81_FR_22585 81 FR 22511 - Tart Cherries Grown in the States of Michigan, et al.; Revision of Exemption Requirements

81 FR 22511 - Tart Cherries Grown in the States of Michigan, et al.; Revision of Exemption Requirements

DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

Federal Register Volume 81, Issue 74 (April 18, 2016)

Page Range22511-22513
FR Document2016-08834

The Department of Agriculture (USDA) is adopting, as a final rule, without change, an interim rule implementing a recommendation from the Cherry Industry Administrative Board (Board) that revised 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. The interim rule changed the number of years that new market development and market expansion projects are eligible for handler diversion credit from one year to three years. The interim rule also revised 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 81 Issue 74 (Monday, April 18, 2016)
[Federal Register Volume 81, Number 74 (Monday, April 18, 2016)]
[Rules and Regulations]
[Pages 22511-22513]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-08834]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

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Federal Register / Vol. 81, No. 74 / Monday, April 18, 2016 / Rules 
and Regulations

[[Page 22511]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Doc. No. AMS-FV-15-0046; FV15-930-1 FIR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Affirmation of interim rule as final rule.

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

SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim rule implementing a recommendation 
from the Cherry Industry Administrative Board (Board) that revised 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. The interim rule changed the number of years that new 
market development and market expansion projects are eligible for 
handler diversion credit from one year to three years. The interim rule 
also revised 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.

DATES: Effective April 19, 2016.

FOR FURTHER INFORMATION CONTACT: Jennie M. Varela, Marketing 
Specialist, or Christian D. Nissen, Regional Director, Southeast 
Marketing Field Office, Marketing Order and Agreement Division, 
Specialty Crops Program, AMS, USDA; Telephone: (863) 324-3375, Fax: 
(863) 291-8614, or Email: [email protected] or 
[email protected].
    Small businesses may obtain information on complying with this and 
other marketing order regulations by viewing a guide at the following 
Web site: http://www.ams.usda.gov/rules-regulations/moa/small-businesses; or by contacting Antoinette Carter, Marketing Order and 
Agreement Division, Specialty Crops 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 final 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 final rule continues in effect the provisions of the interim 
rule that revised the exemption provisions prescribed under the order. 
The interim rule changed the number of years that new market 
development and market expansion projects are eligible for handler 
diversion credit from one year to three years. The interim rule also 
revised 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. 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. Prior to this change, this 
section specified 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

[[Page 22512]]

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, new 
market and market expansion 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 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 limiting these activities to one year, 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. During the 2014-15 season, the first season with volume 
regulation under the one-year limitation, 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 continues in effect a revision to 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. Prior to this change, the 
previous provisions (Sec.  930.162(d)) stated 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. These 
changes are being considered under a separate action.

Final 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 final 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 
$7,500,000 (13 CFR 121.201).
    According to the National Agricultural Statistics Service and Board 
data, the average annual grower price for tart cherries during the 
2014-15 season was $0.35 per pound, and total utilization was around 
300 million pounds. Therefore, average receipts for tart cherry 
producers were around $175,800, 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 final rule continues in effect the action that revised 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 continues in effect the revision to 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.
    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

[[Page 22513]]

