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.

Proposed Rules Federal Register

1724 

Vol. 75, No. 8 

Wednesday, January 13, 2010 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 930 

[Docket No. AO–370–A8; AMS–FV–06–0213; 

FV07–930–2] 

Tart Cherries Grown in the States of 

Michigan, New York, Pennsylvania, 

Oregon, Utah, Washington, and 

Wisconsin; Secretary’s Decision and 

Referendum Order on Proposed 

Amendment of Marketing Agreement 

and Order No. 930 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule and referendum 

order. 

SUMMARY: This decision proposes 

amendments to Marketing Agreement 

and Order No. 930 (order), which 

regulates the handling of tart cherries 

grown in Michigan, New York, 

Pennsylvania, Oregon, Utah, 

Washington, and Wisconsin, and 

provides growers and processors with 

the opportunity to vote in a referendum 

to determine if they favor the changes. 

Seven amendments were proposed by 

the Cherry Industry Administrative 

Board (Board), which is responsible for 

local administration of the order. These 

amendments would: Authorize 

changing the primary reserve capacity 

associated with the volume control 

provisions of the order; authorize 

establishment of a minimum inventory 

level at which all remaining product 

held in reserves would be released to 

handlers for use as free tonnage; 

establish an age limitation on product 

placed into reserves; revise the 

nomination and election process for 

handler members on the Board; revise 

Board membership affiliation 

requirements; and update order 

language to more accurately reflect 

grower and handler participation in the 

nomination and election process in 

districts with only one Board 

representative. In addition, the 

Agricultural Marketing Service (AMS) 

proposed to make any such changes as 

may be necessary to the order to 

conform to any amendment that may 

result from the hearing. 

A Board proposal to revise the voting 

requirements necessary to approve a 

Board action is not recommended for 

adoption. 

The amendments are designed to 

provide flexibility in administering the 

volume control provisions of the order 

and to update Board nomination, 

election, and membership requirements. 

The amendments are intended to 

improve the operation and 

administration of the order. 

DATES: The referendum will be 

conducted from February 1, 2010, 

through February 13, 2010. The 

representative period for the purpose of 

the referendum will be July 1, 2008 

through June 30, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Martin Engeler, Marketing Order 

Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, 2202 

Monterey Street, Suite 102–B, Fresno, 

California 93721; telephone: (559) 487– 

5110, Fax: (559) 487–5906; or Marc 

McFetridge, Marketing Order 

Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, 1400 

Independence Avenue, SW., Stop 0237, 

Washington, DC 20250–0237; telephone: 

(202) 720–1509, Fax: (202) 720–8938, or 

e-mail: Martin.Engeler@usda.gov or 

Marc.McFetridge@usda.gov. 

Small businesses may request 

information on this proceeding by 

contacting Jay Guerber, Marketing Order 

Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, 1400 

Independence Avenue, SW., Stop 0237, 

Washington, DC 20250–0237; 

Telephone: (202) 720–2491, Fax: (202) 

720–8938, e-mail: 

Jay.Guerber@usda.gov. 

SUPPLEMENTARY INFORMATION: Prior 

documents in this proceeding: Notice of 

Hearing issued on February 5, 2007, and 

published in the February 7, 2007, issue 

of the Federal Register (72 FR 5646), 

and a Recommended Decision issued on 

May 7, 2009 and published in the May 

12, 2009, issue of the Federal Register 

(74 FR 22112). 

This action is governed by the 

provisions of sections 556 and 557 of 

title 5 of the United States Code and is 

therefore excluded from the 

requirements of Executive Order 12866. 

Preliminary Statement 

The proposed amendments are based 

on the record of a public hearing held 

on February 21 and 22, 2007, in Grand 

Rapids, Michigan, and March 1 and 2, 

2007, in Provo, Utah, to consider such 

amendments to the order. The hearing 

was held pursuant to the provisions of 

the Agricultural Marketing Agreement 

Act of 1937, as amended (7 U.S.C. 601– 

674), hereinafter referred to as the ‘‘Act’’, 

and the applicable rules of practice and 

procedure governing the formulation of 

marketing agreements and orders (7 CFR 

Part 900). 

Notice of this hearing was published 

in the Federal Register on February 7, 

2007, and contained amendment 

proposals submitted by the Board. 

The amendments included in this 

decision would: 

1. Amend § 930.50 of the order to 

authorize changing the primary reserve 

capacity associated with the volume 

control provisions of the order. 

2. Amend § 930.54 of the order to 

authorize establishment of a minimum 

inventory level at which all remaining 

product held in reserves would be 

released to handlers for use as free 

tonnage. 

3. Amend § 930.55 to establish an age 

limitation on product placed into 

reserves. 

4. Amend § 930.23 to revise the 

nomination and election process for 

handler members on the Board, 

including revisions to conform this 

section to amendment of § 930.20 

regarding membership affiliation 

requirements. 

5. Amend § 930.20 to revise Board 

membership affiliation requirements. 

6. Amend § 930.23 to update order 

language to more accurately reflect 

grower and handler participation in the 

nomination and election process in 

Districts with only one Board 

representative. 

In addition to the proposed 

amendments to the order, AMS 

proposed to make any such additional 

changes as may be necessary to the 

order to conform to any amendments 

that may result from the hearing. To the 

extent necessary, conforming changes 

have been made to the amendments. 

A Board proposal to revise the voting 

requirements necessary to approve a 

Board action is not recommended for 

adoption. 

Upon the basis of evidence 

introduced at the hearing and the record 


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thereof, the Administrator of AMS on 

May 7, 2009, filed a Recommended 

Decision and Opportunity to File 

Written Exceptions thereto by June 11, 

2009. 

Six exceptions were filed during the 

period provided. Five of the exceptions 

were filed by growers and processors of 

tart cherries, and one was filed on 

behalf of the Board. All of the 

exceptions expressed concern about 

Material Issue Number 6 regarding 

membership affiliation requirements. 

