Tart Cherries Grown in the States of Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin; Order Regulating Handling

SUMMARY: This final rule establishes a Federal marketing agreement and

order which regulates the handling of tart cherries grown in the States

of Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and

Wisconsin. The order was favored by the required two-thirds majority of

producers voting in a referendum and was also favored by processors who

processed more than 50 percent of the commodity as required by the

Agricultural Marketing Agreement Act of 1937. In addition, the

marketing agreement was executed by the required number of handlers,

that is, handlers who handled more than 50 percent of the tart cherries

handled during the representative period. The marketing agreement and

order authorize volume, grade, size, and maturity regulations and

mandatory inspection. It also authorizes production, processing, and

marketing research and promotion projects, including paid advertising.

The objective of the order is to improve producer returns by

strengthening consumer demand through volume control and quality

assurance mechanisms. Agreement and order activities will be financed

by assessments levied on tart cherry handlers. The order was considered

at several public hearings conducted in 1993, 1994, and 1995. The

referendum was conducted by the Department of Agriculture by mail

ballot June 12 through July 10, 1996.

EFFECTIVE DATE: September 25, 1996.

FOR FURTHER INFORMATION CONTACT:

(1) R. Charles Martin or Kenneth G. Johnson, Marketing Order

Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O.

Box 96456, room 2523-S, Washington, D.C. 20090-6456; telephone: (202)

720-2861, FAX: (202) 720-5698.

(2) Robert Curry, Northwest Marketing Field Office, Marketing Order

Administration Branch, Fruit and Vegetable Division, AMS, USDA, 1220

S.W. Third Avenue, room 369, Portland, Oregon, 97204; telephone: (503)

326-2724, FAX: (503) 326-7440. Small businesses may request information

on compliance with this regulation by contacting: Jay Guerber,

Marketing Order Administration Branch, Fruit and Vegetable Division,

AMS, USDA, P.O. Box 96456, Room 2523-S, Washington, D.C. 20090-6456;

telephone: (202) 720-2491, Fax: (202) 720-5698.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding:

Notice of Hearing, issued on November 30, 1993, and published in

the Federal Register on November 30, and amended on December 23, 1993,

and January 31, 1994 [58 FR 63108, 58 FR 68065, and 59 FR 4259,

respectively]. The notice reopening the hearing was issued on December

5, 1994, and published in the Federal Register on December 8, 1994 [59

FR 63273]; Recommended Decision and Opportunity to File Written

Exceptions to the Proposed Marketing Agreement and Order, issued

November 20, 1995, and published in the Federal Register on November

29, 1995 (60 FR 61292). The reopening of the comment period to file

written exceptions to the proposed marketing agreement and order was

issued on December 27, 1995, and published in the Federal Register on

January 2, 1996 (61 FR 21). The Secretary's Decision was issued on May

22, 1996 and published in the Federal Register on May 29, 1996 (61 FR

26956).

Preliminary Statement

This administrative action is governed by the provisions of

sections 556 and 557 of Title 5 of the United States Code, and is

therefore excluded from the requirements of Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil

Justice Reform. This action is not intended to have retroactive effect.

This rule will not preempt any State or local laws, regulations, or

policies, unless they present an irreconcilable conflict with this

action.

The Act provides that administrative proceedings must be exhausted

before parties may file suit in court. Under section 608c(15)(A) of the

Act, any handler subject to an order may file with the Secretary of

Agriculture (Secretary) a petition stating that the order, any

provision of the order, or any obligation imposed in connection with

the order is not in accordance with law and request a modification of

the order or to be exempted therefrom. A handler is afforded the

opportunity for a hearing on the petition. After the hearing the

Secretary 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 in equity to review the Secretary's ruling

on the petition, provided a bill in equity is filed not later than 20

days after the date of the entry of the ruling.

The proposed marketing agreement and order was formulated on the

record of a public hearing held December 15-17, 1993, in Grand Rapids,

Michigan; January 13, 1994, in Provo, Utah; February 15-17, 1994, in

Portland, Oregon; January 12-13, 1995, in Portland, Oregon; and January

18-19, 1995, in Grand Rapids, Michigan. These multiple hearing sessions

were held to consider a proposed marketing agreement and order

regulating the handling of tart cherries grown in the proposed

production area. The hearing was held pursuant to the provisions of the

Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-

674), hereinafter referred to as the Act, and the applicable rules of

practice and procedure governing the formulation of marketing

agreements and marketing orders (7 CFR part 900). Approximately 40

witnesses, including tart cherry growers, handlers, and economists,

testified in support of the order. Growers and handlers mainly from the

States of Oregon and Washington testified in opposition to the proposed

order and asked to have Oregon and

[[Page 49940]]

Washington excluded from the proposed production area.

At the conclusion of the February 1994 hearing in Oregon, the

deadline for filing post-hearing briefs was set at April 29, 1994. The

deadline for filing post-hearing briefs was subsequently extended to

May 31, 1994. However, based on a review of the hearing evidence and

post hearing briefs, the Department of Agriculture (USDA) determined

that the hearing should be reopened to clarify certain aspects of the

proposal. USDA wanted to obtain additional information and

clarification concerning: (1) The States that should be regulated under

the order; (2) the economic impact of the proposed order on small and

large businesses; (3) whether the expected program benefits would

exceed costs, especially for growers, handlers and consumers; and (4)

how certain provisions would be implemented under the proposed

marketing order. The hearing was reopened and held January 12-13, 1995,

in Portland, Oregon, and January 18-19, 1995 in Grand Rapids, Michigan.

At the conclusion of the Michigan hearing, the deadline for filing

post-hearing briefs was set at March 17, 1995. Ten briefs were filed

following the first briefing period and seven briefs were filed

following the second briefing period.

The proponents testified that severely fluctuating tart cherry

prices are inherently harmful to growers and consumers. It was their

view that the proposed marketing order would improve grower returns by

strengthening consumer demand through volume control and quality

assurance mechanisms.

Upon the basis of evidence introduced at the hearing and the record

thereof, the Administrator of the Agricultural Marketing Service (AMS)

on November 29, 1995, filed with the Hearing Clerk, U. S. Department of

Agriculture, a recommended decision with the opportunity for written

exceptions by December 29, 1995. Subsequently, the USDA received three

requests to provide more time to analyze the recommended decision and

prepare and file written comments. Based on these requests the USDA

reopened the comment period until January 16, 1996.

Upon the basis of evidence introduced at the hearing and the record

thereof, the Deputy Assistant Secretary, Marketing and Regulatory

Programs, on May 22, 1996, filed with the Hearing Clerk, U. S.

Department of Agriculture, a Secretary's Decision and Referendum Order,

directing that a referendum be conducted during the period June 12

through July 10, 1996, among producers and processors of tart cherries

to determine whether they favored issuance of the proposed marketing

order. In the referendum, the marketing order was favored by more than

two-thirds of the producers voting in the referendum and also by

producers of more than two-thirds of the production represented in the

referendum. The marketing order was also favored by processors who

processed 79.3 percent of the total volume of processed tart cherries

during the representative period. The marketing agreement was signed by

handlers who, during the representative period, handled 71 percent of

the volume of tart cherries handled during the representative period.

The referendum results and handler sign-up met the statutory

requirements on producer, processor and handler approval necessary to

issue the marketing order and agreement.

The terms of the order set forth in this document are the same as

those contained in the Secretary's Decision and Referendum Order, with

one exception. This document corrects an error that appeared in section

930.20(c) pertaining to the definition of District 2, Central Michigan.

That definition is revised to read that District 2 consists of that

area north of a line drawn along the northern boundary of Allegan

County, rather than north of a line drawn along the southern boundary

of Allegan County.

Small Business Consideration: In accordance with the Regulatory

Flexibility Act (RFA) (5 U.S.C. 601 et seq.), the Agricultural

Marketing Service considered the economic impact of this action on

small entities. The record indicates that there are approximately 75

handlers of tart cherries in the production area and 1,600 producers.

Small agricultural service firms have been defined by the Small

Business Administration (SBA) (13 CFR 121.601) as those whose annual

receipts are less than $5,000,000, and small agricultural producers are

defined as those having annual receipts of less than $500,000. The

majority of the handlers and producers of tart cherries may be

classified as small entities.

For practical purposes, there is no fresh market for tart cherries.

Processors dry, freeze, can, juice, or puree pitted tart cherries.

Market use averages are: 56 percent of the product becomes industrial

grade frozen cherries; 16 percent goes into consumer-size cans of pie

filling; 8 percent is used for commercial pie filling; 10 percent

becomes juice concentrate; 2 percent is dried; and 8 percent goes into

water packs.

Since 1971, there has been a marked transformation in the

processing industry's structure. Currently, 75 percent of the crop is

processed by farmer-owned cooperatives or grower-owned processing

facilities; whereas in 1971, a substantial volume was processed by

independent handlers. Processors, through their sales agents, market in

all U.S. markets and export to Europe and Asia. There are no discrete

regional markets where cherries from a particular district could have a

particular advantage, beyond nominal differences in transportation

costs, which can often be overcome by price discounting.

The record evidence shows that economic adversity has caused more

than 21 percent of Michigan's growers to withdraw from tart cherry

farming. There were 1,183 Michigan commercial growers in 1986, compared

to 933 in 1992. In 1992, Michigan growers had an average production of

238,000 pounds with 19 percent of those growers averaging 800,000

pounds, accounting for 66 percent of the total Michigan production. In

States other than Michigan, there has also been a general decline in

the number of commercial growers since 1986. There are fewer growers in

other States besides Michigan, but the number of bearing acres has

increased from 45,000 acres in 1986, to more than 50,000 acres in 1990.

