[Federal Register Volume 61, Number 192 (Wednesday, October 2, 1996)]
[Proposed Rules]
[Pages 51391-51395]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24843]


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DEPARTMENT OF AGRICULTURE
7 CFR Part 1214

[FV-96-708PR]


Kiwifruit Research, Promotion, and Consumer Information Order; 
Referendum Procedures

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule with request for comments.

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SUMMARY: The purpose of this rule is to provide procedures which the 
Department of Agriculture (Department) will use in conducting the 
referendum to determine whether the issuance of the proposed Kiwifruit 
Research, Promotion, and Consumer Information Order (Order) is approved 
by a majority of the producers and importers voting in the referendum 
and that the producers and importers favoring approval produce and 
import 50 percent of the total volume of kiwifruit produced and 
imported by persons voting in the referendum.

DATES: Comments must be received by November 1, 1996. Pursuant to the 
Paperwork Reduction Act, comments on the information collection burden 
must be received by December 2, 1996.


[[Page 51392]]


ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule to: Research and Promotion Branch, Fruit 
and Vegetable Division, Agricultural Marketing Service (AMS), USDA, PO 
Box 96456, Room 2535-S, Washington, DC 20090-6456, fax (202) 205-2800. 
Three copies of all written material should be submitted, and they will 
be made available for public inspection at the Research and Promotion 
Branch during regular business hours. All comments should reference the 
docket number and the date and page number of this issue of the Federal 
Register. Also, pursuant to the Paperwork Reduction Act, send comments 
regarding the accuracy of the burden estimate, ways to minimize the 
burden, including through the use of automated collection techniques or 
other forms of information technology, or any other aspect of this 
collection of information, to the above address.

FOR FURTHER INFORMATION CONTACT: Sonia N. Jimenez, Research and 
Promotion Branch, Fruit and Vegetable Division, AMS, USDA, PO Box 
96456, Room 2535-S, Washington, DC 20090-6456, telephone (202) 720-9916 
or (888) 720-9917.

SUPPLEMENTARY INFORMATION: This proposed rule is issued under the 
Kiwifruit Research, Promotion, and Consumer Information Act (7 U.S.C. 
7461-7473), hereinafter referred to as the Act.
    This rule provides the procedures under which the referendum would 
be conducted.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. It is not intended to have retroactive effect. This 
rule would not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 558 of the Act, 
after an Order is implemented, a person subject to the Order may file a 
petition with the Secretary stating that the Order or any provision of 
the Order, or any obligation imposed in connection with the Order, is 
not in accordance with law and requesting a modification of the Order 
or an exemption from the Order. The petitioner is afforded the 
opportunity for a hearing on the petition. After such hearing, the 
Secretary will make a ruling on the petition. The Act provides that the 
district courts of the United States in any district in which a person 
who is a petitioner resides or carries on business are vested with 
jurisdiction to review the Secretary's ruling on the petition, if a 
complaint for that purpose is filed within 20 days after the date of 
the entry of the ruling.

