[Federal Register Volume 70, Number 228 (Tuesday, November 29, 2005)]
[Proposed Rules]
[Pages 71734-71748]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-23327]



[[Page 71733]]

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Part IV





Department of Agriculture





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Agricultural Marketing Service



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7 CFR Parts 916 and 917



Nectarines and Peaches Grown in California; Recommended Decision and 
Opportunity To File Written Exceptions To Proposed Amendments To 
Marketing Agreement Nos. 124 and 85 and Order Nos. 916 and 917; 
Proposed Rule

Federal Register / Vol. 70, No. 228 / Tuesday, November 29, 2005 / 
Proposed Rules

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Docket No. AO-90-A7; FV05-916-1]


Nectarines and Peaches Grown in California; Recommended Decision 
and Opportunity To File Written Exceptions To Proposed Amendments To 
Marketing Agreement Nos. 124 and 85 and Order Nos. 916 and 917

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule and opportunity to file exceptions.

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SUMMARY: This recommended decision invites written exceptions on 
proposed amendments to Marketing Agreement Nos. 124 and 85 and Order 
Nos. 916 and 917 (orders), which regulate the handling of nectarines 
and peaches grown in California. The Nectarine Administrative Committee 
(NAC), the Peach Commodity Committee (PCC), and the Control Committee 
(part of M.O. No. 917) (Committees), which are responsible for local 
administration of orders 916 and 917, jointly proposed the amendments. 
The proposed amendments to order 917 only apply to peaches. The 
amendments included in this recommended decision would: Update 
definitions for ``handle'', ``grower'', and the commodities covered in 
both orders; add a definition for ``pure grower''; increase committee 
membership of the NAC from eight to thirteen members and modify 
sections of the order to conform to the increased membership; eliminate 
the Shippers Advisory Committee (order 916); allow the Control 
Committee under order 917 to be suspended if the provisions of one 
commodity are suspended and transfer applicable duties and 
responsibilities to the remaining Commodity Committee; and authorize 
interest and late payment charges on assessments paid late; and other 
related amendments. All of the proposals are intended to streamline and 
improve the administration, operation, and functioning of the orders.

DATES: Written exceptions must be filed by December 19, 2005.

ADDRESSES: Written exceptions should be filed with the Hearing Clerk, 
U.S. Department of Agriculture, Room 1081-S, Washington, DC 20250-9200, 
Facsimile number (202) 720-9776 or http://www.regulations.gov. All 
comments should reference the docket number and the date and page 
number of this issue of the Federal Register. Comments will be made 
available for public inspection in the Office of the Hearing Clerk 
during regular business hours, or can be viewed at: http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Melissa Schmaedick, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. 
Box 1035, Moab, Utah; telephone: (435) 259-7988, Fax: (435) 259-4945; 
or Kathleen M. Finn, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW., Stop 0237, 
Washington, DC 20250-0237; telephone: (202) 720-2491, fax (202) 720-
8938.
    Small businesses may request information on this proceeding 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.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice 
of Hearing issued on January 25, 2005 and published in the January 28, 
2005 issue of the Federal Register (70 FR 4041).
    This action is governed by the provisions of sections 556 and 557 
of title 5 of the United States Code and, therefore, is excluded from 
the requirements of Executive Order 12866.

Preliminary Statement

    Notice is hereby given of the filing with the Hearing Clerk of this 
recommended decision with respect to the proposed amendment of 
Marketing Agreements Nos. 124 and 85 and Order Nos. 916 and 917, which 
regulate the handling of nectarines and peaches grown in California, 
and the opportunity to file written exceptions thereto. Copies of this 
decision can be obtained from Melissa Schmaedick, whose address is 
listed above.
    This recommended decision is issued pursuant to the provisions of 
the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 
601 et seq.), hereinafter referred to as the ``Act,'' and the 
applicable rules of practice and procedure governing the formulation of 
marketing agreements and orders (7 CFR part 900).
    The proposed amendments are based on the record of a public hearing 
held on February 15 and 16, 2005, in Fresno, California. Notice of this 
hearing was published in the Federal Register on January 28, 2005 (70 
FR 4041). The notice of hearing contained proposed order changes 
jointly proposed by the Nectarine Administrative Committee, the Peach 
Commodity Committee, and the Control Committee (part of order 917), 
which are responsible for local administration of orders 916 and 917. 
The proposed amendments to order 917 only apply to peaches. The pear 
provisions of the order have been suspended since 1994. Because the 
Pear Commodity Committee and the pear provisions are suspended, the 
Pear Commodity Committee did not participate in any amendment 
discussions.
    The proposed recommendations are the result of a task force 
appointed by the Committees to conduct a review of the orders. The task 
force met several times in 2003 and drafted proposed amendments to the 
orders and presented the recommendations at industry meetings. The 
recommendations were then forwarded to the Commodity Committees and the 
Control Committee, each of which unanimously approved the proposed 
amendments. The Nectarine Administrative Committee, the Peach Commodity 
Committee, and the Control Committee believe that the proposed changes 
would improve the administration, operation, and functioning of the 
programs in effect for nectarines and peaches grown in California. The 
Committees' request for a hearing was submitted to USDA on January 5, 
2004.
    The Committees' proposed amendments are summarized below. This 
recommended decision makes modifications to some of the proposals and 
does not recommend one proposal.
    The Committees' proposed amendments to marketing orders 916 and 917 
would:
    1. Allow hybrid fruit that exhibits the characteristics of 
nectarines or peaches and is subject to cultural practices common to 
such fruit be subject to marketing order regulations.
    2. Specify that the act of packing be considered a handling 
function.
    3. Change the marketing season for nectarines from May 1 through 
November 30 to April 1 through November 30.
    4. Allow the duties and responsibilities of the Control Committee 
under the peach order to be transferred to one Commodity Committee if 
the provisions for the other commodity are suspended.
    5. Increase membership on the nectarine committee from eight to 
thirteen members and revise the procedures that constitute quorum and 
voting requirements to conform to the increased Committee size. The 
proposal would also add to both orders that the Committees may vote by 
facsimile and set forth voting requirements for video conferencing.

[[Page 71735]]

    6. Eliminate the Shippers' Advisory Committee under the nectarine 
order.
    7. Modify the definitions of grower to clarify that officers of 
grower corporations are eligible to serve as grower members the 
Committee.
    8. Add a definition of ``pure grower'' for purposes of eligibility 
for membership on the Committees. This proposal would also allow 
alternative methods to conduct nominations, change the date for holding 
nominations, authorize positions for pure growers and add tenure 
requirements for Committee members.
    9. Authorize nominees to state their willingness to serve on the 
Committees prior to the selection.
    10. Change the district boundaries under the nectarine order and 
redefine the peach districts.
    11. Change the names and the composition of the districts of the 
Peach Commodity Committee.
    12. Allow for interest and/or late payments for assessments not 
paid timely and authorize the Peach Committee to borrow money.
    13. Provide authority to recommend different regulations for 
specific market destinations (not recommended herein).
    14. Clarify that subcommittees may be established by the Peach 
Commodity Committee.
    Twenty-two witnesses testified at the hearing. These witnesses 
represented fresh nectarine and peach growers and handlers. All 
witnesses with the exception of one supported the Committees' 
recommended changes. The one opposing witness spoke against proposal 13 
which would allow the Committees to recommend different regulation for 
different market destinations of peaches and nectarines.
    Witnesses speaking in favor of the proposed changes addressed the 
need to improve the administration, operation, and functioning of the 
programs in effect for nectarines and peaches grown in California. The 
California nectarine and peach industries are regulated under federal 
marketing orders 916 and 917, respectively. Both programs were 
established over 70 years ago and were most recently amended in the 
1970's.
    Marketing orders 916 and 917 are administered by marketing order 
administrative committees, each of which have contracted with the 
California Tree Fruit Agreement (CTFA) for management of marketing, 
promotion and certain administrative functions. CTFA also manages the 
California State Marketing Order for plums.
    Witnesses at the hearing stated that the amendments being 
considered were designed to streamline the operation of the orders 
based on accepted business procedures in the 21st century. Witnesses 
also stated that many of the proposed amendments would provide the 
programs with the necessary flexibility for the future. Most 
importantly, the proposed amendments, if implemented, would result in 
improved consistency between and more efficient administration of the 
orders.
    At the conclusion of the hearing, the Administrative Law Judge 
stated that the final date for interested persons to file proposed 
findings and conclusions or written arguments and briefs based on the 
evidence received at the hearing would be April 12, 2005. The deadline 
was subsequently extended to May 12, 2005. One hundred and forty six 
briefs and comments were filed. The majority of comments filed were in 
opposition to Proposal 13, which would add authority to orders 916 and 
917 for the Committees to recommend different regulations for different 
market destinations for California peaches and nectarines. The 
Committees also filed a joint brief requesting that Proposal 13 be 
withdrawn. Accordingly, Proposal 13 has been removed from consideration 
and will not be discussed further in this decision.

