[Federal Register Volume 65, Number 39 (Monday, February 28, 2000)]
[Proposed Rules]
[Pages 10600-10618]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-4190]



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Part II





Department of Agriculture





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Agricultural Marketing Service



7 CFR Part 1240



Honey Research, Promotion, and Consumer Information Order; Proposed 
Rule

  Federal Register / Vol. 65, No. 39 / Monday, February 28, 2000 / 
Proposed Rules  

[[Page 10600]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1240

[FV-00-701 PR1]
RIN 0581-AB84


Honey Research, Promotion, and Consumer Information Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The U.S. Department of Agriculture (the Department or USDA) is 
seeking comments regarding proposed amendments to the Honey Research, 
Promotion, and Consumer Information Order (Order). These amendments are 
authorized by amendments to the Honey Research, Promotion, and Consumer 
Information Act (Act). The Order needs to be amended as a result of 
these changes to the Act.
    The following amendments must be approved by honey producers, 
producer-packers, handlers, and importers voting in a referendum to 
become effective: a requirement for the Honey Board (Board) to reserve 
8 percent of its funds annually for beekeeping and production research; 
authority for the Board to develop recommendations for purity standards 
and an inspection and monitoring system to enhance the image of honey 
and honey products; the addition of two handlers who are also importers 
to the Board; a decrease in the producer assessment from 1 cent per 
pound to 0.75 cents per pound; the addition of an assessment of 0.75 
cents per pound on handlers; and an increase in the assessment rate 
from 1 cent per pound to 1.5 cents per pound on imports.
    The following major (and other minor) amendments would become 
effective after the referendum, regardless of the outcome: changing the 
two importer/exporter positions to two importer positions on the Board; 
eliminating the public member position; revising nomination and 
eligibility requirements; requiring that at least 50 percent of the 
Board members be honey producers; providing authority for the Board to 
develop a voluntary quality assurance program with enforcement by USDA; 
eliminating the requirement to file for an exemption under the program; 
and removing obsolete language.

DATES: Comments must be received by April 28, 2000.

ADDRESSES: Interested persons are invited to submit written comments 
concerning the proposed rule to the Docket Clerk, Research and 
Promotion Branch, Fruit and Vegetable Programs, Agricultural Marketing 
Service, USDA, Stop 0244, 1400 Independence Avenue, SW, Room 2535 South 
Building, Washington, DC 20250-0244. Comments should be submitted in 
triplicate and will be made available for public inspection at the 
above address during regular business hours. Comments may also be 
submitted electronically to: [email protected]. All comments 
should reference the docket number and the date and page number of this 
issue of the Federal Register. A copy of this proposed rule may be 
found at: www.ams.usda.gov/fv/rpdocketlist.htm. Also, pursuant to the 
Paperwork Reduction Act (PRA), send comments regarding the merits of 
the burden estimate, ways to minimize the burden, including the use of 
automated collection techniques or other forms of information 
technology, or any other aspect of this collection of information to 
the above address. Comments concerning the collection of information 
under the PRA should also be sent to the Desk Officer for Agriculture, 
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Karen T. Comfort or John D. Reilly, 
Research and Promotion Branch, Fruit and Vegetable Programs, AMS, USDA, 
Stop 0244, 1400 Independence Avenue, SW, Room 2535 South Building, 
Washington, DC 20250-0244; telephone (202) 720-9915; facsimile (202) 
205-2800.

SUPPLEMENTARY INFORMATION: This proposal to amend the Honey Research, 
Promotion, and Consumer Information Order (Order) [7 CFR Part 1240] is 
issued pursuant to amendments to the Honey Research, Promotion, and 
Consumer Information Act [Pub. L. 98-590; enacted October 30, 1984; 7 
U.S.C. 4601 through 4613, as amended], hereinafter referred to as 
``Act.'' The amendments to the Act were made by the Agricultural 
Research, Extension, and Education Reform Act of 1998 [Pub. L. 105-185, 
enacted June 23, 1998]. The proposed rule for conducting a referendum 
on amendments to the Order will be published in the Federal Register in 
the near future.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
This rule would not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    Under Section 10 of the Act, a person subject to the Order may 
file, within a period prescribed by the Secretary of Agriculture 
(Secretary), a written petition with the Secretary stating that the 
Order, or any provision of the Order, or any obligation imposed in 
connection with the Order, is not established in accordance with the 
law, and request 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 not later than two years after: (1) the effective date of the 
Order, provision, or obligation challenged in the petition; or (2) the 
date on which the petitioner became subject to the Order, provision, or 
obligation challenged in the petition. The petitioner will have the 
opportunity for a hearing on the petition. Thereafter, the Secretary 
will issue a ruling on a petition, which will be final if the petition 
is in accordance with the law.
    The Act provides that the district court of the United States for 
any district in which the petitioner resides or conducts business shall 
have 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 to be 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 this 
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.
    There are approximately 3,285 producers, 400 producer-packers, and 
348 importers who pay assessments under the Order, and 121 handlers who 
are currently subject to the provisions of the Act. Small agricultural 
service firms are defined by the Small Business Administration [13 CFR 
121.601] as those having annual receipts of less than $5 million and 
small agricultural producers are defined as those having annual 
receipts of not more than

[[Page 10601]]

$500,000. The majority of honey producers, producer-packers, importers, 
and handlers may be classified as small entities.
    According to USDA estimates, last published in 1995, the number of 
beekeepers in the U.S. varies from 139,000 to 212,000. Approximately 95 
percent of these beekeepers are hobbyists with fewer than 25 colonies. 
Another 4 percent are part-time or ``sideliner'' beekeepers with 25 to 
299 colonies. Commercial beekeepers owning 300 or more colonies number 
approximately 2,000.
    Based on the latest available statistics from USDA's National 
Agricultural Statistics Service, 2.63 million colonies produced 
approximately 220 million pounds of honey in the United States in 1998. 
This represented a 12 percent increase in production from 1997.
    According to Board historical data, 3,285 producers paid over $1.8 
million in assessments under the Act and Order in 1998. This amount 
represented 58 percent of the Board's revenue for the period. In 1998, 
348 importers of honey paid nearly $1.4 million in assessments, and the 
eight largest importers paid approximately 75 percent of this amount. 
The countries of origin of imported honey include Argentina, Canada, 
China, and Mexico.
    Based on the latest available information, U.S. honey production in 
1998 totaled 220 million pounds, a 24 million-pound increase from 1997. 
California, North Dakota, Florida, South Dakota, Montana, and Minnesota 
accounted for 60 percent of production. Forty-three other states 
accounted for the remaining 40 percent of domestic production. The 
value of production in 1998 was $144.3 million, down from $147.8 
million in 1997.
    In 1998, exports of U.S. honey packaged for retail sales totaled 
nearly 3.9 million pounds, with a value of $3.8 million. Bulk honey 
exports totaled over 6.5 million pounds, with a value of $5.0 million. 
Sizable quantities of honey are exported to a wide range of countries 
in Europe, the Middle East, and the Far East. U.S. per capita 
consumption of honey was about 1.2 pounds per person in 1998, about the 
same as in 1997.
    Also during this period, honey imports into the U.S. totaled 132.4 
million pounds, about 35 million pounds less than in 1997. Argentina 
accounted for 53 percent of the quantity and 50 percent of the value of 
imports in 1998. China accounted for 23 percent of the quantity of 
imports and 21 percent of the value. About 12 percent of the quantity 
and 16 percent of the total value of imports came from Canada; 6 
percent of the quantity and 5 percent of the value came from Mexico. 
The remainder came from an assortment of countries around the world. 
The value of the U.S. imports in 1998 was about $77.8 million, down 35 
percent from the year before.
    The proposed amendments would add a $0.0075 per pound assessment on 
honey handlers, decrease the producer assessment from $0.01 to $0.0075 
per pound, and increase the assessment on imported honey from $0.01 to 
$0.015 per pound. An assessment of $0.0075 per pound represents 1.1 
percent of the 1998 average price of honey of $0.655 per pound 
(wholesale). Basing projections on the assessments remitted or reported 
for each group over the 5-year period from 1995 to 1999, the Board 
would collect approximately $4,860,000 in assessments annually, a $1.6 
million increase in revenue from assessments collected in 1998, if the 
amendments are approved. The Transaction Report form used in the 
assessment collection process would have to be revised to reflect the 
new assessment rates.
    The proposed amendments also would require producers to maintain 
and make available to the Board and the Secretary such books and 
records which are appropriate or necessary for the administration or 
enforcement of the honey research and promotion program. Presently, 
only handlers, importers, and producer-packers are required to maintain 
these records. The primary intent of this amendment is to require 
producers to maintain and make available books and records to 
facilitate enforcement of the Act.
    The proposed changes to the Order would add authority for the Board 
to require producers to maintain records and, at such time and such 
manner that the Board may prescribe, report information pertaining to 
the quantity of honey produced and the total number of bee colonies 
maintained. Under the current Order, the Board's authority to request 
reports extends only to handlers, importers, and producer-packers. It 
is most likely that this information would be obtained from producers 
through periodic audits.
    Based on this expanded reporting authority, there are also plans to 
collect information periodically from producers for statistical 
purposes. At this time, Board plans are tentative on how and when 
producers are to report the prescribed statistical information due to 
mailing costs and certain other factors relating to the content and 
design of the proposed information collection. Such form or mailer for 
collecting the information will be submitted to OMB for approval prior 
to its use and the industry will be notified.
    The amendments to the Order in this proposal would also reduce the 
reporting burden for certain producers, producer-packers, handlers, and 
importers who qualify for exemption from assessment based on the 
quantity of honey or honey products produced, handled, or imported. 
Pursuant to the 1998 changes to the Act, the Order would no longer 
require individuals to file an application with the Board in order to 
attain exempt status.
    The recordkeeping and reporting requirements related to the 
proposed amendments to the Order are designed to minimize the burden on 
producers, producer-packers, handlers, and importers. In addition, any 
information collection that cannot occur through forms already in use 
would pose a minimal additional burden.
    The estimated total annual cost of maintaining records and 
providing the information to the Board and USDA by an estimated 5,870 
respondents (5,000 producers, 400 producer-packers, 121 handlers, 348 
importers, and 1 cooperative representative) would be $40,775 or $5.03 
per producer, $31.03 per producer-packer, $26.36 per handler, $0.11 per 
importer, and $5.00 per cooperative representative, and represents an 
overall increase in burden for each of these groups.
    The impact of the recordkeeping requirement provided for in this 
proposed rule on small entities would be minimal. This recordkeeping 
requirement is consistent with prudent business practices and should 
not impose any undue costs or significant burdens on a vast majority of 
the small entities affected. It is anticipated that a significant 
number of these small entities currently practice such recordkeeping 
for commercial and/or tax purposes.
    AMS has performed the initial Regulatory Flexibility Analysis 
regarding the impact of this proposed rule on small entities. However, 
in order to have additional data that may be helpful in evaluating the 
effects of this rule on small entities, we are inviting comments 
concerning the potential effects of this rule. In particular, we are 
interested in determining the number and kind of small entities that 
may incur benefits or costs from implementation of this proposed rule 
and information on the expected benefits and costs.

Paperwork Reduction Act

    In accordance with the Office of Management and Budget (OMB) 
regulation [5 CFR 1320] which

[[Page 10602]]

