[Federal Register Volume 75, Number 69 (Monday, April 12, 2010)]
[Proposed Rules]
[Pages 18430-18446]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-7575]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1245

[Doc. No. AMS-FV-07-0091; FV-07-706-PR-2A]
RIN 0581-AC78


Establishment of a U.S. Honey Producer Research, Promotion, and 
Consumer Information Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule and Referendum Order.

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SUMMARY: This proposed rule would establish a new U.S. honey producer 
funded research and promotion program under the Commodity Promotion, 
Research, and Information Act of 1996 (1996 Act). The proposed U.S. 
Honey Producer Research, Promotion and Consumer Information Order 
(Proposed U.S. Producer Order) was submitted to the Department of 
Agriculture (Department) by the American Honey Producers Association 
(AHPA). The Department is conducting an initial referendum to ascertain 
whether the persons to be covered by and assessed under the Proposed 
U.S. Producer Order favor the Order prior to it going into effect. The 
Proposed U.S. Producer Order would provide that producers pay an 
assessment to the U.S. Honey Producer Board (Proposed Board) at the 
rate of $0.02 cents per pound of U.S. honey produced and shall only be 
imposed on U.S. producers. A producer who produces less than 100,000 
pounds of U.S. honey per year would be eligible for a certificate of 
exemption. The Proposed U.S. Producer Order would be implemented if it 
is approved by a majority of the producers voting in the referendum, 
which also represent a majority of the volume of U.S. honey produced 
during the representative period by those voting in the referendum. A 
separate final rule on referendum procedures is being published in this 
issue of the Federal Register.

DATES: The voting period is May 17, 2010 through June 4, 2010. To be 
eligible to vote, producers must have produced 100,000 or more pounds 
of honey from January 1, 2008 through December 31, 2008. Ballots will 
be mailed to all known honey producers on or before May 17, 2010. 
Ballots must be received by the referendum agent no later than the 
close of business by 4:30 p.m. (Eastern Time) on June 4, 2010.

ADDRESSES: Copies of the Proposed U.S. Producer Order may be obtained 
from: Referendum Agent, Research and Promotion Branch, Fruit and 
Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., Stop 
0244, Room 0632-S, Washington, DC 20250-0244; telephone: (202) 720-9915 
or (888) 720-9917 (toll free); or facsimile: (202) 205-2800; or can be 
viewed at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Kimberly Coy, Marketing Specialist, 
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 proposed rule is issued under the 
Commodity Promotion, Research, and

[[Page 18431]]

Information Act of 1996 (1996 Act) (7 U.S.C. 7411-7425).
    As part of this rulemaking, a proposed rule was published in the 
Federal Register on July 14, 2009 [74 FR 34182], with a 60-day comment 
period which closed on September 4, 2009. Fourteen comments were 
received.
    In a separate rulemaking, a proposed rule with the Honey Packers 
and Importers Research, Promotion, Consumer Education and Industry 
Information Order (Packers and Importers Order) was published in the 
Federal Register on June 4, 2007 [72 FR 30924], with a 60-day comment 
period which ended on August 3, 2007. That rule also proposed 
termination of the Original Honey Research, Promotion, and Consumer 
Information Order (Original Order) and regulations in 7 CFR Part 1240. 
A second proposed rule and referendum order was published in the 
Federal Register on March 3, 2008 [73 FR 11474]. A final rule including 
the referendum procedures was published in the Federal Register the 
same day [73 FR 11470]. The final rule establishing the Packers and 
Importers Order was published in the Federal Register on May 21, 2008 
[73 FR 29390]. A final rule terminating the Original Order was 
published in the Federal Register on April 17, 2009 [74 FR 17767].
    This proposed rule for the Processed U.S. Producer Order 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 proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposed rule is not intended to have 
retroactive effect.
    Section 524 of the 1996 Act provides that the Act shall not affect 
or preempt any other Federal or State law authorizing promotion or 
research relating to an agricultural commodity.
    Under section 519 of the 1996 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 provides 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. For example, in proposing the Packers and Importers 
Order, under the authority of the 1996 Act, the Department also 
proposed that the Original Order issued under the Honey Research, 
Promotion, and Consumer Information Act (7 U.S.C. 4601-4613) be 
terminated, after taking into account the duplicative nature of the two 
programs. As previously noted, the Original Order was terminated on 
April 17, 2009 [74 FR 17767]. However, the Proposed U.S. Producer Order 
and the previously promulgated Packers and Importers Order are 
authorized under the same statute, the 1996 Act.
    Nonetheless, a more detailed comparison of the provisions of both 
programs appears later in this document. The following is an overview 
of the two programs.
    The Packers and Importers Order and the Proposed U.S. Producer 
Order represent different interests within the honey industry. The 
Proposed U.S. Producer Order represents the interests of U.S. producers 
while the Packers and Importers Order represents the interests of honey 
packers and importers. In addition, assessment requirements on both 
programs are on different parts of the industry.
    The Proposed U.S. Producer Order provides for assessments to be 
paid by U.S. honey producers that produce in excess of 100,000 pounds 
of U.S. honey per year at the rate of $0.02 cents per pound of U.S. 
honey produced. The number of entities to be assessed under the 
Proposed U.S. Producer Order would be around 317. The first handler 
would be responsible for collecting and remitting assessments. The 
reporting burden for the Proposed U.S. Producer Order is on the first 
handler.
    The Packers and Importers Order de minimis amount is 250,000 pounds 
and the number of entities assessed is 75. Under the Packers and 
Importers Order, first handlers must pay an assessment rate of $0.01 
per pound on domestically produced honey or honey products that the 
handler handles and, each importer must pay an assessment of $0.01 per 
pound on honey or honey products the importer imports into the United 
States. The reporting burden for the Packers and Importers Order is on 
both the first handler and the importer.
    At the initial rate of $0.02 per pound, revenue for the Proposed 
U.S. Producer Order would be approximately $1.9 million. At the initial 
rate of $0.01 per pound for the Packers and Importers Order, revenue 
will be approximately $3 million. The aggregate collection of 
assessments for the honey industry would be approximately $4.9 million.
    The goals of the Proposed U.S. Producer Order are to: (1) Develop 
and finance an effective and coordinated research, promotion, industry 
information, and consumer education program for U.S. honey; (2) support 
and strengthen the position of the U.S. honey industry to ultimately 
increase consumption of U.S. honey; and (3) develop, maintain, and 
expand existing markets and enhance the image of U.S. honey.

Background

    This rule proposes the implementation of a U.S. Producer Order. The 
American Honey Producers Association (AHPA), which represents more than 
550 U.S. honey producers, submitted a proposal to the Department for a 
national research, promotion, and consumer information order for U.S. 
honey on May 24, 2007.
    The Proposed U.S. Producer Order is authorized under the 1996 Act. 
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 U.S. Producer Order would 
provide for the continued development and financing of a coordinated 
program of research, promotion, and information. The Proposed U.S. 
Producer Order will authorize these activities for U.S. honey only.
    According to the AHPA, the U.S. honey industry is facing serious 
threats due to Colony Collapse Disorder (CCD) and other factors. The 
survival of U.S. commercial beekeepers is dependent upon creating a 
strong market demand for domestic, U.S.-produced honey. The AHPA 
believes that the establishment and implementation of an all U.S. Honey 
Producer Board will permit U.S. beekeepers to specifically address the 
various factors that affect the U.S. honey industry. Funding of an all 
U.S. Honey Producer Board, will permit the development of programs 
related to

[[Page 18432]]

issues such as the drastic decline in numbers of the honeybee due to 
(1) natural pests and diseases that kill or weaken the honeybee; (2) 
record droughts in the mid-west that have destroyed the plants and 
flowers honeybees use to gather pollen, and (3) the overall dramatic 
decrease in demand for U.S. honey.
    U.S. honey producers have attempted to halt the long term decline 
in the numbers of honeybees (over 30 percent in the past twenty-years), 
due to the above mentioned issues, costing them millions of dollars for 
treatment, colony development, maintenance, replacement, and in lost 
honey production and pollination services. The funds generated by a 
U.S. Honey Producer Program would be spent on conducting research 
activities designed to address these critical issues, as well as 
promotional activities to expand the demand for U.S. Honey.
    The honeybee is a fundamental component of U.S. agriculture 
supplying pollination to 90 different food, fiber, and seed crops at an 
estimated value of approximately $15 to $20 billion a year. The value 
of pollination service is vastly greater than the total value of honey 
and wax produced by honey bees. Honey bees pollinate approximately one-
third of the human diet each year in the United States, and more than 
140 billion honey bees (representing 2 million colonies) are 
transported by beekeepers across the U.S. to pollinate crops. 
California grows 100% of the U.S. almond crop and supplies 80% of the 
world almonds. Each year, nearly one million honey bee hives are needed 
to pollinate the California Central Valley's 600,000 acres of almond 
groves. By the year 2012, it is estimated that this number may increase 
to two million hives if the expected increase in almond production 
grows to 800,000 acres. Blueberries and avocados also receive more than 
90 percent of their pollination from honey bees.
    Without an active, vibrant domestic honey industry, many other 
agricultural commodities may suffer due to the loss of essential 
pollination services that the U.S. honey industry provides. Due to many 
recent problems facing the U.S. honey industry, U.S. farmers were 
forced to import honey bees from other countries (New Zealand and 
Australia) for pollination services in 2006. This marked the first time 
since 1922 that honey bees were imported into the U.S. for pollination 
services, underscoring the fragile state of the U.S. honey industry and 
highlighting the need for a research and promotion program focused 
solely on the domestic honey industry. Although the United States can 
import honey, it may be difficult to import bees on the massive scale 
required by U.S. farm producers for the critical pollination of U.S. 
crops.
    U.S. commercial beekeepers depend on the production of honey as 
well as pollination services in order to maintain a viable business. In 
order to remain in operation, U.S. beekeepers require a vibrant U.S. 
marketplace. The AHPA stated in its proposal that the creation of a 
U.S. honey producer program would help ensure the survival of the U.S. 
honey industry and strengthen other agricultural industries.
    The AHPA believes that both the Proposed Board and the Packers and 
Importers Board, will more effectively operate programs specifically 
focused on each assessment payers' interests. The two boards would 
pursue their own distinct focus and agendas. Within this proposal is a 
discussion of some of the differences between the Proposed U.S. 
Producer Order and the Packers and Importers Order.
    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; and provision for credits for generic and branded 
activities.
    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.
    For the Proposed U.S. Producer Order, the Department is conducting 
a referendum, preceding the Proposed U.S. Producer Order's effective 
date, to ascertain whether the persons to be covered and assessed favor 
the Proposed U.S. Producer Order going into effect. Implementation of 
the Proposed U.S. Producer Order would require the approval of a 
majority of the producers voting in the referendum, which also 
represent a majority of the volume of U.S. honey produced 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, section 518 of the 1996 Act requires the Department to 
conduct subsequent referenda: (1) Not later than seven years after 
assessments first begin under the Proposed U.S. Producer Order; or (2) 
at the request of the Proposed Board established under the Proposed 
U.S. Producer 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 U.S. Producer Order, including referenda 
costs, would be paid from assessments.

