[Federal Register Volume 61, Number 186 (Tuesday, September 24, 1996)]
[Rules and Regulations]
[Pages 49939-49952]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24505]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 Prices of new books are listed in the first FEDERAL REGISTER issue of each 
 week.
 
 ========================================================================
 

  Federal Register / Vol. 61, No. 186 / Tuesday, September 24, 1996 / 
Rules and Regulations  

[[Page 49939]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. AO-370-A5; FV93-930-3]


Tart Cherries Grown in the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington, and Wisconsin; Order Regulating 
Handling

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This final rule establishes a Federal marketing agreement and 
order which regulates the handling of tart cherries grown in the States 
of Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and 
Wisconsin. The order was favored by the required two-thirds majority of 
producers voting in a referendum and was also favored by processors who 
processed more than 50 percent of the commodity as required by the 
Agricultural Marketing Agreement Act of 1937. In addition, the 
marketing agreement was executed by the required number of handlers, 
that is, handlers who handled more than 50 percent of the tart cherries 
handled during the representative period. The marketing agreement and 
order authorize volume, grade, size, and maturity regulations and 
mandatory inspection. It also authorizes production, processing, and 
marketing research and promotion projects, including paid advertising. 
The objective of the order is to improve producer returns by 
strengthening consumer demand through volume control and quality 
assurance mechanisms. Agreement and order activities will be financed 
by assessments levied on tart cherry handlers. The order was considered 
at several public hearings conducted in 1993, 1994, and 1995. The 
referendum was conducted by the Department of Agriculture by mail 
ballot June 12 through July 10, 1996.

EFFECTIVE DATE: September 25, 1996.

FOR FURTHER INFORMATION CONTACT:
    (1) R. Charles Martin or Kenneth G. Johnson, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O. 
Box 96456, room 2523-S, Washington, D.C. 20090-6456; telephone: (202) 
720-2861, FAX: (202) 720-5698.
    (2) Robert Curry, Northwest Marketing Field Office, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, 1220 
S.W. Third Avenue, room 369, Portland, Oregon, 97204; telephone: (503) 
326-2724, FAX: (503) 326-7440. Small businesses may request information 
on compliance with this regulation by contacting: Jay Guerber, 
Marketing Order Administration Branch, Fruit and Vegetable Division, 
AMS, USDA, P.O. Box 96456, Room 2523-S, Washington, D.C. 20090-6456; 
telephone: (202) 720-2491, Fax: (202) 720-5698.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding:
    Notice of Hearing, issued on November 30, 1993, and published in 
the Federal Register on November 30, and amended on December 23, 1993, 
and January 31, 1994 [58 FR 63108, 58 FR 68065, and 59 FR 4259, 
respectively]. The notice reopening the hearing was issued on December 
5, 1994, and published in the Federal Register on December 8, 1994 [59 
FR 63273]; Recommended Decision and Opportunity to File Written 
Exceptions to the Proposed Marketing Agreement and Order, issued 
November 20, 1995, and published in the Federal Register on November 
29, 1995 (60 FR 61292). The reopening of the comment period to file 
written exceptions to the proposed marketing agreement and order was 
issued on December 27, 1995, and published in the Federal Register on 
January 2, 1996 (61 FR 21). The Secretary's Decision was issued on May 
22, 1996 and published in the Federal Register on May 29, 1996 (61 FR 
26956).

Preliminary Statement

    This administrative action is governed by the provisions of 
sections 556 and 557 of Title 5 of the United States Code, and is 
therefore excluded from the requirements of Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This action 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 
action.
    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 the Secretary of 
Agriculture (Secretary) 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 the 
Secretary 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 in equity to review the Secretary's ruling 
on the petition, provided a bill in equity is filed not later than 20 
days after the date of the entry of the ruling.
    The proposed marketing agreement and order was formulated on the 
record of a public hearing held December 15-17, 1993, in Grand Rapids, 
Michigan; January 13, 1994, in Provo, Utah; February 15-17, 1994, in 
Portland, Oregon; January 12-13, 1995, in Portland, Oregon; and January 
18-19, 1995, in Grand Rapids, Michigan. These multiple hearing sessions 
were held to consider a proposed marketing agreement and order 
regulating the handling of tart cherries grown in the proposed 
production area. The hearing was held pursuant to the provisions of the 
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674), hereinafter referred to as the Act, and the applicable rules of 
practice and procedure governing the formulation of marketing 
agreements and marketing orders (7 CFR part 900). Approximately 40 
witnesses, including tart cherry growers, handlers, and economists, 
testified in support of the order. Growers and handlers mainly from the 
States of Oregon and Washington testified in opposition to the proposed 
order and asked to have Oregon and

[[Page 49940]]

Washington excluded from the proposed production area.
    At the conclusion of the February 1994 hearing in Oregon, the 
deadline for filing post-hearing briefs was set at April 29, 1994. The 
deadline for filing post-hearing briefs was subsequently extended to 
May 31, 1994. However, based on a review of the hearing evidence and 
post hearing briefs, the Department of Agriculture (USDA) determined 
that the hearing should be reopened to clarify certain aspects of the 
proposal. USDA wanted to obtain additional information and 
clarification concerning: (1) The States that should be regulated under 
the order; (2) the economic impact of the proposed order on small and 
large businesses; (3) whether the expected program benefits would 
exceed costs, especially for growers, handlers and consumers; and (4) 
how certain provisions would be implemented under the proposed 
marketing order. The hearing was reopened and held January 12-13, 1995, 
in Portland, Oregon, and January 18-19, 1995 in Grand Rapids, Michigan. 
At the conclusion of the Michigan hearing, the deadline for filing 
post-hearing briefs was set at March 17, 1995. Ten briefs were filed 
following the first briefing period and seven briefs were filed 
following the second briefing period.
    The proponents testified that severely fluctuating tart cherry 
prices are inherently harmful to growers and consumers. It was their 
view that the proposed marketing order would improve grower returns by 
strengthening consumer demand through volume control and quality 
assurance mechanisms.
    Upon the basis of evidence introduced at the hearing and the record 
thereof, the Administrator of the Agricultural Marketing Service (AMS) 
on November 29, 1995, filed with the Hearing Clerk, U. S. Department of 
Agriculture, a recommended decision with the opportunity for written 
exceptions by December 29, 1995. Subsequently, the USDA received three 
requests to provide more time to analyze the recommended decision and 
prepare and file written comments. Based on these requests the USDA 
reopened the comment period until January 16, 1996.
    Upon the basis of evidence introduced at the hearing and the record 
thereof, the Deputy Assistant Secretary, Marketing and Regulatory 
Programs, on May 22, 1996, filed with the Hearing Clerk, U. S. 
Department of Agriculture, a Secretary's Decision and Referendum Order, 
directing that a referendum be conducted during the period June 12 
through July 10, 1996, among producers and processors of tart cherries 
to determine whether they favored issuance of the proposed marketing 
order. In the referendum, the marketing order was favored by more than 
two-thirds of the producers voting in the referendum and also by 
producers of more than two-thirds of the production represented in the 
referendum. The marketing order was also favored by processors who 
processed 79.3 percent of the total volume of processed tart cherries 
during the representative period. The marketing agreement was signed by 
handlers who, during the representative period, handled 71 percent of 
the volume of tart cherries handled during the representative period. 
The referendum results and handler sign-up met the statutory 
requirements on producer, processor and handler approval necessary to 
issue the marketing order and agreement.
    The terms of the order set forth in this document are the same as 
those contained in the Secretary's Decision and Referendum Order, with 
one exception. This document corrects an error that appeared in section 
930.20(c) pertaining to the definition of District 2, Central Michigan. 
That definition is revised to read that District 2 consists of that 
area north of a line drawn along the northern boundary of Allegan 
County, rather than north of a line drawn along the southern boundary 
of Allegan County.
    Small Business Consideration: In accordance with the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601 et seq.), the Agricultural 
Marketing Service considered the economic impact of this action on 
small entities. The record indicates that there are approximately 75 
handlers of tart cherries in the production area and 1,600 producers. 
Small agricultural service firms have been defined by the Small 
Business Administration (SBA) (13 CFR 121.601) as those whose annual 
receipts are less than $5,000,000, and small agricultural producers are 
defined as those having annual receipts of less than $500,000. The 
majority of the handlers and producers of tart cherries may be 
classified as small entities.
    For practical purposes, there is no fresh market for tart cherries. 
Processors dry, freeze, can, juice, or puree pitted tart cherries. 
Market use averages are: 56 percent of the product becomes industrial 
grade frozen cherries; 16 percent goes into consumer-size cans of pie 
filling; 8 percent is used for commercial pie filling; 10 percent 
becomes juice concentrate; 2 percent is dried; and 8 percent goes into 
water packs.
    Since 1971, there has been a marked transformation in the 
processing industry's structure. Currently, 75 percent of the crop is 
processed by farmer-owned cooperatives or grower-owned processing 
facilities; whereas in 1971, a substantial volume was processed by 
independent handlers. Processors, through their sales agents, market in 
all U.S. markets and export to Europe and Asia. There are no discrete 
regional markets where cherries from a particular district could have a 
particular advantage, beyond nominal differences in transportation 
costs, which can often be overcome by price discounting.
    The record evidence shows that economic adversity has caused more 
than 21 percent of Michigan's growers to withdraw from tart cherry 
farming. There were 1,183 Michigan commercial growers in 1986, compared 
to 933 in 1992. In 1992, Michigan growers had an average production of 
238,000 pounds with 19 percent of those growers averaging 800,000 
pounds, accounting for 66 percent of the total Michigan production. In 
States other than Michigan, there has also been a general decline in 
the number of commercial growers since 1986. There are fewer growers in 
other States besides Michigan, but the number of bearing acres has 
increased from 45,000 acres in 1986, to more than 50,000 acres in 1990.
    Record evidence indicates that the demand for red tart cherries is 
inelastic at high and low levels of production, and relatively elastic 
in the middle range. At the extremes, during times of very low and very 
high production, different factors become operational. In very short 
crop years, such as 1991, there is limited but sufficient exclusive 
demand for cherries that can cause processor prices to double and 
grower prices to triple. In the event of large crops, there seems to be 
no price low enough to expand sales beyond about 275 million pounds of 
raw fruit in a single year.
    Since 1982, annual sales have averaged 230 million pounds. Under 
the order, total returns to growers could be increased by restricting 
supplies of red tart cherries available for sale by handlers during 
large crop years. Also, production characteristics of the tart cherry 
industry provide an opportunity to increase growers' total earnings by 
converting the excess production of large crop years into storable 
products that could constitute reserve pools. These pools would be 
liquidated in a year when the available supplies are short.
    One of the main concerns addressed in the order is the short term 
annual variation in supply which is attributable to climatic factors 
that neither growers