Material Issues

    The material issues presented on the record of hearing are as 
follows:
    1a. Whether to amend the order to allow hybrid fruit that exhibits 
the characteristics of nectarines and is subject to cultural practices 
common to nectarines to be subject to marketing order regulations;
    1b. Whether to amend the order to allow hybrid fruit that exhibits 
the characteristics of peaches and is subject to cultural practices 
common to peaches to be subject to marketing order regulations;
    2a. Whether to amend the order by specifying that the act of 
packing nectarines be considered a handling function;
    2b. Whether to amend the order by specifying that the act of 
packing peaches be considered a handling function;
    3. Whether to amend the nectarine order by changing the marketing 
season from May 1 through November 30 to April 1 through November 30;
    4. Whether to amend the provisions relating to the Control 
Committee under marketing order No. 917 by allowing the duties and 
responsibilities of the Control Committee to be transferred to one 
Commodity Committee if the provisions of the other Commodity Committee 
are suspended;
    5a. Whether to amend the nectarine order by increasing membership 
from 8 members to 13 members and revising the procedures that 
constitute quorum and voting requirements to conform to the increased 
Committee size. The proposal would also add that the Committee may vote 
by facsimile and would specify that voting requirements for video 
conferencing would be the same as those for assembled meetings;
    5b. Whether to amend the peach order by adding that the Peach 
Commodity Committee may vote by facsimile or video teleconference;
    6. Whether to amend the nectarine order by eliminating the 
Shippers' Advisory Committee;
    7a. Whether to amend the nectarine order by modifying the 
definition of grower to clarify that officers of corporations would be 
eligible to serve in grower positions on the Committee;
    7b. Whether to amend the order by modifying the definition of 
grower to clarify that, for peaches, officers of corporations would be 
eligible to serve in grower positions on the Committees;
    8a. Whether to amend the order by adding a definition of ``pure 
producer'' and ``pure grower'' for purposes of eligibility for 
membership on the Committee;
    8b. Whether to amend the order by adding a definition for peaches 
of ``pure producer'' and ``pure grower'' for purposes of eligibility 
for membership on the Committee;
    8c. Whether to amend the nectarine order by allowing alternative 
methods to conduct nominations, changing the date by which the 
nomination procedure should be held from February 15 to January 31, 
requiring at least 50 percent of the positions be held by pure growers 
and adding tenure requirements for Committee members;
    8d. Whether to amend the peach provisions of the order by allowing 
alternative methods to conduct nominations, changing the date by which 
the nomination procedure should be held from February 15 to January 31, 
requiring at least 50 percent of the positions be held by pure growers, 
and adding tenure requirements for Committee members;
    9a. Whether to amend the order by authorizing the nominees to state 
their willingness to serve on the Committee prior to the selection;
    9b. Whether to amend the order by authorizing the peach nominees to 
state their willingness to serve on the Committees prior to the 
selection;
    10a. Whether to amend the order by changing the district boundaries 
under the nectarine order;

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    10b. Whether to amend the order by redefining the peach growing 
Fresno and Tulare districts under the order;
    11. Whether to amend the order by changing the names and the 
composition of the districts of the Peach Commodity Committee;
    12a. Whether to amend the order to allow for interest and/or late 
payments for assessments not paid timely;
    12b. Whether to amend the order to allow for interest and/or late 
payments for peach assessments not paid timely and to authorize the 
Committee to borrow money for administration of peach provisions of the 
order;
    13a. Whether to amend the order to provide authority to recommend 
specific regulations for specific market destinations of the product;
    13b. Whether to amend the order to provide authority to recommend 
specific regulations for specific market destinations of peaches; and,
    14. Whether to amend the order to clarify that subcommittees may be 
established by the Peach Commodity Committee.

Findings and Conclusions

    The following findings and conclusions on the material issues are 
based on evidence presented at the hearing and the record thereof.

Material Issue Number 1a and 1b--Hybrid Fruit

    Sections 916.5 and 917.4 of the orders should be amended to allow 
hybrid fruit that exhibits the characteristics of nectarines (916.5) or 
peaches (917.4) and is subject to cultural practices common to 
nectarines or peaches be subject to marketing order regulations.
    Currently, nectarines are defined in marketing order number 916 as 
all varieties of Prunus Amygdalus Nectarina, commonly called 
nectarines, grown in the production area. Peaches are defined in 
marketing order number 917 as the edible portion of all varieties of 
peach trees.
    These proposed amendments would provide a procedure for the 
Committees to recommend to USDA specific hybrids to be included under 
the definitions and become subject to order provisions.
    The proposed definitions provide that the hybrids must exhibit the 
characteristics of a nectarine or peach and be subject to cultural 
practices common to nectarines and peaches to be considered for 
inclusion under the orders.
    According to the hearing record, the cultivation of hybrids has 
been a practice in the nectarine and peach industry. Hybrid crosses 
between peaches and nectarines already exist. This technology provides 
for the development of fruit and fruit trees with more favorable 
characteristics, such as disease resistance. As breeding technology 
becomes more sophisticated, it is anticipated that nectarines and 
peaches will be crossbred with other tree fruit, such as apricots or 
plums.
    The proposal would require that in order to be subject to order 
requirements, all hybrids would need to be recommended to USDA by the 
Committees for inclusion under the orders. If these amendments are 
adopted, the Committees would identify hybrids currently in production 
that have characteristics of nectarines or peaches. The characteristics 
of the fruit would help determine whether the hybrids should be 
regulated. The Committees would also consider the cultural practices 
used on that specific hybrid, as cultural practices differ among 
various fruit trees. USDA would then proceed with rulemaking, as 
appropriate, as to what hybrids would be included under the orders.
    It is recommended that the definitions of the products regulated 
under the orders be amended to include hybrids. The procedure for the 
Committees to recommend to USDA the inclusion of hybrids would allow 
for industry deliberations on what hybrids should be included. The 
proposed amendments would provide flexibility in including hybrids as 
they are developed and provides sufficient safeguards to ensure 
compliance with order provisions. For the reasons above, it is 
recommended that sections 916.5 and 917.4 be amended to provide that 
all hybrids exhibiting the characteristics of nectarines or peaches be 
classified as a nectarine or peach under the respective marketing order 
program, if recommended by the Committees and approved by USDA. There 
was no opposition testimony on this issue.

Material Issue Number 2a and 2b--Addition of ``Packing'' as a Handling 
Function

    Section 916.11 of the nectarine marketing order and Sec.  917.6 of 
the peach marketing order should be amended to specify that the act of 
packing nectarines and peaches is a handling function.
    Currently, ``pack'' is not specified as a handling function in 
Sec. Sec.  916.11 and 917.6, the definitions of ``Handle''. The current 
definitions include selling, consigning, delivering, or transporting 
fruit between the production area and any point outside, or within the 
production area. Selling the fruit on the tree, transporting the fruit 
within the production area from the orchard to the packing facility 
within the area for preparation for market or the delivery of the fruit 
to the packing facility are activities that are not considered 
handling.
    In its proposal, the Committees recommended modifications of 
Sec. Sec.  916.10 and 917.7, the definitions of ``Handler.'' Currently, 
these definitions state that ``Handler'' means any person, except a 
common or contract carrier transporting fruit owned by another person, 
that handles fruit. USDA is not recommending that these sections of the 
orders be amended. However, USDA recommends adding the term ``pack'' to 
the functions that constitute handling as specified in the definitions 
of ``Handle''. As the evidence established, packing is a function that 
handlers perform. The addition of the term pack to the definition of 
handler would clarify which functions are covered. Therefore, by adding 
``pack'' as a handling function under the definitions of ``Handle'', 
the general intent of the Committees' proposal would be met.
    Witnesses testified that in the industry, the packer is the party 
that generally assumes all of the responsibilities of a handler, except 
the selling of the fruit. In most cases, the packer is responsible for 
inspecting the product and is responsible for paying assessments and 
abiding by the regulatory provisions of the orders. While there may be 
more than one handler involved in the preparation for marketing and 
marketing the product, the first handler is the party that is 
responsible for abiding by the provisions of the orders. This proposal 
would clarify that packing is considered a handling function, and thus, 
most packers would be considered the first handler and the entity 
regulated by the orders.
    USDA recommends that the proposed amendments be modified. The 
proposed amendment as presented by the Committees includes the 
statement that ``Handle'' and ``pack'' are synonymous. Because there 
could be situations where a handler performs functions other than 
packing, these terms are not always synonymous. However, ``pack'' is an 
important function of handlers.
    Thus, USDA recommends adding the word ``pack'' as a handling 
function among the other handling functions of selling, consigning, 
delivering or transporting under the nectarine order. Specifically, the 
modification would add the word ``pack'' before ``sell'' and the word 
``packed'' before ``sold'' in Sec.  916.11. For peaches, the proposed 
change cannot impact the pear provisions. Therefore, USDA recommends 
that a proviso be added to

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Sec.  917.6 to state that packing is a handling function of peaches.
    There was no opposition testimony on this issue. For the above 
reasons, it is recommended that the proposed amendments of Sec. Sec.  
916.11 and 917.6 be modified to specify that ``pack'' is a handling 
function under the nectarine and peach orders. The proposed amendments 
to Sec. Sec.  916.10 and 917.7, as presented by the Committees, are not 
being recommended in this decision.

Material Issue Number 3--Change in the Nectarine Marketing Season

    Section 916.15 of the nectarine marketing order should be amended 
by changing the marketing season from May 1 through November 30 to 
April 1 through November 30. Record evidence indicates that this 
amendment would more accurately reflect the nectarine industry's 
current marketing season and conform to the current handling 
regulations.
    Witnesses testified that due to new methods used in plant breeding, 
the industry now has nectarine varieties that mature earlier than the 
previous generations of nectarines. There are varieties that are 
harvested earlier than in the past and thus, marketed in early April of 
each year, rather than May. The current handling regulations in effect 
for nectarines begins April 1.
    Because the current marketing season begins in May, fruit harvested 
in the month of April is attributed to the prior year's marketing 
season but is regulated by the present year's regulations. The proposed 
amendment would conform the term of the marketing season to the 
regulatory period.
    The record supports changing the marketing season for nectarines 
from May 1 through November 30 to April 1 through November 30. There 
was no opposition testimony on this issue. For the above reasons, it is 
recommended that Sec.  916.15 be amended to include an earlier 
beginning date of April 1 for the order's marketing period.

Material Issue Number 4--Marketing Order 917 Control Committee

    Section 917.18, Nomination of Commodity Committee members of the 
Control Committee of the California peach marketing order should be 
amended. The proposed amendment would allow the duties and 
responsibilities of the Control Committee to be transferred to one 
Commodity Committee if the provisions of the other Commodity Committee 
are suspended.
    Section 917.18 of the marketing order currently provides for the 
establishment of a Control Committee to oversee and coordinate the 
joint activities of the Peach and Pear Commodity Committees under 
Marketing Order 917. The order does not contain, however, provisions 
for the Control Committee if only one Commodity Committee is 
operational. Since 1994, when the California pear industry suspended 
their order provisions, California peaches have been the only active 
commodity under marketing order 917. This proposed amendment would 
address the administrative needs of the current situation.
    Record evidence indicates that since the pear program has been 
suspended, the duties of the Control Committee have lessened. In the 
Pear Commodity Committee's absence, the Peach Commodity Committee has 
continued to operate in conjunction with the Control Committee. 
However, in recent years the Control Committee has held meetings 
infrequently and only to carry out duties that the Peach Commodity 
Committee cannot perform.
    Witnesses testified that the proposed amendment would allow the 
duties of the Control Committee to be transferred to a Commodity 
Committee when only one Commodity Committee was operational under 
marketing order 917. The proposed amendment would not terminate the 
Control Committee. The Control Committee would become active if the 
California pear industry were to vote to re-activate the pear 
provisions of marketing order 917. Thus, the proposed amendment, if 
adopted, would allow marketing order 917 to operate efficiently, yet 
would also allow for flexibility if the commodities active under the 
order were to change.
    There was no opposition testimony on this issue and the record 
supports this change. For the above reasons, it is recommended that 
Sec.  917.18 be amended to allow the duties and responsibilities of the 
Control Committee to be transferred to one Commodity Committee if the 
provisions of the other Commodity Committee are suspended.

