[Federal Register Volume 66, Number 84 (Tuesday, May 1, 2001)]
[Rules and Regulations]
[Pages 21824-21834]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-10602]



[[Page 21823]]

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Part II





Department of Agriculture





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Agricultural Marketing Service



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7 CFR Part 1240



Honey Research, Promotion, and Consumer Information Order; Amendments; 
Final Rule

  Federal Register / Vol. 66, No. 84 / Tuesday, May 1, 2001 / Rules and 
Regulations  

[[Page 21824]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1240

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


Honey Research, Promotion, and Consumer Information Order; 
Amendments

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule amends the honey research and promotion program by: 
changing the size and composition of the National Honey Board (Board); 
changing nomination and eligibility requirements for handlers, 
importers, and representatives of cooperatives on the Board; changing 
the term of office for members of the Board and the National Honey 
Nominations Committee; authorizing the Board to develop a voluntary 
quality assurance program; removing the requirement for small companies 
to file for an exemption under the program in order to avoid paying 
assessments; requiring producers to submit reports to the Board and to 
maintain records; and adding statutory requirements for continuance 
referenda and evaluations. Amendments to the Honey Research, Promotion, 
and Consumer Information Act (Act) require that these changes be made 
to the program. The Act authorized additional changes, but they failed 
to receive the approval of the voters in a referendum held in September 
2000.

EFFECTIVE DATE: May 31, 2001.

FOR FURTHER INFORMATION CONTACT: Kathie M. Birdsell, 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) 720-9917 (toll free); facsimile (202) 205-
2800.

SUPPLEMENTARY INFORMATION: The honey research and promotion program 
will be changed by amending the Honey Research, Promotion, and Consumer 
Information Order (Order) (7 CFR part 1240). The changes to the Order 
are being made as a result of changes made by Congress to the Honey 
Research, Promotion, and Consumer Information Act (Act) (Pub. L. 98-
690; enacted October 30, 1984; 7 U.S.C. 4601-4613, as amended) on June 
23, 1998 (Pub. L. 105-185). The honey program operates under the Act.
    Prior documents. A proposed rule on amending the Order was 
published in the Federal Register on February 28, 2000 (65 FR 10600) 
with a 60-day comment period. The comment period ended on April 28, 
2000. A second proposed rule and a referendum order were published in 
the Federal Register on August 7, 2000 (65 FR 48324).
    In addition, USDA published a proposed rule on the referendum 
procedures which were used in the referendum on the votable amendments 
in the Federal Register on May 15, 2000 (65 FR 30924) with a 30-day 
comment period. The final rule on the referendum procedures was 
published in the August 7, 2000, issue of the Federal Register (65 FR 
48318).

Question and Answer Overview

Why Is The Honey Program Being Changed?

    The honey program is being changed because the Act which authorizes 
the program was amended in 1998. The amendments to the Act require the 
same changes to be made to the program.

What Are the Major Changes That Will be Made to the Honey Program?

    The major changes affect: (1) The composition and size of the 
National Honey Board (Board); (2) nomination and eligibility 
requirements for handlers, importers, and representatives of 
cooperatives on the Board; (3) the term of office for members of the 
Board and the National Honey Nominations Committee (Committee); (4) 
authorization for the voluntary quality assurance program; (5) 
exemption, reporting, and recordkeeping procedures; and (6) 
requirements for referenda and evaluations.

How Would the Size and Composition of the Board Change?

    The Board is currently composed of seven producers, two importers 
(or one importer and one exporter), two handlers, one representative of 
a cooperative, one public member, and their alternates.
    This rule will change the importer-exporter position on the Board 
to another importer position to provide more importer input into Board 
deliberations. In addition, the public member position will be 
eliminated, and at least 50 percent of the Board members will have to 
be producers. In addition, the Board will be required to periodically 
review the producer regions and number of importer positions on the 
Board and recommend any appropriate changes to the U.S. Department of 
Agriculture (USDA or the Department).

How Will Nomination and Eligibility Procedures Change?

    Currently, handlers, importers, and others submit the names of 
handlers and importers to the Committee for consideration as the 
official nominees to serve on the Board as handler members and 
alternates. This rule will allow handler and importer organizations to 
be certified to submit the names of handlers and importers to the 
Committee as well. In addition, national honey marketing cooperatives 
will be allowed to submit names to the Committee for consideration as 
the official nominees for the cooperative representative and alternate 
on the Board.
    This rule also adds a new eligibility requirement for importer 
members and alternates. In order to be eligible to serve in these 
positions, importers must receive at least 75 percent of their gross 
honey business income from the sale of imported honey and honey 
products during any three of the preceding five years. Previously, any 
person who imported any amount of honey was eligible to serve on the 
Board as an importer member or alternate.