[[Page 49941]]

nor processors can control, and which leads to chaotic marketing 
conditions. Such climatic factors can result in highly unpredictable 
annual crop sizes, causing gluts and shortages of tart cherries. When 
gluts occur, large carryin inventories can decrease processor and 
grower prices, regardless of the anticipated size of the oncoming 
year's crop. Many sales are consummated with large buyers well before 
the current crop year's supply and demand situation is clear (based on 
what can best be described as ``Anticipated Supply'', i.e., the sum of 
the carryin inventory and USDA crop forecast, available usually late in 
June, weeks before the actual crop harvest.)
    These large, unrestricted carryin inventories and crop estimates 
can play a dominant role in setting the tone of the market in a given 
year. The order is intended to lessen the impact of these inventories 
and estimates by establishing an ``optimum supply,'' thereby reducing 
price swings to growers and buyers, and ultimately resulting in a 
stabilization and enhancement of the market.
    The order would impose some reporting and record keeping 
requirements on handlers. Handler testimony indicated that the expected 
burden that would be imposed with respect to these requirements would 
be negligible since most of the information that would be reported to 
the Board is already compiled by handlers for other uses and is readily 
available. Reporting and recordkeeping requirements issued under 
comparable marketing order programs impose an average annual burden on 
each regulated handler of about one hour. It is reasonable to expect 
that a comparable burden would be imposed under this marketing order on 
the estimated 75 handlers of tart cherries. With respect to growers, 
they testified at the hearing that information required to be submitted 
to the Board for grower diversion is already collected and available 
from growers.
    The purpose of the RFA is to fit regulatory and informational 
requirements to the size and scale of the business entities in a manner 
that is consistent with the objectives of the rule and applicable 
statutes. The marketing order provisions have been carefully reviewed 
and every effort has been made to eliminate any unnecessary costs or 
requirements. As discussed in the RFA, Congress' intent, among other 
objectives, was to direct agencies to identify the need for any 
``special accommodation'' (e.g., exemption or relaxation) on regulated 
small entities (i.e., handlers) because, in the past, some Federal 
regulatory and reporting requirements imposed unnecessary and 
disproportionately burdensome demands on small businesses. After 
reviewing the record AMS determined that direct or indirect costs 
imposed under the marketing order regulation would not be 
proportionately greater on small handlers than on large handlers, or 
conversely, that any projected order benefits would not be 
proportionately smaller for small handlers than for large handlers.
    The record evidence indicates that the order may impose some 
additional costs and requirements on handlers, but those costs are 
insignificant and are directly proportional to the sizes of the 
regulated handlers. The evidence also indicates that, given the severe 
economic conditions and unstable markets facing the majority of the 
industry, the benefits to small (as well as large) handlers are likely 
to be greater than would accrue under the alternatives to the order 
herein, namely no marketing order, or an order without the combination 
of volume controls and other order authorities. USDA has made extensive 
efforts to notify, and include the input of, small entities and others 
in the development phase and subsequent formal rulemaking proceeding. 
All handlers, growers, and other interested persons were given an 
opportunity to participate in this proceeding and submit testimony, not 
once, but twice since the hearing was reopened to take additional 
evidence. In addition, USDA mailed to all known growers and handlers 
notification of the hearing dates and locations. Any regulations issued 
under the order which would regulate the handling of tart cherries, and 
which would impose volume, quality or other requirements on handlers, 
would not occur without additional rulemaking. Such requirements would 
have to be published in the Federal Register, giving all interested 
persons full opportunity to participate in the rulemaking proceeding. 
Any proposal would have to include economic and other considerations 
under rulemaking procedures.
    The record evidence indicates that the order would be instrumental 
in providing expanding markets and sales, and raising and stabilizing 
prices of tart cherries, primarily for the benefit of producers. The 
evidence also indicates that handlers would benefit as well. While the 
level of such benefits to handlers is difficult to quantify, it is also 
clear the provisions of the order are designed to benefit small 
entities. Small handlers and producers are more likely to be minimally 
capitalized than large entities, and are less likely to survive without 
the stability the order would provide.
    Accordingly, based on the information discussed above, AMS has 
determined that the issuance of this final rule will not have a 
significant economic impact on a substantial number of small entities.
    In compliance with Office of Management and Budget (OMB) 
regulations (5 CFR Part 1320) which implement the Paperwork Reduction 
Act of 1995 (Pub. L. 104-13), the information collection and 
recordkeeping requirements that may be imposed by this order have been 
approved by OMB and assigned OMB Number 0581-0177. Any requirements 
imposed will be evaluated against the potential benefits to be derived 
and it is expected that any added burden resulting from increased 
recordkeeping will not be significant when compared to those 
anticipated benefits.

Findings and Determinations

    (a) Findings upon the basis of the hearing record. Pursuant to the 
provisions of the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601 et seq.) and the applicable rules of practice and 
procedure governing the formulation of marketing agreements and 
marketing orders (7 CFR Part 900), a public hearing was held upon a 
proposed marketing agreement and a proposed order, regulating the 
handling of tart cherries grown in the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington, and Wisconsin.
    Upon the basis of the evidence introduced at the hearing and the 
record thereof, it is found that:
    (1) The marketing agreement and order, and all of the terms and 
conditions thereof, will tend to effectuate the declared policy of the 
Act;
    (2) The marketing agreement and order regulates the handling of 
tart cherries grown in the production area in the same manner as, and 
is applicable only to, persons in the respective classes of commercial 
and industrial activity specified in the marketing agreement and order 
upon which a hearing has been held;
    (3) The marketing agreement and order is limited in its application 
to the smallest regional production area 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 
area will not effectively carry out the declared policy of the Act;
    (4) There are no differences in the production and marketing of 
tart cherries grown in the production area

[[Page 49942]]

which make necessary different terms and provisions applicable to 
different parts of such area; and
    (5) All handling of tart cherries grown in the production area is 
in the current of interstate or foreign commerce or directly burdens, 
obstructs, or affects such commerce.
    (b) Additional findings. It is necessary and in the public interest 
to make this order effective not later than September 25, 1996.
    A later effective date would unnecessarily delay the implementation 
of the agreement and order and the collection of handler assessments 
necessary to fund day-to-day program expenses and authorized research 
and promotion activities. The Department and industry implementation 
activities must begin promptly. These activities include, but are not 
limited to, the nomination of members and alternate members of the 
administrative board to locally administer the marketing order, the 
selection of that board by the Secretary of Agriculture, and following 
that, holding board meetings to select a management team, draft board 
operating guidelines, consider a budget and assessment rate for the 
1997 fiscal period, and make other recommendations consistent with 
order authority. Some of the board recommendations will require 
rulemaking by the Department to be implemented.
    In view of the foregoing, it is hereby found and determined that 
good cause exists for making this order effective September 25, 1996, 
and that it would be contrary to the public interest to delay the 
effective date of this order for 30 days after its publication in the 
Federal Register (Sec. 553(d), Administrative Procedure Act; 5 U.S.C. 
551-559).
    (c) Determinations. It is hereby determined that:
    (1) The ``Marketing Agreement Regulating the Handling of Tart 
Cherries Grown in the States of Michigan, New York, Pennsylvania, 
Oregon, Utah, Washington, and Wisconsin'' upon which the aforesaid 
public hearing was held has been signed by handlers (excluding 
cooperative associations of producers who are not engaged in 
processing, distributing, or shipping tart cherries covered by the 
order) who during the period July 1, 1995, through May 31, 1996, 
handled not less than 50 percent of the volume of such tart cherries 
covered by this order, and
    (2) The issuance of this order is favored or approved by at least 
two-thirds of the producers who participated in a referendum on the 
question of its approval and who, during the period July 1, 1995, 
through May 31, 1996 (which has been deemed to be a representative 
period), have been engaged within the tart cherry production area in 
the production of tart cherries for market, such producers having also 
produced for market at least two-thirds of the volume of such commodity 
represented in the referendum.

List of Subjects in 7 CFR Part 930

    Marketing agreements, Tart cherries, Reporting and recordkeeping 
requirements.

Order Relative to Handling of Tart Cherries Grown in the States of 
Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and 
Wisconsin

    It is therefore ordered, that on and after the effective date 
hereof, all handling of tart cherries grown in the States of Michigan, 
New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin, shall 
be in conformity to, and in compliance with, the terms and conditions 
of the said order, as follows:
    The provisions of the marketing order include Secs. 930.1 through 
930.91. The marketing agreement includes the provisions of the order 
and three additional provisions, Sec. 930.97 Counterparts, Sec. 930.98 
Additional parties, and Sec. 930.99 Order with marketing agreement. 
These provisions are not published herein as part of the order.
    The provisions of the marketing order are set forth in full herein.
    Title 7, Chapter IX is amended by adding part 930 to read as 
follows:

PART 930--TART CHERRIES GROWN IN THE STATES OF MICHIGAN, NEW YORK, 
PENNSYLVANIA, OREGON, UTAH, WASHINGTON, AND WISCONSIN

Subpart--Order Regulating Handling

Definitions

Sec.
 930.1  Act.
930.2  Board.
930.3  Cherries.
930.4  Crop year.
930.5  Department or USDA.
930.6  District.
930.7  Fiscal period.
930.8  Free market tonnage percentage cherries.
930.9  Grower.
930.10  Handle.
930.11  Handler.
930.12  Person.
930.13  Primary inventory reserve.
930.14  Production area.
930.15  Restricted percentage cherries.
930.16  Sales constituency.
930.17  Secondary inventory reserve.
930.18  Secretary.