Order Assessments

    The funds generated through the mandatory assessments on 
domestically produced U.S. honey would be used to pay for promotion, 
research, and consumer and industry information as well as the 
administration, maintenance, and functioning of the Proposed Board and 
shall be solely used to support U.S. honey.
    Under the Proposed U.S. Producer Order, ``first handler'' would be 
defined to mean the person who first handles U.S. honey, including a 
producer who handles U.S. honey of the producer's own production. The 
term is further defined as follows:
    (a) When a producer delivers U.S. honey from the producer's own 
production to a packer or processor for processing in preparation for 
marketing and consumption, the packer or processor is the first 
handler, regardless of whether such honey is handled for the packer's 
or processor's own account or for the account of the producer or the 
account of other persons.
    (b) When a producer delivers U.S. honey to a handler who takes 
title to such honey, and places it in storage, such handler is the 
first handler.
    (c) When a producer delivers U.S. honey to a commercial storage 
facility

[[Page 18433]]

for the purpose of holding such honey under the producer's own account 
for later sale, the first handler of such honey would be identified on 
the basis of later handling of such honey.
    (d) When a producer delivers U.S. honey to a processor who 
processes and packages a portion of such honey for the processor's own 
account and sells the balance, with or without further processing, to 
another processor or commercial user, the first processor is the first 
handler for all the honey.
    (e) When a producer supplies U.S. honey to a cooperative marketing 
organization that sells or markets such honey, with or without further 
processing and packaging, the cooperative marketing organization 
becomes the first handler upon physical delivery to such cooperative.
    (f) U.S. honey used from the producer's own production for the 
purpose of feeding the producer's own bees is not considered as 
handled. Honey in any form sold and shipped to any persons for the 
purpose of feeding bees is handled and is subject to assessment. The 
buyer of such honey for feeding bees is the first handler.
    (g) When a producer packages and sells U.S. honey of the producer's 
own production at a roadside stand or other facility to consumers or 
sells to wholesale or retail outlets or other buyers, the producer is 
both a producer and a first handler.
    (h) When a producer uses U.S. honey from the producer's own 
production in the manufacture of formulated products for the producer's 
own account and for the account of others, the producer is both a 
producer and a first handler.
    In addition, ``handle'' means to process, package, sell, transport, 
purchase, or in any other way place U.S. honey, or cause it to be 
placed, in commerce. This term shall include selling unprocessed U.S. 
honey that will be consumed with or without further processing or 
packaging. This term shall not include the transportation of 
unprocessed U.S. honey by a producer to a first handler or the 
transportation of processed or unprocessed U.S. honey by a commercial 
carrier for the account of the first handler or producer. This term 
shall not include the purchase of U.S. honey by a consumer or other 
end-user of the U.S. honey.
    The Proposed U.S. Producer Order would provide that producers pay 
an assessment to the Proposed Board at the rate of $0.02 cents per 
pound of U.S. honey produced and shall only be imposed on U.S. 
producers. The Proposed U.S. Producer Order establishes that each first 
handler, responsible for collecting and remitting assessments, shall 
pay the Proposed Board the amount due on a date as established by the 
Proposed Board. The Proposed Board may provide for different payment 
schedules so as to recognize differences in marketing or purchasing 
practices and procedures.
    Except as otherwise provided for, the first handler shall collect 
the assessment from the producer or deduct such assessment from the 
proceeds paid to the producer on whose U.S. honey the assessment is 
made, and remit the assessments to the Proposed Board. The first 
handler shall furnish the producer with evidence of such payment. Any 
such collection or deduction of assessment shall be made no later than 
the time when the assessment becomes payable to the Proposed Board. The 
first handler shall maintain separate records for each U.S. producer's 
honey handled, including U.S. honey produced by said first handler. 
Should a first handler fail to collect an assessment from a producer, 
the producer shall be responsible for the payment of the assessment to 
the Proposed Board. Under the Proposed U.S. Producer Order, first 
handlers shall remit to the Proposed Board the assessment on all U.S. 
honey for which they act as first handler, in addition to the 
assessment owed on U.S. honey they produce. The first handler shall 
collect and pay assessments to the Proposed Board unless such first 
handler has received documentation acceptable to the Proposed Board 
that the assessment has been previously paid. Assessments shall be paid 
to the Proposed Board at such time and in such manner as the Proposed 
Board, with the Secretary's approval, directs pursuant to this part. 
The Proposed Board may authorize other organizations to collect 
assessments on its behalf with the approval of the Secretary.
    The assessment levied on U.S. honey producers would be used to pay 
for promotion, research, and consumer education and industry 
information developed and designed to benefit honey produced in the 
U.S., as well as the administration, maintenance, and functioning of 
the Board. Expenses incurred by the Department in implementing and 
administering the Proposed U.S. Producer 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 U.S. Producer Order.
    Under the Proposed U.S. Producer Order, a producer who produces 
less than 100,000 pounds of U.S. honey per year would be eligible for a 
certificate of exemption.
    In addition, a producer who operates under an approved National 
Organic Program (NOP) system plan, produces only products eligible to 
be labeled as 100 percent organic under the NOP, and is not a split 
operation, is exempt from paying assessments under the Proposed U.S. 
Producer Order.
    The Proposed U.S. Producer Order allows the Proposed Board to 
recommend to the Secretary an increase to the assessment, as it deems 
appropriate, by an affirmative vote of five Board members. The Proposed 
Board may not recommend an increase in the assessment of more than 
$0.05 per pound of U.S. honey and an assessment may not increase by 
more than $0.005 in any single fiscal year. Any change in the 
assessment rate shall be subject to rulemaking and announced by the 
Proposed Board at least 30 days prior to becoming effective.
    Although the 1996 Act allows for credits of assessments for generic 
and branded activities, the AHPA, who proposed the U.S. Producer Order, 
did not elect to include this provision.
    The Proposed U.S. Producer Order establishes that producers will be 
responsible for paying assessments. The Order further states that the 
first handler will be the responsible entity for collecting the 
assessments and filing specific reports and maintaining records 
regarding the amount of U.S. honey placed in commerce.
    Each first handler would be required to maintain any books and 
records necessary to carry out the provisions of the Proposed U.S. 
Producer 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.
    The Proposed U.S. Producer Order provides that all officers, 
employees, and agents of the Department and of the respective Board 
members 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

[[Page 18434]]

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 Proposed 
U.S. Producer 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 Proposed U.S. Producer Order and a statement of the 
particular provisions of the Proposed U.S. Producer Order violated by 
the person would be allowed.
    It is anticipated that, based on current estimates of the number of 
commercial beekeepers in the U.S that would be covered under this 
proposal, the Proposed Board would collect approximately $1.9 million 
dollars per year and that program administrative expenses could be kept 
at a minimum so that approximately $1.6 million would be available to 
develop and implement research and promotion programs designed 
specifically to benefit honey produced in the United States.
    It is also anticipated that since only 317 producers would be 
covered under the Proposed U.S. Producer Order, program administrative 
expenditures would be kept to a minimum.