Record evidence indicates that the demand for red tart cherries is

inelastic at high and low levels of production, and relatively elastic

in the middle range. At the extremes, during times of very low and very

high production, different factors become operational. In very short

crop years, such as 1991, there is limited but sufficient exclusive

demand for cherries that can cause processor prices to double and

grower prices to triple. In the event of large crops, there seems to be

no price low enough to expand sales beyond about 275 million pounds of

raw fruit in a single year.

Since 1982, annual sales have averaged 230 million pounds. Under

the order, total returns to growers could be increased by restricting

supplies of red tart cherries available for sale by handlers during

large crop years. Also, production characteristics of the tart cherry

industry provide an opportunity to increase growers' total earnings by

converting the excess production of large crop years into storable

products that could constitute reserve pools. These pools would be

liquidated in a year when the available supplies are short.

One of the main concerns addressed in the order is the short term

annual variation in supply which is attributable to climatic factors

that neither growers

[[Page 49941]]

nor processors can control, and which leads to chaotic marketing

conditions. Such climatic factors can result in highly unpredictable

annual crop sizes, causing gluts and shortages of tart cherries. When

gluts occur, large carryin inventories can decrease processor and

grower prices, regardless of the anticipated size of the oncoming

year's crop. Many sales are consummated with large buyers well before

the current crop year's supply and demand situation is clear (based on

what can best be described as ``Anticipated Supply'', i.e., the sum of

the carryin inventory and USDA crop forecast, available usually late in

June, weeks before the actual crop harvest.)

These large, unrestricted carryin inventories and crop estimates

can play a dominant role in setting the tone of the market in a given

year. The order is intended to lessen the impact of these inventories

and estimates by establishing an ``optimum supply,'' thereby reducing

price swings to growers and buyers, and ultimately resulting in a

stabilization and enhancement of the market.

The order would impose some reporting and record keeping

requirements on handlers. Handler testimony indicated that the expected

burden that would be imposed with respect to these requirements would

be negligible since most of the information that would be reported to

the Board is already compiled by handlers for other uses and is readily

available. Reporting and recordkeeping requirements issued under

comparable marketing order programs impose an average annual burden on

each regulated handler of about one hour. It is reasonable to expect

that a comparable burden would be imposed under this marketing order on

the estimated 75 handlers of tart cherries. With respect to growers,

they testified at the hearing that information required to be submitted

to the Board for grower diversion is already collected and available

from growers.

The purpose of the RFA is to fit regulatory and informational

requirements to the size and scale of the business entities in a manner

that is consistent with the objectives of the rule and applicable

statutes. The marketing order provisions have been carefully reviewed

and every effort has been made to eliminate any unnecessary costs or

requirements. As discussed in the RFA, Congress' intent, among other

objectives, was to direct agencies to identify the need for any

``special accommodation'' (e.g., exemption or relaxation) on regulated

small entities (i.e., handlers) because, in the past, some Federal

regulatory and reporting requirements imposed unnecessary and

disproportionately burdensome demands on small businesses. After

reviewing the record AMS determined that direct or indirect costs

imposed under the marketing order regulation would not be

proportionately greater on small handlers than on large handlers, or

conversely, that any projected order benefits would not be

proportionately smaller for small handlers than for large handlers.

The record evidence indicates that the order may impose some

additional costs and requirements on handlers, but those costs are

insignificant and are directly proportional to the sizes of the

regulated handlers. The evidence also indicates that, given the severe

economic conditions and unstable markets facing the majority of the

industry, the benefits to small (as well as large) handlers are likely

to be greater than would accrue under the alternatives to the order

herein, namely no marketing order, or an order without the combination

of volume controls and other order authorities. USDA has made extensive

efforts to notify, and include the input of, small entities and others

in the development phase and subsequent formal rulemaking proceeding.

All handlers, growers, and other interested persons were given an

opportunity to participate in this proceeding and submit testimony, not

once, but twice since the hearing was reopened to take additional

evidence. In addition, USDA mailed to all known growers and handlers

notification of the hearing dates and locations. Any regulations issued

under the order which would regulate the handling of tart cherries, and

which would impose volume, quality or other requirements on handlers,

would not occur without additional rulemaking. Such requirements would

have to be published in the Federal Register, giving all interested

persons full opportunity to participate in the rulemaking proceeding.

Any proposal would have to include economic and other considerations

under rulemaking procedures.

The record evidence indicates that the order would be instrumental

in providing expanding markets and sales, and raising and stabilizing

prices of tart cherries, primarily for the benefit of producers. The

evidence also indicates that handlers would benefit as well. While the

level of such benefits to handlers is difficult to quantify, it is also

clear the provisions of the order are designed to benefit small

entities. Small handlers and producers are more likely to be minimally

capitalized than large entities, and are less likely to survive without

the stability the order would provide.

Accordingly, based on the information discussed above, AMS has

determined that the issuance of this final rule will not have a

significant economic impact on a substantial number of small entities.

In compliance with Office of Management and Budget (OMB)

regulations (5 CFR Part 1320) which implement the Paperwork Reduction

Act of 1995 (Pub. L. 104-13), the information collection and

recordkeeping requirements that may be imposed by this order have been

approved by OMB and assigned OMB Number 0581-0177. Any requirements

imposed will be evaluated against the potential benefits to be derived

and it is expected that any added burden resulting from increased

recordkeeping will not be significant when compared to those

anticipated benefits.

Findings and Determinations

(a) Findings upon the basis of the hearing record. Pursuant to the

provisions of the Agricultural Marketing Agreement Act of 1937, as

amended (7 U.S.C. 601 et seq.) and the applicable rules of practice and

procedure governing the formulation of marketing agreements and

marketing orders (7 CFR Part 900), a public hearing was held upon a

proposed marketing agreement and a proposed order, regulating the

handling of tart cherries grown in the States of Michigan, New York,

Pennsylvania, Oregon, Utah, Washington, and Wisconsin.

Upon the basis of the evidence introduced at the hearing and the

record thereof, it is found that:

(1) The marketing agreement and order, and all of the terms and

conditions thereof, will tend to effectuate the declared policy of the

Act;

(2) The marketing agreement and order regulates the handling of

tart cherries grown in the production area in the same manner as, and

is applicable only to, persons in the respective classes of commercial

and industrial activity specified in the marketing agreement and order

upon which a hearing has been held;

(3) The marketing agreement and order is limited in its application

to the smallest regional production area which is practicable,

consistent with carrying out the declared policy of the Act, and the

issuance of several orders applicable to subdivisions of the production

area will not effectively carry out the declared policy of the Act;

(4) There are no differences in the production and marketing of

tart cherries grown in the production area

[[Page 49942]]

which make necessary different terms and provisions applicable to

different parts of such area; and

(5) All handling of tart cherries grown in the production area is

in the current of interstate or foreign commerce or directly burdens,

obstructs, or affects such commerce.

(b) Additional findings. It is necessary and in the public interest

to make this order effective not later than September 25, 1996.

A later effective date would unnecessarily delay the implementation

of the agreement and order and the collection of handler assessments

necessary to fund day-to-day program expenses and authorized research

and promotion activities. The Department and industry implementation

activities must begin promptly. These activities include, but are not

limited to, the nomination of members and alternate members of the

administrative board to locally administer the marketing order, the

selection of that board by the Secretary of Agriculture, and following

that, holding board meetings to select a management team, draft board

operating guidelines, consider a budget and assessment rate for the

1997 fiscal period, and make other recommendations consistent with

order authority. Some of the board recommendations will require

rulemaking by the Department to be implemented.

In view of the foregoing, it is hereby found and determined that

good cause exists for making this order effective September 25, 1996,

and that it would be contrary to the public interest to delay the

effective date of this order for 30 days after its publication in the

Federal Register (Sec. 553(d), Administrative Procedure Act; 5 U.S.C.

551-559).

(c) Determinations. It is hereby determined that:

(1) The ``Marketing Agreement Regulating the Handling of Tart

Cherries Grown in the States of Michigan, New York, Pennsylvania,

Oregon, Utah, Washington, and Wisconsin'' upon which the aforesaid

public hearing was held has been signed by handlers (excluding

cooperative associations of producers who are not engaged in

processing, distributing, or shipping tart cherries covered by the

order) who during the period July 1, 1995, through May 31, 1996,

handled not less than 50 percent of the volume of such tart cherries

covered by this order, and

(2) The issuance of this order is favored or approved by at least

two-thirds of the producers who participated in a referendum on the

question of its approval and who, during the period July 1, 1995,

through May 31, 1996 (which has been deemed to be a representative

period), have been engaged within the tart cherry production area in

the production of tart cherries for market, such producers having also

produced for market at least two-thirds of the volume of such commodity

represented in the referendum.

List of Subjects in 7 CFR Part 930

Marketing agreements, Tart cherries, Reporting and recordkeeping

requirements.

Order Relative to Handling of Tart Cherries Grown in the States of

Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and

Wisconsin

It is therefore ordered, that on and after the effective date

hereof, all handling of tart cherries grown in the States of Michigan,

New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin, shall

be in conformity to, and in compliance with, the terms and conditions

of the said order, as follows:

The provisions of the marketing order include Secs. 930.1 through

930.91. The marketing agreement includes the provisions of the order

and three additional provisions, Sec. 930.97 Counterparts, Sec. 930.98

Additional parties, and Sec. 930.99 Order with marketing agreement.

These provisions are not published herein as part of the order.

The provisions of the marketing order are set forth in full herein.

Title 7, Chapter IX is amended by adding part 930 to read as

follows:

PART 930--TART CHERRIES GROWN IN THE STATES OF MICHIGAN, NEW YORK,

PENNSYLVANIA, OREGON, UTAH, WASHINGTON, AND WISCONSIN

Subpart--Order Regulating Handling

Definitions

Sec.

