[Federal Register Volume 72, Number 106 (Monday, June 4, 2007)]
[Proposed Rules]
[Pages 30924-30940]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-2737]



[[Page 30923]]

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Part II





Department of Agriculture





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Agricultural Marketing Service



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7 CFR Parts 1212 and 1240



Establishment of Honey Packers and Importers Research, Promotion, 
Consumer Education and Industry Information Order; Referendum 
Procedures; Proposed Rules

  Federal Register / Vol. 72, No. 106 / Monday, June 4, 2007 / Proposed 
Rules  

[[Page 30924]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 1212 and 1240

[Docket No. AMS-FV-06-0176; FV-03-704-PR-1A]
RIN 0581-AC37


Establishment of Honey Packers and Importers Research, Promotion, 
Consumer Education and Industry Information Order and Termination of 
the Honey Research, Promotion, and Consumer Information Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule with request for comments.

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SUMMARY: This rule proposes a new industry-funded research, promotion, 
consumer education, and information order for honey and honey products 
under the Commodity Promotion, Research, and Information Act of 1996 
(1996 Act). The proposed Honey Packers and Importers Research, 
Promotion, Consumer Education and Industry Information Order (Proposed 
Order) was submitted to the Department of Agriculture (Department) by 
the National Honey Packers and Dealers Association (Association). The 
Department proposes that an initial referendum be conducted to 
ascertain whether the persons to be covered by and assessed under the 
Proposed Order favor the Proposed Order prior to it going into effect. 
The Proposed Order would replace the existing Honey Research, 
Promotion, and Consumer Information Order (Current Order) for honey and 
honey products and this action proposes the Current Order's 
termination. The Current Order is issued under the Honey Research, 
Promotion, and Consumer Information Act (Honey Act). This rule also 
announces the Agricultural Marketing Service's (AMS) intention to 
request approval of new honey information collection requirements by 
the Office of Management and Budget (OMB) for the Proposed Order. 
Comments are specifically requested on the potential impact of 
terminating the Current Order and on implementing the Proposed Order.

DATES: Comments must be received by August 3, 2007. Pursuant to the 
Paperwork Reduction Act, comments on the information collection burden 
that would result from this proposal must be received by August 3, 
2007.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Research and Promotion Branch, Fruit and Vegetable Programs, AMS, USDA, 
1400 Independence Avenue, SW., STOP 0244, Washington, DC 20250-0244. 
Comments may also be sent by facsimile to: (202) 205-2800, or 
electronically to: http://www.regulations.gov. All comments should 
reference the docket number and the date and page number of this issue 
of the Federal Register and will be made available for public 
inspection in the Office of the Docket Clerk during regular business 
hours, or can be viewed at: http://www.regulations.gov.
    Pursuant to the Paperwork Reduction Act (PRA), 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, should be sent to the above address and to the Desk Office 
for Agriculture, Office of Information and Regulatory Affairs, Office 
of Management and Budget, New Executive Office Building, 725 17th 
Street, NW., Room 725, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Sonia Jimenez, Chief, Research and 
Promotion Branch, Fruit and Vegetable Programs, AMS, USDA, Stop 0244, 
Room 0634-S, 1400 Independence Ave., SW., Washington, DC 20250-0244; 
telephone (202) 720-9915 or (888) 720-9917 (toll free), Fax: (202) 205-
2800 or e-mail [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under the Commodity 
Promotion, Research, and Information Act of 1996 (1996 Act) (7 U.S.C. 
7411-7425) and under the Honey Research, Promotion, and Consumer 
Information Act (Honey Act) (7 U.S.C. 4601-4613). The Current Order 
appears at 7 CFR part 1240.
    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 Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    Section 524 of the 1996 Act provides that it shall not affect or 
preempt any other Federal or State law authorizing promotion or 
research relating to an agricultural commodity.
    Under both section 519 of the 1996 Act and section 10 of the Honey 
Act, a person subject to an order may file a petition with the 
Department stating that the order, any provision of the order, or any 
obligation imposed in connection with the order, is not established in 
accordance with the law, and requesting a modification of the order or 
an exemption from the order. Any such petition must be filed within two 
years after the effective date of an order, provision or obligation 
subject to challenge. The petitioner would have the opportunity for a 
hearing on the petition. Thereafter, the Department would issue a 
ruling on the petition. The 1996 Act and the Honey Act provide that the 
district court of the United States for any district in which the 
petitioner resides or conducts business shall be the jurisdiction to 
review a final ruling on the petition, if the petitioner files a 
complaint for that purpose not later than 20 days after the date of 
entry of the Department's final ruling.
    In deciding whether a proposal for an order is consistent with and 
will effectuate the purpose of the 1996 Act, the Secretary may consider 
the existence of other federal research and promotion programs issued 
under other laws. Taking into account the duplicative nature of the 
Proposed Program with the Current Program, the Department is proposing 
that the Current Order be terminated.
    Similar to the Current Order, the goals of the Proposed Order are 
to: (1) Develop and finance an effective and coordinated research, 
promotion, industry information, and consumer education program for 
honey and honey products; (2) strengthen the position of the honey 
industry; and (3) develop, maintain, and expand existing markets for 
honey and honey products.
    The Department is soliciting comments from producers, first 
handlers, manufacturers, importers, consumers, industry organizations 
and other interested persons on the possible termination of the Current 
Order and replacing it with the Proposed Order. In view of the proposed 
termination of the Current Order, comments are requested specifically 
on the potential impact of terminating the Current Order and on 
implementing the Proposed Order. This comment request is expanded upon 
later in the document under the section captioned ``Request for Public 
Comments.''

Background

    While both the Current and the Proposed Order have the same goal in 
terms of making positive strides for the

[[Page 30925]]

honey industry, some of the main provisions within each order vary 
significantly between the two orders. Below is a discussion of some of 
the differences between the Current Order and the Proposed Order 
submitted by the Association. This comparison is not exhaustive, but it 
is intended to allow interested persons a way to distinguish between 
the two orders so they may better be able to provide comments to the 
Department.

Current Order: Honey Research, Promotion, and Consumer Information 
Order (Part 1240)

    The Current Order, authorized by the Honey Act [7 U.S.C. 4601-
4613], became effective on July 21, 1986, after honey producers and 
importers voted in favor of the Order. A 12-member board consisting of 
seven producers, two handlers, two importers, one officer of a 
marketing cooperative, and their alternates, administers the program. 
Under the Honey Act, at least 50 percent of the members of the Board 
must be honey producers. The Act also provides for the establishment of 
a National Honey Nominations Committee consisting of state members for 
nominating producer members to the Board. The State members are 
nominated by state beekeeper associations. Nominations for handler and 
importer members are made by qualified national organizations 
representing handler and importer interests, respectively. The national 
honey marketing cooperative representative is nominated by a qualified 
national honey marketing cooperative. Board reconstitution is every 
five years, subject to certain statutory considerations and 
restrictions.
    Under the Current Order, assessments are collected on honey and 
honey products produced in or imported into the 50 States, Puerto Rico, 
and the District of Columbia. The funds are collected from producers 
and importers and are used by the National Honey Board for market 
research and development, advertising and promotion of honey and honey 
products, and consumer information. This is done under the oversight of 
AMS. The current assessment rate is 1 cent per pound. First handlers 
are responsible for collection of producer assessments and payment to 
the National Honey Board. The U.S. Customs Service collects the 
importer assessments.
    Producers and importers marketing less than 6,000 pounds of honey 
per year are exempt from paying assessments. In addition, producers who 
operate under an approved National Organic Program (NOP) (7 CFR part 
205) system plan, produce only products eligible to be labeled as 100 
percent organic under the NOP, and are not a split operation, are 
exempt from the paying assessments. Similarly, importers who import 
only products eligible to be labeled as 100 percent organic under the 
NOP, and are not a split operation, are exempt from paying assessments.
    Under the Current Order, approximately 2,700 entities are assessed 
and approximately $3.6 million is collected annually.
    Under the Current Order, handlers, importers, producers, and 
producer-packers are required to report certain specified information 
to the Board. Persons who have an exemption from assessments also must 
report to the Board information.
    The Honey Act provides for a number of permissive terms that may be 
included in an order. For example, the Honey Act provides authority to 
establish minimum purity standards for honey and honey products that 
are designed to maintain a positive and wholesome marketing image for 
honey and honey products. An inspection and monitoring system and a 
voluntary quality assurance program is authorized in connection with 
the minimum purity standards. Only a voluntary quality assurance 
program has been approved by referendum and therefore appears in the 
Current Order.
    The Honey Act requires a referendum to establish an order as well 
as to authorize a number of order provisions, including handler 
representation on the Board, reconstitution of the Board, an 
alternative assessment rate as provided by statute on honey producers, 
producer-packers, handlers and importers, and an inspection and 
monitoring system of a voluntary quality assurance program. Approval is 
by a majority vote by number and volume for producers, importers and 
when applicable, handlers.

Proposed Order: Honey Packers and Importers Research, Promotion, 
Consumer Education and Industry Information Order (Part 1212)

    This rule proposes the implementation of a Honey Packers and 
Importers Research, Promotion, Consumer Education and Industry 
Information Order (Proposed Order). The Department received the 
proposal for a new order from the National Honey Packers and Dealers 
Association (Association).
    The Proposed Order is authorized under the 1996 Act, instead of the 
Honey Act, which provides the statutory authority for the Current 
Order. The 1996 Act varies from the Honey Act in several ways.
    The 1996 Act authorizes the Department, under a generic authority, 
to establish agricultural commodity research and promotion orders, 
which may include a combination of promotion, research, industry 
information, and consumer information activities funded by mandatory 
assessments. These programs are designed to maintain and expand markets 
and uses for agricultural commodities. The Proposed Order, similar to 
the Current Order, would provide for the continued development and 
financing of a coordinated program of research, promotion, and 
information for honey and honey products.
    The 1996 Act provides for a number of optional provisions that 
allow the tailoring of orders to the needs of different commodity 
groups. Section 516 of the 1996 Act contains permissive terms that may 
be included in the orders. For example, Sec.  516 authorizes an order 
to provide for exemption of de minimis quantities of an agricultural 
commodity; different payment and reporting schedules; coverage of 
research, promotion, and information activities to expand, improve, or 
make more efficient the marketing or use of an agricultural commodity 
covered by the order in both domestic and foreign markets; provision 
for reserve funds; provision for credits for generic and branded 
activities; and assessment of imports.
    Section 518 of the 1996 Act provides for referenda to ascertain 
approval of an order to be conducted either prior to its going into 
effect or within 3 years after assessments first begin to be collected 
under an order. An order also may provide for its approval in a 
referendum based upon different voting patterns. In accordance with 
Sec.  518(e) of the 1996 Act, the results of the referendum must be 
determined in one of three ways: (1) By a majority of those persons 
voting; (2) by persons voting for approval who represent a majority of 
the volume of the agricultural commodity; or (3) by a majority of those 
persons voting for approval who also represent a majority of the volume 
of the agricultural commodity.
    Section 518 provides for the Department to: (1) Conduct an initial 
referendum, preceding a proposed order's effective date, among persons 
who would pay assessments under the proposed order; or (2) implement a 
proposed order, pending the conduct of a referendum, among persons 
subject to

[[Page 30926]]

assessments, within three years after assessments first begin.
    For the Proposed Order, the Department is recommending a referendum 
be conducted, preceding the Proposed Order's effective date, to 
ascertain whether the persons to be covered and assessed favor the 
Proposed Order going into effect. Implementation of the Proposed Order 
would require the approval of a majority of the first handlers and 
importers voting in the referendum, which also represent a majority of 
the volume of honey and honey products handled and imported during the 
representative period by those voting in the referendum. Specific 
procedures to be followed in such referendum will be published in a 
separate Federal Register publication.
    In addition, Sec.  518 requires the Department to conduct 
subsequent referenda: (1) Not later than seven years after assessments 
first begin under the proposed order; or (2) at the request of the 
proposed board established under the proposed order; or (3) at the 
request of ten percent or more of the number of persons eligible to 
vote. In addition to these criteria, the 1996 Act provides that the 
Department may conduct a referendum at any time to determine whether 
persons eligible to vote favor the continuation, suspension, or 
termination of an order or a provision of an order. Expenses incurred 
by the Department in implementing and administering the proposed order, 
including referenda costs, would be paid from assessments.

