[Federal Register Volume 74, Number 39 (Monday, March 2, 2009)]
[Rules and Regulations]
[Pages 9045-9047]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-4291]



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Rules and Regulations
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Federal Register / Vol. 74, No. 39 / Monday, March 2, 2009 / Rules 
and Regulations

[[Page 9045]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Doc. No. AMS-FV-08-0091; FV09-984-1 FIR]


Walnuts Grown in California; Changes to Regulations Governing 
Board Nominations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, with a change, an interim final rule revising the administrative 
rules and regulations governing nominations for the California Walnut 
Board (Board). The Board locally administers the marketing order that 
regulates the handling of walnuts grown in California (order). This 
rule continues in effect an action that removes references to 
independent handlers, revises specifications under which groups of 
growers may submit nominations for certain grower positions on the 
Board, and corrects numerical references to other sections of the 
order. These changes are needed to bring the administrative rules and 
regulations into conformance with recently enacted amendments to the 
order concerning Board structure and nomination procedures.

DATES: Effective Date: April 1, 2009.

FOR FURTHER INFORMATION CONTACT: Debbie Wray, Marketing Specialist, or 
Kurt J. Kimmel, Regional Manager, California Marketing Field Office, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or E-mail: 
Debbie.Wray@ams.usda.gov, or Kurt.Kimmel@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or E-mail: Jay.Guerber@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 984, as amended (7 CFR part 984), regulating the handling of 
walnuts grown in California, hereinafter referred to as the ``order.'' 
The order is effective under the Agricultural Marketing Agreement Act 
of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the 
``Act.''
    USDA is issuing this rule in conformance with Executive Order 
12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. Such 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing, USDA would rule on the petition. The Act provides 
that the district court of the United States in any district in which 
the handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction to review USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This rule continues in effect the action that revises the 
administrative rules and regulations governing Board nominations by 
removing references to ``independent'' handlers, adding language 
specifying that groups of growers who marketed an aggregate of at least 
500 tons of walnuts through handlers that handled less than 35% of the 
prior year's crop may submit nominations for grower positions on the 
ballots, and correcting references to order sections that were 
renumbered as a result of recent order amendments.
    Section 984.35 of the California walnut marketing order provides 
for the allocation of grower and handler positions on the Board. 
Historically, some members represented the interests of a major 
industry cooperative, and some members represented independent 
interests. Some members represented the interests of certain production 
area districts, and some served the industry ``at large.'' Recently, 
the structure of the industry changed when the major cooperative 
handler became a publicly-traded corporation. Subsequently, the 
industry approved amendments to the order that restructured the Board 
to reflect the changes to the industry's composition. Language 
specifying membership allocation between cooperative and independent 
interests was removed from the order because all production area walnut 
handlers are now considered independent. Alternative membership 
allocation provisions were added to the order. Board membership 
positions are now allocated between growers and handlers, the specific 
Districts within the production area, and grower positions with no 
District affiliation (``at large'' positions). In the event that one 
industry handler handles 35 percent or more of the crop, such handler--
and growers affiliated with such handler--are entitled to a given 
number of Board positions. As a result of the amendments, some sections 
of the order were renumbered.
    Section 984.37 of the order provides authority for the Board, with 
the approval of USDA, to make changes to the Board nomination 
procedures specified in the order. The procedures are contained in the 
order's administrative rules and regulations. Prior to this action, 
Sec.  984.437 of the regulations specified that if the ``at large'' 
grower position on the Board was assigned to represent independent 
growers, groups of ten or more growers who marketed a combined volume 
of 500 or more tons of walnuts through independent handlers in the 
prior year could propose a nominee for the ballot. The previous 
regulations also specified that groups of ten or more growers from

[[Page 9046]]

