[Federal Register Volume 82, Number 245 (Friday, December 22, 2017)]
[Proposed Rules]
[Pages 60687-60690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27526]


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

  Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / 
Proposed Rules  

[[Page 60687]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1212

[Document Number AMS-SC-16-0124]


Honey Packers and Importers Research, Promotion, Consumer 
Education and Industry Information Order; Change in Producer 
Eligibility Requirements and Implementation of Charges for Past Due 
Assessments

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: This proposal invites comments on revising the eligibility 
requirements for producer representatives on the Honey Packers and 
Importers Board (Board) and prescribing late payment and interest 
charges on past due assessments under the Agricultural Marketing 
Service's (AMS) regulation regarding a national research and promotion 
program for honey and honey products. The Board administers the 
regulations with oversight by the U.S. Department of Agriculture 
(USDA). This proposal would reduce the minimum production requirement 
for producers to serve on the Board from 150,000 to 50,000 pounds 
annually and thereby allow more producers to be eligible to serve on 
the Board. This proposal would also prescribe late payment and interest 
charges on past due assessments to help facilitate program 
administration. Both of these actions were unanimously recommended by 
the Board.

DATES: Comments must be received by January 22, 2018.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments may be submitted on the internet at: 
http://www.regulations.gov or to the Promotion and Economics Division, 
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, Room 
1406-S, Stop 0244, Washington, DC 20250-0244; facsimile: (202) 205-
2800. All comments should reference the document number and the date 
and page number of this issue of the Federal Register and will be made 
available for public inspection, including name and address, if 
provided, in the above office during regular business hours or it can 
be viewed at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Sue Coleman, Marketing Specialist, 
Promotion and Economics Division, Specialty Crops Program, AMS, USDA, 
1400 Independence Avenue SW, Room 1406-S, Stop 0244, Washington, DC 
20250-0244; telephone: (503) 633-4330; facsimile: (202) 205-2800; or 
electronic mail: [email protected].

SUPPLEMENTARY INFORMATION: This proposal affecting 7 CFR part 1212 is 
authorized under the Commodity Promotion, Research, and Information Act 
of 1996 (1996 Act) (7 U.S.C. 7411-7425).

Executive Orders 12866, 13563, and 13771

    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, reducing costs, harmonizing rules and promoting flexibility. 
This action falls within a category of regulatory actions that the 
Office of Management and Budget (OMB) exempted from Executive Order 
12866 review. Additionally, because this rule does not meet the 
definition of a significant regulatory action it does not trigger the 
requirements contained in Executive Order 13771. See OMB's Memorandum 
titled ``Interim Guidance Implementing Section 2 of the Executive Order 
of January 30, 2017 titled `Reducing Regulation and Controlling 
Regulatory Costs' '' (February 2, 2017).

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 reveals that this regulation would not 
have substantial and direct effects on Tribal governments and would not 
have significant Tribal implications.

Executive Order 12988

    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. It is not intended to have retroactive effect. Section 
524 of the 1996 Act (7 U.S.C. 7423) provides that it 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 (7 U.S.C. 7418), a person subject 
to an order may file a written petition with USDA stating that an 
order, any provision of an order, or any obligation imposed in 
connection with an order, is not established in accordance with the 
law, and request a modification of an order or an exemption from an 
order. Any petition filed challenging an order, any provision of an 
order, or any obligation imposed in connection with an order, shall be 
filed within two years after the effective date of an order, provision, 
or obligation subject to challenge in the petition. The petitioner will 
have the opportunity for a hearing on the petition. Thereafter, USDA 
will 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 have 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 the 
entry of USDA's final ruling.