Administrative Body

930.20  Establishment and membership.
930.21  Reestablishment
930.22  Term of office.
930.23  Nomination and election.
930.24  Appointment.
930.25  Failure to nominate.
930.26  Acceptance.
930.27  Vacancies.
930.28  Alternate members
930.29  Eligibility for membership on Cherry Industry Administrative 
Board.
930.30  Powers.
930.31  Duties.
930.32  Procedure.
930.33  Expenses and compensation.

Expenses and Assessments

930.40  Expenses.
930.41  Assessments.
930.42  Accounting.

Quality Control

930.44  Quality Control.

Research, Market Development and Promotion

930.48  Research, Market Development and Promotion.

Regulations

930.50  Marketing policy.
930.51  Issuance of volume regulations.
930.52  Establishment of districts subject to volume regulations.
930.53  Modification, suspension, or termination of regulations.
930.54  Prohibition on the use or disposition of inventory reserve 
cherries.
930.55  Primary inventory reserves.
930.56  Off-premise inventory reserve.
930.57  Secondary inventory reserve.
930.58  Grower diversion privilege.
930.59  Handler diversion privilege.
930.60  Equity holders.
930.61  Handler compensation.
930.62  Exemptions.
930.63  Deferment of restricted obligation.

Reports and Records

930.70  Reports.
930.71  Records.
930.72  Verification of reports and records.
930.73  Confidential information.

Miscellaneous Provisions

930.80  Compliance.
930.81  Right of the Secretary.
930.82  Effective time.
930.83  Termination.
930.84  Proceedings after termination.
930.85  Effect of termination or amendment.
930.86  Duration of immunities.
930.87  Agents.
930.88  Derogation.
930.89  Personal liability.
930.90  Separability.
930.91  Amendments.

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

[[Page 49943]]

Subpart--Order Regulating Handling

Definitions


Sec. 930.1   Act.

    Act means Public Act No. 10, 73d Congress (May 12, 1933), as 
amended, and as reenacted and amended by the Agricultural Marketing 
Agreement Act of 1937, as amended (48 Stat. 31, as amended, 68 Stat. 
906, 1047; 7 U.S.C. 601 et seq.).


Sec. 930.2   Board.

    Board means the Cherry Industry Administrative Board established 
pursuant to Sec. 930.20.


Sec. 930.3   Cherries.

    Cherries means all tart/sour cherry varieties grown in the 
production area classified botanically as Prunus cerasas, or hybrids of 
Prunus cerasas by Prunus avium, or Prunus cerasas by Prunus fruticosa.


Sec. 930.4   Crop year.

    Crop year means the 12-month period beginning on July 1 of any year 
and ending on June 30 of the following year, or such other period as 
the Board, with the approval of the Secretary, may establish.


Sec. 930.5   Department or USDA.

    Department or USDA means the United States Department of 
Agriculture.


Sec. 930.6   District.

    District means one of the subdivisions of the production area 
described in Sec. 930.20(c), or such other subdivisions as may be 
established pursuant to Sec. 930.21, or any subdivision added pursuant 
to Sec. 930.52.


Sec. 930.7   Fiscal period.

    Fiscal period is synonymous with fiscal year and means the 12-month 
period beginning on July 1 of any year and ending on June 30 of the 
following year, or such other period as the Board, with the approval of 
the Secretary, may establish: Provided, that the initial fiscal period 
shall begin on the effective date of this part.


Sec. 930.8   Free market tonnage percentage cherries.

    Free market tonnage percentage cherries means that proportion of 
cherries handled in a crop year which are free to be marketed in normal 
commercial outlets in that crop year under any volume regulation 
established pursuant to Sec. 930.50 or Sec. 930.51 and, in the absence 
of a restricted percentage being established for a crop year pursuant 
to Sec. 930.50 or Sec. 930.51, means all cherries received by handlers 
in that crop year.


Sec. 930.9   Grower.

    Grower is synonymous with producer and means any person who 
produces cherries to be marketed in canned, frozen, or other processed 
form and who has a proprietary interest therein: Provided that, the 
term grower shall not include a person who produces cherries to be 
marketed exclusively for the fresh market in an unpitted condition.


Sec. 930.10   Handle.

    Handle means the process to brine, can, concentrate, freeze, 
dehydrate, pit, press or puree cherries, or in any other way convert 
cherries commercially into a processed product, or divert cherries 
pursuant to Sec. 930.59 or obtain grower diversion certificates issued 
pursuant to Sec. 930.58, or otherwise place cherries into the current 
of commerce within the production area or from the area to points 
outside thereof: Provided, That the term handle shall not include:
    (a) The brining, canning, concentrating, freezing, dehydration, 
pitting, pressing or the converting, in any other way, of cherries into 
a processed product for home use and not for resale.
    (b) The transportation within the production area of cherries from 
the orchard where grown to a processing facility located within such 
area for preparation for market.
    (c) The delivery of such cherries to such processing facility for 
such preparation.
    (d) The sale or transportation of cherries by a grower to a handler 
of record within the production area.
    (e) The sale of cherries in the fresh market in an unpitted 
condition.


Sec. 930.11   Handler.

    Handler means any person who first handles cherries or causes 
cherries to be handled for his or her own account.


Sec. 930.12   Person.

    Person means an individual, partnership, corporation, association, 
or any other business unit.


Sec. 930.13   Primary inventory reserve.

    Primary inventory reserve means that portion of handled cherries 
that are placed into handlers' inventories in accordance with any 
restricted percentage established pursuant to Sec. 930.50 or 
Sec. 930.51.


Sec. 930.14   Production area.

    Production area means the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington and Wisconsin.


Sec. 930.15   Restricted percentage cherries.

    Restricted percentage cherries means that proportion of cherries 
handled in a crop year which must be either placed into handlers' 
inventories in accordance with Sec. 930.55 or Sec. 930.57 or otherwise 
diverted in accordance with Sec. 930.59 and thereby withheld from 
marketing in normal commercial outlets under any volume regulation 
established pursuant to Sec. 930.50 or Sec. 930.51.


Sec. 930.16   Sales constituency.

    Sales constituency means a common marketing organization or 
brokerage firm or individual representing a group of handlers or 
growers.


Sec. 930.17   Secondary inventory reserve.

    Secondary inventory reserve means any portion of handled cherries 
voluntarily placed into inventory by a handler under Sec. 930.57.


Sec. 930.18   Secretary.

    Secretary means the Secretary of Agriculture of the United States, 
or any officer or employee of the U.S. Department of Agriculture to 
whom authority has heretofore been delegated, or to whom authority may 
hereafter be delegated, to act in the Secretary's stead.

Administrative Body


Sec. 930.20   Establishment and membership.

    (a) There is hereby established a Cherry Industry Administrative 
Board (Board) consisting of 18 members. Seventeen of these members 
shall be qualified growers and handlers selected pursuant to this part, 
each of whom shall have an alternate having the same qualifications as 
the member for whom the person is an alternate. The remaining member of 
the Board shall be a public member who, along with his or her 
alternate, shall be elected by the Board from the general public.
    (b) District representation on the Board shall be as follows:

------------------------------------------------------------------------
                                                       Grower    Handler
                      District                        members    members
------------------------------------------------------------------------
1..................................................         2          2
2..................................................         1          2
3..................................................         1          1
4..................................................         1          1
5..................................................         1       or 1
6..................................................         1       or 1
7..................................................         1          1
8..................................................         1       or 1
9..................................................         1       or 1
------------------------------------------------------------------------

    (c) Upon the adoption of this part, the production area shall be 
divided into the following described subdivisions for purposes of this 
section:
    District 1--Northern Michigan: that portion of the State of 
Michigan which

[[Page 49944]]

is north of a line drawn along the northern boundary of Mason County 
and extended east to Lake Huron.
    District 2--Central Michigan: that portion of the State of Michigan 
which is south of District 1 and north of a line drawn along the 
northern boundary of Allegan County and extended east to Lake St. 
Clair.
    District 3--Southern Michigan: That portion of the State of 
Michigan not included in Districts 1 and 2.
    District 4--The State of New York.
    District 5--The State of Oregon.
    District 6--The State of Pennsylvania.
    District 7--The State of Utah.
    District 8--The State of Washington.
    District 9--The State of Wisconsin.
    (d) The ratio of grower to handler representation in District 2 
shall alternate each time the term of a Board member from the 
representative group having two seats expires. During the initial 
period of the order, the ratio shall be as designated in paragraph (b) 
of this section.
    (e) Board members from Districts 5, 6, 8 and 9 may be either grower 
or handler members and will be nominated and elected as outlined in 
Sec. 930.23. If District 5, 6, 8, and/or 9 becomes subject to volume 
regulation under Secs. 930.52(a), then the Board shall be reestablished 
by the Secretary to provide such District(s) with at least one grower 
and one handler seat on the Board and such seats shall be filled 
according to the provisions of Sec. 930.23.
    (f) In order to achieve a fair and balanced representation on the 
Board, and to prevent any one sales constituency from gaining control 
of the Board, not more than one board member may be from, or affiliated 
with, a single sales constituency in those districts having more than 
one seat on the Board. There is, however, no prohibition on the number 
of Board members from differing districts that may be elected from a 
single sales constituency which may have operations in more than one 
district. However, as provided in Sec. 930.23, a handler or grower may 
only nominate Board members and vote in one district.
    (g) Subject to the approval of the Secretary, the Board shall at 
its first meeting and annually thereafter elect from among any of its 
members a chairperson and a vice-chairperson and may elect other 
appropriate officers.


Sec. 930.21   Reestablishment.

    Districts, subdivisions of districts, and the distribution of 
representation among growers and handlers within a respective district 
or subdivision thereof, or among the subdivision of districts, may be 
reestablished by the Secretary, subject to the provisions of 
Sec. 930.23, based upon recommendations by the Board. In recommending 
any such changes, the Board shall consider:
    (a) the relative importance of producing areas;
    (b) relative production;
    (c) the geographic locations of producing areas as they would 
affect the efficiency of administration of this part;
    (d) shifts in cherry production within the districts and the 
production area;
    (e) changes in the proportion and role of growers and handlers 
within the districts; and (f) other relevant factors.