Material Issue 5a and 5b--Increase in Membership of the Administrative 
Committee for Nectarines and Addition of Authority To Vote Via 
Facsimile for Both the Nectarine and Peach Commodity Committees

    Section 916.20 of the nectarine order should be amended to increase 
the membership on the Nectarine Administrative Committee from 8 members 
to 13 members. Order provisions relating to quorum and voting 
requirements should also be amended to conform to the increased 
Committee size. Section 916.32 of the nectarine order and Sec.  917.29 
(d) of the peach order should also be amended to add the authority for 
the Committees to vote by facsimile, as well as to specify that voting 
requirements for video conferencing would be the same as those for 
assembled meetings.
    Record evidence supports the increase in the Nectarine 
Administrative Committee size. Currently, with only a membership of 8, 
the Nectarine Administrative Committee frequently does not have enough 
members present at meetings to constitute a quorum or meet the 
requirements for a super-majority vote. As a result, decision-making is 
often delayed until the next Committee meeting. Such delays make the 
functioning of the NAC less efficient, especially when emergency 
decisions need to be made.
    Witnesses testified that the proposal to increase membership would 
address the quorum shortage by providing for a larger pool of committee 
members to attend meetings. It would also result in greater industry 
participation in marketing order activities by allowing more persons to 
be appointed to the Committee.
    Record evidence indicates that if the proposed amendment were 
implemented, a quorum of 9 out of 13 Committee members would be needed 
in order to maintain roughly the same ratio that is currently in place. 
The current Committee requires 6 out of 8 members to constitute a 
quorum.
    This proposed amendment would also provide authority for voting by 
facsimile and holding meetings via video teleconference for both the 
Nectarine and Peach Commodity Committees. Use of this technology would 
result in timesavings while still allowing the Committees to conduct 
their business. For example, this technology would be helpful in 
providing flexibility during harvest season when Committee members find 
it more challenging to take time away from the field.
    According to the record, voting requirements for meetings held via 
videoconference would be the same as those currently in place for 
conventional committee meetings. Because video conferencing involves 
technology that allows each member to see the other members in 
attendance at the meeting, any voting would be verified through 
visually accounting for the votes made. Votes made by conference call 
would need to be followed by the submission of signed votes submitted 
to the Committee offices by mail or fax. Votes made by fax would need 
to be unanimous.
    Record evidence also supports including authority to make use of 
any

[[Page 71738]]

new technology that might be developed in the future as part of this 
proposed amendment. For this reason, USDA recommends adding the phrase, 
``or any other means of communication recommended by the Committee and 
approved by the Secretary,'' to the proposed amendatory language. The 
addition of this language would increase the flexibility of this 
authority and is commonly found in other federal marketing orders.
    There was no opposition testimony given against this proposed 
amendment. For the reasons stated above, it is recommended that Sec.  
916.20 be amended to increase the membership on the Nectarine 
Administrative Committee from 8 members to 13 members. Section 916.32 
of the nectarine order and section 917.29 (d) of the peach order should 
also be amended to add the authority for the Committees to vote by 
facsimile and to establish voting requirements.
    USDA also recommends adding language that would allow the 
Committees to adopt the usage of any new technology that would be 
helpful in facilitating committee meetings in the future.

Material Issue Number 6--Elimination of the Shippers' Advisory 
Committee

    Section 916.37, Shipper's Advisory Committee, should be removed 
from the California nectarine marketing order language.
    The Shipper's Advisory Committee (SAC) was originally established 
to advise the Nectarine Administrative Committee on marketing 
conditions and to suggest the level of regulation believed to be 
necessary to affect an orderly marketing of the crop.
    Upon implementation, the SAC was intended to have five handler 
members and five alternate handler members. The role of the SAC was 
exclusively an advisory one, as the SAC did not have any voting rights 
under the marketing order. With regard to their role under the 
marketing order, the industry believed that handlers/shippers would be 
in a better position to furnish the Committee with information 
regarding market conditions and preferences than growers.
    However, record evidence indicates that the SAC has not been active 
for over 30 years. According to the record, removal of order language 
in Sec.  916.37 would remove obsolete language from the order 
provisions.
    There was no opposition testimony given against this proposed 
amendment. For the reasons stated above, the record supports removing 
Sec.  916.37 as it currently serves no useful purpose.

Material Issue Number 7a and 7b--Eligibility of Corporate Officers for 
Committee Membership

    Section 916.9, Grower, of the California nectarine order and Sec.  
917.5, Grower, of the California peach order, should be amended to 
clarify that officers of corporations would be eligible to serve in 
grower positions.
    The term ``grower'' under both marketing orders is currently 
defined as a grower of nectarines or peaches for the fresh market who 
has a proprietary interest therein. The nomination procedures in Sec.  
916.20 and 917.24 specify that employees of growers are eligible to 
serve as committee members or alternates on the nectarine and peach 
marketing order administrative committees. However, the nomination 
procedures and the current definition of grower do not specify that 
officers of grower corporations are eligible to serve in grower 
positions. The proposed amendment would clarify that corporate 
officers, as well as employees of growers, are eligible to serve on the 
Committee in grower positions.
    Witnesses testified that the proposed amendment would specify that 
that corporate officers would be eligible to serve on the Committees, 
to participate in nomination procedures as growers, and to cast 
referenda votes on behalf of their corporations. However, any corporate 
officer who is also a grower independent of the corporation would be 
allowed to serve and vote in only one capacity.
    Record evidence supports amending the definitions of grower to 
include officers of corporations for purposes of eligibility for 
membership in the Nectarine and Peach Committees. These amendments 
would clarify the definitions of grower when the entity is a 
corporation.
    In order to provide clarity, USDA recommends modifying the proposed 
definitions to state that both employees of growers and corporate 
officers of growers are eligible to serve on the Committees in grower 
positions. The modified definitions would read as follows:
    ``Grower is synonymous with producer and means any person who 
produces fruit (or nectarines) for market in fresh form, and who has a 
proprietary interest therein. Employees of growers and officers of 
corporations actively engaged in growing peaches are eligible to serve 
in grower positions on the Committee.''
    There was no opposition testimony given against this proposed 
amendment. For the reasons stated above, it is recommended that Sec.  
916.9, Grower, of the California nectarine order and Sec.  917.5, 
Grower, of the California peach order, should be amended as modified by 
USDA.

Material Issue Number 8a and 8b--Addition of Definitions for ``Pure 
Producer'' and ``Pure Grower''

    A new Sec.  916.16, Pure grower or pure producer, should be added 
to the California nectarine order. Additionally, a new Sec.  917.8, 
Pure grower or pure producer, should be added to the California peach 
order.
    The nectarine and peach marketing orders do not currently 
distinguish pure growers from all other growers. The proposed 
definitions of ``pure grower'' would be used in conjunction with the 
proposed amendments discussed in Material Issue 8(c) and 8(d) that 
would require a minimum number of pure grower seats on each 
administrative Committee.
    The proposed amendments would identify pure growers as any grower: 
(1) Who produces his or her own product (and is not an employee or 
officer of a packing business); or (2) who produces and handles his or 
her own product, provided that a pure grower can pack the production of 
other growers as long as the production packed does not exceed 25 
percent of the total production packed for that marketing year by that 
pure grower's packing facility. Regarding the second situation, at 
least 75 percent of that grower's total amount packed must involve his 
or her own fruit. This threshold would make allowances for pure growers 
who pack their own fruit and also pack small quantities of fruit for 
other growers.
    According to the record, witnesses believe that a distinction is 
needed because pure growers are considered by the industry to be more 
financially at risk than other growers. The record indicates that a 
pure grower's total business and financial activities are primarily 
reliant on their own production.
    Witnesses stated that, in the industry, there are growers who 
handle their own product. Some of these growers also pack other 
growers' products. The record indicated that growers who also pack a 
significant amount of fruit from other growers should not be considered 
pure growers because their risks as a grower are offset by their 
packing operations. However, some of these grower/packers pack small 
quantities of fruit for a few other growers. Accordingly, 25 percent 
(represented as the grower/packer's total pack-out) is considered a 
reasonable threshold to determine whether a grower/packer

[[Page 71739]]

should be considered a pure grower for eligibility purposes on the 
Committees.
    Record evidence also indicates that any grower who also operates as 
a handler could be eligible to qualify as either a grower member or a 
handler member on the Committees. However, that person must select and 
may only participate in one nomination process: either as a grower or 
as a handler, but not both.
    In order to provide clarity, USDA recommends modifying the proposed 
definition. The modified definition would read as follows:
    ``Pure grower means any grower: (1) Who produces his or her own 
product (and is not an employee or officer of a packing business); (2) 
who produces and handles his or her own product; Provided that; a pure 
grower can pack the production of other growers as long as the 
production packed does not exceed 25 percent of the total production 
packed for that marketing year by that pure grower's packing facility. 
A pure producer is synonymous with pure grower.''
    USDA recommends that authority be added to this provision allowing 
the Committees to recommend to USDA, rules and regulations for the 
implementation and operation of these sections.
    According to the record, the proposed definitions of ``pure 
grower'' would be used in conjunction with the proposed amendments 
discussed in Material Issue 8(c) and 8(d) that would require a minimum 
number of pure growers seats on each administrative committee. Evidence 
suggests that representation of pure growers on the administrative 
committees is important to Committee decision-making as they offer a 
different industry perspective than growers whose financial interests 
are not limited to growing only.
    Record evidence supports the conclusion that the representation of 
pure grower interests on the orders' administrative committees should 
be added. No opposition to this proposal was presented at the hearing. 
Therefore, it is recommended that Sec.  916.16 and Sec.  917.8, Pure 
grower and pure producer, be added, as modified by USDA, to the 
marketing orders.