Five of the exceptions raised specific 

concerns with the changes AMS made 

in the Recommended Decision to the 

industry’s proposed amendment under 

Material Issue Number 5 regarding the 

nomination and election process of 

Board members, and its application in 

conjunction with Material Issue Number 

6. Two of the exceptions addressed 

Material Issue Number 4 regarding the 

proposal to change Board voting 

requirements. One exception addressed 

Material Issue Number 1 concerning 

changing the reserve capacity through 

informal rulemaking, Material Issue 

Number 2 concerning establishment of a 

minimum inventory level at which 

reserve product would be released to 

handlers as free tonnage, and Material 

Issue Number 3 concerning placing an 

age limitation on reserve products. The 

specific issues raised in these 

exceptions are discussed in the Findings 

and Conclusions; Discussions of 

Exceptions section of this document. 

Small Business Considerations 

Pursuant to the requirements set forth 

in the Regulatory Flexibility Act (RFA), 

AMS has considered the economic 

impact of this action 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 

business subject to such actions so that 

small businesses will not be unduly or 

disproportionately burdened. Marketing 

orders and amendments thereto are 

unique in that they are normally 

brought about through group action of 

essentially small entities for their own 

benefit. 

Small agricultural producers have 

been defined by the Small Business 

Administration (SBA) (13 CFR 121.201) 

as those having annual receipts of less 

than $750,000. Small agricultural 

service firms, which include handlers 

regulated under the order, are defined as 

those with annual receipts of less than 

$7,000,000. 

There are approximately 40 handlers 

and processors of tart cherries subject to 

regulation under the order and 

approximately 900 producers of tart 

cherries in the regulated area. A 

majority of the producers, processors, 

and handlers are considered small 

entities according to the SBA’s 

definition. 

The geographic region regulated 

under the order covers the States of 

Michigan, New York, Oregon, 

Pennsylvania, Utah, Washington, and 

Wisconsin. Acreage devoted to tart 

cherry production in the regulated area 

has declined in recent years. According 

to data presented at the hearing, bearing 

acreage in 1987–88 totaled 50,050 acres; 

by 2006–2007 it had declined to 37,200 

acres. Michigan accounts for 74 percent 

of total U.S. bearing acreage with 27,700 

bearing acres. Utah is second, with a 

reported 2,800 acres, or approximately 

eight percent of the total. The remaining 

States’ acreage ranges from 700 to 2,000 

acres. 

Production of tart cherries can 

fluctuate widely from year to year. The 

magnitude of these fluctuations is one of 

the most pronounced for any 

agricultural commodity in the United 

States, and is due in large part to 

weather related conditions during the 

bloom and growing seasons. This 

fluctuation in supplies presents a 

marketing challenge for the tart cherry 

industry because demand for the 

product is relatively static. In addition, 

the demand for tart cherries is inelastic, 

which means a change in the supply has 

a proportionately larger change in the 

price level. 

Authorities under the order include 

volume regulation, promotion and 

research, and grade and quality 

standards. Volume regulation is used 

under the order to augment supplies 

during short supply years with product 

placed in reserves during large supply 

years. This practice is intended to 

reduce the annual fluctuations in 

supplies and corresponding fluctuations 

in prices. 

The Board is comprised of 

representatives from all producing areas 

based on the volume of cherries 

produced in those areas. The Board 

consists of a mix of handler and grower 

members, and a member that represents 

the public. Board meetings where 

regulatory recommendations and other 

decisions are made are open to the 

public. All members are able to 

participate in Board deliberations, and 

each Board member has an equal vote. 

Others in attendance at meetings are 

also allowed to express their views. 

The Board appointed a subcommittee 

to consider amendments to the 

marketing order. The subcommittee met 

several times for this purpose, and 

ultimately recommended several 

amendments to the order. The Board 

subsequently requested that USDA 

conduct a hearing to consider the 

proposed amendments. The views of all 

participants were considered 

throughout this process. 

In addition, the hearing to receive 

evidence on the proposed amendments 

was open to the public and all 

interested parties were invited and 

encouraged to participate and express 

their views. 

The proposed amendments are 

intended to provide additional 

flexibility in administering the volume 

control provisions of the order, and to 

update Board nomination, election, and 

membership requirements. The 

amendments are intended to improve 

the operation and administration of the 

order. Record evidence indicates the 

proposals are intended to benefit all 

producers and handlers under the order, 

regardless of size. 

Amendment 1—Adding the Authority 

To Change the Primary Reserve 

Capacity 

This amendment would revise 

§ 930.50 of the order to authorize 

changing the primary reserve capacity 

associated with the volume provisions 

of the order through informal 

rulemaking. Changing the reserve 

capacity currently requires amendment 

of the order through the formal 

rulemaking process. 

The order establishes a fixed quantity 

of 50-million pounds of tart cherries and 

tart cherry products that can be held in 

the primary reserve. Any reserve 

product in excess of the 50-millionpound limitation must be placed in the 

secondary reserve. 

Free tonnage product can be sold to 

any market outlet, but most shipments 

are sold domestically, which is 

considered the primary market. Reserve 

product can be used only in specific 

outlets which are considered secondary 

markets. These secondary markets 

include development of export markets, 

new product development, new 

markets, and government purchases. 

When the order was promulgated, a 

50-million-pound limitation was placed 

on the capacity of the primary reserve. 

Proponents of the current order 

proposed a limitation on the quantity of 

product that could be placed into the 

primary reserve. That limitation was 

incorporated into the order, and can 

only be changed through the formal 

rulemaking process. 

Economic data presented when the 

order was promulgated indicated that a 

reserve program could benefit the 

industry by managing fluctuating 

supplies. Witnesses at the February and 

March 2007 hearing indicated the order 


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has been successful in this regard. 

However, the record indicated that the 

order could be more flexible in allowing 

modifications to the 50-million-pound 

limitation should conditions warrant 

such a change in the future. 

