[Federal Register Volume 69, Number 80 (Monday, April 26, 2004)]
[Proposed Rules]
[Pages 22690-22702]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-9259]



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Part IV





Department of Agriculture





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Agricultural Marketing Service



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7 CFR Parts 1150, 1160, et al.



Proposed Rule To Exempt Organic Producers From Assessment by Research 
and Promotion Programs; Proposed Rule

  Federal Register / Vol. 69, No. 80 / Monday, April 26, 2004 / 
Proposed Rules  

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 1150, 1160, 1205, 1207, 1209, 1210, 1215, 1216, 1218, 
1219, 1220, 1230, 1240, 1250, 1260, and 1280

[Docket No. PY-02-006]
RIN 0581-AC15


Proposed Rule To Exempt Organic Producers From Assessment by 
Research and Promotion Programs

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would exempt any person producing and 
marketing solely 100 percent organic products from paying assessments 
to any research and promotion program administered by the Agricultural 
Marketing Service (AMS). A proposed rule to exempt any person producing 
and marketing solely 100 percent organic products from paying 
assessments to certain marketing order programs administered by AMS was 
published previously in the Federal Register.

DATES: Comments must be received by May 26, 2004. Pursuant to the 
Paperwork Reduction Act, comments on the information collection burden 
that would result from this proposal must be received by June 25, 2004.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule to Angela C. Snyder, Office of the Deputy 
Administrator, Poultry Programs, Agricultural Marketing Service, U.S. 
Department of Agriculture, 1400 Independence Avenue, SW.; STOP 0256, 
Room 3932--South; Washington, DC 20250. Comments should be submitted in 
duplicate. Comments may also be submitted electronically to: 
[email protected] or www.regulations.gov. All comments should 
reference the docket number and the date and page number of this issue 
of the Federal Register. All comments received will be made available 
for public inspection at Poultry Programs, AMS, USDA, Room 3932--South; 
1400 Independence Avenue, SW.; Washington, DC 20250 during regular 
business hours. A copy of this proposed rule may be found at: http://www.ams.usda.gov/2002farmbill/organicexempt.
    Pursuant to the Paperwork Reduction Act (PRA), send comments 
regarding the accuracy of the burden estimate, ways to minimize the 
burden, including the use of automated collection techniques or other 
forms of information technology, or any other aspect of this collection 
of information to the above address. Comments concerning the 
information collection under the PRA should also be sent to the Desk 
Officer for Agriculture, Office of Information and Regulatory Affairs, 
Office of Management and Budget, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Angela C. Snyder, Office of the Deputy 
Administrator, Poultry Programs, Agricultural Marketing Service, U.S. 
Department of Agriculture, 1400 Independence Avenue, SW.; STOP 0256, 
Room 3932--South; Washington, DC 20250; (202) 720-4476; (202) 720-5631 
(fax); or e-mail at [email protected].

SUPPLEMENTARY INFORMATION: 

Executive Order 12866

    This proposed rule has been determined to be ``not significant'' 
for purposes of Executive Order 12866 and therefore has not been 
reviewed by the Office of Management and Budget.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
This proposed rule would not preempt any state or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule.
    The Commodity Promotion, Research, and Information Act of 1996; 
Cotton Research and Promotion Act; Dairy Production Stabilization Act 
of 1983; Egg Research and Consumer Information Act; Fluid Milk 
Promotion Act of 1990; Hass Avocado Promotion, Research, and 
Information Act of 2000; Honey Research, Promotion, and Consumer 
Information Act; Mushroom Promotion, Research, and Consumer Information 
Act of 1990; Popcorn Promotion, Research, and Consumer Information Act; 
Pork Promotion, Research, and Consumer Information Act of 1985; Potato 
Research and Promotion Act; Soybean Promotion, Research, and Consumer 
Information Act; and Watermelon Research and Promotion Act provide that 
administrative proceedings must be exhausted before parties may file 
suit in court. Under these acts, any person subject to an order may 
file a petition with the Secretary of Agriculture stating that the 
order, any provision of the order, or any obligation imposed in 
connection with the order is not in accordance with law and request a 
modification of the order or to be exempted therefrom. The petitioner 
is afforded the opportunity for a hearing on the petition. After the 
hearing, the Secretary will make a ruling on the petition. The acts 
provide that the district courts of the United States in any district 
in which the person is an inhabitant, or has his principal place of 
business, has jurisdiction to review the Secretary's ruling, provided a 
complaint is filed within 20 days from the date of the entry of ruling. 
There are no administrative proceedings that must be exhausted prior to 
any judicial challenge to the provisions of the Beef Promotion and 
Research Act of 1985.

Background

    Section 10607 of the Farm Security and Rural Investment Act of 2002 
(Pub. L. 107-171)--known as the 2002 Farm Bill--amended Section 501 of 
the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 
7401) (FAIR Act) on May 13, 2002. The amendment exempts any person that 
produces and markets solely 100 percent organic products, and that does 
not produce any conventional or nonorganic products, from paying 
assessments under a commodity promotion law with respect to any 
agricultural commodity that is produced on a certified organic farm as 
defined in section 2103 of the Organic Foods Production Act of 1990 (7 
U.S.C. 6502).
    The U.S. Department of Agriculture is proposing amendments to the 
orders and/or rules and regulations of the 16 research and promotion 
programs for which it has oversight. These amendments will establish a 
provision for organic producers and marketers meeting the specified 
criteria and procedures to be exempt from paying assessments for 
research and promotion. The Department proposed amendments to the 
general regulations affecting 28 marketing order programs in a separate 
rule published in the December 2, 2003, Federal Register [68 FR 67381]. 
The comment period for this proposed rule ended on February 2, 2004. 
The comments received in that rulemaking currently are being reviewed 
by AMS.
    The FAIR Act amendment covers research and promotion programs 
established under either freestanding legislation (beef, cotton, eggs, 
fluid milk, dairy, Hass avocados, honey, mushrooms, popcorn, pork, 
potatoes, soybeans, and watermelons) or the Commodity Promotion, 
Research, and Information Act of 1996 (blueberries, lamb, and peanuts).
    The FAIR Act amendment would also cover a program for mangos, once 
one is established. The mango industry has requested a program, and 
rulemaking is ongoing. A second proposed rule on the

[[Page 22691]]

Mango Promotion, Research and Information Order was published in the 
October 9, 2003, issue of the Federal Register [68 FR 58556]. In 
November 2003, first handlers and importers of mangos voted to approve 
a national mango promotion, research, and information order. A final 
rule would have to be issued before the mango research and promotion 
program could become effective. However, it is anticipated that 
provisions similar to those proposed in this document for Hass avocados 
(7 CFR part 1219) would be needed to exempt persons producing and 
marketing solely 100 percent organic products from paying assessments 
under a mango research and promotion program.
    Wholly industry-funded and -operated and charged with creating and 
expanding markets for the agricultural commodities they represent, 
these programs are overseen by AMS, including review of budgets, plans, 
and projects. Producers, handlers, importers, and/or others in the 
marketing chain pay assessments to these commodity boards to fund the 
programs. Industries voluntarily request these programs. Research and 
promotion programs allow industries to establish, finance, and carry 
out coordinated programs of research, producer and consumer education, 
and promotion to improve, maintain, and develop markets for their 
commodities.
    Under this proposal, language would be added to the orders, plans, 
and/or regulations of each program specifying the criteria for 
identifying persons eligible to obtain an assessment exemption and 
procedures for applying for an exemption. The provision would be 
tailored to each of the sixteen programs, all of which have structural 
and operational distinctions. The result would be some procedural 
differences between the programs' regulatory language. For example, 
under the cotton program, producers would be required to reapply for 
exemption every year on or before the beginning of the crop year (see 
Sec.  1205.519(b) of this proposal). Under the watermelon program, 
however, producers would reapply for exemption on or before January 1 
of each year (see Sec.  1210.516(b) of this proposal).

Who Is Eligible for Exemption

    To be eligible for an exemption, the person must be subject to an 
assessment under a research and promotion program. Of the 16 research 
and promotion programs covered under this proposed rule, 14 assess 
producers. Most of these programs also assess other entities, including 
handlers, first handlers, importers, exporters, feeders, and seed stock 
producers. The remaining two research and promotion programs assess 
processors.
    The FAIR Act amendment specifies that to be exempt from a commodity 
promotion assessment, a person--meaning an individual, group of 
individuals, corporation, association, cooperative, or other business 
entity--must produce and market solely 100 percent organic products and 
must not produce any nonorganic or conventional products. For purposes 
of this proposed rule, ``produce'' means to grow or produce food, feed, 
livestock, or fiber or to receive food, feed, livestock, or fiber and 
alter that product by means of feeding, slaughtering, or processing.
    To meet this requirement, that person need not be just a producer. 
Under this proposed rule, producers, handlers, first handlers, 
processors, importers, exporters, feeders, and seed stock producers may 
be eligible for exemption if they meet the definition of ``produce'' as 
outlined in this proposed rule. Regardless, to be exempt, such persons 
must possess certification from a USDA-accredited certifying agent and 
certify that the farm or handling operation meets the requirements of 
100 percent organic as defined in section 2103 of the Organic Foods 
Production Act of 1990 (7 U.S.C. 6502).
    This definition of ``produce'' would be added to the regulatory 
text of all but four of the sixteen programs to ensure that non-
traditional producers meeting the criteria and procedures may obtain an 
exemption. Four programs--dairy, peanuts, soybeans, and eggs--are 
strictly producer programs. Because traditional producers are the only 
parties assessed, it is not necessary to redefine ``produce'' for 
purposes of obtaining an exemption. The definition referenced above is 
only needed to include assessment payers other than non-traditional 
producers.

