[Federal Register Volume 65, Number 31 (Tuesday, February 15, 2000)]
[Proposed Rules]
[Pages 7657-7672]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-3405]



  Federal Register / Vol. 65, No. 31 / Tuesday, February 15, 2000 / 
Proposed Rules  

[[Page 7657]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1218

[FV-99-701-PR2]


Proposed Blueberry Promotion, Research, and Information Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would establish an industry-funded 
promotion, research, and information program for cultivated 
blueberries. A proposed program--the Blueberry Promotion, Research, and 
Information Order (Order)--was submitted to USDA by the North American 
Blueberry Council, Inc. Under the Order, blueberry producers and 
importers would pay an assessment of $12 per ton, which would be paid 
to the proposed U.S.A. Blueberry Council. Producers and importers of 
less than 2,000 pounds of fresh and processed blueberries annually 
would be exempt from the assessment. The proposed program would be 
implemented under the Commodity Promotion, Research, and Information 
Act of 1996 (Act). In addition, the USDA is announcing that a 
referendum will be conducted among eligible blueberry producers and 
importers to determine whether they favor the implementation of the 
program.

DATES: In order to be eligible to vote, blueberry producers and 
importers must have produced or imported 2,000 pounds or more of 
blueberries during the period from January 1, 1999 through December 31, 
1999 (representative period). The voting period for the referendum will 
be from March 13 through March 24, 2000.

FOR FURTHER INFORMATION CONTACT: Oliver L. Flake, Research and 
Promotion Branch, Fruit and Vegetable Programs, AMS, USDA, Stop 0244, 
1400 Independence Avenue, SW, Room 2535-S, Washington, DC 20250-0244; 
telephone (202) 720-5976 or fax (202) 205-2800.

SUPPLEMENTARY INFORMATION: This proposed Order is issued pursuant to 
the Commodity Promotion, Research, and Information Act of 1996, 7 
U.S.C. 7401-7425; Public Law 104-127, enacted April 4, 1996, 
hereinafter referred to as the Act.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
Section 524 of the Act provides that the Act shall not affect or 
preempt any other Federal or state law authorizing promotion or 
research relating to an agricultural commodity.
    Under section 519 of the Act, a person subject to the Order may 
file a petition with the Secretary of Agriculture (Secretary) stating 
that the Order, any provision of the Order, or any obligation imposed 
in connection with the Order, is not established in accordance with the 
law, and requesting a modification of the Order or an exemption from 
the Order. Any petition filed challenging the Order, any provision of 
the Order, or any obligation imposed in connection with the Order, 
shall be filed within two years after the effective date of the Order, 
provision, or obligation subject to challenge in the petition. The 
petitioner will have the opportunity for a hearing on the petition. 
Thereafter, the Secretary of Agriculture (Secretary) will issue a 
ruling on a petition. The Act provides that the district court of the 
United States for any district in which the petitioner resides or 
conducts business shall have the jurisdiction to review a final ruling 
on the petition, if the petitioner files a complaint for that purpose 
not later than 20 days after the date of the entry of the Secretary's 
final ruling.

Executive Order 12866

    This proposed 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 (OMB).

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C. 
601 et seq.], the Agency is required to examine the impact of the 
proposed rule on small entities. The purpose of the RFA is to fit 
regulatory actions to the scale of businesses subject to such actions 
so that small businesses will not be disproportionately burdened.
    The Act authorizes generic programs of promotion, research, and 
information for agricultural commodities. Congress found that it is in 
the national public interest and vital to the welfare of the 
agricultural economy of the United States to maintain and expand 
existing markets and develop new markets and uses for agricultural 
commodities through industry-funded, government-supervised, generic 
commodity promotion programs.
    This program is intended to develop and finance an effective and 
coordinated program of promotion, research, and information to maintain 
and expand the markets for cultivated blueberries (hereinafter referred 
to as blueberries). A proposal was submitted by the North American 
Blueberry Council, Inc. (proponent or NABC). The proponent has proposed 
that blueberry producers and importers approve the program in a 
referendum in advance of its implementation. In addition, NABC proposed 
that producers, importers, exporters, and first handlers would serve on 
a 13-member U.S.A. Blueberry Council (USABC) that would administer the 
program under USDA's oversight. In order to provide the opportunity for 
public input into USABC deliberations, the Secretary added one public 
member to the proponent's proposed USABC. Any person subject to the 
program may file with the Secretary a petition stating that the Order 
or any provision of the Order is not in accordance with law and 
requesting a modification of the Order or an exemption from the Order.
    While the proposed Order would impose certain recordkeeping 
requirements on first handlers, information required under the proposed 
Order could be compiled from records currently maintained. First 
handlers would collect and remit the assessments on domestic 
blueberries to the Council. Their responsibilities would include 
accurate recordkeeping and accounting of all blueberries purchased or 
contracted for, including the number of pounds handled, the names of 
their producers, and when blueberries are purchased. The forms require 
the minimum information necessary to effectively carry out the 
requirements of the program, and their use is necessary to fulfill the 
intent of the Act. Such records shall be retained for at least two 
years. This information is already being maintained as a normal 
business practice.
    In addition, first handlers of blueberries who seek nomination to 
serve on the USABC would be required to complete a nomination form 
which would be submitted to the Secretary.
    The added burden to first handlers for a blueberry promotion, 
research, and information program is therefore expected to be minimal.
    There is also a minimal paperwork burden on producers. The burden 
relates to those producers who would seek nomination to serve on the 
USABC and those who vote in referenda. In addition, the proposed Order 
would require producers to keep records and to provide information to 
the USABC or the Secretary when requested. However, it is not 
anticipated that producers would be required to submit forms to the 
USABC. Most likely, the information would be obtained through an audit 
of a producer's records to confirm

[[Page 7658]]

information provided by a first handler or if a first handler did not 
file the required reports as part of the USABC's compliance operation. 
When seeking nomination to serve on the USABC, producers would be 
required to complete one form which would be submitted to the 
Secretary.
    In addition, there is a minimal burden on importers. The import 
assessments would be collected by the U.S. Customs Service (Customs) at 
time of entry into the United States. Importers would be required to 
keep records and to provide information to the USABC or the Secretary 
when requested. However, it is not anticipated that importers would be 
required to submit forms to the USABC. Importers who seek nomination to 
serve on the USABC would be required to complete one form which would 
be submitted to the Secretary.
    Further, there would be a minimal burden on exporters who seek 
nomination to serve on the USABC. They would be required to complete 
one form which would be submitted to the Secretary.
    The estimated annual cost of providing the information to the USABC 
by an estimated 2,254 respondents (2,000 producers, 200 first handlers, 
50 importers, and 4 exporters) would be $14,570 or $11,090 for all 
producers or $5.55 per producer, $2,020 for all first handlers or 
$10.10 per first handler, $1,440 for all importers or $28.80 per 
importer, and $20 for all exporters or $5.00 per exporter.
    USDA would oversee program operations and, if the program is 
implemented, would conduct a referendum (1) every five years to 
determine whether blueberry producers and importers support 
continuation of the program, (2) at the request of the USABC, or (3) at 
the request of 10 percent or more of the number of persons eligible to 
vote in referenda. Additionally, the Secretary may conduct a referendum 
at any time to determine whether the continuation, suspension, or 
termination of the Order or a provision of the Order is favored by 
those eligible to vote in referenda.
    There are approximately 2,000 producers, 200 first handlers, 50 
importers, and 4 exporters of blueberries who would be subject to the 
program. These figures have been revised since publication of the 
proposed rule. This revision is based upon more current information 
from a comment received concerning the proposed Order. That comment is 
discussed later in this proposed rule. Most of the producers would be 
classified as small businesses under the criteria established by the 
Small Business Administration (SBA) [13 CFR 121.601]. Most importers 
and first handlers would not be classified as small businesses and, 
while most exporters are large, we assume that some are small. The SBA 
defines small agricultural handlers as those whose annual receipts are 
less than $5 million, and small agricultural producers are defined as 
those having annual receipts of not more than $500,000 annually.
    The blueberry, along with the cranberry and Concord grape, is one 
of only three native North American fruits. Blueberries were 
domesticated from wild highbush blueberries in the early 1900's. Over 
the years, they have been bred for flavor, size, color, vigor, and 
yield.
    North America is the world's leading producer of blueberries. From 
1993 to 1997, cultivated blueberries represented an average of 
approximately 70 percent of all blueberries produced in the United 
States with the remainder, known as lowbush (wild) blueberries, 
produced primarily in Maine. There are over 37 varieties of 
blueberries, but not all are actively produced for market.
    Blueberries are harvested from April through October, with more 
than 60 percent harvested from mid-June though mid-August. Blueberries 
are grown in 35 states. Commercial production operations are located in 
Michigan (44 percent), New Jersey (19 percent), Oregon (12 percent), 
Georgia (9 percent), North Carolina (5 percent), Washington (5 
percent), Indiana and Florida (2 percent each), and all other states (2 
percent).
    A majority of blueberry growers are relatively small business 
owners, operating 20- to 30-acre farms which have been in their 
families for a number of generations. Blueberry acreage is expanding in 
the United States, with considerable growth in the high-yielding areas 
of the Northwest and South. Harvested acreage in the United States has 
more than doubled over the past 15 years, from 21,850 harvested acres 
in 1980 to an estimated 46,685 harvested acres in 1996.
    U.S. blueberry production has more than doubled since the late 
1970's, from an average of 35,693 tons during the five-year period 1977 
through 1981 to an average of more than 75,500 tons from 1993 through 
1997. According to USDA's National Agricultural Statistics Service 
(NASS), total production of blueberries was 79,485 tons in 1998, a 
decrease from 84,990 tons in 1997. Approximately 39,493 tons of the 
total were utilized for fresh market sale and 37,608 tons were 
processed (primarily frozen).
    Farm value of the 1997 blueberry crop was $141 million, compared 
with $113.6 million a year earlier.
    U.S. frozen blueberry per capita consumption has been declining 
rapidly in recent years, decreasing from 0.38 pounds in 1996 to 0.33 
pounds in 1997. From calendar year 1991 through 1995, U.S. per capita 
consumption of frozen blueberries averaged 0.43 pounds.
    The United States exported 6.3 million pounds of fresh blueberries 
in 1997, valued at $7.9 million. Canada is the principal destination 
for U.S. exports--accounting for nearly 79 percent of the total in 
1997. Other key markets included Switzerland (7 percent), the United 
Kingdom (5 percent), and Germany (3 percent). The remaining export 
volume went mostly to other European and Asian countries.
    U.S. exports of frozen blueberries totaled 11,050 tons in 1997, and 
were valued at $9.9 million. The largest U.S. export market for frozen 
blueberries is Canada, accounting for 90 percent of the total quantity 
exported in 1997. Japan was the second largest U.S. market, accounting 
for 8 percent of the total. The remaining 2 percent of U.S. exports 
were sent mainly to other Asian and European countries.
    In 1997, the United States imported 6,950 tons of fresh blueberries 
worth $10.8 million. Imports from Canada accounted for 89 percent of 
the total. Other major suppliers of fresh blueberries were Chile, with 
9 percent of the total, and New Zealand with 2 percent.
    In 1997, total imports of frozen blueberries reached 4,900 tons, 
valued at $8.5 million. The bulk of U.S. frozen blueberry imports 
(about 96 percent) in 1997 came from Canada. U.S. imports of frozen 
blueberries from Chile represented 2 percent of the total, while Mexico 
accounted for 1 percent of the total. The rest of the 1997 import 
volume originated from the Netherlands, Costa Rica, and Colombia.
    During the 1997 season, average annual production per U.S. producer 
was approximately 66.04 tons of blueberries. Blueberries produced 
during this growing season provided average annual gross sales of 
$109,557 per blueberry producer.
    The proposed Order would authorize a fixed assessment paid by 
producers (to be collected by first handlers) and importers (to be 
collected by Customs) at a rate of $12 per ton.
    Section 516(a)(1) of the Act provides authority to the Secretary to 
exempt from the Order any de minimis quantity of an agricultural 
commodity otherwise covered by the Order. The proponent has recommended 
that producers and

