[Federal Register Volume 84, Number 229 (Wednesday, November 27, 2019)]
[Rules and Regulations]
[Pages 65262-65265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25650]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 923

[Doc. No. AMS-SC-19-0049; SC19-923-1 FR]


Marketing Order Regulating the Handling of Sweet Cherries Grown 
in Designated Counties in Washington; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This final rule implements a recommendation from the 
Washington Cherry Marketing Committee (Committee) to decrease the 
assessment rate established for the 2019-2020 and subsequent fiscal 
periods. The assessment rate will remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Effective December 27, 2019.

FOR FURTHER INFORMATION CONTACT: Dale Novotny, Marketing Specialist, or 
Gary Olson, Regional Director, 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 action, pursuant to 5 U.S.C. 553, 
amends regulations issued to carry out a marketing order as defined in 
7 CFR 900.2(j). This final rule is issued under Marketing Order No. 
923, as amended (7 CFR part 923), regulating the handling of sweet 
cherries grown in designated counties of Washington. Part 923 (referred 
to as 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 Committee locally administers the Order 
and is comprised of sweet cherry growers and handlers operating within 
the area of production.
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 13563 and 13175. This final rule 
falls within a category of regulatory actions

[[Page 65263]]

that the Office of Management and Budget (OMB) exempted from Executive 
Order 12866 review. 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).
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the Order now in effect, Washington sweet cherry 
handlers are subject to assessments. Funds to administer the marketing 
order are derived from such assessments. The assessment rate will be 
applicable to all assessable Washington sweet cherries for the 2019-
2020 fiscal period, 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 a marketing order may file with USDA a 
petition stating that the order, any provision of the marketing order, 
or any obligation imposed in connection with the marketing order is not 
in accordance with law and request a modification of the marketing 
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.
    The Order authorizes the Committee, with the approval of USDA, to 
formulate an annual budget of expenses and collect assessments from 
handlers to administer the program. Committee members are familiar with 
the Committee's needs and with the costs of goods and services in their 
local area and can formulate an appropriate budget and assessment rate. 
The assessment rate is formulated and discussed in a public meeting 
where all directly affected persons have an opportunity to participate 
and provide input.
    This final rule decreases the assessment rate from $0.25 to $0.20 
per ton of Washington sweet cherries handled for the 2019-2020 and 
subsequent fiscal periods. The lower rate is necessary to fund the 
Committee's 2019-2020 fiscal period budgeted expenditures while 
maintaining the Committee's financial reserve fund at an amount not 
exceeding approximately one fiscal period's operational expenses. Based 
on input received from growers at an annual meeting, the 2019 crop of 
Washington sweet cherries is expected to be similar in volume compared 
to the 2018 crop. The Committee believes that decreasing the continuing 
assessment rate will allow the Committee to fully fund its 2019-2020 
budgeted expenses and maintain its financial reserve within the limits 
established in the Order.
    The Committee held a well-publicized meeting May 8, 2019, where all 
interested parties were encouraged to participate in the discussions. 
However, the Order's quorum requirement was not met, and the Committee 
was not able to conduct official business. The following day, the 
Committee conducted the vote by email and, with a vote of 15-1, 
recommended 2019-2020 fiscal period budgeted expenditures of $56,250 
and an assessment rate of $0.20 per ton of sweet cherries handled. In 
comparison, last year's budgeted expenditures were $55,750. The 
assessment rate of $0.20 is $0.05 lower than the $0.25 per ton rate 
currently in effect. The Committee recommended the assessment rate 
decrease because of a normal size crop estimate and a financial reserve 
fund balance that was higher than the Committee believes is 
responsible. At the recommended assessment rate and budgeted 
expenditures, the Committee expects its financial reserve to be $55,093 
at the end of the 2019-2020 fiscal period, which would be within the 
limits set in the Order.
    The major expenditures recommended by the Committee for the 2019-
2020 fiscal period include $25,000 for program management contract 
services provided by the Washington State Fruit Commission, $7,250 for 
administrative expenses, $7,000 for regulation proceedings, $5,000 for 
data management, $5,000 for research, $4,000 for an annual audit, and 
$3,000 for travel. In comparison, these major expense categories 
budgeted for the 2018-2019 fiscal period were $25,000, $6,950, $7,000, 
$5,000, $5,000, $3,800, and $3,000, respectively.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, expected sweet cherry sales, and the 
amount of funds available in the authorized reserve. Expected income 
derived from handler assessments of $40,000 (200,000 tons of sweet 
cherries at $0.20 per ton), plus $5 interest income and $16,245 from 
the reserve would be adequate to cover budgeted expenses of $56,250. 
Funds from the reserve (estimated to be $71,338 at the beginning of the 
2019-2020 fiscal period) will be used to supply part of the Committee's 
2019-2020 expenses in an effort to keep the reserve within the maximum 
permitted by Sec.  923.142(a).
    The assessment rate established in this rule will 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 will be in effect for an indefinite 
period, the Committee 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 Committee meetings are available from the Committee or 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 budget for subsequent 
fiscal periods would be reviewed and, as appropriate, approved by USDA.

