[Federal Register Volume 78, Number 30 (Wednesday, February 13, 2013)]
[Proposed Rules]
[Pages 10104-10107]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-02975]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 78, No. 30 / Wednesday, February 13, 2013 / 
Proposed Rules  

[[Page 10104]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1210

[Document Number AMS-FV-11-0031]


Watermelon Research and Promotion Plan; Importer Membership 
Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: This rule proposes to amend the Watermelon Research and 
Promotion Plan (Plan) importer membership requirements to serve on the 
National Watermelon Promotion Board (Board). The Board recommended to 
eliminate the requirement that an importer import more than 50 percent 
of the total volume handled and imported in order to qualify as an 
importer member. This change would allow for additional parties to 
qualify as an importer member.

DATES: Comments must be received by March 15, 2013.

ADDRESSES: Interested persons are invited to submit written comments on 
the Internet at: http://www.regulations.gov or to the Promotion and 
Economics Division, Fruit and Vegetable Program, Agricultural Marketing 
Service (AMS), U.S. Department of Agriculture, (USDA) Room 0632-S, Stop 
0244, 1400 Independence Avenue SW., Washington, DC 20250-0244; 
facsimile: (202) 205-2800. All comments should reference the docket 
number and the date and page number of this issue of the Federal 
Register and will be made available for public inspection in the above 
office during regular business hours or it can be viewed at http://www.regulations.gov. All comments received will be posted without 
change, including any personal information provided. Please be advised 
that the identity of the individuals or entities submitting comments 
will be made public on the Internet at the address provided above.

FOR FURTHER INFORMATION CONTACT: Jeanette Palmer, Marketing Specialist, 
Promotion and Economics Division, Fruit and Vegetable Program, AMS, 
U.S. Department of Agriculture, Stop 0244, 1400 Independence Avenue 
SW., Room 0632-S, Washington, DC 20250-0244; telephone: (888) 720-9917; 
facsimile: (202) 205-2800; or electronic mail: 
[email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under the Watermelon 
Research and Promotion Plan [7 CFR part 1210]. The Plan is authorized 
under the Watermelon Research and Promotion Act (Act) [7 U.S.C. 4901-
4916].

Executive Order 12866 and Executive Order 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been designated as ``non-significant 
regulatory action'' under section 3(f) of Executive Order 12866. 
Accordingly, the Office of Management and Budget (OMB) has waived the 
review process.

Executive Order 12988

    In addition, this rule has been reviewed under Executive Order 
12988, Civil Justice Reform. The rule is not intended to have 
retroactive effect.
    The Act allows producers, producer-packers, handlers, and importers 
to file a written petition with the Secretary of Agriculture 
(Secretary) if they believe that the Plan, any provision of the Plan, 
or any obligation imposed in connection with the Plan, is not 
established in accordance with the law. In any petition, the person may 
request a modification of the Plan or an exemption from the Plan. The 
petitioner will have the opportunity for a hearing on the petition. 
Afterwards, an Administrative Law Judge (ALJ) will issue a decision. If 
the petitioner disagrees with the ALJ's ruling, the petitioner has 30 
days to appeal to the Judicial Officer, who will issue a ruling on 
behalf of the Secretary. If the petitioner disagrees with the 
Secretary's ruling, the petitioner may file, within 20 days, an appeal 
in the U.S. District Court for the district where the petitioner 
resides or conducts business.

Initial Regulatory Flexibility Act and Paperwork Reduction Act

    In accordance with the Regulatory Flexibility Act [5 U.S.C. 601-
612], AMS has examined the economic impact of this rule on the small 
producers, handlers, and importers that would be affected by this rule.
    The Small Business Administration defines, in 13 CFR part 121, 
small agricultural producers as those having annual receipts of no more 
than $750,000 and small agricultural service firms (handlers and 
importers) as those having annual receipts of no more than $7 million. 
Under these definitions, the majority of the producers, handlers, and 
importers that would be affected by this rule would be considered small 
entities. Producers of less than 10 acres of watermelons are exempt 
from this program. Importers of less than 150,000 pounds of watermelons 
per year are also exempt.
    USDA's National Agricultural Statistics Service (NASS) data for the 
2011 crop year was about 312 hundredweight (cwt.) of watermelons were 
produced per acre. The 2011 grower price published by NASS was $14.00 
per hundredweight. Thus, the value of watermelon production per acre in 
2011 averaged about $4,368 (312 cwt. x $14.00). At that average price, 
a producer would have to farm over 172 acres to receive an annual 
income from watermelons of $750,000 ($750,000 divided by $4,368 per 
acre equals 172). Accordingly, as previously noted, a majority of the 
watermelon producers would be classified as small businesses.
    Based on the Board's data, using an average of freight on board 
(f.o.b.) price of $.164 per pound and the number of pounds handled in 
2011, none of the watermelon handlers had receipts over the $7.5 
million threshold. Therefore, the watermelon handlers would all be 
considered small businesses. A handler would have to ship over 45.7 
million pounds of watermelons to be considered large (457,317,073 times 
$.164 f.o.b. equals $7,500,000).

