[Federal Register Volume 62, Number 55 (Friday, March 21, 1997)]
[Rules and Regulations]
[Pages 13533-13537]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7293]



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 Rules and Regulations
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  Federal Register / Vol. 62, No. 55 / Friday, March 21, 1997 / Rules 
and Regulations  

[[Page 13533]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1215

[FV-96-709FR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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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 Popcorn 
Promotion, Research, and Consumer Information Order is favored by a 
majority of the processors voting in the referendum and that the 
majority process more than 50 percent of the popcorn certified as being 
processed by those voting in the referendum.

DATES: This rule is effective from March 22, 1997, through August 31, 
1997.

FOR FURTHER INFORMATION CONTACT: Stacey L. Bryson, Research and 
Promotion Branch, Fruit and Vegetable Division, AMS, USDA, Room 2535-S, 
P.O. Box 96456, Washington, D.C. 20090-6456. Telephone (888) 720-9917 
or (202) 720-6930.

SUPPLEMENTARY INFORMATION: A referendum will be conducted among 
eligible popcorn processors to determine whether the issuance of the 
proposed Popcorn Promotion, Research, and Consumer Information Order 
(Order) (7 CFR part 1215) is favored by a majority of persons voting in 
the referendum. The Order is authorized under the Popcorn Promotion, 
Research and Consumer Information Act (Act) (Pub. L. 104-427, 7 U.S.C. 
7481-7491).

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
This final rule will not preempt any State or local laws, regulations, 
or policies, unless they present an irreconcilable conflict with this 
rule. In accordance with Sec. 580 of the Act, nothing in the popcorn 
statute preempts or supersedes any other program relating to popcorn 
promotion organized and operated under the laws of the United States or 
any State.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 577 of the Act, 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 has examined the impact of this rule on small 
entities. Accordingly, we have performed this Final Regulatory 
Flexibility Analysis.
    The Act which authorized the creation of a generic program of 
promotion and research for popcorn became effective on April 4, 1996.
    Section 576 of the Act provides that the Secretary shall conduct a 
referendum, within the 60-day period immediately preceding the 
effective date of the Order, to determine whether the issuance of the 
Order is favored by a majority of the processors voting in the 
referendum. Paragraph (2) of section 576 of the Act requires that the 
Order become effective only if favored by a majority of the processors 
voting in the referendum and if the majority processed more than 50 
percent of the popcorn certified as having been processed during the 
representative period by the processors voting.
    Small agricultural service firms, which would include processors 
who would be covered under the proposed Order, have been defined by the 
Small Business Administration (13 CFR 121.601) as those whose annual 
receipts are less than $5 million. The Department estimates that there 
are approximately 35 processors who would pay the assessments out of an 
industry of 67 processors in total. Almost 50 percent of the industry 
would be exempt from the program; those processors marketing 4 million 
pounds or less of popcorn annually would be exempt. Further, only 2 of 
the 35 eligible processors have been identified as small entities.
    According to the Popcorn Institute, a trade association consisting 
of popcorn processors representing the industry, annual sales of 
popcorn were 77.240 million pounds less in 1994 than they were in 1993, 
when sales totaled approximately 1.156 billion pounds.
    The peak period for popcorn sales for home consumption is the fall. 
Sales remain constant throughout the winter months and taper off during 
the spring and summer.
    Almost all of the popcorn consumed throughout the world is grown in 
the United States, and Americans consume more popcorn than the citizens 
of any other country. Popcorn is grown in 19 states. According to the 
latest Census on Agriculture, the top five major popcorn-producing 
states in 1992 were, in descending order, Indiana (23 percent), 
Illinois (19 percent), Nebraska (18 percent), Ohio (10 percent), and 
Missouri (7 percent). This is the most recent official information on 
popcorn production released by the U.S. government.
    U.S. exports of popcorn totaled nearly 290 million pounds in 1995, 
with a value of $64.7 million. According to the Snack Food Association, 
retail sales of popcorn in the United States totaled $1.469 billion in 
1994.
    This rule establishes the procedures under which eligible popcorn