Establishment of the U.S. Honey Producer 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 Proposed Board from nominees submitted in accordance with a 
Proposed U.S. Producer Order. The Proposed U.S. Producer Order would 
provide for the establishment of a U.S. Honey Producer Board to 
administer the Proposed U.S. Producer Order under AMS oversight. The 
AHPA has proposed that the Proposed Board be composed of no more than 
seven honey producers and seven alternates.
    Each term of office on the Proposed Board would begin on April 1 
and end on March 31, with the exception of the initial Board's term of 
office. The Proposed Board would nominate the seven producer members 
and their alternate representatives appointed by the Secretary from 
seven regions of the United States, to carry out a program of 
promotion, research, and information regarding U.S. honey. 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 six producing States in 2007 
included North Dakota, California, Florida, South Dakota, Montana, and 
Minnesota.
    One producer member and one alternate would be appointed to serve 
on the Proposed Board from each of the following regions:
    (1) Region 1: Washington, Oregon, Idaho, California, Nevada, Utah, 
Alaska, and Hawaii.
    (2) Region 2: Montana, Wyoming, Nebraska, Kansas, Colorado, 
Arizona, and New Mexico.
    (3) Region 3: North Dakota and South Dakota.
    (4) Region 4: Minnesota, Iowa, Wisconsin, and Michigan.
    (5) Region 5: Texas, Oklahoma, Missouri, Arkansas, Tennessee, 
Louisiana, Mississippi, and Alabama.
    (6) Region 6: Florida, Georgia, and all other U.S. territories and 
possessions.
    (7) Region 7: Illinois, Indiana, Ohio, Kentucky, Virginia, North 
Carolina, South Carolina, West Virginia, Maryland, District of 
Columbia, Delaware, New Jersey, New York, Pennsylvania, Connecticut, 
Rhode Island, Massachusetts, New Hampshire, Vermont, and Maine.
    In the Proposed U.S. Producer Order, U.S. honey producers within 
each of the seven regions would receive from the Proposed Board, an 
established list of producers eligible to serve on the Proposed Board 
and would notify all producers within the regions that they may 
nominate persons to serve as members and alternates on the Proposed 
Board.
    The Proposed U.S. Producer Order indicates that the Proposed 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 Proposed 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 
distribution of the production of the agriculture commodity in the 
United States.
    Under the Proposed U.S. Producer Order at least once every five 
years, but not more frequently than once in each three year period, the 
Proposed Board would review the geographical distribution in the United 
States of the quantities of production of U.S. honey covered by the 
Proposed U.S. Producer Order.
    The review, based on a five year average annual review of 
assessments and/or Department statistics, would enable the Proposed 
Board to evaluate whether the Proposed Board membership is reflective 
of the regional representation of U.S. honey produced.
    Under the Proposed U.S. Producer Order, Board members could serve 
terms of three years and are eligible to serve a maximum of two 
consecutive terms. When the Proposed Board is first established, three 
producers would be assigned initial terms of four years; two producers 
would be assigned initial terms of three years; and two producers would 
be assigned initial terms of two years. Thereafter, each of these 
positions will carry a full three-year term. Members serving initial 
terms of two or four years would be eligible to serve a second term of 
three years. Each Board member and alternate member would continue to 
serve until the member's or alternate's successor meets all 
qualifications and is appointed by the Secretary.
    In the event that any member or alternate of the Proposed Board 
ceases to be a member of the category of members from which the member 
was appointed to the Proposed Board, such position shall become vacant. 
Provided, that if, as a result of the Proposed Board reallocation a 
producer member or alternate is no longer from the region from which 
such person was appointed, the affected member or alternate may serve 
out the term for which such person was appointed.
    Under the Proposed U.S. Producer Order, a quorum is met if there 
are a majority of members present including alternates acting in place 
of members.

Comparison of the Proposed U.S. Producer Order and the Packers and 
Importers Order

    A major difference between the Packers and Importers Order and the 
Proposed U.S. Producer Order is that the Proposed U.S. Producer Order 
provides for assessments to be paid by the producers of U.S. honey 
rather than first handlers and importers of honey and honey products.
    Other differences between the Proposed U.S. Producer Order and the 
Packers and Importers Order are the entities assessed, the de minimis 
amount, and the assessment rate.
    The Proposed U.S. Producer Order provides for assessments to be 
paid by U.S. honey producers that produce in excess of 100,000 pounds 
of U.S. honey per year. The number of entities assessed under the 
Proposed U.S.

[[Page 18435]]

Producer Order would be around 317. In addition, the Proposed U.S. 
Producer Order would provide that producers pay an assessment to the 
Proposed Board at the rate of $0.02 cents per pound of U.S. honey 
produced and shall only be imposed on U.S. producers. The first handler 
will be responsible for collecting and remitting assessments. The 
reporting burden under the Proposed U.S. Producer Order would be on the 
first handler.
    The Packers and Importers Order de minimis amount is 250,000 pounds 
and the number of entities assessed is 75. Under the Packers and 
Importers Order, first handlers must pay an assessment rate of $0.01 
per pound on domestically produced honey or honey products that the 
handler handles and, each importer must pay an assessment of $0.01 per 
pound on honey or honey products the importer imports into the United 
States. The reporting burden for the Packers and Importers Order is on 
both the first handler and the importer.
    At the initial rate of $0.02 per pound, revenue for the Proposed 
U.S. Producer Order would be approximately $1.9 million. At the initial 
rate of $0.01 per pound for the Packers and Importers Order, revenue 
will be approximately $3 million.
    In addition to differences in the entities assessed, the de minimis 
amount, and the assessment rate, there are other comparative 
differences between the Proposed U.S. Producer Order and the Packers 
and Importers Order including reporting costs, the makeup of the 
Boards, and the nomination process.
    The Proposed Board would consist of seven producers and each member 
would have an alternate. The Secretary would appoint members to the 
Proposed Board from nominees submitted in accordance with the Proposed 
U.S. Producer Order. Each term of office will begin on April 1 and end 
on March 31.
    In the Proposed U.S. Producer Order, U.S. honey producers within 
each of the seven regions would receive from the Proposed Board, an 
established list of producers eligible to serve on the Proposed Board 
and would notify all producers within the regions that they may 
nominate persons to serve as members and alternates on the Proposed 
Board.
    The Packers and Importers Board consists of 10 members; three first 
handler representatives, two importer representatives, one importer-
handler representative, three producer representatives, and one 
marketing cooperative representative. A term of office begins on 
January 1.
    Under the Packers and Importers Order, first handlers, producers, 
and a national honey marketing cooperative representative represent 
those entities in the United States. Board members from each of these 
groups are nominated by national organizations representing each of 
them respectively. Importers and the importer-handler on the Packers 
and Importers Board are nominated by national organizations 
representing importers.
    The estimated total cost of providing information to the Proposed 
Board by all respondents would be $47,751. This total has been 
estimated by multiplying 1,447 total hours required for reporting and 
recordkeeping by $33, the average mean hourly earnings of various 
occupations involved in keeping this information. In contrast, under 
the Packers and Importers Order an estimated 350 total hours are 
required for reporting and recordkeeping at a total cost of $11,550.

Other Order Provisions

    The 1996 Act requires that for fiscal years beginning 3 years after 
the date of the Board's establishment, the Board shall not expend for 
administration, maintenance, and functioning of the Board in a single 
fiscal year an amount that exceeds 15 percent of the assessments and 
other income received by the Board for that fiscal year. There is no 
specific requirement for research funds under the Proposed U.S. 
Producer Order.
    The Proposed U.S. Producer Order provides for a continuance 
referendum every seven years.
    This Proposed U.S. Producer Order includes definitions, provisions 
concerning establishment of the Board, expenses and assessments, plans 
and projects, reports, books and records, and other miscellaneous 
provisions.
    The Department modified the AHPA'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 AHPA's proposal were: (1) To remove the terms ``handler'' and 
``producer-packer'' and adopt ``first handler'' as the term to be used 
throughout the Proposed U.S. Producer Order; (2) to describe in more 
detail the section describing reports, books, and records that need to 
be provided by the Board on its financial position;(3) to delete any 
references to quality standards and prices as these provisions are not 
authorized under the 1996 Act; (4) to remove the refund of assessment 
language; (5) to add language which states that any change in the 
assessment rate shall be subject to rulemaking; (6) to delete from 
section 1245.37(q) what was duplicated in section 1245.51; and (7) to 
modify section numbers as appropriate to match the above necessary 
changes made to the proposal.

Regulatory Flexibility Act Analysis

    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 is 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 Packers and Importers Order and the Proposed U.S. Producer 
Order represent different interests within the honey industry. The 
Proposed U.S. Producer Order represents the interest of U.S. producers 
while the Packers and Importers Order represents the interests of honey 
packers and importers. In addition, assessment requirements on both 
programs would be required of different segments of the industry.
    The Proposed U.S. Producer Order provides for assessments to be 
paid by U.S. honey producers that produce in excess of 100,000 pounds 
of U.S. honey per year at the rate of $0.02 cents per pound of U.S. 
honey produced. The number of entities assessed under the Proposed U.S. 
Producer Order would be around 317. An estimated 1,683 producers would 
be exempt under the 100,000 pound exemption, while an estimated 5 
producers would be exempt as organic producers. The first handler will 
be responsible for collecting and remitting assessments.
    The Packers and Importers Order de minimis amount is 250,000 pounds 
and the number of entities assessed is 75. Under the Packers and 
Importers Order, first handlers must pay an assessment rate of $0.01 
per pound on domestically produced honey or honey products that the 
handler handles and, each importer must pay an assessment of $0.01 per

[[Page 18436]]

