[Federal Register Volume 85, Number 184 (Tuesday, September 22, 2020)]
[Proposed Rules]
[Pages 59610-59638]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-19031]
[[Page 59609]]
Vol. 85
Tuesday,
No. 184
September 22, 2020
Part II
Department of Agriculture
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Agricultural Marketing Service
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7 CFR Part 1223
Pecan Research, Promotion, and Information Order; Proposed Rule
Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 /
Proposed Rules
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1223
[Document Number AMS-SC-20-0013; PR-A1]
Pecan Research, Promotion, and Information Order
AGENCY: Agricultural Marketing Service.
ACTION: Proposed rule.
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SUMMARY: This proposal invites comments on the establishment of the
Pecan Research, Promotion, and Information Order (Order). The purpose
of the program would be to strengthen the position of pecans in the
marketplace, maintain and expand markets for pecans, and develop new
uses for pecans. The program would be financed by an assessment on
pecan producers and importers. This proposal also invites comments on
the procedures for conducting a referendum to determine whether the
continuation of the proposed Order is favored by domestic producers and
importers of pecans. In addition, this proposal announces the
Agricultural Marketing Service's (AMS) intent to request approval by
the Office of Management and Budget (OMB) of new information collection
requirements to implement the program.
DATES: Comments must be received by November 23, 2020. Pursuant to the
Paperwork Reduction Act (PRA), comments on the information collection
burden that would result from this proposal must be received by
November 23, 2020.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposed rule. All comments must be submitted through
the Federal e-rulemaking portal at http://www.regulations.gov and
should reference the document number, and the date and page number of
this issue of the Federal Register. All comments submitted in response
to this proposed rule will be included in the rulemaking record and
will be made available to the public. Please be advised that the
identity of the individuals or entities submitting comments will be
made public at http://www.regulations.gov.
Pursuant to the PRA, comments regarding the accuracy of the burden
estimate, ways to minimize the burden, including the use of automated
collection techniques or other forms of information technology, or any
other aspect of this collection of information, should be sent to the
above address.
FOR FURTHER INFORMATION CONTACT: Andrea Ricci, Marketing Specialist,
Promotion and Economics Division, Specialty Crops Program, AMS, USDA,
755 E Nees Avenue #25985, Fresno, CA 93720; telephone: (202) 572-1442;
or electronic mail: [email protected].
SUPPLEMENTARY INFORMATION: This proposal is issued pursuant to 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.
Section 519 of the 1996 Act (7 U.S.C. 7418) provides that a person
subject to an order may file a written petition with the U.S.
Department of Agriculture (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, must be filed within two years
after the effective date of an order, provision, or obligation subject
to challenge in the petition. The petitioner would 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 the establishment of the Pecan
Research, Promotion, and Information Order (Order). The program would
be financed by an assessment on producers and importers and would be
administered by a board of industry members selected by the Secretary.
The initial assessment rate would be $0.02 per pound of inshell pecans
and $0.04 per pound of shelled pecans produced within or imported to
the United States. Entities that produce or import less than 50,000
pounds of inshell pecans (25,000 pounds of shelled pecans) on average
for four fiscal periods (the fiscal period for which the exemption is
claimed and the previous three fiscal periods) would be exempt from the
payment of assessments.
The purpose of the program would be to strengthen the position of
pecans in the marketplace, maintain and expand markets for pecans, and
develop new uses for pecans. The proposal was submitted to USDA by the
National Pecan Federation (NPF), an organization representing pecan
growers and shellers across the United States whose mission is to
promote, protect, and improve business conditions for the pecan
industry.
This proposal also invites comments on the procedures for
conducting a referendum to determine whether the continuation of the
proposed Order is favored by domestic producers and importers of
pecans. A referendum would be held among eligible domestic producers
and importers no later than three years after assessments begin to
determine whether they favor continuation of the program. In
[[Page 59611]]
addition, this proposal announces the intent of AMS to request approval
by OMB of new information collection requirements to implement the
program.
Legal Basis for Action
The proposed Order is authorized under the 1996 Act which
authorizes USDA to establish agricultural commodity research and
promotion orders which may include a combination of promotion,
research, industry information, and consumer information activities
funded by mandatory assessments. These programs are designed to
maintain and expand markets and uses for agricultural commodities.
The 1996 Act provides several optional provisions that allow the
tailoring of orders for different commodities. Section 516 of the 1996
Act provides permissive terms for orders, and other sections provide
for alternatives. For example, section 514 of the 1996 Act provides for
orders applicable to (1) producers, (2) first handlers and others in
the marketing chain as appropriate, and (3) importers (if imports are
subject to assessments). Section 516 states that an order may include
an exemption of de minimis quantities of an agricultural commodity;
different payment and reporting schedules; coverage of research,
promotion, and information activities to expand, improve, or make more
efficient the marketing or use of an agricultural commodity in both
domestic and foreign markets; provision for reserve funds; provision
for credits for generic and branded activities; and assessment of
imports.
In addition, section 518 of the 1996 Act provides for referenda to
ascertain approval of an order to be conducted either prior to its
going into effect or within three years after assessments first begin
under the order. Pursuant to section 518 of the Act, an order may also
provide for its approval in a referendum based upon different voting
patterns. Section 515 provides for establishment of a board from among
producers, first handlers and others in the marketing chain as
appropriate, and importers, if imports are subject to assessment.
USDA currently oversees a marketing order for pecans grown in
Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas,
Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma,
South Carolina, and Texas, which is authorized under the Agricultural
Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674). The
purpose of marketing orders, in general, is to stabilize market
conditions, allowing industries to work together to solve marketing
problems, and to improve profitability. The pecan marketing order
authorizes collection of industry data; research and promotion
activities; regulations on grade, size, quality, pack and container;
and is financed by assessments paid by handlers of pecans grown in the
production area.
The purpose of research and promotion programs, in general, 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. The proposed
pecan research and promotion program would be national in scope,
financed by an assessment on pecan producers and importers, and
authorize research and promotion activities. The purpose of the
proposed Order would be to strengthen the position of pecans in the
marketplace, maintain and expand markets for pecans, and develop new
uses for pecans. USDA has not identified any relevant Federal rules
that duplicate, overlap, or conflict with this proposed rule.
Industry Background
The pecan industry is comprised of producers, shellers,
accumulators, wholesalers, and importers that produce, process, and
supply pecans for market. Pecans include any and all varieties or sub
varieties, inshell or shelled of the Genus, species: Carya
illinoinensis. Pecans are grown primarily in Alabama, Arkansas,
Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri,
Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and
Texas. According to the most recent Census of Agriculture (2017), there
are 15,608 operations with bearing acreage of pecans. Bearing acreage
is greatest in Georgia with about 30 percent of the nationwide total,
followed by Texas at 27 percent, Oklahoma at 22 percent, New Mexico at
11 percent, and Arizona at 4 percent. These five states generally
account for about 95 percent of U.S. pecan production.
U.S. Supply and Consumption
Pecans are an alternate bearing crop, causing variability in
production from year to year. Based on data from the National
Agricultural Statistics Service (NASS), the 2014 to 2019 six-year
average of total U.S. pecan production was almost 265 million pounds on
an inshell basis, as shown in Table 1. Together, Georgia and New Mexico
produced more than half of pecan production nationwide.
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[GRAPHIC] [TIFF OMITTED] TP22SE20.023
From 2013 through 2016, pecan production averaged about 263 million
pounds per year, and reached a peak in 2017 at nearly 305 million
pounds. The following year, however, domestic production dropped 21
percent due to the destruction of the Georgia pecan crop by Hurricane
Michael. The trend of U.S. pecan production is depicted in Chart 1.
[GRAPHIC] [TIFF OMITTED] TP22SE20.024
[[Page 59613]]
In 2018, Hurricane Michael swept across the southern half of
Georgia as a Category 3 storm. According to the University of Georgia
Pecan Extension, this storm resulted in a loss of nearly half the
expected 2018 crop and a loss of 17 percent of the state's pecan
acreage. The effects of Hurricane Michael remain present as the 2019
Georgia crop was down nearly 30 percent from the average production of
the six years prior to the storm. Prior to Hurricane Michael, Georgia
was the top pecan-producing state in the U.S. Considering this, along
with the state's recovery efforts, the University of Georgia Pecan
Extension expects Georgia pecan production to rebound in the coming
years. Pecan production nationwide began to increase in 2019, climbing
six percent from 2018.
Table 2 shows U.S. pecan supply and utilization. Domestic
production generally accounts for about 40 percent of the domestic
supply, while imports account for nearly one-third, with beginning
stocks just under 30 percent. Almost all pecans imported into the U.S.
are from Mexico. Of these, 70 percent are shelled, and 30 percent are
inshell.
[GRAPHIC] [TIFF OMITTED] TP22SE20.025
Nearly half of the U.S. supply of pecans is consumed domestically
each year. Per capita consumption has trended upward for the last four
years, reaching a high of 1.20 inshell pounds in 2019. Compared to 2018
and to the 2013 to 2018 six-year average, 2019 per capita consumption
is up 23 percent and 33 percent, respectively.
Exports
The U.S. exports about 24 percent of its pecan supply on average
each year. Shelled pecans make up 60 percent of U.S. pecan exports,
while inshell are 40 percent. Europe and Canada are the primary markets
for shelled pecans with, on average, 49 percent and 24 percent,
respectively, of total shelled exports. In Europe, the largest
consumers of U.S. shelled pecans are the Netherlands, the United
Kingdom, and Germany with 39 percent, 24 percent, and 15 percent,
respectively, of total shelled exports to Europe. On average, about 94
percent of U.S. inshell exports go to Asia. Together, Hong Kong and
China make up 72 percent of the Asian market for inshell pecan exports
from the United States.
Competition
The pecan industry competes with other tree nut industries such as
almonds, pistachios and walnuts. As Table 3 illustrates, sales by
volume of pecans are 95 percent lower than sales of almonds, 74 percent
lower than sales of walnuts, but 40 percent higher than sales of
pistachios.
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[GRAPHIC] [TIFF OMITTED] TP22SE20.026
Prices received by growers, as shown in Table 4, are 25 percent
lower for pecans than for almonds. Compared to other nuts, grower-
received prices for pecans are 18 percent lower than those for
pistachios, but double those for walnuts.
[GRAPHIC] [TIFF OMITTED] TP22SE20.027
Price Trends
Chart 2 shows the trend of prices for pecans from 2013 to 2019. In
recent years, pecan prices were at their highest in 2016 before
dropping in the following two years. Prices increased slightly between
2018 and 2019 but are still down about 12 percent compared to the
average of the previous six years.
[[Page 59615]]
[GRAPHIC] [TIFF OMITTED] TP22SE20.028
Need for a Program
According to the NPF, the greatest challenge the pecan industry is
facing is supply surpassing demand. Data from the International Nut and
Dried Fruit Council and from the research compiled by the Boston
Consulting Group, contracted by the NPF, show that the supply of pecans
may exceed demand by 19 percent in 2028.\1\ The NPF believes the
establishment of a national research and promotion program for pecans
would help the industry address this challenge. NPF concluded that
without a program funded by assessments from both domestically produced
and imported pecans, the industry would not be able to meet the
challenge of the approaching supply and demand imbalance.
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\1\ Based on historic compound annual growth rates (CAGR's) in
global pecan supply and demand for 10 years from 2008 to 2018;
resultant CAGR's of 6 percent for global supply and demand applied
to 2018 estimates to forecast 2028 figures.
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In 2016, the U.S. pecan industry favored the establishment of a
marketing order for pecans grown in Alabama, Arkansas, Arizona,
California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi,
North Carolina, New Mexico, Oklahoma, South Carolina, and Texas. The
program authorizes collection of industry data; research and promotion
activities; regulation of grade, size, quality, pack and container; and
is financed by assessments paid by handlers of pecans grown in the
production area. Over the past several years the marketing order
program has launched marketing campaigns to increase demand for pecans.
According to the NPF, the proposed research and promotion program
will benefit domestic producers and importers of pecans, thereby
justifying the collection of assessments on both domestic production
and imports.
The NPF proposal indicates that imported product accounts for
approximately 39 percent of pecans being supplied to the U.S., with
domestic production accounting for the other 61 percent. With mandatory
assessments being collected only on domestic production, this has
created a gap in the dollars available to fund marketing campaigns
focused on creating increased demand for pecans in the U.S. and
globally. As domestic production and imports increase, the need for a
robust promotion campaign is apparent, which would only be accomplished
with both domestic producers and importers contributing financially.
The NPF concluded that the marketing order would continue to have an
important role within the industry and the intent is that the two
programs would work together to benefit the entire pecan industry.
Provisions of Proposed Program
Definitions
Pursuant to section 513 of the 1996 Act, Sec. Sec. 1223.1 through
1223.24 of proposed 7 CFR part 1223 (referred to as the proposed Order)
define certain terms that would be used throughout final 7 CFR part
1223 (referred to as the Order). Several of the terms are common to all
research and promotion programs authorized under the 1996 Act, while
other terms are specific to the proposed Order.
Section 1223.1 would define the term ``Act'' to mean the Commodity
Promotion, Research, and Information Act of 1996 (7 U.S.C. 7411-7425),
and any amendments thereto.
Section 1223.2 would define the term ``American Pecan Council'' or
``APC'' to mean that governing body of the Federal Marketing Order
established pursuant to 7 CFR part 986, unless otherwise noted. As
specified in proposed Sec. 1223.41, the APC would conduct the initial
nominations for producers of the American Pecan Promotion Board and
submit them to the Secretary.
Section 1223.3 would define the term ``American Pecan Promotion
Board'' or ``Board'' to mean the administrative body established
pursuant to Sec. 1223.40.
Section 1223.5 would define ``Customs'' or ``CBP'' to mean the
Customs and Border Protection, an agency of the United Sates Department
of Homeland Security.
Section 1223.7 would define ``first handler'' to mean any person
who receives, shells, cracks, accumulates, warehouses, roasts, packs,
sells, consigns, transports, exports, or ships (except as a common or
contract carrier of pecans owned by another person), or in any other
way puts inshell or shelled pecans in the stream of commerce. The term
first handler includes a producer who handles or markets pecans of the
producer's own production.
Section 1223.8 would define the term ``fiscal period'' to mean the
period from October 1 to September 30, or such other period as
recommended by the Board and approved by the Secretary.
Section 1223.10 would define the term ''information'' to mean
information
[[Page 59616]]
and programs that are designed to increase efficiency in processing and
to develop new markets, marketing strategies, increase market
efficiency, and activities that are designed to enhance the image of
pecans on a national or international basis. This includes consumer
information, which means any action taken to provide information to,
and broaden the understanding of, the general public regarding the
consumption, use, nutritional attributes, and care of pecans. This
would also include industry information, which means information and
programs that would lead to the development of new markets, new
marketing strategies, or increased efficiency for the pecan industry,
and activities to enhance the image of the pecan industry.
Section 1223.11 would define the term ``inshell pecans'' to mean
nuts whose kernel is maintained inside the shell.
Section 1223.12 would define the terms ``market'' or ``marketing.''
The term ``marketing'' would mean the sale or other disposition of
pecans in any channel of commerce. The term ``market'' would mean to
sell or otherwise dispose of pecans in interstate, foreign, or
intrastate commerce.
