[Federal Register Volume 65, Number 57 (Thursday, March 23, 2000)]
[Proposed Rules]
[Pages 15580-15584]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7160]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. AO-370-A7; FV00-930-1]


Tart Cherries Grown in the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington, and Wisconsin; Hearing on 
Proposed Amendment of Marketing Agreement and Order No. 930

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Notice of hearing on proposed rulemaking.

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SUMMARY: Notice is hereby given of a public hearing to consider 
amending Marketing Agreement and Order No. 930, hereinafter referred to 
as the ``order.'' The order regulates the handling of tart cherries 
grown in Michigan, New York, Pennsylvania, Oregon, Utah, Washington and 
Wisconsin. The purpose of the hearing is to receive evidence on a 
number of amendments proposed by the Cherry Industry Administrative 
Board (Board), which is responsible for local administration of the 
order. Major proposals include making all districts subject to volume 
regulations, rather than only those districts producing more than 15 
million pounds per year; making shipments of cherry juice and juice 
concentrate to certain markets eligible to receive diversion credit; 
making all cherry shipments subject to assessments; and eliminating the 
requirement that different assessment rates be established for 
different cherry products.

DATES: The hearing dates are:
    1. March 27, 2000, 12:00 p.m. to 5:00 p.m., and continuing on March 
28, 2000, at 9:00 a.m., if necessary, Rochester, New York.
    2. March 29, 2000, 10:00 a.m. to 5:00 p.m.; March 30, 2000, 9:00 
a.m. to 5:00

[[Page 15581]]

p.m.; and continuing on March 31, 2000 at 9:00 a.m., if necessary; 
Grand Rapids, Michigan.
    3. April 4, 2000, 9:00 a.m. to 5:00 p.m. and continuing on April 5, 
2000 at 9:00 a.m., if necessary, Kennewick, Washington.
    4. April 6, 2000, 10:00 a.m. to 5:00 p.m., and continuing on April 
7, 2000, if necessary, Salt Lake City, Utah.

ADDRESSES: The hearing locations are:
    1. Rochester--Radisson Hotel Rochester Airport, 175 Jeffferson 
Road, Rochester, New York 14623.
    2. Grand Rapids--Courtyard by Marriott Downtown, 11 Monroe Avenue, 
Grand Rapids, Michigan 49503.
    3. Kennewick--Cavannaugh's at Columbia Center, 1101 W. Columbia 
Center Boulevard, Kennewick, Washington 99336.
    4. Salt Lake City--Utah Department of Agriculture and Food 
(Conference Room), 350 North Redwood Road, Salt Lake City, Utah 84116.

FOR FURTHER INFORMATION CONTACT: Anne M. Dec, 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) 205-6632. Small businesses may request information 
on this proceeding by contacting Jay Guerber, 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) 205-6632.

