12038 Federal Register / Vol. 72, No. 50 / Thursday, March 15, 2007 / Rules and Regulations 

§ 875.408 What is the significance of 

incontestability? 

(a) Incontestability means coverage 

issued based on an erroneous 

application may remain in effect. Such 

coverage will not remain in effect under 

any of the following conditions: 

(1) If your coverage has been in force 

for less than 6 months, the Carrier may 

void your coverage upon a showing that 

information on your signed application 

that was material to your approval for 

coverage is different from what is shown 

in your medical records. 

(2) If your coverage has been in force 

for at least 6 months but less than 2 

years, the Carrier may void your 

coverage upon a showing that 

information on your signed application 

that was material to your approval for 

coverage is different from what is shown 

in your medical records and pertains to 

the condition for which benefits are 

sought. 

(3) After your coverage has been in 

effect for 2 years, the Carrier may void 

your coverage only upon a showing that 

you knowingly and intentionally made 

a false or misleading statement or 

omitted information in your signed 

application for coverage regarding your 

health status that was material to your 

approval for coverage. 

(4) If your coverage is voided, as 

described in paragraph (a)(1), (a)(2), or 

(a)(3) of this section, no claims will be 

paid. In addition, the provisions of 

§ 875.104 relating to the procedures for 

resolving a dispute involving benefits 

eligibility or claims denials do not apply 

to your situation. You may request a 

review by the Carrier if you believe that 

your coverage was voided in error. You 

must submit your request in writing to 

the Carrier within 30 days of the date of 

the rescission letter (letter voiding your 

coverage). 

* * * * * 

■ 6. In § 875.410 revise the first 

sentence to read as follows: 

§ 875.410 May I continue my coverage 

when I leave Federal or military service? 

If you are an active workforce 

member, your coverage will 

automatically continue when you leave 

active service, as long as the Carrier 

continues to receive the required 

premium when due. * * * 

[FR Doc. E7–4695 Filed 3–14–07; 8:45 am] 

BILLING CODE 6325–39–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Parts 916 and 917 

[Docket No. AMS–FV–06–0190; FV07–916/ 

917–2 FIR] 

Nectarines and Peaches Grown in 

California; Temporary Suspension of 

Provisions Regarding Continuance 

Referenda Under the Nectarine and 

Peach Marketing Orders 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: The Department of 

Agriculture (USDA) is adopting, as a 

final rule, without change, an interim 

final rule temporarily suspending order 

provisions that require continuance 

referenda to be conducted for the 

nectarine and peach marketing orders 

during winter 2006–07. This rule 

enables USDA to postpone conducting 

the continuance referenda until the 

industry has had sufficient time to 

evaluate the effects of recent 

amendments to the marketing orders. 

Temporary suspension of the 

continuance referenda should also 

minimize confusion during the current 

committee nomination period, which 

overlaps with the scheduled referenda 

period. 

DATES: Effective Date: April 16, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Laurel May, 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: 

Laurel.May@usda.gov; or Kurt Kimmel, 

Regional Manager, California Marketing 

Field Office, Marketing Order 

Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, 2202 

Monterey Street, Suite 102B, Fresno, 

California 93721; Telephone: (559) 487–

5901, Fax: (559) 487–5906, or E-mail: 

Kurt.Kimmel@usda.gov. The rule can be 

viewed at http://www.regulations.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 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.’’

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. A handler 

is afforded the opportunity for a hearing 

on the petition. After the hearing, USDA 

would rule on the petition. The Act 

provides that the district court of the 

United 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 date of the 

entry of the ruling. 

This rule continues in effect the 

action that temporarily suspends the 

provisions in §§ 916.64(e) and 917.61(e) 

of the orders, which specify when 

continuance referenda should be 

conducted to determine whether 

growers favor continuance of the orders. 

