[Federal Register Volume 64, Number 143 (Tuesday, July 27, 1999)]
[Rules and Regulations]
[Pages 40511-40514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19062]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 930
[Docket No. FV99-930-3 IFR]
Tart Cherries Grown in the States of Michigan, et al.; Decreased
Assessment Rates
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule decreases the assessment rate for cherries that are
utilized in the production of tart cherry products other than juice,
juice concentrate, or puree from $0.0025 to $0.00225 per pound. It also
decreases the assessment rate for cherries utilized for juice, juice
concentrate, or puree from $0.00125 to $0.001125 per pound. Both
assessment rates are established for the Cherry Industry Administrative
Board (Board) under Marketing Order No. 930 for the 1999-2000 and
subsequent fiscal periods. The Board is responsible for local
administration of the marketing order which regulates the handling of
tart cherries grown in the production area. Authorization to assess
tart cherry handlers enables the Board to incur expenses that are
reasonable and necessary to administer the program. The fiscal period
begins July 1 and ends June 30. The assessment rates will remain in
effect indefinitely unless modified, suspended, or terminated.
DATES: Effective July 28, 1999. Comments received by September 27,
1999, will be considered prior to issuance of a final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk, Fruit
and Vegetable Programs, AMS, USDA, room 2525-S, PO Box 96456,
Washington, DC 20090-6456; Fax: (202) 720-5698; or E-mail:
moab.docketclerk@usda.gov. Comments should reference the docket 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.
FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella or Kenneth G.
Johnson, Marketing Order Administration Branch, Fruit and Vegetable
Programs, AMS, USDA, room 2530-S, PO Box 96456, Washington, DC 20090-
6456, telephone: (202) 720-2491; or George Kelhart, Technical Advisor,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, room 2525-S, PO Box 96456, Washington, DC 20090-6456;
telephone: (202) 720-2491, Fax: (202) 720-5698. Small businesses may
request information on complying with this regulation, or obtain a
guide on complying with fruit, vegetable, and specialty crop marketing
agreements and orders by contacting Jay Guerber, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, PO Box
96456, room 2525-S, Washington, DC 20090-6456; telephone (202) 720-
2491; Fax: (202) 720-5698, or E-mail: Jay.Guerber@usda.gov. You may
also view the marketing agreement and order small business compliance
guide at the following web site: http://www.ams.usda.gov/fv/moab.html.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 930 (7 CFR part 930), regulating the handling
of tart cherries grown in the States of Michigan, New York,
Pennsylvania, Oregon, Utah, Washington, and Wisconsin, hereinafter
referred to as the ``order.'' The marketing agreement and order are
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 (Department) is issuing this rule in
conformance with Executive Order 12866.
This 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 rates
as issued herein will be applicable to all assessable tart cherries
beginning July 1, 1999, and continue until amended, suspended, or
terminated. This rule will not preempt any State or local laws,
regulations, or policies, unless they present an irreconcilable
conflict with this rule.
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 the Secretary 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 the Secretary would rule on the
petition. The Act provides that the
[[Page 40512]]
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 the Secretary'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 decreases the assessment rate established for the Board
for the 1999-2000 and subsequent fiscal periods for cherries that are
utilized in the production of tart cherry products other than juice,
juice concentrate, or puree from $0.0025 to $0.00225 per pound of
cherries. The assessment rate for cherries utilized for juice, juice
concentrate, or puree is decreased from $0.00125 to $0.001125 per
pound.
The tart cherry marketing order provides authority for the Board,
with the approval of the Department, 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. They are familiar with the Board'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 rates. The assessment
rates are formulated and discussed in a public meeting. Thus, all
directly affected persons have an opportunity to participate and
provide input.
For the 1997-98 fiscal period, the Board recommended, and the
Department approved, assessment rates that would continue in effect
from fiscal period to fiscal period unless modified, suspended or
terminated by the Secretary upon recommendation and information
submitted by the Board or other information available to the Secretary.
The Board met on March 18-19, 1999, and unanimously recommended
1999-2000 expenditures of $487,780 and an assessment rate of $0.00225
per pound for cherries that are utilized in the production of tart
cherry products other than juice, juice concentrate, or puree, and an
assessment rate of $0.001125 per pound for cherries utilized for juice,
juice concentrate, or puree. In comparison, last year's budgeted
expenditures were $540,000. Decreased assessment rates have been
recommended by the Board because the cherry industry has experienced
record high crops for the past two seasons, and anticipates another
large crop in 1999-2000. In addition, the Board wants to reduce handler
costs and keep its monetary reserve within the authorized maximum of
approximately one year's operational expenses specified in
Sec. 930.42(a). The decreased rates are expected to generate enough
income to meet the Board's reduced operating expenses in 1999-2000.