What Are the Changes in the Terms of Office for Committee and Board 
Members?

    This rule will change the beginning of the term of office for 
Committee members from January 1 to July 1. This will facilitate more 
timely nomination and appointment of new members.
    In addition, the amended Act authorized the Secretary to stagger 
the terms of office of Board members periodically to help ensure 
continuity of Board membership. For example, currently the term of 
office for the producer members and alternates from four of the seven 
producer regions end on December 31, 2001. This means that over 50 
percent of the producer members on the Board could change in one year. 
This is not desirable. Therefore, the Secretary will work with the 
Board and the Committee to determine which of the regional producer 
positions should have a different term of office.

What Is a Voluntary Quality Assurance Program?

    After this rule becomes effective, the Board will be allowed to 
develop rules and regulations for a voluntary quality assurance program 
for review by USDA. Under this type of program, the Board may develop 
an official seal of approval to be used only by producers, handlers, 
and importers who participate in the program. In order to participate 
in the

[[Page 21825]]

program, the products of the industry members would be required to meet 
certain purity standards. The goal of this type of program is to 
increase demand for honey and honey products by increasing consumer 
confidence in the honey and honey products on the market.

How Would Exemption and Recordkeeping Requirements Change?

    Producers, producer-packers, and importers who sell (1) less than 
6,000 pounds of honey annually and (2) the honey is sold through local 
retail outlets, such as roadside stands, farmers markets, or groceries 
will no longer have to request an exemption from the Board in order to 
avoid paying assessments under the program. In addition, producers 
would be required to keep records for a period of two years just like 
producer-packers, handlers, and importers. The Board and the Department 
need access to certain industry records in order to enforce the 
assessment and reporting provisions of the program.

What Are the Statutory Requirements on Continuance Referenda and 
Evaluations?

    The Act requires the Secretary of Agriculture (Secretary) to 
conduct a continuance referendum on the honey program at least once 
every five years. When the Act was amended in 1998, it specified that 
continuance referenda be held no more than once every two years. 
Therefore this rule adds that limitation on the frequency of 
continuance referenda to the Order.
    In 1996 [7 U.S.C. 7401], Congress required all national research 
and promotion boards to conduct independent evaluations of their 
programs at least once every five years. This rule will simply include 
that requirement in the Order.

What Happened to the Other Proposed Amendments?

    The other proposed amendments (votable amendments) did not receive 
enough support from the industry in the September 2000 referendum. 
Therefore, they are not being implemented at this time. However, the 
amended Act authorizes the Secretary to conduct rulemaking and a 
referendum to implement one or more of the votable amendments at a 
later time, if recommended by the Board or the honey industry.
    The votable amendments would have: (1) Required the Board to 
reserve 8 percent of its funds annually for beekeeping and production 
research; (2) authorized the Board to develop recommendations for 
purity standards and an inspection and monitoring system to enhance the 
image of honey and honey products; (3) added two handler-importer 
members and alternates to the Board; (4) reduced the producer 
assessment from 1 cent per pound to 0.75 cents per pound; (5) added a 
new assessment on handlers of 0.75 cents per pound on the domestic 
honey that they handle; and (6) increased the importer assessment from 
1 cent per pound to 1.5 cents per pound on imported honey and honey 
products.

Executive Orders 12866 and 12988

    This rule has been determined to be ``not significant'' for 
purposes of Executive Order (E.O.) 12866 and, therefore, has not been 
reviewed by the Office of Management and Budget.
    In addition, this rule has been reviewed under E.O. 12988, Civil 
Justice Reform. The rule is not intended to have retroactive effect and 
would not preempt any State or local laws, regulations, or policies, 
unless they present an irreconcilable conflict with this rule.
    The Act allows producers, producer-packers, importers, and handlers 
(if covered by the program) to file a written petition with the 
Secretary of Agriculture (Secretary) if they believe that the Order, 
any provision of the Order, or any obligation imposed in connection 
with the Order is not in accordance with law. In the petition, the 
person may request a modification of the Order or an exemption from the 
Order. Petitions must 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. 
Afterwards, the Secretary will issue a ruling on the petition.
    If the petitioner disagrees with the Secretary's ruling, the 
petitioner may file, within 20 days, an appeal in the U.S. District 
Court for the district where the petitioner resides or conducts 
business.