Section 1223.14 would define the terms ``part'' and ``subpart.''
The term ``part'' would mean all rules, regulations, and supplemental
orders issued pursuant to the Act and the Order. The Pecan Promotion,
Research, and Information Order would be a ``subpart'' (specifically
subpart A) of such part.
Section 1223.15 would define the term ``pecans'' to mean and
includes any and all varieties or subvarieties, inshell or shelled, of
the Genus, species: Carya illinoinensis grown or imported into the
United States.
Section 1223.17 would define the term ``producer'' to mean
synonymous with grower and any person engaged in the production and
sale of pecans in the United States who owns, or who shares in the
ownership and risk of loss of such pecans.
Section 1223.18 would define the terms programs, plans, and
projects to mean research, promotion and information programs, plans,
or projects established under the Order.
Section 1223.19 would define the term ``promotion'' to mean any
action taken to present a favorable image of pecans to the general
public and the food industry for the purpose of improving the
competitive position of pecans both in the United States and abroad and
stimulating the sale of pecans. This includes paid advertising and
public relations.
Section 1223.20 would define the term ``research'' to mean any type
of test, study, or analysis designed to advance the image,
desirability, use, marketability, production, product development, or
quality of pecans, including research relating to nutritional value,
cost of production, new product development, varietal development,
nutritional value, health research, and marketing of pecans.
Section 1223.22 would define the term ``shelled pecans'' to mean
pecans whose shells have been removed leaving only edible kernels,
kernel pieces or pecan meal. One pound of shelled pecans is the
equivalent of two pounds inshell pecans.
Sections 1223.4, 1223.6, 1223.9, 1223.13, 1223.16, 1223.21,
1223.23, 1223.24, and 1223.25 would define the terms ``conflict of
interest,'' ``Department or USDA,'' ``importer,'' ``Order,''
``person,'' ``Secretary,'' ``suspend,'' ``terminate,'' and ``United
States,'' respectively. The definitions are the same as or are based on
the definitions specified in section 513 of the Act.
Establishment of the Board
Pursuant to section 515 of the 1996 Act, Sec. Sec. 1223.40 through
1223.47 of the proposed Order would detail the establishment and
membership of the proposed American Pecan Promotion Board (Board),
nominations and appointments, term of office, removal and vacancies,
procedure, compensation and reimbursement, powers and duties, and
prohibited activities.
Section 1223.40 would specify the Board establishment and
membership. The 1996 Act requires the composition of a board to reflect
the geographical distribution of production of the commodity in the
U.S. as well as the quantity or value of the commodity imported into
the United States. In accordance with this requirement, the NPF
recommended the Board would consist of 17 members: 10 domestic
producers and 7 importers.
To determine whether the NPF's proposed board representation is
reflective of the appropriate geographical distribution, USDA used the
following resources: The NASS for U.S. production data; the 2007, 2012,
and 2017 Census of Agriculture (published by NASS) for bearing acreage
data by state; Customs import data for shelled and inshell pecans (HTS
Codes 0802901500 and 0802901000, respectively); and the Global
Agricultural Trade System (GATS) of the Foreign Agricultural Service
(FAS) for data on U.S. exports of inshell pecans to Mexico. All data
presented in this document is based on a calendar year for consistency
in timeframe. Due to the alternate-bearing nature of the crop, USDA
concluded that the most appropriate way to illustrate production and
import volume is a six-year average of years 2014 through 2019.
U.S. Production
Every five years, following the Census of Agriculture, NASS reviews
production for each commodity and evaluates the inclusion of states in
its annual estimating program. Given limited available resources, NASS
has reduced the number of states included in its annual estimation of
pecan production to five states as of 2019, down from 12 states in 2014
after the 2012 Census of Agriculture. NASS had reported annual
estimates of pecan production for 15 states as early as 2007.
Using bearing acreage data from the 2007, 2012, and 2017 Census of
Agriculture, USDA estimated 2017 production in the seven states for
which no data was issued by NASS. USDA calculated an average yield per
acre for each of these seven states using bearing acreage data from the
2007 and 2012 Census of Agriculture and NASS production data for the
corresponding years. Next, USDA applied these calculations of yield to
bearing acreage data from the 2017 Census of Agriculture to estimate
2017 production. Table 5 shows the result.
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[GRAPHIC] [TIFF OMITTED] TP22SE20.029
In 2018, Hurricane Michael swept across the southern half of
Georgia as a Category 3 storm. According to the University of Georgia
Pecan Extension, this storm resulted in a loss of nearly half the
expected 2018 crop and a loss of 17 percent of the state's pecan
acreage. The effects of Hurricane Michael remain present as the 2019
Georgia crop was down nearly 30 percent from the average production of
the six years prior to the storm. To more accurately represent the
geographical distribution of U.S. pecan production, USDA adjusted the
six-year average of production for Georgia by applying weights to each
year's production figures. Equal weights of 20 percent were applied to
years 2014 through 2017, and weights of 10 percent each were applied to
years 2018 and 2019. The result, as shown in Table 5, is a six-year
weighted average of 90.9 million pounds, inshell, of Georgia
production. Prior to Hurricane Michael, Georgia was the top pecan
producer in the United States. Considering this, along with the state's
recovery efforts, the University of Georgia Pecan Extension expects
Georgia pecan production to rebound in the coming years.
According to the proposal, domestic board representation would be
split into three regions: Eastern, Central, and Western. The Eastern
Region includes Alabama, Florida, Georgia, North Carolina, South
Carolina, and any other U.S. states the majority of whose land mass is
in the Eastern Time Zone, plus any U.S. territories in the Atlantic
Ocean. The Central Region includes Arkansas, Kansas, Louisiana,
Mississippi, Missouri, Oklahoma, Texas, and any other U.S. states the
majority of whose land mass is in the Central Time Zone. Finally, the
Western Region includes Arizona, California, New Mexico, and any other
U.S. states the majority of whose land mass is in the Mountain or
Pacific Time Zones, plus Alaska, Hawaii, and any U.S. territories in
the Pacific Ocean.
Table 6 lists the three regions including their states and
territories, along with regional six-year average production, and
portion of total U.S. production. The Eastern and Central Regions, with
34 percent and 25 percent of total U.S. production, respectively, would
each have three seats on the Board as recommended by the NPF. The
Western Region, with 41 percent of total U.S. production would have
four seats on the Board as recommended by the NPF, for a total of 10
seats representing domestic U.S. production.
[[Page 59618]]
[GRAPHIC] [TIFF OMITTED] TP22SE20.030
Imports
Regarding import volume, USDA estimated about 208 million pounds,
inshell, using a six-year average for years 2014 through 2019. To
arrive at this estimate, USDA considered the routine industry practice
of domestic inshell pecans being exported to Mexico for shelling, and
then reentering the United States as shelled kernels. These shelled
kernels may be documented as imported product, but they were actually
produced in the United States. To account for this scenario, USDA
deducted from total imports U.S. exports of inshell pecans to Mexico.
This calculation assumes that all U.S. inshell pecan exports to Mexico
ultimately return to the United States as shelled kernels. According to
the NPF, this is a reasonable assumption. The result of this
calculation is shown in Table 7.
[GRAPHIC] [TIFF OMITTED] TP22SE20.031
[[Page 59619]]
In Table 8, revised imports are added to domestic production to
estimate the total U.S. supply of pecans. With 279.5 million pounds, on
an inshell basis, U.S. production accounts for 57 percent of the total
domestic supply; and, with just over 208 million pounds, on an inshell
basis, imports account for 43 percent of the total U.S. supply. In its
proposal, the NPF recommended 17 total board members, including ten
domestic producers and seven importers.
[GRAPHIC] [TIFF OMITTED] TP22SE20.032
The NPF proposed to have no alternate Board members. It wants to
ensure that industry members who seek representation and serve on the
Board are committed to their service and participate in all Board
meetings.
At least once every five years, the Board must review the
geographical distribution of United States production of pecans and the
quantity or value of imports. The review would be conducted through an
audit of state crop production, Customs data, and Board assessment
records. If warranted, the Board would recommend to the Secretary of
Agriculture that the Board membership be reapportioned appropriately to
reflect such changes. The distribution of production between regions
also shall be considered. Any changes in Board composition would be
implemented by the Secretary through rulemaking.
Section 1223.41 of the proposed Order would specify Board
nominations and appointments. The initial nominations for producers
would be submitted to the Secretary by the American Pecan Council
(APC). The APC would publicize the nomination process, using trade
press or other means it deems appropriate. The APC would use regional
caucuses, mail or other methods to solicit potential nominees and would
work with USDA to help ensure that all interested persons are apprised
of the nomination process. The APC would submit the nominations and
recommend two nominees for each Board position for the Secretary's
consideration.
USDA would conduct initial importer nominations. This includes
publicizing the nomination process, using trade press or other means it
deems appropriate, and conducting outreach to all importers. USDA would
receive the nominations and submit two nominees for each Board position
for the Secretary's consideration.
Regarding subsequent nominations, the Board would solicit
nominations as described in the following paragraph. Nominees must
produce more than 50,000 pounds of inshell pecans (25,000 pounds of
shelled pecans) on average for four fiscal periods (the fiscal period
for which the nominations are being conducted and the previous three
fiscal periods).
The Board would seek nominations for each vacant seat from
producers who paid their assessments to the Board in the most recent
fiscal period. Producers that produce in more than one region could
seek nomination in only the region in which they produce the majority
of their pecans. Interested producers could also submit a background
statement outlining their qualifications to serve on the Board. The
names of producer nominees would be placed on a ballot by region. The
ballots, along with any background statements, would be mailed to
producers in each respective region for a vote. Producers who produce
pecans in more than one region could only vote in the region in which
they produce the majority of their pecans. The votes would be tabulated
for each region with the nominee receiving the highest number of votes
at the top of the list in descending order by vote. Two candidates for
each position would be submitted to the Secretary for consideration.
The Board would also solicit candidates for importer nominees. All
qualified national organizations representing importers would have the
opportunity to nominate members to serve on the Board. To be certified
by the Secretary as a qualified national organization, an organization
would have to have been established for more than a year; be comprised
primarily of importers of pecans; receive a portion of its operating
funds from importers; and demonstrate it would be willing and able to
further the Act and Order's purposes. Interested importers could also
submit a background statement outlining their qualifications to serve
on the Board. The names of importer nominees would then be placed on a
ballot. The ballots, along with any background statements, would be
mailed to importers for a vote. The votes would be tabulated with the
nominee receiving the highest number of votes at the top of the list in
descending order by vote. Two candidates for each position would then
be submitted to the Secretary for consideration.
The Board would submit nominations to the Secretary at least six
months before the new Board term begins.
The NPF also recommended that no two Board members be employed by a
single corporation, company, partnership, or any other legal entity.
The NPF stated this is to help ensure that no one entity has control on
the Board.
In order to provide the Board flexibility, the Board could
recommend to the Secretary modifications to its nomination procedures.
Any such modifications would be implemented through rulemaking by the
Secretary.
Section 1223.42 of the proposed Order would specify the term of
office. Except for the initial Board, each Board member would serve a
three-year term or until the Secretary selected his or her successor.
Each term of office would
[[Page 59620]]
begin on October 1 and end on September 30. No member could serve more
than two consecutive terms, excluding any term of office less than
three years. For the initial Board, the members' terms would be
staggered for two, three, and four years and would be determined at
random. The initial members would be able to serve one successive
three-year term.
Section 1223.43 of the proposed Order would specify criteria for
the removal of members and for filling vacancies. If a Board member
ceased to work for or be affiliated with the category of members from
which the member was appointed or in the region he or she represented,
such position would become vacant. The Board could recommend to the
Secretary that a member be removed from office if the member
consistently refused to perform his or her duties or engaged in
dishonest acts or willful misconduct. Further, without recommendation
of the Board, a member may be removed by the Secretary upon showing of
adequate cause, including the continued failure by a member to submit
reports or remit assessments required under this part, if the Secretary
determines that such member's continued service would be detrimental to
the achievement of the purposes of the Act. If a position became
vacant, nominations to fill the vacancy would be conducted using the
nomination process as proposed in Sec. 1223.41 of the Order. A vacancy
would not be required to be filled if the unexpired term is less than
six months.
Section 1223.44 of the proposed Order would specify procedures of
the Board. A majority of the Board members (9) would constitute a
quorum. A motion would carry if supported by one vote more than 50
percent of the total votes represented by the Board members present.
Proxy voting would not be permitted.
The proposed Order would also provide for the Board to take action
by mail, telephone, electronic mail, facsimile, or any other electronic
means when the chairperson believes it is necessary. Actions taken
under these procedures would be valid only if all members and the
Secretary were notified of the meeting and all members were provided
the opportunity to vote and at least nine Board members voted in favor
of the action. Additionally, all votes would have to be confirmed in
writing and recorded in Board minutes.
The proposed Order would specify that Board members would serve
without compensation. However, Board members would be reimbursed for
reasonable travel expenses, as approved by the Board, incurred when
performing Board business.
Section 1223.46 of the proposed Order would specify powers and
duties of the Board. These are similar in promotion programs authorized
under the 1996 Act. They include, among other things, to administer the
Order and collect assessments; to develop bylaws and recommend
regulations necessary to administer the Order; to select a chairperson
and other Board officers; to create committees and subcommittees as
necessary; to hire staff or contractors; to develop programs and enter
into contracts to implement programs; to prepare and submit a budget
for approval by USDA in accordance with the Order; to invest Board
funds appropriately; have its books audited by an outside certified
public accountant at the end of each fiscal period and at other times
as requested by the Secretary; to provide appropriate notice of
meetings to the industry and USDA and keep minutes of such meetings; to
report its activities to producers and importers; to make public an
accounting of funds received and expended; to receive, investigate and
report to the Secretary complaints of violations of the Order; and to
recommend amendments to the Order as appropriate.
Section 1223.47 of the proposed Order would specify prohibited
activities that are common to all promotion programs authorized under
the 1996 Act. In summary, the Board nor its employees and agents could
engage in actions that would be a conflict of interest; use Board funds
to lobby (influencing legislation or governmental action or policy, by
local, state, national, and foreign governments or subdivision thereof,
other than recommending to the Secretary amendments to the Order); or
engage in any advertising or activities that may be false, misleading
or disparaging to another agricultural commodity.
Expenses and Assessments
Pursuant to sections 516 and 517 of the 1996 Act, Sec. Sec.
1223.50 through 1223.53 of the proposed Order detail requirements
regarding the Board's budget and expenses, financial statements,
assessments, and exemption from assessments. At least 60 calendar days
before the start of the fiscal period, and as necessary during the
year, the Board would submit a budget to USDA covering its projected
expenses. The budget must include a summary of anticipated revenue and
expenses for each program along with a breakdown of staff and
administrative expenses. Except for the initial budget, the Board's
budgets should include comparative data for at least one preceding
fiscal period.
Each budget must provide for adequate funds to cover the Board's
anticipated expenses. Any amendment or addition to an approved budget
must be approved by USDA, including shifting of funds from one program,
plan or project to another. Shifts of funds that do not result in an
increase in the Board's approved budget would not need prior approval
from USDA. For example, if the Board's approved budget provided for $1
million in consumer advertising and $500,000 in research projects, a
shift of $50,000 from consumer advertising to research would require
USDA approval. However, a shift within the $1 million consumer
advertising line item would not require prior USDA approval.