930.1 Act.

930.2 Board.

930.3 Cherries.

930.4 Crop year.

930.5 Department or USDA.

930.6 District.

930.7 Fiscal period.

930.8 Free market tonnage percentage cherries.

930.9 Grower.

930.10 Handle.

930.11 Handler.

930.12 Person.

930.13 Primary inventory reserve.

930.14 Production area.

930.15 Restricted percentage cherries.

930.16 Sales constituency.

930.17 Secondary inventory reserve.

930.18 Secretary.

Administrative Body

930.20 Establishment and membership.

930.21 Reestablishment

930.22 Term of office.

930.23 Nomination and election.

930.24 Appointment.

930.25 Failure to nominate.

930.26 Acceptance.

930.27 Vacancies.

930.28 Alternate members

930.29 Eligibility for membership on Cherry Industry Administrative

Board.

930.30 Powers.

930.31 Duties.

930.32 Procedure.

930.33 Expenses and compensation.

Expenses and Assessments

930.40 Expenses.

930.41 Assessments.

930.42 Accounting.

Quality Control

930.44 Quality Control.

Research, Market Development and Promotion

930.48 Research, Market Development and Promotion.

Regulations

930.50 Marketing policy.

930.51 Issuance of volume regulations.

930.52 Establishment of districts subject to volume regulations.

930.53 Modification, suspension, or termination of regulations.

930.54 Prohibition on the use or disposition of inventory reserve

cherries.

930.55 Primary inventory reserves.

930.56 Off-premise inventory reserve.

930.57 Secondary inventory reserve.

930.58 Grower diversion privilege.

930.59 Handler diversion privilege.

930.60 Equity holders.

930.61 Handler compensation.

930.62 Exemptions.

930.63 Deferment of restricted obligation.

Reports and Records

930.70 Reports.

930.71 Records.

930.72 Verification of reports and records.

930.73 Confidential information.

Miscellaneous Provisions

930.80 Compliance.

930.81 Right of the Secretary.

930.82 Effective time.

930.83 Termination.

930.84 Proceedings after termination.

930.85 Effect of termination or amendment.

930.86 Duration of immunities.

930.87 Agents.

930.88 Derogation.

930.89 Personal liability.

930.90 Separability.

930.91 Amendments.

Authority: 7 U.S.C. 601-674

[[Page 49943]]

Subpart--Order Regulating Handling

Definitions

Sec. 930.1 Act.

Act means Public Act No. 10, 73d Congress (May 12, 1933), as

amended, and as reenacted and amended by the Agricultural Marketing

Agreement Act of 1937, as amended (48 Stat. 31, as amended, 68 Stat.

906, 1047; 7 U.S.C. 601 et seq.).

Sec. 930.2 Board.

Board means the Cherry Industry Administrative Board established

pursuant to Sec. 930.20.

Sec. 930.3 Cherries.

Cherries means all tart/sour cherry varieties grown in the

production area classified botanically as Prunus cerasas, or hybrids of

Prunus cerasas by Prunus avium, or Prunus cerasas by Prunus fruticosa.

Sec. 930.4 Crop year.

Crop year means the 12-month period beginning on July 1 of any year

and ending on June 30 of the following year, or such other period as

the Board, with the approval of the Secretary, may establish.

Sec. 930.5 Department or USDA.

Department or USDA means the United States Department of

Agriculture.

Sec. 930.6 District.

District means one of the subdivisions of the production area

described in Sec. 930.20(c), or such other subdivisions as may be

established pursuant to Sec. 930.21, or any subdivision added pursuant

to Sec. 930.52.

Sec. 930.7 Fiscal period.

Fiscal period is synonymous with fiscal year and means the 12-month

period beginning on July 1 of any year and ending on June 30 of the

following year, or such other period as the Board, with the approval of

the Secretary, may establish: Provided, that the initial fiscal period

shall begin on the effective date of this part.

Sec. 930.8 Free market tonnage percentage cherries.

Free market tonnage percentage cherries means that proportion of

cherries handled in a crop year which are free to be marketed in normal

commercial outlets in that crop year under any volume regulation

established pursuant to Sec. 930.50 or Sec. 930.51 and, in the absence

of a restricted percentage being established for a crop year pursuant

to Sec. 930.50 or Sec. 930.51, means all cherries received by handlers

in that crop year.

Sec. 930.9 Grower.

Grower is synonymous with producer and means any person who

produces cherries to be marketed in canned, frozen, or other processed

form and who has a proprietary interest therein: Provided that, the

term grower shall not include a person who produces cherries to be

marketed exclusively for the fresh market in an unpitted condition.

Sec. 930.10 Handle.

Handle means the process to brine, can, concentrate, freeze,

dehydrate, pit, press or puree cherries, or in any other way convert

cherries commercially into a processed product, or divert cherries

pursuant to Sec. 930.59 or obtain grower diversion certificates issued

pursuant to Sec. 930.58, or otherwise place cherries into the current

of commerce within the production area or from the area to points

outside thereof: Provided, That the term handle shall not include:

(a) The brining, canning, concentrating, freezing, dehydration,

pitting, pressing or the converting, in any other way, of cherries into

a processed product for home use and not for resale.

(b) The transportation within the production area of cherries from

the orchard where grown to a processing facility located within such

area for preparation for market.

(c) The delivery of such cherries to such processing facility for

such preparation.

(d) The sale or transportation of cherries by a grower to a handler

of record within the production area.

(e) The sale of cherries in the fresh market in an unpitted

condition.

Sec. 930.11 Handler.

Handler means any person who first handles cherries or causes

cherries to be handled for his or her own account.

Sec. 930.12 Person.

Person means an individual, partnership, corporation, association,

or any other business unit.

Sec. 930.13 Primary inventory reserve.

Primary inventory reserve means that portion of handled cherries

that are placed into handlers' inventories in accordance with any

restricted percentage established pursuant to Sec. 930.50 or

Sec. 930.51.

Sec. 930.14 Production area.

Production area means the States of Michigan, New York,

Pennsylvania, Oregon, Utah, Washington and Wisconsin.

Sec. 930.15 Restricted percentage cherries.

Restricted percentage cherries means that proportion of cherries

handled in a crop year which must be either placed into handlers'

inventories in accordance with Sec. 930.55 or Sec. 930.57 or otherwise

diverted in accordance with Sec. 930.59 and thereby withheld from

marketing in normal commercial outlets under any volume regulation

established pursuant to Sec. 930.50 or Sec. 930.51.

Sec. 930.16 Sales constituency.

Sales constituency means a common marketing organization or

brokerage firm or individual representing a group of handlers or

growers.

Sec. 930.17 Secondary inventory reserve.

Secondary inventory reserve means any portion of handled cherries

voluntarily placed into inventory by a handler under Sec. 930.57.

Sec. 930.18 Secretary.

Secretary means the Secretary of Agriculture of the United States,

or any officer or employee of the U.S. Department of Agriculture to

whom authority has heretofore been delegated, or to whom authority may

hereafter be delegated, to act in the Secretary's stead.

Administrative Body

Sec. 930.20 Establishment and membership.

(a) There is hereby established a Cherry Industry Administrative

Board (Board) consisting of 18 members. Seventeen of these members

shall be qualified growers and handlers selected pursuant to this part,

each of whom shall have an alternate having the same qualifications as

the member for whom the person is an alternate. The remaining member of

the Board shall be a public member who, along with his or her

alternate, shall be elected by the Board from the general public.

(b) District representation on the Board shall be as follows:

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

Grower Handler

District members members

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

1.................................................. 2 2

2.................................................. 1 2

3.................................................. 1 1

4.................................................. 1 1

5.................................................. 1 or 1

6.................................................. 1 or 1

7.................................................. 1 1

8.................................................. 1 or 1

9.................................................. 1 or 1

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

(c) Upon the adoption of this part, the production area shall be

divided into the following described subdivisions for purposes of this

section:

District 1--Northern Michigan: that portion of the State of

Michigan which

[[Page 49944]]

is north of a line drawn along the northern boundary of Mason County

and extended east to Lake Huron.

District 2--Central Michigan: that portion of the State of Michigan

which is south of District 1 and north of a line drawn along the

northern boundary of Allegan County and extended east to Lake St.

Clair.

District 3--Southern Michigan: That portion of the State of

Michigan not included in Districts 1 and 2.

District 4--The State of New York.

District 5--The State of Oregon.

District 6--The State of Pennsylvania.

District 7--The State of Utah.

District 8--The State of Washington.

District 9--The State of Wisconsin.

(d) The ratio of grower to handler representation in District 2

shall alternate each time the term of a Board member from the

representative group having two seats expires. During the initial

period of the order, the ratio shall be as designated in paragraph (b)

of this section.

(e) Board members from Districts 5, 6, 8 and 9 may be either grower

or handler members and will be nominated and elected as outlined in

Sec. 930.23. If District 5, 6, 8, and/or 9 becomes subject to volume

regulation under Secs. 930.52(a), then the Board shall be reestablished

by the Secretary to provide such District(s) with at least one grower

and one handler seat on the Board and such seats shall be filled

according to the provisions of Sec. 930.23.

(f) In order to achieve a fair and balanced representation on the

Board, and to prevent any one sales constituency from gaining control

of the Board, not more than one board member may be from, or affiliated

with, a single sales constituency in those districts having more than

one seat on the Board. There is, however, no prohibition on the number

of Board members from differing districts that may be elected from a

single sales constituency which may have operations in more than one

district. However, as provided in Sec. 930.23, a handler or grower may

only nominate Board members and vote in one district.

(g) Subject to the approval of the Secretary, the Board shall at

its first meeting and annually thereafter elect from among any of its

members a chairperson and a vice-chairperson and may elect other

appropriate officers.

Sec. 930.21 Reestablishment.