Regulatory Flexibility Act and Paperwork Reduction Act

    Regulatory Flexibility Analysis. In accordance with the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601 et seq.), the Agricultural 
Marketing Service (AMS) has examined the impact of changes to the honey 
program on small honey producers, producer-packers, and importers. The 
final regulatory flexibility analysis was included in the proposed rule 
that was published in the Federal Register on August 7, 2000.
    However, that analysis included the impact of both the votable and 
non-votable amendments to the Order. This rule will implement only the 
non-votable amendments because the votable amendments were not approved 
in the September 2000 referendum. Accordingly, the applicable analysis 
is as follows.
    The Small Business Administration (SBA) (13 CFR 121.201) defines 
small agricultural producers as those having annual receipts of no more 
than $500,000. Small producer-packers, handlers, and importers fit into 
the SBA definition for small agricultural service firms with annual 
receipts of less than $5 million.
    According to National Honey Board (Board) records, 2,885 producers 
paid $1,864,590 in assessments in 1999. That represents $646 in 
assessments on 64,600 pounds of honey per producer. At the average 
wholesale price for honey in 1999 of 65.5 cents per pound, the average 
producer had $42,313 in receipts, well below the $500,000 threshold.
    Similarly, Board records indicate that 348 importers paid 
$1,743,021 in assessments in 1999. That represents $5,008 in 
assessments on 500,800 pounds of honey per importer. At the average 
wholesale price for honey of 65.5 cents per pound, the average importer 
had $328,024 in receipts, well below the $5 million threshold.
    Therefore, a majority of the producers, producer-packers, handlers, 
and importers who would be affected by the changes to the Order may be 
considered small entities. In addition, an estimated three handler-
importer organizations whose membership includes these entities would 
be affected by the changes to the Order.
    The changes in the nomination procedures for Board members would 
benefit handlers, importers, and marketing cooperatives by giving them 
increased input on the individuals who are nominated by the National 
Honey Nominations Committee (Committee). The new eligibility 
requirements for persons serving as importer members and alternates on 
the Board and the elimination of the authority for an exporter to serve 
in an importer position on the Board will also benefit importers by 
providing them more representation on the Board and, thus, more input 
into Board decisions on how their assessment dollars are spent.
    The change in the term of office for Committee members will greatly 
facilitate the ability of state beekeeper associations to submit 
nominees to

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serve on the Committee to USDA in a timely manner and help assure that 
the Secretary is able to appoint new members to the Committee prior to 
the beginning of the term of office. The new requirement that 50 
percent of the members of the Board must be producers reflects the 
amended provisions of the Act.
    In addition, producers, handlers, and importers would benefit from 
the changes on reconstituting the Board. Reconstitution of Board 
members will be based on changes in the geographical distribution of 
honey production in the United States and on changes in the proportion 
of assessments paid on domestic honey and on imported honey and honey 
products, and this should provide more equitable treatment and fairness 
of representation on the Board for producers, handlers, and importers 
alike.
    All segments of the honey industry could benefit from the 
implementation of a quality assurance program and a related inspection 
and monitoring system because they have the potential to increase 
wholesale and retail confidence in the quality of the honey that is 
marketed. This means that consumers, food service operators, and 
manufacturers would be likely to have more confidence in the quality of 
honey and honey products available on the market. This, in turn, is 
expected to generate increased sales of honey in the United States and 
abroad, which would benefit producers, handlers, and importers alike. 
Handlers would also have confidence in the purity of the honey they are 
buying from producers or importers.
    Adding reporting and recordkeeping requirements for producers will 
assist the Board in periodically collecting production information to 
help identify industry trends for use in program planning and 
evaluation. This information will help guide the Board in its decision 