pound on honey or honey products the importer imports into the United 
States. The reporting burden for the Packers and Importers Order is on 
both the first handler and the importer.
    At the initial rate of $0.02 per pound, revenue for the Proposed 
U.S. Producer Order would be approximately $1.9 million. At the initial 
rate of $0.01 per pound for the Packers and Importers Order, revenue 
will be approximately $3 million. The aggregate collection of 
assessments for the honey industry will be approximately $4.9 million.
    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 
U.S. Producer Order in effect. The Proposed U.S. Producer 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 U.S. honey of those voting 
in the referendum. Every seven years, the Department shall conduct a 
referendum to determine whether producers of U.S. honey 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 producers required to pay assessments; or at 
the request of the Board.
    The Proposed U.S. Producer Order provides for first handlers to 
file reports to the Proposed Board. While the Proposed U.S. Producer 
Order would impose certain reporting and recordkeeping requirements on 
first handlers, the information required under the Proposed U.S. 
Producer 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 U.S. Producer Program, and their use is 
necessary to fulfill the intent of the 1996 Act. An estimated 63 first 
handler respondents and 317 producer respondents would provide 
information to the Proposed Board. The estimated total cost of 
providing information to the Proposed Board by all respondents would be 
$47,751. This total has been estimated by multiplying 1,447 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 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 $7.0 million or less. Using these criteria, under 
the Proposed U.S. Producer Order, most producers and handlers would be 
considered small businesses.
    National Agricultural Statistic Service (NASS) data reports that 
U.S. production of honey, from producers with five or more colonies, 
totaled less than 155 million pounds in 2006, a decrease of almost 16 
percent from 2004. The top six producing States in 2006 included North 
Dakota, California, Florida, South Dakota, Montana, and Minnesota. NASS 
reported the value of honey sold from these six states in 2006 was 
$84,583,000 and the volume produced was 90,433,000 pounds. By 
comparison, as recently as 2000, U.S. commercial beekeepers produced 
over 220 million pounds of honey. In 2006, honey prices increased 
during 2006 to 104.2 cents, up 14 percent from 91.8 cents in 2005, due 
to congressional action.
    Based on the assessment reports in connection with the Original 
Order and recorded by Customs, seventeen countries produced over 93 
percent of the honey imported into the U.S. In 2005, five of these 
countries produced almost 79 percent of the total honey imported into 
the United States. These countries and their share of the imports are: 
China (27%), Argentina (21%), Vietnam (13%), Canada (10%), and India 
(8%). Imports accounted for 69 percent of U.S. consumption in 2006, an 
increase of 18 percent, up from 51 percent since 2002.
    The Proposed Board may develop guidelines for compliance with the 
Proposed U.S. Producer Order. The Proposed Board may 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. Any changes in the assessment rate shall be subject to 
rulemaking. The administrative expenses of the Proposed 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.
    The Proposed U.S. Producer Order is designed to: (1) Develop and 
finance an effective and coordinated research, promotion, industry 
information, and consumer education program for U.S. honey; (2) 
strengthen the position of the U.S. honey industry and ultimately 
increase consumption of U.S. honey; and (3) maintain, develop, and 
expand existing markets for U.S. honey.
    Additionally, the Proposed U.S. Producer Order would impose some 
additional reporting and recordkeeping costs on first handlers; 
however, the reporting requirements are minimal. If the Proposed U.S. 
Producer Order is implemented, the reporting and recordkeeping burden 
cost would be $47,916 under the Proposed U.S. Producer Order. These 
costs should be offset by the benefits derived by the operation of the 
Proposed U.S. Producer Order.
    Section 516 authorizes an order to provide for exemption of de 
minimis quantities (the AHPA has proposed less than 100,000 pounds 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; and provision for credits 
for generic and branded activities.
    Also, under authority provided by 7 U.S.C. 7401, the Proposed U.S. 
Producer Order exempts producers who operate under an approved National 
Organic Program (NOP) (7 CFR part 205) system plan, produce 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 Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this proposed rule.
    While the Department has performed an 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, 
the Department invited comments concerning potential effects. We did 
not receive any comments as a result of the publication of the Initial 
Regulatory Flexibility Analysis.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), AMS submitted to OMB a new information collection for the

[[Page 18437]]

Proposed U.S. Honey Producer Program under OMB control number 0581-NEW.
    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: July 31, 2012.
    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 U.S. Producer Order, producers would be required 
to pay assessments and first handlers would be required to collect 
these assessments and file reports with the Proposed Board. While the 
Proposed U.S. Producer Order would impose certain recordkeeping 
requirements on first handlers, information required under the Proposed 
U.S. Producer Order could be compiled from records currently maintained 
by such first handlers. Such records would be retained for at least two 
years beyond the marketing year of their applicability.
    Under the Proposed U.S. Producer Order, producers are responsible 
to pay an assessment of $0.02 per pound.
    An estimated 63 first handler respondents and 317 U.S. producer 
respondents would provide information to the Proposed Board. The 
estimated total cost of providing information to the Proposed Board by 
all respondents would be $47,751. This total has been estimated by 
multiplying 1,447 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 U.S. Producer 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 U.S. Producer 
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 Proposed 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.
    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: Producers.
    Estimated number of Respondents: 28 for initial nominations, 9 in 
subsequent years.
    Estimated number of Responses per Respondent: 1 every 3 years. 
(0.3)
    Estimated Total Annual Burden on Respondents: 4.2 hours for the 
initial nominations and 1.35 hours annually thereafter.
    (2) Monthly Report by Each First Handler of U.S. 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 U.S. honey handled.
    Respondents: First handlers.
    Estimated number of Respondents: 63.
    Estimated number of Responses per Respondent: 12.
    Estimated Total Annual Burden on Respondents: 378 hours.
    (3) 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 producers.
    Estimated Number of Respondents: 380.
    Estimated Total Annual Burden of Respondents: 190 hours.
    (4) An Exemption Application for Producers Who Would Be Exempt From 
Assessments. (Certification Of Exemption).
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.5 hours per response for each 
exempt producer.
    Respondents: Exempt Producers.
    Estimated Number of Respondents: 1683.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 841.50 hours.
    (5) Nomination Appointment Form.
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.25 hours per application.
    Respondents: Producers.
    Estimated Number of Respondents: 30.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 7.5 hours.
    (6) Nomination Appointment Ballot.
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.25 hours per application.
    Respondents: Producers.
    Estimated Number of Respondents: 105.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 26.25 hours.
    (7) Organic Exemption Form. (Approved under OMB Form No. 0581-
0217).
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.5 hours per exemption form.
    Respondents: Producers.
    Estimated Number of Respondents: 5.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 2.5 hours.
    In the July 14, 2009 proposed rule, comments were invited on: (a) 
Whether the proposed collection of information is necessary for the 
proper performance of functions of the Proposed U.S. Producer Order and 
the Department's oversight of the Proposed U.S. Producer 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 assumption used; (c) ways to enhance the quality, utility, and

[[Page 18438]]

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. We did not receive any comments on the 
collection of information part of this rule.

Comments

    A 60-day comment period was provided to allow interested persons an 
opportunity to respond to this proposal, published in the Federal 
Register on July 14, 2009. Fourteen comments were received on the 
Proposed U.S. Producer Order by the June 08, 2009 deadline. Ten 
commenters supported the Proposed U.S. Producer Order, three were 
opposed, and one comment was an attachment of the original proposal 
submitted by the AHPA without any additional comments attached.
    One commenter that opposed the Proposed U.S. Producer Order was 
concerned about the effect of the cost of the program on the national 
taxpayer. If the Proposed U.S. Producer Order is approved in 
referendum, the assessment rate will be $0.02 per pound of U.S. honey 
produced and will only be imposed on producers of 100,000 pounds or 
more per fiscal year. Research and promotion programs under the 
Department are self-help programs, funded by assessments on their 
applicable industries, and do not receive taxpayer funds. Therefore, 
those which characterize or refer to assessments as taxes are not 
correct, and are referred to in the discussion of comments as 
assessments.
    One commenter that opposed the Proposed U.S. Producer Order stated 
that the price of honey is unaffordable and the addition of a research 
program for honey would subsequently increase the price further. The 
purpose of the Proposed U.S. Producer Order is to maintain and expand 
markets for U.S. honey as well as to develop and carry out generic 
promotion, research, and information activities relating to U.S. honey. 
The Proposed U.S. Producer Order does not regulate the price of honey.
    Two commenters that opposed the Proposed U.S. Producer Order 
believe that there is not a need to strengthen the position of U.S. 
honey because there is already a demand for U.S. honey. AHPA believes 
that funding of an all U.S. Honey Producer Board, will allow for 
opportunities beyond those already available, including increasing the 
demand of U.S. honey. Funding will allow for the establishment, 
issuance, effectuation, or administration of appropriate activities for 
research, promotion, advertising, or information, including industry 
and consumer information, with respect to U.S. honey.
    One commenter that opposed the Proposed U.S. Producer Order would 
like to opt-out of all honey programs. U.S. honey producers are given 
the opportunity to vote to determine whether the implementation of the 
Proposed U.S. Producer Order is favored by a majority of eligible 
persons voting who also represent a majority of the volume of U.S. 
honey produced. In addition, the Honey Packers and Importers program 
requires a continuance referendum every 7 years. The referendum allows 
the industry to determine the future of these programs.
    One commenter that opposed the Proposed U.S. Producer Order 
believes that the threshold for exemption will lead to loopholes and 
possible fraud to avoid assessment. First handlers and producers, 
including those exempt under the Proposed U.S. Producer Order, are 
required to maintain and make available for inspection and audit by 
employees or agents of the Board or the Secretary, such books and 
records as are necessary to carry out the provisions of the Proposed 
U.S. Producer Order. This requirement ensures that the Order is 
enforced.
    Two commenters that opposed the Proposed U.S. Producer Order 
believe that assessments solely on U.S. honey producers would be an 
unwarranted expense that will punish U.S. honey producers. In addition 
two commenters that supported the Proposed U.S. Producer Order stated 
that the proposed assessment should be on foreign honey only. Research 
and promotion programs are self-help programs, funded by their 
applicable industries. The Proposed U.S. Producer Order represents the 
interest of U.S. honey producers alone and therefore should be funded 
by U.S. honey producers. The assessment would be a self imposed-
assessment only if the Department determines that the implementation of 
the Proposed U.S. Producer Order is favored by a majority of eligible 
persons voting in the referendum who also represent a majority of the 
volume of U.S. honey produced.
    One commenter that opposed the Proposed U.S. Producer Order and one 
commenter that supported the Proposed U.S. Producer Order, who both pay 
an assessment under the Packers and Importers Order, are concerned that 
they will have to pay an assessment under the Proposed U.S. Producer 
Order as well. Under the Packers and Importers Order, first handlers 
must pay an assessment rate of $0.01 per pound that they handle. The 
Proposed U.S. Producer Order provides for assessments to be paid by 
U.S. honey producers that produce in excess of 100,000 pounds of U.S. 
honey per year at the rate of $0.02 cents per pound. If a producer also 
handles his or her own honey production, that producer will be covered 
under both programs.
    Five commenters that supported the Proposed U.S. Producer Order 
stated that although there is currently a Packers and Importers Order, 
the U.S. honey producers would best be served by the Proposed U.S. 
Producer Order. The commenters believe that the interests of producers 
vary from those of the importers.
    Five commenters that supported the Proposed U.S. Producer Order 
were concerned about what they believe is a decline in market share of 
U.S. honey. One commenter that supported the Proposed U.S. Producer 
Order believes that the continual low prices of what the commenter 
believes is adulterated and contaminated honey, has forced commercial 
beekeepers out of the marketplace. Two commenters believe that an all 
U.S. honey program will address the perceived quality issue of honey by 
allowing the Proposed Board to promote U.S. honey.
    Six commenters that supported the Proposed U.S. Producer Order 
spoke to the growing concern in the industry of the effect of Colony 
Collapse Disorder (CCD) and believe that although there is currently a 
Packers and Importers Order the Proposed U.S. Producer Order as U.S. 
honey producers are uniquely impacted by CCD. In addition, one 
commenter that supported the Proposed U.S. Producer Order stated that 
any assessment that benefits the U.S. bee population is paramount. Two 
commenters that supported the Proposed U.S. Producer Order stated that 
having industry funds available will allow for more immediate research 
response to beekeeping needs as well as to the overall benefits of U.S. 
honey.