[[Page 7659]]

importers of less than 2,000 pounds of blueberries annually be exempt 
from assessment.
    At the proposed rate of assessment of $12 per ton, the USABC would 
collect approximately $1.1 million annually. It is expected that the 
assessment would represent less than 1 percent of producers' average 
return. In 1997, the average price for blueberries was $1,659 per ton.
    USDA will keep all individuals informed throughout the referendum 
process to ensure that they are aware of and are able to participate in 
the referendum. USDA will publicize information regarding the 
referendum process so that trade associations and related industry 
media can be kept informed.
    In addition, the blueberry industry would nominate producers and 
the USABC would nominate importers, exporters, first handlers, and a 
public member to serve as members and alternates on the USABC. The 
USABC would recommend the assessment rate, programs, projects, a 
budget, and any rules and regulations that might be necessary for the 
administration of the program. USDA would ensure that the nominees 
represent the blueberry industry in accordance with the proposed Order.
    The USABC would consist of 13 members: one producer representative 
from each of four regions, one producer representative for each of the 
top five producing states, one importer, one exporter, one first 
handler, and one public member. The regional and state members would be 
nominated from within the respective regions or states by the state 
commissions or the NABC as applicable for initial nominations, and the 
importer, exporter, and first handler members would be nominated by the 
USABC. There would be an alternate for each member. The importer 
position would be filled by a person who imports fresh or processed 
blueberries from outside of the United States for sale in the United 
States. The exporter position would be filled by a representative of 
the foreign production area which, based on a 3-year average, produces 
the most blueberries that are shipped to the United States.
    In order to provide the opportunity for public input into USABC 
deliberations, the Secretary added one public member and alternate to 
the proponent's proposed USABC. The public member and alternate would 
be nominated by the USABC.
    Proposed recordkeeping and reporting requirements for the blueberry 
promotion, research, and information program would be designed to 
minimize the burden on the blueberry industry. The blueberry promotion 
program would be designed to strengthen the position of blueberries in 
the marketplace, maintain and expand existing domestic and foreign 
markets, and develop new uses and markets for blueberries.
    The estimated annual cost of providing the information to the USABC 
by an estimated 2,254 respondents (2,000 producers, 200 first handlers, 
50 importers, and 4 exporters) would be $14,570 or $11,090 for all 
producers or $5.55 per producer, $2,020 for all first handlers or 
$10.10 per first handler, $1,440 for all importers or $28.80 per 
importer, and $20 for all exporters or $5.00 per exporter.
    With regard to alternatives to this proposed rule, the Act itself 
does provide for authority to tailor a program according to the 
individual needs of an industry. Provision is made for permissive terms 
in an order in Section 516 of the Act, and other sections provide for 
alternatives. For example, Section 514 of the Act provides for orders 
applicable to (1) producers, (2) first handlers and other persons in 
the marketing chain as appropriate, and (3) importers (if imports are 
subject to assessment). Section 516 authorizes an order to provide for 
exemption of de minimis quantities of an agricultural commodity; 
different payment and reporting schedules; coverage of research, 
promotion, and information activities to expand, improve, or make more 
efficient the marketing or use of an agricultural commodity in both 
domestic and foreign markets; provision for reserve funds; provision 
for credits for generic and branded activities; and assessment of 
imports. In addition, Section 518 of the Act provides for referenda to 
ascertain approval of an order to be conducted either prior to its 
going into effect or within 3 years after assessments first begin under 
the order. An order also may provide for its approval in a referendum 
to be based upon (1) a majority of those persons voting; (2) persons 
voting for approval who represent a majority of the volume of the 
agricultural commodity; or (3) a majority of those persons voting for 
approval who also represent a majority of the volume of the 
agricultural commodity. Section 515 of the Act provides for 
establishment of a board from among producers, first handlers, and 
others in the marketing chain as appropriate and importers, if 
importers are subject to assessment.
    This proposal includes provisions for both domestic and foreign 
market expansion and improvement; reserve funds; and an initial 
referendum to be conducted prior to the Order going into effect. 
Approval would be determined by a majority of producers and importers 
voting for approval who also represent a majority of the volume of 
blueberries represented in the referendum.
    The proposed rule that was published in the Federal Register on 
July 22, 1999 [64 FR 39790] invited comments concerning the potential 
effects of the proposed Order. One comment from the proponent of the 
Order was received regarding the Regulatory Flexibility Analysis.
    Based upon available information, we estimated that 1,297 producers 
and 120 importers would be subject to the program. The commenter 
estimates in its comment that 2,000 producers and 50 importers/exports 
would be subject to the program.
    In the July 22, 1999, proposed rule, we invited information on the 
number of persons subject to the program. The commenter's estimate of 
the number of producers subject to the program is supported by data 
from the 1997 Census of Agriculture. Further, we accept the estimate as 
to importers. However, our estimate as to the number of handlers and 
exporters will remain unchanged based upon available information. 
Accordingly, we have changed all references to these estimates in both 
this proposed Order as well as the referendum procedures, which are 
published separately in this issue of the Federal Register.
    The commenter also requested a change to a reference in the 
Regulatory Flexibility Analysis regarding the required forms to be 
submitted to the USABC. The commenter requested that producers be 
required to provide the USABC with an annual report at the end of the 
harvest season. The commenter asked that this report include the 
producer's production so that proper assessments can be determined and 
checked with USABC production figures. We believe that such a required 
annual report would place an unnecessary added burden on producers. The 
Order already requires that producers maintain records to confirm 
information provided by first handlers. Consequently, if needed, 
assessments can be checked through an audit of producers' records. 
Therefore, no changes are made as a result of this comment.
    Regarding a reference in the Regulatory Flexibility Analysis to the 
nomination of the pubic member to the USABC, the commenter inquired 
whether the blueberry industry would be responsible to nominate this 
public member. Section 1218.41(d) states that

[[Page 7660]]

the nominations for the public member will be made by the USABC after 
it is appointed. We have revised the Regulatory Flexibility Analysis as 
appropriate. Another point addressed by the commenter concerned the 
accuracy of a reference to native North American fruits and whether 
crab apples should be included in the reference. The statement is 
correct, and no change is necessary.

Paperwork Reduction Act

    In accordance with the Office of Management and Budget (OMB) 
regulation [5 CFR part 1320] which implements the Paperwork Reduction 
Act of 1995 [44 U.S.C. Chapter 35], the information collection and 
recordkeeping requirements that may be imposed by this Order have been 
submitted to OMB for approval.
    Title: National Research, Promotion, and Consumer Information 
Programs.
    OMB Number for background form (number 1 below): 0505-0001.
    Expiration Date of Approval: July 31, 2002.
    OMB Number for other information collections: 0581-0093.
    Expiration Date of Approval: November 30, 2000.
    Type of Request: Revision of currently approved information 
collections for advisory committees and boards and for research and 
promotion programs.
    Abstract: The information collection requirements in the request 
are essential to carry out the intent of the Act.
    In addition, there will be the additional burden on producers and 
importers voting in referenda. The referendum ballot, which represents 
the information collection requirement relating to referenda, is 
addressed in a proposed rule on referendum procedures which is 
published separately in this issue of the Federal Register.
    Under the proposed program, first handlers would be required to 
collect assessments from producers and file reports with and submit 
assessments to the USABC. While the proposed Order would impose certain 
recordkeeping requirements on first handlers, information required 
under the proposed Order could be compiled from records currently 
maintained. Such records shall be retained for at least two years 
beyond the marketing year of their applicability. The estimated annual 
cost of providing the information to the USABC by an estimated 2,254 
respondents (2,000 producers, 200 first handlers, 50 importers, and 4 
exporters) would be $14,570 or $11,090 for all producers or $5.55 per 
producer, $2,020 for all first handlers or $10.10 per first handler, 
$1,440 for all importers or $28.80 per importer, and $20 for all 
exporters or $5.00 per exporter.
    The proposed Order's provisions have been carefully reviewed, and 
every effort has been made to minimize any unnecessary recordkeeping 
costs or requirements, including efforts to utilize information already 
submitted under other blueberry programs administered by USDA.
    The proposed forms would require the minimum information necessary 
to effectively carry out the requirements of the program, and their use 
is necessary to fulfill the intent of the Act. Such information can be 
supplied without data processing equipment or outside technical 
expertise. In addition, there are no additional training requirements 
for individuals filling out reports and remitting assessments to the 
USABC. The forms would be simple, easy to understand, and place as 
small a burden as possible on the person required to file the 
information.
    Collecting information yearly would coincide with normal industry 
business practices. Reporting other than yearly would impose an 
additional and unnecessary recordkeeping burden on first handlers. The 
timing and frequency of collecting information are intended to meet the 
needs of the industry while minimizing the amount of work necessary to 
fill out the required reports. In addition, the information to be 
included on these forms is not available from other sources because 
such information relates specifically to individual producers and first 
handlers who are subject to the provisions of the Act.
    Therefore, there is no practical method for collecting the required 
information without the use of these forms.
    Information collection requirements that are included in this 
proposal include:
    (1) A background information form.
    Estimate of Burden: Public reporting for this collection of 
information is estimated to average 0.5 hours per response for each 
producer.
    Respondents: Producers, importers, exporters, and first handlers.
    Estimated number of Respondents: 18 (52 for initial nominations to 
the USABC, 28 in the second year, and 24 in the fourth year).
    Estimated number of Responses per Respondent: 1 every 3 years.
    Estimated Total Annual Burden on Respondents: 26 hours for the 
initial nominations to the Council and 9 hours annually thereafter.
    (2) An annual report by each first handler of blueberries.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.5 hours per first handler 
reporting on blueberries handled.
    Respondents: First handlers.
    Estimated number of Respondents: 200.
    Estimated number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 100 hours.
    (3) A request for certificate of exemption.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.5 hours per first handler, 
producer, or importer reporting on blueberries handled. Upon approval 
of an application, producers and importers will receive exemption 
certification.
    Respondents: Producers and importers.
    Estimated number of Respondents: 200.
    Estimated number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 100 hours.
    (4) Importer application for reimbursement of assessment.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.5 hours per importer requesting a 
refund.
    Respondents: Importers.
    Estimated number of Respondents: 18.
    Estimated number of Responses per Respondent: 12.
    Estimated Total Annual Burden on Respondents: 108 hours.
    (5) A requirement to maintain records sufficient to verify reports 
submitted under the Order.
    Estimate of Burden: Public recordkeeping burden for keeping this 
information is estimated to average 0.5 hours per recordkeeper 
maintaining such records.
    Recordkeepers: Producers, first handlers, and importers.
    Estimated number of recordkeepers: 2,250.
    Estimated total recordkeeping hours: 1,125 hours.
    Comments were invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of functions of the 
Order and the USDA's oversight of the program, including whether the 
information will have practical utility; (b) the accuracy of USDA'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,

[[Page 7661]]

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 collection techniques or other forms 
of information technology.
    The burdens have been revised, as appropriate, based upon a comment 
from the proponent concerning the estimated number of producers and 
importers. Another comment was received from a producer who opposed the 
proposed Order. This commenter did not want more paperwork and 
specifically stated that she did not want to submit an annual report. A 
comment from the proponent requested that an annual report be required 
of producers. As previously discussed, we have not included such a 
change in the Order provisions. Further, every attempt has been made to 
minimize the burden on regulated parties, including producers. 
Accordingly, no change is made based upon the producer's comment.