making as well as be provided to industry members for their use in 
making individual marketing decisions. The amendment will also assist 
the Board in enforcing the assessment and reporting provisions of the 
Order which is expected to help ensure that everyone who is subject to 
assessments is paying assessments.
    Elimination of the requirement for persons who are eligible to 
claim an exemption to file an application for an application will 
significantly reduce the paperwork burden on the industry as well as 
reduce the Board's costs in managing the program.
    The new statutory guideline for the timing of referenda reduces the 
possibility that the operations of the Board will be disrupted so 
frequently that the effectiveness of the Board's programs would be 
compromised.
    In addition, removing obsolete provisions from the Order and 
rewriting other provisions will make the Order more understandable to 
the public, the industry, and the Board and its staff.
    We have also revised the paperwork and recordkeeping impact as 
described in the August 7, 2000, by eliminating references and 
information relating to the votable amendments that will not be 
implemented as a result of this final rule. Therefore, the remaining 
paperwork and recordkeeping impact is described below.
    One amendment requires producers to maintain and make available to 
the Board and the Secretary books and records. Another requires 
producers to periodically report to the Board information pertaining to 
the quantity of honey produced and the total number of bee colonies 
maintained. Currently, only handlers, importers, and producer-packers 
are required to maintain records and provide reports to the Board or 
the Secretary. This information is necessary for enforcement of the 
Act. It is most likely that the information requested from producers 
would be obtained through periodic audits.
    Based on this expanded reporting authority, there are also plans to 
collect production information periodically from producers. At this 
time, the Board's plans are tentative on how and when producers are to 
report the prescribed information due to mailing costs and certain 
other factors relating to the content and design of the information 
collection. The 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 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 will be eliminated. Pursuant to the 1998 changes to the Act, 
the Order will 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 
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 
will 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 5,043 
respondents would be $25,245 annually. The 5,043 respondents are as 
follows: 5,024 producers, 7 handlers, 7 importers, 2 cooperative 
representatives, and 3 organizations. The total cost for producers is 
$25,120 or $5.00 per producer per response. The total cost for handlers 
is $35 or $5.00 per handler. The total cost for importers is $35 or $5 
per importer. The total cost for cooperative representatives is $10 or 
$5 per cooperative representative. The total cost for organizations is 
$45 or $15 per organization.
    The impact of the recordkeeping requirement provided for in this 
rule on small entities will be minimal. This recordkeeping requirement 
is consistent with prudent business practices and is not expected to 
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 keep these records for commercial and/or 
tax purposes.
    The forms to be modified will 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 
amendments to the Order. The information required has been designed to 
coincide with normal industry business practices to minimize the burden 
on the industry.
    With regard to alternatives, the provisions of the amendments to 
the Order in this rule have been carefully reviewed, and every effort 
has been made to minimize any unnecessary costs or requirements while 
maintaining consistency with the provisions of the Act, as amended.
    There are no federal rules that duplicate, overlap, or conflict 
with this rule.
    Paperwork Reduction Act. In accordance with the OMB regulation [5 
CFR part 1320] which implements the Paperwork Reduction Act of 1995 [44 
U.S.C. Chapter 35], the information collection and recordkeeping 
requirements that are imposed by this rule have been approved by OMB 
under OMB Control Nos. 0581-0093 and 0505-0001.
    This information differs from what was published in the August 7, 
2000, proposed rule because the August 7, 2000, proposed rule included 
the burden associated with amendments that will not be implemented by 
this final rule. Following are the increases and decreases in burden 
that will become effective with this final rule.