Executive Order 12866 and Regulatory Flexibility Act

    This rule has been determined not significant for purposes of 
Executive Order 12866, and therefore has not been reviewed by the 
Office of Management and Budget.
    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.), the Agency is required to examine the impact of the proposed 
rule on small entities.
    Legislation to create a generic program of promotion and research 
for kiwifruit became effective on April 4, 1996.
    Section 561 of the Act provides that the Secretary of Agriculture 
(Secretary) shall conduct a referendum during the 60-day period 
immediately preceding the proposed effective date of an Order to 
determine whether the issuance of an Order is favored by a majority of 
the producers and importers voting in the referendum. Paragraph (a)(2) 
of Section 561 of the Act requires that the Order be approved by a 
majority of producers and importers voting in the referendum and that 
the producers and importers favoring approval produce and import 50 
percent or more of the volume of kiwifruit produced and imported by 
persons voting in the referendum.
    There are approximately 650 producers, 45 importers, and 65 
handlers of kiwifruit that would be covered by the program. Small 
agricultural service firms, which would include the handlers and 
importers who would be covered under the Order, have been defined by 
the Small Business Administration (SBA) (13 CFR 121.601) as those whose 
annual receipts are less than $5 million and small agricultural 
producers, those who would be required to pay assessments, as those 
having annual receipts of $500,000. Only one handler has been 
identified to have $5 million in annual sales. In addition, there are 
10 producers at or over the $500,000 annual sales receipts threshold. 
The Department does not have specific information regarding the size of 
importers. However, it could be concluded that the majority of 
kiwifruit producers and importers may be classified as small entities.
    The Department is aware of kiwifruit producers in California, 
Oregon, Pennsylvania, South Carolina, and importers that import 
kiwifruit from Chile, New Zealand, and Italy. The Department believes 
that these individuals would include the majority of the producers and 
importers that would be covered under the program.
    California is the source for practically all of the kiwifruit 
produced in the United States. The California kiwifruit industry 
consists of approximately 600 producers and 65 handlers. Production 
rose by 119 percent between 1984 and 1994, increasing from 18,000 tons 
to 34,800 tons. In the same period, the value of production increased 
by 4 percent.
    Most U.S. kiwifruit is utilized fresh. Fresh utilization increased 
by 219 percent between 1984 and 1994, growing from 11,700 tons to 
37,500 tons. The season average price during the same period fell by 54 
percent, declining from $1,000 per ton to $491 per ton. Exports 
accounted for about 29 percent of U.S. fresh utilization during that 
period.
    Between 1992 and 1994, the average annual production per producer, 
including kiwifruit for processing, was 22,365 7-pound trays of 
kiwifruit. The average price was $376 per ton, giving an average return 
of about $29,000 per producer per year. The average value of total 
production (fresh and processed) per year was $16.3 million. A typical 
f.o.b. price during this period was $7.78 per tray, and the average 
amount shipped per handler was about 190,176 trays, yielding an average 
annual revenue per handler of $1.5 million. U.S. importers handled an 
average of 172,163 trays per year per importer. During this period, the 
average value of total imports per year was $17.1 million (f.o.b. 
country of origin). The majority of kiwifruit came from Chile, with the 
remaining coming from New Zealand and Italy.
    This proposed rule provides the procedures under which kiwifruit 
producers and importers may vote on whether they want the kiwifruit 
research and promotion program to be implemented. Kiwifruit producers 
of 500 pounds or more and importers of 10,000 pounds or more annually 
can vote in the referendum. There are approximately 700 eligible 
voters.
    The Department would keep all these individuals informed throughout 
the program implementation and referendum process to ensure that they 
are aware of and are able to participate in the program implementation 
process. In addition, trade associations and related industry media 
would receive news releases and other information regarding the 
implementation and referendum process.

[[Page 51393]]

    There is a federal marketing order program and a California state 
program for kiwifruit. The marketing order regulations for grade, size, 
maturity, and containers are designed to assure consumers of 
consistently good quality California kiwifruit. The marketing order and 
its regulations allow small farmers to compete effectively in an 
increasingly competitive marketplace. The California Kiwifruit 
Commission (CKC) administers the California state program for 
kiwifruit. The CKC is composed of kiwifruit producers, packers, and 
handlers. In 1995-96 it is estimated that producers would pay 
$1,407,000 in assessments at a rate of 17 cents per kiwifruit tray or 
tray equivalent. Handlers collect the assessments and remit the money 
to the CKC.
    Voting in the referendum is optional. However, if producers and 
importers choose to vote, the burden of voting would be offset by the 
benefits of having the opportunity to vote on whether they want the 
program or not.
    The Department considered requiring eligible voters to vote in 
person at various Department offices across the country. However, 
conducting the referendum from one central location by mail ballot is 
more cost effective for this program. Also, the Department would 
provide easy access to information for potential voters through a toll 
free telephone line.