Sec. 930.22   Term of office.

    The term of office of each member and alternate member of the Board 
shall be for three fiscal years: Provided that, of the nine initial 
members and alternates from the combination of Districts 1, 2 and 3, 
one-third of such initial members and alternates shall serve only one 
fiscal year, one-third of such members and alternates shall serve only 
two fiscal years, one-third of such members and alternates shall serve 
three fiscal years; and one-half of the initial members and alternates 
from Districts 4 and 7 shall serve only one fiscal year, and one-half 
of such initial members and alternates shall serve two fiscal years 
(determination of which of the initial members and their alternates 
shall serve for 1 fiscal year, 2 fiscal years, or 3 fiscal years, in 
both instances, shall be by lot). Members and alternate members shall 
serve in such capacity for the portion of the term of office for which 
they are selected and have qualified until their respective successors 
are selected, have qualified and are appointed. The consecutive terms 
of office of grower, handler and public members and alternate members 
shall be limited to two 3-year terms, excluding any initial term 
lasting less than 3 years. The term of office of a member and alternate 
member for the same seat shall be the same. If this part becomes 
effective on a date such that the initial fiscal period is less than 
six months in duration, then the tolling of time for purposes of this 
subsection shall not begin until the beginning of the first 12-month 
fiscal period.


Sec. 930.23   Nomination and election.

    (a) Forms and ballots. Nomination and election of initial and 
successor members and alternate members of the Board shall be conducted 
through petition forms and election ballots distributed to all eligible 
growers and handlers via the U.S. Postal Service or other means, as 
determined by the Secretary. Similar petition forms and election 
ballots shall be used for both members and alternate members and any 
requirements for election of a member shall apply to the election of an 
alternate.
    (b) Nomination:
    (1) In order for the name of a grower nominee to appear on an 
election ballot, the nominee's name must be submitted with a petition 
form, to be supplied by the Secretary or the Board, which, except in 
District 8, contains at least five signatures of growers, other than 
the nominee, from the nominee's district who are eligible to vote in 
the referendum. Grower petition forms in District 8 must be signed by 
only two growers, other than the nominee, from the nominee's district.
    (2) In order for the name of a handler nominee to appear on an 
election ballot, the nominee's name must be submitted with a petition 
form, to be supplied by the Secretary or the Board, which contains the 
signature of at least one handler, other than the nominee, from the 
nominee's district who is eligible to vote in the referendum. The 
requirement that the petition form be signed by a handler other than 
the nominee shall not apply in any District where less than two 
handlers are eligible to vote.
    (3) Only growers, including duly authorized officers or employees 
of growers, who are eligible to serve as grower members of the Board 
shall participate in the nomination of grower members and alternate 
grower members of the Board. No grower shall participate in the 
submission of nominees in more than one district during any fiscal 
period. If a grower produces cherries in more than one district, that 
grower may select in which district he or she wishes to participate in 
the nominations and election process and shall notify the Secretary or 
the Board of such selection. A grower may not participate in the 
nomination process in one district and the election process in a second 
district in the same election cycle.
    (4) Only handlers, including duly authorized officers or employees 
of handlers, who are eligible to serve as handler members of the Board 
shall participate in the nomination of handler members and alternate 
handler members of the Board. No handler shall participate in the 
selection of nominees in more than one district during any fiscal 
period. If a handler handles cherries in more than one district, that 
handler may select in which district he or she wishes to participate in 
the nominations and election process and shall notify the Secretary or 
the Board of such selection. A handler may not participate in the 
nominations process in one district and the elections process

[[Page 49945]]

in a second district in the same election cycle. If a person is a 
grower and a grower-handler only because some or all of his or her 
cherries were custom packed, but he or she does not own or lease and 
operate a processing facility, such person may vote only as a grower.
    (5) In Districts 5, 6, 8 and 9, both growers and handlers may be 
nominated for the district's Board seat. Grower and handler nominations 
must follow the petition procedures outlined in paragraphs (b)(1) and 
(b)(2) of this section.
    (6) All eligible growers and handlers in all districts may submit 
the names of the nominees for the public member and alternate public 
member of the Board.
    (7) After the appointment of the initial Board, the Secretary or 
the Board shall announce at least 180 days in advance when a Board 
member's term is expiring and shall solicit nominations for that 
position in the manner described in this section. Nominations for such 
position should be submitted to the Secretary or the Board not less 
than 120 days prior to the expiration of such term.
    (c) Election:
    (1) After receiving nominations, the Secretary or the Board shall 
distribute ballots via the U.S. Postal Service or other means, as 
determined by the Secretary, to all eligible growers and handlers 
containing the names of the nominees by district for the respective 
seats on the Board, excluding the public voting member seat. The 
ballots will clearly indicate that growers and handlers may only rank 
or otherwise vote for nominees in their own district.
    (2) Except as provided in paragraph (c)(4) of this section, only 
growers, including duly authorized officers or employees of growers, 
who are eligible to serve as grower members of the Board shall 
participate in the election of grower members and alternate grower 
members of the Board. No grower shall participate in the election of 
Board members in more than one district during any fiscal period. If a 
grower produces cherries in more than one district, the grower must 
vote in the same district in which he or she chose to participate in 
the nominations process under paragraph (b)(3) of this section. 
However, if the grower did not participate in the nominations process, 
he or she may select in which district he or she wishes to vote and 
shall notify the Secretary or the Board of such selection.
    (3) Except as provided in paragraph (c)(4) of this section, only 
handlers, including duly authorized officers or employees of handlers, 
who are eligible to serve as handler members of the Board shall 
participate in the election of handler members and alternate handler 
members of the Board. No handler shall participate in the election of 
Board members in more than one district during any fiscal period. If a 
handler does handle cherries in more than one district, he or she must 
vote in the same district in which the handler elected to participate 
in the nominations process under paragraph (b)(4) of this section. 
However, if a handler did not participate in the nominations process, 
that handler may select in which district he or she chooses to vote and 
shall notify the Secretary or the Board of such selection. If a person 
is a grower and a grower-handler only because some or all of his or her 
cherries were custom packed, but he or she does not own or lease and 
operate a processing facility, such person may vote only as a grower.
    (4) In Districts 5, 6, 8 and 9, growers and handlers may vote for 
either the grower or handler nominee(s) for the single seat allocated 
to those districts.
    (d) The members of the Board appointed by the Secretary pursuant to 
Sec. 930.24 shall, at the first meeting and whenever necessary 
thereafter, by at least a two-thirds vote of the entire Board, select 
individuals to serve as the public member and alternate public member 
of the Board from the list of nominees received from growers and 
handlers pursuant to paragraph (b) of this section or from other 
persons nominated by the Board. The persons selected shall be subject 
to appointment by the Secretary under Sec. 930.24.
    (e) The Board, with the approval of the Secretary, may establish 
rules and regulations necessary and incidental to the administration of 
this section.


Sec. 930.24   Appointment.

    The selection of nominees made pursuant to elections conducted 
under Sec. 930.23(c) shall be submitted to the Secretary in a format 
which indicates the nominees by district, with the nominee receiving 
the highest number of votes at the top and the number of votes received 
being clearly indicated. The Secretary shall appoint from those 
nominees or from other qualified individuals, the grower and handler 
members of the Board and an alternate for each such member on the basis 
of the representation provided for in Sec. 930.20 or as provided for in 
any reapportionment or reestablishment undertaken pursuant to 
Sec. 930.21. The public member and alternate public member are 
nominated by the Board pursuant to Sec. 930.23(d) and shall also be 
subject to appointment by the Secretary. The Secretary shall appoint 
from nominees by the Board or from other qualified individuals the 
public member and the alternate public member.


Sec. 930.25   Failure to nominate.

    If nominations are not made within the time and in the manner 
prescribed in Sec. 930.23, the Secretary may, without regard to 
nominations, select the members and alternate members of the Board on 
the basis of the representation provided for in Sec. 930.20 or as 
provided for in any reapportionment or reestablishment undertaken 
pursuant to Sec. 930.21.


Sec. 930.26   Acceptance.

    Each person to be appointed by the Secretary as a member or as an 
alternate member of the Board shall, prior to such appointment, qualify 
by advising the Secretary that he/she agrees to serve in the position 
for which nominated for selection.


Sec. 930.27   Vacancies.

    To fill any vacancy occasioned by the failure of any person 
appointed as a member or as an alternate member of the Board to 
qualify, or in the event of the death, removal, resignation, or 
disqualification of any member or alternate member of the Board, a 
successor for the unexpired term of such member or alternate member of 
the Board shall be appointed by the Secretary from the most recent list 
of nominations for the Board made by growers and handlers, from 
nominations made by the Board, or from other qualified individuals. Any 
nominations made by the Board to fill a vacancy must be received by the 
Secretary within 90 days of the effective date of the vacancy. Board 
members wishing to resign from the Board must do so in writing to the 
Secretary.


Sec. 930.28   Alternate members.

    An alternate member of the Board, during the absence of the member 
for whom that member serves as an alternate, shall act in the place and 
stead of such member and perform such other duties as assigned. 
However, if a member is in attendance at a meeting of the Board, an 
alternate member may not act in the place and stead of such member. In 
the event of the death, removal, resignation, or disqualification of a 
member, the alternate shall act for the member until a successor for 
such member is appointed and has qualified.


Sec. 930.29   Eligibility for membership on Cherry Industry 
Administrative Board.

    (a) Each grower member and each grower alternate member of the 
Board shall be a grower, or an officer or employee of a grower, in the 
district for which nominated or appointed.

[[Page 49946]]

    (b) Each handler member and each handler alternate member of the 
Board shall be a handler, or an officer or employee of a handler, who 
owns, or leases, and operates a cherry processing facility in the 
district for which nominated or appointed.
    (c) The public member and alternate public member of the Board 
shall be prohibited from having any financial interest in the cherry 
industry and shall possess such additional qualifications as may be 
established by regulation.


