

and at least once every 12 months 

thereafter. Such audits would determine 

if: (1) The DV user utilized appropriate 

treatment processes; (2) the DV user has 

a letter issued by a Board-approved 

process authority that validated that the 

treatment achieves a 4-log reduction of 

Salmonella; (3) personnel and 

procedures used at the facility ensure 

that treatment parameters were 

followed; and (4) records are retained 

for two years that document the 

treatment of almonds, or that any 

untreated almonds were properly 

disposed of as outlined above. A 

summary audit report of the DV user 

would be sent to the Board within 10 

days of the audit. On an annual basis, 

DV user auditors would have to submit 

an application to the Board on ABC 

Form No. 53, ‘‘Application for Direct 

Verifiable (DV) Program Auditors,’’ and 

be approved by the Board’s TERP. 

Should the applicant disagree with the 

TERP’s decision, it could appeal the 

decision in writing to the Board, and 

ultimately to USDA. 

The Board recommended including 

Mexico and Canada as part of the DV 

program for compliance purposes. The 

Board was concerned that handlers 

could circumvent the regulation by 

shipping untreated almonds to Mexico 

or Canada, then, bring them back into 

the U.S. and sell them in normal market 

channels. 

Shipments Outside of the U.S., Canada, 

or Mexico 

Handlers could also ship untreated 

almonds directly to locations outside 

the U.S., Canada, or Mexico, provided 

that each container of such almonds is 

prominently identified with the term 

unpasteurized. The lettering must be on 

one outside principal display panel, at 

least 1⁄2 inch in height, clear and legible. 

Again, if a third party is involved in the 

transaction, the handler must provide 

sufficient documentation to the Board to 

track the shipment from the handler’s 

facility to the importer in the foreign 

country. 

Accordingly, a new paragraph (b) 

regarding outgoing quality control and a 

mandatory program to reduce the 

potential for Salmonella bacteria 

contamination in almonds is proposed 

to be added to § 981.442 of the order’s 

administrative rules and regulations. 

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. Thus, both statutes have small 

entity orientation and compatibility. 

There are approximately 6,000 

producers of almonds in the production 

area and approximately 115 handlers 

subject to regulation under the 

marketing order. Additionally, the 

Board estimates there would be about 25 

process authorities, 53 almond 

manufacturers, and 50 DV program 

auditors impacted by this rule. Small 

agricultural producers are defined by 

the Small Business Administration (13 

CFR 121.201) as those having annual 

receipts of less than $750,000, and small 

agricultural service firms are defined as 

those whose annual receipts are less 

than $6,500,000. 

Data for the most recently completed 

crop year indicate that about 52 percent 

of the handlers shipped under 

$6,500,000 worth of almonds. Dividing 


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Federal Register / Vol. 71, No. 234 / Wednesday, December 6, 2006 / Proposed Rules 70687 

average almond crop value for 2003–

2005 reported by the National 

Agricultural Statistics Service (NASS) 

($2.043 billion) by the number of 

producers (6,000) yields an average 

annual producer revenue estimate of 

about $340,000. Based on the foregoing, 

about half of the handlers and a majority 

of almond producers may be classified 

as small entities. While data regarding 

the size of the process authorities is not 

available, it may be assumed that some 

process authorities, almond 

manufacturers, and DV program 

auditors may be classified as small 

entities. 

The almond industry’s 6,000 growers 

produce approximately 1 billion pounds 

annually (kernel weight basis). Industry 

members expect production to increase 

by 50 percent in the next 3–5 years, due 

to a significant amount of newly planted 

acreage that will come into production. 

Although the Board currently projects 

that there are about 115 handlers, 

handler number estimates can vary over 

time. Recent surveys have yielded 

estimates ranging from 112 (see Table 1) 

to 117 (see Table 2). Handlers ultimately 

market their almonds to customers in 

the U.S. and abroad. As shown in Table 

1, the Board estimates that about 27 of 

112 handlers handle more than 10 

million pounds each, and cumulatively 

handle 82 percent of the crop. 

TABLE 1.—NUMBER OF HANDLERS CATEGORIZED BY SIZE

Less than 1 

million lbs. 

Between 1 

and 5 

million lbs. 

Between 5 

and 10 

million lbs. 

More than 

10 million 

lbs. 

No. of handlers ................................................................................................................ 41 28 16 27 

Percent of crop handled .................................................................................................. 1 6 11 82 

According to data provided by the 

Board, about 30 percent of California 

almonds are sold domestically (about 

300 million pounds). An estimated 20 

percent of the domestic shipments are 

in the form of manufactured product—

blanched, sliced, diced, or otherwise 

further processed using thermal 

treatments. About 70 percent of 

California almond production is 

exported to more than 80 countries 

worldwide. Mexico and Canada account 

for approximately 5 percent of export 

shipments. The quantities shipped by 

companies handling almonds vary 

considerably. However, a limited 

number of handlers are responsible for 

the majority of domestic and export 

shipments as shown in Table 2 below. 