Districts, subdivisions of districts, and the distribution of

representation among growers and handlers within a respective district

or subdivision thereof, or among the subdivision of districts, may be

reestablished by the Secretary, subject to the provisions of

Sec. 930.23, based upon recommendations by the Board. In recommending

any such changes, the Board shall consider:

(a) the relative importance of producing areas;

(b) relative production;

(c) the geographic locations of producing areas as they would

affect the efficiency of administration of this part;

(d) shifts in cherry production within the districts and the

production area;

(e) changes in the proportion and role of growers and handlers

within the districts; and (f) other relevant factors.

Sec. 930.22 Term of office.

The term of office of each member and alternate member of the Board

shall be for three fiscal years: Provided that, of the nine initial

members and alternates from the combination of Districts 1, 2 and 3,

one-third of such initial members and alternates shall serve only one

fiscal year, one-third of such members and alternates shall serve only

two fiscal years, one-third of such members and alternates shall serve

three fiscal years; and one-half of the initial members and alternates

from Districts 4 and 7 shall serve only one fiscal year, and one-half

of such initial members and alternates shall serve two fiscal years

(determination of which of the initial members and their alternates

shall serve for 1 fiscal year, 2 fiscal years, or 3 fiscal years, in

both instances, shall be by lot). Members and alternate members shall

serve in such capacity for the portion of the term of office for which

they are selected and have qualified until their respective successors

are selected, have qualified and are appointed. The consecutive terms

of office of grower, handler and public members and alternate members

shall be limited to two 3-year terms, excluding any initial term

lasting less than 3 years. The term of office of a member and alternate

member for the same seat shall be the same. If this part becomes

effective on a date such that the initial fiscal period is less than

six months in duration, then the tolling of time for purposes of this

subsection shall not begin until the beginning of the first 12-month

fiscal period.

Sec. 930.23 Nomination and election.

(a) Forms and ballots. Nomination and election of initial and

successor members and alternate members of the Board shall be conducted

through petition forms and election ballots distributed to all eligible

growers and handlers via the U.S. Postal Service or other means, as

determined by the Secretary. Similar petition forms and election

ballots shall be used for both members and alternate members and any

requirements for election of a member shall apply to the election of an

alternate.

(b) Nomination:

(1) In order for the name of a grower nominee to appear on an

election ballot, the nominee's name must be submitted with a petition

form, to be supplied by the Secretary or the Board, which, except in

District 8, contains at least five signatures of growers, other than

the nominee, from the nominee's district who are eligible to vote in

the referendum. Grower petition forms in District 8 must be signed by

only two growers, other than the nominee, from the nominee's district.

(2) In order for the name of a handler nominee to appear on an

election ballot, the nominee's name must be submitted with a petition

form, to be supplied by the Secretary or the Board, which contains the

signature of at least one handler, other than the nominee, from the

nominee's district who is eligible to vote in the referendum. The

requirement that the petition form be signed by a handler other than

the nominee shall not apply in any District where less than two

handlers are eligible to vote.

(3) Only growers, including duly authorized officers or employees

of growers, who are eligible to serve as grower members of the Board

shall participate in the nomination of grower members and alternate

grower members of the Board. No grower shall participate in the

submission of nominees in more than one district during any fiscal

period. If a grower produces cherries in more than one district, that

grower may select in which district he or she wishes to participate in

the nominations and election process and shall notify the Secretary or

the Board of such selection. A grower may not participate in the

nomination process in one district and the election process in a second

district in the same election cycle.

(4) Only handlers, including duly authorized officers or employees

of handlers, who are eligible to serve as handler members of the Board

shall participate in the nomination of handler members and alternate

handler members of the Board. No handler shall participate in the

selection of nominees in more than one district during any fiscal

period. If a handler handles cherries in more than one district, that

handler may select in which district he or she wishes to participate in

the nominations and election process and shall notify the Secretary or

the Board of such selection. A handler may not participate in the

nominations process in one district and the elections process

[[Page 49945]]

in a second district in the same election cycle. If a person is a

grower and a grower-handler only because some or all of his or her

cherries were custom packed, but he or she does not own or lease and

operate a processing facility, such person may vote only as a grower.

(5) In Districts 5, 6, 8 and 9, both growers and handlers may be

nominated for the district's Board seat. Grower and handler nominations

must follow the petition procedures outlined in paragraphs (b)(1) and

(b)(2) of this section.

(6) All eligible growers and handlers in all districts may submit

the names of the nominees for the public member and alternate public

member of the Board.

(7) After the appointment of the initial Board, the Secretary or

the Board shall announce at least 180 days in advance when a Board

member's term is expiring and shall solicit nominations for that

position in the manner described in this section. Nominations for such

position should be submitted to the Secretary or the Board not less

than 120 days prior to the expiration of such term.

(c) Election:

(1) After receiving nominations, the Secretary or the Board shall

distribute ballots via the U.S. Postal Service or other means, as

determined by the Secretary, to all eligible growers and handlers

containing the names of the nominees by district for the respective

seats on the Board, excluding the public voting member seat. The

ballots will clearly indicate that growers and handlers may only rank

or otherwise vote for nominees in their own district.

(2) Except as provided in paragraph (c)(4) of this section, only

growers, including duly authorized officers or employees of growers,

who are eligible to serve as grower members of the Board shall

participate in the election of grower members and alternate grower

members of the Board. No grower shall participate in the election of

Board members in more than one district during any fiscal period. If a

grower produces cherries in more than one district, the grower must

vote in the same district in which he or she chose to participate in

the nominations process under paragraph (b)(3) of this section.

However, if the grower did not participate in the nominations process,

he or she may select in which district he or she wishes to vote and

shall notify the Secretary or the Board of such selection.

(3) Except as provided in paragraph (c)(4) of this section, only

handlers, including duly authorized officers or employees of handlers,

who are eligible to serve as handler members of the Board shall

participate in the election of handler members and alternate handler

members of the Board. No handler shall participate in the election of

Board members in more than one district during any fiscal period. If a

handler does handle cherries in more than one district, he or she must

vote in the same district in which the handler elected to participate

in the nominations process under paragraph (b)(4) of this section.

However, if a handler did not participate in the nominations process,

that handler may select in which district he or she chooses to vote and

shall notify the Secretary or the Board of such selection. If a person

is a grower and a grower-handler only because some or all of his or her

cherries were custom packed, but he or she does not own or lease and

operate a processing facility, such person may vote only as a grower.

(4) In Districts 5, 6, 8 and 9, growers and handlers may vote for

either the grower or handler nominee(s) for the single seat allocated

to those districts.

(d) The members of the Board appointed by the Secretary pursuant to

Sec. 930.24 shall, at the first meeting and whenever necessary

thereafter, by at least a two-thirds vote of the entire Board, select

individuals to serve as the public member and alternate public member

of the Board from the list of nominees received from growers and

handlers pursuant to paragraph (b) of this section or from other

persons nominated by the Board. The persons selected shall be subject

to appointment by the Secretary under Sec. 930.24.

(e) The Board, with the approval of the Secretary, may establish

rules and regulations necessary and incidental to the administration of

this section.

Sec. 930.24 Appointment.

The selection of nominees made pursuant to elections conducted

under Sec. 930.23(c) shall be submitted to the Secretary in a format

which indicates the nominees by district, with the nominee receiving

the highest number of votes at the top and the number of votes received

being clearly indicated. The Secretary shall appoint from those

nominees or from other qualified individuals, the grower and handler

members of the Board and an alternate for each such member on the basis

of the representation provided for in Sec. 930.20 or as provided for in

any reapportionment or reestablishment undertaken pursuant to

Sec. 930.21. The public member and alternate public member are

nominated by the Board pursuant to Sec. 930.23(d) and shall also be

subject to appointment by the Secretary. The Secretary shall appoint

from nominees by the Board or from other qualified individuals the

public member and the alternate public member.

Sec. 930.25 Failure to nominate.

If nominations are not made within the time and in the manner

prescribed in Sec. 930.23, the Secretary may, without regard to

nominations, select the members and alternate members of the Board on

the basis of the representation provided for in Sec. 930.20 or as

provided for in any reapportionment or reestablishment undertaken

pursuant to Sec. 930.21.

Sec. 930.26 Acceptance.

Each person to be appointed by the Secretary as a member or as an

alternate member of the Board shall, prior to such appointment, qualify

by advising the Secretary that he/she agrees to serve in the position

for which nominated for selection.

Sec. 930.27 Vacancies.

To fill any vacancy occasioned by the failure of any person

appointed as a member or as an alternate member of the Board to

qualify, or in the event of the death, removal, resignation, or

disqualification of any member or alternate member of the Board, a

successor for the unexpired term of such member or alternate member of

the Board shall be appointed by the Secretary from the most recent list

of nominations for the Board made by growers and handlers, from

nominations made by the Board, or from other qualified individuals. Any

nominations made by the Board to fill a vacancy must be received by the

Secretary within 90 days of the effective date of the vacancy. Board

members wishing to resign from the Board must do so in writing to the

Secretary.

Sec. 930.28 Alternate members.

An alternate member of the Board, during the absence of the member

for whom that member serves as an alternate, shall act in the place and

stead of such member and perform such other duties as assigned.

However, if a member is in attendance at a meeting of the Board, an

alternate member may not act in the place and stead of such member. In

the event of the death, removal, resignation, or disqualification of a

member, the alternate shall act for the member until a successor for

such member is appointed and has qualified.

Sec. 930.29 Eligibility for membership on Cherry Industry

Administrative Board.

(a) Each grower member and each grower alternate member of the

Board shall be a grower, or an officer or employee of a grower, in the

district for which nominated or appointed.

