[Federal Register Volume 62, Number 53 (Wednesday, March 19, 1997)]
[Proposed Rules]
[Pages 12976-12979]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6985]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 62, No. 53 / Wednesday, March 19, 1997 / 
Proposed Rules  

[[Page 12976]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1208

[FV-97-701PR]


Fresh Cut Flowers and Fresh Cut Greens Promotion and 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 that the 
Department of Agriculture (Department) will use in conducting the 
referendum to determine whether to continue the Fresh Cut Flowers and 
Fresh Cut Greens Promotion and Information Order (Order). In order to 
continue, the program must be approved by a majority of the qualified 
handlers voting in the referendum.

DATES: Comments must be received by April 3, 1997.

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, 
P.O. 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 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, P.O. 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 
Fresh Cut Flowers and Fresh Cut Greens Promotion and Information 
Act of 1993 (7 U.S.C. 6801-et seq.), hereinafter referred to as the 
Act, and the Order.

    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 8 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. Accordingly, we have performed this initial 
regulatory flexibility analysis.
    The Act, which authorizes the creation of a generic program of 
promotion and information for fresh cut flowers and greens, became 
effective on December 14, 1993.
    Section 7 of the Act provides that the Secretary of Agriculture 
(Secretary) shall conduct a referendum not later than 3 years after the 
issuance of an order to ascertain whether the order then in effect 
shall be continued. The Order was issued on December 29, 1994. 
Paragraph (a)(2) of section 7 of the Act requires that the Order be 
approved by a simple majority of all votes cast in the referendum. In 
addition, paragraph (b) of section 7 of the Act specifies that each 
qualified handler eligible to vote in the referendum shall be entitled 
to cast one vote for each separate facility of the person that is an 
eligible separate facility. Eligible separate facility is defined in 
paragraph (b)(2) of section 7 of the Act as a handling or marketing 
facility of a qualified handler that is physically located away from 
other facilities of the qualified handler or that the business function 
of the separate facility is substantially different from the functions 
of other facilities owned or operated by the qualified handler and the 
annual sales of cut flowers and cut greens to retailers and exempt 
handlers from the facility are $750,000 or more annually.
    Only those wholesale handlers (including but not limited to, 
wholesale jobbers, bouquet and floral article manufacturers, auction 
houses that clear the sale of cut flowers and greens, and retail 
distribution centers), producers and importers who have annual sales of 
$750,000 or more of fresh cut flowers and greens and who sell those 
products to exempt handlers, retailers, or consumers are considered 
qualified handlers and assessed under the Order.
    There are approximately 525 wholesale handlers, 84 importers, and 
83 producers who are qualified handlers. Small agricultural service 
firms, which would include the qualified handlers 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. 
Only 127 qualified handlers have been identified to have $5 million in 
annual sales.

[[Page 12977]]