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 is 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 are eligible for diversion credit from one 
year to three years provides handlers with more incentive to utilize 
these programs while not impacting the calculations for free and 
restricted percentages.
    Another alternative considered was maintaining the previous 
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.
    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.
    As noted in the initial regulatory flexibility analysis, USDA has 
not identified any relevant Federal rules that duplicate, overlap, or 
conflict with this final rule. Further, the public comment received 
concerning the proposal did not address the initial regulatory 
flexibility analysis.
    In addition, 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 this 
issue.
    An interim rule concerning this action was published in the Federal 
Register on November 5, 2015, (80 FR 68424) and was effective November 
6, 2015. Copies of the rule were sent via email to all Board members 
and tart cherry handlers. Finally, the rule was made available through 
the internet by USDA and the Office of the Federal Register. A 60-day 
comment period ending January 4, 2016, was provided to allow interested 
persons to respond to the proposal.
    One comment was received during the comment period in response to 
the interim rule. The commenter, a producer, supported part of the 
action but offered an alternative to the membership of the 
subcommittee.
    The commenter supported the expansion of handler diversion credits 
for new market development and market expansion projects from one year 
to three years. The commenter agreed with the Board's finding that it 
will encourage growth in the industry.
    Regarding the change to the membership of the approval 
subcommittee, the commenter suggested that membership should be further 
modified to include cherry growers that are not also handlers. However, 
the Board's intent in making the revision to the subcommittee 
requirements was, in part, to ensure impartiality. Consequently, the 
Board recommended that the subcommittee be composed of members who are 
not affiliated with any handler. Even growers who are not handlers 
themselves have a business relationship with the handlers to which they 
sell.
    The additional points in the comment were not relevant to the 
interim rule. Accordingly, no changes will be made to the interim rule, 
based on the comment received. Therefore, for the reasons given in the 
interim rule, we are adopting the interim rule as a final rule, without 
change.
    To view the interim rule and the comment that was received, go to: 
http://www.regulations.gov/#!docketDetail;D=AMS-FV-15-0046.
    This action also affirms information contained in the interim rule 
concerning Executive Orders 12866, 12988, 13175, and 13563; the 
Paperwork Reduction Act (44 U.S.C. Chapter 35); and the E-Gov Act (44 
U.S.C. 101).
    After consideration of all relevant material presented, it is found 
that finalizing the interim rule, without change, as published in the 
Federal Register (80 FR 68424, November 5, 2015) will tend to 
effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 930

    Marketing agreements, Reporting and recordkeeping requirements, 
Tart cherries.


0
Accordingly, the interim rule that amended 7 CFR part 930 and that was 
published at 80 FR 68424 on November 5, 2015, is adopted as a final 
rule, without change.

    Dated: April 12, 2016.
Elanor Starmer,
Administrator, Agricultural Marketing Service.
[FR Doc. 2016-08834 Filed 4-15-16; 8:45 am]
 BILLING CODE 3410-02-P



                                                                                                                                                                                                22511

                                                Rules and Regulations                                                                                         Federal Register
                                                                                                                                                              Vol. 81, No. 74