Temporary suspension of the provisions 

for continuance referenda will provide 

growers with more time to evaluate the 

effects of recent amendments to the 

orders before voting on continuance of 

the marketing programs. Suspension of 

the referenda requirements will also 

diminish the confusion likely to occur 

if the referenda are held during current 

committee nominations. These actions 

were unanimously recommended by the 

Nectarine Administrative Committee 

(NAC) and the Peach Commodity 

Committee (PCC) (committees) at their 

August 31, 2006, meetings. 

Nectarines 

Section 916.64(e) of the nectarine 

marking order currently provides that 

USDA shall conduct a continuance 


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Federal Register / Vol. 72, No. 50 / Thursday, March 15, 2007 / Rules and Regulations 12039 

referendum between December 1 and 

February 15 of every fourth fiscal period 

since winter 1974–75 to ascertain 

whether continuance of the order is 

favored by nectarine growers. A 

continuance referendum is, therefore, 

scheduled to be conducted between 

December 1, 2006, and February 15, 

2007. Authorization to suspend the 

continuance referendum requirement is 

provided in § 916.64(b). 

The NAC recommended that the 

provision requiring the winter 2006–07 

continuance referendum be temporarily 

suspended to allow the industry time to 

fully realize the impact of recent 

amendments to the marketing order. 

Amendments to the order were 

approved by nectarine growers in a 

referendum held in March 2006. The 

majority of the amendments were 

implemented on January 1, 2007. The 

continuance referendum cycle will 

resume as provided in § 916.64(e) in the 

period between December 1, 2010, and 

February 15, 2011. A referendum can be 

held in the interim if deemed 

appropriate by USDA. 

Among the recent amendments to the 

order are revisions to the NAC’s 

nomination procedures, which require a 

transition to mail balloting. Ballots for 

the 2007–09 term of office were mailed 

to growers in January 2007. The NAC 

believes that receiving both the 

nomination ballots and the continuance 

referenda ballots during this transitional 

period would confuse growers, who 

would then be less likely to return any 

of the ballots. The committees expect 

that temporary suspension of the 

continuance referendum will minimize 

confusion and maximize grower 

participation in both the committee 

nominations and the continuance 

referendum. After this initial 

transitional period, biennial committee 

nominations should take place earlier in 

the year and are not expected to overlap 

with scheduled continuance referendum 

periods. 

Peaches 

Section 917.61(e) of the peach 

marketing order currently provides that 

USDA shall conduct a continuance 

referendum between December 1 and 

February 15 of every fourth fiscal period 

since winter 1974–75 to ascertain 

whether continuance of the order is 

favored by peach growers. A 

continuance referendum is, therefore, 

scheduled to be conducted between 

December 1, 2006 and February 15, 

2007. Authorization to suspend the 

continuance referendum requirement is 

provided in § 917.61(b). 

The PCC recommended that the 

provision requiring the winter 2006–07 

continuance referendum be temporarily 

suspended to allow the industry time to 

fully realize the impact of recent 

amendments to the marketing order. 

Amendments to the order were 

approved by peach growers in a 

referendum held in March 2006. The 

majority of the amendments were 

implemented on January 1, 2007. The 

continuance referendum cycle will 

resume as provided in § 917.61(e) in the 

period between December 1, 2010, and 

February 15, 2011. A referendum can be 

held in the interim if deemed 

appropriate by USDA. 

Section 917.61(e) also requires that 

USDA conduct continuance referenda 

regarding the provisions of Part 917 

pertaining to pears. Although the 

provisions pertaining to pears are 

currently suspended, the pear referenda 

are conducted concurrently with the 

peach and nectarine continuance 

referenda. In order to stay synchronized 

with the peach and nectarine referenda, 

the pear referendum will not be held 

during the period between December 1, 

2006, and February 15, 2007. The pear 

continuance referendum cycle will 

resume as provided in § 917.61(e) in the 

period between December 1, 2010, and 

February 15, 2011. A referendum can be 

held in the interim if deemed 

appropriate by USDA. 