Order Assessments

    A major difference between the Current and Proposed Orders is that 
the Proposed Order provides for assessments to be paid by first 
handlers and importers of honey or honey products instead of producers 
and importers of such products. The number of entities assessed under 
the Proposed Order would be around 75, as compared to the 2,700 
presently under the Current Order. The funds generated through the 
mandatory assessments on domestically handled and imported honey or 
honey products would be used, as it is under the Current Order, to pay 
for promotion, research, and consumer and industry information as well 
as the administration, maintenance, and functioning of the Board.
    Under the Proposed Order, ``first handler'' would be defined to 
mean the first person who handles honey or honey products, and would 
include a producer who handles his or her own production. In addition, 
``handle'' would be defined to mean process, package, sell, transport, 
purchase or in any other way place honey or honey products, or cause 
them to be placed, in commerce. This term would include selling 
unprocessed honey that will be consumed without further processing or 
packaging, but would not include the transportation of unprocessed 
honey by the producer to a handler or transportation by a commercial 
carrier for the account of the first handler or producer.
    The Proposed Order would provide that each first handler pay an 
assessment to the proposed Board at the rate of $0.01 per pound of 
domestically produced honey or honey products that the handler handles. 
Under the Current Order, producers must pay an assessment rate of $0.01 
per pound of honey produced. The Proposed Order establishes that each 
first handler responsible for remitting assessments shall pay the Board 
the amount due on a monthly basis no later than the fifteenth day of 
the month following the month in which the honey or honey products were 
marketed.
    The Proposed Order would define ``importer'' to mean any person who 
imports honey or honey products from outside the United States for sale 
in the United States as a principal or as an agent, broker, or 
consignee for any person. An importer is also listed in the import 
records as the importer of record for such honey or honey products with 
the United States Customs and Border Protection (Customs).
    Section 516(f) of the 1996 Act allows assessments on imports at a 
rate comparable to the rate for domestics. The Proposed Order treats 
importers in the same manner as they are treated under the Current 
Order in terms of the assessment rate and collection of assessments: 
Each importer would pay an assessment to the Board at the rate of $0.01 
per pound of honey or honey products the importer imports into the 
United States. An importer must pay the assessment to the Board through 
Customs when the honey or honey products being assessed enter the 
United States. If Customs does not collect an assessment from an 
importer, the importer would be responsible for paying the assessment 
directly to the Board.
    The assessment levied on domestically handled and imported honey 
and honey products would be used to pay for promotion, research, and 
consumer education and industry information as well as the 
administration, maintenance, and functioning of the Board. Expenses 
incurred by the Department in implementing and administering the 
Proposed Order, including referenda costs, also would be paid from 
assessments.
    Persons failing to remit total assessments due in a timely manner 
may also be subject to actions under Federal debt collection procedures 
as set forth in 7 CFR 3.1 through 3.36 for all research and promotion 
programs administered by the Department [60 FR 12533, March 7, 1995]. 
Persons also would have to pay interest and late payment charges on 
late assessments as prescribed in the Proposed Order.
    Under the Proposed Order, a first handler who handles less than 
250,000 pounds of honey or honey products per year or an importer who 
imports less than 250,000 pounds of honey or honey products per year, 
would be exempt from paying assessments.
    In addition, a first handler who operates under an approved NOP 
system plan, handles only products eligible to be labeled as 100 
percent organic under the NOP, and is not a split operation, is exempt 
from the paying assessments under the Proposed Order. An importer who 
imports only products eligible to be labeled as 100 percent organic 
under the NOP, and is not a split operation, also is exempt from paying 
assessments.
    The Proposed Order allows the Board to recommend to the Secretary 
for approval an increase or decrease to the assessment, as it deems 
appropriate by at least a two-thirds vote of members present at a 
meeting of the Board. The Board may not recommend an increase in the 
assessment of more than $0.02 per pound of honey or honey products and 
may not increase the assessment by more than $0.0025 in any single 
fiscal year.
    Although the 1996 Act allows for credits of assessments for generic 
and branded activities, the Association who proposed the new Order did 
not elect to include it.
    As the Proposed Order establishes that first handlers and importers 
will be responsible for paying assessments, the Order states that these 
two groups will also be responsible for filing specific reports and 
maintaining records regarding the amount of honey and honey products 
brought to the market. This is different than the Current Order in 
which reporting and record maintenance requirements are broader.
    First handlers would be required to file reports and maintain 
records on the total quantity of honey and honey products acquired 
during the reporting period, the quantity of honey processed for sale 
from the handler's own production, and the quantity of honey purchased 
from a handler or importer responsible for paying the assessment

[[Page 30927]]

due. The Board would recommend to the Department specific reporting 
periods and dates when such reports are due to the Board.
    Unless otherwise provided by Customs, importers would be required 
to report the total quantity of honey and honey products imported 
during each reporting period, and keep a record of each lot of honey 
and honey products imported during such period, including the quantity, 
date, country of origin, and port of entry. Under the Proposed Order, 
Customs would collect assessments on imported honey and honey products 
and remit the funds to the Board.
    Each first handler and importer, including those who would be 
exempt from paying assessments under the Proposed Order, would be 
required to maintain any books and records necessary to carry out the 
provisions of the Proposed Order for two years beyond the fiscal period 
to which they apply. This would include the books and records necessary 
to verify any required reports. These books and records would be made 
available to the Board's or Department's employees or agents during 
normal business hours for inspection if necessary.
    Both the Current and Proposed Order provide that all officers, 
employees, and agents of the Department and of the Board are required 
to keep confidential all information obtained from persons subject to 
the Order. This information would be disclosed only if the Department 
considers the information relevant, and the information is revealed in 
a judicial proceeding or administrative hearing brought at the 
direction or on the request of the Department or to which the 
Department or any officer of the Department is a party.
    However, the issuance of general statements based on reports or on 
information relating to a number of persons subject to the Order would 
be permitted, if the statements do not identify the information 
furnished by any person. Finally, the publication, by direction of the 
Department, of the name of any person violating the Order and a 
statement of the particular provisions of the Order violated by the 
person would be allowed.
    It is anticipated that 95 percent of the assessment dollars 
presently collected under the Current Order would be collected under 
the Proposed Order. This is because the Proposed Order would exempt 
first handlers handling and importers importing less than 250,000 
pounds of honey or honey products per year. In contrast, under the 
Current Order, about 95 percent of current assessment dollars are 
collected from approximately 2,700 producers and importers. Producers 
and importers who handle less than 6,000 pounds of honey or honey 
products are exempt from the assessment under the Current Program. It 
is estimated that revenue for the Proposed Order will be around or 
slightly more than $3 million. Of this amount, about 64 percent would 
be generated by assessments on imported honey and honey products.
    It is also believed that the assessment of only first handlers and 
importers rather than producers and importers would reduce program 
administrative expenses as fewer entities would be paying assessments 
and filing reports.

Establishment of the Honey Packers and Importers Board

    Section 515 of the 1996 Act provides for the establishment of a 
Board consisting of producers, first handlers, and others in the 
marketing chain, as appropriate. The Department would appoint members 
to the Board from nominees submitted in accordance with a Proposed 
Order. The Proposed Order would provide for the establishment of a 
Honey Packers and Importers Board to administer the Proposed Order 
under AMS oversight. The Association has proposed that the Board be 
composed of ten members; including three first handler representatives, 
two importer representatives one importer-handler representative, one 
national honey marketing cooperative representative and three producer 
representatives and their alternates.
    The Current Board consists of 12 members; seven producers, two 
handlers, two importers, one officer of a marketing cooperative, and 
their alternates.
    On the Proposed Board, the importer representatives must import at 
least 75 percent of the honey or honey products they market in the 
United States. The importer-handler representative must also import at 
least 75 percent of the honey or honey products they market in the 
United States and must handle at least 250,000 pounds annually. In 
addition, the producer representatives must produce a minimum of 
150,000 pounds of honey in the United States annually based on the best 
three year average of the most recent five calendar years.
    Each term of office on the Board would end on December 31, with new 
terms of office beginning on January 1, with the exception of the 
initial Board's term of office, as opposed to the Current Order in 
which a term of office begins on April 1.
    First handlers, producers and a national honey marketing 
cooperative representative would represent those entities in the United 
States. Board members from each of these groups would be nominated by 
national organizations representing each of them respectively. The 
United States would be defined to include collectively the 50 States, 
the District of Columbia, the Commonwealth of Puerto Rico and the 
territories and possessions of the United States. Honey is produced in 
almost all of the 50 States. The top ten producing States in 2006 
included North Dakota, South Dakota, California, Florida, Minnesota, 
Montana, Texas, Wisconsin, Idaho, and New York.
    Importers and the importer-handler on the Board would be nominated 
by national organizations representing importers. Such importers and 
the importer-handler would represent those individuals who import for 
sale honey or honey products into the United States as a principal or 
as an agent, broker, or consignee for any person who produces honey or 
honey products outside the United States. The importer-handler member 
of the Board would be required to import at least 75 percent of the 
honey or honey products they market in the United States and must 
handle at least 250,000 pounds annually. All qualified national 
organizations representing first handlers, producers, importers and 
honey-marketing cooperatives would have the opportunity to participate 
in a nomination caucus for the purposes of preparing a slate of 
candidates for the above positions submitted to the Department for 
consideration.
    Eligible organizations must submit nominations to the Department 
six months before a new term of office begins. To become a qualified 
national organization representing first handlers, importers, or 
producers under the Proposed Order, each such organization would be 
required to meet the following criteria: (1) The majority of its voting 
membership must consist of first handlers, importers or producers of 
honey, respectively; (2) it must have a history of stability and 
permanency and have been in existence for more than 1 year; (3) its 
primary purpose must be to promote honey first handlers', importers' or 
producers' welfare; (4) it must derive a portion of its operating funds 
from first handlers, importers, or producers; and (5) it must 
demonstrate it is willing and able to further the 1996 Act's purposes. 
Further, any organization representing first handlers or producers must 
represent a substantial number of first handlers or producers who 
market or produce a substantial volume of honey or honey products in at 
least 20 States. Any