implements the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35], 
the information collection and recordkeeping requirements that may be 
imposed based on the proposed amendments to this Order have been 
submitted to OMB for approval.
    Title: National Research, Promotion, and Consumer Information 
Programs.
    OMB Number: 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 proposed recordkeeping and information collection 
requirements are essential to carry out the intent of the Act, as 
amended.
    In addition, there would also be a new burden on handlers voting 
for the first time in the upcoming referendum. The referendum ballot, 
which represents the information collection requirement relating to the 
referendum, is addressed in a proposed rule on referendum procedures 
which will be published in the Federal Register in the near future.
    The amendments to the Order contained in this proposed rule would 
increase the recordkeeping burden on producers. The Order currently 
requires handlers, importers, and producer-packers to retain their 
books and records for at least two years beyond the marketing year of 
their applicability. The Order would be changed to conform to the Act, 
as amended, by also requiring producers to maintain and retain books 
and records for two years. It is anticipated that producers already 
maintain and retain the books and records which contain this 
information for commercial and/or tax purposes. Therefore, this 
recordkeeping requirement is consistent with prudent business practices 
and should not impose any undue costs or significant burdens on a vast 
majority of producers.
    The proposed changes to the Order would add authority for the Board 
to require producers to maintain records and, at such time and such 
manner that the Board may prescribe, report information pertaining to 
the quantity of honey produced and the total number of bee colonies 
maintained. Under the current Order, the Board's authority to request 
reports extends only to handlers, importers, and producer-packers. It 
is most likely that this information would be obtained from producers 
through periodic audits.
    Based on this expanded reporting authority, there are also plans to 
collect information periodically from producers for statistical 
purposes. At this time, Board plans are tentative on how and when 
producers are to report the prescribed statistical information due to 
mailing costs and certain other factors relating to the content and 
design of the proposed information collection.
    If approved by voters in the referendum, the amended Order would 
impose a new $0.0075 per pound assessment on handlers of honey and 
honey products, decrease the producer assessment from $0.01 to $0.0075 
per pound, and increase the assessment on imported honey and honey 
products from $0.01 to $0.015 per pound. If the amendments are approved 
in the referendum, the Transaction Report form, which is currently used 
to report purchase and assessment information, would have to be 
modified to reflect the new assessment rates.
    Information provided on the Transaction Report is collected under 
OMB No. 0581-0093. There would be a slight increase in the reporting 
burden for handlers and producer-packers in order to complete 
additional assessment information covering their handling activity on 
the Transaction Report. However, the added reporting burden would be 
minimal. The extra information to be collected represents a small 
portion of the total information that handlers and producer-packers are 
already required to fill out and submit on the same form for each 
purchase.
    The background information form used by the Secretary to determine 
if nominees to the Board are eligible to serve would be revised and 
submitted as a new form (AMS-755). It would be added to the information 
collection under OMB No. 0581-0093. This form is completed and 
submitted to USDA by those persons nominated for member or alternate 
positions on the Board.
    To conform to the 1998 amendments to the Act, the proposed changes 
to the Order would include revised qualification requirements for 
serving on the Board. This information would be collected on the 
Board's Candidate Profile questionnaire (No. 4 below), and would be 
used by the Board's staff and the National Honey Nominations 
(Committee) to determine the qualifications of candidates to the Board. 
The Candidate Profile form would be submitted as a new form and added 
to the information collection under OMB No. 0581-0093. It is 
anticipated that the basic background information to be collected would 
be readily accessible or otherwise maintained from records currently 
maintained by those persons who would be candidates to serve on the 
Board.
    It should be noted that the amendments to the Order contained in 
this proposed rule would reduce the reporting burden for those 
producers, producer-packers, and importers who previously have been 
required to file an application with the Board in order to qualify for 
exemption from assessment. Based on the changes to the Act in 1998, 
persons subject to the Act would no longer be required to file an 
application for exempt status.
    The estimated total annual cost of maintaining records and 
providing the information to the Board and USDA under this rulemaking 
action by an estimated 5,870 respondents (5,000 producers, 400 
producer-packers, 121 handlers, 348 importers, and 1 cooperative 
representative) would be $40,775 or $5.03 per producer, $31.03 per 
producer-packer, $26.36 per handler, $0.11 per importer, and $5.00 per 
cooperative representative.
    The new recordkeeping requirement involving 2,700 hours for 
producers and producer-packers would be added to the program's 
recordkeeping burden under OMB No. 0581-0093. The previously approved 
recordkeeping burden totals 12,525 hours. This total is a 
miscalculation due to an overstatement in the number of respondents. 
Based on recalculation of the previous burden, the new annual 
recordkeeping burden would equal 5,451 hours, after including the 
additional 2,700 hours.
    The estimated annual burden of 1,355 hours in providing additional 
information on the Transaction Report would be added to the previous 
burden under OMB No. 0581-0093. The previously approved burden totals 
9,100 hours. However, this total is a miscalculation due to an 
overstatement in the number of respondents. Based on recalculation of 
the previous burden, the estimated new annual burden for completion of 
the Transaction Report would equal 8,128 hours, after including the 
additional 1,355 hours.
    The estimated annual burden of 10 hours for completing the 
background information form (AMS-755) represents a new burden to be 
reported under OMB No. 0581-0093. The removal of the exemption 
application requirement would eliminate the estimated annual burden of 
41.5 hours as reported under OMB No. 0581-0093. The estimated annual 
burden of 12.5 hours for completing the Candidate Profile form 
represents a new burden to be reported under OMB No. 0581-0093 for the 
first time.
    The provisions of the amendments to the Order in this proposal have 
been carefully reviewed, and every effort has been made to minimize any 
unnecessary recordkeeping or reporting costs or requirements.

[[Page 10603]]

    The proposed forms to be modified 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, 
as well as the proposed amendments to the Order. 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 
Board. These forms would be simple, easy to understand, and place as 
small a burden as possible on the person required to file the 
information.
    The information required has been designed to coincide with normal 
industry business practices to minimize the burden on the industry. The 
information sought is not available from other sources because such 
information relates specifically to persons covered by the Act and 
Order. Therefore, there is no practical method for collecting the 
required information without the proposed recordkeeping requirements 
and use of forms described herein.
    The new recordkeeping requirement included in this proposed rule 
is:
    (1) A requirement for producers to maintain books and records to 
facilitate administration and enforcement of the Order.
    Estimate of Burden: Public recordkeeping burden for keeping this 
information is estimated to average 0.5 hours per recordkeeper 
maintaining such records.
    Respondents (Recordkeepers): Producers and producer-packers.
    Estimated Number of Respondents (Recordkeepers): 5,400.
    Estimated Number of Responses per Respondent (Recordkeeper): 1.
    Estimated Total Annual Burden on Respondents (Recordkeepers): 2,700 
hours.
    Information collection requirements included in this proposed rule 
resulting in an increase or decrease in burden are:
    (2) A Transaction Report to be completed by first handlers, 
producer-packers, and importers.
    Estimate of Increased Burden: Public reporting burden for the 
collection of additional information from handlers and producer-packers 
is estimated to average an additional 3 minutes per each response [18 
minutes (requested)-15 minutes (currently approved) = 3 minutes 
(increase)].
    Respondents: Handlers and producer-packers.
    Estimated Number of Respondents: 521.
    Estimated Number of Responses per Respondent: 52.
    Estimated Total Annual Burden on Respondents: 8,128 hours [8,128 
hours (requested-9,100 hours (currently approved) = 972 (decrease)]. 
Note: The previously approved burden of 9,100 hours is not correct due 
to an overstatement in the number of respondents. If the previous 
burden were recalculated based on 521 respondents, it would equal 6,773 
hours. This means that the 8,128 hours now requested would represent an 
increase in burden of 1,355 hours instead of a decrease of 972 hours.
    (3) A background information form (AMS-755) to be completed by 
candidates nominated for appointment to the Board.
    Estimate of Burden: Public reporting burden for the collection of 
information from two nominees for each of the estimated five member and 
five alternate position openings annually is estimated to average 0.5 
hours per response.
    Respondents: Producers, producer-packers, handlers, importers, and 
cooperative representatives.
    Estimated Number of Respondents: 20.
    Estimated Number of Responses per Respondent: 1
    Estimated Total Annual Burden on Respondents: 10.0 hours [10.0 
hours (requested)-0.0 hours (new form) = 10.0 hours (increase)].
    (4) A Candidate Profile form used by Board staff and the Committee 
to determine qualifications to serve on the Board.
    Estimate of Burden: Public reporting burden for this collection of 
information from candidates to the Board is estimated to average 0.50 
hours per response.
    Respondents: Producers, producer-packers, importers, handlers, 
handler-importers, and cooperative representatives.
    Estimated Number of Respondents: 25.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 12.5 hours [12.5 
hours (requested)-0.0 hours (new form) = 12.5 hours (increase)].
    The following information collection would be eliminated by this 
rule:
    (5) A producer or importer application to be completed by producers 
and importers seeking exemption from assessment.
    Estimate of Burden: Public reporting burden for this collection of 
information from producers, producer-packers, and importers is 
estimated to average 0.083 hours per response.
    Respondents: Producers, producer-packers, and importers.
    Estimated Number of Respondents: 500.
    Estimated Number of Responses per Respondent: 1.
    Estimated Decrease in Total Annual Burden on Respondents: 41.5 
hours [0.0 hours (form discontinued)-41.5 hours (currently approved) = 
41.5 hours (decrease)].
    Comments are invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of functions of the 
amendments to the Order and USDA's oversight of the program, including 
whether the information will have practical utility; (b) the accuracy 
of USDA's estimate of any recordkeeping and/or reporting burden, 
including the validity of the methodology and assumptions used; (c) 
ways to enhance the quality, utility, and clarity of the information to 
be collected; and (d) ways to minimize the burden of the recordkeeping 
requirement on those who are affected, including the use of appropriate 
automated, electronic, mechanical, or other technology collection 
techniques or other forms of information technology.
    Comments concerning the recordkeeping and information collection 
requirements contained in this action should reference OMB No. 0581-
0093, Docket Number FV-00-701 PR1, and the date and page number of this 
issue of the Federal Register. Comments should be sent to the USDA 
Docket Clerk and the OMB Desk Officer for Agriculture at the addresses 
and within the time frames listed above. All responses to this notice 
will be summarized and included in the request for OMB approval.
    OMB is required to make a decision concerning the collection of 
information contained in this rule between 30 and 60 days after 
publication. Therefore, a comment to OMB is best assured of having its 
full effect if OMB receives it within 30 days of publication.

Background

    The Act was amended on June 23, 1998, by the Agricultural Research, 
Extension, and Education Reform Act (1998 amendments).
    On July 31, 1998, USDA issued a news release inviting persons to 
submit proposals for implementing the 1998 amendments by September 30, 
1998. Subsequently, on September 21, 1998, USDA extended the deadline 
to December 31, 1998, to provide the various segments of the honey 
industry ample opportunity to develop proposals. One proposal and eight 
comments were received.

[[Page 10604]]

    The proposal was submitted by the National Honey Board with support 
from the American Beekeeping Federation (ABF), the American Honey 
Producers Association (AHPA), and the National Honey Packers and 
Dealers Association (NHPDA). Submissions by American Farm Bureau 
Federation, B. Weaver Apiaries, Inc., China Products North American, 
Inc., Mississippi Beekeepers Association, Joe Rowland, Thomas R. Smith, 
Southern Arizona Beekeepers Association, and U.S. Beekeepers did not 
include regulatory text. Therefore, they are being made part of the 
overall rulemaking record and will be considered along with the 
comments received on this proposed rule.
    A copy of the current Order and the proposed rule amending the 
Order can be obtained by contacting Karen T. Comfort or John D. Reilly, 
Research and Promotion Branch, Fruit and Vegetable Programs, AMS, USDA, 
Stop 0244, 1400 Independence Avenue, SW, Room 2535 South Building, 
Washington, DC 20250-0244; telephone (202) 720-9915; facsimile (202) 
205-2800. The current Order and the proposed rule amending the Order 
can also be found at: www.ams.usda.gov/fv/rpb.html.

Proposal

    The Board submitted this proposal with support from the ABF, AHPA, 
and NHPDA. The proposed amendments to the Order submitted by the Board 
are explained below.
    In Secs. 1240.1 through 1240.28 of the Order, definitions would be 
added for the terms ``Department,'' ``honey production,'' ``industry 
information,'' ``national honey marketing cooperative,'' ``plans and 
projects,'' ``qualified national organization representing handler 
interests,'' and ``qualified national organization representing 
importer interests.'' Each of these new definitions was added to 
sections 4602(19) through (24) of the Act as part of the 1998 
amendments. Currently, the Order does not contain definitions for these 
terms. The definitions have also been arranged in alphabetical order 
for ease of reference.
    Definitions would be revised for the terms ``handle,'' ``honey,'' 
``Honey Board,'' and ``research.'' The definition of the term 
``handle'' would be amended to exclude the purchase of honey or a honey 
product by a consumer or other end-user, which conforms to the revised 
definition set out in section 4602(7) of the Act.
    The definition of the term ``honey'' would be modified to include 
comb honey. USDA has recognized in the past that the intent of the Act 
is to assess comb honey. This proposed revision would resolve any 
confusion in this area.
    The term ``Honey Board'' would reappear under the definition 
heading of ``National Honey Board'' which then clarifies that the terms 
``National Honey Board, ``Honey Board,'' and ``Board'' all refer to the 
National Honey Board created by the Act.
    The definition of ``research'' would be revised to include studies 
that test the effectiveness of market development and promotion efforts 
as well as studies on bees as provided for in the 1998 amendments to 
section 4601(b) of the Act.
    Section 1240.30 would be revised to change the composition of the 
Board to 14 members consisting of: seven producers; two handlers; two 
handlers who are also importers, if approved in referendum; two 
importers; and one representative (i.e., officer, director, or 
employee) of a national honey marketing cooperative. The public member 
position would be eliminated as well as specific representation for 
honey exporters. These changes are authorized by the 1998 amendments to 
section 4606(c)(2) of the Act. Except for the addition to the Board of 
two handlers who are also importers, these changes would become 
effective regardless of the outcome of the referendum. See also 
discussion on producer representation under USDA Changes to Proposal.
    Presently, the Board has 13 members consisting of: seven producers; 
two handlers; two importers or one importer and one exporter; one 
cooperative representative; and one public member. The cooperative 
representative must be an officer or employee of a honey marketing 
cooperative but does not necessarily have to be from a ``national'' 
honey marketing cooperative.
    Section 1240.31 would be revised to remove obsolete language 
regarding the length of the terms of office of the initial Board 
members. This section would also be revised to provide that terms of 
office be staggered periodically as recommended by the Board and as 
determined by the Secretary to maintain continuity of Board membership 
and to avoid situations where a majority of the members' terms end at 
the same time. The Order currently provides for staggered terms only 
with respect to the seating of members on the initial Board. Section 
4606(c)(8) of the Act as amended in 1998 provides for periodic 
staggering of Board terms. This amendment does not require approval in 
the referendum in order to take effect.
    In Sec. 1240.32 concerning nominations, a number of revisions would 
be made to conform the Order with the 1998 amendments to the Act with 
regard to the nomination process for Board members. For instance, 
references to state associations representing exporters would be 
deleted from Sec. 1240.32(a) since section 4606(c)(2) of the amended 
Act no longer provides for exporter representation on the Board. 
Similarly, references to the Board member and alternate positions 
representing the general public would be removed from this section to 
correspond with the elimination of these positions by the 1998 
amendments to the Act. References to the initial Committee formed after 
the Order was implemented as well as language on the first annual 
meeting of the Committee would also be deleted from Sec. 1240.32 since 
such provisions are no longer relevant. Furthermore, as provided in 
section 4606(b)(2) of the amended Act, Sec. 1240.32 would be amended to 
reflect the Secretary's authority to stagger the terms of Committee 
members. These revisions do not require approval in the referendum in 
order to take effect.
    In addition, Sec. 1240.32(a)(3) would be revised so that the term 
of office for Committee members would begin on July 1 instead of 
January 1. This change would accommodate the nomination of Committee 
members by state beekeeper associations, which often meet in the winter 
months. Currently, it is difficult for the associations to meet and 
elect their nominees, for the nominees to complete and submit 
background information forms, and for the Secretary to review the 
nominations and make a determination prior to the beginning of the term 
of office on January 1. Having the term of office commence on July 1 
would allow adequate time for the nomination process to be completed 
prior to the beginning of the term. In addition, since the Committee's 
main meeting is usually in the fall, new members would be appointed by 
the Secretary in time to participate in that meeting if the term of 
office begins on July 1. This change would go into effect regardless of 
the outcome of the referendum.
    Section 1240.32(b) would be revised with regard to the process the 
Committee would follow in considering recommendations of nominees and 
submitting nominations to the Secretary for handler, importer, handler-
importer, and cooperative representative positions on the Board. Based 
on sections 4606(c)(2)(B) through (E) of the Act, as amended, the 
Committee would be required to consider the recommendations of 
``qualified organizations representing handler interests,'' ``qualified 
organizations

