[Federal Register Volume 67, Number 173 (Friday, September 6, 2002)]
[Rules and Regulations]
[Pages 56895-56905]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-22671]



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  Federal Register / Vol. 67, No. 173 / Friday, September 6, 2002 / 
Rules and Regulations  

[[Page 56895]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1219

[FV-01-705-FR]
RIN 0581-AB92


Hass Avocado Promotion, Research, and Information Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule establishes the Hass Avocado Promotion, 
Research, and Information Order (Order). This industry-funded program 
is authorized under the Hass Avocado Promotion, Research, and 
Information Act of 2000 (Act). Under the Order, producers and importers 
will pay an initial assessment of 2.5 cents per pound on fresh Hass 
avocados produced in or imported into the United States for consumption 
in the United States. Exports of U.S. Hass avocados are exempt from 
assessment. Initially only fresh domestic and imported Hass avocados 
will be assessed. The Hass Avocado Board (Board) will be appointed by 
the U.S. Department of Agriculture (USDA or the Department) to conduct 
research, promotion, industry information, and consumer information 
needed for the maintenance, expansion, and development of domestic 
markets for Hass avocados.

DATES: Effective September 9, 2002. Collection and remittance of 
assessments and applicable reporting will begin on January 2, 2003.

FOR FURTHER INFORMATION CONTACT: Julie Morin, Research and Promotion 
Branch, FV, AMS, USDA, Stop 0244, 1400 Independence Avenue, SW., Room 
2535-S, Washington, DC 20250-0244, telephone (202) 720-6930, fax (202) 
205-2800, e-mail [email protected].

SUPPLEMENTARY INFORMATION: This Order is issued under the Hass Avocado 
Promotion, Research, and Information Act of 2000 (Act) (7 U.S.C. 7801-
7813), enacted on October 23, 2000.
    Prior documents: Proposed rules on both the Order (66 FR 36870) and 
the referendum procedures (66 FR 36886) were published in the Federal 
Register on July 13, 2001, each with a 45-day comment period. 
Subsequently, the USDA published a notice in the Federal Register on 
August 28, 2001 (66 FR 4158), extending both comment periods by 15 
days, to September 12, 2001. A second proposed rule on the Order (67 FR 
7290) and a final rule on the referendum procedures (67 FR 7261) were 
published in the February 19, 2002, issue of the Federal Register. 
Corrections to both of these rulemakings were published in the March 
25, 2002, issue of the Federal Register (67 FR 13563; 67 FR 13577). A 
referendum order was published in the April 9, 2002, issue of the 
Federal Register (67 FR 17018).

Question and Answer Overview

Why Is the Final Rule Being Published?

    In a recent referendum, eligible producers and importers of Hass 
avocados voted in favor of implementing the Order. This action 
completes this rulemaking process.

What Is the Purpose of the Hass Avocado Program?

    The purpose of the program is to increase consumption of Hass 
avocados in the United States.

Who Will Be Covered by the Program?

    Producers and importers of Hass avocados will pay assessments under 
the program, and first handlers will be involved in the assessment 
collection process.

Who Will Sit on the Board?

    The Act provides that there will be a 12-member Board consisting of 
seven domestic Hass avocado producers, two importers, and three 
additional members who can either be importers or domestic producers. 
The three ``swing'' seats will be allocated to producers and importers 
so as to assure as nearly as possible that the composition of the Board 
reflects the proportion of domestic production and imports supplying 
the United States market. The proportion will be based on the average 
volume of domestic production and imports in the United States over the 
previous three years. Each member will have an alternate.

How Will Members of the Board Be Selected?

    The Order provides for a nomination and election process to 
identify industry members who are interested and willing to serve on 
the Board. In the initial nomination process, the California Avocado 
Commission (Commission) will conduct an election to determine who will 
be nominated for each domestic producer seat. USDA will conduct an 
election among importers to determine who will be nominated to fill the 
importer seats. Two names must be submitted for each member and each 
alternate position. From the names submitted, USDA will appoint the 
members and alternates of the Board.

Executive Orders 12866 and 12988

    This rule has been determined to be not significant for purposes of 
Executive Order 12866 and, therefore, has not been reviewed by the 
Office of Management and Budget.
    This rule has been reviewed under E.O. 12988, Civil Justice Reform. 
It is not intended to have retroactive effect. Section 1212 of the Act 
states that the Act may not be construed to preempt or supersede any 
other program relating to Hass avocado promotion, research, industry 
information, and consumer information organized and operated under the 
laws of the United States or of a state.
    Under Section 1207 of the Act, a person subject to the Oder may 
file a petition with USDA stating that the Order, any provision for the 
Order, or any obligation imposed in connection with the Order, is not 
established in accordance with law, and requesting a modification of 
the Order or an exemption from the Order. Any petition filed 
challenging the Order, any provision of the Order, or any obligation 
imposed in connection with the Order, shall be filed within two years 
after the effective date of the Order, provision, or obligation subject 
to challenge in the petition. The petitioner will have the opportunity 
for a hearing on the petition. Thereafter, USDA will issue a ruling on 
the petition. The Act provides that the district court of the United 
States in any district in which the

[[Page 56896]]

petitioner resides or conducts business shall have the jurisdiction to 
review a final ruling on the petition, if the petitioner files a 
complaint for that purpose not later that 20 days after the date of the 
entry of USDA's final ruling.

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601 et seq.), the Agency has examined the impact of this rule on small 
entities and prepared a final regulatory flexibility analysis that was 
included in the proposed rule published in the Federal Register on 
February 19, 2002. This analysis indicates that the Agency minimized 
the economic impacts of the Order provisions on small entities to the 
fullest extent reasonably possible while adhering to the program's 
objectives.
    In addition, the Order provisions were carefully reviewed, and 
every effort was made to minimize any unnecessary information 
collection and recordkeeping costs or requirements. In accordance with 
OMB regulation (5 CFR (part 1320) which implements the Paperwork 
Reduction Act of 1995 (44 U.S.C. chapter 35), the collection and 
recordkeeping requirements that are imposed by this Order were 
submitted to OMB and approved under OMB control numbers 0581-0197 and 
0505-0001. The information collection numbers differ from what was 
published in the February 19, 2002, proposed rule because the rule 
inadvertently omitted OMB number 0505-0001 for the background 
nomination form. Section 1219.77 is corrected to add this OMB control 
number.
    Copies of the final regulatory flexibility analysis and the 
discussion of the information collection and recordkeeping requirements 
contained in this rulemaking can be obtained from Julie Morin at the 
address listed above or by e-mail at [email protected].

