Cherries (tart) grown in— Michigan et al.,

[Federal Register: March 23, 2000 (Volume 65, Number 57)]

[Proposed Rules]

[Page 15580-15584]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr23mr00-22]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. AO-370-A7; FV00-930-1]

Tart Cherries Grown in the States of Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin; Hearing on Proposed Amendment of Marketing Agreement and Order No. 930

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Notice of hearing on proposed rulemaking.

SUMMARY: Notice is hereby given of a public hearing to consider amending Marketing Agreement and Order No. 930, hereinafter referred to as the ``order.'' The order regulates the handling of tart cherries grown in Michigan, New York, Pennsylvania, Oregon, Utah, Washington and Wisconsin. The purpose of the hearing is to receive evidence on a number of amendments proposed by the Cherry Industry Administrative Board (Board), which is responsible for local administration of the order. Major proposals include making all districts subject to volume regulations, rather than only those districts producing more than 15 million pounds per year; making shipments of cherry juice and juice concentrate to certain markets eligible to receive diversion credit; making all cherry shipments subject to assessments; and eliminating the requirement that different assessment rates be established for different cherry products.

DATES: The hearing dates are:

1. March 27, 2000, 12:00p.m. to 5:00p.m., and continuing on March 28, 2000, at 9:00a.m., if necessary, Rochester, New York.

2. March 29, 2000, 10:00a.m. to 5:00p.m.; March 30, 2000, 9:00 a.m. to 5:00

   [[Page 15581]]

   p.m.; and continuing on March 31, 2000 at 9:00a.m., if necessary; Grand Rapids, Michigan.

3. April 4, 2000, 9:00a.m. to 5:00p.m. and continuing on April 5, 2000 at 9:00a.m., if necessary, Kennewick, Washington.

4. April 6, 2000, 10:00a.m. to 5:00p.m., and continuing on April 7, 2000, if necessary, Salt Lake City, Utah.

   ADDRESSES: The hearing locations are:

1. Rochester--Radisson Hotel Rochester Airport, 175 Jeffferson Road, Rochester, New York 14623.

2. Grand Rapids--Courtyard by Marriott Downtown, 11 Monroe Avenue, Grand Rapids, Michigan 49503.

3. Kennewick--Cavannaugh's at Columbia Center, 1101 W. Columbia Center Boulevard, Kennewick, Washington 99336.

4. Salt Lake City--Utah Department of Agriculture and Food (Conference Room), 350 North Redwood Road, Salt Lake City, Utah 84116.

   FOR FURTHER INFORMATION CONTACT: Anne M. Dec, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 205-6632. Small businesses may request information on this proceeding by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 205-6632.

   SUPPLEMENTARY INFORMATION: This administrative action is instituted pursuant to the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.'' This action is governed by the provisions of sections 556 and 557 of title 5 of the United States Code and, therefore, is excluded from the requirements of Executive Order 12866.

   The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) seeks to ensure that within the statutory authority of a program, the regulatory and informational requirements are tailored to the size and nature of small businesses. Interested persons are invited to present evidence at the hearing on the possible regulatory and informational impacts of the proposals on small businesses.

   The amendments proposed herein have been reviewed under Executive Order 12988, Civil Justice Reform. They are not intended to have retroactive effect. If adopted, the proposed amendments would not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with the proposals.

   The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with the Secretary a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing 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 Secretary's ruling on the petition, provided an action is filednot later than 20 days after the date of the entry of the ruling.

   The hearing is called pursuant to the provisions of the Act and the applicable rules of practice and procedure governing the formulation of marketing agreements and orders (7 CFR part 900).

   The Board proposes to revise seven areas of program operations. The proposed amendments are summarized below.

1. Make all districts in the production area subject to volume regulations rather than applying such regulations only to districts with annual production of 15 million pounds or more.

2. Allocate Board membership among districts based on each district's level of production. This would provide more flexibility than the order's current provisions which set a definite number of member seats for each district.

