[Federal Register Volume 66, Number 216 (Wednesday, November 7, 2001)]
[Proposed Rules]
[Pages 56391-56396]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-27815]



  Federal Register / Vol. 66, No. 216 / Wednesday, November 7, 2001 / 
Proposed Rules  

[[Page 56391]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1210

[FV-01-702 PR2]


Watermelon Research and Promotion Plan; Amendment To Cover all 
Handlers and Referendum Order

AGENCY: Agricultural Marketing Service, Agriculture.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend the Watermelon Research and 
Promotion Plan (Plan) and the regulations issued under the Plan to 
cover all handlers of watermelons--including wholesalers, persons who 
arrange the sale or transfer of watermelons, and fresh-cut processors 
in addition to the first handlers who are currently covered. Under this 
rule, all handlers would pay assessments and file reports on all 
watermelons they handle, including any watermelons handled domestically 
after their importation. All handlers would also be eligible to seek 
nomination to the National Watermelon Promotion Board and vote in 
referenda. The amendment would increase assessment income under the 
watermelon program. In order to become effective, the amendment must be 
approved by a majority of the eligible watermelon producers, handlers, 
and importers voting in a referendum.

DATES: The voting period for the referendum will be from December 3, 
2001 through January 11, 2002. If the following persons produced, 
handled, or imported watermelons in calendar year 2000, they may vote 
in the referendum: Current producers of 10 or more acres of 
watermelons; watermelon handlers (including first handlers, 
wholesalers, fresh-cut processors, and anyone who arranges the sale or 
transfer of watermelons); watermelon importers of 150,000 or more 
pounds of watermelons annually; and watermelon importers who import 
less than 150,000 pounds of watermelons annually and did not apply for 
and receive reimbursement of assessments.

FOR FURTHER INFORMATION CONTACT: Daniel R. Manzoni, Research and 
Promotion Branch, FV, AMS, USDA, Stop 0244, 1400 Independence Avenue, 
SW., Room 2535 South Building, Washington, DC 20250-0244; telephone 
(202) 720-9915; facsimile (202) 205-2800; or e-mail 
[email protected].

SUPPLEMENTARY INFORMATION: Prior documents. USDA published a proposed 
rule on amending the Plan in the Federal Register on April 30, 2001 [66 
FR 21602] with a 60-day comment period. On the same date, USDA 
published proposed referendum procedures in the Federal Register [66 FR 
21596] with a 60-day comment period.
    The National Watermelon Promotion Board (Board) administers the 
Watermelon Research and Promotion Plan [7 CFR part 1210] under the 
supervision of the U.S. Department of Agriculture (USDA or the 
Department). The Plan was implemented in June 1989 under the Watermelon 
Research and Promotion Act (Act), as amended [Pub. L. 99-198; enacted 
January 1, 1986; 7 U.S.C. 4901-4916].
    Under the Plan, the National Watermelon Promotion Board (Board) 
conducts promotion, consumer information, industry information, and 
research programs. To fund these activities, producers and handlers pay 
2 cents per hundredweight (cwt.) on the domestic watermelons that they 
produce or handle, respectively, and importers pay 4 cents per cwt. on 
the foreign watermelons they import into the United States. Handlers 
collect the assessments from producers of 10 or more acres of 
watermelons and send the producer assessment to the Board along with 
their handler assessments. The assessments on imported watermelons are 
collected by the U.S. Customs Service (Customs) at the time the 
watermelons enter the United States. Customs remits the assessments to 
the Board. Importers of less than 150,000 pounds of watermelons 
annually may request the Board to reimburse them for the assessments 
collected by Customs and remitted to the Board.

Question and Answer Overview

Why Should all Handlers of Watermelons pay Assessments Under the Plan?