Background

    The Act authorizes the Department to establish a Hass avocado 
research, promotion, and information program. The program will be 
funded by an assessment levied on producers and importers of Hass 
avocados of 2.5 cents per pound of Hass avocados. The rate may be 
raised up to a maximum rate of 5 cents per pound. Exports of U.S. Hass 
avocados are exempt from assessment. The Act authorizes assessments on 
domestic Hass avocados and on imports of fresh, frozen, and processed 
Hass avocados. Initially, only fresh domestic and imported Hass 
avocados will be assessed.
    The Board will use the funds to pay for research, promotion, 
industry information, and consumer information; administration, 
maintenance, and functioning of the Board; and expenses incurred by 
USDA in implementing and administering the Order, including referendum 
costs.
    The Board will be composed of 12 voting members; 7 producers, 2 
importers, and 3 producer and importers (swing seats). The three 
``swing'' seats will be allocated to producers and importers so as to 
assure as nearly possible that the composition of the Board reflects 
the proportion of domestic production and imports supplying the United 
States market, based on the three-year average of domestic production 
and imports.
    The producer assessment will be collected by first handlers, and 
the importer assessment will be collected by the U.S. Customs Service.
    A state association of avocado producers (currently, the 
Commission) will receive 85 percent of the assessments paid by domestic 
producers, and importer associations will receive 85 percent of the 
assessments paid by their members. The state association could use the 
assessment funds to promote California Hass avocados in the United 
States, and the importer associations could use the assessments to 
promote Hass avocados on a country-of-origin basis in the United 
States. The funds remaining with the Board would be used to promote 
Hass avocados generically in the United States. The Board would also 
enter into contracts with the state association as provided for in the 
Act.
    USDA issued a news release on January 8, 2001, requesting proposals 
for an initial Order or portions of an initial Order by February 7, 
2001. A second news release, extending the deadline for submission of 
proposals to March 9, 2001, was issued on February 2, 2001.
    An entire proposed Order was submitted by the Commission. In 
addition, proposals containing portions of an Order were submitted by 
the Asociacion de Productores y Empacadores Exportadores de Aguacate de 
Michoacan (APEAM); the Chilean Exporters Association (ASOEX), Chilean 
Fruit Growers Federation (FEDERUTA), and Comite de Paltas de Chile; and 
the New Zealand Avocado Growers Association (NZAGA) and the New Zealand 
Avocado Industry Council (NZAIC). USDA published a proposed rule on 
July 13, 2001, for comment. A second proposed rule was published on 
February 19, 2002. A referendum order that set the registration period 
from May 13-31, 2002, and voting period from June 24-July 12, 2002, was 
published on April 9, 2002. In the referendum, producers and importers 
of Hass avocados voted to implement the program.
    The Order is summarized as follows: Sections 1219.1 through 1219.26 
of the Order define certain terms, such as Hass avocado, handler, 
producer, and importer, which are used in the Order.
    Sections 1219.30 through 1219.42 include provisions relating to the 
establishment, adjustment, and membership; nominations; appointment; 
term of office; vacancies; reimbursement; and the powers and duties of 
the Board.
    The Board will be the body organized to administer the Order 
through the implementation of programs, plans, projects, budgets, and 
contracts to promote and disseminate information about Hass avocados, 
under the supervision of USDA. Further, the Board will be authorized to 
incur expenses necessary for the performance of its duties and to 
establish a reserve fund.
    Sections 1219.50 through 1219.58 authorize the collection of 
assessments, specify who pays them and how, and specify persons who 
will be exempt from paying the assessment. The assessment rate may not 
exceed 5 cents per pound of Hass avocados. The assessment sections also 
outline the procedures to be followed by first handlers and importers 
for remitting assessments and establish interest charges for unpaid or 
late assessments.
    Sections 1219.60 through 1219.65 concern reporting and 
recordkeeping requirements for persons subject to the Order; the 
confidentiality of information obtained from such books, records, or 
reports; and the maintenance of lists of importers and producers.
    Sections 1219.70 through 1219.77 describe the rights of the 
Secretary of Agriculture; the authority for the Department to suspend 
or terminate the Order; proceedings after termination; the effect of 
termination or amendment; personal liability of Board members and 
staff; separability; amendments; and OMB control numbers.

General Findings

    The Department conducted a referendum among producers and importers 
of Hass avocados from June 24 through July 12, 2002, to determine 
whether the Order would become effective. The representative period for 
establishing voter eligibility was from January 1, 2000, through 
December 31, 2001. It is determined that a majority of the eligible 
producers and importers

[[Page 56897]]

voting in the referendum favored implementation of the Order. After 
consideration of all relevant materials presented, including the 
proposals, comments received, and the referendum results, it is found 
that the Order is consistent with and effectuates the policy and 
purpose of the Act.
    Pursuant to the provision in 5 U.S.C. 553, it is found and 
determined that good cause exists for not postponing the effective date 
of this action until 30 days after publication in the Federal Register 
because: (1) The Act requires implementation of the Order if the Order 
is approved by the Hass avocado industry; (2) the industry approved the 
Order in a recent referendum; (3) the Order cannot be fully implemented 
until this rule becomes effective and the Board is appointed; and (4) 
no useful purpose would be served by delaying the effective date of 
this action. Further, collection and remittance of assessments and 
applicable reporting will begin on January 2, 2003. If the Board is not 
in place on the effective date of the Order, the Order provides for the 
Department to receive assessments on the Board's behalf.

List of Subjects in 7 CFR Part 1219

    Administrative practice and procedure, Advertising, Consumer 
Information, Marketing agreements, Hass avocados, Promotion, Reporting 
and recordkeeping requirements.

    For the reasons set forth in the preamble, Title 7 of chapter XI of 
the Code of Federal Regulations is amended as follows:

PART 1219--HASS AVOCADO PROMOTION, RESEARCH, AND INFORMATION

    1. The authority citation for part 1219 continues to read as 
follows:

    Authority: 7 U.S.C. 7801-7813.

    2. Subpart A is added to part 1219 to read as follows:

Subpart A--Hass Avocado Promotion, Research, and Information Order

Definitions

Sec.
1219.1 Act.
1219.2 Association.
1219.3 Conflict of interest.
1219.4 Consumer information.
1219.5 Crop year.
1219.6 Customs.
1219.7 Department.
1219.8 Exempt handler.
1219.9 First handler.
1219.10 Fiscal period or marketing year.
1219.11 Handle.
1219.12 Hass avocado.
1219.13 Hass Avocado Board.
1219.14 Importer.
1219.15 Industry information.
1219.16 Marketing.
1219.17 Order.
1219.18 Part and subpart.
1219.19 Person.
1219.20 Producer.
1219.21 Programs, plans, and projects.
1219.22 Promotion.
1219.23 Research.
1219.24 Secretary.
1219.25 State.
1219.26 United States.

The Hass Avocado Board

1219.30 Establishment and membership.
1219.31 Initial nomination and appointment of producer members and 
alternates.
1219.32 Initial nomination and appointment of importer members and 
alternates.
1219.33 Subsequent nomination and appointment of Board members and 
alternates.
1219.34 Failure to nominate.
1219.35 Term of office.
1219.36 Vacancies.
1219.37 Alternate members.
1219.38 Powers and duties.
1219.39 Board procedure.
1219.40 Committee procedure.
1219.41 Compensation and expenses.
1219.42 Prohibited activities.

Budgets, Expenses, and Assessments

1219.50 Budgets, programs, plans, and projects.
1219.51 Contracts and agreements.
1219.52 Control of administrative costs.
1219.53 Budget and expenses.
1219.54 Assessments.
1219.55 Exemption from assessment.
1219.56 Adjustment of accounts.
1219.57 Patents, copyrights, trademarks, publications, and product 
formulations.
1219.58 Importer associations.