[[Page 10105]]

    According to the Board, there are approximately 950 producers, 230 
handlers, and 137 importers who are required to pay assessments under 
the program.
    Based on the watermelon import assessments received for the year 
2011, the United States imported watermelons worth over $211 million 
dollars. The largest imports of watermelon came from Mexico which 
accounted for 89 percent of the total in 2011. Other suppliers of 
imported watermelon are Guatemala at 8 percent and Costa Rica at 1 
percent. The remaining 2 percent of imported watermelon came from 
Nicaragua, Honduras, Panama, Vietnam, Canada, Dominican Republic, and 
Israel.
    The Board's audit records show imports for the fiscal years 2009, 
2010, and 2011 at $754,760, $746,043, and $855,890 respectively. Based 
on this data, the three-year average of imports for watermelon totals 
$785,564 (2,356,693 divided by 3). This represents approximately 30 
percent of the total assessments paid to the Board. Currently, the 
Board membership distribution consists of 14 producers, 14 handlers, 8 
importers, and 1 public member. A final rule to increase the number of 
importers on the Board was published in the July 18, 2011, Federal 
Register [76 FR 42009].
    The Watermelon Research and Promotion Improvement Act of 1993 
amended the Watermelon Research and Promotion Act by adding importer 
members to the Board among other things. At that time the industry 
recommended that, in order to qualify as an importer member on the 
Board, an individual that both handles and imports watermelons may vote 
for importer members and serve as an importer member if that person 
imports 50 percent or more of the combined total volume of watermelons 
handled and imported by that person. A final rule was published in the 
Federal Register on February 28, 1995 [60 FR 10795] containing this and 
other amendments to the program.
    At the time of this amendment there was a more clear division of 
roles among producers, handlers, and importers. In other words, those 
individuals that imported watermelons did not cross over into handling 
or producing watermelons as much as they do now. Since then, the 
industry has become more consolidated and of the 137 importers required 
to pay assessments 42 also handled watermelons and would be eligible to 
serve as either handler or importer member.
    At its February 26, 2011, meeting, the Board voted unanimously, to 
modify the importer eligibility requirements to serve on the Board. The 
Board is having difficulty finding eligible importers to serve on the 
Board because of the requirement in the Plan that a person who both 
imports and handles watermelon will be counted as an importer if that 
person imports 50 percent or more of the combined total volume of 
watermelons handled and imported by that person. The Board voted to 
eliminate the 50 percent requirement or more of the combined total 
volume of watermelons handled and imported by a person to allow more 
individuals to become eligible to serve on the Board as an importer. 
Individuals that both handle and import would be allowed to decide 
which part of the industry they would prefer to represent regardless of 
the volume handled or imported. The industry believes that this change 
would increase the importer representation on the Board by allowing 
more individuals to be eligible to serve. This action may also increase 
diversity representation on the Board.
    The Board considered a second alternative by changing the 50 
percent or more of the combined total volume of watermelons handled and 
imported by the person to 25 percent or more of the combined total 
volume of watermelons handled and imported by the person. However, the 
Board did not choose this option because they wanted to allow more 
importers to be eligible for nomination on the Board and therefore, 
they eliminated the percentage requirement. By eliminating the 
percentage requirement for the importer member, this will allow for 
smaller importer businesses to become eligible to serve as an importer 
member on the Board.
    Section 1655(a) of the Act provides for referenda to be conducted 
to ascertain approval of changes to the Plan prior to going into 
effect. In order to implement the amendments to the Plan, the Secretary 
determines that the Plan has been approved by a majority of the 
producers, handlers, and importers of watermelon voting in the 
referendum. Accordingly, before these amendments are made to the Plan, 
a referendum will be conducted among eligible producers, handlers, and 
importers of watermelon.
    In accordance with the Office of Management and Budget (OMB) 
regulation [5 CFR part 1320] which implements the Paperwork Reduction 
Act of 1995 [44 U.S.C. Chapter 35], have been assigned OMB number 0581-
0093, which represents the information collection and recordkeeping 
requirements that are imposed by the Plan that have been approved 
previously, except that the background form, has been approved under 
OMB number 0505-0001.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    We have performed this Initial Regulatory Flexibility Analysis 
regarding the impact of this amendment to the Plan on small entities, 
and we invite comments concerning potential effects of this amendment.