[[Page 30928]]

organization representing importers must represent at least a majority 
of the volume of honey or honey products imported into the United 
States.
    To be eligible as a qualified national honey-marketing 
organization, the Department must certify that an entity qualifies as a 
cooperative, as defined in proposed section 1212.42(d). Such entity 
shall not be eligible for certification as a qualified national 
organization representing producer interests.
    If the Department determines that there are no qualified national 
organizations representing first handlers, importers, producers, and 
honey-marketing cooperatives interests, individuals who have paid their 
assessments to the Board in the most recent fiscal year could submit 
nominations for those positions specified.
    The nomination process in the Proposed Order varies from that in 
the Current Order. Under the Current Order, the National Honey 
Nominations Committee (Committee), consisting of individuals nominated 
by state beekeeper associations and appointed by the Secretary, is the 
entity that nominates members and alternates for the Board and submits 
such nominations to the Secretary for approval. The Committee picks 
producer members from seven regions established based on the production 
of honey. The Committee picks handler, importer, and cooperative 
members based on recommendations from qualified national organizations 
representing each of these groups' individual interests.
    Just as in the Current Order, the Proposed Order indicates that the 
Board may recommend to the Department that a member be removed from 
office if the member consistently refuses to perform his or her duties 
or engages in dishonest acts or willful misconduct. The Department may 
remove the member if the Department finds that the Board's 
recommendation demonstrates cause.
    The 1996 Act provides that to ensure fair and equitable 
representation, the composition of a board shall reflect the geographic 
distinction of the production of the agriculture commodity in the 
United States and the quantity or value of the agriculture commodity 
imported into the United States.
    Under the Proposed Order at least once every five years, but not 
more frequently than once in each three year period, the Board would 
review the geographical distribution in the United States of the 
production of honey covered by the Order and quantity or value of honey 
and honey products imported into the United States. The review, based 
on a three-year average, would enable the Board to evaluate whether the 
Board membership is reflective of the composition of the honey 
industry.
    Under the Current Order, every five years the Board reviews the 
geographical distribution of domestically produced honey and the 
quantity of honey imported. The Board then makes recommendations based 
on the five-year average annual assessments excluding the two years 
containing the highest and lowest disparity between the proportion of 
assessments owed from the imported and domestic honey and honey 
products.
    Just as under the Current Order, Board members could serve terms of 
three years and be able to serve a maximum of two consecutive terms 
under the Proposed Order. When the Board is first established, one 
producer, one first handler, one importer, and the representative of a 
national honey cooperative would serve a two-year term. One producer, 
one first handler, and the importer-handler representative would serve 
a three-year term of office. One producer, one first handler, and one 
importer would serve a four-year term of office. This would allow the 
terms be staggered on the Board. No member or alternate may serve more 
than two consecutive terms, excluding any initial two-year term of 
office. Determination of which of the initial members and their 
alternates would serve two year, three year or four year terms, would 
be designated by the Department.
    In the event that 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 position shall become vacant.
    Whereas under the Current Order, a quorum is met if there are a 
majority of members and at least 50% are producers, under the Proposed 
Order, a quorum is met if a majority of members are present and at 
least one first handler and one importer are present. Also, under the 
Proposed Order, there is a \2/3\ vote requirement for recommendations 
of a change in assessment.

Other Order Provisions

    In addition to differences in the entities assessed and the make up 
of the Board, there are other comparative changes between the Proposed 
Order and the Current Order.
    There are a number of terms not used in the Current Order that are 
part of the Proposed Order, including ``first handler'' and ``importer-
handler representative.'' Also, the definition of ``honey products'' 
was expanded from the Current Order to state that such a product shall 
be considered to have honey as a principal ingredient if the product 
contains at least 50% honey by weight.
    The Proposed Order provides that 5% of the Board's anticipated 
revenue must be set aside for production research, while the Current 
Order states generally that funding for such research shall be part of 
the budget.
    The provisions regarding referendum procedures in the Proposed 
Order provide for a referendum every seven years. In the Current Order, 
a referendum occurs every five years.
    The Department modified the Association's proposal to make it 
consistent with the 1996 Act and to provide clarity, consistency, and 
correctness with respect to word usage and terminology. The Department 
also changed the proposal to make it consistent with other similar 
national research and promotion programs. Some of the changes made by 
the Department to the Association's proposal were: (1) To remove the 
term ``handler'' and adopt ``first handler'' as the term to be used 
throughout the Proposed Order to be consistent with the 1996 Act; (2) 
to add criteria under nominations if a member or alternate is no longer 
affiliated with the organization he or she was nominated to represent; 
(3) to specify the initial terms of office for the Board to stagger the 
terms for future years; (4) to remove any references to the Current 
Board or Order; (5) to describe in more detail the powers and duties of 
the Board; (6) to add a new section describing reports that need to be 
provided by the Board on its financial position; (7) to add a section 
on independent evaluation of the effectiveness of any plan or program 
conducted by the Board; (8) to add a section on patents, copyrights, 
inventions, product formulation and publication to specify that these 
would become the property of the U.S. government; (9) to add authority 
to collect first handler and importer tax identification numbers; (10) 
to revise referendum requirements; (11) to add a section on amendments 
to the Proposed Order; (12) to add a section to exempt from assessments 
handlers/importers who operate under an approved National Organic 
Program; (13) to delete references to a standards of identity program 
or a testing program for honey as these programs are not authorized 
under the 1996 Act; and (14) to clarify the membership on the Board.

[[Page 30929]]

    While the proposal set forth below has not received the approval of 
the Department, it is determined that the Proposed Order is consistent 
with and will effectuate the purposes of the 1996 Act.

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), AMS is required to examine 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 would not be disproportionately burdened.
    The 1996 Act authorizes generic promotion, research, and 
information programs for agricultural commodities. Development of such 
programs under this authority are in the national public interest and 
vital to the welfare of the agricultural economy of the United States 
and to maintain and expand existing markets and develop new markets and 
uses for agricultural commodities through industry-funded, government-
supervised, generic commodity promotion programs.
    The Association submitted this Proposed Order to: (1) Develop and 
finance an effective and coordinated program of research, promotion, 
industry information, and consumer education regarding honey and honey 
products; (2) strengthen the position of the honey industry; and (3) 
maintain, develop, and expand existing markets for honey and honey 
products.
    The goals of the Current Order are similar. Therefore, taking into 
account the duplicative nature of the Proposed Program with the Current 
Program the Department is proposing that the Current Order be 
terminated. USDA is soliciting comments on the impact of implementing 
the Proposed Order and the impact of terminating the Current Order. It 
is USDA's intention to have an operational program in effect under 
either the Current or Proposed Order.
    The Proposed Order is authorized under Commodity Promotion, 
Research, Information Act of 1996, while the Current Order is 
authorized under the Honey Research, Promotion, and Consumer 
Information Act. A major difference between the Current Order and the 
Proposed Order is that the Proposed Order provides for assessments to 
be paid by first handlers and importers of honey or honey products 
rather than producers and importers.
    Administrative expenses under the Proposed Order should be reduced 
because the number of entities to be assessed under the Proposed Order 
would also be reduced. Approximately 2,700 entities are assessed under 
the Current Order, while only about 75 entities would be assessed under 
the Proposed Order. Administrative costs would be reduced with fewer 
entities paying assessments and filing reports, and the assessment 
collection process would be simplified.
    First handlers, importers, and producers would have the opportunity 
to serve on the proposed 10 member Board. Each member would have an 
alternate. The Board would consist of three first handler 
representatives, three honey producers, two importer representatives, 
one importer-handler representative and one representative from a 
national honey marketing cooperative. The Secretary would appoint 
members to the Board from nominees submitted in accordance with the 
Proposed Order. Twelve members serve on the Current Board.
    Section 518 of the 1996 Act provides for referenda to ascertain 
approval of an order to be conducted either prior to its going into 
effect or within 3 years after assessments first begin under the order. 
An initial referendum would be conducted prior to putting this Proposed 
Order in effect. The Proposed Order also provides for approval in a 
referendum to be based upon: (1) Approval by a majority of those 
persons voting; and (2) persons voting for approval that represent a 
majority of the volume of honey and honey products of those voting in 
the referendum. Every seven years, the Department shall conduct a 
referendum to determine whether first handlers and importers of honey 
or honey products favor the continuation, suspension, or termination of 
the Order. In addition, the Department could conduct a referendum at 
any time; at the request of 10 percent and more of the first handlers 
and importers required to pay assessments; or at the request of the 
Board.
    There are approximately 45 first handlers and 30 importers of honey 
or honey products that would pay assessments under the Proposed Order. 
Under the Current Order, approximately 2,000 producers and 659 
importers pay assessments. Under the Current Order, entities in the 
Board member nomination process include qualified national 
organizations representing handler and importer interests, a national 
honey market cooperative and state beekeeper associations. The Current 
Honey Board consists of 12 members; seven producers, two handlers, two 
importers, and one marketing cooperative member. Under the Proposed 
Order entities in the Board member nomination process would include, 
qualified national organizations representing first handlers, 
importers, producers, and cooperative interests. The Proposed Board 
would consist of 10 members; three first handlers, two importers, one 
importer-handler, three producers, and one marketing cooperative 
member.
    The Proposed Order also provides for first handlers and importers 
to file reports to the Board. In addition, the Proposed Order requires 
that qualified national organizations and nominated producers provide 
information for the nomination and appointment process to the Proposed 
Board. While the Proposed Order would impose certain recordkeeping 
requirements on first handlers, importers, and any producers who seek 
nomination and appointment to the Board, information required under the 
Proposed Order could be compiled from records currently maintained and 
would involve existing clerical or accounting skills. The forms require 
the minimum information necessary to effectively carry out the 
requirements of the Proposed Program, and their use is necessary to 
fulfill the intent of the 1996 Act. An estimated 118 respondents would 
provide information to the Board. They would be: 45 first handlers, 30 
importers, 6 producers (for nominations purposes), 10 certified 
organizations (for nomination purposes), 25 handlers/importers exempt 
under the program, and 2 organic handlers/importers (for exemption 
purposes). The estimated total cost of providing information to the 
Board by all respondents would be $12,408. This total has been 
estimated by multiplying 376 total hours required for reporting and 
recordkeeping by $33, the average mean hourly earnings of various 
occupations involved in keeping this information. Data for computation 
of this hourly rate was obtained from the U.S. Department of Labor 
Statistics. In contrast, under the Current Order, 2,700 respondents 
need a total of 7,776 hours for reporting and recordkeeping for a total 
cost of $129,459.
    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 $6.5 million or less. Using these criteria under 
both the Current and the Proposed Order, most producers, first 
handlers, cooperative organizations and other nominating organizations 
would be considered small businesses, while most importers and 
exporters would not.

