[Federal Register Volume 75, Number 175 (Friday, September 10, 2010)]
[Rules and Regulations]
[Pages 55255-55257]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-22644]



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  Federal Register / Vol. 75, No. 175 / Friday, September 10, 2010 / 
Rules and Regulations  

[[Page 55255]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1250

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


Egg Research and Promotion Order; Referendum Procedures

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

DATES: Effective Date: September 13, 2010.

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

SUPPLEMENTARY INFORMATION:

Executive Order 12866

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

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have a retroactive 
effect.
    The Egg Research and Consumer Information Act (7 U.S.C. 2701-2718) 
(Act) provides that administrative proceedings must be exhausted before 
parties may file suit in court. Section 14 of the Act allows those 
subject to the Order to file a written petition with the Secretary of 
Agriculture (Secretary) if they believe that the Order, any provision 
of the Order, or any obligation imposed in connection with the Order, 
is not in accordance with the law. In any petition, the person may 
request a modification of the Order or an exemption from the Order. The 
petitioner will have the opportunity for a hearing on the petition. 
Afterwards, an Administrative Law Judge (ALJ) will issue a decision. If 
the petitioner disagrees with the ALJ's ruling, the petitioner has 30 
days to appeal to the Judicial Officer, who will issue a ruling on 
behalf of the Secretary. If the petitioner disagrees with the 
Secretary's ruling, the petitioner may file, within 20 days, an appeal 
in the U.S. District Court for the district where the petitioner 
resides or conducts business.

Regulatory Flexibility Act Analysis and Paperwork Reduction Act

    In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C. 
601-612], AMS has considered the economic impact of this action on the 
small producers that will be affected by this rule. The purpose of the 
RFA is to fit regulatory action to scale on businesses subject to such 
action so that small businesses will not be disproportionately 
burdened.
    According to AEB, approximately 245 producers are subject to the 
provisions of the Order, including paying assessments. Under the 
current Order, producers in the 48 contiguous United States and the 
District of Columbia who own more than 75,000 laying hens each pay a 
mandatory assessment of 10 cents per 30-dozen case of eggs. Assessments 
under the program are used by AEB to finance promotion, research, and 
consumer information programs designed to increase consumer demand for 
eggs in domestic and international markets. At the current rate of 10 
cents per case, assessments generate about $20 million in annual 
revenues. The Order is administered by AEB under supervision of the 
U.S. Department of Agriculture (USDA).
    In 13 CFR part 121, the Small Business Administration (SBA) defines 
small agricultural producers as those having annual receipts of no more 
than $750,000 and small agricultural service firms as those having 
annual receipts of no more than $7 million. Under this definition, the 
vast majority of the egg producers that will be affected by this rule 
would not be considered small entities. Producers owning 75,000 or 
fewer laying hens are exempt from this program.
    Given that a laying hen produces approximately 22 dozen eggs per 
year, production from 75,000 laying hens would result in 1.65 million 
dozen eggs. With a farmgate price of $0.837 per dozen, total annual 
receipts would be $1.38 million, which is well above the definition 
used to describe a small farm. The wholesale price of eggs would need 
to drop to approximately $0.45 per dozen before a producer with 75,000 
hens could be classified as a small farm under the SBA definition.
    This final rule establishes procedures under which egg producers 
vote on whether they favor an increase in the assessments they pay to 
AEB. This rule adds a new subpart and establishes procedures to conduct 
this referendum as well as future referenda. The subpart covers 
definitions, voting, instructions, use of subagents, ballots, the 
referendum report, and confidentiality of information.
    AMS will keep egg producers who are eligible to vote informed 
throughout the referendum process to ensure that they are aware of and 
are able to participate. AMS will also publicize information regarding 
the referendum process so that trade associations and related industry 
media can be kept informed.
    Voting in the referendum is optional. However, if egg producers 
choose to vote, the burden of voting is minimal. AMS considered 
electronic voting, but the use of computers is not universal. 
Conducting the referendum from one

[[Page 55256]]

central location by mail ballot would be more cost-effective and 
reliable.
    In accordance with OMB regulation 5 CFR part 1320 that implements 
the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35], the 
information collection requirements contained in this rule have been 
approved previously under OMB control number 0581-0093. This rule does 
not result in a change to those information collection and 
recordkeeping requirements.
    There are no Federal rules that duplicate, overlap, or conflict 
with this rule.
    We have performed this Regulatory Flexibility Analysis regarding 
the impact of these referendum procedures on small entities, and we 
invited comments concerning potential effects of these amendments on 
small businesses. No comments were received.