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    Title: National Research, Promotion, and Consumer Information 
Programs.
    OMB Number: 0581-0093. Expiration Date of Approval: March 31, 2001.
    OMB Number: 0505-0001. Expiration Date of Approval: July 31, 2002.
    Type of Request: Revision of currently approved information 
collections for advisory committees and boards and for research and 
promotion programs.
    Abstract: The recordkeeping and information collection requirements 
are essential to carry out the intent of the Act, as amended.
    Producer recordkeeping and reporting (increase under OMB No. 0581-
0093). 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. This rule changes the Order 
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 is not expected to impose any undue costs or significant 
burdens on a vast majority of producers.
    In addition, the Board will have the authority to require producers 
to report information pertaining to the quantity of honey produced and 
the total number of bee colonies maintained. Currently, the Board's 
authority to request reports extends only to handlers, importers, and 
producer-packers. It is most likely that this information will be 
obtained from producers through periodic audits.
    Based on this expanded reporting authority, the Board also plans to 
collect the quantity of honey produced and number of bee colonies 
maintained periodically from producers. At this time, the Board's plans 
are tentative on how and when producers are to report this information 
due to mailing costs and certain other factors relating to the content 
and design of the possible information collection.
    Candidate Profile form (increase under OMB No. 0581-0093). This 
rule also revises qualification requirements for serving on the Board. 
This information will be collected on the Board's Candidate Profile 
form and be used by the Board's staff and the Committee to determine 
the qualifications of candidates. It is anticipated that the basic 
background information to be collected would be readily accessible or 
otherwise obtained from records currently maintained by those persons 
who would be candidates to serve on the Board.
    Nominee background form (decrease under OMB No. 0505-0001 and 
increase under OMB No. 0581-0093). Currently, nominees for positions on 
the Board or the Committee must submit a copy of a USDA background form 
(AD-755) under OMB No. 0505-0001 to the Secretary. In the future, 
nominees will be required to submit a copy of an AMS background form 
(AMS-755) under OMB No. 0581-0093. The information collected on the two 
forms is identical.
    Report by honey handler and importer organizations and national 
honey marketing cooperatives (increase under OMB No. 0581-0093). This 
rule will allow handler and importer organizations and national honey 
marketing cooperatives to submit the names of handlers, importers, and 
cooperative representatives, respectively, to the Committee for 
nomination to the Board. However, the organizations must submit 
information in a report to the Secretary in order to be certified as 
eligible to submit the names.
    In addition to increasing the burden under OMB No. 0581-0093, this 
rule also decreases the burden by 41.5 hours because it removes the 
requirement for producers, producer-packers, and importers to file an 
application with the Board in order to qualify for exemption from 
assessments.
    The provisions of the amendments to the Order in this rule have 
been carefully reviewed, and every effort has been made to minimize any 
unnecessary recordkeeping or reporting costs or requirements.
    Under this rule, 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 in this rule.
    The estimated total annual cost of maintaining records and 
providing the information to the Board and USDA by an estimated 5,043 
respondents would be $25,245 annually. The 5,043 respondents are as 
follows: 5,024 producers, 7 handlers, 7 importers, 2 cooperative 
representatives, and 3 organizations. The total cost for producers is 
$25,120 or $5.00 per producer per response. The total cost for handlers 
is $35 or $5.00 per handler. The total cost for importers is $35 or $5 
per importer. The total cost for cooperative representatives is $10 or 
$5 per cooperative representative. The total cost for organizations is 
$45 or $15 per organization.
    (1) PRODUCER RECORDKEEPING AND REPORTING (NEW BURDEN UNDER OMB No. 
0581-0093).
    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 (in 
their capacity as producers).
    Estimated Number of Respondents (Recordkeepers): 5,000.
    Estimated Number of Responses per Respondent (Recordkeeper): 1.
    Estimated Total Annual Burden on Respondents (Recordkeepers): 2,500 
hours.
    (2) CANDIDATE PROFILE (NEW BURDEN UNDER OMB No. 0581-0093). 
    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: 15 Producers, 4 handlers, 4 importers, and 1 
cooperative representative.
    Estimated Number of Respondents: 24.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 12 hours.
    (3) BACKGROUND INFORMATION FORM (DECREASE UNDER OMB No. 0505-001 
AND NEW BURDEN UNDER OMB No. 0581-0093).
    Estimate of Burden: Public reporting burden for the collection of 
information from two nominees for each of the estimated four number and 
four alternate position openings annually is estimated to average 0.5 
hours per response.
    Respondents: 9 producers, 3 handlers, 3 importers, and 1 
cooperative representative.
    Estimated Number of Respondents: 16.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 8 hours.
    (4) A REPORT FROM HONEY HANDLER AND IMPORTER ORGANIZATIONS AND 
NATIONAL HONEY MARKETING COOPERATIVES (NEW BURDEN UNDER OMB No. 0581-
0093).
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 1.5 hours per response for each 
organization.