Table 2 shows that 16 handlers are 

responsible for 90 percent of domestic 

shipments. Many of the same handlers 

are among the 38 that are responsible for 

90 percent of exports. About 79 of an 

estimated 117 handlers are responsible 

for the remaining 10 percent of export 

shipments. 

TABLE 2.—HANDLER SHIPMENT SUMMARY

Domestic (U.S.) 

300,000,000 

pounds 

Export to Canada and 

Mexico 37,600,000 

pounds 

All export (includes 

Canada and Mexico) 

700,000,000 pounds 

No. of handlers responsible for 50 percent of shipments ....................... 3 4 9 

No. of handlers responsible for 80 percent of shipments ....................... 12 16 26 

No. of handlers responsible for 90 percent of shipments ....................... 16 26 38 

This rule would add a new paragraph 

(b) for outgoing quality control under 

§ 981.442 of the order’s administrative 

rules and regulations, whereby a 

mandatory program to reduce the 

potential for Salmonella bacteria in 

almonds would be implemented under 

the order. Specifically, handlers would 

have to subject their almonds to a 

treatment process that achieves a 

minimum 4-log reduction in Salmonella 

bacteria prior to shipment. The program 

would exempt handlers who ship 

untreated almonds under a direct 

verifiable (DV) program to 

manufacturers within the U.S., Canada, 

or Mexico who agree to treat the 

almonds accordingly. The program 

would also exempt handlers who ship 

untreated almonds to locations outside 

of the U.S., Canada, or Mexico. All 

containers of untreated almonds 

shipped under the exemptions would 

have to be prominently identified with 

the term ‘‘unpasteurized.’’ The program 

would take effect for the 2007–08 crop 

year which 25 begins on August 1, 2007. 

Authority for the program is provided in 

§ 981.42(b) of the order. 

According to the Board, the costs to 

individual handlers to comply with the 

program would vary considerably 

depending on their markets and 

treatment method(s) chosen. Handlers 

could: (1) Install new equipment in their 

processing lines to treat the almonds 

prior to shipment into commercial 

channels; (2) outsource to another 

handler or an off-site facility within 

California for treatment; (3) transfer 

their untreated product to another 

handler who would treat the almonds 

prior to shipment; (4) ship their 

untreated almonds to Board-approved 

DV users or to locations outside of the 

U.S., Canada, or Mexico; or (5) use a 

combination of these approaches. 

In a handler survey conducted by the 

Board in March 2005 (to which 116 

handlers handling almonds at that time 

responded), 86 handlers (74 percent) 

have their own facilities and/or 

equipment to process almonds; the 

remainder have almonds processed on 

their behalf. Of those handlers with 

their own facilities and/or equipment, 

66 (77 percent of 86) indicated they 

planned to install equipment to treat 

almonds while the remaining 20 

indicated they would outsource to a 

third party, or custom processor. Again, 

the overall economic impact of the 

program would vary based on the 

approach selected. Smaller handlers 

may choose to defer purchasing 

equipment and send their almonds to an 

off-site facility for treatment until more 

cost effective technologies are available. 

Costs would also vary by treatment 

method. Some handlers may choose to 

install PPO chambers at their facilities. 

Handler sources estimate that typical 

installation costs for a PPO chamber 

range from $500,000 to $1,250,000. As 

with other technologies, overall cost 

would depend upon how much 

infrastructure is in place in the 

processing facility as well as the desired 


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70688 Federal Register / Vol. 71, No. 234 / Wednesday, December 6, 2006 / Proposed Rules 

capacity of the chambers. Actual 

treatment cost for handlers treating their 

own product is approximately $0.03 per 

pound, varying with volume and 

efficiencies. PPO treatment is currently 

available in the industry on a contract 

basis at $0.04–$0.05 per pound 

(including transportation to the facility). 

Regarding steam technologies, 

handler sources estimate the following 

equipment costs for in-line steam 

systems designed to treat almonds at 

varying capacities from 1,000 pounds to 

over 30,000 pounds of almonds per 

hour: 

TABLE 3.—ESTIMATED EQUIPMENT

COSTS FOR STEAM UNITS FOR DIFFERING LEVELS OF TREATMENT CAPACITY

Capacity 

(pounds per hour) Equipment costs 

1,000 ..................... $100,000–$200,000 

5,000 ..................... 300,000–325,000 

7,500–15,000 ........ 370,000–470,000 

TABLE 3.—ESTIMATED EQUIPMENT

COSTS FOR STEAM UNITS FOR DIFFERING LEVELS OF TREATMENT CAPACITY—Continued 

Capacity 

(pounds per hour) Equipment costs 

20,000–30,000 ...... 525,000–800,000 

Over 30,000 .......... 600,000–1,000,000 

While treatment equipment costs 

would be the most significant outlay, 

there would also be capital expenditures 

associated with additional conveyance 

equipment, boilers, cooling systems, 

bins, and possible expansion or 

construction of new buildings. Handler 

sources estimate these costs to be an 

additional 50 percent of the treatment 

equipment costs cited in Table 3, 

depending on capacity needs, and 

assuming maximum throughput. 