                                                                                                                                                              Monday, April 18, 2016



                                                This section of the FEDERAL REGISTER                    Division, Specialty Crops Program,                    Board, rather than placing cherries in an
                                                contains regulatory documents having general            AMS, USDA; Telephone: (863) 324–                      inventory reserve.
                                                applicability and legal effect, most of which           3375, Fax: (863) 291–8614, or Email:                    Section 930.159 of the order’s
                                                are keyed to and codified in the Code of                Jennie.Varela@ams.usda.gov or                         administrative rules specifies methods
                                                Federal Regulations, which is published under           Christian.Nissen@ams.usda.gov.                        of handler diversion, including using
                                                50 titles pursuant to 44 U.S.C. 1510.
                                                                                                           Small businesses may obtain                        cherries or cherry products for exempt
                                                The Code of Federal Regulations is sold by              information on complying with this and                purposes prescribed under § 930.162.
                                                the Superintendent of Documents. Prices of              other marketing order regulations by                  Section 930.162 establishes the terms
                                                new books are listed in the first FEDERAL               viewing a guide at the following Web                  and conditions of exemption that must
                                                REGISTER issue of each week.                            site: http://www.ams.usda.gov/rules-                  be satisfied for handlers to receive
                                                                                                        regulations/moa/small-businesses; or by               diversion certificates for exempt uses.
                                                                                                        contacting Antoinette Carter, Marketing               Section 930.162(b) defines the activities
                                                DEPARTMENT OF AGRICULTURE                               Order and Agreement Division,                         which qualify for exemptions under
                                                                                                        Specialty Crops Program, AMS, USDA,                   new market development and market
                                                Agricultural Marketing Service                          1400 Independence Avenue SW., STOP                    expansion and the period for which
                                                                                                        0237, Washington, DC 20250–0237;                      they are eligible for diversion credit.
                                                7 CFR Part 930                                          Telephone: (202) 720–2491, Fax: (202)                 New market development and market
                                                [Doc. No. AMS–FV–15–0046; FV15–930–1                    720–8938, or Email: Antoinette.Carter@                expansion activities include, but are not
                                                FIR]                                                    ams.usda.gov.                                         limited to, sales of cherries into markets
                                                                                                        SUPPLEMENTARY INFORMATION: This final                 that are not yet commercially
                                                Tart Cherries Grown in the States of                    rule is issued under Marketing Order                  established, product line extensions, or
                                                Michigan, et al.; Revision of Exemption                 No. 930, as amended (7 CFR part 930),                 segmentation of markets along
                                                Requirements                                            regulating the handling of tart cherries              geographic or other definable
                                                                                                        grown in the States of Michigan, New                  characteristics.
                                                AGENCY:   Agricultural Marketing Service,
                                                                                                        York, Pennsylvania, Oregon, Utah,                       Section 930.162(d) establishes a
                                                USDA.
                                                                                                        Washington, and Wisconsin, hereinafter                Board-appointed subcommittee to
                                                ACTION: Affirmation of interim rule as                                                                        review the applications for exemption
                                                                                                        referred to as the ‘‘order.’’ The order is
                                                final rule.                                             effective under the Agricultural                      or renewal of exemption and to either
                                                SUMMARY:    The Department of                           Marketing Agreement Act of 1937, as                   approve or deny the exemption. Prior to
                                                Agriculture (USDA) is adopting, as a                    amended (7 U.S.C. 601–674), hereinafter               this change, this section specified that
                                                final rule, without change, an interim                  referred to as the ‘‘Act.’’                           the subcommittee consist of three
                                                rule implementing a recommendation                         The Department of Agriculture                      members, including the Board manager,
                                                from the Cherry Industry Administrative                 (USDA) is issuing this rule in                        or a Board member acting in the
                                                Board (Board) that revised the                          conformance with Executive Orders                     manager’s stead, the public member,
                                                exemption provisions under the                          12866, 13563, and 13175.                              and one industry person who is not on
                                                marketing order for tart cherries grown                    This final rule continues in effect the            the Board.
                                                in the States of Michigan, New York,                    provisions of the interim rule that                     The order provides for the use of
                                                Pennsylvania, Oregon, Utah,                             revised the exemption provisions                      volume regulation to stabilize prices
                                                Washington, and Wisconsin (order). The                  prescribed under the order. The interim               and improve grower returns during
                                                Board locally administers the order and                 rule changed the number of years that                 periods of oversupply. At the beginning
                                                is comprised of growers and handlers                    new market development and market                     of each season, the Board examines
                                                operating within the production area.                   expansion projects are eligible for                   production and sales data to determine
                                                The interim rule changed the number of                  handler diversion credit from one year                whether a volume regulation is
                                                years that new market development and                   to three years. The interim rule also                 necessary and, if so, announces free and
                                                market expansion projects are eligible                  revised the composition of the                        restricted percentages to limit the
                                                for handler diversion credit from one                   subcommittee which reviews exemption                  volume of tart cherries on the market.
                                                year to three years. The interim rule also              requests. These changes are intended to               Free percentage cherries can be used to
                                                revised the composition of the                          encourage the use of new market                       supply any available market, including
                                                subcommittee which reviews exemption                    development and market expansion                      domestic markets for pie filling, water
                                                requests. These changes are intended to                 activities to facilitate sales and to help            packed, and frozen tart cherries.
                                                encourage handlers to participate in                    ensure impartiality during the review                 Restricted percentage cherries can be
                                                new market and market expansion                         process. These changes were                           placed in reserve or be used to earn
                                                activities to facilitate sales and help                 unanimously recommended by the                        diversion credits as prescribed in
                                                ensure impartiality during the review                   Board at its meeting on June 25, 2015.                §§ 930.159 and 930.162 of the order’s
                                                process.                                                   Section 930.59 of the order authorizes             administrative rules. These activities
mstockstill on DSK4VPTVN1PROD with RULES