Books, Records, and Reports

1219.60 Reports.
1219.61 Books and records.
1219.62 Books and records of the Board.
1219.63 Confidential treatment.
1219.64 List of importers.
1219.65 List of producers.

Miscellaneous

1219.70 Right of the Secretary.
1219.71 Suspension or termination.
1210.72 Proceedings after termination.
1219.73 Effect of termination or amendment.
1219.74 Personal liability.
1219.75 Separability.
1219.76 Amendments.
1219.77 OMB control numbers.

Subpart A--Hass Avocado Promotion, Research, and Information Order

Definitions


Sec.  1219.1  Act.

    Act means the Hass Avocado Promotion, Research, and Information Act 
of 2000, Public Law 106-387, 7 U.S.C. 7801-7813, and any amendments 
thereto.


Sec.  1219.2  Association.

    Association means an avocado organization established by State 
statute in a State with the majority of Hass avocado production in the 
United States.


Sec.  1219.3  Conflict of interest.

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


Sec.  1219.4  Consumer information.

    Consumer information means any action or program that disseminates 
or otherwise provides information to consumers and other persons, on 
the use, nutritional attributes, and other information that will assist 
consumers and other persons in the United States in making evaluations 
and decisions regarding the purchase, preparation, and use of Hass 
avocados.


Sec.  1219.5  Crop year.

    Crop year means the period from November 1 of one year through 
October 31 of the following year, or such other one-year period 
recommended by the Board and approved by the Secretary.


Sec.  1219.6  Customs.

    Customs means the United States Customs Service.


Sec.  1219.7  Department.

    Department means the United States Department of Agriculture.


Sec.  1219.8  Exempt handler.

    Exempt handler means a person who would otherwise be considered a 
first handler, except that all Hass avocados purchased by the person 
have already been subject to assessments under the Order. A person who 
handles both Hass avocados that have already been subject to 
assessments under the Order and Hass avocados that have not been 
subject to assessments under the Order is a first handler.


Sec.  1219.9  First handler.

    First handler means a person operating in the Hass avocado 
marketing system that sells domestic or imported Hass avocados for 
consumption in the United States and who is responsible for remitting 
assessments to the Board. For the purposes of the Order, the term means 
the first person who handles Hass avocados for sale (except a common or 
contract carrier of Hass avocados owned by another person),

[[Page 56898]]

including a producer who handles Hass avocados for sale of the 
producer's own production.


Sec.  1219.10  Fiscal period or marketing year.

    Fiscal period or marketing year means the period beginning on 
November 1 of any year and extending through the last day of October of 
the following year, or such other consecutive 12-month period as shall 
be recommended by the Board and approved by the Secretary.


Sec.  1219.11  Handle.

    Handle means to pack, process, transport, purchase, or in any other 
way to place or cause Hass avocados to which one has title or 
possession to be placed in the current of commerce. Such term shall not 
include the transportation or delivery of Hass avocados by the producer 
thereof to a handler.


Sec.  1219.12  Hass avocado.

    Hass avocado means the fruit grown in or imported into the United 
States of the species Persea americana Mill., or other type of avocados 
that, in the determination of the Board, with approval of the 
Secretary, is so similar to the Hass variety avocado as to be 
indistinguishable to consumers in fresh form. The term shall include 
all fruit in fresh, frozen, or any other processed form.


Sec.  1219.13  Hass Avocado Board.

    Hass Avocado Board or the Board means the administrative body 
established pursuant to Sec.  1219.40.


Sec.  1219.14  Importer.

    Importer means any person who imports Hass avocados into the United 
States. The term includes a person who holds title to Hass avocados 
produced outside of the United States immediately upon release by 
Customs, as well as any person who acts on behalf of others, as an 
agent, broker, or consignee, to secure the release of Hass avocados 
from Customs and the introduction of the released Hass avocados into 
the current of commerce and who is listed in the import records of 
Customs as the importer of record for such Hass avocados.


Sec.  1219.15  Industry information.

    Industry information means information, programs, and activities 
that are designed to increase efficiency in processing, enhance the 
development of new markets and marketing strategies, increase marketing 
efficiency, and enhance the image of Hass avocados and the Hass avocado 
industry in the United States.


Sec.  1219.16  Marketing.

    Marketing means any activity related to the sale or other 
disposition of Hass avocados in any channel of commerce.


Sec.  1219.17  Order.

    Order means this subpart.


Sec.  1219.18  Part and subpart.

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


Sec.  1219.19  Person.

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


Sec.  1219.20  Producer.

    Producer means any person who is engaged in the business of 
producing Hass avocados in the United States for commercial use, who 
owns, or shares the ownership and risk of loss, of such Hass avocados.


Sec.  1219.21  Programs, plans, and projects.

    Programs, plans, and projects means those research, promotion, and 
information programs, plans, studies, or projects established pursuant 
to Sec.  1219.50.


Sec.  1219.22  Promotion.

    Promotion means any action to advance the image, desirability, or 
marketability of Hass avocados in the United States, including paid 
advertising, sales promotion, and publicity. Promotion activities are 
designed to improve the competitive position and stimulate sales of 
Hass avocados in the domestic marketplace.


Sec.  1219.23  Research.

    Research means any type of test, study, or analysis relating to 
market research, market development, and market efforts, or relating to 
the use, quality, or nutritional value of Hass avocados, other related 
food science research, or research designed to advance the knowledge, 
image, desirability, usage, or marketability of Hass avocados in the 
United States.


Sec.  1219.24  Secretary.

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


Sec.  1219.25  State.

    State means any of the several 50 States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth 
of the Northern Mariana Islands, the United States Virgin Islands, 
Guam, American Samoa, the Republic of the Marshall Islands, and the 
Federated States of Micronesia.


Sec.  1219.26  United States.

    United States means collectively the several 50 States of the 
United States, the District of Columbia, the Commonwealth of Puerto 
Rico, the Commonwealth of the Northern Mariana Islands, the United 
States Virgin Islands, Guam, American Samoa, the Republic of the 
Marshall Islands, and the Federated States of Micronesia.

The Hass Avocado Board


Sec.  1219.30  Establishment and membership.

