[Federal Register Volume 85, Number 224 (Thursday, November 19, 2020)]
[Rules and Regulations]
[Pages 73599-73601]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-24910]



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 Rules and Regulations
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  Federal Register / Vol. 85, No. 224 / Thursday, November 19, 2020 / 
Rules and Regulations  

[[Page 73599]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Doc. No. AMS-SC-20-0036; SC20-930-3 FR]


Tart Cherries Grown in the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington and Wisconsin; Changes to 
Subcommittee Size and Addition of Term Limits

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation from the Cherry Industry 
Administrative Board (Board) to change subcommittee size and add term 
limits under the marketing order for tart cherries grown in the States 
of Michigan, New York, Pennsylvania, Oregon, Utah, Washington and 
Wisconsin.

DATES: Effective December 21, 2020.

FOR FURTHER INFORMATION CONTACT: Jennie M. Varela, Senior 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 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 rule is issued under Marketing Agreement and Order 
No. 930, as amended (7 CFR part 930), regulating the handling of tart 
cherries grown in the states of Michigan, New York, Pennsylvania, 
Oregon, Utah, Washington and Wisconsin. Part 930 (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 Board locally administers the Order and is comprised of 
producers and handlers of tart cherries operating within the production 
area, and a public member.
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 13563 and 13175. This action falls 
within a category of regulatory actions 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 the 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' '' (February 2, 2017).
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect.
    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 marketing 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. A 
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 rule changes subcommittee size and adds term limits to 
subcommittee appointments under the Order. This action modifies the 
composition of the subcommittee which reviews exemption requests by 
increasing the subcommittee from three members and an alternate to a 
maximum of five members with no alternate. This rule also adds a five-
year term limit to these appointments. This should provide more 
opportunities for participation and additional flexibility in staffing 
the subcommittee. The Board unanimously recommended this change at its 
March 19, 2020, meeting.
    Section 930.31 of the Order authorizes the Board to have committees 
and subcommittees as may be necessary. Section 930.59 authorizes 
handler diversion of tart cherries from the reserve for specific uses 
including, but not limited to, new product and new market development. 
Section 930.62 authorizes the Board, with approval of the Secretary, to 
exempt cherries from the assessment, volume regulation, and reserve 
provisions of the Order for specified uses. Both sections authorize the 
Board, with the approval of the Secretary, to establish requirements 
necessary and incidental to the administration of the Order.
    Section 930.159 of the Order's administrative requirements 
specifies methods of handler diversion, including using cherries or 
cherry products for exempt purposes prescribed under Sec.  930.162. 
Section 930.162, in part, establishes a Board appointed subcommittee, 
as authorized under Sec.  930.31 stated above, to assist the Board 
staff in reviewing the applications for exemptions. The changes will 
impact this subcommittee.
    In seasons with volume regulation, handlers can sell cherries for 
exempt uses, including new products and new markets, and receive 
diversion credit rather than keeping that tonnage in reserve. The Board 
established the review subcommittee to review and grant exemption 
requests that have the potential to expand new markets. The 
subcommittee works with Board staff to carry out these tasks. Prior to 
this action, this subcommittee consisted of three members and one 
alternate, each having no handler affiliation but knowledge of the tart 
cherry industry. Section 930.162 further specifies that one of the 
members or the alternate should be the Board's public member or

[[Page 73600]]