Material Issue Number 8c and 8d--Modification of Nomination Procedures 
and Addition of Tenure Requirements

    Marketing order 916 regulating California nectarines should be 
amended to allow alternative methods for conducting nominations to be 
used, to change the date by which the nomination procedure should be 
held from February 15 to January 31, to require that at least 50 
percent of the positions be held by pure growers, and to add tenure 
requirements for Committee members.
    Similarly, the peach provisions under marketing order 917 
regulating California peaches should be amended. The proposed 
amendments would allow alternative methods to conduct nominations for 
the Peach Commodity Committee, would change the date by which the 
nomination procedure should be held from February 15 to January 31, 
would require that at least 50 percent of the positions be held by pure 
growers, and would add tenure requirements for Peach Commodity 
Committee members.
    Currently, nominations for the nectarine and peach administrative 
committees are made at grower industry meetings. According to the 
hearing record, nomination procedures would be modified to provide for 
mailings of ballots and would change the beginning date of the 
nomination period from February 15 to January 31. The change in the 
beginning date would be necessary in order to provide extra time for 
the mailing of ballots. Mailing of ballots would provide every grower 
more opportunity to vote in the nomination of members by making it 
easier for growers to participate.
    Witnesses testified that for the past 20 years, many growers do not 
attend industry nomination meetings. This proposal would modify the 
nomination process by allowing mail balloting in the nomination 
process. It is intended that this will result in greater industry 
participation in the nomination process.
    Record evidence also indicated an overriding concern within the 
industry for representation of pure grower interests in the decision-
making functions of the administrative committees. Witnesses contrasted 
pure-grower interests with larger corporate grower interests and 
indicated that meetings are more accessible to corporate growers 
represented by employees. In contrast, a pure grower would likely 
attend industry meetings him or herself.
    Nomination ballots would be mailed to all growers based on the 
district where their primary production base is located. While growers 
would be allowed to exchange their ballot for those of another district 
if they had production in said district (regardless of the volume that 
they produced in each district), they would be limited to filing just 
one ballot in the selection process. This would afford all growers the 
opportunity to vote for the nomination of Committee members regardless 
of whether they could attend industry meetings. Since the mailing of 
ballots would extend the balloting process, this amendment would also 
move the deadline for nominations from February 15 to January 31.
    If implemented, the proposed amendment would also require that 50 
percent of the grower membership seats of each Committee be allocated 
to pure grower seats. This requirement would ensure that pure nectarine 
and peach growers are participating in marketing order program 
deliberations. This proposal would be implemented in conjunction with 
the proposed amendments discussed above in Material Issue 8a and 8b, 
the addition of a definition for ``pure grower.''
    Record evidence also supports the implementation of tenure 
requirements on the nectarine and peach administrative committees. The 
proposed tenure requirements would limit the amount of time a Committee 
member could serve to 2 consecutive 3-year terms. This provision would 
allow for broader industry participation in the Committees and would 
allow new industry leaders to be developed. The involvement of new 
members would allow for the introduction of new ideas and innovation in 
the direction of the nectarine and peach programs.
    If implemented, any past time served on the Committee prior to this 
amendment being implemented would not count toward the tenure 
requirements. USDA recommends modifying the proposal to specify that 
tenure does not apply to time served prior to the effective date of 
this amendment. If a member were appointed to fill a vacancy or 
unexpired term, that time in service would not count toward the six-
year limit. Also, once a member has completed his or her third term, it 
would be possible for that person to be nominated into an alternate's 
position. After one term as an alternate, that person would be eligible 
to be appointed as a member again.
    Record evidence supports the conclusion that the above-proposed 
amendments would assist the Nectarine and Peach Committees in 
generating broader industry participation in Committee nominations, 
would provide for representation of pure grower interests on the 
Committees, would promote rotation in the service of Committee members, 
and would encourage participation of new members on the Committee. 
Record evidence also indicates that changing the deadline for 
nominations from February 15 to January 31 is necessary since the 
mailing of ballots would extend the balloting process.
    No opposition to the above proposals was received at the hearing. 
For the

[[Page 71740]]

reasons outlined in this material issue, Sec. Sec.  916.20 and 916.22 
should be amended. Similarly, the peach provisions in Sec.  917.24 
should be amended, as modified by USDA.

Material Issue Number 9a and 9b--Modification of the Acceptance 
Procedure for Persons Nominated To Serve on the Nectarine and Peach 
Committees

    Section 916.25, Acceptance, of the California nectarine order 
should be amended to authorize nominees to the Nectarine Administrative 
Committee to state their willingness to serve on the Committee prior to 
selection by USDA.
    Similarly, Sec.  917.25 of the California peach order should be 
amended to authorize nominees to the Peach Commodity Committee to state 
their willingness to serve prior to selection.
    This proposed amendment would modify the current acceptance 
procedure for persons nominated to serve on the Nectarine and Peach 
Committees. Currently, the acceptance procedure for persons nominated 
and selected to serve on the Committees involves a two-step process. 
First, persons nominated for consideration and possible appointment to 
the Committee by USDA are required to complete a form indicating their 
eligibility to sit as a member of the Committee. Once appointed by 
USDA, nominees must then sign an additional form indicating their 
acceptance of the appointment. If this amendment were implemented, the 
two steps could be combined into one, thus resulting in less paperwork, 
a shorter acceptance procedure and improved efficiency in the 
acceptance process.
    Record evidence supports this proposed change. No opposition to 
this proposed amendment was presented at the hearing. For the reasons 
outlined above, Sec.  916.25, Acceptance, of the California nectarine 
order should be amended. Section 917.25, Selection of members of 
various commodity committees, of the California peach order should also 
be amended.

Material Issue Number 10a and 10b--Modification of Marketing Order 916 
District Boundaries and Modification of Marketing Order 917 Fresno and 
Tulare Representation Area Boundaries

    Section 916.12 of the California nectarine order and Sec.  917.14 
of the California peach marketing order should be amended. Section 
916.12 should be amended to change the district boundaries for 
Districts 1 and 2 under the nectarine order (referred to as the Fresno 
and Tulare districts). Section 917.14 should be amended to redefine the 
Fresno and Tulare Peach Commodity Committee representation areas under 
the peach provisions of order 917.
    Witnesses stated that nectarine and peach production has shifted 
over time such that current day production patterns are more in line 
with each other than they were previously. For this reason, district 
boundaries for nectarines and the Peach Commodity Committee 
representation areas should be redefined to better reflect current 
production trends.
    According to the hearing record, two key elements would comprise 
this change. First, the Tulare District (District 2 under the nectarine 
order) would have as its northern boundary the Tulare County line 
instead of Avenue 384, which is formally defined as the fourth standard 
parallel south of the Mount Diablo Baseline of the general land office. 
This area is currently part of the Fresno District (District 1 under 
the nectarine order).
    Secondly, Kings County would shift from the Fresno District to the 
Tulare District. This change in the allocation of counties among 
districts would better reflect current day production within the 
nectarine and peach production areas, as the Tulare and Kings Counties 
have been increasing in their peach production in recent years.
    According to the record, 2003 nectarine production totaled 
21,613,927 containers. Under the current definitions for Districts 1 
and 2 (Fresno and Tulare Districts, respectively) the former is 
credited with a production of 20,716,073 containers (96 percent) and 
the later is credited with 497,772 containers (2 percent). If the 
proposed amendment were implemented, 2003 production for the Fresno 
District would equal 14,602,037 containers (68 percent) and Tulare 
District production for that year would equal 6,611,808 containers (31 
percent).
    In 2003, total California peach production equaled 22,534,252 
containers. Of that amount, 20,754,501 containers (90 percent) were 
produced in the current Fresno District and 604,438 containers (3 
percent) were produced in the current Tulare District. If the proposed 
boundary changes were implemented, production attributed to Fresno 
District would equal 14,602,037 containers (65 percent) and production 
attributed to Tulare District would equal 6,611,808 containers (30 
percent).
    The proposed modification in district boundaries would alter the 
production base used to define the Nectarine and Peach Commodity 
Committee representation and would result in better representation of 
grower interests in the Tulare District for each industry. This would 
result in a more equitable representation of both production and grower 
interests on the nectarine and Peach Commodity Committees.
    Record evidence supports the modification of district boundary 
lines for Districts 1 and 2 under the nectarine order and the Fresno 
and Tulare Districts under the peach program. For the reasons stated 
above, it is recommended that Sec.  916.12 of the California nectarine 
order and Sec.  917.14 of the California peach marketing order be 
amended.

Material Issue Number 11--Modification of Marketing Order 917 Peach 
Commodity Committee Representation Areas

    Section 917.22, Nomination of the Peach Commodity Committee 
members, should be amended to reflect conforming changes in 
representation that would result if the amendments discussed in 
Material Issue 10b were implemented. Furthermore, the Peach Commodity 
Committee representation areas should be renamed so that they are 
consistent with the district nomenclature of the nectarine order.
    The current peach representation area names and the corresponding 
Committee representation for each peach producing district, or groups 
of districts, under order 917 are as follows:
    (a) South Coast District and Southern California District: one 
nominee.
    (b) Tehachapi District and Kern District: one nominee.
    (c) Tulare District: one nominee.
    (d) Fresno District: eight nominees.
    (e) Stanislaus District and Stockton District: one nominee.
    (f) All of the production area not included in the above: one 
nominee.
    If the proposed amendment were implemented, the new distribution 
would place three member seats in the newly defined Tulare District and 
would reduce the member seats in the newly defined Fresno District to 
seven. The representation area defined as, ``(f) All of the production 
area not included in the above'' in the current language of Sec.  
917.22 (above) would be removed. Membership seats for the remaining 
districts would remain as they are currently allocated, with one seat 
for each of the following: The combined Tehachapi and Kern Districts, 
the combined South Coast and Southern California Districts, and the 
combined Stanislaus and Stockton Districts plus all remaining 
production. Total membership for the Peach Commodity Committee would 
remain at 13.
    In addition to the redistricting and reallocation, record evidence 
supports

[[Page 71741]]

renaming the peach representation areas with the comparable district 
nomenclature that is currently used in the nectarine order. While the 
names for the peach representation areas remain tied to their 
geographic descriptions, common references to those areas rely on 
numeric names. Thus, the proposed name change, combined with the 
proposed reallocation in district representation and redefinition of 
district boundaries discussed in Material Issue 10b, would result in 
the following:
    (a) District 1 composed of the Fresno District: seven nominees.
    (b) District 2 composed of the Tulare District: three nominees.
    (c) District 3 composed of the Tehachapi District and Kern 
District: one nominee.
    (d) District 5 composed of the South Coast District and Southern 
California District: one nominee.
    (e) District 4 composed of the Stanislaus District, Stockton 
District and all of the production area not included in paragraphs (a) 
through (d): One nominee.
    The proposed renaming of the above representation areas as 
published in Notice of Hearing and as presented by witnesses had 
proposed Districts 4 and 5 reversed. However, with District 4 
originally listed as (d) and defined as ``Stanislaus District, Stockton 
District and all of the production area not included in paragraphs (a) 
through (d),'' followed by paragraph District 5, or paragraph (e), the 
definition of District 4 would have been incorrect. USDA recommends 
reversing the order of paragraphs (d) and (e) published in the Notice 
so that the language reads as outlined above.
    Record evidence supports this amendment. No opposition to these 
amendments was presented at the hearing. For the reasons outlined 
above, it is recommended that Sec.  917.22, Nomination of the Peach 
Commodity Committee members, be amended. Also, USDA recommends 
modifying the proposed amendatory language for Sec.  917.22 by 
reversing the order of paragraphs (d) and (e) as published in the 
Notice.