Background

    The Act authorizes the Secretary, under a generic authority, to 
establish agricultural commodity research and promotion orders. The Act 
provides for a number of optional provisions that allow the tailoring 
of orders for different commodities. Section 516 of the Act provides 
permissive terms for orders, and other sections provide for 
alternatives. For example, Section 514 of the Act provides for orders 
applicable to (1) producers, (2) first handlers and others in the 
marketing chain as appropriate, and (3) importers (if importers are 
subject to assessment). Section 516 authorizes an order to provide for 
exemption of de minimis quantities of an agricultural commodity; 
different payment and reporting schedules; coverage of research, 
promotion, and information activities to expand, improve, or make more 
efficient the marketing or use of an agricultural commodity in both 
domestic and foreign markets; provision for reserve funds; provision 
for credits for generic and branded activities; and assessment of 
imports. In addition, Section 518 of the Act provides for referenda to 
ascertain approval of an order to be conducted either prior to its 
going into effect or within 3 years after assessments first begin under 
the order. The order also may provide for its approval in a referendum 
based upon different voting patterns. Section 515 provides for 
establishment of a board from among producers, first handlers and 
others in the marketing chain as appropriate, and importers, if imports 
are subject to assessment.
    This proposed Order includes provisions for both domestic and 
foreign market expansion and improvement, reserve funds, and an initial 
referendum to be conducted prior to the Order going into effect. 
Approval would be determined by a majority of producers and importers 
voting for approval who also represent a majority of the volume of 
blueberries represented in the referendum.
    The proponent has requested the establishment of a national 
blueberry promotion, research, and information order pursuant to the 
Act. The Act authorizes the establishment and operation of generic 
promotion programs which may include a combination of promotion, 
research, industry information, and consumer information activities 
funded by mandatory assessments. These programs are designed to 
maintain and expand markets and uses for agricultural commodities. This 
proposal would provide for the development and financing of an 
effective and coordinated program of research, promotion, and 
information for blueberries. The purpose of the program would be to 
strengthen the position of blueberries in domestic and foreign markets, 
and to develop, maintain, and expand markets for blueberries.
    The program would not become effective until approved in a 
referendum conducted by USDA. Section 518 of the Act provides for USDA 
(1) to conduct an initial referendum, preceding a proposed order's 
effective date, among persons who would pay assessments under the 
program or (2) to implement a proposed order, pending the conduct of a 
referendum, among persons subject to assessments, within three years 
after assessments first begin.
    In accordance with Section 518(e) of the Act, an order may provide 
for its approval in a referendum based upon (1) a majority of those 
persons voting; (2) persons voting for approval who represent a 
majority of the volume of the agricultural commodity; or (3) a majority 
of those persons voting for approval who also represent a majority of 
the volume of the agricultural commodity.
    The Secretary will conduct a referendum in which approval of the 
Order would be determined by a majority of producers and importers 
voting for approval who also represent a majority of the volume of 
blueberries represented in the referendum. The proponent has 
recommended that a referendum be conducted prior to the proposed Order 
going into effect.
    In accordance with the Act, USDA would oversee the program's 
operations. In addition, the Act requires the Secretary to conduct 
subsequent referenda: (1) not later than 7 years after assessments 
first begin under the Order; or (2) at the request of the board 
established under the Order; or (3) at the request of 10 percent or 
more of the number of persons eligible to vote. The proponent group has 
requested that a referendum be conducted every five years to determine 
if producers and importers want the program to continue.
    In addition to these criteria, the Act provides that the Secretary 
may conduct a referendum at any time to determine whether the 
continuation, suspension, or termination of the Order or a provision of 
the Order is favored by persons eligible to vote.
    A national research and promotion program for blueberries would 
help the industry to address the many market problems it currently 
faces. According to the proponent, three main factors currently 
affecting blueberry sales, both here in the domestic market and abroad, 
are increasing production, aggressive competition, and changing 
consumer habits.
    Over the years, increased blueberry production has led to depressed 
grower prices and increasing cold storage inventory levels. Though 
slightly lower production and inventory levels in 1996 and early 1997 
improved grower returns to more profitable levels, record production in 
1997 led once again to a build up in cold storage inventory of frozen 
blueberries and a downturn in grower prices in late 1997 and early 
1998. The potential for continued increases in tonnage from new 
plantings, expected to come into full production in the future, will 
continue to affect the balance of supply and demand and threaten to 
depress grower returns.
    The blueberry industry has seen tremendous growth in the Northwest 
and Southern states which accounted for an estimated 19.9 percent of 
total U.S. blueberry acreage in 1980 and an estimated 38.6 percent of 
acres by 1996. The growth in the Northwest is an important factor for 
the future of the industry, given its production potential. Over the 
years, yield per acre in the Northwest has been substantially above 
that of the major growing regions of Michigan and New Jersey. On 
average, from 1990 to 1996, Oregon produced 71 percent more blueberries 
per acre than New Jersey (3.6 tons per acre versus 2.1 tons per acre) 
and more than twice the yield of Michigan (3.6 tons per acre versus 1.6 
tons per acre). During this same time period, Washington produced

[[Page 7662]]

an average of 38 percent more blueberries per acre than New Jersey (2.9 
tons per acre compared to 2.1 tons per acre) and 81 percent more than 
Michigan (2.9 tons per acre versus 1.6 tons per acre).
    The blueberry industry is facing strong competition in the 
marketplace from both indirect and direct competitors. Like all food 
products, the blueberry must compete for a share of the consumer 
dollar. As competition in the supermarket increases, the blueberry 
industry must work harder to gain its share of consumer attention at a 
time when the industry's direct and indirect competitors expand their 
promotional activities.
    A recent informal survey conducted by the proponent showed that 
from 1991 to 1995, the blueberry industry committed an average of 0.26 
percent of farm gate value to the voluntary NABC domestic marketing 
program, far below the average of products such as prunes, kiwifruit, 
figs, pears, grapes, apples, citrus, and avocados whose domestic 
marketing expenditures averaged 2.10 percent of crop value. Though some 
individual members of the blueberry industry conduct promotional 
efforts on their own as well as contribute to the NABC program, it is 
extremely difficult to compete for a share of consumer and industrial 
user attention when the national generic marketing expenditure is 
slightly more than one-tenth the average amount of competitive 
products.
    The blueberry industry must also address direct competition with 
the lowbush blueberry industry which is very active in the industrial 
market both in the United States and abroad. The blueberry industry 
must also contend with artificial blueberries which are making their 
presence felt in a wide range of national and regional branded food 
products.
    Changing consumer trends are also having an impact on the use of 
blueberries. Of great concern to the blueberry industry is the overall 
decline in home baking, given the fact that consumers perceive 
blueberries as the primary baking berry. As consumers move away from 
home baking of blueberry muffins and pies and decide to buy rather than 
bake, the industry must increase its efforts in the industrial market 
to be sure that manufacturers maintain and expand their use of 
blueberries in baked applications.
    It is also necessary for the industry to expand the awareness of 
the versatility of blueberries and encourage new consumer and food 
manufacturer uses.
    In 1965, the NABC was established as a voluntary association of 
U.S. and Canadian lowbush (native) and cultivated (highbush) blueberry 
growers and marketers who collectively worked to promote blueberry 
awareness and consumption. Over the years, the structure of the 
organization changed to where the association now represents only the 
cultivated blueberry industry in the United States and Canada. The 31 
U.S.-based NABC members account for an estimated 78 percent of the U.S. 
blueberry crop. These members, along with members from British Columbia 
and Quebec, voluntarily assess themselves at a rate of $9 per ton to 
fund domestic publicity and promotion efforts directed to both the 
consumer and industrial user, as well as to support international 
market development. The NABC generates approximately $500,000 annually.
    As the only national organization funding market development 
efforts for cultivated (highbush) blueberries, the voluntary NABC has 
not been able to generate the funds necessary to support the aggressive 
marketing efforts needed to help expand blueberry consumption and 
improve the profitability of the industry. In order to deal with 
increased production, aggressive competition, and changing consumer 
habits, the proponent states that a more extensive marketing program is 
needed. A mandatory national program could solve this problem. In 
addition, a mandatory national program would place all domestic 
growers, first handlers, and importers on an equal playing field with 
each investing a fair share in promoting blueberries.
    Additional funds generated through a national program would allow 
the blueberry industry to take advantage of a wide range of promotional 
opportunities. At a minimum, increased funding would allow the industry 
to expand its current consumer, food service, and food manufacturer 
promotion efforts. It would also allow for increased participation in 
the USDA's Market Access Program and the opportunity to develop 
stronger markets overseas. Increased funding would allow for a more 
aggressive school effort (educational films, educational booklets, 
Internet lesson plans, and the like) and help increase awareness and 
demand among children. In addition, such a program would create the 
opportunity to explore tie-in promotional activities with nationally 
branded food products which would help the blueberry industry gain 
advertising and in-store exposure. Further, a mandatory national 
program would generate the funds for the industry to support expanded 
varietal research activities, new product development efforts, and 
nutritional and health research proposals.
    Section 516(f) of the Act allows an order to authorize the levying 
of assessments on imports of the commodity covered by the program or on 
products containing that commodity, at a rate comparable to the rate 
determined for the domestic agricultural commodity covered by the 
order. The proponent has proposed to assess imports.
    The assessment levied on domestically-produced and imported 
blueberries would be used to pay for promotion, research, and consumer 
and industry information as well as administration, maintenance, and 
functioning of the Council. Expenses incurred by the Secretary in 
implementing and administering the Order, including referenda costs, 
also would be paid from assessments.
    Sections 516(e)(1) and (2) of the Act state that the Secretary may 
provide credits of assessments for generic and branded activities. The 
proponent has elected not to propose credits for generic or branded 
activities. Therefore, the terms ``generic activities'' and ``branded 
activities'' are not defined in the Order.
    First handlers would be responsible for the collection of 
assessments from the producer and payment to the Council. First 
handlers would be required to maintain records for each producer for 
whom blueberries are handled, including blueberries produced by the 
first handler. In addition, first handlers would be required to file 
reports regarding the collection, payment, or remittance of the 
assessments.
    Assessments on imported fresh and processed blueberries would be 
collected by Customs at the time of entry into the United States and 
remitted to the Council.
    All information obtained from persons subject to this Order as a 
result of recordkeeping and reporting requirements would be kept 
confidential by all officers, employees, and agents of USDA and of the 
Council. This information may be disclosed only if the Secretary 
considers the information relevant, and the information is revealed in 
a judicial proceeding or administrative hearing brought at the 
direction or on the request of the Secretary or to which the Secretary 
or any officer of USDA is a party. Other exceptions for disclosure of 
confidential information would include the issuance of general 
statements based on reports or on information relating to a number of 
persons subject to an order if the statements do not identify the

