[Federal Register Volume 79, Number 61 (Monday, March 31, 2014)]
[Rules and Regulations]
[Pages 17849-17852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-07024]



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 Rules and Regulations
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  Federal Register / Vol. 79, No. 61 / Monday, March 31, 2014 / Rules 
and Regulations  

[[Page 17849]]



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: Final rule.

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

SUMMARY: This rule amends the Watermelon Research and Promotion Plan's 
(Plan) importer membership requirements to serve on the National 
Watermelon Promotion Board (Board). The Board recommended eliminating 
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 allows for additional parties to qualify as an 
importer member. The U.S. Department of Agriculture (USDA or 
Department) conducted a referendum among eligible producers, handlers, 
and importers of watermelons from January 13 through 27, 2014. Seventy-
four percent of those voting in the referendum favored amendment of the 
Plan. Additional revisions are made to remove unnecessary language in 
the Plan and regulations. Also, a section of the regulations is 
clarified and revised accordingly.

DATES: Effective Date: April 1, 2014.

FOR FURTHER INFORMATION CONTACT: Jeanette Palmer, Marketing Specialist, 
Promotion and Economics Division, Fruit and Vegetable Program, AMS, 
USDA, Stop 0244, 1400 Independence Avenue SW., Room 1406-S, Washington, 
DC 20250-0244; telephone: (888) 720-9917 (toll free); Direct line: 202-
720-9915; 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].
    As part of this rulemaking process, a proposed rule was published 
in the Federal Register on February 13, 2013 [78 FR 10104], with a 
thirty-day comment period, which closed on March 15, 2013. Sixteen 
comments were received by the March 15, 2013, deadline. These comments 
were discussed in a second proposed rule and referendum order that was 
published in the Federal Register on October 29, 2013 [78 FR 64408].
    Pursuant to section 1655 of the Act, a referendum was conducted 
among watermelon producers, handlers, and importers to determine 
whether they favor amending the Plan 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.
    The representative period for establishing voter eligibility for 
the referendum was the period January 1 through December 31, 2012. 
Section 1653(b) of the Act requires that the amendment be approved by a 
majority of watermelon producers, handlers, and importers voting in the 
referendum. Producers of 10 acres or more of watermelons, watermelon 
handlers, importers of 150,000 or more pounds of watermelons annually, 
and importers of less than 150,000 pounds of watermelons annually who 
did not apply for and receive reimbursements of assessments during the 
representative period were eligible to vote in the referendum. 
Additionally, eligible voters had to currently be engaged in the 
business of producing, handling or importing watermelons. The 
referendum was conducted by mail ballot from January 13, 2014, through 
January 27, 2014. Seventy-four percent of those voting in the 
referendum favored amendment of the Plan.
    Additional revisions are made to remove unnecessary language in 
section 1210.363(b) of the Plan and section 1210.602(a) of the 
regulations. The language pertains to the conduct of referenda and is 
no longer applicable as a result of the Watermelon Research and 
Promotion Improvement Act of 1993, amendments to the Watermelon 
Research and Promotion Act.
    Lastly, section 1210.404(g) of the regulations, which references 
importer eligibility requirements, is amended to conform to language 
amending section 1210.363(b) of the Plan that has been approved in 
referendum.

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 a ``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 13175

    This action has been reviewed in accordance with the requirements 
of Executive Order 13175, Consultation and Coordination with Indian 
Tribal Governments. The review revealed that this regulation will not 
have substantial and direct effects on Tribal governments and will not 
have significant Tribal implications.