Background

    This proposal invites comments on revising the eligibility 
requirements for producer representatives on the Board and prescribing 
late payment and interest charges on past due assessments under the 
Honey Packers and Importers Research, Promotion, Consumer Education and 
Industry Information Order. The part is administered by the Board with 
oversight by USDA. Under the part, assessments are collected from first 
handlers and importers and used for research and promotion projects 
designed to maintain and expand the market for honey and honey products 
in the United States and abroad. This proposal would reduce the minimum 
production requirement for producers to serve on the Board from 150,000 
to

[[Page 60688]]

50,000 pounds annually and thereby allow more producers to be eligible 
to serve on the Board. This proposal would also prescribe late payment 
and interest charges on past due assessments to help facilitate program 
administration. Both of these actions were unanimously recommended by 
the Board in April 2016.

Producer Eligibility Requirements

    Section 1212.46 of the part provides authority for the Board to 
recommend amendments to the part. Section 1212.40 of the part provides 
that the Board have ten members--three first handlers, two importers, 
one importer-handler, three producers, and one marketing cooperative 
representative. Currently, eligible producers must produce a minimum of 
150,000 pounds of honey in the United States annually based on the best 
three-year average of the most recent five calendar years.
    The Board has had difficulty over the past few years in identifying 
honey producers who meet the current eligibility requirement for 
production volume. U.S. honey production has decreased and fewer 
producers can meet the part's eligibility requirement. USDA's National 
Agricultural Statistics Service estimates U.S. honey production from 
producers with 5 or more colonies at 164 million pounds in 2008 \1\ and 
at 156 million pounds in 2015.\2\ The Board has been having 
difficulties identifying producer nominees who produce over the 150,000 
pound threshold.
---------------------------------------------------------------------------

    \1\ USDA, National Agricultural Statistics Service, Honey Final 
Estimates 2008-2012, September 2014, p. 4; http://usda.mannlib.cornell.edu/usda/nass/SB1039/sb1039.pdf.
    \2\ USDA, National Agricultural Statistics Service, Honey, March 
22, 2017, p. 2, http://usda.mannlib.cornell.edu/usda/current/Hone/Hone-03-22-2017.pdf.
---------------------------------------------------------------------------

    Thus, the Board formed a subcommittee in October 2015 to review 
this issue. Over the following six months, the Board conducted outreach 
with beekeeping associations to gather input about the need and the 
level to reduce the annual production volume requirement for producers 
to serve on the Board. The recommendation from the associations to the 
subcommittee was that the minimum production requirement for producers 
be set at 50,000 pounds to increase the pool of eligible producers.
    The Board met in April 2016 and unanimously recommended that the 
part's minimum production requirement for producers be reduced from 
150,000 to 50,000 pounds. This should allow more producers to be 
eligible to serve on the Board. Section 1212.40 of the part is proposed 
to be revised accordingly.

Charges on Past Due Assessments

    Section 1212.52 of the part specifies that the Board will cover its 
expenses by levying an assessment on first handlers and importers. 
First handlers must pay their assessments to the Board on a monthly 
basis no later than the fifteenth day of the month following the month 
in which the honey or honey products were marketed. Importers must pay 
assessments to the Board on honey and honey products imported into the 
United States through the U.S. Customs and Border Protection (Customs). 
If Customs does not collect an assessment from an importer, the 
importer must pay the assessment directly to the Board.
    The honey program also provides for two exemptions. Pursuant to 
section 1212.53, first handlers and importers who handle or import less 
than 250,000 pounds of honey or honey products annually, and first 
handlers and importers of organic honey and honey products are exempt 
from the payment of assessments.
    Section 1212.52(g) of the part specifies that the Board shall 
impose a late payment charge on any first handler or importer who fails 
to pay their assessments to the Board on time. First handlers or 
importers subject to a late payment charge must also pay interest on 
the unpaid assessments for which they are liable. The late payment and 
interest charges must be prescribed in regulations issued by USDA.
    Assessment funds are used by the Board for activities designed to 
benefit all industry members. Thus, it is important that all assessed 
entities pay their assessments in a timely manner. Entities who fail to 
pay their assessments on time would be able to reap the benefits of 
Board programs at the expense of others. In addition, they would be 
able to utilize funds for their own use that should otherwise be paid 
to the Board to finance Board programs.
    Thus, the Board recommended that rates of late payment and interest 
charges for past due assessments be prescribed in the part's 
regulations. A late payment charge would be imposed upon first handlers 
and importers who fail to pay their assessments to the Board within 30 
calendar days of the date when assessments are due. This one-time late 
payment charge would be 10 percent of the assessments due before 
interest charges have accrued.
    Additionally, interest at a rate of \2/3\ of 1 percent per month on 
the outstanding balance (which computes to an annual rate of 8 
percent), including any late payment and accrued interest, would be 
added to any accounts for which payment has not been received within 30 
calendar days of the date when assessments are due. Interest would 
continue to accrue monthly until the outstanding balance is paid to the 
Board.
    This action is expected to help facilitate program administration 
by providing an incentive for entities to remit their assessments in a 
timely manner, with the intent of creating a fair and equitable process 
among all assessed entities. Accordingly, a new Subpart C would be 
added to the part's regulations regarding past due assessments, and a 
new section 1212.520 would be added to Subpart C.

