[Federal Register Volume 82, Number 100 (Thursday, May 25, 2017)]
[Proposed Rules]
[Pages 24080-24082]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-10677]


 ========================================================================
 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. 82, No. 100 / Thursday, May 25, 2017 / 
Proposed Rules  

[[Page 24080]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Doc. No. AMS-SC-16-0104; SC16-930-4 PR]


Tart Cherries Grown in the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington and Wisconsin; Modification of 
Allocation of Assessments

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: This proposed rule would implement a recommendation from the 
Tart Cherry Industry Administrative Board (Board) to increase the 
portion of assessments allocated to research and promotion activities 
from $0.005 to $0.006 per pound of tart cherries and decrease the 
portion allocated to administrative expenses from $0.0025 to $0.0015 
per pound of tart cherries handled under the marketing order (order). 
The overall assessment rate would remain unchanged at $0.0075 per pound 
of tart cherries. The Board locally administers the order and is 
comprised of producers and handlers of tart cherries operating within 
the area of production, and one public member. Assessments upon tart 
cherry handlers are used by the Board to fund reasonable and necessary 
expenses of the program. The fiscal period begins October 1 and ends 
September 30. The assessment rate would remain in effect indefinitely 
unless modified, suspended, or terminated.

DATES: Comments must be received by June 26, 2017.

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 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: Jennie M. Varela, Marketing 
Specialist, or Christian D. Nissen, Regional Director, Southeast 
Marketing Field Office, Marketing Order and Agreement Division, 
Specialty Crops Program, AMS, USDA; Telephone: (863) 324-3375, Fax: 
(863) 291-8614, 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 
Agreement and Order No. 930, both 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 proposed rule 
in conformance with Executive Orders 12866, 13771, 13563, and 13175.
    This proposed 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 proposed herein would be applicable to all 
assessable tart cherries beginning on October 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 portion of the assessment 
rate allocated to research and promotion activities from $0.005 to 
$0.006 per pound of tart cherries and decrease the portion allocated to 
administrative expenses from $0.0025 to $0.0015 per pound of tart 
cherries. The overall assessment rate for the 2016-17 and subsequent 
fiscal periods would remain unchanged at $0.0075 per pound of tart 
cherries.
    The tart cherry marketing order provides authority for the Board, 
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 Board are producers and handlers of tart cherries, and 
one public member. They are familiar with the Board's needs and with 
the costs of goods and services in their local areas 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 2010-11 and subsequent fiscal periods, the Board 
recommended, and USDA approved, an assessment rate of $0.0075 per pound 
of tart cherries that would continue in effect from fiscal

[[Page 24081]]

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 September 8, 2016, and unanimously recommended 
2016-17 expenditures of $2,523,550 and an assessment rate of $0.0075 
per pound of tart cherries. In comparison, last year's budgeted 
expenditures were $1,725,000. The total assessment rate remains 
unchanged by this proposed action. However, this proposed rule would 
increase the portion of the assessment rate allocated to research and 
promotion activities from $0.005 to $0.006 per pound of tart cherries 
and decrease the portion allocated to administrative expenses from 
$0.0025 to $0.0015 per pound of tart cherries. This shift in allocation 
would allow for expanded research and promotion activities to help 
market this season's above-average crop, while helping to ensure that 
the funds held in the Board's authorized reserve are consistent with 
the order's limits on the reserve.
    The major expenditures recommended by the Board for the 2016-17 
year include $2,045,550 for promotion, $255,000 for personnel, and 
$106,000 for office expenses. Budgeted expenses for these items in 
2015-16 were $1,150,000, $236,000, and $102,000, respectively.
    The assessment rate recommended by the Board was derived by 
considering expected shipments of tart cherries and examining the needs 
of the industry with regard to research and promotion and the 
authorized reserve. Tart cherry shipments for the 2016-17 year are 
estimated at 314.7 million pounds, which should provide $2,360,250 in 
assessment income. Income derived from handler assessments, interest 
income, and funds from the Board's authorized reserve would be adequate 
to cover budgeted expenses. Funds in the reserve (approximately 
$894,000) would be kept within the maximum permitted by the order of no 
more than approximately one year's operational expenses as stated in 
Sec.  930.42.
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA upon recommendation 
and information submitted by the Board or other available information.
    Although this assessment rate 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 USDA. Board meetings are open 
to the public, and interested persons may express their views at these 
meetings. USDA 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 2016-17 budget and those for subsequent fiscal periods would be 
reviewed and, as appropriate, approved by USDA.