Background

    Under the Plan, the Board administers a nationally coordinated 
program of research, development, advertising, and promotion designed 
to strengthen the watermelon's position in the market place and to 
establish, maintain, and expand markets for watermelons. This program 
is financed by assessments on producers growing 10 acres or more of 
watermelons, handlers of watermelons, and importers of 150,000 pounds 
of watermelons or more per year. The Plan specifies that handlers are 
responsible for collecting and submitting both the producer and handler 
assessments to the Board, reporting their handling of watermelons, and 
maintaining records necessary to verify their reporting(s). Importers 
are responsible for payment of assessments to the Board on watermelons 
imported into the United States through the U.S. Customs Service and 
Border Protection. This action will not have any impact on the 
assessment rates paid by producers, handlers, and importers.
    Membership on the Board consists of two producers and two handlers 
for each of the seven districts established by the Plan, at least one 
importer, and one public member. The Board currently consists of 37 
members: 14 producers, 14 handlers, 8 importers, and 1 public member. A 
final rule to increase the number of importers on the Board was 
published in the July 18, 2011, Federal Register [76 FR 42009].
    The Watermelon Research and Promotion Improvement Act of 1993 
amended the Watermelon Research and Promotion Act by adding importer 
members to the Board among other things. At that time the industry 
recommended that, in order to qualify as an importer member on the 
Board, an individual that both handles and imports watermelons may vote 
for importer members and serve as an importer member if that person 
imports 50 percent or more of the combined total volume of watermelons 
handled and imported by that person. A final rule was published in the 
Federal Register on February 28, 1995 [60 FR

[[Page 10106]]

10795] containing this and other amendments to the program. At the time 
of this amendment there was a more clear division of roles among 
producers, handlers, and importers. In other words, those individuals 
that imported watermelons did not cross over into handling or producing 
watermelons as much as they do now. Since then, the industry has become 
more consolidated and of the 137 importers required to pay assessments 
42 also handled watermelons and would be eligible to serve as either 
handler or importer member.
    At its February 26, 2011, meeting, the Board voted unanimously, to 
modify the importer eligibility requirements to serve on the Board. The 
Board is having difficulty finding eligible importers to serve on the 
Board because of the requirement in the Plan that a person who both 
imports and handles watermelon will be counted as an importer if that 
person imports 50 percent or more of the combined total volume of 
watermelons handled and imported by that person. The Board voted to 
eliminate the 50 percent requirement or more of the combined total 
volume of watermelons handled and imported by a person to allow more 
individuals to become eligible to serve on the Board as an importer. 
Individuals that both handle and import would be allowed to decide 
which part of the industry they would prefer to represent regardless of 
the volume handled or imported. The industry believes that this change 
would increase the importer representation on the Board by allowing 
more individuals to be eligible to serve. This action may also increase 
diversity representation on the Board.
    Accordingly, the propose rule would amend sections 1210.321(d), 
1210.363(b), 1210.404(g), and 1210.602(a) which reference importer 
eligibility requirements to be nominated to the Board and participation 
in a referendum. These sections would be revised to read as follows: a 
person who both imports and handles watermelon may vote for importer 
members and serve as an importer member if that person identifies that 
their vote will be considered as an importer.
    For changes to the Plan to become effective, the proposed 
amendments to the Plan must be approved by a majority of producers, 
handlers, and importers of watermelon voting in a referendum. 
Accordingly, a referendum will be conducted among eligible producers, 
handlers, and importers of watermelon. Specific dates for the 
referendum will be announced at a later date.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposal. Thirty days is deemed appropriate so that the 
proposed amendments, if adopted, may be implemented to allow for the 
calendar year 2013 nomination meetings to take place before the 
appointments for new Board members are due. All written comments 
received in response to this rule by the date specified would be 
considered prior to finalizing this action.