[[Page 30930]]

    National Agricultural Statistic Service (NASS) data reports that 
U.S. production of honey, from producers with five or more colonies, 
totaled 155 million pounds in 2006. The top ten producing States in 
2006 included North Dakota, South Dakota, California, Florida, 
Minnesota, Montana, Texas, Wisconsin, Idaho, and New York. To avoid 
disclosing data for individual operations, NASS statistics do not 
include Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, 
Oklahoma, Rhode Island, and South Carolina. NASS reported the value of 
honey sold in 2006 was $161,314,000. Honey prices increased during 2006 
to 104.2 cents, up 14 percent from 91.8 cents in 2005.
    Based on the assessment reports in connection with the Current 
Order and recorded by Customs, four countries account for 72 percent of 
the honey and honey products imported into the United States. These 
countries and their share of the imports are: China (28%); Argentina 
(21%); Vietnam (13%); and Canada (10%). Other countries combined 
totaled 28 percent of honey and honey products imported to the United 
States. Assessment revenue collected from importers of honey or honey 
products for 2006 under the Current Order were approximately $2.3 
million.
    At the initial rate, revenue for the Proposed Order would be 
approximately $3 million. This amount is comparable to assessments 
collected under the Current Order. In 2006, $3.6 million of assessment 
income was collected from the honey industry, of which 36 percent was 
from domestic production and 64 percent from imports. In 2006, 155 
million pounds of honey or honey products were produced in the United 
States, 279.4 million pounds were imported and 7.6 million pounds were 
exported. The value of production in 2006 was $161.3 million. The 
average price for honey in the U.S. in 2006 was 104.2 cents per pound. 
Therefore, the estimated assessment revenue as a percentage of total 
grower revenue (using 2006 as a model) could be estimated at 1.8 
percent.
    The honey industry and consumers would benefit from additional 
information that may be conveyed through the plans and projects 
regarding honey and honey products. Another benefit to first handlers 
and importers of honey or honey products would be that they would have 
more representation on the Board and have additional input into Board 
decisions regarding the plans and programs under the Proposed Order.
    Associations and related industry media would receive news releases 
and other information regarding the implementation of the Proposed 
Order, termination of the Current Order, and the referendum process. 
Furthermore, all information would be available electronically.
    The Board could develop guidelines for compliance with the Proposed 
Order. The Board could recommend changes in the assessment rate, 
programs, plans, projects, budgets, and any rules and regulations that 
might be necessary for the administration of the program. The 
administrative expenses of the Board are limited by the 1996 Act to no 
more than 15 percent of assessment income. This does not include USDA 
costs for program oversight.
    With regard to alternatives, the 1996 Act itself provides for 
authority to tailor a program according to the individual needs of an 
industry. Provision is made for permissive terms in an order in Sec.  
516 of the 1996 Act, and other sections provide for alternatives. In 
tailoring the program to industry needs, a decision also must be made 
about the termination or retention of the Current Program. This 
proposed rule requests comments on this issue.
    Similar to the Current Order, the Proposed Order is designed to: 
(1) Develop and finance an effective and coordinated research, 
promotion, industry information, and consumer education program for 
honey and honey products; (2) strengthen the position of the honey 
industry; and (3) maintain, develop, and expand existing markets for 
honey and honey products. Additionally, the Proposed Order would 
require first handlers of honey or honey products, instead of honey 
producers, to pay assessments to the Board that administers the 
program. While assessments would impose some additional costs on first 
handlers, the reporting requirements are minimal because handlers under 
the Current Order already report to the Honey Board. Also, the costs 
are minimal and uniform on all first handlers. These costs should be 
offset by the benefits derived by the operation of the Proposed Order. 
Under the Proposed Order importers would continue to pay assessments 
and be responsible for reporting and recordkeeping.
    Section 516 authorizes an order to provide for exemption of de 
minimis quantities (the Association has proposed 250,000 pounds or less 
as a de minimis quantity) of an agricultural commodity; different 
payment and reporting schedules; coverage of research, promotion, and 
information activities to expand, improve, or make more efficient the 
marketing or use of an agricultural commodity in both domestic and 
foreign markets; provision for reserve funds; provision for credits for 
generic and branded activities; and assessment of imports.
    Also, under authority provided by 7 U.S.C. 7401, the Proposed Order 
exempts first handlers who operate under an approved National Organic 
Program (NOP) (7 CFR part 205) system plan, handle only products that 
are eligible to be labeled as 100 percent organic under the NOP, and 
are not a split operation, from paying assessments. The Proposed Order 
also states that importers who import only products that are eligible 
to be labeled as 100 percent organic under the NOP, and are not a split 
operation, shall be exempt from paying assessments.
    The Proposed Order includes provisions for domestic market 
expansion and improvement, reserve funds, and a referendum to be 
conducted prior to implementation of the Proposed Order. Approval would 
be based upon a majority of those persons voting for approval who also 
represent a majority of the volume of the honey and honey products of 
those voting in the referendum. Termination of the Current Order also 
is proposed.
    If the Current Order is terminated and the Proposed Order 
implemented, there would be a decrease in the reporting and 
recordkeeping burden cost from $129,459 under the Current Order to 
$12,408 under the Proposed Order. The reduced cost is due to a 
reduction in the total of individuals required to report. If the 
Current Order is not terminated, it would duplicate some of the 
provisions proposed under the Proposed Order.
    With the exception of the Current Order, the Department has not 
identified any relevant Federal rules that duplicate, overlap or 
conflict with this proposed rule.
    While the Department has performed this initial Regulatory 
Flexibility Analysis regarding the impact of this proposed rule on 
small entities, in order to have as much data as possible for a more 
comprehensive analysis of the effects of this rule on small entities, 
we are inviting comments concerning potential effects. In particular, 
the Department requests information on the expected benefits and costs 
of implementing the Proposed Program and terminating the Current Order.

Request for Public Comments

    Interested persons are requested to provide their views concerning 
implementing a honey research and promotion program under and the

[[Page 30931]]

Commodity Promotion, Research, and Information Act of 1996 and the 
termination of the current honey research and promotion program under 
the Honey Research, Promotion, and Consumer Information Act. Comments 
evaluating and analyzing differences between these statutory 
authorities as well as differences between the Current and Proposed 
Orders in terms of establishing an effective honey research and 
promotion program for the honey industry are appreciated. The goals of 
both programs are similar; however, a major difference is that 
responsibility for assessments would shift from producers under the 
Current Order to handlers under the Proposed Order. Under the Current 
Order, handlers are responsible for collecting such assessments. 
Importers would continue to be assessed under the Proposed Program. 
Comments concerning the costs and benefits of such changes are 
specifically requested. Further, views on referendum voting by handlers 
and importers rather than producers and importers; establishment, 
membership and reconstitution of the Board, and reporting and 
recordkeeping requirements also are specifically requested. Data and 
statistics and other information on the honey industry including 
imports, also are welcome.
    While this action proposes termination of the Current Order, an 
option is to retain the Current Order and not implement the Proposed 
Order. In proposing termination of the Current Order, the Honey Act 
requires that the Secretary find that an order obstructs or does not 
tend to effectuate the purposes of the Honey Act. Comments concerning 
the termination of the Current Order are requested. Comments, views, 
and arguments are solicited from interested persons, including 
producers, handlers, importers, exporters, and industry organizations.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), AMS announces its intention to request an approval of a 
new information collection for the Proposed Honey Program.
    Title: Advisory Committee and Research and Promotion Board 
Background Information.
    OMB Number for background form AD-755: (Approved under OMB No. 
0505-0001).
    Expiration Date of approval: March 31, 2009.

    Title: National Research, Promotion, and Consumer Information 
Programs.
    OMB Number: 0581-NEW.
    Expiration Date of Approval: 3 years from approval date.
    Type of Request: New information collection for research and 
promotion programs.
    Abstract: The information collection requirements in the request 
are essential to carry out the intent of the 1996 Act.
    Under the Proposed Order, first handlers would be required to pay 
assessments to and file reports with the Board. While the Proposed 
Order would impose certain recordkeeping requirements on first 
handlers, information required under the Proposed Order could be 
compiled from records currently maintained by such handlers. Such 
records would be retained for at least two years beyond the marketing 
year of their applicability.
    Under the Proposed Order importers are responsible to pay 
assessments. Unless provided by Customs, importers must report the 
total quantity of product imported during the reporting period and a 
record of each importation of such product during such period, giving 
quantity, date, and port of entry. Under the Proposed Order, Customs 
would collect assessments on imported honey and honey products and 
remit the funds to the Board.
    An estimated 118 respondents would provide information to the 
Board. They would be: 45 first handlers, 30 importers, 6 producers (for 
nominations purposes), 10 certified organizations (for nomination 
purposes), 25 handlers/importers exempt under the program, and 2 
organic handlers/importers (for exemption purposes). The estimated 
total cost of providing information to the Board by all respondents 
would be $11,682. This total has been estimated by multiplying 354 
total hours required for reporting and recordkeeping by $33, the 
average mean hourly earnings of various occupations involved in keeping 
this information. Data for computation of this hourly rate was obtained 
from the U.S. Department of Labor Statistics.
    The Proposed Order's provisions have been carefully reviewed, and 
every effort has been made to minimize any unnecessary recordkeeping 
costs or requirements, including efforts to utilize information already 
submitted under other honey programs administered by the Department.
    The proposed forms would require the minimum information necessary 
to effectively carry out the requirements of the Proposed Order, and 
their use is necessary to fulfill the intent of the 1996 Act. Such 
information can be supplied without data processing equipment or 
outside technical expertise. In addition, there are no additional 
training requirements for individuals filling out reports and remitting 
assessments to the Board. The forms would be simple, easy to 
understand, and place as small a burden as possible on the person 
required to file the information.
    Collecting information monthly during the production season would 
coincide with normal industry business practices. The timing and 
frequency of collecting information are intended to meet the needs of 
the industry while minimizing the amount of work necessary to fill out 
the required reports. The requirement to keep records for two years is 
consistent with normal industry practices. There is no practical method 
for collecting the required information without the use of these forms.
    If the Current Order is terminated and the Proposed Order 
implemented, there would be a decrease in the reporting and 
recordkeeping burden cost from $129,459 under the Current Order to 
$11,682 under the Proposed Order. The reduced cost is due to a 
reduction in the total of individuals required to report from 2,700 
under the Current Order to 118 under the Proposed Order.
    Information collection requirements that are included in this 
proposal include:
(1) A Background Information Form AD-755 (Approved Under OMB Form No. 
0505-0001)
    Estimate of Burden: Public reporting for this collection of 
information is estimated to average 0.5 hours per response for each 
Board nominee.
    Respondents: First handlers, importers, producers and cooperative 
organizations.
    Estimated Number of Respondents: 40 for initial nominations, 13 in 
subsequent years.
    Estimated Number of Responses per Respondent: 1 every 3 years. 
(0.3)
    Estimated Total Annual Burden on Respondents: 20 hours for the 
initial nominations and 6 hours annually thereafter.
(2) An Exemption Application for First Handlers and Importers Who Would 
Be Exempt From Assessments
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.25 hours per response for each 
exempt first handler and importer.
    Respondents: Exempt first handlers and importers.
    Estimated Number of Respondents: 25.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 6.25 hours.