If the reserve capacity was changed, 

costs associated with storing product in 

reserves could also change. In addition, 

to the extent such a change could affect 

supplies in the marketplace; returns to 

both growers and handlers could also be 

affected. 

Any Board recommendation to change 

the reserve capacity would be required 

to be implemented through the informal 

rulemaking process. As part of the 

informal rulemaking process, USDA 

expects that any Board recommendation 

will include an analysis of the pertinent 

factors and issues, including the impact 

of a proposed regulation on producers 

and handlers. During that process, the 

Board would recommend a change to 

USDA, and only if the recommendation 

was accompanied by adequate 

justification would USDA proceed with 

the change. 

Amendment 2—Adding the Authority 

To Establish a Minimum Inventory 

Level at Which Reserves Would Be 

Released 

This amendment would revise 

§ 930.54 of the order to provide the 

Board with the authority to establish a 

minimum inventory level at which 

reserves would be released and made 

available to handlers as free tonnage. 

This amendment would allow the Board 

to clear out the primary reserve and 

subsequently the secondary reserve 

when a specified minimum inventory 

level of tart cherries is reached. The 

specified minimum level would be 

established through the informal 

rulemaking process. 

Under current order provisions, 

handlers cannot access the secondary 

reserve until the primary reserve is 

empty. Based on current language of the 

order, one handler who has not 

completely disposed of or otherwise 

fulfilled its reserve obligation can 

prevent access to the secondary reserve. 

The amendment would allow the 

Board to clear out the primary reserve 

when inventory levels are at a minimum 

level in order to provide the industry 

access to secondary reserve inventories. 

If the amendment were implemented, 

costs to both handlers and the Board 

could be reduced. Handlers incur costs 

in maintaining reserves. According to 

the record, these costs include the cost 

of storage, which can be in the range of 

$.01 per pound per month. Handlers 

also incur costs associated with tracking 

their own inventory levels. Witnesses 

stated that when inventory levels reach 

a minimal amount the costs of tracking 

inventory outweigh the benefit from 

carrying inventory in the primary 

reserve. 

A significant portion of the Board 

staff’s time is directed at tracking 

reserve inventory maintained at 

handlers’ facilities. Hearing witnesses 

testified that while it is difficult to 

quantify the exact value of the Board 

staff’s time to conduct these activities, 

the time could be better spent on other 

industry issues, and it is unnecessary to 

track minimal levels of inventory. 

The amendment, if implemented, 

could have a positive impact on the 

market. As inventories are released from 

the reserves, products could be sold, 

generating revenue for the industry. 

If implemented, this amendment is 

expected to reduce costs to handlers and 

the Board, thus having a positive 

economic impact. 

Amendment 3—Establishing an Age 

Limitation on Products Placed Into 

Reserves 

This amendment would revise 

§ 930.55 to require that products placed 

in reserves must have been produced in 

the current or immediately preceding 

two crop years. If implemented, this 

amendment would allow the Board to 

place an age limit on products carried 

in the reserve. The purpose of the 

amendment would be to help ensure 

that products of saleable quality are 

maintained in reserve inventories. 

Witness supported the amendment by 

stating that it would add credibility to 

product quality for all products carried 

in the reserve. Currently, handlers can 

carry products they have no intention of 

selling just to meet their reserve 

obligation. This amendment would 

require handlers to rotate product in 

their reserve inventory, thus preventing 

them from maintaining the same 

product in the reserve year after year. 

Product held in inventory tends to 

deteriorate over time. When reserve 

product is ultimately released for sale to 

meet market demand, this proposed 

amendment would help ensure the 

reserve product available is in saleable 

condition and can satisfy the market’s 

needs. Assuring product is available to 

satisfy the market helps to foster longterm market stability. 

In terms of costs, handlers may 

experience some minimal costs 

associated with periodically rotating 

product through their reserve inventory. 

It would be difficult to estimate such 

costs because they would vary 

depending upon each handler’s 

operation. To the extent costs would be 

increased, they would be proportionate 

to each handler’s share of the entire 

industry’s reserve inventory. Each 

handler’s reserve inventory obligation is 

based on the handler’s share of the total 

crop handled. Thus, small handlers 

would not be disproportionately 

burdened. 

It is anticipated that the benefits of 

providing a good quality product in 

reserves to ultimately supply markets 

when needed would outweigh any costs 

associated with implementation of this 

amendment. 

Amendment 4—Revision of Nomination 

and Election Process for Handler 

Members on the Board 

This amendment relates to 

nomination and election of Board 

members under § 930.23 of the order. It 

would require a handler to receive 

support from handlers that handled at 

least five percent of the average 

production of tart cherries in the 

applicable district in order to be a 

candidate and to be elected by the 

industry and recommended to the 

Secretary for Board membership. Under 

the current order, there is no accounting 

for handler volume in the nomination 

and balloting process. Each handler is 

entitled to one equal vote. This proposal 

would continue to allow each handler to 

have one vote, but would also require 

handler candidates to be supported by 

handlers representing at least five 

percent of the average production in the 

applicable district to be eligible to run 

for a Board position and to be elected 

by the industry for recommendation to 

the Secretary. This would help to ensure 

that handler members on the Board 

represent the interests of handlers in 

their district that account for at least a 

minimal percentage of the volume in the 

district. The amendment proposed by 

the Board was modified by AMS. The 

amendment as modified by AMS would 

not apply the five percent support 

requirements to candidates whose 

potential election could prevent a sales 

constituency conflict from occurring, as 

discussed under amendment number 

five. The modification would help to 

ensure that all qualified handlers could 

participate in the election process. 

This proposed amendment is not 

anticipated to have a significant 

economic impact on small businesses. It 

only affects the nomination and election 

criteria for membership on the Board by 

adding volume as an element of support 

to help ensure that Board membership 

reflects the interests of its constituency. 