Sec. 930.30   Powers.

    The Board shall have the following powers:
    (a) To administer this part in accordance with its terms and 
provisions;
    (b) To make rules and regulations to effectuate the terms and 
provisions of this part;
    (c) To receive, investigate, and report to the Secretary complaints 
of violations of this part; and
    (d) To recommend to the Secretary amendments to this part.


Sec. 930.31   Duties.

    The Board shall have, among others, the following duties:
    (a) To select such officers, including a chairperson and vice-
chairperson, as may be necessary, and to define the duties of such 
officers and the duties of the chairperson and the vice-chairperson;
    (b) To employ or contract with such persons or agents as the Board 
deems necessary and to determine the duties and compensation of such 
persons or agents;
    (c) To select such committees and subcommittees as may be 
necessary;
    (d) To adopt bylaws and to adopt such rules for the conduct of its 
business as it may deem advisable;
    (e) To submit to the Secretary a budget for each fiscal period, 
prior to the beginning of such period, including a report explaining 
the items appearing therein and a recommendation as to the rates of 
assessments for such period;
    (f) To keep minutes, books, and records which will reflect all of 
the acts and transactions of the Board and which shall be subject to 
examination by the Secretary;
    (g) To prepare periodic statements of the financial operations of 
the Board and to make copies of each statement available to growers and 
handlers for examination at the office of the Board;
    (h) To cause its financial statements to be audited by a certified 
public accountant at least once each fiscal year and at such times as 
the Secretary may request. Such audit shall include an examination of 
the receipt of assessments and the disbursement of all funds. The Board 
shall provide the Secretary with a copy of all audits and shall make 
copies of such audits, after the removal of any confidential individual 
grower or handler information that may be contained in them, available 
to growers and handlers for examination at the offices of the Board;
    (i) To act as intermediary between the Secretary and any grower or 
handler with respect to the operations of this part;
    (j) To investigate and assemble data on the growing, handling, and 
marketing conditions with respect to cherries;
    (k) To apprise the Secretary of all Board meetings in a timely 
manner;
    (l) To submit to the Secretary such available information as the 
Secretary may request;
    (m) To investigate compliance with the provisions of this part;
    (n) To develop and submit an annual marketing policy for approval 
by the Secretary containing the optimum supply of cherries for the crop 
year established pursuant to Sec. 930.50 and recommending such 
action(s) necessary to achieve such optimum supply;
    (o) To implement volume regulations established under Sec. 930.50 
and issued by the Secretary under Sec. 930.51, including the release of 
any inventory reserves;
    (p) To provide thorough communication to growers and handlers 
regarding the activities of the Board and to respond to industry 
inquiries about Board activities;
    (q) To oversee the collection of assessments levied under this 
part;
    (r) To enter into contracts or agreements with such persons and 
organizations as the Board may approve for the development and conduct 
of activities, including research and promotion activities, authorized 
under this part or for the provision of services required by this part 
and for the payment of the cost thereof with funds collected through 
assessments pursuant to Sec. 930.41 and income from such assessments. 
Contracts or agreements for any plan or project shall provide that:
    (1) The contractors shall develop and submit to the Board a plan or 
project together with a budget(s) which shall show the estimated cost 
to be incurred for such plan or project;
    (2) Any contract or agreement for a plan or project and any plan or 
project adopted by the Board shall only become effective upon approval 
by the Secretary; and
    (3) Every such contracting party shall keep accurate records of all 
of its transactions and make periodic reports to the Board of 
activities conducted and an accounting for funds received and expended, 
and such other reports as the Secretary or the Board may require. The 
Secretary or employees of the Board may audit periodically the records 
of the contracting party;
    (s) Pending disbursement consistent with its budget, to invest, 
with the approval of the Secretary, and in accordance with applicable 
Departmental policies, funds collected through assessments authorized 
under Sec. 930.41 and income from such assessments;
    (t) To establish standards or grade requirements for cherries for 
frozen and canned cherry products, subject to the approval of the 
Secretary;
    (u) To borrow such funds, subject to the approval of the Secretary 
and not to exceed the expected expenses of one fiscal year, as are 
necessary for administering its responsibilities and obligations under 
this part; and
    (v) To establish, with the approval of the Secretary, such rules 
and procedures relative to administration of this subpart as may be 
consistent with the provisions contained in this subpart and as may be 
necessary to accomplish the purposes of the Act and the efficient 
administration of this subpart.


Sec. 930.32  Procedure.

    (a) Twelve members of the Board, including alternates acting for 
absent members, shall constitute a quorum. For any action of the Board 
to pass, at least two-thirds of the entire Board must vote in support 
of such action.
    (b) The Board may provide through its own rules and regulations, 
subject to approval by the Secretary, for simultaneous meetings of 
groups of its members assembled at different locations and for votes to 
be conducted by telephone or other means of communication. Votes so 
cast shall be promptly confirmed in writing.
    (c) All meetings of the Board are open to the public, although the 
Board may hold portions of meetings in executive session for the 
consideration of certain business. The Board will establish, with the 
approval of the Secretary, a means of advanced notification of growers 
and handlers of Board meetings.


Sec. 930.33  Expenses and compensation.

    Except for the public member and alternate public member who shall 
receive such compensation as the Board may establish and the Secretary 
may approve, the members of the Board, and alternates when acting as 
members,

[[Page 49947]]

shall serve without compensation but shall be reimbursed for necessary 
and reasonable expenses, as approved by the Board, incurred by them in 
the performance of their duties under this part. The Board at its 
discretion may request the attendance of one or more alternates at any 
or all meetings, notwithstanding the expected or actual presence of the 
respective member(s), and may pay the expenses of such alternates.

Expenses and Assessments


Sec. 930.40  Expenses.

    The Board is authorized to incur such expenses as the Secretary 
finds are reasonable and likely to be incurred for its maintenance and 
functioning and to enable it to exercise its powers and perform its 
duties in accordance with the provisions of this part. The funds to 
cover such expenses shall be acquired by the levying of assessments as 
provided in Sec. 930.41.


Sec. 930.41  Assessments.

    (a) An assessment may be levied upon handlers annually under this 
part to cover the administrative costs of the Board, costs of 
inspection, and any research, development and promotion activities 
initiated by the Board under Sec. 930.48.
    (b) Each part of an assessment intended to cover the costs of each 
activity in paragraph (a) of this section, must be identified and 
approved by the Board and the Secretary, and any notification or other 
statement regarding assessments provided to handlers must contain such 
information.
    (c) As a pro rata share of the administrative, inspection, 
research, development, and promotion expenses which the Secretary finds 
reasonable and likely to be incurred by the Board during a fiscal 
period, each handler shall pay to the Board assessments on all cherries 
handled, as the handler thereof, during such period: Provided, a 
handler shall be exempt from any assessment on the tonnage of handled 
cherries that are diverted according to Sec. 930.59 which includes 
cherries represented by grower diversion certificates issued pursuant 
to Sec. 930.58(b) and acquired by handlers and those cherries devoted 
to exempt uses under Sec. 930.62.
    (d) The Secretary, after consideration of the recommendation of the 
Board, shall fix the rate of assessment to be paid by each handler 
during the fiscal period in an amount designed to secure sufficient 
funds to cover the expenses which may be approved and incurred during 
such period or subsequent period as provided in paragraph (c) of this 
section. At any time during or after the fiscal period, the Secretary 
may increase the rate of assessment in order to secure sufficient funds 
to cover any later finding by the Secretary relative to the expenses 
which may be incurred. Such increase shall be applied to all cherries 
handled during the applicable fiscal period. In order to provide funds 
for the administration of the provisions of this part during the first 
part of a fiscal period before sufficient operating income is available 
from assessments, the Board may accept the payment of assessments in 
advance, and may borrow money for such purposes.
    (e) Assessments not paid within a time prescribed by the Board may 
be made subject to interest or late payment charges, or both. The 
period of time, rate of interest, and late payment charge will be as 
recommended by the Board and approved by the Secretary: Provided, That 
when interest or late payment charges are in effect, they shall be 
applied to all assessments not paid within the prescribed period of 
time.
    (f) Assessments will be calculated on the basis of pounds of 
cherries handled: Provided, That the formula adopted by the Board and 
approved by the Secretary for determining the rate of assessment will 
compensate for differences in the number of pounds of cherries utilized 
for various cherry products and the relative market values of such 
cherry products.
    (g) The Board, with the approval of the Secretary, may establish 
rules and regulations necessary and incidental to the administration of 
this section.


Sec. 930.42  Accounting.

    (a) If, at the end of a fiscal period, the assessments collected 
are in excess of expenses incurred, the Board, with the approval of the 
Secretary, may carry over all or any portion of such excess into 
subsequent fiscal periods as a reserve. Such reserve funds may be used 
to cover any expenses authorized by this part, and to cover necessary 
expenses of liquidation in the event of termination of this part. If 
any such excess is not retained in a reserve, it shall be refunded 
proportionately to the handlers from whom the excess was collected. 
Without an additional reserve level approved by the Secretary, the 
amount held in reserve may not exceed approximately one year's 
operational expenses. Upon termination of this part, any funds not 
required to defray the necessary expenses of liquidation shall be 
disposed of in such a manner as the Secretary may determine to be 
appropriate: Provided, That to the extent practicable, such funds shall 
be returned pro rata to the persons from whom such funds were 
collected.
    (b) All funds received by the Board pursuant to the provisions of 
this part shall be used solely for the purpose specified in this part 
and shall be accounted for in the manner provided in this part. The 
Secretary may at any time require the Board and its members to account 
for all receipts and disbursements.

Quality Control


Sec. 930.44  Quality Control.