    (a) A Hass Avocado Board, called the Board elsewhere in this part, 
is hereby established to administer the terms and provisions of this 
subpart. The Board shall consist of 12 members nominated by the Hass 
avocado industry and appointed by the Secretary as provided in this 
subpart, each of whom shall have an alternate nominated and appointed 
in the same manner as members of the Board are nominated and appointed. 
Board members and alternates shall be domiciled in the United States.
    (b) The membership of the Board shall be divided as follows:
    (1) Seven members and their alternates shall be producers of Hass 
avocados that are subject to assessments under this subpart;
    (2) Two members and their alternates shall be importers of Hass 
avocados that are subject to assessments under this subpart; and
    (3) Three members shall be producers of Hass avocados that are 
subject to assessments under this subpart or importers of Hass avocados 
that are subject to assessments under this subpart. Producers and 
importers shall be allocated to these positions so as to assure as 
nearly as possible that the composition of the 12-member Board reflects 
the proportion of domestic production and imports supplying the United 
States market. Such proportion shall be based on the Secretary's 
determination of the average volume of domestic production and the 
average volume of imports into the United States market over the 
previous three years, based on all information available to the 
Secretary.
    (c) Three years after the assessment of funds commences pursuant to 
this

[[Page 56899]]

subpart, and at the end of each three-year period thereafter, the Board 
shall review the production of domestic Hass avocados in the United 
States and the volume of imported Hass avocados on the basis of the 
amount of assessments collected from producers and importers over the 
immediately preceding three-year period and, if warranted, recommend to 
the Secretary the reapportionment of the positions authorized in 
paragraph (b)(3) of this section to reflect changes in the proportion 
of domestic Hass avocado production to the volume of imported Hass 
avocados, to the extent possible in the Act. Any adjustment under this 
paragraph shall be subject to the review and approval of the Secretary.
    (d) For purposes of this section, importer means a person who is 
involved in, as a substantial activity, the importation of Hass 
avocados for sale or marketing in the United States (either directly or 
as an agent, broker, or consignee of any person that produces Hass 
avocados outside of the United States for sale in the United States), 
who is subject to assessments under the Order, and who is listed by 
Customs as the importer of record for such Hass avocados. A substantial 
activity means that the volume of a person's Hass avocado imports must 
exceed the volume of the person's production or handling of domestic 
Hass avocados.


Sec.  1219.31  Initial nomination and appointment of producer members 
and alternates.

    (a) The Association will nominate producer members and alternates 
to serve on the Board in accordance with the following procedures.
    (1) The Association shall establish a list of producers in the 
United States who are eligible to serve on the Board and notify all 
producers that they may nominate persons to serve as members and 
alternates on the Board.
    (2) After names are received from the producers, the Association 
shall prepare a ballot with the names of all persons nominated and mail 
it to all producers to allow them the opportunity to vote for the 
persons who will represent their interests on the Board.
    (3) After tabulating the vote, the Association shall announce the 
results and submit two names for each producer member and two names for 
each alternate producer member to the Secretary from the persons 
receiving the highest number of votes.
    (b) The Secretary shall select the producer members and alternates 
of the Board from the names submitted by the Association. Following the 
selection of the producer members, the Secretary shall select the 
alternate producer members. In selecting the alternate members, the 
Secretary shall consider the names submitted by the Association for 
each alternate member position along with the individuals whose names 
were submitted by the Association for each Board member position but 
were not selected for that position.


Sec.  1219.32  Initial nomination and appointment of importer members 
and alternates.

    (a) The Department will conduct the nomination process for the 
initial importer members and alternates on the Board in accordance with 
the following procedures.
    (1) The Department shall notify all known importers and importer 
organizations that they may nominate persons to serve as importer 
members and alternates on the Board.
    (2) After names are received from the importers and importer 
organizations, the Department shall prepare a ballot with the names of 
all persons nominated and mail it to all known importers to allow them 
the opportunity to vote for the persons who will represent their 
interests on the Board.
    (3) After tabulating the vote, the Department shall announce the 
results and submit two names for each importer member and two names for 
each alternate importer member to the Secretary from the persons 
receiving the highest number of votes.
    (b) The Secretary shall select the importer members and alternates 
of the Board from the nominees elected by importers. Following the 
selection of the importer members, the Secretary shall select the 
alternate importer members. In selecting the alternate members, the 
Secretary shall consider the names for each alternate member position 
along with the individuals who were elected by importers for each Board 
member position but were not selected for that position.


Sec.  1219.33  Subsequent nomination and appointment of Board members 
and alternates.

    The Board's staff shall announce at least 150 days in advance of 
the expiration of members' and alternates' terms that such terms are 
expiring and shall solicit nominations in accordance with procedures 
recommended by the Board and approved by the Secretary. Nominations for 
such positions should be submitted to the Secretary no less than 90 
days prior to the expiration of the terms.


Sec.  1219.34  Failure to nominate.

    In any case in which producers or importers fail to nominate 
individuals for appointment to the Board, the Secretary may appoint 
individuals to fill vacancies from the appropriate segments of the 
industry.


Sec.  1219.35  Term of office.

    The members and alternate members of the Board shall serve for 
terms of three years, except the members of the initial Board shall 
serve terms as follows: Four members and four alternates shall serve 
for two-year terms; four members and four alternates shall serve for 
three-year terms; and four members and four alternates shall serve for 
four-year terms. No member shall serve more than two consecutive three-
year terms. Members and alternates serving initial two-year or four-
year terms may serve for one additional three-year term. A Board member 
may serve as an alternate during the years the member is ineligible for 
a member position. Each term of office will end on October 31, with new 
terms of office beginning on November 1.


Sec.  1219.36  Vacancies.

    (a) In the event any member or alternate of the Board ceases to be 
a member of the category of members from which the member was appointed 
to the Board, such member or alternate shall be disqualified from 
serving on the Board and the position shall automatically become 
vacant.
    (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 that the recommendation of the Board shows adequate cause, the 
member shall be removed from office.
    (c) Should any Board member position become vacant in the event of 
the death, removal, resignation, or disqualification, the alternate of 
that member shall automatically assume the position of said member. The 
alternate shall serve until the end of the member's normal term. If 
there is no alternate member to assume the position of member, the 
successor member and alternate shall be nominated and selected in the 
manner specified in Sec. Sec.  1219.31, 1219.32, or 1219.33.
    (d) Should any alternate member become vacant in the event of 
death, removal, resignation, or disqualification, the Board may 
nominate persons to serve for the unexpired term of such alternate 
member. The nomination shall be conducted at a regularly scheduled 
Board meeting as soon as practicable after the vacancy occurs. The 
Board may

[[Page 56900]]

solicit the names of nominees from producers and importers prior to the 
meeting and from the floor of the meeting. All nominees must meet the 
qualifications for nomination. The Board shall submit two nominees for 
each vacancy to the Secretary. A vacancy will not be required to be 
filled if the unexpired term is less than six months.


Sec.  1219.37  Alternate members.

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


Sec.  1219.38  Powers and duties.