[[Page 10605]]

representing importer interests,'' and ``qualified national honey 
marketing cooperatives.'' The requirements for qualification or 
certification of these organizations are set forth in section 
4606(c)(6) of the Act. These requirements were added to the Act to 
ensure that the recommendations being made to the Committee would be 
from organizations that truly represent the various industry segments. 
If, in a given instance, there is not a qualified national organization 
that represents handler or importer interests, the Committee would 
consider the recommendations of individual handlers who have paid 
assessments on the honey they have handled or the recommendations of 
individual importers who have paid assessments on the honey they have 
imported. This revision would become effective regardless of the 
outcome of the referendum.
    Currently, candidates for nomination to the Board for handler or 
importer positions may be recommended to the Committee by any industry 
organization that represents the interests of handlers or importers. 
There are no certification or qualification requirements that need to 
be met by the industry organization making the recommendations.
    With regard to nominations for the cooperative position on the 
Board, the current Order does not provide a process whereby 
recommendations are initiated by qualified national honey marketing 
cooperatives. The current Order also does not limit cooperative 
nominations to persons affiliated with honey marketing cooperatives 
that are ``national'' in character. The current Order does require that 
the representative be an officer or employee of the cooperative. In 
contrast, the proposed revision of Sec. 1240.32(b) would expand 
eligibility to include all directors of a cooperative's board. This 
takes into account the possibility that one may serve on the board of 
directors of a cooperative but not necessarily be an officer of the 
cooperative.
    The Act, as amended, requires the Committee to make the following 
nominations: (1) one producer member (and alternate) from each of the 
seven regions established by the Secretary; (2) two handler members 
(and two alternates) from recommendations made by qualified national 
organizations representing handler interests; (3) two importer members 
(and two alternates) from recommendations made by qualified national 
organizations representing importer interests; (4) two handler members 
who are also importers (i.e., handler-importers) and two alternates 
from recommendations made by qualified national organizations 
representing handler or importer interests; and (5) one member (and one 
alternate) who are officers, directors, or employees of a national 
honey marketing cooperative from recommendations made by qualified 
national honey marketing cooperatives. Therefore, this proposed rule 
would revise Sec. 1240.32 of the Order to adopt this new Board 
composition and to remove the obsolete references to the current Board 
structure. The two handler-importer positions on the Board are subject 
to voter approval in the referendum before taking effect.
    Section 1240.32(b) would also be revised to require that at least 
75 percent of an importer's gross income generated by the sale of honey 
and honey products during any three of the preceding five years be from 
the sale of imported honey and honey products in order to be eligible 
for nomination to one of the importer member or alternate positions on 
the Board. This conforms to section 4606(c)(5)(B) of the Act as amended 
in 1998. Presently, the Order does not establish a minimum gross income 
level for importer member eligibility. This change would take effect 
regardless of the outcome of the referendum.
    As mandated by section 4606(c)(4) of the Act, and not subject to 
voter approval in the referendum, Sec. 1240.32(b)(6) in the proposal 
would be amended with respect to the administrative reconstitution of 
the Board if certain criteria are met. The 1998 amendments to the Act 
made changes in Board reconstitution requirements in order to provide 
more equitable treatment and fairness of representation on the Board. 
See discussion on Board reconstitution under USDA Changes to Proposal 
in which references to reconstitution of the Board would be moved from 
Sec. 1240.32 to Sec. 1240.33.
    The proposal would require the Board to review every five years: 
(1) the geographic distribution of domestically produced honey assessed 
under the Order, (2) the changes in the annual average percentage of 
assessments owed by importers under the Order relative to assessments 
owed by producers and handlers of domestic honey and honey products, 
and (3) whether there are any changes in the proportion of assessments 
owed on imports by importers and handler-importers.
    As a result of this review, and if necessary to reflect changes in 
the proportion of domestic and imported honey assessed, the Board would 
recommend for the Secretary's approval changes in the regional 
representation of honey producers. And, if the proportion of 
assessments owed by handler-importers compared with the proportion of 
assessments owed by importers changed by more than 6 percent from the 
base period or if the proportion of assessments owed by importers 
compared with the proportion of assessments owed by producers and 
handlers of domestic honey and honey products changed by more than 6 
percent from the base period proportion, the Board would recommend to 
the Secretary: (1) the reallocation of handler-importer member 
positions as handler positions; (2) the reallocation of importer member 
positions as handler-importer positions; (3) the reallocation of 
handler-importer positions as importer member positions; or (4) the 
addition of Board members.
    For the initial review conducted by the Board, the base period 
proportions would be the proportions determined by the Board for fiscal 
year 1996. Otherwise, the base period proportions would be the 
proportions determined during the prior review.
    Recommendations made by the Board shall be based on the five-year 
average of annual assessments, excluding the two years containing the 
highest and lowest disparity between the proportion of assessments owed 
from imported and domestic honey or honey products and whether any 
change in the average in the annual assessments is from the assessments 
owed by importers or the assessments owed by handler-importers.
    The provision on Board reconstitution in Sec. 1240.32(b)(6) of the 
current Order provides authority for the Board to review the fairness 
of representation on the Board among producer regions, but not the 
adequacy of representation among handlers and importers serving on the 
board. In addition, the criteria for evaluating representation on the 
Board are more permissive in the current Order when compared to the 
assessment-based criteria provided for in the proposed new version. 
Also, the current Order, while requiring the Board to conduct a review 
every five years, does not mandate that the Board propose changes to 
representation among producer regions as a result of such review.
    In Sec. 1240.35 on Board meeting procedures, the quorum requirement 
would be changed from seven to eight members assuming the voters 
approve the amendments in the referendum allowing the size of the Board 
to increase from 13 to 14 members. This would maintain the practice 
that more than half of the Board members must be present at Board 
meetings for official Board action to be taken. Note, if the

[[Page 10606]]

voters in the referendum do not approve the amendments, the number of 
Board members would decrease from 13 to 12 and the quorum requirement 
would not be raised. This would occur because the public member 
position would be eliminated regardless of the outcome of the 
referendum.
    In Sec. 1240.36, a grammatical change would be made, replacing the 
word ``of'' with the word ``at'' in the second sentence without 
changing the meaning. This change would go into effect regardless of 
the outcome of the referendum.
    In Sec. 1240.38, the Board's duty to investigate potential 
violations of the Order in paragraph (d) would be expanded to also 
include the authority to investigate violations of any rule or 
regulation implemented to carry out the Order. The Board would continue 
to be required to report any findings to the Secretary.
    An editorial change would be made in Sec. 1240.38(l) covering the 
Board's authority to appoint working committees. The provision 
currently states that members of committees be ``drawn from'' 
producers, handlers, importers, exporters, members of wholesale or 
retail outlets, or other members of the public. The proposed new 
language reads simply that the committees ``may include'' these 
representatives. This revision does not alter the eligibility of who is 
able to serve on working committees. This revision to Sec. 1240.38(l) 
would go into effect regardless of the outcome of the referendum.
    In addition, throughout Sec. 1240.38 the words ``plan'' and 
``plans'' are inserted in place of ``project'' and ``projects'' in 
certain instances. For example, the repeated use of the phrase 
``programs and projects'' would read ``programs and plans.'' In 
addition to programs and projects being closely synonymous in meaning 
and somewhat redundant when used together, the use of ``plan'' or 
``plans'' better describes the Board's planning activities. Also, the 
term ``industry information'' would be inserted alongside the other 
permissible program activities of research, promotion, and consumer 
education as provided for in section 4601(b)(1) of the amended Act and 
elsewhere. These changes to Sec. 1240.38 would go into effect 
regardless of the outcome of the referendum.
    In the text of Sec. 1240.39 as well as the section title and the 
heading immediately preceding the section, ``industry information'' 
would be added to reflect the Board's authority to conduct this type of 
activity along with research, promotion, and consumer education. The 
addition of ``industry information'' as an authorized activity appears 
in section 4601(b)(1) of the Act and elsewhere. The word ``programs'' 
would also be added wherever the words ``plans and/or projects'' 
appear. This is consistent with the Act, which frequently uses the word 
``programs'' in connection with research, promotion, industry 
information, and consumer education activities. These changes would go 
into effect regardless of the outcome of the referendum.
    A new paragraph would be added to Sec. 1240.39 authorizing the 
Board to conduct research designed to advance the cost-effectiveness, 
competitiveness, efficiency, pest and disease control, and other 
management aspects relating to beekeeping, honey production, and honey 
bees. The Board believes that the proposed changes to the Order 
authorized by the 1998 amendments to the Act would strengthen the honey 
industry by expanding research in areas that would help solve 
production problems, reduce costs of production, and enhance the image 
of honey as a pure and natural product. Such research authority is 
specifically provided for in sections 4601(a) through (b) of the Act.
    Another new paragraph would be added to Sec. 1240.39 authorizing 
the Board to conduct activities which may lead to the development of 
new markets or marketing strategies for honey or honey products, as 
well as activities to increase the efficiency of the honey industry and 
to enhance the image of honey and honey products. The authority to 
conduct these activities is specifically provided for in section 
4601(b)(1)(C) of the amended Act. This paragraph would become effective 
regardless of the outcome of the referendum.
    Another new paragraph would be added to Sec. 1240.39 to address the 
Board's authority to carry out activities and develop procedures for 
the inspection or monitoring of honey and honey products being sold for 
domestic consumption or for export from the United States. This 
includes the authority to develop minimum purity standards. Sections 
4607(a)(8) and 4607(b) of the amended Act provide specific authority 
for the Board to develop and conduct these activities. Any program 
involving the establishment of minimum purity standards as well as 
systems for inspection or monitoring of honey or honey products would 
be subject to prior approval by the Secretary. In addition, the Board's 
power to develop purity standards or inspection or monitoring programs 
that are mandatory must first be approved by voters in the referendum.
    Sections 1240.39 and 1240.40 would be amended to allow activities 
to be funded with donations or other funds available to the Board in 
addition to assessment funds. Section 4606(e)(1) of the amended Act 
created the specific authority for the Board to accept voluntary 
contributions to finance expenses covered in its budget including 
activities in research, promotion, consumer education, and industry 
information as well as expenses for the administration of the Board. 
These changes to Secs. 1240.39 and 1240.40 would go into effect 
regardless of the outcome of the referendum.
    In Sec. 1240.40 on budget and expenses, industry information would 
be included in the types of activities for which the Board is 
authorized to incur expenses based on its authorization as a 
permissible activity under section 4601(b)(1) and elsewhere in the Act. 
This revision does not require approval in the referendum.
    Also in Sec. 1240.40, a new paragraph would be added to require the 
Board to reserve at least 8 percent of all assessments collected each 
year for expenditure on research programs designed to advance the cost-
effectiveness, competitiveness, efficiency, pest and disease control, 
and other management aspects relating to beekeeping, honey production, 
and honey bees. The Board believes that the additional assessment 
funding for such research projects, including an 8 percent allocation 
for production research, would allow the industry to leverage its 
resources to make research both practical for and applicable to the 
industry's needs. Any allocated funds remaining at the end of the year 
would be carried forward for allocation and expenditure in subsequent 
years. The 8 percent figure was selected because it provides the 
funding level the industry felt would be adequate for the intended 
research. Allocating 8 percent of the Board's funds to this type of 
research is specifically provided for in section 4606(f)(2) of the 
amended Act. In order to become effective, this provision must be 
approved in the referendum.
    Section 1240.41 would be amended so that handlers as well as 
producer-packers in their capacity as handlers would pay assessments. 
Currently, only producers and importers as well as producer-packers in 
their capacity as producers are subject to assessment under the Order.
    First handlers would be responsible for paying assessments on the 
honey they handle as well as collecting and remitting assessments from 
producers.