A typical system of 10 million pound 

annual capacity would be equivalent to 

22,000 pounds per hour, which falls in 

the 20,000 to 30,000 pound per hour 

range in Table 3. The treatment 

equipment costs for that capacity range 

from $525,000 to $800,000. With an 

additional 50 percent for cost of other 

related equipment and facility 

expansion, the costs range from 

$787,500 to $1,200,000. Handler sources 

suggest that a figure near the upper end 

of that range, $1,125,000, is a good point 

estimate of the cost for a 10,000,000 

pound per year treatment line. 

An important step in assessing the 

financial impact of the proposed 

mandatory treatment on handlers is to 

estimate the annualized equipment cost 

and operating cost of treating the 

almonds to prevent Salmonella 

contamination. This can be illustrated 

by additional computations, with 

10,000,000 pounds per year serving as a 

representative level of treatment 

capacity, as shown in Table 4, third line 

of column A. Table 4 also shows a range 

of costs across different levels of 

handler treatment capacity. 

TABLE 4.—ESTIMATE OF AVERAGE ANNUAL EQUIPMENT AND OPERATING COSTS AT VARYING LEVELS OF HANDLER

TREATMENT CAPACITY

A 

Handler annual capacity 

B 

Total equipment cost * 

C 

Annual use 

cost of equipment, 5 year 

life ** 

D E 

Unit cost of equipment at 

F G H 

Equipment plus operating 

cost at 

50% of 

capacity 

(c/50% of A) 

Full capacity 

(C/A) 

Average 

operating 

cost 

50% of 

capacity 

(D+F) 

Full capacity 

(E+F) 

(Pounds) Cents per pound 

2,000,000 ..................................... $300,000 $69,292 $0.069 $0.035 $0.0035 $0.0725 $0.0385 

5,000,000 ..................................... 487,500 112,600 0.045 0.023 0.0035 0.0485 0.0265 

10,000,000 ................................... 1,125,000 259,845 0.052 0.026 0.0035 0.0555 0.0295 

15,000,000 ................................... 1,500,000 346,460 0.046 0.023 0.0035 0.0495 0.0265 

20,000,000 ................................... 1,650,000 381,106 0.038 0.019 0.0035 0.0415 0.0225 

* Equipment cost estimates at varying capacity levels, including treatment chambers, plus an additional 50 percent for conveyors, other equipment and extension of facilities. 

** Annualized equipment cost is computed by dividing the equipment purchase cost by 4.3295, which is the Present Value of a $1 annuity for 5 

Years (estimated life of the equipment) at a 5 percent interest rate (estimated cost of capital). 

Source for equipment and operating costs: Almond handlers. 

To obtain the annual unit cost for 

installing a 10 million pound capacity 

treatment line (an expenditure of 

$1,125,000 in column B), the first step 

is to obtain the annualized equipment 

cost. The parameters recommended by 

the handlers were a 5 year equipment 

life and a 5 percent cost of capital. The 

annual equipment use factor (4.3295) is 

the present value of a $1 annuity for 5 

years at 5 percent. Dividing the total 

equipment expenditure of $1,125,000 by 

4.3295 yields an annualized equipment 

cost estimate of $259,845 (column C). 

Dividing this figure by the annual 

10,000,000 pound capacity yields a cost 

per pound estimate of 2.6 cents (column 

E). If the treatment line ran at half 

capacity, the equipment costs per pound 

would double to 5.2 cents (column D). 

This method of computing annualized 

equipment cost does not account for the 

tax implications of annual equipment 

depreciation or for the salvage value at 

the end of the equipment’s useful life. 

In addition, the useful life of many 

pieces of equipment may well be over 

5 years. 

Ongoing operational costs (electricity, 

etc.) are estimated by handlers to range 

from $0.0027 to $0.0043 per pound, 

depending on the system. The midpoint 

of this range ($0.0035) appears in 

column F. 

The key results from Table 4 are the 

cost estimates per pound of almonds 

treated, including both annualized 

equipment costs and operating costs. 

The highest cost is 7.25 cents per pound 

for the smallest handler (2 million 

pounds treated annually) operating at 50 

percent capacity (column G). The lowest 

cost estimate is 2.25 cents per pound for 

a handler treating 20 million pounds per 

year operating at full capacity (column 

H). These costs can be put in context by 

comparing them to almond grower 

prices as reported each year by the 

NASS. For 2003 to 2005, grower prices 

averaged $2.07 per pound, computed by 

dividing the value of production for 

those three years by the three-year 

quantity of production. The treatment 

cost estimates per pound in Table 4 


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range from 3 percent to 1 percent of the 

2003–2005 average grower price, and 

represent an even smaller proportion of 

the prices paid to handlers when selling 

to almond users further down the 

marketing chain. 