Background

    The Act established a national egg research and promotion program--
administered by AEB--that is financed through industry assessments and 
subject to oversight by AMS. This program of promotion, research, and 
consumer information is designed to strengthen the position of eggs in 
the marketplace and to establish, maintain, and expand markets for 
eggs.
    This program is financed by assessments on egg producers owning 
more than 75,000 laying hens. The Order specifies that handlers are 
responsible for collecting and remitting the producer assessments to 
AEB, reporting their handling of eggs, and maintaining records 
necessary to verify their reports.
    Only producers in the contiguous United States and the District of 
Columbia are subject to the program, and producers owning 75,000 or 
fewer laying hens are eligible to obtain an exemption from paying 
assessments.
    This final rule establishes procedures under which egg producers 
may vote on whether they want to increase the rate of assessments they 
pay to AEB from 10 cents to 15 cents per 30-dozen case of eggs. These 
procedures will also be used for any future referenda. A proposed rule 
and request for comments was published in the Federal Register on 
September 28, 2009 (74 FR 49342), with a 60-day comment period. No 
comments were received. A separate proposed rule to increase the 
assessment rate was published in the September 25, 2009, issue of the 
Federal Register (74 FR 48865).
    This final rule adds a new subpart and establishes procedures to be 
used in this and future referenda. This subpart covers definitions, 
voting, instructions, use of subagents, ballots, the referendum report, 
and confidentiality of information.
    Pursuant to 5 U.S.C. 553, it is found and determined that good 
cause exists for not postponing the effective date of the rule until 30 
days after publication in the Federal Register in order to conduct a 
referendum on whether producers favor increasing the assessment rate as 
soon as possible.

List of Subjects in 7 CFR Part 1250

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

0
For the reasons set forth in the preamble, 7 CFR part 1250 is amended 
as follows:

PART 1250--EGG RESEARCH AND PROMOTION

0
1. The authority citation of Part 1250 continues to read as follows:

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

0
2. Part 1250 is amended by adding a new subpart consisting of 
Sec. Sec.  1250.200 through 1250.207 and titled ``Referendum 
Procedures'' to read as follows:
Subpart--Referendum Procedures
Sec.
1250.200 Referenda.
1250.201 Definitions.
1250.202 Voting.
1250.203 Instructions.
1250.204 Subagents.
1250.205 Ballots.
1250.206 Referendum report.
1250.207 Confidential information.

Subpart--Referendum Procedures


Sec.  1250.200  Referenda.

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


Sec.  1250.201  Definitions.

    (a) Act means the Egg Research and Consumer Information Act and as 
it may be amended (Pub. L. 93-428, 7 U.S.C. 2701 et seq.).
    (b) Administrator means the administrator of the Agricultural 
Marketing Service, with power to redelegate, or any other officer or 
employee of the Department to whom authority has been delegated or may 
hereafter be delegated to act in the Administrator's stead.
    (c) Egg producer or producer means any person who either is an egg 
farmer who acquires and owns laying hens, chicks, and/or started 
pullets for the purpose of and is engaged in the production of 
commercial eggs; or is a person who supplied or supplies laying hens, 
chicks, and/or started pullets to an egg farmer for the purpose of 
producing commercial eggs pursuant to an oral or written contractual 
agreement for the production of commercial eggs. Such person is deemed 
to be the owner of such laying hens unless it is established in 
writing, to the satisfaction of the Secretary or the Egg Board, that 
actual ownership of the laying hens is in some other party to the 
contract. In the event the party to an oral contract who supplied or 
supplies the laying hens cannot be readily identified by the Secretary 
or the Egg Board, the person who has immediate possession and control 
over the laying hens at the egg production facility shall be deemed to 
be the owner of such hens unless written notice is provided to the 
Secretary or the Egg Board, signed by the parties to said oral 
contract, clearly stating that the eggs are being produced under a 
contractual agreement and identifying the party (or parties) under said 
contract who is the owner of the hens.
    (d) Order means the order or any amendment thereto promulgated 
pursuant to the act with respect to which the Secretary has directed 
that a referendum be conducted.
    (e) Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other entity.
    (f) Referendum agent means the individual or individuals designated 
by the Secretary to conduct the referendum.
    (g) Representative period means the period designated by the 
Secretary pursuant to section 9 of the Act (7 U.S.C. 2708).
    (h) Secretary means the Secretary of Agriculture or any other 
officer or employee of the Department of Agriculture to whom there has 
heretofore been delegated, or to whom there may be hereafter delegated, 
the authority to act in the Secretary's stead.


Sec.  1250.202  Voting.

    (a) Each person who is a producer, as defined in this subpart, at 
the time of the referendum, who was engaged in the production of 
commercial eggs during the representative period, and who is

[[Page 55257]]

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


Sec.  1250.203  Instructions.

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


Sec.  1250.204  Subagents.

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


Sec.  1250.205  Ballots.

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


Sec.  1250.206  Referendum report.

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


Sec.  1250.207  Confidential information.

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

    Dated: September 3, 2010.
David R. Shipman,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2010-22644 Filed 9-9-10; 8:45 am]
BILLING CODE 3410-02-P