[[Page 7663]]

information furnished by any person or the publication, by direction of 
the Secretary of the name of any person violating the Order and a 
statement of the particular provisions of the Order violated by the 
person.
    The proposed Order provides for USDA to conduct an initial 
referendum preceding the proposed Order's effective date. Therefore, 
the proposed Order must be approved by producers and importers voting 
in the referendum. Approval would be determined by a majority of 
producers and importers voting for approval who also represent a 
majority of the volume of blueberries represented in the referendum. 
The proposed Order also provides for subsequent referenda to be 
conducted (1) every 5 years after the program is in effect, (2) at the 
request of the Board established under the Order, or (3) when requested 
by 10 percent or more of blueberry producers and importers subject to 
the Order. In addition, the Secretary may conduct a referendum at any 
time.
    The Act requires that such a proposed order provide for the 
establishment of a board to administer the program under USDA 
supervision. The proponent's proposal provided for a 12-member U.S.A. 
Blueberry Council to which the Secretary would add a public member, as 
stated earlier.
    To ensure fair and equitable representation of the blueberry 
industry on the USABC, the Act requires membership on the USABC to 
reflect the geographical distribution of the production of blueberries 
and the quantity or value of imports. To that end, the proposed Order 
divides the production area into four relatively equal regions which 
would each have one member on the USABC. Regions are based on the most 
recent three-year average of blueberries produced in each region. The 
proposed Order also provides for a representative from each of the top 
five blueberry producing states based on the most recent 3-year average 
of blueberries produced in each state. In addition, the proposed Order 
provides for one importer, a first handler, and an exporter position to 
be filled by a representative of the foreign production area which, 
based on a 3-year average, produces the most blueberries that are 
shipped to the United States. Each member would have an alternate.
    Upon implementation of the Order and pursuant to the Act, the USABC 
would at least once in each five-year period, but not more frequently 
than once in each three-year period, review the geographical 
distribution of blueberry production in the United States and the 
quantity of fresh and processed blueberries imported into the United 
States and make a recommendation to the Secretary after considering the 
results of its review and other information it deems relevant regarding 
the reapportionment of the USABC.
    Members and alternates would serve for three-year terms, except 
that the members and alternates appointed to the initial USABC would 
serve proportionately for two, three, and four years. No member or 
alternate would serve more than two consecutive three-year terms.
    A proposal was submitted by the North American Blueberry Council, 
Inc. (proponent or NABC). Prior to publication, the Department modified 
the proponent's proposal to make it consistent with the Act and other 
similar national research and promotion programs; for consistency 
throughout the text; and for clarity.
    In the definitions, ``commodity covered'' was changed to 
``blueberries,'' ``consumer information'' and ``producer information'' 
were combined into a definition of ``information'' to conform with the 
Act. Additionally, the definition of ``research,'' and ``importer'' 
were altered to conform with the Act.
    In the definitions and throughout the proposed Order, ``grower/
producer'' was changed to ``producer,'' ``handler'' was changed to 
``first handler,'' the term ``board'' was eliminated, and ``council'' 
was changed to ``U.S.A. Blueberry Council'' or ``USABC.'' The terms 
``plans, projects, and programs'' were deleted because they were deemed 
unnecessary, and a definition for ``processed blueberries'' and ``part 
and subpart'' were added. Throughout the proposed Order, the term 
``blueberry products'' was changed to ``fresh and processed 
blueberries,'' and, for clarity, time periods were changed to match 
definitions.
    The following terms were removed from the definitions: 
``association,'' ``buyer,'' ``broker,'' ``distributor,'' ``packer,'' 
``processor,'' and ``shipper.'' These terms were removed because they 
are not necessary for the administration of the proposed program.
    In Sec. 1218.40 Establishment and membership, the two exporter/
importer positions on the proposed USABC were changed to an importer 
position and an exporter position. The industry's proposal made 
importer representation optional. However, Section 515(b)(2)(B) of the 
Act requires importers to have representation on boards when imports 
are assessed under a program. It is estimated that imports will 
represent approximately 12 percent of the assessments under this 
proposed program. One of the optional importer/exporter positions was 
changed to provide for an importer position, and the other position was 
changed to provide for an exporter position. The exporter position 
would be filled by a representative of the foreign production area 
which, based on a three-year average, produces the most fresh and 
processed blueberries that are shipped to the United States. In 
addition, to provide the opportunity for public input into USABC 
deliberations, the Secretary added a public member and alternate to the 
proponent's proposed USABC. The public member and alternate would be 
nominated by the USABC. In this same section, a statement indicating 
that the addition of importer members and alternates would be 
accomplished by notice and rulemaking, was deleted as unnecessary.
    In Sec. 1218.43 Vacancies, additional information was added to 
specify that alternate members would assume the position of member if 
the member position becomes vacant during a term of office. In 
Sec. 1218.44, a new paragraph (g) was added to clarify that proxy 
voting is not authorized. In addition, a new paragraph (h) was added to 
allow the chairperson to have a vote during the USABC meetings.
    In Sec. 1218.60, the date all reports are due was changed from 
November 30 of the crop year to 30 days after the end of the crop year. 
This phrase was changed for clarity.
    In Sec. 1218.61, the length of time records must be maintained by 
first handlers, producers, and importers was changed from seven years 
to two years beyond the fiscal period to be consistent with other 
research and promotion programs. Also, the following sections were 
added to the proponent's proposal: Sec. 1218.73 Proceedings after 
termination; Sec. 1218.74 Effect of termination or amendment; and 
Sec. 1218.76 Separability. 
    Other minor changes which did not materially affect the text were 
made for consistency and clarity.
    A proposed rule seeking comments on the national research and 
promotion program for blueberries was published on July 22, 1999, in 
the Federal Register [64 FR 39790]. Comments were invited on the entire 
proposal with the deadline for comments on September 20, 1999. Eight 
comments were received from seven commenters by that deadline. Of the 
eight comments, three were supportive of the proposed program, one 
expressed opposition, two addressed specific concerns, and two were 
generally not applicable to the proposed Order. The commenters were a 
blueberry producer association, a state

[[Page 7664]]

department of agriculture, four producers, and a blueberry cooperative. 
Two additional comments (one of which was sent twice) were received 
after the close of the comment period. The late comments reflected to a 
large extent the comments that were timely received. One of the late 
comments had questions about regulation of U-pick operations which are 
covered by the proposed Order.
    A comment was received requesting that, throughout the proposal and 
in the Council's title, the term ``blueberry'' be changed to 
``cultivated blueberry.'' The commenter stated that the generic use of 
the term ``blueberry'' was misleading as to the specific type of 
blueberry and industry segment represented by the proposed Council. The 
commenter noted that the wild blueberry industry promotes its product 
as unique from the cultivated blueberry. While the commenter brings 
forth differences between the two types of blueberries, the Order and 
Council name were proposed by the proponent organization which 
represents approximately 70 percent of domestic production of all 
blueberries. Wild blueberry production is very localized and represents 
less than 30 percent of total domestic blueberry production. Generally, 
most consumers do not differentiate between wild and cultivated 
blueberries. Webster's Ninth New Collegiate Dictionary (1984) defines a 
blueberry as ``the edible blue or blackish berry of any of several 
plants (genus Vaccinium) of the heath family; a low or tall shrub 
producing these berries.'' This definition includes both wild (lowbush) 
and cultivated (highbush) varieties.
    Even if this proposed program is implemented, the wild blueberry 
industry can still create a separate image and niche market to identify 
its product.
    It is not uncommon in other national research and promotion 
programs that a generic term is used for a commodity that is defined 
with further specificity. For example, the Fluid Milk Promotion Order 
uses the term ``milk'' and defines it as any class of cow's milk 
produced in the United States. Neither this definition of milk nor the 
title of the Fluid Milk Promotion Order addresses goats' milk or other 
speciality milks. As with fluid milk, ``blueberry'' is a generic term. 
Further, cultivated blueberries represent the majority of production. 
Therefore, no change will be made as a result of this comment, and we 
will leave the proposed Order provisions and Council title as 
recommended by the proponent.
    Comments were received concerning the accuracy and clarity of 
wording in the background section of the proposed Order. These comments 
included a notation that the NABC is not the only national organization 
funding blueberry market development and asked for clarification of how 
the proposed Order would be approved in a referendum. We have addressed 
these comments and revised the background section, as appropriate.
    Comments regarding the regulatory text included a comment 
concerning Sec. 1218.2 which defines blueberries. The commenter 
requested that the definition of blueberries be clarified by including 
lowbush/highbush crosses (known as ``half-high'' blueberries). The 
definition of blueberries submitted by the proponent only excludes the 
lowbush (wild) blueberry. Therefore, simply clarifying that hybrids are 
included will not significantly change the definition of blueberry. 
Further, any blueberry that is not a pure lowbush is generally 
considered cultivated (highbush).
    A comment was submitted on Sec. 1218.07 which defines a first 
handler. The commenter felt a need to specify that a producer who 
markets his or her own product be considered a first handler. Including 
such producers in the definition of first handlers is consistent with 
other similar national research and promotion programs. Therefore, we 
accept the commenter's suggestion to include blueberry producers who 
market their own product in the definition of first handlers and have 
added this to the definition.
    A comment was received concerning Sec. 1218.41 which addresses 
nominations and appointments to the USABC. The commenter requested the 
inclusion of a statement indicating that no one group should have a 
majority position on the USABC. The commenter specifically requested 
that no one state and/or organization have representatives filling more 
than 6 out of the 13 USABC positions. The commenter addresses a valid 
concern regarding representation of states and organizations on the 
USABC. However, according to Sec. 1218.40, which describes the 
establishment of membership, it would not be possible for any state or 
organization to have a majority of the positions on the Council. Only 
two members could come from the same state as, of the nine producer 
positions, four regions are represented along with the top five 
blueberry producing states. Concerning majority representation of 
organizations, with 9 of the 13 positions being filled by producers, an 
organization could not obtain a majority position. Therefore, no change 
is necessary as a result of this comment.
    One comment was submitted regarding Sec. 1218.45 which outlines 
USABC procedures. The commenter requested that ``industry experts'' be 
included on USABC committees and that these individuals be able to vote 
on committee actions. Similar national research and promotion programs 
allow for nonmembers to serve on Board committees and vote on committee 
actions but not on Board actions. We have accepted this comment and 
added the following language to Sec. 1218.45(e): Committees may also 
consist of individuals other than USABC members and such members may 
vote in committee meetings.
    A comment was received regarding Sec. 1218.47 which outlines the 
powers and duties of the proposed USABC. The commenter requested that 
the USABC have the power to pay all necessary expenses and fees for 
committee members who are not USABC members. As mentioned in the 
previous paragraph, precedent exists for allowing individuals to serve 
on USABC committees who are not USABC members. The Act states that 
members and alternates will serve without compensation except that they 
may be reimbursed for travel expenses. Therefore, we accept the comment 
that non-USABC members who serve on committees be compensated for 
travel expenses but deny the request that the USABC pay fees for such 
committee members. This comment is addressed in Sec. 1218.45(e), where 
a reference to travel expenses for such committee members has been 
added.
    One comment was received regarding Sec. 1218.50 which addresses 
budget and expenses. The commenter requested a statement in this 
section that would allow the USABC to establish an operating monetary 
reserve and carry over excess funds to subsequent fiscal periods 
provided that the funds in the reserve do not exceed one fiscal 
period's budget. The Act authorizes orders to contain authority to 
reserve funds from assessments provided that the amount of funds 
reserved does not exceed the greatest aggregate amount of the 
anticipated disbursements specified in budgets approved by the 
Secretary for any two fiscal years. We therefore accept the commenter's 
request and have added Sec. 1218.50(j) which authorizes an operating 
monetary reserve, not to exceed one fiscal period's budget.
    One comment was received in regard to Sec. 1218.51 which deals with 
financial statements. The commenter requested clarification on how 
often financial statements would be required of the USABC. As a general 
rule, research and