[[Page 13534]]

processors may vote on whether they want the proposed popcorn promotion 
and research program to be implemented. The proposed Order is being 
published separately in this issue of the Federal Register.
    The referendum procedures provide definitions of who is eligible to 
vote and instructions for referendum agents regarding subagents, 
publicity for the referendum and the results, ballots, voting, ballot 
handling and tabulation, reporting, and confidentiality of referendum 
materials. The representative period for establishing voter eligibility 
for the referendum will be determined by the Secretary in a separate 
referendum order published with the proposed order. Persons who have 
processed over 4 million pounds of popcorn for market during the 
representative period will be eligible to vote. There are an estimated 
35 eligible processors of which only two have been identified as small 
entities. The referendum will be conducted by mail ballot.
    The Department will keep all eligible processors of record informed 
throughout the referendum process to ensure awareness and 
participation. In addition, trade associations and related industry 
media will receive news releases and other information regarding the 
referendum process.
    Voting in the referendum is optional. However, if processors 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.
    It is estimated that there are 35 popcorn processors who will be 
eligible to vote in the referendum. It will take an average 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 2.9 hours.
    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 will provide 
easy access to information for potential voters through a toll free 
telephone line.
    If the program is implemented, the estimated cost in providing the 
required information to the Board under the Order by the estimated 67 
respondents would be $19.28 per respondent annually. This total has 
been estimated by multiplying 129.15 (total burden hours requested) by 
$10.00 per hour, a sum deemed to be reasonable if the respondents were 
compensated for their time.

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, was approved by OMB on December 16, 
1996.
    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 
processor.
    Respondents: Processors.
    Estimated Number of Respondents: 35.
    Estimated Number of Responses per Respondent: 1 every 3 years 
(.33).
    Estimated Total Annual Burden on Respondents: 2.9 hours.
    In the proposed rule published on September 30, 1996, comments were 
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.
    By the November 29, 1996, deadline for comments on the information 
collections associated with the referendum rules, two comments were 
received, from the Popcorn Institute. In its comments, the Institute 
states that it agrees with the Department's estimate of the burdens 
associated with the ballot. The Institute also states that the ballot 
must contain the necessary information to determine whether each voter 
is an eligible processor pursuant to the referendum rules. The 
Department agrees with this. In fact, paragraph (a)(2) of Sec. 1215.503 
of the proposed rule requires the voters to provide the total volume of 
popcorn processed during the representative period. Further, all 
ballots will contain a certification by the voter that all information 
provided on the ballot is correct.
    In addition, the Institute recommended that the Department develop 
and utilize procedures to verify the information collected by the 
anticipated 35 potential respondents. This issue is addressed below in 
the discussion of the Institute's comment on the referendum procedures.
    The Institute further commented that the burden of voting could be 
reduced if the respondents were allowed to utilize electronic means of 
communicating their votes to the Department. The Institute states that, 
by using electronic procedures, the Department would not have to rely 
on conventional mail for the delivery of ballots. It could confirm the 
receipt of ballots confidentially and could more easily develop a list 
of voters which could be used for public inspection and potential 
challenges. Although the Department is receptive to the concept of 
utilizing new technological methods for casting votes in the future, we 
are not equipped to implement such a method and ensure confidentiality 
and the identification of each ballot's origin by electronic means at 
this time. Consequently, it is not possible to establish a procedure to 
utilize electronic methods during the initial referendum on this 
program. The Department believes that mail balloting is the most 
efficient and appropriate method for the upcoming referendum. Further, 
the popcorn industry will have access to the Agricultural Marketing 
Service's web site (http://www.usda.gov/ams/titlepag.htm), which will 
provide information about the proposed program and the referendum.

Background

    The purpose of the Act is to provide an orderly procedure for 
developing and financing an effective and coordinated program of 
promotion, research, and consumer information to strengthen the markets 
for popcorn. The program would be funded by an assessment of no more 
than 8 cents per hundredweight levied on popcorn processors. Processors 
who process and market 4 million pounds or less of popcorn annually 
would be exempt from paying