Initial 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. Accordingly, AMS has considered the economic impact of 
this action on such entities.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so that small businesses will not be 
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 
(first handlers and importers) as those having annual receipts of no 
more than $7.5 million.
    The Board reported that there are about 752 importers and 41 first 
handlers of honey and honey products covered under the program during 
the 2016 fiscal period. Seventeen out of the 41 first handlers (41 
percent) and 25 out of the 752 importers (3 percent) accounted for 90 
percent of the assessments in their respective categories. Total 
assessments for 2016 were $6.74 million, of which $1.75 million (26 
percent) came from first handlers and $4.99 million (74 percent) was 
paid by importers. This data can be used to compute an estimate of 
average annual revenue from honey sales from each of these categories, 
which in turn helps to estimate the number of large and small first 
handlers and importers. As mentioned above, 17 first handlers account 
for 90 percent of the domestic assessments. Multiplying first handler 
assessments in 2016 of $1,750,155 by 0.9 and then dividing by 17 yields 
an average annual assessment of $92,655 for the first handlers in this 
category. Dividing this figure ($92,655) by the assessment rate of 1.5 
cents per pound ($0.015) yields an average quantity per first handler 
of 6.177 million pounds.

[[Page 60689]]

Multiplying 6.177 million pounds by the average 2016 U.S. domestic 
price of $2.08 per pound \3\ yields an average, annual honey revenue 
per handler of $12.85 million, which is well above the SBA threshold of 
$7.5 million. It should be noted that this revenue estimate is based on 
the average price at the producer level, and the $12.85 million is an 
estimate of the total value at which the average size handler acquired 
the honey from producers. Therefore most of the 17 first handlers that 
pay 90 percent of the domestic assessments are likely to be large firms 
according to the SBA definition.
---------------------------------------------------------------------------

    \3\ USDA, NASS, Honey, March 22, 2017, p. 3, http://usda.mannlib.cornell.edu/usda/current/Hone/Hone-03-22-2017.pdf.
---------------------------------------------------------------------------

