[Federal Register Volume 64, Number 143 (Tuesday, July 27, 1999)]
[Rules and Regulations]
[Pages 40511-40514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19062]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. FV99-930-3 IFR]


Tart Cherries Grown in the States of Michigan, et al.; Decreased 
Assessment Rates

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule decreases the assessment rate for cherries that are 
utilized in the production of tart cherry products other than juice, 
juice concentrate, or puree from $0.0025 to $0.00225 per pound. It also 
decreases the assessment rate for cherries utilized for juice, juice 
concentrate, or puree from $0.00125 to $0.001125 per pound. Both 
assessment rates are established for the Cherry Industry Administrative 
Board (Board) under Marketing Order No. 930 for the 1999-2000 and 
subsequent fiscal periods. The Board is responsible for local 
administration of the marketing order which regulates the handling of 
tart cherries grown in the production area. Authorization to assess 
tart cherry handlers enables the Board to incur expenses that are 
reasonable and necessary to administer the program. The fiscal period 
begins July 1 and ends June 30. The assessment rates will remain in 
effect indefinitely unless modified, suspended, or terminated.

DATES: Effective July 28, 1999. Comments received by September 27, 
1999, will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, Fruit 
and Vegetable Programs, AMS, USDA, room 2525-S, PO Box 96456, 
Washington, DC 20090-6456; Fax: (202) 720-5698; or E-mail: 
[email protected]. Comments should reference the docket number 
and the date and page number of this issue of the Federal Register and 
will be available for public inspection in the Office of the Docket 
Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella or Kenneth G. 
Johnson, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, room 2530-S, PO Box 96456, Washington, DC 20090-
6456, telephone: (202) 720-2491; or George Kelhart, Technical Advisor, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, room 2525-S, PO Box 96456, Washington, DC 20090-6456; 
telephone: (202) 720-2491, Fax: (202) 720-5698. Small businesses may 
request information on complying with this regulation, or obtain a 
guide on complying with fruit, vegetable, and specialty crop marketing 
agreements and orders by contacting Jay Guerber, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, PO Box 
96456, room 2525-S, Washington, DC 20090-6456; telephone (202) 720-
2491; Fax: (202) 720-5698, or E-mail: Jay.G[email protected]. You may 
also view the marketing agreement and order small business compliance 
guide at the following web site: http://www.ams.usda.gov/fv/moab.html.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 930 (7 CFR part 930), regulating the handling 
of tart cherries grown in the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington, and Wisconsin, hereinafter 
referred to as the ``order.'' The marketing agreement and order are 
effective under the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, tart cherry 
handlers are subject to assessments. Funds to administer the order are 
derived from such assessments. It is intended that the assessment rates 
as issued herein will be applicable to all assessable tart cherries 
beginning July 1, 1999, and continue until amended, suspended, or 
terminated. This rule will not preempt any State or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with the 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. Such 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

[[Page 40512]]

