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[Federal Register: April 5, 2010 (Volume 75, Number 64)]
[Proposed Rules]               
[Page 17072-17075]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05ap10-16]                         

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Proposed Rules
                                                Federal Register
________________________________________________________________________

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.

========================================================================



[[Page 17072]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Doc. No. AMS-FV-09-0091; FV10-916/917-2 PR]

 
Nectarines and Peaches Grown in California; Increased Assessment 
Rates

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rates established for 
the Nectarine Administrative Committee and the Peach Commodity 
Committee (Committees) for the 2009-10 and subsequent fiscal periods 
from $0.0175 to $0.0280 per 25-pound container or container equivalent 
of nectarines handled, and from $0.0025 to $0.026 per 25-pound 
container or container equivalent of peaches handled. The Committees 
locally administer the marketing orders which regulate the handling of 
nectarines and peaches grown in California. Assessments upon nectarine 
and peach handlers are used by the Committees to fund reasonable and 
necessary expenses of the programs. The fiscal periods run from March 1 
through the last day of February. The assessment rates would remain in 
effect indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by May 5, 2010.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or Internet: http://www.regulations.gov. Comments should reference the document number and 
the date and page number of this issue of the Federal Register and will 
be available for public inspection in the Office of the Docket Clerk 
during regular business hours, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this rule 
will be included in the record and will be made available to the 
public. Please be advised that the identity of the individuals or 
entities submitting the comments will be made public on the Internet at 
the address provided above.

FOR FURTHER INFORMATION CONTACT: Jerry L. Simmons, Marketing 
Specialist, or Kurt Kimmel, Regional Manager, California Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 
487-5906; or E-mail: Jerry.Simmons@ams.usda.gov or 
Kurt.Kimmel@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation 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, or E-mail: 
Antoinette.Carter@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
Nos. 916 and 917, both as amended (7 CFR parts 916 and 917), regulating 
the handling of nectarines and peaches grown in California, 
respectively, hereinafter referred to as the ``orders.'' The orders are 
effective under the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing orders now in effect, California 
nectarine and peach handlers are subject to assessments. Funds to 
administer the orders are derived from such assessments. It is intended 
that the assessment rates as proposed herein would be applicable to all 
assessable nectarines and peaches beginning on March 1, 2010, and 
continue until amended, suspended, or terminated.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. Such 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing, USDA would rule on the petition. The Act provides 
that the district court of the United States in any district in which 
the handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction to review USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This rule would increase the assessment rates established for the 
Nectarine Administrative Committee (NAC) for the 2010-11 and subsequent 
fiscal periods from $0.0175 to $0.0280 per 25-pound container or 
container equivalent of nectarines and for the Peach Commodity 
Committee (PCC) for the 2010-11 and subsequent fiscal periods from 
$0.0025 to $0.026 per 25-pound container or container equivalent of 
peaches.
    The nectarine and peach marketing orders provide authority for the 
Committees, with the approval of USDA, to formulate annual budgets of 
expenses and collect assessments from handlers to administer the 
programs. The members of NAC and PCC are producers of California 
nectarines and peaches, respectively. They are familiar with the 
Committees' needs, and with the costs for goods and services in their 
local area and are, therefore, in a position to formulate appropriate 
budgets and assessment rates. The assessment rates are formulated and 
discussed in public meetings. Thus, all directly affected persons have 
an opportunity to participate and provide input.

NAC Assessment and Expenses

    For the 2009-10 and subsequent fiscal periods, the NAC recommended, 
and USDA approved, an assessment rate that would continue in effect 
from fiscal period to fiscal period unless modified, suspended, or 
terminated by USDA upon recommendation and information submitted by the 
Committee or other information available to USDA.

