[Federal Register Volume 86, Number 8 (Wednesday, January 13, 2021)]
[Rules and Regulations]
[Pages 2880-2901]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00328]



[[Page 2879]]

Vol. 86

Wednesday,

No. 8

January 13, 2021

Part III





Department of Agriculture





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Agricultural Marketing Service





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7 CFR Part 1223





Pecan Promotion, Research, and Information Order; Final Rule

  Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / 
Rules and Regulations  

[[Page 2880]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1223

[Document Number AMS-SC-20-0013; FR]


Pecan Promotion, Research, and Information Order

AGENCY: Agricultural Marketing Service.

ACTION: Final rule.

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SUMMARY: This rule establishes the Pecan Promotion, Research, and 
Information Order (Order). This rule also establishes 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 rule announces the Agricultural Marketing 
Service's (AMS) approval of new pecan information collection 
requirements by the Office of Management and Budget (OMB) for the 
operation of the Order.

DATES: Effective Date February 12, 2021. Collection of assessments as 
required by Sec. Sec.  1223.52 and 1223.53 and compliance with 
reporting and recordkeeping requirements under Sec. Sec.  1223.60 and 
1223.61 will begin October 1, 2021.

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 is issued pursuant to the Commodity 
Promotion, Research, and Information Act of 1996 (1996 Act) (7 U.S.C. 
7411-7425).
    As part of this rulemaking process, a proposed rule was published 
in the Federal Register on September 22, 2020 (85 FR 59610). That rule 
provided for a 60-day comment period, which ended on November 23, 2020. 
Fifty-four comments were received. All comments are addressed later in 
this final rule.

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 will not 
have substantial and direct effects on Tribal governments and will not 
have significant Tribal implications.

Executive Order 12988

    This action 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 rule establishes the Pecan Promotion, Research, and 
Information Order (7 CFR part 1223) (Order). The purpose of the program 
is 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. The program will be 
financed by an assessment on producers and importers and will be 
administered by a board of industry members selected by the Secretary. 
The initial assessment rate will 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) will be exempt from the 
payment of assessments. Assessment collection, along with the 
appropriate reporting and recordkeeping, will become effective October 
1, 2021. This date aligns with the Order's fiscal period.
    A referendum will be conducted among producers and importers to 
determine if pecan producers and importers favor the continuation of 
the program three years after the collection of assessment begins.

Legal Basis for Action

    The 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).

[[Page 2881]]

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; 
a provision for reserve funds; a 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 1996 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, (7 CFR part 986) 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 pecan 
research and promotion program will be national in scope, financed by 
an assessment on pecan producers and importers, and authorize research 
and promotion activities. USDA has not identified any relevant Federal 
rules that duplicate, overlap, or conflict with this 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 
subvarieties, inshell or shelled, of 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 volume nationwide.
    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.
BILLING CODE 3410-02-P

[[Page 2882]]

[GRAPHIC] [TIFF OMITTED] TR13JA21.000

    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.
[GRAPHIC] [TIFF OMITTED] TR13JA21.001


[[Page 2883]]


    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] TR13JA21.002

    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] TR13JA21.003

    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] TR13JA21.004

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 2885]]

[GRAPHIC] [TIFF OMITTED] TR13JA21.005

BILLING CODE 3410-02-C

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 
will help the industry address this challenge. NPF concluded that 
without a program funded by assessments from both domestically produced 
and imported pecans, the industry will 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 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. Per the NPF, the increase in domestic production and imports 
has created the need for a robust promotion campaign, which would only 
be accomplished through financial contribution by both domestic 
producers and importers. 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 Program

    Pursuant to section 513 of the 1996 Act, Sec. Sec.  1223.1 through 
1223.25 of 7 CFR part 1223 (referred to as the ``Order'') define 
certain terms that will be used throughout 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 pecans Order.
    Pursuant to section 515 of the 1996 Act, Sec. Sec.  1223.40 through 
1223.47 of the Order detail the establishment of the American Pecan 
Promotion Board (Board), nominations and appointments, the term of 
office, removal and vacancies, procedure, compensation and 
reimbursement, powers and duties, and prohibited activities.
    Pursuant to sections 516 and 517 of the 1996 Act, Sec. Sec.  
1223.50 through 1223.54 of the Order detail requirements regarding the 
Board's budget and expenses, financial statements, assessments, and 
exemption from assessments.
    The Board's programs and expenses shall be funded through 
assessments on producers and importers, other income, and other funds 
available to the Board. The Order provides for an initial assessment 
rate of $0.02 per pound on all inshell pecans and $0.04 per pound on 
all shelled pecans. Each producer will pay on the amount of pecans 
produced in the United States. The importer of record will 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 to collect and remit assessments owed to the Board. First 
handlers will collect assessments from each producer based on pounds of 
pecans received. The first handler will remit those assessments, along 
with the required reports, to the Board. If a producer is acting as its 
own first handler, the producer will be required to remit its 
individual assessments. Assessments owed will be due to the Board by 
the 10th calendar day of the month following the end of