Paperwork Reduction Act

    In accordance with the Office of Management and Budget (OMB) 
regulations (5 CFR part 1320) which implements the Paperwork Reduction 
Act of 1995 (44 U.S.C. Chapter 35), the referendum ballot, which 
represents the information collection and recordkeeping requirements 
that may be imposed by this rule has been submitted to OMB for 
approval.
    Title: National Research, Promotion, and Consumer Information 
Programs.
    OMB Number: 0581-0093.
    Expiration Date of Approval: October 31, 1997.
    Type of Request: Revision of a currently approved information 
collection for research and promotion programs.
    Abstract: The information collection requirements in this request 
are essential to carry out the intent of the Act.
    The burden associated with the ballot is as follows:
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average .25 hours per response for each 
producer and importer.
    Respondents: Producers and importers.
    Estimated Number of Respondents: 700.
    Estimated Number of Responses per Respondent: 1 every 6 years 
(.16).
    Estimated Total Annual Burden on Respondents: 28 hours.
    Because there may be insufficient time for normal clearance 
procedures, AMS is seeking temporary approval from OMB for the use of 
the ballot for the referendum. The ballot would be added to the other 
information collections approved for use under OMB Number 0581-0093.
    Comments are invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of functions of the 
Order and the Department's oversight of the program, including whether 
the information will have practical utility; (b) the accuracy of the 
AMS's estimate of the burden of the proposed collection of information 
including the validity of the methodology and assumption used; (c) ways 
to enhance the quality, utility, and clarity of the information to be 
collected; and (d) ways to minimize the burden of the collection of 
information on those who are to respond, including the use of 
appropriate automated, electronic, mechanical, or other technological 
collections techniques or other forms of information technology.
    Comments should reference OMB No. 0581-0093, the docket number, and 
the date and page number of this issue of the Federal Register. 
Comments should be sent to Sonia N. Jimenez at the address listed above 
by December 2, 1996. All comments received will be available for public 
inspection during regular business hours at the same address. All 
responses to this notice will be summarized and included in the request 
for OMB approval.

Background

    The Act authorizes the Secretary to establish a national kiwifruit 
research, promotion, and consumer information program. The program 
would be funded by an assessment levied on producers and importers not 
to exceed 10 cents per 7-pound tray of kiwifruit. Producers who produce 
less than 500 pounds annually, importers who import less than 10,000 
pounds annually, and kiwifruit sold directly to a consumer by a 
producer for a purpose other than resale and domestic and imported 
kiwifruit for processing are exempt from assessments.
    Assessments would be used to pay for: research, promotion, and 
consumer information; administration, maintenance, and functioning of 
the Board; and expenses incurred by the Secretary in implementing and 
administering the Order, including referendum costs.
    Section 561 of the Act requires that a referendum be conducted 
among eligible producers and importers of kiwifruit to determine 
whether they favor implementation of the Order. The Order shall become 
effective if it is approved by a majority of producers and importers 
voting in the referendum and the producers and importers favoring 
approval produce and import more than 50 percent of the total volume of 
kiwifruit produced and imported by persons voting in the referendum.
    A proposed rule on the Order is published separately in this issue 
of the Federal Register.
    This proposed rule provides the procedures under which kiwifruit 
producers and importers may vote on whether they want the kiwifruit 
research and promotion program to be implemented. Kiwifruit producers 
of 500 pounds or more and importers of 10,000 pounds or more annually 
can vote in the referendum. There are approximately 700 eligible 
voters.
    This proposed rule would add a new subpart which would establish 
procedures to be used in the referendum. This subpart would be in 
effect for the referendum period only and would not be part of the Code 
of Federal Regulations. This subpart covers definitions, voting, 
instructions, use of subagents, ballots, the referendum report, and 
confidentiality of information.
    All written comments received in response to this rule by the date 
specified herein will be considered prior to finalizing this action. We 
encourage the industry to pay particular attention to the definitions 
to be sure that they are appropriate for the kiwifruit industry.