A key aspect of handler costs is the 

proportion of total capacity at which a 

new production line would operate. 

Operating at higher capacity spreads the 

equipment cost across a wider base. For 

a small handler, investing in equipment 

with this level of capacity may only be 

viable economically if the costs are 

spread over their entire production run, 

rather than only applying costs to a 

small portion of their production run. If 

they do not intend to run their entire 

production through the treatment 

process, it may be more viable to 

outsource the treatment. Costs of 

contract processing (i.e., batch 

operations for steam processes or PPO 

treatment) are estimated to range from 

$0.04 to $0.05 per pound. This estimate 

includes additional costs associated 

with transporting almonds to a custom 

facility ($0.01 to $0.015 per pound). For 

medium-sized and larger handlers, it 

may be more cost effective to construct 

a treatment processing line, particularly 

if they intend to immediately put a 

significant portion of their production 

through the process. 

Handler sources estimate that the cost 

of setting up a new oil roast line is 

$300,000 to $600,000, with operating 

costs of $0.06 to $0.10 per pound. A 

blanching line may cost upward of 

$1,500,000 to $2,500,000 with an 

operating cost of approximately $0.12 to 

$0.22 per pound. It is unlikely that 

handlers would select these 

technologies unless they are already 

providing custom processed, valueadded products to their customers. 

Regarding compliance and oversight 

costs, it is anticipated that handlers who 

do not currently have thorough 

recordkeeping procedures in place 

would likely have to invest 

approximately 40–80 person-hours to 

develop their treatment plan. However, 

once this document has been created, it 

would be updated on an annual basis, 

which would likely involve less time. 

Validation of treatment systems is 

estimated to cost from $1,000 to $3,000 

per line, depending upon the 

complexity of the equipment utilized. 

Treatment technology and equipment 

that have been modified to the point 

where operating parameters such as 

time, temperature, or volume, change 

must be revalidated. 

Handler verification costs could vary, 

depending on whether the handler was 

under an on-site program or an auditbased program. The fee for an on-site 

program would be a minimum charge of 

$44.00 per hour (with 1 hour required 

to treat 44,000 pounds), or $0.204 per 

hundredweight, whichever is greater. 

The former is equivalent to $1.00 per 

thousand pounds treated. For an auditbased program, the fee would be $78.00 

per hour. Travel time for both programs 

would be charged at $44.00 per hour 

and $0.34 per mile. 

Examples of estimated handler 

verification costs are provided in Tables 

5 and 6 below: 

TABLE 5.—ANNUAL HANDLER VERIFICATION COSTS: ON-SITE PROGRAM

Audit cost by type 

Volume of almonds treated per year 

100,000 

lbs 

2 mill. 

lbs 

40 mill. 

lbs 

100 mill. 

lbs 

250 mill. 

lbs 

Hourly rate* .......................................................................................................... $100 $2,000 $40,000 $100,000 $250,000 

Per Cwt = $.204 ................................................................................................... 204 4,080 81,600 204,000 510,000 

* Hourly rate of $44/hour, with 1 hour required per 44,000 1bs of volume treated (equivalent to $1.00 per thousand pounds treated). 

TABLE 6.—ANNUAL HANDLER VERIFICATION COSTS: AUDIT-BASED PROGRAM

Audit cost by hours required to complete audit* 

1 2 3 4 5 6 7 8 

Audit hourly cost = $78 .................................................................... $78 $156 $234 $312 $390 $468 $546 $624 

Auditor Transportation Cost** .......................................................... 32 32 32 32 32 32 32 32 

Cost per individual audit .................................................................. 110 188 266 344 422 500 578 656 

* Estimated hours per audit varies by volume treated annually: (up to 2 milllon pounds: 1–3 hours); (more than 2 but less than 40 million 

pounds: 2–5 hours); (40 million pounds or more: 3–8 hours). 

** Estimated auditor transportation cost to each facility is approximately $32: $22 for travel time (1⁄2 hour @ $44/hour) plus mileage reimbursement of $10 (30 miles @ $0.34 per mile). 

The benefits associated with the 

proposed mandatory program are the 

avoided costs of a Salmonella outbreak. 

These costs may vary depending on 

several factors, including the quantity of 

product recalled, impact on consumer 

sales, lost customer confidence, 

insurance costs, and possible litigation. 

Using 2003–2005 average almond crop 

value as the basis, a loss of 5 percent 

would be equal to approximately $102 

million. 

