Tart Cherries Grown in the States of Michigan, et al.; Revision of Exemption Requirements, 68424-68427 [2015-28141]
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68424
Federal Register / Vol. 80, No. 214 / Thursday, November 5, 2015 / Rules and Regulations
Finally, this rule does not allow 20
percent of the 5-pound container to
consist of loose grapes. Loose grapes are
not permitted by this relaxation. The 20
percent tolerance is given to limit the
number of bunches weighing less than
one-quarter pound and each must still
contain at least five attached berries. As
previously stated, this change is not
expected to affect the overall quality of
grapes in the marketplace as all of the
other requirements of U.S. No. 1 Table
grade, as set forth in the U.S. Standards
for Grades of Table Grapes, will still
apply.
A similar requirement has been in
place under the marketing order since
2010 for clamshell containers weighing
two pounds or less, and the industry has
received positive responses from
customers. Since that time, the
popularity of clamshell containers has
increased, and larger sized clamshell
containers are now being used for
packaging grapes due to customer’s
demands.
This action simply applies the same
requirements to larger clamshell
containers, as desired by customers.
Accordingly, no changes will be made
to the rule as proposed, based on the
comments received.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://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.
After consideration of all relevant
matter presented, including the
information and recommendation
submitted by the Committee and other
available information, it is hereby found
that this rule, as hereinafter set forth,
will tend to effectuate the declared
policy of the Act. In accordance with
section 8e of the Act, the United States
Trade Representative has concurred
with the issuance of this rule.
List of Subjects
7 CFR Part 925
jstallworth on DSK7TPTVN1PROD with RULES
Grapes, Marketing agreements,
Reporting, and recordkeeping
requirements.
Avocados, Food grades and standards,
Grapefruit, Grapes, Imports, Kiwifruit,
Limes, Olives, Oranges.
For the reasons set forth in the
preamble, 7 CFR parts 925 and 944 are
amended as follows:
14:34 Nov 04, 2015
Jkt 238001
1. The authority citation for 7 CFR
parts 925 and 944 continues to read as
follows:
■
Authority: 7 U.S.C. 601–674.
2. Amend § 925.304 by revising
paragraph (a) introductory text, redesignating paragraphs (a)(1) and (2) as
paragraphs (a)(3) and (4) and adding
new paragraphs (a)(1) and (2) to read as
follows:
■
§ 925.304 California Desert Grape
Regulation 6.
*
*
*
*
*
(a) Grade, size, and maturity. Except
as provided in paragraphs (a)(3) and (4)
of this section, such grapes shall meet
the minimum grade and size
requirements established in paragraphs
(a)(1) or (2) of this section.
(1) U.S. No. 1 Table, as set forth in the
United States Standards for Grades of
Table Grapes (European or Vinifera
Type 7 CFR 51.880 through 51.914),
with the exception of the tolerance
percentage for bunch size when packed
in individual consumer clamshell
packages weighing 5 pounds or less:
Provided that not more than 20 percent
of the weight of such containers may
consist of single clusters weighing less
than one-quarter pound, but with at
least five berries each; or
(2) U.S. No. 1 Institutional, with the
exception of the tolerance percentage for
bunch size. Such tolerance shall be 33
percent instead of 4 percent as is
required to meet U.S. No. 1 Institutional
grade. Grapes meeting these quality
requirements may be marked ‘‘DGAC
No. 1 Institutional’’ but shall not be
marked ‘‘Institutional Pack.’’
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PART 944—FRUITS; IMPORT
REQUIREMENTS
3. Amend § 944.503 by revising
paragraph (a)(1) introductory text,
redesignating paragraphs (a)(1)(i) and
(ii) as paragraphs (a)(1)(iii) and (iv) and
adding new paragraphs (a)(1)(i) and (ii)
to read as follows:
■
§ 944.503
4.
7 CFR Part 944
VerDate Sep<11>2014
PART 925—GRAPES GROWN IN A
DESIGNATED AREA OF
SOUTHEASTERN CALIFORNIA
Table Grape Import Regulation
(a)(1) Pursuant to section 8e of the Act
and Part 944—Fruits, Import
Regulations, and except as provided in
paragraphs (a)(1)(iii) and (iv) of this
section, the importation into the United
States of any variety of Vinifera species
table grapes, except Emperor, Calmeria,
Almeria, and Ribier varieties, is
prohibited unless such grapes meet the
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minimum grade and size requirements
established in paragraphs (a)(1)(i) or (ii)
of this section.