All qualified handlers, regardless of 

size, will continue to be able to 

participate in the nomination and 

election process. The process would 

continue to allow for both small and 


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large handlers to be represented on the 

Board. 

Amendment 5—Revision of Board 

Membership Affiliation Requirements 

This amendment would revise 

§ 930.20 to allow more than one Board 

member to be affiliated with the same 

sales constituency from the same 

district, if such a conflict cannot be 

avoided. 

Currently, § 930.20 does not allow 

more than one Board member to be 

affiliated with the same sales 

constituency from the same district 

under any circumstances. The purpose 

of this provision is to prevent any one 

sales constituency from having a 

controlling influence on Board issues 

and actions. However, a situation 

occurred in District 7, Utah, where this 

particular provision of the order did not 

allow the district from having two 

representatives on the Board, as it was 

entitled to under § 930.20 (b) of the 

order. In that situation, the only 

candidates willing to serve on the Board 

from Utah were affiliated with the same 

sales constituency. Thus Utah was only 

able, under the marketing order rules, to 

seat one of the two Board 

representatives it was entitled to. 

The proposed amendment is designed 

to prevent this problem from occurring 

in the future by allowing more than one 

Board member affiliated with the same 

sales constituency to represent a 

district, if such a sales constituency 

conflict cannot be avoided. The hearing 

record is clear that the sales 

constituency provision should not 

prevent a district from having its 

allocated number of seats on the Board 

if there are eligible candidates willing to 

serve on the Board. 

This amendment is not expected to 

have an economic impact on growers or 

handlers. It relates to representation on 

the Board, and is intended to help 

ensure each area covered under the 

order has the opportunity to achieve its 

allocated representation on the Board. 

Amendment 6—Update Order 

Language To Accurately Reflect Grower 

and Handler Participation in the 

Nomination and Election Process in 

Districts With Only One Board 

Representative 

This amendment to § 930.23 would 

revise and update order language to 

more accurately reflect grower and 

handler participation in the nomination 

and election process in districts with 

only one Board representative. 

Sections 930.23(b)(5) and (c)(4) 

specifically reference Districts 5, 6, 8, 

and 9 in regard to the nomination and 

election process. Those were the 

districts entitled to one Board seat when 

the order was initially promulgated. 

However, districts that are entitled to 

one Board seat have changed over time 

due to shifts in production. Amending 

§§ 930.23(b)(5) and (c)(4) by removing 

the specific references to Districts 5, 6, 

8, and 9 and replacing it with generic 

language to cover any district that is 

entitled to only one Board 

representative based on the 

representative calculation established in 

§ 930.20 would update order language to 

better reflect the constantly changing 

tart cherry industry. 

This amendment updates order 

language to remove incorrect references 

to district representation in the event 

production shifts occur. It has no 

economic impact on handlers, growers, 

or any other entities. 

Interested persons were invited to 

present evidence at the hearing on the 

probable regulatory and informational 

impacts of the proposed amendments to 

the order on small entities. The record 

evidence is that some of the proposed 

amendments may result in some 

minimal cost increases while others will 

result in cost decreases. To the extent 

there are any cost increases, the benefits 

of the proposed changes are expected to 

outweigh the costs. In addition, changes 

in costs as a result of these amendments 

would be proportional to the size of 

businesses involved and would not 

unduly or disproportionately impact 

small entities. The informational impact 

of proposed amendments is addressed 

in the Paperwork Reduction Act 

discussion that follows. 

USDA has not identified any relevant 

Federal rules that duplicate, overlap or 

conflict with this proposed rule. These 

amendments are intended to improve 

the operation and administration of the 

order to the benefit of the industry. 

A Board proposal to change the voting 

requirements necessary to approve a 

Board action is not being recommended 

for adoption. 

Paperwork Reduction Act 

Information collection requirements 

for Part 930 are currently approved by 

the Office of Management and Budget 

(OMB), under OMB Number 0581–0177, 

Tart Cherries Grown in the States of 

Michigan, New York, Pennsylvania, 

Oregon, Utah, Washington, and 

Wisconsin. Implementation of these 

amendments would not trigger any 

changes to those requirements. It is 

possible that a change to the reporting 

requirements may occur in the future if 

the Board believes it would be necessary 

to assist in program compliance efforts. 

Should any such changes become 

necessary in the future, they would be 

submitted to OMB for approval. 

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. 

Civil Justice Reform 

The amendments to Marketing Order 

930 proposed herein have been 

reviewed under Executive Order 12988, 

Civil Justice Reform. They are 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 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. 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 Sates 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 

no later than 20 days after the date of 

the entry of the ruling. 

Findings and Conclusions; Discussion 

of Exceptions 

The material issues, findings and 

conclusions, rulings, and general 

findings and determinations included in 

the Recommended Decision set forth in 

the May 12, 2009, issue of the Federal 

Register (74 FR 22112) are hereby 

approved and adopted subject to the 

following additions and modifications. 

Material Issue Number 1—Authority To 

Change the Primary Reserve Capacity 

Based on the briefs and exceptions 

filed, the findings and conclusions in 

Material Issue Number 1 of the 

Recommended Decision are amended by 

adding the following four paragraphs to 

read as follows: 

One exception to the Recommended 

Decision concerning Material Issue 

Number 1 was filed by a grower and 

processor of tart cherries. The exception 

did not support amending the order to 


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authorize changing the capacity of the 

primary reserve pool through informal 

rulemaking. The exception stated that 

when the order was promulgated, a 50 

million-pound limitation was 

established for the primary reserve, and 

that limitation was adequately justified 

at the time. Conversely, the proposed 

amendment was not adequately justified 

through documentation and economic 

testimony. 

The proposed amendment in itself 

would not make a change to the reserve 

capacity. It would change the process by 

which a change to the reserve capacity 

could be made. Under the proposed 

amendment, such a change could be 

made through the informal rulemaking 

process rather than the formal 

rulemaking process that is currently 

required. 