The Board considered various 

alternatives and options to a mandatory 

treatment program. One option would 

be to take no action. However, the Board 

concluded that this was not in the best 

interest of the industry nor consumers. 

The Board believes that the industry 

should provide consumers with a 

quality product. Taking no action when 

there are viable alternatives could be 

significant in terms of the financial well 

being of the industry should another 

outbreak occur that was linked to 

almonds. 

The Board also considered continuing 

its voluntary action plan alone, without 

proposing a mandatory program. 

However, surveys conducted by the 

Board indicate that not all handlers are 

implementing the action plan. Thus, the 

Board concluded that a mandatory 

program is in the best interest of the 

industry and consumers. 

The Board also considered the 

effectiveness of testing for Salmonella 

prior to shipment. During the 2001 and 

2004 outbreaks, significant amounts of 

testing occurred at the orchard level, in 

hulling and shelling facilities, and at 

retail. However, it was determined by 

the CDHS, University of California, 

Davis, and other pathogen experts that 

testing cannot be relied upon as the only 


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70690 Federal Register / Vol. 71, No. 234 / Wednesday, December 6, 2006 / Proposed Rules 

measure to ensure that almonds are 

Salmonella free. Thus, the Board 

concluded that testing alone was not a 

viable alternative. 

The Board also explored the merits of 

requiring alternative log reductions. As 

previously mentioned, the Board 

initially supported a 5-log reduction, 

which was FDA’s performance standard. 

However, a risk assessment model 

demonstrated that a minimum 4-log 

reduction could provide an appropriate 

level of consumer protection compared 

to a 5-log reduction. Thus, the Board 

concluded that a minimum 4-log 

reduction was an appropriate standard 

for almonds. 

The Board also explored the merits of 

whether the DV program should be 

temporary, whereby all almonds would 

be treated at the handler level prior to 

shipment. The Board submitted an 

initial proposal to USDA in February 

2006 that would have ultimately 

required handlers to treat all almonds 

prior to shipment, with the DV program 

being temporary. However, concerns 

were raised by various parties, 

including manufacturers, handlers, and 

foreign countries, regarding the 

temporary nature of the DV program, 

and the requirement that all exported 

almonds be treated prior to shipment. 

The Board ultimately revised its 

proposal to remove the proviso 

regarding discontinuance of the DV 

program, to allow untreated almonds to 

be shipped to locations outside the U.S., 

Canada, or Mexico, and to require that 

all containers of untreated almonds be 

prominently identified with the term 

‘‘unpasteurized.’’

This action would impose additional 

reporting and recordkeeping burden on 

California almonds handlers, process 

authorities, almond manufacturers, and 

DV program auditors. Process 

authorities, manufacturers, and DV 

auditors would be required to submit 

respective applications to the Board 

annually. Almond handlers would be 

required to submit treatment plans to 

the Board annually. These new forms 

and a sample ‘‘Handler Treatment Plan’’

are being submitted to the Office of 

Management and Budget (OMB) for 

approval under OMB Control No. 0581–

NEW. Specific burdens for the three 

applications and handler treatment plan 

are detailed later in this document in 

the section titled Paperwork Reduction 

Act. 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. Finally, USDA has not 

identified any relevant Federal rules 

that duplicate, overlap, or conflict with 

this rule. 

Additionally, the meetings were 

widely publicized throughout the 

California almond industry and all 

interested persons were invited to 

attend the meetings and participate in 

deliberations on all issues. Between the 

summer of 2004 and the Board’s August 

2006, meeting, this issue was addressed 

at an estimated 12 Board meetings, 18 

Food Quality and Safety Committee 

meetings, and well over 20 task force 

meetings. All of these meetings were 

public meetings and all entities, both 

large and small, were able to express 

views on this issue. Additionally, the 

Board issued about 35 updates to 

handlers regarding its voluntary action 

plan and progress towards its 

recommended mandatory program. 

Finally, interested persons are invited to 

submit information on the regulatory 

and informational impacts of this action 

on small businesses. 

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. 

A 45-day comment period is provided 

for interested persons to comment on 

this proposal.The comment period is 

deemed appropriate because the Board 

recommended that the mandatory 

program be in effect for the 2007–08 

crop year, which begins August 1, 2007. 

For that year, handlers would have to 

submit their treatment plans to the 

Board by May 1, 2006. All written 

comments received will be considered 

before a final determination is made on 

this matter. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

Chapter 35), the AMS announces its 

intention to request approval of a new 

information collection under the 

marketing order for California almonds. 

Title: Almonds Grown in California, 

Marketing Order No. 981. 

OMB No.: 0581–NEW. 

Expiration Date of Approval: 3 years 

from OMB date of approval. 

Type of Request: New collection. 

Abstract: The information collection 

requirements in this request are 

essential to carry out the intent of the 

Act, to provide the respondents the type 

of service they request, and to 

administer the California almond 

marketing order program, which has 

been operating since 1950. 