    Between the farm and retail markets, watermelons are handled 
several times. The Plan currently only covers first handlers of 
watermelons--those who first put watermelons into the marketing chain. 
However, wholesalers, fresh-cut processors, and other persons who 
arrange the sale or transfer of watermelons perform similar functions 
and benefit from the Board's promotion of watermelons. Therefore, the 
Board recommended that these additional handlers also be covered by the 
Plan. Including all handlers would simplify the assessment process 
because all--not just some--handlers would be required to pay 
assessments.

What Would Be the Overall Impact of This Rule?

    Currently, there are approximately 619 first handlers required to 
pay assessments to the Board on the domestic watermelons they handle. 
If this amendment is approved, first handlers would be required by pay 
assessments on all watermelons they handle, including any watermelons 
handled domestically after their importation.
    Also, an additional estimated 550 handlers--wholesalers, fresh-cut 
processors, and persons who arrange the sale or transfer of watermelons 
(such as brokers)--would be required to pay assessments for the first 
time. The additional handlers would not include retailers, wholesale 
retailers, foodservice distributors, or foodservice operators. The 
additional estimated 550 handlers would be expected to pay an 
assessment to the Board of 2 cents per cwt. on the watermelons they 
handle, including any watermelons handled domestically after their 
importation into the United States. The assessment would be due not 
later than 30 days after the end of the month in which the watermelons 
were handled. These handlers would also be required to submit to the 
Board with their assessments a report containing their name, address, 
and telephone number, the period covered by the report, and the total 
quantity of watermelons handled during the reporting period. If 
assessments are not paid on time, late payment charges and interest 
would be applied to the amount due, and they might be subject to civil 
penalties.
    These handlers would be eligible to be nominated and to serve as a 
handler member of the Board for the district in which they reside. This 
provides the opportunity to participate in the development and 
implementation of marketing and research projects which can impact all 
aspects of the industry, from field to store. These handlers would also 
be eligible to vote in referenda relating to the Plan--including the 
referendum on this amendment.

How Will This Change Affect Board Operations?

    The main impact on the Board would be the availability of an 
additional estimated $900,000 in assessment income which would be used 
to benefit the watermelon industry as a whole through more marketing, 
public relations, education, and research activities, with specific 
emphasis on

[[Page 56392]]

post harvest research and category management. This has the potential 
to increase demand for watermelons.

Why Is There Going to Be a National Referendum on the Amendment?

    The Act requires USDA to conduct a referendum on amendments to the 
Plan. Conducting a referendum allows the persons affected or 
potentially affected by the amendments the opportunity to vote on 
whether it should be adopted.

When Will the Vote Be Taken?

    The voting period will be from December 3, 2001 through January 11, 
2002.

How Can I Vote in the Referendum?

    Voting will take place by mail. All known eligible producers, 
handlers, and importers will receive a ballot and voting instructions 
in the mail from USDA. Producers, handlers, and importers who believe 
they are eligible to vote and who do not receive a ballot in the mail 
may request a ballot by calling a toll-free telephone number. The 
ballot must be received by USDA by close of business on January 11, 
2002.

What Criteria Will USDA Use To Decide Whether the Industry Wants the 
Amendment or not?

    The amendment must be approved by a simple majority of the voters 
in the referendum.

If the Watermelon Industry Approves This Amendment, When Will it Become 
Effective?

    The amendment would likely become effective for the 2002 marketing 
year which begins on April 1, 2002.

Executive Orders 12866 and 12988

    This proposed 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 (OMB).
    This proposed rule has been reviewed under E.O. 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.
    Section 1645 of the Act allows producers, handlers, and importers 
of watermelons who are subject to the Plan to file a written petition 
with the Secretary of Agriculture (Secretary) if they believe that the 
Plan, any provision of the Plan, or any obligation imposed in 
connection with the Plan, is not in accordance with law. In the 
petition, the person may request a modification of the Plan or an 
exemption from the Plan. The petitioner will have the opportunity for a 
hearing on the petition. Afterwards, an Administrative Law Judge (ALJ) 
will issue a decision. If the petitioner disagrees with the ALJ's 
decision, the petitioner has 30 days to appeal to the Judicial Officer, 
who will issue a ruling on behalf of the Secretary. 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