[[Page 2886]]

the previous month. As an example, assessments for pecans received in 
June will be due to the Board by July 10th.
    Importer assessments will be collected through Customs and Border 
Protection (Customs). If Customs does not collect the assessment from 
an importer, the importer will be responsible for paying the assessment 
directly to the Board by the 10th calendar day of the month following 
the month the pecans were imported into the United States.
    The Order provides 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. The late payment charge and rate 
of interest are prescribed in Subpart C of the Order.
    The Order provides for two exemptions from assessment requirements. 
First, 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) will be 
exempt. Producers or importers seeking an exemption shall apply to the 
Board for an exemption prior to the start of the fiscal period. This is 
an annual exemption; entities must reapply each year. The Board will 
issue, if deemed appropriate, a certificate of exemption to the 
eligible producer or importer.
    The second exemption under the Order is for organic pecans. The 
exemption applies 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, will be exempt from the payment of assessments.
    Pursuant to section 516 of the 1996 Act, Sec. Sec.  1223.55 through 
1223.57 of the Order detail requirements regarding promotion, research 
and information programs, plans and projects authorized under the 
Order.
    Pursuant to section 515 of the 1996 Act, Sec. Sec.  1223.60 through 
1223.62 of the Order specify the reporting and recordkeeping 
requirements under the Order as well as requirements regarding 
confidentiality of information.
    Pursuant to section 518 of the 1996 Act, Sec.  1223.71(a)(1) of the 
Order specifies that a referendum will be conducted not later than 
three years after assessments first begin under the Order. The Order 
will not continue unless it is approved by a majority of those persons 
voting in the referendum for approval.
    Section 1223.71(b) of the Order specifies criteria for subsequent 
referenda. Under the Order, a referendum will be held to ascertain 
whether the program should continue, be amended, or terminated.
    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 programs authorized under the 1996 Act.
    Sections 1223.100 through 1223.107 of the Order 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.

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 Final 
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 will 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 estimated 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, will 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 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 Order will 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 make recommendations on grade, 
size, quality, pack and container requirements.

Objectives of the Action

    The purpose of the Order is 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 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

[[Page 2887]]

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 pecan research and promotion program is national in scope, 
financed by an assessment on pecan producers and importers, and 
authorizes research and promotion activities. The purpose of the Order 
is 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 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 5 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] TR13JA21.006

    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. While the benefits of the Order are 
difficult to quantify, the benefits are expected to outweigh the 
program's costs.

Compliance Requirements

    This action imposes 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) may 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 will 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 will also be 
exempt from assessment. The reporting and recordkeeping burden to file 
an application for exemption from assessment will 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, will be required to file a 
report listing pecans imported or received from each producer. This 
report will 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 have been 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

[[Page 2888]]

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 in the proposed rule, 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, 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 more than forty-six hundred 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.
    On June 9, 2020, AMS published a Notice to Trade alerting the 
industry that it had received a proposal from the NPF requesting the 
establishment of a research and promotion program for pecans. A 
proposed rule providing a 60-day comment period was published in the 
Federal Register on September 22, 2020 (85 FR 59610). AMS published a 
Notice to Trade on September 22, 2020, alerting the industry that it 
was seeking comments on the proposal. Subsequently, AMS sent a postcard 
and an email to all known pecan producers and importers notifying them 
of the Federal Register published proposal.
    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 (PRA) of 1995 (44 
U.S.C. Chapter 35), AMS requested approval of new information 
collection and recordkeeping requirements for the 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 new national research and promotion program for 
the pecan industry. The program will be financed by an assessment on 
pecan producers and importers and will be administered by a board of 
industry members selected by the Secretary. The program will 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 will 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 will 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 
will 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 may also submit a background statement 
outlining qualifications to serve on the Board. Except for the initial 
Board nominations, producers and importers will have the opportunity to 
submit a ``Nomination Ballot'' to the Board where they will vote for 
candidates to serve on the Board. Nominees will 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 will be able to be certified by the Secretary and have an 
opportunity to nominate importer members. Those such organizations must 
submit the 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), will be exempt from assessments. Producers or 
importers shall apply to the Board for an exemption prior to the start 
of the fiscal period. This will be an annual exemption; entities will 
have to reapply each year. Producers or importers may submit a request, 
``Application for Exemption from Assessments,'' to the Board for an 
exemption from paying assessments. Producers and importers who qualify 
as ``organic'' or ``100 percent organic'' under the NOP may submit an 
``Organic Exemption Form'' to the Board and request an exemption from 
assessments.
    First handlers who receive assessments from producers will be asked 
to submit a ``First Handler/Importer Report'' that will accompany their 
assessments paid to the Board and report the quantity of pecans 
received

