[Federal Register Volume 88, Number 37 (Friday, February 24, 2023)]
[Proposed Rules]
[Pages 11822-11825]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03751]


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 Proposed Rules
                                                 Federal Register
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 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.
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  Federal Register / Vol. 88, No. 37 / Friday, February 24, 2023 / 
Proposed Rules  

[[Page 11822]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Doc. No. AMS-SC-22-0068]


Tart Cherries Grown in the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington, and Wisconsin; Assessment Rate 
Increase

AGENCY: Agricultural Marketing Service, Department of Agriculture 
(USDA).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Cherry Industry Administrative Board (Board) to increase the assessment 
rate established for the 2022-23 and subsequent fiscal periods. The 
proposed assessment rate would remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Comments must be received by March 27, 2023.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments may be sent to the Docket 
Clerk, Market Development Division, Specialty Crops Program, AMS, USDA, 
1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237. 
Comments may also be submitted to the Docket Clerk electronically by 
Email: [email protected] or via the internet at: https://www.regulations.gov. Comments should reference the document number and 
the date and page number of this issue of the Federal Register. 
Comments submitted in response to this proposed rule will be included 
in the record and will be made available to the public and can be 
viewed at: https://www.regulations.gov. 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.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments can be sent to the Docket 
Clerk, Market Development Division, Specialty Crops Program, AMS, USDA, 
1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237. 
Comments can also be submitted to the Docket Clerk electronically by 
Email: [email protected] or via the internet at: https://www.regulations.gov. Comments should reference the document number and 
the date and page number of this issue of the Federal Register and can 
be viewed at: https://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: 
    Delaney Fuhrmeister, Marketing Specialist, or Christian D. Nissen, 
Branch Chief, Southeast Region Branch, Market Development 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, Market Development 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, 
proposes to amend regulations issued to carry out a marketing order as 
defined in 7 CFR 900.2(j). This proposed rule is issued under Marketing 
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 area of 
production, and a public member.
    The Agricultural Marketing Service (AMS) is issuing this proposed 
rule in conformance with Executive Orders 12866 and 13563. Executive 
Orders 12866 and 13563 direct agencies to assess all costs and benefits 
of available regulatory alternatives and, if regulation is necessary, 
to select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
distributive impacts, and equity). Executive Order 13563 emphasizes the 
importance of quantifying both costs and benefits, reducing costs, 
harmonizing rules, and promoting flexibility. This action falls within 
a category of regulatory actions that the Office of Management and 
Budget (OMB) exempted from Executive Order 12866 review.
    This proposed rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which 
requires agencies to consider whether their rulemaking actions would 
have tribal implications. AMS has determined that this proposed rule is 
unlikely to have substantial direct effects on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian tribes.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the 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 
for the 2022-23 crop year, 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

[[Page 11823]]

