[Federal Register Volume 85, Number 145 (Tuesday, July 28, 2020)]
[Rules and Regulations]
[Pages 45303-45306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15412]



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 Rules and Regulations
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  Federal Register / Vol. 85 , No. 145 / Tuesday, July 28, 2020 / Rules 
and Regulations  

[[Page 45303]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1200

[Doc. No. AMS-SC-19-0105]


Administrative Procedures Governing Formulation of a Research and 
Promotion Order

AGENCY: Agricultural Marketing Service, Agriculture (USDA).

ACTION: Final rule.

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SUMMARY: This rule establishes procedures to govern the formulation of 
new research and promotion programs--or orders--under the Commodity 
Promotion, Research, and Information Act of 1996 (Act). Research and 
promotion programs are administered by boards or councils with 
oversight by the United States Department of Agriculture (USDA). This 
rule specifies the process for proposing such programs to USDA. It also 
clarifies that USDA's Agricultural Marketing Service (AMS) will 
continue to require associations of producers or individuals proposing 
new programs to post a bond or other collateral to reimburse USDA for 
the costs of program development.

DATES: Effective date: August 27, 2020.

FOR FURTHER INFORMATION CONTACT: Heather Pichelman, Promotion and 
Economics Division, Specialty Crops Program, AMS, USDA, 1400 
Independence Avenue SW, Room 1406-S, Stop 0244, Washington, DC 20250-
0244; telephone: (202) 720-9915; facsimile: (202) 205-2800; or 
electronic mail: [email protected].

SUPPLEMENTARY INFORMATION: As authorized under the Act, this final rule 
adds a new subpart D to 7 CFR part 1200--Rules of Practice and 
Procedure Governing Proceedings Under Research, Promotion, and 
Information Programs. Subpart D addresses procedures specific to the 
formulation of new programs under the Act.

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. 7 U.S.C. 
7423 provides that the Act shall not affect or preempt any other 
Federal or State law authorizing promotion or research relating to an 
agricultural commodity.

Background

    This final rule establishes procedures to govern the formulation of 
new research and promotion programs under the Act. This rule also 
clarifies that AMS will continue to require associations of producers 
or individuals proposing new programs to post a bond or other 
collateral to reimburse USDA for the costs of program development.
    Title 7 U.S.C. 7413(b)(1)(B) authorizes associations of producers 
of an agricultural commodity or other individuals to petition USDA to 
establish a research, promotion, and/or information program with 
respect to that commodity. The purpose of such programs is to provide a 
framework for agricultural industries to pool their resources and 
combine efforts to develop new markets, strengthen existing markets, 
and conduct important research and promotion activities. See 7 U.S.C. 
7411(b).
    USDA's Agricultural Marketing Service (AMS) oversees these 
programs. With this final rule, AMS is establishing the following 
procedures for formulating new programs so interested parties are aware 
of the process and requirements.
    Under Sec.  1200.202(a), an industry association or individuals may 
file a written proposal for a new research and promotion program with 
the AMS Administrator (Administrator). Under Sec.  1200.202(b), the 
Administrator will consider whether there is broad industry support for 
the proposed program and whether proposed provisions of the program are 
authorized under the Act. The Administrator will also evaluate 
anticipated benefits to the industry and the economic feasibility of 
the program. Finally, the Administrator will consider whether the 
proposed program would tend to effectuate the declared policy of the 
Act. Under Sec.  1200.202(c), if the Administrator determined that the 
program will not effectuate the policy of the Act, AMS will deny the 
proposal and would notify the proponent(s), explaining the grounds for 
denial. Under Sec.  1200.202(d), if the Administrator determined that 
the proposed program will likely effectuate the purposes of the Act by 
benefitting producers, handlers, and importers of the commodity, or 
others in the marketing chain, the Administrator will notify the 
proponent(s) that AMS will proceed with program development and, in 
accordance with Sec.  1200.204, the proponent(s) will be required to 
post a bond or other collateral to cover AMS expenses to develop the 
program.
    The Act provides that once a board is established under an order, 
the Secretary of Agriculture (Secretary) must be reimbursed for all 
expenses incurred in the implementation,