Material Issue Number 12a and 12b--Addition of Interest and Penalties 
for Late Payments and Authority To Borrow Funds

    Section 916.41 of the nectarine order and Sec.  917.37 of the peach 
order should be amended to allow for interest and/or late payments for 
assessments not paid on time. Section 917.37 should be further amended 
to authorize the Committee to borrow money for administration of peach 
provisions of the order.
    Currently there are no provisions providing for penalties or 
interest charges on late assessment payments under either the nectarine 
or peach order.
    Record evidence indicates that the proposed amendment would 
strengthen the assessment collection functions of the orders and, in 
the case of peaches, allow access to additional funds. Implementation 
of interest and late payments would serve as an incentive for handlers 
to pay their assessments in a timely manner. And, adding the authority 
to borrow funds to marketing order 917 would allow the Control and 
Peach Committees access to additional funds to administer the order 
when the carry forward of assessment monies is inadequate.
    There was no opposition testimony given against this proposed 
amendment. For the reasons stated above, it is recommended that Sec.  
916.41 and Sec.  917.37 be amended.

Material Issue Number 13a and 13b--Authority To Recommend Regulations 
by Market Destination

    This proposed amendment would have provided authority under the 
nectarine and peach programs to recommend specific regulations for 
specific market destinations. Over 100 comments in opposition to this 
proposed amendment were filed during the briefing period following the 
public hearing on proposed amendments to marketing orders 916 and 917. 
Comments stated concerns that the proposed authority would negatively 
impact the distribution of fruit to certain markets and would unfairly 
disadvantage certain handlers who ship utility-grade product overseas. 
The Nectarine and Peach Commodity Committees, in their brief, requested 
that this proposal be withdrawn. Accordingly, proposal 13 is not being 
considered in this recommended decision.

Material Issue Number 14--Establishment of Subcommittees Under the 
Peach Commodity Committee

    Section 917.35 of the order should be amended to clarify that the 
Peach Commodity Committee may establish subcommittees.
    Witnesses at the hearing explained that the order does not 
currently specify that the Peach Commodity Committee can establish 
subcommittees. However, the language in Sec.  917.35 does state that 
``other committees'' can be established. This proposal would specify 
that ``other committees'' established by Peach Committee could be 
referred to as ``subcommittees.'' The proposed amendment is intended as 
a clarifying change needed to update the order. Record evidence 
indicates that the subcommittee structure is already in place for the 
peach industry, and that the proposed amendment would result in a 
simple name change for all sub-groups currently existing under the 
Control and Peach Commodity Committees.
    No opposition to this amendment was presented at the hearing. For 
the reasons outlined above, it is recommended that Sec.  917.35 be 
amended.

Conforming Changes

    The Agricultural Marketing Service proposed to make such changes as 
may be necessary to the order to conform with any amendment that may 
result from the hearing. Necessary conforming changes have been 
identified and discussed in this Recommended Decision under the 
pertinent material issues.

Small Business Considerations

    Pursuant to the 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 initial regulatory flexibility 
analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions so that small businesses will not be 
unduly or disproportionately burdened. Marketing orders and amendments 
thereto are unique in that they are normally brought about through 
group action of essentially small entities for their own benefit. Thus, 
both the RFA and the Act are compatible with respect to small entities.
    Small agricultural growers are defined by the Small Business 
Administration (SBA)(13 CFR 121.201) as those having annual receipts of 
less than $750,000. Small agricultural service firms, which include 
handlers regulated under the order, were defined at the time of the 
hearing as those with annual receipts of less than $5,000,000. The 
definition of small agricultural service firm has subsequently changed 
to one with annual receipts of $6,000,000.
    Interested persons were invited to present evidence at the hearing 
on the probable regulatory and informational impact on growers and 
handlers of the proposed amendments, and in particular the impact on 
small businesses. The record evidence shows that most of the proposed 
amendments are designed to enhance industry

[[Page 71742]]

efficiencies and streamline administrative operations of the marketing 
order Committees. The amendments are not expected to have any direct 
cost impacts on growers or handlers, whether small or large. Improved 
operating efficiencies of the marketing order programs and their 
administrative committees are expected to positively benefit the 
nectarine and peach industries.
    According to the record, there are approximately 207 California 
nectarine and peach handlers (combined) and approximately 1,500 growers 
(combined nectarines and peaches) in the production area, the State of 
California. A majority of these handlers and growers may be classified 
as small entities.
    Based on calculations made by the Peach and Nectarine Committees' 
staff, witnesses indicated that about 26 handlers (13 percent) would 
qualify as large business entities under the SBA definition of a large 
agricultural service firm ($5,000,000). For the 2004 season, it was 
estimated that the average handler price received was eight dollars per 
container or container equivalent of nectarines or peaches. Thus, a 
handler would have to ship at least 625,000 containers to have annual 
receipts of 5 million dollars. Given data on shipments presented at the 
hearing and the estimated eight-dollar average handler price received 
during the 2004 season, small handlers represented approximately 87 
percent of all the handlers within the industry. Under the 6 million 
dollar definition, more than 87 percent of handlers would qualify as 
small handler entities.
    Record evidence also indicated that less than 20 percent of the 
combined number of California nectarine and peach growers could be 
defined as other than small entities. The Committees estimated that the 
average 2004 grower price received for nectarines and peaches was 5 
dollars per container or a container equivalent. A grower would have to 
produce at least 150,000 containers of nectarines and peaches to have 
annual receipts of 750,000 dollars. Given data maintained by the 
Committees' staff and the five dollar estimated average grower price 
received during the 2004 season, the staff estimates that more than 80 
percent of growers can be classified as small growers.
    Evidence presented at the hearing indicates an average 2004 grower 
price of five dollars per container or container equivalent for both 
nectarines and peaches, and a combined pack-out of approximately 
40,422,900 containers. Thus, the value of the 2004 pack-out is 
estimated to be $202,114,500. Dividing this total estimated grower 
revenue by the estimated number of combined nectarine and peach growers 
(1,500) yields an estimate of 2004 average revenue per grower of about 
$134,743. Because many growers produce both commodities, industry 
nectarine and peach production statistics were presented at the hearing 
as combined totals.
    National Agricultural Statistical Service (NASS) data presented at 
the hearing provides the following production profile for California 
nectarines and peaches, respectively (all numbers are two-year averages 
for the 2003 crop year and preliminary data for 2004): Bearing acres, 
36,500 of nectarines and 37,000 of peaches; yield per acre of utilized 
production, 7.19 tons and 10.84 tons; annual utilized production, 
262,500 tons and 401,000 tons. Utilized production of both nectarines 
and peaches was less than total production in 2004; utilized production 
data was therefore used in the computation. Two-year (2003 and 2004) 
average grower prices per ton for nectarines and peaches were $391 and 
$309.50 respectively. However, $309.50 is the peach price per ton for 
both fresh and processed uses. Approximately one third of California 
freestone peaches are sold for processing at a price lower than growers 
receive for fresh market sales. Therefore, a better estimate of the 
price per ton for fresh peach sales is to use the U.S. estimated grower 
price for fresh peaches of 27 cents per pound ($540 per ton) for 2003, 
the most recent year for which a U.S. fresh peach price was available 
from the Economic Research Service of the USDA.
    This NASS and ERS data is used to compute an additional estimate of 
average annual sales revenue per producer. By assuming that growers of 
nectarines are also growers of peaches, the 2004 average acreage for 
these crops (dividing the sum of nectarine and peach bearing acres by 
two) is equal to 36,750 acres. Dividing this number by the number of 
combined peach and nectarine growers reported by CTFA (1,500) yields an 
estimate of 24.5 acres as the average size of a sample nectarine or 
peach farm in 2004. If the sample farm's acreage was split evenly 
between nectarines and peaches (12.5 acres of each fruit) and 
production yields equal to the statewide average (reported above), that 
farm would have produced and sold 89.88 tons of nectarines and 134.42 
tons of peaches. The value of production for that sample farm would 
have been $35,143 for nectarines and $72,587 for peaches, or $107,730 
total. This figure is lower than the $134,743 estimate using industry 
data. However, both computations confirm that the average nectarine or 
peach grower qualifies as a small grower under the SBA definition.
    The proposed amendments would: update definitions and districts in 
both orders; increase Committee membership of the Nectarine 
Administrative Committee from eight to thirteen members and modify 
sections of the order to conform to the increased membership; eliminate 
the Shippers Advisory Committee (M.O. No. 916); allow the Control 
Committee under M.O. No. 917 to be suspended if the provisions of one 
commodity are suspended and transfer applicable duties and 
responsibilities to the remaining Commodity Committee; and authorize 
interest and late payment charges on assessments that are paid late.
    All of the proposals are intended to streamline and improve the 
administration, operation, and functioning of the programs. Many of the 
proposed amendments would up-date the language of these two orders, 
thus better representing, and conforming with, current practices in 
these industries. The proposed amendments are not expected to result in 
any significant cost increases for growers or handlers. More efficient 
administration of program activities may result in cost savings for the 
Peach and Nectarine Committees.
    Proposal 1 would amend the order to allow hybrid fruit that 
exhibits the characteristics of nectarines or peaches and is subject to 
cultural practices common to nectarines and peaches be subject to 
marketing order regulations. This proposed amendment provides a 
procedure for the Committees to recommend to USDA the specific hybrids 
to be included under the definitions and subject to order provisions.
    The cultivation of hybrid fruit has been a practice of the 
nectarine and peach industries. The improvement in breeding technology 
provides for the development of fruit and fruit trees with more 
favorable characteristics, such as disease resistance. As breeding 
technology becomes more sophisticated, it is anticipated that 
nectarines and peaches will be crossbred with other tree fruit, such as 
apricots and plums.
    The proposal would require that in order to be subject to order 
requirements, all hybrids would need to be recommended to USDA by the 
Committees for inclusion under the order. If this amendment is adopted, 
the Committees would identify hybrids currently in production that have

