80_FR_68638 80 FR 68424 - Tart Cherries Grown in the States of Michigan, et al.; Revision of Exemption Requirements

80 FR 68424 - Tart Cherries Grown in the States of Michigan, et al.; Revision of Exemption Requirements

DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

Federal Register Volume 80, Issue 214 (November 5, 2015)

Page Range68424-68427
FR Document2015-28141

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 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.

Federal Register, Volume 80 Issue 214 (Thursday, November 5, 2015)
[Federal Register Volume 80, Number 214 (Thursday, November 5, 2015)]
[Rules and Regulations]
[Pages 68424-68427]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-28141]


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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.

-----------------------------------------------------------------------

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: http://www.regulations.gov. All comments should reference the document number 
and the date and page number of this issue of the Federal Register and 
will be made available for public inspection in the Office of the 
Docket Clerk during regular business hours, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this rule 
will be included in the record and will be made available to the 
public. Please be advised that the identity of the individuals or 
entities submitting the comments will be made public on the internet at 
the address provided above.

FOR FURTHER INFORMATION CONTACT: Jennie M. Varela, Marketing 
Specialist, or Christian D. Nissen, Regional Director, Southeast 
Marketing Field Office, Marketing Order and Agreement Division, Fruit 
and Vegetable Program, AMS, USDA; Telephone: (863) 324-3775, Fax: (863) 
291-8614, or Email: [email protected] or 
[email protected].
    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: [email protected].

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: http://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



                                                68424            Federal Register / Vol. 80, No. 214 / Thursday, November 5, 2015 / Rules and Regulations

                                                   Finally, this rule does not allow 20                 PART 925—GRAPES GROWN IN A                            minimum grade and size requirements
                                                percent of the 5-pound container to                     DESIGNATED AREA OF                                    established in paragraphs (a)(1)(i) or (ii)
                                                consist of loose grapes. Loose grapes are               SOUTHEASTERN CALIFORNIA                               of this section.
                                                not permitted by this relaxation. The 20                                                                        (i) U.S. No. 1 Table, as set forth in the
                                                percent tolerance is given to limit the                 ■ 1. The authority citation for 7 CFR                 United States Standards for Grades of
                                                number of bunches weighing less than                    parts 925 and 944 continues to read as                Table Grapes (European or Vinifera
                                                one-quarter pound and each must still                   follows:                                              Type 7 CFR 51.880 through 51.914),
                                                contain at least five attached berries. As                  Authority: 7 U.S.C. 601–674.                      with the exception of the tolerance
                                                previously stated, this change is not                   ■ 2. Amend § 925.304 by revising                      percentage for bunch size when packed
                                                expected to affect the overall quality of               paragraph (a) introductory text, re-                  in individual consumer clamshell
                                                grapes in the marketplace as all of the                 designating paragraphs (a)(1) and (2) as              packages weighing 5 pounds or less: not
                                                other requirements of U.S. No. 1 Table                  paragraphs (a)(3) and (4) and adding                  more than 20 percent of the weight of
                                                grade, as set forth in the U.S. Standards               new paragraphs (a)(1) and (2) to read as              such containers may consist of single
                                                for Grades of Table Grapes, will still                  follows:                                              clusters weighing less than one-quarter
                                                apply.                                                                                                        pound, but with at least five berries
                                                   A similar requirement has been in                    § 925.304 California Desert Grape                     each; or
                                                place under the marketing order since                   Regulation 6.                                           (ii) U.S. No. 1 Institutional, with the
                                                2010 for clamshell containers weighing                  *      *     *     *      *                           exception of the tolerance percentage for
                                                two pounds or less, and the industry has                   (a) Grade, size, and maturity. Except              bunch size. Such tolerance shall be 33
                                                received positive responses from                        as provided in paragraphs (a)(3) and (4)              percent instead of 4 percent as is
                                                customers. Since that time, the                         of this section, such grapes shall meet               required to meet U.S. No. 1 Institutional
                                                popularity of clamshell containers has                  the minimum grade and size                            grade. Grapes meeting these quality
                                                increased, and larger sized clamshell                   requirements established in paragraphs                requirements may be marked ‘‘DGAC
                                                containers are now being used for                       (a)(1) or (2) of this section.                        No. 1 Institutional’’ but shall not be
                                                packaging grapes due to customer’s                         (1) U.S. No. 1 Table, as set forth in the          marked ‘‘Institutional Pack.’’
                                                demands.                                                United States Standards for Grades of                 *      *    *     *     *
                                                   This action simply applies the same                  Table Grapes (European or Vinifera
                                                                                                        Type 7 CFR 51.880 through 51.914),                    Rex A. Barnes,
                                                requirements to larger clamshell
                                                containers, as desired by customers.                    with the exception of the tolerance                   Associate Administrator, Agricultural
                                                                                                        percentage for bunch size when packed                 Marketing Service.
                                                   Accordingly, no changes will be made
                                                to the rule as proposed, based on the                   in individual consumer clamshell                      [FR Doc. 2015–28136 Filed 11–4–15; 8:45 am]

