[Federal Register Volume 71, Number 222 (Friday, November 17, 2006)]
[Rules and Regulations]
[Pages 66833-66835]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-19460]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. FV06-930-2 FR]


Tart Cherries Grown in the States of Michigan, et al.; Increased 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule increases the assessment rate established for the 
Cherry Industry Administrative Board (Board) for the 2006-2007 fiscal 
year and subsequent fiscal years from $0.0021 to $0.0066 per pound to 
fund the Board's administrative expenses and its new research and 
promotion program. Authorization to assess tart cherry handlers enables 
the Board to incur expenses that are reasonable and necessary to 
administer the program. The Board locally administers the marketing 
order which regulates the handling of tart cherries grown in the States 
of Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and 
Wisconsin. The fiscal year began July 1, 2006, and ends June 30, 2007. 
The assessment rate will remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Effective Date: This final rule becomes effective November 20, 
2006.

FOR FURTHER INFORMATION CONTACT: Dawana J. Clark or Kenneth G. Johnson, 
DC Marketing Field Office, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA, Unit 155, 4700 River Road, 
Riverdale, Maryland 20737; telephone: (301) 734-5243, Fax: (301) 734-
5275, or e-mail: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue, SW., STOP 0237, Washington, DC 20250-0237; telephone: (202) 
720-2491, Fax: (202) 720-8938, or e-mail: [email protected].

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing 
Agreement and Order No. 930, as amended (7 CFR part 930), regulating 
the handling of tart cherries produced in the States of Michigan, New 
York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin, 
hereinafter referred to as the ``order.'' The order is 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 (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the marketing order now in effect, tart 
cherries 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, 2006, 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 USDA 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 USDA 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 USDA'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 final rule increases the assessment rate established for the 
Board for the 2006-2007 and subsequent fiscal years for tart cherries 
from $0.0021 to $0.0066 per pound of tart cherries to fund the Board's 
administrative expenses and its new research and promotion program.
    The tart cherry marketing order provides authority for the Board, 
with approval of USDA, 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.
    Authority to fix the rate of assessment to be paid by each handler 
and to collect such assessment appears in Sec.  930.41 of the order. In 
addition, Sec.  930.48 of the order provides that the Board, with the 
approval of USDA, may establish or provide for the establishment of 
production research, marketing research, and market development 
projects designed to assist, improve, or promote the marketing, 
distribution, consumption, or efficient production of cherries. The 
expense of such projects is paid from funds collected pursuant to Sec.  
930.41 (Assessments), or from such other funds as approved by the USDA.
    For the 2003-2004 fiscal year, the Board recommended, and USDA 
approved, an assessment rate of $0.0021 per pound of tart cherries 
handled that would continue in effect from fiscal

[[Page 66834]]