Final Regulatory Flexibility Act

    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 final rule 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 
businesses subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act are unique in that they are brought about through 
group action of essentially small entities acting on their own behalf.
    There are approximately 1,450 growers and 37 handlers of sweet 
cherries in the regulated production area subject to regulation under 
the Order. Small agricultural service firms are defined by the Small 
Business Administration (SBA) as those having annual receipts of less 
than $30,000,000, and small agricultural producers are defined as those 
having annual receipts

[[Page 65264]]

of less than $1,000,000 (13 CFR 121.201).
    According to data from USDA Market News, the 2018 season average 
f.o.b. price for Washington sweet cherries was approximately $35.14 per 
15-pound carton. The Committee reported that the industry shipped 3,964 
tons for the season, which equals approximately 27,394,133 cartons 
(204,456 tons at a net weight of 15 pounds per carton). Using the 
number of handlers, and assuming a normal distribution, most handlers 
would have average annual receipts of more than $30,000,000 ($35.14 
times 27,394,133 cartons equals $962,629,845 divided by 37 handlers 
equals $26,017,022 per handler).
    In addition, based on USDA National Agricultural Statistics Service 
data, the weighted average grower price for the 2018 season was $1,900 
per ton of sweet cherries. Based on grower price, shipment data, and 
the total number of Washington sweet cherry growers, and assuming a 
normal distribution, the average annual grower revenue is below 
$1,000,000 ($1,900 times 205,456 tons equals $390,366,400 divided by 
1,450 growers equals $269,218 per grower). Thus, most growers of 
Washington sweet cherries may be classified as small entities, but most 
of their handlers may be classified as large entities.
    This final rule decreases the assessment rate collected from 
handlers for the 2019-2020 and subsequent fiscal periods from $0.25 to 
$0.20 per ton of Washington sweet cherries handled. The Committee 
recommended 2019-2020 fiscal period expenditures of $56,250 and the 
$0.20 per ton assessment rate with an affirmative vote of 15-1. The one 
dissenting voter gave no reason for their opposition. The assessment 
rate of $0.20 is $0.05 lower than the rate for the 2018-2019 fiscal 
period.
    The Committee estimates that the industry will handle 200,000 tons 
of fresh, Washington sweet cherries during the 2019-2020 fiscal period. 
Thus, the $0.20 per ton rate should provide $40,000 in assessment 
income. Income derived from handler assessments, along with $5 interest 
income and $16,245 from the reserve, will cover all budgeted expenses.
    The major expenditures recommended by the Committee for the 2019-
2020 fiscal period include $25,000 for program management contract 
services provided by the Washington State Fruit Commission, $7,250 for 
administrative expenses, $7,000 for regulation proceedings, $5,000 for 
data management, $5,000 for research, $4,000 for an annual audit, and 
$3,000 for travel. In comparison, these major expense categories 
budgeted for the 2018-2019 fiscal period were $25,000, $6,950, $7,000, 
$5,000, $5,000, $3,800, and $3,000, respectively.
    The lower assessment rate will cover most of the Committee's 2019-
2020 fiscal period budgeted expenditures, with the remaining balance to 
come from the financial reserve. Decreasing the continuing assessment 
rate and using some funds from the reserve will allow the Committee to 
fully fund budgeted expenses and bring its financial reserve to a level 
that is compliant with the Order.
    Prior to arriving at this budget and assessment rate, the Committee 