The Board would be authorized to incur reasonable expenses for its
maintenance and functioning. During its first year of operation, the
Board could borrow funds for startup costs and capital outlay. Any
borrowed funds would be subject to the same fiscal, budget and audit
controls as other funds of the Board.
The Board could also accept voluntary contributions and seek other
funding sources to carry out activities authorized under the Order. Any
contributions received by the Board would be free from encumbrances by
the donor and the Board would retain control over use of the funds.
However, the Board could receive funds from outside sources targeted
for specific authorized projects. For example, the Board could receive
Federal grant funds, subject to approval by the Secretary, for a
specific research project. The Board would also be required to
reimburse USDA for costs incurred by USDA in overseeing the Order's
operations, including all costs associated with referenda.
The Board would be limited to spending no more than 15 percent of
its assessment and other income received for administration,
maintenance, and the functioning of the Board for that fiscal period.
This limitation would be applicable for fiscal periods beginning three
or more years after the establishment of the Board. Reimbursements to
USDA would not be considered administrative costs. As an example, if
the Board received $9 million in assessments during fiscal period five,
and $1 million in Federal grant funding, the Board's assessment and
other income would be $10 million for that fiscal period. In this
scenario, the Board would be limited to spending
[[Page 59621]]
no more than $1.5 million (.15 x $10 million) on administrative costs.
The Board could also maintain a monetary reserve and carry over
excess funds from one fiscal period to the next. However, such reserve
funds could not exceed two fiscal period's budgeted expenses. For
example, if the Board's budgeted expenses for a fiscal period were $8
million, it could carry over no more than $16 million in reserve. With
approval of the Secretary, reserve funds could be used to pay expenses.
The Board could invest its revenue collected under the Order in the
following: (1) Obligations of the United States or any agency of the
United States; (2) General obligations of any State or any political
subdivision of a State; (3) Interest bearing accounts or certificates
of deposit of financial institutions that are members of the Federal
Reserve; and 4) Obligations fully guaranteed as to principal interest
by the United States.
The Board would be required to submit to USDA financial statements
on a monthly or quarterly basis, or at any other time as requested by
the Secretary. Financial statements should include, at a minimum, a
balance sheet, statement of activities (budget versus actual), an
income statement, and an expense budget.
Assessments
The Board's programs and expenses would be funded through
assessments on producers and importers, other income, and other funds
available to the Board. The Order would provide for an initial
assessment rate of $0.02 per pound of all inshell pecans and $0.04 per
pound on all shelled pecans. Each producer would pay on the amount of
pecans produced in the United States. The importer of record would pay
assessments based on the amount of pecans imported to the United
States.
The Order provides that it is the responsibility of the first
handler, as defined in Sec. 1223.7, to collect and remit assessments
owed to the Board. First handlers would collect assessments from each
producer based on pounds of pecans received. The first handler would
remit those assessments, along with the required reports, to the Board.
As an example, first handler A receives 100,000 pounds inshell pecans
from producer X, 250,000 pounds shelled pecans from producer Y, and
750,000 inshell pecans from producer Z. First handler A would collect
$2,000 (100,000 pounds x $0.02 per pound inshell pecans) from producer
X, $10,000 (250,000 pounds x $0.04 per pound shelled pecans) from
producer Y, and $15,000 (750,000 pounds x $0.02 per pound inshell
pecan) from producer Z. First handler A would remit the assessment
collected totaling $27,000 ($2,000 + $10,000 + $15,000) to the Board.
If a producer is acting as its own first handler, the producer would be
required to remit its individual assessments. Assessments owed would be
due to the Board by the 10th calendar day of the month following the
end of the previous month. As an example, assessments for pecans
received in June would be due to the Board by July 10th.
Importer assessments would be collected through Customs. If Customs
did not collect the assessment from an importer, the importer would be
responsible for paying the assessment directly to the Board by the 10th
calendar day of the month following the end of the previous month after
the pecans were imported into the United States.
Domestic inshell pecans are routinely exported to Mexico, shelled,
and imported into the United States as shelled pecans. The intent of
the Order is not to double assess such pecans. For pecans produced in
the United States, shipped to locations outside the United States for
shelling, and imported back into the United States, assessments would
be owed on the pecans produced in the United States and would be
remitted by the first handler. If assessments are being collected
through Customs, the importer would need to request a refund from the
Board and provide proof that assessments had been previously remitted
by the first handler. For importers who remit assessments directly to
the Board, the importers would have to provide documentation that
assessments had been paid by the first handler. As an example, if
producer A, acting as its own first handler, exports 100,000 pounds of
inshell pecans to Mexico to be shelled, that individual would be
required to remit to the Board assessments owed on the 100,000 pounds
of inshell pecans. When Importer B imports the 50,000 pounds of shelled
pecans, the importer would need to provide documentation that
substantiates that assessments were remitted by the producer A.
Section 1223.52(e)(2) of the Order would prescribe the Harmonized
Tariff Schedule (HTS) of the United States categories covered under the
program. Imported commodities are assigned codes via the HTS with the
first numbers denoting the heading, which is a broad description of the
commodity, and the subsequent numbers denoting the subheadings, which
specify the commodity in greater detail. In the event an HTS number
subject to assessment changed and the change is merely a replacement of
a previous number and has no impact on the description of the pecans
involved, assessments would continue to be collected based on the new
number.
Section 1223.520 of the Order would provide authority for the Board
to impose a late payment charge and interest for assessments not
received within 30 calendar days of the date assessments were due.
There would be a one-time late payment charge of five percent of the
assessments due. In addition, there would be a one percent per month
interest charge on the outstanding balance, including any late payment
and accrued interest. Interest would accrue monthly until the
outstanding balance would be paid to the Board.
De Minimis
The proposed Order would provide an exemption to assessment of
producers whose production volume was less than 50,000 pounds of
inshell pecans (25,000 pounds of shelled pecans) on average for four
fiscal periods (the fiscal period for which the exemption is claimed
and the previous three fiscal periods). The exemption would also apply
to importers whose import volume was less than 50,000 pounds of inshell
pecans (25,000 pounds of shelled pecans) on average for four fiscal
periods (the fiscal period for which the exemption is claimed and the
previous three fiscal periods). The Federal Marketing Order (FMO)
regulating the handling of pecans defines a producer or grower as one
who produces ``a minimum of 50,000 pounds of inshell pecans'' or who
owns ``a minimum of 30 pecan acres''. Record evidence in the 2015 FMO
promulgation hearings--including witness testimonies and a study
entitled ``Economic Analysis of the Implementation of a Federal
Marketing Order for Pecans''--verified that 50,000 pounds of inshell
pecans or 30 pecan acres was an acceptable threshold for distinguishing
a commercial pecan producer from a hobby farmer.
This proposal prescribes an average of four fiscal periods of
production or imports to determine whether an entity is subject to
assessment. For quantifying the number of domestic producers of pecans,
data from the 2017 Census of Agriculture, representing a single year,
is the best resource available to USDA. Regarding importers, USDA used
a six-year average instead of a four-year average to maintain
consistency across analyses in this proposal. Finally, all data used in
this analysis is reflective of a calendar year, not a fiscal year.
NASS, who publishes the Census of
[[Page 59622]]
Agriculture, reports data on a calendar year basis. USDA analyzed
Customs data by calendar year for consistency with NASS. In 2017, NASS
estimated pecan production for 12 states. Every five years, following
the Census of Agriculture, NASS reviews production for each commodity
and evaluates the inclusion of states in its annual estimating program.
To determine the number of domestic producers that would be
assessed or exempt from assessment, USDA first estimated the minimum
number of acres required to produce 50,000 pounds, inshell, of pecans
for 12 states. To accomplish this, USDA divided the de minimis
threshold of 50,000 pounds, inshell, by the 2017 yield estimates for
each of the 12 states. These yield estimates, along with the resulting
minimum number of acres to produce 50,000 pounds, inshell, of pecans
are shown in Table 9. Next, USDA used each state's minimum number of
acres to find the number of operations that had pecan bearing acreage
that would enable them to produce at least 50,000 pounds, inshell, of
pecans, based on data from the 2017 Census of Agriculture.
[GRAPHIC] [TIFF OMITTED] TP22SE20.033
Table 10 depicts the number of producers and importers that would
be assessed and exempt from assessment under the de minimis threshold
of 50,000 pounds, inshell, of pecans. According to the 2017 Census of
Agriculture, there were 15,608 operations with bearing acreage of
pecans in the U.S. in 2017. Based on data from Customs and Border
Protection (Customs), there were 190 entities that imported shelled or
inshell pecans between 2014 and 2019. USDA estimates that of the total
15,798 producers and importers of pecans, 1,061, or seven percent,
would be assessed and 14,737, or 93 percent, would be exempt from
assessment.
USDA seeks comment on whether this de minimis provides a good
representation of the industry for assessments collected and board
representation.
[GRAPHIC] [TIFF OMITTED] TP22SE20.034
[[Page 59623]]
Using NASS data, USDA estimates 2017 pecan production to amount to
more than 316 million pounds, inshell. Customs data shows total imports
of shelled and inshell pecans to average 244.5 million pounds, on an
inshell basis, from 2014 to 2019.\2\ Together, total volume of pecans
in the U.S. market is almost 561 million pounds, inshell, as shown in
Table 11. Assessed volume amounts to 251 million pounds, inshell, for
producers and 244 million pounds, inshell, for importers. Total
assessed volume multiplied by the assessment rate of $0.02 per pound of
inshell pecans (equivalent to $0.04 per pound of shelled pecans)
results in a total assessment revenue of nearly $10 million.\3\
---------------------------------------------------------------------------
\2\ For quantifying the number of domestic producers of pecans,
data from the 2017 Census of Agriculture, representing a single
year, is the best resource available to USDA. The Census of
Agriculture is only published every five years. Regarding importers,
USDA used a six-year average to maintain consistency across analyses
in this proposal.
\3\ In its proposal, NPF estimated that 4,300 growers would be
subject to assessment under this proposed Order, and that assessment
revenue would range from $10.5 million to $11.6 million. The
variance in the number of assessed growers and the amount of
assessment revenue estimated by USDA and by NPF is due to differing
methods of analysis, and different assumptions made.
[GRAPHIC] [TIFF OMITTED] TP22SE20.035
In addition to the proposed exemption of 50,000 pounds of pecans on
an inshell basis or 25,000 pounds of pecans on a shelled basis, USDA
considered other options for a de minimis threshold. First, USDA
considered a de minimis exemption for growers with less than 30 acres
of pecans, aligning with one of the definitions of producer or grower
in the FMO. A de minimis exemption of less than 30 acres could not
apply to pecan importers, and therefore would not be fairly applied to
all those subject to the program. Thus, this exemption is not contained
in this proposal.
In the pecan FMO, handlers who handle at least 1,000 pounds of
pecans, on an inshell basis, are subject to assessment. If this de
minimis exemption of less than 1,000 pounds of pecans, on an inshell
basis, were applied to pecan growers, then about 50 percent of growers
would be subject to assessment. Of these assessed growers, nearly half
would operate between 5 and 15 bearing acres of pecans, therefore
placing a significant burden on smaller growers to fund the program.
Thus, this exemption is not contained in this proposal.
Finally, USDA considered a de minimis exemption which mirrors the
definition of a small pecan grower and small pecan importer according
to the Small Business Administration (SBA). The SBA size standard for a
small pecan grower is annual sales receipts of no more than $1 million.
The SBA size standard for small pecan importer (equivalent to
``Postharvest crop activities'') is annual receipts equal to no more
than $30 million. Tying the de minimis exemption to these differing SBA
size standards becomes problematic when considering equitable
contributions to the proposed program. This is true not only when
evaluating contributions from each sector but also within the
respective sectors. A de minimis exemption tied to annual sales
receipts may overly burden growers and importers who produce or import
high annual sales receipts of pecans.
AMS seeks comments on the proposed de minimis exemption,
particularly on whether the proposed level is appropriate to ensure
equitable contribution and representation from both domestic producers
and importers, or if modification to the exemption level is needed.
Please provide data to substantiate any recommendation.
Exemptions
The proposed Order would provide for two exemptions. First, as
described in the previous section, producers who produce domestically
and importers that import less than 50,000 pounds of inshell pecans
(25,000 pounds of shelled pecans) on average for four fiscal periods
(the fiscal period for which the exemption is claimed and the previous
three fiscal periods) would be exempt.
Producers or importers seeking an exemption would apply to the
Board for an exemption prior to the start of the fiscal period. This
would be an annual exemption; entities would have to reapply each year.
They would have to certify that they expect to produce domestically or
import less than 50,000 pounds of inshell pecans (25,000 pounds of
shelled pecans) on average for four fiscal periods (the fiscal period
for which the exemption is claimed and the previous three fiscal
periods). The Board could request documentation to support the
exemption claim, such as past sales or import data. The Board would
then issue, if deemed appropriate, a certificate of exemption to the
eligible producer or importer.
Producers and importers who received an exemption but domestically
produced or imported more than 50,000 pounds of inshell pecans (25,000
pounds of shelled pecans) on average for four fiscal periods (the
fiscal period for which the exemption is claimed and the previous three
fiscal periods) during the fiscal period would be obligated to pay the
applicable assessments.
Producers and importers who are exempt from assessments would be
eligible for a refund of assessments collected. Requests for assessment
refunds would be submitted to the Board within 90 days of the last day
of the fiscal period when assessments were collected. The Board would
refund such assessments no later than 60 calendar days after receipt of
information justifying the exemption.
[[Page 59624]]
The Board could develop additional procedures to administer the
exemption as appropriate. Such procedures would be implemented through
rulemaking by the Secretary.
The second exemption under the proposed Order would be for organic
pecans. Under section 501 of the Federal Agriculture Improvement and
Reform Act of 1996 (FAIR Act) (7 U.S.C. 7401), a producer who operates
under an approved National Organic Program (NOP) (7 CFR part 205)
system plan, and domestically produces pecans that are certified
``organic'' or ``100 percent organic'' (as defined in the NOP) would be
eligible for exemption. The exemption would apply to all certified
``organic'' or ``100 percent organic'' pecans regardless of whether the
pecans are produced by a person who produces conventional or nonorganic
pecans. Likewise, an importer who imports pecans that are certified as
``organic'' or ``100 percent organic'' under the NOP, or certified as
``organic'' or ``100 percent organic'' under a U.S. equivalency
arrangement established under the NOP, would be exempt from the payment
of assessments.
Refunds From Escrow Account
Pursuant to section 517 of the 1996 Act, Sec. 1223.54 of the
proposed Order would specify the refund procedures if the initial
referendum does not pass. The NPF has proposed that the proposed Order
be voted in a referendum of producers and importers no later than three
years after assessments first begin under the Order. The Board shall
establish an interest bearing escrow account with a financial
institution that is a member of the Federal Reserve System and would
deposit into such account an amount equal to ten percent of the
assessments collected during the period beginning on the effective date
of the Order and ending on the date the Secretary announces the results
of the required referendum.
If the required referendum fails, the Board shall promptly pay
refunds of assessments to all producers and importers that have paid
assessments during the period beginning on the effective date of the
Order and ending on the date the Secretary announces the results of the
required referendum in the manner specified in the proposed Order.