period to fiscal period unless modified, suspended, or terminated by 
USDA upon recommendation and information submitted by the Board or 
other information available to USDA.
    The Board met on March 16, 2006, and recommended 2006-2007 
expenditures of $1,523,000 and an assessment rate of $0.0066 per pound 
of tart cherries. Eighteen of the nineteen Board members voted in 
support of the assessment rate increase. One Board seat is vacant. In 
comparison, last year's budgeted expenses were $488,000. The assessment 
rate of $0.0066 is $0.0045 higher than the rate currently in effect. 
The Board recommended that the assessment rate be increased to cover 
its administrative expenses and fund a new research and promotion 
program which will commence in Fall 2006. The $0.0066 assessment rate 
will cover the costs of the research and promotion program which will 
be assessed at $0.005 per pound (or $10 per ton) of cherries for 
processing and $0.0016 per pound for administrative expenses. The 
$0.0016 per pound for administrative expenses will be a reduction from 
the 2005-2006 assessment rate of $0.0021 per pound. The Board believes 
that its new research and promotion program is the best way for the 
industry to develop both stronger demand for tart cherries and tart 
cherry products and increase sales opportunities.
    According to a recent Board survey, both growers and handlers 
believe a research and promotion program will benefit the industry. 
This program will be directed primarily at consumers and retail 
nutrition advisors, and employ promotional strategies, such as print 
advertising. All tart cherry handlers regulated under the marketing 
order will pay the proposed assessment rate to fund the new research 
and promotion program. However, certain organic handlers may be exempt 
from paying assessments for market promotion activities pursuant to 7 
CFR 900.700.
    The major expenditures recommended by the Board for the 2006-2007 
fiscal year include $1,150,000 for promotion, $169,000 for personnel, 
$82,000 for meetings, $77,000 for office expenses, $20,000 for 
compliance, and $5,000 for industry educational efforts. Budgeted 
expenses for major items in 2005-2006 were $159,000 for personnel, 
$150,000 for compliance, $81,000 for meetings, $93,000 for office 
expenses, and $5,000 for industry educational efforts. The Board 
recommended an increased assessment rate to generate larger revenue to 
meet its expenses and keep its reserves at an acceptable level.
    In deriving the recommended assessment rate, the Board determined 
assessable tart cherry production for the fiscal period at 230 million 
pounds. Therefore, total assessment income for 2006-2007 is estimated 
at $1,518,000 (230 million pounds x $0.0066). This amount plus adequate 
funds in the reserve and interest income will be adequate to cover 
budgeted expenses. Funds in the reserve (approximately $411,000) will 
be kept within the approximately six months' operating expenses as 
recommended by the Board consistent with Sec.  930.42(a).
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by USDA 
upon recommendation and other information submitted by the Board or 
other available information.
    Although the assessment rate will be 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 USDA. Board meetings are 
open to the public and interested persons may express their views at 
these meetings. USDA 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 2006-2007 budget and those for subsequent fiscal 
periods will be reviewed and, as appropriate, approved by USDA.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this action on small entities. Accordingly, AMS has 
prepared this final regulatory flexibility analysis.
    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 40 handlers of tart cherries who are 
subject to regulation under the tart cherry marketing order and 
approximately 900 producers of tart cherries in the regulated area. 
Small agricultural service firms, which includes handlers, are defined 
by the Small Business Administration (SBA) (13 CFR 121.201) as those 
having annual receipts of less than $6,500,000, and small agricultural 
producers are defined as those having annual receipts of less than 
$750,000. The majority of producers and handlers of tart cherries under 
the order are considered small entities under SBA's standards.
    The principal demand for tart cherries is in the form of processed 
products. Tart cherries are dried, frozen, canned, juiced, and pureed. 
During the period 2001-2002 through 2005-2006, approximately 93.8 
percent of the U.S. tart cherry crop, or 214.3 million pounds, was 
processed annually. Of the 214.3 million pounds of tart cherries 
processed, 62 percent was frozen, 26 percent was canned, and 12 percent 
was utilized for juice and other products.
    Based on National Agricultural Statistics Service data, acreage in 
the United States devoted to tart cherry production has been trending 
downward. Bearing acreage has declined from a high of 50,050 acres in 
1987-88 to 37,100 acres in 2005-2006. This represents a 26 percent 
decrease in total bearing acres. Michigan leads the nation in tart 
cherry acreage with 74 percent of the total and produces about 72 
percent of the U.S. tart cherry crop each year.
    This rule increases the assessment rate established for the Board 
and collected from handlers for the 2006-2007 and subsequent fiscal 
periods from $0.0021 to $0.0066 per pound of tart cherries.
    The Board discussed continuing the existing assessment rate, but 
concluded that it needed the additional funds to devote to its research 
and promotion program which will be funded through assessments.
    This action increases the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to producers. However, these costs 
will be offset by the benefits derived by the operation of the 
marketing order. 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, all entities, both large and 
small, were able to express views on this issue. Finally, interested 
persons are invited to submit information on the

[[Page 66835]]

regulatory and informational impacts of this action on small 
businesses.
    This rule will 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 AMS is committed to complying with the E-Government Act to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to government 
information and services and for other purposes.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    A proposed rule was published in the Federal Register on June 21, 
2006 (71 FR 35562). Copies of the proposed rule were mailed or sent via 
facsimile to all Board members and cherry handlers. Finally, the 
proposed rule was made available through the Internet USDA and the 
Office of the Federal Register. A 20-day comment period ending July 11, 
2006, was provided to allow interested persons to respond to the 
proposal. One comment was received.
    The commenter opposed the proposal on the basis that the increased 
assessment rate is indefinite and that Congress should vote on it. The 
commenter also stated that the recommended assessment rate represents a 
large increase and that we are, in essence, raising taxes on people who 
have no representation that is directly accountable to those people. 
Finally, the commenter was of the view that federalism issues and 
Executive Order 13132 applies. In response to the commenter, and as 
previously stated in this action, the tart cherry marketing order, as 
issued in accordance with the Agriculture Marketing Act of 1937, 
provides the authority for the Board, with USDA approval, to formulate 
a budget and collect assessments from handlers to administer the 
program. The members of the Board are producers and handlers who are 
nominated and elected by their peers to represent their respective 
production areas/districts to address issues that come before the 
Board. The assessment rate is formulated and discussed in a public 
meeting. All directly affected persons have an opportunity to 
participate and provide input. Finally, this rule does not have 
sufficient Federalism implications to warrant an assessment under 
Executive Order 13132.
    Accordingly, no changes will be made to this rule based on the 
comment 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 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 that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because the 2006-2007 
fiscal period began on July 1, 2006, and the marketing order requires 
that the rate of assessment for each fiscal period apply to all 
assessable tart cherries handled during such fiscal period. Further, 
handlers are aware of this action which was unanimously recommended by 
the Board at a public meeting. Also, a 20-day comment period was 
provided for in the proposed rule.

List of Subjects in 7 CFR Part 930

    Marketing agreements, Reporting and recordkeeping requirements, 
Tart cherries.


0
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

0
1. The authority citation for 7 CFR part 930 continues to read as 
follows:

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


0
2. Section 930.200 is revised to read as follows:


Sec.  930.200  Assessment rate.

    On and after July 1, 2006, the assessment rate imposed on handlers 
shall be $0.0066 per pound of tart cherries grown in the production 
area and utilized in the production of tart cherry products. Included 
in this rate is $0.005 per pound of cherries to cover the costs of the 
new research and promotion program and $0.0016 per pound of cherries to 
cover administrative expenses.

    Dated: November 14, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-19460 Filed 11-16-06; 8:45 am]
BILLING CODE 3410-02-P