                                                                                                        handler diversion. When volume                        include, in part, the development of
                                                DATES:   Effective April 19, 2016.                      regulation is in effect, handlers may                 new products, new market development
                                                FOR FURTHER INFORMATION CONTACT:                        fulfill any restricted percentage                     and market expansion, the development
                                                Jennie M. Varela, Marketing Specialist,                 requirement in full or in part by                     of export markets, and charitable
                                                or Christian D. Nissen, Regional                        acquiring diversion certificates or by                contributions.
                                                Director, Southeast Marketing Field                     voluntarily diverting cherries or cherry                In 2012, the Board made a series of
                                                Office, Marketing Order and Agreement                   products in a program approved by the                 changes to the volume control


                                           VerDate Sep<11>2014   16:20 Apr 15, 2016   Jkt 238001   PO 00000   Frm 00001   Fmt 4700   Sfmt 4700   E:\FR\FM\18APR1.SGM   18APR1


                                                22512               Federal Register / Vol. 81, No. 74 / Monday, April 18, 2016 / Rules and Regulations

                                                provisions to facilitate the marketing of               number of years that new market                       small entities acting on their own
                                                tart cherries and to help lower                         development and market expansion                      behalf.
                                                restrictions during seasons when                        activities are eligible for diversion credit            There are approximately 600
                                                volume control is implemented. One of                   back to three years. The Board also                   producers of tart cherries in the
                                                these changes was to decrease the                       noted that projects approved for the                  regulated area and approximately 40
                                                number of years that new market                         2014–15 season would be allowed to                    handlers of tart cherries who are subject
                                                development and market expansion                        continue and be subject to the new                    to regulation under the order. Small
                                                projects are eligible for handler                       three-year cycle.                                     agricultural producers are defined by
                                                diversion credit from three years to one                   This action also continues in effect a             the Small Business Administration
                                                year. The Board thought this decrease                   revision to the composition of the                    (SBA) as those having annual receipts of
                                                would continue to encourage new                         subcommittee appointed to review                      less than $750,000 and small
                                                market development and market                           exemption applications. The                           agricultural service firms have been
                                                expansion projects while reducing the                   subcommittee was formed to assist                     defined as those having annual receipts
                                                impact these credits had on volume                      Board staff members in reviewing and                  of less than $7,500,000 (13 CFR
                                                restriction calculations. At that time,                 granting exemptions. The subcommittee                 121.201).
                                                new market and market expansion sales                   reviews applications to use restricted                  According to the National
                                                were not included in the average sales                  cherries for activities related to new                Agricultural Statistics Service and
                                                figure used to determine optimum                        product development, new market                       Board data, the average annual grower
                                                supply for volume regulation. The                       development and market expansion, the                 price for tart cherries during the 2014–
                                                Board anticipated the change would                      development of export markets, and for                15 season was $0.35 per pound, and
                                                shift more volume to sales, helping to                  experimental purposes. Prior to this                  total utilization was around 300 million
                                                reduce the calculated surplus and lower                 change, the previous provisions                       pounds. Therefore, average receipts for
                                                the restricted percentage.                              (§ 930.162(d)) stated that the                        tart cherry producers were around
                                                   In revisiting this change, the Board                 subcommittee consists of the manager of               $175,800, well below the SBA threshold
                                                recognized that the underlying rationale                the Board or a Board member acting in                 for small producers. In 2014, The Food
                                                for having reduced the duration of                      their stead, the public member, and one               Institute estimated an f.o.b. price of
                                                diversion credit for new market                         industry member who is not on the                     $0.96 per pound for frozen tart cherries,
                                                development and market expansion was                    Board. The Board recommended                          which make up the majority of
                                                no longer an issue. Since that change,                  changing the composition of the                       processed tart cherries. Using this data,
                                                the method for calculating average sales                subcommittee to help ensure                           average annual handler receipts were
                                                for the purpose of volume regulation has                impartiality so that no one affiliated                about $6.9 million, which is also below