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 2022-
23 and subsequent fiscal periods from $0.00575 to $0.0075 per pound of 
tart cherries. This change would also increase the portion of the 
assessment rate allocated to research and promotion from $0.00275 to 
$0.0055 per pound and would decrease the portion allocated to 
administrative expenses from $0.003 to $0.002 per pound.
    The Order authorizes the Board, with the approval of AMS, to 
formulate an annual budget of expenses and collect assessments from 
handlers to administer the program. The members of the Board are 
familiar with the Board's needs and with the costs for 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, and all directly affected persons have an opportunity 
to participate and provide input.
    For the 2020-21 and subsequent fiscal periods, the Board 
recommended, and AMS approved, an assessment rate that would continue 
in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by AMS upon recommendation and information 
submitted by the Board or other information available to AMS.
    The Board met on September 8, 2022, and unanimously recommended 
2022-23 expenditures of $1,667,000 and an assessment rate of $0.0075 
per pound, divided into $0.0055 for research and promotion program and 
$0.002 for administrative expenses. In comparison, last year's budgeted 
expenditures were $1,086,500. The assessment rate of $0.0075 is 
$0.00175 higher than the rate currently in effect.
    The Board recommended increasing the assessment rate to allow for 
more spending on health benefit research, increased spending on 
promotion, and to add funds to Board reserves, which have been depleted 
due to reduced production in previous seasons. The production during 
the 2022-23 fiscal period was 242,352,172 million pounds, an increase 
from the 172,354,783 million pounds produced the previous year. 
However, at the current assessment rate, assessment income would equal 
$1,393,525, which does not meet the Board's anticipated expenditures of 
$1,667,000. By increasing the assessment rate by $0.00175, assessment 
income would be $1,817,641. This amount along with reserve funds and 
interest income should provide sufficient funds to meet 2022-23 
anticipated expenses.
    Major expenditures recommended by the Board for the 2022-23 year 
include $850,000 for promotion, $250,000 for health benefits research, 
and $200,000 for salaries. Budgeted expenses for these items in 2021-22 
were $600,000, $0, and $258,000, respectively.
    The assessment rate recommended by the Board was derived by 
reviewing anticipated expenses, production of tart cherries, and the 
level of funds in reserve. The 2022-23 crop produced 242,352,172 pounds 
of tart cherries, which should provide $1,817,641 in assessment income 
(242,352,172 pounds multiplied by $0.0075). However, the Board 
anticipates that due to approved exemptions and loss adjustments the 
actual income from assessments will be closer to $1,784,641. Income 
derived from handler assessments at the proposed rate, along with 
reserve funds and interest income, would be adequate to cover budgeted 
expenses. Funds in the reserve (currently about $262,732) are expected 
to be kept within the maximum permitted by the Order (approximately one 
fiscal period's expenses as authorized in Sec.  930.42).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by AMS 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. Dates and times of Board 
meetings are available from the Board or AMS. Board meetings are open 
to the public and interested persons may express their views at these 
meetings. AMS evaluates Board recommendations and other available 
information to determine whether modification of the assessment rate is 
needed, and further rulemaking would be undertaken as necessary. The 
Board's 2022-23 budget and those for subsequent fiscal periods would be 
reviewed and, as appropriate, approved by AMS.
    After consideration of all relevant material presented, including 
the information and recommendations submitted by the Board and other 
available information, AMS has determined that this proposed rule is 
consistent with and would effectuate the purposes of the Act.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA)(5 U.S.C. 601-612), 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 approximately 400 tart cherry growers in the production 
area and approximately 40 handlers subject to regulation under the 
Order. The Small Business Administration (SBA) standard for small 
agricultural producers applicable to tart cherries is annual receipts 
of less than $3,000,000 (Other Noncitrus Fruit Farming, NAICS 111339). 
Small agricultural service firms are defined as those having annual 
receipts of less than $30,000,000 (13 CFR 121.201).
    The National Agricultural Statistics Service (NASS) reported that 
the 2021-22 value of the tart cherry crop for processed utilization was 
approximately $83 million. Production utilized for processing was 171.0 
million pounds and the season average grower price for processed tart 
cherries was $0.485 per pound. Dividing the crop value by the estimated 
number of producers (400) yields an estimated average annual receipts 
per producer of $207,500 ($83 million divided by 400 producers). This 
is well below the SBA threshold for small producers.
    An estimate of the season average price per pound received by 
handlers for processed tart cherries was derived from AMS's purchases 
of dried tart cherries for feeding programs in the 2021-2022 season at 
an average price of $4.70 per pound. The dried cherry price was 
converted to a raw product equivalent price of $0.94 per pound at an 
industry recognized ratio of five to one. Multiplying this price by 
2021 total processed utilization of 171.0 million pounds results in an 
estimated handler-level tart cherry value of $160.7 million. Dividing 
this figure by the number of handlers ($160.7 million divided by 40 
handlers) yields estimated average