district court of the United States in any district in which the 
handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction to review the Secretary's ruling on the 
petition, provided an action is filed not later than 20 days after the 
date of the entry of the ruling.
    This rule decreases the assessment rate established for the Board 
for the 1999-2000 and subsequent fiscal periods for cherries that are 
utilized in the production of tart cherry products other than juice, 
juice concentrate, or puree from $0.0025 to $0.00225 per pound of 
cherries. The assessment rate for cherries utilized for juice, juice 
concentrate, or puree is decreased from $0.00125 to $0.001125 per 
pound.
    The tart cherry marketing order provides authority for the Board, 
with the approval of the Department, to formulate an annual budget of 
expenses and collect assessments from handlers to administer the 
program. The members of the Board are producers and handlers of tart 
cherries. They are familiar with the Board's needs and with the costs 
for goods and services in their local area and are thus in a position 
to formulate an appropriate budget and assessment rates. The assessment 
rates are formulated and discussed in a public meeting. Thus, all 
directly affected persons have an opportunity to participate and 
provide input.
    For the 1997-98 fiscal period, the Board recommended, and the 
Department approved, assessment rates that would continue in effect 
from fiscal period to fiscal period unless modified, suspended or 
terminated by the Secretary upon recommendation and information 
submitted by the Board or other information available to the Secretary.
    The Board met on March 18-19, 1999, and unanimously recommended 
1999-2000 expenditures of $487,780 and an assessment rate of $0.00225 
per pound for cherries that are utilized in the production of tart 
cherry products other than juice, juice concentrate, or puree, and an 
assessment rate of $0.001125 per pound for cherries utilized for juice, 
juice concentrate, or puree. In comparison, last year's budgeted 
expenditures were $540,000. Decreased assessment rates have been 
recommended by the Board because the cherry industry has experienced 
record high crops for the past two seasons, and anticipates another 
large crop in 1999-2000. In addition, the Board wants to reduce handler 
costs and keep its monetary reserve within the authorized maximum of 
approximately one year's operational expenses specified in 
Sec. 930.42(a). The decreased rates are expected to generate enough 
income to meet the Board's reduced operating expenses in 1999-2000.
    The major expenditures recommended by the Board for the 1999-2000 
fiscal period include $222,780 for personnel, $100,000 for Board 
meetings, and $100,000 for compliance. Budgeted expenses for these 
items in 1998-99 were $150,000 for personnel, $80,000 for Board 
meetings, and $175,000 for compliance.
    The order provides that when an assessment rate based on the number 
of pounds of tart cherries handled is established, it should provide 
for differences in relative market values for various cherry products. 
The discussion of this provision in the order's promulgation record 
indicates that proponents testified that cherries utilized in high 
value products such as frozen, canned, or dried cherries should be 
assessed one rate while cherries used to make low value products such 
as juice concentrate or puree should be assessed at one-half that rate.
    Data from the National Agricultural Statistics Service (NASS) 
states that for 1998, tart cherry utilization for juice, wine, or 
brined uses was 28.3 million pounds for all districts covered under the 
order. The total processed amount of tart cherries for 1998 was 303.8 
million pounds. Juice, wine, and brined tart cherries represented less 
than 10 percent of the total processed crop, and about 8 percent over 
the last three seasons (1996 through 1998).
    In deriving the recommended assessment rates, the Board estimated 
assessable tart cherry production for the crop year at 260 million 
pounds. It further estimated that about 204.5 million pounds of the 
assessable poundage would be utilized in the production of high-valued 
products, like frozen, canned, or dried cherries, and that about 55.5 
million pounds would be utilized in the production of low-valued 
products, like juice, juice concentrate, or puree. Potential assessment 
income from the high valued products would be approximately $460,125 
(204.5 million pounds  x  $0.00225 per pound). The potential income 
from tart cherries utilized for juice, juice concentrate, or puree 
would be $62,500 (55.5 million pounds  x  $0.001125 per pound). 
Therefore, total assessment income for 1999-2000 is estimated at 
$522,625, which will be adequate to cover budgeted expenses. Funds in 
the reserve (currently $225,000) will be kept within the approximately 
one year's operational expenses permitted by the order 
(Sec. 930.42(a)).
    The assessment rates established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by the 
Secretary upon recommendation and information submitted by the Board or 
other available information.
    Although the assessment rates are effective for an indefinite 
period, the Board will continue to meet prior to or during each fiscal 
period to recommend a budget of expenses and consider recommendations 
for modification of the assessment rates. The dates and times of Board 
meetings are available from the Board or the Department. Board meetings 
are open to the public and interested persons may express their views 
at these meetings. The Department will evaluate Board recommendations 
and other available information to determine whether modifications of 
the assessment rates are needed. Further rulemaking will be undertaken 
as necessary. The Board's 1999-2000 budget and those for subsequent 
fiscal periods will be reviewed and, as appropriate, approved by the 
Department.

The Regulatory Flexibility Act and Effects on Small Businesses

    The Agricultural Marketing Service (AMS) has considered the 
economic impact of this action on small entities and has prepared this 
initial regulatory flexibility analysis. The Regulatory Flexibility Act 
(RFA) allows AMS to certify that regulations do not have a significant 
economic impact on a substantial number of small entities. However, as 
a matter of general policy, AMS' Fruit and Vegetable Programs 
(Programs) no longer opts for such certification, but rather performs 
regulatory flexibility analyses for any rulemaking that would generate 
the interest of a significant number of small entities. Performing such 
analyses shifts the Programs' efforts from determining whether 
regulatory flexibility analyses are required to the consideration of 
regulatory options and economic or regulatory impacts.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 40 handlers of tart cherries who are 
subject to regulation under the order and

[[Page 40513]]

