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[Federal Register: May 27, 2010 (Volume 75, Number 102)]
[Proposed Rules]               
[Page 29684-29686]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27my10-16]                         

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Doc. No. AMS-FV-10-0029; FV10-930-2 PR]

 
Tart Cherries Grown in the States of Michigan, et al.; Increased 
Assessment Rate for the 2010-2011 Crop Year for Tart Cherries

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate established for 
the Cherry Industry Administrative Board (Board) for the 2010-2011 
fiscal period from $0.0066 to $0.0075 per pound of assessable tart 
cherries. The Board locally administers the marketing order which 
regulates the handling of tart cherries grown in Michigan, New York, 
Oregon, Pennsylvania, Utah, Washington, and Wisconsin. Assessments upon 
tart cherry handlers are used by the Board to fund reasonable and 
necessary expenses of the program. The 2010-2011 fiscal period year 
begins October 1, 2010. The assessment rate would remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by July 26, 2010.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
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 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: Kenneth G. Johnson, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, Unit 
155, 4700 River Road, Riverdale, MD 20737; telephone: (301) 734-5243, 
Fax: (301) 734-5275; E-mail: Kenneth.Johnson@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Antoinette Carter, 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, or E-mail: 
Antoinette.Carter@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 930 (7 CFR part 930), regulating the handling 
of tart cherries produced 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 Reform. Under the marketing order provisions now in effect, 
tart cherry handlers are subject to assessments. Funds to administer 
the order are derived from such assessments. It is intended that the 
assessment rate as proposed herein would be applicable to all 
assessable tart cherries beginning October 1, 2010, and continue until 
amended, suspended, or terminated.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempt therefrom. Such 
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 in equity to review USDA's ruling on the 
petition, provided an action is filed not later than 20 days after the 
date of the entry of the ruling.
    This rule would increase the assessment rate established for the 
Board for the 2010-2011 and subsequent fiscal periods from $0.0066 to 
$0.0075 per pound of assessable tart cherries. The 2010-2011 fiscal 
period begins on October 1, 2010, and ends on September 30, 2011.
    The tart cherry marketing order provides authority for the Board, 
with the approval of USDA, 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 rate. The assessment rate is 
formulated and discussed in a public meeting. Thus, all directly 
affected persons have an opportunity to participate and provide input.
    Authority to fix the rate of assessment to be paid by each handler 
and for the Board to collect such assessments appears in Sec.  930.41 
of the order. That section also provides that each part of an 
assessment rate intended to cover administrative costs and research and 
promotional costs be identified. Section 930.48 of the order provides 
that the Board, with the approval of the USDA, may establish or provide 
for the establishment of production research, market research and 
development, and/or promotional activities designed to assist, improve, 
or promote the marketing, distribution, consumption, or efficient 
production of cherries. The expense of such projects is paid from funds 
collected pursuant to Sec.  930.41 (Assessments), or from such other 
funds as approved by the USDA.
    For the 2006-2007 fiscal year, the Board recommended, and USDA 
approved, an assessment rate of $0.0066 per pound of tart cherries 
handled that would continue in effect from fiscal period to fiscal 
period unless modified, suspended, or terminated by USDA upon 
recommendation and information submitted by the Board or other 
information available to USDA.
    The Board met on January 26, 2010, and recommended 2010-2011 
expenditures of $1,665,000 and an assessment rate of $0.0075 per pound 
of tart cherries. The Board's recommendation was unanimous. In 
comparison, last year's budgeted

[[Page 29685]]