Among the recent amendments to the 

order are revisions to the PCC’s 

nomination procedures, which require a 

transition to mail balloting. Ballots for 

the 2007–09 term of office were mailed 

to growers in January 2007. The PCC 

believes that receiving both the 

nomination ballots and the continuance 

referenda ballots during this transitional 

period would confuse growers, who 

would then be less likely to return any 

of the ballots. The committees expect 

that temporary suspension of the 

continuance referendum will minimize 

confusion and maximize grower 

participation in both the committee 

nominations and the continuance 

referendum. After this initial 

transitional period, biennial committee 

nominations should take place earlier in 

the year and are not expected to overlap 

with scheduled continuance referendum 

periods. 

Final Regulatory Flexibility Act 

Pursuant to requirements set forth in 

the Regulatory Flexibility Act (RFA), the 

Agricultural Marketing Service (AMS) 

has considered the economic impact of 

this action on small entities. 

Accordingly, AMS has prepared this 

final regulatory flexibility analysis. 

The purpose of the RFA is to fit 

regulatory actions to the scale of 

business subject to such actions 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 150 handlers 

of nectarines and peaches who are 

subject to regulation under the order 

and approximately 800 growers of these 

fruits in the regulated area. Small 

agricultural service firms, which 

include handlers, have been defined by 

the Small Business Administration (13 

CFR 121.201) as those having annual 

receipts of less than $6,500,000, and 

small agricultural growers are defined as 

those having annual receipts of less than 

$750,000. The majority of California 

nectarine and peach handlers and 

growers may be classified as small 

entities. 

The committees’ staff has estimated 

that there are fewer than 26 handlers in 

the industry who could be defined as 

other than small entities. For the 2005 

season, the committees’ staff estimated 

that the average handler price received 

was $10.00 per container or container 

equivalent of nectarines or peaches. A 

handler would have to ship at least 

600,000 containers to have annual 

receipts of $6,000,000. Given data on 

shipments maintained by the 

committees’ staff and the average 

handler price received during the 2005 

season, the committees’ staff estimates 

that small handlers represent 

approximately 86 percent of all the 

handlers within the industry. 

The committees’ staff has also 

estimated that fewer than 10 percent of 

the growers in the industry could be 

defined as other than small entities. For 

the 2005 season, the committees’ staff 

estimated the average grower price 

received was $5.25 per container or 

container equivalent for nectarines and 

peaches. A grower would have to 

produce at least 142,858 containers of 

nectarines and peaches to have annual 

receipts of $750,000. Given data 

maintained by the committees’ staff and 

the average grower price received 

during the 2005 season, the committees’

staff estimates that small growers 

represent more than 90 percent of the 

producers within the industry. 

With an average grower price of $5.25 

per container or container equivalent, 

and a combined packout of nectarines 

and peaches of approximately 

38,776,500 containers, the value of the 

2005 packout is estimated to be 

$203,576,600. Dividing this total 

estimated grower revenue figure by the 


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12040 Federal Register / Vol. 72, No. 50 / Thursday, March 15, 2007 / Rules and Regulations 

estimated number of growers (800) 

yields an estimated average revenue per 

grower of about $254,471 from the sales 

of peaches and nectarines. 

This rule continues in effect the 

action that temporarily suspends the 

provisions in §§ 916.64(e) and 917.61(e), 

which specify the time period in which 

continuance referenda should be 

conducted to determine if growers favor 

continuance of the nectarine and peach 

marketing orders, respectively. Pursuant 

to these provisions, the next 

continuance referenda are scheduled for 

the period between December 1, 2006, 

and February 15, 2007. Authorization to 

suspend these provisions is provided in 

§§ 916.64(b) and 917.61(b) of the orders. 

The committees recommended 

suspension of these provisions to allow 

the industry time to evaluate the effects 

of recent amendments to the marketing 

orders before voting on continuation of 

the programs. For instance, several of 

the amendments were intended to 

increase industry participation in 

program activities. Others were 

intended to modernize the marketing 

orders’ operations to better reflect 

current industry business practices. 

Postponing the referenda will give the 

industry time to operate under the 

amended orders and determine whether 

the intended goals were met before the 

next continuance referenda. The 

continuance referenda cycles as 

provided in §§ 916.64(e) and 917.61(e) 

will resume in the period between 

December 1, 2010, and February 15, 

2011. Referenda can be held in the 

interim if deemed appropriate by USDA. 