SUPPLEMENTARY INFORMATION: This administrative action is instituted 
pursuant to the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.'' 
This action is governed by the provisions of sections 556 and 557 of 
title 5 of the United States Code and, therefore, is excluded from the 
requirements of Executive Order 12866.
    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) seeks to 
ensure that within the statutory authority of a program, the regulatory 
and informational requirements are tailored to the size and nature of 
small businesses. Interested persons are invited to present evidence at 
the hearing on the possible regulatory and informational impacts of the 
proposals on small businesses.
    The amendments proposed herein have been reviewed under Executive 
Order 12988, Civil Justice Reform. They are not intended to have 
retroactive effect. If adopted, the proposed amendments would not 
preempt any State or local laws, regulations, or policies, unless they 
present an irreconcilable conflict with the proposals.
    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. A handler is afforded the opportunity for a hearing 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.
    The hearing is called pursuant to the provisions of the Act and the 
applicable rules of practice and procedure governing the formulation of 
marketing agreements and orders (7 CFR part 900).
    The Board proposes to revise seven areas of program operations. The 
proposed amendments are summarized below.
    1. Make all districts in the production area subject to volume 
regulations rather than applying such regulations only to districts 
with annual production of 15 million pounds or more.
    2. Allocate Board membership among districts based on each 
district's level of production. This would provide more flexibility 
than the order's current provisions which set a definite number of 
member seats for each district.
    A related change is proposed in quorum requirements. Since the 
number of Board members could vary over time, at least two-thirds of 
the Board members must be present at any Board meeting. The order 
currently provides that 12 of 18 members constitutes a quorum.
    3. If both a Board member and alternate are unable to attend a 
meeting, allow the Board to designate another alternate to act in his 
or her stead. Currently, only a member's designated alternate may serve 
in that member's stead.
    4. Revise order diversion and exemption provisions in six ways:
    Provide for diversion credit for shipments of cherry juice and 
juice concentrate to established diversion markets. The order currently 
prohibits juice and juice concentrate from receiving diversion credit.
    Add specific authority to exempt or provide diversion credit for 
cherries exported to designated markets.
    Add specific authority for the transfer of diversion credits among 
handlers.
    Provide that grower diversions that take place in districts that 
are subsequently exempt from volume regulation still qualify for 
diversion credit.
    Clarify diversion and exemption provisions of the order by 
eliminating cross references among those provisions, and specify that 
exemptions would not be entitled to receive diversion credit.
    Further clarify Sec. 930.59 by adding a paragraph indicating that 
the Secretary's rulemaking authority extends to all the provisions of 
that section.
    5. Revise Sec. 930.54 to make it clear that cherries in the 
inventory reserve may be released either for use in any market, or for 
use in only certain designated markets, depending on prevailing 
conditions.
    6. Make two changes in Sec. 930.41 pertaining to assessments:
    Provide that assessments must be paid on all cherries handled, 
except for those that are diverted by destruction at a handler's 
facilities or are covered by grower diversion certificates. Currently, 
all cherries used in outlets eligible for diversion credit or exemption 
are exempt from assessments.
    Provide that a uniform assessment rate apply to all cherries 
handled, unless the Board recommends differential rates to compensate 
for differences in the number of pounds used for various products or 
for the relative market values of such products. The order currently 
requires differential rates to be established, unless there is a 
compelling reason to do otherwise.
    7. Make two changes to Sec. 930.50, Marketing policy:
    In recommending volume regulations, allow the Board to use a crop 
estimate other than the official USDA crop estimate. Currently, the 
Board is required to use the USDA estimate.
    Provide that the 10 percent reserve release provided for market 
expansion only apply during years when restricted percentages are in 
effect. Currently, the release is being made whether or not volume 
regulations are in place.
    The Board works with the Department in administering the order. 
These proposals have not received the approval of the Secretary of 
Agriculture.
    The Board believes that the proposed changes would improve the 
administration, operation, and functioning of the order.
    Also, the Fruit and Vegetable Programs of the Agricultural 
Marketing Service (AMS) proposes to allow such conforming changes to 
the order which

[[Page 15582]]

may be necessary as a result of the hearing.
    The public hearing is held for the purpose of: (i) Receiving 
evidence about the economic and marketing conditions which relate to 
the proposed amendments of the order; (ii) determining whether there is 
a need for the proposed amendments to the order; and (iii) determining 
whether the proposed amendments or appropriate modifications thereof 
will tend to effectuate the declared policy of the Act.
    Testimony is invited at the hearing on all the proposals and 
recommendations contained in this notice, as well as any appropriate 
modifications or alternatives.
    All persons wishing to submit written material as evidence at the 
hearing should be prepared to submit four copies of such material at 
the hearing and should have prepared testimony available for 
presentation at the hearing.
    From the time the notice of hearing is issued and until the 
issuance of a final decision in this proceeding, Department employees 
involved in the decisional process are prohibited from discussing the 
merits of the hearing issues on an ex parte basis with any person 
having an interest in the proceeding. The prohibition applies to 
employees in the following organizational units: Office of the 
Secretary of Agriculture; Office of the Administrator, AMS; Office of 
the General Counsel, except any designated employees of the General 
Counsel assigned to represent the Board in this rulemaking proceeding; 
and the Fruit and Vegetable Programs, AMS.
    Procedural matters are not subject to the above prohibition and may 
be discussed at any time.

List of Subjects in 7 CFR Part 930

    Marketing agreements, Tart cherries, Reporting and recordkeeping 
requirements.

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. Testimony is invited on the following proposals or appropriate 
alternatives or modifications to such proposals.
    Proposals submitted by the Cherry Industry Administrative Board:

Proposal No. 1

    Amend Sec. 930.52 by revising paragraph (a); removing paragraph 
(c); redesignating current paragraphs (d) and (e) as paragraphs (c) and 
(d), respectively; and revising paragraph (c) to read as follows:


Sec. 930.52  Establishment of districts subject to volume regulation.