[[Page 30932]]

(3) Monthly Report by Each First Handler of Honey
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.5 hours per each first handler 
reporting on honey handled.
    Respondents: First handlers.
    Estimated Number of Respondents: 45.
    Estimated Number of Responses per Respondent: 12.
    Estimated Total Annual Burden on Respondents: 270 hours.
(4) A Requirement To Maintain Records Sufficient To Verify Reports 
Submitted Under the Order
    Estimate of Burden: Public recordkeeping burden for keeping this 
information is estimated to average 0.5 hours per recordkeeper 
maintaining such records.
    Respondents: First handlers and importers.
    Estimated Number of Respondents: 118.
    Estimated Total Annual Burden on Respondents: 59 hours.
(5) Application for Reimbursement of Assessment
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.25 hours per request for 
reimbursement.
    Respondents: First handlers and importers.
    Estimated Number of Respondents: 20.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 5 hours.
(6) Application for Certification of Organizations
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.5 hours per application.
    Respondents: First handlers, importers, producers and marketing 
cooperatives.
    Estimated Number of Respondents: 10.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 5 hours.
(7) Nomination Appointment Form
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.5 hours per application.
    Respondents: First handlers, importers, producers and marketing 
cooperatives.
    Estimated Number of Respondents: 10.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 5 hours.
(8) Organic Exemption Form
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.5 hours per exemption form.
    Respondents: First handlers and importers.
    Estimated Number of Respondents: 2.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 1 hour.

Request for Public Comment on the Paperwork Reduction Act

    Comments are invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of functions of the 
Proposed Order and the Department's oversight of the Proposed Order, 
including whether the information would have practical utility; (b) the 
accuracy of the Department's estimate of the burden of the proposed 
collection of information, including the validity of the methodology 
and assumptions used; (c) ways to enhance the quality, utility, and 
clarity of the information to be collected; and (d) ways to minimize 
the burden of the collection of information on those who are to 
respond, including the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    Comments concerning the information collection requirements 
contained in this action should reference OMB No. 0581-NEW. In 
addition, the docket number, date, and page number of this issue of the 
Federal Register also should be referenced. Comments should be sent to 
the USDA Docket Clerk at the addresses and within the timeframes listed 
at the beginning of this proposed rule. All comments received will be 
available for public inspection during regular business hours at the 
same address. Comments regarding information collection should also be 
sent to the Office of Management and Budget at: Desk Office for 
Agriculture, Office of Information and Regulatory Affairs, Office of 
Management and Budget, New Executive Office Building, 725 17th Street, 
NW., Room 725, Washington, DC 20503.
    OMB is required to make a decision concerning the collection of 
information contained in this rule between 30 and 60 days after 
publication. Therefore, a comment to OMB is best assured of having its 
full effect if OMB receives it within 30 days of publication. The 
proposal set forth below has not received the approval of the 
Department.
    A 60-day comment period is provided to allow interested persons to 
respond to this proposal. All written comments received in response to 
this rule by the date specified would be considered prior to finalizing 
this action.

List of Subjects in 7 CFR Parts 1212 and 1240

    Administrative practice and procedure, Advertising, Consumer 
education, Honey and honey products, Marketing agreements, Promotion, 
Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, under the authority at 7 
U.S.C. 4601-4613, it is proposed that Title 7, Chapter XI of the Code 
of Federal Regulations be amended as follows:

PART 1240--[REMOVED]

    1. Part 1240 is proposed to be removed.
    2. Part 1212 is proposed to be added as follows:

PART 1212--HONEY PACKERS AND IMPORTERS RESEARCH, PROMOTION, 
CONSUMER EDUCATION AND INDUSTRY INFORMATION ORDER

Subpart A--Honey Packers and Importers Research, Promotion, Consumer 
Education, and Industry Information Order

Definitions

Sec.
1212.1 Act.
1212.2 Board.
1212.3 Conflict of interest.
1212.4 Department.
1212.5 Exporter.
1212.6 First handler.
1212.7 Fiscal period.
1212.8 Handle.
1212.9 Honey.
1212.10 Honey products.
1212.11 Importer.
1212.12 Importer-handler representative.
1212.13 Information.
1212.14 Market or marketing.
1212.15 Order.
1212.16 Part and subpart.
1212.17 Person.
1212.18 Plans and programs.
1212.19 Producer.
1212.20 Promotion.
1212.21 Qualified national organization representing first handler 
interests.
1212.22 Qualified national organization representing importer 
interests.

[[Page 30933]]

1212.23 Qualified national organization representing producer 
interests.
1212.24 Qualified national organization representing cooperative 
interests.
1212.25 Referendum.
1212.26 Research.
1212.27 Secretary.
1212.28 Suspend.
1212.29 State.
1212.30 Terminate.
1212.31 United States.
1212.32 United States Customs Service.

Honey Packers and Importers Board

1212.40 Establishment and membership.
1212.41 Term of office.
1212.42 Nominations and appointments.
1212.43 Removal and vacancies.
1212.44 Procedure.
1212.45 Reimbursement and attendance.
1212.46 Powers.
1212.47 Duties.
1212.48 Reapportionment of Board membership.

Expenses and Assessments

1212.50 Budget and expenses.
1212.51 Financial statements.
1212.52 Assessments.
1212.53 Exemption from assessment.
1212.54 Operating reserve.
1212.55 Prohibition on use of funds.

Promotion, Research, and Information

1212.60 Programs, plans, and projects.
1212.61 Independent evaluation.
1212.62 Patents, copyrights, inventions, product formulations, and 
publications.

Reports, Books, and Records

1212.70 Reports.
1212.71 Books and records.
1212.72 Confidential treatment.

Miscellaneous

1212.80 Right of the Secretary.
1212.81 Referenda.
1212.82 Suspension or termination.
1212.83 Proceedings after termination.
1212.84 Effect of termination or amendment.
1212.85 Personal liability.
1212.86 Separability.
1212.87 Amendments.
1212.88 OMB control number.
Subpart B--[Reserved]

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

Subpart A--Honey Packers and Importers Research, Promotion, 
Consumer Education, and Industry Information Order

Definitions


Sec.  1212.1  Act.

    ``Act'' means the Commodity Promotion, Research, and Information 
Act of 1996, (7 U.S.C. 7411-7425), and any amendments to that Act.


Sec.  1212.2  Board.

    ``Board'' or ``Honey Packers and Importers Board'' means the 
administrative body established pursuant to Sec.  1212.40, or such 
other name as recommended by the Board and approved by the Department.


Sec.  1212.3  Conflict of interest.

    ``Conflict of interest'' means a situation in which a member or 
employee of the Board 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.  1212.4  Department.

    ``Department'' means the United States Department of Agriculture, 
or any 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.  1212.5  Exporter.

    ``Exporter'' means any person who exports honey or honey products 
from the United States.


Sec.  1212.6  First handler.

    ``First handler'' means the first person who buys or takes 
possession of honey or honey products from a producer for marketing. If 
a producer markets honey or honey products directly to consumers, that 
producer shall be considered to be the first handler with respect to 
the honey produced by the producer.


Sec.  1212.7  Fiscal period.

    ``Fiscal period'' means a calendar year from January 1 through 
December 31, or such other period as recommended by the Board and 
approved by the Secretary.


Sec.  1212.8  Handle.

    ``Handle'' means to process, package, sell, transport, purchase or 
in any other way place honey or honey products, or causes them to be 
placed, in commerce. This term includes selling unprocessed honey that 
will be consumed without further processing or packaging. This term 
does not include the transportation of unprocessed honey by the 
producer to a handler or transportation by a commercial carrier of 
honey, whether processed or unprocessed for the account of the first 
handler or producer.


Sec.  1212.9  Honey.

    ``Honey'' means the nectar and saccharine exudations of plants that 
are gathered, modified, and stored in the comb by honeybees, including 
comb honey.


Sec.  1212.10  Honey products.

    ``Honey products'' mean products where honey is a principal 
ingredient. For purposes of this subpart, a product shall be considered 
to have honey as a principal ingredient if the product contains at 
least 50% honey by weight.


Sec.  1212.11  Importer.

    ``Importer'' means any person who imports for sale honey or honey 
products into the United States as a principal or as an agent, broker, 
or consignee of any person who produces honey or honey products outside 
the United States or for sale in the United States, and who is listed 
in the import records as the importer of record for such honey or honey 
products.


Sec.  1212.12  Importer-Handler Representative.

    ``Importer-Handler Representative'' means any person who is an 
importer and first handler, who must import at least 75 percent of the 
honey they market in the United States and must handle at least 250,000 
pounds annually.


Sec.  1212.13  Information.

    ``Information'' means activities or programs designed to develop 
new and existing markets, new and existing marketing strategies and 
increased efficiency and activities to enhance the image of honey and 
honey products. These include:
    (a) Consumer education, which means any action taken to provide 
information to, and broaden the understanding of, the general public 
regarding the consumption, use, nutritional attributes, and care of 
honey and honey products; and
    (b) Industry information, which means information and programs that 
will lead to the development of new markets, new marketing strategies, 
or increased efficiency for the honey industry, and activities to 
enhance the image of the honey industry.


Sec.  1212.14  Market or marketing.

    (a) ``Marketing'' means the sale or other disposition of honey or 
honey products in any channel of commerce.
    (b) ``Market'' means to sell or otherwise dispose of honey or honey 
products in interstate, foreign, or intrastate commerce.


Sec.  1212.15  Order.

    ``Order'' means the Honey Packers and Importers Research, 
Promotion, Consumer Education and Industry Information Order.


Sec.  1212.16  Part and subpart.

    ``Part'' means the Honey Packers and Importers Research, Promotion, 
Consumer Education, and Industry Information Order (Order) and all 
rules,

[[Page 30934]]

regulations, and supplemental orders issued pursuant to the Act and the 
Order. The Order shall be a ``subpart'' of such part.


Sec.  1212.17  Person.

    ``Person'' means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity.


Sec.  1212.18  Plans and programs.

    ``Plans and programs'' mean those research, promotion and 
information programs, plans, or projects established pursuant to this 
Order.


Sec.  1212.19  Producer.

    ``Producer'' means any person who is engaged in the production and 
sale of honey in any State and who owns, or shares the ownership and 
risk of loss of the production of honey or a person who is engaged in 
the business of producing, or causing to be produced, honey beyond 
personal use and having value at first point of sale.


Sec.  1212.20  Promotion.

    ``Promotion'' means any action, including paid advertising and 
public relations that presents a favorable image for honey or honey 
products to the public and food industry with the intent of improving 
the perception and competitive position of honey and stimulating sales 
of honey or honey products.


Sec.  1212.21  Qualified national organization representing first 
handler interests.

    ``Qualified national organization representing first handler 
interests'' means an organization that the Secretary certifies as being 
eligible to nominate first handler and alternate first handler members 
of the Board under Sec.  1212.42.


Sec.  1212.22  Qualified national organization representing importer 
interests.

    ``Qualified national organization representing importer interests'' 
means an organization that the Secretary certifies as being eligible to 
nominate importer, importer-handler, and alternate importer and 
importer-handler members of the Board under Sec.  1212.42.


Sec.  1212.23  Qualified national organization representing producer 
interests.

    ``Qualified national organization representing producer interests'' 
means an organization that the Secretary certifies as being eligible to 
nominate producer and alternate producer members of the Board under 
Sec.  1212.42.