[[Page 21828]]

    Respondents: Honey handler and importer organizations.
    Estimated Number of Respondents: 3.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 4.5 hours.
    Comments on the regulatory and paperwork impact of the amendments 
to the Order were invited in the February 28, 2000, proposed rule. 
Three comments were submitted by the April 28, 2000, deadline, and were 
discussed in the August 7, 2000, proposed rule on these amendments.

Background

    As explained above, the Act, which authorizes the honey research 
and promotion program, was amended in 1998. Subsequently, the U.S. 
Department of Agriculture (USDA or the Department) requested interested 
persons to submit proposals for making comparable changes to the 
program, which operates under the Honey Research, Promotion, and 
Consumer Information (Order).
    The National Honey Board (Board)--with the support of three honey 
industry groups--submitted a proposal containing regulatory text for 
all of the changes authorized or required by the 1998 amendments to the 
Act. Proposals submitted by eight other organizations or persons did 
not include regulatory text. Therefore, the Department published the 
Board's proposal, with a few changes, as a proposed rule in the Federal 
Register on February 28, 2000 (65 FR 10600), with a 60-day comment 
period. The eight other submissions were made part of the rulemaking 
record and are considered comments on the proposed changes.
    A total of 30 comments were received on the proposed amendments. 
These included the original eight comments that were received in 
response to USDA's request for proposals in 1999, some of which were 
resubmitted by the commenter. Seventeen commenters supported the 
amendments, 12 commenters opposed one or more of the amendments, and 
one commenter merely expressed an opinion on the direction the Board 
should take. As discussed in the August 7, 2000, rule, some changes 
were made to the proposed amendments as a result of comments received.
    USDA held a national referendum on the votable amendments from 
September 5 through 29, 2000. In the referendum, only 30.33 percent of 
the voters, who represented 51.26 percent of the pounds of honey 
produced, handled, and imported by the voters in the referendum, 
approved the votable amendments. Therefore, only the non-votable 
amendments will be made effective by this final rule. In order to 
implement only the non-votable amendments, it has been necessary to 
delete language related to the votable amendments and to rewrite some 
paragraphs as a result of the deletions. Some renumbering of sections 
and paragraphs has also occurred.
    This rule will amend the Order by: (1) Changing the size and 
composition of the Board; (2) changing nomination and eligibility 
requirements for handlers, importers, and representatives of 
cooperatives on the Board; (3) changing the term of office for members 
of the Board and the National Honey Nominations Committee (Committee); 
(4) authorizing the Board to develop a voluntary quality assurance 
program; (5) removing the requirement for small companies to file for 
an exemption under the program in order to avoid paying assessments; 
(6) requiring producers to provide reports and maintain records; and 
(7) adding statutory requirements for continuance referenda and 
evaluations.
    The amendments that appeared in the August 7, 2000, proposed rule 
that will not be made by this rule are: (1) A requirement for the Board 
to reserve 8 percent of its funds annually for beekeeping and 
production research; (2) authorization for the Board to develop 
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-importer members and alternates to the Board; 
(4) a reduction in the producer assessment from 1 cent per pound to 
0.75 cents per pound; (5) a new assessment on handlers of 0.75 cents 
per pound on the domestic honey that they handle; and (6) an increase 
in the importer assessment from 1 cent per pound to 1.5 cents per pound 
on imported honey and honey products.
    Board size and composition. The Board is currently composed of 
seven producers, two importers (or one importer and one exporter), two 
handlers, one representative of a cooperative, one public member, and 
their alternates.
    This rule will change the importer-exporter position on the Board 
to another importer position to provide more importer input into Board 
deliberations. In addition, the public member position will be 
eliminated, and at least 50 percent of the Board members will have to 
be producers.
    Also, this rule will add a new section to the Order to provide for 
reconstitution of the Board every five years. The new section provides 
procedures for making changes in the boundaries of the domestic 
producer regions and for adding importer members if warranted. The 
representation of importers will not change unless the proportion of 
assessments owed by importers compared with the proportion of 
assessments owed by producers on domestic honey changes by more than 6 
percent from the proportions determined by the Board for its 1996 
fiscal period. The first review is required before the next continuance 
referendum on the program, which will be held in 2001.
    Nominating and eligibility requirements. This rule will also change 
some of the nomination procedures under the Order. Currently, handlers, 
importers, and others submit the names of handlers and importers to the 
Committee for consideration as the official nominees to serve on the 
Board as handler members and alternates. This rule will allow handler 
and importer organizations to be certified to submit the names of 
handlers and importers to the Committee as well. In addition, national 
honey marketing cooperatives will be allowed to submit names to the 
Committee for consideration as the official nominees for the 
cooperative representative and alternate on the Board.
    This rule also adds a new eligibility requirement for importer 
members and alternates. In order to be eligible to serve in these 
positions, importers must receive at least 75 percent of their gross 
honey business income from the sale of imported honey and honey 
products during any three of the preceding five years. Previously, any 
person who imported any amount of honey was eligible to serve on the 
Board as an importer member or alternate.
    Terms of office. In addition, this rule will change the beginning 
of the term of office for Committee members from January 1 to July 1. 
This will facilitate more timely nomination and appointment of new 
members.
    Also, the amended Act authorized the Secretary to stagger the terms 
of office of Board members periodically to help ensure continuity of 
Board membership. For example, currently the term of office for the 
producer members and alternates from four of the seven producer regions 
end on December 31, 2001. This means that over 50 percent of the 
producer members on the Board could change in one year. This is not 
desirable. Therefore, the Secretary will work with the Board and the 
Committee to determine which of the regional producer positions should 
have a different term of office.

[[Page 21829]]