[[Page 10607]]

The total assessment on honey produced in the United States would be 
increased from $0.01 per pound to $0.015 per pound. Payment of this 
total amount would be allocated among producers, handlers, and 
producer-packers. The assessment rate to be levied on producers for 
honey produced and handled would be $0.0075 per pound of honey. This is 
a decrease from the current assessment rate of $0.01 per pound paid by 
producers. A new assessment levied on handlers would be $0.0075 per 
pound of honey handled. Producer-packers would pay a $0.0075 assessment 
on the honey they produce as well as a $0.0075 assessment on the honey 
for which they act as a first handler, even if the honey handled was 
from the producer-packer's own production.
    The new assessment rates for producers, handlers, and producer-
packers is authorized by section 4606(e)(3) of the Act. Sections 
4608(a) and 4608(e) provide new requirements affecting first handlers 
with regard to the payment of the handler assessment as well as the 
collection and payment of the producer's assessment. These proposed 
changes to the Order at Sec. 1240.41 covering the new assessment rates 
as well as the authority to subject handlers to assessment must first 
be approved in the referendum. If the amendments are not approved in 
the referendum, the current rate of $0.01 per pound payable by domestic 
producers would remain in effect, and handlers would not be subject to 
assessment.
    Section 1240.41 would also be revised so that the total assessment 
on honey and honey products imported into the United States would be 
increased from $0.01 per pound to $0.015 per pound in order to equal 
the combined rate paid by producers and handlers on domestic honey. Of 
this $0.015 total, $0.0075 would represent the assessment due from the 
importer, and $0.0075 would represent the assessment due from a handler 
and paid by the importer on behalf of the handler. The full assessment 
on imported honey would be due at the time of entry of the honey into 
the United States. The authority for increasing the assessment on 
imported honey is found in section 4606(e)(3)(B) of the Act and is 
subject to referendum approval before being implemented. If the 
amendments are not approved in the referendum, the current rate of 
$0.01 per pound payable by importers on honey and honey products would 
remain in effect.
    Section 1240.41 would also be amended so that importers are 
ultimately responsible for the payment of assessments in the event the 
U.S. Customs Service (Customs) did not collect the amounts owed at the 
time of entry. While the current Order makes reference to importers 
being subject to late payment charges, it does not expressly provide 
that importers are liable for paying the assessment directly to the 
Board if Customs fails to collect the amount. This change is authorized 
by section 4608(i)(2) of the Act. In addition, reference in the Order 
to the collection of assessments by the Secretary would be removed 
since the Secretary does not undertake the collection responsibility. 
These changes clarifying the Secretary's role as to assessment 
collection as well as the ultimate liability of importers for 
assessment payment do not require approval in the referendum.
    Section 1240.41 would also be amended to make producers subject to 
late-payment charges and interest penalties on past-due assessments 
similar to handlers, importers, and producer-packers. Presently, the 
Order only mentions that a producer is responsible for payment of the 
assessment to the Board should the first handler fail to collect the 
assessment. Subjecting producers to late-payment charges and interest 
penalties for assessments owed to the Board would be consistent with 
the sanctions other program participants face for failing to pay 
amounts due to the Board. This change would go into effect regardless 
of the outcome of the referendum.
    Since the honey price support loan program, as provided in the 
Agricultural Act of 1949 [7 U.S.C. Sec. 1446(b)], has been 
discontinued, Sec. 1240.41(g) of the current Order would be revised by 
referring to a more generic loan program. This generic reference would 
adequately accommodate any new recourse loan program or other loan 
program that might be developed by USDA's Farm Service Agency. The 
other features of this provision would not be changed. The Board's 
proposal would have this provision on loan programs appear at 
Sec. 1240.41(m). However, see discussion under USDA Changes to Proposal 
in which this provision would appear at Sec. 1240.41(k). This change 
does not require approval in the referendum.
    In Sec. 1240.42 on exemption from assessment, an exemption would be 
added for handlers handling less than 6,000 pounds of honey per year. 
The 6,000-pound limit is identical to the exemption amount for 
producers, producer-packers, and importers. Providing the exemption for 
handlers conforms to section 4606(e)(4)(B) of the amended Act. This 
amendment would not take effect unless the referendum is approved.
    In addition, Sec. 1240.42(c) in the current Order would be removed. 
This section requires that a person file an application with the Board 
in order to receive an exemption from paying assessments. With the 
removal of this provision, no direct action would be necessary for a 
producer, producer-packer, handler, or importer to qualify for 
exemption, other than to maintain relevant records.
    Based on the number of persons eligible to claim an exemption, 
eliminating the application requirement would significantly reduce the 
reporting requirement for applicants as well as the consequent 
recordkeeping demands on the Board's staff. The elimination of the 
exemption application requirement in Sec. 1240.42(c) conforms to the 
1998 amendments to the Act, which struck a similar provision from 
section 4606(e)(4)(B), as redesignated. This change would go into 
effect regardless of the outcome of the referendum.
    A minor editorial change would also be made to Sec. 1240.42 by 
inserting the word ``United'' to precede ``States'' for purposes of 
clarification and correctness.
    The Board proposes that Sec. 1240.43 of the Order be removed in its 
entirety. This section authorizes the payment of refunds to States 
operating a similar assessment program. Coverage of this same subject 
in Sec. 1240.42(f) would also be stricken. Both Sec. 1240.43 and 
Sec. 1240.42(f) of the Order discuss how States operating programs 
similar to those authorized by the Act may obtain refunds of 
assessments from the Board. These provisions were originally included 
in the Order because a program existed in California at the time. Since 
the California program no longer exists, and no other similar State 
plans exist, the provisions in the Order referencing State plans are no 
longer relevant and therefore would be removed. The elimination of 
these provisions from the Order would take effect regardless of the 
outcome of the referendum.
    The section on operating reserves at Sec. 1240.44 in the current 
Order would be redesignated as Sec. 1240.43.
    A new Sec. 1240.44 would be added to authorize the Board to develop 
and recommend to the Secretary a system or program for monitoring the 
purity of honey and honey products being sold for domestic consumption 
and for export. The authority to develop and carry out such programs, 
including the establishment of minimum purity standards, is based on 
sections 4607(a) through (b) of the amended Act. This section must be 
approved in the referendum to become effective.

[[Page 10608]]

    A new Sec. 1240.45 would also be added to authorize the Board, 
subject to the approval of the Secretary, to develop and implement a 
voluntary quality assurance program concerning purity standards for 
honey and honey products. Components of this program could include, 
among other things, the establishment of an official seal of approval 
to be displayed on honey and honey products which meet the standards of 
purity established under the program, actions to encourage persons in 
the honey industry to participate in the program, actions to encourage 
consumers to purchase honey and honey products containing the official 
seal of approval, and periodic inspections by the Secretary of honey 
and honey products of individuals who participate in the program. The 
components provided in this new provision parallel those set forth in 
sections 4607(a) and (c) of the amended Act. This section does not 
require approval in the referendum.
    A new Sec. 1240.46 would also be added to the Order authorizing the 
Board to recommend, subject to the Secretary's approval, the 
establishment of minimum purity standards for honey. Authority for this 
provision is based on section 4607(a) of the amended Act. This section 
must be approved in the referendum to become effective.
    New Secs. 1240.44, 1240.45, and 1240.46 would address concerns 
about the disparate quality of honey available to consumers as well as 
the need to maintain a positive and wholesome marketing image for honey 
and honey products.
    Section 1240.50 would be revised to make producers subject to 
reporting requirements similar to handlers, importers, and producer-
packers. This would cover producers subject to assessment as well as 
those currently exempt. In 1996, section 4608(f)(1) of the Act was 
amended to add recordkeeping and reporting requirements for producers. 
Requiring producers to be subject to reporting requirements similar to 
others in the honey program would facilitate enforcement of the Order. 
Without this reporting requirement, it has been difficult for the Board 
to investigate producers for potential noncompliance with the Order. 
This reporting requirement would also assist the Board in periodically 
collecting production information to help identify industry trends for 
use in program planning and evaluation.
    Section 1240.50 would also be revised to provide the Board the 
authority to request reports from producers and producer-packers on the 
quantity of honey produced and the total number of bee colonies 
maintained. This change is authorized by the 1998 amendments to the 
Act. Section 1240.50 already contains reporting requirements for 
handlers and producer-packers with regard to the total quantity of 
honey acquired or handled as well as the total quantity of honey 
imported in the case of importers. Section 1240.50 would also be 
revised so that these reporting requirements would include coverage for 
``honey products'' in addition to ``honey'' as provided in the current 
Order for handlers, producer-packers, and importers. Section 4608(f)(1) 
provides authority for these changes.
    The changes in reporting requirements in Sec. 1240.50 involving 
producers, producer-packers, handlers, and importers would go into 
effect regardless of the outcome of the referendum.
    In addition, Sec. 1240.51 would be amended to require that 
producers as well as handlers, importers, and producer-packers maintain 
and make available for inspection their books and records. This applies 
to those subject to assessment as well as those currently exempt. 
Making producers subject to recordkeeping requirements similar to 
others in the program would facilitate enforcement of the Order. 
Without this requirement, it has been difficult for the Board to carry 
out compliance investigations against producers for possible violation 
of the Order. This change would go into effect regardless of the 
outcome of the referendum.
    Section 1240.51 would also be revised to provide the authority for 
employees or agents of the Board or USDA to inspect the books and 
records of individuals subject to the Act and Order. The existing Order 
provides no authority for ``agents'' to inspect books and records. One 
reason for extending this authority to agents is to provide the Board 
the flexibility of utilizing the services of an outside auditing firm 
to assist with its compliance efforts. This change is authorized by 
section 4608(f)(2). This change would go into effect regardless of the 
outcome of the referendum.
    In Sec. 1240.52, a specific penalty would be added for persons 
convicted of disclosing confidential information. The penalty consists 
of a fine of up to $1,000, imprisonment for up to 1 year, or both, as 
well as removal from office or employment. These proposed changes to 
Sec. 1240.52 of the Order are authorized by section 4608(g) of the Act 
and do not require approval in the referendum.
    In Sec. 1240.61, a change was made to remove the word ``projects'' 
and replace it with the word ``plans.''
    In Sec. 1240.62 on suspension or termination of the Order, there 
would be a change to allow handlers, if subject to assessment, to vote 
in continuance referenda every five years or referenda on request as 
provided for in sections 4612(c) through (d) of the Act. This change 
would only go into effect if the referendum is approved. Obsolete 
provisions referring to the first continuance referendum would be 
removed regardless of the outcome of the referendum.
    Section 1240.62 would also be revised with regard to petitions for 
referenda so handlers would be included in calculating the 10 percent 
which is needed for submitting a petition to have a referendum. The 
authority for this change is provided by section 4612(d)(1) of the Act 
and would only go into effect if the amendment making handlers subject 
to assessment is approved in the referendum.
    Also added to Sec. 1240.62 is a requirement that referenda at the 
request of the Board or by petition of program participants can be held 
no more than once every two years. If continuation of the Order is 
approved in a referendum held at the request of the Board or by 
petition, then the next periodic referendum to determine the 
continuation of the Order shall be held no sooner than five years from 
the date of the referendum on request. These changes are made pursuant 
to sections 4612(c) through (d) of the Act. These changes are not 
subject to approval in the referendum.

USDA Changes to Proposal

    The Department has modified the Board's proposal to make it 
consistent with the Act when necessary as well as provide clarity, 
consistency, and correctness when appropriate with respect to word 
usage and terminology. For example, in some cases, references to 
``Honey Board'' or ``National Honey Board'' were changed to ``Board'' 
for simplicity. In certain instances, gender-specific references were 
replaced with gender-neutral language.
    The Department did not change the title of the Order, as proposed 
by the Board, to include a reference to ``industry information'' for 
consistency with the Act's title which was not changed by the 1998 
amendments to the Act. However, a subpart designation has been added to 
apply to Secs. 1240.01 through 1240.67.
    In the definition of ``Act,'' the Department did not change the 
Act's name to reference ``industry