List of Subjects in 7 CFR Part 1210

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

    For the reasons set forth in the preamble, Part 1210, Chapter XI of 
Title 7 is proposed to be amended as follows:

PART 1210--WATERMELON RESEARCH AND PROMOTION PLAN

0
1. The authority citation for 7 CFR part 1210 continues to read as 
follows:

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

0
2. Revise Sec.  1210.321 paragraph (d) to read as follows:


Sec.  1210.321  Nomination and selection.

* * * * *
    (d) Nominations for importers positions that become vacant may be 
made by mail ballot, nomination conventions, or by other means 
prescribed by the Secretary. The Board shall provide notice of such 
vacancies and the nomination process to all importers through press 
releases and any other available means as well as direct mailing to 
known importers. All importers may participate in the nomination 
process: Provided, That a person who both imports and handles 
watermelon may vote for importer members and serve as an importer 
member if that person identifies that their vote be considered as an 
importer.
* * * * *
0
3. Revise Sec.  1210.363 paragraph (b) to read as follows:


Sec.  1210.363  Suspension or termination.

* * * * *
    (b) The Secretary may conduct a referendum at any time and shall 
hold a referendum on request of the Board or at least 10 percent of the 
combined total of the watermelon producers, handlers, and importers to 
determine if watermelon producers, handlers, and importers favor 
termination or suspension of this Plan. The Secretary shall suspend or 
terminate this Plan at the end of the marketing year whenever the 
Secretary determines that the suspension or termination is favored by a 
majority of the watermelon producers, handlers, and importers voting in 
such referendum who, during a representative period determined by the 
Secretary, have been engaged in the production, handling, or importing 
of watermelons and who produced, handled, or imported more than 50 
percent of the combined total of the volume of watermelons produced, 
handled, or imported by those producers, handlers, and importers voting 
in the referendum. For purposes of this section, the vote of a person 
who both produces and handles watermelons will be counted as a handler 
vote if the producer purchased watermelons from other producers, in a 
combined total volume that is equal to 25 percent or more of the 
producer's own production; or the combined total volume of watermelon 
handled by the producer from the producer's own production and 
purchases from other producer's production is more than 50 percent of 
the producer's own production. Provided, That a person who both imports 
and handles watermelon may vote for importer members and serve as an 
importer member if that person identifies that their vote be considered 
as an importer. Any such referendum shall be conducted by mail ballot.

0
4. Revise Sec.  1210.404 paragraph (g) to read as follows:


Sec.  1210.404  Importer member nomination and selection.

* * * * *
    (g) Any individual who both imports and handles watermelons will be 
considered an importer if that person identifies themselves as an 
importer.

0
5. Revise Sec.  1210.602 paragraph (a) to read as follows:


Sec.  1210.602  Voting.

    (a) Each person who is an eligible producer, handler, or importer 
as defined in this subpart, at the time of the referendum and who also 
was a producer, handler, or importer during the representative period, 
shall be entitled to one vote in the referendum: Provided, That each 
producer in a landlord-tenant relationship or a divided ownership 
arrangement involving totally independent entities cooperating only to 
produce watermelons in which more than one of the parties is a 
producer, shall be entitled to one vote in the referendum covering only 
that producer's share of the ownership: Provided further, That the vote 
of a person who both produces and handles watermelons will be counted 
as a handler vote if the producer purchased watermelons from

[[Page 10107]]

other producers, in a combined total volume that is equal to 25 percent 
or more of the producer's own production; or the combined total volume 
of watermelon handled by the producer from the producer's own 
production and purchased from other producer's production is more than 
50 percent of the producer's own production: Provided further, That a 
person who both imports and handles watermelons may vote and serve as 
an importer if that person identifies that their vote be considered as 
an importer.
* * * * *

    Dated: February 5, 2013.
David R. Shipman,
Administrator.
[FR Doc. 2013-02975 Filed 2-12-13; 8:45 am]
BILLING CODE 3410-02-P