                                                been adjusted so that only export sales                 with a handler was part of the review                 the SBA threshold for small agricultural
                                                are excluded from the average sales                     process.                                              service firms. Assuming a normal
                                                calculation. Consequently, all sales from                  Consequently, the Board                            distribution, the majority of producers
                                                market development and market                           recommended revising the                              and handlers of tart cherries may be
                                                expansion activities are now included                   subcommittee to consist of three                      classified as small entities.
                                                as sales when calculating a restriction.                members, all of whom are not affiliated                 This final rule continues in effect the
                                                Therefore, increasing the number of                     with a handler but have industry                      action that revised § 930.162 of the
                                                years new market development and                        knowledge. One of these members shall                 regulations regarding exemptions by
                                                market expansion projects are eligible to               be the public member or the alternate                 changing the number of years that new
                                                receive diversion credit from one year to               public member, if available to serve.                 market development and market
                                                three years will not significantly impact               The subcommittee will also include a                  expansion projects are eligible for
                                                the calculations for free and restricted                similarly qualified alternate should one              handler diversion credit from one year
                                                percentages.                                            of the other members be unable to serve.              to three years. This rule also continues
                                                   Further, since limiting these activities                The Board made several other                       in effect the revision to the composition
                                                to one year, participation in new market                recommendations for changes to the                    of the subcommittee which reviews
                                                development and market expansion                        regulations under the order at its June               exemption requests. These changes are
                                                activities has dropped dramatically. In                 25, 2015, meeting. These changes are                  intended to encourage the use of new
                                                years prior to changing from three years                being considered under a separate                     market development and market
                                                to one year, applications for new market                action.                                               expansion activities to facilitate sales
                                                activities numbered around 20 to 25 a                                                                         and to help ensure impartiality during
                                                season. During the 2014–15 season, the                  Final Regulatory Flexibility Analysis                 the review process. The authority for
                                                first season with volume regulation                        Pursuant to requirements set forth in              these actions is provided in § 930.59 of
                                                under the one-year limitation,                          the Regulatory Flexibility Act (RFA) (5               the order.
                                                applications dropped to eight. Handlers                 U.S.C. 601–612), the Agricultural                       It is not anticipated that this action
                                                stated that it was not worth the time and               Marketing Service (AMS) has                           will impose additional costs on
                                                effort to develop one of these projects if              considered the economic impact of this                handlers or growers, regardless of size.
                                                the benefit was only for a single year. It              action on small entities. Accordingly,                Rather, this should help handlers
                                                was reported that the shortened time                    AMS has prepared this final regulatory                receive better returns on their new
                                                frame did not allow handlers to recoup                  flexibility analysis.                                 market development and market
                                                the resources needed to establish one of                   The purpose of the RFA is to fit                   expansion projects by providing
                                                these projects.                                         regulatory actions to the scale of                    additional time for the handlers to
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                                                   The Board affirmed its support for                   businesses subject to such actions in                 receive diversion credit for those
                                                new market development and market                       order that small businesses will not be               activities. This should provide more
                                                expansion diversion credit programs.                    unduly or disproportionately burdened.                opportunity for them to recoup the time
                                                Accordingly, the Board voted                            Marketing orders issued pursuant to the               and resources required to establish these
                                                unanimously to change the exemption                     Act, and rules issued thereunder, are                 projects.
                                                provisions applicable to handler                        unique in that they are brought about                   In addition, changing the number of
                                                diversion activities by increasing the                  through group action of essentially                   years that these projects are eligible for


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                                                                    Federal Register / Vol. 81, No. 74 / Monday, April 18, 2016 / Rules and Regulations                                               22513