    An equivalent computation can be made for the 25 importers who paid 
90 percent of the $4,991,926 in assessments in 2016. Of the 25 
importers, the average assessment per importer was $179,709. Dividing 
the average assessment per importer by the assessment rate of $0.015 
per pound yields an average quantity per importer estimate of 11.981 
million pounds.
    For honey imports, the equivalent of the season average price for 
domestic honey is referred to as a ``unit value.'' The unit value of 
$1.24 per pound is computed by dividing annual imported honey value of 
$417.31 million by average quantity of 335.69 million pounds (import 
data from the Foreign Agricultural Service). Multiplying the $1.24 unit 
value by the average quantity of 11.981 million pounds yields average 
annual honey revenue per importer figure of $14.856 million, almost two 
times the SBA threshold figure of $7.5 million for a large firm. 
Therefore the majority of the 25 importers that pay 90 percent of the 
assessments are large firms, according to the SBA definition.
    Comparable computations can be made to determine the average 2016 
honey revenue for the 24 first handlers and 727 importers that paid 10 
percent of the assessments in the first handler and importer 
categories. The first handler and importer average annual honey revenue 
figures are approximately $1,011,000 and $57,000, respectively, 
indicating that the vast majority are small businesses (in terms of 
honey sales), under the SBA large business threshold of $7.5 million in 
annual sales.
    Based on the foregoing, the majority of first handlers and 
importers may be classified as small entities.
    This proposed rule invites comments on relaxing the part's 
eligibility requirements for producer representatives on the Board as 
specified in section 1212.40 of the part. The part currently requires 
that producer representatives produce a minimum of 150,000 pounds of 
honey (based on the best three year average of the most recent five 
calendar years) in the United States annually. U.S. honey production 
has been decreasing and fewer producers can meet this eligibility 
requirement. Thus, the Board unanimously recommended reducing the 
minimum production requirement from 150,000 to 50,000 pounds annually. 
This would allow for a greater pool of producer nominees to be eligible 
to serve on the Board. Authority for this action is provided in section 
1212.46(d) of the part.
    This proposal would also prescribe charges for past due assessments 
under the part. A new section 1212.520 would be added to the part 
specifying a one-time late payment charge of 10 percent of the 
assessments due and interest at a rate of \2/3\ of 1 percent per month 
(or 8 percent on an annual basis) on the outstanding balance, including 
any late payment and accrued interest. This section would be included 
in a new Subpart C--Regulations Regarding Past Due Assessments. 
Authority for this action is provided in section 1212.52(g) of the part 
and section 517(e) of the 1996 Act.
    Regarding the economic impact of the proposed rule on affected 
entities, relaxing the eligibility requirements for producer 
representatives on the Board is administrative in nature and would have 
no economic impact on entities covered under the program. This change 
would help increase the number of producers who would be eligible to 
serve on the Board. Eligible producers, first handlers and importers 
interested in serving on the Board would have to complete a background 
questionnaire. Those requirements are addressed later in this proposal 
in the section titled Reporting and Recordkeeping Requirements.
    Prescribing charges for past due assessments would impose no 
additional costs on first handlers and importers who pay their 
assessments on time. It merely provides an incentive for entities to 
remit their assessments in a timely manner. For all entities who are 
delinquent in paying assessments, both large and small, the charges 
would be applied uniformly. As for the impact on the industry as a 
whole, this action would help facilitate program administration by 
providing an incentive for entities to remit their assessments in a 
timely manner, with the intent of creating a fair and equitable process 
for all assessed entities.
    Additionally, as previously mentioned, the part also provides for 
two exemptions. First handlers and importers who handle or import less 
than 250,000 pounds of honey or honey products annually, and first 
handlers and importers of organic honey and honey products are exempt 
from the payment of assessments.
    Regarding alternatives, one option to the proposed action regarding 
producer eligibility would be to maintain the status quo and not reduce 
the production threshold for producers to be eligible to serve on the 
Board. However, the Board has been having difficulty identifying 
producer nominees who produce over 150,000 pounds of honey annually. 
After outreach to beekeeping associations, the Board concluded that 
reducing the minimum production requirement for producers from 150,000 
to 50,000 pounds annually would be appropriate to increase the pool of 
eligible producers.
    Likewise, an alternative to the proposed action to prescribe late 
payment and interest charges for past due assessments would be to 
maintain the status quo and not prescribe these charges. However, the 
Board determined that implementing such charges would help facilitate 
program administration by encouraging entities to pay their assessments 
in a timely manner. The Board reviewed rates of late payment and 
interest charges prescribed in other research and promotion programs 
and concluded that the late payment charge and the interest charge 
contained in this proposal would be appropriate.

