[Federal Register Volume 81, Number 183 (Wednesday, September 21, 2016)]
[Proposed Rules]
[Pages 64785-64787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-22740]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 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.
 
 ========================================================================
 

  Federal Register / Vol. 81, No. 183 / Wednesday, September 21, 2016 / 
Proposed Rules  

[[Page 64785]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 923

[Doc. No. AMS-SC-16-0077; SC16-923-1 PR]


Cherries Grown in Designated Counties in Washington; Increased 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule would implement a recommendation from the 
Washington Cherry Marketing Committee (Committee) to increase the 
assessment rate established for the 2016-2017 and subsequent fiscal 
periods from $0.15 to $0.25 per ton of Washington cherries handled. The 
Committee locally administers the marketing order and is comprised of 
growers and handlers of cherries operating within the production area. 
Assessments upon cherry handlers are used by the Committee to fund 
reasonable and necessary expenses of the marketing order. The fiscal 
period begins April 1 and ends March 31. The assessment rate would 
remain in effect indefinitely unless modified, suspended or terminated.

DATES: Comments must be received by October 6, 2016.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Specialty Crops Program, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or internet: http://www.regulations.gov. Comments should reference the document number and 
the date and page number of this issue of the Federal Register and will 
be made available for public inspection in the Office of the Docket 
Clerk during regular business hours, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this 
proposed rule will be included in the record and will be made available 
to the public. Please be advised that the identity of the individuals 
or entities submitting the comments will be made public on the internet 
at the address provided above.

FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson or Gary D. Olson, 
Northwest Marketing Field Office, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA; Telephone: (503) 326-
2724, Fax: (503) 326-7440, or Email: [email protected] or 
[email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, 
Fax: (202) 720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing 
Order No. 923, as amended (7 CFR part 923), regulating the handling of 
cherries grown in designated counties in Washington, 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 proposed rule 
in conformance with Executive Orders 12866, 13563, and 13175.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the order now in effect, Washington cherry 
handlers are subject to assessments. Funds to administer the order are 
derived from such assessments. It is intended that the assessment rate, 
as proposed herein, would be applicable to all assessable Washington 
cherries beginning April 1, 2016, and continue until amended, 
suspended, or terminated.
    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 proposed rule would increase the assessment rate for the 2016-
2017 and subsequent fiscal periods from $0.15 to $0.25 per ton of 
Washington cherries.
    The order provides authority for the Committee, with the approval 
of USDA, to formulate an annual budget of expenses and collect 
assessments from handlers to administer the program. The members of the 
Committee are growers and handlers of Washington cherries. They are 
familiar with the Committee'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 2013-2014 and subsequent fiscal periods, the Committee 
recommended, and the USDA approved, an assessment rate of $0.15 per ton 
of Washington cherries that would continue in effect from fiscal period 
to fiscal period unless modified, suspended, or terminated by USDA upon 
recommendation and information submitted by the Committee or other 
information available to USDA.
    The Committee met on May 18, 2016, and unanimously recommended 
expenditures of $57,150 for the 2016-2017 fiscal period. In comparison, 
the previous fiscal period's budgeted expenditures were $59,750. The 
Committee also unanimously recommended an assessment rate of $0.25 per 
ton of Washington cherries. The recommended assessment rate of $0.25 is 
$0.10 higher than the rate currently in effect.

[[Page 64786]]