Referendum Order

    Pursuant to the 1996 Act, a referendum will be conducted to 
determine whether eligible producers of honey favor issuance of the 
Proposed U.S. Producer Order. The Proposed U.S. Producer Order is 
authorized under the 1996 Act.
    The representative period for establishing voter eligibility for 
the referendum shall be the period from January 1, 2008, through 
December 31, 2008. Producers must have produced 100,000 pounds of honey 
during the

[[Page 18439]]

representative period from January 1, 2008 through December 31, 2008, 
to be eligible to vote. The referendum shall be conducted by mail 
ballot from May 17, 2010 through June 4, 2010. Ballots must be received 
by the referendum agent no later than the close of business 4:30 pm 
(Eastern Time) on June 4, 2010, to be counted.
    Section 518 of the 1996 Act authorizes the Department to conduct a 
referendum prior to the Order's effective date. The Order shall become 
effective only if it is determined that the Order has been approved by 
a majority of the producers voting in the referendum, which also 
represent a majority of the volume of U.S. honey produced during the 
representative period.
    Kimberly Coy, of the USDA, AMS, Research and Promotion Branch, is 
designated as the referendum agent to conduct this referendum. The 
referendum procedures [7 CFR 1245.100 through 1245.108], which were 
issued pursuant to the 1996 Act, shall be used to conduct the 
referendum.
    The referendum agent will mail registration instructions to all 
known eligible producers in advance of the referendum. Any producer who 
does not receive registration instructions should contact the 
referendum agent cited under the ``For Further Information'' section no 
later than one week before the end of the registration period. Prior to 
the first day of the voting period, the referendum agent will mail the 
ballots to be cast in the referendum and voting instructions to all 
eligible voters. Persons who are producers during the representative 
period are eligible to vote. Any producer who does not receive a ballot 
should contact the referendum agent cited under the ``For Further 
Information'' section no later than one week before the end of the 
registration period. Ballots must be received by the referendum agents 
no later than the close of business (Eastern time) on or before June 4, 
2010, to be counted.

List of Subjects in 7 CFR Parts 1245

    Administrative practice and procedure, Advertising, Consumer 
Education, U.S. Honey, Marketing agreements, Promotion, Reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, it is proposed that 
Title 7, Chapter XI of the Code of Federal Regulations be amended by 
adding Part 1245 to read as follows:

PART 1245--U.S. HONEY PRODUCER RESEARCH, PROMOTION, AND CONSUMER 
INFORMATION

Definitions

Sec.
1245.1 Act.
1245.2 Board.
1245.3 Conflict of interest.
1245.4 Department.
1245.5 Exporter.
1245.6 First handler.
1245.7 Fiscal period and marketing year.
1245.8 Handle.
1245.9 Honey.
1245.10 Honey production.
1245.11 Information.
1245.12 Marketing.
1245.13 Order.
1245.14 Part and subpart.
1245.15 Person.
1245.16 Plans and projects.
1245.17 Producer.
1245.18 Promotion.
1245.19 Referendum.
1245.20 Research.
1245.21 Secretary.
1245.22 State.
1245.23 Suspend.
1245.24 Terminate.
1245.25 United States.

U.S. Honey Producer Board

1245.30 Establishment and membership.
1245.31 Nominations and voting.
1245.32 Term of office.
1245.33 Board reapportionment.
1245.34 Vacancies.
1245.35 Procedure.
1245.36 Compensation and reimbursement.
1245.37 Powers and duties.
1245.38 Prohibited activities.

Expenses and Assessments

1245.40 Budget and expenses.
1245.41 Assessments.
1245.42 Late payment.
1245.43 Exemption from assessment.
1245.44 Operating reserve.

Promotion, Research, and Information

1245.50 Plans and projects.
1245.51 Contracts.
1245.52 Patents, copyrights, trademarks, information, publications, 
and product formulations.

Reports, Books, and Records

1245.60 First handler reports.
1245.61 Books and records.
1245.62 Confidential treatment.

Miscellaneous

1245.70 Right of the Secretary.
1245.71 Referenda.
1245.72 Suspension or termination.
1245.73 Proceedings after termination.
1245.74 Effect of termination or amendment.
1245.75 Personal liability.
1245.76 Separability.
1245.77 Amendments.
1245.78 OMB Control Numbers.

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

Subpart A--U.S. Honey Producer Research, Promotion, and Consumer 
Information Order Definitions


Sec.  1245.1  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.  1245.2  Board.

    ``Board'' or ``U.S. Honey Producer Board'' means the administrative 
body established pursuant to Sec.  1245.30, or such other name as 
recommended by the Board and approved by the Department.


Sec.  1245.3  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.  1245.4  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.  1245.5  Exporter.

    ``Exporter'' means any person who exports U.S. honey from the 
United States.


Sec.  1245.6  First handler.

    ``First handler'' means the person who first handles U.S. honey, 
including a producer who handles U.S. honey of the producer's own 
production. Persons who are first handlers include but are not limited 
to the following:
    (a) When a producer delivers U.S. honey from the producer's own 
production to a packer or processor for processing in preparation for 
marketing and consumption, the packer or processor is the first 
handler, regardless of whether such honey is handled for the packer's 
or processor's own account or for the account of the producer or the 
account of other persons.
    (b) When a producer delivers U.S. honey to a handler who takes 
title to such honey, and places it in storage, such handler is the 
first handler.
    (c) When a producer delivers U.S. honey to a commercial storage 
facility for the purpose of holding such honey under the producer's own 
account for later sale, the first handler of such honey would be 
identified on the basis of later handling of such honey.

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    (d) When a producer delivers U.S. honey to a processor who 
processes and packages a portion of such lot of honey for the 
processor's own account and sells the balance, with or without further 
processing, to another processor or commercial user, the first 
processor is the first handler for all the honey.
    (e) When a producer supplies U.S. honey to a cooperative marketing 
organization that sells or markets such honey, with or without further 
processing and packaging, the cooperative marketing organization 
becomes the first handler upon physical delivery to such cooperative.
    (f) When a producer uses U.S. honey from the producer's own 
production for the purpose of feeding the producer's own bees, that 
honey is not considered as handled. Honey in any form sold and shipped 
to any persons for the purpose of feeding bees is handled and is 
subject to assessment. The buyer of such honey for feeding bees is the 
first handler.
    (g) When a producer packages and sells U.S. honey of the producer's 
own production at a roadside stand or other facility to consumers or 
sells to wholesale or retail outlets or other buyers, the producer is 
both a producer and a first handler.
    (h) When a producer uses U.S. honey from the producer's own 
production in the manufacture of formulated products for the producer's 
own account and for the account of others, the producer is both a 
producer and a first handler.


Sec.  1245.7  Fiscal period and marketing year.

    ``Fiscal period'' means the 12-month period ending on December 31 
or such other consecutive 12-month period as shall be recommended by 
the Board and approved by the Secretary.


Sec.  1245.8  Handle.

    ``Handle'' means to process, package, sell, transport, purchase or 
in any other way place honey, or causes it 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 first handler 
or transportation by a commercial carrier of honey, whether processed 
or unprocessed for the account of the first handler or producer. This 
term shall not include the purchase of honey by a consumer or other end 
user of the honey.


Sec.  1245.9  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.  1245.10  Honey production.

    ``Honey production'' means all beekeeping operations related to 
managing honey bee colonies to produce U.S. honey, harvesting U.S. 
honey from the colonies, extracting honey from the honeycombs, and 
preparing U.S. honey for sale and further processing.


Sec.  1245.11  Information.

    ``Information'' means information, programs, or activities that are 
designed to develop new domestic or foreign markets, maintain or expand 
such markets, develop new marketing strategies, increase market 
efficiency, or enhance the image of U.S. honey. These include:
    (a) Consumer information, 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 U.S. 
honey; and
    (b) Industry information means any action that will lead to the 
development of new markets, new marketing strategies, or increased 
efficiency for the U.S. honey industry, and activities to enhance the 
image or strengthen the position of the U.S. honey industry.


Sec.  1245.12  Marketing.

    ``Marketing'' means the sale or other disposition of U.S. honey in 
the domestic market or the foreign market.


Sec.  1245.13  Order.

    ``Order'' means the U.S. Honey Producer Research, Promotion, and 
Consumer Information Order.


Sec.  1245.14  Part and subpart.

    ``Part'' means the Honey Producer Research, Promotion, Consumer 
Education, and Industry Information Order (Order) part 1245 and all 
rules, regulations, and supplemental orders issued pursuant to the Act 
and the Order. The Order shall be a ``subpart'' of such part.


Sec.  1245.15  Person.

    ``Person'' means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity. For 
the purpose of this definition, the term partnership includes, but is 
not limited to:
    (a) A spouse or marital partner who has title to, or leasehold 
interest in, honey bee colonies or beekeeping equipment as tenants in 
common, joint tenants, tenants by the entirety, or, under community 
property laws, as community property, and
    (b) Joint ventures wherein one or more parties to the agreement, 
informal or otherwise, contributed land and others contributed capital, 
labor, management, equipment, or other services, or any variation of 
such contributions by two or more parties, so that it results in the 
production, or handling for market and the authority to transfer title 
to the U.S. honey so produced, or handled.


Sec.  1245.16  Plans and projects.

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


Sec.  1245.17  Producer.

    ``Producer'' means any person who produces honey in any State for 
sale in commerce.