Producers and importers shall notify the Board, in a manner specified
by the Secretary, within 60 days after the announcement of the
referendum of their demand to receive a refund.
If the amount deposited in the escrow account is less than the
amount of all refunds that producers and importers subject to the Order
have a right to receive, the Board shall prorate the amount deposited
in such account among all producers and importers who desire a refund
of assessments paid no later than 90 days after the required referendum
results are announced by the Secretary.
If the proposed Order is approved by the required referendum
conducted under this section, the Board would close the escrow account
and all funds would be available to the Board under Sec. 1223.50.
Promotion, Research and Information
Pursuant to section 516 of the 1996 Act, Sec. Sec. 1223.55 through
1223.57 of the proposed Order would detail requirements regarding
promotion, research and information programs, plans and projects
authorized under the Order. The Board would develop and submit to the
Secretary for approval programs, plans and projects regarding
promotion, research, education, and other activities, including
consumer and industry information and advertising designed to, among
other things, maintain and expand markets for pecans, and develop new
uses for pecans. The Board would be required to evaluate each plan and
program to ensure that it contributes to an effective promotion
program. The Order would also require that, at least once every five
years, the Board fund an independent evaluation of the effectiveness of
the Order and programs conducted by the Board.
Finally, the Order would specify that any patents, copyrights,
trademarks, inventions, product formulations and publications developed
through the use of funds received by the Board would be the property of
the U.S. Government, as represented by the Board. These along with any
rents, royalties and the like from their use would be considered income
subject to the same fiscal, budget, and audit controls as other funds
of the Board, and could be licensed with approval of the Secretary.
Reports, Books and Records
Pursuant to section 515 of the 1996 Act, Sec. Sec. 1223.60 through
1223.62 specify the reporting and recordkeeping requirements under the
proposed Order as well as requirements regarding confidentiality of
information.
Producers and first handlers would be required to submit
periodically to the Board certain information as the Board may request.
Since first handlers would be obligated to collect and remit
assessments owed to the Board, the first handlers would be required to
submit a report at the time assessments are remitted. Producers who are
acting as their own first handler would also be required to submit a
report at the time assessments are remitted. Specifically, the report
submitted to the Board would include, but is not be limited to, the
producer and handlers' name, address, and telephone number; the pounds
produced or handled; and the pounds of pecans for which assessments
were paid. Producers who received a certificate of exemption from the
Board would not have to submit such a report to the Board.
Likewise, importers who pay their assessments directly to the Board
would be required to submit a report to the Board that would include,
but not be limited to, the importer's name, address, and telephone
number; the pounds of pecans imported to the United States; the pounds
of pecans for which assessments were paid. Importers would submit this
report at the same time they remit their assessments to the Board.
Importers who paid their assessments through Customs would not have to
submit such reports because Customs would collect this information upon
entry.
Additionally, producers, first handlers and importers including
those who were exempt, would be required to maintain books and records
needed to verify any required reports. Such books and records would be
required to be made available during normal business hours for
inspection by the Board's or USDA's employees or agents. Producers,
first handlers, and importers would be required to maintain such books
and records for three years beyond the applicable fiscal period.
The Order would also require that all information obtained from
persons subject to the Order as a result of proposed recordkeeping and
reporting requirements would be kept confidential by all officers,
employees, and agents of the Board and USDA. Such information could
only be disclosed if the Secretary considered it relevant, and the
information were revealed in a judicial proceeding or administrative
hearing brought at the direction or at the request of the Secretary or
to which the Secretary or any officer of USDA were a party. Other
exceptions for disclosure of confidential information would include the
issuance of general statements based on reports or on information
relating to a number of persons subject to the Order, if the statements
did not identify the information furnished by any person, or the
publication, by direction of the Secretary, of the name of any person
violating the Order and a statement of
[[Page 59625]]
the particular provisions of the Order violated.
Miscellaneous Provisions
Referenda
Pursuant to section 518 of the 1996 Act, Sec. 1223.71(a)(1) of the
proposed Order specifies that the program would be implemented, and a
referendum conducted not later than three years after assessments first
begin under the Order. The Order would continue if approved by a
majority of producers and importers voting in the referendum who,
during a representative period determined by the Secretary, were
engaged in the production or importation of pecans into the United
States.
Section 1223.71(b) of the proposed Order specifies criteria for
subsequent referenda. Under the Order, a referendum would be held to
ascertain whether the program should continue, be amended, or
terminated. This section specifies that a referendum would be held
every seven years to determine whether producers and importers favor
continuation of the Order. The Order would continue if favored by a
majority of producers and importers voting in the referendum.
Additionally, a referendum could be conducted at the request of the
Board. A referendum could also be conducted at the request of 10
percent or more of the number of persons eligible to vote in a
referendum under the Order. Finally, a referendum could be conducted at
any time as determined by the Secretary.
Other Miscellaneous Provisions
Sections 1223.70 and 1223.72 through 1223.78 describe the rights of
the Secretary; authorize the Secretary to suspend or terminate the
Order when deemed appropriate; prescribe proceedings after termination;
address personal liability, separability, and amendments; and provide
OMB control numbers. These provisions are common to all research and
promotion program authorized under the 1996 Act.
Referenda Procedures
Sections 1223.100 through 1223.107 of the proposed Order would
specify procedures for the conduct of referenda. The sections cover the
definitions, voting instructions, use of subagents, ballots, the
referendum report, and confidentiality of information. Producers and
importers eligible to vote in the referenda would mean any person,
during the representative period, that was subject to the Order. Each
eligible producer or importer would be entitled to cast only one
ballot. USDA would conduct the referenda. USDA would announce the
voting period; mail ballots to eligible producers and importers;
tabulate the results; prepare a report; and announce the results to the
public. The ballots and other information or reports that would
disclose any person's vote would be held confidential. The procedures
would be applicable for the initial referendum and future referenda.
Initial Regulatory Flexibility Analysis
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (5 U.S.C. 601-612), USDA has considered the economic
impact of this action on small entities. USDA has prepared this Initial
Regulatory Flexibility Analysis, the purpose of which is to fit
regulatory actions to the scale of businesses subject to such actions
in order that small businesses would not be unduly or
disproportionately burdened.
Need for Regulation
NPF stated in its proposal that the greatest challenge facing the
pecan industry is supply outpacing demand. Based on worldwide planting
and crop data, NPF estimates that supply would exceed demand by 15
percent in 2027. NPF believes that the establishment of a national
research and promotion program for pecans, funded by assessments on
both domestic producers and importers, would help the industry address
this challenge.
In 2016, the U.S. pecan industry favored the establishment of a
marketing order for pecans grown in Alabama, Arkansas, Arizona,
California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi,
North Carolina, New Mexico, Oklahoma, South Carolina, and Texas. The
program authorizes collection of industry data; research and promotion
activities; regulations on grade, size, quality, pack and container;
and is financed by assessments paid by handlers of pecans grown in the
production area. Over the past several years, the marketing order
program has launched marketing campaigns to increase demand for pecans.
According to the NPF, the proposed research and promotion program
will benefit domestic producers and importers of pecans, thereby
justifying the collection of assessments on both domestic production
and imports. The NPF proposal indicates that imported product accounts
for approximately 39 percent of pecans being supplied to the United
States. With mandatory assessments applied to both domestic production
and imports, the proposed Order would be able to fund marketing
campaigns focused on creating increased demand for pecans in the United
States and globally. The NPF concluded that the marketing order would
continue to have an important role within the industry and the intent
is that the two programs would work together for the benefit of the
entire pecan industry. The research and promotion program would
concentrate its efforts on activities that would maintain and expand
markets for pecans, strengthening its position in the marketplace. The
marketing order would continue its primary responsibility of collection
and distribution of industry data to empower stakeholders with accurate
and timely information. Additionally, the marketing order provides the
authority for the pecan industry to recommend on grade, size, quality,
pack and container requirements.
Objectives of the Action
The purpose of the program would be to strengthen the position of
pecans in the marketplace, maintain and expand markets for pecans, and
develop new uses for pecans.
Legal Basis for Action
The proposed Order is authorized under the 1996 Act which
authorizes USDA to establish agricultural commodity research and
promotion orders which may include a combination of promotion,
research, industry information, and consumer information activities
funded by mandatory assessments. These programs are designed to
maintain and expand markets and uses for agricultural commodities.
USDA currently administers a marketing order for pecans grown in
Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas,
Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma,
South Carolina, and Texas which is authorized under the Agricultural
Marketing Agreement Act of 1937. The purpose of marketing orders, in
general, is to stabilize market conditions, allowing industries to work
together to solve marketing problem, improving profitability. Marketing
order programs' mandatory assessments are paid by handlers within the
designated production areas. The pecan marketing order authorizes
collection of industry data; research and promotion activities;
regulations on grade, size, quality, pack and container; and is
financed by assessments paid by handlers of pecans grown in the
production area.
The proposed pecan research and promotion program is national in
scope, financed by an assessment on pecan producers and importers, and
authorizes
[[Page 59626]]
research and promotion activities. The purpose of the proposed Order
would be to strengthen the position of pecans in the marketplace,
maintain and expand markets for pecans, and develop new uses for
pecans. USDA has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this proposed rule.
Potentially Affected Small Entities
In 13 CFR part 121, the Small Business Administration (SBA) defines
the threshold at which an operation would be considered ``small'' based
on its North American Industry Classification System (NAICS) Code. For
Tree Nut Farming operations (NAICS Code 111335) and Fruit and Tree Nut
Combination Farming operations (NAICS Code 111336), an operation is
considered to be ``small'' if its annual receipts total no more than $1
million. This standard applies to U.S. pecan producers.
Importers and first handlers of inshell and shelled pecans (HTS
Codes 0802901000 and 0802901500, respectively) belong to the industry
classification of Postharvest Crop Activities (NAICS Code 115114).
``Postharvest crop activities'' include nut hulling and shelling,
sorting, grading, packing, and cooling. An operation that meets this
definition is considered to be ``small'', per the SBA, if its annual
receipts equal no more than $30 million. Table 12 depicts the number of
pecan producers, importers, and handlers that would be considered small
under these SBA standards.
According to the 2017 Census of Agriculture, published by NASS in
2019, there were 15,608 farms with pecan bearing acreage. Of these
15,608 farms, 440 sold pecans whose market value met or exceeded $1
million. Based on these figures, 97 percent of U.S. pecan producers are
considered to be ``small'' under the SBA standards. USDA recognizes the
potential inclusion in its count of ``small'' farms those farms whose
sales of pecans were exactly $1 million in market value; however, USDA
lacks the data to remedy this, and the number of farms who meet this
criterion is likely quite small.
[GRAPHIC] [TIFF OMITTED] TP22SE20.036
According to data from Customs, there were 190 importers of inshell
and shelled pecans from 2014 to 2019. Of these, four importers had a
six-year average sales value of pecans which exceeded $30 million. The
portion of pecan importers that would be considered to be ``small''
under the SBA standards, therefore, is 98 percent.
The definition of a ``small'' importer also applies to a first
handler; that is, annual receipts which exceed $30 million. According
to the American Pecan Council (APC), there were 104 first handlers who
reported pecans handled in crop year 2018. Of these, the APC estimates
that about 75 percent recorded annual receipts exceeding $30 million.
Of the 15,902 total entities expected to be impacted by this
action, including producers, importers, and first handlers, about 97
percent would be considered to be ``small'' according to their
respective SBA size standards.
Compliance Requirements
This proposal would impose a reporting and recordkeeping burden on
producers, importers, and first handlers of pecans. Producers and
importers who domestically produce or import less than 50,000 pounds of
inshell pecans (25,000 pounds of shelled pecans) on average for four
fiscal periods (the fiscal period for which the exemption is claimed
and the previous three fiscal periods) could submit to the Board an
application for exemption from paying assessments. Of the 15,168
domestic producers considered to be small under SBA standards, 14,618
of them, or 96 percent, produced less than 50,000 pounds, inshell, of
pecans, and would be exempt from assessment. Of the 186 importers
considered to be small under SBA standards, 119 of them, or 64 percent,
imported less than 50,000 pounds, inshell of pecans, and would also be
exempt from assessment. The reporting and recordkeeping burden to file
an application for exemption from assessment would impact a total of
14,737 producers and importers considered to be small under their
respective SBA size standards. Importers, and first handlers, who
collect the assessments from producers, would be required to file a
report listing pecans imported or received from each producer. This
report would place a reporting and recordkeeping burden on a total of
149 importers and first handlers considered to be small under their SBA
size standard of annual receipts of no more than $30 million.
These forms are being submitted to OMB for approval under OMB
Control No. 0581-NEW. Specific burdens for the forms are detailed later
in this document in the section titled Paperwork Reduction Act. As with
all Federal promotion programs, reports and forms are periodically
reviewed to reduce information requirements and duplication by industry
and public sector agencies.
Alternatives To Minimize Impacts of the Rule
Regarding alternatives, USDA considered de minimis exemptions of 30
acres of pecans, 1,000 pounds, inshell, of pecan volume, and $1 million
in annual pecan sales receipts. These alternatives, which are fully
discussed in the section titled De Minimis, were rejected in favor of
the industry-proposed de minimis exemption of 50,000 pounds, inshell,
or 25,000 pounds, shelled. USDA also considered the alternative of no
action; that is, the status quo. This alternative, however,
[[Page 59627]]
would leave the pecan industry without the tools of a research and
promotion program to strengthen the position of pecans in the
marketplace, maintain and expand markets for pecans, and develop new
uses for pecans. In place of a research and promotion program, the NPF
discussed amending the Agricultural Marketing Agreement Act of 1937,
which provides authority for the pecan marketing order. The NPF stated
in its proposal for a pecan research and promotion program that it
decided not to move forward with this alternative due to the time and
costs involved in amending U.S. law.
Outreach
Regarding outreach efforts, NPF conducted sessions earlier in 2020
throughout the United States in different States and regions. Many were
held in conjunction with regional and state organization meetings where
both pecan producers and importers participated. They also presented at
the National Pecan Shellers Association (NPSA) mid-winter conference.
NPSA supports and promotes the interest of pecan shellers and the
global industry. Approximately 13 sessions were held across the United
States. NPF also had information regarding the proposed program
published in April 2020 editions of the ``The Pecan Grower'' and
``Pecan South'' magazines. ``The Pecan Grower'' is the official
publication of the Georgia Pecan Growers Association, with nearly
three-thousand subscribers including growers, researchers, extension
agents and agribusinesses. ``Pecan South'' is a magazine for growers,
processors, commercial vendors, and those interested in pecans. It
provides to its forty-six hundred plus subscribers U.S. pecan
production information; industry news and events; and market-related
issues, both domestic and international. In the articles, NPF
elaborated the work it has been doing to establish a research and
promotion program for pecans that would assess producers and importers.
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.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), AMS announces its intention to request an approval of a
new information collection and recordkeeping requirements for the
proposed pecan program.
Title: Advisory Committee or Research and Promotion Background
Information.
OMB Number for background form AD-755: (Approved under OMB No.
0505-0001).
Expiration Date of Approval: 03/31/2022.
Title: National Research, Promotion, and Consumer Information
Programs.
Expiration Date of Approval: 3 years from approval date.