the Board's public member alternate, if either are available to serve. 
This rule increases the size of the subcommittee and includes term 
limits for all subcommittee appointments. The current requirement 
regarding the service of the Board's public member or their alternate 
continues to remain in effect.
    The Board formed a New Product New Market Committee (Committee) to 
examine the current regulations regarding the subcommittee responsible 
for reviewing applications for exemption or the renewal of exemption. 
The formation and tasking of this Committee was largely the result of 
growing Board member perceptions that the exemption process was not 
fully understood or utilized by industry. The Committee reviewed the 
process for selecting subcommittee members, assessed subcommittee 
operations, and identified improvement opportunities.
    During Board meetings in January and March 2020, the Committee 
outlined some of the challenges associated with the subcommittee, 
including subcommittee participation. The Committee stated the 
requirements, which stipulate the subcommittee shall consist of three 
members and one alternate, were limiting. The Committee did not 
recommend any changes to existing qualification requirements to serve 
on the subcommittee. Any subcommittee meeting and quorum requirements 
would be addressed in the Board's bylaws.
    The Committee recommended expanding the size of the subcommittee to 
five members without mandating a set number of members required to 
conduct business. The Committee noted this adjustment would provide 
some flexibility in staffing the subcommittee while allowing the 
subcommittee to fulfill its responsibility to review and grant 
exemptions.
    The Committee also recommended the inclusion of five-year term 
limits for all subcommittee appointments as this would help balance 
preserving subcommittee institutional knowledge with the need to 
include new participants and perspectives in the exemption review 
process. One Committee member also noted a fixed term may encourage 
more qualified people to pursue subcommittee participation because they 
would know their commitment to the Board would not be open-ended. The 
Committee also believed establishing a regular schedule of appointments 
through term limits should lead to increased awareness of when 
participation opportunities would be coming available.
    In discussing the Committee's suggested changes, the Board was 
supportive of the recommendations to increase the number of seats on 
the subcommittee and to establish term limits for subcommittee 
participants. In reviewing the increase in the size of the 
subcommittee, the Board did not recommend a specific quorum requirement 
for the subcommittee to meet. However, the Board believes the 
additional subcommittee members would provide more candidates to draw 
from when scheduling subcommittee meetings and would help ensure some 
members were in attendance for each scheduled subcommittee meeting. The 
Board also agreed increasing the number of seats on the subcommittee 
would provide the opportunity for more participation. The Board 
concluded no changes should be made to the existing requirement that 
the public member or alternate public member, when available, serve on 
the subcommittee, but did decide removing the requirement for an 
alternate subcommittee member would simplify the structure of the 
subcommittee.
    The Board was also supportive of establishing term limits for 
subcommittee members. Members agreed having term limits would increase 
opportunities for others to serve on the subcommittee, and qualified 
candidates may be more willing to participate if there is a fixed term.
    Accordingly, the Board unanimously voted to increase the size of 
the subcommittee to a maximum of five total members with a five-year 
term limit for all appointments to the subcommittee. The Board believes 
the changes will not only improve operational flexibility and 
administration of the subcommittee but encourage greater industry and 
small business participation on the subcommittee and in new product and 
new market projects.

Final 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 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 400 producers of tart cherries in the 
production area and 40 handlers subject to regulation under the Order. 
Small agricultural producers are defined by the Small Business 
Administration (SBA) as those having annual receipts less than 
$1,000,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $30,000,000 (13 CFR 121.201).
    According to the National Agricultural Statistics Service and Board 
data, the average annual price for tart cherries during the 2018-19 
season was approximately $0.196 per pound. With total utilization at 
288.8 million pounds for the 2018-2019 season, the total 2018-2019 
value of the crop utilized for processing is estimated at $56.6 
million. Dividing the crop value by the estimated number of producers 
(400) yields an estimated average receipt per producer of $141,500. 
This is well below the SBA threshold for small producers. A free on 
board (FOB) price of $0.80 per pound for frozen tart cherries was 
reported by the Food Institute during the 2018-2019 season. Based on 
utilization, this price represents a good estimate of the price for 
processed cherries. Multiplying the FOB price by total utilization of 
288.8 million pounds results in an estimated handler-level tart cherry 
value of $231 million. Dividing this figure by the number of handlers 
(40) yields estimated annual handler receipts of $5.8 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 rule will increase the size of the subcommittee and add term 
limits to subcommittee appointments under Sec.  930.162. This action 
modifies the composition of the subcommittee which reviews exemption 
requests from three members and an alternate to a maximum of five 
members with no alternate. This rule also adds a five-year term limit 
to these appointments. This will provide more opportunities for 
participation and additional flexibility in staffing the subcommittee. 
The authority for these actions is provided in Sec. Sec.  930.31, 
930.59 and 930.62. These changes were unanimously recommended by the 
Board at its meeting on March 19, 2020.
    It is not anticipated that this action will impose any additional 
costs on growers or handlers. This change is administrative in nature, 
does not increase reporting requirements, and