each district who marketed an aggregate of 500 or more tons of walnuts 
through independent handlers in the prior year could propose nominees 
for the independent grower positions in their districts.
    The amended order no longer differentiates between cooperative and 
independent entities, and Board positions are no longer apportioned to 
represent either cooperative or independent entities. References in the 
order to independent handlers have been removed from the provisions 
specifying Board nominations. This rule continues in effect the action 
that changes Sec.  984.437(a) and (b) of the administrative rules and 
regulations by removing references to independent handlers. Changes 
made to those paragraphs also specify that groups of ten or more 
growers who marketed an aggregate of at least 500 tons of walnuts 
through handlers that handled less than 35 percent of the prior year's 
crop may nominate growers to serve in the ``at large'' grower 
positions. Further revisions to the regulations specify that groups of 
ten or more growers from each district who marketed an aggregate of at 
least 500 tons of walnuts through handlers that handled less than 35 
percent of the prior year's crop may nominate growers to represent each 
district. Finally, this rule also continues in effect the revision of 
certain references to renumbered order provisions in the regulations 
that are no longer correct.
    This rule was unanimously recommended by the Board at its meeting 
on September 12, 2008.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule on small entities. Accordingly, AMS has 
prepared this final regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf. The Small Business Administration 
(SBA) defines small agricultural service firms as those whose annual 
receipts are less than $7,000,000, and defines small agricultural 
producers as those whose annual receipts are less than $750,000 (13 CFR 
121.201).
    There are currently 55 handlers of California walnuts subject to 
regulation under the marketing order, and there are approximately 4,000 
growers in the production area. USDA's National Agricultural Statistics 
Service (NASS) reports that California walnuts were harvested from a 
total of 218,000 bearing acres during 2007-08. The average yield for 
the 2007-08 crop was 1.49 tons per acre, which is slightly lower than 
the 1.53 tons per acre average for the previous five years. NASS 
reported the value of the 2007-08 crop at $2,320 per ton, which is 
considerably higher than the previous five-year average of $1,384 per 
ton.
    At the time of the 2002 Census of Agriculture, which is the most 
recent information available, approximately 83 percent of California's 
walnut farms were smaller than 100 acres. Forty-seven percent were 
between 1 and 15 acres. A 100-acre farm with an average yield of 1.49 
tons per acre would have been expected to produce about 149 tons of 
walnuts during 2007-08. At $2,320 per ton, that farm's production would 
have had an approximate value of $345,000. Assuming that the majority 
of California's walnut farms are still smaller than 100 acres, it could 
be concluded that the majority of the growers had receipts of less than 
$345,000 in 2007-08. This is well below the SBA threshold of $750,000, 
thus, the majority of California's walnut growers would be considered 
small growers according to SBA's definition.
    According to information supplied by the industry, approximately 
two-thirds of California's walnut handlers shipped merchantable walnuts 
valued under $7,000,000 during the 2007-08 marketing year and would 
therefore be considered small handlers according to the SBA definition.
    This rule continues in effect the action that revises the 
administrative rules and regulations governing the nomination of Board 
members. References to independent handlers are being removed from the 
regulations to conform to recent amendments to the order. Procedures 
for the nomination of grower members by groups of growers who marketed 
an aggregate of at least 500 tons of walnuts through handlers that 
handled less than 35 percent of the prior year's crop are being added. 
References to renumbered sections of the order are being corrected. 
This action imposes no additional cost or burden on growers or handlers 
of any size.
    The Board unanimously recommended these changes, which were 
necessary to bring the order's administrative rules and regulations 
into conformance with the recently amended order. As such, no 
alternatives were considered practicable.
    The Board's meeting was widely publicized throughout the California 
walnut industry and all interested persons were invited to attend the 
meeting and participate in Board deliberations on all issues. Like all 
Board meetings, the September 12, 2008, meeting was a public meeting 
and all entities, both large and small, were able to express views on 
this issue.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large California walnut handlers. As 
with all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    AMS is committed to complying with the E-Government Act, to promote 
the use of Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    As noted in the initial regulatory flexibility analysis, USDA has 
not identified any relevant Federal rules that duplicate, overlap, or 
conflict with this rule.
    An interim final rule concerning this action was published in the 
Federal Register on December 5, 2008. Copies of the rule were mailed or 
sent by facsimile to all walnut handlers. In addition, the rule was 
made available through the Internet by USDA and the Office of the 
Federal Register. That rule provided for a 60-day comment period, which 
ended February 3, 2009. No comments were received.
    The interim final rule published in the Federal Register contained 
an incorrect reference to an order provision. Section 984.437 has been 
modified to include the correct reference.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http:/
/www.ams.usda.gov/AMSv1.0/
ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBus
inessGuide. Any questions about the compliance guide should be sent to 
Jay Guerber at the previously mentioned address in the FOR FURTHER 
INFORMATION CONTACT section.
    After consideration of all relevant matters presented, the 
information and recommendations submitted by the Board, and other 
information, it is found that finalizing the interim final rule as 
published in the Federal Register (73

[[Page 9047]]

FR 73995, December 5, 2008), with a change, will tend to effectuate the 
declared policy of the Act.

List of Subjects in 7 CFR Part 984

    Walnuts, Marketing agreements, Nuts, Reporting and recordkeeping 
requirements.

0
Accordingly, the interim final rule amending 7 CFR part 984, which was 
published at 73 FR 73995 on December 5, 2008, is adopted as a final 
rule with the following change:

PART 984--WALNUTS GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 984 continues to read as 
follows:

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


0
2. In Sec.  984.437 paragraphs (a) and (b) are revised to read as 
follows:


Sec.  984.347  Methods for proposing names of additional candidates to 
be included on walnut growers' nomination ballots.

    (a) With regard to Board grower member positions specified in Sec.  
984.35(a)(5) and (b)(6), any ten or more such growers who marketed an 
aggregate of 500 or more tons of walnuts through handlers who did not 
handle 35% or more of the crop during the marketing year preceding the 
year in which Board nominations are held, may petition the Board to 
include on the nomination ballot the name of an eligible candidate for 
this position, and the name of an eligible candidate to serve as his or 
her alternate. The names of the eligible candidates proposed pursuant 
to this paragraph shall be included on the ballot together with the 
names of any incumbents who are willing to continue serving on the 
Board.
    (b) Any ten or more growers eligible to serve in the grower member 
positions specified in Sec.  984.35(a)(3) and (4) or Sec.  984.35(b)(4) 
and (5) and who marketed an aggregate of 500 or more tons of walnuts 
through handlers who did not handle 35% or more of the crop during the 
marketing year preceding the year in which Board nominations are held, 
may petition the Board to include on the nomination ballot for a 
district the name of an eligible candidate for the applicable position, 
and the name of an eligible candidate to serve as his or her alternate. 
The names of the eligible candidates proposed pursuant to this 
paragraph shall be included on the ballot together with the names of 
any incumbents who are willing to continue serving on the Board.
* * * * *

    Dated: February 24, 2009.
Robert C. Keeney,
Acting Associate Administrator.
[FR Doc. E9-4291 Filed 2-27-09; 8:45 am]
BILLING CODE 3410-02-P