    Voluntary quality assurance program. After this rule is implemented 
the Board may develop rules and regulations for a voluntary quality 
assurance program for review by USDA. The voluntary quality assurance 
program may include the establishment of an official Board seal of 
approval to be displayed on honey and honey products or producers, 
handlers, and importers that participate in the voluntary program and 
are found to meet such standards of purity as are established under the 
program. It may also include actions to encourage the honey industry to 
participate in the program and to encourage consumers to purchase honey 
and honey products that bear the official seal of approval. In 
addition, the Department or other parties approved by the Department 
may perform periodic inspections of the participants in the voluntary 
program. Before a voluntary quality assurance program will be 
implemented, USDA will issue the proposed rules and regulations 
relating to the program for public comment.
    Exemptions, reports, and recordkeeping. Producers, producer-
packers, and importers who sell (1) less than 6,000 pounds of honey 
annually and (2) the honey is sold through local retail outlets, such 
as roadside stands, farmers markets, or groceries will no longer have 
to request an exemption from the Board in order to avoid paying 
assessments under the program. In addition, producers would be required 
to keep records for a period of two years just like producer-packers, 
handlers, and importers. The Board and the Department need access to 
certain industry records in order to enforce the assessment and 
reporting provisions of the program.
    Continuance referenda. The Act requires the Secretary of 
Agriculture to conduct a continuance referendum on the honey program at 
least once every five years. When the Act was amended in 1998, it 
specified that continuance referenda be held no more than once every 
two years. Therefore, this rule adds the limitation on the frequency of 
continuance referenda to the Order.
    Evaluations. This rule also includes a requirement for the Board to 
conduct an independent evaluation of the effectiveness of its programs 
at least once every five years. The requirement was imposed by Congress 
on all national research and promotion programs in 1996.
    Miscellaneous changes. Finally, this rule removes obsolete and 
gender-specific language from the Order and makes a number of changes 
for syntax and for clarity. Most of these changes were in the August 7, 
2000, proposed rule. Additional changes made by this rule include 
removing gender-specific language from Secs. 1240.34(b), 1240.38(j), 
and 1240.62(a), expanding Sec. 1240.5 Department to read Department or 
USDA, and adding the tenure limitation for Committee members back into 
paragraph (a)(3) of Sec. 1240.32.

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, 7 CFR part 1240 is 
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 of part 1240 to read as set forth above.

    3. Add a heading for a new subpart A, consisting of Secs. 1240.1 
through 1240.67, to read as follows:

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

    4. Remove Sec. 1240.43.
    4a. Redesignate Secs. 1240.1 through 1240.14, 1240.16 through 
1240.22, and 1240.44 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
1240.16....................................................       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
1240.44....................................................      1240.43
------------------------------------------------------------------------

    5. 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.

    6. 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.

    7. Add a new Sec. 1240.5 to read as follows:


Sec. 1240.5  Department or USDA.

    Department or USDA means the United States Department of 
Agriculture.

    8. Revise newly designated Sec. 1240.8 to read as follows:


Sec. 1240.8  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.
    9. 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.

    10. 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.

    11. 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

[[Page 21830]]

listed in the import records as the importer of record for such honey 
or honey products.

    12. 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.

    13. 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:
    (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.

    14. 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.

    15. 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 and alternate 
handler members of the Board under Sec. 1240.32.

    16. 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 and alternate 
importer members of the Board under Sec. 1240.32.

    17. 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.

    18. Revise Sec. 1240.30 to read as follows:


Sec. 1240.30  Establishment and membership.

    A Honey Board is established to administer the terms and provisions 
of this part. The Board shall consist of twelve (12) 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; 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.

    19. 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's or alternate's successor meets all 
qualifications and is appointed by the Secretary.
    20. Amend Sec. 1240.32 as follows:
    a. By revising paragraphs (a)(1) and (a)(3), and (b)(1) and (b)(2) 
respectively;
    b. Removing paragraph (b)(6);
    c. Redesignating paragraphs (b)(7) and (b)(8) as (b)(6) and (b)(7) 
respectively;
    d. Revising newly designated paragraphs (b)(6) and (b)(7); and
    e. Adding paragraphs (b)(8), (b)(9), (b)(10), (b)(11), and (b)(12).
    The revisions and additions to Sec. 1240.32 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 
beekeeper 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. No member shall serve 
more than two consecutive three-year terms. 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 an importer.
    (8) 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, and cooperative member positions due to 
become vacant. Selection of nominees by the Committee will be pursuant 
to the following:

[[Page 21831]]

    (i) Nominations for producer members and alternate producer members 
will be from the regions in which one or more vacancies 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 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; and
    (iv) 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.
    (9) 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.
    (10) 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) Substantial 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.
    (11) 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 handlers and importers who are not members 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 handlers and importers who are not 
members when making the nominations of the organization to the 
Committee, if nonmembers indicate an interest in serving on the Board.
    (12) A certification determination by the Secretary of a qualified 
organization representing handler or importer interests shall be final.
    21. 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 of domestic honey. The Board shall 
conduct the initial review required by this paragraph prior to the 
first continuance referendum conducted after May 31, 2001.
    (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; and/
or
    (ii) 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 the addition of members pursuant to paragraph 
(b)(1)(ii) of this section unless the proportion of assessments owed by 
importers compared with the proportion of assessments owed on domestic 
honey by producers changed by more than 6 percent from the base period 
proportion determined in accordance with paragraph (d) of this section.
    (c) Except as provided in paragraph (d) of this section, 
recommendations made under paragraph (b) of this section shall be based 
on 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.
    (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 period 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 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.
    22. Amend Sec. 1240.34 as follows:
    a. By revising paragraphs (a) and (b); and
    b. By removing ``Honey Nominations Committee and adding 
``Committee'' in its place in paragraph (c).
    The revisions of paragraphs (a) and (b) 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, the affected member and/or alternate may 
serve out the term for which such person was appointed, or if a member, 
whose position is based on the member's status as an importer is