(i) U.S. No. 1 Table, as set forth in the
United States Standards for Grades of
Table Grapes (European or Vinifera
Type 7 CFR 51.880 through 51.914),
with the exception of the tolerance
percentage for bunch size when packed
in individual consumer clamshell
packages weighing 5 pounds or less: not
more than 20 percent of the weight of
such containers may consist of single
clusters weighing less than one-quarter
pound, but with at least five berries
each; or
(ii) U.S. No. 1 Institutional, with the
exception of the tolerance percentage for
bunch size. Such tolerance shall be 33
percent instead of 4 percent as is
required to meet U.S. No. 1 Institutional
grade. Grapes meeting these quality
requirements may be marked ‘‘DGAC
No. 1 Institutional’’ but shall not be
marked ‘‘Institutional Pack.’’
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*
Rex A. Barnes,
Associate Administrator, Agricultural
Marketing Service.
[FR Doc. 2015–28136 Filed 11–4–15; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 930
[Doc. No. AMS–FV–15–0046; FV15–930–1
IR]
Tart Cherries Grown in the States of
Michigan, et al.; Revision of Exemption
Requirements
Agricultural Marketing Service,
USDA.
ACTION: Interim rule with request for
comments.
AGENCY:
This rule implements a
recommendation from the Cherry
Industry Administrative Board (Board)
to revise the exemption provisions
under the marketing order for tart
cherries grown in the States of
Michigan, New York, Pennsylvania,
Oregon, Utah, Washington, and
Wisconsin (order). The Board locally
administers the order and is comprised
of growers and handlers operating
within the production area. This rule
changes the number of years that new
market development and market
expansion projects are eligible for
handler diversion credit from one year
to three years. This rule also revises the
composition of the subcommittee which
SUMMARY:
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Federal Register / Vol. 80, No. 214 / Thursday, November 5, 2015 / Rules and Regulations
reviews exemption requests. These
changes are intended to encourage
handlers to participate in new market
and market expansion activities to
facilitate sales and help ensure
impartiality during the review process.
DATES: Effective November 6, 2015;
comments received by January 4, 2016
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: https://
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: https://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–
3775, Fax: (863) 291–8614, 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 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
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14:34 Nov 04, 2015
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conformance with Executive Orders
12866, 13563, and 13175.
This rule has been reviewed under
Executive Order 12988, Civil Justice
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
not later than 20 days after the date of
the entry of the ruling.
This rule revises the exemption
provisions prescribed under the order.
This rule expands the availability of
diversion credits for new market
development and market expansion
activities from one year to three years.
This rule also revises the composition of
the subcommittee which reviews
exemption requests. These changes are
intended to encourage the use of new
market developments and market
expansion activities to facilitate sales
and to help ensure impartiality during
the review process. These changes were
unanimously recommended by the
Board at its meeting on June 25, 2015.
Section 930.59 of the order authorizes
handler diversion. When volume
regulation is in effect, handlers 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.
Section 930.159 of the order’s
administrative rules specifies methods
of handler diversion, including using
cherries or cherry products for exempt
purposes prescribed under § 930.162.
Section 930.162 establishes the terms
and conditions of exemption that must
be satisfied for handlers to receive
diversion certificates for exempt uses.
Section 930.162(b) defines the activities
which qualify for exemptions under
new market development and market
expansion and the period for which
they are eligible for diversion credit.
New market development and market
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68425
expansion activities include, but are not
limited to, sales of cherries into markets
that are not yet commercially
established, product line extensions, or
segmentation of markets along
geographic or other definable
characteristics.
Section 930.162(d) establishes a
Board-appointed subcommittee to
review the applications for exemption
or renewal of exemption and to either
approve or deny the exemption. This
section currently specifies that the
subcommittee consist of three members,
including the Board manager, or a Board
member acting in the manager’s stead,
the public member, and one industry
person who is not on the Board.