[[Page 71743]]

characteristics of nectarines or peaches. The characteristics of the 
fruit would help determine whether the hybrid should be regulated. The 
Committees would also consider the cultural practices used on that 
specific hybrid, as cultural practices differ among various fruit 
trees. USDA would then proceed with rulemaking, as appropriate, as to 
what hybrids would be included under the order.
    The proposed amendment would provide flexibility in including 
hybrids as they are developed and provides sufficient safeguards to 
ensure compliance of order provisions. Incorporating specific reference 
to hybrid fruit into the definitions of ``nectarine'' and ``peach'' is 
not expected to result in any significant increase in costs to growers 
or handlers. There may be slight increases in the administration costs 
of the nectarine and peach orders in terms of program oversight, but it 
is expected that any increases would be offset by the benefits of 
including hybrids under the orders provisions.
    Proposal 2 would specify that the act of ``packing'' nectarines and 
peaches would be a handling function under the orders. Most packers 
already assume all of the responsibilities of a handler, except the 
selling of the fruit and thus, this proposal is not expected to result 
in any significant increases in costs and would likely result in 
efficiencies that would benefit the administration of marketing orders 
916 and 917.
    Proposal 3, which seeks to extend the marketing season for 
nectarines, would more accurately reflect the nectarine industry's 
current marketing season and conform to current handling regulations. 
The proposed amendment would change the current marketing season from 
May 1 through November 30 to April 1 through November 30. According to 
record evidence, aligning the marketing year with current production 
would not result in any increases in costs.
    Proposal 4 would allow for the temporary suspension of the Control 
Committee, the oversight committee for peaches and pears under 
marketing order 917, when one of the commodity programs is suspended. 
Since the pear program has been suspended, the duties of the Control 
Committee have been lessened, as there is only one Commodity Committee 
that is active under the marketing order program. In the Pear Commodity 
Committee's absence, the Peach Commodity Committee has continued to 
operate in conjunction with the Control Committee. The proposed 
amendment would also allow the Control Committee to become active again 
if both commodity groups were to become active under the order. This 
amendment is not expected to result in any increases in costs to 
growers or handlers.
    Proposal 5 would increase the membership on the NAC from eight to 
thirteen members and revise quorum requirements. Proposal 5 would also 
provide for voting by facsimile and holding meetings via video 
teleconference for both the Nectarine and Peach Commodity Committees. 
Record evidence indicated that these amendments were necessary in order 
to update the business practices of the Nectarine and Peach Committees 
to include current day technology. The increase in Committee members 
from 8 to 13 would allow for greater industry participation and would 
provide for a larger pool of committee members to attend meetings and 
meet quorum requirements. This amendment is not expected to result in 
any significant increases in costs to growers or handlers.
    Regarding the increase in committee membership, this proposal would 
benefit growers by allowing more growers to be appointed to the 
Committee, thereby increasing industry participation in the marketing 
order program functions.
    Regarding the use of facsimile and video teleconference, this 
provision would allow both the Nectarine and Peach Committees to take 
advantage of technology that is available currently, but was not known 
when the orders were promulgated. Amendments proposed under this 
material issue are not expected to result in any significant increases 
in costs to growers or handlers.
    Proposal 6 would eliminate the Shipper's Advisory Committee under 
the nectarine marketing order and bring the language of the order into 
conformance with current day operations of the program. Record evidence 
indicates that the Shipper's Advisory Committee has not been active for 
over 30 years and, while it once served a function under the marketing 
order program, it is no longer necessary. This amendment is not 
expected to result in any increases in costs to growers or handlers.
    Proposal 7 would modify the definition of grower to specify that 
both employees of growers and corporate officers of growers are 
eligible to serve on the Nectarine and Peach Committees in grower 
positions. This proposed amendment would be a clarifying change and 
would bring the language of the order into conformance with current-day 
operations of the program. This amendment is not expected to result in 
any increases in costs to growers or handlers.
    Proposal 8 would add a definition for pure grower to both the 
nectarine and peach orders. If implemented, pure growers would be 
defined as growers that grow their own product (and are not employees 
or officers of a packing business) or, that grow and pack only their 
own product. If they do pack for other growers, the total production 
packed from other growers cannot exceed 25 percent of the total 
production packed for that marketing season for that pure grower's 
packing facility. Pure growers, who only pack a limited amount of fruit 
for other growers, are still essentially dependent on their own 
production, which is the essential component of being a pure grower.
    Proposal 8 would also modify the current nomination procedures for 
the Committees, as well as modify the deadline for conducting the 
nominations, add a 50-percent pure grower membership requirement for 
the Committees and establish tenure requirements for members. According 
to the hearing record, nomination procedures would be modified to 
provide for mailings of ballots and would change the beginning date of 
the nomination period from February 15 to January 31. The change in the 
beginning date would be necessary in order to provide extra time for 
the mailing of ballots.
    While some increases in administration costs could arise as a 
result of the mailing of ballots, record evidence indicates that the 
benefit of increased industry participation would merit that expense.
    Proposal 9 would modify the current acceptance procedure for 
persons nominated to serve on the Nectarine and Peach Committees. 
Currently, the acceptance procedure for persons nominated and selected 
to serve on the Committees involves a two-step process. If this 
amendment were implemented, the two steps could be combined into one, 
thus resulting in less paperwork, a shorter acceptance procedure and 
improved efficiency in the acceptance process. This amendment is not 
expected to result in any increases in costs to growers or handlers.
    Proposal 10 would modify the Fresno and Tulare districts under the 
peach marketing order by moving Kings County from the Fresno district 
to the Tulare district and by including all of Tulare County in the 
Tulare district, and would also modify district boundaries under the 
nectarine order. This change would also serve as the basis for

[[Page 71744]]

modifying committee representation for the Tulare district under the 
peach order, as discussed under Proposal 11. These amendments are not 
expected to result in any significant increases in costs to growers or 
handlers.
    Proposal 11 would modify the names of the peach producing districts 
under that marketing order and change district representation on the 
Peach Committee to reflect the modified districts discussed under 
Proposal 10. This proposal would provide for more accurate 
representation of current-day peach production. This amendment is not 
expected to result in any significant increases in costs to growers or 
handlers.
    Proposal 12 would provide for interest and penalty provisions for 
late payment of assessments to be added to both the nectarine and peach 
orders and would authorize the borrowing of funds for administration of 
the peach order. These amendments would strengthen the assessment 
collection functions of the orders and, in the case of peaches, allow 
access to additional funds. The implementation of interest and late 
payments would serve as an incentive for handlers to pay their 
assessments in a timely manner. The authority to borrow funds under 
marketing order 917 would allow the Control and Peach Committees access 
to additional funds to administer the order when the carry forward of 
assessment monies is inadequate. While these amendments are expected to 
result in some costs under the marketing orders, the more timely 
assessment payments and the authority to borrow funds (for peaches) are 
expected to benefit the industries.
    Lastly, Proposal 14 would clarify that ``other committees'' 
established by the Peach Committee would be referred to as 
``subcommittees.'' This amendment is not expected to result in any 
increases in costs to growers or handlers.
    The proposals put forth at the hearing would streamline program 
organization, but are not expected to result in a significant change in 
industry production, handling or distribution activities. In discussing 
the impacts of the proposed amendments on growers and handlers, record 
evidence indicates that the changes are expected to be positive because 
the administration of the programs would be more efficient, and 
therefore more effective, in executing Committee duties and 
responsibilities. There would be no significant cost impact on either 
small or large growers or handlers.
    Interested persons were invited to present evidence at the hearing 
on the probable regulatory and informational impact of the proposed 
amendments to the order on small entities. The record evidence is that 
most of the amendments are designed to increase efficiency in the 
functioning of the orders.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this proposed rule. These amendments are 
designed to enhance the administration and functioning of marketing 
orders 916 and 917 to the benefit the California nectarine and peach 
industries.
    Committee meetings regarding these proposals as well as the hearing 
dates were widely publicized throughout the California nectarine and 
peach industries. All interested persons were invited to attend the 
meetings and the hearing and participate in deliberations on all 
issues. All Committee meetings (the NAC, the PCC, the Control Committee 
and the CTFA) and the hearing were public forums and all entities, both 
large and small, were able to express views on these issues. Finally, 
interested persons are invited to submit information on the regulatory 
and informational impacts of this action on small businesses.
    A 20-day comment period is provided to allow interested persons to 
respond to this proposal. Twenty days is deemed appropriate so that 
this rulemaking may be completed and nominations can be conducted prior 
to the next crop year, which begins in March. All written exceptions 
timely received will be considered and a grower referendum will be 
conducted before these proposals are implemented.

Paperwork Reduction Act

    Current information collection requirements for Parts 916 and 917 
have been previously approved by the Office of Management and Budget 
(OMB) under OMB number 0581-0189, ``Generic Fruit Crops.'' The proposed 
changes would have an insignificant impact on total burden hours 
currently approved under this information collection.
    Specifically, the proposed amendment to increase the Nectarine 
Administrative Committee (committee) from 8 to 13 members would require 
an additional 5 members and 5 alternates to complete existing 
confidential background and acceptance statements every 2 years. 
Increasing committee members from 16 (8 members and 8 alternates) to 26 
(13 members and 13 alternates) would result in an increase of .43 
burden hours, or 26 minutes. In addition, because the Shipper's 
Advisory Committee is being recommended to be abolished, form FV-75, 
``Confidential California Tree Fruit Agreement Questionnaire'', which 
is currently approved under OMB No. 0581-0189 for 1.99 burden hours, 
would no longer be needed. Removing this form would result in an 
overall decrease of 1.56 burden hours.
    Also, the proposal would authorize nominees under the nectarine 
order to state their willingness to serve on the committee prior to 
their selection, which would result in the combining of Confidential 
Background statement and the acceptance statement, which are already 
approved by OMB. There would be no change in the burden hours by 
combining these forms.
    The California Peach Commodity Committee proposed to amend the 
provisions relating to the Control Committee under marketing order 917 
to allow the duties and responsibilities of the Control Committee to be 
transferred to one commodity committee if the provisions of the other 
commodity committee are suspended. If this change was implemented, and 
the Peach Commodity Committee was to assume the duties and 
responsibilities of the Control Committee, some forms used by the 
Control Committee would require a modification in the name of the 
committee using those forms. However, the functioning of the forms and 
the current burden would remain the same.
    In addition, any changes to forms, or increased burden generated in 
nominating and selecting pure growers on the Committees would be 
submitted to OMB for approval prior to implementation.
    AMS is committed to compliance with the Government Paperwork 
Elimination Act (GPEA), which requires Government agencies in general 
to provide the public the option of submitting information or 
transacting business electronically to the maximum extent possible.
    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. Witnesses stated 
that existing forms could be adequately modified to serve the needs of 
the nectarine and peach commodity committees.