    It is concluded that the majority of qualified handlers may be 
classified as small entities.
    Statistics reported by the National Agricultural Statistics Service 
show that in 1995 sales of domestic cut flowers and cut greens totaled 
approximately $521.3 million at the wholesale level. The leading 
producing states by wholesale value are California, with about 49 
percent of the total of flower and cut green production, followed by 
Florida, Colorado and Hawaii.
    Exports in 1995 of U.S. cut flowers were valued at $23.9 million, 
with about 64 percent of the value from exports to Canada, and 26 
percent of the value from exports to Japan. Exports of cut greens are 
not reported by the Bureau of the Census as a separate item; they are 
included in a ``basket'' export category that includes other types of 
fresh cut plant exports such as branches without flowers or buds, 
evergreens, and grasses, which are suitable for ornamental purposes. In 
1995 the value of these exports was $45.6 million.
    The value of imports of cut flowers in 1995 was $495.2 million. 
Major countries exporting cut flowers to the United States, by value, 
are Colombia which accounts for about 65 percent of the value, followed 
by the Netherlands (11.6 percent), Ecuador (10.2 percent), and Mexico 
(3.8 percent). Imports of cut greens are reported in a category that 
includes some other fresh cut plant items suitable for ornamental 
purposes such as grasses, branches without flowers or buds, and other 
plant parts, but excludes fresh evergreens. In 1995 this ``basket 
category'' of imports had a value of $24.1 million.
    This proposed rule provides the procedures under which qualified 
handlers may vote on whether they want the fresh cut flowers and fresh 
cut greens promotion and information program to be continued. Qualified 
handlers of $750,000 or more in annual gross sales are eligible to vote 
in the referendum. There are approximately 692 eligible voters 
representing approximately 923 votes some of which represent separate 
facilities. It will take an average of 15 minutes for each voter to 
read the voting instructions and complete the referendum ballot. The 
total burden on the total number of voters will be 77 hours.
    The Department would keep all these individuals informed throughout 
the referendum process to ensure that they are aware of and are able to 
participate in the process. In addition, trade associations and related 
industry media would receive news releases and other information 
regarding the referendum process.
    Voting in the referendum is optional. However, if qualified 
handlers choose to vote, the burden of voting would be offset by the 
benefits of having the opportunity to vote on whether they want to 
continue 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. It is anticipated that a referendum would be 
conducted in June to maximize industry participation.
    While we have performed this Initial Regulatory Flexibility 
Analysis regarding the impact of this proposed rule on small entities, 
in order to have all the data necessary for a more comprehensive 
analysis of the effects of this rule on small entities, we are inviting 
comments concerning potential effects. In particular, we are interested 
in determining the number and kind of small entities that may incur 
benefits or costs from implementation of this proposed rule and 
information on the expected benefits or costs.

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 has been 
approved by the Office of Management and Budget (OMB) and has been 
assigned OMB number 0581-0093. It is estimated that there are 692 
qualified handlers, representing 923 votes, who will be eligible to 
vote in the referendum. It will take an average of 15 minutes for each 
voter to read the voting instructions and complete the referendum 
ballot. The total burden on the total number of voters will be 77 
hours.

Background

    The Act authorized the Secretary to establish a national cut 
flowers and cut greens promotion and consumer information program. The 
program is funded by an assessment of \1/2\ percent of gross sales of 
cut flowers and greens which is levied on qualified handlers. The 
program is administered by the National PromoFlor Council (Council) 
under the supervision of the Department of Agriculture (Department).
    Assessments are 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 7 of the Act requires that a referendum be conducted not 
later than 3 years after the issuance of the Order among eligible 
qualified handlers of fresh cut flowers and fresh cut greens to 
determine whether they favor continuance of the Order. The Order shall 
continue in effect if it is approved by a simple majority of qualified 
handlers voting in the referendum.
    In accordance with section 3(4) of the Act, qualified handler is 
defined in the Order as a person operating in the cut flowers and 
greens marketing system that sells domestic or imported cut flowers and 
greens to retailers and exempt handlers and whose annual sales of cut 
flowers and greens to retailers and exempt handlers are $750,000 or 
more. The term also includes, but is not limited to, the following 
entities when they have the requisite volume of $750,000 sales of cut 
flowers and greens a year: A wholesale handler; a manufacturer of 
bouquets or floral articles for sale to retailers if the cut flowers 
and greens used are a substantial portion of the value of the 
manufactured floral article; an auction house that clears the sale of 
cut flowers and greens to retailers and exempt handlers through a 
central clearinghouse; a distribution center that is owned or 
controlled by a retailer if the predominant retail business activity is 
floral sales; an importer whose principal activity is the importation 
of cut flowers and greens into the United States and sells to retailers 
and exempt handlers or directly to consumers; and a producer that sells 
cut flowers and cut greens directly to retailers or consumers.
    Paragraph (b) of section 7 of the Act specifies that each qualified 
handler eligible to vote in the referendum shall be entitled to cast 
one vote for each separate facility of the person that is an eligible 
separate facility. Eligible separate facility is defined in paragraph 
(b)(2) of section 7 of the Act as a handling or marketing facility of a 
qualified handler that is physically located away from other facilities 
of the qualified handler or that the business function of the separate 
facility is substantially different from the functions of other 
facilities owned or operated by the qualified handler and the annual 
sales of cut flowers and cut greens to retailers and exempt handlers 
from the facility are $750,000 or more annually.
    This proposed rule provides the procedures under which fresh cut 
flowers and greens qualified handlers may vote on whether they want the

