[Federal Register Volume 83, Number 50 (Wednesday, March 14, 2018)]
[Rules and Regulations]
[Pages 11136-11139]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-05063]



[[Page 11136]]

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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: Final rule.

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SUMMARY: This rule revises the eligibility requirements for producer 
representatives on the Honey Packers and Importers Board (Board) and 
prescribes 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. 
This rule reduces the minimum production requirement for producers to 
serve on the Board and thereby allow more producers to be eligible to 
serve on the Board. This rule also prescribes late payment and interest 
charges on past due assessments to help facilitate program 
administration.

DATES: Effective Date: April 13, 2018.

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: (202)378-2569; facsimile: (202) 205-2800; or 
electronic mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule 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 rule 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 rule revises the eligibility requirements for producer 
representatives on the Board and prescribes 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 rule reduces 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 rule also prescribes late payment and interest charges on past due 
assessments to help facilitate program administration. Both of these 
actions were unanimously recommended by the Board.

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.
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    \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.
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    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

[[Page 11137]]

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 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 
Sec.  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 will 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 will 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, 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.
    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 is added to 
the part's regulations regarding past due assessments, and a new Sec.  
1212.520 is added to subpart C.

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

[[Page 11138]]

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 rule relaxes the part's eligibility requirements for producer 
representatives on the Board as specified in section 1212.40 of the 
part. The program 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 will allow for a greater 
pool of producer nominees to be eligible to serve on the Board. 
Authority for this action is provided in Sec.  1212.46(d) of the part.
    This rule also prescribes charges for past due assessments under 
the part. A new Sec.  1212.520 is 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 is included in a new subpart C--Past 
Due Assessments. Authority for this action is provided in Sec.  
1212.52(g) of the part and section 517(e) of the 1996 Act.
    Regarding the economic impact of this rule on affected entities, 
relaxing the eligibility requirements for producer representatives on 
the Board is administrative in nature and will have no economic impact 
on entities covered under the program. This change will help increase 
the number of producers who will be eligible to serve on the Board. 
Eligible producers, first handlers and importers interested in serving 
on the Board will have to complete a background questionnaire. Those 
requirements are addressed later in this rule in the section titled 
Reporting and Recordkeeping Requirements.
    Prescribing charges for past due assessments will 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 
will be applied uniformly. As for the impact on the industry as a 
whole, this action will 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 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 is appropriate to increase the pool of 
eligible producers.
    Likewise, an alternative to the 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 will 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 rule is 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 rule will not result in a change 
to the information collection and recordkeeping requirements previously 
approved and will 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 
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 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.
    A proposed rule concerning this action was published in the Federal 
Register on December 22, 2017 (82 FR 60687). The Board sent the 
proposed rule directly to beekeeping associations, the Board, and 
assessment payers. Additionally, the Board included notification about 
the proposal and internet links in its industry newsletter. Finally, 
the proposal was made available through the internet by USDA and the 
Office of the Federal Register. A 30-day comment period ending January 
22, 2018, was provided to allow interested persons to submit comments.

Analysis of Comment

    One comment was received in response to the proposed rule. The 
comment requested two public seats on the Board because of taxpayer 
dollars and environmental concerns. Currently, the plan does not 
authorize a Board public member. The national research and promotion 
program for honey and honey products is funded through assessments paid 
by honey first handlers and importers. This comment is considered 
outside the scope. These types of concerns can be presented to the 
Board for their consideration. In addition, all Board meetings are open 
to the public to attend. No changes have been made to the rule based on 
this comment.
    After consideration of all relevant matters presented, including 
the information and recommendation

[[Page 11139]]

submitted by the Board and other available information, it is hereby 
found that this rule, as hereinafter set forth, is consistent with and 
will effectuate the purposes of the 1996 Act.

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 
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 is added to read as follows:

Subpart C--Past Due Assessments


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

    (a) 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.
    (b) 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: March 8, 2018.
Bruce Summers,
Acting Administrator.
[FR Doc. 2018-05063 Filed 3-13-18; 8:45 am]
 BILLING CODE 3410-02-P