[[Page 49946]]

(b) Each handler member and each handler alternate member of the

Board shall be a handler, or an officer or employee of a handler, who

owns, or leases, and operates a cherry processing facility in the

district for which nominated or appointed.

(c) The public member and alternate public member of the Board

shall be prohibited from having any financial interest in the cherry

industry and shall possess such additional qualifications as may be

established by regulation.

Sec. 930.30 Powers.

The Board shall have the following powers:

(a) To administer this part in accordance with its terms and

provisions;

(b) To make rules and regulations to effectuate the terms and

provisions of this part;

(c) To receive, investigate, and report to the Secretary complaints

of violations of this part; and

(d) To recommend to the Secretary amendments to this part.

Sec. 930.31 Duties.

The Board shall have, among others, the following duties:

(a) To select such officers, including a chairperson and vice-

chairperson, as may be necessary, and to define the duties of such

officers and the duties of the chairperson and the vice-chairperson;

(b) To employ or contract with such persons or agents as the Board

deems necessary and to determine the duties and compensation of such

persons or agents;

(c) To select such committees and subcommittees as may be

necessary;

(d) To adopt bylaws and to adopt such rules for the conduct of its

business as it may deem advisable;

(e) To submit to the Secretary a budget for each fiscal period,

prior to the beginning of such period, including a report explaining

the items appearing therein and a recommendation as to the rates of

assessments for such period;

(f) To keep minutes, books, and records which will reflect all of

the acts and transactions of the Board and which shall be subject to

examination by the Secretary;

(g) To prepare periodic statements of the financial operations of

the Board and to make copies of each statement available to growers and

handlers for examination at the office of the Board;

(h) To cause its financial statements to be audited by a certified

public accountant at least once each fiscal year and at such times as

the Secretary may request. Such audit shall include an examination of

the receipt of assessments and the disbursement of all funds. The Board

shall provide the Secretary with a copy of all audits and shall make

copies of such audits, after the removal of any confidential individual

grower or handler information that may be contained in them, available

to growers and handlers for examination at the offices of the Board;

(i) To act as intermediary between the Secretary and any grower or

handler with respect to the operations of this part;

(j) To investigate and assemble data on the growing, handling, and

marketing conditions with respect to cherries;

(k) To apprise the Secretary of all Board meetings in a timely

manner;

(l) To submit to the Secretary such available information as the

Secretary may request;

(m) To investigate compliance with the provisions of this part;

(n) To develop and submit an annual marketing policy for approval

by the Secretary containing the optimum supply of cherries for the crop

year established pursuant to Sec. 930.50 and recommending such

action(s) necessary to achieve such optimum supply;

(o) To implement volume regulations established under Sec. 930.50

and issued by the Secretary under Sec. 930.51, including the release of

any inventory reserves;

(p) To provide thorough communication to growers and handlers

regarding the activities of the Board and to respond to industry

inquiries about Board activities;

(q) To oversee the collection of assessments levied under this

part;

(r) To enter into contracts or agreements with such persons and

organizations as the Board may approve for the development and conduct

of activities, including research and promotion activities, authorized

under this part or for the provision of services required by this part

and for the payment of the cost thereof with funds collected through

assessments pursuant to Sec. 930.41 and income from such assessments.

Contracts or agreements for any plan or project shall provide that:

(1) The contractors shall develop and submit to the Board a plan or

project together with a budget(s) which shall show the estimated cost

to be incurred for such plan or project;

(2) Any contract or agreement for a plan or project and any plan or

project adopted by the Board shall only become effective upon approval

by the Secretary; and

(3) Every such contracting party shall keep accurate records of all

of its transactions and make periodic reports to the Board of

activities conducted and an accounting for funds received and expended,

and such other reports as the Secretary or the Board may require. The

Secretary or employees of the Board may audit periodically the records

of the contracting party;

(s) Pending disbursement consistent with its budget, to invest,

with the approval of the Secretary, and in accordance with applicable

Departmental policies, funds collected through assessments authorized

under Sec. 930.41 and income from such assessments;

(t) To establish standards or grade requirements for cherries for

frozen and canned cherry products, subject to the approval of the

Secretary;

(u) To borrow such funds, subject to the approval of the Secretary

and not to exceed the expected expenses of one fiscal year, as are

necessary for administering its responsibilities and obligations under

this part; and

(v) To establish, with the approval of the Secretary, such rules

and procedures relative to administration of this subpart as may be

consistent with the provisions contained in this subpart and as may be

necessary to accomplish the purposes of the Act and the efficient

administration of this subpart.

Sec. 930.32 Procedure.

(a) Twelve members of the Board, including alternates acting for

absent members, shall constitute a quorum. For any action of the Board

to pass, at least two-thirds of the entire Board must vote in support

of such action.

(b) The Board may provide through its own rules and regulations,

subject to approval by the Secretary, for simultaneous meetings of

groups of its members assembled at different locations and for votes to

be conducted by telephone or other means of communication. Votes so

cast shall be promptly confirmed in writing.

(c) All meetings of the Board are open to the public, although the

Board may hold portions of meetings in executive session for the

consideration of certain business. The Board will establish, with the

approval of the Secretary, a means of advanced notification of growers

and handlers of Board meetings.

Sec. 930.33 Expenses and compensation.

Except for the public member and alternate public member who shall

receive such compensation as the Board may establish and the Secretary

may approve, the members of the Board, and alternates when acting as

members,

[[Page 49947]]

shall serve without compensation but shall be reimbursed for necessary

and reasonable expenses, as approved by the Board, incurred by them in

the performance of their duties under this part. The Board at its

discretion may request the attendance of one or more alternates at any

or all meetings, notwithstanding the expected or actual presence of the

respective member(s), and may pay the expenses of such alternates.

Expenses and Assessments

Sec. 930.40 Expenses.

The Board is authorized to incur such expenses as the Secretary

finds are reasonable and likely to be incurred for its maintenance and

functioning and to enable it to exercise its powers and perform its

duties in accordance with the provisions of this part. The funds to

cover such expenses shall be acquired by the levying of assessments as

provided in Sec. 930.41.

Sec. 930.41 Assessments.

(a) An assessment may be levied upon handlers annually under this

part to cover the administrative costs of the Board, costs of

inspection, and any research, development and promotion activities

initiated by the Board under Sec. 930.48.

(b) Each part of an assessment intended to cover the costs of each

activity in paragraph (a) of this section, must be identified and

approved by the Board and the Secretary, and any notification or other

statement regarding assessments provided to handlers must contain such

information.

(c) As a pro rata share of the administrative, inspection,

research, development, and promotion expenses which the Secretary finds

reasonable and likely to be incurred by the Board during a fiscal

period, each handler shall pay to the Board assessments on all cherries

handled, as the handler thereof, during such period: Provided, a

handler shall be exempt from any assessment on the tonnage of handled

cherries that are diverted according to Sec. 930.59 which includes

cherries represented by grower diversion certificates issued pursuant

to Sec. 930.58(b) and acquired by handlers and those cherries devoted

to exempt uses under Sec. 930.62.

(d) The Secretary, after consideration of the recommendation of the

Board, shall fix the rate of assessment to be paid by each handler

during the fiscal period in an amount designed to secure sufficient

funds to cover the expenses which may be approved and incurred during

such period or subsequent period as provided in paragraph (c) of this

section. At any time during or after the fiscal period, the Secretary

may increase the rate of assessment in order to secure sufficient funds

to cover any later finding by the Secretary relative to the expenses

which may be incurred. Such increase shall be applied to all cherries

handled during the applicable fiscal period. In order to provide funds

for the administration of the provisions of this part during the first

part of a fiscal period before sufficient operating income is available

from assessments, the Board may accept the payment of assessments in

advance, and may borrow money for such purposes.

(e) Assessments not paid within a time prescribed by the Board may

be made subject to interest or late payment charges, or both. The

period of time, rate of interest, and late payment charge will be as

recommended by the Board and approved by the Secretary: Provided, That

when interest or late payment charges are in effect, they shall be

applied to all assessments not paid within the prescribed period of

time.

(f) Assessments will be calculated on the basis of pounds of

cherries handled: Provided, That the formula adopted by the Board and

approved by the Secretary for determining the rate of assessment will

compensate for differences in the number of pounds of cherries utilized

for various cherry products and the relative market values of such

cherry products.

(g) The Board, with the approval of the Secretary, may establish

rules and regulations necessary and incidental to the administration of

this section.

Sec. 930.42 Accounting.

(a) If, at the end of a fiscal period, the assessments collected

are in excess of expenses incurred, the Board, with the approval of the

Secretary, may carry over all or any portion of such excess into

subsequent fiscal periods as a reserve. Such reserve funds may be used

to cover any expenses authorized by this part, and to cover necessary

expenses of liquidation in the event of termination of this part. If

any such excess is not retained in a reserve, it shall be refunded

proportionately to the handlers from whom the excess was collected.

Without an additional reserve level approved by the Secretary, the

amount held in reserve may not exceed approximately one year's

operational expenses. Upon termination of this part, any funds not

required to defray the necessary expenses of liquidation shall be

disposed of in such a manner as the Secretary may determine to be

appropriate: Provided, That to the extent practicable, such funds shall

be returned pro rata to the persons from whom such funds were

collected.

(b) All funds received by the Board pursuant to the provisions of

this part shall be used solely for the purpose specified in this part

and shall be accounted for in the manner provided in this part. The

Secretary may at any time require the Board and its members to account

for all receipts and disbursements.

Quality Control

Sec. 930.44 Quality Control.

(a) Quality standards. The Board may establish, with the approval

of the Secretary, such minimum quality and inspection requirements

applicable to cherries as will contribute to orderly marketing or be in

the public interest. If such requirements are adopted, no handler shall

process cherries into manufactured products or sell manufactured

products in the current of commerce unless such cherries and/or such

cherries used in the manufacture of products meet the applicable

requirements as evidenced by certification acceptable to the Board. The

Board, with the approval of the Secretary, may establish rules and

regulations necessary and incidental to the administration of this

section.

