[Federal Register Volume 64, Number 209 (Friday, October 29, 1999)]
[Rules and Regulations]
[Pages 58323-58325]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28377]



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  Federal Register / Vol. 64, No. 209 / Friday, October 29, 1999 / 
Rules and Regulations  

[[Page 58323]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. FV99-930-3 FR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting, as a 
final rule, without change, the provisions of an interim final rule 
which decreased 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 per pound to $0.00225 per pound. The 
interim final rule also decreased the assessment rate for cherries 
utilized for juice, juice concentrate, or puree from $0.00125 per pound 
to $0.001125 per pound. Both assessment rates are established for the 
Cherry Industry Administrative Board (Committee) 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 began July 1 and ends June 30. The assessment rate 
will remain in effect indefinitely unless modified, suspended, or 
terminated.

EFFECTIVE DATE: November 29, 1999.

FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella or Kenneth G. 
Johnson, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, room 2530-S, P.O. 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, P.O. Box 96456, Washington, DC 20090-6456; 
telephone: (202) 720-2491, Fax: (202) 720-5698.
    Small businesses may request information on compliance 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, P.O. Box 96456, room 2525-S, Washington, DC 20090-
6456; telephone (202) 720-2491; Fax: (202) 720-5698, or E-mail: 
Jay.G[email protected].
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 930, both as amended (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 rate 
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 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 continues in effect a decrease in 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 also was decreased from 
$0.00125 per pound 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 rate. The assessment 
rate is 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, an assessment rate 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 $497,780 and an assessment rate of $0.00225 
per pound of cherries that are utilized in the production of tart 
cherry products other

[[Page 58324]]

than juice, juice concentrate, or puree, and an assessment rate of 
$0.001125 per pound of 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 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 
crop year 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 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). 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 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 rate. 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 modification of 
the assessment rate is 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 rule on small entities and has prepared this 
final regulatory flexibility analysis. The Regulatory Flexibility Act 
(RFA) would allow 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 opt for such certification, but rather 
perform 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 marketing order and 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 producers have been defined by the Small 
Business Administration (13 CFR 121.601) as those having annual 
receipts less than $500,000, and small agricultural service firms are 
defined as those whose annual receipts are less than $5,000,000. The 
majority of tart cherry producers and handlers may be classified as 
small entities.
    This rule continues in effect decreases in 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 $497,780 and the reduced assessment rates. 
The quantity of assessable tart cherries for 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.

[[Page 58325]]

    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. 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). 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 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.
    An interim final rule concerning this action was published in the 
Federal Register on July 27, 1999. Copies of the rule were mailed by 
the Board's staff to all Board members and cherry handlers. In 
addition, the rule was made available through the Internet by the 
office of the Federal Register. That rule provided a 60-day comment 
period which ended September 27, 1999. No comments were received.
    A small business guide on complying with fruit, vegetable and 
specialty crop marketing agreement and orders may be viewed at the 
following website: http:/www.ams.usda.gov/fv/moab.html. Any questions 
about the compliance guide should be sent to Jay Guerber at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Board and other 
available information, it is found that finalizing this interim final 
rule , without modifications, as published in the Federal Register (64 
FR 40511), will tend to effectuate the declared policy of the Act.

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

    Accordingly, the interim final rule amending 7 CFR part 930 which 
was published at 64 FR 40511 on July 27, 1999, is adopted as a final 
rule without change.

    Dated: October 26, 1999.
Eric M. Forman,
Acting Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-28377 Filed 10-28-99; 8:45 am]
BILLING CODE 3410-02-P