[Federal Register Volume 66, Number 83 (Monday, April 30, 2001)]
[Rules and Regulations]
[Pages 21273-21276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-10663]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. FV01-930-1 FIR]


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, 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 $0.0017 to $0.0012 per pound. It also decreased the 
assessment rate for cherries utilized for juice, juice concentrate, or 
puree from $0.00085 to $0.0006 per pound. Both assessment rates were 
recommended by 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 began July 1 and ends June 
30. The assessment rates continue to remain in effect indefinitely 
unless modified, suspended, or terminated.

EFFECTIVE DATE: May 30, 2001.

FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella or 
Kenneth G. Johnson, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, Suite 2A04, Unit 155, 4700 River Road, 
Riverdale, MD 20737, telephone: (301) 734-5243, Fax: (301) 734-5275; 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, 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: 
[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

[[Page 21274]]

assessments. It is intended that the assessment rates as issued herein 
will 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 continues the interim final rule which decreased 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 $0.0017 to $0.0012 per pound of cherries. The assessment 
rate decrease for cherries utilized for juice, juice concentrate, or 
puree from $0.00085 to $0.0006 per pound also is continued.
    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 2000-2001 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 2, 2000, and unanimously recommended, and 
the Department approved, 2000-2001 expenditures of $455,000 and 
assessment rate decreases from $0.00225 to $0.0017 per pound for 
cherries that are utilized in the production of tart cherry products 
other than juice, juice concentrate, or puree and from $0.001125 to 
$0.00085 per pound for cherries utilized for juice, juice concentrate, 
or puree.
    The Board met again on September 8, 2000, and unanimously 
recommended a further decrease in the assessment rates to $0.0012 per 
pound for cherries that are utilized in the production of tart cherry 
products other than juice, juice concentrate, or puree, and to $0.0006 
per pound for cherries utilized for juice, juice concentrate, or puree. 
Further decreased assessment rates have been recommended by the Board 
because the cherry industry has experienced record high crops for the 
past two seasons and again this season. In addition, the Board wants to 
further reduce handler costs while maintaining a monetary reserve which 
is adequate to cover approximately six months' operational expenses 
(based on an annual operating budget of approximately $455,000). 
Section 930.42(a) of the order authorizes a reserve sufficient to cover 
one year's operating expenses. The decreased rates are expected to 
generate enough income to meet the Board's reduced operating expenses 
in 2000-2001.
    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 1999, tart cherry utilization for juice, wine, or 
brined uses was 34.5 million pounds for all districts covered under the 
order. The total processed amount of tart cherries for 1999 was 252.3 
million pounds. Juice, wine, and brined tart cherries represented less 
than 14 percent of the total processed crop, and about 10 percent over 
the last three seasons (1996 through 1998).
    In deriving the recommended assessment rates, the Board determined 
assessable tart cherry production for the crop year at 280 million 
pounds. It further estimated that about 265 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 $318,000 
(265 million pounds  x  $0.0012 per pound). The potential income from 
tart cherries utilized for juice, juice concentrate, or puree would be 
$9,000 (15 million pounds  x  $0.0006 per pound). Therefore, total 
assessment income for 2000-2001 is estimated at $327,000. This amount 
plus funds in the reserve and interest income will be adequate to cover 
budgeted expenses. Funds in the reserve (approximately $374,000) will 
be kept within the approximately six months' operating expenses as 
recommended by the Board which would be consistent with the order (7 
CFR 930.42(a)).
    The assessment rates 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 2000-2001 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 
final regulatory flexibility analysis. The Regulatory Flexibility Act 
(RFA) allows AMS to certify that regulations do not have a

[[Page 21275]]

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 approximately 900 producers 
of tart cherries in the regulated area. Small agricultural service 
firms have been defined by the Small Business Administration (13 CFR 
121.201) 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.
    The Board unanimously recommended, and the Department approved, 
2000-2001 expenditures of $455,000 and assessment rate decreases from 
$0.00225 to $0.0017 per pound for cherries that are utilized in the 
production of tart cherry products other than juice, juice concentrate 
or puree and from $0.001125 to $0.0085 per pound for cherries utilized 
for juice, juice concentrate, or puree.
    This rule continues the interim final rule which further decreased 
the assessment rate established for the Board and collected from 
handlers 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 $0.0017 to $0.0012 per pound, 
and the assessment rate for cherries utilized for juice, juice 
concentrate, or puree from $0.00125 to $0.0006 per pound. The Board 
unanimously recommended 2000-2001 expenditures of $455,000 and the 
further reduced assessment rates. The quantity of assessable tart 
cherries expected to be produced during the 2000-2001 crop year is 
estimated at 280 million pounds. Assessment income, based on this crop, 
along with interest income and reserves should be adequate to cover 
budgeted expenses.
    The Executive Committee of the Board, after discussing the 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 an operating reserve of approximately one year's operating 
expenses.
    However, after considerable discussion, the Board concluded it 
should further 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 again this season. 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 further 
decrease the assessment rates. In deriving the recommended assessment 
rates, the Board estimated assessable tart cherry production for the 
crop year at 280 million pounds. It further estimated that about 265 
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 $318,000 (265 million pounds  x  $0.0012 per pound). 
The potential income from the tart cherries utilized for juice, juice 
concentrate, or puree would be $9,000 (15 million pounds  x  $0.0006 
per pound). Therefore, total assessment income for 2000-2001 is 
estimated at $327,000. This amount plus funds in the reserve and 
interest income should be adequate to cover budgeted expenses. Funds in 
the reserve (approximately $374,000) will be kept within the 
approximately six months' operational expenses as recommended by the 
Board which would be consistent with the order (7 CFR 930.42(a)).
    This action continues the interim final rule which decreased 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 September 8, 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 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 January 3, 2001 (66 FR 232). Copies of the 
rule were mailed by the Board's staff to all Board members and 
handlers. In addition, this rule was made available through the 
Internet by the Office of the Federal Register. That rule provided for 
a 60-day comment period which ended March 5, 2001. No comments were 
received.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 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 Board's recommendation, and other information, it is found that 
finalizing the interim final rule, without change, as published in the 
Federal Register 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.

[[Page 21276]]

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 66 FR 232 on January 3, 2001, is adopted as a final 
rule without change.

    Dated: April 24, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 01-10663 Filed 4-27-01; 8:45 am]
BILLING CODE 3410-02-U