On August 22, 2006, the Board 

unanimously recommended adding a 

new section to the order’s 

administrative rules and regulations to 

implement a mandatory program to help 

reduce the potential for Salmonella in 

almonds. This document concerns the 

additional reporting and recordkeeping 

requirements regarding this mandatory 

program, in addition to the 

accompanying regulation previously 

discussed. Almond handlers would be 

required to submit annual treatment 

plans to the Board and inspection 

agency regarding how they plan to treat 

their almonds to reduce the potential for 

Salmonella. Entities interested in being 

almond process authorities that would 

validate technologies would have to 

submit an application to the Board on 

ABC Form No. 51, ‘‘Application for 

Process Authority for Almonds.’’

Manufacturers in the U.S., Canada, and 

Mexico interested in being approved to 

accept untreated almonds, provided 

they agree to treat the almonds 

themselves under the Board’s DV 

program, would have to submit an 

application to the Board on ABC Form 

No. 52, ‘‘Application for Direct 

Verifiable (DV) Program for 

FurtherProcessing of Untreated 

Almonds.’’ Entities interested in being 

approved DV user auditors would have 

to submit an application to the Board on 

ABC Form No. 53, ‘‘Application for 

Direct Verifiable (DV) Program 

Auditors.’’ This information would be 

needed by the Board to properly 

administer the mandatory Salmonella 

treatment program for the California 

almond industry. 

The information collected is used 

only by authorized representatives of 

USDA, including AMS, Fruit and 

Vegetable Programs regional and 

headquarters’ staff, and authorized 

employees and agents of the Board. 

Authorized Board employees, agents, 

and the industry are the primary users 

of the information and AMS is the 

secondary user. 

Handler Treatment Plan 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to be no more than 27.3 

hours per response (80 hours per 

response for the first year of regulation, 

and 1 hour per response each year 

thereafter) . 

Respondents: Almond handlers. 

Estimated Number of Respondents: 

115. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 3,143 hours per year 

(9,200 hours for the first year of 


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regulation, and 115 hours for each year 

thereafter). 

Application for Process Authority for 

Almonds—ABC Form No. 51 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 2 hours per 

response. 

Respondents: Persons or organizations 

that would like to qualify to be Boardapproved process authorities that 

validate treatments and technologies. 

Estimated Number of Respondents: 

25. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 50 hours. 

Application for Direct Verifiable (DV) 

Program for FurtherProcessing of 

Untreated Almonds—ABC Form No. 52 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 1 hour per 

response. 

Respondents: Manufacturers who 

would like to qualify to participate in 

the Board’s direct verifiable program. 

Estimated Number of Respondents: 

53. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 53 hours. 

Application for Direct Verifiable (DV) 

Program Auditors—ABC Form No. 53 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 1 hour per 

response. 

Respondents: Entities that would like 

to qualify as auditors under the DV 

program. 

Estimated Number of Respondents: 

50. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 50 hours. 

Comments: Comments are invited on: 

(1) Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(2) the accuracy of the agency’s estimate 

of the burden of the proposed collection 

of information, including the validity of 

the methodology and assumptions used; 

(3) ways to enhance the quality, utility, 

and clarity of the information to be 

collected; and (4) ways to minimize the 

burden of the collection of information 

on those who are to respond, including 

the use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology. 

Comments should reference OMB No. 

0581–NEW and the California almond 

marketing order, and be sent to the 

USDA in care of the Docket Clerk at the 

address above. All comments received 

will be available for public inspection 

during regular business hours at the 

same address. All responses to this 

notice will be summarized and included 

in the request for OMB approval. All 

comments will also become a matter of 

public record. 

The AMS is committed to complying 

with the E-Government Act, to promote 

the use of the Internet and other 

information technologies to provide 

increased opportunities for citizen 

access to Government information and 

services, and for other purposes. 

It is estimated that handlers and 

manufacturers may spend between 20–

100 hours annually maintaining records 

pertaining to this rule. Using a figure of 

$10 per hour (a sum deemed reasonable, 

should handlers and manufacturers be 

compensated for this time), it is 

estimated that the recordkeeping burden 

would cost handlers and manufacturers 

between $200–$1,000 per year. 

Additionally, handler and 

manufacturers would have to maintain 

related records and documentation for 

two full years following the end of the 

crop year. 

A 60-day comment period is provided 

to allow interested persons to comment 

on this proposed information collection. 

List of Subjects in 7 CFR Part 981 

Almonds, Marketing agreements, 

Nuts, Reporting and recordkeeping 

requirements. 

For the reasons set forth in the 

preamble, 7 CFR part 981 is proposed to 

be amended as follows: 

PART 981—ALMONDS GROWN IN 

CALIFORNIA 

1. The authority citation for 7 CFR 

part 981 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

2. Section 981.442 is amended by 

adding paragraph (b) to read as follows: 

§ 981. 442 Quality control. 