[[Page 13535]]

the assessment. Assessments would be used to pay for: promotion, 
research, consumer information, and industry information; 
administration, maintenance, and functioning of the Popcorn Board which 
would operate the program under the Secretary's supervision; and 
expenses incurred by the Secretary in implementing and administering 
the program, including referendum costs.
    This rule will add a new subpart which establishes procedures to be 
used in the initial referendum required by the Act. This subpart will 
be in effect for the referendum period only and will not be part of the 
Code of Federal Regulations. The proposed Order would go into effect 
only if the Secretary determines that the Order is approved by no less 
than a majority of the processors voting in the referendum and if the 
majority processed more than 50 percent of the popcorn certified as 
having been processed during the representative period by the 
processors voting.
    The referendum procedures provide definitions of who is eligible to 
vote and instructions for referendum agents regarding subagents, 
publicity for the referendum and the results, ballots, voting, ballot 
handling and tabulation, reporting, and confidentiality of referendum 
materials. The representative period for establishing voter eligibility 
for the referendum shall be determined by the Secretary. Persons who 
have processed over 4 million pounds of popcorn for market during the 
representative period will be eligible to vote. There are an estimated 
35 eligible processors. The referendum will be conducted by mail 
ballot.
    A proposed rule on the Order was published in the September 30, 
1996, issue of the Federal Register (61 FR 51046). On the same date, a 
proposed rule was published on the referendum procedures (61 FR 51055). 
As stated above, the comment period on the information collection 
requirements associated with this rule ended on November 29, 1996, and 
one comment was received on the information collection requirements. 
The comment period on the substance of the referendum procedures ended 
on October 30, 1996. One comment was also received, from the Popcorn 
Institute, on the procedures.
    In its comment on the procedures, the Institute recommends that the 
representative period for determining voter eligibility be January 1 
through December 31, 1996. This would be the most recent full calendar 
year preceding a referendum in 1997. The Institute states that this 
representative period will ensure that the information is readily 
available for respondents to include on the ballots. The Department 
accepts the suggested representative period. As is common practice, the 
representative period will be established in the referendum order which 
is being published with the proposed order. The referendum order also 
establishes the voting period and identifies the referendum agents. The 
proposed order and referendum order will be published separately in 
this issue of the Federal Register.
    In its comment, the Institute also states that it is important that 
the rule ensure that those entities that are comprised of multi-
ownership arrangements are entitled to only one vote; however, if two 
popcorn companies are owned by the same holding company and both 
processing companies will be paying assessments individually under the 
proposed program, both entities should be entitled to vote separately. 
However, the definition of ``person'' in paragraph (e) of Sec. 1215.501 
provides for these situations. Under the definition of ``person'' in 
the regulations those entities that are comprised of multi-ownership 
arrangements are entitled to only one vote. For example, a partnership 
which owns a processing facility would only receive one vote regardless 
of the number of partners participating in ownership. However, the 
definition also provides that two companies that pay assessments 
separately would be entitled to vote separately in the referendum.
    Further, the Institute expresses the position that anyone who has 
reason to challenge a ballot should be allowed to do so.
    To accomplish this, the Institute recommends that Sec. 1215.505 be 
expanded to require the referendum agent to ``make available for public 
inspection for 10 days following the end of the referendum period a 
list of each person casting a vote in the referendum.''
    The Department believes that voter eligibility can be 
satisfactorily determined without a challenge process. The referendum 
will be conducted by mail ballot. Ballots will be sent only to 
potential eligible voters. Due to the anticipated small number of 
voters, the referendum agents anticipate the ability to determine the 
eligibility of a majority of the voters in advance of the referendum. 
The referendum agents will also take steps to verify any questionable 
ballots as provided in Sec. 1215.505, which has been slightly changed 
to clarify terminology. The term ``challenged'' has been changed to 
``questioned.'' All ballot handling is done in the presence of an 
official from the Department's Office of the Inspector General (OIG), 
and the referendum agents or the OIG official may request documentation 
from any or all voters. We believe this course of action addresses the 
commenters concerns as well as allows for the timely tabulation of 
referendum results.
    The Institute's final issue relates to the technical classification 
of an eligible processor as discussed in Sec. 1215.501. There are 
several references to ``ownership of the popcorn process'' or 
``ownership of all or a portion of the popcorn process.'' The Institute 
believes these references are confusing and recommends that they be 
changed to ``ownership of the popcorn processed'' or ``ownership of all 
or a portion of the popcorn processed.'' The Department has modified 
the proposed rule accordingly.
    After consideration of all relevant material presented, it is found 
that this final rule effectuates the declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because: (1) These 
procedures are the same as or similar to referendum procedures for 
other research and promotion programs; (2) it is estimated that there 
are no more than 35 eligible voters; (3) minimal preparation time is 
needed to conduct the referendum; (4) therefore, no useful purpose 
would be served in delaying the effective date for 30 days; and (5) 
this action better reflects the statutory provisions concerning 
issuance of an order.