Sec.  1245.18  Promotion.

    ``Promotion'' means any action, including paid advertising and 
public relations, to advance the desirability or marketability of U.S. 
honey to the general public and the food industry with the express 
intent of improving the competitive position, expanding existing 
markets, increasing consumption, and enhancing the image of U.S. honey.


Sec.  1245.19  Referendum.

    ``Referendum'' means a referendum to be conducted by the Secretary 
pursuant to the Act whereby U.S. honey producers 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 who also represent a majority of the volume of 
U.S. honey produced.


Sec.  1245.20  Research.

    ``Research'' means any type of systematic study, analysis, test, or 
investigation, including studies testing the effectiveness of market 
development and promotion efforts, or the evaluation of any study or 
investigation designed to advance the image, desirability, usage, 
marketability, or production of U.S. honey. 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, U.S. honey production, and honey 
bees.


Sec.  1245.21  Secretary.

    ``Secretary'' means the Secretary of Agriculture of the United 
States, or any

[[Page 18441]]

other officer or employee of the Department to whom the Secretary 
delegated the authority to act on his or her behalf.


Sec.  1245.22  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.  1245.23  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.  1245.24  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.  1245.25  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.

U.S. Honey Producer Board


Sec.  1245.30  Establishment and membership.

    (a) There is hereby established a U.S. Honey Producer Board, 
composed of no more than seven honey producers and seven alternates, 
appointed by the Secretary, to carry out a program of promotion, 
research, and information regarding U.S. honey.
    (b) One producer member and one alternate shall be appointed to 
serve on the Board from each of the following regions:
    (1) Region 1: Washington, Oregon, Idaho, California, Nevada, Utah, 
Alaska, and Hawaii.
    (2) Region 2: Montana, Wyoming, Nebraska, Kansas, Colorado, 
Arizona, and New Mexico.
    (3) Region 3: North Dakota and South Dakota.
    (4) Region 4: Minnesota, Iowa, Wisconsin, and Michigan.
    (5) Region 5: Texas, Oklahoma, Missouri, Arkansas, Tennessee, 
Louisiana, Mississippi, and Alabama.
    (6) Region 6: Florida, Georgia, and all other U.S. territories and 
possessions.
    (7) Region 7: Illinois, Indiana, Ohio, Kentucky, Virginia, North 
Carolina, South Carolina, West Virginia, Maryland, District of 
Columbia, Delaware, New Jersey, New York, Pennsylvania, Connecticut, 
Rhode Island, Massachusetts, New Hampshire, Vermont, and Maine.
    (c) Board's Ability to Serve the Diversity of the Industry. When 
making recommendations for appointments, the industry should take into 
account the diversity of the population served and the knowledge, 
skills, and abilities of the members to serve a diverse population, 
size of the operations, methods of production and distribution, and 
other distinguishing factors to ensure that the Board represents the 
diverse interest of persons responsible for paying assessments, and 
others in the marketing chain, if appropriate.


Sec.  1245.31  Nominations and Voting.

    (a) The Board shall seek nominations for members and alternates 
from the specific regions set forth in this subpart in accordance with 
the following procedures:
    (1) The Board shall establish a list of producers that are eligible 
to serve on the Board and shall notify all producers that they may 
nominate persons to serve as members and alternates on the Board. 
Nominations shall be received by mail from any producer that resides in 
the region in which one or more vacancies will occur. Persons that are 
interested in nominating an individual to serve on the Board shall 
submit to the Board in writing the name and mailing address of the 
proposed nominee and such other information as the Board may require, 
in order to place such individual on the ballot.
    (2) Once proposed nominations have been submitted from the 
applicable region, the Board shall cause each proposed nominee, if the 
individual qualifies, to be placed on the region's nominee ballot. The 
Board then shall mail a ballot to each known producer within the 
region.
    (3) Within 45 days after a mail ballot is issued, the Board shall 
validate the ballots cast, tabulate the votes, and provide the 
Secretary with the results of the vote and the identification of the 
two producers receiving the highest number of votes for each open 
position on the Board.
    (b) For each region, the Board shall submit to the Secretary the 
name of the nominee receiving the highest number of votes and the name 
of the nominee receiving the second highest number of votes as the 
producers' first and second choice nominees. The Secretary shall select 
the producer members and alternates of the Board from the names of 
those persons receiving the highest and second highest number of votes 
within a specific region, as submitted by the Board.
    (c) Notice of balloting to nominate candidates for the Board shall 
be publicized by the Board to producers in the region involved, and to 
the Secretary, at least 90 days before the region's nominee ballot is 
issued except for the initial Board.
    (d) In proposing nominees for inclusion on a mail ballot, 
nominations must be received by the Board at least 30 days before the 
region's nominee ballot is issued.
    (e) If a producer nominee is engaged in the production of honey in 
more than one region, such producer shall participate within the region 
that such producer so elects in writing to the Board and such election 
shall remain controlling until revoked in writing to the Board.
    (f) Each producer within a region shall cast a ballot for each open 
position on the Board assigned to such region in accordance with the 
procedures prescribed in this subpart. The completed ballot must be 
returned to the Board or its designee within 30 days after the ballot 
is issued.
    (g) The Board shall provide nominees with qualification statements 
and other specified information. Each nominee selected in the mail 
ballot will be contacted by the Board and asked to forward such 
completed documentation to the Board within 14 days of such 
notification.
    (h) The Department will conduct the nomination process for the 
initial Board using the same procedures described above.


Sec.  1245.32  Term of office.

    The members of the Board and their alternates shall serve for terms 
of three years. No member or alternate shall serve more than two 
consecutive three-year terms. The term of office shall begin on April 
1. When the Board is first established, three producers will be 
assigned initial terms of four years; two producers will be assigned 
initial terms of three years; and two producers will be assigned 
initial terms of two years. 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 
Board member and alternate member shall continue to serve until the 
member's or alternate's successor meets all qualifications and is 
appointed by the Secretary.


Sec.  1245.33  Board reapportionment.

    (a) At least once every five years, but not more frequently than 
once in a three-year period, the Board shall review the geographic 
distribution of the quantities of U.S. honey assessed under this 
subpart. The review will be based on Board assessment records and 
statistics from the Department.

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    (b) If warranted as a result of this review, the Board shall 
recommend for the Secretary's approval changes in the regional 
representation of honey producers. Any changes in the makeup of the 
Board shall be subject to rulemaking by the Department.
    (c) Recommendations made under paragraph (b) of this section shall 
be based on the 5-year average annual assessments and statistics from 
the Department, determined pursuant to the review that is conducted 
under paragraph (a) of this section.
    (d) Any such reallocation shall be made at least six months prior 
to the date on which terms of office of the Board begin and shall 
become effective at least 30 days prior to such date.


Sec.  1245.34  Vacancies.

    (a) In the event any member of the Board ceases to be a producer, 
such position shall automatically become vacant: Provided, that if, as 
a result of Board reallocation pursuant to Sec.  1245.33, a producer 
member or alternate is no longer from the region from which such person 
was appointed, the affected member or alternate may serve out the term 
for which such person was appointed.
    (b) If a member of the Board consistently refuses to perform the 
duties of a member of the Board, or if a member of the Board engages in 
acts of dishonesty or willful misconduct, the Board may recommend to 
the Secretary that the member be removed from office. If the Secretary 
finds the recommendation of the Board shows adequate cause, the 
Secretary may remove such member from office.
    (c) Should any member position become vacant, the alternate for 
that member shall automatically assume the position of that member. At 
its next meeting, the Board shall nominate a replacement for such 
alternate. Should the positions of both a member and such member's 
alternate become vacant, successors for the unexpired terms of such 
member and alternate shall be nominated and appointed in the manner 
specified in Sec.  1245.31, except that nomination and replacement 
shall not be required if the unexpired terms are less than six months.


Sec.  1245.35  Procedure.

    (a) A majority of members, including alternates acting in place of 
members of the Board, shall constitute a quorum. Alternates shall serve 
whenever the member is absent from a meeting or is disqualified.
    (b) All Board members shall be notified at least 30 days in advance 
of all Board and committee meetings unless an emergency meeting is 
declared.
    (c) Any action of the Board shall require the concurring votes of a 
majority of those present and voting.
    (d) At the start of each fiscal period, the Board will select a 
chairperson and vice chairperson. The chairperson, or in the 
chairperson's absence the vice chairperson, shall conduct meetings 
throughout that fiscal period.
    (e) In lieu of voting at a properly convened meeting and, when in 
the opinion of the chairperson of the Board such action is considered 
necessary, the Board may act upon the concurring votes of a majority of 
its members by mail, telephone, electronic mail, facsimile, or any 
other means of communication, provided that all members are notified 
and given the opportunity to vote. All votes shall be promptly 
confirmed in writing. Any action so taken shall have the same force and 
effect as though such action had been taken at a properly convened 
meeting of the Board. All votes shall be recorded in the Board minutes.
    (f) There shall be no voting by proxy.
    (g) The Chairperson shall be a voting member of the Board.
    (h) The organization of the Board and the procedures for conducting 
meetings shall be in accordance with the Board's bylaws, which shall be 
established by the Board and approved by the Secretary.


Sec.  1245.36  Compensation and reimbursement.

    (a) Members of the Board, alternates when acting as members, and 
the members of any special committees formed by the Board shall serve 
without compensation.
    (b) Members of the Board, alternates, and the members of any 
special committees shall be reimbursed for reasonable travel expenses, 
as approved by the Board, incurred in the performance of their Board 
duties. The Board shall have the authority to request the attendance of 
alternates of any or all meetings, notwithstanding the expected or 
actual presence of the respective members.


Sec.  1245.37  Powers and duties.