The order provides for the use of
volume regulation to stabilize prices
and improve grower returns during
periods of oversupply. At the beginning
of each season, the Board examines
production and sales data to determine
whether a volume regulation is
necessary and if so, announces free and
restricted percentages to limit the
volume of tart cherries on the market.
Free percentage cherries can be used to
supply any available market, including
domestic markets for pie filling, water
packed, and frozen tart cherries.
Restricted percentage cherries can be
placed in reserve, or be used to earn
diversion credits as prescribed in
§§ 930.159 and 930.162 of the order’s
administrative rules. These activities
include, in part, the development of
new products, new market development
and market expansion, the development
of export markets, and charitable
contributions.
In 2012, the Board made a series of
changes to the volume control
provisions to facilitate the marketing of
tart cherries and to help lower
restrictions during seasons when
volume control is implemented. One of
these changes was to decrease the
number of years that new market
development and market expansion
projects are eligible for handler
diversion credit from three years to one
year. The Board thought this decrease
would continue to encourage new
market development and market
expansion projects, while reducing the
impact these credits had on volume
restriction calculations. At that time,
these sales were not included in the
average sales figure used to determine
optimum supply for volume regulation.
The Board anticipated the change would
shift more volume to sales helping to
reduce the calculated surplus and lower
the restricted percentage.
In revisiting this change, the Board
recognized that the underlying rationale
for having reduced the duration of
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Federal Register / Vol. 80, No. 214 / Thursday, November 5, 2015 / Rules and Regulations
diversion credit for new market
development and market expansion was
no longer an issue. Since that change,
the method for calculating average sales
for the purpose of volume regulation has
been adjusted so that only export sales
are excluded from the average sales
calculation. Consequently, all sales from
market development and market
expansion activities are now included
as sales when calculating a restriction.
Therefore, increasing the number of
years new market development and
market expansion projects are eligible to
receive diversion credit from one year to
three years will not significantly impact
the calculations for free and restricted
percentages.
Further, since making this change,
participation in new market
development and market expansion
activities has dropped dramatically. In
years prior to changing from three years
to one year, applications for new market
activities numbered around 20 to 25 a
season. For the 2014–15 season, the first
season with volume regulation since the
change, applications dropped to eight.
Handlers stated that it was not worth
the time and effort to develop one of
these projects if the benefit was only for
a single year. It was reported that the
shortened time frame did not allow
handlers to recoup the resources needed
to establish one of these projects.
The Board affirmed its support for
new market development and market
expansion diversion credit programs.
Accordingly, the Board voted
unanimously to change the exemption
provisions applicable to handler
diversion activities by increasing the
number of years that new market
development and market expansion
activities are eligible for diversion credit
back to three years. The Board also
noted that projects approved for the
2014–15 season would be allowed to
continue and be subject to the new
three-year cycle.
This action also revises the
composition of the subcommittee
appointed to review exemption
applications. The subcommittee was
formed to assist Board staff members in
reviewing and granting exemptions. The
subcommittee reviews applications to
use restricted cherries for activities
related to new product development,
new market development and market
expansion, the development of export
markets, and for experimental purposes.
Current rule provisions
(§ 930.162(d))state that the
subcommittee consists of the manager of
the Board or a Board member acting in
their stead, the public member, and one
industry member who is not on the
Board. The Board recommended
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14:34 Nov 04, 2015
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changing the composition of the
subcommittee to help ensure
impartiality so that no one affiliated
with a handler was part of the review
process.
Consequently, the Board
recommended revising the
subcommittee to consist of three
members all of whom are not affiliated
with a handler, but have industry
knowledge. One of these members shall
be the public member or the alternate
public member, if available to serve.
The subcommittee will also include a
similarly qualified alternate should one
of the other members be unable to serve.
The Board made several other
recommendations for changes to the
regulations under the order at its June
25, 2015 meeting. However, these
changes will be considered under a
separate action.