List of Subjects in 7 CFR Part 1215

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Popcorn, Promotion, Reporting and 
recordkeeping requirements.
    For the reasons set forth in the preamble, Title 7, chapter XI of 
the Code of Federal Regulations is amended as follows:
    1. Part 1215, consisting of subpart C, is added to read as follows:

PART 1215--POPCORN PROMOTION, RESEARCH, AND CONSUMER INFORMATION 
ORDER

Subpart C--Procedure for the Conduct of Referenda in Connection With 
the Popcorn Promotion, Research, and Consumer Information Order
Sec.
1215.500   General.
1215.501   Definitions.
1215.502   Voting.

[[Page 13536]]

1215.503   Instructions.
1215.504   Subagents.
1215.505   Ballots.
1215.506   Referendum report.
1215.507   Confidential information.

    Authority: 7 U.S.C. 7481-7491.

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


Sec. 1215.500  General.

    A referendum to determine whether eligible processors favor the 
issuance of the Order shall be conducted in accordance with these 
procedures.


Sec. 1215.501  Definitions.

    Unless otherwise defined below, the definitions 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 Popcorn Promotion, Research, and Consumer 
Information Order.
    (c) Referendum agent or subagent 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 have title to, or leasehold interest in, 
processing 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 processing of popcorn and the authority to transfer 
title to the popcorn so processed.
    (f) Eligible processor means any person who processes over 4 
million pounds of popcorn during the representative period and who:
    (1) Owns or shares in the ownership of processing facilities and 
equipment resulting in the ownership of the popcorn processed;
    (2) Rents processing facilities and equipment resulting in the 
ownership of all or a portion of the popcorn processed;
    (3) Owns processing facilities and equipment but does not manage 
them and, as compensation, obtains the ownership of a portion of the 
popcorn processed; or
    (4) Is a party in a landlord-tenant relationship or a divided 
ownership arrangement involving totally independent entities 
cooperating only to process popcorn who share the risk of loss and 
receive a share of the popcorn processed. No other acquisition of legal 
title to popcorn shall be deemed to result in persons becoming eligible 
processors.


Sec. 1215.502  Voting.

    (a) Each person who is an eligible processor 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 processor in a landlord-tenant relationship or a divided 
ownership arrangement involving totally independent entities 
cooperating only to process popcorn, in which more than one of the 
parties is a processor, shall be entitled to cast one ballot in the 
referendum covering only such processor's share of the ownership.
    (b) Proxy voting is not authorized, but an officer or employee of 
an eligible corporate processor or an administrator, executor, or 
trustee of an eligible processing entity may cast a ballot on behalf of 
such processing entity. Any individual so voting in a referendum shall 
certify that such individual is an officer or employee of the eligible 
processor, or an administrator, executor, or trustee of an eligible 
processing 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. 1215.503  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 procedures to be followed by 
the referendum agent. Such agent shall:
    (a) Prepare 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, and
    (2) The total volume of popcorn processed by the voting processor 
during the representative period.
    (b) Give reasonable advance public notice of the referendum by 
utilizing available media or public information sources, without 
incurring advertising expense, to publicize the dates, method of 
voting, eligibility requirements, and other pertinent information. Such 
sources of publicity may include, but are not limited to, print and 
radio and such other means as the agent may deem advisable.
    (c) Mail to each eligible processor whose name and address is known 
to the agent, the instructions on voting and a ballot. No person who 
claims to be eligible to vote shall be refused a ballot.
    (d) At the end of the voting period, collect, open, number, and 
review the ballots and tabulate the results in the presence of an agent 
of the Office of Inspector General.
    (e) Prepare a report on the referendum.
    (f) Announce the results to the public.


Sec. 1215.504  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 and all functions which, in the 
absence of such appointment, shall be performed by the agent.


Sec. 1215.505  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. 1215.506  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.

[[Page 13537]]

Sec. 1215.507  Confidential information.

    The ballots and other information or reports that reveal, or tend 
to reveal, the vote of any processor in the referendum shall be held 
strictly confidential and shall not be disclosed.

    Dated: March 18, 1997.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 97-7293 Filed 3-20-97; 8:45 am]
BILLING CODE 3410-02-P