    The Board shall have the following powers and duties in addition to 
the responsibilities and authorities specified in other sections of 
this subpart:
    (a) To administer the Order in accordance with its terms and 
conditions and to collect assessments;
    (b) To develop and recommend to the Secretary for approval such 
bylaws as may be necessary for the functioning of the Board and such 
rules as may be necessary to administer the Order, including activities 
authorized to be carried out under the Order;
    (c) To meet, organize, and select from among the members of the 
Board a chairperson, other officers, committees, and subcommittees, at 
the start of each fiscal period, and at such other times as the Board 
determines to be appropriate;
    (d) To recommend to the Secretary rules and regulations to 
effectuate the terms and conditions of this subpart;
    (e) To employ such persons, other than the members, as the Board 
considers necessary to assist the Board in carrying out its duties and 
to determine the compensation and specify the duties of such persons;
    (f) To appoint from its members an executive committee and to 
delegate to the committee authority to administer the terms and 
provisions of this subpart under the direction of the Board and within 
the policies determined by the Board and approved by the Secretary;
    (g) To develop budgets for the implementation of this subpart and 
submit the budgets to the Secretary for approval and to propose and 
develop (or receive and evaluate), approve, and submit to the Secretary 
for approval programs, plans, and projects for Hass avocado promotion, 
industry information, consumer information, or related research;
    (h) To develop and implement after the approval by the Secretary 
programs, plans, and projects for Hass avocado promotion, industry 
information, consumer information, or related research, to contract or 
enter into agreements with appropriate persons to implement the 
programs, plans, and projects, and to pay the costs of the 
implementation of contracts and agreements with funds collected under 
this subpart.
    (i) To maintain such records and books and prepare and submit such 
reports and records from time to time to the Secretary as the Secretary 
may prescribe; to make appropriate accounting with respect to the 
receipt and disbursement of all funds entrusted to it; and to keep 
records that accurately reflect the actions and transactions of the 
Board;
    (j) To work to achieve an effective, continuous, and coordinated 
program of promotion, research, consumer information, and industry 
information designed to strengthen the Hass avocado industry's position 
in the domestic marketplace; to maintain and expand existing domestic 
markets and uses for Hass avocados; to create new domestic markets; and 
to carry out programs, plans, and projects designed to provide maximum 
benefits to the Hass avocado industry;
    (k) To evaluate on-going and completed programs, plans, and 
projects for Hass avocado promotion, industry information, consumer 
information, or related research and to comply with the independent 
evaluation provisions of the Federal Agricultural Improvement and 
Reform Act of 1996 [7 U.S.C. 7401 et seq.];
    (l) To receive, investigate, and report to the Secretary complaints 
of violations of the Order;
    (m) To recommend to the Secretary amendments to this Order;
    (n) To invest, pending disbursement under a program, plan, or 
project, funds collected through assessments authorized under this Act 
only in:
    (1) Obligations of the United States or any agency of the United 
States;
    (2) General obligations of any State or any political subdivision 
of a State;
    (3) Any interest-bearing account or certificate of deposit of a 
bank that is a member of the Federal Reserve System; or
    (4) Obligations fully guaranteed as to principal and interest by 
the United States, except that income from any such invested funds may 
be used only for a purpose for which the invested funds may be used;
    (o) To borrow funds necessary for the startup expenses of the 
Order;
    (p) To cause the books of the Board to be audited by a qualified 
independent auditor at the end of each fiscal period and to submit a 
report of the audit directly to the Secretary;
    (q) To give the Secretary the same notice of meetings and 
teleconferences of the Board and its committees as is given to members 
in order that the Secretary's representative(s) may attend or 
participate in the meetings;
    (r) To act as intermediary between the Secretary and any producer, 
first handler, or importer;
    (s) To periodically prepare and make public reports of its 
activities carried out, and at least once each fiscal period, to make 
public an accounting of funds received and expended; and
    (t) To notify Hass avocado producers, first handlers, and importers 
of all Board meetings through news releases or other means.


Sec.  1219.39  Board procedure.

    (a) At a properly convened meeting of the Board, seven (7) members, 
including alternates acting in place of members of the Board, shall 
constitute a quorum: Provided, that such alternates shall serve only 
when the member is absent from a meeting. 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.
    (b) In lieu of voting at a properly convened meeting and, when in 
the opinion of the chairperson of the Board such action is considered 
necessary, the Board may take action if supported by one vote more than 
50 percent of the members by mail, telephone, electronic mail, 
facsimile, or other means of communication. Such alternative means for 
the Board taking action may be undertaken for various reasons. These 
reasons include the need to address matters of an emergency nature when 
there is not enough time to call an assembled meeting of the Board. All 
telephone votes shall be confirmed promptly in writing. In that event, 
all members must be notified and provided an opportunity to vote. Any 
action so taken shall have the same force and effect as though such 
action had been taken at a properly convened meeting of the Board. All 
votes shall be recorded in the Board minutes.

[[Page 56901]]

    (c) All Board members and alternates and the Secretary will be 
notified at least 10 days in advance of all Board meetings, except the 
chairperson of the Board can waive the 10-day requirement in matters of 
an emergency nature.
    (d) Each member of the Board will be entitled to one vote on any 
matter put to the Board, and the motion will carry if supported by one 
vote more than 50 percent of the total votes represented by the Board 
members present.
    (e) There shall be no voting by proxy.
    (f) The chairperson shall be a voting member of the Board.


Sec.  1219.40  Committee procedure.

    (a) The Board may establish committees as deemed necessary to carry 
out the purposes and objectives of the Order.
    (b) The chairperson of the Board shall appoint all committee 
chairpersons and shall appoint all members of each committee after 
consultation with the committee chairperson affected. Appointments are 
subject to approval by the Board and may be changed from time to time 
as determined by the chairperson of the Board with the concurrence of 
the Board.
    (c) The chairperson of the Board may appoint committee members from 
among the Board members and alternates and from the industry in 
general.
    (d) The rules and procedures under which committees conduct their 
activities shall be prescribed in the Board's bylaws.
    (e) Committee members and the Secretary will be notified at least 
10 days in advance of all committee meetings.
    (f) It will be considered a quorum at a committee meeting when at 
least one more than half of those assigned to the committee are 
present.
    (g) There shall be no voting by proxy on committees.
    (h) The chairperson of the Board shall be an ex-officio member of 
all committees.


Sec.  1219.41  Compensation and expenses.

    (a) The members and alternates of the Board and committee members 
shall serve without compensation but shall be reimbursed for reasonable 
out-of-pocket expenses, as approved by the Board, incurred by them in 
the performance of their duties.
    (b) The Board shall have in place sufficient internal controls to 
prevent reimbursements or expenditures for unreasonable or otherwise 
controversial travel and meeting expenses.


Sec.  1219.42  Prohibited activities.

    The Board may not engage in and shall prohibit its employees and 
agents from engaging in:
    (a) Any action that would be a conflict of interest. For the 
purposes of this subpart, Board members and employees thereof must 
disclose any relationship with any organization or company that has a 
contract with the Board or operates a State promotion program. No 
member may vote on any matter in which the member or member's business 
entity has a financial interest.
    (b) Using funds collected under this subpart for the purpose of 
influencing legislation or governmental action or policy, by local, 
national, and foreign governments, except to develop and make 
recommendations to the Secretary as provided for in this subpart.
    (c) In a program, plan, or project conducted under this subpart:
    (1) Making any reference to private brand names or making false, 
misleading, disparaging, or unwarranted claims on behalf of Hass 
avocados or
    (2) Making any false, misleading, or disparaging statements with 
respect to the attributes or use of any agricultural product. This 
section shall not preclude the Board from offering its programs, plans, 
and projects for use by commercial parties under such terms and 
conditions as the Board may prescribe as approved by the Secretary.
    (d) For the purposes of this section, a reference to State of 
origin or country of origin does not constitute a reference to a 
private brand name with regard to any funds credited to or disbursed by 
the Board to the Association or to any importer association established 
in accordance with Sec.  1219.54.

Budgets, Expenses, and Assessments


Sec.  1219.50  Budgets, programs, plans, and projects.