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 the National
Agricultural Statistics Service and
Board data, the average annual grower
price for tart cherries during the 2013–
14 season was $0.35 per pound, and
total shipments were around 289
million pounds. Therefore, average
receipts for tart cherry producers were
around $168,600, well below the SBA
threshold for small producers. In 2014,
The Food Institute estimated an f.o.b.
price of $0.96 per pound for frozen tart
cherries, which make up the majority of
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processed tart cherries. Using this data,
average annual handler receipts were
about $6.9 million, which is also below
the SBA threshold for small agricultural
service firms. Assuming a normal
distribution, the majority of producers
and handlers of tart cherries may be
classified as small entities.
This rule revises § 930.162 of the
regulations regarding exemptions by
changing the number of years that new
market development and market
expansion projects are eligible for
handler diversion credit from one year
to three years. This rule also revises the
composition of the subcommittee which
reviews exemption requests. These
changes are intended to encourage the
use of new market development and
market expansion activities to facilitate
sales and to help ensure impartiality
during the review process. The
authority for these actions is provided
in § 930.59 of the order. These changes
were unanimously recommended by the
Board at its meeting on June 25, 2015.
It is not anticipated that this action
will impose additional costs on
handlers or growers, regardless of size.
Rather, this should help handlers
receive better returns on their new
market development and market
expansion projects by providing
additional time for the handlers to
receive diversion credit for those
activities. This should provide more
opportunity for them to recoup the time
and resources required to establish these
projects. In addition, changing the
number of years that these projects are
eligible for diversion credits may
provide additional incentive for
handlers to develop these programs, and
may facilitate additional sales which
could improve returns for growers and
handlers. Further, the Board does not
believe that this change significantly
impacts the calculations for free and
restricted percentages.
The change in composition of the
subcommittee is administrative in
nature, and not expected to result in any
additional costs.
This rule is expected to benefit the
industry. The effects of this rule are not
expected to be disproportionately
greater or less for small handlers or
producers than for larger entities.
The Board discussed alternatives to
these changes, including not changing
the number of years that new market
development and market expansion
projects were eligible for diversion
credit. The Board agreed that increasing
the number of years that new market
development and market expansion
projects were eligible for diversion
credit from one year to three years
provides handlers with more incentive
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to utilize these programs, while not
impacting the calculations for free and
restricted percentages. Another
alternative considered was maintaining
the current composition of the
subcommittee responsible for reviewing
exemption requests. However, the Board
wanted to specify that the subcommittee
be composed of members who are not
affiliated with any handler. Therefore,
for the reasons mentioned above, 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.
Accordingly, 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.
USDA has not identified any relevant
Federal rules that duplicate, overlap or
conflict with this rule.
The Board’s meeting was widely
publicized throughout the tart cherry
industry and all interested persons were
invited to attend and participate in
Board deliberations on all issues. Like
all Board meetings, the June 25, 2015,
meeting was a public meeting and all
entities, both large and small, were able
to express 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: https://www.ams.usda.gov/
MarketingOrdersSmallBusinessGuide.
Any questions about the compliance
guide should be sent to Jeffrey Smutney
at the previously mentioned address in
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14:34 Nov 04, 2015
Jkt 238001
the FOR FURTHER INFORMATION CONTACT
section.
This rule invites comments on
changes to the exemption requirements
currently prescribed under the order.
Any comments received will be
considered prior to the 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 Board would like this
in in place as soon as possible should
volume regulation be recommended for
this season so handlers can consider
these changes when making plans; (2)
the Board unanimously recommended
these changes at a public meeting and
interested parties had an opportunity to
provide input; and (3) 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
1. The authority citation for 7 CFR
part 930 continues to read as follows:
■
2. Section 930.162 is amended by
revising the last sentence of paragraph
(b)(2) and revising paragraph (d) to read
as follows:
■
Exemptions.
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(b) * * *
(2) * * * In addition, shipments of
tart cherries or tart cherry products in
new market development and market
expansion outlets are eligible for
handler diversion credit for a period of
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three years from the handler’s first date
of shipment into such outlets.