(b) Inspection and certification. Whenever the handling of any

cherries requires inspection pursuant to this part, each handler who

handles cherries shall cause such cherries to be inspected by the

appropriate division of USDA, and certified by it as meeting the

applicable requirements of such regulation: Provided, That inspection

and certification shall be required for cherries which previously have

been so inspected and certified only if such cherries have been

regraded, resorted, repackaged, or in any other way further prepared

for market. Promptly after inspection and certification, each such

handler shall submit, or cause to be submitted, to the Board a copy of

the certificate of inspection issued with respect to such cherries.

Research, Market Development and Promotion

Sec. 930.48 Research, market mevelopment and promotion.

The Board, with the approval of the Secretary, may establish or

provide for the establishment of production and processing research,

market research and development, and/or promotional activities,

including paid advertising, designed to assist, improve or promote the

efficient production and processing, marketing, distribution, and

consumption of cherries subject to this

[[Page 49948]]

part. The expense of such projects shall be paid from funds collected

pursuant to this part and the income from such funds.

Regulations

Sec. 930.50 Marketing policy.

(a) Optimum Supply. On or about July 1 of each crop year, the Board

shall hold a meeting to review sales data, inventory data, current crop

forecasts and market conditions in order to establish an optimum supply

level for the crop year. The optimum supply volume shall be calculated

as 100 percent of the average sales of the prior three years to which

shall be added a desirable carryout inventory not to exceed 20 million

pounds or such other amount as the Board, with the approval of the

Secretary may establish. This optimum supply volume shall be announced

by the Board in accordance with paragraph (h) of this section.

(b) Preliminary percentages. On or about July 1 of each crop year,

the Board shall establish a preliminary free market tonnage percentage

which shall be calculated as follows: From the optimum supply computed

in paragraph (a) of this section, the Board shall deduct the carryin

inventory to determine the tonnage requirements (adjusted to a raw

fruit equivalent) for the current crop year which will be subtracted by

the current year USDA crop forecast. If the resulting number is

positive, this would represent the estimated over-production which

would need to be the restricted percentage tonnage. This restricted

percentage tonnage would then be divided by the sum of the USDA crop

forecast for the regulated districts to obtain the percentages for the

regulated districts. The Board shall establish a preliminary restricted

percentage equal to the quotient, rounded to the nearest whole number,

with the compliment being the preliminary free tonnage percentage. If

subtracting the current crop year requirement, computed in the first

sentence from the current USDA crop forecast, results in a negative

number, the Board shall establish a preliminary free tonnage of 100

percent with a preliminary restricted percentage of zero. The Board

shall announce these preliminary percentages in accordance with

paragraph (h) of this section.

(c) Interim percentages. Between July 1 and September 15 of each

crop year, the Board may modify the preliminary free market tonnage and

restricted percentages to adjust to the actual pack occurring in the

industry. The Board shall announce any interim percentages in

accordance with paragraph (h) of this section.

(d) Final percentages. No later than September 15 of each crop

year, the Board shall review actual production during the current crop

year and make such adjustments as are necessary between free and

restricted tonnage to achieve the optimum supply and recommend such

final free market tonnage and restricted percentages to the Secretary

and announce them in accordance with paragraph (h) of this section. The

difference between any final free market tonnage percentage designated

by the Secretary and 100 percent shall be the final restricted

percentage. With its recommendation, the Board shall report on its

consideration of the factors in paragraph (e) of this section.

(e) Factors. When computing preliminary and interim percentages, or

determining final percentages for recommendation to the Secretary, the

Board shall give consideration to the following factors:

(1) The estimated total production of cherries;

(2) The estimated size of the crop to be handled;

(3) The expected general quality of such cherry production;

(4) The expected carryover as of July 1 of canned and frozen

cherries and other cherry products;

(5) The expected demand conditions for cherries in different market

segments;

(6) Supplies of competing commodities;

(7) An analysis of economic factors having a bearing on the

marketing of cherries;

(8) The estimated tonnage held by handlers in primary or secondary

inventory reserves; and

(9) Any estimated release of primary or secondary inventory reserve

cherries during the crop year.

(f) Modification. In the event the Board subsequently deems it

advisable to modify its marketing policy, because of national

emergency, crop failure, or other major change in economic conditions,

it shall hold a meeting for that purpose, and file a report thereof

with the Secretary within 5 days (exclusive of Saturdays, Sundays, and

holidays) after the holding of such meeting, which report shall show

the Board's recommended modification and the basis therefor.

(g) Reserve tonnage to sell as free tonnage. In addition, the Board

shall make available tonnage equivalent to an additional 10 percent, if

available, of the average sales of the prior 3 years for market

expansion. Handlers can determine if they need the additional tonnage

and inform the Board so that reserve cherries may be released to them.

Handlers not desiring the additional tonnage would not have it released

to them.

(h) Publicity. The Board shall promptly give reasonable publicity

to growers and handlers of each meeting to consider a marketing policy

or any modification thereof, and each such meeting shall be open to

them and to the public. Similar publicity shall be given to growers and

handlers of each marketing policy report or modification thereof, filed

with the Secretary and of the Secretary's action thereon. Copies of all

marketing policy reports shall be maintained in the office of the

Board, where they shall be made available for examination. The Board

shall notify handlers, and give reasonable publicity to growers, of its

computation of the optimum supply, preliminary percentages, and interim

percentages and shall notify handlers of the Secretary's action on

final percentages by registered or certified mail.

(i) Restricted Percentages. Restricted percentage requirements

established under paragraphs (b), (c) or (d) of this section may be

fulfilled by handlers by either establishing an inventory reserve in

accordance with Sec. 930.55 or Sec. 930.57 or by diversion of product

in accordance with Sec. 930.59. In years where required, the Board

shall establish a maximum percentage of the restricted quantity which

may be established as a primary inventory reserve such that the total

primary inventory reserve does not exceed 50 million pounds. Handlers

will be permitted to divert (at plant or with grower-diversion

certificates) as much of the restricted percentage requirement as they

deem appropriate, but may not establish a primary inventory reserve in

excess of the percentage established by the Board for restricted

cherries. In the event handlers wish to establish inventory reserve in

excess of this amount, they may do so, in which case it will be

classified as a secondary inventory reserve and will be regulated

accordingly.

(j) Inventory Reserve Release. In years when inventory reserve

cherries are available and when the expected availability of cherries

from the current crop plus expected carryin inventory does not fulfill

the optimum supply, the Board shall release not later than November 1st

of the current crop year such volume from the inventory reserve as will

satisfy the optimum supply.

(k) The Board, with the approval of the Secretary, may establish

rules and regulations necessary and incidental to the administration of

this section.

[[Page 49949]]

Sec. 930.51 Issuance of volume regulations.

(a) Whenever the Secretary finds, from the recommendation and

supporting information supplied by the Board, that to designate final

free market tonnage and restricted percentages for any cherries

acquired by handlers during the crop year will tend to effectuate the

declared policy of the Act, the Secretary shall designate such

percentages. Such regulation designating such percentage shall fix the

free market tonnage and restricted percentages, totaling 100 percent,

which shall be applied in accordance with this section, Sec. 930.55,

Sec. 930.57 and Sec. 930.59 to cherries grown in regulated districts,

as determined under Sec. 930.52, and handled during such fiscal period.

(b) The Board shall be informed immediately of any such regulation

issued by the Secretary, and the Board shall promptly give notice

thereof to handlers.

(c) That portion of a handler's cherries that are restricted

percentage cherries is the product of the restricted percentage imposed

under paragraph (a) of this section multiplied by the tonnage of

cherries, originating in a regulated district, handled, including those

diverted according to Sec. 930.59, by that handler in that fiscal year.

Therefore, while diverted cherries, including those represented by

grower diversion certificates, may be exempt from assessment under

Sec. 930.41, they must be counted when computing restricted percentage

requirements.

(d) The Board, with the approval of the Secretary, shall develop

rules and regulations which shall provide guidelines for handlers in

complying with any restricted tonnage requirements, including, but not

limited to, a grace period of at least 30 days to segregate and

appropriately document any tonnage they wish to place in the inventory

reserve and to assemble any applicable diversion certificates.

Sec. 930.52 Establishment of districts subject to volume regulations.

(a) Upon adoption of this part, the districts in which handlers

shall be subject to any volume regulations implemented in accordance

with this part shall be those districts in which the average annual

production of cherries over the prior three years has exceeded 15

million pounds. Handlers in districts not meeting the 15 million pound

requirement at the time of order promulgation shall become subject to

volume regulation implemented in accordance with this part in the crop

year that follows any three-year period in which the 15 million pound

average production requirement is exceeded in that district.

(b) Handlers in districts which are not subject to volume

regulation would only be so regulated to the extent that they handled

cherries which were grown in a district subject to regulation as

specified in paragraph (a) of this section. In such a case, the handler

must place in inventory reserve pursuant to Sec. 930.55 or Sec. 930.57

or divert pursuant to Sec. 930.59 the required restricted percentage of

the crop originating in the regulated district.

(c) Handlers in districts not meeting the production requirement

described in paragraph (a) of this section in a given year would not be

subject to volume regulation in the next crop year.

(d) Any district producing a crop which is less than 50 percent of

the average annual processed production in that district in the

previous five years would be exempt from any volume regulation if, in

that year, a restricted percentage is established.

(e) The Board, with the approval of the Secretary, may establish

rules and regulations necessary and incidental to the administration of

this section.

Sec. 930.53 Modification, suspension, or termination of regulations.