The hearing record supports that 

circumstances and conditions in the 

industry change over time which could 

warrant a change in the reserve 

capacity. If the proposed amendment is 

adopted and such circumstances occur, 

a change could be made through 

informal rulemaking. During that 

process, the Board would recommend a 

change to USDA, and only if the 

recommendation was accompanied by 

adequate justification would USDA 

proceed with the change. 

The record supports allowing a 

change to the reserve capacity to be 

made through informal rulemaking 

rather than formal rulemaking. Thus, 

the exception concerning Material Issue 

Number 1 is denied. 

Material Issue Number 2—Authority To 

Establish a Minimum Level at Which 

Reserves Would Be Released 

Based on the briefs and exceptions 

filed, the findings and conclusions in 

Material Issue Number 2 of the 

Recommended Decision are amended by 

adding the following two paragraphs to 

read as follows: 

One exception to the Recommended 

Decision concerning Material Issue 

Number 2 was filed by a grower and 

processor of tart cherries. The exception 

did not support amending the order to 

authorize establishing a minimum level 

at which cherries in the reserve would 

be released. The exception indicated 

that adequate justification for the 

proposed amendment was not provided. 

It further states that the Board did not 

present a reasonable definition of what 

the minimum level would be in order 

for the reserves to be released. The 

exception suggested that actual criteria 

for establishing a minimum level should 

be developed and incorporated into the 

proposed amendment. 

This proposal would not establish a 

level at which reserves would be 

released. Informal rulemaking would be 

required to establish such a level. The 

Board would need to develop adequate 

justification in any recommendation it 

would make to USDA to implement a 

regulation that would authorize release 

of the reserve. The intent of the proposal 

is to provide additional flexibility in 

administering the reserve program, and 

could also reduce costs associated with 

tracking small amounts of reserve 

product. The record evidence indicates 

that these objectives may be achieved if 

the proposed amendment is adopted. 

For these reasons, the exception is 

denied. 

Material Issue Number 3— 

Establishment of a Minimum Age 

Limitation on Product Placed Into 

Reserves 

Based on the briefs and exceptions 

filed, the findings and conclusions in 

Material Issue Number 3 of the 

Recommended Decision are amended by 

adding the following three paragraphs to 

read as follows: 

One exception to the Recommended 

Decision concerning Material Issue 

Number 3 was filed by a grower and 

processor of tart cherries. The exception 

stated that the age of fruit placed in 

reserves is not truly a regulation of fruit 

quality, and that handlers should be 

able to place whatever product they 

choose in the reserve. The exception 

states that handlers could still place 

poor quality product in reserves if the 

amendment is adopted. 

According to the record evidence, the 

intent of this proposed amendment is to 

help maintain marketable products in 

the reserve. When reserves are 

ultimately released, they need to be in 

a condition to satisfy market demands. 

While placing an age limitation on 

reserve products does not guarantee a 

specific level of quality, the record 

shows that product quality deteriorates 

over time. Placing an age limitation on 

product held in reserves will reduce the 

likelihood that product of a deteriorated 

quality will be carried in handlers’ 

reserve inventories. Based on the record 

evidence, the proposed amendment 

should be implemented and the 

exception is therefore denied. 

Material Issue Number 4—Voting 

Requirements 

Based upon the briefs and exceptions 

filed, the findings and conclusions in 

Material Issue Number 4 of the 

Recommended Decision are amended by 

adding the following five paragraphs to 

read as follows: 

Two exceptions to the Recommended 

Decision were filed regarding Material 

Issue Number 4. One exception was 

filed on behalf of the Board and the 

other was filed by a tart cherry producer 

and processor. 

The exception filed on behalf of the 

Board was opposed to the conclusion in 

the Recommended Decision to not adopt 

the amendment as proposed by the 

Board. The proposal would have 

changed the voting requirements 

necessary for the Board to pass any 

action from two-thirds of the entire 

Board membership to two-thirds of the 

members present at a meeting. 

According to the exception, the 

stringent voting requirement was 

originally implemented because of a 

perception that an entity or entities or 

any particular dominant district in 

terms of representation on the Board 

may otherwise have too large an 

influence on Board actions. The 

exception stated that due to changes in 

industry structure, there is no longer a 

dominant entity or district in terms of 

Board representation, and a relaxation 

of the voting requirements would thus 

be appropriate. In addition, the 

exception stated that experience under 

the order has shown no evidence of 

control over the Board by any entity or 

region, and based on current industry 

demographics, no entity or region could 

gain such control. Finally, the exception 

states that safeguards exist under the 

order to protect the concerns of industry 

members against being adversely 

affected if the proposed changes to the 

voting requirements were adopted. 

As stated in the Recommended 

Decision, the super-majority voting 

requirements were incorporated into the 

order to help ensure a high degree of 

support for issues at the Board level. 

These requirements were included in 

the order to help ensure minority 

interests were addressed and that the 

industry majority supported Board 

actions. These fundamentals are still 

relevant today. While it may be true that 

the industry demographics have 

changed since the order was 

promulgated, this does not establish a 

foundation that the current voting 

requirements are not working properly 

and should be changed. The record 

evidence does not show that the current 

voting requirements are having a 

negative impact on Board actions or the 

Board’s ability to conduct business. 

The other exception regarding 

Material Issue Number 4 expressed 

support for the determination in the 

Recommended Decision not to 

implement the proposed amendment. 

The record supports leaving the 

current voting requirements under the 


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order in place, and the exception 

advocating a change to the 

Recommended Decision by adopting 

Material Issue Number 4 is therefore 

denied. 

Material Issue Number 6—Revising 

Board Membership Affiliation 

Requirements 

Based upon the briefs and exceptions 

filed, the findings and conclusions in 

Material Issue Number 6 of the 

Recommended Decision are amended by 

adding the following eight paragraphs to 

read as follows: 

Six exceptions concerning Material 

Issue Number 6 were received. Five of 

the exceptions were from tart cherry 

growers and processors, and one was 

from the Board. 