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(d) Review of applications. A Board
appointed subcommittee shall review
applications for exemption or renewal
of exemption and either approve or
deny the exemption. The subcommittee
shall consist of three members and one
alternate, each having no handler
affiliation but knowledge of the tart
cherry industry, one of whom shall be
the public member or the alternate
public member if available to serve. Any
denial of an application for exemption
or renewal of an existing exemption
shall be served on the applicant by
certified mail and shall state the reasons
for the denial. Within 10 days after the
receipt of a denial, the applicant may
file an appeal, in writing, with the
Deputy Administrator, Specialty Crops
Program, supported by any arguments
and evidence the applicant may wish to
offer as to why the application for
exemption or renewal of exemption
should have been approved. The Deputy
Administrator, upon consideration of
such appeal, will take such action as
deemed appropriate with respect to the
application for exemption or renewal of
exemption.
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Dated: October 30, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural
Marketing Service.
[FR Doc. 2015–28141 Filed 11–4–15; 8:45 am]
BILLING CODE 3410–02–P
FARM CREDIT ADMINISTRATION
12 CFR Parts 600 and 606
RIN 3052–AD08
Organization and Functions;
Enforcement of Nondiscrimination on
the Basis of Handicap in Programs or
Activities Conducted by the Farm
Credit Administration; Organization of
the Farm Credit Administration
Farm Credit Administration.
Final rule.
AGENCY:
Authority: 7 U.S.C. 601–674.
§ 930.162
68427
ACTION:
The Farm Credit
Administration (FCA, we, our or
Agency) issues a final rule amending
our regulations in order to reflect
internal organization changes. Another
amendment updates a statutory citation
for the Farm Credit Act.
DATES: This regulation shall become
effective no earlier than 30 days after
publication in the Federal Register
during which either or both Houses of
Congress are in session. We will publish
SUMMARY:
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]]>Agencies
[Federal Register Volume 80, Number 214 (Thursday, November 5, 2015)]
[Rules and Regulations]
[Pages 68424-68427]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-28141]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 930
[Doc. No. AMS-FV-15-0046; FV15-930-1 IR]
Tart Cherries Grown in the States of Michigan, et al.; Revision
of Exemption Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim rule with request for comments.
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SUMMARY: This rule implements a recommendation from the Cherry Industry
Administrative Board (Board) to revise the exemption provisions under
the marketing order for tart cherries grown in the States of Michigan,
New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin
(order). The Board locally administers the order and is comprised of
growers and handlers operating within the production area. This rule
changes the number of years that new market development and market
expansion projects are eligible for handler diversion credit from one
year to three years. This rule also revises the composition of the
subcommittee which
[[Page 68425]]
reviews exemption requests. These changes are intended to encourage
handlers to participate in new market and market expansion activities
to facilitate sales and help ensure impartiality during the review
process.
DATES: Effective November 6, 2015; comments received by January 4, 2016
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: https://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: https://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) 324-3775, Fax: (863)
291-8614, 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
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 Orders 12866, 13563, and 13175.
This rule has been reviewed under Executive Order 12988, Civil
Justice 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 not later than 20 days after the date of
the entry of the ruling.
This rule revises the exemption provisions prescribed under the
order. This rule expands the availability of diversion credits for new
market development and market expansion activities from one year to
three years. This rule also revises the composition of the subcommittee
which reviews exemption requests. These changes are intended to
encourage the use of new market developments and market expansion
activities to facilitate sales and to help ensure impartiality during
the review process. These changes were unanimously recommended by the
Board at its meeting on June 25, 2015.
Section 930.59 of the order authorizes handler diversion. When
volume regulation is in effect, handlers 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.
Section 930.159 of the order's administrative rules specifies
methods of handler diversion, including using cherries or cherry
products for exempt purposes prescribed under Sec. 930.162. Section
930.162 establishes the terms and conditions of exemption that must be
satisfied for handlers to receive diversion certificates for exempt
uses. Section 930.162(b) defines the activities which qualify for
exemptions under new market development and market expansion and the
period for which they are eligible for diversion credit. New market
development and market expansion activities include, but are not
limited to, sales of cherries into markets that are not yet
commercially established, product line extensions, or segmentation of
markets along geographic or other definable characteristics.
Section 930.162(d) establishes a Board-appointed subcommittee to
review the applications for exemption or renewal of exemption and to
either approve or deny the exemption. This section currently specifies
that the subcommittee consist of three members, including the Board
manager, or a Board member acting in the manager's stead, the public
member, and one industry person who is not on the Board.