[[Page 45304]]

administration, and supervision of the order, including all referenda 
costs incurred in connection with the order. The board uses assessment 
funds collected from regulated entities to reimburse the Secretary for 
program oversight.
    However, AMS incurs substantial expenses in the development process 
leading to program establishment. AMS may conduct industry outreach 
meetings, solicit public input, analyze economic data, draft rulemaking 
documents, and conduct initial referenda. These activities are 
necessary to progress toward program establishment. Typical expenses 
for these preliminary activities may include, but not be limited to, 
employee time and travel, supplies, printing, and mailing.
    In some cases, the proponent industry may elect to defer an initial 
referendum for up to three years after the program is established. In 
other cases, despite all efforts of the proponent and AMS to develop a 
new program, ultimately the proposed program may not be established. 
Nevertheless, under either of these scenarios, AMS will have already 
incurred expenses related to program development.
    Section 7417(a)(2) of the Act provides that the Secretary can 
require the industry seeking a new program to post a bond or other 
collateral to cover the cost of the initial referendum. In Sec.  
1200.201, this rule defines cost of the referendum to mean all the 
expenses AMS incurs in the development of a potential new program, 
including the cost of conducting an initial referendum.
    The amount of the bond or collateral required under Sec.  1200.204 
will be based on unique factors like the projected number of staff 
hours involved, the amount of staff travel necessary for outreach, the 
size and complexity of the proposed program, and the number of industry 
members to be polled in an initial referendum. This will ensure that 
AMS will be reimbursed on a timely basis for all expenses related to 
program development, even if the initial referendum is deferred or if 
the program is not established.
    Section 1200.202(e) of this rule specifies that once AMS has worked 
with industries or individuals to develop a proposed order, AMS will 
publish the proposal in the Federal Register to allow public comments 
on the proposed program. Based on comments, AMS will determine whether 
to proceed with program establishment.
    Under Sec.  1200.203 of this rule, if AMS determined to proceed 
with program establishment, the Administrator could conduct an initial 
referendum among the producers, handlers, and importers who would be 
subject to assessment under the program in order to determine whether 
they favor establishment of the program. The Act provides that USDA 
could also establish the program and defer the initial referendum for 
up to three years after the program is established. See 7 U.S.C. 
7417(b). In either case, referendum voters will be those entities who, 
during a representative period determined by the Administrator, 
produced, handled, and/or imported the agricultural commodity. For 
referendum expenses incurred after a program is established, the 
Secretary will be reimbursed by the board appointed to administer the 
program, as provided by the Act. See 7 U.S.C. 7417(f).
    Under Sec.  1200.205 of this rule, if at any time during the 
development process, based on public comments, referendum votes, or 
other information available, AMS determines that the proposed program 
will not tend to effectuate the policy of the Act, the Administrator 
will terminate proceedings and will collect reimbursement for program 
development expenses from the bond or collateral posted by the program 
proponent(s).
    This rule will also make other administrative provisions related to 
the establishment of a new program. Section 1200.201 will define other 
terms necessary for administration of the regulation. Section 1200.206 
will provide for the issuance, effectuation, and publication of the new 
order.