Five of the exceptions expressed 

concerns with the interaction of 

Material Issue Number 6 and Material 

Issue Number 5 as these two issues were 

discussed in the Recommended 

Decision. The amendment proposed by 

the Board and discussed in Material 

Issue Number 5 of the Recommended 

Decision would revise Board 

membership nomination procedures. 

The amendment would require a 

handler to receive support from 

handler(s) that handled at least five 

percent of the average production of tart 

cherries in the applicable district in 

order to be eligible to participate as a 

candidate in an election for Board 

membership. The proposed amendment 

would also require a handler to receive 

support from handler(s) that handled at 

least five percent of the average 

production of tart cherries in the 

applicable district in order to be elected 

by the industry and recommended to 

the Secretary for selection to the Board. 

The amendment proposed by the Board 

and discussed in Material Issue Number 

6 of the Recommended Decision would 

revise Board membership affiliation 

requirements to allow more than one 

Board member per district to be 

affiliated with the same sales 

constituency if it cannot be avoided. 

The Recommended Decision included 

adding a provision to the proposal in 

Material Issue Number 5 to conform to 

the proposed amendment to § 930.20 (g). 

The added provision would not apply 

the five percent support requirement for 

Board membership candidates in 

instances where such a requirement 

would result in a sales constituency 

conflict. (A sales constituency conflict is 

considered to exist if two persons from 

the same district are affiliated with the 

same sales constituency.) 

The five exceptions that expressed 

concern with the interaction of Material 

Issues 5 and 6 were opposed to the 

provisions added in the Recommended 

Decision regarding not applying the five 

percent support requirement in certain 

instances. These exceptions stated that 

the five percent support requirement 

should apply in all situations, regardless 

of potential sales constituency conflicts. 

According to these exceptions, having 

support from handlers with a minimum 

of five percent of the volume of cherries 

handled in the district requirement is 

more important than avoiding a 

potential sales constituency conflict. 

These exceptions further state that 

avoiding a sales constituency conflict is 

not as big an issue now as it was when 

the order was promulgated because the 

structure of the industry has changed 

and one sales constituency could no 

longer gain control of the Board. The 

exceptions also state that this 

amendment should not apply in one 

District but not another. 

One exception expressed the view 

that the proposed amendment to revise 

Board membership affiliation 

requirements to allow more than one 

Board member per district to be from 

the same sales constituency if it cannot 

be avoided, should only apply in 

situations that are identical to those 

currently prevailing in Utah. In Utah, a 

situation occurred where there were no 

candidates from a different sales 

constituency that were willing to serve 

on the Board. Consequently, Utah 

(District 7) was unable to fill a Board 

position for a period of time. 

One of the exceptions indicated that 

if the five percent support requirement 

was not applied in certain instances, it 

would preclude other handler 

candidates from seeking nomination 

and election if their election would 

present a sales constituency conflict. 

The Recommended Decision took into 

account both the merits of the proposed 

amendment requiring Board candidates 

to receive support from handlers 

handling at least five percent of the 

volume in the District to be nominated 

and elected to the Board and also the 

merits of the proposed amendment to 

allow a sales constituency conflict to 

exist in Board membership if such a 

situation cannot be avoided, in the 

interest of each District achieving its 

allocated representation on the Board. 

The added provision in Material Issue 

Number 5 recognizes the importance of 

both issues. The changes would not 

preclude any qualified handler from 

seeking his or her candidacy for 

nomination or election to the Board. 

Any qualified handler would be able to 

seek a Board position, including those 

who may present a sales constituency 

conflict with an existing Board member. 

The effect of the changes to the proposal 

would relieve those handlers that do not 

present a sales constituency conflict 

from the five percent support 

requirements. This would provide 

opportunity to avoid a sales 

constituency conflict among Board 

members if the handler without a sales 

constituency conflict were to win the 

election. In addition, this requirement 

would be the same in all districts. 

Although it currently appears to be an 

issue only in Utah at this time, as the 

record indicates and the exceptions 

note, changes and affiliations in the 

industry occur over time. It could 

possibly be an issue in another district 

in the future, and if so, it would be 

applied the same in all instances. 

In order to address the issues raised 

as a result of the interaction of the 

provisions in proposals in Material 

Issue Numbers 5 and 6, and to maintain 

an open election process that allows all 

qualified handler candidates to 

participate, USDA believes the proposed 

provisions as presented in the 

Recommended Decision are appropriate. 

The exceptions are therefore denied. 

Rulings on Exceptions 

In arriving at the findings and 

conclusions and the regulatory 

provisions of this decision, the 

exceptions to the Recommended 

Decision were carefully considered in 

conjunction with the record evidence. 

To the extent that the findings and 

conclusions and the regulatory 

provisions of this decision are at 

variance with the exceptions, such 

exceptions are denied. 

Marketing Agreement and Order 

Annexed hereto and made a part 

hereof is the document entitled ‘‘Order 

Amending the Order Regulating the 

Handling of Tart Cherries Grown in the 

States of Michigan, New York, 

Pennsylvania, Oregon, Utah, 

Washington, and Wisconsin.’’ This 

document has been decided upon as the 

detailed and appropriate means of 

effectuating the foregoing findings and 

conclusions. 

It is hereby ordered, that this entire 

decision be published in the Federal 

Register. 

Referendum Order 

It is hereby directed that a referendum 

be conducted in accordance with the 

procedure for the conduct of referenda 

(7 CFR part 900.400–407) to determine 

whether the annexed order amending 

the order regulating the handling of tart 

cherries grown in the States of 

Michigan, New York, Pennsylvania, 

Oregon, Utah, Washington, and 

Wisconsin is approved or favored by 


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1730 Federal Register / Vol. 75, No. 8 / Wednesday, January 13, 2010 / Proposed Rules 

1This order shall not become effective unless and 

until the requirements of § 900.14 of the rules of 

practice and procedure governing proceedings to 

formulate marketing agreements and marketing 

orders have been met. 

growers and processors, as defined 

under the terms of the order, who 

during the representative period were 

engaged in the production or processing 

of tart cherries in the production area. 