    Initial Regulatory Flexibility Analysis. In accordance with the 
Regulatory Flexibility Act (RFA) [5 U.S.C. 601 et seq.], the 
Agricultural Marketing Service (AMS) 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.
    In 13 CFR 121.201, the Small Business Administration defines small 
agricultural service firms (handlers and importers) as those having 
annual receipts of less than $5 million and small agricultural 
producers as those having annual receipts of not more than $750,000.
    Currently, there are approximately 2,220 producers of 10 or more 
acres of watermelons, 620 handlers, and 280 importers of more than 
150,000 pounds of watermelons annually. If this rule is implemented, 
there would be an additional 550 handlers subject to the Plan: 480 
wholesalers and persons who arrange the sale or transfer of watermelons 
and 70 fresh-cut processors. A majority of the producers, handlers, and 
importers may be classified as small entities.
    This proposed rule would amend the Plan to cover all handlers of 
watermelons. If it is adopted, wholesalers, persons who arrange the 
sale or transfer of watermelons, and fresh-cut processors of 
watermelons--in addition to first handlers--would pay an assessment of 
2 cents per cwt. on all watermelons they handle (including any 
watermelons handled domestically after their importation), file reports 
with the Board, keep records on their handling transactions, and be 
subject to penalties for noncompliance with the Plan. These additional 
handlers will also be eligible to be nominated to serve as handler 
members on the Board and to vote in referenda.
    The watermelon industry as a whole could benefit from this rule. 
Covering all handlers under the Plan would simplify the assessment 
process and provide more income to the Board. The assessment process 
would be simplified because all handlers would be treated equally. No 
longer would the first handler be the only person paying the handler 
assessment. Covering all handlers is more workable in an actual 
business setting. Also, an additional estimated 550 handlers paying 
assessments is likely to increase the income of the Board from $1.3 
million to $2.2 million annually. As a result, there would be more 
funds available to the Board to increase the demand for watermelons, 
which would benefit producers, handlers, and importers alike, without 
increasing the rate of assessment.
    The Board would use the estimated $900,000 in assessment income to 
benefit the watermelon industry as a whole through more marketing, 
public relations, education, and research activities, with specific 
emphasis on post harvest research and category management.
    Category management is a new system used by major supermarket 
chains to manage supplies of the various products they sell. Each 
section of a supermarket is considered a category, and some sections--
such as the produce section--contain several categories. With category 
management, the supermarket chains are less flexible in how much of a 
given product they want within a given time frame. In order to maintain 
or increase market share, the suppliers to the retail chains need to 
develop their own category management plans. It is much more difficult 
for producers and suppliers of perishable items to fit into this system 
than producers and suppliers of non-perishable goods. This means that 
an effective category management program may be essential for a 
perishable agricultural commodity group. However, developing an 
effective category management program is expensive. The Board began 
developing its category management program in 2000. The Board's goal is 
to position watermelons as the leader in the melon category of the 
produce section. In order to maintain its category management program, 
the Board needs to purchase additional sales data and conduct 
additional consumer research. An effective category management plan has 
the potential to increase demand for watermelons. This would benefit 
producers, handlers, and importers.
    The Board considered raising the assessment rate for producers, 
handlers, and importers by 50 percent in order to

[[Page 56393]]