* * * * * 

(b) Outgoing. Pursuant to § 981.42(b), 

beginning with the 2007–08 crop year, 

which begins on August 1, 2007, and 

except as provided in § 981.13 and in 

paragraph (6) of this section, handlers 

shall subject their almonds to a 

treatment process or processes prior to 

shipment to reduce potential 

Salmonella bacteria contamination in 

accordance with the provisions of this 

section. 

(1) Treatment process. Acceptable 

treatment processes shall utilize 

technologies that have been determined 

to achieve in total a minimum 4-log 

reduction of Salmonella bacteria in 

almonds, pursuant to a letter of 

determination issued by the Food and 

Drug Administration(FDA), or 

acceptance by a scientific review panel 

as identified by the Board (Technical 

Expert Review Panel or ‘‘TERP’’). Such 

panel shall be approved at least 

annually by the Board prior to the 

beginning of each crop year, or as 

needed during the crop year. 

(2) On-site versus off-site treatment. 

Handlers shall subject almonds to a 

treatment process or processes prior to 

shipment either at their handling 

facility (on-site), or at an off-site 

treatment facility located within the 

production area. Transportation of 

almonds by a handler to an off-site 

treatment facility shall not be deemed a 

shipment. 

(3) Validation by process authorities. 

Handlers shall only use, or transport 

their almonds to off-site treatment 

facilities that use treatment processes 

that have been validated by a Boardapproved process authority. Validation 

means that the treatment technology 

and equipment have been demonstrated 

to achieve in total a minimum 4-log 

reduction of Salmonella bacteria in 

almonds. 

A process authority is an entity that 

has expert knowledge of appropriate 

processes for the treatment of almonds 

as defined in paragraph (b)(1) of this 

section, and meets other criteria as 

specified by the Board. Treatment 

technology and equipment that have 

been modified to the point where 

operating parameters such as time, 

temperature, or volume, change shall be 

revalidated. On an annual basis, process 

authorities must submit an application 

to the Board on ABC Form No. 51, 

‘‘Application for Process Authority for 

Almonds,’’ and be approved by the 

Board’s TERP. Should the applicant 

disagree with the TERP’s decision, it 

may appeal the decision in writing to 

the Board, and ultimately to USDA. 

(4) Compliance and verification. In 

accordance with the requirements of 

this paragraph, handlers shall utilize 

either an on-site verification program 

(traditional), or an audit-based 

verification program to ensure that their 

almonds have been subjected to an 

acceptable treatment process to reduce 

Salmonella bacteria prior to shipment. 

Each handler may decide which 

verification program would be the most 

cost-effective for his or her operation. 


PWALKER on PRODPC60 with PROPOSALS
70692 Federal Register / Vol. 71, No. 234 / Wednesday, December 6, 2006 / Proposed Rules 

(i) By May 31, each handler shall 

submit to the Board a Treatment Plan 

for the upcoming crop year: Provided, 

That, for the 2007–08 crop year, which 

begins on August 1, 2007, each handler 

shall submit to the Board its Treatment 

Plan by May 1, 2007. A Treatment Plan 

shall describe how a handler plans to 

treat his or her almonds, and must 

address specific parameters as outlined 

by the Board for the handler to ship 

almonds. Such plan shall be reviewed 

by the Board, in conjunction with the 

inspection agency, to ensure it is 

complete and can be verified, and be 

approved by the Board. Almonds sent 

by a handler for treatment to an off-site 

facility affiliated with another handler 

shall be subject to the approved 

Treatment Plan utilized at that facility. 

Handlers shall follow their own 

approved Treatment Plans for almonds 

sent to an off-site facility that is not 

affiliated with another handler. 

(ii) Handlers utilizing an on-site 

verification program shall cause the 

inspection agency to verify that their 

Treatment Plans have been followed, 

and that their almonds have been 

subjected to an acceptable treatment 

process that has been validated by a 

Board-approved process authority. Such 

handlers shall submit, or cause to be 

submitted, a verification report to the 

Board. The inspection agency must 

physically observe the treatment process 

to issue such report. 

(iii) Handlers utilizing an audit-based 

verification program shall be subject to 

periodic audits conducted by the 

inspection agency. The inspection 

agency shall provide copies of the audit 

report to the Board. Handlers who do 

not comply with an audit-based 

verification program shall be required to 

revert to an on-site verification program. 

(iv) Interhandler transfers of almonds 

may or may not be treated prior to 

transfer. Handlers receiving untreated 

almonds from another handler shall be 

responsible for treating the product. 

Handlers receiving treated almonds 

from another handler must have 

procedures outlined in theirTreatment 

Plan addressing how the integrity of the 

treated almonds will be maintained. In 

all instances involving interhandler 

transfers, the receiving handler shall be 

responsible for ensuring that the 

almonds are treated prior to shipment 

and maintaining documentation to that 

effect. 