    (a) The Board shall submit to the Secretary, on a fiscal period 
basis, annual budgets of its anticipated expenses and disbursements of 
the Board in the administration of this subpart, including the 
projected costs of Hass avocado promotion, industry information, 
consumer information, and related research programs, plans, and 
projects. The first budget shall cover such period as may remain before 
the beginning of the next fiscal period. If such fiscal period is 90 
days or less, the first budget shall cover such period, as well as the 
next fiscal period. Thereafter, the Board shall submit budgets for each 
succeeding fiscal period not less than 60 days before the beginning of 
such fiscal period.
    (b) The Board shall receive and evaluate, or on its own initiative 
develop programs, plans and projects for Hass avocado promotion, 
industry information, consumer information as well as related research. 
The Board shall submit to the Secretary for approval any program, plan, 
or project authorized in this subpart. Such programs, plans or projects 
shall provide for:
    (1) The establishment, implementation, issuance, effectuation, 
administration, and evaluation of appropriate programs, plans, or 
projects for advertising, sales promotion, other promotion, and 
consumer information with respect to Hass avocados directed toward 
increasing the general demand for Hass avocados in the United States. 
Funds shall be available as necessary to carry out this section;
    (2) The establishment, implementation, issuance, effectuation, 
administration, and evaluation of appropriate programs, plans, and 
projects designed to strengthen the position of the Hass avocado 
industry in the domestic marketplace; to maintain, develop, and expand 
markets for Hass avocados in the United States; to lead to the 
development of new marketing strategies; to advance the image and 
desirability of, increase the efficiency of, and encourage further 
development of the Hass avocado industry; and to provide for the 
disbursement of necessary funds for the purposes described in this 
section;
    (3) The establishment, implementation, issuance, effectuation, 
administration, and evaluation of programs, plans, and projects for 
marketing development research; research on the sale, distribution, 
marketing, use, quality, and nutritional value of Hass avocados; and 
other research with respect to Hass avocado marketing, promotion, 
industry information, or consumer information, including the creation 
of new products thereof. Information acquired from such plans and 
projects shall be disseminated as appropriate. Funds shall be available 
as necessary to carry out this section; and
    (4) The Board to enter into contracts or make agreements for the 
development and carrying out of research, promotion, and information, 
and pay for the costs of such contracts or agreements with funds 
collected pursuant to Sec.  1219.54.
    (c) A budget, program, plan, or project for Hass avocados 
promotion, industry information, consumer information, or related 
research may not be implemented prior to approval of the budget, 
program, plan, or project by the Secretary. If the Secretary fails to 
provide notice to the Board or approval or disapproval of a budget, 
program, plan, or project within 45 days after

[[Page 56902]]

receipt, such budget, program, plan, or project shall be deemed 
approved by the Secretary and may be implemented by the Board.
    (d) The Board, from time to time, may seek advice and consult with 
experts from the production, import, wholesale, and retail segments of 
the Hass avocado industry to assist in the development of promotion, 
industry information, consumer information, and related research 
programs, plans, and projects. For these purposes, the Board may 
appoint special committees composed of persons other than Board 
members. A committee so appointed shall consult directly with the 
Board.
    (e) Programs must be conducted throughout the year to reflect the 
periods when imported and domestic Hass avocados are in the U.S. 
marketplace.
    (f) The Board shall consult with both the Association and importer 
associations on programs, plans, and projects for generic promotions.


Sec.  1219.51  Contracts and agreements.

    (a) The Board shall enter into a contract or an agreement with the 
Association for the implementation of programs, plans, or projects for 
promotion, industry information, consumer information, or related 
research with respect to Hass avocados and for the payment of the cost 
of the contract or agreement with funds received by the Board under 
this subpart. The Board may disburse such funds as necessary for these 
purposes after such programs, plans, or projects have been submitted to 
and approved by the Secretary.
    (b) Any contract or agreement entered into shall provide that the 
contracting or agreeing party shall develop and submit to the Board a 
program, plan or project, together with a budget that includes the 
estimated costs to be incurred for the program, plan or project, and 
such program, plan or project shall become effective on the approval of 
the Secretary. For such contract or agreement, the contracting or 
agreeing party shall:
    (1) Keep accurate records of all transactions of the party;
    (2) Account for funds received and expended;
    (3) Make periodic reports to the Board of activities conducted; and
    (4) Make such other reports as the Board or the Secretary shall 
require.
    (c) The Secretary may audit the records of the contracting or 
agreeing party periodically.
    (d) Contractors and subcontractors are subject to the provisions of 
Sec.  1219.42.
    (e) The Board may enter into contracts or agreements for 
administrative services, including contracts for employment, as may be 
required to conduct its business. To the extent appropriate to the 
contract involved, contracts or agreements entered into by the Board 
under the authority of this section shall conform to the provisions 
described in paragraph (b) of this section.


Sec.  1219.52  Control of administrative costs.

    (a) As soon as practicable after September 9, 2002, and after 
consultation with the Secretary and other appropriate persons, the 
Board shall implement a system of cost controls based on normally 
accepted business practices to:
    (1) Ensure that the costs incurred by the Board in administering 
this part in any fiscal period shall not exceed 10 percent of the 
projected level of assessments and other income received by the Board 
for generic promotion and research programs for that fiscal period; and
    (2) Cover the minimum administrative activities and personnel 
needed to properly administer and enforce this subpart, and conduct, 
supervise, and evaluate programs, plans, and projects under this 
subpart.
    (b) Reimbursements to the Secretary required under Sec.  1219.53(b) 
are excluded from the limitation on spending.
    (c) To the extent possible, the Board shall use the resources, 
staffs, and facilities of existing avocado organizations as provided in 
Sec.  1219.54(a).


Sec.  1219.53  Budget and expenses.

    (a) The Board is authorized to incur such expenses, including 
provision for a reasonable reserve for operating contingencies, as the 
Secretary finds are reasonable and likely to be incurred by the Board 
for its maintenance and functioning and to enable it to exercise its 
powers and perform its duties in accordance with the provisions of this 
subpart. Such expenses shall be paid from funds received by the Board, 
including assessments, contributions from any person not subject to 
assessments under this subpart, and other funds available to the Board.
    (b) The Board shall reimburse the Department:
    (1) For expenses not to exceed $25,000 incurred by the Secretary in 
connection with any referendum conducted under the Act;
    (2) For administrative costs incurred by the Secretary for 
supervisory work of up to two employee years annually after the Order 
or amendment to the Order has been issued and made effective; and
    (3) For costs incurred by the Secretary in implementation of the 
Order, for enforcement of the Act and the order, for subsequent 
referenda conducted under the Act, and in defending the Board in 
litigation arising out of action taken by the Board or otherwise in 
defense of the Order.
    (c) The Board shall establish and maintain the minimum level of 
annual administrative expenses necessary to efficiently and effectively 
carry out the programs authorized by the Act. The Board shall include 
its annual administrative expenses as a separate item in its annual 
report. The Board shall adhere to its fiduciary responsibilities and 
ensure that all monies are spent in accordance with the Act and the 
Order.
    (d) With the approval of the Secretary, the Board may borrow money 
for the payment of administrative expenses, subject to the same fiscal, 
budget, and audit controls as other funds of the Board. Any funds 
borrowed by the Board shall be expended only for startup costs and 
capital outlays and are limited to the first period of operation of the 
Board.
    (e) The Board may accept voluntary contributions, but these shall 
only be used to pay expenses incurred in the conduct of programs, 
plans, and projects. The contributions shall be free from any 
encumbrance by the donor, and the Board shall retain complete control 
of their use.