[[Page 17073]]

    The NAC met on December 10, 2009, and unanimously recommended 2010-
11 expenditures of $1,448,101 and an assessment rate of $0.0280 per 25-
pound container or container equivalent of nectarines. In comparison, 
the budgeted expenditures for the 2009-10 fiscal period were 
$1,797,290. The assessment rate of $0.0280 per 25-pound container or 
container equivalent of nectarines is $0.0105 higher than the rate 
currently in effect. The NAC recommended a higher assessment rate 
because the 2009 crop was lower than expected due to a large number of 
tree pullouts and other economic factors.
    The major expenditures recommended by the NAC for the 2010-11 
fiscal period include $291,377 for administration, $157,016 for 
production research, and $999,708 for domestic and international 
programs. In comparison, budgeted expenses for these items in 2008-09 
were $319,965.32 for administration, $349,447.55 for production 
research, and $1,127,877.33 for domestic and international programs.
    The assessment rate recommended by the NAC was derived after 
considering anticipated fiscal year expenses; estimated assessable 
nectarines of 16,200,000 25-pound containers or container equivalents; 
the estimated income from other sources, such as interest; and the need 
for an adequate financial reserve to carry the NAC into the 2011-12 
fiscal period. Therefore, the NAC recommended an assessment rate of 
$0.0280 per 25-pound container or container equivalent.
    Combining expected assessment revenue of $453,600 with the $641,840 
carryover available from the 2009-10 fiscal period and other income 
such as interest should be adequate to meet Committee needs. The 
assessment rate is also likely to provide a $116,486 reserve, which may 
be used to cover administrative expenses prior to the beginning of the 
2011-12 shipping season as provided in the order (Sec.  916.42).

PCC Assessment and Expenses

    For the 2009-10 and subsequent fiscal periods, the PCC recommended, 
and USDA approved, an assessment rate that would continue in effect 
from fiscal period to fiscal period unless modified, suspended, or 
terminated by USDA upon recommendation and information submitted by the 
Committee or other information available to USDA.
    The PCC met on December 10, 2009, and recommended 2010-11 
expenditures of $1,839,651 and an assessment rate of $0.026 per 25-
pound container or container equivalent of peaches. In comparison, 
budgeted expenditures for the 2009-10 fiscal period were $1,885,250. 
The assessment rate of $0.026 per 25-pound container or container 
equivalent of peaches is $0.0235 higher than the rate currently in 
effect. The PCC recommended a higher assessment rate because the 2009 
crop was lower than expected due to a large number of tree pullouts and 
other economic factors.
    The major expenditures recommended by the PCC for the 2010-11 
fiscal period include $368,756 for administration, $199,662 for 
production research, and $1,271,233 for domestic and international 
programs. In comparison, budgeted expenses for these items in 2009-10 
were $334,058 for administration, $366,920 for production research, and 
$1,184,272 for domestic and international programs.
    The assessment rate recommended by the PCC was derived after 
considering anticipated fiscal year expenses; estimated assessable 
peaches of 20,600,000 25-pound containers or container equivalents; the 
estimated income from other sources, such as interest; and the need for 
an adequate financial reserve to carry the PCC into the 2011-12 fiscal 
period. Therefore, the PCC recommended an assessment rate of $0.026 per 
25-pound container or container equivalent.
    Combining expected assessment revenues of $535,600 with the 
$854,699 carryover available from the 2009-10 fiscal period and other 
income such as interest should be adequate to meet Committee needs. The 
assessment rate is also likely to provide a $147,502 reserve, which may 
be used to cover administrative expenses prior to the beginning of the 
2011-12 shipping season as provided in the order (Sec.  917.38).

Continuance of Assessment Rates

    The proposed assessment rates would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA upon recommendation 
and information submitted by the Committees or other available 
information.
    Although these assessment rates would be in effect for an 
indefinite period, the Committees will continue to meet prior to or 
during each fiscal period to recommend budgets of expenses and consider 
recommendations for modification of the assessment rates. The dates and 
times of Committee meetings are available from the Committees' Web site 
at http://www.eatcaliforniafruit.com or USDA. Committee meetings are 
open to the public and interested persons may express their views at 
these meetings. USDA would evaluate the Committees' recommendations and 
other available information to determine whether modification of the 
assessment rate for each Committee is needed. Further rulemaking would 
be undertaken as necessary. The Committees' 2010-11 fiscal period 
budgets and those for subsequent fiscal periods would be reviewed and, 
as appropriate, approved by USDA.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) 
has considered the economic impact of this rule on small entities. 
Accordingly, AMS has prepared this initial regulatory flexibility 
analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf.
    There are approximately 101 California nectarine and peach handlers 
subject to regulation under the orders covering nectarines and peaches 
grown in California, and about 475 producers of these fruits in 
California. Small agricultural service firms, which include handlers, 
are defined by the Small Business Administration (SBA) (13 CFR 121.201) 
as those having annual receipts of less than $7,000,000, and small 
agricultural producers are defined as those having annual receipts of 
less than $750,000. A majority of these handlers and producers may be 
classified as small entities.
    The Committees' staff has estimated that there are fewer than 50 
handlers in the industry who would not be considered small entities. 
For the 2009 season, the committees' staff estimated that the average 
handler price received was $11.50 per container or container equivalent 
of nectarines or peaches. A handler would have to ship at least 608,696 
containers to have annual receipts of $7,000,000. Given data on 
shipments maintained by the committees' staff and the average handler 
price received during the 2009 season, the Committees' staff estimates 
that small handlers represent approximately 50 percent of all the 
handlers within the industry.
    The Committees' staff has also estimated that fewer than 50 
producers