Examples

     A farmer grows 100 percent organic soybeans and 
100 percent organic corn. The farmer is eligible for exemption under 
the soybean promotion, research, and consumer information program.
     A farmer grows 100 percent organic soybeans and 
conventional corn. While the farmer's soybean land may be certified 
organic as a split farm operation under the Organic Foods Production 
Act of 1990 (7 U.S.C. 6502), the farmer is not eligible for exemption 
under the soybean promotion, research, and consumer information program 
because the farmer's production is not solely 100 percent organic.
     An importer imports 100 percent organic live 
cattle, feeds and grows the cattle, and is a certified handling 
operation. The importer is eligible for exemption under the beef 
promotion and research program.
     An importer imports 100 percent organic boxed 
beef and sells it to another party. The importer is not eligible for 
exemption under the beef promotion and research program because the 
importer is not a producer as defined in this proposed rule.
     An importer imports 100 percent organic boxed 
beef. The importer also imports 100 percent organic beef and processes 
it into ground beef. The importer is eligible for exemption under the 
beef promotion and research program.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 [44 U.S.C. 
Chapter 35], this proposed rule also announces that AMS is seeking 
emergency approval for a new information collection request enabling 
organic entities to apply for an exemption from paying assessments 
under the following programs: 7 CFR Parts 1150, 1160, 1205, 1207, 1209, 
1210, 1215, 1216, 1218, 1219, 1220, 1230, 1240, 1250, 1260, and 1280.
    Title: Organic Producer and Marketer Exemption From Assessment 
Under Research and Promotion Programs.
    OMB Number: 0581-NEW.
    Type of Request: New collection.
    Abstract: Research and promotion program, though overseen by AMS, 
are wholly industry-funded and -operated and are charged with creating 
and expanding markets for the agricultural commodities they represent. 
Producers, handlers, importers, and/or others in the marketing chain 
pay assessments to these commodity boards to fund the programs. 
Research and promotion programs allow industries to establish, finance, 
and carry out coordinated programs of research, producer and consumer 
education, and promotion to improve, maintain, and develop markets for 
their commodities.
    On May 13, 2002, Section 501 of the FAIR Act was amended under the 
2002 Farm Bill to exempt any person that produces and markets solely 
100 percent organic products, and that does not produce any 
conventional or non-organic products, from paying assessments under a 
commodity promotion law with respect to any agricultural commodity that 
is produced on a certified organic farm as defined in Section 2103 of 
the Organic Foods Production Act of 1990 (7 U.S.C. 6502). To be exempt 
from paying assessments

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under a research and promotion program, the person would submit an 
application--``Organic Exemption Request Form''--to the applicable 
board or council. The form would need to be submitted to the board, 
council, or other party designated by the board or council prior to or 
during the initial applicable assessment period, and annually 
thereafter, as long as the applicant continues to be eligible for the 
exemption. This application would include the applicant's name, name 
and address of the company, telephone and fax numbers, a copy of the 
applicant's organic farm or organic handling operation certificate 
provided by a USDA-accredited certifying agent under the Organic Foods 
Production Act of 1990 (7 U.S.C. 6502), and a signed certification that 
the applicant meets all of the requirements specified for an assessment 
exemption. If the applicant complies with these requirements and is 
eligible for a promotion assessment exemption, the board or council 
would approve the exemption and notify the applicant within 30 days of 
receiving the applicant's application. If the application is 
disapproved, the board or council would notify the applicant of the 
reason(s) for disapproval. The Secretary may review any decisions made 
by the boards or councils at her or his discretion.
    Most of the programs require that the person responsible for 
remitting assessments on behalf of the exempt party maintain a record 
of that party's exemption. In most cases, this is a handler maintaining 
a record of an exempt producer. The burdens on these persons for such 
recordkeeping requirements are included in the information collection 
requests previously approved for all of the programs--Hass avocados 
under OMB control number 0581-0197, beef and pork under 0590-0001, lamb 
under 0581-0198, and the rest under 0581-0093.
    The form's design has been carefully reviewed, and every effort has 
been made to minimize any unnecessary recordkeeping requirements. AMS 
has determined that there is no practical method for collecting the 
required information without the use of this form. The form would be 
available from the boards and councils. In addition, an electronic 
fillable form would be made available. The information collection would 
be used only by authorized board or council employees and 
representatives of USDA, including AMS staff. Authorized board and 
council employees will be the primary users of the information, and AMS 
will be the secondary user.
    The request for approval of the new information collection is as 
follows:
Form AMS-15, Organic Exemption Request Form
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 30 minutes per response.
    Respondents: Eligible Certified Organic Producers and Marketers.
    Estimated Number of Respondents: 2,159.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 1,079.5 hours.
    Comments: Comments are invited on: (1) Whether the collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
collection of information, including the validity of the methodology 
and assumptions used; (3) ways to enhance the quality, utility, and 
clarity of the information to be collected; and (4) 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 of other forms 
of information technology.
    A 60-day period is provided to comment on the information 
collection burden. Comments should reference OMB No. 0581-NEW and be 
sent to [email protected]. All comments received will be 
available for public inspection during regular business hours at the 
same address. All responses to this proposed rule will be summarized 
and included in the request for OMB approval. All comments will become 
a matter of public record.
    Comments concerning the information collection under the PRA should 
also be sent to the Desk Officer for Agriculture, Office of Information 
and Regulatory Affairs, Office of Management and Budget, Washington, DC 
20503.

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.) (RFA), the Agricultural Marketing Service (AMS) has examined the 
impact of the proposed rule on small entities. The purpose of the RFA 
is to fit regulatory actions to the scale of businesses subject to such 
actions so that small businesses will not be disproportionately 
burdened.
    As previously mentioned, producers, handlers, first handlers, 
processors, importers, exporters, feeders, and seed stock producers pay 
assessments to the national boards or councils that administer various 
commodity research and promotion programs, or in some cases to other 
parties designated by a board or council to collect assessments. 
Initiated as a result of the 2002 Farm Bill, which amended Section 501 
of the Federal Agricultural Improvement and Reform Act of 1996 (FAIR 
Act), this proposed rule would exempt from assessment those entities 
that produce and market solely 100 percent organic products.
    To obtain the exemption, eligible producers, handlers, first 
handlers, processors, importers, exporters, feeders, and seed stock 
producers must submit a request for exemption to the appropriate board 
or council on a form. While the proposed rule would impose certain 
reporting and recordkeeping requirements on these entities, the form 
requires the minimum information necessary to effectively administer 
the exemption provision, and its use is necessary for compliance 
purposes.
    In preparing its initial regulatory flexibility analysis, AMS 
attempted to identify the entities that would be affected by the 
proposed rule and to examine the potential impact on such entities. 
However, information was not available to allow AMS to determine 
whether any importers would be covered by this proposed rule under the 
beef and pork programs. In addition, information was not available to 
allow AMS to identify the respondents under the lamb program as 
producers, first handlers, feeders, exporters, and seed stock 
producers, so AMS addressed the lamb program in the aggregate to 
determine the economic impact.
    The estimated respondents providing new information to the boards 
or councils and the burden associated with the information collections 
is as follows. There would be an estimated 2,159 respondents providing 
new information to the boards or councils under the following programs:
    Beef: 167 producers, number of importers unknown (167 total).
    Blueberries: 7 producers, 0 importers (7 total).
    Cotton: 100 producers, 10 importers (110 total).
    Dairy: 600 producers.
    Eggs: 0 producers.
    Fluid milk: 0 processors.
    Hass avocados: 60 producers, 0 importers (60 total).
    Honey: 10 producers, 0 importers (10 total).
    Lamb: 40 respondents (including producers, first handlers, feeders, 
seed stock producers, and exporters).