Type of Request: New information collection for research and
promotion programs.
Abstract: The information collection requirements in the request
are essential to carry out the intent of the 1996 Act. The information
collection concerns a proposal received by USDA for a national research
and promotion program for the pecan industry. The program would be
financed by an assessment on pecan producers and importers and would be
administered by a board of industry members selected by the Secretary.
The program would provide for an exemption for producers who produce
domestically and importers that import less than 50,000 pounds of
inshell pecans (25,000 pounds of shelled pecans) on average for four
fiscal periods (the fiscal period for which the exemption is claimed
and the previous three fiscal periods). A referendum would be held
among eligible producers and importers to determine whether they favor
implementation of the program not later than three years after
assessments first begin under the Order. The purpose of the program
would be to strengthen the position of pecans in the marketplace,
maintain and expand markets for pecans, and develop new uses for pecans
within the United States.
In summary, the information collection requirements under the
program concern Board nominations, exemption applications, the
collection and refund of assessments, and referenda. For Board
nominations, producers and importers interested in serving on the Board
would be asked to submit a ``Nomination Form'' to the Board indicating
their desire to serve or to nominate another industry member to serve
on the Board. Interested persons could also submit a background
statement outlining qualifications to serve on the Board. Except for
the initial Board nominations, producers and importers would have the
opportunity to submit a ``Nomination Ballot'' to the Board where they
would vote for candidates to serve on the Board. Nominees would also
have to submit a background information form, ``AD-755,'' to the
Secretary to ensure they are qualified to serve on the Board.
Organizations representing importers would be able to be certified by
the Secretary and have an opportunity to nominate importer members.
Those such organizations would submit form ``Application for
Certification of Organization.''
Regarding assessments, producers and importers who domestically
produce and import less than 50,000 pounds of inshell pecans (25,000
pounds of shelled pecans) on average for four fiscal periods (the
fiscal period for which the exemption is claimed and the previous three
fiscal periods), would be exempt from assessments. Producers or
importers would apply to the Board for an exemption prior to the start
of the fiscal period. This would be an annual exemption; entities would
have to reapply each year. Producers or importers could submit a
request, ``Application for Exemption from Assessments,'' to the Board
for an exemption from paying assessments. Producers and importers who
would qualify as ``organic'' or ``100 percent organic'' under the NOP
could submit an ``Organic Exemption Form'' to the Board and request an
exemption from assessments.
First handlers who receive assessments from producers would be
asked to submit a ``First Handler/Importer Report'' that would
accompany their assessments paid to the Board and report the quantity
of pecans received during the applicable period, the quantity for which
assessments were paid, contact information for whom they collected the
assessment, and the country of export (for imports). Additionally, only
importers who pay their assessments directly to the Board would be
required to submit a report. As previously mentioned, the majority of
importer assessments would be collected by Customs. Customs would remit
the funds to the Board and the other information would be available
from Customs (i.e., country of export, quantity of pecans imported).
Importers and producers who are exempt and whose assessments were
collected, either by Customs or a first handler, could also request a
refund of any assessments paid to the Board. Producers and importers
would also file a form to request a refund of assessments paid if the
referendum fails to pass. A referendum is proposed to be conducted
three years after the assessments first begin to determine if producers
and importers favor continuance of the Order.
Lastly, producers and importers eligible to vote in a referendum
would have to complete a ballot to determine
[[Page 59628]]
whether the research and promotion program would continue.
Information collection requirements that are included in this
proposal include:
(1) Nomination Form
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.25 hour per application.
Respondents: Producers and importers.
Estimated Number of Respondents: 50.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 12.5 hours.
(2) Background Statement
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.25 hour per application.
Respondents: Producers and importers.
Estimated Number of Respondents: 50.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 12.5 hours.
(3) Nomination Ballot
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.25 hour per application.
Respondents: Producers and importers.
Estimated Number of Respondents: 900.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 225 hours.
(4) Background Information FormAD-755 (OMB Form No. 0505-0001)
Estimate of Burden: Public reporting for this collection of
information is estimated to average 0.5 hour per response for each
Board nominee.
Respondents: Producers and importers.
Estimated Number of Respondents: 11 (34 for initial nominations to
the Board, 0 for the second year, and up to 11 annually thereafter).
Estimated Number of Responses per Respondent: 1 every 3 years.
(0.3)
Estimated Total Annual Burden on Respondents: 17 hours for the
initial nominations to the Board, 0 hours for the second year of
operation, and up to 5.5 hours annually thereafter.
(5) Application for Certification of Organization
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.25 hour.
Respondents: Importer organizations.
Estimated Number of Respondents: 5.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 2.5 hours.
(6) Application for Exemption From Assessments
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.25 hour per producers or importer
reporting on pecans produced domestically or imported. Upon approval of
an application, producers and importers would receive exemption
certification.
Respondents: Producers and importers who produce or import less
than 50,000 pounds of inshell pecans (25,000 pounds of shelled pecans)
on average for four fiscal periods (the fiscal period for which the
exemption is claimed and the previous three fiscal periods).
Estimated Number of Respondents: 14,737.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 3,684 hours.
(7) Organic Exemption Form
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.5 hours per exemption form.
Respondents: Organic producers and importers.
Estimated Number of Respondents: 50.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 25 hours.
(8) First Handler/Importer Report
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.5 hour per first handler or
importer.
Respondents: First handlers who collect assessments from producers
who produce over 50,000 pounds of inshell pecans (25,000 pounds of
shelled pecans) on average for four fiscal periods (the fiscal period
for which the exemption is claimed and the previous three fiscal
periods) and importers that do not remit through Customs.
Estimated Number of Respondents: 175.
Estimated Number of Responses per Respondent: 12.
Estimated Total Annual Burden on Respondents: 1,050 hours.
(9) Application for Reimbursement of Assessments
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.25 hour.
Respondents: Producers and importers.
Estimated Number of Respondents: 170.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 42.5 hours.
(10) Application for Refund of Assessments Paid From Escrow
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.25 hour.
Respondents: Producers and importers.
Estimated Number of Respondents: 900.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 225 hours.
(11) Referendum Ballot
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.25 hour.
Respondents: Producers and importers.
Estimated Number of Respondents: 900.
Estimated Number of Responses per Respondent: 0.14 (after first
referendum they would occur once every 7 years).
Estimated Total Annual Burden on Respondents: 31.50 hours.
(12) A Requirement To Maintain Records Sufficient To Verify Reports
Submitted Under the Order
Estimate of Burden: Public recordkeeping burden for keeping this
information is estimated to average 0.5 hours per record keeper
maintaining such records.
Recordkeepers: Producers, first handlers and importers.
Estimated number of recordkeepers: 15,902.
Estimated total recordkeeping hours: 7,951 hours.
As noted above, under the proposed program, producers through first
handlers, and importers would be required to pay assessments and file
reports with and submit assessments to the Board (importers through
Customs). While the proposed Order would impose certain recordkeeping
requirements on producers, first handlers, and importers, information
[[Page 59629]]
required under the proposed Order could be compiled from records
currently maintained. Such records shall be retained for at least three
years beyond the fiscal period of their applicability.
An estimated 15,902 respondents would provide information to the
Board (15,608 producers, 104 first handlers, and 190 importers). The
estimated cost of providing the information to the Board by respondents
would be $630,994. This total has been estimated by multiplying
13,278.5 hours by ($36.08 hourly wage x 0.317 benefits = $11.44
(benefits) + $36.08 (wage) = $47.52), $47.52 for the average mean
hourly earnings of producers and importers plus benefits.
Data for computation of the hourly rate for producers (Occupation
Code 11-9013: Farmers, Ranchers, and other Agricultural Managers =
$38.63) and importers (Occupation Code 13-1020: Buyers and Purchasing
Agents = $33.53) was obtained from the U.S. Department of Labor's
Bureau of Labor Statistics. The average of the producer and importer
wages is $36.08. Data for computation of this hourly wage were obtained
from the U.S. Department of Labor Statistics' publication, ``May 2019
National Occupation Employment and Wage Estimates in the United
States,'' updated May 31, 2019. This publication can also be found at
the following website: https://www.bls.gov/oes/current/oes_nat.htm#45-0000. Data for the benefit costs of 31.7 percent was obtained by U.S.
Department of Labor's Bureau of Labor Statistics press release dated
Dec. 14, 2018.
The proposed Order's provisions have been carefully reviewed, and
every effort has been made to minimize any unnecessary recordkeeping
costs or requirements, including efforts to utilize information already
submitted under other programs administered by USDA and other state
programs. USDA currently oversees a marketing order for pecans grown in
Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas,
Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma,
South Carolina, and Texas, which is authorized under the Marketing
Agricultural Agreement Act of 1937. This program collects information
to facilitate the administration of the program. The information
collected by the marketing order has been carefully reviewed and it was
determined that the information collected could not be utilized to
facilitate the administration of the research and promotion program.
The proposed forms would require the minimum information necessary to
effectively carry out the requirements of the program, and their use is
necessary to fulfill the intent of the 1996 Act. Such information can
be supplied without data processing equipment or outside technical
expertise. In addition, there are no additional training requirements
for individuals filling out reports and remitting assessments to the
Board. The forms would be simple, easy to understand, and place as
small a burden as possible on the person required to file the
information.
Collecting information monthly would coincide with normal industry
business practices. The timing and frequency of collecting information
are intended to meet the needs of the industry while minimizing the
amount of work necessary to fill out the required reports. The
requirement to keep records for three years is consistent with normal
industry practices. In addition, the information to be included on
these forms is not available from other sources because such
information relates specifically to individual producers, first
handlers and importers who are subject to the provisions of the 1996
Act. Therefore, there is no practical method for collecting the
required information without the use of these forms.
Request for Public Comment Under the Paperwork Reduction Act
Comments are invited on: (a) Whether the proposed collection of
information is necessary for the proper performance of functions of the
proposed Order and USDA's oversight of the proposed Order, including
whether the information would have practical utility; (b) the accuracy
of USDA's estimate of the burden of the proposed collection of
information, including the validity of the methodology and assumptions
used; (c) the accuracy of USDA's estimate of the principal producing
areas in the United States for pecans; (d) the accuracy of USDA's
estimate of the number of producers, first handlers and importers of
pecans that would be covered under the program; (e) ways to enhance the
quality, utility, and clarity of the information to be collected; and
(f) ways to minimize the burden of the collection of information on
those who are to respond, including the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology.
Comments concerning the information collection requirements
contained in this action should reference OMB No. 0581-NEW. In
addition, the docket number, date, and page number of this issue of the
Federal Register also should be referenced. Comments should be sent to
the same addresses referenced in the ADDRESSES section of this rule.
OMB is required to make a decision concerning the collection of
information contained in this rule between 30 and 60 days after
publication. Therefore, a comment to OMB is best assured of having its
full effect if OMB receives it within 30 days of publication.
USDA made modifications to the proponent's proposal to conform with
other similar national research and promotion programs implemented
under the 1996 Act.
While the proposal set forth below has not received the approval of
USDA, it is determined that this proposed Order is consistent with and
would effectuate the purposes of the 1996 Act.
A 60-day comment period is provided to allow interested persons to
respond to this proposal. All written comments received in response to
this rule by the date specified will be considered prior to finalizing
this action.
List of Subjects in 7 CFR Part 1223
Administrative practice and procedure, Advertising, Consumer
information, Marketing agreements, Pecan promotion, Reporting and
recordkeeping requirements.
0
For the reasons set forth in the preamble, it is proposed that title 7,
chapter XI of the Code of Federal Regulations be amended by adding part
1223 to read as follows:
PART 1223--PECAN PROMOTION, RESEARCH, AND INFORMATION ORDER
Subpart A--Pecan Promotion, Research, and Information Order
Definitions
Sec.
1223.1 Act.
1223.2 American Pecan Council.
1223.3 American Pecan Promotion Board.
1223.4 Conflict of interest.
1223.5 Customs or CBP.
1223.6 Department or USDA.
1223.7 First handler.
1223.8 Fiscal period.
1223.9 Importer.
1223.10 Information.
1223.11 Inshell pecans.
1223.12 Market or marketing.
1223.13 Order.
1223.14 Part and subpart.
1223.15 Pecans.
1223.16 Person.
1223.17 Producer.
1223.18 Programs, plans, and projects.
1223.19 Promotion.
1223.20 Research.
1223.21 Secretary.
1223.22 Shelled pecans.
[[Page 59630]]
1223.23 Suspend.
1223.24 Terminate.
1223.25 United States.
American Pecan Promotion Board
1223.40 Establishment and membership.
1223.41 Nominations and appointments.
1223.42 Term of office.
1223.43 Vacancies.
1223.44 Procedure.
1223.45 Compensation and reimbursement.
1223.46 Powers and duties.
1223.47 Prohibited activities.
Expenses and Assessments
1223.50 Budget and expenses.
1223.51 Financial statements.
1223.52 Assessments.
1223.53 Exemption procedures.
1223.54 Refund escrow accounts.
Promotion, Research, and Information
1223.55 Programs, plans, and projects.
1223.56 Independent evaluation.
1223.57 Patents, copyrights, trademarks, information, publications,
and product formulations.
Reports, Books, and Records
1223.60 Reports.
1223.61 Books and records.
1223.62 Confidential treatment.
Miscellaneous
1223.70 Right of the Secretary.
1223.71 Referenda.
1223.72 Suspension and termination.
1223.73 Proceedings after termination.
1223.74 Effect of termination or amendment.
1223.75 Personal liability.
1223.76 Separability.
1223.77 Amendments.
1223.78 OMB control numbers.
Subpart B--Referendum Procedures
1223.100 General.
1223.101 Definitions.
1223.102 Voting.
1223.103 Instructions.
1223.104 Subagents.
1223.105 Ballots.
1223.106 Referendum report.
1223.107 Confidential information.
Subpart C--Administrative Provisions
1223.520 Late payment and interest charges for past due assessments.
Authority: 7 U.S.C. 7411-7425; 7 U.S.C. 7401.
Subpart A--Pecan Promotion, Research, and Information Order
Definitions
Sec. 1223.1 Act.
Act means the Commodity Promotion, Research, and Information Act of
1996 (7 U.S.C. 7411-7425), and any amendments thereto.
Sec. 1223.2 American Pecan Council.
American Pecan Council or APC means that governing body of the
Federal Marketing Order established pursuant to 7 CFR part 986 unless
otherwise noted.
Sec. 1223.3 American Pecan Promotion Board.
American Pecan Promotion Board or the Board means the
administrative body established pursuant to Sec. 1223.40.
Sec. 1223.4 Conflict of interest.
Conflict of interest means a situation in which a member or
employee of the Board has a direct or indirect financial interest in a
person who performs a service for, or enters into a contract with, the
Board for anything of economic value.
Sec. 1223.5 Customs or CBP.
Customs or CBP means Customs and Border Protection, an agency of
the United States Department of Homeland Security.
Sec. 1223.6 Department or USDA.
Department or USDA means the U.S. Department of Agriculture, or any
officer or employee of the Department to whom authority has heretofore
been delegated, or to whom authority may hereafter be delegated, to act
in the Secretary's stead.
Sec. 1223.7 First handler.