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

[[Page 17850]]

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 and Paperwork Reduction Act

    In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C. 
601-612], AMS has examined the economic impact of this rule on the 
small producers, handlers, and importers affected by this rule. The 
purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened.
    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 affected by this rule would be considered small entities. 
Producers of fewer 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 
2012 crop year indicates that about 306 hundredweight (cwt.) of 
watermelons were produced per acre within the United States. The 2012 
grower price published by NASS was $13.30 per hundredweight. Thus, the 
value of watermelon production per acre in 2012 averaged about $4,070 
(306 cwt. x $13.30). At that average price, a producer would have to 
farm more than 184 acres to receive an annual income from watermelons 
of $750,000 ($750,000 divided by $4,070 per acre equals 184). 
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 the freight on board 
(f.o.b.) price of $.181 per pound and the number of pounds handled in 
2012, none of the watermelon handlers had receipts greater than the $7 
million threshold. Therefore, the watermelon handlers would all be 
considered small businesses. A handler would have to ship more than 38 
million pounds of watermelons to be considered a large entity 
(38,674,033 times $.181 f.o.b. equals $7 million).
    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 
2012, the United States imported watermelons worth over $237 million. 
The largest volume of watermelon imports came from Mexico, which 
accounted for 86 percent of the total volume in 2012. Other suppliers 
of imported watermelons are Guatemala--at 9 percent, and Honduras--at 2 
percent. The remaining 3 percent of imported watermelons came from 
Costa Rica, Nicaragua, Canada, Dominican Republic, and Panama.
    Based on U.S. Customs and Border Protection (Customs) and Board 
data, it is estimated that there are about 201 importers of watermelon. 
Not all of these importers are required to pay assessments under the 
program. Using 2012 Customs data, all of the importers import less than 
$7.0 million worth of watermelon annually. Therefore, all of the 
watermelon importers would be considered small entities.
    The Board's audit records show import assessments for the calendar 
years 2010, 2011, and 2012 at $746,043, $855,890, and $824,897, 
respectively. Based on this data, the three-year average of import 
assessments for watermelon totals $808,943 ($2,426,830 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 that increased 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 an individual who 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 who 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. Of the 137 importers required to 
pay assessments, 42 also handle domestically produced watermelons and 
would be eligible to serve as either a 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 watermelons be counted as an importer only 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 or more requirement 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 importer 
members. Individuals who both handle and import will be allowed to 
choose which part of the industry they wish to represent, regardless of 
the volume handled or imported. The industry believes that this change 
will increase importer representation on the Board by allowing more 
individuals to be eligible to serve. This action may also increase 
diversity on the Board.
    The Board considered a second alternative, which was to change 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 found this 
purpose better served if they eliminated the percentage requirement 
altogether. Eliminating the percentage requirement for the importer 
member will allow for smaller importer businesses to become eligible to 
serve as importer members on the Board.
    Additional revisions are made to remove unnecessary language in 
section 1210.363(b) of the Plan and section 1210.602(a) of the 
regulations. The language pertains to the conduct of referenda and is 
no longer applicable as a result of the Watermelon Research and 
Promotion Improvement Act of 1993 amendments to the Watermelon Research 
and Promotion Act.

[[Page 17851]]

    As well, section 1210.404(g) of the regulations, which references 
importer eligibility requirements, is amended to conform to language 
amending section 1210.363(b) of the Plan that has been approved in 
referendum.
    In accordance with the Office of Management and Budget (OMB) 
regulation [5 CFR part 1320] that implements the Paperwork Reduction 
Act of 1995 [44 U.S.C. Chapter 35], the information collection and 
recordkeeping requirements that are imposed by the Plan have been 
approved previously and assigned OMB number 0581-0093, except that the 
Board member background questionnaire has been approved under OMB 
number 0505-0001.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other programs.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    Additionally, the estimated numbers in the RFA represent the total 
universe of watermelon producers, handlers, and importers--not only 
those who were eligible to vote in the referendum.