This action is also expected to 

decrease the confusion likely to occur if 

the continuance referenda scheduled for 

the period between December 1, 2006, 

and February 15, 2007, are held as 

scheduled. Implementation of the order 

amendments required a transition to 

mail balloting for NAC and PCC 

nominations in January 2007, which 

would overlap with the scheduled 

continuance referenda. Growers could 

each receive as many as four ballots 

during the overlapping nominations and 

referenda periods if they produce both 

nectarines and peaches. The committees 

are concerned that the flood of ballots 

could confuse growers and discourage 

them from participating fully. Therefore, 

the committees recommended that the 

continuance referenda be postponed. 

After this initial transitional period the 

biennial committee nominations should 

take place earlier in the year and are not 

expected to overlap with scheduled 

continuance referenda periods. 

One alternative to this action would 

be to conduct the referenda as 

scheduled. However, the committees 

believe that growers need additional 

time to evaluate the effectiveness of the 

amendments that were adopted before 

voting on continuation of the marketing 

programs. Postponing the continuance 

referenda until a later time is expected 

to provide a better assessment of 

industry support for the orders. Further, 

if the continuance referenda were not 

postponed the referenda period would 

overlap with the committee 

nominations period. Voter confusion 

would likely occur due to the receipt of 

multiple ballots during that time. The 

committees were concerned that the 

confusion would lead to decreased 

grower participation in both the 

referenda and the committee 

nominations. Therefore, USDA has 

determined that the provisions requiring 

that continuance referenda be 

conducted during the period between 

December 1, 2006, and February 15, 

2007, should be temporarily suspended. 

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. 

This rule will not impose any 

additional reporting or recordkeeping 

requirements on either small or large 

nectarine or peach 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. 

In addition, USDA has not identified 

any relevant Federal rules that 

duplicate, overlap, or conflict with this 

rule. 

Further, the committees’ meetings 

were widely publicized throughout the 

nectarine and peach industry and all 

interested persons were invited to 

attend the meetings and participate in 

committee deliberations. Like all 

committee meetings, the August 31, 

2006, meetings were public meetings 

and all entities, both large and small, 

were able to express their views on this 

issue. 

An interim final rule concerning this 

action was published in the Federal 

Register on December 28, 2006. The 

committees posted the rule on their Web 

site. In addition, the rule was made 

available through the Internet by USDA 

and the Office of the Federal Register. 

That rule provided for a 30-day 

comment period which ended January 

29, 2007. One comment supporting the 

proposal was received. The commenter 

cited more time to evaluate the effects 

of recent amendments to the order and 

reduced confusion for committee 

nominations as justification for 

temporarily suspending the provisions 

for continuance referenda. 

A small business guide on complying 

with fruit, vegetable, and specialty crop 

marketing agreements and orders may 

be viewed at: http://www.ams.usda.gov/ 

fv/moab.html. Any questions about the 

compliance guide should be sent to Jay 

Guerber at the previously mentioned 

address in the FOR FURTHER INFORMATION

CONTACT section. 

After consideration of all relevant 

material presented, including the 

committees’ recommendations, and 

other information, it is found that the 

order provisions suspended by this 

action no longer tend to effectuate the 

declared policy of the Act for the 2006–

07 period. Accordingly, we are 

finalizing the interim final rule, without 

change, as published in the Federal 

Register (71 FR 78042, December 28, 

2006). 

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. 

PART 916—NECTARINES GROWN IN 

CALIFORNIA 

PART 917—FRESH PEARS AND 

PEACHES GROWN IN CALIFORNIA 

■ Accordingly, the interim final rule 

amending 7 CFR parts 916 and 917, 

which was published at 71 FR 78042 on 

September 28, 2006, is adopted as a 

final rule without change. 

Dated: March 9, 2007. 

Lloyd C. Day, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. E7–4662 Filed 3–14–07; 8:45 am] 

BILLING CODE 3410–02–P 


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