considered maintaining the current assessment rate of $0.25 per ton. 
However, after grower input and discussions at the May 8, 2019, 
meeting, the Committee projected the 2019 crop to be similar in volume 
to the previous year. This amount of production at the current 
assessment level of $0.25 per ton would generate enough assessment 
income to fund the Committee's operations for the 2019-2020 fiscal 
period, but its financial reserve would be too high and not in 
compliance with the Order. Based on estimated shipments, the 
recommended assessment rate of $0.20 per ton of sweet cherries should 
provide $40,000 in assessment income. The Committee determined 
assessment revenue will be adequate to cover most of its budgeted 
expenditures for the 2019-2020 fiscal period, with the remaining 
balance coming from its financial reserve. Reserve funds will be kept 
within the amount authorized in the Order.
    A review of historical data and preliminary information pertaining 
to the upcoming fiscal period indicates that the average grower price 
range for the 2019-2020 season should be approximately $1,598-$3,081 
per ton of Washington sweet cherries. Therefore, the estimated 
assessment revenue for the 2019-2020 fiscal period as a percentage of 
total grower revenue would be between 0.007 and 0.013 percent.
    The Committee's meetings are widely publicized throughout the 
Washington sweet cherry industry. All interested persons are invited to 
attend the meetings and participate in Committee deliberations on all 
issues. Like all Committee meetings, the May 8, 2019, meeting was a 
public meeting and all entities, both large and small, were able to 
express views on this issue. Interested persons were invited to submit 
comments on this rule, including the regulatory and information 
collection 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 OMB and assigned OMB No. 0581-0189, Fruit 
Crops. No changes in those requirements will be necessary because of 
this action. Should any changes become necessary, they will be 
submitted to OMB for approval.
    This final rule will not impose any additional reporting or 
recordkeeping requirements on either small or large Washington sweet 
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. As noted in the 
final regulatory flexibility analysis, USDA has not identified any 
relevant Federal rules that duplicate, overlap, or conflict with this 
final rule.
    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.
    A proposed rule concerning this action was published in the Federal 
Register on September 23, 2019 (84 PR 49682). Copies of the proposed 
rule were provided to all Washington sweet cherry handlers. The 
proposal was also made available through the internet by USDA and the 
Office of the Federal Register. A 30-day comment period ending October 
23, 2019, was provided for interested persons to respond to the 
proposal. No comments were received. Accordingly, no changes will be 
made to the rule as proposed.
    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.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule will tend to 
effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 923

    Marketing agreements, Fruits, Reporting and recordkeeping 
requirements, Cherries.


[[Page 65265]]


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

PART 923--MARKETING ORDER REGULATING THE HANDLING OF SWEET CHERRIES 
GROWN IN DESIGNATED COUNTIES IN WASHINGTON

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


0
 2. Revise 923.236 to read as follows:


Sec.  923.263  Assessment rate.

    On and after April 1, 2019, an assessment rate of $0.20 per ton is 
established for the Washington Cherry Marketing Committee.

    Dated: November 21, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2019-25650 Filed 11-26-19; 8:45 am]
BILLING CODE 3410-02-P