[[Page 22693]]

    Mushrooms: 2 producers, 0 importers (2 total).
    Peanuts: 54 producers.
    Popcorn: 0 processors.
    Pork: 18 producers, number of importers unknown (18 total).
    Potatoes: 35 producers, 0 importers (35 total).
    Soybeans: 1,028 producers.
    Watermelons: 27 producers, 1 handler, 0 importers (28 total).
    No respondents were identified for the fluid milk, popcorn, and egg 
programs. The fluid milk and egg programs exempt smaller entities from 
assessment--fluid milk processors processing less than $3 million 
pounds and egg producers owning 75,000 or fewer laying hens. Among 
assessment payers, no solely 100 percent organic processors or 
producers are known; if they exist, they are already exempt for de 
minimis reasons. No popcorn processors that produce (as defined in this 
rule) solely 100 percent organic product were identified because of the 
current nature of the popcorn industry.
    The burden associated with the information collection would be 
$10,795.00 for all respondents, or $5.00 per respondent. These totals 
have been estimated by multiplying the burden hours associated with the 
exemption request form by $10.00 per hour, a sum deemed to be 
reasonable should the respondents be compensated for their time.
    Under the 16 research and promotion programs, those assessed pay 
assessments to the boards and councils that administer the programs. 
The total annual collections and assessment rates for each board or 
council are as follows:
    Beef: $83.6 million; $1 per head.
    Blueberries: $1.5 million; $12 per ton.
    Cotton: $65.2 million; $1 per bale plus 0.5 percent of the value of 
the lint in each bale.
    Dairy: $255.0 million; 15 cents per cwt.
    Eggs: $19.7 million; 10 cents per 30-dozen case of eggs.
    Fluid milk: $106.2 million; 20 cents per cwt.
    Hass avocados: $16.3 million; 2.5 cents per pound.
    Honey: $3.6 million; 1 cent per pound.
    Lamb: $3.5 million; $0.005 per pound of live weight, $0.30 per head 
on lambs purchased for slaughter.
    Mushrooms: $1.7 million; .002 cents per pound.
    Peanuts: $6.7 million; 1 percent of the value of the peanuts.
    Popcorn: $558,000; 6 cents per cwt.
    Pork: $47.8 million; 0.40 percent of the market value.
    Potatoes: $8.6 million; 2 cents per cwt.
    Soybeans: $77.8 million; \1/2\ of 1 percent of the net market 
value.
    Watermelons: $1.5 million; 2 cents per cwt for domestic 
watermelons, 4 cents per cwt for imported watermelons.
    The Small Business Administration [13 CFR 121.201] defines small 
agricultural producers as those having annual receipts of $750,000 or 
less annually and small agricultural service firms as those having 
annual receipts of $5 million or less. These include producers, 
feeders, and seed stock producers. Importers, exporters, handlers, and 
first handlers would be considered agricultural service firms. Using 
these criteria, most if not all of the agricultural producers and 
agricultural service firms covered by the proposed rule would be 
considered small businesses.
    The proposed rule would allow producers and marketers of solely 100 
percent organic products to request an exemption from paying 
assessments. These exemptions were estimated by multiplying the exempt 
volume by the assessment rate, and the amounts for exempt entities 
would be as follows:
    Beef: producers--$15,197; importers--unknown.
    Blueberries: producers--$5,833; importers--$0 ($5,833 total).
    Cotton: producers--$52,000; importers--$25,000 ($77,000 total).
    Dairy: producers--$1.33 million.
    Eggs: producers--$0.
    Fluid milk: processors--$0.
    Hass avocados: producers--$91,000; importers--$0 ($91,000 total).
    Honey: producers--$11,174; importers--$0 ($11,174 total).
    Lamb: $2,987 total (includes producers, first handlers, feeders, 
seed stock producers, and exporters).
    Mushrooms: producers--$14,400; importers--$0 ($14,400 total).
    Peanuts: producers--$18,690.
    Popcorn: processors--$0.
    Pork: producers--$966; importers--unknown.
    Potatoes: producers--$45,000; importers--$0 ($45,000 total).
    Soybeans: producers--$40,273.
    Watermelons: producers--$17,890; handlers--$950; importers--$0 
($18,840 total).
    Therefore, the estimated net economic impact of this proposed rule 
on the respondents is as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                     Exemption
                             Program                                 Paperwork         from         Net amount
                                                                   burden costs     assessments
----------------------------------------------------------------------------------------------------------------
Beef............................................................            $835         $15,197         $14,362
Blueberries.....................................................              35           5,833           5,798
Cotton..........................................................             550          77,000          76,450
Dairy...........................................................           3,000       1,330,000       1,327,000
Eggs............................................................               0               0               0
Fluid milk......................................................               0               0               0
Hass avocados...................................................             300          91,000          90,700
Honey...........................................................              50          11,174          11,124
Lamb............................................................             200           2,987           2,787
Mushrooms.......................................................              10          14,400          14,390
Peanuts.........................................................             270          18,690          18,420
Popcorn.........................................................               0               0               0
Pork............................................................              90             966             876
Potatoes........................................................             175          45,000          44,825
Soybeans........................................................           5,140          40,273          35,133
Watermelons.....................................................             140          18,840          18,700
                                                                 -----------------
    Total.......................................................          10,795       1,671,360       1,660,565
----------------------------------------------------------------------------------------------------------------


[[Page 22694]]

    Based on the above figures, this rule should have only a beneficial 
economic effect on small entities.
    To ensure that AMS is able to thoroughly assess the potential 
impact of this proposed rule on affected entities, interested parties 
are invited to submit comments, views, and opinions on the probable 
regulatory and informational impact of this proposed rule on small 
entities. Comments may indicate the size, number, and type of entities 
that would be affected by this proposed rule and explain the potential 
effects of the proposed amendments on those entities.
    In accordance with the PRA, the reporting and recordkeeping 
provisions that would be generated by this proposed rule will be 
submitted to the Office of Management and Budget (OMB) under OMB No. 
0581-NEW.
    Reports and forms are periodically reviewed to reduce information 
requirements and duplication by industry and public sector agencies. In 
addition, USDA has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    There are no viable alternatives to proposing these organic 
assessment exemption procedures. The FAIR Act requires USDA to take 
this action to lessen the assessment costs for persons who produce and 
market solely 100 percent organic products. The anticipated assessment 
reductions for eligible persons are expected to greatly outweigh the 
costs related to the additional reporting.
    A 30-day comment period is provided for interested persons to 
submit written comments on the criteria for identifying persons 
eligible to obtain an assessment exemption and the procedural details 
for obtaining an exemption under the various research and promotion 
programs. Thirty days is deemed appropriate because this action was 
mandated by Congress under the 2002 Farm Bill and is intended to 
provide relief to producers and marketers of solely 100 percent organic 
products. Pursuant to the Paperwork Reduction Act, comments on the 
information collecting burden must be received within 60 days after the 
date of publication of this proposed rule in the Federal Register.

List of Subjects

7 CFR Part 1150

    Dairy products, Reporting and recordkeeping requirements, Research.

7 CFR Part 1160

    Fluid milk products, Milk, Promotion.

7 CFR Part 1205

    Advertising, Agricultural Research, Cotton, Reporting and 
recordkeeping requirements.

7 CFR Part 1207

    Advertising, Agricultural research, Potatoes, Reporting and 
recordkeeping requirements.

7 CFR Part 1209

    Advertising, Agricultural Research, Marketing agreements, 
Mushrooms, Reporting and recordkeeping requirements.

7 CFR Part 1210

    Administrative practice and procedure, Advertising, Agricultural 
research, Reporting and recordkeeping requirements, Watermelons.

7 CFR Part 1215

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Popcorn, Promotion, Reporting and 
recordkeeping requirements.

7 CFR Part 1216

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

7 CFR Part 1218

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

7 CFR Part 1219

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

7 CFR Part 1220

    Administrative practice and procedure, Advertising, Agricultural 
research, Marketing agreements, Soybeans and soybean products, 
Reporting and recordkeeping requirements.

7 CFR Part 1230

    Administrative practice and procedure, Advertising, Agricultural 
research, Marketing agreement, Meat and meat products, Pork and pork 
products.

7 CFR Part 1240

    Advertising, Agricultural research, Honey, Imports, Reporting and 
recordkeeping requirements.

7 CFR Part 1250

    Administrative practice and procedure, Advertising, Agricultural 
research, Eggs and egg products, Reporting and recordkeeping 
requirements.

7 CFR Part 1260

    Administrative practice and procedure, Advertising, Agricultural 
research, Imports, Marketing agreements, Meat and meat products, 
Reporting and recordkeeping requirements.

7 CFR Part 1280

    Administrative practice and procedure, Advertising, Consumer 
information, Lamb and lamb products, Marketing agreements, Reporting 
and recordkeeping requirements.
    For the reasons set forth in the preamble, 7 CFR Parts 1150, 1160, 
1205, 1207, 1209, 1210, 1215, 1216, 1218, 1219, 1220, 1230, 1240, 1250, 
1260, and 1280 are proposed to be amended as follows:

PART 1150--DAIRY PROMOTION

    1. The authority citation for Part 1150 is revised to read as 
follows:

    Authority: 7 U.S.C. 4501-4514 and 7 U.S.C. 7401.

