[Federal Register Volume 71, Number 119 (Wednesday, June 21, 2006)]
[Proposed Rules]
[Pages 35562-35564]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-9727]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 930
[Docket No. FV06-930-2 PR]
Tart Cherries Grown in the States of Michigan, et al.; Increased
Assessment Rate
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 2006-2007
fiscal year and subsequent fiscal years from $0.0021 to $0.0066 per
pound to fund the Board's administrative expenses and its new research
and promotion program. Authorization to assess tart cherry handlers
enables the Board to incur expenses that are reasonable and necessary
to administer the program. The Board locally administers the marketing
order which regulates the handling of tart cherries grown in the States
of Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and
Wisconsin. The fiscal year begins July 1, 2006 and ends June 30, 2007.
The assessment rate will remain in effect indefinitely unless modified,
suspended, or terminated.
DATES: Comments must be received by July 11, 2006.
ADDRESSES: Interested persons are invited to submit written comments
concerning this action. Comments must be sent to the Docket Clerk,
Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW.,
STOP 0237, Washington, DC 20250-0237; Fax: (202) 720-8938, or E-mail:
moabdocket.clerk@usda.gov. All comments should reference the docket
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.ams/usda.gov/fv/moab/html.
FOR FURTHER INFORMATION CONTACT: Dawana J. Clark or Kenneth G. Johnson,
DC Marketing Field Office, Fruit and Vegetable Programs, AMS, USDA,
Unit 155, 4700 River Road, Riverdale, Maryland 20737; telephone: (301)
734-5243, Fax: (301) 734-5275.
Small businesses may request information on complying with this
regulation 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, or e-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 930, as amended (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 now in effect, tart cherries
are subject to assessments. Funds to administer the order are derived
from such assessments. It is intended that the assessment rate as
issued herein will be applicable to all assessable tart cherries
beginning July 1, 2006, and continue until amended, suspended, or
terminated. This rule will not preempt any State or local laws,
regulations, or policies, unless they present an irreconcilable
conflict with this rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with the USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. Such
handler is afforded the opportunity for a hearing on the petition.
After the hearing the 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 the 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 2006-2007 and subsequent fiscal years for tart cherries
from $0.0021 to $0.0066 per pound of tart cherries to fund the Board's
administrative expenses and its new research and promotion program.
The tart cherry marketing order provides authority for the Board,
with 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 to collect such assessment appears in Sec. 930.41 of the order. In
addition, Sec. 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, marketing research, and market development
projects 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 2003-2004 fiscal year, the Board recommended, and USDA
approved, an assessment rate of $0.0021 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 March 16, 2006, and recommended 2006-2007
expenditures of $1,523,000 and an assessment rate of $0.0066 per pound
of tart cherries. Eighteen of the nineteen Board members voted in
support of the assessment rate increase. One Board seat is vacant. In
comparison, last year's budgeted expenses were $488,000. The assessment
rate of $0.0066 is $0.0045 higher than the rate currently in effect.
The Board recommended that the
[[Page 35563]]
assessment rate be increased to cover its administrative expenses and
fund a new research and promotion program which will commence in Fall
2006. The proposed $0.0066 assessment rate would cover the costs of the
research and promotion program which would be assessed at $.005 per
pound (or $10 per ton) of cherries for processing and $.0016 per pound
for administrative expenses. The $0.0016 per pound for administrative
expenses would be a reduction from the 2005-2006 assessment rate of
$0.0021 per pound. The Board believes that its new research and
promotion program is the best way for the industry to develop both
stronger demand for tart cherries and tart cherry products and increase
sales opportunities.
According to a recent Board survey, both growers and handlers
believe a research and promotion program would benefit the industry.
This program would be directed primarily at consumers and retail
nutrition advisors, and employ promotional strategies, such as print
advertising. All tart cherry handlers regulated under the marketing
order would pay the proposed assessment rate to fund the new research
and promotion program. However, certain organic handlers may be exempt
from paying assessments for market promotion activities pursuant to 7
CFR 900.700.