                                                comments received.                                      packages weighing 5 pounds or less:                   BILLING CODE 3410–02–P

                                                   A small business guide on complying                  Provided that not more than 20 percent
                                                with fruit, vegetable, and specialty crop               of the weight of such containers may
                                                                                                        consist of single clusters weighing less              DEPARTMENT OF AGRICULTURE
                                                marketing agreements and orders may
                                                be viewed at: http://www.ams.usda.gov/                  than one-quarter pound, but with at
                                                                                                        least five berries each; or                           Agricultural Marketing Service
                                                MarketingOrdersSmallBusinessGuide.
                                                                                                           (2) U.S. No. 1 Institutional, with the
                                                Any questions about the compliance                                                                            7 CFR Part 930
                                                                                                        exception of the tolerance percentage for
                                                guide should be sent to Jeffrey Smutny
                                                                                                        bunch size. Such tolerance shall be 33                [Doc. No. AMS–FV–15–0046; FV15–930–1
                                                at the previously mentioned address in
                                                                                                        percent instead of 4 percent as is                    IR]
                                                the FOR FURTHER INFORMATION CONTACT
                                                                                                        required to meet U.S. No. 1 Institutional
                                                section.                                                                                                      Tart Cherries Grown in the States of
                                                                                                        grade. Grapes meeting these quality
                                                   After consideration of all relevant                  requirements may be marked ‘‘DGAC                     Michigan, et al.; Revision of Exemption
                                                matter presented, including the                         No. 1 Institutional’’ but shall not be                Requirements
                                                information and recommendation                          marked ‘‘Institutional Pack.’’
                                                submitted by the Committee and other                                                                          AGENCY:  Agricultural Marketing Service,
                                                available information, it is hereby found               *      *     *     *      *                           USDA.
                                                that this rule, as hereinafter set forth,               PART 944—FRUITS; IMPORT                               ACTION: Interim rule with request for
                                                will tend to effectuate the declared                    REQUIREMENTS                                          comments.
                                                policy of the Act. In accordance with
                                                section 8e of the Act, the United States                ■  3. Amend § 944.503 by revising                     SUMMARY:   This rule implements a
                                                Trade Representative has concurred                      paragraph (a)(1) introductory text,                   recommendation from the Cherry
                                                with the issuance of this rule.                         redesignating paragraphs (a)(1)(i) and                Industry Administrative Board (Board)
                                                                                                        (ii) as paragraphs (a)(1)(iii) and (iv) and           to revise the exemption provisions
                                                List of Subjects                                                                                              under the marketing order for tart
                                                                                                        adding new paragraphs (a)(1)(i) and (ii)
                                                7 CFR Part 925                                          to read as follows:                                   cherries grown in the States of
                                                                                                                                                              Michigan, New York, Pennsylvania,
                                                  Grapes, Marketing agreements,                         § 944.503    Table Grape Import Regulation            Oregon, Utah, Washington, and
                                                Reporting, and recordkeeping                            4.                                                    Wisconsin (order). The Board locally
                                                requirements.                                             (a)(1) Pursuant to section 8e of the Act            administers the order and is comprised
                                                7 CFR Part 944                                          and Part 944—Fruits, Import                           of growers and handlers operating
jstallworth on DSK7TPTVN1PROD with RULES