Final Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) requires 
agencies to consider the economic impact of each rule on small 
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 purpose of research and 
promotion programs is to benefit all sizes of producers, handlers, and 
importers of an agricultural commodity.
    The Act makes it possible for producer associations or other 
individuals engaged in specific agricultural commodity industries to 
submit a proposal for a new program. It is impossible for AMS to 
determine which industries may seek research and promotion programs in 
the future or to determine the number or size of business entities that 
might propose such programs. The expenses necessary for each program's 
development depend on factors such as projected staff hours to develop 
the program, travel expenses related to outreach, size and complexity 
of the proposed program, and the size of the industry to be polled in a 
referendum. Based on its experience with past program proposals, AMS 
estimates that expenses for typical program development range from 
$80,000 to $150,000. Thus, under this rule, proponents could be 
required to post bonds or other collateral to cover those amounts if 
AMS agrees to proceed with program development. Costs to individuals or 
businesses will depend on the number of entities in each proponent 
group. Given that we don't know the identity or business size of future 
program proponents, AMS cannot determine what economic impact this rule 
might have on small entities. Based on experience with proponents 
seeking to establish new programs under the Act, AMS believes that this 
rule is unlikely to have a significant economic impact on a substantial 
number of small entities.
    There will be no new direct costs associated with the 
implementation of this rule. This rule codifies procedures for 
proposing new research and promotion programs that have been practiced 
since the Act's adoption in 1996. In addition to specifying the program 
proposal process, the rule clarifies that the cost of the referendum to 
be covered by the required bond or collateral would include all the 
costs associated with program development.

Paperwork Reduction Act

    No information collection or recordkeeping requirements are imposed 
on the public by this rule. Accordingly, OMB clearance is not required 
by the Paperwork Reduction Act of 1995, 44 U.S.C. 3501, Chapter 35.
    As with all Federal research and promotion programs, reports and 
forms are periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.

E-Government Act

    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 purposes.
    A proposed rule concerning this action was published in the Federal 
Register on April 27, 2020 (85 FR 23246). A 30-day comment period 
ending on May 27, 2020, was provided to allow interested persons to 
respond to the proposal. The proposal was also

[[Page 45305]]

made available through the internet by USDA and the Office of the 
Federal Register.

Analysis of Comments

    Two comments were received in response to the proposed rule. Of 
those comments, only one was substantive and related to this proposed 
rule. This commenter expressed a concern about the proposal. The 
commenter called the proposed rule a ridiculous idea.
    AMS initiated this rule because it incurs substantial expenses in 
the development process leading to program establishment. The Act 
already requires the Secretary to be reimbursed for all expenses 
incurred in the implementation, administration, and supervision of the 
order, including all referenda costs incurred in connection with the 
order after a board has been established. This rule added expenses AMS 
incurs to develop a program to this requirement.
    AMS has been requiring associations of producers or individuals 
proposing new programs to post a bond or other collateral to reimburse 
USDA for the costs of program development. This rule codifies this 
procedure, along with others, for proposing new research and promotion 
programs. These procedures have been practiced since the Act's adoption 
in 1996. Therefore, no changes have been made to this rule based on the 
comment.
    A definition of ``Secretary'' has been added to the Definitions 
section to provide clarity.
    After consideration of all relevant matters presented, including 
the information and recommendation submitted by the Board, the comments 
received, and other relevant information, it is hereby found that this 
rule, as hereinafter set forth, is consistent with and would effectuate 
the purposes of the Act.

List of Subjects in 7 CFR Part 1200

    Administrative practice and procedure, Agricultural research, 
Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, AMS amends 7 CFR part 
1200 as follows:

PART 1200--RULES OF PRACTICE AND PROCEDURE GOVERNING PROCEEDINGS 
UNDER RESEARCH, PROMOTION, AND INFORMATION PROGRAMS

0
1. The authority citation for part 1200 continues to read as follows:

    Authority: 7 U.S.C. 2101-2119, 2611-2627, 2701-2718, 2901-2911, 
4501-4514, 4801-4819, 4901-4916, 6101-6112, 6301-6311, 6401-6417, 
7411-7425, 7481-7491, and 7801-7813.


0
2. Add subpart D, consisting of Sec. Sec.  1200.200 through 1200.206, 
to read as follows:

Subpart D--Administrative Procedures Governing Formulation of a 
Research and Promotion Order

Sec.
1200.200 General.
1200.201 Definitions.
1200.202 Proposals.
1200.203 Initial referendum.
1200.204 Reimbursement of Secretary's expenses.
1200.205 Termination of proceedings.
1200.206 Execution of the order.