    2. Add a new Sec.  1150.157 to read as follows:


Sec.  1150.157  Assessment exemption.

    (a) A producer described in Sec.  1150.152(a) and (b) who produces 
and markets solely 100 percent organic products and does not produce 
any conventional or non-organic products shall be exempt from the 
payment of assessments on milk provided the milk is produced on a 
certified organic farm as defined in section 2103 of the Organic Foods 
Production Act of 1990 (7 U.S.C. 6502).
    (b) To apply for an exemption under this section, a producer 
pursuant to Sec.  1150.152(a) and (b) shall submit a request for 
exemption to the Board on a form provided by the Board at any time 
initially and annually thereafter on or before July 1 as long as the 
producer continues to be eligible for the exemption.
    (c) The request shall include the following: the producer's name 
and address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), and a signed certification that the applicant meets all of the 
requirements specified

[[Page 22695]]

in paragraph (a) of this section for an assessment exemption.
    (d) If a producer described in Sec.  1150.152(a) and (b) complies 
with the requirements of this section, the Board will grant an 
assessment exemption and issue a Certificate of Exemption to the 
producer within 30 days of receipt of the producer's request.
    (e) The producer described in paragraph (c) of this section shall 
provide a copy of the Certificate of Exemption to each person 
responsible for remitting assessments to the Board on behalf of the 
producer pursuant to Sec.  1150.152.
    (f) The person responsible for remitting assessments to the Board 
pursuant to Sec.  1150.152 shall maintain records showing the exempt 
producer's name and address and the exemption number assigned by the 
Board pursuant to Sec.  1150.172.
    3. Revise Sec.  1150.187 to read as follows:


Sec.  1150.187  Paperwork Reduction Act assigned number.

    The information collection and recordkeeping requirements contained 
in Sec. Sec.  1150.133, 1150.152, 1150.153, 1150.157, 1150.171, 
1150.172, and 1150.273 of these regulations (7 CFR Part 1150) have been 
approved by the Office of Management and Budget (OMB) under the 
provisions of 44 U.S.C. Chapter 35 and have been assigned OMB Control 
Number 0581-0093.

PART 1160--FLUID MILK PROMOTION

    4. The authority citation for Part 1160 is revised to read as 
follows:

    Authority: 7 U.S.C. 6401-6417 and 7 U.S.C. 7401.

    5. In Sec.  1160.211, paragraph (a)(1) is revised to read as 
follows:


Sec.  1160.211  Assessments.

    (a)(1) Each fluid milk processor shall pay to the Board or its 
designated agent an assessment of $.20 per hundredweight of fluid milk 
products processed and marketed commercially in consumer-type packages 
in the United States by such fluid milk processor. Any fluid milk 
processor who markets milk of its own production directly to consumers 
as prescribed under section 113(g) of the Dairy Production 
Stabilization Act of 1983 (7 U.S.C. 4504(g)), and not exempt under 
Sec.  1160.108 or Sec.  1160.215, shall also pay the assessment under 
this subpart. The Secretary shall have the authority to receive 
assessments on behalf of the Board.
* * * * *
    6. Section 1160.215 is added to read as follows:


Sec.  1160.215  Assessment exemption.

    (a) No assessment shall be required on fluid milk products exported 
from the United States.
    (b) A fluid milk processor described in Sec.  1160.211(a) who 
produces and markets solely 100 percent organic products, and who does 
not produce any conventional or non-organic products, shall be exempt 
from the payment of assessments on fluid milk products produced on a 
certified organic farm as defined in section 2103 of the Organic Foods 
Production Act of 1990 (7 U.S.C. 6502). For purposes of this section, 
produce means to grow or produce food, feed, livestock, or fiber or to 
receive food, feed, livestock, or fiber and alter that product by means 
of feeding, slaughtering, or processing.
    (c) To apply for an assessment exemption, a fluid milk processor 
described in Sec.  1160.211 paragraph (a) shall submit a request for 
exemption to the Board on a form provided by the Board at any time 
initially and annually thereafter on or before July 1 as long as the 
fluid milk processor continues to be eligible for the assessment 
exemption.
    (d) The request shall include the following: The fluid milk 
processor's name and address, a copy of the organic farm or organic 
handling operation certificate provided by a USDA-accredited certifying 
agent as defined in section 2103 of the Organic Foods Production Act of 
1990 (7 U.S.C. 6502), and a signed certification that the applicant 
meets all of the requirements specified in paragraph (b) of this 
section for an assessment exemption.
    (e) The Board will grant an assessment exemption to any fluid milk 
processor meeting the criteria in Sec.  1160.215(b) and issue a 
Certificate of Exemption to the fluid milk processor within 30 days of 
receipt of the fluid milk processor's request, provided such fluid milk 
processor meets the requirements of this section.

PART 1205--COTTON RESEARCH AND PROMOTION

    7. The authority citation for Part 1205 is revised to read as 
follows:

    Authority: 7 U.S.C. 2101-2118 and 7 U.S.C. 7401.

    8. Section 1205.519 is added to read as follows:


Sec.  1205.519  Organic exemption.

    (a) A person who produces and markets solely 100 percent organic 
products, and who does not produce any conventional or nonorganic 
products, shall be exempt from the payment of assessments with respect 
to any cotton that is produced on a certified organic farm as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502). For purposes of this section, produce means to grow or produce 
food, feed, livestock, or fiber or to receive food, feed, livestock, or 
fiber and alter that product by means of feeding, slaughtering, or 
processing.
    (b) To apply for an exemption under this section, an eligible 
cotton producer shall submit a request for exemption to the Board--on a 
form provided by the Board--at any time initially and annually 
thereafter on or before the beginning of the crop year as long as the 
producer continues to be eligible for the exemption.
    (c) The request shall include the following: the producer's name 
and address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), and a signed certification that the applicant meets all of the 
requirements specified in paragraph (a) of this section for an 
assessment exemption.
    (d) If the producer complies with the requirements of this section, 
the Board will grant the exemption and issue a Certificate of Exemption 
to the producer within 30 days of receipt of the producer's 
application. The producer shall provide a copy of the Certificate of 
Exemption to each handler to whom the producer sells cotton. The 
handler shall maintain records showing the exempt producer's name and 
address and the exemption number assigned by the Board.
    (e) An importer who meets the criteria in paragraph (a) of this 
section may submit documentation to the Board and request an exemption 
from assessment on 100 percent organic cotton and 100 percent organic 
cotton products--on a form provided by the Board--at any time initially 
and annually thereafter on or before the beginning of the crop year as 
long as the importer continues to be eligible for the exemption. This 
documentation shall include a copy of the organic farm or organic 
handling operation certificate provided by a USDA-accredited certifying 
agent as defined in section 2103 of the Organic Foods Production Act of 
1990 (7 U.S.C. 6502) and a signed certification that the applicant 
meets all of the requirements specified for an assessment exemption. If 
the importer complies with the requirements of this section, the Board 
will grant the exemption and issue a

[[Page 22696]]

Certificate of Exemption to the importer within 30 days of receipt of 
the importer's application. The Board will also issue the importer a 9-
digit alphanumeric Harmonized Tariff Schedule (HTS) classification 
valid for 1 year from the date of issue. This HTS classification should 
be entered by the importer, in the appropriate location as determined 
by the U.S. Customs Service, on the Customs entry documentation. Any 
line item entry of 100 percent organic cotton and cotton products 
bearing this HTS classification assigned by the Board will not be 
subject to assessments.

PART 1207--POTATO RESEARCH AND PROMOTION

    9. The authority citation for Part 1207 is revised to read as 
follows:

    Authority: 7 U.S.C. 2611-2627 and 7 U.S.C. 7401.

    10. Section 1207.514 is added to read as follows:


Sec.  1207.514  Exemption for organic potatoes.