                                                                                                        Regulations, and except as provided in                within the production area. This rule
                                                  Avocados, Food grades and standards,                  paragraphs (a)(1)(iii) and (iv) of this               changes the number of years that new
                                                Grapefruit, Grapes, Imports, Kiwifruit,                 section, the importation into the United              market development and market
                                                Limes, Olives, Oranges.                                 States of any variety of Vinifera species             expansion projects are eligible for
                                                  For the reasons set forth in the                      table grapes, except Emperor, Calmeria,               handler diversion credit from one year
                                                preamble, 7 CFR parts 925 and 944 are                   Almeria, and Ribier varieties, is                     to three years. This rule also revises the
                                                amended as follows:                                     prohibited unless such grapes meet the                composition of the subcommittee which


                                           VerDate Sep<11>2014   14:34 Nov 04, 2015   Jkt 238001   PO 00000   Frm 00004   Fmt 4700   Sfmt 4700   E:\FR\FM\05NOR1.SGM   05NOR1


                                                                 Federal Register / Vol. 80, No. 214 / Thursday, November 5, 2015 / Rules and Regulations                                       68425

                                                reviews exemption requests. These                       conformance with Executive Orders                     expansion activities include, but are not
                                                changes are intended to encourage                       12866, 13563, and 13175.                              limited to, sales of cherries into markets
                                                handlers to participate in new market                      This rule has been reviewed under                  that are not yet commercially
                                                and market expansion activities to                      Executive Order 12988, Civil Justice                  established, product line extensions, or
                                                facilitate sales and help ensure                        Reform. This rule is not intended to                  segmentation of markets along
                                                impartiality during the review process.                 have retroactive effect.                              geographic or other definable
                                                DATES: Effective November 6, 2015;                         The Act provides that administrative               characteristics.
                                                comments received by January 4, 2016                    proceedings must be exhausted before                    Section 930.162(d) establishes a
                                                will be considered prior to issuance of                 parties may file suit in court. Under                 Board-appointed subcommittee to
                                                a final rule.                                           section 608c(15)(A) of the Act, any                   review the applications for exemption
                                                ADDRESSES: Interested persons are
                                                                                                        handler subject to an order may file                  or renewal of exemption and to either
                                                invited to submit written comments                      with USDA a petition stating that the                 approve or deny the exemption. This
                                                concerning this rule. Comments must be                  order, any provision of the order, or any             section currently specifies that the
                                                sent to the Docket Clerk, Marketing                     obligation imposed in connection with                 subcommittee consist of three members,
                                                Order and Agreement Division, Fruit                     the order is not in accordance with law               including the Board manager, or a Board
                                                and Vegetable Program, AMS, USDA,                       and request a modification of the order               member acting in the manager’s stead,
                                                1400 Independence Avenue SW., STOP                      or to be exempted therefrom. A handler                the public member, and one industry
                                                0237, Washington, DC 20250–0237; Fax:                   is afforded the opportunity for a hearing             person who is not on the Board.
                                                (202) 720–8938; or Internet: http://                    on the petition. After the hearing, USDA                The order provides for the use of
                                                                                                        would rule on the petition. The Act                   volume regulation to stabilize prices
                                                www.regulations.gov. All comments
                                                                                                        provides that the district court of the               and improve grower returns during
                                                should reference the document number
                                                                                                        United States in any district in which                periods of oversupply. At the beginning
                                                and the date and page number of this
                                                                                                        the handler is an inhabitant, or has his              of each season, the Board examines
                                                issue of the Federal Register and will be
                                                                                                        or her principal place of business, has               production and sales data to determine
                                                made available for public inspection in
                                                                                                        jurisdiction to review USDA’s ruling on               whether a volume regulation is
                                                the Office of the Docket Clerk during
                                                                                                        the petition, provided an action is filed             necessary and if so, announces free and
                                                regular business hours, or can be viewed
                                                                                                        not later than 20 days after the date of              restricted percentages to limit the
                                                at: http://www.regulations.gov. All
                                                                                                        the entry of the ruling.                              volume of tart cherries on the market.