   A related change is proposed in quorum requirements. Since the number of Board members could vary over time, at least two-thirds of the Board members must be present at any Board meeting. The order currently provides that 12 of 18 members constitutes a quorum.

3. If both a Board member and alternate are unable to attend a meeting, allow the Board to designate another alternate to act in his or her stead. Currently, only a member's designated alternate may serve in that member's stead.

4. Revise order diversion and exemption provisions in six ways:

   Provide for diversion credit for shipments of cherry juice and juice concentrate to established diversion markets. The order currently prohibits juice and juice concentrate from receiving diversion credit.

   Add specific authority to exempt or provide diversion credit for cherries exported to designated markets.

   Add specific authority for the transfer of diversion credits among handlers.

   Provide that grower diversions that take place in districts that are subsequently exempt from volume regulation still qualify for diversion credit.

   Clarify diversion and exemption provisions of the order by eliminating cross references among those provisions, and specify that exemptions would not be entitled to receive diversion credit.

   Further clarify Sec. 930.59 by adding a paragraph indicating that the Secretary's rulemaking authority extends to all the provisions of that section.

5. Revise Sec. 930.54 to make it clear that cherries in the inventory reserve may be released either for use in any market, or for use in only certain designated markets, depending on prevailing conditions.

6. Make two changes in Sec. 930.41 pertaining to assessments:

   Provide that assessments must be paid on all cherries handled, except for those that are diverted by destruction at a handler's facilities or are covered by grower diversion certificates. Currently, all cherries used in outlets eligible for diversion credit or exemption are exempt from assessments.

   Provide that a uniform assessment rate apply to all cherries handled, unless the Board recommends differential rates to compensate for differences in the number of pounds used for various products or for the relative market values of such products. The order currently requires differential rates to be established, unless there is a compelling reason to do otherwise.

7. Make two changes to Sec. 930.50, Marketing policy:

   In recommending volume regulations, allow the Board to use a crop estimate other than the official USDA crop estimate. Currently, the Board is required to use the USDA estimate.

   Provide that the 10 percent reserve release provided for market expansion only apply during years when restricted percentages are in effect. Currently, the release is being made whether or not volume regulations are in place.

   The Board works with the Department in administering the order. These proposals have not received the approval of the Secretary of Agriculture.

   The Board believes that the proposed changes would improve the administration, operation, and functioning of the order.

   Also, the Fruit and Vegetable Programs of the Agricultural Marketing Service (AMS) proposes to allow such conforming changes to the order which

   [[Page 15582]]

   may be necessary as a result of the hearing.

   The public hearing is held for the purpose of: (i) Receiving evidence about the economic and marketing conditions which relate to the proposed amendments of the order; (ii) determining whether there is a need for the proposed amendments to the order; and (iii) determining whether the proposed amendments or appropriate modifications thereof will tend to effectuate the declared policy of the Act.

   Testimony is invited at the hearing on all the proposals and recommendations contained in this notice, as well as any appropriate modifications or alternatives.

   All persons wishing to submit written material as evidence at the hearing should be prepared to submit four copies of such material at the hearing and should have prepared testimony available for presentation at the hearing.

   From the time the notice of hearing is issued and until the issuance of a final decision in this proceeding, Department employees involved in the decisional process are prohibited from discussing the merits of the hearing issues on an ex parte basis with any person having an interest in the proceeding. The prohibition applies to employees in the following organizational units: Office of the Secretary of Agriculture; Office of the Administrator, AMS; Office of the General Counsel, except any designated employees of the General Counsel assigned to represent the Board in this rulemaking proceeding; and the Fruit and Vegetable Programs, AMS.

   Procedural matters are not subject to the above prohibition and may be discussed at any time.

   List of Subjects in 7 CFR Part 930

   Marketing agreements, Tart cherries, Reporting and recordkeeping requirements.