[[Page 10609]]

information'' as proposed because, while the Act was amended, the title 
was not.
    The Board proposed defining ``National Honey Board'' instead of 
``Honey Board'' to include the Board's common reference. The Department 
retained ``Honey Board'' as the term defined but included ``National 
Honey Board'' as a synonym.
    The definition of ``part and subpart'' was not changed to refer to 
the Order as it was proposed to be renamed by the Board.
    The term ``plans and projects'' is not a new definition being added 
to the Order as indicated in the proposal. A definition for this term 
does appear in the present Order at Sec. 1240.21. The proposal would 
amend the existing definition by adding the words ``industry 
information'' to the existing text.
    A minor change in the definition of ``Committee'' was made for 
syntax and clarity.
    In the definitions of ``qualified national organization 
representing handler interests'' at Sec. 1240.23 and ``qualified 
national organization representing importer interests'' at 
Sec. 1240.24, several section cross-references were added. A minor 
change was also made to the latter definition for purposes of syntax 
and clarity. In addition, portions of the text from each definition on 
eligibility requirements were moved to Sec. 1240.32 on nominations and 
revised slightly for purposes of brevity and clarity. For example, 
``the association or organization'' was shortened to ``the 
organization'' in almost every instance.
    In the definition of ``research'' at Sec. 1240.25, the words 
``products containing honey'' were replaced with ``honey products'' for 
consistency with language in the Act and Order. The definition of 
``research'' was also revised to add clarification to the proposal's 
reference to ``studies on bees'' in accordance with sections 4601(a)(9) 
through (10), 4601(b)(1)(C) through (D), and 4606(f)(2)(A) of the Act.
    In Sec. 1240.30 and elsewhere, the word ``national'' was placed in 
front of references to ``honey marketing cooperative'' to be consistent 
with usage of this term in section 4606(c)(2)(E) and elsewhere in the 
Act.
    In Sec. 1240.31 on terms of office, several changes were made in 
order to make the language consistent with USDA procedures and 
terminology, such as the substitution of gender-neutral language. 
Another revision added authority for the Secretary to make a 
determination on staggered Board terms individually. This change was 
made pursuant to language added to section 4606(c)(8) of the Act, which 
refers only to the Secretary's authority in making determinations on 
staggered terms. In the last sentence following ``alternate'' in 
Sec. 1240.31, the word ``member'' was stricken to parallel similar word 
usage elsewhere in the section.
    In Sec. 1240.32, subparagraph (b)(6) as it appeared in the proposal 
was stricken since it covers actions of the Board as opposed to actions 
of the Committee, which is the subject of Sec. 1240.32. The text of 
former subparagraph (b)(6) would be reinserted, with several 
modifications, as a new Sec. 1240.33 titled ``Board reconstitution.''
    A new provision was added to Sec. 1240.32(b)(8) on the basic 
eligibility requirements for those nominated to fill Board seats as 
handler-importers. To be nominated for the handler-importer position, a 
handler must also have been an importer of record of at least 40,000 
pounds of honey during any three of the preceding five years. These 
requirements are contained in section 4606(c)(2)(C) of the Act. The 
creation of two handler-importer positions on the Board must be 
approved in the referendum to become effective.
    In Sec. 1240.32(b)(9), changes were made to underscore the 
possibility that a full slate of nominees may not be submitted should 
Board members serve in staggered terms. The proposal and current Order 
use set numbers in terms of filling the different Board positions. The 
language is modified to better convey that the number of nominations 
will directly correspond to the number of positions due to become 
vacant.
    In Sec. 1240.32(b)(12), language was added providing that 
organizations seeking certification as a qualified national 
organization for purposes of making nomination recommendations must 
agree to notify nonmembers of Board nomination opportunities as well as 
consider the nomination of nonmembers interested in serving on the 
Board. This language was added to conform with section 4606(c)(6)(F) of 
the Act.
    Finally, a new Sec. 1240.32(b)(13) was added to state that the 
certification of an organization by the Secretary shall be final, 
pursuant to section 4606(c)(6)(C) of the Act.
    A new Sec. 1240.33 contains the text on Board reconstitution. This 
topic is currently covered under Sec. 1240.32(b)(6) in the Order. The 
Board's proposal to amend the Order also covers this topic in 
Sec. 1240.32(b)(6). It is recommended that the subject of Board 
reconstitution be moved from Sec. 1240.32 to Sec. 1240.33 for purposes 
of organization and clarity. Section 1240.32 primarily covers the 
activities of the Committee and the nomination process for Board 
members. Board reconstitution covers the process whereby the Board 
evaluates possible changes in representation to the Board based on such 
factors as changes in the geographic distribution of honey producers, 
changes in the proportion of domestic and imported honey assessed, or 
the source of assessments on imported honey or honey products. It would 
be clearer from an organizational standpoint for this topic to be 
covered in a new Sec. 1240.33.
    In the new Sec. 1240.33 covering Board reconstitution, the word 
``shall'' was substituted in place of ``may'' before the word 
``recommend'' in paragraph (b) of the proposed text to clarify the 
Board's responsibility to move forward with reconstituting the Board if 
warranted by the results of the review. Section 4606(c)(4)(B) of the 
Act requires the Board to recommend reconstitution of the Board to the 
Secretary if certain criteria as provided in the section are met. A 
provision was also added to emphasize that, notwithstanding any action 
on reconstitution, at least 50 percent of the members serving on the 
Board shall be honey producers, pursuant to section 4606(c)(7) of the 
Act. Several other minor editorial changes were made including use of 
the word ``continuance'' in place of ``continuation'' in modifying 
referendum.
    The Board's proposal includes no modifications to Sec. 1240.34 on 
vacancies. However, Sec. 1240.34(a) needs to be revised to include the 
cross-reference to the new Sec. 1240.33 on Board reconstitution in 
place of Sec. 1240.32(b)(6).
    Section 1240.34(a) of the existing Order provides an exception 
where a producer member or alternate serving on the Board may complete 
the term of office in situations where, due to Board adjustment of 
regions, the member or alternate is no longer from the region from 
which the person was appointed. Section 4606(c)(4) of the Act addresses 
changes in geographic regions for producer representation and 
reallocation of handler, importer, and handler-importer positions on 
the Board. For purposes of consistency, the exception in 
Sec. 1240.34(a) allowing producers affected by geographic redistricting 
to finish out their term would be extended to allow those members 
serving in handler, importer, or handler-importer Board positions to 
complete their terms in situations where their position is subject to 
reallocation by the Board.

[[Page 10610]]

    In Sec. 1240.38 on Board duties and in Sec. 1240.40(a), a 
requirement was added that budgets be submitted to the Secretary for 
approval 60 days in advance of the beginning of the fiscal period. The 
Act and current Order do not specify any time frame for submitting the 
budget to the Secretary. The 60-day period formalizes current USDA 
policy and allows adequate time for review and approval prior to the 
start of the fiscal period. A minor change was made to Sec. 1240.38(e) 
by inserting ``consumer'' to precede ``education'' and deleting the 
word ``development.'' And ``industry information'' was added to the 
list of allowable program activities in Sec. 1240.38(l) as provided for 
in 1998 amendments to the Act.
    Several changes were made to the Board's proposal involving 
Sec. 1240.39. A paragraph was added providing that the Board shall 
conduct ``an independent evaluation'' of the effectiveness of the Order 
and its programs at least once every five years. This requirement 
appears in Commodity Promotion and Evaluation [7 U.S.C. 7401]. Section 
1240.39(e) of the current Order does contain a provision on periodic 
program evaluations; however, it does not require that the review be 
conducted by an independent source.
    As a result of adding the paragraph on independent evaluations, the 
paragraphs in Sec. 1240.39 were redesignated.
    Also in Sec. 1240.39, the proposed provision on activities and 
procedures for monitoring the purity of honey and honey products was 
modified by striking the words ``and prevention'' from the phrase 
``including programs or activities for identification and prevention of 
adulterated honey.'' Pursuant to section 4607(b)(2) in the Act, the 
Board has the authority to ``develop and recommend * * * a system for 
identifying honey.''
    Finally, the phrase ``research, education, industry information, 
and promotion'' in Sec. 1240.39 of the proposal was replaced with 
``research, promotion, consumer education, and industry information'' 
to be consistent with similar references elsewhere in the section.
    In Sec. 1240.40(a), the words ``industry information'' were added 
to ``research, promotion, and consumer education'' to be consistent 
with similar references elsewhere in the provision.
    In Sec. 1240.40(c), the word ``projects'' was not changed to 
``plans'' as suggested in the proposal. The word ``projects'' is 
retained so as to mirror the same language in section 4606(f)(2) of the 
Act on this point.
    Section 1240.41(a) of the current Order and the proposal was 
removed because it is not necessary.
    In the discussion of assessment rates in Sec. 1240.41, changes were 
made to clarify that handlers, importers, and producer-packers are 
subject to assessments for both honey and honey used in honey products 
while producers are assessed only on honey produced. This is based on 
section 4606(e)(3) of the Act. ``U.S.'' was added where necessary to 
specify honey produced domestically versus honey produced outside the 
United States.
    Discussion of the assessment rate on imported honey and honey 
products was expanded for purposes of clarification. For example, one 
change clarifies that importers must pay assessments through Customs to 
the Board. Both the current Order and the proposal provide that the 
importer is required to pay the assessment to the Board at the time the 
honey or honey products enter the United States. There is no specific 
mention of Customs acting as the payment intermediary. Congress made a 
similar clarification in section 4608(c) of the Act.
    In Sec. 1240.41, language on the prescribed interest rate set by 
the Board and approved by the Secretary was removed and replaced with 
language specifying that the rate of interest shall be prescribed in 
regulations issued by the Secretary.
    A new paragraph (i) was added to Sec. 1240.41 specifying that 
persons failing to remit assessments in a timely manner may also be 
subject to actions under federal debt collection procedures.
    Finally, in Sec. 1240.41 on government loan programs, the ``USDA 
Commodity Credit Corporation'' was substituted for ``CCC,'' and other 
minor changes were made to the sentence to accommodate this change. 
Also, ``USDA'' was inserted before ``loan program'' in the first 
sentence for purposes of clarity. This provision was redesignated from 
Sec. 1240.41(m) in the Board's proposal to Sec. 1240.41(k).
    Paragraphs (j) and (k) in Sec. 1240.41 of the Board's proposal were 
redesignated as paragraphs (l) and (m) of Sec. 1240.41.
    In Sec. 1240.42(a) on exemption from assessment, the words ``or 
honey products'' were added to the exemption language since the 
calculation of the 6,000 pound minimum amount to qualify for exemption 
from assessment can include both honey and honey products in the case 
of producer-packers, handlers, and importers. This is consistent with 
section 4606(e)(4)(A) of the Act as amended in 1998. In 
Sec. 1240.42(c), the reference to a person who ``claims'' an exemption 
was replaced with language referring to a person who has been exempt. 
This change was made because section 4606(e)(4) of the Act eliminated 
the requirement of filing a claim with the Board as a prerequisite to 
being exempt from assessments. Several other minor changes in word 
order and phraseology were also made.
    In Sec. 1240.44 on activities involving the inspection and 
monitoring of honey, the words ``and the Secretary shall have the 
authority to approve or disapprove'' were added to mirror similar 
language in section 4607(d) of the Act and to underscore the 
Secretary's oversight authority. The proposal provides that the Board 
is ``authorized to develop and recommend to the Secretary'' a system or 
program for monitoring the purity of honey. However, the Board's 
proposal contains no mention of the Secretary's authority to approve 
such system or program as is provided for in the 1998 amendments to the 
Act.
    Also in Sec. 1240.44, the words ``or program'' were inserted to 
follow the word ``system'' in several instances for purposes of 
consistency throughout the section. Also, several other minor changes 
in punctuation were made to follow similar construction in section 
4607(b) of the Act.
    In Sec. 1240.45, language regarding the Secretary's authority to 
approve or disapprove the establishment of a voluntary quality 
assurance program was inserted to be consistent with similar language 
in section 4607(d) of the Act and to underscore the Secretary's 
authority on this point. A paragraph was also added providing that a 
producer, handler, or importer must participate in the voluntary 
quality assurance program in order to be eligible to display the 
official seal of approval. This addition is based on sections 
4607(c)(2)(A) and (c)(3) of the Act. Finally, a provision was inserted 
to provide that a voluntary quality assurance program and any related 
rule or regulation for its development and operation may be ``in 
addition to or independent of'' any program, rule, or regulation 
involving an inspection and monitoring system established under the 
authority of Sec. 1240.44. This language was taken from sections 
4607(a)(8) and (c)(1) of the amended Act.
    In Sec. 1240.46 on minimum purity standards, the words ``develop 
and'' were inserted before ``recommend'' and ``and related rules and 
regulations'' were added to immediately follow ``minimum purity 
standards'' for consistency with section 4607(a)(8) of the Act.
    In Sec. 1240.50, minor grammatical corrections were made. Also, the 
articles

[[Page 10611]]

``the'' and ``a'' were inserted at various points in the text.
    In Sec. 1240.51 on books and records, a change was made in 
reference to those subject to exemption since it is no longer necessary 
to file a claim with the Board in order to be exempt from assessments. 
In addition, the word ``agent'' was added for use with employees since 
section 4608(f)(2) of the amended Act provides authority for employees 
or agents of the Board or USDA to inspect and review books and records.
    In Sec. 1240.52 on confidential treatment, a revision is made so 
that the confidentiality provisions with respect to books, records, or 
reports would apply to officers and employees of the USDA and employees 
and agents of the Board. Members and alternates of the Board are 
specifically excluded from inspecting or reviewing books and records 
under section 4608(f)(2) of the amended Act in the first place. This 
change is authorized by section 4608(g)(1) of the amended Act. 
Presently, the Order as well as the Board's proposal extend the 
confidentiality provisions to ``any person.''
    In Sec. 1240.52(a), a minor edit was made substituting the word 
``the'' in place of ``a'' to precede ``number.''
    Section 1240.52(c) of the proposal, which covers the penalties for 
disclosure of confidential information, was removed. The specific 
penalties for violating the confidentiality provisions of the Act and 
Order, as provided for in section 4608(g) of the Act, are self-
executing and, therefore, are not included in the Order.
    In Sec. 1240.62 on the suspension or termination of Order, several 
minor revisions were made such as adding ``(5)'' after the word 
``five'' and adding ``(2)'' after the word ``two''. Also the phrase 
``subject to assessment under the Order'' was inserted in both 
paragraphs (b) and (c) to provide greater clarity and completeness.