generate additional funds to grow demand for watermelons. However, 
watermelon producers are not in the position to increase their burden 
under the program, given the state of the industry. Therefore, this 
alternative was not considered viable. In the watermelon industry, just 
as in other fruit and vegetable industries, there are handlers that 
cover the assessment cost as a business expense, handlers that pass the 
cost back to producers, and handlers that pass the cost along to 
retailers and, hence, consumers. Therefore, it is likely that some of 
the additional assessments collected from the newly covered handlers 
would be passed back to first handlers, who may pass it back to 
producers. However, it is not anticipated that this will represent a 
majority of the additional assessments that would be collected. Any 
increased cost for producers is expected to be less than an overall 
increase in the producer assessment. In addition, any increased cost 
for producers or handlers is likely to be offset by the benefit of 
increased demand for watermelons.
    The information collection requirements contained in this proposed 
rule are designed to minimize the burden on handlers covered by the 
watermelon research and promotion program. The estimated additional 
annual cost of providing the information by an estimated 550 new 
handlers would be $2,750 or $5 per new handler as discussed below.
    There are no federal rules that duplicate, overlap, or conflict 
with this rule.
    AMS has performed this initial Regulatory Flexibility Analysis 
regarding the impact of this proposed rule on small entities. In order 
to have additional data that may be helpful in evaluating the effects 
of this rule on small entities, we invited comments concerning its 
potential effects. However, no comments were received on this aspect of 
the April 30, 2001, proposed rule.
    Paperwork Reduction Act. In accordance with the Office of 
Management and Budget (OMB) regulation [5 CFR part 1320] which 
implements the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35], 
the information collection and recordkeeping requirements that would be 
imposed by this rule were submitted to OMB and approved by OMB under 
OMB Number 0581-0093.
    This proposed rule would add an information collection burden on 
the additional 550 handlers who would be subject to the Plan. The 
information collection burden includes filing reports and maintaining 
books and records under the Plan. Handlers are required to maintain 
such records for two fiscal years beyond the fiscal period of their 
applicability. The additional handlers would also be eligible to vote 
in referenda under the Plan, but the voting burden is associated with 
the ballot which is included in the final referendum procedures which 
are being published separately in this issue of the Federal Register.
    Title: National Research, Promotion, and Consumer Information 
Programs.
    OMB Number: 0581-0093.
    Expiration Date of Approval: July 31, 2004.
    Type of Request: Revision of a currently approved information 
collection for research and promotion programs.
    Abstract: The information collection requirements in this rule are 
essential to carry out the intent of the Act.
    The increase in burden associated with this rule is as follows:
1. Handler's Report.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average .75 hours per response.
    New Respondents: Handlers.
    Estimated Number of New Respondents: 550.
    Estimated Number of Responses per New Respondent: 4 times a year.
    Estimated Total Annual Burden on New Respondents: 1,650 hours.
2. A Requirement To Maintain Records Sufficient To Verify Reports 
Submitted Under the Plan.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average .50 hours per response.
    New Respondents: Handlers.
    Estimated Number of New Respondents: 550.
    Estimated Total Annual Burden on New Respondents: 275 hours.
    The estimated additional annual cost of providing the information 
by an estimated 550 new handlers would be $2,750 or $5 per new handler. 
The increase of 275 total burden hours has been added to the previous 
burden total of 314.5 hours under OMB No. 0581-0093.
    In the proposed rule published on April 30, 2001, comments were 
invited on:
    (a) Whether the proposed additional collection of information is 
necessary and whether it will have practical utility; (b) the accuracy 
of USDA's estimate of the burden of the proposed increase in the 
collection of information, including the validity of the methodology 
and assumption used; (c) ways to enhance the quality, utility, and 
clarity of the information to be collected; and (d) ways to minimize 
the burden of the collection of information on those who are to 
respond, including the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    One comment was received by the June 29, 2001, deadline. The 
commenter asserted that the estimate of the burden associated with the 
handler's report (0.75 hours) and recordkeeping (0.5 hours) was 
overstated. AMS believes that the burden estimate is accurate, and, 
therefore, no changes are made in response to this comment.