   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. Testimony is invited on the following proposals or appropriate alternatives or modifications to such proposals.

   Proposals submitted by the Cherry Industry Administrative Board:

   Proposal No. 1

   Amend Sec. 930.52 by revising paragraph (a); removing paragraph (c); redesignating current paragraphs (d) and (e) as paragraphs (c) and (d), respectively; and revising paragraph (c) to read as follows:

   Sec. 930.52 Establishment of districts subject to volume regulation.

   (a) All districts within the production area, as defined in Sec. 930.14, shall be subject to any volume regulations implemented in accordance with this part. The production of any cherries within a district shall cause that district to continue to be subject to any volume regulations implemented in accordance with this part unless the district is otherwise exempted from regulations under Sec. 930.52(c).

   (b) * * *

   (c) Any district producing a crop which falls below 50 percent of the average annual processed production in that district in the previous five years would be exempt from any volume regulation if, in that year, a restricted percentage is established. * * * * *

   Proposal No. 2

   Amend Sec. 930.20 by revising paragraphs (a), (b), (d) and (e); adding a new paragraph (f); and redesignating current paragraphs (f) and (g) as (g) and (h), respectively, to read as follows:

   Sec. 930.20 Establishment and membership.

   (a) There is hereby established a Cherry Industry Administrative Board, the members of which shall be calculated in accordance with paragraph (b) of this section. The number of Board members may vary, depending upon the production levels of the districts. All but one of these members shall be qualified growers and handlers selected pursuant to this part, each of whom shall have an alternate having the same qualifications as the member for whom the person is an alternate. One member of the Board shall be a public member who, along with his or her alternate, shall be elected by the Board from the general public.

   (b) District representation on the Board shall be based upon the previous three year average production in the district and shall be established as follows:

   (1) Up to and including 10 million pounds shall have 1 member;

   (2) Greater than 10 and up to and including 40 million pounds shall have 2 members;

   (3) Greater than 40 and up to and including 80 million pounds shall have 3 members; and

   (4) Greater than 80 million pounds shall have 4 members.

   Allocation of the seats in each district shall be as follows but subject to the provisions of paragraphs (d), (e) and (f) of this section:

   Grower

   Handler District type

   members

   members

   Up to and including 10 million pounds...

   1 Or

   1 More than 10 and up to 40 million pounds

   1

   1 More than 40 and up to 80 million pounds

   1

   2 More than 80 million pounds.............

   2

   2

   (c) * * *

   (d) The ratio of grower to handler representation in districts with three members shall alternate each time the term of a Board member from the representative group having two seats expires. During the initial period of the order, the ratio shall be as designated in paragraph (b) of this section.

   (e) Board members from districts with one seat may be either grower or handlers members and will be nominated and elected as outlined in Sec. 930.23.

   (f) If the 3-year average production of a district changes so that a different number of seats should be allocated to a district, then the Board shall be reestablished by the Secretary, and such seats shall be filled according to the applicable provisions of this part. * * * * *

   Amend Sec. 930.32 by revising paragraph (a) to read as follows:

   Sec. 930.32 Procedure.

   (a) Two-thirds of the members of the Board, including alternates acting for absent members, shall constitute a quorum. For any action of the Board to

   [[Page 15583]]

   pass, at least two-thirds of the entire Board must vote in support of such action. * * * * *

   Proposal No. 3

   Revise Sec. 930.28 to read as follow:

   Sec. 930.28 Alternate members.

   An alternate member of the Board, during the absence of the member for whom that member serves as an alternate, shall act in the place and stead of such member and perform such other duties as assigned. However, if a member is in attendance at a meeting of the Board, an alternate member may not act in the place and stead of such member. In the event a member and his or her alternate are absent from a meeting of the Board, such member or alternate, in that order, may designate, in writing and prior to the meeting, an alternate from another district to act in his or her place. If neither a member nor his or her alternate has designated an alternate as his or her replacement, or if such designated alternate is unable to serve as the replacement, the chairperson may, with the concurrence of a majority of the members including alternates acting as members, designate an alternate, who is present at the meeting and is not acting as a member, to act in the place and stead of the absent member. In the event of the death, removal, resignation or disqualification of a member, the alternate shall act for the member until a successor is appointed and has qualified.