Civil Justice Reform

    The amendments to Marketing Agreement Nos. 124 and 85 and Order 
Nos. 916 and 917 proposed herein have been reviewed under Executive 
Order 12988, Civil Justice Reform. They are not intended to have 
retroactive effect. If adopted, the proposed amendments would not 
preempt any State or local

[[Page 71745]]

laws, regulations, or policies, unless they present an irreconcilable 
conflict with this proposal.
    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 the date of 
the entry of the ruling.

Rulings on Briefs of Interested Persons

    Briefs, proposed findings and conclusions, and the evidence in the 
record were considered in making the findings and conclusions set forth 
in this recommended decision. To the extent that the suggested findings 
and conclusions filed by interested persons are inconsistent with the 
findings and conclusions of this recommended decision, the requests to 
make such findings or to reach such conclusions are denied.

General Findings

    The findings hereinafter set forth are supplementary to the 
findings and determinations which were previously made in connection 
with the issuance of the marketing agreement and order; and all said 
previous findings and determinations are hereby ratified and affirmed, 
except insofar as such findings and determinations may be in conflict 
with the findings and determinations set forth herein.
    (1) The marketing agreements and orders, as amended, and as hereby 
proposed to be further amended, and all of the terms and conditions 
thereof, would tend to effectuate the declared policy of the Act;
    (2) The marketing agreements and orders, as amended, and as hereby 
proposed to be further amended, regulate the handling of nectarines and 
peaches grown in the production area (the State of California) in the 
same manner as, and are applicable only to, persons in the respective 
classes of commercial and industrial activity specified in the 
marketing agreements and orders upon which a hearing has been held;
    (3) The marketing agreements and orders, as amended, and as hereby 
proposed to be further amended, are limited in their application to the 
smallest regional production areas which is practicable, consistent 
with carrying out the declared policy of the Act, and the issuance of 
several orders applicable to subdivisions of the production areas would 
not effectively carry out the declared policy of the Act;
    (4) The marketing agreements and orders, as amended, and as hereby 
proposed to be further amended, prescribe, insofar as practicable, such 
different terms applicable to different parts of the production areas 
as are necessary to give due recognition to the differences in the 
production and marketing of nectarines and peaches grown in the 
production area; and
    (5) All handling of nectarines and peaches grown in the production 
areas as defined in the marketing agreements and orders, is in the 
current of interstate or foreign commerce or directly burdens, 
obstructs, or affects such commerce.

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 out in the preamble, 7 CFR parts 916 and 917 
are proposed to be amended as follows:

PART 916--NECTARINES GROWN IN CALIFORNIA

    1. The authority citation for 7 CFR part 916 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.
    2. Revise Sec.  916.5 to read as follows:


Sec.  916.5  Nectarines.

    Nectarines means: (1) All varieties of nectarines grown in the 
production area; and
    (2) Hybrids grown in the production area that exhibit the 
characteristics of a nectarine and are subject to cultural practices 
common to nectarines, as recommended by the committee and approved by 
the Secretary.
    3. Revise Sec.  916.9 to read as follows:


Sec.  916.9  Grower.

    Grower is synonymous with producer and means any person who 
produces nectarines for market in fresh form, and who has a proprietary 
interest therein. Employees of growers and officers of corporations 
actively engaged in growing nectarines are eligible to serve in grower 
positions on the committee.
    4. Revise Sec.  916.11 to read as follows:


Sec.  916.11  Handle.

    Handle and ship are synonymous and mean to pack, sell, consign, 
deliver, or transport nectarines, or to cause nectarines to be packed, 
sold, consigned, delivered, or transported, between the production area 
and any point outside thereof, or within the production area: Provided, 
That the term handle shall not include the sale of nectarines on the 
tree, the transportation within the production area of nectarines from 
the orchard where grown to a packing facility located within such area 
for preparation for market, or the delivery of such nectarines to such 
packing facility for such preparation.
    5. Revise paragraphs (a) and (b) of Sec.  916.12 to read as 
follows:


Sec.  916.12  District.

* * * * *
    (a) District 1 shall include the counties of Madera and Fresno.
    (b) District 2 shall include the counties of Kings and Tulare.
* * * * *
    6. Revise Sec.  916.15 to read as follows:


Sec.  916.15  Marketing season.

    Marketing season means the period beginning on April 1 and ending 
on November 30 of any year.
    7. Add a new Sec.  916.16 to read as follows:


Sec.  916.16  Pure Grower or Pure Producer.

    (a) Pure grower means any grower: (1) Who produces his or her own 
product (and is not an employee or officer of a packing business); or
    (2) Who produces and handles his or her own product; Provided, 
That; A pure grower can pack the production of other growers as long as 
the production packed does not exceed 25 percent of the total 
production packed for that marketing year for that pure grower's 
packing facility. Pure grower is synonymous with pure producer.
    (b) The committee may establish, with the approval of the 
Secretary, rules and regulations for the implementation and operation 
of this section.
    8. Revise Sec.  916.20 to read as follows:


Sec.  916.20  Establishment and membership.

    There is hereby established a Nectarine Administrative Committee 
consisting of thirteen members, each of whom shall have an alternate 
who shall

[[Page 71746]]

have the same qualifications as the member for whom he/she is an 
alternate. The members and their alternates shall be growers or 
authorized employees of growers. Six of the members and their 
respective alternates shall be growers of nectarines in District 1. 
Four members and their respective alternates shall be growers of 
nectarines in District 2; two of the members and their respective 
alternates shall be growers of nectarines in District 3; and one member 
and his/her alternate shall be growers of nectarines in District 4; 
Provided, That at least 50% of the nominees from each representation 
area shall be pure growers. Furthermore, no person shall serve more 
than three consecutive two-year terms of office or a total of six 
consecutive years; Provided further, That an appointment to fill less 
than a two-year term of office, or serving one term as an alternate, 
shall not be included in determining the three consecutive terms of 
office; Provided further, That time served prior to the effective date 
of this section shall not be counted toward consecutive term limits.
    9. Revise paragraph (b) of Sec.  916.22 to read as follows:


Sec.  916.22  Nomination.

* * * * *
    (b) Successor members. (1) The committee shall appoint a nominating 
committee, which will hold or cause to be held, not later than January 
31 of each odd numbered year, a nomination procedure or a meeting or 
meetings of growers in each district for the purpose of designating 
nominees for successor members and alternate members of the committee. 
Meetings may be supervised by the nominating committee that shall 
prescribe such procedure as shall be reasonable and fair to all persons 
concerned. After the nomination procedure or meetings have concluded, 
the nominating committee by February 15 will verify consent to place 
the nominee's name on the ballot and will cause a ballot listing all of 
the nominees for a given district to be mailed to all growers within 
the district. Members and their alternates will be chosen based on a 
descending ranking of votes received. Once ballots have been tabulated, 
the Nectarine Administrative Committee will announce to the growers the 
nominees that have been selected and recommended to the Secretary.
    (2) Nominations may only be by growers, or by duly authorized 
employees. At meetings, only growers who are present at such nomination 
meetings may participate in the nomination of nominees for members and 
their alternates. All known growers will then receive a ballot for the 
nominees in the district in which they produce and are entitled to vote 
accordingly. A grower who produces in multiple districts is allowed to 
vote only in one district, and may exchange his/her ballot for that of 
the nominees in another district provided the grower is producing in 
the district for which he/she wants to participate. Employees of such 
grower shall be eligible for membership as principal or alternate to 
fill only one position on the committee.
    (3) A particular grower, including authorized employees of such 
grower, shall be eligible for membership as principal or alternate to 
fill only one position on the committee.
    10. Revise Sec.  916.25 to read as follows:


Sec.  916.25  Acceptance.

    Each person to be selected by the Secretary as a member or as an 
alternate member of the committee shall, prior to such selection, 
qualify by advising the Secretary that he/she agrees to serve in the 
position for which nominated for selection.
    11. Revise Sec.  916.32 to read as follows:


Sec.  916.32  Procedure.

    (a) Nine members of the committee, or alternates acting for 
members, shall constitute a quorum and any action of the committee 
shall require the concurring vote of the majority of those present: 
Provided, That actions of the committee with respect to expenses and 
assessments, or recommendations for regulations pursuant to Sec. Sec.  
916.50 to 916.55, shall require at least nine concurring votes.
    (b) The committee may vote by telephone, telegraph, or other means 
of communication, such as facsimile, and any votes so cast shall be 
confirmed promptly in writing: Provided, That if an assembled meeting 
is held, all votes shall be cast in person. A videoconference shall be 
considered an assembled meeting and all votes shall be considered as 
cast in person.
    12. Remove Sec.  916.37.
    13. Add three new sentences at the end of paragraph (b) of Sec.  
916.41 to read as follows:


Sec.  916.41  Assessments.

* * * * *
    (b) * * * Furthermore, any assessment not paid by a handler within 
a period of time prescribed by the committee may be subject to an 
interest or late payment charge, or both. The period of time, rate of 
interest and late payment charge shall be as recommended by the 
committee and approved by the Secretary. Subsequent to such approval, 
all assessments not paid within the prescribed period of time shall be 
subject to an interest or late payment charge or both.

PART 917--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA

    14. The authority citation for part 917 continues to read as 
follows:

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

    15. Revise Sec.  917.4 to read as follows:


Sec.  917.4  Fruit.