                                                comments submitted in response to this                     This rule revises the exemption                    Free percentage cherries can be used to
                                                rule will be included in the record and                 provisions prescribed under the order.                supply any available market, including
                                                will be made available to the public.                   This rule expands the availability of                 domestic markets for pie filling, water
                                                Please be advised that the identity of the              diversion credits for new market                      packed, and frozen tart cherries.
                                                individuals or entities submitting the                  development and market expansion                      Restricted percentage cherries can be
                                                comments will be made public on the                     activities from one year to three years.              placed in reserve, or be used to earn
                                                internet at the address provided above.                 This rule also revises the composition of             diversion credits as prescribed in
                                                FOR FURTHER INFORMATION CONTACT:                        the subcommittee which reviews                        §§ 930.159 and 930.162 of the order’s
                                                Jennie M. Varela, Marketing Specialist,                 exemption requests. These changes are                 administrative rules. These activities
                                                or Christian D. Nissen, Regional                        intended to encourage the use of new                  include, in part, the development of
                                                Director, Southeast Marketing Field                     market developments and market                        new products, new market development
                                                Office, Marketing Order and Agreement                   expansion activities to facilitate sales              and market expansion, the development
                                                Division, Fruit and Vegetable Program,                  and to help ensure impartiality during                of export markets, and charitable
                                                AMS, USDA; Telephone: (863) 324–                        the review process. These changes were                contributions.
                                                3775, Fax: (863) 291–8614, or Email:                    unanimously recommended by the                          In 2012, the Board made a series of
                                                Jennie.Varela@ams.usda.gov or                           Board at its meeting on June 25, 2015.                changes to the volume control
                                                Christian.Nissen@ams.usda.gov.                             Section 930.59 of the order authorizes             provisions to facilitate the marketing of
                                                   Small businesses may request                         handler diversion. When volume                        tart cherries and to help lower
                                                information on complying with this                      regulation is in effect, handlers may                 restrictions during seasons when
                                                regulation by contacting Jeffrey Smutny,                fulfill any restricted percentage                     volume control is implemented. One of
                                                Marketing Order and Agreement                           requirement in full or in part by                     these changes was to decrease the
                                                Division, Fruit and Vegetable Program,                  acquiring diversion certificates or by                number of years that new market
                                                AMS, USDA, 1400 Independence                            voluntarily diverting cherries or cherry              development and market expansion
                                                Avenue SW., STOP 0237, Washington,                      products in a program approved by the                 projects are eligible for handler
                                                DC 20250–0237; Telephone: (202) 720–                    Board, rather than placing cherries in an             diversion credit from three years to one
                                                2491, Fax: (202) 720–8938, or Email:                    inventory reserve.                                    year. The Board thought this decrease
                                                Jeffrey.Smutny@ams.usda.gov.                               Section 930.159 of the order’s                     would continue to encourage new
                                                SUPPLEMENTARY INFORMATION: This rule                    administrative rules specifies methods                market development and market
                                                is issued under Marketing Order No.                     of handler diversion, including using                 expansion projects, while reducing the
                                                930, as amended (7 CFR part 930),                       cherries or cherry products for exempt                impact these credits had on volume
                                                regulating the handling of tart cherries                purposes prescribed under § 930.162.                  restriction calculations. At that time,
                                                grown in the States of Michigan, New                    Section 930.162 establishes the terms                 these sales were not included in the
                                                York, Pennsylvania, Oregon, Utah,                       and conditions of exemption that must                 average sales figure used to determine
                                                Washington, and Wisconsin, hereinafter                  be satisfied for handlers to receive                  optimum supply for volume regulation.
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                                                referred to as the ‘‘order.’’ The order is              diversion certificates for exempt uses.               The Board anticipated the change would
                                                effective under the Agricultural                        Section 930.162(b) defines the activities             shift more volume to sales helping to
                                                Marketing Agreement Act of 1937, as                     which qualify for exemptions under                    reduce the calculated surplus and lower
                                                amended (7 U.S.C. 601–674), hereinafter                 new market development and market                     the restricted percentage.
                                                referred to as the ‘‘Act.’’                             expansion and the period for which                      In revisiting this change, the Board
                                                   The Department of Agriculture                        they are eligible for diversion credit.               recognized that the underlying rationale
                                                (USDA) is issuing this rule in                          New market development and market                     for having reduced the duration of