Executive Orders 12866 and 13771, and Regulatory Flexibility Act

    This rule does not meet the definition of a significant regulatory 
action contained in section 3(f) of Executive Order 12866, and is not 
subject to review by the Office of Management and Budget (OMB). 
Additionally, because this rule does not meet the definition of a 
significant regulatory action it does not trigger the requirements 
contained in Executive Order 13771. See OMB's Memorandum titled 
``Interim Guidance Implementing Section 2 of the Executive Order of 
January 30, 2017 titled `Reducing Regulation and Controlling Regulatory 
Costs'[thinsp]'' (February 2, 2017).
    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 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 approximately 600 producers of tart cherries in the 
regulated area and approximately 40 handlers of tart cherries who are 
subject to regulation under the order. Small agricultural producers are 
defined by the Small Business Administration (SBA) as those having 
annual receipts of less than $750,000, and small agricultural service 
firms have been defined as those whose annual receipts are less than 
$7,500,000 (13 CFR 121.201).
    According to the National Agricultural Statistics Service (NASS) 
and Board data, the average annual grower price for tart cherries 
during the 2015-16 season was approximately $0.347 per pound. With 
total utilization at 251.1 million pounds, the total 2015-16 crop value 
is estimated at $87 million. Dividing the crop value by the estimated 
number of producers (600) yields an estimated average receipt per 
producer of $145,000. This is well below the SBA threshold for small 
producers. In 2015, The Food Institute estimated a free on board 
(f.o.b.) price of $0.96 per pound for frozen tart cherries, which make 
up the majority of processed tart cherries. Multiplying the f.o.b price 
by total utilization of 251.1 million pounds results in an estimated 
handler-level tart cherry value of $241 million. Dividing this figure 
by the number of handlers (40) yields an estimated average annual 
handler receipts of $6 million, which is below the SBA threshold for 
small agricultural service firms. Assuming a normal distribution, the 
majority of producers and handlers of tart cherries may be classified 
as small entities.
    This proposal would increase the portion of the assessment rate 
allocated to research and promotion activities from $0.005 to $0.006 
per pound of tart cherries and decrease the portion allocated to 
administrative expenses from $0.0025 to $0.0015 per pound of tart 
cherries. The overall assessment rate established for the Board for the 
2016-17 and subsequent fiscal periods would remain unchanged at $0.0075 
per pound of tart cherries. The quantity of assessable tart cherries 
for the 2016-17 season is estimated at 314.7 million pounds. Thus, the 
$0.0075 rate should provide $2,360,250 in assessment income. Income 
derived from handler assessments, interest income, and funds from the 
Board's authorized reserve should provide sufficient funds to meet this 
year's anticipated expenses.
    The major expenditures recommended by the Board for the 2016-17 
year include $2,045,550 for promotion, $255,000 for personnel, and 
$106,000 for office expenses. Budgeted expenses for these items in 
2015-16 were $1,150,000, $236,000, and $102,000, respectively.
    This proposed rule would shift the allocation of the assessment 
rate to increase the portion allocated for research and promotion, 
while decreasing the portion allocated for administrative costs. This 
adjustment would allow for expanded research and promotion activities 
to help market this season's above-average crop, while helping to 
ensure that the funds held in the Board's authorized reserve are 
consistent with the order's limits on the reserve.
    Prior to arriving at this budget and assessment rate, the Board 
considered production history, crop estimates, its

[[Page 24082]]

financial statements, and the need to both reduce financial reserves 
and increase its marketing efforts to increase demand for tart 
cherries. The Board also considered not taking this action, but 
determined that 2016-17 expenditures of $2,523,550 were appropriate, 
and the recommended assessment rate and allocation, along with funds 
from interest income, block grants, and funds from reserves, would be 
adequate to cover budgeted expenses.
    A review of historical information and preliminary information 
pertaining to the upcoming crop year indicates that the average grower 
price for the 2016-17 season could be approximately $0.348 per pound of 
tart cherries. Therefore, the estimated assessment revenue for the 
2016-17 crop year as a percentage of total grower revenue would be 
approximately 2 percent.
    This action would not 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 costs 
may be passed on to producers. However, these costs would be offset by 
the benefits derived by the operation of the marketing order.
    The Board's meetings were widely publicized throughout the tart 
cherry industry, and all interested persons were invited to attend the 
meetings and participate in Board deliberations on all issues. Like all 
Board meetings, the June 23, 2016, and September 8, 2016, meetings were 
public meetings, 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 OMB and assigned OMB No. 0581-0177, Tart 
Cherries Grown in the States of Michigan, New York, Pennsylvania, 
Oregon, Utah, Washington, and Wisconsin. No changes in those 
requirements are necessary as a result of this proposed action. Should 
any changes become necessary, they would be submitted to OMB for 
approval.
    This proposed rule 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.
    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 30-day comment period is provided to allow interested persons to 
respond to this proposed rule.

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

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 October 1, 2016, the assessment rate imposed on 
handlers shall be $0.0075 per pound of tart cherries grown in the 
production area and utilized in the production of tart cherry products. 
Included in this rate is $0.006 per pound of tart cherries to cover the 
cost of the research and promotion program and $0.0015 per pound of 
tart cherries to cover administrative expenses.

    Dated: May 19, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2017-10677 Filed 5-24-17; 8:45 am]
BILLING CODE 3410-02-P