    (a) A person who produces and markets solely 100 percent organic 
products, and who does not produce any conventional or nonorganic 
products, shall be exempt from the payment of assessments with respect 
to any potatoes that are produced on a certified organic farm as 
defined in section 2103 of the Organic Foods Production Act of 1990 (7 
U.S.C. 6502). For purposes of this section, produce means to grow or 
produce food, feed, livestock, or fiber or to receive food, feed, 
livestock, or fiber and alter that product by means of feeding, 
slaughtering, or processing.
    (b) To apply for an exemption under this section, the producer 
shall submit a request for exemption to the Board--on a form provided 
by the Board--at any time initially and annually thereafter on or 
before July 1 as long as the producer continues to be eligible for the 
exemption.
    (c) The request shall include the following: the producer's name 
and address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), and a signed certification that the applicant meets all of the 
requirements specified in paragraph (a) of this section for an 
assessment exemption.
    (d) If the producer complies with the requirements of this section, 
the Board will grant the exemption and issue a Certificate of Exemption 
to the producer within 30 days of receipt of the producer's 
application. The producer shall provide a copy of the Certificate of 
Exemption to each handler to whom the producer sells potatoes. The 
handler shall maintain records showing the exempt producer's name and 
address and the exemption number assigned by the Board.
    (e) An importer who meets the criteria in paragraph (a) of this 
section may submit documentation to the Board and request an exemption 
from assessment on 100 percent organic potatoes, potato products, and 
seed potatoes--on a form provided by the Board--at any time initially 
and annually thereafter on or before July 1 as long as the importer 
continues to be eligible for the exemption. This documentation shall 
include a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502) and a signed certification that the applicant meets all of the 
requirements specified for an assessment exemption. If the importer 
complies with the requirements of this section, the Board will grant 
the exemption and issue a Certificate of Exemption to the importer 
within 30 days of receipt of the importer's application. The Board will 
also issue the importer a 9-digit alphanumeric Harmonized Tariff 
Schedule (HTS) classification valid for 1 year from the date of issue. 
This HTS classification should be entered by the importer, in the 
appropriate location as determined by the U.S. Customs Service, on the 
Customs entry documentation. Any line item entry of 100 percent organic 
potatoes, potato products, and seed potatoes bearing this HTS 
classification assigned by the Board will not be subject to 
assessments.

PART 1209--MUSHROOM PROMOTION, RESEARCH, AND CONSUMER INFORMATION

    11. The authority citation for Part 1209 is revised to read as 
follows:

    Authority: 7 U.S.C. 6101-6112 and 7 U.S.C. 7401.

    12. In Sec.  1209.52, revise paragraph (a) to read as follows:


Sec.  1209.52  Exemption from assessment.

    (a) The following persons shall be exempt from assessments under 
this part:
    (1) A person who produces or imports, on average, 500,000 pounds or 
less of mushrooms annually; and
    (2) A person who produces and markets solely 100 percent organic 
products on a certified organic farm as defined in section 2103 of the 
Organic Foods Production Act of 1990 (7 U.S.C. 6502) and does not 
produce any conventional or nonorganic products. For purposes of this 
section, produce means to grow or produce food, feed, livestock, or 
fiber or to receive food, feed, livestock, or fiber and alter that 
product by means of feeding, slaughtering, or processing.
    13. In Sec.  1209.252, paragraph (a) is revised to read as follows:


Sec.  1209.252  Exemption procedures.

    (a) Types of exemptions and requirements. (1) Any person who 
produces or imports, on average, 500,000 pounds or less of mushrooms 
annually and who desires to claim an exemption from assessments during 
a fiscal year shall apply to the Council, on a form provided by the 
Council, for a Certificate of Exemption. The producer or importer shall 
certify that the person's production or importation of mushrooms shall 
not exceed 500,000 pounds, on average, for the fiscal year for which 
the exemption is claimed. An average shall be calculated by averaging a 
person's estimated production or importation for the fiscal year for 
which an exemption is claimed with the person's production or 
importation in the preceding fiscal year.
    (2) To apply for an exemption for organic mushrooms, an eligible 
mushroom producer shall submit a request for exemption to the Council--
on a form provided by the Council--at any time initially and annually 
thereafter on or before January 1 as long as the producer continues to 
be eligible for the exemption. The request shall include the following: 
The producer's name and address, a copy of the organic farm or organic 
handling operation certificate provided by a USDA-accredited certifying 
agent as defined in section 2103 of the Organic Foods Production Act of 
1990 (7 U.S.C. 6502), and a signed certification that the applicant 
meets all of the requirements specified for an assessment exemption. If 
the applicant complies with the requirements of Sec.  1209.52(a)(2), 
the Council will grant the exemption and issue a Certificate of 
Exemption to the producer within 30 days of receipt of the producer's 
request. An importer who meets the criteria in Sec.  1290.52(a)(2) may 
submit documentation to the Council and request an exemption from 
assessment on 100 percent organic mushrooms--on a form provided by the 
Council--at any time initially and annually thereafter on or before 
January 1 as long as the importer continues to be eligible for the 
exemption. This

[[Page 22697]]

documentation shall include a copy of the organic farm or organic 
handling operation certificate provided by a USDA-accredited certifying 
agent as defined in section 2103 of the Organic Foods Production Act of 
1990 (7 U.S.C. 6502) and a signed certification that the applicant 
meets all of the requirements specified for an assessment exemption. If 
the importer complies with the requirements of this section, the 
Council will grant the exemption and issue a Certificate of Exemption 
to the importer within 30 days of receipt of the importer's 
application. The Council will also issue the importer a 9-digit 
alphanumeric Harmonized Tariff Schedule (HTS) classification valid for 
1 year from the date of issue. This HTS classification should be 
entered by the importer, in the appropriate location as determined by 
the U.S. Customs Service, on the Customs entry documentation. Any line 
item entry of 100 percent organic mushrooms bearing this HTS 
classification assigned by the Council will not be subject to 
assessments.
* * * * *

PART 1210--WATERMELON RESEARCH AND PROMOTION

    14. The authority citation for Part 1210 is revised to read as 
follows:

    Authority: 7 U.S.C. 4901-4916 and 7 U.S.C. 7401.

    15. Section 1210.516 is added to read as follows:


Sec.  1210.516  Exemption for organic watermelons.

    (a) A person who produces and markets solely 100 percent organic 
products, and who does not produce any conventional or nonorganic 
products, shall be exempt from the payment of assessments with respect 
to any watermelons that are produced on a certified organic farm as 
defined in section 2103 of the Organic Foods Production Act of 1990 (7 
U.S.C. 6502). For purposes of this section, produce means to grow or 
produce food, feed, livestock, or fiber or to receive food, feed, 
livestock, or fiber and alter that product by means of feeding, 
slaughtering, or processing.
    (b) To apply for this exemption, the producer or handler shall 
submit the request to the Board--on a form provided by the Board--at 
any time initially and annually thereafter on or before January 1 as 
long as the producer or handler continues to be eligible for the 
exemption.
    (c) The request shall include the following: The applicant's name 
and address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), and a signed certification that the applicant meets all of the 
requirements specified for an assessment exemption.
    (d) If the producer or handler complies with the requirements of 
this section, the Board will approve the exemption and issue a 
Certificate of Exemption to the producer or handler within 30 days of 
receipt of the application. The producer shall provide a copy of the 
Certificate of Exemption to each handler to whom the producer sells 
watermelons. The handler shall maintain records showing the exempt 
producer's name and address and the exemption number assigned by the 
Board.
    (e) An importer who meets the criteria in paragraph (a) of this 
section may submit documentation to the Board and request an exemption 
from assessment on 100 percent organic watermelons--on a form provided 
by the Board--at any time initially and annually thereafter on or 
before January 1 as long as the importer continues to be eligible for 
the exemption. This documentation shall include a copy of the organic 
farm or organic handling operation certificate provided by a USDA-
accredited certifying agent as defined in section 2103 of the Organic 
Foods Production Act of 1990 (7 U.S.C. 6502) and a signed certification 
that the applicant meets all of the requirements specified for an 
assessment exemption. If the importer complies with the requirements of 
this section, the Board will grant the exemption and issue a 
Certificate of Exemption to the importer within 30 days of receipt of 
the importer's application. The Board will also issue the importer a 9-
digit alphanumeric Harmonized Tariff Schedule (HTS) classification 
valid for 1 year from the date of issue. This HTS classification should 
be entered by the importer, in the appropriate location as determined 
by the U.S. Customs Service, on the Customs entry documentation. Any 
line item entry of 100 percent organic watermelons bearing this HTS 
classification assigned by the Board will not be subject to 
assessments.

PART 1215--POPCORN PROMOTION, RESEARCH, AND CONSUMER INFORMATION

    16. The authority citation for Part 1215 is revised to read as 
follows:

    Authority: 7 U.S.C. 7481-7491 and 7 U.S.C. 7401.

    17. Section 1215.52 is revised to read as follows:


Sec.  1215.52  Exemption from assessment.

    (a) Persons that process and distribute 4 million pounds or less of 
popcorn annually, based on the previous year, shall be exempted from 
assessment.
    (b) Persons who produce and market solely 100 percent organic 
products and who do not produce any conventional or nonorganic products 
shall be exempt from the payment of assessments with respect to any 
popcorn that is produced on a certified organic farm as defined in 
section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502). For purposes of this section, produce means to grow or produce 
food, feed, livestock, or fiber or to receive food, feed, livestock, or 
fiber and alter that product by means of feeding, slaughtering, or 
processing.
    (c) To claim an exemption, persons shall apply to the Board, in the 
form and manner prescribed in the rules and regulations.
    18. Section 1215.300 is amended by:
    (a) Revising paragraphs (b) and (c);
    (b) Redesignating paragraph (d) as paragraph (e);
    (c) Adding a new paragraph (d).
    Revisions read as follows:


Sec.  1215.300  Exemption procedures.