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                                                68426            Federal Register / Vol. 80, No. 214 / Thursday, November 5, 2015 / Rules and Regulations

                                                diversion credit for new market                         changing the composition of the                       processed tart cherries. Using this data,
                                                development and market expansion was                    subcommittee to help ensure                           average annual handler receipts were
                                                no longer an issue. Since that change,                  impartiality so that no one affiliated                about $6.9 million, which is also below
                                                the method for calculating average sales                with a handler was part of the review                 the SBA threshold for small agricultural
                                                for the purpose of volume regulation has                process.                                              service firms. Assuming a normal
                                                been adjusted so that only export sales                   Consequently, the Board                             distribution, the majority of producers
                                                are excluded from the average sales                     recommended revising the                              and handlers of tart cherries may be
                                                calculation. Consequently, all sales from               subcommittee to consist of three                      classified as small entities.
                                                market development and market                           members all of whom are not affiliated                   This rule revises § 930.162 of the
                                                expansion activities are now included                   with a handler, but have industry                     regulations regarding exemptions by
                                                as sales when calculating a restriction.                knowledge. One of these members shall                 changing the number of years that new
                                                Therefore, increasing the number of                     be the public member or the alternate                 market development and market
                                                years new market development and                        public member, if available to serve.                 expansion projects are eligible for
                                                market expansion projects are eligible to               The subcommittee will also include a                  handler diversion credit from one year
                                                receive diversion credit from one year to               similarly qualified alternate should one              to three years. This rule also revises the
                                                three years will not significantly impact               of the other members be unable to serve.              composition of the subcommittee which
                                                the calculations for free and restricted                  The Board made several other                        reviews exemption requests. These
                                                percentages.                                            recommendations for changes to the                    changes are intended to encourage the
                                                   Further, since making this change,                   regulations under the order at its June               use of new market development and
                                                participation in new market                             25, 2015 meeting. However, these                      market expansion activities to facilitate
                                                development and market expansion                        changes will be considered under a                    sales and to help ensure impartiality
                                                activities has dropped dramatically. In                 separate action.                                      during the review process. The
                                                years prior to changing from three years                Initial Regulatory Flexibility Analysis               authority for these actions is provided
                                                to one year, applications for new market                                                                      in § 930.59 of the order. These changes
                                                activities numbered around 20 to 25 a                      Pursuant to requirements set forth in              were unanimously recommended by the
                                                season. For the 2014–15 season, the first               the Regulatory Flexibility Act (RFA) (5               Board at its meeting on June 25, 2015.
                                                season with volume regulation since the                 U.S.C. 601–612), the Agricultural                        It is not anticipated that this action
                                                change, applications dropped to eight.                  Marketing Service (AMS) has                           will impose additional costs on
                                                Handlers stated that it was not worth                   considered the economic impact of this                handlers or growers, regardless of size.
                                                the time and effort to develop one of                   action on small entities. Accordingly,                Rather, this should help handlers
                                                these projects if the benefit was only for              AMS has prepared this initial regulatory              receive better returns on their new
                                                a single year. It was reported that the                 flexibility analysis.                                 market development and market
                                                shortened time frame did not allow                         The purpose of the RFA is to fit                   expansion projects by providing
                                                handlers to recoup the resources needed                 regulatory actions to the scale of                    additional time for the handlers to