List of Subjects in 7 CFR Part 1214

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Kiwifruit, Promotion, Reporting and 
recordkeeping requirements.
    For the reasons set forth in the preamble, it is proposed that 
Title 7, chapter XI of the Code of Federal Regulations be amended as 
follows:
    1. Subpart C is added to proposed Part 1214 to read as follows:

PART 1214--KIWIFRUIT RESEARCH, PROMOTION, AND CONSUMER INFORMATION 
ORDER

* * * * *

[[Page 51394]]

Subpart C--Procedure for the Conduct of Referenda in Connection With 
the Kiwifruit Research, Promotion, and Consumer Information Order
Sec.
1214.200  General.
1214.201  Definitions.
1214.202  Voting.
1214.203  Instructions.
1214.204  Subagents.
1214.205  Ballots.
1214.206  Referendum report.
1214.207  Confidential information.

    Authority: 7 U.S.C. 7461-7473.

Subpart C--Procedure for the Conduct of Referenda in Connection 
With the Kiwifruit Research, Promotion, and Consumer Information 
Order


Sec. 1214.200  General.

    A referendum to determine whether eligible producers and importers 
favor the issuance of the proposed Kiwifruit Research, Promotion, and 
Consumer Information Order shall be conducted in accordance with these 
procedures.


Sec. 1214.201  Definitions.

    Unless otherwise defined below, the definition of terms used in 
these procedures shall have the same meaning as the definitions in the 
Order.
    (a) Administrator means the Administrator of the Agricultural 
Marketing Service, with power to redelegate, or any officer or employee 
of the Department to whom authority has been delegated or may hereafter 
be delegated to act in the Administrator's stead.
    (b) Order means the Kiwifruit Research, Promotion, and Consumer 
Information Order.
    (c) Referendum agent or agent means the individual or individuals 
designated by the Secretary to conduct the referendum.
    (d) Representative period means the period designated by the 
Secretary.
    (e) Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity. For 
the purpose of this definition, the term ``partnership'' includes, but 
is not limited to:
    (1) A husband and wife who has title to, or leasehold interest in, 
kiwifruit production facilities and equipment as tenants in common, 
joint tenants, tenants by the entirety, or, under community property 
laws, as community property, and
    (2) So-called ``joint ventures'', wherein one or more parties to 
the agreement, informal or otherwise, contributed capital and others 
contributed labor, management, equipment, or other services, or any 
variation of such contributions by two or more parties so that it 
results in the production or importation of kiwifruit and the authority 
to transfer title to the kiwifruit so produced or imported.
    (f) Eligible producer means any person or entity defined as a 
producer who produced 500 pounds or more of kiwifruit during the 
representative period and who:
    (1) Owns or shares in the ownership of kiwifruit production 
facilities and equipment resulting in the ownership of the kiwifruit 
produced;
    (2) Rents kiwifruit production facilities and equipment resulting 
in the ownership of all or a portion of the kiwifruit produced;
    (3) Owns kiwifruit production facilities and equipment but does not 
manage them and, as compensation, obtains the ownership of a portion of 
the kiwifruit produced; or
    (4) Is a party in a landlord-tenant relationship or a divided 
ownership arrangement involving totally independent entities 
cooperating only to produce kiwifruit who share the risk of loss and 
receive a share of the kiwifruit produced. No other acquisition of 
legal title to kiwifruit shall be deemed to result in persons becoming 
eligible producers.
    (g) Eligible importer means any person or entity defined as an 
importer who imported 10,000 pounds or more during the representative 
period. Importation occurs when commodities originating outside the 
United States are entered or withdrawn from the U.S. Customs Service 
for consumption in the United States. Included are persons who hold 
title to foreign-produced kiwifruit immediately upon release by the 
U.S. Customs Service, as well as any persons who act on behalf of 
others, as agents or broker, to secure the release of kiwifruit from 
the U.S. Customs Service when such kiwifruit are entered or withdrawn 
for consumption in the United States.


Sec. 1214.202  Voting.