[[Page 7665]]

promotion boards submit financial statements on a monthly basis. 
Section 1218.51(a) provides that the USABC shall prepare and submit 
financial statements to the Secretary as requested by the Secretary. 
Therefore, along with the annual financial statement, the Secretary may 
request a financial statement at any time. Consequently, no change to 
the Order provision is needed as a result of this comment.
    Comments were received concerning Sec. 1218.52 which deals with 
assessments. Some of the comments questioned whether the USABC could 
charge a penalty on late assessments in addition to interest charges. A 
commenter suggested that the Council set the penalty amount and 
interest charge upon approval by the Secretary. The Act and other 
similar national research and promotion programs allow for late-payment 
charges. Therefore, we have revised Sec. 1218.52(e) to include a late 
payment charge, in addition to interest, that may be charged to late 
assessments. However, it should be noted that the USABC would be 
required to use the rates specified in official debt collection 
regulations. These regulations authorize a one-time late payment charge 
of 6 percent per year of the unpaid balance once the payment of 
assessments is 90 days past due. In addition, from the first day any 
assessments are late, a rate of 15 percent interest is applied on the 
unpaid balance.
    Another comment requested that Sec. 1218.52(d)(1) be clarified by 
indicating that the assessment rate for imported fresh and processed 
blueberries be the same or equivalent to the rate for fresh and 
processed blueberries produced in the United States. The commenter's 
request that ``and processed'' be added to the description of 
blueberries produced in the United States, which would be assessed, is 
not made because among domestic blueberries only fresh blueberries 
would be assessed under the Order.
    Another comment was submitted addressing Sec. 1218.52(c). The 
commenter felt that the method of assessment should be changed from an 
amount per unit of sale ($12 per ton) to a percent of farm gate value. 
This commenter stated that an assessment rate based on a percent of 
farm gate value is more equitable. The proponent, which represents the 
majority of domestic blueberry producers and is comprised of importers 
as well as producers, recommended that only a flat assessment rate of 
$12 per ton be used. The Act provides authority to tailor a program 
according to the individual needs of an industry. Further, the proposed 
flat assessment conforms to many other national research and promotion 
programs. The industry is familiar with this method of assessment, and 
it would enhance administrative simplicity and cost effectiveness. 
Accordingly, no change to the Order provisions is made as a result of 
this comment.
    A comment was submitted regarding Sec. 1218.75 which addresses 
personal liability. The commenter believed that USABC staff should be 
covered under this liability statement. Taking this comment into 
account, we have changed Sec. 1218.75, as appropriate.
    One comment was received that was opposed to the overall Order. The 
commenter noted that the program was not voluntary, that it would 
increase expenses and paperwork, and that the current promotion of 
blueberries was very good. We disagree with this comment. The proposed 
program is authorized and consistent with the provisions of the Act 
and, if implemented, would benefit the overall industry. Further, every 
effort has been made to minimize the burden of this program on the 
affected parties. Further, we would also note that, if this proposed 
Order is approved in a referendum, the terms of office for the initial 
Council will be established according to the provisions of 
Sec. 1218.42, with appropriate rounding to maintain a calendar year 
basis.
    In summary, Sec. 1218.02, Sec. 1218.07, Sec. 1218.45(e), 
Sec. 1218.50, Sec. 1218.52(e), Sec. 1218.75, and the background section 
have been revised as a result of comments received that were deemed to 
have merit. Changes to the Regulatory Flexibility Analysis were 
discussed previously. In addition to making several changes to the 
proposed Order based on the comments received, two additional changes 
to the proposed rule made by AMS are noted and discussed below.
    The Department has revised the referendum requirements. The 
proponent had recommended that the Order be implemented if approved by 
producers and importers representing a majority of the volume of 
blueberries represented in the referendum. The Department will keep 
this requirement but add a second requirement. In order to be 
implemented, the Order must also be approved by a majority of the 
voters in the referendum. The majority of the persons to be covered by 
the proposed program are small producers. This change was made in order 
to ensure that these small producers have fair input into the outcome 
of the referendum. In addition, this change would further the goals of 
the Secretary's Small Farm Initiative without harming the interests of 
the larger growers.
    In addition, in Sec. 1218.52 Assessments, a statement was added 
indicating that, along with assessments, the USABC may use donations 
and other funds available to cover its expenses. This was added because 
the USABC may be eligible to receive funds from sources such as the 
Department's Foreign Agricultural Service.
    The Order is summarized as follows: Sections 1218.01 through 
1218.23 of the proposed Order define certain terms, such as 
blueberries, producer, and importer, which are used in the proposed 
Order.
    Sections 1218.40 through 1216.48 include provisions relating to the 
USABC. These provisions cover establishment and membership, nominations 
and appointments, term of office, vacancies, alternate members, 
procedures for conducting USABC business, compensation and 
reimbursement, and powers and duties of the USABC, and prohibited 
activities. The USABC is the governing body authorized to administer 
the Order through the implementation of programs, plans, projects, 
budgets, and contracts to promote and disseminate information about 
blueberries, subject to oversight of the Secretary.
    Sections 1218.50 through 1218.56 cover budget review and approval; 
financial statements; authorize the collection of assessments; specify 
how assessments would be used, including reimbursement of necessary 
expenses incurred by the USABC for the performance of its duties and 
expenses incurred for USDA's oversight responsibilities; specify who 
pays the assessment and how; authorize the imposition of a late-payment 
charge on past-due assessments; outline exemption procedures; address 
programs, plans, and projects; require the USABC to periodically 
conduct an independent review of its overall program; and address 
patents, copyrights, trademarks, information, publications, and product 
formulations developed through the use of assessment funds.
    The proposed assessment rate is $12 per ton for domestic 
blueberries and imported fresh and processed blueberries. The 
assessment rate may be raised or lowered after the initial continuance 
referendum which would be conducted after the program has been in 
operation five years. A referendum on a higher or lower new assessment 
rate is not required.
    The federal debt collection procedures referenced above and in 
Sec. 1218.52(e) include those set forth in 7

[[Page 7666]]

CFR 3.1 through 3.36 for all research and promotion programs 
administered by AMS [60 FR 12533, March 7, 1995].
    Sections 1218.60 through 1218.62 concern reporting and 
recordkeeping requirements for persons subject to the Order and protect 
the confidentiality of information from such books, records, or 
reports.
    Sections 1218.70 through 1218.78 describe the rights of the 
Secretary; address referenda; authorize the Secretary to suspend or 
terminate the Order when deemed appropriate; prescribe proceedings 
after termination; address personal liability, separability, and 
amendments; and provide OMB control numbers.
    The Department has determined that this Order is consistent with 
and will effectuate the purposes of the Act.
    For the Order to become effective, the Order must be approved by a 
majority of producers and importers voting for approval who also 
represent a majority of the volume of blueberries represented in the 
referendum.

Referendum Order

    It is hereby directed that a referendum be conducted among eligible 
blueberry producers and importers to determine whether they favor 
implementation of the Blueberry Promotion, Research, and Information 
Order.
    The referendum shall be conducted from March 13 through 24, 2000. 
Ballots will be mailed to all known blueberry producers and importers 
on or before March 13, 2000. Eligible voters who do not receive a 
ballot by mail should call the following toll-free telephone number to 
receive a ballot: 1 (888) 720-9917. All ballots will be subject to 
verification. Ballots must be received by the referendum agents no 
later than March 24, 2000, to be counted.
    Oliver L. Flake and Martha B. Ransom, Research and Promotion 
Branch, Fruit and Vegetable Programs, Agricultural Marketing Service, 
U.S. Department of Agriculture, Room 2535-S, Stop 0244, Washington, DC 
20250-0244, are designated as the referendum agents of the Secretary of 
Agriculture to conduct the referendum. The Procedure for the Conduct of 
Referenda in Connection with the Blueberry Promotion, Research, and 
Information Order, 7 CFR 1218.100-1218.107, which is being published 
separately in this issue of the Federal Register, shall be used to 
conduct the referendum.

List of Subjects in 7 CFR Part 1218

    Administrative practice and procedure, Advertising, Blueberries, 
Consumer information, Marketing agreements, Blueberry 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:

PART 1218--BLUEBERRY PROMOTION, RESEARCH, AND INFORMATION ORDER

    1. The authority citation for part 1218 continues to read as 
follows:

    Authority: 7 U.S.C. 7401-7425.

    2.Subpart A is added to part 1218 to read as follows:
Subpart A--Blueberry Promotion, Research, and Information Order

Definitions

Sec.
1218.1  Act.
1218.2  Blueberries.
1218.3  Conflict of interest.
1218.4  Crop year.
1218.5  Department.
1218.6  Exporter.
1218.7  First handler.
1218.8  Fiscal period.
1218.9  Importer.
1218.10  Information.
1218.11  Market or marketing.
1218.12  Order.
1218.13  Part and subpart.
1218.14  Person.
1218.15  Processed blueberries.
1218.16  Producer.
1218.17  Promotion.
1218.18  Research.
1218.19  Secretary.
1218.20  Suspend.
1218.21  Terminate.
1218.22  United States.
1218.23  USABC.

U.S.A. Blueberry Council

1218.40  Establishment and membership.
1218.41  Nominations and appointments.
1218.42  Term of office.
1218.43   Vacancies.
1218.44   Alternate members.
1218.45   Procedure.
1218.46   Compensation and reimbursement.
1218.47   Powers and duties.
1218.48   Prohibited activities.

Expenses and Assessments

1218.50   Budget and expenses.
1218.51   Financial statements.
1218.52   Assessments.
1218.53   Exemption procedures.
1218.54   Programs, plans, and projects.
1218.55   Independent evaluation.
1218.56   Patents, copyrights, trademarks, information, 
publications, and product formulations.

Reports, Books, and Records

1218.60   Reports.
1218.61   Books and records.
1218.62   Confidential treatment.

Miscellaneous

1218.70   Right of the Secretary.
1218.71   Referenda.
1218.72   Suspension and termination.
1218.73   Proceedings after termination.
1218.74   Effect of termination or amendment.
1218.75   Personal liability.
1218.76   Separability.
1218.77   Amendments.
1218.78   OMB control numbers.

Subpart A--Blueberry Promotion, Research, and Information Order

Definitions


Sec. 1218.1  Act.

    Act means the Commodity Promotion, Research, and Information Act of 
1996 (7 U.S.C. 7401-7425; Pup. L. 104-127; 110 Stat. 1029), or any 
amendments thereto.


Sec. 1218.2  Blueberries.

    Blueberries means cultivated blueberries grown in or imported into 
the United States of the genus Vaccinium Corymbosum and Ashei, 
including the northern highbush, southern highbush, rabbit eye 
varieties, and any hybrid, and excluding the lowbush (native) blueberry 
Vaccinium Angustifolium.


Sec. 1218.3  Conflict of interest.