    The expenditures recommended by the Committee for the 2016-2017 
fiscal period include $25,000 for the management fee; $7,000 for 
compliance; $5,000 for the data management fee; $5,000 for accounting 
administration; $5,000 for research; $4,000 for Committee travel; 
$3,000 for an audit; and $3,150 for miscellaneous other expenses. In 
comparison, expenditures for the 2015-2016 fiscal period were $25,000 
for the management fee; $7,000 for compliance; $5,000 for the data 
management fee; $7,000 for accounting administration; $5,000 for 
research; $4,000 for Committee travel; $4,000 for an audit; and $2,750 
for miscellaneous other expenses.
    Committee members estimated the 2016 fresh cherry production to be 
approximately 150,000 tons, which would be less than the 2015 
production of 165,358 tons by 15,358 tons. However, cherry production 
tends to fluctuate due to the effects of weather, pollination, and tree 
health. The Committee's recommended assessment rate was derived by 
dividing the 2016-2017 anticipated expenses by the expected shipments 
of Washington cherries, while also taking into account the Committee's 
monetary reserve. The recommended assessment rate of $0.25 per ton, 
when multiplied by the 150,000 tons of estimated 2016 Washington cherry 
shipments, is expected to generate $37,500 in handler assessments. The 
projected revenue from handler assessments, together with funds from 
the Committee's monetary reserve, would be adequate to cover the 2016-
2017 budgeted expenses of $57,150. The Committee expects its monetary 
reserve to decrease from $49,661 at the beginning of the 2016-2017 
fiscal period to approximately $30,011 at the end of the 2016-2017 
fiscal period. That amount would be within the provisions of the order 
and would provide the Committee with greater ability to absorb 
fluctuations in assessment income and expenses into the future.
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA upon recommendation 
and information submitted by the Committee or other available 
information.
    Although this assessment rate would be in effect for an indefinite 
period, the Committee 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 the Committee meetings are available from the Committee and 
USDA. Committee meetings are open to the public and interested persons 
may express their views at these meetings. USDA would evaluate 
Committee recommendations and other available information to determine 
whether modification of the assessment rate is needed. Further 
rulemaking would be undertaken as necessary. The Committee's 2016-2017 
budget and those for subsequent fiscal periods would be reviewed and, 
as appropriate, approved by USDA.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) 
has considered the economic impact of this proposed rule on small 
entities. Accordingly, AMS has prepared this initial regulatory 
flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses 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.
    There are 53 handlers of Washington sweet cherries subject to 
regulation under the order and approximately 1,500 growers in the 
regulated production area. Small agricultural service firms are defined 
by the Small Business Administration (13 CFR 121.201) as those having 
annual receipts of less than $7,500,000, and small agricultural growers 
are defined as those having annual receipts of less than $750,000.
    National Agricultural Statistics Service has prepared a preliminary 
report for the 2015 shipping season showing that prices for the 171,600 
tons of sweet cherries that entered the fresh market averaged $2,380 
per ton. Based on the number of growers in the production area (1,500), 
the average grower revenue from the sale of sweet cherries in 2015 can 
therefore be estimated at approximately $272,272 per year. In addition, 
the Committee reports that most of the industry's 53 handlers reported 
gross receipts of less than $7,500,000 from the sale of fresh sweet 
cherries last fiscal period. Thus, the majority of growers and handlers 
of Washington sweet cherries may be classified as small entities.
    This proposal would increase the assessment rate collected from 
handlers, for the 2016-2017 and subsequent fiscal periods from $0.15 to 
$0.25 per ton of Washington cherries handled. The Committee unanimously 
recommended 2016-2017 expenditures of $57,150 and an assessment rate of 
$0.25 per ton. The proposed assessment rate of $0.25 is $0.10 higher 
than the rate established for the 2013-2014 fiscal period.
    The 2016-2017 Washington cherry crop is estimated at 150,000 tons. 
At the proposed $0.25 per ton assessment rate, the Committee 
anticipates that assessment income of approximately $37,500, along with 
reserve funds, would be adequate to cover budgeted expenses for the 
2016-2017 fiscal period. With the proposed assessment rate and budgeted 
expense level, the Committee anticipates that $19,650 would need to be 
deducted from the monetary reserve. As such, reserve funds are 
estimated to be at $30,011 on March 31, 2017. That reserve level is 
within the maximum permitted by the order of approximately one fiscal 
period's operational expenses (Sec.  923.42(a)(2)).
    The expenditures recommended by the Committee for the 2016-2017 
fiscal period include $25,000 for the management fee; $7,000 for 
compliance; $5,000 for the data management fee; $5,000 for accounting 
administration; $5,000 for research; $4,000 for Committee travel; 
$3,000 for the audit; and $3,150 for miscellaneous other expenses.
    In comparison, expenditures for the 2015-2016 fiscal period were 
$25,000 for the management fee; $7,000 for compliance; $5,000 for the 
data management fee; $7,000 for accounting administration; $5,000 for 
research; $4,000 for Committee travel; $4,000 for the audit; and $2,750 
for miscellaneous other expenses.
    The Committee discussed alternatives to this action, including 
recommending alternative expenditure levels and assessment rates. 
Although lower assessment rates were considered, none were selected 
because they would not have generated sufficient income to administer 
the order.
    A review of historical data and preliminary information pertaining 
to the upcoming fiscal period indicates that the grower price for the 
2016-2017 fiscal period could average $2,380 per ton of sweet cherries. 
Therefore, the estimated assessment revenue for the 2016-2017 fiscal 
period, as a percentage of total grower revenue, is approximately 0.01 
percent.
    This action would increase 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

[[Page 64787]]

may be passed on to growers. However, these costs would be offset by 
the benefits derived by the operation of the order.
    In addition, the Committee's meeting was widely publicized 
throughout the Washington cherry industry and all interested persons 
were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the May 18, 
2016, 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 comments on this proposed rule, including 
the regulatory and informational impacts of this action on small 
businesses.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0189. No changes in those requirements are 
necessary as a result of this action. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This proposed rule would not impose any additional reporting or 
recordkeeping requirements on either small or large Washington 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.
    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 action.
    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/rules-regulations/moa/small-businesses. Any questions 
about the compliance guide should be sent to Richard Lower at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    A 15-day comment period is provided to allow interested persons to 
respond to this proposed rule. Fifteen days is deemed appropriate 
because: (1) The 2016-2017 fiscal period began on April 1, 2016, and 
the order requires that the assessment rate for each fiscal period 
apply to all assessable Washington cherries handled during such fiscal 
period; (2) the Committee needs to have sufficient funds to pay its 
expenses, which are incurred on a continuous basis; (3) handlers are 
already shipping Washington cherries from the 2016 crop; and (4) 
handlers are aware of this action, which was unanimously recommended by 
the Committee at a public meeting and is similar to other assessment 
rate actions issued in past years.

List of Subjects in 7 CFR Part 923

    Cherries, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 923 is 
proposed to be amended as follows:

PART 923--CHERRIES GROWN IN DESIGNATED COUNTIES IN WASHINGTON

0
 1. The authority citation for 7 CFR part 923 continues to read as 
follows:

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

0
 2. Section 923.236 is revised to read as follows:


Sec.  923.236  Assessment rate.

    On and after April 1, 2016, an assessment rate of $0.25 per ton is 
established for the Washington Cherry Marketing Committee.

    Dated: September 16, 2016.
Elanor Starmer,
Administrator, Agricultural Marketing Service.
[FR Doc. 2016-22740 Filed 9-20-16; 8:45 am]
 BILLING CODE 3410-02-P