Background

    The National Watermelon Promotion Board (Board) has recommended 
that the Watermelon Research and Promotion Plan (Plan) be amended to 
include all handlers of domestic watermelons due to an increased need 
to promote watermelons. In 1999, domestic production of watermelons 
totaled 4.1 billion pounds. This was a 12-percent increase over 1998. 
At the same time, the season average price of watermelons fell from 
$7.71 per hundredweight (cwt.) in 1998 to $6.49 per cwt. in 1999. This 
indicates that additional promotion of watermelons is needed.
    The proposed amendment would increase the Board's assessment income 
by approximately $900,000 to approximately $2.2 million annually. It 
would also streamline the assessment payment and collection processes 
because all handlers would be covered--not just the first handler--
because they perform similar functions in the marketing chain.
    Section 1210.305 of the Plan currently defines a handler as any 
person (except a common or contract carrier of watermelons owned by 
another person) who handles watermelons, including a producer who 
handles watermelons of the producer's own production. This means the 
first person who performs the handling function. Under Sec. 1210.307 of 
the Plan, to handle means to grade, pack, process, sell, transport, 
purchase, or in any other way to place or cause watermelons to which 
one has title or possession to be placed in the current of commerce. 
The handling function does not include the transportation or delivery 
of field run watermelons by a producer to a handler for grading, 
sizing, or processing.
    Currently, 691 first handlers pay an assessment of 4 cents per cwt. 
on the watermelons that they handle, file

[[Page 56394]]