[[Page 12978]]

fresh cut flowers and greens promotion and consumer information program 
to continue. Qualified handlers of $750,000 gross sales annually can 
vote in the referendum. There are approximately 692 eligible voters 
representing approximately 923 votes.
    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 fresh cut flowers and 
greens industry.
    A 15-day comment period is deemed appropriate for this rule 
because: (1) These proposed regulations contain provisions that are the 
same as or similar to referendum procedures for other research and 
promotion programs; (2) the fresh cut flowers and greens industry is 
aware that a referendum would be conducted this year; (3) comments 
would be addressed before a final rule is published; and (4) this 
rulemaking should be expedited in order to conduct a referendum in June 
to maximize industry participation.

List of Subjects in 7 CFR Part 1208

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Cut flowers, Cut greens, Promotion, 
Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, it is proposed that 
Title 7 of Chapter XI of the Code of Federal Regulations be amended as 
follows:
    1. Part 1208 is amended by adding a new Subpart C to read as 
follows:

PART 1208--FRESH CUT FLOWERS AND FRESH CUT GREENS PROMOTION AND 
INFORMATION ORDER

Subpart C--Procedure for the Conduct of Referenda in Connection With 
the Fresh Cut Flowers and Fresh Cut Greens Promotion and Information 
Order

Sec.
1208.200  General.
1208.201  Definitions.
1208.202  Voting.
1208.203  Instructions.
1208.204  Subagents.
1208.205  Ballots.
1208.206  Referendum report.
1208.207  Confidential information.

    Authority: 7 U.S.C. 6801 et seq.

Subpart C--Procedure for the Conduct of Referenda in Connection 
With the Fresh Cut Flowers and Fresh Cut Greens Promotion and 
Information Order


Sec. 1208.200  General.

    A referendum to determine whether qualified handlers favor 
continuance of the Fresh Cut Flowers and Fresh Cut Greens Promotion and 
Information Order shall be conducted in accordance with these 
procedures.


Sec. 1208.201  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 Fresh Cut Flowers and Fresh Cut Greens 
Promotion and 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, firm, 
partnership, corporation, joint stock company, association, society, 
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, 
fresh cut flowers and greens 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 handling of fresh cut flowers and greens and the 
authority to transfer title to the fresh cut flowers and greens 
handled.
    (f) Eligible qualified handler means a person who is a qualified 
handler under Sec. 1208.16 of the Order that operates in the cut 
flowers and greens marketing system and sells domestic or imported cut 
flowers and greens to retailers and exempt handlers and has annual 
sales of cut flowers and greens to retailers and exempt handlers that 
are $750,000 or more.
    (g) Separate facility means a handling or marketing facility of a 
qualified handler that is physically located away from other facilities 
of the qualified handler or that the business function of the separate 
facility is substantially different from the functions of other 
facilities owned or operated by the qualified handler and the annual 
sales of cut flowers and cut greens to retailers and exempt handlers 
from the facility are $750,000 or more annually.


Sec. 1214.202  Voting.

    (a) Each person who is an eligible qualified handler as defined in 
this subpart, at the time of the referendum and during the 
representative period, shall be entitled to cast one vote for each 
separate facility of the person that is an eligible separate facility.
    (b) Proxy voting is not authorized, but an officer or employee of 
an eligible qualified handler, or an administrator, executor, or 
trustee of an eligible qualified handler entity may cast a ballot on 
behalf of such qualified handler entity. Any individual so voting in a 
referendum shall certify that such individual is an officer or employee 
of the eligible qualified handler, or an administrator, executor, or 
trustee of an eligible qualified handler 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 whether the person 
voting, or on whose

[[Page 12979]]

behalf the vote is cast, is an eligible voter;
    (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 qualified handlers, 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 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 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. 1208.204  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. 1208.205  Ballots.

    The referendum agent and subagents shall accept all ballots cast; 
but, should they, or any of them, deem that a ballot should be 
questioned for any reason, the agent or subagent shall endorse above 
their signature, on the ballot, a statement to the effect that such 
ballot was questioned, by whom questioned, 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. 1208.206  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. 1208.207  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: March 14, 1997.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 97-6985 Filed 3-17-97; 9:49 am]
BILLING CODE 3410-02-P