Sec.  1212.24  Qualified national organization representing cooperative 
interests.

    ``Qualified national organization representing cooperative 
interests'' means an organization that the Secretary certifies as being 
eligible to nominate cooperative and alternate cooperative members of 
the Board under Sec.  1212.42.


Sec.  1212.25  Referendum.

    ``Referendum'' means a referendum to be conducted by the Secretary 
pursuant to the Act whereby first handlers and importers shall be given 
the opportunity to vote to determine whether the implementation of or 
continuance of this part is favored by a majority of eligible persons 
voting in the referendum and a majority of volume voting in the 
referendum.


Sec.  1212.26  Research.

    ``Research'' means any type of test, study, or analysis designed to 
advance the image, desirability, use, marketability, production, 
product development, or quality of honey and honey products, including 
research relating to nutritional value, cost of production, new product 
development, testing the effectiveness of market development and 
promotion efforts. Such term shall also include studies on bees to 
advance the cost effectiveness, competitiveness, efficiency, pest and 
disease control, and other management aspects of beekeeping, honey 
production, and honey bees.


Sec.  1212.27  Secretary.

    ``Secretary'' means the Secretary of Agriculture of the United 
States, or any other officer or employee of the Department to whom 
authority the Secretary delegated the authority to act on his or her 
behalf.


Sec.  1212.28  Suspend.

    ``Suspend'' means to issue a rule under Sec.  553 of U.S.C. Title 5 
to temporarily prevent the operation of an order or part thereof during 
a particular period of time specified in the rule.


Sec.  1212.29  State.

    ``State'' means any of the fifty States of the United States of 
America, the District of Columbia, the Commonwealth of Puerto Rico and 
the territories and possessions of the United States.


Sec.  1212.30  Terminate.

    ``Terminate'' means to issue a rule under Sec.  553 of U.S.C. Title 
5 to cancel permanently the operation of an order beginning on a date 
certain specified in the rule.


Sec.  1212.31  United States.

    ``United States'' means collectively the 50 States, the District of 
Columbia, the Commonwealth of Puerto Rico and the territories and 
possessions of the United States.


Sec.  1212.32  United States Customs Service.

    ``United States Customs Service'' or ``Customs'' means the United 
States Customs and Border Protection, an agency of the Department of 
Homeland Security.

Honey Packers and Importers Board


Sec.  1212.40  Establishment and membership.

    The Honey Packers and Importers Board is established to administer 
the terms and provisions of this part. The Board shall have ten 
members, composed of three first handler representatives, two importer 
representatives, one importer-handler representative, three producer 
representatives, and one marketing cooperative representative. The 
importer-handler representative must import at least 75 percent of the 
honey or honey products they market in the United States and handle at 
least 250,000 pounds annually. In addition, the producer 
representatives must produce a minimum of 150,000 pounds of honey in 
the United States annually based on the best three year average of the 
most recent five calendar years, as certified by producers. The 
Secretary will appoint members to the Board from nominees submitted in 
accordance with Sec.  1212.42. The Secretary shall also appoint an 
alternate for each member.


Sec.  1212.41  Term of office.

    With the exception of the initial Board, each Board member and 
alternate will serve a three-year term or until the Secretary selects 
his or her successor. No member or alternate may serve more than two 
consecutive terms, excluding any initial two-year term of office. The 
terms of the initial Board members shall be staggered for two, three, 
and four-year terms. For the initial Board, one producer, one first 
handler, one importer, and the representative of a national honey 
cooperative will serve a two-year term of office. One producer, one 
first handler, and the importer-handler representative, will serve a 
three-year term of office. One producer, one first handler, and one 
importer will serve a four-year term of office. Determination of which 
of the initial members and their alternates shall serve two-year, 
three-year or four-year terms, shall be designated by the Secretary. 
Thereafter, each of these positions will carry a full three-year term. 
Members serving initial terms of two or four years will be eligible to 
serve a second term of three years. Each term of office will end on 
December 31, with new terms of office beginning on January 1. If this

[[Page 30935]]

part becomes effective on a date such that the initial period is less 
than six months in duration, then the tolling of time for purposes of 
this subsection shall not begin until the beginning of the first 12-
month fiscal period.


Sec.  1212.42  Nominations and appointments.

    All nominations to the Board will be made as follows:
    (a) All qualified national organizations representing first handler 
interests will have the opportunity to participate in a nomination 
caucus and will, to the extent practical, submit as a group a single 
slate of nominations to the Secretary for the first handler positions 
and the alternate positions on the Board. If the Secretary determines 
that there are no qualified national organizations representing first 
handler interests, individual first handlers who have paid assessments 
to the Board in the most recent fiscal period may submit nominations. 
For the initial Board, persons that meet the definition of first 
handlers as defined in this subpart will certify such qualification and 
upon certification, if qualified, may submit nominations.
    (b) All qualified national organizations representing importer 
interests will have the opportunity to participate in a nomination 
caucus and will, to the extent practical, submit as a group a single 
slate of nominations to the Secretary for importer positions, for the 
importer-handler position and for the alternate positions on the Board. 
If the Secretary determines that there are no qualified national 
organizations representing importer interests, individual importers who 
have paid assessments to the Board in the most recent fiscal period may 
submit nominations. For the initial Board, persons that meet the 
definition of importer as defined in this subpart will certify such 
qualification and upon certification, if qualified, may submit 
nominations.
    (c) All qualified national organizations representing producer 
interests will have the opportunity to participate in a nomination 
caucus and will, to the extent practical, submit as a group a single 
slate of nominations to the Secretary for the producer positions and 
the producer alternate positions on the Board. If the Secretary 
determines that there are no qualified national organizations 
representing producer interests, individual producers may submit 
nominations to the Secretary. For the initial Board, persons that meet 
the definition of producer as defined in this subpart will certify such 
qualification and upon certification, if qualified, may submit 
nominations.
    (d) For the purposes of this subpart, a national honey-marketing 
cooperative means any entity that is organized under the Capper-
Volstead Act (7 U.S.C. 291) or state law as a cooperative and markets 
honey or honey products in at least 20 states. All national honey-
marketing cooperatives that are first handlers will have the 
opportunity to participate in a nomination caucus and will, to the 
extent practical, submit as a group a single slate of nominations to 
the Secretary of persons who serve as an officer, director, or employee 
of a national honey marketing cooperative for the cooperative position 
and the alternate position on the Board.
    (e) Eligible organizations, cooperatives, producers, first handlers 
or importers must submit nominations to the Secretary six months before 
the new Board term begins. At least two nominees for each position to 
be filled must be submitted.
    (f) Qualified national organization representing first handler 
interests. To be certified by the Secretary as a qualified national 
organization representing first handler interests, an organization must 
meet the following criteria, as evidenced by a report submitted by the 
organization to the Secretary:
    (1) The organization's voting membership must be comprised 
primarily of first handlers of honey or honey products;
    (2) The organization must represent a substantial number of first 
handlers who market a substantial volume of honey or honey products in 
at least 20 states;
    (3) The organization has a history of stability and permanency and 
has been in existence for more than one year;
    (4) The organization must have as a primary purpose promoting honey 
first handlers' economic welfare;
    (5) The organization must derive a portion of its operating funds 
from first handlers; and
    (6) The organization must demonstrate it is willing and able to 
further the Act's purposes.
    (g) Qualified national organization representing importer 
interests. To be certified as a qualified national organization 
representing importer interests, an organization must meet the 
following criteria, as evidenced by a report submitted by the 
organization to the Secretary:
    (1) The organization's importer membership must represent at least 
a majority of the volume of honey or honey products imported into the 
United States;
    (2) The organization has a history of stability and permanency and 
has been in existence for more than one year;
    (3) The organization must have as a primary purpose promoting honey 
importers' economic welfare;
    (4) The organization must derive a portion of its operating funds 
from importers; and
    (5) The organization must demonstrate it is willing and able to 
further the Act's purposes.
    (h) Qualified national organization representing producer 
interests. To be certified by the Secretary as a qualified national 
organization representing producer interests, an organization must meet 
the following criteria, as evidenced by a report submitted by the 
organization to the Secretary:
    (1) The organization's membership must be comprised primarily of 
honey producers;
    (2) The organization must represent a substantial number of 
producers who produce a substantial volume of honey in at least 20 
states;
    (3) The organization has a history of stability and permanency and 
has been in existence for more than one year;
    (4) The organization must have as one of its primary purposes 
promoting honey producers' economic welfare;
    (5) The organization must derive a portion of its operating funds 
from producers; and
    (6) The organization must demonstrate it is willing and able to 
further the Act's purposes.
    (i) To be certified by the Secretary as a qualified national 
organization representing first handler, producer or importer 
interests, an organization must agree to:
    (1) Take reasonable steps to publicize to non-members the 
availability of open Board first handler, producer or importer 
positions; and
    (2) Consider nominating a non-member first handler, producer or 
importer, if he or she expresses an interest in serving on the Board.
    (j) National honey-marketing cooperative. The Secretary can certify 
that an entity qualifies as a national honey-marketing cooperative, as 
defined in Sec.  1212.42(d). Such entity shall not be eligible for 
certification as a qualified national organization representing 
producer interests.


Sec.  1212.43  Removal and vacancies.

    (a) In the event that 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 position shall become vacant.
    (b) The Board may recommend to the Secretary that a member be 
removed from office if the member consistently refuses to perform his 
or her duties or

[[Page 30936]]

engages in dishonest acts or willful misconduct. The Secretary may 
remove the member if he or she finds that the Board's recommendation 
show adequate cause.
    (c) A vacancy for any reason will be filled as follows:
    (1) If a member position becomes vacant, the alternate for that 
position will serve the remainder of the member's term. In accordance 
with Sec.  1212.42, the Secretary will request nominations for a 
replacement alternate and will appoint a nominee to serve the remainder 
of the term. The Secretary does not have to appoint a replacement if 
the unexpired term is less than six months.
    (2) If both a member and alternate position become vacant, in 
accordance with Sec.  1212.42, the Secretary will request nominations 
for replacements and appoint a member and alternate to serve the 
remainder of the term. The Secretary does not have to appoint a new 
member or alternate if the unexpired term for the position is less than 
six months.
    (3) No successor appointed to a vacated term of office shall serve 
more than two successive three-year terms on the Board.


Sec.  1212.44  Procedure.

    (a) A majority of the Board members will constitute a quorum so 
long as at least one of the members present is an importer member and 
one of the members present is a first handler member. An alternate will 
be counted for the purpose of determining a quorum only if a member 
from his or her membership class is absent or disqualified from 
participating. Any Board action will require the concurring votes of a 
majority of those present and voting; with the exception of the two-
thirds vote requirement in Sec.  1212.52(f). All votes at meetings will 
be cast in person. The Board must give timely notice of all Board and 
committee meetings to members and alternates.
    (b) The Board may take action by any means of communication when, 
in the opinion of the Board chairperson, an emergency requires that 
action must be taken before a meeting can be called. Any action taken 
under this procedure is valid only if:
    (1) All members and the Secretary are notified and the members are 
provided the opportunity to vote;
    (2) Each proposition is explained accurately, fully, and 
substantially identically to each member;
    (3) With the exception of the two-thirds vote requirement in Sec.  
1212.52(f), a majority of the members vote in favor of the action; and
    (4) All votes are promptly confirmed in writing and recorded in the 
Board minutes.