First handler means any person who receives, shells, cracks,
accumulates, warehouses, roasts, packs, sells, consigns, transports,
exports, or ships (except as a common or contract carrier of pecans
owned by another person), or in any other way puts inshell or shelled
pecans in the stream of commerce. The term first handler includes a
producer who handles or markets pecans of the producer's own
production.
Sec. 1223.8 Fiscal period.
Fiscal period means October 1 to September 30, or such other period
as recommended by the Board and approved by the Secretary.
Sec. 1223.9 Importer.
Importer means any person who imports pecans into the United States
as a principal or as an agent, broker, or consignee of any person who
produces or handles pecans outside of the United States for sale in the
United States, and who is listed in the import records as the importer
of record for such pecans.
Sec. 1223.10 Information.
Information means information and programs that are designed to
increase efficiency in processing and to develop new markets, marketing
strategies, increase market efficiency, and activities that are
designed to enhance the image of pecans on a national or international
basis. These include:
(a) Consumer information, which means any action taken to provide
information to, and broaden the understanding of, the general public
regarding the consumption, use, nutritional attributes, and care of
pecans; and
(b) Industry information, which means information and programs that
will lead to the development of new markets, new marketing strategies,
or increased efficiency for the pecan industry, and activities to
enhance the image of the pecan industry.
Sec. 1223.11 Inshell pecans.
Inshell pecans are nuts whose kernel is maintained inside the
shell.
Sec. 1223.12 Market or marketing.
(a) Marketing means the sale or other disposition of pecans in any
channel of commerce.
(b) To market means to sell or otherwise dispose of pecans in
interstate, foreign, or intrastate commerce.
Sec. 1223.13 Order.
Order means an order issued by the Secretary under section 514 of
the Act that provides for a program of generic promotion, research, and
information regarding agricultural commodities authorized under the
Act.
Sec. 1223.14 Part and subpart.
This part is comprised of all rules, regulations, and supplemental
orders issued pursuant to the Act and the Order. The Pecan Promotion,
Research, and Information Order comprises subpart A of this part.
Sec. 1223.15 Pecans.
Pecans means and includes any and all varieties or subvarieties,
inshell or shelled, of the Genus, species: Carya illinoinensis grown or
imported into the United States.
Sec. 1223.16 Person.
Person means any individual, group of individuals, partnership,
corporation, association, cooperative, or any other legal entity.
Sec. 1223.17 Producer.
Producer is synonymous with grower and means any person engaged in
the production and sale of pecans in the United States who owns, or who
shares in the ownership and risk of loss of such pecans.
Sec. 1223.18 Programs, plans, and projects.
Programs, plans, and projects mean those research, promotion, and
information programs, plans, or projects established pursuant to this
subpart.
[[Page 59631]]
Sec. 1223.19 Promotion.
Promotion means any action taken to present a favorable image of
pecans to the general public and the food industry for the purpose of
improving the competitive position of pecans both in the United States
and abroad and stimulating the sale of pecans. This includes paid
advertising and public relations.
Sec. 1223.20 Research.
Research means any type of test, study, or analysis designed to
advance the image, desirability, use, marketability, production,
product development, or quality of pecans, including research relating
to nutritional value, cost of production, new product development,
varietal development, nutritional value, health research, and marketing
of pecans.
Sec. 1223.21 Secretary.
Secretary means the Secretary of Agriculture of the United States,
or any officer or employee of the Department to whom authority has
heretofore been delegated, or to whom authority may hereafter be
delegated, to act in the Secretary's stead.
Sec. 1223.22 Shelled pecans.
Shelled pecans are pecans whose shells have been removed leaving
only edible kernels, kernel pieces or pecan meal. One pound of shelled
pecans is the equivalent of two pounds inshell pecans.
Sec. 1223.23 Suspend.
Suspend means to issue a rule under section 553 of title 5, U.S.C.,
to temporarily prevent the operation of an order or part thereof during
a particular period of time specified in the rule.
Sec. 1223.24 Terminate.
Terminate means to issue a rule under section 553 of title 5,
U.S.C., to cancel permanently the operation of an order or part thereof
beginning on a date certain specified in the rule.
Sec. 1223.25 United States.
United States means collectively the 50 states, the District of
Columbia, the Commonwealth of Puerto Rico, and the territories and
possessions of the United States.
American Pecan Promotion Board
Sec. 1223.40 Establishment and membership.
(a) Establishment of the American Pecan Promotion Board. There is
hereby established an American Pecan Promotion Board, called the Board
in this part, comprised of seventeen (17) members, appointed by the
Secretary from nominations as follows:
(1) Ten (10) producer members: Three (3) each from the Eastern
Region and Central Region and four (4) from the Western Region as
follows:
(i) Eastern Region shall mean the States of Alabama, Florida,
Georgia, North Carolina, South Carolina plus any states in the United
States, the majority of whose land mass is in the Eastern Time Zone,
plus any U.S. territories in the Atlantic Ocean;
(ii) Central Region shall mean the States of Arkansas, Kansas,
Louisiana, Mississippi, Missouri, Oklahoma, Texas plus any states in
the United States, the majority of whose land mass is in the Central
Time Zone; and
(iii) Western Region shall mean the States of Arizona, California,
New Mexico plus any states in the United States, the majority of whose
land mass is in the Mountain or Pacific Time Zones, plus Alaska and
Hawaii and any U.S. territories in the Pacific Ocean.
(2) Seven (7) importers.
(b) Adjustment of membership. At least once every five years, the
Board will review the geographical distribution of United States
production of pecans and the quantity or value of imports. The review
will be conducted through an audit of state crop production and Customs
figures and Board assessment records. If warranted, the Board will
recommend to the Secretary that the membership on the Board be altered
to reflect any changes in the geographical distribution of domestic
pecan production and the quantity or value of imports. If the level of
imports fluctuates versus domestic pecan production, importer members
may be added to or reduced from the Board.
(c) Board's ability to serve the diversity of the industry. When
making recommendations for appointments, the industry should take into
account the diversity of the population served and the knowledge,
skills, and abilities of the members to serve a diverse population,
size of the operations, methods of production and distribution, and
other distinguishing factors to ensure that the recommendations of the
Board take into account the diverse interest of persons responsible for
paying assessments, and others in the marketing chain, if appropriate.
Sec. 1223.41 Nominations and appointments.
(a) Initial nominations for producers will be submitted to the
Secretary by the American Pecan Council (APC), or the Department if
appropriate. Before considering any nominations, the APC shall
publicize the nomination process, using trade press or other means it
deems appropriate, to reach out to all known producers for the U.S.
market. The APC may use regional caucuses, mail or other methods to
elicit potential nominees. The APC shall submit the nominations to the
Secretary and recommend two nominees for each Board position specified
in paragraph (a)(1) of Sec. 1223.40. The Department will conduct
initial nominations for the importer members. The Secretary shall
appoint the members of the Board.
(b) Subsequent nominations shall be conducted as follows:
(1) Nomination of producer members will be conducted by the Board.
The Board staff will seek nominations for each vacant producer seat
from each region from producers who have paid their assessments to the
Board in the most recent fiscal period and who produced more than
50,000 pounds of inshell pecans (25,000 pounds of shelled pecans) on
average for four fiscal periods (the fiscal period for which
nominations are being conducted and the previous three fiscal periods).
Producers who produce pecans in more than one region may seek
nomination only in the region in which they produce the majority of
their pecans. Nominations will be submitted to the Board office and
placed on a ballot that will be sent to producers in each region for a
vote. Producers may only vote in the region in which they produce the
majority of their pecans. The votes shall be tabulated for each region
with the nominee receiving the highest number of votes at the top of
the list in descending order by vote. Two candidates for each position
shall be submitted to the Secretary; and
(2) Nomination of importer members will be conducted by the Board.
All qualified national organizations representing importer interests
will have the opportunity to nominate members to serve on the Board. If
the Secretary determines that there are no qualified national
organizations representing importer interests, individual importers who
have paid assessments to the Board in the most recent fiscal period and
imported more than 50,000 pounds of inshell pecans (25,000 pounds of
shelled pecans) on average for four fiscal periods (the fiscal period
for which nominations are being conducted and the previous three fiscal
periods) may submit nominations. The names of importer nominees shall
be placed on a ballot and mailed to importers for a vote. The votes
shall be tabulated with the nominee receiving the highest number of
votes at the top of the list in descending order by vote. Two
candidates for each importer Board position shall be submitted to the
Secretary. To be certified by the
[[Page 59632]]
Secretary as a qualified national organization representing importer
interests, an organization must meet the following criteria, as
evidenced by a report submitted by the organization to the Secretary:
(i) The organization's voting membership must be comprised
primarily of importers of pecans;
(ii) The organization has a history of stability and permanency and
has been in existence for more than one year;
(iii) The organization must derive a portion of its operating funds
from importers;
(iv) The organization must demonstrate it is willing and able to
further the Act and Order's purposes; and
(v) To be certified by the Secretary as a qualified national
organization representing importer interests, an organization must
agree to take reasonable steps to publicize to non-members the
availability of open Board importer positions.
(c) Producer and importer nominees may provide the Board a short
background statement outlining their qualifications to serve on the
Board.
(d) Nominees must be in compliance with the applicable provisions
of this subpart.
(e) The Board must submit nominations to the Secretary at least six
months before the new Board term begins. The Secretary shall appoint
the members of the Board.
(f) No two members shall be employed by a single corporation,
company, partnership, or any other legal entity.
(g) The Board may recommend to the Secretary modifications to its
nomination procedures as it deems appropriate. Any such modifications
shall be implemented through rulemaking by the Secretary.
Sec. 1223.42 Term of office.
(a) With the exception of the initial Board, each Board member will
serve a three-year term or until the Secretary selects his or her
successor. Each term of office shall begin on October 1 and end on
September 30. No member may serve more than two consecutive terms,
excluding any term of office less than three years.
(b) For the initial board, the terms of Board members shall be
staggered for two, three, and four years. Determination of which of the
initial members shall serve a term of two, three, or four years shall
be determined at random. Those members serving an initial term of two,
three, or four years may serve one successive three-year term.
Sec. 1223.43 Vacancies.
(a) In the event that any member of the Board ceases to work for or
be affiliated with the category of members from which the member was
appointed to the Board, such position shall automatically become
vacant.
(b) If a member of the Board consistently refuses to perform the
duties of a member of the Board, or if a member of the Board engages in
acts of dishonesty or willful misconduct, the Board may recommend to
the Secretary that the member be removed from office. If the Secretary
finds the recommendation of the Board shows adequate cause, the
Secretary shall remove such member from office.
(c) Without recommendation of the Board, a member may be removed by
the Secretary upon showing of adequate cause, including the continued
failure by a member to submit reports or remit assessments required
under this part, if the Secretary determines that such member's
continued service would be detrimental to the achievement of the
purposes of the Act.
(d) Should the position of a member become vacant, successors for
the unexpired terms of such member shall be appointed in the manner
specified in Sec. Sec. 1223.40 and 1223.41, except that said
nomination and replacement shall not be required if said unexpired
terms are less than six months.
Sec. 1223.44 Procedure.
(a) At a Board meeting, it will be considered a quorum when a
majority of members are present.
(b) At the start of each fiscal period, the Board will select a
chairperson and vice chairperson who will conduct meetings and appoint
committee membership throughout that period.
(c) All Board and committee members will receive a minimum of 10
days advance notice of all Board and committee meetings, unless an
emergency meeting is declared by the Chairperson.
(d) Each member of the Board will be entitled to one vote on any
matter put to the Board, and the motion will carry if supported by one
vote more than 50 percent of the total votes represented by the Board
members present.
(e) It will be considered a quorum at a committee meeting when at
least one more than half of those assigned to the committee are
present. Committees may also consist of individuals other than Board
members and such individuals may vote in committee meetings. These
committee members shall be appointed by the Chairperson and shall serve
without compensation but shall be reimbursed for reasonable travel
expenses, as approved by the Board.
(f) In lieu of voting at a properly convened meeting and, when in
the opinion of the Chairperson of the Board such action is considered
necessary, the Board may take action if supported by one vote more than
50 percent of the members by mail, telephone, electronic mail,
facsimile, or any other means of communication, and all telephone votes
shall be confirmed promptly in writing. In that event, all members and
the Secretary must be notified and all members must be provided the
opportunity to vote. Any action so taken shall have the same force and
effect as though such action had been taken at a properly convened
meeting of the Board. All votes shall be recorded in Board minutes.
(g) There shall be no voting by proxy.
(h) The Chairperson shall be a voting member.
(i) The organization of the Board and the procedures for the
conducting of meetings of the Board shall be in accordance with its
bylaws, which shall be established by the Board and approved by the
Secretary.
Sec. 1223.45 Compensation and reimbursement.
The members of the Board when acting as members, shall serve
without compensation but shall be reimbursed for reasonable travel
expenses, as approved by the Board, incurred by them in the performance
of their duties as Board members.
Sec. 1223.46 Powers and duties.
The Board shall have the following powers and duties:
(a) To administer this subpart in accordance with its terms and
conditions and to collect assessments;
(b) To develop and recommend to the Secretary for approval such
bylaws as may be necessary for the functioning of the Board, and such
rules as may be necessary to administer this subpart, including
activities authorized to be carried out under this subpart;
(c) To meet, organize, and select from among the members of the
Board a chairperson, other officers, committees, and subcommittees, as
the Board determines to be appropriate;
(d) To employ persons, other than the Board members, or to enter
into contracts, other than with Board members, as the Board considers
necessary to assist the Board in carrying out its duties and to
determine the compensation and specify the duties of such persons, or
to determine the contractual terms of such parties;
(e) To develop programs and projects, and enter into contracts or
agreements,
[[Page 59633]]
which must be approved by the Secretary before becoming effective, for
the development and carrying out of programs or projects of research,
information, or promotion, and the payment of costs thereof with funds
collected pursuant to this subpart. Each contract or agreement shall
provide that any person who enters into a contract or agreement with
the Board shall develop and submit to the Board a proposed activity;
keep accurate records of all of its transactions relating to the
contract or agreement; account for funds received and expended in
connection with the contract or agreement; make periodic reports to the
Board of activities conducted under the contract or agreement; and make
such other reports available as the Board or the Secretary considers
relevant. Any contract or agreement shall provide that:
(1) The contractor or agreeing party shall develop and submit to
the Board a program, plan, or project together with a budget or budgets
that shall show the estimated cost to be incurred for such program,
plan, or project;
(2) The contractor or agreeing party shall keep accurate records of
all its transactions and make periodic reports to the Board of
activities conducted, submit accounting for funds received and
expended, and make such other reports as the Secretary or the Board may
require;
(3) The Secretary may audit the records of the contracting or
agreeing party periodically; and
(4) Any subcontractor who enters into a contract with a Board
contractor and who receives or otherwise uses funds allocated by the
Board shall be subject to the same provisions as the contractor;
(f) To prepare and submit for approval of the Secretary fiscal
period budgets in accordance with Sec. 1223.50;
(g) To invest assessments collected under this part in accordance
with Sec. 1223.50;
(h) To maintain such records and books and prepare and submit such
reports and records from time to time to the Secretary as the Secretary
may prescribe; to make appropriate accounting with respect to the
receipt and disbursement of all funds entrusted to it; and to keep
records that accurately reflect the actions and transactions of the
Board;
(i) To cause its books to be audited by a competent auditor at the
end of each fiscal period and at such other times as the Secretary may
request, and to submit a report of the audit directly to the Secretary;
(j) To give the Secretary the same notice of meetings of the Board
as is given to members in order that the Secretary's representative(s)
may attend such meetings, and to keep and report minutes of each
meeting of the Board to the Secretary;
(k) To act as intermediary between the Secretary and any producer,
first handler, or importer;
(l) To furnish to the Secretary any information or records that the
Secretary may request;
(m) To receive, investigate, and report to the Secretary complaints
of violations of this subpart;
(n) To recommend to the Secretary such amendments to this subpart
as the Board considers appropriate; and
(o) To work to achieve an effective, continuous, and coordinated
program of promotion, research, consumer information, evaluation, and
industry information designed to strengthen the pecan industry's
position in the marketplace; maintain and expand existing markets and
uses for pecans; and to carry out programs, plans, and projects
designed to provide maximum benefits to the pecan industry.