[[Page 73601]]

will provide the Board with improved flexibility in staffing the 
subcommittee.
    This action will have a beneficial impact as it will encourage 
greater industry and small business participation in applying for 
diversion credit for new product and new market projects under Sec.  
930.162, and expanding the market for tart cherries. The subcommittee 
performs the function of reviewing and granting exemption requests that 
have the potential to expand these markets. Increasing the maximum size 
of the subcommittee without mandating that all seats be filled allows 
for more flexibility in conducting subcommittee business. The Board 
also believes the additional members will provide more candidates to 
draw from when scheduling subcommittee meetings and help ensure some 
members are in attendance for each scheduled meeting. Adding a five-
year term limit to subcommittee membership helps maintain subcommittee 
institutional knowledge while ensuring the inclusion of the perspective 
and insight from new participants.
    This rule is expected to benefit the industry. The effects of this 
rule are not expected to be disproportionately greater or lesser for 
small handlers or producers than for larger entities.
    The Board considered one alternative to this change. The Board 
considered making no changes either to the structure of the 
subcommittee or the lack of term limits for serving thereon. However, 
when discussing the alternative, Board members assessed that increasing 
the subcommittee size and the inclusion of term limits would not only 
increase the likelihood of subcommittee participation, but also promote 
increased industry confidence and trust in the subcommittee's 
composition and function. Therefore, the alternative was rejected.
    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 action. Should any 
changes become necessary, they would be submitted to OMB for approval.
    This final rule will not impose any 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. USDA has not 
identified any relevant Federal rules that duplicate, overlap or 
conflict with this final rule. Further, the public comment received 
concerning the proposal did not address the initial regulatory 
flexibility analysis.
    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.
    The Board's meeting was widely publicized throughout the tart 
cherry industry. All interested persons were invited to attend the 
meeting and participate in Board deliberations on all issues. Like all 
Board meetings, the March 19, 2020, meeting was a public meeting, and 
all entities, both large and small, were able to express views on this 
issue.
    A proposed rule concerning this action was published in the Federal 
Register on July 24, 2020 (85 FR 44792). Copies of the proposed rule 
were also mailed or sent via email to all tart cherry handlers. The 
proposal was made available through the internet by USDA and the Office 
of the Federal Register. A 30-day comment period ending August 24, 
2020, was provided for interested persons to respond to the proposal.
    One comment was received in response to the proposal. However, this 
comment did not address the merits of the proposal. Accordingly, no 
changes will be made to the rule as proposed, based on the comments 
received.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
https://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 Board 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 930

    Marketing agreements, Reporting and recordkeeping requirements, 
Tart Cherries.

    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. Amend Sec.  930.162 by revising paragraph (d) to read as follows:


Sec.  930.162  Exemptions.

* * * * *
    (d) Review of applications. A Board appointed subcommittee shall 
review applications for exemption or renewal of exemption and either 
approve or deny the exemption. The subcommittee shall consist of up to 
five total members, each having no handler affiliation but knowledge of 
the tart cherry industry, one of whom shall be the public member or the 
alternate public member if available to serve. Each subcommittee 
appointment shall be limited to a five-year term. Any denial of an 
application for exemption or renewal of an existing exemption shall be 
served on the applicant by certified mail and shall state the reasons 
for the denial. Within 10 days after the receipt of a denial, the 
applicant may file an appeal, in writing, with the Deputy 
Administrator, Specialty Crops Program, supported by any arguments and 
evidence the applicant may wish to offer as to why the application for 
exemption or renewal of exemption should have been approved. The Deputy 
Administrator, upon consideration of such appeal, will take such action 
as deemed appropriate with respect to the application for exemption or 
renewal of exemption.
* * * * *

Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-24910 Filed 11-18-20; 8:45 am]
BILLING CODE 3410-02-P