The representative period for the 

conduct of such referendum is hereby 

determined to be July 1, 2008 through 

June 30, 2009. 

The agents of the Secretary to conduct 

such referendum are hereby designated 

to be Kenneth G. Johnson and Patricia 

A. Petrella, Marketing Order 

Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, Suite 

2A04, Unit 155, 4700 River Road, 

Riverdale, MD 20737; telephone: (301) 

734–5243, Fax: (301) 734–5275; E-mail 

Kenneth.Johnson@ams.usda.gov or 

Patricia.Petrella@ams.usda.gov. 

List of Subjects in 7 CFR Part 930 

Marketing agreements, Reporting and 

recordkeeping requirements, Tart 

cherries. 

Dated: January 6, 2010. 

David R. Shipman, 

Acting Administrator, Agricultural Marketing 

Service. 

Order Amending the Order Regulating 

the Handling of Tart Cherries Grown in 

Michigan, New York, Pennsylvania, 

Oregon, Utah, Washington, and 

Wisconsin 1

Findings and Determinations 

The findings and determinations 

hereinafter set forth are supplementary 

to the findings and determinations that 

were previously made in connection 

with the issuance of the marketing 

agreement and order; and all said 

previous findings and determinations 

are hereby ratified and affirmed, except 

insofar as such findings and 

determinations may be in conflict with 

the findings and determinations set 

forth herein. 

(a) Findings and Determinations Upon 

the Basis of the Hearing Record 

Pursuant to the provisions of the 

Agricultural Marketing Agreement Act 

of 1937, as amended, (7 U.S.C. 601– 

612), and the applicable rules of 

practice and procedure effective 

thereunder (7 CFR part 900), a public 

hearing was held upon proposed 

amendment of Marketing Agreement 

and Order No. 930 (7 CFR part 930), 

regulating the handling of tart cherries 

grown in Michigan, New York, 

Pennsylvania, Oregon, Utah, 

Washington, and Wisconsin. Upon the 

basis of the evidence introduced at such 

hearing and the record thereof, it is 

found that: 

(1) The marketing agreement and 

order, as amended, and as hereby 

proposed to be further amended, and all 

of the terms and conditions thereof, 

would tend to effectuate the declared 

policy of the Act; 

(2) The marketing agreement and 

order, as amended, and as hereby 

proposed to be further amended, 

regulate the handling of tart cherries 

grown in the production area in the 

same manner as, and are applicable only 

to, persons in the respective classes of 

commercial and industrial activity 

specified in the marketing agreement 

and order upon which a hearing has 

been held; 

(3) The marketing agreement and 

order, as amended, and as hereby 

proposed to be further amended, are 

limited in their application to the 

smallest regional production area which 

is practicable, consistent with carrying 

out the declared policy of the Act, and 

the issuance of several orders applicable 

to subdivisions of the production area 

would not effectively carry out the 

declared policy of the Act; 

(4) The marketing agreement and 

order, as amended, and as hereby 

proposed to be further amended, 

prescribe, insofar as practicable, such 

different terms applicable to different 

parts of the production area as are 

necessary to give due recognition to the 

differences in the production and 

marketing of tart cherries grown in the 

production area; and 

(5) All handling of tart cherries grown 

in the production area as defined in the 

marketing agreement and order is in the 

current of interstate or foreign 

commerce or directly burdens, 

obstructs, or affects such commerce. 

Order Relative to Handling 

It is therefore ordered, That on and 

after the effective date hereof, all 

handling of tart cherries grown in 

Michigan, New York, Pennsylvania, 

Oregon, Utah, Washington, and 

Wisconsin shall be in conformity to, and 

in compliance with the terms and 

conditions of the said order as hereby 

proposed to be amended as follows: 

The provisions of the proposed 

marketing agreement and order 

amending the order contained in the 

Recommended Decision issued on May 

7, 2009, and published in the Federal 

Register on May 12, 2009, will be and 

are the terms and provisions of this 

order amending the order and are set 

forth in full herein. 

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. Revise paragraph (g) of § 930.20 to 

read as follows: 

§ 930.20 Establishment and Membership. 

* * * * * 

(g) In order to achieve a fair and 

balanced representation on the Board, 

and to prevent any one sales 

constituency from gaining control of the 

Board, not more than one Board member 

may be from, or affiliated with, a single 

sales constituency in those districts 

having more than one seat on the Board; 

Provided, That this prohibition shall not 

apply in a district where such a conflict 

cannot be avoided. There is no 

prohibition on the number of Board 

members from differing districts that 

may be elected from a single sales 

constituency which may have 

operations in more than one district. 

However, as provided in § 930.23, a 

handler or grower may only nominate 

Board members and vote in one district. 

* * * * * 

3. In § 930.23 revise paragraphs (b)(2) 

and (b)(5), redesignate paragraph (c)(3) 

as paragraph (c)(3)(i), add a new 

paragraph (c)(3)(ii), and revise 

paragraph (c)(4) to read as follows: 

§ 930.23 Nomination and Election. 

* * * * * 

(b) * * * 

(2) In order for the name of a handler 

nominee to appear on an election ballot, 

the nominee’s name must be submitted 

with a petition form, to be supplied by 

the Secretary or the Board, which 

contains the signature of one or more 

handler(s), other than the nominee, from 

the nominee’s district who is or are 

eligible to vote in the election and that 

handle(s) a combined total of no less 

than five percent (5%) of the average 

production, as that term is used 

§ 930.20, handled in the district. 

Provided, that this requirement shall not 

apply if its application would result in 

a sales constituency conflict as provided 

in § 930.20(g). The requirement that the 

petition form be signed by a handler 

other than the nominee shall not apply 

in any district where fewer than two 

handlers are eligible to vote. 