reports with the Board for the months in which they handle watermelons, 
and maintain records of their handling transactions for a period of two 
years after the year in which they occurred. In 1999, the average 
handler assessment was $1,640.
    Assessment payments and a report must be postmarked not later than 
30 days after the end of the month in which the watermelons are 
handled. If a handler does not remit the assessments to the Board on 
time, the Board imposes a one-time late payment charge of 10 percent. 
In addition, handlers are charged 1.5 percent per month interest on the 
outstanding balance. The failure to pay assessments is considered a 
violation of the Act and the Plan. If a handler does not pay the 
assessments which are due, the Board may audit the handler's records 
and request USDA to take legal action against the handler. If USDA 
takes legal action, the handler may be subject to civil penalties from 
$550 to $5,500 per violation.
    The Board has identified additional estimated 550 handlers who 
would be required to pay the same assessment, file the same reports, 
and maintain the same records as first handlers on all they handle, 
including any watermelons handled domestically after their importation, 
if this amendment is adopted. The additional handlers are wholesalers, 
fresh-cut processors, and other persons who arrange the sale or 
transfer of watermelons. These handlers would also be subject to the 
same penalties for non-payment of assessments.
    The additional handlers would also be eligible to serve as handler 
members on the Board and vote in referenda. Serving on the Board 
provides the opportunity to participate in the development and 
implementation of marketing and research projects which can impact all 
aspects of the industry, from the field to the consumer's table. Voting 
in referenda provides the right to vote on changes in the program--
including the current proposed amendment--and on whether the program 
should continue or be terminated.
    To include all handlers under the Plan, this proposed rule would 
revise Sec. 1210.305 by eliminating the reference to the first person 
who performs the handling function and by adding a statement that 
handler does not mean a retailer, wholesale retailer, foodservice 
distributor, or foodservice operator.
    In addition, this rule would amend Secs. 1210.308 and 1210.341(a) 
of the Plan, Secs. 1210.402(b) and 1210.404(d) of the nominating 
procedures issued under the Plan, and Secs. 1210.515(a) and 1210.518(a) 
and (b) of the rules and regulations issued under the Plan in order to 
remove references to first handlers. It is also necessary to amend 
Secs. 1210.341(c) and 1210.350(a) of the Plan to clarify the assessment 
and reporting requirements for all handlers. Since Sec. 1210.517 (which 
concerns determining first handlers) would no longer be necessary if 
all handlers are covered by the Plan, that section would be removed and 
reserved. In addition, this rule would add a new Sec. 1210.518(b)(3) to 
state that the handling party is responsible for the payment of 
assessments on any handling of watermelons.
    This rule would also redesignate Secs. 1210.301 through 1210.314 of 
the Plan as necessary to arrange the definitions in alphabetical order.
    A final rule establishing procedures for the referendum on these 
amendments to the Plan and for future referenda is published separately 
in this issue of the Federal Register.
    The final rule on referendum procedures also adds letter 
designations to the various subparts of the watermelon research and 
promotion program as follows: the Plan [Secs. 1210.301 through 
1210.367] will become Subpart A; the Procedures for Nominating Members 
to the National Watermelon Promotion Board [Secs. 1210.400 through 
1210.405] will become Subpart B; the Rules and Regulations 
[Secs. 1210.500 through 1210.540] will become Subpart C; and the 
Referendum Procedures [Secs. 1210.600 through 1210.607] will become 
Subpart D.
    The Act requires a referendum for all amendments to the Plan 
(Subpart A) except a change in the rate of assessment, which may be 
made after notice-and-comment rulemaking. The Act does not require a 
referendum for changes to Subparts B, C, and D. Therefore, the proposed 
amendments to the Plan which are contained in this rule would be the 
subject of the upcoming referendum. The proposed amendments to Subpart 
B (nominating procedures) and Subpart C (rules and regulations) which 
are contained in this rule can be made without a referendum. However, 
since they are needed only if the amendments to the Plan are approved 
in the referendum, they will be adopted only if the amendments to the 
Plan are approved in the referendum.
    USDA published a proposed rule on amending the Plan in the Federal 
Register on April 30, 2001 [66 FR 21602]. Comments on the proposed rule 
were due on June 29, 2001.
    AMS received 23 comments regarding the proposed amendments to the 
Plan. Of the 23 comments, 15 supported the proposed amendments, and 
eight comments did not support the proposed amendments.
    In summary, the 14 comments supporting the amendments cited what 
they believed were the benefits of the current program and how the 
revenue from the proposed amendments would improve it by enhancing the 
industry's ability to compete in a very competitive global marketplace.
    The fifteenth comment that supported the proposed amendments 
expressed concern regarding Board representation of the additional 
handlers who would be covered by the program if the amendments are 
adopted. The commenter is opposed to increasing the size of the Board. 
As explained in the April 30, 2001, proposed rule, the additional 
handlers would be eligible to serve in the existing handler positions 
on the Board. There are two handlers for each of seven districts 
established under the Plan, and this would not change. Therefore, there 
would be no increase in the size of the Board.
    One commenter opposed the proposed amendments because he believed 
that he would have to pay an additional 2 cents per cwt. However, the 
commenter may have misunderstood the proposal. Any current producer-
handler would not be considered an additional handler required to pay 
an additional 2 cents per cwt. if the amendments are adopted. A 
producer-handler's assessment obligation would remain the same, i.e., 
to pay the 2 cents per cwt. as a producer and the 2 cents per cwt. as a 
handler.
    Three commenters asserted that the current program is unworkable 
and does not benefit the watermelon industry. They want the Department 
to conduct a referendum on whether the current watermelon program 
should be terminated. The Department would conduct a referendum on the 
entire program if requested by the Board or by 10 percent of the 
industry.
    Two commenters stated that the watermelon program is working well 
and does not need to be amended. The Department is conducting public 
rulemaking and a national referendum to determine the level of industry 
support for the amendments. Therefore, these comments are denied.
    One commenter expressed the opinion that the proposed amendments 
would not treat wholesalers fairly. However, the purpose of the 
amendments is to treat all watermelon handlers in the same manner. 
Currently, only first handlers are assessed under

[[Page 56395]]

the program. The proposed amendments would also assess other handlers, 
such as wholesalers, in the watermelon marketing chain. Therefore, this 
comment is denied.
    The last comment opposed to the amendments stated that the proposed 
amendments are unfair because a majority of the people who would be 
affected by the proposed amendments will not have a chance to vote on 
them and national supermarkets would be exempt. The Department and the 
Board are compiling a list of the additional handlers who would be 
covered by the amendments so that they will have the opportunity to 
vote on whether the amendments become effective. In addition, USDA will 
have a toll-free telephone number for these handlers to call if they do 
not receive a ballot so that USDA can provide them with a ballot. Also, 
national supermarkets would not be covered by the amendment because 
they are in the retail segment of the marketing chain. The purpose of 
the proposed amendments is to cover all handlers between the grower and 
the retail segment. Therefore, this comment is denied.