    Conflict of interest means a situation in which a member or 
employee of the U.S.A. Blueberry Council has a direct or indirect 
financial interest in a person who performs a service for, or enters 
into a contract with, the USABC for anything of economic value.


Sec. 1218.4  Crop year.

    Crop year means the 12-month period from November 1 through October 
31 of the following year or such other period approved by the 
Secretary.


Sec. 1218.5  Department.

    Department means the U.S. Department of Agriculture.


Sec. 1218.6  Exporter.

    Exporter means a person involved in exporting blueberries from 
another country to the United States.


Sec. 1218.7  First handler.

    First handler means any person, (excluding a common or contract 
carrier), receiving blueberries from producers and who as owner, agent, 
or otherwise ships or causes blueberries to be shipped as specified in 
the Order. This definition includes those engaged in the business of 
buying, selling and/or offering for sale; receiving; packing; grading; 
marketing; or distributing blueberries in commercial quantities. This 
definition includes a retailer, except a retailer who purchases or 
acquires from, or handles on behalf of

[[Page 7667]]

any producer, blueberries. The term first handler includes a producer 
who handles or markets blueberries of the producer's own production.


Sec. 1218.8  Fiscal period.

    Fiscal period means a calendar year from January 1 through December 
31, or such other period as approved by the Secretary.


Sec. 1218.9  Importer.

    Importer means any person who imports fresh or processed 
blueberries into the United States as a principal or as an agent, 
broker, or consignee of any person who produces or handles fresh or 
processed blueberries outside of the United States for sale in the 
United States, and who is listed in the import records as the importer 
of record for such blueberries.


Sec. 1218.10  Information.

    Information means information and programs that are designed to 
increase efficiency in processing and to develop new markets, marketing 
strategies, increase market efficiency, and activities that are 
designed to enhance the image of blueberries on a national or 
international basis. These include:
    (a) Consumer information, which means any action taken to provide 
information to, and broaden the understanding of, the general public 
regarding the consumption, use, nutritional attributes, and care of 
blueberries; and
    (b) Industry information, which means information and programs that 
will lead to the development of new markets, new marketing strategies, 
or increased efficiency for the blueberry industry, and activities to 
enhance the image of the blueberry industry.


Sec. 1218.11  Market or marketing.

    (a) Marketing means the sale or other disposition of blueberries in 
any channel of commerce.
    (b) To market means to sell or otherwise dispose of blueberries in 
interstate, foreign, or intrastate commerce.


Sec. 1218.12  Order.

    Order means an order issued by the Secretary under section 514 of 
the Act that provides for a program of generic promotion, research, and 
information regarding agricultural commodities authorized under the 
Act.


Sec. 1218.13  Part and subpart.

    Part means the Blueberry Promotion, Research, and Information Order 
and all rules, regulations, and supplemental orders issued pursuant to 
the Act and the Order. The Order shall be a subpart of such part.


Sec. 1218.14  Person.

    Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity.


Sec. 1218.15  Processed blueberries.

    Processed blueberries means blueberries which have been frozen, 
dried, pureed, or made into juice.


Sec. 1218.16  Producer.

    Producer means any person who grows blueberries in the United 
States for sale in commerce, or a person who is engaged in the business 
of producing, or causing to be produced for any market, blueberries 
beyond the person's own family use and having value at first point of 
sale.


Sec. 1218.17  Promotion.

    Promotion means any action taken to present a favorable image of 
blueberries to the general public and the food industry for the purpose 
of improving the competitive position of blueberries both in the United 
States and abroad and stimulating the sale of blueberries. This 
includes paid advertising and public relations.


Sec. 1218.18  Research.

    Research means any type of test, study, or analysis designed to 
advance the image, desirability, use, marketability, production, 
product development, or quality of blueberries, including research 
relating to nutritional value, cost of production, new product 
development, varietal development, nutritional value, health research, 
and marketing of blueberries.


Sec. 1218.19  Secretary.

    Secretary means the Secretary of Agriculture of the United States, 
or any officer or employee of the Department to whom authority has 
heretofore been delegated, or to whom authority may hereafter be 
delegated, to act in the Secretary's stead.


Sec. 1218.20  Suspend.

    Suspend means to issue a rule under section 553 of title 5, U.S.C., 
to temporarily prevent the operation of an order or part thereof during 
a particular period of time specified in the rule.


Sec. 1218.21  Terminate.

    Terminate means to issue a rule under section 553 of title 5, 
U.S.C., to cancel permanently the operation of an order or part thereof 
beginning on a certain date specified in the rule.


Sec. 1218.22  United States.

    United States means collectively the 50 states, the District of 
Columbia, the Commonwealth of Puerto Rico, and the territories and 
possessions of the United States.


Sec. 1218.23  USABC.

    USABC, or U.S.A. Blueberry Council, means the administrative body 
established pursuant to Sec. 1218.40.

U.S.A. Blueberry Council


Sec. 1218.40  Establishment and membership.

    (a) Establishment of the U.S.A. Blueberry Council. There is hereby 
established a U.S.A. Blueberry Council, hereinafter called the USABC, 
composed of no more than 13 members and alternates, appointed by the 
Secretary from the nominations as follows:
    (1) One producer member and alternate from each of the following 
regions:
    (i) Region #1 Western Region (all states from the Pacific east to 
the Rockies): Alaska, Arizona, California, Colorado, Hawaii, Idaho, 
Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.
    (ii) Region #2 Midwest Region (all states east of the Rockies to 
the Great Lakes and south to the Kansas/Missouri/Kentucky state line): 
Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, 
Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.
    (iii) Region #3 Northeast Region(all states east of the Great Lakes 
and North of the North Carolina/Tennessee state line): Connecticut, 
Delaware, New York, Maine, Maryland, Massachusetts, New Hampshire, New 
Jersey, Pennsylvania, Rhode Island, Virginia, Vermont, Washington, 
D.C., and West Virginia.
    (iv) Region #4 Southern Region (all states south of the Virginia/
Kentucky/Missouri/Kansas state line and east of the Rockies): Alabama, 
Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, 
Oklahoma, Puerto Rico, South Carolina, Tennessee and Texas.
    (2) One producer member and alternate from each of the top five 
blueberry producing states, based upon the average of the total tons 
produced over the previous three years. Average tonnage will be based 
upon North American Blueberry Council production figures for the 
initial election and production and assessment figures generated by the 
USABC thereafter.
    (3) One importer and alternate.
    (4) One exporter and alternate shall be filled by foreign blueberry 
producers currently shipping blueberries into the

[[Page 7668]]

United States from the largest foreign blueberry production area, based 
on a three-year average.
    (5) One first handler member and alternate shall be filled by a 
United States based independent or cooperative organization which is a 
producer/shipper of domestic blueberries.
    (6) One public member and alternate.
    (b) Adjustment of membership. At least once every five years, the 
USABC will review the geographical distribution of United States 
production of blueberries and the quantity of imports. The review will 
be conducted through an audit of state crop production figures and 
USABC assessment receipts. If warranted, the USABC will recommend to 
the Secretary that membership on the USABC be altered to reflect any 
changes in geographical distribution of domestic blueberry production 
and the quantity of imports. If the level of imports increases, 
importer members and alternates may be added to the USABC.


Sec. 1218.41  Nominations and appointments.

    (a) Voting for regional and state representatives will be made by 
mail ballot.
    (b) In a case where a state has a state blueberry commission or 
marketing order in place, the state commission or committee will 
nominate members and alternates to serve on the USABC. At least two 
nominees shall be submitted to the Secretary for each member and each 
alternate.
    (c) Nomination and election of regional, and state representatives 
where no commission or order is in place will be handled by the USABC, 
provided that the initial nominations will be handled by the North 
American Blueberry Council. The USABC will seek nominations for members 
and alternates from the specific states and/or regions. Nominations 
will be returned to the USABC and placed on a ballot which will then be 
sent to producers in the state and/or region for vote. The final 
nominee for member will have received the highest number of votes cast. 
The person with the second highest number of votes cast will be the 
final nominee for alternate. The persons with the third and fourth 
place highest number of votes cast will be designated as additional 
nominees for consideration by the Secretary.
    (d) Nominations for the importer, exporter, first handler, and 
public member positions will be made by the USABC. Two nominees for 
each member and alternate position will be submitted to the Secretary 
for consideration.
    (e) From the nominations, the Secretary shall select the members of 
the USABC and alternates for each position on the USABC.


Sec. 1218.42  Term of office.

    USABC members and alternates will serve for a term of three years 
and be able to serve a maximum of two consecutive terms. A USABC member 
may serve as an alternate during the years the member is ineligible for 
a member position. When the USABC is first established, the state 
representatives, first handler member, and their respected alternates 
will be assigned initial terms of three years. Regional 
representatives, the importer member, the exporter member, public 
member, and their alternates will serve an initial term of two years. 
Thereafter, each of these positions will carry a full three-year term. 
USABC nominations and appointments will take place in two out of every 
three years. Each term of office will end on December 31, with new 
terms of office beginning on January 1.


Sec. 1218.43  Vacancies.

    (a) In the event any member of the USABC ceases to be a member of 
the category of members from which the member was appointed to the 
USABC, such position shall automatically become vacant.
    (b) If a member of the USABC consistently refuses to perform the 
duties of a member of the USABC, or if a member of the USABC engages in 
acts of dishonesty or willful misconduct, the USABC may recommend to 
the Secretary that the member be removed from office. If the Secretary 
finds the recommendation of the USABC shows adequate cause, the 
Secretary shall remove such member from office.
    (c) Should any member position become vacant, the alternate of that 
member shall automatically assume the position of said member. Should 
the positions of both a member and such member's alternate become 
vacant, successors for the unexpired terms of such member and alternate 
shall be appointed in the manner specified in Sec. 1218.40 and 
Sec. 1218.41, except that said nomination and replacement shall not be 
required if said unexpired terms are less than six months.


Sec. 1218.44  Alternate members.

    An alternate member of the USABC, during the absence of the member 
for whom the person is the alternate, shall act in the place and stead 
of such member and perform such duties as assigned. In the event of 
death, removal, resignation, or disqualification of any member, the 
alternate for that member shall automatically assume the position of 
said member. In the event that both a producer member of the USABC and 
the alternate are unable to attend a meeting, the USABC may not 
designate any other alternate to serve in such member's or alternate's 
place and stead for such a meeting.


Sec. 1218.45  Procedure.

    (a) At a USABC meeting, it will be considered a quorum when a 
minimum of seven members, or their alternates serving in the absence, 
are present.
    (b) At the start of each fiscal period, the USABC will select a 
chairperson and vice chairperson who will conduct meetings throughout 
that period.
    (c) All USABC members and alternates will receive a minimum of 10 
days advance notice of all USABC and committee meetings.
    (d) Each member of the USABC will be entitled to one vote on any 
matter put to the USABC, and the motion will carry if supported by one 
vote more than 50 percent of the total votes represented by the USABC 
members present.
    (e) It will be considered a quorum at a committee meeting when at 
least one more than half of those assigned to the committee are 
present. Alternates may also be assigned to committees as necessary. 
Committees may also consist of individuals other than USABC members and 
such individuals may vote in committee meetings. These committee 
members shall serve without compensation but shall be reimbursed for 
reasonable travel expenses, as approved by the USABC.
    (f) In lieu of voting at a properly convened meeting and, when in 
the opinion of the chairperson of the USABC such action is considered 
necessary, the USABC may take action if supported by one vote more than 
50 percent of the members by mail, telephone, electronic mail, 
facsimile, or any other means of communication, and all telephone votes 
shall be confirmed promptly in writing. In that event, all members must 
be notified and provided the opportunity to vote. Any action so taken 
shall have the same force and effect as though such action had been 
taken at a properly convened meeting of the USABC. All votes shall be 
recorded in USABC minutes.
    (g) There shall be no voting by proxy.
    (h) The chairperson shall be a voting member.
    (i) The organization of the USABC and the procedures for the 
conducting of meetings of the USABC shall be in accordance with its 
bylaws, which shall be established by the USABC and approved by the 
Secretary.