                                                diversion credits may provide                           that duplicate, overlap, or conflict with                This action also affirms information
                                                additional incentive for handlers to                    this final rule. Further, the public                  contained in the interim rule concerning
                                                develop these programs and may                          comment received concerning the                       Executive Orders 12866, 12988, 13175,
                                                facilitate additional sales, which could                proposal did not address the initial                  and 13563; the Paperwork Reduction
                                                improve returns for growers and                         regulatory flexibility analysis.                      Act (44 U.S.C. Chapter 35); and the E-
                                                handlers. Further, the Board does not                      In addition, the Board’s meeting was               Gov Act (44 U.S.C. 101).
                                                believe that this change significantly                  widely publicized throughout the tart                    After consideration of all relevant
                                                impacts the calculations for free and                   cherry industry, and all interested                   material presented, it is found that
                                                restricted percentages.                                 persons were invited to attend and                    finalizing the interim rule, without
                                                   The change in composition of the                     participate in Board deliberations on all             change, as published in the Federal
                                                subcommittee is administrative in                       issues. Like all Board meetings, the June             Register (80 FR 68424, November 5,
                                                nature and is not expected to result in                 25, 2015, meeting was a public meeting,               2015) will tend to effectuate the
                                                any additional costs.                                   and all entities, both large and small,               declared policy of the Act.
                                                   This rule is expected to benefit the                 were able to express views on this issue.
                                                industry. The effects of this rule are not                                                                    List of Subjects in 7 CFR Part 930
                                                                                                           An interim rule concerning this action
                                                expected to be disproportionately                       was published in the Federal Register                   Marketing agreements, Reporting and
                                                greater or less for small handlers or                   on November 5, 2015, (80 FR 68424)                    recordkeeping requirements, Tart
                                                producers than for larger entities.                     and was effective November 6, 2015.                   cherries.
                                                   The Board discussed alternatives to                  Copies of the rule were sent via email
                                                these changes, including not changing                                                                         ■ Accordingly, the interim rule that
                                                                                                        to all Board members and tart cherry                  amended 7 CFR part 930 and that was
                                                the number of years that new market
                                                                                                        handlers. Finally, the rule was made                  published at 80 FR 68424 on November
                                                development and market expansion
                                                                                                        available through the internet by USDA                5, 2015, is adopted as a final rule,
                                                projects were eligible for diversion
                                                                                                        and the Office of the Federal Register. A             without change.
                                                credit. The Board agreed that increasing
                                                                                                        60-day comment period ending January
                                                the number of years that new market                                                                             Dated: April 12, 2016.
                                                                                                        4, 2016, was provided to allow
                                                development and market expansion                                                                              Elanor Starmer,
                                                                                                        interested persons to respond to the
                                                projects are eligible for diversion credit                                                                    Administrator, Agricultural Marketing
                                                                                                        proposal.
                                                from one year to three years provides                                                                         Service.
                                                handlers with more incentive to utilize                    One comment was received during
                                                                                                        the comment period in response to the                 [FR Doc. 2016–08834 Filed 4–15–16; 8:45 am]
                                                these programs while not impacting the                                                                        BILLING CODE 3410–02–P
                                                calculations for free and restricted                    interim rule. The commenter, a
                                                percentages.                                            producer, supported part of the action
                                                   Another alternative considered was                   but offered an alternative to the
                                                                                                        membership of the subcommittee.                       DEPARTMENT OF AGRICULTURE
                                                maintaining the previous composition
                                                of the subcommittee responsible for                        The commenter supported the                        Agricultural Marketing Service
                                                reviewing exemption requests.                           expansion of handler diversion credits
                                                However, the Board wanted to specify                    for new market development and market                 7 CFR Part 1290
