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[Federal Register Volume 78, Number 148 (Thursday, August 1, 2013)]
[Rules and Regulations]
[Pages 46494-46496]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-18432]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Doc. No. AMS-FV-13-0030; FV13-930-2 IR]

Tart Cherries Grown in the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington, and Wisconsin; Revising Handler 
Reporting and Grower Diversion Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule invites comments on changes to handler reporting and 
grower diversion requirements prescribed under the marketing order for 
tart cherries grown in the States of Michigan, New York, Pennsylvania, 
Oregon, Utah, Washington, and Wisconsin (order). The Cherry Industry 
Administrative Board (Board) locally administers the order. This rule 
changes the deadline for submitting the handler reserve plan from 
November 1 to October 1 and extends the deadline for redeeming or 
transferring grower diversion certificates from November 1 to June 30 
of a given crop year. A crop year is the 12-month period beginning on 
July 1 of any crop year and ending on June 30 of the following year. 
These changes will provide the industry with a more complete and timely 
picture of the available supply earlier in the season and give handlers 
more time and flexibility in meeting their obligations under volume 
regulation.

DATES: Effective August 2, 2013; comments received by September 30, 
2013 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, 
Marketing Order and Agreement Division, Fruit and Vegetable Program, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or Internet: http://www.regulations.gov. All comments should reference the document number 
and the date and page number of this issue of the Federal Register and 
will be made available for public inspection in the Office of the 
Docket Clerk during regular business hours, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this 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: Jennie M. Varela, Marketing 
Specialist, or Christian D. Nissen, Regional Director, Southeast 
Marketing Field Office, Marketing Order and Agreement Division, Fruit 
and Vegetable Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 
325-8793, or Email: Jennie.Varela@ams.usda.gov or 
Christian.Nissen@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: Jeffrey.Smutny@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
and Agreement 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, hereinafter 
referred to as the ``order.'' 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 Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice

[[Page 46495]]

Reform. This rule is not intended to have retroactive effect.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to 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 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 no later than 20 days after the date of the 
entry of the ruling.
    This rule changes the deadline for submitting the handler reserve 
plan from November 1 to October 1 and extends the deadline for 
redeeming or transferring grower diversion certificates issued by the 
Board from November 1 to June 30 of a given crop year. These changes 
will provide the industry with a more complete and timely picture of 
the available supply earlier in the season and will provide handlers 
more time and flexibility in meeting their obligations under volume 
regulation. The Board unanimously approved these changes at its March 
21, 2013, meeting.
    Sections 930.58 and 930.59 of the order provide authority for 
grower and handler diversion, respectively. In particular, Sec.  
930.59(c) requires that handlers notify the Board of their intent to 
divert cherries. These sections also provide authority for the Board to 
establish rules and regulations to administer these provisions, with 
the approval of the Secretary.
    Section 930.159 of the rules and regulations establishes 
requirements for handler diversion. This section currently states, in 
part, that handlers intending to divert cherries or cherry products 
under a volume regulation must notify the Board and submit their plan 
for complying with that season's restriction obligation by November 1.
    Section 930.158 of the order's rules and regulations establishes 
requirements for using grower diversion certificates. This section 
currently provides that handlers redeem grower diversion certificates 
with the Board by November 1 of the crop year, as the certificates will 
not be valid after that date.
    Section 930.58 of the order was recently amended to exempt cherries 
diverted in the orchard (grower diversion) from inclusion in a 
handler's total volume calculation. When a volume regulation is issued, 
handlers are obligated to keep a percentage of their total volume in 
reserve or account for the restricted volume with diversion 
certificates. These certificates can be earned through export sales, 
new market or new product sales, or through grower diversion. Before 
the amendment, the volume of cherries represented by a grower diversion 
certificate was added to the handler's total volume. Following the 
amendment, handlers can redeem grower diversion certificates without 
adding tonnage to their total volume.
    Amendments to an order often require conforming changes or 
adjustments to the administrative rules and regulations. The Board 
created a committee to review the order's diversion and reporting 
regulations and present any recommended changes to the Board. This rule 
implements the two recommended changes: Changing the due date for the 
handler reserve plan to October 1, and allowing the transfer and 
redemption of grower diversion certificates through the end of the crop 
year, June 30.
    Separating grower diversion certificates from a handler's total 
volume simplified the completion of the reserve plan. Consequently, the 
Board believes handlers will be able to complete their reserve plan for 
restricted tart cherries at an earlier date. As a result, the Board 
recommended that the deadline for submitting handler reserve plans be 
changed from November 1 to October 1 of each season. The reserve plan 
is submitted in combination with a handler's final pack report. The 
Board consolidates this data and uses it to issue reports on the final 
volume processed and available inventory. This date change will provide 
the industry a more complete and timely picture of the available supply 
earlier in the season. This information is important to the industry, 
especially when considering the release of additional reserves when a 
volume regulation is in effect.
    Originally, the deadline to redeem grower diversion certificates 
was tied to the handler reserve plan as handlers needed to account for 
grower diversion when calculating their total volume. As such, current 
regulations establish a due date of November 1 for grower diversion 
certificates, while other diversion certificates can be transferred 
throughout the season. With the amendment to the order, grower 
diversion certificates no longer need to be linked to when the handler 
reserve plan is due. To bring consistency to the use of diversion 
certificates, the Board recommended allowing handlers to transfer and 
redeem grower diversion certificates through the end of the season, 
June 30. This change also provides handlers additional time and 
flexibility in meeting restriction obligations.
    In addition to adjusting the deadline for submitting the handler 
reserve plan and extending the deadline for redeeming grower diversion 
certificates, this rule also makes a minor wording change to Sec.  
930.158 to facilitate the change in date.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) 
has considered the economic impact of this action 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 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 600 producers of tart cherries in the 
regulated area and approximately 40 handlers of tart cherries who are 
subject to regulation under the order. Small agricultural producers are 
defined by the Small Business Administration (SBA) as those having 
annual receipts of less than $750,000 and small agricultural service 
firms have been defined as those having annual receipts of less than 
$7,000,000 (13 CFR 121.201).
    According to data from the National Agricultural Statistics Service 
and the Board, the average annual grower price for tart cherries during 
the 2012-13 season was $0.54 per pound, and total shipments were around 
85 million pounds. Therefore, average receipts for tart cherry 
producers were around $76,200, well below the SBA threshold for small 
producers. In 2013, The Food Institute estimated an f.o.b. price of 
$0.84 per pound for frozen tart cherries, which make up the majority of 
processed tart cherries. Using this data, average annual handler 
receipts were about $1.8 million, also below the SBA threshold for 
small agricultural service firms. Assuming a normal distribution, the 
majority of producers and handlers