    (a) Quality standards. The Board may establish, with the approval 
of the Secretary, such minimum quality and inspection requirements 
applicable to cherries as will contribute to orderly marketing or be in 
the public interest. If such requirements are adopted, no handler shall 
process cherries into manufactured products or sell manufactured 
products in the current of commerce unless such cherries and/or such 
cherries used in the manufacture of products meet the applicable 
requirements as evidenced by certification acceptable to the Board. The 
Board, with the approval of the Secretary, may establish rules and 
regulations necessary and incidental to the administration of this 
section.
    (b) Inspection and certification. Whenever the handling of any 
cherries requires inspection pursuant to this part, each handler who 
handles cherries shall cause such cherries to be inspected by the 
appropriate division of USDA, and certified by it as meeting the 
applicable requirements of such regulation: Provided, That inspection 
and certification shall be required for cherries which previously have 
been so inspected and certified only if such cherries have been 
regraded, resorted, repackaged, or in any other way further prepared 
for market. Promptly after inspection and certification, each such 
handler shall submit, or cause to be submitted, to the Board a copy of 
the certificate of inspection issued with respect to such cherries.

Research, Market Development and Promotion


Sec. 930.48  Research, market mevelopment and promotion.

    The Board, with the approval of the Secretary, may establish or 
provide for the establishment of production and processing research, 
market research and development, and/or promotional activities, 
including paid advertising, designed to assist, improve or promote the 
efficient production and processing, marketing, distribution, and 
consumption of cherries subject to this

[[Page 49948]]

part. The expense of such projects shall be paid from funds collected 
pursuant to this part and the income from such funds.

Regulations


Sec. 930.50  Marketing policy.

    (a) Optimum Supply. On or about July 1 of each crop year, the Board 
shall hold a meeting to review sales data, inventory data, current crop 
forecasts and market conditions in order to establish an optimum supply 
level for the crop year. The optimum supply volume shall be calculated 
as 100 percent of the average sales of the prior three years to which 
shall be added a desirable carryout inventory not to exceed 20 million 
pounds or such other amount as the Board, with the approval of the 
Secretary may establish. This optimum supply volume shall be announced 
by the Board in accordance with paragraph (h) of this section.
    (b) Preliminary percentages. On or about July 1 of each crop year, 
the Board shall establish a preliminary free market tonnage percentage 
which shall be calculated as follows: From the optimum supply computed 
in paragraph (a) of this section, the Board shall deduct the carryin 
inventory to determine the tonnage requirements (adjusted to a raw 
fruit equivalent) for the current crop year which will be subtracted by 
the current year USDA crop forecast. If the resulting number is 
positive, this would represent the estimated over-production which 
would need to be the restricted percentage tonnage. This restricted 
percentage tonnage would then be divided by the sum of the USDA crop 
forecast for the regulated districts to obtain the percentages for the 
regulated districts. The Board shall establish a preliminary restricted 
percentage equal to the quotient, rounded to the nearest whole number, 
with the compliment being the preliminary free tonnage percentage. If 
subtracting the current crop year requirement, computed in the first 
sentence from the current USDA crop forecast, results in a negative 
number, the Board shall establish a preliminary free tonnage of 100 
percent with a preliminary restricted percentage of zero. The Board 
shall announce these preliminary percentages in accordance with 
paragraph (h) of this section.
    (c) Interim percentages. Between July 1 and September 15 of each 
crop year, the Board may modify the preliminary free market tonnage and 
restricted percentages to adjust to the actual pack occurring in the 
industry. The Board shall announce any interim percentages in 
accordance with paragraph (h) of this section.
    (d) Final percentages. No later than September 15 of each crop 
year, the Board shall review actual production during the current crop 
year and make such adjustments as are necessary between free and 
restricted tonnage to achieve the optimum supply and recommend such 
final free market tonnage and restricted percentages to the Secretary 
and announce them in accordance with paragraph (h) of this section. The 
difference between any final free market tonnage percentage designated 
by the Secretary and 100 percent shall be the final restricted 
percentage. With its recommendation, the Board shall report on its 
consideration of the factors in paragraph (e) of this section.
    (e) Factors. When computing preliminary and interim percentages, or 
determining final percentages for recommendation to the Secretary, the 
Board shall give consideration to the following factors:
    (1) The estimated total production of cherries;
    (2) The estimated size of the crop to be handled;
    (3) The expected general quality of such cherry production;
    (4) The expected carryover as of July 1 of canned and frozen 
cherries and other cherry products;
    (5) The expected demand conditions for cherries in different market 
segments;
    (6) Supplies of competing commodities;
    (7) An analysis of economic factors having a bearing on the 
marketing of cherries;
    (8) The estimated tonnage held by handlers in primary or secondary 
inventory reserves; and
    (9) Any estimated release of primary or secondary inventory reserve 
cherries during the crop year.
    (f) Modification. In the event the Board subsequently deems it 
advisable to modify its marketing policy, because of national 
emergency, crop failure, or other major change in economic conditions, 
it shall hold a meeting for that purpose, and file a report thereof 
with the Secretary within 5 days (exclusive of Saturdays, Sundays, and 
holidays) after the holding of such meeting, which report shall show 
the Board's recommended modification and the basis therefor.
    (g) Reserve tonnage to sell as free tonnage. In addition, the Board 
shall make available tonnage equivalent to an additional 10 percent, if 
available, of the average sales of the prior 3 years for market 
expansion. Handlers can determine if they need the additional tonnage 
and inform the Board so that reserve cherries may be released to them. 
Handlers not desiring the additional tonnage would not have it released 
to them.
    (h) Publicity. The Board shall promptly give reasonable publicity 
to growers and handlers of each meeting to consider a marketing policy 
or any modification thereof, and each such meeting shall be open to 
them and to the public. Similar publicity shall be given to growers and 
handlers of each marketing policy report or modification thereof, filed 
with the Secretary and of the Secretary's action thereon. Copies of all 
marketing policy reports shall be maintained in the office of the 
Board, where they shall be made available for examination. The Board 
shall notify handlers, and give reasonable publicity to growers, of its 
computation of the optimum supply, preliminary percentages, and interim 
percentages and shall notify handlers of the Secretary's action on 
final percentages by registered or certified mail.
    (i) Restricted Percentages. Restricted percentage requirements 
established under paragraphs (b), (c) or (d) of this section may be 
fulfilled by handlers by either establishing an inventory reserve in 
accordance with Sec. 930.55 or Sec. 930.57 or by diversion of product 
in accordance with Sec. 930.59. In years where required, the Board 
shall establish a maximum percentage of the restricted quantity which 
may be established as a primary inventory reserve such that the total 
primary inventory reserve does not exceed 50 million pounds. Handlers 
will be permitted to divert (at plant or with grower-diversion 
certificates) as much of the restricted percentage requirement as they 
deem appropriate, but may not establish a primary inventory reserve in 
excess of the percentage established by the Board for restricted 
cherries. In the event handlers wish to establish inventory reserve in 
excess of this amount, they may do so, in which case it will be 
classified as a secondary inventory reserve and will be regulated 
accordingly.
    (j) Inventory Reserve Release. In years when inventory reserve 
cherries are available and when the expected availability of cherries 
from the current crop plus expected carryin inventory does not fulfill 
the optimum supply, the Board shall release not later than November 1st 
of the current crop year such volume from the inventory reserve as will 
satisfy the optimum supply.
    (k) The Board, with the approval of the Secretary, may establish 
rules and regulations necessary and incidental to the administration of 
this section.

[[Page 49949]]

Sec. 930.51   Issuance of volume regulations.

    (a) Whenever the Secretary finds, from the recommendation and 
supporting information supplied by the Board, that to designate final 
free market tonnage and restricted percentages for any cherries 
acquired by handlers during the crop year will tend to effectuate the 
declared policy of the Act, the Secretary shall designate such 
percentages. Such regulation designating such percentage shall fix the 
free market tonnage and restricted percentages, totaling 100 percent, 
which shall be applied in accordance with this section, Sec. 930.55, 
Sec. 930.57 and Sec. 930.59 to cherries grown in regulated districts, 
as determined under Sec. 930.52, and handled during such fiscal period.
    (b) The Board shall be informed immediately of any such regulation 
issued by the Secretary, and the Board shall promptly give notice 
thereof to handlers.
    (c) That portion of a handler's cherries that are restricted 
percentage cherries is the product of the restricted percentage imposed 
under paragraph (a) of this section multiplied by the tonnage of 
cherries, originating in a regulated district, handled, including those 
diverted according to Sec. 930.59, by that handler in that fiscal year. 
Therefore, while diverted cherries, including those represented by 
grower diversion certificates, may be exempt from assessment under 
Sec. 930.41, they must be counted when computing restricted percentage 
requirements.
    (d) The Board, with the approval of the Secretary, shall develop 
rules and regulations which shall provide guidelines for handlers in 
complying with any restricted tonnage requirements, including, but not 
limited to, a grace period of at least 30 days to segregate and 
appropriately document any tonnage they wish to place in the inventory 
reserve and to assemble any applicable diversion certificates.


Sec. 930.52  Establishment of districts subject to volume regulations.

    (a) Upon adoption of this part, the districts in which handlers 
shall be subject to any volume regulations implemented in accordance 
with this part shall be those districts in which the average annual 
production of cherries over the prior three years has exceeded 15 
million pounds. Handlers in districts not meeting the 15 million pound 
requirement at the time of order promulgation shall become subject to 
volume regulation implemented in accordance with this part in the crop 
year that follows any three-year period in which the 15 million pound 
average production requirement is exceeded in that district.
    (b) Handlers in districts which are not subject to volume 
regulation would only be so regulated to the extent that they handled 
cherries which were grown in a district subject to regulation as 
specified in paragraph (a) of this section. In such a case, the handler 
must place in inventory reserve pursuant to Sec. 930.55 or Sec. 930.57 
or divert pursuant to Sec. 930.59 the required restricted percentage of 
the crop originating in the regulated district.
    (c) Handlers in districts not meeting the production requirement 
described in paragraph (a) of this section in a given year would not be 
subject to volume regulation in the next crop year.
    (d) Any district producing a crop which is less than 50 percent of 
the average annual processed production in that district in the 
previous five years would be exempt from any volume regulation if, in 
that year, a restricted percentage is established.
    (e) The Board, with the approval of the Secretary, may establish 
rules and regulations necessary and incidental to the administration of 
this section.


Sec. 930.53  Modification, suspension, or termination of regulations.