                                                to establish one of these projects.                     businesses subject to such actions in                 receive diversion credit for those
                                                   The Board affirmed its support for                   order that small businesses will not be               activities. This should provide more
                                                new market development and market                       unduly or disproportionately burdened.                opportunity for them to recoup the time
                                                expansion diversion credit programs.                    Marketing orders issued pursuant to the               and resources required to establish these
                                                Accordingly, the Board voted                            Act, and rules issued thereunder, are                 projects. In addition, changing the
                                                unanimously to change the exemption                     unique in that they are brought about                 number of years that these projects are
                                                provisions applicable to handler                        through group action of essentially                   eligible for diversion credits may
                                                diversion activities by increasing the                  small entities acting on their own                    provide additional incentive for
                                                number of years that new market                         behalf.                                               handlers to develop these programs, and
                                                development and market expansion                           There are approximately 600                        may facilitate additional sales which
                                                activities are eligible for diversion credit            producers of tart cherries in the                     could improve returns for growers and
                                                back to three years. The Board also                     regulated area and approximately 40                   handlers. Further, the Board does not
                                                noted that projects approved for the                    handlers of tart cherries who are subject             believe that this change significantly
                                                2014–15 season would be allowed to                      to regulation under the order. Small                  impacts the calculations for free and
                                                continue and be subject to the new                      agricultural producers are defined by                 restricted percentages.
                                                three-year cycle.                                       the Small Business Administration                        The change in composition of the
                                                   This action also revises the                         (SBA) as those having annual receipts of              subcommittee is administrative in
                                                composition of the subcommittee                         less than $750,000 and small                          nature, and not expected to result in any
                                                appointed to review exemption                           agricultural service firms have been                  additional costs.
                                                applications. The subcommittee was                      defined as those having annual receipts                  This rule is expected to benefit the
                                                formed to assist Board staff members in                 of less than $7,000,000 (13 CFR                       industry. The effects of this rule are not
                                                reviewing and granting exemptions. The                  121.201).                                             expected to be disproportionately
                                                subcommittee reviews applications to                       According to the National                          greater or less for small handlers or
                                                use restricted cherries for activities                  Agricultural Statistics Service and                   producers than for larger entities.
                                                related to new product development,                     Board data, the average annual grower                    The Board discussed alternatives to
                                                new market development and market                       price for tart cherries during the 2013–              these changes, including not changing
                                                expansion, the development of export                    14 season was $0.35 per pound, and                    the number of years that new market
                                                markets, and for experimental purposes.                 total shipments were around 289                       development and market expansion
jstallworth on DSK7TPTVN1PROD with RULES




                                                Current rule provisions                                 million pounds. Therefore, average                    projects were eligible for diversion
                                                (§ 930.162(d))state that the                            receipts for tart cherry producers were               credit. The Board agreed that increasing
                                                subcommittee consists of the manager of                 around $168,600, well below the SBA                   the number of years that new market
                                                the Board or a Board member acting in                   threshold for small producers. In 2014,               development and market expansion
                                                their stead, the public member, and one                 The Food Institute estimated an f.o.b.                projects were eligible for diversion
                                                industry member who is not on the                       price of $0.96 per pound for frozen tart              credit from one year to three years
                                                Board. The Board recommended                            cherries, which make up the majority of               provides handlers with more incentive