* * * * *
    (b) A person who produces and markets solely 100 percent organic 
products and who does not produce any conventional or nonorganic 
products as provided in Sec.  1215.52(b) of this part may apply for an 
exemption by submitting a request for exemption to the Board on a form 
provided by the Board at any time initially. The request shall include 
the following: the applicant's name and address, a copy of the organic 
farm or organic handling operation certificate provided by a USDA-
accredited certifying agent as defined in section 2103 of the Organic 
Foods Production Act of 1990 (7 U.S.C. 6502), and a signed 
certification that the applicant meets all of the requirements 
specified for an assessment exemption.
    (c) Upon receipt of an application, the Board shall determine 
whether an exemption may be granted and issue a Certificate of 
Exemption to the producer within 30 days of receipt of the applicant's 
request.
    (d) Any person who desires to renew the exemption from assessments 
for a subsequent fiscal year shall reapply to the Board by January 1 of 
that year.
* * * * *

[[Page 22698]]

PART 1216--PEANUT PROMOTION, RESEARCH, AND INFORMATION

    19. The authority citation for Part 1216 is revised to read as 
follows:

    Authority: 7 U.S.C. 7411-7425 and 7 U.S.C. 7401.

    20. Section 1216.56 is added to read as follows:


Sec.  1216.56  Exemption for organic peanuts.

    (a) A person who produces and markets solely 100 percent organic 
products, and who does not produce any conventional or nonorganic 
products, shall be exempt from the payment of assessments with respect 
to any peanuts that are produced on a certified organic farm as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502).
    (b) In order to apply for this exemption, an eligible peanut 
producer shall submit a request for exemption to the Board--on a form 
provided by the Board--at any time initially and annually thereafter on 
or before August 1 as long as the producer continues to be eligible for 
the exemption.
    (c) The request shall include the following: the producer's name 
and address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), and a signed certification that the applicant meets all of the 
requirements specified for an assessment exemption.
    (d) If the producer complies with the requirements of this section, 
the Board will approve the exemption and issue a Certificate of 
Exemption to the producer within 30 days of receipt of the producer's 
application.
    (e) The producer shall provide a copy of the Certificate of 
Exemption to each handler to whom the producer sells peanuts. The 
handler shall maintain records showing the exempt producer's name and 
address and the exemption number assigned by the Board.

PART 1218--BLUEBERRY PROMOTION, RESEARCH, AND INFORMATION

    21. The authority citation for Part 1218 is revised to read as 
follows:

    Authority: 7 U.S.C. 7411-7425 and 7 U.S.C. 7401.

    22. Section 1218.53 is amended by:
    (a) Redesignating paragraphs (b) through (e) as paragraphs (f) 
through (i).
    (b) Revising paragraph (a).
    (c) Adding new paragraphs (b) through (e) to read as follows:


Sec.  1218.53  Exemption procedures.

    (a) Any producer who produces less than 2,000 pounds of blueberries 
annually shall be exempt from the payment of assessments. Such producer 
may apply to the USACBC, on a form provided by the USACBC, for a 
certificate of exemption. Such producer shall certify that the 
producer's production of blueberries shall be less than 2,000 pounds 
for the fiscal year for which the exemption is claimed.
    (b) Any importer who imports less than 2,000 pounds of fresh and 
frozen blueberries annually shall be exempt from the payment of 
assessments. Such importer may apply to the USACBC, on a form provided 
by the USACBC, for a certificate of exemption. Such importer shall 
certify that the importer's importation of fresh and frozen blueberries 
shall not exceed 2,000 pounds for the fiscal year for which the 
exemption is claimed.
    (c) A person who produces and markets solely 100 percent organic 
products, and who does not produce any conventional or nonorganic 
products, shall be exempt from the payment of assessments with respect 
to any blueberries that are produced on a certified organic farm as 
defined in section 2103 of the Organic Foods Production Act of 1990 (7 
U.S.C. 6502). For purposes of this section, produce means to grow or 
produce food, feed, livestock, or fiber or to receive food, feed, 
livestock, or fiber and alter that product by means of feeding, 
slaughtering, or processing.
    (d) To apply for this exemption, a producer shall submit a request 
for exemption to the USACBC--on a form provided by the USACBC--at any 
time initially and annually thereafter on or before January 1 as long 
as the producer continues to be eligible for the exemption. The request 
shall include the following: the producer's name and address, with a 
copy of the organic farm or organic handling operation certificate 
provided by a USDA-accredited certifying agent as defined in section 
2103 of the Organic Foods Production Act of 1990, and a signed 
certification that the applicant meets all of the requirements 
specified for an assessment exemption. If a producer complies with the 
requirements in paragraph (c) of this section, the USACBC will grant an 
assessment exemption and issue a certification of exemption to the 
producer within 30 days of receipt of the producer's request.
    (e) An importer who meets the criteria in paragraph (c) of this 
section may submit documentation to the Board and request an exemption 
from assessment on 100 percent organic fresh and frozen blueberries--on 
a form provided by the USACBC--at any time initially and annually 
thereafter on or before January 1 as long as the importer continues to 
be eligible for the exemption. This documentation shall include a copy 
of the organic farm or organic handling operation certificate provided 
by a USDA-accredited certifying agent as defined in section 2103 of the 
Organic Foods Production Act of 1990 (7 U.S.C. 6502) and a signed 
certification that the applicant meets all of the requirements 
specified for an assessment exemption. If the importer complies with 
the requirements of this section, the USACBC will grant the exemption 
and issue a Certificate of Exemption to the importer within 30 days of 
receipt of the importer's application. The USACBC will also issue the 
importer a 9-digit alphanumeric Harmonized Tariff Schedule (HTS) 
classification valid for 1 year from the date of issue. This HTS 
classification should be entered by the importer, in the appropriate 
location as determined by the U.S. Customs Service, on the Customs 
entry documentation. Any line item entry of 100 percent organic fresh 
and frozen blueberries bearing this HTS classification assigned by the 
USACBC will not be subject to assessments.
* * * * *

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

    23. The authority citation for Part 1219 is revised to read as 
follows:

    Authority: 7 U.S.C. 7801-7813 and 7 U.S.C. 7401.

    24. In part 1219, add a new Subpart C--Rules and Regulations to 
read as follows:

Subpart C--Rules and Regulations


Sec.  1219.200  Terms defined.

    Unless otherwise defined in this subpart, the definitions of terms 
used in this subpart shall have the same meaning as the definitions of 
such terms which appear in Subpart A--Hass Avocado Promotion, Research, 
and Information Order of this part.


Sec.  1219.201  Definitions.

    Organic Act means section 2103 of the Organic Foods Production Act 
of 1990 (7 U.S.C. 6502).


Sec.  1219.202  Exemption for organic Hass avocados.

    (a) A person who produces and markets solely 100 percent organic 
products, and who does not produce any conventional or nonorganic

[[Page 22699]]

products, shall be exempt from the payment of assessments with respect 
to any Hass avocados that are produced on a certified organic farm as 
defined in the Organic Act. For purposes of this section, produce means 
to grow or produce food, feed, livestock, or fiber or to receive food, 
feed, livestock, or fiber and alter that product by means of feeding, 
slaughtering, or processing.
    (b) To obtain this exemption, an eligible Hass avocado producer 
shall submit a request for exemption to the Board--on a form provided 
by the Board--at any time initially and annually thereafter on or 
before November 1 as long as the producer continues to be eligible for 
the exemption.
    (c) The request shall include the following: the producer's name 
and address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined 
in the Organic Act, and a signed certification that the applicant meets 
all of the requirements specified for an assessment exemption.
    (d) If the producer complies with the requirements of paragraph (a) 
of this section, the Board will grant an assessment exemption and shall 
issue a Certificate of Exemption to the producer within 30 days of 
receiving the producer's application. The producer shall provide a copy 
of the Certificate of Exemption to each handler to whom the producer 
sells Hass avocados. The handler shall maintain records showing the 
exempt producer's name and address and the exemption number assigned by 
the Board.
    (e) An importer who meets the criteria in paragraph (b) of this 
section may submit documentation to the Board and request an exemption 
from assessment on 100 percent organic Hass avocados--on a form 
provided by the Board--at any time initially and annually thereafter on 
or before November 1 as long as the importer continues to be eligible 
for the exemption. This documentation shall include a copy of the 
organic farm or organic handling operation certificate provided by a 
USDA-accredited certifying agent as defined in section 2103 of the 
Organic Act and a signed certification that the applicant meets all of 
the requirements specified for an assessment exemption. If the importer 
complies with the requirements of this section, the Board will grant 
the exemption and issue a Certificate of Exemption to the importer 
within 30 days of receipt of the importer's application. The Board will 
also issue the importer a 9-digit alphanumeric Harmonized Tariff 
Schedule (HTS) classification valid for 1 year from the date of issue. 
This HTS classification should be entered by the importer, in the 
appropriate location as determined by the U.S. Customs Service, on the 
Customs entry documentation. Any line item entry of 100 percent organic 
Hass avocados bearing this HTS classification assigned by the Board 
will not be subject to assessments.