Sec. 1223.47 Prohibited activities.
The Board may not engage in, and shall prohibit the employees and
agents of the Board from engaging in:
(a) Any action that would be a conflict of interest; and
(b) Using funds collected by the Board under this subpart to
undertake any action for the purpose of influencing legislation or
governmental action or policy, by local, state, national, and foreign
governments, other than recommending to the Secretary amendments to
this subpart.
(c) No program, plan, or project including advertising shall be
false or misleading or disparaging to another agricultural commodity.
Pecans of all origins shall be treated equally.
Expenses and Assessments
Sec. 1223.50 Budget and expenses.
(a) At least 60 days prior to the beginning of each fiscal period,
and as may be necessary thereafter, the Board shall prepare and submit
to the Secretary a budget for the fiscal period covering its
anticipated expenses and disbursements in administering this subpart.
Each such budget shall include:
(1) A statement of objectives and strategy for each program, plan,
or project;
(2) A summary of anticipated revenue, with comparative data for at
least one preceding year (except for the initial budget);
(3) A summary of proposed expenditures for each program, plan, or
project; and
(4) Staff and administrative expense breakdowns, with comparative
data for at least one preceding year (except for the initial budget).
(b) Each budget shall provide adequate funds to defray its proposed
expenditures and to provide for a reserve as set forth in this subpart.
(c) Subject to this section, any amendment or addition to an
approved budget must be approved by the Secretary, including shifting
funds from one program, plan, or project to another. Shifts of funds
which do not cause an increase in the Board's approved budget and which
are consistent with governing bylaws need not have prior approval by
the Secretary.
(d) The Board is authorized to incur such expenses, including
provision for a reasonable reserve, as the Secretary finds are
reasonable and likely to be incurred by the Board for its maintenance
and functioning, and to enable it to exercise its powers and perform
its duties in accordance with the provisions of this subpart. Such
expenses shall be paid from funds received by the Board.
(e) With approval of the Secretary, the Board may borrow money for
the payment of administrative expenses, subject to the same fiscal,
budget, and audit controls as other funds of the Board. Any funds
borrowed by the Board shall be expended only for startup costs and
capital outlays and are limited to the first year of operation of the
Board.
(f) The Board may accept voluntary contributions, but these shall
only be used to pay expenses incurred in the conduct of programs,
plans, and projects. Such contributions shall be free from any
encumbrance by the donor and the Board shall retain complete control of
their use.
(g) The Board may also receive funds provided through the
Department's Foreign Agricultural Service or from other sources, for
authorized activities.
(h) The Board shall reimburse the Secretary for all expenses
incurred by the Secretary in the implementation, administration, and
supervision of this subpart, including all referendum costs in
connection with this subpart.
(i) For fiscal periods beginning three (3) or more years after the
date of the establishment of the Board, the Board may not expend for
administration, maintenance, and functioning of the Board in any fiscal
period an amount that exceeds 15 percent of the assessments and other
income received by the Board for that fiscal period. Reimbursements to
the Secretary required under paragraph (h) of this
[[Page 59634]]
section are excluded from this limitation on spending.
(j) The Board may establish an operating monetary reserve and may
carry over to subsequent fiscal periods excess funds in any reserve so
established: Provided that the funds in the reserve do not exceed the
last two fiscal periods' budget of expenses. Subject to approval by the
Secretary, such reserve funds may be used to defray any expenses
authorized under this part.
(k) Pending disbursement of assessments and all other revenue under
a budget approved by the Secretary, the Board may invest assessments
and all other revenues collected under this part in:
(1) Obligations of the United States or any agency of the United
States;
(2) General obligations of any State or any political subdivision
of a State;
(3) Interest bearing accounts or certificates of deposit of
financial institutions that are members of the Federal Reserve System;
(4) Obligations fully guaranteed as to principal interest by the
United States; or
(5) Other investments as authorized by the Secretary.
Sec. 1223.51 Financial statements.
(a) The Board shall prepare and submit financial statements to the
Secretary on a monthly or quarterly basis or at any other time as
requested by the Secretary. Each such financial statement shall
include, but not be limited to, a balance sheet, income statement, and
expense budget. The expense budget shall show expenditures during the
time period covered by the report, year-to-date expenditures, and the
unexpended budget.
(b) Each financial statement shall be submitted to the Secretary
within 30 days after the end of the time period to which it applies.
(c) The Board shall submit annually to the Secretary an annual
financial statement within 90 days after the end of the fiscal period
to which it applies.
Sec. 1223.52 Assessments.
(a) The funds to cover the Board's expenses shall be paid from
assessments on producers and importers, other income of the Board, and
other funds available to the Board including those collected pursuant
to Sec. 1223.57 and subject to the limitations contained in Sec.
1223.57.
(b) Each producer shall pay an assessment per pound of pecans
produced in the United States. The collection of assessments on pecans
produced in the United States will be the responsibility of the first
handler receiving the pecans from producers. In the case of the
producer acting as its own first handler, the producer will be required
to collect and remit its individual assessments.
(1) First handlers may remit assessments to a third-party
collection agent under this subpart.
(2) First handlers may also remit assessments directly to the
Board.
(c) Such assessments shall be levied at $0.02 per pound on all
inshell pecans and $0.04 per pound on all shelled pecans. The
assessment rate may be reviewed and modified with the approval of the
Secretary. A change in the assessment rate is subject to rulemaking by
the Secretary.
(d) All assessment payments and reports will be submitted to the
office of the Board. All assessment payments for a fiscal period are to
be received no later than the 10th of the month following the end of
the previous month. A late payment charge shall be imposed on any
producer and importer who fails to remit to the Board, the total amount
for which any such producer and importer is liable on or before the due
date established by the Board on forms approved by the Secretary. In
addition to the late payment charge, an interest charge shall be
imposed on the outstanding amount for which the producer and importer
is liable. The rate of interest shall be prescribed in regulations
issued by the Secretary.
(e) Each importer of pecans shall pay an assessment to the Board on
pecans imported for marketing in the United States, through Customs.
(1) The assessment rate for imported pecans shall be the same or
equivalent to the rate for pecans produced in the United States.
(2) The import assessment shall be uniformly applied to imported
pecans that are identified by the number 0802.90.10.00 and
0802.90.15.00 in the Harmonized Tariff Schedule (HTS) of the United
States or any other numbers used to identify pecans in that schedule.
(3) In the event that any HTS number is subject to assessment is
changed and such change is merely a replacement of a previous number
and has no impact on the description of pecans, assessment will
continue to be collected based on the new numbers.
(4) The assessment due on imported pecans shall be paid when they
enter, or are withdrawn from warehouse, for consumption in the United
States.
(5) If Customs does not collect an assessment from an importer, the
importer is responsible for paying the assessment directly to the Board
no later than the 10th of the month following the end of the previous
month after the assessed pecans were imported into the United States.
(f) Persons failing to remit total assessments due in a timely
manner may also be subject to actions under Federal debt collection
procedures.
(g) The Board may authorize other organizations to collect
assessments on its behalf with the approval of the Secretary.
Sec. 1223.53 Exemption procedures.
(a) De minimis. An exemption from payment of assessments as
provided in Sec. 1223.52, shall be provided to producers that
domestically produce and importers that import less than 50,000 pounds
of inshell pecans (25,000 pounds of shelled pecans) on average for four
fiscal periods (the fiscal period for which the exemption is claimed
and the previous three fiscal periods) as follows:
(1) Any producer who desires to claim an exemption from assessments
shall file an application on a form provided by the Board, for a
certificate of exemption for each fiscal period claiming an exemption.
Such producer shall certify that it will domestically produce less than
50,000 pounds of inshell pecans (25,000 pounds of shelled pecans) on
average for four fiscal periods (the fiscal period for which the
exemption is claimed and the previous three fiscal periods). It is the
responsibility of the producer to retain a copy of the certificate of
exemption.
(2) Any importer who desires to claim an exemption from assessments
shall file an application on a form provided by the Board, for a
certificate of exemption for each fiscal period claiming an exemption.
Such importer shall certify that it will import less than 50,000 pounds
of inshell pecans (25,000 pounds of shelled pecans) on average for four
fiscal periods (the fiscal period for which the exemption is claimed
and the previous three fiscal periods). It is the responsibility of the
importer to retain a copy of the certificate of exemption.
(3) On receipt of an exemption application, the Board shall
determine whether an exemption may be granted for that fiscal period.
The Board will then issue, if deemed appropriate, a certificate of
exemption to the producer or importer which is eligible to receive one
covering that fiscal period. The Board may request persons applying for
the exemption to provide supporting documentation, such as past sales
receipts or import data.
(4) The Board, with the Secretary's approval, may require persons
receiving an exemption from assessments to
[[Page 59635]]
provide to the Board reports on the disposition of exempt pecans and,
in the case of importers, proof of payment of assessments.
(5) The exemption will apply immediately following the issuance of
the certificate of exemption.
(6) Producers and importers who received an exemption certificate
from the Board but domestically produced or imported more than 50,000
pounds of inshell pecans (25,000 shelled of pecans) on average for four
fiscal periods (the fiscal period for which the exemption is claimed
and the previous three fiscal periods) during the fiscal period shall
pay the Board the applicable assessments owed and submit any necessary
reports to the Board pursuant to Sec. 1223.60.
(b) Assessment refunds. Importers and producers who are exempt from
assessment shall be eligible for a refund of assessments collected,
either by Customs or a first handler. Requests for such assessment
refunds must be submitted to the Board within 90 days of the last day
in the fiscal period when assessments were collected on such producer's
or importer's pecans. No interest will be paid on such assessments. The
Board shall refund such assessments no later than 60 calendar days
after receipt by the Board of information justifying the exemption from
assessment.
(c) Organic. (1) A producer who domestically produces pecans under
an approved National Organic Program (7 CFR part 205) (NOP) organic
production system plan may be exempt from the payment of assessments
under this part, provided that:
(i) Only agricultural products certified as ``organic'' or ``100
percent organic'' (as defined in the NOP) are eligible for exemption;
(ii) The exemption shall apply to all certified ``organic'' or
``100 percent organic'' (as defined in the NOP) products of a producer
regardless of whether the agricultural commodity subject to the
exemption is produced by a person that also produces conventional or
nonorganic agricultural products of the same agricultural commodity as
that for which the exemption is claimed;
(iii) The producer maintains a valid certificate of organic
operation as issued under the Organic Foods Production Act of 1990 (7
U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OFPA (7
CFR part 205); and
(iv) Any producer so exempted shall continue to be obligated to pay
assessments under this part that are associated with any agricultural
products that do not qualify for an exemption under this section.
(2) To apply for exemption under this section, an eligible producer
shall submit a request to the Board on an Organic Exemption Request
Form (Form AMS-15) at any time during the fiscal period initially, and
annually thereafter on or before the start of the fiscal period, for as
long as the producer continues to be eligible for the exemption.
(3) A producer request for exemption shall include the following:
(i) The applicant's full name, company name, address, telephone and
fax numbers, and email address;
(ii) Certification that the applicant maintains a valid certificate
of organic operation issued under the OFPA and the NOP;
(iii) Certification that the applicant produces organic products
eligible to be labeled ``organic'' or ``100 percent organic'' under the
NOP;
(iv) A requirement that the applicant attach a copy of their
certificate of organic operation issued by a USDA-accredited certifying
agent;
(v) Certification, as evidenced by signature and date, that all
information provided by the applicant is true; and
(vi) Such other information as may be required by the Board, with
the approval of the Secretary.
(4) If a producer complies with the requirements of this section,
the Board will grant an assessment exemption and issue a Certificate of
Exemption to the producer within 30 days. If the application is
disapproved, the Board will notify the applicant of the reason(s) for
disapproval within the same timeframe.
(5) An importer who imports pecans that are eligible to be labeled
as ``organic'' or ``100 percent organic'' under the NOP, or certified
as ``organic'' or ``100 percent organic'' under a U.S. equivalency
arrangement established under the NOP, may be exempt from the payment
of assessments. Such importer may submit documentation to the Board and
request an exemption from assessment on certified ``organic'' or ``100
percent organic'' pecans on an Organic Exemption Request Form (Form
AMS-15) at any time initially, and annually thereafter on or before the
beginning of the fiscal period, as long as the importer continues to be
eligible for the exemption. This documentation shall include the same
information required of a producer in paragraph (c)(3) of this section.
If the importer complies with the requirements of this section, the
Board will grant the exemption and issue a Certificate of Exemption to
the importer within the applicable timeframe. Any importer so exempted
shall continue to be obligated to pay assessments under this part that
are associated with any imported agricultural products that do not
qualify for an exemption under this section.
(6) If Customs collects the assessment on exempt product under
paragraph (c)(5) of this section that is identified as ``organic'' by a
number in the Harmonized Tariff Schedule, the Board must reimburse the
exempt importer the assessments paid upon receipt of such assessments
from Customs. For all other exempt organic product for which Customs
collects the assessment, the importer may apply to the Board for a
reimbursement of assessments paid, and the importer must submit
satisfactory proof to the Board that the importer paid the assessment
on exempt organic product.
(7) The exemption will apply immediately following the issuance of
the Certificate of Exemption.
Sec. 1223.54 Refund escrow accounts.
(a) The Board shall establish an interest bearing escrow account
with a financial institution that is a member of the Federal Reserve
System and will deposit into such account an amount equal to 10 percent
of the assessments collected during the period beginning on the
effective date of the Order and ending on the date the Secretary
announces the results of the required referendum.
(b) If the Order is not approved by the required referendum, the
Board shall promptly pay refunds of assessments to all producers and
importers that have paid assessments during the period beginning on the
effective date of the Order and ending on the date the Secretary
announces the results of the required referendum in the manner
specified in paragraph (c) of this section.
(c) If the amount deposited in the escrow account is less than the
amount of all refunds that producers and importers subject to this
subpart have a right to receive, the Board shall prorate the amount
deposited in such account among all producers and importers who desire
a refund of assessments paid no later than 90 days after the required
referendum results are announced by the Secretary.
(d) Any producer or importer requesting a refund shall submit an
application on the prescribed form to the Board within 60 days from the
date the results of the required referendum are announced by the
Secretary. The producer and importer shall also submit documentation to
substantiate that assessments were paid. Any such demand shall be made
by such producer
[[Page 59636]]
or importer in accordance with the provisions of this subpart and in a
manner consistent with the regulations in this part.