    The Board shall have the following powers and duties:
    (a) To administer the Order in accordance with its terms and 
provisions of the Act and to collect assessments;
    (b) To carry out promotion, research, and information plans and 
projects related to U.S. honey;
    (c) To develop and recommend to the Department for approval such 
rules, regulations, and by-laws for the conduct of its business as it 
may deem advisable;
    (d) To recommend to the Secretary amendments to the Order;
    (e) To pay the costs of promotion, research, and information plans 
and projects with assessments collected pursuant to section 1245.41, 
earnings from invested assessments, and other funds authorized under 
this part.
    (f) To appoint and convene, from time to time, special committees 
and subcommittees which may include producers, first handlers, 
exporters, members of wholesale or retail outlets for honey, or other 
members of the public to assist in the development of research, 
promotion, advertising, information plans, or projects for U.S. honey;
    (g) To prepare and submit to the Secretary for approval 60 days in 
advance of the beginning of a fiscal period, a budget of its 
anticipated expenses in the administration of this part, including the 
probable costs of all promotion, research, and information activities 
and to recommend a rate of assessment;
    (h) To meet and organize and select from among its members a 
chairperson, and other officers;
    (i) To require its employees to receive, investigate, and report to 
the Secretary complaints of violations of the Order;
    (j) To employ persons, other than members, as it may deem necessary 
and to determine the compensation and define the duties of each 
employee;
    (k) To cause its books to be audited by an independent auditor at 
the end of each fiscal period and to submit a copy of each audit to the 
Secretary;
    (l) To periodically prepare and make public and to make available 
to producers reports of its activities carried out and, at least once 
each fiscal period, to make public an accounting of funds received and 
expended;
    (m) To give to the Secretary the same notice of meetings of the 
Board and any special committees as is given to members in order that 
representatives of the Secretary may attend such meetings;
    (n) To notify honey producers of all Board meetings through press 
releases or other means;
    (o) To maintain such records as the Secretary may require and make 
such records available to the Secretary for inspection and audit;
    (p) To account for the receipt and disbursement of all funds in the 
possession, or under the control, of the Board; and
    (q) To develop plans and projects, and enter into contracts or 
agreements, which must be approved by the Secretary before becoming 
effective, for

[[Page 18443]]

the development and carrying out of plans or projects of research, 
information, or promotion, and the payment of costs thereof with funds 
collected pursuant to this subpart.


Sec.  1245.38  Prohibited activities.

    The Board may not engage in, and shall prohibit its employees and 
agents from engaging in:
    (a) Any action that would be a conflict of interest; and
    (b) Using funds collected by the Board under the Order to undertake 
any action for the purpose of influencing legislation or governmental 
policy or action, by local, state, national, and foreign governments, 
other than recommending to the Secretary amendments to the Order.

Expenses And Assessments


Sec.  1245.40  Budget and expenses.

    (a) At least 60 days prior to the beginning of each fiscal period, 
or as may be necessary thereafter, the Board shall prepare and submit 
to the Secretary a budget for the fiscal period covering its 
anticipated expenses and disbursements in the administration of this 
subpart. Each such budget shall include:
    (1) A statement of objectives and strategy for each plan or 
project;
    (2) A summary of anticipated revenue, with comparative data for at 
least one preceding year (except for the initial budget);
    (3) A summary of proposed expenditures for each 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, including shifting funds from one plan or project to 
another, must be approved by the Secretary before such amendment or 
addition shall occur. 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 Secretary.
    (d) The Board is authorized to incur expenses, including a 
provision for a reserve for operating contingencies, for research, 
promotion, advertising, or information activities and such other 
expenses for the administration, maintenance, and functioning of the 
Board as may be authorized by the Secretary. Such expenses shall be 
paid from funds received by the Board, including assessments, 
contributions from persons, and other funds available to the Board.
    (e) With approval of the Secretary, the Board may borrow money for 
the payment of administrative expenses, subject to the same fiscal, 
budget, and audit controls as other funds of the Board. Any funds 
borrowed by the Board shall be expended only for startup costs and 
capital outlays and are limited to the first 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 research, 
promotion, advertising, or information activities. Voluntary 
contributions shall be free from any encumbrances 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, and 
supervision of the Order, including all referenda costs incurred in 
connection with the Order.
    (h) For fiscal years beginning 3 years after the date of the 
Board's establishment, the Board shall not expend for administration, 
maintenance, and functioning of the Board in a single fiscal year an 
amount that exceeds 15 percent of the assessments and other income 
received by the Board for that fiscal year. Such limitation on spending 
shall not include reimbursements to the Secretary.


Sec.  1245.41  Assessments.

    (a) The assessment rate shall be $0.02 per pound of U.S. honey 
produced and shall only be imposed on producers of 100,000 pounds or 
more per fiscal year. Such assessments shall not be levied on the 
portion of U.S. honey which does not enter commerce and which is 
utilized solely to sustain a producer's own colonies of bees.
    (b) The assessment rate shall not be increased without an 
affirmative vote of five members of the Board. The assessment rate 
shall not be increased by more than $0.005 per fiscal year and shall 
not exceed $0.05 per pound. Any change in the assessment rate shall be 
announced by the Board at least 30 days prior to becoming effective and 
shall not be subject to a vote in a referendum. Any change in the 
assessment rate shall be subject to rulemaking.
    (c) Except as provided in this section, the first handler shall 
collect the assessment from the producer or deduct such assessment from 
the proceeds paid to the producer on whose honey the assessment is 
made, and remit the assessments to the Board. The first handler shall 
furnish the producer with evidence of such payment. Any such collection 
or deduction of assessment shall be made not later than the time when 
the assessment becomes payable to the Board. The first handler shall 
maintain separate records for each producer's honey handled, including 
honey produced by said handler. Should a first handler fail to collect 
an assessment from a producer, the producer shall be responsible for 
the payment of the assessment to the Board.
    (d) First handlers shall remit to the Board the assessment on all 
U.S. honey for which they act as first handler, in addition to the 
assessment owed on U.S. honey they produce.
    (e) The first handler shall collect and pay assessments to the 
Board unless such handler has received documentation acceptable to the 
Board that the assessment has been previously paid.
    (f) Assessments shall be paid to the Board on a monthly basis no 
later than the fifteenth day of the month following the month in which 
the U.S. honey was produced unless the Board determines that 
assessments due shall be paid to the Board at a different time and 
manner, with approval of the Secretary. The Board may recommend 
different payment schedules so as to recognize differences in marketing 
or purchasing practices and procedures.
    (g) The Board may authorize other organizations to collect 
assessments on its behalf with the approval of the Secretary.


Sec.  1245.42  Late payment.

    (a) There shall be a late-payment charge imposed on any person who 
fails to remit to the Board the total amount for which any such person 
is liable on or before the payment due date established by the Board. 
The amount of the late-payment charge shall be prescribed in 
regulations issued by the Secretary.
    (b) There shall also be imposed on any person subject to a late-
payment charge, an additional charge in the form of interest on the 
outstanding portion of any amount for which the person is liable. The 
rate of interest shall be prescribed in regulations issued by the 
Secretary.
    (c) Persons failing to remit total assessments due in a timely 
manner may also be subject to actions under federal debt collection 
procedures.


Sec.  1243.43  Exemption from assessment.

    (a) A producer who produces less than 100,000 pounds of U.S. honey 
per year shall be exempt from the payment

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of assessments. Such producer may apply to the Board--on a form 
provided by the Board--for a certificate of exemption. Such producer 
shall certify that the producer's production of U.S. honey shall be 
less than 100,000 pounds for the fiscal year for which the exemption is 
claimed.
    (b) A producer who operates under an approved National Organic 
Program (NOP) (7 CFR part 205) system plan, produces 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.
    (1) To obtain the exemption an eligible producer shall submit a 
request for exemption to the Board--on a form provided by the Board--at 
any time initially and annually thereafter on or before the beginning 
of the fiscal period as long as the producer continues to be eligible 
for the exemption.
    (2) The request shall include the following: The producer's name 
and address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined 
in the Organic Act, a signed certification that the applicant meets all 
of the requirements specified for an assessment exemption, and such 
other information as may be required by the Board and with the approval 
of the Secretary.
    (3) If the producer complies with the requirements of this 
subsection, the Board will grant an assessment exemption and shall 
issue a Certificate of Exemption to the producer. For exemption 
requests received on or before August 15 of the fiscal year, the Board 
will have 60 days to approve the exemption request; after August 15 of 
the fiscal year, the Board will have 30 days to approve the exemption 
request. If the application is disapproved, the Board will notify the 
applicant of the reason(s) for disapproval within the same timeframe.
    (c) An exemption will apply immediately following the issuance of 
the certificate of exemption.
    (d) 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 begin to pay the assessment 
on all U.S. honey produced.
    (e) The Board may recommend to the Secretary that honey exported 
from the United States be exempt from this subpart and recommend 
procedures for refunding assessments paid on exported honey and any 
necessary safeguards to prevent improper use of this exemption.


Sec.  1245.44  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 shall not exceed 
one fiscal period's budget.

Promotion, Research, and Information


Sec.  1245.50  Plans and projects.

    (a) The Board shall receive and evaluate, or, on its own 
initiative, develop and submit to the Secretary for approval, any plan 
or project authorized under this part. Such plans or projects may 
provide for:
    (1) The establishment, issuance, effectuation, or administration of 
appropriate activities for research, promotion, advertising, or 
information, including industry and consumer information, with respect 
to U.S. honey;
    (2) The establishment and conduct of marketing research and 
development activities to encourage, improve, or expand the acquisition 
of knowledge pertaining to U.S. honey or their consumption and use, 
nutritional benefits or the marketing and utilization of U.S. honey;
    (3) The development and expansion of the sale of U.S. honey in 
foreign markets; or
    (4) The sponsorship of research designed to advance the cost-
effectiveness, competitiveness, efficiency, pest and disease control, 
and other management aspects of beekeeping, U.S. honey production, and 
honey bees.
    (b) No plan or project shall be implemented prior to approval by 
the Secretary. Once a plan or project is so approved, the Board shall 
take appropriate steps to implement it.
    (c) Each plan or project implemented under this part shall be 
reviewed or evaluated periodically by the Board to ensure that it 
contributes to an effective program of promotion, research, or 
information. If the Board finds that any such plan or project does not 
contribute to an effective program of promotion, research, or 
information, then the Board shall terminate such plan or project.
    (d) In addition to any evaluation that may be carried out pursuant 
to paragraph (c) of this section, the Board shall, not less often than 
every five years, authorize and fund, from funds otherwise available to 
the Board, an independent evaluation of the effectiveness of the Order 
and plans and projects conducted by the Board pursuant to the Act. The 
Board shall submit to the Secretary, and make available to the public, 
the results of each periodic independent evaluation conducted under 
this paragraph.
    (e) No plan or project including advertising shall be false or 
misleading or disparaging to another agricultural commodity including 
but not limited to unfair or deceptive acts or practices with respect 
to quality, value, or use of any competing product. In addition, no 
reference to a brand name, trade name, or State identification will be 
made.