PART 1220--SOYBEAN PROMOTION, RESEARCH, AND CONSUMER INFORMATION

    25. The authority citation for Part 1220 is revised to read as 
follows:

    Authority: 7 U.S.C. 6301-6311 and 7 U.S.C. 7401.

    26. Section 1220.302 is added to read as follows:


Sec.  1220.302  Exemption.

    (a) A person who produces and markets solely 100 percent organic 
products, and who does not produce any conventional or non-organic 
products, shall be exempt from the payment of assessment with respect 
to any soybeans that are produced on a certified organic farm as 
defined in section 2103 of the Organic Foods Production Act of 1990 (7 
U.S.C. 6502).
    (b) To apply for an exemption under this section, the producer 
shall submit the request to the Board or other party as designated by 
the Board--on a form provided by the Board--at any time initially and 
annually thereafter on or before January 1 as long as the producer 
continues to be eligible for the exemption.
    (c) The request shall include the following: the producer's name 
and address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), and a signed certification that the applicant meets all of the 
requirements specified for an assessment exemption.
    (d) If the producer complies with the requirements of this section, 
the Board or designee will grant the exemption and issue a Certificate 
of Exemption to the producer within 30 days of receipt of the 
producer's application.
    (e) The producer shall provide a copy of the Certificate of 
Exemption to each first purchaser. The first purchaser shall maintain 
records showing the exempt producer's name and address and the 
exemption number assigned by the Board.

PART 1230--PORK PROMOTION, RESEARCH, AND CONSUMER INFORMATION

    27. The authority citation for Part 1230 is revised to read as 
follows:

    Authority: 7 U.S.C. 4801-4819 and 7 U.S.C. 7401.

    28. Section 1230.102 is added to read as follows:


Sec.  1230.102  Exemption.

    (a) A person who produces and markets solely 100 percent organic 
products, and who does not produce any conventional or non-organic 
products, shall be exempt from the payment of assessment with respect 
to any porcine animals or pork and pork products that are produced on a 
certified organic farm as defined in section 2103 of the Organic Foods 
Production Act of 1990 (7 U.S.C. 6502). For purposes of this section, 
produce means to grow or produce food, feed, livestock, or fiber or to 
receive food, feed, livestock, or fiber and alter that product by means 
of feeding, slaughtering, or processing.
    (b) To apply for an exemption under this section, the producer 
shall submit the request to the Board--on a form provided by the 
Board--at any time initially and annually thereafter on or before 
January 1 as long as the producer continues to be eligible for the 
exemption.
    (c) The request shall include the following: the producer's name 
and address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), and a signed certification that the applicant meets all of the 
requirements specified for an assessment exemption.
    (d) If the producer complies with the requirements of this section, 
the Board will grant the exemption and issue a Certificate of Exemption 
to the producer within 30 days of receipt of the producer's 
application.
    (e) The producer shall provide a copy of the Certificate of 
Exemption to each person responsible for collecting and remitting the 
assessment to the Board.
    (f) The person responsible for collecting and remitting the 
assessment to the Board shall maintain records showing the exempt 
producer's name and address and the exemption number assigned by the 
Board.
    (g) An importer who meets the criteria in paragraph (a) above may 
submit documentation to the Board and request an exemption from 
assessment on 100 percent organic porcine animals or pork

[[Page 22700]]

and pork products--on a form provided by the Board--at any time 
initially and annually thereafter on or before January 1 as long as the 
importer continues to be eligible for the exemption. This documentation 
shall include a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502) and a signed certification that the applicant meets all of the 
requirements specified for an assessment exemption. If the importer 
complies with the requirements of this section, the Board will grant 
the exemption and issue a Certificate of Exemption to the importer 
within 30 days of receipt of the importer's application. The Board will 
also issue the importer a 9-digit alphanumeric Harmonized Tariff 
Schedule (HTS) classification valid for 1 year from the date of issue. 
This HTS classification should be entered by the importer, in the 
appropriate location as determined by the U.S. Customs Service, on the 
Customs entry documentation. Any line item entry of 100 percent organic 
porcine animals or pork and pork products bearing this HTS 
classification assigned by the Board will not be subject to 
assessments.

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

    29. The authority citation for Part 1240 continues to read as 
follows:

    Authority: 7 U.S.C. 4601-4612 and 7 U.S.C. 7401.

    30. Section 1240.42 is amended by:
    (a) Redesignating paragraph (d) as paragraph (f).
    (b) Revising paragraph (c).
    (c) Adding new paragraphs (d) and (e).
    Revisions read as follows:


Sec.  1240.42  Exemption from assessment.

* * * * *
    (c) If, after a person has been exempt from paying assessments for 
any year pursuant to paragraphs (a) and (b) of this section, and the 
person no longer meets the requirements of paragraphs (a) and (b) of 
this section for exemption, the person shall file a report with the 
Board in the form and manner prescribed by the Board and pay an 
assessment on or before March 15 of the subsequent year on all honey or 
honey products produced or imported by such person during the year for 
which the person claimed the exemption.
    (d) A person who produces and markets solely 100 percent organic 
products, and who does not produce any conventional or nonorganic 
products, shall be exempt from the payment of assessments with respect 
to any honey that is produced on a certified organic farm as defined in 
section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502). For purposes of this section, produce means to grow or produce 
food, feed, livestock, or fiber or to receive food, feed, livestock, or 
fiber and alter that product by means of feeding, slaughtering, or 
processing. A person is a producer, first-handler, or producer-packer.
    (e) An importer who meets the criteria in paragraph (d) of this 
section may submit documentation to the Board and request an exemption 
from assessment on 100 percent organic honey and honey products.
* * * * *
    31. Amend Sec.  1240.50 by revising paragraph (d) to read as 
follows:


Sec.  1240.50  Reports.

* * * * *
    (d) For persons who have an exemption from assessments under Sec.  
1240.42, such information as deemed necessary by the Board, and 
approved by the Secretary, concerning the exemption including 
disposition of exempted honey.
    32. Revise Sec.  1240.114 to read as follows:


Sec.  1240.114  Exemption procedures.

    (a) To obtain a Certificate of Exemption for organic honey, an 
eligible person shall submit a request for exemption to the Board--on a 
form provided by the Board--at any time initially and annually 
thereafter on or before January 1 as long as the producer continues to 
be eligible for the exemption. The request shall include the following: 
the person's name and address, a copy of the organic farm or organic 
handling operation certificate provided by a USDA-accredited certifying 
agent as defined in section 2103 of the Organic Foods Production Act of 
1990 (7 U.S.C. 6502), and a signed certification that the applicant 
meets all of the requirements specified for an assessment exemption.
    (b) If the person complies with the requirements of this section, 
the Board will approve the exemption and issue a Certificate of 
Exemption to the producer within 30 days of receiving the producer's 
application.
    (c) A person receiving an organic exemption shall provide a copy of 
the Certificate of Exemption to each handler to whom the producer sells 
honey. The handler shall maintain records showing the exempt producer's 
name and address and the exemption number assigned by the Board.
    (d) An importer who is eligible to be exempt from the payment of 
assessments on imported organic honey and honey products may request an 
exemption from assessment on 100 percent organic honey and honey 
products--on a form provided by the Board--at any time initially and on 
or before January 1 as long as the importer continues to be eligible 
for the exemption. This documentation shall include a copy of the 
organic farm or organic handling operation certificate provided by a 
USDA-accredited certifying agent as defined in section 2103 of the 
Organic Foods Production Act of 1990 (7 U.S.C. 6502) and a signed 
certification that the applicant meets all of the requirements 
specified for an assessment exemption. If the importer complies with 
the requirements of this section, the Board will grant the exemption 
and issue a Certificate of Exemption to the importer within 30 days of 
receipt of the importer's application. The Board will also issue the 
importer a 9-digit alphanumeric Harmonized Tariff Schedule (HTS) 
classification valid for 1 year from the date of issue. This HTS 
classification should be entered by the importer, in the appropriate 
location as determined by the U.S. Customs Service, on the Customs 
entry documentation. Any line item entry of 100 percent organic honey 
and honey products bearing this HTS classification assigned by the 
Board will not be subject to assessments.
    33. In Sec.  1240.115, revise paragraph (b)(1) to read as follows:


Sec.  1240.115  Levy of assessments.