(a) In the event the Board at any time finds that, by reason of

changed conditions, any regulations issued pursuant to Secs. 930.44 or

930.51 should be modified, suspended, or terminated, it shall so

recommend to the Secretary.

(b) Whenever the Secretary finds, from the recommendations and

information submitted by the Board or from other available information,

that a regulation issued pursuant to Secs. 930.44 or 930.51 should be

modified, suspended or terminated with respect to any or all shipments

of cherries in order to effectuate the declared policy of the Act, the

Secretary shall modify, suspend, or terminate such regulation.

Sec. 930.54 Prohibition on the use or disposition of inventory

reserve cherries.

(a) Release of primary and secondary inventory reserve cherries.

Except as provided in Sec. 930.50 and paragraph (b) of this section,

cherries that are placed in inventory reserve pursuant to the

requirements of Sec. 930.50, Sec. 930.51, Sec. 930.55, or Sec. 930.57

shall not be used or disposed of by any handler or any other person:

Provided, That if the Board determines that the total available

supplies for use in normal commercial outlets do not at least equal the

amount, as estimated by the Board, needed to meet the demand in such

outlets, the Board shall recommend to the Secretary and provide such

justification that, during such period as may be recommended by the

Board and approved by the Secretary, a portion or all of the primary

and/or secondary inventory reserve cherries shall be released for such

use.

(b) Reserved.

Sec. 930.55 Primary inventory reserves.

(a) Whenever the Secretary has fixed the free market tonnage and

restricted percentages for any fiscal period, as provided for in

Sec. 930.51(a), each handler in a regulated district shall place in his

or her primary inventory reserve for such period, at such time, and in

such manner, as the Board may prescribe, or otherwise divert, according

to Sec. 930.59, a portion of the cherries acquired during such period.

(b) The form of the cherries, frozen, canned in any form, dried, or

concentrated juice, placed in the primary inventory reserve is at the

option of the handler. Except as may be limited by Sec. 930.50(i) or as

may be permitted pursuant to Sec. 930.59 and Sec. 930.62, such

inventory reserve portion shall be equal to the sum of the products

obtained by multiplying the weight or volume of the cherries in each

lot of cherries acquired during the fiscal period by the then effective

restricted percentage fixed by the Secretary: Provided, That in

converting cherries in each lot to the form chosen by the handler, the

inventory reserve obligations shall be adjusted in accordance with

uniform rules adopted by the Board in terms of raw fruit equivalent.

(c) Inventory reserve cherries shall meet such standards of grade,

quality, or condition as the Board, with the approval of the Secretary,

may establish. All such cherries shall be inspected by USDA. A

certificate of such inspection shall be issued which shall show, among

other things, the name and address of the handler, the number and type

of containers in the lot, the grade of the product, the location where

the lot is stored, identification marks (can codes or lot stamp), and a

certification that the cherries meet the prescribed standards. Promptly

after inspection and certification, each such handler shall submit, or

cause to be submitted, to the Board, at the place designated by the

Board, a copy of the certificate of inspection issued with respect to

such cherries.

(d) Handlers shall be compensated for inspection costs incurred on

cherries placed in the primary inventory reserve. All reporting of

cherries placed in, rotated in and out, or released from an inventory

reserve shall be in accordance with rules and procedures established

[[Page 49950]]

by the Board, with the approval of the Secretary. The Board could, with

the approval of the Secretary, also limit the number of inspections of

reserve cherries being rotated into inventory reserves for which the

Board would be financially liable.

(e) Except as provided in Sec. 930.54, handlers may not sell

inventory reserve cherries prior to their official release by the

Board. Handlers may rotate cherries in their inventory reserves with

prior notification to the Board. All cherries rotated into the

inventory reserve must meet the applicable inspection requirements.

Sec. 930.56 Off-premise inventory reserve.

Any handler may, upon notification to the Board, arrange to hold

inventory reserve, of his or her own production or which was purchased,

on the premises of another handler or in an approved commercial storage

facility in the same manner as though the inventory reserve were on the

handler's own premises.

Sec. 930.57 Secondary inventory reserve.

(a) In the event the inventory reserve established under

Sec. 930.55 of this part is at its maximum volume, and the Board has

announced, in accordance with Sec. 930.50, that volume regulation will

be necessary to maintain an orderly supply of quality cherries for the

market, handlers in a regulated district may elect to place in a

secondary inventory reserve all or a portion of the cherries the volume

regulation would otherwise require them to divert in accordance with

Sec. 930.59.

(b) Should any handler in a regulated district exercise his or her

right to establish a secondary inventory reserve under paragraph (a) of

this section, all costs of maintaining that reserve, as well as

inspection costs, will be the responsibility of the individual handler.

(c) The secondary inventory reserve shall be established in

accordance with Secs. 930.55 (b) and (c) and such other rules and

regulations which the Board, with the approval of the Secretary, may

establish.

(d) The Board shall retain control over the release of any cherries

from the secondary inventory reserve. No cherries may be released from

the secondary reserve until all cherries in any primary inventory

reserve established under Sec. 930.55 have been released. Any release

of the secondary inventory reserve shall be in accordance with the

annual marketing policy and with Sec. 930.54.

Sec. 930.58 Grower diversion privilege.

(a) In general. Any grower may voluntarily elect to divert, in

accordance with the provisions of this section, all or a portion of the

cherries which otherwise, upon delivery to a handler, would become

restricted percentage cherries. Upon such diversion and compliance with

the provisions of this section, the Board shall issue to the diverting

grower a grower diversion certificate which such grower may deliver to

a handler, as though there were actual harvested cherries.

(b) Eligible diversion. Grower diversion certificates shall be

issued to growers only if the cherries are diverted in accordance with

the following terms and conditions or such other terms and conditions

that the Board, with the approval of the Secretary, may establish.

Diversion may take such of the following forms which the Board, with

the approval of the Secretary, may designate: uses exempt under

Sec. 930.62; nonhuman food uses; or other uses, including diversion by

leaving such cherries unharvested.

(c) Application/mapping. The Board, with the approval of the

Secretary, shall develop rules and regulations providing for the

diversion of cherries by growers. Such regulations may include, among

other things:

(1) The form and content of applications and agreements relating to

the diversion, including provisions for supervision and compensation;

and

(2) Provisions for mapping areas in which cherries will be left

unharvested.

(d) Diversion certificate. If the Board approves the application it

shall so notify the applicant and conduct such supervision of the

applicant's diversion of cherries as may be necessary to assure that

the cherries have been diverted. After the diversion has been

accomplished, the Board shall issue to the diverting grower a diversion

certificate stating the weight of cherries diverted. Where diversion is

carried out by leaving the cherries unharvested, the Board shall

estimate the weight of cherries diverted on the basis of such uniform

rule prescribed in rules and regulations as the Board, with the

approval of the Secretary, may recommend to implement this section.

Sec. 930.59 Handler diversion privilege.

(a) In general. Handlers handling cherries harvested in a regulated

district may fulfill any restricted percentage requirement in full or

in part by voluntarily diverting cherries or cherry products in a

program approved by the Board, rather than placing cherries in an

inventory reserve. Upon such diversion and compliance with the

provisions of this section, the Board shall issue to the diverting

handler a handler diversion certificate which shall satisfy any

restricted percentage or diversion requirement to the extent of the

Board or Department inspected weight of the cherries diverted.

(b) Eligible diversion. Handler diversion certificates shall be

issued to handlers only if the cherries are diverted in accordance with

the following terms and conditions or such other terms and conditions

that the Board, with the approval of the Secretary, may establish. Such

diversion may take place in any of the following forms which the Board,

with the approval of the Secretary, may designate: uses exempt under

Sec. 930.62; contribution to a Board approved food bank or other

approved charitable organization; acquisition of grower diversion

certificates that have been issued in accordance with Sec. 930.58; or

other uses, including diversion by destruction of the cherries at the

handler's facilities: Provided, That diversion may not be accomplished

by converting cherries into juice or juice concentrate.

(c) Notification. The handler electing to divert cherries through

means specified in this section or other approved means (not including

uses exempt under Sec. 930.62), shall first notify the Board of such

election. Such notification shall describe in detail the manner in

which the handler proposes to divert cherries including, if the

diversion is to be by means of destruction of the cherries, a detailed

description of the means of destruction and ultimate disposition of the

cherries. It shall also contain an agreement that the proposed

diversion is to be carried out under the supervision of the Board and

that the cost of such supervision is to be paid by the handler. Uniform

fees for such supervision shall be established by the Board, pursuant

to rules and regulations approved by the Secretary.

(d) Application. The handler electing to divert cherries by

utilizing an exemption under Sec. 930.62 shall first apply to the Board

for approval of such diversion; no diversion should take place prior to

such approval. Such application shall describe in detail the uses to

which the diverted cherries will be put. It shall also contain an

agreement that the proposed diversion is to be carried out under the

supervision of the Board and that the cost of such supervision is to be

paid by the applicant. The Board shall notify the applicant of the

Board's approval or disapproval of the submitted application.

(e) Diversion certificate. The Board shall conduct such supervision

of the handler's diversion of cherries under paragraph (c) or under

paragraph (d) of

[[Page 49951]]

this section as may be necessary to assure that the cherries are

diverted. After the diversion has been accomplished, the Board shall

issue to the diverting handler a handler diversion certificate

indicating the weight of cherries which may be used to offset any

restricted percentage requirement.

Sec. 930.60 Equity holders.

(a) Inventory reserve ownership. The inventory reserve shall be the

sole responsibility of the handlers who place products into the

inventory reserve. A handler's equity in the primary inventory reserve

may be transferred to another person upon notification to the Board.

(b) Agreements with growers. Individual handlers are encouraged to

have written agreements with growers who deliver their cherries to the

handler as to how any restricted percentage cherries delivered to the

handler will be handled and what share, if any, the grower will have in

the eventual sale of any inventory reserve cherries.