Reporting and Recordkeeping Requirements

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection requirements that are imposed 
by the part have been previously approved by OMB under OMB control 
number 0581-0093. Additionally, Board nominees (including producers) 
must submit a Background Information form (AD-755) to ensure they are 
qualified to serve on the Board. The time to complete that form is 
estimated at 30 minutes per response. The background form is approved 
under OMB control no. 0505-0001. This proposed rule would not result in 
a change to the information collection and recordkeeping requirements 
previously approved and would impose no additional reporting 
requirements and recordkeeping burden on honey producers, first 
handlers or importers.
    As with all Federal promotion programs, reports and forms are

[[Page 60690]]

periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies. Finally, USDA has 
not identified any relevant Federal rules that duplicate, overlap, or 
conflict with this proposed rule.
    Regarding outreach efforts, as previously mentioned, this action 
was discussed at a subcommittee in October 2015. The Board conducted 
outreach over the following six months to beekeeping associations to 
gather input about the need to reduce the annual production volume 
requirement for eligible producers on the Board. The Board met in April 
2016 and unanimously recommended reducing the production volume 
requirement from 150,000 to 50,000 pounds annually. The Board also 
recommended prescribing late payment charges and interest on past due 
assessments in the part's regulations. All of the Board's meetings are 
open to the public and interested persons are invited to participate 
and express their views.
    AMS has performed this initial RFA regarding the impact of this 
proposed action on small entities and invites comments concerning 
potential effects of this action.
    USDA has determined that this proposed rule is consistent with and 
would effectuate the purposes of the 1996 Act.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposal. Thirty days is deemed appropriate because 
this action would relax the minimum production requirement for 
producers to serve on the Board, thereby allowing more producers to be 
eligible to serve on the Board. This action would also prescribe late 
payment and interest charges for past due assessments which would 
facilitate the collection of assessments under the program. All written 
comments received in response to this proposed rule by the date 
specified will be considered prior to finalizing this action.

List of Subjects in 7 CFR Part 1212

    Administrative practice and procedure, Advertising, Consumer 
information, Honey Packer and Importer promotion, Marketing agreements, 
Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, 7 CFR part 1212 is 
proposed to be amended as follows:

PART 1212--HONEY PACKERS AND IMPORTERS RESEARCH, PROMOTION, 
CONSUMER EDUCATION AND INDUSTRY INFORMATION ORDER

0
1. The authority citation for 7 CFR part 1212 continues to read as 
follows:

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

0
2. Section 1212.40 is revised to read as follows:


Sec.  1212.40   Establishment and membership.

    The Honey Packers and Importers Board is established to administer 
the terms and provisions of this part. The Board shall have ten 
members, composed of three first handler representatives, two importer 
representatives, one importer-handler representative, three producer 
representatives, and one marketing cooperative representative. The 
importer-handler representative must import at least 75 percent of the 
honey or honey products they market in the United States and handle at 
least 250,000 pounds annually. In addition, the producer 
representatives must produce a minimum of 50,000 pounds of honey in the 
United States annually based on the best three-year average of the most 
recent five calendar years, as certified by producers. The Secretary 
will appoint members to the Board from nominees submitted in accordance 
with Sec.  1212.42. The Secretary shall also appoint an alternate for 
each member.
0
3. Subpart C--Regulations Regarding Past Due Assessments is added to 
read as follows:

Subpart C--Regulations Regarding Past Due Assessments


Sec.  1212.520   Late payment and interest charges for past due 
assessments.

    (1) A late payment charge will be imposed on any first handler or 
importer who fails to make timely remittance to the Board of the total 
assessments for which they are liable. The late payment will be imposed 
on any assessments not received within 30 calendar days of the date 
when assessments are due. This one-time late payment charge will be 10 
percent of the assessments due before interest charges have accrued.
    (2) In addition to the late payment charge, \2/3\ of 1 percent per 
month (or an annual rate of 8 percent) interest on the outstanding 
balance, including any late payment and accrued interest, will be added 
to any accounts for which payment has not been received within 30 
calendar days of the date when assessments are due. Interest will 
continue to accrue monthly until the outstanding balance is paid to the 
Board.

    Dated: December 18, 2017.
Bruce Summers,
Acting Administrator.
[FR Doc. 2017-27526 Filed 12-21-17; 8:45 am]
 BILLING CODE 3410-02-P