    (a) In the event the Board at any time finds that, by reason of 
changed conditions, any regulations issued pursuant to Secs. 930.44 or 
930.51 should be modified, suspended, or terminated, it shall so 
recommend to the Secretary.
    (b) Whenever the Secretary finds, from the recommendations and 
information submitted by the Board or from other available information, 
that a regulation issued pursuant to Secs. 930.44 or 930.51 should be 
modified, suspended or terminated with respect to any or all shipments 
of cherries in order to effectuate the declared policy of the Act, the 
Secretary shall modify, suspend, or terminate such regulation.


Sec. 930.54   Prohibition on the use or disposition of inventory 
reserve cherries.

    (a) Release of primary and secondary inventory reserve cherries. 
Except as provided in Sec. 930.50 and paragraph (b) of this section, 
cherries that are placed in inventory reserve pursuant to the 
requirements of Sec. 930.50, Sec. 930.51, Sec. 930.55, or Sec. 930.57 
shall not be used or disposed of by any handler or any other person: 
Provided, That if the Board determines that the total available 
supplies for use in normal commercial outlets do not at least equal the 
amount, as estimated by the Board, needed to meet the demand in such 
outlets, the Board shall recommend to the Secretary and provide such 
justification that, during such period as may be recommended by the 
Board and approved by the Secretary, a portion or all of the primary 
and/or secondary inventory reserve cherries shall be released for such 
use.
    (b) Reserved.


Sec. 930.55   Primary inventory reserves.

    (a) Whenever the Secretary has fixed the free market tonnage and 
restricted percentages for any fiscal period, as provided for in 
Sec. 930.51(a), each handler in a regulated district shall place in his 
or her primary inventory reserve for such period, at such time, and in 
such manner, as the Board may prescribe, or otherwise divert, according 
to Sec. 930.59, a portion of the cherries acquired during such period.
    (b) The form of the cherries, frozen, canned in any form, dried, or 
concentrated juice, placed in the primary inventory reserve is at the 
option of the handler. Except as may be limited by Sec. 930.50(i) or as 
may be permitted pursuant to Sec. 930.59 and Sec. 930.62, such 
inventory reserve portion shall be equal to the sum of the products 
obtained by multiplying the weight or volume of the cherries in each 
lot of cherries acquired during the fiscal period by the then effective 
restricted percentage fixed by the Secretary: Provided, That in 
converting cherries in each lot to the form chosen by the handler, the 
inventory reserve obligations shall be adjusted in accordance with 
uniform rules adopted by the Board in terms of raw fruit equivalent.
    (c) Inventory reserve cherries shall meet such standards of grade, 
quality, or condition as the Board, with the approval of the Secretary, 
may establish. All such cherries shall be inspected by USDA. A 
certificate of such inspection shall be issued which shall show, among 
other things, the name and address of the handler, the number and type 
of containers in the lot, the grade of the product, the location where 
the lot is stored, identification marks (can codes or lot stamp), and a 
certification that the cherries meet the prescribed standards. Promptly 
after inspection and certification, each such handler shall submit, or 
cause to be submitted, to the Board, at the place designated by the 
Board, a copy of the certificate of inspection issued with respect to 
such cherries.
    (d) Handlers shall be compensated for inspection costs incurred on 
cherries placed in the primary inventory reserve. All reporting of 
cherries placed in, rotated in and out, or released from an inventory 
reserve shall be in accordance with rules and procedures established

[[Page 49950]]

by the Board, with the approval of the Secretary. The Board could, with 
the approval of the Secretary, also limit the number of inspections of 
reserve cherries being rotated into inventory reserves for which the 
Board would be financially liable.
    (e) Except as provided in Sec. 930.54, handlers may not sell 
inventory reserve cherries prior to their official release by the 
Board. Handlers may rotate cherries in their inventory reserves with 
prior notification to the Board. All cherries rotated into the 
inventory reserve must meet the applicable inspection requirements.


Sec. 930.56   Off-premise inventory reserve.

    Any handler may, upon notification to the Board, arrange to hold 
inventory reserve, of his or her own production or which was purchased, 
on the premises of another handler or in an approved commercial storage 
facility in the same manner as though the inventory reserve were on the 
handler's own premises.


Sec. 930.57   Secondary inventory reserve.

    (a) In the event the inventory reserve established under 
Sec. 930.55 of this part is at its maximum volume, and the Board has 
announced, in accordance with Sec. 930.50, that volume regulation will 
be necessary to maintain an orderly supply of quality cherries for the 
market, handlers in a regulated district may elect to place in a 
secondary inventory reserve all or a portion of the cherries the volume 
regulation would otherwise require them to divert in accordance with 
Sec. 930.59.
    (b) Should any handler in a regulated district exercise his or her 
right to establish a secondary inventory reserve under paragraph (a) of 
this section, all costs of maintaining that reserve, as well as 
inspection costs, will be the responsibility of the individual handler.
    (c) The secondary inventory reserve shall be established in 
accordance with Secs. 930.55 (b) and (c) and such other rules and 
regulations which the Board, with the approval of the Secretary, may 
establish.
    (d) The Board shall retain control over the release of any cherries 
from the secondary inventory reserve. No cherries may be released from 
the secondary reserve until all cherries in any primary inventory 
reserve established under Sec. 930.55 have been released. Any release 
of the secondary inventory reserve shall be in accordance with the 
annual marketing policy and with Sec. 930.54.


Sec. 930.58   Grower diversion privilege.

    (a) In general. Any grower may voluntarily elect to divert, in 
accordance with the provisions of this section, all or a portion of the 
cherries which otherwise, upon delivery to a handler, would become 
restricted percentage cherries. Upon such diversion and compliance with 
the provisions of this section, the Board shall issue to the diverting 
grower a grower diversion certificate which such grower may deliver to 
a handler, as though there were actual harvested cherries.
    (b) Eligible diversion. Grower diversion certificates shall be 
issued to growers only if the cherries are diverted in accordance with 
the following terms and conditions or such other terms and conditions 
that the Board, with the approval of the Secretary, may establish. 
Diversion may take such of the following forms which the Board, with 
the approval of the Secretary, may designate: uses exempt under 
Sec. 930.62; nonhuman food uses; or other uses, including diversion by 
leaving such cherries unharvested.
    (c) Application/mapping. The Board, with the approval of the 
Secretary, shall develop rules and regulations providing for the 
diversion of cherries by growers. Such regulations may include, among 
other things:
    (1) The form and content of applications and agreements relating to 
the diversion, including provisions for supervision and compensation; 
and
    (2) Provisions for mapping areas in which cherries will be left 
unharvested.
    (d) Diversion certificate. If the Board approves the application it 
shall so notify the applicant and conduct such supervision of the 
applicant's diversion of cherries as may be necessary to assure that 
the cherries have been diverted. After the diversion has been 
accomplished, the Board shall issue to the diverting grower a diversion 
certificate stating the weight of cherries diverted. Where diversion is 
carried out by leaving the cherries unharvested, the Board shall 
estimate the weight of cherries diverted on the basis of such uniform 
rule prescribed in rules and regulations as the Board, with the 
approval of the Secretary, may recommend to implement this section.


Sec. 930.59   Handler diversion privilege.

    (a) In general. Handlers handling cherries harvested in a regulated 
district may fulfill any restricted percentage requirement in full or 
in part by voluntarily diverting cherries or cherry products in a 
program approved by the Board, rather than placing cherries in an 
inventory reserve. Upon such diversion and compliance with the 
provisions of this section, the Board shall issue to the diverting 
handler a handler diversion certificate which shall satisfy any 
restricted percentage or diversion requirement to the extent of the 
Board or Department inspected weight of the cherries diverted.
    (b) Eligible diversion. Handler diversion certificates shall be 
issued to handlers only if the cherries are diverted in accordance with 
the following terms and conditions or such other terms and conditions 
that the Board, with the approval of the Secretary, may establish. Such 
diversion may take place in any of the following forms which the Board, 
with the approval of the Secretary, may designate: uses exempt under 
Sec. 930.62; contribution to a Board approved food bank or other 
approved charitable organization; acquisition of grower diversion 
certificates that have been issued in accordance with Sec. 930.58; or 
other uses, including diversion by destruction of the cherries at the 
handler's facilities: Provided, That diversion may not be accomplished 
by converting cherries into juice or juice concentrate.
    (c) Notification. The handler electing to divert cherries through 
means specified in this section or other approved means (not including 
uses exempt under Sec. 930.62), shall first notify the Board of such 
election. Such notification shall describe in detail the manner in 
which the handler proposes to divert cherries including, if the 
diversion is to be by means of destruction of the cherries, a detailed 
description of the means of destruction and ultimate disposition of the 
cherries. It shall also contain an agreement that the proposed 
diversion is to be carried out under the supervision of the Board and 
that the cost of such supervision is to be paid by the handler. Uniform 
fees for such supervision shall be established by the Board, pursuant 
to rules and regulations approved by the Secretary.
    (d) Application. The handler electing to divert cherries by 
utilizing an exemption under Sec. 930.62 shall first apply to the Board 
for approval of such diversion; no diversion should take place prior to 
such approval. Such application shall describe in detail the uses to 
which the diverted cherries will be put. It shall also contain an 
agreement that the proposed diversion is to be carried out under the 
supervision of the Board and that the cost of such supervision is to be 
paid by the applicant. The Board shall notify the applicant of the 
Board's approval or disapproval of the submitted application.
    (e) Diversion certificate. The Board shall conduct such supervision 
of the handler's diversion of cherries under paragraph (c) or under 
paragraph (d) of

[[Page 49951]]

this section as may be necessary to assure that the cherries are 
diverted. After the diversion has been accomplished, the Board shall 
issue to the diverting handler a handler diversion certificate 
indicating the weight of cherries which may be used to offset any 
restricted percentage requirement.


Sec. 930.60   Equity holders.

    (a) Inventory reserve ownership. The inventory reserve shall be the 
sole responsibility of the handlers who place products into the 
inventory reserve. A handler's equity in the primary inventory reserve 
may be transferred to another person upon notification to the Board.
    (b) Agreements with growers. Individual handlers are encouraged to 
have written agreements with growers who deliver their cherries to the 
handler as to how any restricted percentage cherries delivered to the 
handler will be handled and what share, if any, the grower will have in 
the eventual sale of any inventory reserve cherries.
    (c) Rulemaking authority. The Board, with the approval of the 
Secretary, may adopt rules and regulations necessary and incidental to 
the administration of this section.