Sec.  1219.54  Assessments.

    (a) Except as provided in Sec.  1219.55, the initial rate of 
assessment shall be 2.5 cents per pound on fresh Hass avocados produced 
and handled in the United States and on fresh Hass avocados imported 
into the United States. An equivalent rate shall be assessed on 
processed and frozen Hass avocados on which an assessment has not been 
paid. Such equivalent rate will be assessed on processed or frozen Hass 
avocados upon the recommendation of the Board with the approval of the 
Secretary. The rate of assessment may be increased or decreased as 
recommended by the Board and approved by the Secretary. Such an 
increase or decrease may occur not more than once annually. Any change 
in the assessment rate shall be announced by the Board at least 30 days 
prior to going into effect and shall not be subject to a vote in a 
referendum. The maximum assessment rate authorized is 5 cents per 
pound. No more than one assessment shall be made on any Hass avocados.

[[Page 56903]]

    (b) Domestic assessments. The collection of assessments on domestic 
Hass avocados will be the responsibility of the first handler.
    (1) In the case of a producer acting as the producer's own first 
handler, the producer will be required to collect and remit the 
assessments due to the Board.
    (2) Each first handler shall collect from the producer and pay to 
the Board an assessment of 2.5 cents per pound in accordance with this 
subpart. Assessments shall be remitted by each first handler to the 
Board or its agent within 30 days after the end of the month in which 
the sale or non-sale transfer subject to assessment under this subpart 
took place.
    (3) The first handler shall maintain a separate record of the 
domestic Hass avocados of each producer whose domestic Hass avocados 
are handled, including the domestic Hass avocados owned by the handler 
and domestic Hass avocados that are exported.
    (4) Assessment of other types of fresh avocados may be added at the 
recommendation of the Board with the approval of the Secretary.
    (c) Import assessments. Each importer of fresh Hass avocados shall 
pay an assessment to the Board through Customs on fresh Hass avocados 
imported for marketing in the United States.
    (1) The assessment rate for imported fresh Hass avocados shall be 
the same or equivalent to the rate for fresh Hass avocados produced and 
handled in the United States.
    (2) The import assessment shall be uniformly applied to imported 
fresh Hass avocados that are identified by the number 0804.40.00.10 in 
the Harmonized Tariff Schedule of the United States or any other 
numbers to identify fresh Hass avocados. Assessments on other types of 
imported fresh avocados or on processed Hass avocados, such as 
prepared, preserved, or frozen Hass avocados or Hass avocado paste, 
puree, and oil will be added at the recommendation of the Board with 
the approval of the Secretary.
    (3) The assessments due on imported Hass avocados shall be paid 
when they are released from custody by Customs and introduced into the 
stream of commerce in the United States.
    (d) All assessment payments and reports will be submitted to the 
Board's office. All final payments for a crop year are to be received 
no later than November 30 of that year, unless the Board determines 
that assessments due from the first handler shall be paid to the Board 
at a different time and manner, with approval of the Secretary.
    (e) A late payment charge prescribed by the Secretary shall be 
imposed on any first handler who fails to remit to the Board the total 
amount for which any such handler is liable on or before the due date. 
In addition to the late payment charge, an interest charge shall be 
imposed on the outstanding amount for which the handler is liable. The 
rate of interest shall be prescribed by the Secretary. The timeliness 
of a payment to the Board shall be based on the date the payment is 
actually received by the Board.
    (f) Regulations issued by the Secretary may provide for different 
first handler payment schedules of assessments on domestic Hass 
avocados, so as to recognize differences in marketing or purchasing 
practices and procedures.
    (g) Persons failing to remit total assessments due in a timely 
manner may also be subject to actions under federal debt collection 
procedures.
    (h) The Board may authorize other organizations to collect 
assessments on its behalf with approval of the Secretary.
    (i) The collection of assessments shall commence on or after a date 
established by the Secretary and shall continue until terminated by the 
Secretary. If the Board is not constituted on the date the first 
assessments are to be remitted, the Secretary shall have the authority 
to receive assessments on behalf of the Board and may hold such 
assessments in an interest-bearing account until the Board is 
constituted and the funds are transferred to the Board.
    (j) To facilitate the payment of assessments under this section, 
the Board shall publish lists of first handlers required to remit 
assessments under this subpart and exempt handlers.
    (k) The Association shall receive an amount of assessment funds 
equal to 85 percent of the assessments paid on Hass avocados produced 
in such State. Such funds shall be remitted to such State organization 
no later than 30 days after such funds are received by the Board. In 
addition, such funds and any proceeds from the investment of such funds 
shall be used by the Association to finance promotion, research, 
consumer information, and industry information programs, plans, and 
projects in the United States. However, no such funds shall be used for 
any administrative expenses incurred by the Association.
    (l) An association of Hass avocado importers established pursuant 
to Sec.  1219.58 shall receive an amount of assessment funds equal to 
85 percent of the assessments paid on Hass avocados imported by its 
members. Such funds shall be remitted to such importer association no 
later than 30 days after such funds are received by the Board. In 
addition, such funds and any proceeds from the investment of such funds 
shall be used by the importer association to finance promotion, 
research, consumer information, and industry information programs, 
plans, and projects in the United States. However, no such funds shall 
be used for any administrative expenses incurred by the importer 
association.
    (m) In general, assessment funds received by the Board shall be 
used:
    (1) For payment of costs incurred in implementing and administering 
this subpart;
    (2) To provide for a reasonable reserve to be maintained from 
assessments to be available for contingencies; and
    (3) To cover the administrative costs incurred by the Secretary in 
implementing and administering this Act, as set forth in Sec.  
1219.53(b).
    (n) The Board may establish an operating monetary reserve which may 
carry over to subsequent fiscal periods: Provided that, the funds in 
the reserve do not exceed one fiscal period's budget. Subject to 
approval by the Secretary, reserve funds may be used to defray any 
expenses authorized under this part.


Sec.  1219.55  Exemption from assessment.

    (a) Any sale of Hass avocados for export from the United States is 
exempt from assessment.
    (b) The Board may require persons receiving an exemption from 
assessments to provide to the Board reports on the disposition of 
exempt Hass avocados.


Sec.  1219.56  Adjustment of accounts.

    Whenever the Board or the Secretary determines through an audit of 
a person's reports, records, books, or accounts or by some other means 
that additional money is due to the Board, the person shall be notified 
of the amount due. The person shall then remit any amount due the Board 
by the next date for remitting assessments. Overpayments shall be 
credited to the account of the person remitting the overpayment and 
shall be applied against any amounts due in succeeding months unless 
the person requests a refund of the overpayment.


Sec.  1219.57  Patents, copyrights, trademarks, publications, and 
product formulations.