(e) If the Order is approved by the required referendum conducted
under Sec. 1223.71 then:
(1) The escrow account shall be closed; and,
(2) The funds shall be available to the Board for disbursement
under Sec. 1223.50.
Promotion, Research, and Information
Sec. 1223.55 Programs, plans, and projects.
(a) The Board shall receive and evaluate, or on its own initiative
develop, and submit to the Secretary for approval any program, plan, or
project authorized under this subpart. Such programs, plans, or
projects shall provide for:
(1) The establishment, issuance, effectuation, and administration
of appropriate programs for promotion, research, and information,
including producer and consumer information, with respect to pecans;
and
(2) The establishment and conduct of research with respect to the
use, nutritional value, sale, distribution, and marketing of pecans,
and the creation of new products thereof, to the end that the marketing
and use of pecans may be encouraged, expanded, improved, or made more
acceptable and to advance the image, desirability, or quality of
pecans.
(b) No program, plan, or project shall be implemented prior to its
approval by the Secretary. Once a program, plan, or project is so
approved, the Board shall take appropriate steps to implement it.
(c) Each program, plan, or project implemented under this subpart
shall be reviewed or evaluated periodically by the Board to ensure that
it contributes to an effective program of promotion, research, or
information. If it is found by the Board that any such program, plan,
or project does not contribute to an effective program of promotion,
research, or information, then the Board shall terminate such program,
plan, or project.
Sec. 1223.56 Independent evaluation.
The Board shall, not less often than every five years, authorize
and fund, from funds otherwise available to the Board, an independent
evaluation of the effectiveness of the Order and other programs
conducted by the Board pursuant to the Act. The Board shall submit to
the Secretary, and make available to the public, the results of each
periodic independent evaluation conducted under this section.
Sec. 1223.57 Patents, copyrights, trademarks, information,
publications, and product formulations.
Patents, copyrights, trademarks, information, publications, and
product formulations developed through the use of funds received by the
Board under this subpart shall be the property of the U.S. Government
as represented by the Board and shall, along with any rents, royalties,
residual payments, or other income from the rental, sales, leasing,
franchising, or other uses of such patents, copyrights, trademarks,
information, publications, or product formulations, inure to the
benefit of the Board; shall be considered income subject to the same
fiscal, budget, and audit controls as other funds of the Board; and may
be licensed subject to approval by the Secretary. Upon termination of
this subpart, Sec. 1223.73 shall apply to determine disposition of all
such property.
Reports, Books, and Records
Sec. 1223.60 Reports.
(a) Each first handler, producer, or importer subject to this
subpart shall be required to provide to the Board periodically such
information as required by the Board, with the approval of the
Secretary, which may include but not be limited to the following:
(1) First handler must report or producer acting as its own first
handler:
(i) Number of pounds handled;
(ii) Number of pounds on which an assessment was collected;
(iii) Name, address and other contact information from whom the
first handler has collected the assessments on each pound handled; and
(iv) Date collection was made on each pound handled.
(2) Unless provided by Customs, importer must report:
(i) Number of pounds imported;
(ii) Number of pounds on which an assessment was paid;
(iii) Name, address, and other contact information of the importer;
and
(iv) Date assessment was paid on each pound imported.
(b) These reports shall accompany the payment of the collected
assessments.
Sec. 1223.61 Books and records.
Each producer, first handler, and importer subject to this subpart
shall maintain and make available for inspection by the Secretary such
books and records as are necessary to carry out the provisions of this
part, including such records as are necessary to verify any reports
required. Such records shall be retained for at least 3 years beyond
the fiscal period of their applicability.
Sec. 1223.62 Confidential treatment.
All information obtained from books, records, or reports under the
Act and this part shall be kept confidential by all persons, including
all employees and former employees of the Board, all officers and
employees and former officers and employees of contracting and
subcontracting agencies or agreeing parties having access to such
information. Such information shall not be available to Board members,
producers, importers, or first handlers. Only those persons having a
specific need for such information to effectively administer the
provisions of this subpart shall have access to such information. Only
such information so obtained as the Secretary deems relevant shall be
disclosed by them, and then only in a judicial proceeding or
administrative hearing brought at the direction, or on the request, of
the Secretary, or to which the Secretary or any officer of the United
States is a party and involving this subpart. Nothing in this section
shall be deemed to prohibit:
(a) The issuance of general statements based upon the reports of
the number of persons subject to this subpart or statistical data
collected therefrom, which statements will not identify the information
furnished by any person; and
(b) The publication, by direction of the Secretary, of the name of
any person who has been adjudged to have violated this subpart,
together with a statement of the particular provisions of this subpart
violated by such person.
Miscellaneous
Sec. 1223.70 Right of the Secretary.
All fiscal matters, programs, plans, or projects, rules or
regulations, reports, or other substantive actions proposed and
prepared by the Board shall be submitted to the Secretary for approval.
Sec. 1223.71 Referenda.
(a) Required referendum. For the purpose of ascertaining whether
the persons subject to this subpart favor the continuation, suspension,
amendment, or termination of this subpart, the Secretary shall conduct
a referendum among persons subject to assessments under Sec. 1223.52
who, during a representative period determined by the Secretary, have
engaged in the production or importation of pecans:
(1) The required referendum shall be conducted not later than 3
years after assessments first begin under the Order; and
(2) The Order will be approved in a referendum if a majority of
producers and importers vote for approval in the referendum.
[[Page 59637]]
(b) Subsequent referenda. The Secretary shall conduct subsequent
referenda:
(1) For the purpose of ascertaining whether producers and importers
favor the continuation, suspension, or termination of the Order;
(2) Every seven years the Secretary shall hold a referendum to
determine whether producers and importers of pecans favor the
continuation of the Order. The Order shall continue if it is favored by
a majority of producers and importers voting for approval in the
referendum who have been engaged in the production or importation of
pecans;
(3) At the request of the Board established in this subpart;
(4) At the request of 10 percent or more of the number of persons
eligible to vote in a referendum as set forth under the Order; or
(5) At any time as determined by the Secretary.
Sec. 1223.72 Suspension and termination.
(a) The Secretary shall suspend or terminate this part or subpart
or a provision thereof if the Secretary finds that this part or subpart
or a provision thereof obstructs or does not tend to effectuate the
purposes of the Act, or if the Secretary determines that this part or
subpart or a provision thereof is not favored by persons voting in a
referendum conducted pursuant to the Act.
(b) The Secretary shall suspend or terminate this subpart at the
end of the fiscal period whenever the Secretary determines that its
suspension or termination is approved or favored by a majority of
producers and importers voting for approval who, during a
representative period determined by the Secretary, have been engaged in
the production or importation of pecans.
(c) If, as a result of a referendum the Secretary determines that
this subpart is not approved, the Secretary shall:
(1) Not later than 180 days after making the determination, suspend
or terminate, as the case may be, collection of assessments under this
subpart; and
(2) As soon as practical, suspend or terminate, as the case may be,
activities under this subpart in an orderly manner.
Sec. 1223.73 Proceedings after termination.
(a) Upon the termination of this subpart, the Board shall recommend
not more than three of its members to the Secretary to serve as
trustees for the purpose of liquidating the affairs of the Board. Such
persons, upon designation by the Secretary, shall become trustees of
all of the funds and property then in the possession or under control
of the Board, including claims for any funds unpaid or property not
delivered, or any other claim existing at the time of such termination.
(b) The said trustees shall:
(1) Continue in such capacity until discharged by the Secretary;
(2) Carry out the obligations of the Board under any contracts or
agreements entered into pursuant to this subpart;
(3) From time to time account for all receipts and disbursements
and deliver all property on hand, together with all books and records
of the Board and the trustees, to such person or persons as the
Secretary may direct; and
(4) Upon request of the Secretary execute such assignments or other
instruments necessary and appropriate to vest in such person's title
and right to all funds, property, and claims vested in the Board or the
trustees pursuant to this subpart.
(c) Any person to whom funds, property, or claims have been
transferred or delivered pursuant to this subpart shall be subject to
the same obligations imposed upon the Board and upon the trustees.
(d) Any residual funds not required to defray the necessary
expenses of liquidation shall be turned over to the Secretary to be
disposed of, to the extent practical, to the pecan producer
organizations in the interest of continuing pecan promotion, research,
and information programs.
Sec. 1223.74 Effect of termination or amendment.
Unless otherwise expressly provided by the Secretary, the
termination of this part, or the issuance of any amendment to this
part, shall not:
(a) Affect or waive any right, duty, obligation, or liability which
shall have arisen, or which may thereafter arise in connection with any
provision of this part; or
(b) Release or extinguish any violation of this part; or
(c) Affect or impair any rights or remedies of the United States,
or of the Secretary or of any other persons, with respect to any such
violation.
Sec. 1223.75 Personal liability.
No member or employee of the Board shall be held personally
responsible, either individually or jointly with others, in any way
whatsoever, to any person for errors in judgment, mistakes, or other
acts, either of commission or omission, as such member or employee,
except for acts of dishonesty or willful misconduct.
Sec. 1223.76 Separability.
If any provision of this subpart is declared invalid or the
applicability thereof to any person or circumstances is held invalid,
the validity of the remainder of this subpart or the applicability
thereof to other persons or circumstances shall not be affected
thereby.
Sec. 1223.77 Amendments.
Amendments to this subpart may be proposed from time to time by the
Board or by any interested person affected by the provisions of the
Act, including the Secretary.
Sec. 1223.78 OMB control numbers.
The control number assigned to the information collection
requirements by the Office of Management and Budget pursuant to the
Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, is OMB control
number 0581-NEW, except for the Board nominee background statement form
which is assigned OMB control number 0505-0001.
Subpart B--Referendum Procedures
Sec. 1223.100 General.
Referenda to determine whether eligible pecan producers and
importers favor the issuance, amendment, suspension, or termination of
the Pecan Promotion, Research, and Information Order shall be conducted
in accordance with this subpart.
Sec. 1223.101 Definitions.
(a) Administrator means the Administrator of the Agricultural
Marketing Service, with power to redelegate, or any officer or
employees of the U.S. Department of Agriculture to whom authority has
been delegated or may hereafter be delegated to act in the
Administrator's stead.
(b) Eligible importer means any person who, during the
representative period, was subject to the Order and required to pay
assessments on pecans imported into the United States.
(c) Eligible producer means any person who, during the
representative period, was subject to the Order and required to pay
assessments on pecans produced in the United States.
(d) Order means subpart A of this part, the Pecan Promotion,
Research, and Information Order.
(e) Pecans means and includes any and all varieties or
subvarieties, inshell and shelled, of Carya illinoinensis grown or
imported into the United States.
(f) Person means any individual, group of individuals, partnership,
corporation, association, cooperative, or
[[Page 59638]]
any other legal entity. For the purpose of this paragraph (f), the term
``partnership'' includes, but is not limited to:
(1) A husband and a wife who have title to, or leasehold interest
in, a pecan farm as tenants in common, joint tenants, tenants by the
entirety, or, under community property laws, as community property; and
(2) So-called ``joint ventures'' wherein one or more parties to an
agreement, informal or otherwise, contributed land and others
contributed capital, labor, management, or other services, or any
variation of such contributions by two or more parties.
(g) Referendum agent or agent means the individual or individuals
designated by the Secretary to conduct the referendum.
(h) Representative period means the period designated by the
Secretary.
(i) United States means collectively the 50 states, the District of
Columbia, the Commonwealth of Puerto Rico, and the territories and
possessions of the United States.
Sec. 1223.102 Voting.
(a) Each person who is an eligible producer or an eligible
importer, as defined in this subpart, at the time of the referendum and
during the representative period, shall be entitled to cast only one
ballot in the referendum. However, each producer in a landlord-tenant
relationship or a divided ownership arrangement involving totally
independent entities cooperating only to produce pecans, in which more
than one of the parties is a producer, shall be entitled to cast one
ballot in the referendum covering only such producer's share of the
ownership.
(b) Proxy voting is not authorized, but an officer or employee of a
corporate producer or importer, or an administrator, executor, or
trustee or an eligible entity may cast a ballot on behalf of such
person. Any individual so voting in a referendum shall certify that
such individual is an officer or employee of the eligible entity, or an
administrator, executive, or trustee of an eligible entity and that
such individual has the authority to take such action. Upon request of
the referendum agent, the individual shall submit adequate evidence of
such authority.
(c) All ballots are to be cast by mail, overnight delivery,
electronic mail, facsimile, or by other means as instructed by the
Secretary.
Sec. 1223.103 Instructions.
The referendum agent shall conduct the referendum, in the manner
provided in this section, under the supervision of the Administrator.
The Administrator may prescribe additional instructions, not
inconsistent with the provisions in this section, to govern the
procedure to be followed by the referendum agent. Such agent shall:
(a) Determine the period during which ballots may be cast.
(b) Provide ballots and related material to be used in the
referendum. The ballot shall provide for recording essential
information, including that needed for ascertaining whether the person
voting, or on whose behalf the vote is cast, is an eligible voter.
(c) Give reasonable public notice of the referendum:
(1) By utilizing available media or public information sources,
without incurring advertising expense, to publicize the dates, places,
method of voting, eligibility requirements, and other pertinent
information. Such sources of publicity may include, but are not limited
to, print and radio; and
(2) By such other means as the agent may deem advisable.
(d) Mail to eligible producers and eligible importers whose names
and addresses are known to the referendum agent, the instructions on
voting, a ballot, and a summary of the terms and conditions of the
proposed Order. No person who claims to be eligible to vote shall be
refused a ballot.
(e) At the end of the voting period, collect, open, number, and
review the ballots and tabulate the results in the presence of an agent
of a third party authorized to monitor the referendum process.
(f) Prepare a report on the referendum.
(g) Announce the results to the public.
Sec. 1223.104 Subagents.
The referendum agent may appoint any individual or individuals
necessary or desirable to assist the agent in performing the referendum
agent's functions listed in this subpart. Each individual so appointed
may be authorized by the agent to perform any or all of the functions
which, in the absence of such appointment, shall be performed by the
agent.
Sec. 1223.105 Ballots.
The referendum agent and subagents shall accept all ballots cast.
However, if the agent or subagent deems that a ballot should be
challenged for any reason, the agent or subagent shall endorse above
their signature, on the ballot, a statement to the effect that such
ballot was challenged, by whom challenged, the reasons therefore, the
results of any investigations made with respect thereto, and the
disposition thereof. Ballots invalid under this subpart shall not be
counted.
Sec. 1223.106 Referendum report.
Except as otherwise directed, the referendum agent shall prepare
and submit to the Administrator a report on the results of the
referendum, the manner in which it was conducted, the extent and kind
of public notice given, and other information pertinent to the analysis
of the referendum and its results.
Sec. 1223.107 Confidential information.
The ballots and other information or reports that reveal, or tend
to reveal, the vote of any person covered under the Act and the voting
list shall be held confidential and shall not be disclosed.
Subpart C--Administrative Provisions
Sec. 1223.520 Late payment and interest charges for past due
assessments.
(a) A late payment charge will be imposed on any producer, 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 5 percent of the assessments due before interest charges have
accrued.
(b) In addition to the late payment charge, 1 percent per month
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.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-19031 Filed 9-21-20; 8:45 am]
BILLING CODE P