[Federal Register Volume 74, Number 186 (Monday, September 28, 2009)]
[Proposed Rules]
[Pages 49342-49344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-23151]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / 
Proposed Rules  

[[Page 49342]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1250

[Doc. No. AMS-PY-09-0116]


Egg Research and Promotion Order; Referendum Procedures

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule with request for comments.

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

SUMMARY: This proposed rule would establish procedures which the USDA 
will use in conducting a referendum to determine whether egg producers 
favor increasing the assessment they pay to the American Egg Board 
(AEB) from a rate of 10 cents per 30-dozen case of commercial eggs to 
15 cents per case. An amendment to increase the assessment rate in the 
Egg Research and Promotion Order will be implemented if it is approved 
by two-thirds of the egg producers voting in the referendum or by a 
majority of producers voting if they produced two-thirds of the eggs 
produced by all voters. These procedures would also be used for 
subsequent referenda. A proposed rule to increase the assessment rate 
is published separately in this issue of the Federal Register. AEB, 
which administers the Order, recommended this action to sustain and 
expand its national promotion, research, and consumer information 
program.

DATES: Comments must be received on or before November 27, 2009.

ADDRESSES: Interested persons are invited to submit written comments on 
the Internet at http://www.regulations.gov or to Angela C. Snyder, 
Research and Promotion; Standards, Promotion, & Technology Branch; 
Poultry Programs, AMS, USDA; 1400 Independence Avenue, SW., Room 3932-
S, Stop 0256; Washington, DC 20250-0259; fax (202) 720-2930. Comments 
should reference the docket number and the date and page number of this 
issue of the Federal Register and will be available for public 
inspection at the above address during regular business hours or can be 
viewed at: http://www.regulations.gov. All comments received will be 
posted without change, including any personal information provided.

FOR FURTHER INFORMATION CONTACT: Angela C. Snyder, Research and 
Promotion; Standards, Promotion & Technology Branch; Poultry Programs, 
AMS, USDA, 1400 Independence Avenue, SW., Room 3932-S, Stop 0256; 
Washington, DC 20250-0256; telephone: (202) 720-4476; fax (202) 720-
2930; or e-mail: [email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    The Office of Management and Budget (OMB) has waived the review 
process required by Executive Order 12866 for this action.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. The rule is not intended to have a retroactive 
effect and will not affect or preempt any State or Federal law 
authorizing promotion or research relating to an agricultural 
commodity.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Section 14 of the Act allows 
those subject to the Order to file a written petition with the 
Secretary of Agriculture (Secretary) if they believe that the Order, 
any provision of the Order, or any obligation imposed in connection 
with the Order, is not in accordance with the law. In any petition, the 
person may request a modification of the Order or an exemption from the 
Order. The petitioner will have the opportunity for a hearing on the 
petition. Afterwards, an Administrative Law Judge (ALJ) will issue a 
decision. If the petitioner disagrees with the ALJ's ruling, the 
petitioner has 30 days to appeal to the Judicial Officer, who will 
issue a ruling on behalf of the Secretary. If the petitioner disagrees 
with the Secretary's ruling, the petitioner may file, within 20 days, 
an appeal in the U.S. District Court for the district where the 
petitioner resides or conducts business.