    (a) Any patents, copyrights, trademarks, inventions, information, 
publications, and product formulations developed through the use of 
funds received by the Board under this subpart shall be the property of 
the U.S. Government as represented by the Board, and shall, along with 
any rents,

[[Page 56904]]

royalties, residual payments, or other income from the rental, sale, 
leasing, franchising, or other uses of such patents, copyrights, 
trademarks, inventions, information, publications, or product 
formulations, inure to the benefit of the Board; shall be considered 
income subject to the same fiscal, budget, and audit controls as other 
funds of the Board; and may be licensed subject to approval of the 
Secretary. Section 1219.72 describes the procedures for termination.
    (b) Should patents, copyrights, trademarks, inventions, 
publications, or product formulations be developed through the use of 
funds collected by the Board under this subpart and funds contributed 
by another organization or person, ownership and related rights to such 
patents, copyrights, trademarks, inventions, publications, or product 
formulations shall be determined by agreement between the Board and the 
party contributing funds towards the development of such patent, 
copyright, trademark, invention, publication, or product formulation in 
a manner consistent with paragraph (a) of this section.


Sec.  1219.58  Importer associations.

    (a) An association of avocado importers is eligible to receive 
assessment funds and any proceeds from the investment of such funds 
only if such importer association is:
    (1) Established pursuant to State law that requires detailed State 
regulation comparable to that applicable to the State organization of 
domestic avocado producers, as determined by the Secretary; or
    (2) Certified by the Secretary as meeting the requirements 
applicable to the Board as to its operations and obligations, including 
budgets, programs, plans, projects, audits, conflicts of interest, and 
reimbursements for administrative costs incurred by the Secretary.
    (b) An importer association may represent any importers of Hass 
avocados including importers of Hass avocados from a particular foreign 
country. An importer association may be composed of importers as well 
as representatives of foreign avocado exporting industries. An importer 
association should establish it own bylaws and may use existing 
organizations for the establishment of the association and coordination 
of the association's promotion and research efforts.
    (c) For the purposes of the Order, the information required for 
certification of the importer associations by the Secretary may 
include, but is not limited to, the following:
    (1) Evidence of incorporation under any state law with all 
appropriate legal requirements;
    (2) Evidence that the association is composed of importers that are 
located in any state and subject to assessments under the Order, no 
matter where the association has been incorporated or in which state 
the importers reside;
    (3) Certification of the association's ability and willingness to 
further the aims and objectives of the Order;
    (4) Evidence of stability and permanency; and
    (5) A description of the functions of the association.

Books, Records, and Reports


Sec.  1219.60  Reports.

    (a) Each first handler of domestic Hass avocados, producer, and 
importer subject to this subpart shall report to the administrative 
staff of the Board, at such times and in such manner as the Board may 
prescribe, such information as may be necessary for the Board to 
perform its duties.
    (b) First handler reports shall include, but shall not be limited 
to, the following:
    (1) Number of pounds of domestic Hass avocados received during the 
reporting period;
    (2) Number of pounds on which assessments were collected;
    (3) Assessments collected during the reporting period;
    (4) Name and address of person(s) from whom the first handler 
collected the assessments on each pound handled;
    (5) Date collection was made on each pound handled;
    (6) Record of assessments paid, including a statement from the 
handler that assessments have been paid on all domestic Hass avocados 
handled during the reporting period; and
    (7) Number of pounds exported.
    (c) Each importer subject to this subpart may be required to report 
the following:
    (1) Number of pounds of Hass avocados imported during the reporting 
period;
    (2) Number of pounds on which an assessment was paid;
    (3) Name and address of the importer;
    (4) Date collection was made on each pound imported and to whom 
payment was made; and
    (5) Record of each importation of Hass avocados during such period, 
giving quantity, variety, date, and port of entry.


Sec.  1219.61  Books and records.

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


Sec.  1219.62  Books and records of the Board.

    (a) The Board shall maintain such books and records as the 
Secretary may require. Such books and records shall be made available 
upon request by the Secretary for inspection and audit.
    (b) The Board shall prepare and submit to the Secretary, from time 
to time, such reports as the Secretary may require.
    (c) The Board shall account for the receipt and disbursement of all 
the funds entrusted to the Board.
    (d) The Board shall cause the books and records of the Board to be 
audited by an independent auditor at the end of each fiscal period. A 
report of each audit shall be submitted to the Secretary.


Sec.  1219.63  Confidential treatment.

    (a) All information obtained from the books, records, or reports 
under the Act, this subpart, and the regulations issued thereunder 
shall be kept confidential and shall not be disclosed to the public by 
any person, including all current and former officers, employees, staff 
and agents of the Department, the Board, and contracting and 
subcontracting agencies or agreeing parties having access to such 
information. Only those persons having a specific need for such 
information to effectively administer the provisions of this subpart 
shall have access to such information. Only such information so 
obtained as the Secretary deems relevant shall be disclosed, and then 
only in a judicial proceeding 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. Nothing in this subpart shall be deemed to prohibit:
    (1) The issuance of general statements based upon the reports of 
the number of persons subject to this subpart or statistical data 
collected from such reports, if such statements do not identify the 
information furnished by any person; or
    (2) The publication, by direction of the Secretary, of the name of 
any person who has been adjudged to have violated this subpart, 
together with a statement

[[Page 56905]]

of the particular provisions of this subpart violated by such person.
    (b) Any disclosure of any confidential information by any employee 
or agent of the Board shall be considered willful misconduct.
    (c) No information on how a person voted in a referendum conducted 
under the Act shall be made public.


Sec.  1219.64  List of importers.

    The administrative staff of the Board shall periodically review the 
list of importers of Hass avocados to determine whether persons on the 
list are subject to this subpart.


Sec.  1219.65  List of producers.

    The administrative staff of the Board shall periodically review the 
list of producers of Hass avocados to determine whether the persons on 
the list of subject to this subpart. On the request of the Secretary or 
the Board, the Association shall provide to the Secretary or the 
administrative staff of the Board the list of producers of Hass 
avocados.

Miscellaneous


Sec.  1219.70  Right of the Secretary.

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


Sec.  1219.71  Suspension or termination.

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


Sec.  1219.72  Proceedings after termination.

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


Sec.  1219.73  Effect of termination or amendment.

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


Sec.  1219.74  Personal liability.

    No member, alternate member, employee, or agent of the Board shall 
be held personally responsible, either individually or jointly with 
others, in any way whatsoever, to any person for errors in judgment, 
mistakes, or other acts, either of Association or omission, as such 
member, alternate, employee, or agent, except for acts of dishonesty or 
willful misconduct.


Sec.  1219.75  Separability.

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


Sec.  1219.76  Amendments.

    Amendments to this subpart may be proposed, from time to time, by 
the Board or by any interested persons affected by the provisions of 
the Act, including the Secretary. Except for changes in the assessment 
rate, the provisions of the Act applicable to the Order are applicable 
to any amendment of the Order.


Sec.  1219.77  OMB control numbers.

    The control numbers assigned to the information collection 
requirements in this part by the Office of Management and Budget 
pursuant to the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, 
are OMB control numbers 0581-0197 and 0505-0001.

    Dated: August 30, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-22671 Filed 9-5-02; 8:45 am]
BILLING CODE 3410-02-P