Sec.  1245.51  Contracts.

    (a) Subject to the approval of the Secretary, the Board may:
    (1) Enter into contracts and agreements to carry out promotion, 
research, and information activities relating to U.S. honey, including 
contracts and agreements with producer associations or other entities 
as considered appropriate by the Secretary; and
    (2) Pay the cost of approved promotion, research, and information 
activities using assessments collected under the Order, earnings 
obtained from assessments, and other income of the Board.
    (b) Each contract or agreement shall provide that any person who 
enters into the contract or agreement with the Board shall:
    (1) Develop and submit to the Board a proposed activity together 
with a budget that specifies the cost to be incurred to carry out the 
activity;
    (2) Keep accurate records of all of its transactions relating to 
the contract or agreement;
    (3) Account for funds received and expended in connection with the 
contract or agreement;
    (4) Make periodic reports to the Board of activities conducted 
under the contract or agreement; and
    (5) Make such other reports as the Board or the Secretary considers 
relevant.
    (c) Each contract or agreement shall provide that:
    (1) The contractor or agreeing party shall develop and submit to 
the Board a plan or project together with a budget or budgets that 
shall show the estimated cost to be incurred for such plan or project;
    (2) The contractor or agreeing party shall keep accurate records of 
all its transactions and make periodic reports to the Board of 
activities conducted, submit account for funds received and expended, 
and make such other reports as the Secretary or the Board may require;
    (3) The Secretary may audit the records of the contracting or 
agreeing party periodically; and

[[Page 18445]]

    (4) Any subcontractor who enters into a contract with a Board 
contractor and who receive or otherwise uses funds allocated by the 
Board shall be subject to the same provisions as the contractor.


Sec.  1245.52  Patents, copyrights, trademarks, information, 
publications, and product formulations.

    (a) Patents, copyrights, trademarks, information, publications, and 
product formulations developed through the use of funds received by the 
Board under this subpart:
    (1) 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;
    (2) Shall be considered income subject to the same fiscal, budget, 
and audit controls as other funds of the Board; and
    (3) May be licensed subject to approval by the Department.
    (b) Upon termination of this subpart, section 1245.73 shall apply 
to determine disposition of all such property.

Reports, Books, and Records


Sec.  1245.60  First handler reports.

    (a) Each first handler subject to this part shall be required to 
report to the Board, at such time and in such manner as the Board may 
prescribe such information as may be necessary for the Board to perform 
its duties. Such reports may include, but shall not be limited to the 
following:
    (1) The first handler's name and address;
    (2) The date of report (which is also date of payment to the 
Board);
    (3) The period covered by report; and
    (4) The total quantity of U.S. domestic honey determined as 
assessable during the reporting period.
    (b) First handlers who collect assessments from producers or 
withhold assessments for their accounts or pay the assessments 
themselves shall also include with each report a list of all such 
producers whose honey was handled during the period, their addresses, 
and the total assessable quantities handled for each such producer.
    (c) First handlers shall also include with each report the 
following:
    (1) The total quantity of U.S. honey acquired during the reporting 
period;
    (2) The total quantity of U.S. honey handled during such period;
    (3) The amount of U.S. honey acquired from each producer, giving 
the name and address of each producer;
    (4) The assessments collected during the reporting period;
    (5) The quantity of U.S. honey purchased from a first handler 
responsible for paying the assessment due pursuant to this Order;
    (6) The date that assessment payments were made on U.S. honey 
handled;
    (7) The first handler's tax identification number;
    (8) The quantity of U.S. honey processed for sale from a first 
handler's own production; and
    (9) A record of each transaction for U.S. honey on which 
assessments had already been paid, including a statement from the 
seller that the assessment had been paid.
    (d) In the event of a first handler's death, bankruptcy, 
receivership, or incapacity to act, the representative of the handler 
or his or her estate, shall be considered the first handler for the 
purposes of this part.


Sec.  1245.61  Books and records.

    Each first handler and producer shall maintain, and during normal 
business hours, make available for inspection by employees or agents of 
the Board or the Secretary, such books and records as are necessary to 
carry out the provisions of this part, including such records as are 
necessary to verify any required reports. A member or alternate member 
of the Board is prohibited from conducting inspections authorized by 
this section. Such books and records shall be maintained for two years 
beyond the fiscal period of their applicability.
    (a) The Board may request any other information from first handlers 
and producers, that it deems necessary to perform its duties under this 
subpart, subject to the approval of the Secretary.


Sec.  1245.62  Confidential treatment.

    (a) All information obtained from the books, records, or reports 
required to be maintained by producers shall be kept confidential by 
all employees and agents of the Board and all officers and employees of 
the Department, and shall not be disclosed to the public. Only such 
information as the Secretary deems relevant shall be disclosed, and 
then only in a judicial proceeding or administrative hearing brought at 
the direction, or upon the request, of the Secretary, or to which the 
Secretary or any officer of the United States is a party, and involving 
this subpart.
    (b) Nothing in this subpart shall be deemed to prohibit:
    (1) The issuance of general statements based upon the reports of 
the number of producers or first handlers or statistical data collected 
therefrom, if such statements do not identify the information furnished 
by any person; or
    (2) The publication by direction of the Secretary of the name of 
any person who has been adjudged to have violated this part, together 
with a statement of the particular provisions of this part violated by 
such person.

Miscellaneous


Sec.  1245.70  Right of the Secretary.

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


Sec.  1245.71  Referenda.

    (a) After the initial referendum, the Secretary shall conduct 
subsequent referenda;
    (1) Every seven years, to determine whether producers of U.S. honey 
favor the continuation, suspension, or termination of the Order. The 
Order shall continue if it is favored by a majority of the producers 
voting for approval in the referendum and who also represent a majority 
of the volume of U.S. honey produced.
    (2) At the request of the Board or when petitioned by ten (10) 
percent or more of the number of persons eligible to vote under the 
Order, but not more often than once every five years under this 
paragraph; or
    (3) Whenever the Department deems that a referendum is necessary.


Sec.  1245.72  Suspension or termination.

    (a) The Secretary shall suspend or terminate this part or subpart 
or a provision thereof if the Secretary finds that the subpart or a 
provision thereof obstructs or does not tend to effectuate the purposes 
of the Act, or if the Secretary determines that this subpart or a 
provision thereof is not favored by persons voting in a referendum 
conducted pursuant to the Act.
    (b) The Secretary shall suspend or terminate this subpart at the 
end of the marketing year whenever the Secretary determines that its 
suspension or termination is approved or favored by a majority of the 
producers voting who, during a representative period determined by the 
Secretary, have been engaged in the production of U.S. honey.
    (c) If, as a result of a referendum the Secretary determines that 
this subpart is not approved, the Secretary shall:
    (1) Not later than 180 days after making the determination, suspend 
or

[[Page 18446]]

terminate, as the case may be, collection of assessments under this 
subpart; and
    (2) As soon as practical, suspend or terminate, as the case may be, 
activities under this Order and regulations issued hereunder in an 
orderly manner.


Sec.  1245.73  Proceedings after termination.

    (a) Upon the termination of this subpart, the Board shall recommend 
to the Secretary not more than five of its members to serve as trustees 
for the purpose of liquidating the affairs of the Board. Such persons, 
upon designation by the Secretary, shall become trustees of all funds 
and property then in possession or under control of the Board, 
including claims for any funds unpaid or property not delivered or any 
other claim existing at the time of such termination.
    (b) The said trustees shall:
    (1) Continue in such capacity until discharged by the Secretary;
    (2) Carry out the obligations of the Board under any contracts or 
agreements entered into by it pursuant to Section 1245.37;
    (3) From time to time account for all receipts and disbursements 
and deliver all property on hand, together with all books and records 
of the Board and of the trustees, to such person as the Secretary may 
direct; and
    (4) Upon the direction of the Secretary, execute such assignments 
or other instruments necessary or appropriate to vest in such person 
full title and right to all of the funds, property, and claims vested 
in the Board or the trustees pursuant to this subpart.
    (c) Any person to whom funds, property, or claims have been 
transferred or delivered pursuant to this subpart shall be subject to 
the same obligations as imposed upon the trustees.
    (d) Any residual funds not required to defray the necessary 
expenses of liquidation shall be returned to the persons who 
contributed such funds, or paid assessments, or if not practicable, 
shall be turned over to the Department to be utilized, to the extent 
practicable, in the interest of continuing one or more of the honey 
research or education programs hitherto authorized.


Sec.  1245.74  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 subpart;
    (b) Release or extinguish any violation of this subpart; or
    (c) Affect or impair any rights or remedies of the United States or 
any person with respect to any violation.


Sec.  1245.75  Personal liability.

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


Sec.  1245.76  Separability.

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


Sec.  1245.77  Amendments.

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


Sec.  1245.78  OMB control numbers.

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

    Dated: March 26, 2010.
David R. Shipman,
Acting Administrator.
[FR Doc. 2010-7575 Filed 4-9-10; 8:45 am]
BILLING CODE P