Initial Regulatory Flexibility Act Analysis and Paperwork Reduction Act

    In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C. 
601-612], the AMS has considered the economic impact of this action on 
the small producers that would be affected by this rule. The purpose of 
the RFA is to fit regulatory action to scale on businesses subject to 
such action so that small businesses will not be disproportionately 
burdened.
    According to AEB, approximately 245 producers are subject to the 
provisions of the Order, including paying assessments. Under the 
current Order, producers in the 48 contiguous United States and the 
District of Columbia who own more than 75,000 laying hens each pay a 
mandatory assessment of 10 cents per 30-dozen case of eggs. Assessments 
under the program are used by AEB to finance promotion, research, and 
consumer information programs designed to increase consumer demand for 
eggs in domestic and international markets. At the current rate of 10 
cents per case, assessments generate about $20 million in annual 
revenues. The Order is administered by AEB under supervision of the 
U.S. Department of Agriculture.
    In 13 CFR part 121, the Small Business Administration (SBA) defines 
small agricultural producers as those having annual receipts of no more 
than $750,000. Under this definition, the vast majority of the egg 
producers that would be affected by this rule would not be considered 
small entities. Producers owning 75,000 or fewer laying hens are exempt 
from this program.
    Given that a laying hen produces approximately 22 dozen eggs per 
year, production from 75,000 laying hens would result in 1.65 million 
dozen eggs. With a wholesale price of $0.965 per dozen, total annual 
receipts would be $1.59 million, which is well above the definition 
used to describe a small farm. The wholesale price of eggs would need 
to drop to approximately $0.45 per dozen before a producer with 75,000 
hens could be classified as a small farm under the SBA definition.
    This proposed rule would establish the procedures under which egg 
producers vote on whether they favor an increase in the assessments 
they pay to AEB. This proposal would add a new subpart which 
establishes procedures to conduct this referendum as well as

[[Page 49343]]

future referenda. The proposed subpart covers definitions, voting, 
instructions, use of subagents, ballots, the referendum report, and 
confidentiality of information.
    USDA will keep egg producers who are eligible to vote informed 
throughout the referendum process to ensure that they are aware of and 
are able to participate. USDA will also publicize information regarding 
the referendum process so that trade associations and related industry 
media can be kept informed.
    Voting in the referendum is optional. However, if egg producers 
choose to vote, the burden of voting is minimal. USDA considered 
electronic voting, but the use of computers is not universal. 
Conducting the referendum from one central location by mail ballot 
would be more cost-effective and reliable.
    In accordance with the Office of Management and Budget (OMB) 
regulation 5 CFR part 1320 that implements the Paperwork Reduction Act 
of 1995 [44 U.S.C. Chapter 35], the information collection requirements 
contained in this proposed rule have been approved previously under OMB 
control number 0581-0093. This rule does not result in a change to 
those information collection and recordkeeping requirements.
    There are no Federal rules that duplicate, overlap, or conflict 
with this rule.
    We have performed this Initial Regulatory Flexibility Analysis 
regarding the impact of these proposed referendum procedures on small 
entities, and we invite comments concerning potential effects of these 
amendments on small businesses.

Background

    The Egg Research and Consumer Information Act established a 
national egg research and promotion program--administered by AEB--that 
is financed through industry assessments and subject to oversight by 
AMS. This program of promotion, research, and consumer information is 
designed to strengthen the position of eggs in the marketplace and to 
establish, maintain, and expand markets for eggs.
    This program is financed by assessments on egg producers owning 
more than 75,000 laying hens. The Egg Research and Promotion Order 
specifies that handlers are responsible for collecting and remitting 
the producer assessments to AEB, reporting their handling of eggs, and 
maintaining records necessary to verify their reports.
    Only producers in the contiguous United States are subject to the 
program, and producers owning 75,000 or fewer laying hens are exempt 
from paying assessments.
    This proposed rule would establish the procedures under which egg 
producers may vote on whether they want to increase the assessments 
they pay to AEB by increasing the rate from 10 cents to 15 cents per 
30-dozen case of eggs. A proposed rule to increase the assessment rate 
is published separately in this issue of the Federal Register. This 
proposed rule would add a new subpart which would establish procedures 
to be used in this and future referenda. This subpart covers 
definitions, voting, instructions, use of subagents, ballots, the 
referendum report, and confidentiality of information.
    A 60-day comment period is provided to allow interested parties to 
respond to this proposal. All written comments received by the date 
specified in response to this rule will be considered prior to conduct 
of the referendum.
    All written comments received in response to this rule by the date 
specified will be considered prior to finalizing this action.

List of Subjects in 7 CFR Part 1250

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

    For the reasons set forth in the preamble, 7 CFR Part 1250 is 
proposed to be amended as follows:

PART 1250--EGG RESEARCH AND PROMOTION

    1. The authority citation of Part 1250 continues to read as 
follows:

    Authority:  7 U.S.C. 2701-2718 and 7 U.S.C. 2401.