    Fruit means the edible product of the following kinds of trees:
    (a) All varieties of peaches grown in the production area;
    (b) All hybrids grown in the production area exhibiting the 
characteristics of a peach and subject to cultural practices common to 
peaches as recommended by the committee and approved by the Secretary; 
and
    (c) All varieties of pears except Beurre Hardy, Beurre D'Anjou, 
Bosc, Winter Nelis, Doyenne du Comice, Beurre Easter, and Beurre 
Clairgeau.
    16. Revise Sec.  917.5 to read as follows:


Sec.  917.5  Grower.

    Grower is synonymous with producer and means any person who 
produces fruit for market in fresh form, and who has a proprietary 
interest therein. Employees of growers and officers of corporations 
actively engaged in growing peaches are eligible to serve in grower 
positions on the committee.
    17. Revise Sec.  917.6 to read as follows:


Sec.  917.6  Handle.

    Handle and ship are synonymous and mean to sell, consign, deliver 
or transport fruit or to cause fruit to be sold, consigned, delivered 
or transported between the production area and any point outside 
thereof, or within the production area: Provided, That for peaches, 
packing or causing the fruit to be packed also constitutes handling; 
Provided further, That the term handle shall not include the sale of 
fruit on the tree, the transportation within the production area of 
fruit from the orchard where grown to a packing facility located within 
such area for preparation for market, or the delivery of such fruit to 
such packing facility for such preparation.
    18. Add a new Sec.  917.8 to read as follows:


Sec.  917.8  Pure Grower or Pure Producer.

    (a) For peaches, pure grower means any grower:
    (1) Who produces his or her own product (and is not an employee or 
officer of a packing business); or
    (2) Who produces and handles his or her own product; Provided, 
That: A

[[Page 71747]]

pure producer can pack the production of other growers as long as the 
production packed does not exceed 25 percent of the total production 
packed for that marketing year by that pure grower's packing facility. 
Pure grower is synonymous with pure producer.
    (b) The committee may establish, with the approval of the 
Secretary, rules and regulations for the implementation and operation 
of this section.
    19. Revise paragraphs (n) and (o) of Sec.  917.14 to read as 
follows:


Sec.  917.14  District.

* * * * *
    (n) Fresno District includes and consists of Madera County, Fresno 
County, and Mono County.
    (o) Tulare District includes and consists of Tulare County and 
Kings County.
* * * * *
    20. Revise Sec.  917.18 to read as follows:


Sec.  917.18  Nomination of commodity committee members of the Control 
Committee.

    Nominations for the 13 members of the Control Committee to 
represent the commodity committees shall be made in the following 
manner:
    (a) A nomination for one member shall be made by each commodity 
committee selected pursuant to Sec.  917.25. Nominations for the 
remaining members shall be made by the respective commodity committees 
as provided in this section. The number of remaining members which each 
respective commodity shall be entitled to nominate shall be based upon 
the proportion that the previous three fiscal periods' shipments of the 
respective fruit is of the total shipments of all fruit to which this 
part is applicable during such periods. In the event provisions of this 
part are terminated as to any fruit, the members of the commodity 
committee of the remaining fruit shall have all of the powers, duties, 
and functions given to the Control Committee under this part and 
sections of this part pertaining to the designation of the Control 
Committee shall be terminated. In the event provisions of this part are 
suspended as to any fruit, the members of the commodity committee of 
the remaining fruit shall have all the powers, duties, and functions 
given to the Control Committee under this part and sections of this 
part pertaining to the designation of the Control Committee shall be 
suspended.
    (b) A person nominated by any commodity committee for membership on 
the Control Committee shall be an individual person who is a member or 
alternate member of the commodity committee that nominates him/her. 
Each member of each commodity committee shall have only one vote in the 
selection of nominees for membership on the Control Committee.
    21. Revise Sec.  917.22 to read as follows:


Sec.  917.22  Nomination of Peach Commodity Committee members.

    Nominations for membership on the Peach Commodity Committee shall 
be made by growers of peaches in the respective representation areas, 
as follows:
    (a) District 1 composed of the Fresno District: seven nominees.
    (b) District 2 composed of the Tulare District: three nominees.
    (c) District 3 composed of the Tehachapi District and Kern 
District: one nominee.
    (d) District 5 composed of the South Coast District and Southern 
California District: one nominee.
    (e) District 4 composed of the Stanislaus District, Stockton 
District and all of the production area not included in paragraphs (a) 
through (d) of this section: one nominee.
    22. Revise Sec.  917.24 to read as follows:


Sec.  917.24  Procedure for nominating members of various commodity 
committees.

    (a) The Control Committee shall hold or cause to be held not later 
than January 31 for peaches and not later than February 15 for pears of 
each odd numbered year a nomination procedure or a meeting or meetings 
of the growers of the fruits in each representation area set forth in 
Sec. Sec.  917.21 and 917.22 for purposes of designating nominees for 
successor members and alternate members of the commodity committees. 
These meetings shall be supervised by the Control Committee, which 
shall prescribe such procedure as shall be reasonable and fair to all 
persons concerned.
    (b) With respect to each commodity committee only growers of the 
particular fruit who are present at such nomination meetings or 
represented at such meetings by duly authorized employees may 
participate in the nomination and election of nominees for commodity 
committee members and alternates. For peaches, those who may receive 
nomination forms if the nominations are conducted via a mail process 
may also participate in the nomination and election of nominees for 
Peach Commodity Committee members and alternates. All peach growers, or 
authorized employees, will receive a ballot for the nominees in the 
district in which they produce and are entitled to vote accordingly. A 
peach grower who produces in multiple districts is allowed to vote only 
in one district, and may exchange his/her ballot for that of nominees 
in another district provided the grower is producing in the district 
for which he/she wants to participate. For both commodity committees, 
each such grower, including employees of such grower, shall be entitled 
to cast but one vote for each position to be filled for the 
representation area in which he/she produces such fruit.
    (c) A particular grower, including employees of such growers, shall 
be eligible for membership as principle or alternate to fill only one 
position on a commodity committee. A grower nominated for membership on 
the Pear Commodity Committee must have produced at least 51 percent of 
the pears shipped by him/her during the previous fiscal period, or he/
she must represent an organization that produced at least 51 percent of 
the pears shipped by it during such period. The members and alternates 
of the Peach Commodity Committee shall be growers, or shall be 
authorized employees of such growers and at least 50% of the nominees 
from each representation area shall be pure growers.
    (d) For peaches, no person shall serve more than three (3) 
consecutive two-year terms of office or a total of six (6) consecutive 
years; Provided, That an appointment to fill less than a two-year term 
of office, or serving one (1) term as an alternate, shall not be 
included in determining the (3) consecutive terms of office; Provided 
further, That time served prior to the effective date of this section 
shall not be counted toward consecutive term limits. The members shall 
serve until their respective successors are selected and have 
qualified.
    23. Revise Sec.  917.25 to read as follows:


Sec.  917.25  Acceptance.

    (a) The Secretary shall select the members of each commodity 
committee, except for the Peach Commodity Committee, from nominations 
made by growers, as provided in Sec. Sec.  917.21 through 917.24, or 
from among other eligible persons. Any person selected as a member of 
the Pear Commodity Committee shall qualify by filing with the Secretary 
a written acceptance of the appointment.
    (b) For the Peach Commodity Committee, each person to be selected 
by the Secretary as a member or as an alternate member of the committee 
shall, prior to such selection, qualify by advising the Secretary that 
he/she agrees

[[Page 71748]]

to serve in the position for which nominated for selection.
    24. Revise paragraph (d) of Sec.  917.29 to read as follows:


Sec.  917.29  Organization of committees.

* * * * *
    (d) The Control Committee or any commodity committee may, upon due 
notice to all of the members of the respective committee, vote by 
letter, telegraph or telephone: Provided, That any member voting by 
telephone shall promptly thereafter confirm in writing his/her vote so 
cast. The Peach Commodity Committee may, upon due notice to all of the 
members of the respective committee, vote by letter, telegraph, 
telephone, facsimile, video teleconference, or any other means of 
communication recommended by the committee and approved by the 
Secretary; Provided, That any member voting by telephone shall promptly 
thereafter confirm in writing his/her vote so cast.
    25. Add a sentence at the end of paragraph (d) of Sec.  917.35 to 
read as follows:


Sec.  917.35  Powers and duties of each commodity committee.

* * * * *
    (d) * * * To establish subcommittees to aid the Peach Commodity 
Committee in the performance of its duties under this part as may be 
deemed advisable.
* * * * *
    26. Revise Sec.  917.37 to read as follows:


Sec.  917.37  Assessments.

    (a) As his/her pro rata share of the expenses which the Secretary 
finds are reasonable and are likely to be incurred by the commodity 
committees during a fiscal period, each handler shall pay to the 
Control Committee, upon demand, assessments on all fruit handled by 
him/her. The payment of assessments for the maintenance and functioning 
of the committees may be required under this part throughout the period 
it is in effect irrespective of whether particular provisions thereof 
are suspended or become inoperative.
    (b) The Secretary shall fix the respective rate of assessment, 
which handlers shall pay with respect to each fruit during each fiscal 
period in an amount designed to secure sufficient funds to cover the 
respective expenses, which may be incurred during such period. At any 
time during or after the fiscal period, the Secretary may increase the 
rates of assessment in order to secure funds to cover any later 
findings by the Secretary relative to such expenses, and such increase 
shall apply to all fruit shipped during the fiscal period. Furthermore, 
any assessment not paid by a peach handler within a period of time 
prescribed by the Control Committee may be subject to an interest or 
late payment charge, or both. The period of time, rate of interest and 
late payment charge shall be as recommended by the committee and 
approved by the Secretary. Subsequent to such approval, all assessments 
for peaches not paid within the prescribed period of time shall be 
subject to an interest or late payment charge or both.
    (c) In order to provide funds to carry out the functions of the 
commodity committee prior to commencement of shipments in any season, 
shippers may make advance payments of assessments, which advance 
payments shall be credited to such shippers and the assessments of such 
shippers shall be adjusted so that such assessments are based upon the 
quantity of fruit shipped by such shippers during such season. Any 
shipper who ships fruit for the account of a grower may deduct, from 
the account of sale covering such shipment or shipments, the amount of 
assessments levied on said fruit shipped for the account of such 
grower. The Control Committee may also borrow money for such purposes 
for peaches.

    Dated: November 18, 2005.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 05-23327 Filed 11-28-05; 8:45 am]
BILLING CODE 3410-02-P