Referendum

    After an opportunity for public comment, a referendum will be held 
among honey producers, producer-packers, importers, and handlers who 
would be subject to assessment under the 1998 amendments to the Act. 
Producers, producer-packers, importers, and handlers who are not exempt 
and who have been engaged in the production, importation, or handling 
of honey or honey products during a two-year representative period to 
be determined by the Secretary will be eligible to vote on the proposed 
amendments to the Order.
    All known honey producers, producer-packers, importers, and 
handlers will be mailed information regarding the referendum. Those who 
do not receive a ballot and believe they are eligible will be able to 
request one from USDA.
    The following proposed amendments to the Order must be approved by 
honey producers, producer-packers, importers, and handlers voting in a 
referendum before taking effect: (1) the requirement for the Board to 
reserve 8 percent of its funds annually for beekeeping and production 
research; (2) the authority for the Board to conduct projects, 
including developing recommendations for purity standards and an 
inspection and monitoring system, to enhance the image of honey and 
honey products; (3) the addition of two handler members who are also 
importers to the Board; (4) a decrease in the producer assessment from 
1 cent per pound to 0.75 cents per pound; (5) the addition of an 
assessment of 0.75 cents per pound on handlers; and (6) an increase in 
the assessment rate from 1 cent per pound to 1.5 cents per pound on 
imports.
    The following proposed amendments to the Order would become 
effective after the referendum, regardless of the outcome: (1) revised 
and new definitions for certain terms; (2) changing the two importer/
exporter Board positions to two importer positions; (3) elimination of 
the public member position on the Board; (4) revised nomination and 
eligibility requirements for Board members; (5) a requirement that at 
least 50 percent of the Board members shall be honey producers and 
authority to stagger terms of office as necessary; (6) authority for 
the Board to accept voluntary contributions; (7) elimination of the 
requirement that exempt persons must file for an exemption; (8) the 
authority for the Board to develop an enforceable voluntary quality 
assurance program; (9) clarification of recordkeeping and reporting 
requirements; and (10) the removal of obsolete language.
    There were several additional amendments to the Act in 1998 that do 
not require amendment of the Order. One of these amendments adds a 2-
year statute of limitations for persons filing petitions under Section 
10 of the Act. In addition, the Act was amended to provide that each 
producer-packer and importer who votes in referenda will have one vote 
as a handler and one vote as a producer or importer, assuming the 
producer-packer or importer would owe assessments as a handler in 
addition to owing assessments as a producer or importer. Further, the 
Act was amended to provide that the Order amendments that are subject 
to approval in the referendum will become effective if (1) the changes 
are approved or favored by a majority of the producers, importers, and 
handlers voting in the referendum, and (2) that majority who voted 
produced, imported, and handled 50 percent or more of the quantity of 
the honey and honey products produced, imported, and handled during the 
representative period among those voting in the referendum. The 1998 
amendments to the Act also provided that no individual provision of the 
amended Order shall be subject to a separate vote in the referendum.
    If the proposed amendments to the Order regarding assessments on 
handlers are approved, the same voting criteria for passage will apply 
in all subsequent referenda. If the proposed amendments to the Order 
regarding assessments on handlers are not approved, handler approval 
would not be necessary in future referenda.
    The proposal set forth below has not received the approval of the 
Secretary.

List of Subjects in 7 CFR Part 1240

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Honey promotion, Reporting and 
recordkeeping requirements.
    For the reasons set forth in the preamble, it is proposed that 7 
CFR Part 1240 be amended as follows:

PART 1240--HONEY RESEARCH, PROMOTION, AND CONSUMER INFORMATION

    1. Revise the authority citation for Part 1240 to read as follows:

    Authority: 7 U.S.C. 4601-4613; 7 U.S.C. 7401.

    2. Revise the heading for 7 CFR Part 1240 to read as follows:

PART 1240--HONEY RESEARCH, PROMOTION, AND CONSUMER INFORMATION

    3. Add a heading for a new subpart, consisting of Secs. 1240.01 
through 1240.67, and revise the table of contents for those sections to 
read as follows:

Subpart A--Honey Research, Promotion, and Consumer Information 
Order

Definitions

Sec.
1240.01   Act.
1240.02   Board.
1240.03   Committee.
1240.04   Consumer education.
1240.05   Department.
1240.06   Exporter.

[[Page 10612]]

1240.07   Fiscal period and marketing year.
1240.08   Handle.
1240.09   Handler.
1240.10   Honey.
1240.11   Honey production.
1240.12   Honey products.
1240.13   Importer.
1240.14   Industry information.
1240.15   Marketing.
1240.16   National honey marketing cooperative.
1240.17   Part and subpart.
1240.18   Person.
1240.19   Plans and projects.
1240.20   Producer.
1240.21   Producer-packer.
1240.22   Promotion.
1240.23   Qualified national organization representing handler 
interests.
1240.24   Qualified national organization representing importer 
interests.
1240.25   Research.
1240.26   Secretary.
1240.27   State.
1240.28   State association.

Honey Board

1240.30   Establishment and membership.
1240.31   Term of office.
1240.32   Nominations.
1240.33   Board reconstitution.
1240.34   Vacancies.
1240.35   Procedure.
1240.36   Attendance.
1240.37   Powers.
1240.38   Duties.

Research, Promotion, Consumer Education, and Industry Information

1240.39   Research, promotion, consumer education, and industry 
information.

Expenses and Assessments

1240.40   Budget and expenses.
1240.41   Assessments.
1240.42   Exemption from assessment.
1240.43   Operating reserve.
1240.44   Inspection and monitoring system.
1240.45   Voluntary quality assurance program.
1240.46   Minimum purity standards.

Reports, Books, and Records

1240.50   Reports.
1240.51   Books and records.
1240.52   Confidential treatment.

Miscellaneous

1240.60   Influencing governmental action.
1240.61   Right of the Secretary.
1240.62   Suspension or termination.
1240.63   Proceedings after termination.
1240.64   Effect of termination or amendment.
1240.65   Personal liability.
1240.66   Separability.
1240.67   Patents, copyrights, inventions, product formulations, and 
publications.

    4.-6. Redesignate Secs. 1240.1 through 1240.67 as follows:

 
               Old section                          New section
 
1240.1..................................  1240.26
1240.2..................................  1240.1
1240.3..................................  1240.18
1240.4..................................  1240.10
1240.5..................................  1240.12
1240.6..................................  1240.20
1240.7..................................  1240.8
1240.8..................................  1240.9
1240.9..................................  1240.21
1240.10.................................  1240.13
1240.11.................................  1240.6
1240.12.................................  1240.22
1240.13.................................  1240.25
1240.14.................................  1240.4
1240.15.................................  unchanged
1240.16.................................  1240.3
1240.17.................................  1240.28
1240.18.................................  1240.2
1240.19.................................  1240.27
1240.20.................................  1240.7
1240.21.................................  1240.19
1240.22.................................  1240.17
1240.30.................................  unchanged
1240.31.................................  unchanged
1240.32.................................  unchanged
1240.34.................................  unchanged
1240.35.................................  unchanged
1240.36.................................  unchanged
1240.37.................................  unchanged
1240.38.................................  unchanged
1240.39.................................  unchanged
1240.40.................................  unchanged
1240.41.................................  unchanged
1240.42.................................  unchanged
1240.43.................................  remove
1240.44.................................  1240.43
1240.50.................................  unchanged
1240.51.................................  unchanged
1240.52.................................  unchanged
1240.60.................................  unchanged
1240.61.................................  unchanged
1240.62.................................  unchanged
1240.63.................................  unchanged
1240.64.................................  unchanged
1240.65.................................  unchanged
1240.66.................................  unchanged
1240.67.................................  unchanged
 

    7. Revise newly designated Sec. 1240.2 to read as follows:


Sec. 1240.2  Board.

    Board or National Honey Board means Honey Board, the administrative 
body established pursuant to Sec. 1240.30.
    8. Revise newly designated Sec. 1240.3 to read as follows:


Sec. 1240.3  Committee.

    Committee means the National Honey Nominations Committee 
established pursuant to Sec. 1240.32.
    9. Add a new Sec. 1240.5 to read as follows:


Sec. 1240.5  Department.

    Department means the United States Department of Agriculture.
    10. Revise newly designated Sec. 1240.8 to read as follows:


Sec. 124.8  Handle.

    Handle means to process, package, sell, transport, purchase or in 
any other way place honey or honey products, or cause them to be 
placed, in the current of commerce. This term shall include selling 
unprocessed honey that will be consumed without further processing or 
packaging. This term shall not include the transportation of 
unprocessed honey by a producer to a handler or transportation by a 
commercial carrier of honey, whether processed or unprocessed, for the 
account of the handler or producer. This term shall not include the 
purchase of honey or a honey product by a consumer or other end-user of 
the honey or honey product.
    11. Revise newly designated Sec. 1240.10 to read as follows:


Sec. 1240.10  Honey.

    Honey means the nectar and saccharine exudations of plants which 
are gathered, modified, and stored in the comb by honey bees, including 
comb honey.
    12. Add a new Sec. 1240.11 to read as follows:


Sec. 1240.11  Honey production.

    Honey production means all beekeeping operations related to 
managing honey bee colonies to produce honey, harvesting honey from the 
colonies, extracting honey from the honeycombs, and preparing honey for 
sale and further processing.
    13. Revise newly designated Sec. 1240.13 to read as follows:


Sec. 1240.13  Importer.

    Importer means any person who imports honey or honey products into 
the United States as principal or as an agent, broker, or consignee for 
any person who produces honey or honey products 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 honey or honey products.
    14. Add a new Sec. 1240.14 to read as follows:


Sec. 1240.14  Industry information.

    Industry information means information or a program that will lead 
to the development of new domestic and foreign markets, new marketing 
strategies, or increased efficiency for the honey industry, or an 
activity to enhance the image of honey and honey products and of the 
honey industry.
    15. Add a new Sec. 1240.16 to read as follows:


Sec. 1240.16  National honey marketing cooperative.

    National honey marketing cooperative means a cooperative that 
markets its products in at least two of the following four regions of 
the United States, as determined by the Secretary:

[[Page 10613]]

    (a) The Atlantic Coast, including the District of Columbia and the 
Commonwealth of Puerto Rico;
    (b) The Mideast;
    (c) The Midwest; and
    (d) The Pacific, including the states of Alaska and Hawaii.
    16. Revise newly designated Sec. 1240.19 to read as follows:


Sec. 1240.19  Plans and projects.

    Plans and projects means those research, promotion, industry 
information, and consumer education plans, studies, or projects 
established pursuant to Secs. 1240.38 and 1240.39.
    17. Add a new Sec. 1240.23 to read as follows:


Sec. 1240.23  Qualified national organization representing handler 
interests.

    Qualified national organization representing handler interests 
means an organization that the Secretary certifies as being eligible to 
recommend nominations to the Committee for handler, handler-importer, 
alternate handler, and alternate handler-importer members of the Board 
under Sec. 1240.32.
    18. Add a new Sec. 1240.24 to read as follows:


Sec. 1240.24  Qualified national organization representing importer 
interests.

    Qualified national organization representing importer interests 
means an organization that the Secretary certifies as being eligible to 
recommend nominations to the Committee for importer, handler-importer, 
alternate importer, and alternate handler-importer members of the Board 
under Sec. 1240.32.
    19. Revise newly designated Sec. 1240.25 to read as follows:


Sec. 1240.25  Research.

    Research means any type of systematic study or investigation, 
including studies testing the effectiveness of market development and 
promotion efforts, and/or the evaluation of any study or investigation 
designed to advance the image, desirability, usage, marketability, 
production, or quality of honey or honey products. Such term shall also 
include studies on bees to advance the cost effectiveness, 
competitiveness, efficiency, pest and disease control, and other 
management aspects of beekeeping, honey production, and honey bees.
    20. Revise Sec. 1240.30 to read as follows:


Sec. 1240.30  Establishment and membership.

    A Honey Board (elsewwhere in this part called the Board) is 
established to administer the terms and provisions of this part. The 
Board shall consist of fourteen (14) members, each of whom shall have 
an alternate. Seven members and seven alternates shall be honey 
producers; two members and two alternates shall be honey handlers; two 
members and two alternates shall be honey importers; two members and 
two alternates shall be handlers of honey who are also importers; and 
one member and one alternate shall be an officer, director, or employee 
of a national honey marketing cooperative. The Board shall be appointed 
by the Secretary from nominations submitted by the Committee, pursuant 
to Sec. 1240.32. Notwithstanding any other provision of this part, at 
least 50 percent of the members of the Board shall be honey producers.
    21. Revise Sec. 1240.31 to read as follows:


Sec. 1240.31  Term of office.

    The members of the Board and their alternates shall serve for terms 
of three years, except that terms may be staggered periodically as 
recommended by the Board and as determined by the Secretary or as 
determined by the Secretary alone. No member or alternate shall serve 
more than two consecutive three-year terms. The term of office shall 
begin on April 1. Each Board member and alternate member shall continue 
to serve until the member or alternate's successor meets all 
qualifications and is appointed by the Secretary.
    22. Amend Sec. 1240.32 by:
    a. revising paragraphs (a)(1)and (a)(3), and (b)(1) and 
(b)(2)respectively;
    b. removing paragraph (b)(6); and redesignating paragraphs (b)(7) 
and (b)(8) as (b)(6) and (b)(7) respectively;
    c. revising newly designated paragraphs (b)(6) and (b)(7); and
    d. adding paragraphs (b)(8), (b)(9), (b)(10), (b)(11), (b)(12), and 
(b)(13) to read as follows:


Sec. 1240.32  Nominations.