expenses were $1,558,900. The Board recommended that the assessment 
rate be increased to cover increases in administrative expenses. The 
assessment rate has not been increased in four years. The current 
assessment rate to cover administrative costs is $0.0016. The proposed 
increase would raise the assessment rate for administrative expenses to 
$0.0025. In addition, a portion of the assessment rate ($0.005 per 
pound of cherries) would continue to fund the Board's research and 
promotion program. The total assessment rate for 2010-2011 and beyond 
would be $0.0075, an increase of approximately 14 percent over the 
current rate of $0.0066.
    The major expenditures recommended by the Board for the 2010-2011 
year include $1,150,000 for promotion, $213,000 for personnel, $109,000 
for compliance, $102,000 for office expenses, $86,000 for Board 
meetings, and $5,000 for industry educational efforts. Budgeted 
expenses for major items in 2009-2010 were $1,150,000 for promotion, 
$175,900 for personnel, $92,800 for Board meetings, $44,200 for 
compliance, $58,400 for office expenses, and $2,500 for industry 
educational efforts.
    In deriving the recommended assessment rate, the Board estimated 
assessable tart cherry production for the fiscal period at 230 million 
pounds. Therefore, total assessment income for 2010-2011 is estimated 
at $1,725,000 (230 million pounds x $0.0075). This would be adequate to 
cover budgeted expenses. Any excess funds would be placed in the 
financial reserve, which is estimated to be $267,000, well within the 
approximately six months' operating expenses as required by Sec.  
930.42(a).
    The assessment rate proposed in this rule would continue in effect 
indefinitely unless modified, suspended, or terminated by USDA upon 
recommendation and information submitted by the Board or other 
available information.
    Although the assessment rate would be effective for an indefinite 
period, the Board would continue to meet prior to or during each fiscal 
period to recommend a budget of expenses and consider recommendations 
for modification of the assessment rate. The dates and times of Board 
meetings are available from the Board or the USDA. Board meetings are 
open to the public and interested persons may express their views at 
these meetings. USDA will evaluate Board recommendations and other 
available information to determine whether modification of the 
assessment rate is needed. Further rulemaking would be undertaken as 
necessary. The Board's 2010-2011 budget and those for subsequent fiscal 
periods would be reviewed and, as appropriate, approved by the USDA.

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 
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 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 40 handlers of tart cherries who are 
subject to regulation under the tart cherry marketing order and 
approximately 600 producers of tart cherries in the regulated area. 
Small agricultural service firms, which includes handlers, have been 
defined by the Small Business Administration (SBA) (13 CFR 121.201) as 
those having annual receipts of less than $7,000,000, and small 
agricultural producers are defined as those having annual receipts of 
less than $750,000. A majority of the producers and handlers are 
considered small entities under SBA's standards.
    The principal demand for tart cherries is in the form of processed 
products. Tart cherries are dried, frozen, canned, juiced, and pureed. 
During the period 1997/98 through 2008/09, approximately 96 percent of 
the U.S. tart cherry crop, or 244.4 million pounds, was processed 
annually. Of the 244.4 million pounds of tart cherries processed, 61 
percent was frozen, 27 percent was canned, and 12 percent was utilized 
for juice and other products.
    Based on National Agricultural Statistics Service data, acreage in 
the United States devoted to tart cherry production has been trending 
downward. Bearing acreage has declined from a high of 50,050 acres in 
1987/88 to 34,650 acres in 2008/09. This represents a 31 percent 
decrease in total bearing acres. Michigan leads the nation in tart 
cherry acreage with 70 percent of the total and produces about 75 
percent of the U.S. tart cherry crop each year.
    This rule would increase the assessment rate established for the 
Board for the 2010-2011 and subsequent fiscal periods from $0.0066 to 
$0.0075 per pound of assessable tart cherries. The 2010-2011 fiscal 
period begins on October 1, 2010, and ends on September 30, 2011.
    The Board discussed continuing the existing assessment rate, but 
concluded that the rate needed to be increased in order to meet 
recommended expenses. The assessment rate has not been increased for 
four years.
    A review of preliminary information pertaining to the upcoming 
fiscal period indicates that the grower price for tart cherries for the 
2010-2011 season could range between $0.15 and $0.20 per pound. 
Therefore, the estimated assessment revenue for the 2010-2011 fiscal 
period as a percentage of total grower revenue could be or range 
between 3.75 and 5 percent.
    This action would increase the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to producers. However, these costs 
will be offset by the benefits derived by the operation of the 
marketing order. 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, 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 proposed rule would impose 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.
    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. USDA has not identified any 
relevant Federal rules that duplicate, overlap, or conflict with this 
regulation.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBus
inessGuide. Any questions about the

[[Page 29686]]

compliance guide should be sent to Antoinette Carter at the previously 
mentioned address in the FOR FURTHER INFORMATION CONTACT section.
    A 60-day comment period is provided to allow interested persons to 
respond to this proposal. All written comments timely received will be 
considered before a final determination is made on this matter.

List of Subjects in 7 CFR Part 930

    Marketing agreements, Reporting and recordkeeping requirements, 
Tart cherries.

    For the reasons set forth in the preamble, 7 CFR part 930 is 
proposed to be 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  Assessment rate.

    On and after October 1, 2010, the assessment rate imposed on 
handlers shall be $0.0075 per pound of tart cherries grown in the 
production area and utilized in the production of tart cherry products. 
Included in this rate is $0.005 per pound of cherries to cover the cost 
of the research and promotion program and $0.0025 per pound of cherries 
to cover administrative expenses.

    Dated: May 19, 2010.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. 2010-12466 Filed 5-26-10; 8:45 am]
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