[Federal Register Volume 65, Number 99 (Monday, May 22, 2000)]
[Proposed Rules]
[Pages 32044-32046]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-12800]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 65, No. 99 / Monday, May 22, 2000 / Proposed 
Rules  

[[Page 32044]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. FV00-930-3 PR]


Tart Cherries Grown in the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington, and Wisconsin; Decreased 
Assessment Rates

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would decrease the assessment rate for cherries that 
are utilized in the production of tart cherry products other than 
juice, juice concentrate, or puree from $0.00225 to $0.0017 per pound. 
It also would decrease the assessment rate for cherries utilized for 
juice, juice concentrate, or puree from $0.001125 to $0.00085 per 
pound. Both assessment rates are established for the Cherry Industry 
Administrative Board (Board) under Marketing Order No. 930 for the 
2000-2001 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 rate would remain 
in effect indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by June 21, 2000.

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, P.O. 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, DC Marketing Field Office, Fruit and Vegetable Programs, AMS, 
USDA, Suite 5D03, Unit 155, 4700 River Road, Riverdale, Maryland 20737, 
telephone: (301) 734-5243; 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 complying with this 
regulation 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: [email protected].

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 rate 
as issued herein would be applicable to all assessable tart cherries 
beginning July 1, 2000, 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 would decrease the assessment rate established for the 
Board for the 2000-2001 and subsequent fiscal periods for cherries that 
are utilized in the production of tart cherry products other than 
juice, juice concentrate, or puree from $0.00225 to $0.0017 per pound 
of cherries. The assessment rate for cherries utilized for juice, juice 
concentrate, or puree would also be decreased from $0.001125 to 
$0.00085 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 1999-2000 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.

[[Page 32045]]

    The Board met on March 2, 2000, and unanimously recommended 2000-
2001 expenditures of $455,000 and an assessment rate of $0.0017 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 $0.00085 per pound of cherries utilized for juice, 
juice concentrate, or puree. In comparison, last year's budgeted 
expenditures were $497,780. The assessment rates of $0.0017 and 
$0.00085 are lower than the rates currently in effect. The decreased 
assessment rates were recommended because the Board expects the 2000 
crop to be large, wants to reduce handler costs, and wants to keep its 
monetary reserve within the authorized maximum of approximately one 
year's operational expenses specified in section 930.42(a) of the 
order. The decreased assessment rates together with funds from the 
Board's operating reserve and interest income are expected to generate 
enough income to meet the Board's reduced operating expenses in 2000-
2001.
    The major expenditures recommended by the Board for the 2000-2001 
fiscal period include $175,000 for personnel, $120,000 for compliance, 
and $75,000 for Board meetings. Budgeted expenses for these items in 
1999-2000 were $222,780 for personnel, $100,000 for Board meetings, and 
$100,000 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 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 245 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 15 
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 $416,500 
(245 million pounds  x  $0.0017 per pound). The potential income from 
tart cherries utilized for juice, juice concentrate, or puree would be 
$12,750 (15 million pounds  x  $0.00085 per pound). Therefore, total 
assessment income for 2000-2001 is estimated at $429,250. This amount 
plus adequate funds in the reserve and interest income would be 
sufficient to cover budgeted expenses. Funds in the reserve (currently 
$300,000) would be kept within the approximately one year's operational 
expenses permitted by the order (7 CFR 930.42(a)).
    The proposed assessment rates would 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 would be in effect for an indefinite 
period, the Board would 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 would evaluate Board recommendations 
and other available information to determine whether modification of 
the assessment rate is needed. Further rulemaking would be undertaken 
as necessary. The Board's 2000-2001 budget and those for subsequent 
fiscal periods would 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) 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 rules 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 900 producers of tart cherries in the 
production area and approximately 40 handlers subject to regulation 
under the marketing order. Small agricultural producers have been 
defined by the Small Business Administration (13 CFR 121.201) 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 would decrease the assessment rate established for the 
Board and collected from handlers for the 2000-2001 and subsequent 
fiscal periods for cherries utilized in the production of tart cherry 
products other than juice, juice concentrate, or puree from $0.00225 to 
$0.0017 per pound, and the assessment rate for cherries utilized for 
juice, juice concentrate, or puree from $0.001125 to $0.00085 per 
pound. The Board unanimously recommended 2000-2001 expenditures of 
$455,000 and the reduced assessment rates. The quantity of assessable 
tart cherries for the 2000-2001 crop year is estimated at 260 million 
pounds. Assessment income, based on this crop, along with interest 
income and reserves would be adequate to cover budgeted expenses.
    The major expenditures recommended by the Board for the 2000-2001 
fiscal period include $175,000 for personnel, $120,000 for compliance, 
and $75,000 for Board meetings. Budgeted expenses for these items in 
1999-2000 were $222,780 for personnel, $100,000 for Board meetings, and 
$100,000 for compliance.
    Decreased assessment rates were recommended by the Board because 
the Board expects the 2000 crop to be large, wants to reduce handler 
costs, and

[[Page 32046]]

wants to keep its monetary reserve within the authorized maximum of 
approximately one year's operational expenses as specified in section 
930.42(a) of the order.
    The Board discussed the alternative of continuing the existing 
assessment rates, but concluded that the Board should operate as 
efficiently as possible and the amount collected could cause the 
operating reserve to exceed what is actually needed. 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 245 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 15 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 $416,500 (245 million pounds  x  
$0.0017 per pound). The potential income from tart cherries utilized 
for juice, juice concentrate, or puree would be $12,750 (15 million 
pounds  x  $0.00085 per pound). Therefore, total assessment income for 
2000-2001 is estimated at $429,250. This amount plus adequate supplies 
in the reserve would be sufficient to cover budgeted expenses. Funds in 
the reserve (currently $300,000) would be kept within the approximately 
one year's operational expenses permitted by the order (7 CFR 
930.42(a)).
    This action would decrease 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, decreasing the 
assessment rate reduces 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 2, 
2000, 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 would impose 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.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at the 
following web site: 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.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: the 2000-2001 fiscal period begins on July 1, 2000, and the 
rate of assessment applies to all assessable tart cherries handled 
during the fiscal period.

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 
proposed to be 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 rate.

    On and after July 1, 2000, the assessment rate imposed on handlers 
shall be $0.0017 per pound of cherries handled 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 juice, juice concentrate, and puree products shall be $0.00085 
per pound.

    Dated: May 16, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-12800 Filed 5-19-00; 8:45 am]
BILLING CODE 3410-02-P