[[Page 7669]]

Sec. 1218.46  Compensation and reimbursement.

    The members of the USABC, and alternates when acting as members, 
shall serve without compensation but shall be reimbursed for reasonable 
travel expenses, as approved by the USABC, incurred by them in the 
performance of their duties as USABC members.


Sec. 1218.47  Powers and duties.

    The USABC shall have the following powers and duties:
    (a) To administer the Order in accordance with its terms and 
conditions and to collect assessments;
    (b) To develop and recommend to the Secretary for approval such 
bylaws as may be necessary for the functioning of the USABC, and such 
rules as may be necessary to administer the Order, including activities 
authorized to be carried out under the Order;
    (c) To meet, organize, and select from among the members of the 
USABC a chairperson, other officers, committees, and subcommittees, as 
the USABC determines to be appropriate;
    (d) To employ persons, other than the members, as the USABC 
considers necessary to assist the USABC in carrying out its duties and 
to determine the compensation and specify the duties of such persons;
    (e) To develop programs and projects, and enter into contracts or 
agreements, which must be approved by the Secretary before becoming 
effective, for the development and carrying out of programs or projects 
of research, information, or promotion, and the payment of costs 
thereof with funds collected pursuant to this subpart. Each contract or 
agreement shall provide that any person who enters into a contract or 
agreement with the USABC shall develop and submit to the USABC a 
proposed activity; keep accurate records of all of its transactions 
relating to the contract or agreement; account for funds received and 
expended in connection with the contract or agreement; make periodic 
reports to the USABC of activities conducted under the contract or 
agreement; and make such other reports available as the USABC or the 
Secretary considers relevant. Any contract or agreement shall provide 
that:
    (1) The contractor or agreeing party shall develop and submit to 
the USABC a program, plan, or project together with a budget or budgets 
that shall show the estimated cost to be incurred for such program, 
plan, or project;
    (2) The contractor or agreeing party shall keep accurate records of 
all its transactions and make periodic reports to the USABC of 
activities conducted, submit accounting for funds received and 
expended, and make such other reports as the Secretary or the USABC may 
require;
    (3) The Secretary may audit the records of the contracting or 
agreeing party periodically; and
    (4) Any subcontractor who enters into a contract with a USABC 
contractor and who receives or otherwise uses funds allocated by the 
USABC shall be subject to the same provisions as the contractor.
    (f) To prepare and submit for approval of the Secretary fiscal year 
budgets in accordance with Sec. 1218.50;
    (g) To maintain such records and books and prepare and submit such 
reports and records from time to time to the Secretary as the Secretary 
may prescribe; to make appropriate accounting with respect to the 
receipt and disbursement of all funds entrusted to it; and to keep 
records that accurately reflect the actions and transactions of the 
USABC;
    (h) To cause its books to be audited by a competent auditor at the 
end of each fiscal year and at such other times as the Secretary may 
request, and to submit a report of the audit directly to the Secretary;
    (i) To give the Secretary the same notice of meetings of the USABC 
as is given to members in order that the Secretary's representative(s) 
may attend such meetings, and to keep and report minutes of each 
meeting of the USABC to the Secretary;
    (j) To act as intermediary between the Secretary and any producer, 
first handler, importer, or exporter;
    (k) To furnish to the Secretary any information or records that the 
Secretary may request;
    (l) To receive, investigate, and report to the Secretary complaints 
of violations of the Order;
    (m) To recommend to the Secretary such amendments to the Order as 
the USABC considers appropriate; and
    (n) To work to achieve an effective, continuous, and coordinated 
program of promotion, research, consumer information, evaluation, and 
industry information designed to strengthen the blueberry industry's 
position in the marketplace; maintain and expand existing markets and 
uses for blueberries; and to carry out programs, plans, and projects 
designed to provide maximum benefits to the blueberry industry.


Sec. 1218.48  Prohibited activities.

    The USABC may not engage in, and shall prohibit the employees and 
agents of the USABC from engaging in:
    (a) Any action that would be a conflict of interest; and
    (b) Using funds collected by the USABC under the Order to undertake 
any action for the purpose of influencing legislation or governmental 
action or policy, by local, state, national, and foreign governments, 
other than recommending to the Secretary amendments to the Order.

Expenses and Assessments


Sec. 1218.50  Budget and expenses.

    (a) At least 60 days prior to the beginning of each fiscal year, 
and as may be necessary thereafter, the USABC shall prepare and submit 
to the Secretary a budget for the fiscal year covering its anticipated 
expenses and disbursements in administering this subpart. Each such 
budget shall include:
    (1) A statement of objectives and strategy for each program, plan, 
or project;
    (2) A summary of anticipated revenue, with comparative data or at 
least one preceding year (except for the initial budget);
    (3) A summary of proposed expenditures for each program, plan, or 
project; and
    (4) Staff and administrative expense breakdowns, with comparative 
data for at least on preceding year (except for the initial budget).
    (b) Each budget shall provide adequate funds to defray its proposed 
expenditures and to provide for a reserve as set forth in this subpart.
    (c) Subject to this section, any amendment or addition to an 
approved budget must be approved by the Secretary, including shifting 
funds from one program, plan, or project to another. Shifts of funds 
which do not cause an increase in the USABC's approved budget and which 
are consistent with governing bylaws need not have prior approval by 
the Secretary.
    (d) The USABC is authorized to incur such expenses, including 
provision for a reasonable reserve, as the Secretary finds are 
reasonable and likely to be incurred by the USABC for its maintenance 
and functioning, and to enable it to exercise its powers and perform 
its duties in accordance with the provisions of this subpart. Such 
expenses shall be paid from funds received by the USABC.
    (e) With approval of the Secretary, the USABC may borrow money for 
the payment of administrative expenses, subject to the same fiscal, 
budget, and audit controls as other funds of the USABC. Any funds 
borrowed by the USABC shall be expended only for startup costs and 
capital outlays and are limited to the first year of operation of the 
USABC.
    (f) The USABC may accept voluntary contributions, but these shall 
only be

[[Page 7670]]

used to pay expenses incurred in the conduct of programs, plans, and 
projects. Such contributions shall be free from any encumbrance by the 
donor and the USABC shall retain complete control of their use.
    (g) The USABC may also receive funds provided through the 
Department's Foreign Agricultural Service or from other sources, with 
the approval of the Secretary, for authorized activities.
    (h) The USABC shall reimburse the Secretary for all expenses 
incurred by the Secretary in the implementation, administration, and 
supervision of the Order, including all referendum costs in connection 
with the Order.
    (i) The USABC may not expend for administration, maintenance, and 
functioning of the USABC in any fiscal year an amount that exceeds 15 
percent of the assessments and other income received by the USABC for 
that fiscal year. Reimbursements to the Secretary required under 
paragraph (h) are excluded from this limitation on spending.
    (j) The USABC may establish an operating monetary reserve and may 
carry over to subsequent fiscal periods excess funds in any reserve so 
established: Provided that the funds in the reserve do not exceed one 
fiscal period's budget. Subject to approval by the Secretary, such 
reserve funds may be used to defray any expenses authorized under this 
part.


Sec. 1218.51  Financial statements.

    (a) As requested by the Secretary, the USABC shall prepare and 
submit financial statements to the Secretary on a periodic basis. Each 
such financial statement shall include, but not be limited to, a 
balance sheet, income statement, and expense budget. The expense budget 
shall show expenditures during the time period covered by the report, 
year-to-date expenditures, and the unexpended budget.
    (b) Each financial statement shall be submitted to the Secretary 
within 30 days after the end of the time period to which it applies.
    (c) The USABC shall submit annually to the Secretary an annual 
financial statement within 90 days after the end of the fiscal year to 
which it applies.


Sec. 1218.52  Assessments.

    (a) The funds to cover the Council's expenses shall be paid from 
assessments on producers and importers, donations from any person not 
subject to assessments under this Order, and other funds available to 
the Board including those collected pursuant to Sec. 1218.56 and 
subject to the limitations contained therein.
    (b) The collection of assessments on domestic blueberries will be 
the responsibility of the first handler receiving the blueberries. In 
the case of the producer acting as its own first handler, the producer 
will be required to collect and remit its individual assessments.
    (c) Such assessments shall be levied at a rate of $12 per ton on 
all blueberries. The assessment rate will be reviewed, and may be 
modified with the approval of the Secretary, after the first referendum 
is conducted as stated in Sec. 1218.71(b).
    (d) Each importer of fresh and processed blueberries shall pay an 
assessment to the USABC on blueberries imported for marketing in the 
United States, through the U.S. Customs Service.
    (1) The assessment rate for imported fresh and processed 
blueberries shall be the same or equivalent to the rate for fresh 
blueberries produced in the United States.
    (2) The import assessment shall be uniformly applied to imported 
fresh and frozen blueberries that are identified by the numbers 
0810.40.0028 and 0811.90.2028, respectively, in the Harmonized Tariff 
Schedule of the United States or any other numbers used to identify 
fresh and frozen blueberries. Assessments on other types of imported 
processed blueberries, such as dried blueberries, puree, and juice, may 
be added at the recommendation of the USABC with the approval of the 
Secretary.
    (3) The assessments due on imported fresh and processed blueberries 
shall be paid when they enter or are withdrawn for consumption in the 
United States.
    (e) All assessment payments and reports will be submitted to the 
office of the USABC. All final payments for a crop year are to be 
received no later than November 30 of that year. A late payment charge 
shall be imposed on any handler who fails to remit to the USABC, the 
total amount for which any such handler is liable on or before the due 
date established by the USABC. In addition to the late payment charge, 
an interest charge shall be imposed on the outstanding amount for which 
the handler is liable. The rate of interest shall be prescribed in 
regulations issued by the Secretary.
    (f) Persons failing to remit total assessments due in a timely 
manner may also be subject to actions under federal debt collection 
procedures.
    (g) The USABC may authorize other organizations to collect 
assessments on its behalf with the approval of the Secretary.


Sec. 1218.53  Exemption procedures.