[[Page 46496]]

of tart cherries may be classified as small entities.
    This rule modifies Sec.  930.159, changing the deadline for 
submitting the handler reserve plan from November 1 to October 1. This 
rule also modifies Sec.  930.158 to extend the deadline for redeeming 
or transferring grower diversion certificates issued by the Board from 
November 1 to June 30 of a given crop year. These changes are 
authorized under Sec. Sec.  930.59 and 930.58, respectively. These 
changes will provide the industry with a more complete and timely 
picture of the available supply earlier in the season. In addition, the 
new deadline for transferring grower diversion certificates will allow 
handlers more time and flexibility in meeting their obligations under 
volume regulation.
    It is not anticipated that this rule will generate any additional 
costs for growers or handlers. This action is intended to adjust 
regulations to reflect recent amendments to the order and to allow the 
order to function more efficiently. These changes are expected to 
benefit the industry by providing a clear picture of available supply 
earlier in the season, and by allowing handlers more time to utilize 
grower diversion certificates to meet their restriction under volume 
regulation. These changes should impact all entities positively, 
regardless of size.
    Regarding alternatives to this action, the Board considered not 
making any changes to the regulations regarding the handler reserve 
plan or grower diversion certificates. However, the Board unanimously 
supported an earlier date for the handler reserve plan as all handlers 
are aware of the restriction well in advance and it would provide 
timely information regarding the season. Additionally, the Board 
determined that changing the deadline for redeeming grower diversion 
certificates was in line with the industry's objective to have 
consistency among the application of diversion credits. As such, these 
alternatives were rejected.
    In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0177, (Tart Cherries Grown in the States of 
Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and 
Wisconsin). No changes in those requirements as a result of this action 
are necessary. Should any changes become necessary, they would be 
submitted to OMB for approval.
    This rule will require changes to Cherry Industry Administrative 
Board Form 4, ``Handler Reserve Plan and Final Pack Report''. However, 
these changes are minor and the currently approved burden for the form 
remains the same. The revised form has been submitted to OMB for 
approval.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large tart cherry handlers. As with all 
Federal marketing order programs, reports and forms are periodically 
reviewed to reduce information requirements and duplication by industry 
and public sector agencies.
    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.
    In addition, USDA has not identified any relevant Federal rules 
that duplicate, overlap or conflict with this rule.
    Further, the Board's meeting was widely publicized throughout the 
tart cherry industry and all interested persons were invited to attend 
the videoconference meeting at regional locations or call in to 
participate in the Board's deliberations. Like all Board meetings, the 
March 21, 2013, meeting was a public meeting and all entities, both 
large and small, were able to express their views on these issues. 
Finally, interested persons are invited to submit comments on this 
interim rule, including the regulatory and informational impacts of 
this action on small businesses.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about 
the compliance guide should be sent to Jeffrey Smutny at the previously 
mentioned address in the FOR FURTHER INFORMATION CONTACT section.
    This rule invites comments on changes to handler reporting and 
grower diversion requirements prescribed under the order. Any comments 
received will be considered prior to finalization of this rule.
    After consideration of all relevant material presented, including 
the Board's recommendation, and other information, it is found that 
this interim 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 order amendments prompting these changes were 
implemented on June 7, 2012; (2) the Board unanimously recommended 
these changes at a public meeting and interested parties had an 
opportunity to provide input; (3) this change relaxes the date for 
utilizing grower diversion certificates; (4) handlers begin to make 
plans regarding diversion requirements in July; and (5) this rule 
provides a 60-day comment period and any comments 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

0
1. The authority citation for 7 CFR part 930 continues to read as 
follows:

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

Sec.  930.158  [Amended]

0
2. In Sec.  930.158, paragraph (a) is amended by removing the words 
``November 1'' and adding in their place ``June 30'' everywhere they 
appear.

Sec.  930.159  [Amended]

0
3. In Sec.  930.159, paragraph (b) is amended by removing the word 
``November'' and adding in its place ``October'' in the first sentence, 
and removing the words ``certificates redeemed'' and adding in their 
place ``certificates to be redeemed'' in the fourth sentence.

    Dated: July 25, 2013.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2013-18432 Filed 7-31-13; 8:45 am]
BILLING CODE 3410-02-P
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