* * * * * 

(5) In districts entitled to only one 

Board member, both growers and 

handlers may be nominated for the 


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Federal Register / Vol. 75, No. 8 / Wednesday, January 13, 2010 / Proposed Rules 1731 

district’s Board seat. Grower and 

handler nominations must follow the 

petition procedures outlined in 

paragraphs (b)(1) and (b)(2) of this 

section. 

* * * * * 

(c) * * * 

(3)(i) * * * 

(ii) To be seated as a handler 

representative in any district, the 

successful candidate must receive the 

support of handler(s) that handled a 

combined total of no less than five 

percent (5%), of the average production, 

as that term is used in § 930.20, handled 

in the district; Provided, that this 

paragraph shall not apply if its 

application would result in a sales 

constituency conflict as provided in 

§ 930.20(g). 

(4) In districts entitled to only one 

Board member, growers and handlers 

may vote for either the grower or 

handler nominee(s) for the single seat 

allocated to those districts. 

* * * * * 

4. Revise paragraph (i) of § 930.50 to 

read as follows: 

§ 930.50 Marketing policy. 

* * * * * 

(i) Restricted Percentages. Restricted 

percentage requirements established 

under paragraphs (b), (c), or (d) of this 

section may be fulfilled by handlers by 

either establishing an inventory reserve 

in accordance with § 930.55 or § 930.57 

or by diversion of product in accordance 

with § 930.59. In years where required, 

the Board shall establish a maximum 

percentage of the restricted quantity 

which may be established as a primary 

inventory reserve such that the total 

primary inventory reserve does not 

exceed 50-million pounds; Provided, 

That such 50-million-pound quantity 

may be changed upon recommendation 

of the Board and approval of the 

Secretary. Any such change shall be 

recommended by the Board on or before 

September 30 of any crop year to 

become effective for the following crop 

year, and the quantity may be changed 

no more than one time per crop year. 

Handlers will be permitted to divert (at 

plant or with grower diversion 

certificates) as much of the restricted 

percentage requirement as they deem 

appropriate, but may not establish a 

primary inventory reserve in excess of 

the percentage established by the Board 

for restricted cherries. In the event 

handlers wish to establish inventory 

reserve in excess of this amount, they 

may do so, in which case it will be 

classified as a secondary inventory 

reserve and will be regulated 

accordingly. 

* * * * * 

5. Add a new paragraph (d) to 

§ 930.54 to read as follows: 

§ 930.54 Prohibition on the use or 

disposition of inventory reserve cherries. 

* * * * * 

(d) Should the volume of cherries 

held in the primary inventory reserves 

and, subsequently, the secondary 

inventory reserves reach a minimum 

amount, which level will be established 

by the Secretary upon recommendation 

from the Board, the products held in the 

respective reserves shall be released 

from the reserves and made available to 

the handlers as free tonnage. 

6. Revise paragraph (b) of § 930.55 to 

read as follows: 

§ 930.55 Primary inventory reserves. 

* * * * * 

(b) The form of the cherries, frozen, 

canned in any form, dried, or 

concentrated juice, placed in the 

primary inventory reserve is at the 

option of the handler. The product(s) 

placed by the handler in the primary 

inventory reserve must have been 

produced in either the current or the 

preceding two crop years. Except as may 

be limited by § 930.50(i) or as may be 

permitted pursuant to §§ 930.59 and 

930.62, such inventory reserve portion 

shall be equal to the sum of the products 

obtained by multiplying the weight or 

volume of the cherries in each lot of 

cherries acquired during the fiscal 

period by the then effective restricted 

percentage fixed by the Secretary; 

Provided, That in converting cherries in 

each lot to the form chosen by the 

handler, the inventory reserve 

obligations shall be adjusted in 

accordance with uniform rules adopted 

by the Board in terms of raw fruit 

equivalent. 

* * * * * 

[FR Doc. 2010–315 Filed 1–12–10; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2010–0027; Directorate 

Identifier 2008–NM–204–AD] 

RIN 2120–AA64 

Airworthiness Directives; Sicma Aero 

Seat 9140, 9166, 9173, 9174, 9184, 

9188, 9196, 91B7, 91B8, 91C0, 91C2, 

91C3, 91C4, 91C5, and 9301 Series 

Passenger Seat Assemblies; and 

Sicma Aero Seat 9501311–05, 

9501301–06, 9501311–15, 9501301–16, 

9501441–30, 9501441–33, 9501311–55, 

9501301–56, 9501441–83, 9501441–95, 

9501311–97, and 9501301–98 

Passenger Seat Assemblies; Installed 

on Various Transport Category 

Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: We propose to adopt a new 

airworthiness directive (AD) for the 

products listed above. This proposed 

AD results from mandatory continuing 

airworthiness information (MCAI) 

originated by an aviation authority of 

another country to identify and correct 

an unsafe condition on an aviation 

product. The MCAI describes the unsafe 

condition as: Cracks have been found on 

seat backrest links P/N (part number) 

90–000200–104–1 and 90–000200–104– 

2. These cracks can significantly affect 

the structural integrity of seat backrests. 

Failure of the backrest links could result 

in injury to an occupant during 

emergency landing conditions. The 

proposed AD would require actions that 

are intended to address the unsafe 

condition described in the MCAI. 

DATES: We must receive comments on 

this proposed AD by March 1, 2010. 

ADDRESSES: You may send comments by 

any of the following methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: (202) 493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, M– 

30, West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue, SE., 

Washington, DC 20590. 

• Hand Delivery: U.S. Department of 

Transportation, Docket Operations, M– 

30, West Building Ground Floor, Room 

W12–40, 1200 New Jersey Avenue, SE., 

Washington, DC, between 9 a.m. and 5 

p.m., Monday through Friday, except 

Federal holidays. 


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