[[Page 17074]]

in the industry would not be considered small entities. For the 2009 
season, the Committees estimated the average producer price received 
was $6.50 per container or container equivalent for nectarines and 
peaches. A producer would have to produce at least 115,385 containers 
of nectarines and peaches to have annual receipts of $750,000. Given 
data maintained by the Committees' staff and the average producer price 
received during the 2009 season, the Committees' staff estimates that 
small producers represent more than 80 percent of the producers within 
the industry.
    With an average producer price of $6.50 per container or container 
equivalent, and a combined packout of nectarines and peaches of 
37,263,343 containers, the value of the 2009 packout is estimated to be 
$242,211,730. Dividing this total estimated grower revenue figure by 
the estimated number of producers (475) yields an estimate of average 
revenue per producer of about $509,919 from the sales of peaches and 
nectarines.
    The nectarine and peach marketing orders provide authority for the 
Committees, with the approval of USDA, to formulate an annual budget of 
expenses and collect assessments from handlers to administer the 
programs. The members of the NAC and PCC are producers of California 
nectarines and peaches, respectively.
    This rule would increase the assessment rates established for the 
NAC for the 2010-11 and subsequent fiscal periods from $0.0175 to 
$0.0280 per 25-pound container or container equivalent of nectarines 
and for the PCC for the 2010-11 and subsequent fiscal periods from 
$0.0025 to $0.026 per 25-pound container or container equivalent of 
peaches.
    The NAC recommended 2010-11 fiscal period expenditures of 
$1,448,101 for nectarines and an assessment rate of $0.0280 per 25-
pound container or container equivalent of nectarines. The assessment 
rate of $0.0280 is $0.0105 higher than the rate currently in effect. 
The PCC recommended 2010-11 fiscal period expenditures of $1,839,651 
for peaches and an assessment rate of $0.026 per 25-pound container or 
container equivalent of peaches. The assessment rate of $0.026 is 
$0.0235 higher than the rate currently in effect.

Analysis of NAC Budget

    The quantity of assessable nectarines for the 2010-11 fiscal period 
is estimated at 16,200,000 25-pound containers or container 
equivalents. Thus, the $0.0280 rate should provide $453,600 in 
assessment income. Income derived from handler assessments, along with 
income from other sources and funds from the NAC's reserve, would be 
adequate to cover budgeted expenses.
    The major expenditures recommended by the NAC for the 2010-11 year 
include $291,377 for administration, $157,016 for production research, 
and $999,708 for domestic and international programs. Budgeted expenses 
in 2009-10 were $319,965.32 for administration, $349,447.55 for 
production research, and $1,127,877.33 for domestic and international 
programs.
    The NAC recommended an increased 2010-11 fiscal period assessment 
rate because the 2009 crop was lower than expected due to a large 
number of tree pullouts and other economic factors. Income generated 
from the higher assessment rate combined with reserve funds should be 
adequate to cover anticipated 2010-11 expenses.