                                                that the subcommittee be composed of                    expansion projects from one year to
                                                                                                        three years. The commenter agreed with                [Document No. AMS–TM–16–0004]
                                                members who are not affiliated with any
                                                handler. Therefore, for the reasons                     the Board’s finding that it will                      RIN 0581–AC59
                                                mentioned above, these alternatives                     encourage growth in the industry.
                                                were rejected.                                             Regarding the change to the                        Specialty Crop Block Grant Program
                                                   In accordance with the Paperwork                     membership of the approval                            Regulation; Removal of a Final Rule
                                                Reduction Act of 1995 (44 U.S.C.                        subcommittee, the commenter suggested
                                                                                                        that membership should be further                     AGENCY:    Agricultural Marketing Service.
                                                Chapter 35), the order’s information
                                                collection requirements have been                       modified to include cherry growers that               ACTION:   Final rule; removal.
                                                previously approved by the Office of                    are not also handlers. However, the
                                                                                                                                                              SUMMARY:   The Agricultural Marketing
                                                Management and Budget (OMB) and                         Board’s intent in making the revision to
                                                                                                                                                              Service (AMS) is rescinding and
                                                assigned OMB No. 0581–0177, (Tart                       the subcommittee requirements was, in
                                                                                                                                                              removing from the Code of Federal
                                                Cherries Grown in the States of                         part, to ensure impartiality.
                                                                                                                                                              Regulations 7 CFR part 1290 entitled
                                                Michigan, New York, Pennsylvania,                       Consequently, the Board recommended
                                                                                                                                                              ‘‘Specialty Crop Block Grant Program’’
                                                Oregon, Utah, Washington, and                           that the subcommittee be composed of
                                                                                                                                                              (SCBGP) in its entirety. This regulation
                                                Wisconsin). No changes in those                         members who are not affiliated with any
                                                                                                                                                              implemented the SCBGP for the fiscal
                                                requirements as a result of this action                 handler. Even growers who are not
                                                                                                                                                              years 2006 to 2008 and is now obsolete.
                                                are necessary. Should any changes                       handlers themselves have a business
                                                                                                        relationship with the handlers to which               DATES: Effective April 19, 2016.
                                                become necessary, they would be
                                                submitted to OMB for approval.                          they sell.                                            FOR FURTHER INFORMATION CONTACT:
                                                   This rule will not impose any                           The additional points in the comment               Trista Etzig, Grants Division Director;
                                                additional reporting or recordkeeping                   were not relevant to the interim rule.                Telephone: (202) 720–8356; email:
                                                requirements on either small or large                   Accordingly, no changes will be made                  Trista.Etzig@ams.usda.gov.
                                                tart cherry handlers. As with all Federal               to the interim rule, based on the                     SUPPLEMENTARY INFORMATION: SCBGP is
                                                marketing order programs, reports and                   comment received. Therefore, for the                  authorized under the Specialty Crop
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                                                forms are periodically reviewed to                      reasons given in the interim rule, we are             Competitiveness Act of 2004 (7 U.S.C.
                                                reduce information requirements and                     adopting the interim rule as a final rule,            1621 note).
                                                duplication by industry and public                      without change.                                          AMS published 7 CFR part 1290, as
                                                sector agencies.                                           To view the interim rule and the                   a Final rule, in the Federal Register on
                                                   As noted in the initial regulatory                   comment that was received, go to:                     September 11, 2006 (71 FR 53307), to
                                                flexibility analysis, USDA has not                      http://www.regulations.gov/#!docket                   establish regulations for SCBGP. SCBGP
                                                identified any relevant Federal rules                   Detail;D=AMS-FV-15-0046.                              is a noncompetitive grant program that


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Document Created: 2016-04-16 01:45:32
Document Modified: 2016-04-16 01:45:32
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
ActionAffirmation of interim rule as final rule.
DatesEffective April 19, 2016.
ContactJennie M. Varela, Marketing Specialist, or Christian D. Nissen, Regional Director, Southeast Marketing Field Office, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 291-8614, or Email: [email protected] or [email protected]
FR Citation81 FR 22511 
CFR AssociatedMarketing Agreements; Reporting and Recordkeeping Requirements and Tart Cherries

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