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                                                                 Federal Register / Vol. 80, No. 214 / Thursday, November 5, 2015 / Rules and Regulations                                             68427

                                                to utilize these programs, while not                    the FOR FURTHER INFORMATION CONTACT                   three years from the handler’s first date
                                                impacting the calculations for free and                 section.                                              of shipment into such outlets.
                                                restricted percentages. Another                           This rule invites comments on                       *      *     *    *     *
                                                alternative considered was maintaining                  changes to the exemption requirements                    (d) Review of applications. A Board
                                                the current composition of the                          currently prescribed under the order.                 appointed subcommittee shall review
                                                subcommittee responsible for reviewing                  Any comments received will be                         applications for exemption or renewal
                                                exemption requests. However, the Board                  considered prior to the finalization of               of exemption and either approve or
                                                wanted to specify that the subcommittee                 this rule.                                            deny the exemption. The subcommittee
                                                be composed of members who are not                        After consideration of all relevant                 shall consist of three members and one
                                                affiliated with any handler. Therefore,                 material presented, including the                     alternate, each having no handler
                                                for the reasons mentioned above, these                  Board’s recommendation, and other                     affiliation but knowledge of the tart
                                                alternatives were rejected.                             information, it is found that this interim            cherry industry, one of whom shall be
                                                   In accordance with the Paperwork                     rule, as hereinafter set forth, will tend             the public member or the alternate
                                                Reduction Act of 1995 (44 U.S.C.                        to effectuate the declared policy of the              public member if available to serve. Any
                                                Chapter 35), the order’s information                    Act.                                                  denial of an application for exemption
                                                collection requirements have been                                                                             or renewal of an existing exemption
                                                previously approved by the Office of                      Pursuant to 5 U.S.C. 553, it is also
                                                                                                        found and determined upon good cause                  shall be served on the applicant by
                                                Management and Budget (OMB) and                                                                               certified mail and shall state the reasons
                                                assigned OMB No. 0581–0177, (Tart                       that it is impracticable, unnecessary,
                                                                                                        and contrary to the public interest to                for the denial. Within 10 days after the
                                                Cherries Grown in the States of                                                                               receipt of a denial, the applicant may
                                                Michigan, New York, Pennsylvania,                       give preliminary notice prior to putting
                                                                                                        this rule into effect and that good cause             file an appeal, in writing, with the
                                                Oregon, Utah, Washington, and                                                                                 Deputy Administrator, Specialty Crops
                                                Wisconsin). No changes in those                         exists for not postponing the effective
                                                                                                        date of this rule until 30 days after                 Program, supported by any arguments
                                                requirements as a result of this action                                                                       and evidence the applicant may wish to
                                                are necessary. Should any changes                       publication in the Federal Register
                                                                                                        because: (1) The Board would like this                offer as to why the application for
                                                become necessary, they would be                                                                               exemption or renewal of exemption
                                                submitted to OMB for approval.                          in in place as soon as possible should
                                                                                                        volume regulation be recommended for                  should have been approved. The Deputy
                                                   Accordingly, this rule will not impose                                                                     Administrator, upon consideration of
                                                any additional reporting or                             this season so handlers can consider
                                                                                                        these changes when making plans; (2)                  such appeal, will take such action as
                                                recordkeeping requirements on either
                                                                                                        the Board unanimously recommended                     deemed appropriate with respect to the
                                                small or large tart cherry handlers. As
                                                                                                        these changes at a public meeting and                 application for exemption or renewal of
                                                with all Federal marketing order