930.61   Handler compensation.

    Each handler handling cherries from a regulated district that is 
subject to volume regulations shall be compensated by the Board for 
inspection relating to the primary inventory reserve as the Board may 
deem to be appropriate. The Board, with the approval of the Secretary, 
may establish such rules and regulations as are necessary and 
incidental to the administration of this section.


Sec. 930.62   Exemptions.

    The Board, with the approval of the Secretary, may exempt from the 
provisions of Sec. 930.41, Sec. 940.44, Sec. 930.51, Sec. 930.53, and 
Sec. 930.55 through Sec. 930.57 cherries: Diverted in accordance with 
Sec. 930.59; used for new product and new market development; used for 
experimental purposes or for any other use designated by the Board, 
including cherries processed into products for markets for which less 
than 5 percent of the preceding 5-year average production of cherries 
were utilized. The Board, with the approval of the Secretary, shall 
prescribe such rules, regulations, and safeguards as it may deem 
necessary to ensure that cherries handled under the provisions of this 
section are handled only as authorized.


Sec. 930.63   Deferment of restricted obligation.

    (a) Bonding. The Board, with the approval of the Secretary, may 
require handlers to secure bonds on deferred inventory reserve tonnage. 
Handlers may, in order to comply with the requirements of Secs. 930.50 
and 930.51 and regulations issued thereunder, secure bonds on 
restricted percentage cherries to temporarily defer the date that 
inventory reserve cherries must be held to any date requested by the 
handler. This date shall be not later than 60 days prior to the end of 
that crop year. Such deferment shall be conditioned upon the voluntary 
execution and delivery by the handler to the Board of a written 
undertaking within thirty (30) days after the Secretary announces the 
final restricted percentage under Sec. 930.51. Such written undertaking 
shall be secured by a bond or bonds with a surety or sureties 
acceptable to the Board that on or prior to the acceptable deferred 
date the handler will have fully satisfied the restricted percentage 
amount required by Sec. 930.51.
    (b) Rulemaking authority. The Board, with the approval of the 
Secretary, may adopt rules and regulations necessary and incidental to 
the administration of this section.

Reports and Records


Sec. 930.70   Reports.

    (a) Weekly production, monthly sales, and inventory data. Each 
handler shall, upon request of the Board, file promptly with the Board, 
reports showing weekly production data; monthly sales and inventory 
data; and such other information, including the volume of any cherries 
placed in or released from a primary or secondary inventory reserve or 
diverted, as the Board shall specify with respect to any cherries 
handled by the handler. Such information may be provided to the Board 
members in summary or aggregated form only without any reference to the 
individual sources of the information.
    (b) Other reports. Upon the request of the Board, with the approval 
of the Secretary, each handler shall furnish to the Board such other 
information with respect to the cherries acquired, handled, stored and 
disposed of by such handler as may be necessary to enable the Board to 
exercise its powers and perform its duties under this part.
    (c) Protection of proprietary information. Under no circumstances 
shall any information or reports be made available to the Board 
members, or to any person designated by the Board or by the Secretary, 
which will reveal the proprietary information of an individual handler.


Sec. 930.71   Records.

    Each handler shall maintain such records of all cherries acquired, 
handled, stored or sold, or otherwise disposed of as will substantiate 
the required reports and as may be prescribed by the Board. All such 
records shall be maintained for not less than two years after the 
termination of the fiscal year in which the transactions occurred or 
for such lesser period as the Board may direct with the approval of the 
Secretary.


Sec. 930.72   Verification of reports and records.

    For the purpose of assuring compliance and checking and verifying 
the reports filed by handlers, the Secretary and the Board, through its 
duly authorized agents, shall have access to any premises where 
applicable records are maintained, where cherries are received, stored, 
or handled, and, at any time during reasonable business hours, shall be 
permitted to inspect such handlers premises and any and all records of 
such handlers with respect to matters within the purview of this part.


Sec. 930.73   Confidential information.

    All reports and records furnished or submitted by handlers to the 
Board and its authorized agents which include data or information 
constituting a trade secret or disclosing trade position, financial 
condition, or business operations of the particular handler from whom 
received, shall be received by and at all times kept in the custody and 
under the control of one or more employees of the Board or its agent, 
who shall disclose such information to no person other than the 
Secretary.

Miscellaneous Provisions


Sec. 930.80   Compliance.

    Except as provided in this part, no person may handle cherries, the 
handling of which has been prohibited by the Secretary under this part, 
and no person shall handle cherries except in conformity with the 
provisions of this part and the regulations issued hereunder. No person 
may handle any cherries for which a diversion certificate has been 
issued other than as provided in Sec. 930.58(b) and Sec. 930.59(b).


Sec. 930.81   Right of the Secretary.

    Members of the Board (including successors and alternates), and any 
agents, employees, or representatives thereof, shall be subject to 
removal or suspension by the Secretary at any time.

[[Page 49952]]

Each regulation, decision, determination, or other act of the Board 
shall be subject to the Secretary's disapproval at any time. Upon such 
disapproval, the disapproved action of the Board shall be deemed null 
and void, except as to acts done in reliance thereon or in accordance 
therewith prior to such disapproval by the Secretary.


Sec. 930.82   Effective time.

    The provisions of this part, and of any amendment thereto, shall 
become effective at such time as the Secretary may declare, and shall 
continue in force until terminated, or suspended.


Sec. 930.83   Termination.

    (a) The Secretary may, at any time, terminate any or all of the 
provisions of this part by giving at least 1 day's notice by means of a 
press notice or in any other manner in which the Secretary may 
determine.
    (b) The Secretary shall terminate or suspend the operation of any 
or all of the provisions of this part whenever the Secretary finds that 
such provisions do not tend to effectuate the declared policy of the 
Act.
    (c) The Secretary shall terminate the provisions of this part 
whenever the Secretary finds by referendum or otherwise that such 
termination is favored by a majority of the growers and processors: 
Provided, That such majority has, during the current fiscal year, 
produced or canned and frozen more than 50 percent of the volume of the 
cherries which were produced or processed within the production area. 
Such termination shall become effective on the last day of June 
subsequent to the announcement thereof by the Secretary.
    (d) The Secretary shall conduct a referendum within the month of 
March of every sixth year after the effective date of this part to 
ascertain whether continuation of this part is favored by the growers 
and processors. The Secretary may terminate the provisions of this part 
at the end of any fiscal period in which the Secretary has found that 
continuance is not favored by a majority of growers and processors who, 
during a representative period determined by the Secretary, have been 
engaged in the production or processing of tart cherries in the 
production area. Such termination shall be announced on or before the 
end of the fiscal period.
    (e) The provisions of this part shall, in any event, terminate 
whenever the provisions of the Act authorizing them cease to be in 
effect.


Sec. 930.84  Proceedings after termination.

    (a) Upon the termination of the provisions of this part, the then 
functioning members of the Board shall, for the purpose of liquidating 
the affairs of the Board, continue as trustees of all the funds and 
property then in its possession, or under its control, including claims 
for any funds unpaid or property not delivered at the time of such 
termination.
    (b) The said trustees shall:
    (1) continue in such capacity until discharged by the Secretary;
    (2) from time to time account for all receipts and disbursements 
and deliver all property on hand, together with all books and records 
of the Board and of the trustees, to such person as the Secretary may 
direct; and
    (3) upon the request of the Secretary, execute such assignments or 
other instruments necessary or appropriate to vest in such person full 
title and right to all of the funds, property, and claims vested in the 
Board or in the trustees pursuant to this part.
    (c) Any person to whom funds, property, and claims have been 
transferred or delivered, pursuant to this section, shall be subject to 
the same obligations imposed upon the Board and upon the trustees.


Sec. 930.85  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, the 
termination of this part or of any regulation issued pursuant to this 
part, or the issuance of any amendment to either thereof, shall not:
    (a) Affect or waive any right, duty, obligation, or liability which 
shall have risen or which may thereafter arise in connection with any 
provision of this part or any regulation issued thereunder;
    (b) Release or extinguish any violation of this part or any 
regulation issued thereunder;
    (c) Affect or impair any rights or remedies of the Secretary or any 
other person with respect to any such violation.


Sec. 930.86  Duration of immunities.

    The benefits, privileges, and immunities conferred upon any person 
by virtue of this part shall cease upon its termination, except with 
respect to acts done under and during the existence of this part.


Sec. 930.87  Agents.

    The Secretary may, by designation in writing, name any officer or 
employee of the United States, or name any agency or division in the 
U.S. Department of Agriculture, to act as the Secretary's agent or 
representative in connection with any provisions of this part.


Sec. 930.88  Derogation.

    Nothing contained in this part is, or shall be construed to be, in 
derogation or in modification of the rights of the Secretary or of the 
United States to exercise any powers granted by the Act or otherwise, 
or, in accordance with such powers, to act in the premises whenever 
such action is deemed advisable.


Sec. 930.89  Personal liability.

    No member or alternate member of the Board and no employee or agent 
of the Board shall be held personally responsible, either individually 
or jointly with others, in any way whatsoever, to any person for errors 
in judgment, mistakes, or other acts, either of commission or omission, 
as such member, alternate member, employee, or agent, except for acts 
of dishonesty, willful misconduct, or gross negligence.


Sec. 930.90  Separability.

    If any provision of this part is declared invalid or the 
applicability thereof to any person, circumstance, or thing is held 
invalid, the validity of the remainder of this part or the 
applicability thereof to any other person, circumstance, or thing shall 
not be affected thereby.


Sec. 930.91  Amendments.

    Amendments to this subpart may be proposed, from time to time, by 
the Board or by the Secretary.

    Dated: September 19, 1996.
Michael V. Dunn,
Assistant Secretary, Marketing and Regulatory Programs.
[FR Doc. 96-24505 Filed 9-23-96; 8:45 am]
BILLING CODE 3410-02-P