   Proposal No. 4

   Amend Sec. 930.59 by revising paragraphs (a), (b) and (c), removing paragraph (d), revising paragraph (e) and redesignating it as paragraph (d), and adding new paragraphs (e) and (f) to read as follows:

   Sec. 930.59 Handler diversion privilege.

   (a) In general. Handlers handling cherries harvested in a regulated district may fulfill any restricted percentage requirement in full or in part by acquiring diversion certificates or by voluntarily diverting cherries or cherry products in a program approved by the Board, rather than placing cherries in an inventory reserve. Upon voluntary diversion and compliance with the provisions of this section, the Board shall issue to the diverting handler a handler diversion certificate which shall satisfy any restricted percentage or diversion requirement to the extent of the Board or Department inspected weight of the cherries diverted.

   (b) Eligible diversion. Handler diversion certificates shall be issued to handlers only if the cherries are diverted in accordance with the following terms and conditions or such other terms and conditions that the Board, with the approval of the Secretary, may establish. Such diversion may take place in any form which the Board, with the approval of the Secretary, may designate. Such forms may include, but are not limited to:

   (1) Contribution to a Board-approved food bank or other approved charitable organization;

   (2) Use for new product and new market development;

   (3) Export to designated destinations; or

   (4) Other uses or disposition, including destruction of the cherries at the handler's facilities.

   (c) Notification. The handler electing to divert cherries through means authorized under this section shall first notify the Board of such election. Such notification shall describe in detail the manner in which the handler proposes to divert cherries including, if the diversion is to be by means of destruction of the cherries, a detailed description of the means of destruction and ultimate disposition of the cherries. It shall also contain an agreement that the proposed diversion is to be carried out under the supervision of the Board and that the cost of such supervision is to be paid by the handler. Uniform fees for such supervision may be established by the Board, pursuant to rules and regulations approved by the Secretary.

   (d) Diversion certificate. The Board shall conduct such supervision of the handler's diversion of cherries under paragraph (c) of this section as may be necessary to assure that the cherries are diverted as authorized. After the diversion has been completed, the Board shall issue to the diverting handler a handler diversion certificate indicating the weight of cherries which may be used to offset any restricted percentage requirement.

   (e) Transfer of certificates. Within such restrictions as may be prescribed in rules and regulations, including but not limited to procedures for transfer of diversion credit and limitations on the type of certification eligible for transfer, a handler who acquires diversion certificates representing diverted cherries during any crop year may transfer such certificates to another handler or handlers. The Board must be notified in writing whenever such transfers take place during a crop year.

   (f) The Board, with the approval of the Secretary, may establish rules and regulations necessary and incidental to the administration of this section.

   Revise Sec. 930.62 to read as follows:

   Sec. 930.62 Exempt uses.

   (a) The Board, with the approval of the Secretary, may exempt from the provisions of Sec. 930.41, Sec. 930.44, Sec. 940.51, Sec. 930.53, and Sec. 930.55 through Sec. 930.57 cherries for designated uses. Such uses may include, but are not limited to:

   (1) New product and new market development;

   (2) Export to designated destinations;

   (3) Experimental purposes; or

   (4) For any other use designated by the Board, including cherries processed into products for markets for which less than 5 percent of the preceding 5-year average production of cherries were utilized.

   (b) The Board, with the approval of the Secretary, shall prescribe such rules, regulations, and safeguards as it may deem necessary to ensure that cherries handled under the provisions of this section are handled only as authorized.

   (c) Diversion certificates shall not be issued for cherries which are used for exempt purposes.