[[Page 2889]]

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 will be required to submit 
a report. As previously mentioned, the majority of importer assessments 
will be collected by Customs. Customs will remit the funds to the Board 
and the other information will 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, may also request a 
refund of any assessments paid to the Board. Producers and importers 
may also file a form to request a refund of assessments paid if the 
referendum fails to pass. A referendum will be conducted not later than 
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 
will have to complete a ballot to determine whether the research and 
promotion program would continue.
    Information collection requirements that are included in this rule 
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 Form AD-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 0.25 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 current fiscal 
period 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: 525 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.

[[Page 2890]]

    Estimated Number of Responses per Respondent: 0.14 (after first 
referendum one 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 program, producers through first 
handlers, and importers will be required to pay assessments and file 
reports with and submit assessments to the Board (importers through 
Customs). While the Order will impose certain recordkeeping 
requirements on producers, first handlers, and importers, information 
required under the Order may 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 will 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 $606,046. This total has been estimated by multiplying 
12,753.5 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 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 Agricultural 
Marketing 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 forms will 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 
will be simple, easy to understand, and place as small a burden as 
possible on the person required to file the information.
    Collecting information monthly will 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.
    In the September 22, 2020, proposed rule, comments were also 
invited on the information collection requirements prescribed in the 
Paperwork Reduction Act section of this rule. Specifically, comments 
were solicited on: (a) Whether the collection of information is 
necessary for the proper performance of functions of the Order and 
USDA's oversight of the Order, including whether the information would 
have practical utility; (b) the accuracy of USDA's estimate of the 
burden of the 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 will 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.
    Four comments were received regarding information collection. All 
four commenters believed that the estimated recordkeeping burden of 
7,951 hours was overstated by 100 percent. They reasoned that none of 
the information required by the Order would be in addition to any of 
the information normally kept and already required by normal 
accounting, state and Federal Tax preparation and other USDA programs. 
The estimated recordkeeping burden hours are the hours associated with 
maintaining records to verify reports required by the Order. While it 
is understood that some of the information required under the Order may 
be compiled from records currently maintained, there may be additional 
records not currently maintained that would be needed to verify the 
reports required by the Order. Furthermore, the estimated burden is 
nominal and is a customary estimated burden associated with programs 
such as these. In addition, three of the commenters stated that the 
First Handler/Importer Report should be estimated at .08333 hours per 
record keeper, not the .5 hours in the proposed rule. This was based on 
their experience of having to file similar forms as required by the 
Federal marketing order. After further review of the form and similar 
forms required under other research and promotion programs, USDA 
decreased the burden estimate to 0.25 hours. This has been reflected in 
the PRA section above.

Analysis of Comments

    Fifty-four comments were received in response to the proposed rule. 
Of those 54 comments, 28 indicated support for the proposed action, 16 
provided general feedback or suggested changes,

[[Page 2891]]

six opposed the action, two were outside the scope of the rulemaking, 
one was a duplicate, and there was one standalone comment regarding the 
PRA section.

General Comments in Support

    A majority of the commenters expressed their confidence that the 
proposed program would grow consumer demand for pecans, expanding 
markets, while helping offset the current imbalance between supply and 
demand. Several commenters found that being able to assess both 
domestic and imported product would increase the resources available to 
create demand and would allow a more unified strategy. Comments were 
received from several state and national pecan associations voicing 
their support for the proposed program, agreeing that the proposed 
research and promotion program will provide the pecan industry with 
more funds to help promote and drive demand. Commenters discussed the 
challenges the pecan industry has faced the last several years, and 
that while the proposed program will not address all of these 
challenges, it is a step in the right direction. Six commenters simply 
expressed their support for the proposed program.