The major expenditures recommended by the Board for the 1999-2000
fiscal period include $222,780 for personnel, $100,000 for Board
meetings, and $100,000 for compliance. Budgeted expenses for these
items in 1998-99 were $150,000 for personnel, $80,000 for Board
meetings, and $175,000 for compliance.
The order provides that when an assessment rate based on the number
of pounds of tart cherries handled is established, it should provide
for differences in relative market values for various cherry products.
The discussion of this provision in the order's promulgation record
indicates that proponents testified that cherries utilized in high
value products such as frozen, canned, or dried cherries should be
assessed one rate while cherries used to make low value products such
as juice concentrate or puree should be assessed at one-half that rate.
Data from the National Agricultural Statistics Service (NASS)
states that for 1998, tart cherry utilization for juice, wine, or
brined uses was 28.3 million pounds for all districts covered under the
order. The total processed amount of tart cherries for 1998 was 303.8
million pounds. Juice, wine, and brined tart cherries represented less
than 10 percent of the total processed crop, and about 8 percent over
the last three seasons (1996 through 1998).
In deriving the recommended assessment rates, the Board estimated
assessable tart cherry production for the crop year at 260 million
pounds. It further estimated that about 204.5 million pounds of the
assessable poundage would be utilized in the production of high-valued
products, like frozen, canned, or dried cherries, and that about 55.5
million pounds would be utilized in the production of low-valued
products, like juice, juice concentrate, or puree. Potential assessment
income from the high valued products would be approximately $460,125
(204.5 million pounds x $0.00225 per pound). The potential income
from tart cherries utilized for juice, juice concentrate, or puree
would be $62,500 (55.5 million pounds x $0.001125 per pound).
Therefore, total assessment income for 1999-2000 is estimated at
$522,625, which will be adequate to cover budgeted expenses. Funds in
the reserve (currently $225,000) will be kept within the approximately
one year's operational expenses permitted by the order
(Sec. 930.42(a)).
The assessment rates established in this rule will continue in
effect indefinitely unless modified, suspended, or terminated by the
Secretary upon recommendation and information submitted by the Board or
other available information.
Although the assessment rates are effective for an indefinite
period, the Board 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 rates. The dates and times of Board
meetings are available from the Board or the Department. Board meetings
are open to the public and interested persons may express their views
at these meetings. The Department will evaluate Board recommendations
and other available information to determine whether modifications of
the assessment rates are needed. Further rulemaking will be undertaken
as necessary. The Board's 1999-2000 budget and those for subsequent
fiscal periods will be reviewed and, as appropriate, approved by the
Department.
The Regulatory Flexibility Act and Effects on Small Businesses
The Agricultural Marketing Service (AMS) has considered the
economic impact of this action on small entities and has prepared this
initial regulatory flexibility analysis. The Regulatory Flexibility Act
(RFA) allows AMS to certify that regulations do not have a significant
economic impact on a substantial number of small entities. However, as
a matter of general policy, AMS' Fruit and Vegetable Programs
(Programs) no longer opts for such certification, but rather performs
regulatory flexibility analyses for any rulemaking that would generate
the interest of a significant number of small entities. Performing such
analyses shifts the Programs' efforts from determining whether
regulatory flexibility analyses are required to the consideration of
regulatory options and economic or regulatory impacts.
The purpose of the RFA is to fit regulatory actions to the scale of
business 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. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 40 handlers of tart cherries who are
subject to regulation under the order and
[[Page 40513]]
approximately 900 producers of tart cherries in the regulated area. The
number of reported tart cherry producers in the regulated area has been
reduced from 1,220 to 900 based on more recent information received by
the Board. Small agricultural service firms have been defined by the
Small Business Administration (13 CFR 121.601) as those having annual
receipts less than $5,000,000, and small agricultural producers are
those whose annual receipts are less than $500,000. The majority of
tart cherry handlers and producers may be classified as small entities.