    2. Part 1250 is proposed to be amended by adding a new subpart 
consisting of Sec. Sec.  1250.200 through 1250.207 and titled 
``referendum Procedures'' to read as follows:
Subpart--Referendum Procedures
Sec.
1250.200 Referenda.
1250.201 Definitions.
1250.202 Voting.
1250.203 Instructions.
1250.204 Subagents.
1250.205 Ballots.
1250.206 Referendum report.
1250.207 Confidential information.

Subpart--Referendum Procedures


Sec.  1250.200  Referenda.

    Referenda for the purpose of ascertaining whether the issuance by 
the Secretary of Agriculture of an Egg Research and Promotion Order, or 
the continuance, termination, or suspension of such an order, is 
approved or favored by producers shall, unless supplemented or modified 
by the Secretary, be conducted in accordance with this subpart.


Sec.  1250.201  Definitions.

    (a) Act means the Egg Research and Consumer Information Act and as 
it may be amended (Pub. L. 93-428, 7 U.S.C. 2701 et seq.).
    (b) Administrator means the administrator of the Agricultural 
Marketing Service, with power to redelegate, or any other officer or 
employee of the Department to whom authority has been delegated or may 
hereafter be delegated to act in the Administrator's stead.
    (c) Egg producer or producer means any person who either:
    (1) Is an egg farmer who acquires and owns laying hens, chicks, 
and/or started pullets for the purpose of and is engaged in the 
production of commercial eggs; or
    (2) Is a person who supplied or supplies laying hens, chicks, and/
or started pullets to an egg farmer for the purpose of producing 
commercial eggs pursuant to an oral or written contractual agreement 
for the production of commercial eggs. Such person is deemed to be the 
owner of such laying hens unless it is established in writing, to the 
satisfaction of the Secretary or the Egg Board, that actual ownership 
of the laying hens is in some other party to the contract. In the event 
the party to an oral contract who supplied or supplies the laying hens 
cannot be readily identified by the Secretary or the Egg Board, the 
person who has immediate possession and control over the laying hens at 
the egg production facility shall be deemed to be the owner of such 
hens unless written notice is provided to the Secretary or the Egg 
Board, signed by the parties to said oral contract, clearly stating 
that the eggs are being produced under a contractual agreement and 
identifying the party (or parties) under said contract who is the owner 
of the hens.
    (d) Order means the order or any amendment thereto promulgated 
pursuant to the act with respect to which the Secretary has directed 
that a referendum be conducted.
    (e) Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other entity.
    (f) Referendum agent means the individual or individuals designated 
by the Secretary to conduct the referendum.

[[Page 49344]]

    (g) Representative period means the period designated by the 
Secretary pursuant to section 9 of the act (7 U.S.C. 2708).
    (h) Secretary means the Secretary of Agriculture or any other 
officer or employee of the Department of Agriculture to whom there has 
heretofore been delegated, or to whom there may be hereafter delegated, 
the authority to act in the Secretary's stead.


Sec.  1250.202  Voting.

    (a) Each person who is a producer, as defined in this subpart, at 
the time of the referendum, who was engaged in the production of 
commercial eggs during the representative period, and who is not exempt 
from the provisions of the order as provided for in Sec.  1250.348 
thereof, shall be entitled to only one vote in the referendum.
    (b) Proxy voting is not authorized, but an officer or employee of a 
corporate producer, or an administrator, executor, or trustee of a 
producing estate, or an authorized representative of any other entity 
may cast a ballot on behalf of such producer or estate. Any individual 
so voting in a referendum shall certify that such individual is an 
officer or employee of the corporate producer, or an administrator, 
executor, or trustee of the producing estate, or an authorized 
representative of such other entity, and that such individual has the 
authority to take such action. Upon request of the referendum agent, 
the individual shall submit adequate evidence of his authority.
    (c) Each producer shall be entitled to cast only one ballot in the 
referendum.


Sec.  1250.203  Instructions.