Sec.  1212.45  Reimbursement and attendance.

    Board members and alternates, when acting as members, will serve 
without compensation but will be reimbursed for reasonable travel 
expenses, as approved by the Board, that they incur when performing 
Board business. The Board may request that alternates attend any 
meeting even if their respective members are expected to attend or 
actually attend the meeting.


Sec.  1212.46  Powers.

    The Board shall have the following powers subject to Sec.  1212.80:
    (a) Administer this subpart in accordance with its terms and 
provisions of the Act;
    (b) Require its employees to receive, investigate, and report to 
the Secretary complaints of violations of this part;
    (c) Recommend adjustments to the assessments as provided in this 
part;
    (d) Recommend to the Secretary amendments to this part;
    (e) Establish, issue, and administer appropriate programs for 
promotion, research, and information including consumer and industry 
information, and advertising designed to strengthen the honey 
industry's position in the marketplace and to maintain, develop, and 
expand domestic and foreign markets for honey and honey products; and
    (f) Invest assessments collected and other funds received pursuant 
to the Order and use earnings from invested assessments to pay for 
activities carried out pursuant to the Order.


Sec.  1212.47  Duties.

    The Board shall have, among other things, the following duties:
    (a) To meet and organize, and to select from among its members a 
chairperson and such other officers as may be necessary; to select 
committees and subcommittees from its membership and other industry 
representatives; and to develop and recommend such rules, regulations, 
and by-laws to the Secretary for approval to conduct its business as it 
may deem advisable;
    (b) To employ or contract with such persons as it may deem 
necessary and to determine the compensation and define the duties of 
each; and to protect the handling of Board funds through fidelity 
bonds;
    (c) To prepare and submit to the Secretary for approval 60 days in 
advance of the beginning of a fiscal period, a budget of anticipated 
expenses in the administration of this part including the probable 
costs of all programs and plans and to recommend a rate of assessment 
with respect thereto.
    (d) To investigate violations of this part and report the results 
of such investigations to the Secretary for appropriate action to 
enforce the provisions of this part.
    (e) To establish, issue, and administer appropriate programs for 
promotion, research, and information including consumer and industry 
information, and advertising designed to strengthen the honey 
industry's position in the marketplace and to maintain, develop, and 
expand domestic and foreign markets for honey and honey products.
    (f) To maintain minutes, books, and records and prepare and submit 
to the Secretary such reports from time to time as may be required for 
appropriate accounting with respect to the receipt and disbursement of 
funds entrusted to it.
    (g) To periodically prepare and make public and to make available 
to first handlers, producers, and importers reports of its activities 
and, at least once each fiscal period, to make public an accounting of 
funds received and expended.
    (h) To cause its books to be audited by a certified public 
accountant at the end of each fiscal period and to submit a copy of 
each audit to the Secretary.
    (i) To submit to the Secretary such information pertaining to this 
part or subpart as he or she may request.
    (j) To give the Secretary the same notice of Board meetings and 
committee meetings that is given to members in order that the 
Secretary's representative(s) may attend such meetings, and to keep and 
report minutes of each meeting to the Secretary.
    (k) To notify first handlers, importers, and producers of all Board 
meetings through press releases or other means.
    (l) To appoint and convene, from time to time, working committees 
or subcommittees that may include first handlers, importers, exporters, 
producers, members of the wholesale or retail outlets for honey, or 
other members of the honey industry and the public to assist in the 
development of research, promotion, advertising, and information 
programs for honey and honey products.
    (m) To develop and recommend such rules and regulations to the 
Secretary for approval as may be necessary for the development and 
execution of plans or activities to effectuate the declared purpose of 
the Act.
    (n) To provide any patents, copyrights, inventions, product

[[Page 30937]]

formulations, or publications developed through the use of funds 
collected under the provisions of this subpart shall be the property of 
the U.S. Government, as represented by the Board, and shall along with 
any rents, royalties, residual payments, or other income from the 
rental, sales, leasing, franchising, or other uses of such patents, 
copyrights, trademarks, 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 by the 
Department.


Sec.  1212.47  Reapportionment of Board membership.

    At least once in each 5-year period, but not more frequently than 
once in each 3-year period, the Board shall:
    (a) Review, based on a three-year average, the geographical 
distribution in the United States of the production of honey and the 
quantity or value of the honey and honey products imported into the 
United States; and
    (b) If warranted, recommend to the Secretary the reapportionment of 
the Board membership to reflect changes in the geographical 
distribution of the production of honey and the quantity or value of 
the honey and honey products imported into the United States.

Expenses and Assessments


Sec.  1212.50  Budget and expenses.

    (a) At least 60 days prior to the beginning of each fiscal period, 
and as may be necessary thereafter; the Board shall prepare and submit 
to the Department a budget for the fiscal period covering its 
anticipated expenses and disbursements in administering this subpart. 
The budget shall allocate five percent (5%) of the Board's anticipated 
revenue from assessments each fiscal period for production research and 
research relating to the production of honey.
    Each such budget shall include:
    (1) A statement of objectives and strategy for each program, plan, 
or project;
    (2) A summary of anticipated revenue, with comparative data or at 
least one preceding year (except for the initial budget);
    (3) A summary of proposed expenditures for each program, plan, or 
project; and
    (4) Staff and administrative expense breakdowns, with comparative 
data for at least one preceding year (except for the initial budget).
    (b) Each budget shall provide adequate funds to defray its proposed 
expenditures and to provide for a reserve as set forth in this subpart.
    (c) Subject to this section, any amendment or addition to an 
approved budget must be approved by the Department, including shifting 
funds from one program, plan, or project to another. Shifts of funds 
which do not cause an increase in the Board's approved budget and which 
are consistent with governing bylaws need not have prior approval by 
the Department.
    (d) The Board is authorized to incur such expenses, including 
provision for a reserve, as the Department finds 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.
    (e) With approval of the Department, 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 year of operation of the 
Board.
    (f) The Board may accept voluntary contributions, but these shall 
only be used to pay expenses incurred in the conduct of programs, 
plans, and projects. Voluntary contributions shall be free from any 
encumbrance by the donor, and the Board shall retain complete control 
of their use.
    (g) The Board shall reimburse the Department for all expenses 
incurred by the Department in the implementation, administration, 
enforcement and supervision of the Order, including all referendum 
costs in connection with the Order.
    (h) The Board may not expend for administration, maintenance, and 
functioning of the Board in any calendar year an amount that exceeds 15 
percent of the assessments and other income received by the Board for 
that calendar year. Reimbursements to the Department required under 
paragraph (g) of this section, are excluded from this limitation on 
spending.
    (i) The Board may also receive funds provided through the 
Department's Foreign Agricultural Service or from other sources, with 
the approval of the Secretary, for authorized activities.


Sec.  1212.51  Financial statements.

    (a) The Board shall prepare and submit financial statements to the 
Department on a periodic basis. Each such financial statement shall 
include, but not be limited to, a balance sheet, income statement, and 
expense budget. The expense budget shall show expenditures during the 
time period covered by the report, year-to-date expenditures, and the 
unexpended budget.
    (b) Each financial statement shall be submitted to the Department 
within 30 days after the end of the time period to which it applies.
    (c) The Board shall submit annually to the Department an annual 
financial statement within 90 days after the end of the calendar year 
to which it applies.


Sec.  1212.52  Assessments.

    (a) The Board will cover its expenses by levying in a manner 
prescribed by the Secretary an assessment on first handlers and 
importers.
    (b) Each first handler shall pay an assessment to the Board at the 
rate of $0.01 per pound of domestically produced honey or honey 
products the first handler handles. A producer shall pay the Board the 
assessment on all honey or honey products for which the producer is the 
first handler.
    (c) Each first handler responsible for remitting assessments under 
paragraph (b) of this section shall remit the amounts due to the 
Board's office on a monthly basis no later than the fifteenth day of 
the month following the month in which the honey or honey products were 
marketed.
    (d) Each importer shall pay an assessment to the Board at the rate 
of $0.01 per pound of honey or honey products the importer imports into 
the United States. An importer shall pay the assessment to the Board 
through the United States Customs Service (Customs) when the honey or 
honey products being assessed enters the United States. If Customs does 
not collect an assessment from an importer, the importer is responsible 
for paying the assessment to the Board.
    (e) The import assessment recommended by the Board and approved by 
the Secretary shall be uniformly applied to imported honey or honey 
products that are identified as HTS heading number 0409.00.00 and 
2106.90. 9988 by the Harmonized Tariff Schedule of the United States.
    (f) The Board may recommend an increase or decrease in the 
assessment as it deems appropriate by at least a two-thirds vote of 
members present at a meeting of the Board with the approval of the 
Secretary. The Board may not recommend an increase in the assessment of 
more than $0.02 per pound of honey or honey products and may not 
increase the assessment by

[[Page 30938]]

more than $0.0025 in any single fiscal year.
    (g) In situations of late payment:
    (1) The Board shall impose a late payment charge on any first 
handler or importer who fails to remit to the Board the total amount 
for which the first handler or importer is liable on or before the 
payment due date the Board establishes. The amount of the late payment 
charge shall be prescribed by the Department.
    (2) The Board shall require any first handler or importer subject 
to a late payment charge to pay interest on the unpaid assessments for 
which the first handler or importer is liable. The rate of interest 
shall be prescribed by the Department.
    (3) First handlers or importers who fail to remit total assessments 
in a timely manner may also be subject to actions under federal debt 
collection procedures.
    (h) Advance payment. The Board may accept advance payment of 
assessments from first handlers or importers that will be credited 
toward any amount for which the first handlers or importers may become 
liable. The Board does not have to pay interest on any advance payment.


Sec.  1212.53  Exemption from assessment.

    (a) A first handler who handles less than 250,000 pounds of honey 
or honey products per calendar year or an importer who imports less 
than 250,000 pounds of honey or honey products per calendar year is 
exempt from paying assessments.
    (b) A first handler who operates under an approved National Organic 
Program (NOP) (7 CFR part 205) system plan, handles only products that 
are eligible to be labeled as 100 percent organic under the NOP, and is 
not a split operation, shall be exempt from the payment of assessments. 
An importer who imports only products that are eligible to be labeled 
as 100 percent organic under the NOP, and is not a split operation, 
shall be exempt from the payment of assessments.
    (c) A first handler or importer desiring an exemption shall apply 
to the Board, on a form provided by the Board, for a certificate of 
exemption. A first handler shall certify that the first handler will 
handle less than 250,000 of honey and honey products for the calendar 
year for which the exemption is claimed. An importer shall certify that 
the importer will import less than 250,000 pounds of honey and honey 
products during the calendar year for which the exemption is claimed.
    (d) Upon receipt of an application, the Board shall determine 
whether an exemption may be granted. The Board will then issue, if 
deemed appropriate, a certificate of exemption to each person who is 
eligible to receive one. It is the responsibility of these persons to 
retain a copy of the certificate of exemption.
    (e) Exempt importers shall be eligible for reimbursement of 
assessments collected by Customs. These importers shall apply to the 
Board for reimbursement of any assessment paid. No interest will be 
paid on the assessment collected by Customs. Requests for reimbursement 
shall be submitted to the Board within 90 days of the last day of the 
calendar year the honey or honey products were imported.
    (f) If a person has been exempt from paying assessments for any 
calendar year under this section and no longer meets the requirements 
for an exemption, the person shall file a report with the Board in the 
form and manner prescribed by the Board and begins to pay the 
assessment on all honey or honey products handled or imported.
    (g) Any person who desires an exemption from assessments for a 
subsequent calendar year shall reapply to the Board, on a form provided 
by the Board, for a certificate of exemption.
    (h) The Board may recommend to the Secretary that honey and honey 
products exported from the United States be exempt from this subpart 
and recommend procedures for refunding assessments paid on exported 
honey and honey products and any necessary safeguards to prevent 
improper use of this exemption.