Analysis of PCC Budget

    The quantity of assessable peaches for the 2010-11 fiscal year is 
estimated at 20,600,000 25-pound containers or container equivalents. 
Thus, the $0.026 rate should provide $535,600 in assessment income.
    The major expenditures recommended by PCC for the 2010-11 year 
include $368,756 for administration, $199,662 for production research, 
and $1,271,233 for domestic and international programs. Budgeted 
expenses in 2009-10 were $334,058 for administration, $366,920 for 
production research, and $1,184,272 for domestic and international 
programs.
    The PCC recommended an increased 2010-11 fiscal period assessment 
rate because the 2009 crop was lower than expected due to a large 
number of tree pullouts and other economic factors. Income generated 
from the higher assessment rate combined with reserve funds should be 
adequate to cover anticipated 2010-11 expenses.

Considerations in Determining Expenses and Assessment Rates

    Prior to arriving at these budgets, the Committees considered 
alternative expenditure and assessment rate levels, but ultimately 
decided that the recommended levels were reasonable to properly 
administer the orders.
    Each of the Committees then reviewed the proposed expenses; the 
total estimated assessable 25-pound containers or container 
equivalents; and the estimated income from other sources, such as 
interest income, prior to recommending a final assessment rate. The NAC 
decided that an assessment rate of $0.0280 per 25-pound container or 
container equivalent will allow it to meet its 2010-11 fiscal period 
expenses and carryover an operating reserve of about $116,486 which is 
in line with the Committee's financial needs. The PCC decided that an 
assessment rate of $0.026 per 25-pound container or container 
equivalent will allow it to meet its 2010-11 fiscal period expenses and 
carryover an operating reserve of $147,502. These assessment rates 
would allow them to meet their 2010-11 fiscal period expenses and 
carryover necessary reserves to finance operations before 2011-12 
fiscal period assessments are collected.
    A review of historical and preliminary information pertaining to 
the upcoming fiscal period indicates that the grower price for 
nectarines and peaches for the 2010-11 season could range between $6.00 
and $8.00 per 25-pound container or container equivalent. Therefore, 
the estimated assessment revenue for the 2010-11 fiscal period as a 
percentage of total grower revenue could range between 0.33 and 0.47 
percent.
    This action would increase the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to producers. However, these costs 
would be offset by the benefits derived by the operation of the 
marketing order. In addition, the Committees' meetings were widely 
publicized throughout the California nectarine and peach industries and 
all interested persons were invited to attend the meetings and were 
encouraged to participate in the Committees' deliberations on all 
issues. Like all Committee meetings, the December 10, 2009, meetings 
were public meetings and entities of all sizes were able to express 
views on this issue. Finally, interested persons are invited to submit 
information on the regulatory and informational impacts of this action 
on small businesses.
    This proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large handlers. As with 
all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.

[[Page 17075]]

    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBus
inessGuide. Any questions about the compliance guide should be sent to 
Antoinette Carter at the previously mentioned address in the FOR 
FURTHER INFORMATION CONTACT section.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: (1) The 2010-11 fiscal period begins March 1, 2010, and the 
marketing orders require that the rates of assessment for each fiscal 
period apply to all assessable nectarines and peaches handled during 
such fiscal period; (2) the Committees need to have sufficient funds to 
pay its expenses which are incurred on a continuous basis; (3) handlers 
are aware of this action which was unanimously recommended by the 
Committees at public meetings and is similar to other assessment rate 
actions issued in past years.

List of Subjects

7 CFR Part 916

    Marketing agreements, Nectarines, Reporting and recordkeeping 
requirements.

7 CFR Part 917

    Marketing agreements, Peaches, Pears, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR parts 916 and 917 
are proposed to be amended as follows:
    1. The authority citation for 7 CFR parts 916 and 917 continues to 
read as follows:

    Authority: 7 U.S.C. 601-674.

PART 916--NECTARINES GROWN IN CALIFORNIA

    2. Section 916.234 is revised to read as follows:


Sec.  916.234  Assessment rate.

    On and after March 1, 2010, an assessment rate of $0.0280 per 25-
pound container or container equivalent of nectarines is established 
for California nectarines.

PART 917--PEACHES GROWN IN CALIFORNIA

    3. Section 917.258 is revised to read as follows:


Sec.  917.258  Assessment rate.

    On and after March 1, 2010, an assessment rate of $0.026 per 25-
pound container or container equivalent of peaches is established for 
California peaches.

    Dated: March 30, 2010.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. 2010-7568 Filed 4-2-10; 8:45 am]
BILLING CODE P
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