    (a) Each person who is an eligible producer or importer, as defined 
in this subpart, at the time of the referendum and during the 
representative period, shall be entitled to cast only one ballot in the 
referendum. However, each producer in a landlord-tenant relationship or 
a divided ownership arrangement involving totally independent entities 
cooperating only to produce kiwifruit, in which more than one of the 
parties is a producer, shall be entitled to cast one ballot in the 
referendum covering only such producer's share of the ownership.
    (b) Proxy voting is not authorized, but an officer or employee of 
an eligible corporate producer or importer, or an administrator, 
executor, or trustee of an eligible producing or importing entity may 
cast a ballot on behalf of such producer or importer entity. Any 
individual so voting in a referendum shall certify that such individual 
is an officer or employee of the eligible producer or importer, or an 
administrator, executor, or trustee of an eligible producing or 
importing entity, and that such individual has the authority to take 
such action. Upon request of the referendum agent, the individual shall 
submit adequate evidence of such authority.
    (c) All ballots are to be cast by mail.


Sec. 1214.203  Instructions.

    The referendum agent shall conduct the referendum, in the manner 
herein provided, under the supervision of the Administrator. The 
Administrator may prescribe additional instructions, not inconsistent 
with the provisions hereof, to govern the procedure to be followed by 
the referendum agent. Such agent shall:
    (a) Determine the time of commencement and termination of the 
period during which ballots may be cast.
    (b) Provide ballots and related material to be used in the 
referendum. Ballot material shall provide for recording essential 
information including that needed for ascertaining:
    (1) Whether the person voting, or on whose behalf the vote is cast, 
is an eligible voter;
    (2) The total volume of kiwifruit produced by the voting producer 
during the representative period; and
    (3) The total volume of kiwifruit imported by the voting importer 
during the representative period.
    (c) Give reasonable advance public notice of the referendum:
    (1) By utilizing available media or public information sources, 
without incurring advertising expense, to publicize the dates, places, 
method of voting, eligibility requirements, and other pertinent 
information. Such sources of publicity may include, but are not limited 
to, print and radio; and
    (2) By such other means as the agent may deem advisable.
    (d) Mail to eligible producers and importers, whose names and 
addresses are known to the referendum agent, the instructions on 
voting, a ballot, and a summary of the terms and conditions of the 
proposed Order. No person who claims to be eligible to vote shall be 
refused a ballot.
    (e) At the end of the voting period, collect, open, number, and 
review the ballots and tabulate the results in

[[Page 51395]]

presence of an agent of the Office of Inspector General.
    (f) Prepare a report on the referendum.
    (g) Announce the results to the public.


Sec. 1214.204  Subagents.

    The referendum agent may appoint any individual or individuals 
deemed necessary or desirable to assist the agent in performing such 
agent's functions hereunder. Each individual so appointed may be 
authorized by the agent to perform any or all of the functions which, 
in the absence of such appointment, shall be performed by the agent.


Sec. 1214.205  Ballots.

    The referendum agent and subagents shall accept all ballots cast; 
but, should they, or any of them, deem that a ballot should be 
challenged for any reason, the agent or subagent shall endorse above 
their signature, on the ballot, a statement to the effect that such 
ballot was challenged, by whom challenged, the reasons therefore, the 
results of any investigations made with respect thereto, and the 
disposition thereof. Ballots invalid under this subpart shall not be 
counted.


Sec. 1214.206  Referendum report.

    Except as otherwise directed, the referendum agent shall prepare 
and submit to the Administrator a report on results of the referendum, 
the manner in which it was conducted, the extent and kind of public 
notice given, and other information pertinent to analysis of the 
referendum and its results.


Sec. 1214.207  Confidential information.

    The ballots and other information or reports that reveal, or tend 
to reveal, the vote of any person covered under the Act and the voting 
list shall be held confidential and shall not be disclosed.

    Dated: September 23, 1996.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 96-24843 Filed 10-1-96; 8:45 am]
BILLING CODE 3410-02-P