   Proposal No. 5

   Revise Sec. 930.54 to read as follows:

   Sec. 930.54 Prohibition on the use or disposition of inventory reserve cherries.

   Cherries that are placed in inventory reserve pursuant to the requirements of Sec. 930.50, Sec. 930.51, Sec. 930.55, or Sec. 930.57 shall not be used or disposed of by any handler or any other person except as provided in Sec. 930.50 or in paragraph (a) or (b) of this section. (a) If the Board determines that the total available supplies for use in commercial outlets are less than the amount needed to meet the demand in such outlets, the Board may recommend to the Secretary that a portion or all of the primary and/or secondary inventory reserve cherries be released for such use.

   (b) The Board may recommend to the Secretary that a portion or all of the primary and/or secondary inventory reserve cherries be released for sale in certain designated markets.

   Proposal No. 6

   Amend Sec. 930.41 by revising paragraphs (c) and (f) to read as follows:

   Sec. 930.41 Assessments.

   (a) * * *

   (b) * * *

   (c) As a pro rata share of the administrative, inspection, research, development, and promotion expenses which the Secretary finds reasonable and likely to be incurred by the Board

   [[Page 15584]]

   during a fiscal period, each handler shall pay to the Board assessments on all cherries handled, as the handler thereof, during such period: Provided, a handler shall be exempt from any assessment only on the tonnage of handled cherries that either are diverted by destruction at the handler's facilities according to Sec. 930.59 or are cherries represented by grower diversion certificates issued pursuant to Sec. 930.58(b) and acquired by handlers as described in Sec. 930.59.

   (d) * * *

   (e) * * *

   (f) Assessments shall be uniform and calculated on the basis of pounds of cherries handled, unless the Board adopts a formula, approved by the Secretary, for determining the rate(s) of assessment which may compensate:

   (1) for differences in the number of pounds of cherries utilized for various cherry products; or

   (2) for the relative market values of such cherry products; or

   (3) for both of these factors. * * * * *

   Proposal No. 7

   Amend Sec. 930.50 by revising paragraphs (b) and (g) to read as follows:

   Sec. 930.50 Marketing policy.

   (a) * * *

   (b) Preliminary percentages. On or about July 1 of each crop year, the Board shall establish a preliminary free market tonnage percentage which shall be calculated as follows: from the optimum supply computed in paragraph (a) of this section, the Board shall deduct the carryin inventory to determine the tonnage requirements (adjusted to a raw fruit equivalent) for the current crop year which will be subtracted from the current year USDA crop forecast or by an average of such other crop estimates the Board votes to use. If the resulting number is positive, this would represent the estimated over-production which would be the restricted tonnage. This restricted tonnage would then be divided by the sum of the crop forecast(s) for the regulated districts to obtain a preliminary restricted percentage, rounded to the nearest whole number, for the regulated districts. If subtracting the current crop year requirement, computed in the first sentence from the current crop forecast, results in a negative number, the Board shall establish a preliminary free market tonnage percentage of 100 percent with a preliminary restricted percentage of zero. The Board shall announce these preliminary percentages in accordance with paragraph (h) of this section.

   (c) * * *

   (d) * * *

   (e) * * *

   (f) * * *

   (g) Additional tonnage to sell as free tonnage. In addition, the Board, in years when restricted percentages are established, shall make available tonnage equivalent to an additional 10 percent, if available, of the average sales of the prior 3 years, as defined in paragraph (a) of this section, for market expansion. * * * * *

   The Fruit and Vegetable Programs, Agricultural Marketing Service, submitted the following proposal:

   Proposal No. 8

   Make such changes as may be necessary to the order to conform with any amendment thereto that may result from the hearing.

   Dated: March 17, 2000. Kathleen A. Merrigan, Administrator, Agricultural Marketing Service.

   [FR Doc. 00-7160Filed3-22-00; 8:45 am]

   BILLING CODE 3410-02-P