    (a) All districts within the production area, as defined in 
Sec. 930.14, shall be subject to any volume regulations implemented in 
accordance with this part. The production of any cherries within a 
district shall cause that district to continue to be subject to any 
volume regulations implemented in accordance with this part unless the 
district is otherwise exempted from regulations under Sec. 930.52(c).
    (b) * * *
    (c) Any district producing a crop which falls below 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.
* * * * *

Proposal No. 2

    Amend Sec. 930.20 by revising paragraphs (a), (b), (d) and (e); 
adding a new paragraph (f); and redesignating current paragraphs (f) 
and (g) as (g) and (h), respectively, to read as follows:


Sec. 930.20  Establishment and membership.

    (a) There is hereby established a Cherry Industry Administrative 
Board, the members of which shall be calculated in accordance with 
paragraph (b) of this section. The number of Board members may vary, 
depending upon the production levels of the districts. All but one 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. One 
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 based upon the 
previous three year average production in the district and shall be 
established as follows:
    (1) Up to and including 10 million pounds shall have 1 member;
    (2) Greater than 10 and up to and including 40 million pounds shall 
have 2 members;
    (3) Greater than 40 and up to and including 80 million pounds shall 
have 3 members; and
    (4) Greater than 80 million pounds shall have 4 members.
    Allocation of the seats in each district shall be as follows but 
subject to the provisions of paragraphs (d), (e) and (f) of this 
section:

------------------------------------------------------------------------
                                             Grower            Handler
              District type                  members           members
------------------------------------------------------------------------
Up to and including 10 million pounds...            1    Or            1
More than 10 and up to 40 million pounds            1                  1
More than 40 and up to 80 million pounds            1                  2
More than 80 million pounds.............            2                  2
------------------------------------------------------------------------

    (c) * * *
    (d) The ratio of grower to handler representation in districts with 
three members 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 with one seat may be either grower 
or handlers members and will be nominated and elected as outlined in 
Sec. 930.23.
    (f) If the 3-year average production of a district changes so that 
a different number of seats should be allocated to a district, then the 
Board shall be reestablished by the Secretary, and such seats shall be 
filled according to the applicable provisions of this part.
* * * * *
    Amend Sec. 930.32 by revising paragraph (a) to read as follows:


Sec. 930.32  Procedure.

    (a) Two-thirds of the members of the Board, including alternates 
acting for absent members, shall constitute a quorum. For any action of 
the Board to

[[Page 15583]]

pass, at least two-thirds of the entire Board must vote in support of 
such action.
* * * * *

Proposal No. 3

    Revise Sec. 930.28 to read as follow:


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 a member and his or her alternate are absent from a meeting 
of the Board, such member or alternate, in that order, may designate, 
in writing and prior to the meeting, an alternate from another district 
to act in his or her place. If neither a member nor his or her 
alternate has designated an alternate as his or her replacement, or if 
such designated alternate is unable to serve as the replacement, the 
chairperson may, with the concurrence of a majority of the members 
including alternates acting as members, designate an alternate, who is 
present at the meeting and is not acting as a member, to act in the 
place and stead of the absent member. In the event of the death, 
removal, resignation or disqualification of a member, the alternate 
shall act for the member until a successor is appointed and has 
qualified.

Proposal No. 4

    Amend Sec. 930.59 by revising paragraphs (a), (b) and (c), removing 
paragraph (d), revising paragraph (e) and redesignating it as paragraph 
(d), and adding new paragraphs (e) and (f) to read as follows:


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 acquiring diversion certificates or by voluntarily diverting 
cherries or cherry products in a program approved by the Board, rather 
than placing cherries in an inventory reserve. Upon voluntary 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 form which the Board, with the approval 
of the Secretary, may designate. Such forms may include, but are not 
limited to:
    (1) Contribution to a Board-approved food bank or other approved 
charitable organization;
    (2) Use for new product and new market development;
    (3) Export to designated destinations; or
    (4) Other uses or disposition, including destruction of the 
cherries at the handler's facilities.
    (c) Notification. The handler electing to divert cherries through 
means authorized under this section 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 may be established by the Board, pursuant to 
rules and regulations approved by the Secretary.
    (d) Diversion certificate. The Board shall conduct such supervision 
of the handler's diversion of cherries under paragraph (c) of this 
section as may be necessary to assure that the cherries are diverted as 
authorized. After the diversion has been completed, 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.
    (e) Transfer of certificates. Within such restrictions as may be 
prescribed in rules and regulations, including but not limited to 
procedures for transfer of diversion credit and limitations on the type 
of certification eligible for transfer, a handler who acquires 
diversion certificates representing diverted cherries during any crop 
year may transfer such certificates to another handler or handlers. The 
Board must be notified in writing whenever such transfers take place 
during a crop year.
    (f) The Board, with the approval of the Secretary, may establish 
rules and regulations necessary and incidental to the administration of 
this section.
    Revise Sec. 930.62 to read as follows:


Sec. 930.62  Exempt uses.

    (a) The Board, with the approval of the Secretary, may exempt from 
the provisions of Sec. 930.41, Sec. 930.44, Sec. 940.51, Sec. 930.53, 
and Sec. 930.55 through Sec. 930.57 cherries for designated uses. Such 
uses may include, but are not limited to:
    (1) New product and new market development;
    (2) Export to designated destinations;
    (3) Experimental purposes; or
    (4) 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.
    (b) 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.
    (c) Diversion certificates shall not be issued for cherries which 
are used for exempt purposes.

Proposal No. 5

    Revise Sec. 930.54 to read as follows:


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

    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 
except as provided in Sec. 930.50 or in paragraph (a) or (b) of this 
section. (a) If the Board determines that the total available supplies 
for use in commercial outlets are less than the amount needed to meet 
the demand in such outlets, the Board may recommend to the Secretary 
that a portion or all of the primary and/or secondary inventory reserve 
cherries be released for such use.
    (b) The Board may recommend to the Secretary that a portion or all 
of the primary and/or secondary inventory reserve cherries be released 
for sale in certain designated markets.

Proposal No. 6

    Amend Sec. 930.41 by revising paragraphs (c) and (f) to read as 
follows:


Sec. 930.41  Assessments.

    (a) * * *
    (b) * * *
    (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

[[Page 15584]]

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 only on the 
tonnage of handled cherries that either are diverted by destruction at 
the handler's facilities according to Sec. 930.59 or are cherries 
represented by grower diversion certificates issued pursuant to 
Sec. 930.58(b) and acquired by handlers as described in Sec. 930.59.
    (d) * * *
    (e) * * *
    (f) Assessments shall be uniform and calculated on the basis of 
pounds of cherries handled, unless the Board adopts a formula, approved 
by the Secretary, for determining the rate(s) of assessment which may 
compensate:
    (1) for differences in the number of pounds of cherries utilized 
for various cherry products; or
    (2) for the relative market values of such cherry products; or
    (3) for both of these factors.
* * * * *

Proposal No. 7

    Amend Sec. 930.50 by revising paragraphs (b) and (g) to read as 
follows:


Sec. 930.50  Marketing policy.

    (a) * * *
    (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 
from the current year USDA crop forecast or by an average of such other 
crop estimates the Board votes to use. If the resulting number is 
positive, this would represent the estimated over-production which 
would be the restricted tonnage. This restricted tonnage would then be 
divided by the sum of the crop forecast(s) for the regulated districts 
to obtain a preliminary restricted percentage, rounded to the nearest 
whole number, for the regulated districts. If subtracting the current 
crop year requirement, computed in the first sentence from the current 
crop forecast, results in a negative number, the Board shall establish 
a preliminary free market tonnage percentage 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) * * *
    (d) * * *
    (e) * * *
    (f) * * *
    (g) Additional tonnage to sell as free tonnage. In addition, the 
Board, in years when restricted percentages are established, shall make 
available tonnage equivalent to an additional 10 percent, if available, 
of the average sales of the prior 3 years, as defined in paragraph (a) 
of this section, for market expansion.
* * * * *
    The Fruit and Vegetable Programs, Agricultural Marketing Service, 
submitted the following proposal:

Proposal No. 8

    Make such changes as may be necessary to the order to conform with 
any amendment thereto that may result from the hearing.

    Dated: March 17, 2000.
Kathleen A. Merrigan,
Administrator, Agricultural Marketing Service.
[FR Doc. 00-7160 Filed 3-22-00; 8:45 am]
BILLING CODE 3410-02-P