* * * * *
    (b) * * *
    (1) Any persons other than importers holding a valid exemption 
certificate pursuant to Sec.  1240.42 during the 12-month period ending 
on December 31;
* * * * *
    34. Amend Sec.  1240.118 by revising the first sentence to read as 
follows:


Sec.  1240.118  Reports of disposition of exempted honey.

    The Board may require reports by first handlers, producer-packers, 
importers, or any persons who receive an exemption from assessments 
under Sec.  1240.42 on the handling and disposition of exempted honey. 
* * *
    35. Revise Sec.  1240.120 to read as follows:


Sec.  1240.120  Retention period for records.

    Each first handler, producer-packer, importer, or any person who 
receives an

[[Page 22701]]

exemption from assessments under Sec.  1240.42 and is required to make 
reports pursuant to this subpart shall maintain and retain for at least 
two years beyond the marketing year of their applicability:
    (a) One copy of each report made to the Board;
    (b) Records of all exempt producers, producer-packers, and 
importers including certification of exemption as necessary to verify 
the address of such exempt person; and
    (c) Such records as are necessary to verify such reports.
    36. Revise Sec.  1240.121 to read as follows:


Sec.  1240.121  Availability of records.

    Each first handler, producer-packer, importer, or any person who 
receives an exemption from assessments under Sec.  1240.42 and is 
required to make reports pursuant to this subpart shall make available 
for inspection by authorized employees of the Board or the Secretary 
during regular business hours, such records as are appropriate and 
necessary to verify reports required under this subpart.
    37. Revise Sec.  1240.122 to read as follows:


Sec.  1240.122  Confidential books, records, and reports.

    All information obtained from the books, records, and reports of 
handlers, producer-packers, importers or any persons who receive an 
exemption from assessments under Sec.  1240.42 and all information with 
respect to refunds of assessments made to individual producers and 
importers shall be kept confidential in the manner and to the extent 
provided for in Sec.  1240.52 of the Order.

PART 1250--EGG RESEARCH AND PROMOTION

    38. The authority citation for Part 1250 is revised to read as 
follows:

    Authority: 7 U.S.C. 2701-2718 and 7 U.S.C. 7401.

    39. Revise Sec.  1250.530 to read as follows:


Sec.  1250.530  Certification of exempt producers.

    (a) Number of laying hens. Egg producers not subject to the 
provisions of the Act pursuant to Sec.  1250.348 shall file with all 
handlers to whom they sell eggs a statement certifying their exemption 
from the provisions of the Act in accordance with the criterion of 
Sec.  1250.348. Certification shall be made on forms approved and 
provided by the Egg Board to collecting handlers for use by exempt 
producers. The certification form shall be filed with each handler on 
or before January 1 of each year as long as the producer continues to 
do business with the handler. A copy of the certificate of exemption 
shall be forwarded to the Egg Board by the handler within 30 days of 
receipt. The certification shall list the following: the name and 
address of the producer, the basis for producer exemption according to 
the requirements of Sec.  1250.348, and the signature of the producer.
    (b) Organic Production. A person who produces and markets solely 
100 percent organic products, and who does not produce any conventional 
or nonorganic products, shall be exempt from the payment of assessments 
with respect to any eggs produced on a certified organic farm as 
defined in section 2103 of the Organic Foods Production Act of 1990 (7 
U.S.C. 6502).
    (1) To apply for an exemption under this section, a producer shall 
submit a request for exemption to the Board on a form provided by the 
Board at any time initially and annually thereafter on or before 
January 1 as long as the producer continues to be eligible for the 
exemption.
    (2) The request shall include the following: the producer's name 
and address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), and a signed certification that the applicant meets all of the 
requirements specified in paragraph (b) of this section for an 
assessment exemption.
    (3) If the producer complies with the requirements of this section, 
the Board will grant an assessment exemption and issue a certificate of 
exemption to the producer within 30 days of receipt of the producer's 
request.
    (4) The producer shall provide a copy of the certificate of 
exemption to each handler to whom the producer sells eggs. The handler 
shall maintain records showing the exempt producer's name and address 
and the exemption number assigned by the Board.
    (c) If the exempt producer no longer qualifies for an exemption as 
specified in Sec.  1250.348 or Sec.  1250.530(b), that producer shall 
notify, within 10 days, all handlers with whom the producer has filed a 
certificate of exemption.

PART 1260--BEEF PROMOTION AND RESEARCH

    40. The authority citation for Part 1260 is revised to read as 
follows:

    Authority: 7 U.S.C. 2901-2911 and 7 U.S.C. 7401.

    41. Section 1260.302 is added to read as follows:


Sec.  1260.302  Exemption.

    (a) A person who produces and markets solely 100 percent organic 
products, and who does not produce any conventional or non-organic 
products, shall be exempt from the payment of the promotion and 
research assessment with respect to any cattle or beef and beef 
products that are produced on a certified organic farm as defined in 
section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502). For purposes of this section, produce means to grow or produce 
food, feed, livestock, or fiber or to receive food, feed, livestock, or 
fiber and alter that product by means of feeding, slaughtering, or 
processing.
    (b) To apply for an exemption under this section, the producer 
shall submit the request to the Board or other party as designated by 
the Board--on a form provided by the Board--at any time initially and 
annually thereafter on or before January 1 as long as the producer 
continues to be eligible for the exemption.
    (c) The request shall include the following: The producer's name 
and address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), and a signed certification that the applicant meets all of the 
requirements specified for an assessment exemption.
    (d) If the producer complies with the requirements of this section, 
the Board or designee will grant the exemption and issue a Certificate 
of Exemption to the producer within 30 days of receipt of the 
producer's application.
    (e) The producer shall provide a copy of the Certificate of 
Exemption to each person responsible for collecting and remitting the 
assessment.
    (f) The person responsible for collecting and remitting the 
assessment shall maintain records showing the exempt producer's name 
and address and the exemption number assigned by the Board or designee.
    (g) An importer who meets the criteria in paragraph (a) of this 
section may submit documentation to the Board and request an exemption 
from assessment on 100 percent organic cattle or beef and beef 
products'on a form provided by the Board'at any time initially and 
annually thereafter on or before January 1 as long as the importer 
continues to be eligible for the exemption. This documentation

[[Page 22702]]

shall include a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502) and a signed certification that the applicant meets all of the 
requirements specified for an assessment exemption. If the importer 
complies with the requirements of this section, the Board will grant 
the exemption and issue a Certificate of Exemption to the importer 
within 30 days of receipt of the importer's application. The Board will 
also issue the importer a 9-digit alphanumeric Harmonized Tariff 
Schedule (HTS) classification valid for 1 year from the date of issue. 
This HTS classification should be entered by the importer, in the 
appropriate location as determined by the U.S. Customs Service, on the 
Customs entry documentation. Any line item entry of 100 percent organic 
cattle or beef and beef products bearing this HTS classification 
assigned by the Board will not be subject to assessments.

PART 1280--LAMB RESEARCH AND PROMOTION

    42. The authority citation for Part 1280 is revised to read as 
follows:

    Authority: 7 U.S.C. 7411-7425 and 7 U.S.C. 7401.

    43. Section 1280.406 is added to read as follows:


Sec.  1280.406  Exemption.

    (a) A person who produces and markets solely 100 percent organic 
products, and who does not produce any conventional or non-organic 
products, shall be exempt from the payment of assessment with respect 
to any ovine animals or lamb and lamb products that are produced on a 
certified organic farm as defined in section 2103 of the Organic Foods 
Production Act of 1990 (7 U.S.C. 6502). For purposes of this section, 
produce means to grow or produce food, feed, livestock, or fiber or to 
receive food, feed, livestock, or fiber and alter that product by means 
of feeding, slaughtering, or processing. A person is a producer, seed 
stock producer, feeder, exporter, or first handler.
    (b) To apply for an exemption under this section, the person shall 
submit the request to the Board--on a form provided by the Board--at 
any time initially and annually thereafter on or before January 1 as 
long as the person continues to be eligible for the exemption.
    (c) The request shall include the following: the person's name and 
address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), and a signed certification that the applicant meets all of the 
requirements specified for an assessment exemption.
    (d) If the person complies with the requirements of this section, 
the Board will grant the exemption and issue a Certificate of Exemption 
to the producer within 30 days of receipt of the person's application.
    (e) An exempt producer shall provide a copy of the Certificate of 
Exemption to each person to whom the producer sells ovine animals or 
lamb and lamb products. The Certificate of Exemption must accompany the 
ovine animals through the production chain to the person responsible 
for remitting the assessment to the Board.
    (f) The person shall maintain records showing the exempt producer's 
name and address and the exemption number assigned by the Board.

    Dated: April 19, 2004.
A. J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-9259 Filed 4-23-04; 8:45 am]
BILLING CODE 3410-02-P