The order provides for the use of volume regulation to stabilize
prices and improve grower returns during periods of oversupply. At the
beginning of each season, the Board examines production and sales data
to determine whether a volume regulation is necessary and if so,
announces free and restricted percentages to limit the volume of tart
cherries on the market. Free percentage cherries can be used to supply
any available market, including domestic markets for pie filling, water
packed, and frozen tart cherries. Restricted percentage cherries can be
placed in reserve, or be used to earn diversion credits as prescribed
in Sec. Sec. 930.159 and 930.162 of the order's administrative rules.
These activities include, in part, the development of new products, new
market development and market expansion, the development of export
markets, and charitable contributions.
In 2012, the Board made a series of changes to the volume control
provisions to facilitate the marketing of tart cherries and to help
lower restrictions during seasons when volume control is implemented.
One of these changes was to decrease the number of years that new
market development and market expansion projects are eligible for
handler diversion credit from three years to one year. The Board
thought this decrease would continue to encourage new market
development and market expansion projects, while reducing the impact
these credits had on volume restriction calculations. At that time,
these sales were not included in the average sales figure used to
determine optimum supply for volume regulation. The Board anticipated
the change would shift more volume to sales helping to reduce the
calculated surplus and lower the restricted percentage.
In revisiting this change, the Board recognized that the underlying
rationale for having reduced the duration of
[[Page 68426]]
diversion credit for new market development and market expansion was no
longer an issue. Since that change, the method for calculating average
sales for the purpose of volume regulation has been adjusted so that
only export sales are excluded from the average sales calculation.
Consequently, all sales from market development and market expansion
activities are now included as sales when calculating a restriction.
Therefore, increasing the number of years new market development and
market expansion projects are eligible to receive diversion credit from
one year to three years will not significantly impact the calculations
for free and restricted percentages.
Further, since making this change, participation in new market
development and market expansion activities has dropped dramatically.
In years prior to changing from three years to one year, applications
for new market activities numbered around 20 to 25 a season. For the
2014-15 season, the first season with volume regulation since the
change, applications dropped to eight. Handlers stated that it was not
worth the time and effort to develop one of these projects if the
benefit was only for a single year. It was reported that the shortened
time frame did not allow handlers to recoup the resources needed to
establish one of these projects.
The Board affirmed its support for new market development and
market expansion diversion credit programs. Accordingly, the Board
voted unanimously to change the exemption provisions applicable to
handler diversion activities by increasing the number of years that new
market development and market expansion activities are eligible for
diversion credit back to three years. The Board also noted that
projects approved for the 2014-15 season would be allowed to continue
and be subject to the new three-year cycle.
This action also revises the composition of the subcommittee
appointed to review exemption applications. The subcommittee was formed
to assist Board staff members in reviewing and granting exemptions. The
subcommittee reviews applications to use restricted cherries for
activities related to new product development, new market development
and market expansion, the development of export markets, and for
experimental purposes. Current rule provisions (Sec. 930.162(d))state
that the subcommittee consists of the manager of the Board or a Board
member acting in their stead, the public member, and one industry
member who is not on the Board. The Board recommended changing the
composition of the subcommittee to help ensure impartiality so that no
one affiliated with a handler was part of the review process.
Consequently, the Board recommended revising the subcommittee to
consist of three members all of whom are not affiliated with a handler,
but have industry knowledge. One of these members shall be the public
member or the alternate public member, if available to serve. The
subcommittee will also include a similarly qualified alternate should
one of the other members be unable to serve.
The Board made several other recommendations for changes to the
regulations under the order at its June 25, 2015 meeting. However,
these changes will be considered under a separate action.
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 the National Agricultural Statistics Service and Board
data, the average annual grower price for tart cherries during the
2013-14 season was $0.35 per pound, and total shipments were around 289
million pounds. Therefore, average receipts for tart cherry producers
were around $168,600, well below the SBA threshold for small producers.
In 2014, The Food Institute estimated an f.o.b. price of $0.96 per
pound for frozen tart cherries, which make up the majority of processed
tart cherries. Using this data, average annual handler receipts were
about $6.9 million, which is also below the SBA threshold for small
agricultural service firms. Assuming a normal distribution, the
majority of producers and handlers of tart cherries may be classified
as small entities.