    The referendum agent shall conduct the referendum, in the manner 
herein provided, under supervision of the Administrator. The 
Administrator may prescribe additional instructions, not inconsistent 
with the provisions hereof, to govern the procedure to be followed by 
the referendum agent. Such agent shall:
    (a) Determine the time of commencement and termination of the 
period of the referendum, and the time when all ballots must be 
received by the referendum agent.
    (b) Determine whether ballots may be cast by mail, at polling 
places, at meetings of producers, or by any combination of the 
foregoing.
    (c) Provide ballots and related material to be used in the 
referendum. Ballot material shall provide for recording essential 
information for ascertaining:
    (1) Whether the person voting or on whose behalf the vote is cast, 
is an eligible voter, and
    (2) The total volume of commercial eggs produced during a 
representative period.
    (d) Give reasonable advance notice of the referendum:
    (1) By utilizing available media or public information sources, 
without incurring advertising expense, to publicize the dates, places, 
method of voting, eligibility requirements, and other pertinent 
information. Such sources of publicity may include, but are not limited 
to, print and radio; and
    (2) By such other means as the agent may deem advisable.
    (e) Make available to producers instructions on voting, appropriate 
registration, ballot, and certification forms, and, except in the case 
of a referendum on the termination or continuance of an order, a 
summary of the terms and conditions of the order: Provided, That no 
person who claims to be qualified to vote shall be refused a ballot.
    (f) If the ballots are to be cast by mail, cause all the material 
specified in paragraph (e) of this section to be mailed to each 
eligible producer whose name and address are known to the Secretary or 
the referendum agent.
    (g) If the ballots are to be cast at polling places or meetings, 
determine the necessary number of polling or meeting places, designate 
them, announce the time of each meeting or the hours during which each 
polling place will be open, provide the material specified in paragraph 
(e) of this section, and provide for appropriate custody of ballot 
forms and delivery to the referendum agent of ballots cast.
    (h) At the conclusion of the referendum, canvass the ballots, 
tabulate the results, and except as otherwise directed report the 
outcome to the Administrator and promptly thereafter submit the 
following:
    (1) All ballots received by the agent and appointees, together with 
a certificate to the effect that the ballots listed are all of the 
ballots cast and received by the agent and appointees during the 
referendum period;
    (2) A tabulation of all challenged ballots deemed to be invalid; 
and
    (3) A report of the referendum including a detailed statement 
explaining the method used in giving publicity to the referendum and 
showing other information pertinent to the manner in which the 
referendum was conducted.


Sec.  1250.204  Subagents.

    The referendum agent may appoint any person or persons deemed 
necessary or desirable to assist the agent in performing such agent's 
functions of this subpart. Each individual so appointed may be 
authorized by the agent to perform, in accordance with the requirements 
herein set forth, any or all of the following functions (which, in the 
absence of such appointment, shall be performed by said agent):
    (a) Give public notice of the referendum in the manner specified 
herein;
    (b) Preside at a meeting where ballots are to be cast or as poll 
officer at a polling place;
    (c) See the ballots and the aforesaid texts are distributed to 
producers and receive any ballots which are cast; and
    (d) Record the name and address of each person casting a ballot 
with said subagent and inquire, as deemed appropriate, into the 
eligibility of such persons to vote in the referendum.


Sec.  1250.205  Ballots.

    The referendum agent and subagents shall accept all ballots cast; 
but should they, or any of them, deem that a ballot should be 
challenged for any reason, the agent or subagent shall endorse above 
their signature, on the ballot, a statement to the effect that such 
ballot was challenged, by whom challenged, the reasons therefor, and 
the results of any investigations made with respect thereto, and the 
disposition thereof. Invalid ballots shall not be counted.


Sec.  1250.206  Referendum report.

    Except as otherwise directed, the Administrator shall prepare and 
submit to the Secretary a report on the results of the referendum, the 
manner in which it was conducted, the extent and kind of public notice 
given, and other information pertinent to analysis of the referendum 
and its results.


Sec.  1250.207  Confidential information.

    The ballots cast or the manner in which any person voted and all 
information furnished to, compiled by, or in the possession of the 
referendum agent shall be regarded as confidential. The ballots and 
other information or reports that reveal, or tend to reveal, the vote 
of any person covered under the Order and the voter list shall be 
strictly confidential and shall not be disclosed.

    Dated: September 21, 2009.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. E9-23151 Filed 9-25-09; 8:45 am]
BILLING CODE 3410-02-P