(c) Rulemaking authority. The Board, with the approval of the

Secretary, may adopt rules and regulations necessary and incidental to

the administration of this section.

930.61 Handler compensation.

Each handler handling cherries from a regulated district that is

subject to volume regulations shall be compensated by the Board for

inspection relating to the primary inventory reserve as the Board may

deem to be appropriate. The Board, with the approval of the Secretary,

may establish such rules and regulations as are necessary and

incidental to the administration of this section.

Sec. 930.62 Exemptions.

The Board, with the approval of the Secretary, may exempt from the

provisions of Sec. 930.41, Sec. 940.44, Sec. 930.51, Sec. 930.53, and

Sec. 930.55 through Sec. 930.57 cherries: Diverted in accordance with

Sec. 930.59; used for new product and new market development; used for

experimental purposes or for any other use designated by the Board,

including cherries processed into products for markets for which less

than 5 percent of the preceding 5-year average production of cherries

were utilized. The Board, with the approval of the Secretary, shall

prescribe such rules, regulations, and safeguards as it may deem

necessary to ensure that cherries handled under the provisions of this

section are handled only as authorized.

Sec. 930.63 Deferment of restricted obligation.

(a) Bonding. The Board, with the approval of the Secretary, may

require handlers to secure bonds on deferred inventory reserve tonnage.

Handlers may, in order to comply with the requirements of Secs. 930.50

and 930.51 and regulations issued thereunder, secure bonds on

restricted percentage cherries to temporarily defer the date that

inventory reserve cherries must be held to any date requested by the

handler. This date shall be not later than 60 days prior to the end of

that crop year. Such deferment shall be conditioned upon the voluntary

execution and delivery by the handler to the Board of a written

undertaking within thirty (30) days after the Secretary announces the

final restricted percentage under Sec. 930.51. Such written undertaking

shall be secured by a bond or bonds with a surety or sureties

acceptable to the Board that on or prior to the acceptable deferred

date the handler will have fully satisfied the restricted percentage

amount required by Sec. 930.51.

(b) Rulemaking authority. The Board, with the approval of the

Secretary, may adopt rules and regulations necessary and incidental to

the administration of this section.

Reports and Records

Sec. 930.70 Reports.

(a) Weekly production, monthly sales, and inventory data. Each

handler shall, upon request of the Board, file promptly with the Board,

reports showing weekly production data; monthly sales and inventory

data; and such other information, including the volume of any cherries

placed in or released from a primary or secondary inventory reserve or

diverted, as the Board shall specify with respect to any cherries

handled by the handler. Such information may be provided to the Board

members in summary or aggregated form only without any reference to the

individual sources of the information.

(b) Other reports. Upon the request of the Board, with the approval

of the Secretary, each handler shall furnish to the Board such other

information with respect to the cherries acquired, handled, stored and

disposed of by such handler as may be necessary to enable the Board to

exercise its powers and perform its duties under this part.

(c) Protection of proprietary information. Under no circumstances

shall any information or reports be made available to the Board

members, or to any person designated by the Board or by the Secretary,

which will reveal the proprietary information of an individual handler.

Sec. 930.71 Records.

Each handler shall maintain such records of all cherries acquired,

handled, stored or sold, or otherwise disposed of as will substantiate

the required reports and as may be prescribed by the Board. All such

records shall be maintained for not less than two years after the

termination of the fiscal year in which the transactions occurred or

for such lesser period as the Board may direct with the approval of the

Secretary.

Sec. 930.72 Verification of reports and records.

For the purpose of assuring compliance and checking and verifying

the reports filed by handlers, the Secretary and the Board, through its

duly authorized agents, shall have access to any premises where

applicable records are maintained, where cherries are received, stored,

or handled, and, at any time during reasonable business hours, shall be

permitted to inspect such handlers premises and any and all records of

such handlers with respect to matters within the purview of this part.

Sec. 930.73 Confidential information.

All reports and records furnished or submitted by handlers to the

Board and its authorized agents which include data or information

constituting a trade secret or disclosing trade position, financial

condition, or business operations of the particular handler from whom

received, shall be received by and at all times kept in the custody and

under the control of one or more employees of the Board or its agent,

who shall disclose such information to no person other than the

Secretary.

Miscellaneous Provisions

Sec. 930.80 Compliance.

Except as provided in this part, no person may handle cherries, the

handling of which has been prohibited by the Secretary under this part,

and no person shall handle cherries except in conformity with the

provisions of this part and the regulations issued hereunder. No person

may handle any cherries for which a diversion certificate has been

issued other than as provided in Sec. 930.58(b) and Sec. 930.59(b).

Sec. 930.81 Right of the Secretary.

Members of the Board (including successors and alternates), and any

agents, employees, or representatives thereof, shall be subject to

removal or suspension by the Secretary at any time.

[[Page 49952]]

Each regulation, decision, determination, or other act of the Board

shall be subject to the Secretary's disapproval at any time. Upon such

disapproval, the disapproved action of the Board shall be deemed null

and void, except as to acts done in reliance thereon or in accordance

therewith prior to such disapproval by the Secretary.

Sec. 930.82 Effective time.

The provisions of this part, and of any amendment thereto, shall

become effective at such time as the Secretary may declare, and shall

continue in force until terminated, or suspended.

Sec. 930.83 Termination.

(a) The Secretary may, at any time, terminate any or all of the

provisions of this part by giving at least 1 day's notice by means of a

press notice or in any other manner in which the Secretary may

determine.

(b) The Secretary shall terminate or suspend the operation of any

or all of the provisions of this part whenever the Secretary finds that

such provisions do not tend to effectuate the declared policy of the

Act.

(c) The Secretary shall terminate the provisions of this part

whenever the Secretary finds by referendum or otherwise that such

termination is favored by a majority of the growers and processors:

Provided, That such majority has, during the current fiscal year,

produced or canned and frozen more than 50 percent of the volume of the

cherries which were produced or processed within the production area.

Such termination shall become effective on the last day of June

subsequent to the announcement thereof by the Secretary.

(d) The Secretary shall conduct a referendum within the month of

March of every sixth year after the effective date of this part to

ascertain whether continuation of this part is favored by the growers

and processors. The Secretary may terminate the provisions of this part

at the end of any fiscal period in which the Secretary has found that

continuance is not favored by a majority of growers and processors who,

during a representative period determined by the Secretary, have been

engaged in the production or processing of tart cherries in the

production area. Such termination shall be announced on or before the

end of the fiscal period.

(e) The provisions of this part shall, in any event, terminate

whenever the provisions of the Act authorizing them cease to be in

effect.

Sec. 930.84 Proceedings after termination.

(a) Upon the termination of the provisions of this part, the then

functioning members of the Board shall, for the purpose of liquidating

the affairs of the Board, continue as trustees of all the funds and

property then in its possession, or under its control, including claims

for any funds unpaid or property not delivered at the time of such

termination.

(b) The said trustees shall:

(1) continue in such capacity until discharged by the Secretary;

(2) from time to time account for all receipts and disbursements

and deliver all property on hand, together with all books and records

of the Board and of the trustees, to such person as the Secretary may

direct; and

(3) upon the request of the Secretary, execute such assignments or

other instruments necessary or appropriate to vest in such person full

title and right to all of the funds, property, and claims vested in the

Board or in the trustees pursuant to this part.

(c) Any person to whom funds, property, and claims have been

transferred or delivered, pursuant to this section, shall be subject to

the same obligations imposed upon the Board and upon the trustees.

Sec. 930.85 Effect of termination or amendment.

Unless otherwise expressly provided by the Secretary, the

termination of this part or of any regulation issued pursuant to this

part, or the issuance of any amendment to either thereof, shall not:

(a) Affect or waive any right, duty, obligation, or liability which

shall have risen or which may thereafter arise in connection with any

provision of this part or any regulation issued thereunder;

(b) Release or extinguish any violation of this part or any

regulation issued thereunder;

(c) Affect or impair any rights or remedies of the Secretary or any

other person with respect to any such violation.

Sec. 930.86 Duration of immunities.

The benefits, privileges, and immunities conferred upon any person

by virtue of this part shall cease upon its termination, except with

respect to acts done under and during the existence of this part.

Sec. 930.87 Agents.

The Secretary may, by designation in writing, name any officer or

employee of the United States, or name any agency or division in the

U.S. Department of Agriculture, to act as the Secretary's agent or

representative in connection with any provisions of this part.

Sec. 930.88 Derogation.

Nothing contained in this part is, or shall be construed to be, in

derogation or in modification of the rights of the Secretary or of the

United States to exercise any powers granted by the Act or otherwise,

or, in accordance with such powers, to act in the premises whenever

such action is deemed advisable.

Sec. 930.89 Personal liability.

No member or alternate member of the Board and no employee or agent

of the Board shall be held personally responsible, either individually

or jointly with others, in any way whatsoever, to any person for errors

in judgment, mistakes, or other acts, either of commission or omission,

as such member, alternate member, employee, or agent, except for acts

of dishonesty, willful misconduct, or gross negligence.

Sec. 930.90 Separability.

If any provision of this part is declared invalid or the

applicability thereof to any person, circumstance, or thing is held

invalid, the validity of the remainder of this part or the

applicability thereof to any other person, circumstance, or thing shall

not be affected thereby.

Sec. 930.91 Amendments.

Amendments to this subpart may be proposed, from time to time, by

the Board or by the Secretary.

Dated: September 19, 1996.

Michael V. Dunn,

Assistant Secretary, Marketing and Regulatory Programs.

[FR Doc. 96-24505 Filed 9-23-96; 8:45 am]

BILLING CODE 3410-02-P