    (a) Any producer who produces less than 2,000 pounds of blueberries 
annually who desires to claim an exemption from assessments during a 
fiscal year as provided in Sec. 1218.52 shall apply to the USABC, on a 
form provided by the USABC, for a certificate of exemption. Such 
producer shall certify that the producer's production of blueberries 
shall be less than 2,000 pounds for the fiscal year for which the 
exemption is claimed. Any importer who imports less than 2,000 pounds 
of fresh and processed blueberries annually who desires to claim an 
exemption from assessments during a fiscal year as provided in 
Sec. 1218.52 shall apply to the USABC, on a form provided by the USABC, 
for a certificate of exemption. Such importer shall certify that the 
importer's importation of fresh and processed blueberries shall not 
exceed 2,000 pounds, for the fiscal year for which the exemption is 
claimed.
    (b) On receipt of an application, the USABC shall determine whether 
an exemption may be granted. The USABC then will issue, if deemed 
appropriate, a certificate of exemption to each person who is eligible 
to receive one. Each producer who is exempt from assessment must 
provide an exemption number to the first handler in order to be exempt 
from the collection of an assessment on blueberries. First handlers and 
importers, except as otherwise authorized by the USABC, shall maintain 
records showing the exemptee's name and address along with the 
exemption number assigned by the USABC.
    (c) Importers who are exempt from assessment shall be eligible for 
reimbursement of assessments collected by the U.S. Customs Service and 
shall apply to the USABC for reimbursement of such assessments paid. No 
interest will be paid on assessments collected by the U.S. Customs 
Service. Requests for reimbursement shall be submitted to the USABC 
within 90 days of the last day of the year the blueberries were 
actually imported.
    (d) Any person who desires an exemption from assessments for a 
subsequent fiscal year shall reapply to the USABC, on a form provided 
by the USABC, for a certificate of exemption.
    (e) The USABC may require persons receiving an exemption from 
assessments to provide to the USABC reports on the disposition of 
exempt blueberries and, in the case of importers, proof of payment of 
assessments.

[[Page 7671]]

Sec. 1218.54  Programs, plans, and projects.

    (a) The USABC shall receive and evaluate, or on its own initiative 
develop, and submit to the Secretary for approval any program, plan, or 
project authorized under this subpart. Such programs, plans, or 
projects shall provide for:
    (1) The establishment, issuance, effectuation, and administration 
of appropriate programs for promotion, research, and information, 
including producer and consumer information, with respect to fresh and 
processed blueberries; and
    (2) The establishment and conduct of research with respect to the 
use, nutritional value, sale, distribution, and marketing of fresh and 
processed blueberries, and the creation of new products thereof, to the 
end that the marketing and use of blueberries may be encouraged, 
expanded, improved, or made more acceptable and to advance the image, 
desirability, or quality of fresh and processed blueberries.
    (b) No program, plan, or project shall be implemented prior to its 
approval by the Secretary. Once a program, plan, or project is so 
approved, the USABC shall take appropriate steps to implement it.
    (c) Each program, plan, or project implemented under this subpart 
shall be reviewed or evaluated periodically by the USABC to ensure that 
it contributes to an effective program of promotion, research, or 
information. If it is found by the USABC that any such program, plan, 
or project does not contribute to an effective program of promotion, 
research, or information, then the USABC shall terminate such program, 
plan, or project.
    (d) No program, plan, or project including advertising shall be 
false or misleading or disparaging another agricultural commodity. 
Blueberries of all origins shall be treated equally.


Sec. 1218.55  Independent evaluation.

    The USABC shall, not less often than every five years, authorize 
and fund, from funds otherwise available to the USABC, an independent 
evaluation of the effectiveness of the Order and other programs 
conducted by the USABC pursuant to the Act. The USABC shall submit to 
the Secretary, and make available to the public, the results of each 
periodic independent evaluation conducted under this paragraph.


Sec. 1218.56  Patents, copyrights, trademarks, information, 
publications, and product formulations.

    Patents, copyrights, trademarks, information, publications, and 
product formulations developed through the use of funds received by the 
USABC under this subpart shall be the property of the U.S. Government 
as represented by the USABC and shall, along with any rents, royalties, 
residual payments, or other income from the rental, sales, leasing, 
franchising, or other uses of such patents, copyrights, trademarks, 
information, publications, or product formulations, inure to the 
benefit of the USABC; shall be considered income subject to the same 
fiscal, budget, and audit controls as other funds of the USABC; and may 
be licensed subject to approval by the Secretary. Upon termination of 
this subpart, Sec. 1218.73 shall apply to determine disposition of all 
such property.

Reports, Books, and Records


Sec. 1218.60  Reports.

    (a) Each first handler subject to this subpart may be required to 
provide to the USABC periodically such information as may be required 
by the USABC, with the approval of the Secretary, which may include but 
not be limited to the following:
    (1) Number of pounds handled;
    (2) Number of pounds on which an assessment was collected;
    (3) Name and address of person from whom the first handler has 
collected the assessments on each pound handled; and
    (4) Date collection was made on each pound handled. All reports are 
due to the USABC 30 days after the end of the crop year.
    (b) Each producer and importer subject to this subpart may be 
required to provide to the USABC periodically such information as may 
be required by the USABC, with the approval of the Secretary, which may 
include but not be limited to the following:
    (1) Number of pounds produced;
    (2) Number of pounds on which an assessment was paid;
    (3) Name and address of the producer;
    (4) Date collection was made on each pound produced.
    All reports are due to the USABC 30 days after the end of the crop 
year.


Sec. 1218.61  Books and records.

    Each first handler, producer, and importer subject to this subpart 
shall maintain and make available for inspection by the Secretary such 
books and records as are necessary to carry out the provisions of this 
subpart and the regulations issued thereunder, including such records 
as are necessary to verify any reports required. Such records shall be 
retained for at least 2 years beyond the fiscal period of their 
applicability.


Sec. 1218.62  Confidential treatment.

    All information obtained from books, records, or reports under the 
Act, this subpart, and the regulations issued thereunder shall be kept 
confidential by all persons, including all employees and former 
employees of the USABC, all officers and employees and former officers 
and employees of contracting and subcontracting agencies or agreeing 
parties having access to such information. Such information shall not 
be available to USABC members, producers, importers, exporters, or 
first handlers. Only those persons having a specific need for such 
information to effectively administer the provisions of this subpart 
shall have access to such information. Only such information so 
obtained as the Secretary deems relevant shall be disclosed by them, 
and then only in a judicial proceeding or administrative hearing 
brought at the direction, or on the request, of the Secretary, or to 
which the Secretary or any officer of the United States is a party, and 
involving this subpart. Nothing in this section shall be deemed to 
prohibit:
    (a) The issuance of general statements based upon the reports of 
the number of persons subject to this subpart or statistical data 
collected therefrom, which statements do not identify the information 
furnished by any person; and
    (b) The publication, by direction of the Secretary, of the name of 
any person who has been adjudged to have violated this subpart, 
together with a statement of the particular provisions of this subpart 
violated by such person.

Miscellaneous


Sec. 1218.70  Right of the Secretary.

    All fiscal matters, programs, plans, or projects, rules or 
regulations, reports, or other substantive actions proposed and 
prepared by the USABC shall be submitted to the Secretary for approval.


Sec. 1218.71  Referenda.

    (a) Initial Referendum. The Order shall not become effective 
unless:
    (1) The Secretary determines that the Order is consistent with and 
will effectuate the purposes of the Act; and
    (2) The Order is approved by a majority of producers and importers 
voting for approval who also represent a majority of the volume of 
blueberries represented in the referendum who, during a representative 
period determined by the Secretary, have been engaged in the production 
or importation of blueberries.
    (b) Subsequent referenda. Every five years, the Secretary shall 
hold a

[[Page 7672]]

referendum to determine whether blueberry producers and importers favor 
the continuation of the Order. The Order shall continue if it is 
favored by a majority of producers and importers voting for approval 
who also represent a majority of the volume of blueberries represented 
in the referendum who, during a representative period determined by the 
Secretary, have been engaged in the production or importation of 
blueberries. The Secretary will also conduct a referendum if 10 percent 
or more of all eligible blueberry producers and importers request the 
Secretary to hold a referendum. In addition, the Secretary may hold a 
referendum at any time.


Sec. 1218.72  Suspension and termination.

    (a) The Secretary shall suspend or terminate this part or subpart 
or a provision thereof if the Secretary finds that the subpart or a 
provision thereof obstructs or does not tend to effectuate the purposes 
of the Act, or if the Secretary determines that this subpart or a 
provision thereof is not favored by persons voting in a referendum 
conducted pursuant to the Act.
    (b) The Secretary shall suspend or terminate this subpart at the 
end of the marketing year whenever the Secretary determines that its 
suspension or termination is approved or favored by a majority of 
producers and importers voting for approval who also represent a 
majority of the volume of blueberries represented in the referendum 
who, during a representative period determined by the Secretary, have 
been engaged in the production or importation of blueberries.
    (c) If, as a result of a referendum the Secretary determines that 
this subpart is not approved, the Secretary shall:
    (1) Not later than 180 days after making the determination, suspend 
or terminate, as the case may be, collection of assessments under this 
subpart; and
    (2) As soon as practical, suspend or terminate, as the case may be, 
activities under this subpart in an orderly manner.


Sec. 1218.73  Proceedings after termination.

    (a) Upon the termination of this subpart, the USABC shall recommend 
not more than three of its members to the Secretary to serve as 
trustees for the purpose of liquidating the affairs of the USABC. Such 
persons, upon designation by the Secretary, shall become trustees of 
all of the funds and property then in the possession or under control 
of the USABC, including claims for any funds unpaid or property not 
delivered, or any other claim existing at the time of such termination.
    (b) The said trustees shall:
    (1) Continue in such capacity until discharged by the Secretary;
    (2) Carry out the obligations of the USABC under any contracts or 
agreements entered into pursuant to the Order;
    (3) From time to time account for all receipts and disbursements 
and deliver all property on hand, together with all books and records 
of the USABC and the trustees, to such person or persons as the 
Secretary may direct; and
    (4) Upon request of the Secretary execute such assignments or other 
instruments necessary and appropriate to vest in such persons title and 
right to all funds, property and claims vested in the USABC or the 
trustees pursuant to the Order.
    (c) Any person to whom funds, property or claims have been 
transferred or delivered pursuant to the Order shall be subject to the 
same obligations imposed upon the USABC and upon the trustees.
    (d) Any residual funds not required to defray the necessary 
expenses of liquidation shall be turned over to the Secretary to be 
disposed of, to the extent practical, to the blueberry producer 
organizations in the interest of continuing blueberry promotion, 
research, and information programs.


Sec. 1218.74  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, the 
termination of this subpart or of any regulation issued pursuant 
thereto, or the issuance of any amendment to either thereof, shall not:
    (a) Affect or waive any right, duty, obligation or liability which 
shall have arisen or which may thereafter arise in connection with any 
provision of this subpart or any regulation issued thereunder; or
    (b) Release or extinguish any violation of this subpart or any 
regulation issued thereunder; or
    (c) Affect or impair any rights or remedies of the United States, 
or of the Secretary or of any other persons, with respect to any such 
violation.


Sec. 1218.75  Personal liability.

    No member, alternate member, or employee of the USABC 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, or employee, except for acts of dishonesty or willful 
misconduct.


Sec. 1218.76  Separability.

    If any provision of this subpart is declared invalid or the 
applicability thereof to any person or circumstances is held invalid, 
the validity of the remainder of this subpart or the applicability 
thereof to other persons or circumstances shall not be affected 
thereby.


Sec. 1218.77  Amendments.

    Amendments to this subpart may be proposed from time to time by the 
USABC or by any interested person affected by the provisions of the 
Act, including the Secretary.


Sec. 1218.78  OMB control numbers.

    The control number assigned to the information collection 
requirements by the Office of Management and Budget pursuant to the 
Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, is OMB control 
number 0581-0093, except for the USABC nominee background statement 
form which is assigned OMB control number 0505-001.

    Dated: February 9, 2000.
Kathleen A. Merrigan,
Administrator, Agricultural Marketing Service.
[FR Doc. 00-3405 Filed 2-14-00; 8:45 am]
BILLING CODE 3410-02-P