approximately 900 producers of tart cherries in the regulated area. The 
number of reported tart cherry producers in the regulated area has been 
reduced from 1,220 to 900 based on more recent information received by 
the Board. Small agricultural service firms have been defined by the 
Small Business Administration (13 CFR 121.601) as those having annual 
receipts less than $5,000,000, and small agricultural producers are 
those whose annual receipts are less than $500,000. The majority of 
tart cherry handlers and producers may be classified as small entities.
    This rule decreases the assessment rate established for the Board 
and collected from handlers for the 1999-2000 and subsequent fiscal 
periods for cherries that are utilized in the production of tart cherry 
products other than juice, juice concentrate, or puree from $0.0025 to 
$0.00225 per pound, and the assessment rate for cherries utilized for 
juice, juice concentrate, or puree from $0.00125 to $0.001125 per 
pound. The Board unanimously recommended 1999-2000 expenditures of 
$487,780 and the reduced assessment rates. The quantity of assessable 
tart cherries expected to be produced during the 1999-2000 crop year is 
estimated at 260 million pounds. Assessment income, based on this crop, 
will be adequate to cover budgeted expenses.
    The major expenditures recommended by the Board for the 1999-2000 
fiscal period include $222,780 for personnel, $100,000 for Board 
meetings, and $100,000 for compliance. Budgeted expenses for these 
items in 1998-99 were $150,000 for personnel, $80,000 for Board 
meetings, and $175,000 for compliance.
    The Executive Committee of the Board, after discussing a proposed 
budget and assessment rates in executive session, recommended the 
continuation of the current rates. It concluded that it was prudent for 
the Board to have approximately one year's budget amount in the 
operating reserve.
    However, after considerable discussion, the Board concluded it 
should reduce handlers' assessment costs and that the reserve should 
not exceed one-half year's budget amount. Also, the cherry industry has 
experienced record large crops for the past two seasons, and 
anticipates a large crop for the upcoming season. Further, the amount 
budgeted for Board compliance costs has been reduced. The Board 
discussed the alternative of continuing the existing assessment rates, 
but concluded that would cause the amount in the operating reserve to 
exceed what is actually needed.
    After the discussion, the Board voted unanimously to decrease the 
assessment rates. In deriving the recommended assessment rates, the 
Board estimated assessable tart cherry production for the crop year at 
260 million pounds. It further estimated that about 204.5 million 
pounds of the assessable poundage would be utilized in the production 
of high-valued products, like frozen, canned, or dried cherries, and 
that about 55.5 million pounds would be utilized in the production of 
low-valued products, like juice, juice concentrate, or puree. Potential 
assessment income from the high valued products would be approximately 
$460,125 (204.5 million pounds  x  $0.00225 per pound). The potential 
income from the tart cherries utilized for juice, juice concentrate, or 
puree would be $62,500 (55.5 million pounds  x  $0.001125 per pound). 
Therefore, total assessment income for 1999-2000 is estimated at 
$522,625, which will be adequate to cover budgeted expenses. Funds in 
the reserve (currently $225,000) will be kept within the approximately 
one year's operational expenses permitted by the order 
(Sec. 930.42(a)).
    This action decreases the assessment obligation imposed on 
handlers. Assessments are applied uniformly on all handlers, and some 
of the costs may be passed on to producers. However, the assessment 
rate decreases reduce the burden on handlers, and may reduce the burden 
on producers. In addition, the Board's meeting was widely publicized 
throughout the tart cherry industry and all interested persons were 
invited to attend the meeting and participate in Board deliberations on 
all issues. Like all Board meetings, the March 18-19, 1999, meeting was 
a public meeting and all entities, both large and small, were able to 
express views on this issue. Finally, interested persons are invited to 
submit information on the regulatory and informational impacts of this 
action on small businesses.
    This action imposes no additional reporting or recordkeeping 
requirements on either small or large tart cherry handlers. As with all 
Federal marketing order programs, reports and forms are periodically 
reviewed to reduce information requirements and duplication by industry 
and public sector agencies.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Board and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect, and that good cause exists for not postponing the effective 
date of this rule until 30 days after publication in the Federal 
Register because: (1) The 1999-2000 fiscal period began on July 1, 
1999, and the marketing order requires that the rates of assessment for 
each fiscal period apply to all assessable tart cherries handled during 
such fiscal period; (2) this action decreases the assessment rates for 
assessable tart cherries beginning on July 1, 1999; (3) handlers are 
aware of this action which was unanimously recommended by the Board at 
a public meeting and is similar to other assessment rate actions issued 
in past years; and (4) this interim final rule provides a 60-day 
comment period, and all comments timely received will be considered 
prior to finalization of this rule.

List of Subjects in 7 CFR Part 930

    Marketing agreements, Reporting and recordkeeping requirements, 
Tart cherries.

    For the reasons set forth in the preamble, 7 CFR part 930 is 
amended as follows:

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

    1. The authority citation for 7 CFR part 930 continues to read as 
follows:

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

    2. Section 930.200 is revised to read as follows:


Sec. 930.200  Handler assessment rates.

    On and after July 1, 1999, the assessment rate imposed on handlers 
shall be $0.00225 per pound for tart cherries grown in the production 
area and utilized in the production of tart cherry products other than 
juice, juice concentrate, or puree. The assessment rate for tart 
cherries grown in the production area and utilized in the production of 
juice, juice concentrate, or puree products shall be $0.001125 per 
pound. The assessment due date shall be October 1 of each crop year.


[[Page 40514]]


    Dated: July 21, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-19062 Filed 7-26-99; 8:45 am]
BILLING CODE 3410-02-U