(5) Records. Handlers shall maintain 

records and documentation that will be 

subject to audit by the Board for the 

purpose of verifying compliance with 

this section. Records must be 

maintained for two full years following 

the end of the crop year, and must 

identify lots from the point of treatment 

forward to the point of shipment by the 

handler. Lot identification shall also 

provide the ability to differentiate 

treated from untreated product. 

(6) Exemptions. Handlers may ship 

untreated almonds under the following 

conditions. For purposes of this section, 

container means a box, bin, bag, carton, 

or any other type of receptacle used in 

the packaging of bulk almonds. 

(i) Handlers may ship untreated 

almonds for further processing directly 

to manufacturers located within the 

U.S., Canada or Mexico. This program 

shall be termed the Direct Verifiable 

(DV) program. Handlers may only ship 

untreated almonds to manufacturers 

who have submitted ABC Form No. 52, 

‘‘Application for Direct Verifiable (DV) 

Program for Further Processing of 

Untreated Almonds,’’ and have been 

approved by the Board’ TERP. Such 

manufacturers must apply to the Board 

and be approved annually by the TERP. 

Should the applicant disagree with the 

TERP’s decision, it may appeal the 

decision in writing to the Board, and 

ultimately to USDA. The Board shall 

issue a DV User code to an approved 

manufacturer. Handlers must reference 

such code in all documentation 

accompanying the lot and identify each 

container of such almonds with the term 

‘‘unpasteurized.’’ Such lettering shall be 

on one outside principal display panel, 

at least 1⁄2 inch in height, clear and 

legible. If a third party is involved in the 

transaction, the handler must provide 

sufficient documentation to the Board to 

track the shipment from the handler’s 

facility to the approved DV user. 

Approved DV Users shall: 

(A) Subject such almonds to a 

treatment process or processes using 

technologies that achieve in total a 

minimum 4-log reduction of Salmonella 

bacteria as determined by the FDA, 

accepted by the Board’s scientific 

review panel, or established by a Boardapproved process authority; 

(B) Identify the manufacturing 

locations where treatment will occur; 

(C) Have their treatment technology 

and equipment validated by a Boardapproved process authority. Treatment 

technology and equipment that have 

been modified to the point where 

operating parameters such as time, 

temperature, or volume, change shall be 

revalidated; 

(D) Have their technology and 

procedures verified by a Boardapproved DV auditor to ensure they are 

being applied appropriately. On an 

annual basis, DV auditors must submit 

an application to the Board on ABC 

Form No. 53, ‘‘Application for Direct 

Verifiable (DV) Program Auditors,’’ and 

be approved by the Board’s TERP. 

Should the applicant disagree with the 

TERP’s decision, it may appeal the 

decision in writing to the Board, and 

ultimately to USDA; 

(E) Maintain all records regarding 

validation and verification of treatment 

methods, processing, and product 

traceability. Such records shall be 

retained for two years and shall be made 

available for review by the Board; and, 

(F) Ship any almonds which will not 

be treated to a handler, to another 

approved DV User, to locations outside 

the U.S., Canada, and Mexico 

(containers must remain identified with 

the term ‘‘unpasteurized’’), as specified 

in § 981. 442(b)(6)(i), or dispose of such 

almonds in non-edible channels. 

(ii) Handlers may ship untreated 

almonds directly or through a third 

party to locations outside the U.S., 

Canada, and Mexico, provided that each 

container of such almonds is identified 

with the term ‘‘unpasteurized.’’ Such 

lettering shall be on one outside 

principal display panel, at least 1⁄2 inch 

in height, clear and legible. If a third 

party is involved in the transaction, the 

handler must provide sufficient 

documentation to the Board to track the 

shipment from the handler’s facility to 

the importer in the foreign country. 

(7) Other restrictions. The provisions 

of this section do not supersede any 

restrictions or prohibitions regarding 

almonds grown in California under the 

FederalFood, Drug and Cosmetic Act, or 

any other applicable laws or regulations 

or the need to comply with applicable 

food and sanitary regulations of city, 

county, State or Federal agencies. 

Dated: December 1, 2006. 

Lloyd C. Day, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. 06–9543 Filed 12–1–06; 12:43 pm] 

BILLING CODE 3410–02–M 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Parts 2, 33, 365 and 366 

[Docket No. AD07–2–000] 

Repeal of the Public Utility Holding 

Company Act of 1935 and Enactment 

of the Public Utility Holding Company 

Act of 2005; Transaction Subject to 

FPA Section 203; Supplemental Notice 

of Technical Conference 

November 27, 2006. 

AGENCY: Federal Energy Regulatory 

Commission, DOE. 


PWALKER on PRODPC60 with PROPOSALS