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 reports. Importers are 
responsible for payment of assessments to the Board on watermelons 
imported into the United States through the U.S. Customs and Border 
Protection. This action has no 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 an individual who both handles and imports watermelons 
may vote for importer members and serve as an importer member only 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 
who 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. Of the 137 importers required to pay assessments, 42 
also handle watermelons and would be eligible to serve as either a 
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 is counted as an importer only 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 or more requirement 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 importers. 
Individuals who both handle and import will be allowed to choose which 
part of the industry they wish to represent, regardless of the volume 
handled or imported. The Board believes that this change will increase 
the importer representation on the Board by allowing more individuals 
to be eligible to serve. This action may also increase diversity on the 
Board.
    Accordingly, this rule amends section 1210.321(d) of the Plan to 
specify that a person who both imports and handles watermelons may 
participate in the nomination process and serve on the Board as either 
an importer or handler, but not both. The change to this section was 
the only section voted on and approved in the referendum.
    Notwithstanding the discussion that appeared in the proposed rule 
published at 78 FR 64408, a conforming change is made to section 
1210.404(g) in Subpart B--Nominating Procedures of Part 1210. This 
section also pertains to importer eligibility requirements for Board 
representation.
    Pursuant to Section 1654 of the Act, section 1210.363(b) is amended 
to remove language that no longer effectuates the purpose of the Act. 
Specifically, the sentences concerning counting votes as producer, 
handler, or importer votes based on volume are terminated in accordance 
with section 1654(a) of the Act. Section 1210.363(b) pertains to 
referenda to suspend or terminate the Plan or any provision thereof. 
The language removed did not affect the way the amendatory referendum 
was conducted or how the results were determined.
    A conforming change is made to section 1210.602(a) of Subpart D--
Referendum Procedures of the Plan to remove similar language. This also 
no longer effectuates the purpose of the Act.
    The Department published the proposal for public comment in the 
February 13, 2013, Federal Register [78 FR 10104]. The comment period 
ended March 15, 2013. Sixteen comments were received by the deadline. 
These comments were discussed in the October 29, 2013, proposed rule 
published in the Federal Register [78 FR 64408], which included a 
referendum order.

General Findings

    As previously mentioned, the Department conducted a referendum 
among eligible watermelon producers, handlers, and importers from 
January 13, 2014, through January 27, 2014, to determine whether they 
favor amending the Plan's importer member requirements to serve on the 
Board. The representative period for establishing voter eligibility was 
January 1, 2012, through December 31, 2012. Producers of 10 or more 
acres of watermelon, watermelon handlers, importers of 150,000 or more 
pounds of watermelons annually, and importers who import less than 
150,000 pounds of watermelons annually and did not apply for and 
receive assessment reimbursements during the representative period were 
eligible to vote in the referendum. Additionally, eligible voters had 
to be currently engaged in the business of producing, handling or 
importing watermelons.

[[Page 17852]]

Seventy-four percent of those voting favored the amendment to the Plan.
    After consideration of all relevant matters presented, including 
the Board's recommendation, the comments received, and the referendum 
results, it is hereby found that amending section 1210.321(d) of the 
Plan and section 1210.404 of the regulations will tend to effectuate 
the declared policy of the Act. It is further found that the sentences 
concerning counting votes as producer, handler, or importer votes in 
section 1210.363(b) of the Plan and in section 1210.602(a) of the 
regulations in Subpart D--Referendum Procedures, do not effectuate the 
declared policy of the Act, and they are hereby terminated.

Additional Finding

    Pursuant to 5 U.S.C. 553, it is also found that good cause exists 
for not postponing the effective date of this action until 30 days 
after publication in the Federal Register because this action needs to 
be in effect as soon as possible to allow sufficient time for 
completion of the nomination process and appointments for the term of 
office beginning January 1, 2015. Further, the amendment was approved 
in a referendum of producers, handlers, and importers.

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 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. In Sec.  1210.321, paragraph (d) is revised to read as follows:


Sec.  1210.321  Nomination and selection.

* * * * *
    (d) Nominations for importer 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. A person who both imports and handles watermelons may 
participate in the nomination process and serve on the Board as either 
an importer or handler, but not both.
* * * * *

0
3. In Sec.  1210.363, paragraph (b) is revised 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. Any such referendum shall be conducted by mail 
ballot.

0
4. In Sec.  1210.404, revise paragraph (g) to read as follows:


Sec.  1210.404  Importer member nomination and selection.

* * * * *
    (g) A person who both imports and handles watermelons may 
participate in the nomination process and serve on the Board as either 
an importer or handler, but not both.

0
5. In Sec.  1210.602, paragraph (a) is revised 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.
* * * * *

    Dated: March 11, 2014.
Rex A. Barnes,
Associate Administrator.
[FR Doc. 2014-07024 Filed 3-28-14; 8:45 am]
BILLING CODE 3410-02-P