Referendum Order

    It is hereby directed that a referendum be conducted among eligible 
watermelon producers, handlers, and importers to determine whether the 
Plan and the regulations issued under the Plan should be amended to 
cover all handlers of watermelons. The amendments to the Plan will be 
implemented if they are approved by a simple majority of the eligible 
watermelon producers, handlers, and importers voting in the referendum.
    The referendum shall be conducted from December 3, 2001 through 
January 11, 2002. Ballots will be mailed to all known watermelon 
producers, handlers and importers on or before November 19, 2001. 
Eligible voters who do not receive a ballot may call 1-888-720-9917 to 
request a ballot. All ballots will be subject to verification. Ballots 
must be received by the referendum agents no later than 4:30 p.m. 
Eastern Standard Time on January 11, 2002 to be counted.
    Daniel R. Manzoni, Margaret B. Irby, and Martha B. Ransom, Research 
and Promotion Branch, Fruit and Vegetable Programs, Agricultural 
Marketing Service, U.S. Department of Agriculture, Room 2535-S, Stop 
0244, Washington, DC 20250-0244, are designated as the referendum 
agents of the Secretary of Agriculture to conduct the referendum. 
Subpart D--Referendum Procedures [7 CFR 1210.600-1210.607], which is 
being published separately in this issue of the Federal Register, shall 
be used to conduct the referendum.

List of Subjects in 7 CFR Part 1210

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Reporting and recordkeeping 
requirements, Watermelon promotion.

    For the reasons set forth in the preamble, it is proposed that Part 
1210 of Title 7, Chapter XI of the Code of Federal Regulations, be 
amended as follows:

PART 1210--WATERMELON RESEARCH AND PROMOTION

    1. The authority citation for 7 CFR Part 1210 continues to read as 
follows:

    Authority: 7 U.S.C. 4901-4916.

    2. Redesignate Secs. 1210.301 through 1210.314 as follows:

------------------------------------------------------------------------
                                                                  New
                         Old section                            section
------------------------------------------------------------------------
1210.301....................................................    1210.313
1201.302....................................................    1210.301
1210.303....................................................    1210.308
1210.304....................................................    1210.302
1210.305....................................................    1210.314
1210.306....................................................    1210.309
1210.307....................................................    1210.304
1210.308....................................................    1210.305
1210.309....................................................    1210.307
1210.310....................................................    1210.303
1210.311....................................................    1210.310
1210.312....................................................    1210.311
1210.313....................................................    1210.312
1210.314....................................................    1210.306
------------------------------------------------------------------------

    3. Revise newly designated Sec. 1210.305 to read as follows:


Sec. 1210.305  Handler.

    Handler means any person (except a common or contract carrier of 
watermelons owned by another person) who handles watermelons, including 
a producer who handles watermelons of the producer's own production. 
Handler shall not mean a retailer, wholesale retailer, foodservice 
distributor, or foodservice operator.
    4. Amend Sec. 1210.341 by revising paragraphs (a) and (c) to read 
as follows:


Sec. 1210.341  Assessments.