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


Sec.  1200.200   General.

    The terms defined/specified in this subpart shall apply to all 
research and promotion programs authorized under the Act.


Sec.  1200.201   Definitions.

    Act means the Commodity Research, Promotion, and Information Act of 
1996 (7 U.S.C. 7411-7425).
    Administrator means the Administrator of the Agricultural Marketing 
Service or any officer or employee of the United States Department of 
Agriculture to whom authority has been delegated or may hereafter be 
delegated to act for the Administrator.
    Cost of the Referendum means all USDA expenditures related to 
development of an order proposal, including, but not limited to, 
salaries, travel, supplies, printing, mailing, and shipping, and any 
costs related to an initial referendum.
    Order means any order which may be issued pursuant to the Act.
    Secretary means the United States Secretary of Agriculture or any 
officer or employee of the United States Department of Agriculture to 
whom authority has been delegated or may hereafter be delegated to act 
for the Secretary.


Sec.  1200.202   Proposals.

    (a) An order may be proposed by any association of producers of an 
agricultural commodity, by any person that may be affected by the 
issuance of an order with respect to an agricultural commodity, or by 
the Secretary. Any person or organization other than the Secretary 
proposing an order shall file with the Administrator a written 
proposal.
    (b) Upon receipt of a proposal, the Administrator shall investigate 
and evaluate the proposal.
    (c) If the proposal is submitted by an association of producers of 
the agricultural commodity or by any person that may be affected by the 
issuance of an order, and the investigation and consideration lead the 
Administrator to conclude that the proposed order will not tend to 
effectuate the declared policy of the Act, the Administrator shall deny 
the proposal. The Administrator will promptly notify the proponent(s) 
of such denial, which will be accompanied by a brief statement of the 
grounds for the denial.
    (d) If the proposal was submitted by an association of producers of 
the agricultural commodity or by any person that may be affected by the 
issuance of an order and the investigation and consideration lead the 
Administrator to conclude that an order will tend to effectuate the 
declared policy of the Act, the Administrator will promptly notify the 
proponent(s) of such conclusion, and the proponent(s) will be required 
to post a bond or other collateral in accordance with Sec.  1200.204.
    (e) If the Administrator concludes that an order will tend to 
effectuate the declared policy of the Act, the Administrator shall 
publish the proposed order in the Federal Register and give due notice 
and opportunity for public comment on the proposed order.


Sec.  1200.203   Initial referendum.

    For the purpose of ascertaining whether the persons to be covered 
by an order favor the order going into effect, the Administrator may 
conduct an initial referendum among persons to be subject to an 
assessment under the order who, during a representative period 
determined by the Administrator, engaged in the production or handling 
of the agricultural commodity or the importation of the agricultural 
commodity.


Sec.  1200.204   Reimbursement of Secretary's expenses.

    The Administrator may require any person or organization proposing 
an order to post a bond or other collateral to cover the cost of the 
referendum as defined in Sec.  1200.201.


Sec.  1200.205   Termination of proceedings.

    If at any time during development of a new program the 
Administrator concludes, based on public comments, referendum votes, or 
other available information, that an order will not tend to effectuate 
the declared policy of the Act, the Administrator shall terminate the 
proceedings and collect reimbursements from the bond or other

[[Page 45306]]

collateral posted pursuant to Sec.  1200.204 for any expenses incurred 
in development of the proposed program.


Sec.  1200.206   Execution of the order.

    (a) Issuance of the order. The Administrator shall, if the 
Administrator finds that it will tend to effectuate the purposes of the 
Act, issue the final order.
    (b) Effective date of order. No order shall become effective in 
less than 30 days after its publication in the Federal Register, unless 
the Administrator, upon good cause found and published with the order, 
fixes an earlier effective date.
    (c) Notice of issuance. After the Administrator issues the order, 
AMS will publish notice of the order's issuance in the Federal 
Register.

Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-15412 Filed 7-27-20; 8:45 am]
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