* * * * *
    (a) * * *
    (1) There is established a National Honey Nominations Committee, 
which shall consist of not more than one member from each State, 
appointed by the Secretary from nominations submitted by each State 
association. Wherever there is more than one eligible association 
within a State, the Secretary shall designate the association most 
representative of the honey producers, handlers, and importers not 
exempt under Sec. 1240.42 (a) and (b) to make nominations for that 
State.
* * * * *
    (3) Members of the Committee shall serve for three-year terms, 
except that the term of appointments to the Committee may be staggered 
periodically, as determined by the Secretary. The term of office shall 
begin on July 1.
* * * * *
    (b) * * *
    (1) The Committee shall nominate the members and alternate members 
of the Board and submit such nominations promptly to the Secretary for 
approval.
    (2) The Committee shall meet annually to make such nominations, or 
at the determination of the Chairperson, the Committee may conduct its 
business by mail ballot in lieu of an annual meeting.
* * * * *
    (6) In nominating producer members to the Board, no producer-packer 
who, during any three of the preceding five years, purchased for resale 
more honey than the producer-packer produced shall be eligible for 
nomination or appointment to the Board as a producer or as an alternate 
to a producer.
    (7) In nominating importer members to the Board, no importer who, 
during any three of the preceding five years, did not receive at least 
75 percent of the gross income generated by the sale of honey and honey 
products from the sale of imported honey and honey products shall be 
eligible for nomination or appointment to the Board as an importer or 
as an alternate to such importer.
    (8) In nominating handler-importers to the Board, no handler who, 
during any three of the preceding five years, was not an importer of 
record of at least 40,000 pounds of honey shall be eligible for 
nomination or appointment to the Board as a handler-importer or as an 
alternate to a handler-importer.
    (9) Six months before the new Board term begins, the Committee 
shall submit to the Secretary nominations for positions on the Board. 
The number of nominations will directly correspond to the number of 
producer, handler, importer, handler-importer, and cooperative member 
positions due to become vacant. Selection of nominees by the Committee 
will be pursuant to the following:
    (i) Nominations for producer members and alternate producer members 
will be from one of the seven regions established by the Secretary in 
which a vacancy will occur;
    (ii) Nominations for handler members and alternate handler members 
will be based on recommendations made by qualified national 
organizations representing handler interests, or, if the Secretary 
determines that there is not a qualified national organization 
representing handler interests, by

[[Page 10614]]

individual handlers who have paid assessments to the Board on honey or 
honey products handled;
    (iii) Nominations for importer members and alternate importer 
members will be based on recommendations made by qualified national 
organizations representing importer interests, or, if the Secretary 
determines that there is not a qualified national organization 
representing importer interests, by individual importers who have paid 
assessments to the Board on imported honey or honey products;
    (iv) Nominations for handler members and alternate handler members 
who are also importers (i.e., handler-importers) will be based on 
recommendations made by qualified national organizations representing 
importer interests or qualified national organizations representing 
handler interests: Provided, That, if the Secretary determines that 
there is not a qualified national organization representing handler or 
importer interests, then the Committee shall nominate members and 
alternate members from individual handlers or importers who have paid 
assessments to the Board on imported honey or honey products; and
    (v) Nominations for a member and alternate member who are officers, 
directors, or employees of national honey marketing cooperatives will 
be based on recommendations made by qualified national honey marketing 
cooperatives.
    (10) Qualified national organization representing handler 
interests. To be certified by the Secretary as a qualified national 
organization representing handler interests, an association or 
organization must meet the following criteria, as evidenced in a 
factual report submitted by the association or organization to the 
Secretary:
    (i) The organization's membership is comprised primarily of honey 
handlers;
    (ii) The organization represents a substantial number of handlers 
who handle a substantial volume of honey in at least 20 states;
    (iii) The organization has a history of stability and permanency;
    (iv) A primary or overriding purpose of the organization is to 
promote the economic welfare of honey handlers;
    (v) A portion of the operating funds of the organization are 
derived from handlers; and
    (vi) The organization demonstrates the ability and willingness to 
further the purposes of the Act.
    (11) Qualified national organization representing importer 
interests. To be certified as a qualified national organization 
representing importer interests, an association or organization must 
meet the following criteria, as evidenced in a factual report submitted 
by the association or organization to the Secretary:
    (i) The organization's total paid membership is comprised of a 
significant number of importers or the organization's total paid 
membership represents at least a majority of the volume of honey 
imported into the United States;
    (ii) The organization has a history of stability and permanency;
    (iii) A primary or overriding purpose of the organization is to 
promote the economic welfare of honey importers;
    (iv) Geographic territory is covered by the active membership of 
the organization;
    (v) A portion of the operating funds of the organization are 
derived from importers; and
    (vi) The organization demonstrates the ability and willingness to 
further the purposes of the Act.
    (12) As a condition of certification by the Secretary as a 
qualified national organization representing handler or importer 
interests, an organization shall agree to:
    (i) Notify nonmembers of the organization of Board nomination 
opportunities for which the organization is certified to make 
recommendations to the Committee; and
    (ii) Consider the nomination of nonmembers when making the 
nominations of the organization to the Committee, if nonmembers 
indicate an interest in serving on the Board.
    (13) A certification determination by the Secretary of a qualified 
organization representing handler or importer interests shall be final.
    23. Add a new Sec. 1240.33 to read as follows:


Sec. 1240.33.  Board reconstitution.

    (a) Every five years, the Board shall review the geographic 
distribution of the quantities of domestically produced honey assessed 
under this subpart and the changes in the annual average percentage of 
assessments owed by importers under this subpart relative to 
assessments owed by producers and handlers of domestic honey, including 
whether any changes in assessments owed on imported quantities are owed 
by importers or handler-importers. The Board shall conduct the initial 
review required by this paragraph prior to the initial continuance 
referendum conducted pursuant to the Act.
    (b)(1) If warranted as a result of this review, the Board shall 
recommend for the Secretary's approval:
    (i) Changes in the regional representation of honey producers;
    (ii) The reallocation of handler-importer member positions as 
handler member positions;
    (iii) The reallocation of importer member positions as handler-
importer positions;
    (iv) The reallocation of handler-importer member positions as 
importer member positions; and/or
    (v) The addition of Board members.
    (2) If such allocations are necessary to reflect changes in the 
proportion of domestic and imported honey assessed under this subpart 
or the source of assessments on imported honey or honey products, the 
Board may not recommend a reallocation or addition of members pursuant 
to paragraphs (b)(1), (ii), (iii), (iv), and (v) of this section 
unless:
    (i) The proportion of assessments owed by handler-importers 
compared with the proportion of assessments owed by importers changed 
by more than 6 percent from the base period proportion determined in 
accordance with paragraph (d) of this section; or
    (ii) The proportion of assessments owed by importers compared with 
the proportion of assessments owed on domestic honey by producers and 
handlers changed by more than 6 percent from the base period proportion 
determined in accordance with paragraph (d).
    (c) Except as provided in paragraph (d), recommendations made under 
paragraph (b) of this section shall be based on:
    (1) The 5-year average annual assessments, excluding the 2 years 
containing the highest and lowest disparity between the proportion of 
assessments owed from imported and domestic honey or honey products, 
determined pursuant to the review that is conducted under paragraph (a) 
of this section; and
    (2) Whether any change in the average annual assessments is from 
the assessments owed by importers or the assessments owed by handler-
importers.
    (d) The base period proportions for determining the magnitude of 
change under paragraph (c) of this section shall be the proportions 
determined during the prior review conducted under this section. In the 
case of the initial review, the base period proportions shall be the 
proportions determined by the Board for fiscal year 1996.
    (e) Notwithstanding any other provision of this section, at least 
50 percent of the members of the Board shall be honey producers.
    (f) Any such reallocation or addition of members shall be made at 
least six

[[Page 10615]]

months prior to the date on which terms of office of the Board begin 
each year and shall become effective at least 30 days prior to such 
date.
    24. Amend Sec. 1240.34 by revising paragraph (a) to read as 
follows:


Sec. 1240.34  Vacancies.

    (a) In the event any member of the Board ceases to be a member of 
the category of members from which the member was appointed to the 
Board, such position shall automatically become vacant: Provided, That 
if as a result of Board reconstitution pursuant to Sec. 1240.33, a 
producer member or alternate is no longer from the region from which 
such person was appointed, or if a member, whose position is based on 
their status as a handler, importer, or handler-importer is subject to 
reallocation by the Board, the affected member and/or alternate may 
serve out the term for which such person was appointed.
* * * * *
    25. Amend Sec. 1240.35 by revising paragraph (a) to read as 
follows:


Sec. 1240.35  Procedure.

    (a) Eight members, including alternates acting in place of members 
of the Board, shall constitute a quorum: Provided, That such alternates 
shall serve only whenever the member is absent from a meeting or is 
disqualified. Any action of the Board shall require the concurring 
votes of a majority of those present and voting. At assembled meetings, 
all votes shall be cast in person.
* * * * *
    26. Revise Sec. 1240.36 to read as follows:


Sec. 1240.36  Attendance.

    Members of the Board and the members of any special panels shall be 
reimbursed for reasonable out-of-pocket expenses incurred when 
performing Board business. The Board shall have the authority to 
request the attendance of alternates at any or all meetings, 
notwithstanding the expected or actual presence of the respective 
members.
    27. Amend Sec. 1240.38 by revising paragraphs (c), (d), (e), (g), 
(l), and (m) to read as follows:


Sec. 1240.38  Duties.

* * * * *
    (c) To prepare and submit to the Secretary for approval 60 days in 
advance of the beginning of a fiscal period, a budget of its 
anticipated expenses in the administration of this part including the 
probable costs of all programs and plans and to recommend a rate of 
assessment with respect thereto;
    (d) To investigate violations of this part and report the results 
of such investigations to the Secretary for appropriate action to 
enforce the provisions of this part;
    (e) To develop programs and plans and to enter into contracts or 
agreements with the approval of the Secretary for the development and 
carrying out of programs and plans of research, promotion, advertising, 
consumer education, or industry information and the payment of the 
costs thereof with funds collected pursuant to this part;
* * * * *
    (g) To periodically prepare and make public and to make available 
to producers, handlers, producer-packers, and importers, reports of its 
activities carried out and, at least once each fiscal period, to make 
public an accounting of funds received and expended;
* * * * *
    (l) To appoint and convene, from time to time, working committees 
which may include producers, handlers, producer-packers, importers, 
exporters, members of wholesale or retail outlets for honey, or other 
members of the public to assist in the development of research, 
promotion, advertising, consumer education, and industry information 
programs for honey; and
    (m) To develop and recommend such rules and regulations to the 
Secretary for approval as may be necessary for the development and 
execution of plans or activities to effectuate the declared purpose of 
the Act.
    28. Revise the undesignated heading preceding Sec. 1240.39 to read 
as follows:

Research, Promotion, Consumer Education, and Industry Information

    29. Revise Sec. 1240.39 to read as follows:


Sec. 1240.39  Research, promotion, consumer education, and industry 
information.

    (a) Scope of activities. The Board shall develop and submit to the 
Secretary for approval any plans, programs, or projects authorized in 
this section. Such plans, programs, and projects shall provide for:
    (1) The establishment, issuance, effectuation, and administration 
of appropriate plans, programs, or projects for consumer education, 
industry information, advertising, and promotion of honey and honey 
products designed to strengthen the position of the honey industry in 
the marketplace and to maintain, develop, and expand markets for honey 
and honey products;
    (2) The establishment and conduct of marketing research and 
development plans to the end that the acquisition of knowledge 
pertaining to honey and honey products or their consumption and use may 
be encouraged or expanded, or to the end that the marketing and 
utilization of honey and honey products may be encouraged, expanded, 
improved, or made more efficient: Provided, That quality control, grade 
standards, supply management programs, or other programs that would 
otherwise limit the right of the individual honey producer to produce 
honey shall not be conducted under, or as a part of, this subpart;
    (3) The development and expansion of honey and honey product sales 
in foreign markets;
    (4) A prohibition on advertising or other promotion programs that 
make any false or unwarranted claims on behalf of honey or its products 
or false or unwarranted statements with respect to the attributes or 
use of any competing product;
    (5) The sponsorship of research designed to advance the cost-
effectiveness, competitiveness, efficiency, pest and disease control, 
and other management aspects of beekeeping, honey production, and honey 
bees;
    (6) The conduct of activities which may lead to the development of 
new markets or marketing strategies for honey or honey products. In 
addition, the Board may conduct activities designed to increase the 
efficiency of the honey industry or activities to enhance the image of 
honey and honey products and the honey industry;
    (7) Activities and procedures for monitoring the purity of honey 
and honey products being sold for domestic consumption, or for export 
from the United States, including programs or activities for 
identification of adulterated honey;
    (8) Periodic evaluation by the Board of each plan, program, or 
project authorized under this part to insure that each plan, program, 
or project contributes to an effective and coordinated program of 
research, promotion, consumer education, and industry information and 
submit such evaluation to the Secretary. If the Board or the Secretary 
finds that a plan, program, or project does not further the purposes of 
the Act, then the Board shall terminate such plan, program, or project; 
and
    (9) The Board to enter into contracts or make agreements for the 
development and carrying out of research, promotion, consumer 
education, and industry information programs, and pay for the

[[Page 10616]]

costs of such contracts or agreements with funds received by the Board.
    (b) Independent evaluation. In addition to any evaluation that may 
be carried out pursuant to paragraph (a)(8) of this section, the Board 
shall, not less often than every five years, authorize and fund, from 
funds otherwise available to the Board, an independent evaluation of 
the effectiveness of this subpart and other plans, programs, and 
projects conducted by the Board pursuant to the Act. The Board shall 
submit to the Secretary, and make available to the public, the results 
of each periodic independent evaluation conducted under paragraph (b) 
of this section.
    30. Amend Sec. 1240.40 by revising paragraphs (a) and (b), 
redesignating paragraph (c) as paragraph (d), and adding a new 
paragraph (c) to read as follows:


Sec. 1240.40  Budget and expenses.