    (a) Assessments shall be levied on all watermelons produced and 
handled in and imported into the United States for consumption as human 
food. Producers shall be assessed 2 cents per hundredweight on the 
watermelons that they produce. Handlers shall be assessed 2 cents per 
hundredweight on all watermelons that they handle, including any 
watermelons handled after their importation into the United States. If 
a person performs both a producing and a handling function on any lot 
of domestic watermelons, the person shall pay both the producer 
assessment and the handler assessment on those watermelons. Importers 
shall be assessed 4 cents per hundredweight on the watermelons they 
import at the time of entry of the watermelons into the United States.
* * * * *
    (c) Each handler is responsible for payment of the handler 
assessment to the Board, and each handler who purchases watermelons 
from a producer is responsible for the collection and payment to the 
Board of both the producer assessment and the handler's own assessment. 
A handler who purchases watermelons from a producer may collect the 
producer assessment from the producer or deduct the assessment from the 
proceeds paid to the producer on whose watermelons the assessments are 
made. A handler who purchases from a producer shall maintain separate 
records for each producer's watermelons handled, including watermelons 
produced by the handler. In addition, all handlers shall maintain 
records that indicate the total quantity of watermelons handled by the 
handler, including those that are exempt under this Plan, and such 
other information as may be prescribed by the Board.
* * * * *
    5. Amend Sec. 1210.350 by revising paragraph (a) introductory text 
to read as follows:


Sec. 1210.350  Reports.

    (a) Handlers shall report to the Board at such times and in such 
manner as the Board may prescribe by regulations whatever information 
may be necessary in order for the Board to perform its duties. In 
addition, each handler who purchases watermelons from a producer shall 
maintain a record with respect to each producer for whom watermelons 
were handled and for watermelons produced and handled by the handler. 
Such reports may include, but shall not be limited to, the following 
information:
* * * * *
    6. Amend Sec. 1210.402 by revising paragraph (b) to read as 
follows:


Sec. 1210.402  Voter and board member nominee eligibility.

* * * * *
    (b) Any individual, group of individuals, partnership, corporation, 
association, cooperative, or any other entity which is engaged in the 
production or handling of watermelons is considered a person and as 
such is entitled to only one vote, except that such person may cast 
proxy votes as

[[Page 56396]]

provides in Sec. 1210.403 and Sec. 1210.404 of this subpart.
* * * * *
    7. Amend Sec. 1210.404 by revising paragraph (d) to read as 
follows:


Sec. 1210.404  Importer member nomination and selection.

* * * * *
    (d) Any individual, group of individuals, partnership, corporation, 
association, cooperative, or any other entity which is engaged in the 
importing of watermelons is considered a person and as such is entitled 
to only one vote, except that such person may cast proxy votes as 
provided in paragraph (e)(1) of this section.
* * * * *
    8. Amend Sec. 1210.515 by revising paragraph (a) to read as 
follows:


Sec. 1210.515  Levy of assessments.

    (a) An assessment of 2 cents per hundredweight shall be levied on 
all watermelons produced in the United States for ultimate consumption 
as human food. An assessment of 2 cents per hundredweight shall be 
levied on all watermelons handled for ultimate consumption as human 
food. An assessment of 4 cents per hundredweight shall be levied on all 
watermelons imported into the United States for ultimate consumption as 
human food at the time of entry into the United States.
* * * * *
    9. Remove and reserve Sec. 1210.517.
    10. Amend Sec. 1210.518 by revising paragraphs (a) and (b)(1) and 
by adding a new paragraph (b)(3) to read as follows:


Sec. 1210.518  Payment of assessments.

    (a) Time of payment. The assessment of domestically produced 
watermelons shall become due at the time of each handling of the 
watermelons for non-exempt purposes. The assessment on imported 
watermelons shall become due at the time of entry, or withdrawal, into 
the United States and at the time of each subsequent handling.
    (b) Responsibility of payment. (1) A handler who purchases 
watermelons from a producer is responsible for collection and payment 
of both the producer's and the handler's assessment. A handler may 
collect the producer's assessment from the producer or deduct the 
producer's assessment from the proceeds paid to the producer on whose 
watermelons the producer assessment is made. Any such collection or 
deduction of producer assessment shall be made not later than the time 
when the handler handles the watermelons.
* * * * *
    (3) The payment of assessments on any handling of watermelons is 
the responsibility of the handling party.
* * * * *

    Dated: October 30, 2001.
Kenneth C. Clayton,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 01-27815 Filed 11-6-01; 8:45 am]
BILLING CODE 3410-02-P