[[Page 11824]]

annual receipts per handler of approximately $4 million, which is well 
below the SBA threshold of $30 million 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 assessment rate established for 
the Board and collected from handlers for the 2022-23 and subsequent 
fiscal periods from $0.00575 to $0.0075 per pound of tart cherries. 
This change would also increase the portion of the assessment rate 
allocated to research and promotion from $0.00275 to $0.0055 per pound 
and would decrease the portion allocated to administrative expenses 
from $0.003 to $0.002 per pound. The Board unanimously recommended 
2022-23 expenditures of $1,667,000 and the assessment rate of $0.0075 
per pound. The proposed assessment rate of $0.0075 is $0.00175 higher 
than the previous rate. The 2022-23 crop produced 242,352,172 pounds of 
tart cherries, which should provide $1,817,641 in assessment income 
(242,352,172 pounds multiplied by $0.0075). However, the Board 
anticipates that due to approved exemptions and loss adjustments the 
actual income from assessments will be closer to $1,784,641. Income 
derived from handler assessments and funds from the Board's authorized 
reserve, would be adequate to cover budgeted expenses.
    Major expenditures recommended by the Board for the 2022-23 year 
include $850,000 for promotion, $250,000 for health benefits research, 
and $200,000 for salaries. Budgeted expenses for these items in 2021-22 
were $600,000, $0, and $258,000, respectively.
    The Board voted to increase the assessment rate to allow for more 
spending on health benefit research, increased spending on promotion, 
and to add funds to Board reserves, which have been depleted due to 
reduced production in previous seasons. At the current assessment rate 
of $0.00575 and with the 2022-23 crop production at 242,352,172 million 
pounds, assessment income would equal $1,393,525 ($0.00575 multiplied 
by 242,352,172), an amount insufficient to cover the Committee's 
anticipated expenditures of $1,667,000. By increasing the assessment 
rate by $0.00175, assessment income would be approximately $1,817,641 
($0.0075 multiplied by 242,352,172). This amount, along with interest 
income, and funds from the reserve, should provide sufficient funds to 
meet 2022-23 anticipated expenses.
    Prior to arriving at this budget and assessment rate, the Board 
considered the level of production, projected expenditures, and the 
amount in the authorized reserve. The Board discussed alternatives, 
including maintaining the current assessment rate of $0.00575. However, 
leaving the assessment unchanged would not generate sufficient revenue 
to meet Board expenses for the 2022-23 fiscal period. Consequently, the 
Board determined that the assessment rate should be increased to 
$0.0075 per pound to generate sufficient revenue to meet expenses. 
Therefore, the Committee rejected the idea of maintaining the current 
assessment rate.
    A review of historical information and preliminary information 
pertaining to the upcoming season indicates the producer price for the 
2022-23 season should be approximately $0.23 per pound of tart 
cherries. The proposed assessment rate of $0.0075 per pound represents 
3.26 percent of the $0.23 revenue for the 2021-22 fiscal period as a 
percentage of total producer revenue ($0.0075 divided by $0.23 
multiplied by 100).
    This proposed rule would increase the assessment obligation imposed 
on handlers. While assessments impose additional costs on handlers, the 
costs are minimal and uniform on all handlers, and some of the costs 
may be passed on to growers. However, these costs are expected to be 
offset by the benefits derived by the operation of the Order.
    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, the September 8, 2022, meeting was a public meeting and 
all entities, both large and small, were able to express views on this 
issue. 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 OMB and assigned OMB No. 0581-0177, Tart 
Cherries Grown in Michigan, New York, Pennsylvania, Oregon, Utah, 
Washington, and Wisconsin. No changes in those requirements would be 
necessary because of this proposed rule. If 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 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.
    AMS has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this proposed rule.
    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.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. All written comments timely received 
will be considered before a final determination is made on this matter.

List of Subjects in 7 CFR Part 930

    Cherries, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service proposes to amend 7 CFR part 930 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, 2022, 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 $0.0055 per pound of tart cherries to cover 
the cost of the research and promotion program and $0.002 per

[[Page 11825]]

pound of tart cherries to cover administrative expenses.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-03751 Filed 2-23-23; 8:45 am]
BILLING CODE P