                                                                                                        interested parties had an opportunity to              exemption.
                                                programs, reports and forms are
                                                periodically reviewed to reduce                         provide input; and (3) this rule provides             *      *     *    *     *
                                                information requirements and                            a 60-day comment period and any                         Dated: October 30, 2015.
                                                duplication by industry and public                      comments received will be considered                  Rex A. Barnes,
                                                sector agencies.                                        prior to finalization of this rule.                   Associate Administrator, Agricultural
                                                   AMS is committed to complying with                   List of Subjects in 7 CFR Part 930                    Marketing Service.
                                                the E-Government Act to promote the                                                                           [FR Doc. 2015–28141 Filed 11–4–15; 8:45 am]
                                                use of the internet and other                             Marketing agreements, Reporting and                 BILLING CODE 3410–02–P
                                                information technologies to provide                     recordkeeping requirements, Tart
                                                increased opportunities for citizen                     cherries.
                                                access to Government information and                      For the reasons set forth in the                    FARM CREDIT ADMINISTRATION
                                                services, and for other purposes.                       preamble, 7 CFR part 930 is amended as
                                                   USDA has not identified any relevant                 follows:                                              12 CFR Parts 600 and 606
                                                Federal rules that duplicate, overlap or
                                                conflict with this rule.                                                                                      RIN 3052–AD08
                                                                                                        PART 930—TART CHERRIES GROWN
                                                   The Board’s meeting was widely                       IN THE STATES OF MICHIGAN, NEW                        Organization and Functions;
                                                publicized throughout the tart cherry                   YORK, PENNSYLVANIA, OREGON,                           Enforcement of Nondiscrimination on
                                                industry and all interested persons were                UTAH, WASHINGTON, AND                                 the Basis of Handicap in Programs or
                                                invited to attend and participate in                    WISCONSIN                                             Activities Conducted by the Farm
                                                Board deliberations on all issues. Like
                                                                                                                                                              Credit Administration; Organization of
                                                all Board meetings, the June 25, 2015,                  ■ 1. The authority citation for 7 CFR                 the Farm Credit Administration
                                                meeting was a public meeting and all                    part 930 continues to read as follows:
                                                entities, both large and small, were able                   Authority: 7 U.S.C. 601–674.                      AGENCY:    Farm Credit Administration.
                                                to express views on these issues.                                                                             ACTION:   Final rule.
                                                Finally, interested persons are invited to              ■ 2. Section 930.162 is amended by
                                                submit comments on this interim rule,                   revising the last sentence of paragraph               SUMMARY:   The Farm Credit
                                                including the regulatory and                            (b)(2) and revising paragraph (d) to read             Administration (FCA, we, our or
                                                informational impacts of this action on                 as follows:                                           Agency) issues a final rule amending
                                                small businesses.                                                                                             our regulations in order to reflect
                                                                                                        § 930.162    Exemptions.                              internal organization changes. Another
                                                   A small business guide on complying
jstallworth on DSK7TPTVN1PROD with RULES




                                                with fruit, vegetable, and specialty crop               *     *     *      *    *                             amendment updates a statutory citation
                                                marketing agreements and orders may                       (b) * * *                                           for the Farm Credit Act.
                                                be viewed at: http://www.ams.usda.gov/                    (2) * * * In addition, shipments of                 DATES: This regulation shall become
                                                MarketingOrdersSmallBusinessGuide.                      tart cherries or tart cherry products in              effective no earlier than 30 days after
                                                Any questions about the compliance                      new market development and market                     publication in the Federal Register
                                                guide should be sent to Jeffrey Smutney                 expansion outlets are eligible for                    during which either or both Houses of
                                                at the previously mentioned address in                  handler diversion credit for a period of              Congress are in session. We will publish


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Document Created: 2015-12-14 15:03:53
Document Modified: 2015-12-14 15:03:53
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionInterim rule with request for comments.
DatesEffective November 6, 2015; comments received by January 4, 2016 will be considered prior to issuance of a final rule.
ContactJennie 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: [email protected] or [email protected]
FR Citation80 FR 68424 
CFR AssociatedMarketing Agreements; Reporting and Recordkeeping Requirements and Tart Cherries

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