Comments in Opposition

    Six comments received were opposed to the program. Four of the 
commenters stated that producers are already paying an assessment for 
the Federal marketing order program, which is tasked with promoting 
pecans, and are not in favor of having another promotion program that 
will assess producers. One commenter noted that the pecan industry 
already has many national and state level trade organizations and that 
the industry does not need another. Instead of the proposed program, 
the commenter advocated for a consolidated effort and strategy between 
these organizations to insure a more efficient research, promotion and 
marketing effort. As is addressed in this rule, Federal marketing 
orders and research and promotion orders are created pursuant to 
different laws and provide for different activities. The Federal 
marketing order assessment obligations are imposed on handlers, 
although some of the costs may be passed on to producers. Producers and 
importers are obligated to pay the assessment under the research and 
promotion Order. A comment submitted by the American Pecan Council 
(APC) (the Federal marketing order governing body) committed to 
ensuring, with the establishment of the new Order, that the domestic 
pecan industry does not pay more than the total assessment amount that 
is currently obligated under the Federal marketing order. It indicated 
it would therefore recommend reducing the assessment obligated under 
the Federal marketing order should the research and promotion program 
be established. Under Federal marketing orders assessment rates are 
intended to be applicable to each fiscal year. The pecan marketing 
order fiscal period is October 1 through September 30, which is the 
same as the Order. With the assessment obligation under the Order 
beginning October 1, 2021, this would allow the APC adequate time to 
review and recommend its assessment rate for its 2021-22 fiscal year, 
ensuring its commitment to the industry.
    Commenters noted the continued decline in producer price over the 
last couple of years and that producers cannot afford to fund this 
program. According to NASS statistics, grower received price per pound 
(in shell basis) for the six-year period from 2013-2019, have ranged 
from a low of $1.73 in 2013, to a high of $2.59 in 2016, with the six-
year average of $2.11. The reported prices for years 2017, 2018, and 
2019, were $2.33, $1.75, and $1.84, respectively. Based on this 
historical information, pecan grower received prices for upcoming years 
could range between $1.73 and $2.59 per pound. Utilizing these 
historical figures, the estimated assessment cost as a percentage of 
grower received price, could range from approximately 1.15 percent to 
.78 percent ($0.02 divided by $1.73 and $2.59, respectively). While 
there is a cost associated with the program, they are expected to be 
offset by the identified benefits of the Order. As was stated 
previously, the purpose of the Order would be to create increased 
demand for pecans, strengthening the overall viability of the industry. 
One comment stated that the government should fund the program instead 
of producers. The 1996 Act prescribes that such programs are financed 
by an assessment on producers and importers, and does not provide the 
authority for the government to pay for such programs.
    One commenter expressed concern that exempt producers will not be 
aware of the need to submit a form to apply for the exemption and that 
it is too much of a burden on the handler to secure those forms from 
the exempt producers. It would be the task of the Board to educate the 
industry on the Order provisions, working directly with producers who 
would be required to submit the exemption forms.
    Several commenters expressed concern regarding the composition of 
the proposed Board, stating that assurances need to be made that for 
the producer member positions just growers, not dual-role entities such 
as grower/shellers or grower/marketers, are represented on the Board. 
In making recommendations to the Secretary for appointments to the 
Board, the Order states that industry members should consider operation 
size, production and distribution methods, and other factors to ensure 
adequate representation of assessed entities. In addition, the Order 
provides that the Board has the authority to consider recommending 
additional eligibility requirements for members of the Board.

General Comments and Suggested Modifications

    Some comments provided general comments or/and suggested 
modifications to the Order. One commenter suggested that the 
establishment of the American Pecan Promotion Board should be 
apportioned equally among the three identified regions, citing that 
this adjustment accounts more fairly for the nature of pecan production 
as an alternate-year bearing crop. The 1996 Act requires that the 
composition of the board reflect the geographical distribution of 
production. As was discussed in the proposed rule in the Establishment 
of the Board section, USDA did an in-depth analysis of production data 
from the past six years to account for the nature of pecans being an 
alternate bearing crop. The analysis took into consideration the crop 
loss in Georgia due to the hurricane in 2018 by applying lesser weight 
to the production volumes of 2018 and 2019 and placing greater weight 
on the production volumes of 2014 through 2017. Based on the analysis 
of the available data, the distribution of seats among the regions 
reflects the distribution of production in those regions. The Order 
allows for the Board to revisit the distribution of seats on the Board 
at least once every five years and recommend any changes to the 
Secretary for consideration.
    Three commenters suggested that eligible producer members should 
have a majority of their income derived from the production of pecans 
to ensure that producer interests are represented on the Board. The 
commenters noted that it is common to have vertically integrated 
businesses that do not solely identify as producers, but also as 
shellers. The commenters argued that to be eligible to represent 
producers on the Board, the majority of income derived needs to be from 
the production of pecans and not shelling. One commenter believed that 
industry