The major expenditures recommended by the Board for the 2006-2007
year include $1,150,000 for promotion, $169,000 for personnel, $82,000
for meetings, $77,000 for office expenses, $20,000 for compliance, and
$5,000 for industry educational efforts. Budgeted expenses for major
items in 2005-2006 were $159,000 for personnel, $150,000 for
compliance, $81,000 for meetings, $93,000 for office expenses, and
$5,000 for industry educational efforts. The Board recommended an
increased assessment rate to generate larger revenue to meet its
expenses and keep its reserves at an acceptable level.
In deriving the recommended assessment rate, the Board determined
assessable tart cherry production for the fiscal period at 230 million
pounds. Therefore, total assessment income for 2006-2007 is estimated
at $1,518,000 (230 million pounds x $0.0066). This amount plus adequate
funds in the reserve and interest income would be adequate to cover
budgeted expenses. Funds in the reserve (approximately $411,000) would
be kept within the approximately six months' operating expenses as
recommended by the Board consistent with Sec. 930.42(a).
The assessment rate established in this rule would continue in
effect indefinitely unless modified, suspended, or terminated by USDA
upon recommendation and other 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 2006-2007 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), 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 thereunder, are unique in that they are
brought about through group action of essentially small entities acting
on their own behalf. Thus, both statutes have small entity orientation
and compatibility.
There are approximately 40 handlers of tart cherries who are
subject to regulation under the tart cherry marketing order and
approximately 900 producers of tart cherries in the regulated area.
Small agricultural service firms, which includes handlers, are defined
by the Small Business Administration (13 CFR 121.201) as those having
annual receipts of less than $6,500,000, and small agricultural
producers are defined as those having annual receipts of less than
$750,000. The majority of producers and handlers of tart cherries under
the order 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 2001/2002 through 2005/2006, approximately 93.8
percent of the U.S. tart cherry crop, or 214.3 million pounds, was
processed annually. Of the 214.3 million pounds of tart cherries
processed, 62 percent was frozen, 26 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
1987/99 to 37,100 acres in 2005/2006. This represents a 26 percent
decrease in total bearing acres. Michigan leads the nation in tart
cherry acreage with 74 percent of the total and produces about 72
percent of the U.S. tart cherry crop each year.
This rule would increase the assessment rate established for the
Board and collected from handlers for the 2006-2007 and subsequent
fiscal periods from $.0021 to $.0066 per pound of tart cherries.
The Board discussed continuing the existing assessment rate, but
concluded that it needed the additional funds to devote to its research
and promotion program which would be funded through assessments.
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 compliance with the Government Paperwork
Elimination Act (GPEA), which requires Government agencies in general
to provide the public the option of submitting information or
transacting
[[Page 35564]]
business electronically to the maximum extent possible.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at the
following Web site: http://www.ams.usda.gov/fv/moab.html. Any questions
about the compliance guide should be sent to Jay Guerber at the
previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
A 20-day comment period is provided to allow interested persons to
respond to this proposed rule. Twenty days is deemed appropriate
because: (1) The 2006-2007 fiscal period begins July 1, 2006, and the
marketing order requires that the rate of assessment for each fiscal
year apply to all assessable tart cherries handled during such period;
(2) the Board needs to have sufficient funds to pay its expenses which
are incurred on a continuous basis; and (3) handlers are aware of this
action which was recommended by the Board at a public meeting.
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 July 1, 2006, the assessment rate imposed on handlers
shall be $0.0066 per pound of tart cherries grown in the production
area and utilized in the production of tart cherry products. Included
in this rate is $.005 per pound of cherries to cover the costs of the
new research and promotion program and $.0016 per pound of cherries to
cover administrative expenses.
Dated: June 15, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-9727 Filed 6-20-06; 8:45 am]
BILLING CODE 3410-02-P