Sec.  1212.54  Operating reserve.

    The Board may establish an operating monetary reserve and may carry 
over to subsequent fiscal periods excess funds in any reserve so 
established: Provided that the funds in the reserve do not exceed one 
fiscal period's budget. Subject to approval by the Department, such 
reserve funds may be used to defray any expenses authorized under this 
part.


Sec.  1212.55  Prohibition on use of funds.

    (a) The Board may not engage in, and shall prohibit the employees 
and agents of the Board from engaging in:
    (1) Any action that is a conflict of interest;
    (2) Except as otherwise provided in paragraph (b) using funds 
collected by the Board under the Order to undertake any action for the 
purpose of influencing legislation or governmental action or policy, by 
local, state, national, and foreign governments, other than 
recommending to the Secretary amendments to the Order.
    (3) A program, plan or project conducted pursuant to this subpart 
that includes false or misleading claims on behalf of honey or honey 
products.
    (4) Any advertising, including promotion, research and information 
activities authorized that may be false or misleading or disparaging to 
another agricultural commodity.
    (b) The prohibition in paragraph (a)(2) shall not apply:
    (1) To the development and recommendation of amendments to this 
subpart; or
    (2) To the communication to appropriate government officials, in 
response to a request made by the officials, of information relating to 
the conduct, implementation, or results of promotion, research, 
consumer information, education, industry information, or producer 
information activities authorized under this subpart.

Promotion, Research, and Information


Sec.  1212.60  Programs, plans and projects.

    (a) Scope of activities. The Board must develop and submit to the 
Secretary for approval plans and programs authorized by this section. 
The plans and programs may provide for:
    (1) Establishing, issuing, and administering appropriate programs 
for promotion, research, and information including consumer and 
industry information, and advertising designed to strengthen the honey 
industry's position in the marketplace and to maintain, develop, and 
expand domestic and foreign markets for honey and honey products;
    (2) Establishing and conducting research and development activities 
to encourage and expand the acquisition of knowledge about honey and 
honey products, their consumption and use, or to encourage, expand or 
improve the quality, marketing, and utilization of honey and honey 
products;
    (3) Conducting activities that may lead to developing new markets 
or marketing strategies for honey and honey products;
    (4) Conducting activities related to production issues or bee 
research activities; and
    (5) Conducting activities designed to make the honey industry more 
efficient, to improve the quality of honey or to enhance the image of 
honey and honey products and the honey industry.
    (b) No program, plan, or project shall be implemented prior to its 
approval by the Department. Once a program, plan, or project is so 
approved, the Board shall take appropriate steps to implement it.
    (c) The Board must periodically evaluate each plan and program

[[Page 30939]]

authorized under this part to ensure that it contributes to an 
effective and coordinated program of research, promotion and 
information. The Board must submit the evaluations to the Secretary. If 
the Board and the Secretary find that a plan or program does not 
further the purposes of the Act, then such plan or program should be 
terminated.


Sec.  1212.61  Independent evaluation.

    The Board must authorize and fund not less than once every five 
years an independent evaluation of the effectiveness of this subpart 
and the plans and programs conducted by the Board under the Act. The 
Board must submit this independent evaluation to the Secretary and make 
the results available to the public.


Sec.  1212.62  Patents, copyrights, inventions, product formulations, 
and publications.

    Except for a reasonable royalty paid by the Board to the inventor 
of a patented invention, any patents, copyrights, inventions, product 
formulations, or publications developed through the use of funds 
collected under the provisions of this subpart shall be the property of 
the U.S. Government, as represented by the Board, and shall along with 
any rents, royalties, residual payments, or other income from the 
rental, sales, leasing, franchising, or other uses of such patents, 
copyrights, trademarks, 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 by the 
Department. Upon termination of this Order, Sec.  1212.83 shall apply 
to determine disposition of all such property.

Reports, Books, and Records


Sec.  1212.70  Reports.

    (a) Each first handler or importer subject to this part must report 
to the Board, at the time and in the manner it prescribes, and subject 
to the approval of the Secretary, the information the Board deems 
necessary to perform its duties.
    (b) First handlers must report:
    (1) The total quantity of honey and honey products acquired during 
the reporting period;
    (2) The total quantity of honey and honey products handled during 
the period;
    (3) The quantity of honey processed for sale from the first 
handler's own production;
    (4) The quantity of honey and honey products purchased from a first 
handler or importer responsible for paying the assessment due pursuant 
to this Order;
    (5) The date that assessment payments were made on honey and honey 
products handled; and
    (6) The first handler's tax identification number.
    (c) Unless provided by Customs, importers must report:
    (1) The total quantity of honey and honey products imported during 
the reporting period;
    (2) A record of each lot of honey or honey products imported during 
such period, including the quantity, date, country of origin, and port 
of entry; and
    (3) The importer of record's tax identification number.
    (d) The Board may request any other information from first handlers 
and importers that it deems necessary to perform its duties under this 
subpart, subject to the approval of the Secretary.
    (e) The Board, with the Secretary's approval, may request that 
persons claiming an exemption from assessments under Sec.  1212.52 (b) 
or (d) must provide it with any information it deems necessary about 
the exemption, including, without limitation, the disposition of 
exempted honey or honey products.


Sec.  1212.71  Books and records.

    Each first handler and importer, including those who are exempt 
under this subpart, must maintain any books and records necessary to 
carry out the provisions of this part, and any regulations issued under 
this part, including the books and records necessary to verify any 
required reports. Books and records must be made available during 
normal business hours for inspection by the Board's or Secretary's 
employees or agents. A first handler or importer must maintain the 
books and records for two years beyond the fiscal period to which they 
apply.


Sec.  1212.72  Confidential treatment.

    All information obtained from books, records, or reports under the 
Act and this part shall be kept confidential by all persons, including 
all employees and former employees of the Board, all officers and 
employees and former officers and employees of contracting and 
subcontracting agencies or agreeing parties having access to such 
information. Such information shall not be available to Board members, 
first handlers, or importers. 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 by them, 
and then only in a judicial proceeding or administrative hearing 
brought at the direction, or on 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 section shall be deemed to 
prohibit:
    (a) The issuance of general statements based upon the reports of 
the number of persons subject to this subpart or statistical data 
collected thereof, which statements do not identify the information 
furnished by any person; and
    (b) The publication, by direction of the Secretary, of the name of 
any person who has been adjudged to have violated this part, together 
with a statement of the particular provisions of this part violated by 
such person.

Miscellaneous


Sec.  1212.80  Right of the Secretary.

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


Sec.  1212.81  Referenda.

    (a) After the initial referendum, the Secretary shall conduct 
subsequent referenda;
    (1) Every seven years, to determine whether first handlers and 
importers of honey or honey products favor the continuation, 
suspension, or termination of the Order. The Order shall continue if it 
is favored by a majority of first handlers and importers voting in the 
referendum and a majority of volume voting in the referendum who, 
during a representative period determined by the Secretary, have been 
engaged in the handling or importation of honey or honey products;
    (2) At the request of the Board established in this Order;
    (3) At the request of ten (10) percent or more of the number of 
persons eligible to vote under the Order; or
    (4) Whenever the Department deems that a referendum is necessary.
    (b) Approval of order. Approval in a referendum shall be 
established by a majority of eligible persons voting in the referendum 
and a majority of volume voting in the referendum who are first 
handlers or importers during the representative period by those voting 
as established by the Secretary.
    (c) Manner of conducting referenda. A referendum conducted under 
this section shall be conducted in the manner determined by the 
Secretary to be appropriate.

[[Page 30940]]

Sec.  1212.82  Suspension or termination.

    The Secretary shall suspend or terminate the operation of this part 
or subpart or any provision thereof, if the Secretary finds that this 
part or subpart or the provision obstructs or does not tend to 
effectuate the declared policy of the Act.


Sec.  1212.83  Proceedings after termination.

    (a) If this subpart terminates, the Board shall recommend to the 
Secretary up to five of its members to serve as trustees for the 
purpose of liquidating the Board's affairs. Such persons, upon 
designation by the Secretary, will become trustees of any funds and 
property the Board possesses or controls at that time and any existing 
claims it has, including, without limitation, claims for any unpaid or 
undelivered funds or property.
    (b) The trustees will:
    (1) Serve until discharged by the Secretary;
    (2) Carry out the Board's obligations under any contracts or 
agreements entered into pursuant to the Order;
    (3) Account from time to time for all receipts and disbursements 
and deliver all property on hand, together with all the Board's and 
trustees' books and records to any person the Secretary directs; and
    (4) Execute at the Secretary's direction any assignments or other 
instruments necessary or appropriate to vest in any person full title 
and right to all of the funds, property, and claims owned by the Board 
or the trustees under this subpart.
    (c) Any person to whom funds, property, or claims have been 
transferred or delivered pursuant to the Order will be subject to the 
same obligations imposed upon Board and the trustees.
    (d) Any residual funds not required to defray the necessary 
expenses of liquidation shall be turned over to the Department to be 
disposed of, to the extent practical, to one or more honey industry 
organizations in the interest of continuing honey promotion, research, 
and information programs.


Sec.  1212.84  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, terminating 
or amending this subpart or any regulation issued under it will not:
    (a) Affect or waive any right, duty, obligation, or liability that 
arose or may arise in connection with any provision of this part;
    (b) Release or extinguish any violation of this part; or
    (c) Affect or impair any rights or remedies of the United States or 
any person with respect to any violation.


Sec.  1212.85  Personal liability.

    No member, alternate member, or employee of the Board may 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 commission or omission, as a member, alternate 
member, or employee, except for acts of dishonesty or willful 
misconduct.


Sec.  1212.86  Separability.

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


Sec.  1212.87  Amendments.

    Amendments to this Order may be proposed from time to time by the 
Board or any interested person affected by the provisions of the Act, 
including the Department.


Sec.  1212.88  OMB control number.

    The control number assigned to the information collection 
requirements in this subpart by the Office of Management and Budget 
pursuant to the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, 
is OMB control number 0505-0001, OMB control number 0581-0217, and OMB 
control number 0581-[NEW, to be assigned by OMB].

Subpart B--[Reserved]

    Dated: May 29, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 07-2737 Filed 6-1-07; 8:45 am]
BILLING CODE 3410-02-P