[[Page 2892]]

members should not be able to serve on the American Pecan Council and 
the Board at the same time. As was previously mentioned, the Order 
provides that when making recommendations to the Secretary for 
appointment of members to the Board industry members should consider 
size of operations, methods of production and distribution, and other 
factors to ensure adequate representation of assessed entities. The 
Order also provides that the Board may recommend amendments to the 
representation of membership provisions. Once the Board is established, 
it could consider recommending additional eligibility requirements for 
producer members.
    Three commenters stated that the assessment should be higher on 
imported product. The 1996 Act requires that, should imports be 
assessed, the rate be comparable to that of the domestic product. Two 
commenters sought clarification regarding the entity obligated to pay 
the assessment rate required under the Federal marketing order in 
comparison to the assessment rate under the research and promotion 
program. Domestic handlers are obligated to pay assessments under the 
Federal marketing order. Domestic producers are obligated to pay 
assessments under the research and promotion program. In addition, the 
laws authorizing these programs do not allow for the assessment 
obligation to be met by a different entity than those subject to its 
respective law.
    One commenter raised concerns over the entity that would conduct 
referenda under the Order, specifically stating that the proposed rule 
did not clearly define ``referendum agents.'' All referenda are 
administered by the USDA and its employees. Referendum agents are those 
USDA employees who conduct the referendum.
    Several commenters expressed that the program should first and 
foremost support domestic producers. As was stated in the Background 
section of this rule, 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 generic 
promotion activities.
    One commenter expressed concerns regarding the proposed 
assessment's impact on small growers in Mexico. The commenter stated 
that while importers of record will be obligated to pay the assessment, 
the cost will eventually be passed-on to the grower. The Order 
obligates the importer of record to pay the assessment. Although, some 
of the costs may be passed on to producers, these costs are expected to 
be offset by the benefits derived by the operation of the Order. 
Furthermore, contracts between grower and importers are individual 
business decisions between the two parties. Such business decisions are 
outside the scope of the Order.
    One commenter asked that all marketing logos and marketing 
materials be made available, with Board approval, to Mexican shellers 
and importers, for promoting pecans in the international marketplace. 
Once a Board is appointed, it will work with the industry to develop 
marketing materials and logos for industry use to generically promote 
pecans in the marketplace.
    Two commenters asked several questions regarding the different 
initiatives regarding research, development of uses of pecans, and 
strategic planning. With the establishment of the Order and appointment 
of the Board, the Board will begin implementing programs, plans, and 
projects addressing research and marketing priorities.
    Three commenters raised issues that are outside the scope of the 
authority of the Order. Two commenters voiced concerns regarding 
labeling regulations, while one commenter suggested working with 
Customs and Border Protection to develop new Harmonized Tariff codes 
for pecans.
    In the proposed rule, USDA specifically requested comments on the 
proposed de minimis exemption, particularly on whether the proposed 
level was appropriate to ensure equitable contribution by and 
representation of both domestic producers and importers, or if 
modification to the exemption level was needed, asking commenters to 
provide data to substantiate any recommendations. One commenter opposed 
any exemption from the payment of assessments. The commenter did not 
provide data to substantiate its recommendation.
    After review and consideration of the comments received, USDA is 
not making any changes to the proposed rule based on those comments. 
The USDA has determined that this Order is consistent with and will 
effectuate the purposes of the 1996 Act.

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, title 7, chapter XI of the 
Code of Federal Regulations is 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.
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.

[[Page 2893]]

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 CDP.

    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 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.


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

[[Page 2894]]

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 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

[[Page 2895]]

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, 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

[[Page 2896]]

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 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.

[[Page 2897]]

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 month 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 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

[[Page 2898]]

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 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

[[Page 2899]]

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.
    (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

[[Page 2900]]

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 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

[[Page 2901]]

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. 2021-00328 Filed 1-12-21; 8:45 am]
BILLING CODE 3410-02-P