This rule revises Sec. 930.162 of the regulations regarding
exemptions by changing the number of years that new market development
and market expansion projects are eligible for handler diversion credit
from one year to three years. This rule also revises the composition of
the subcommittee which reviews exemption requests. These changes are
intended to encourage the use of new market development and market
expansion activities to facilitate sales and to help ensure
impartiality during the review process. The authority for these actions
is provided in Sec. 930.59 of the order. These changes were
unanimously recommended by the Board at its meeting on June 25, 2015.
It is not anticipated that this action will impose additional costs
on handlers or growers, regardless of size. Rather, this should help
handlers receive better returns on their new market development and
market expansion projects by providing additional time for the handlers
to receive diversion credit for those activities. This should provide
more opportunity for them to recoup the time and resources required to
establish these projects. In addition, changing the number of years
that these projects are eligible for diversion credits may provide
additional incentive for handlers to develop these programs, and may
facilitate additional sales which could improve returns for growers and
handlers. Further, the Board does not believe that this change
significantly impacts the calculations for free and restricted
percentages.
The change in composition of the subcommittee is administrative in
nature, and not expected to result in any additional costs.
This rule is expected to benefit the industry. The effects of this
rule are not expected to be disproportionately greater or less for
small handlers or producers than for larger entities.
The Board discussed alternatives to these changes, including not
changing the number of years that new market development and market
expansion projects were eligible for diversion credit. The Board agreed
that increasing the number of years that new market development and
market expansion projects were eligible for diversion credit from one
year to three years provides handlers with more incentive
[[Page 68427]]
to utilize these programs, while not impacting the calculations for
free and restricted percentages. Another alternative considered was
maintaining the current composition of the subcommittee responsible for
reviewing exemption requests. However, the Board wanted to specify that
the subcommittee be composed of members who are not affiliated with any
handler. Therefore, for the reasons mentioned above, 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.
Accordingly, 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.
USDA has not identified any relevant Federal rules that duplicate,
overlap or conflict with this rule.
The Board's meeting was widely publicized throughout the tart
cherry industry and all interested persons were invited to attend and
participate in Board deliberations on all issues. Like all Board
meetings, the June 25, 2015, meeting was a public meeting and all
entities, both large and small, were able to express 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: https://www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions
about the compliance guide should be sent to Jeffrey Smutney at the
previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
This rule invites comments on changes to the exemption requirements
currently prescribed under the order. Any comments received will be
considered prior to the 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 Board would like this in in place as soon as possible
should volume regulation be recommended for this season so handlers can
consider these changes when making plans; (2) the Board unanimously
recommended these changes at a public meeting and interested parties
had an opportunity to provide input; and (3) 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.
0
2. Section 930.162 is amended by revising the last sentence of
paragraph (b)(2) and revising paragraph (d) to read as follows:
Sec. 930.162 Exemptions.
* * * * *
(b) * * *
(2) * * * In addition, shipments of tart cherries or tart cherry
products in new market development and market expansion outlets are
eligible for handler diversion credit for a period of three years from
the handler's first date of shipment into such outlets.
* * * * *
(d) Review of applications. A Board appointed subcommittee shall
review applications for exemption or renewal of exemption and either
approve or deny the exemption. The subcommittee shall consist of three
members and one alternate, each having no handler affiliation but
knowledge of the tart cherry industry, one of whom shall be the public
member or the alternate public member if available to serve. Any denial
of an application for exemption or renewal of an existing exemption
shall be served on the applicant by certified mail and shall state the
reasons for the denial. Within 10 days after the receipt of a denial,
the applicant may file an appeal, in writing, with the Deputy
Administrator, Specialty Crops Program, supported by any arguments and
evidence the applicant may wish to offer as to why the application for
exemption or renewal of exemption should have been approved. The Deputy
Administrator, upon consideration of such appeal, will take such action
as deemed appropriate with respect to the application for exemption or
renewal of exemption.
* * * * *
Dated: October 30, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2015-28141 Filed 11-4-15; 8:45 am]
BILLING CODE 3410-02-P