    (a) Sixty days in advance of the beginning of each fiscal period, 
or as may be necessary thereafter, the Board shall prepare and 
recommend a budget on a fiscal period basis of its anticipated expenses 
and disbursements in the administration of this subpart, including 
expenses of the Committee and probable costs of research, promotion, 
consumer education, and industry information.
    (b) The Board is authorized to incur expenses for: research, 
promotion, consumer education, and industry information; such other 
expenses for the administration, maintenance, and functioning of the 
Board and the Committee as may be authorized by the Secretary; any 
operating reserve established pursuant to Sec. 1240.43; and those 
administrative costs incurred by the Department specified in paragraph 
(d) of this section. The funds to cover such expenses shall be paid 
from assessments collected pursuant to Sec. 1240.41, donations from any 
person not subject to assessments under this subpart, and other funds 
available to the Board including those collected pursuant to 
Sec. 1240.67 and subject to the limitations contained in that section.
    (c) The Board shall reserve at least 8 percent of all assessments 
collected during a year for expenditure on approved research projects 
designed to advance the cost-effectiveness, competitiveness, 
efficiency, pest and disease control, and other management aspects of 
beekeeping, honey production, and honey bees. If any of the funds 
reserved under this paragraph are not allocated to approved research 
projects in a year, the remaining reserved funds shall be carried 
forward for allocation and expenditure in subsequent years to be used 
on projects described in this paragraph.
* * * * *
    31. Revise Sec. 1240.41 to read as follows:


Sec. 1240.41  Assessments.

    (a) Domestic honey and honey products. (1) The assessment rate to 
producers and producer-packers on honey produced by them in the U.S. 
and handled shall be $0.0075 per pound of honey produced.
    (2) The assessment rate to handlers, including producer-packers in 
their capacity as handlers, on U.S. produced honey or honey products 
shall be $0.0075 per pound of honey or honey products handled.
    (b) Imported honey and honey products. The assessment rate on honey 
or honey products imported into the United States shall be $0.015 per 
pound of honey or honey products imported, which equals the combined 
rate at which domestic honey produced in the U.S. and handled is 
assessed. Of this $0.015 total, $0.0075 per pound represents the 
assessment due from the importer and $0.0075 represents the assessment 
due from the handler and paid by the importer on behalf of the handler. 
The importer of imported honey and honey products shall pay the 
assessment of $0.015 per pound to the Board through the U.S. Customs 
Service at the time of entry of such honey and honey products into the 
United States.
    (c) Except as provided in Sec. 1240.42 and in paragraphs (b), (d), 
and (k) of this section, the first handler shall be responsible for the 
collection of such assessment from the producer and from the handler 
and payment thereof to the Board. The first handler shall maintain 
separate records for each producer's honey handled, including honey 
produced by said handler.
    (d) Producer-packers shall pay to the Board the assessment on all 
honey or honey products for which they act as first handler, in 
addition to the assessment owed on honey they produce.
    (e) Should a first handler fail to collect an assessment from a 
producer, the producer shall be responsible for the payment of the 
assessment to the Board.
    (f) Assessments shall be paid to the Board at such time and in such 
manner as the Board, with the Secretary's approval, directs pursuant to 
this part. Such regulations may provide for different handler, 
importer, producer, or producer-packer payment schedules so as to 
recognize differences in marketing or purchasing practices and 
procedures.
    (g) There shall be a late-payment charge imposed on any handler, 
importer, producer, or producer-packer who fails to remit to the Board 
the total amount for which any such handler, importer, producer, or 
producer-packer is liable on or before the payment due date established 
by the Board under paragraph (f) of this section. The amount of the 
late-payment charge shall be set by the Board subject to approval by 
the Secretary.
    (h) There shall also be imposed on any handler, importer, producer, 
or producer-packer subject to a late-payment charge, an additional 
charge in the form of interest on the outstanding portion of any amount 
for which the handler, importer, producer, or producer-packer is 
liable. The rate of interest shall be prescribed in regulations issued 
by the Secretary.
    (i) Persons failing to remit total assessments due in a timely 
manner may also be subject to actions under federal debt collection 
procedures.
    (j) Should the U.S. Customs Service fail to collect an assessment 
from an importer, the importer shall be responsible for the payment of 
the assessment to the Board.
    (k) Whenever a loan is made on honey under a USDA loan program, the 
Secretary shall provide that the assessment be deducted from the 
proceeds of the loan or the loan deficiency payment, if applicable, and 
that the amount of such assessment shall be forwarded to the Board, 
except that the assessment shall not be deducted by the Secretary in 
the case of a honey marketing cooperative approved by the USDA 
Commodity Credit Corporation that deducts the assessment from its 
member producers. As soon as practicable after the assessment is 
deducted from the loan funds or loan deficiency payment, the Secretary 
shall provide the producer with proof of payment of the assessment.
    (l) The Board is authorized to accept advance payment of 
assessments by handlers, importers, or producer-packers that shall be 
credited toward any amount for which the handlers, importers or 
producer-packers may become liable. The Board is not obligated to pay 
interest on any advance payment.
    (m) The Board is authorized to borrow money for the payment of 
expenses subject to the same fiscal, budget, and audit controls as 
other funds of the Board.
    32. Amend Sec. 1240.42 by revising paragraph (a); removing 
paragraphs (c) and (f); redesignating paragraphs (d) and (e) as (c) and 
(d), respectively; and revising newly designated paragraphs (c) and (d) 
to read as follows:

[[Page 10617]]

Sec. 1240.42  Exemption from assessment.

    (a) A producer who produces less than 6,000 pounds of honey per 
year, a producer-packer who produces and handles less than 6,000 pounds 
of honey or honey products per year, an importer who imports less than 
6,000 pounds of honey or honey products per year, or a handler who 
handles less than 6,000 pounds of honey or honey products per year 
shall be exempt from assessment provided such honey or honey products 
are distributed directly through local retail outlets such as roadside 
stands, farmers markets, groceries, or other outlets as otherwise 
determined by the Secretary during such year.
* * * * *
    (c) If, after a person has been exempt from paying assessments for 
any year under this section, and such person no longer meets the 
requirements of this section for an exemption, such person shall file a 
report with the Board in the form and manner prescribed by the Board 
and pay an assessment on or before March 15 of the subsequent year on 
all honey or honey products produced, handled, or imported by such 
person during the year for which the person claimed the exemption.
    (d) The Board may recommend to the Secretary that honey exported 
from the United States be exempted from the provisions of this subpart 
and include procedures for the refund of assessments on such honey and 
such safeguards as may be necessary to prevent improper use of this 
exemption.
    33. Add a new Sec. 1240.44 to read as follows:


Sec. 1240.44  Inspection and monitoring system.

    (a) The Board is authorized to develop and recommend to the 
Secretary, and the Secretary shall have the authority to approve or 
disapprove, a system or program for monitoring the purity of honey and 
honey products being sold for domestic consumption in, or for export 
from, the United States. Such system or program may include inspection 
and testing procedures to monitor the purity of honey or to detect 
adulterated honey.
    (b) The Board may recommend and the Secretary may issue rules and 
regulations as are necessary to implement such system or program as 
authorized by the Act.
    34. Add a new Sec. 1240.45 to read as follows:


Sec. 1240.45  Voluntary quality assurance program.

    (a) The Board is authorized to develop and carry out a voluntary 
quality assurance program concerning purity standards for honey and 
honey products. The Secretary shall have the authority to approve or 
disapprove such program.
    (b) The program may include the following components:
    (1) The establishment of an official Board seal of approval to be 
displayed on honey and honey products which meet such standards of 
purity as are established under the program;
    (2) Actions to encourage producers, handlers, and importers to 
participate in the program;
    (3) Actions to encourage consumers to purchase honey and honey 
products bearing the official seal of approval; and
    (4) Periodic inspections by the Secretary, or other parties 
approved by the Secretary, of honey and honey products of persons who 
participate in the program.
    (c) To be eligible to display the official seal of approval under 
paragraph (b)(1) of this section on a honey or honey product, a 
producer, handler, or importer shall participate in the voluntary 
program described in paragraph (a) of this section.
    (d) Any program and related rules and regulations for establishing 
and carrying out a voluntary quality assurance program may be in 
addition to or independent of any program, rule, or regulation 
involving an inspection and monitoring system under Sec. 1240.44.
    35. Add a new Sec. 1240.46 to read as follows:


Sec. 1240.46  Minimum purity standards.

    The Board is authorized to develop and recommend to the Secretary 
and the Secretary shall have the authority to approve or disapprove the 
establishment of minimum purity standards and related rules and 
regulations for honey and honey products designed to maintain a 
positive and wholesome marketing image for honey and honey products.
    36. Revise Sec. 1240.50 to read as follows:


Sec. 1240.50  Reports.

    Each handler, importer, producer, or producer-packer subject to 
this part shall be required to report to the employees of the Board, at 
such time and in such manner as it may prescribe, such information as 
may be necessary for the Board to perform its duties. Such reports 
shall include, but shall not be limited to the following:
    (a) For producers or producer-packers: the quantity of honey 
produced and the total number of bee colonies maintained.
    (b) For handlers or producer-packers: the total quantity of honey 
acquired during the reporting period; the total quantity of honey and 
honey products handled during such period; the amount of honey acquired 
from each producer, giving the name and address of each producer; the 
assessments collected during the reporting period; the quantity of 
honey processed for sale from a producer-packer's own production; and a 
record of each transaction for honey on which assessments had already 
been paid, including a statement from the seller that the assessment 
had been paid.
    (c) For importers: the total quantity of honey and honey products 
imported during the reporting period and a record of each importation 
of honey or honey products during such period, giving the quantity, 
date, country of origin, and port of entry.
    (d) For persons who have an exemption from assessments under 
Sec. 1240.42 (a) and (b), such information as deemed necessary by the 
Board, and approved by the Secretary, concerning the exemption 
including disposition of exempted honey.
    37. Revise Sec. 1240.51 to read as follows:


Sec. 1240.51  Books and records.

    Each handler, importer, producer, producer-packer, or any person 
who is exempt from assessments shall maintain and during normal 
business hours make available for inspection by employees or agents of 
the Board or the Secretary, such books and records as are necessary to 
carry out the provisions of this part, including such records as are 
necessary to verify any required reports. A member or alternate member 
of the Board is prohibited from conducting such inspections. Such books 
and records shall be maintained for two years beyond the first period 
of their applicability.
    38. Revise Sec. 1240.52 to read as follows:


Sec. 1240.52  Confidential treatment.

    All information obtained from the books, records, or reports 
required to be maintained under Secs. 1240.50 and 1240.51 shall be kept 
confidential by all employees and agents of the Board and all officers 
and employees of the Department and shall not be disclosed to the 
public. Only such information as the Secretary deems relevant shall be 
disclosed to the public and then only in a suit or administrative 
hearing brought at the direction, or upon the request, of the 
Secretary, or to which the Secretary or any officer of the United 
States is a party, and involving this subpart: Except that nothing in 
this subpart shall be deemed to prohibit:

[[Page 10618]]

    (a) The issuance of general statements based upon the reports of a 
number of handlers or importers subject to this subpart, if such 
statements do not identify the information furnished by any person;
    (b) The publication by direction of the Secretary, of the name of 
any person convicted of violating this subpart, together with a 
statement of the particular provisions of this subpart violated by such 
person.
    39. Revise Sec. 1240.61 to read as follows:


Sec. 1240.61  Right of the Secretary.

    All fiscal matters, programs or plans, rules or regulations, 
reports, or other substantive actions proposed and prepared by the 
Board shall be submitted to the Secretary for approval.
    40. Amend Sec. 1240.62 by:
    a. Revising paragraph (b);
    b. removing paragraph (c) and redesignating paragraph (d) as (c); 
and
    c. revising newly designated paragraph (c) to read as follows:


Sec. 1240.62  Suspension or termination.

* * * * *
    (b) Except as otherwise provided in paragraph (c) of this section, 
five (5) years from the date the Secretary issues an order authorizing 
the collection of assessments on honey under provisions of this 
subpart, and every five (5) years thereafter, the Secretary shall 
conduct a referendum to determine if honey producers, handlers, 
producer-packers, and importers subject to assessment favor the 
termination or suspension of this subpart.
    (c) The Secretary shall hold a referendum on the request of the 
Board, or when petitioned by 10 percent or more of the honey producers, 
handlers, producer-packers, and importers subject to assessment under 
this subpart to determine if the honey producers, handlers, producer-
packers, and importers favor termination or suspension of this subpart. 
A referendum under this paragraph may not be held more than once every 
two (2) years. If the Secretary determines, through a referendum 
conducted pursuant to this paragraph, that continuation of this subpart 
is approved, any referendum otherwise required to be conducted under 
paragraph (b) of this section shall not be held less than five (5) 
years after the date the referendum was conducted under this paragraph.
     41. Revise the heading for Subpart--General Rules and Regulations 
to read as follows:

Subpart B--General Rules and Regulations

    42. Revise the heading for Subpart--Procedure for the Conduct of 
Referenda in Connection With the Honey Research, Promotion, and 
Consumer Information Order to read as follows:

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

    Dated: February 14, 2000.
Kathleen A. Merrigan,
Administrator, Agricultural Marketing Service.
[FR Doc. 00-4190 Filed 2-25-00; 8:45 am]
BILLING CODE 3410-02-P