[[Page 21832]]

subject to reallocation by the Board, the affected member and/or 
alternate may serve out the term for which such person was appointed.
    (b) If a member of the Board consistently refuses to perform the 
duties of a member of the Board, or if a member of the Board engages in 
acts of dishonesty or willful misconduct, the Board may recommend to 
the Secretary that the member be removed from office. If the Secretary 
finds the recommendation of the Board shows adequate cause, the 
Secretary shall remove such member from office.
* * * * *

    23. Amend Sec. 1240.35 by revising paragraph (a) to read as 
follows:


Sec. 1240.35  Procedure.

    (a) A majority of members, of which at least 50 percent are 
producers, 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.
* * * * *

    24. Amend Sec. 1240.38 by revising paragraphs (c), (d), (e), (j), 
(g),(k), (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;
* * * * *
    (j) To submit to the Secretary such information pertaining to this 
subpart as the Secretary may request;
    (k) To notify honey producers, producer-packers, handlers, and 
importers of all Board meetings through press releases or other means.
    (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.
    25. Revise the heading preceding Sec. 1240.39 to read as follows:

RESEARCH, PROMOTION, CONSUMER EDUCATION, AND INDUSTRY INFORMATION

    26. 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 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) 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
    (8) 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 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)(7) 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 this paragraph.

    27. Amend Sec. 1240.40 by revising paragraphs (a) and (b) to read 
as follows:

[[Page 21833]]

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 limitationscontained in that section.
* * * * *

    28. Revise Sec. 1240.41 to read as follows:


Sec. 1240.41  Assessments.

    (a) Domestic honey and honey products. The assessment rate on honey 
produced in the United States and handled shall be 1 cent per pound of 
honey produced.
    (b) Imported honey and honey products. The assessment rate on honey 
or honey products imported into the United States shall be 1 cent per 
pound of honey or honey products imported. The importer of imported 
honey and honey products shall pay the assessment to the Board through 
the U.S. Customs Service at the time of entry of such honey and honey 
products into the United States. 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.
    (c) General. (1) Except as provided in Sec. 1240.42 and in 
paragraphs (c)(2) and (e) of this section, the first handler shall be 
responsible for the collection of such assessment from the producer 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.
    (2) 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.
    (3) 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.
    (4) 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.
    (d) Late payment. (1) There shall be a late-payment charge imposed 
on any importer, handler, or producer-packer who fails to remit to the 
Board the total amount for which any such importer, producer, or 
producer-packer is liable on or before the payment due date established 
by the Board. The amount of the late-payment charge shall be set by the 
Board subject to approval by the Secretary.
    (2) There shall also be imposed on any importer, handler, 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 importer, handler, or producer-packer is liable. The rate of 
interest shall be prescribed in regulations issued by the Secretary.
    (3) Persons failing to remit total assessments due in a timely 
manner may also be subject to actions under federal debt collection 
procedures.
    (e) Honey under loan. Whenever a loan is made on honey under an 
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 Department's 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.
    (f) Advance payment. 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.

    29. Amend Sec. 1240.42 as follows:
    a. By revising paragraph (a);
    b. By removing paragraphs (c) and (f);
    c. By redesignating paragraphs (d) and (e) as (c) and (d), 
respectively; and
    d. By revising newly designated paragraphs (c) and (d).
    The revisions to Sec. 1240.42 read as follows:


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, or an importer who imports 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 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.

    30. Add a new Sec. 1240.44 to read as follows:


Sec. 1240.44  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;

[[Page 21834]]

    (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.

    31. 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 and 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.

    32. 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 under this subpart 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 fiscal period of their applicability.

    33. 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:
    (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.

    34. 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.

    35. Amend Sec. 1240.62 as follows:
    a. By removing ``he/she'' and adding ``the Secretary'' in its place 
in paragraph (a);
    b. By removing paragraph (c);
    c. By redesignating paragraph (d) as (c); and
    d. By revising newly designated paragraph (c).
    The revisions to Sec. 1240.62 read as follows:


Sec. 1240.62  Suspension or termination.

* * * * *
    (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 
and importers subject to assessment under this subpart to determine if 
the honey producers 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.

    Dated: April 23, 2001.
Kenneth C. Clayton,
Acting Administor, Agricultural Marketing Service.
[FR Doc. 01-10602 Filed 4-30-01; 8:45 am]
BILLING CODE 3410-02-P