This rule decreases the assessment rate established for the Board
and collected from handlers for the 1999-2000 and subsequent fiscal
periods for cherries that are utilized in the production of tart cherry
products other than juice, juice concentrate, or puree from $0.0025 to
$0.00225 per pound, and the assessment rate for cherries utilized for
juice, juice concentrate, or puree from $0.00125 to $0.001125 per
pound. The Board unanimously recommended 1999-2000 expenditures of
$487,780 and the reduced assessment rates. The quantity of assessable
tart cherries expected to be produced during the 1999-2000 crop year is
estimated at 260 million pounds. Assessment income, based on this crop,
will be adequate to cover budgeted expenses.
The major expenditures recommended by the Board for the 1999-2000
fiscal period include $222,780 for personnel, $100,000 for Board
meetings, and $100,000 for compliance. Budgeted expenses for these
items in 1998-99 were $150,000 for personnel, $80,000 for Board
meetings, and $175,000 for compliance.
The Executive Committee of the Board, after discussing a proposed
budget and assessment rates in executive session, recommended the
continuation of the current rates. It concluded that it was prudent for
the Board to have approximately one year's budget amount in the
operating reserve.
However, after considerable discussion, the Board concluded it
should reduce handlers' assessment costs and that the reserve should
not exceed one-half year's budget amount. Also, the cherry industry has
experienced record large crops for the past two seasons, and
anticipates a large crop for the upcoming season. Further, the amount
budgeted for Board compliance costs has been reduced. The Board
discussed the alternative of continuing the existing assessment rates,
but concluded that would cause the amount in the operating reserve to
exceed what is actually needed.
After the discussion, the Board voted unanimously to decrease the
assessment rates. In deriving the recommended assessment rates, the
Board estimated assessable tart cherry production for the crop year at
260 million pounds. It further estimated that about 204.5 million
pounds of the assessable poundage would be utilized in the production
of high-valued products, like frozen, canned, or dried cherries, and
that about 55.5 million pounds would be utilized in the production of
low-valued products, like juice, juice concentrate, or puree. Potential
assessment income from the high valued products would be approximately
$460,125 (204.5 million pounds x $0.00225 per pound). The potential
income from the tart cherries utilized for juice, juice concentrate, or
puree would be $62,500 (55.5 million pounds x $0.001125 per pound).
Therefore, total assessment income for 1999-2000 is estimated at
$522,625, which will be adequate to cover budgeted expenses. Funds in
the reserve (currently $225,000) will be kept within the approximately
one year's operational expenses permitted by the order
(Sec. 930.42(a)).
This action decreases the assessment obligation imposed on
handlers. Assessments are applied uniformly on all handlers, and some
of the costs may be passed on to producers. However, the assessment
rate decreases reduce the burden on handlers, and may reduce the burden
on producers. In addition, 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 March 18-19, 1999, 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 information on the regulatory and informational impacts of this
action on small businesses.
This action imposes 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.
The Department has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this rule.
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, as
hereinafter set forth, will tend to effectuate the declared policy of
the Act.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect, and that good cause exists for not postponing the effective
date of this rule until 30 days after publication in the Federal
Register because: (1) The 1999-2000 fiscal period began on July 1,
1999, and the marketing order requires that the rates of assessment for
each fiscal period apply to all assessable tart cherries handled during
such fiscal period; (2) this action decreases the assessment rates for
assessable tart cherries beginning on July 1, 1999; (3) handlers are
aware of this action which was unanimously recommended by the Board at
a public meeting and is similar to other assessment rate actions issued
in past years; and (4) this interim final rule provides a 60-day
comment period, and all comments timely received will be considered
prior to finalization of this 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
amended as follows:
PART 930--TART CHERRIES GROWN IN THE STATES OF MICHIGAN, NEW YORK,
PENNSYLVANIA, OREGON, UTAH, WASHINGTON, AND WISCONSIN
1. The authority citation for 7 CFR part 930 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 930.200 is revised to read as follows:
Sec. 930.200 Handler assessment rates.
On and after July 1, 1999, the assessment rate imposed on handlers
shall be $0.00225 per pound for tart cherries grown in the production
area and utilized in the production of tart cherry products other than
juice, juice concentrate, or puree. The assessment rate for tart
cherries grown in the production area and utilized in the production of
juice, juice concentrate, or puree products shall be $0.001125 per
pound. The assessment due date shall be October 1 of each crop year.
[[Page 40514]]
Dated: July 21, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-19062 Filed 7-26-99; 8:45 am]
BILLING CODE 3410-02-U
