[Federal Register: January 14, 2005 (Volume 70, Number 10)]
[Rules and Regulations]
[Page 2743-2763]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14ja05-14]
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Part III
Department of Agriculture
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Agricultural Marketing Service
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7 CFR Parts 900, 1150, etc.
Exemption of Organic Handlers From Assessments for Market Promotion
Activities Under Marketing Order Programs and Exemption of Organic
Producers From Assessment by Research and Promotion Programs; Final
Rules
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 1150, 1160, 1205, 1206, 1207, 1209, 1210, 1215, 1216,
1218, 1219, 1220, 1230, 1240, 1250, 1260, and 1280
[Docket No. PY-02-006]
RIN 0581-AC15
Exempting Organic Producers From Assessment by Research and
Promotion Programs
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule amends all 17 commodity research and promotion
orders and/or rules and regulations to exempt any person receiving and
handling solely 100 percent organic products from paying assessments to
any research and promotion program administered by the Agricultural
Marketing Service (AMS). To obtain an exemption, the person must
operate under an approved organic system plan authorized by the
National Organic Program (NOP) and produce and market only products
that are eligible for a 100 percent organic label under the NOP. A
separate final rule to exempt any person producing and marketing solely
100 percent organic products from paying assessments for market
promotion activities under certain marketing order programs
administered by AMS is also being published in today's Federal
Register.
DATES: Effective February 14, 2005.
FOR FURTHER INFORMATION CONTACT: Angela C. Snyder, Office of the Deputy
Administrator, Poultry Programs, Agricultural Marketing Service, U.S.
Department of Agriculture, 1400 Independence Avenue, SW.; STOP 0256,
Room 3932-South; Washington, DC 20250; (202) 720-4476 or (760) 386-
0424; (202) 720-5631 (fax); or e-mail at organicassessment@usda.gov.
SUPPLEMENTARY INFORMATION: Prior documents in this proceeding:
Proposed Rule and Invitation for Comments on Proposed Amendments:
Published April 26, 2004 [69 FR 22689]; Proposed Rule; Extension of
Comment Period: Published May 26, 2004 [69 FR 29907].
Executive Order 12866
This rule has been determined to be ``not significant'' for
purposes of Executive Order 12866 and therefore has not been reviewed
by the Office of Management and Budget.
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. It is not intended to have retroactive effect. This
rule would not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
rule.
The Commodity Promotion, Research, and Information Act of 1996;
Cotton Research and Promotion Act; Dairy Production Stabilization Act
of 1983; Egg Research and Consumer Information Act; Fluid Milk
Promotion Act of 1990; Hass Avocado Promotion, Research, and
Information Act of 2000; Honey Research, Promotion, and Consumer
Information Act; Mushroom Promotion, Research, and Consumer Information
Act of 1990; Popcorn Promotion, Research, and Consumer Information Act;
Pork Promotion, Research, and Consumer Information Act of 1985; Potato
Research and Promotion Act; Soybean Promotion, Research, and Consumer
Information Act; and Watermelon Research and Promotion Act provide that
administrative proceedings must be exhausted before parties may file
suit in court. Under these acts, any person subject to an order may
file a petition with the Secretary of Agriculture stating that the
order, any provision of the order, or any obligation imposed in
connection with the order is not in accordance with law and request a
modification of the order or to be exempted therefrom. The petitioner
is afforded the opportunity for a hearing on the petition. After the
hearing, the Secretary will make a ruling on the petition. The acts
provide that the district courts of the United States in any district
in which the person is an inhabitant, or has his principal place of
business, has jurisdiction to review the Secretary's ruling, provided a
complaint is filed within 20 days from the date of the entry of ruling.
There are no administrative proceedings that must be exhausted prior to
any judicial challenge to the provisions of the Beef Promotion and
Research Act of 1985.
Background
Section 10607 of the Farm Security and Rural Investment Act of 2002
(Pub. L. 107-171)--known as the 2002 Farm Bill--amended Section 501 of
the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C.
7401) (FAIR Act) on May 13, 2002. The amendment exempts any person that
produces and markets solely 100 percent organic products, and that does
not produce any conventional or nonorganic products, from paying
assessments under a commodity promotion law with respect to any
agricultural commodity that is produced on a certified organic farm as
defined in section 2103 of the Organic Foods Production Act of 1990 (7
U.S.C. 6502). USDA has implemented National Organic Program (NOP)
requirements at 7 CFR part 205 to carry out the intent of the OFPA.
The Farm Bill text reads as follows: ``Notwithstanding any
provision of a commodity promotion law, a person that produces and
markets solely 100 percent organic products, and that does not produce
any conventional or nonorganic products, shall be exempt from the
payment of an assessment under a commodity promotion law with respect
to any agricultural commodity that is produced on a certified organic
farm (as defined in section 2103 of the Organic Foods Production Act of
1990 (7 U.S.C. 6502)).''
On April 26, 2004, a proposed rule was published in the Federal
Register [69 FR 22690] inviting comments on a proposal to amend the
orders and/or rules and regulations of the 16 research and promotion
programs for which the U.S. Department of Agriculture has oversight.
These amendments would establish a provision for organic producers and
marketers meeting the specified criteria and procedures to be exempt
from paying assessments under research and promotion programs.
Interested parties were provided 30 days to comment on the proposed
amendments. At the request of a commenter, the comment period was
extended by an additional 30 days to June 25, 2004 [69 FR 29907,
published May 26, 2004].
Summary of Changes From the Proposed Rule
This final rule differs from the proposed rule in a number of
respects.
This final rule covers a new program for mangos that was
implemented following publication of the proposed rule. Accordingly, a
new Subpart C is added to 7 CFR part 1206.
This final rule clarifies that, for the purpose of
obtaining an assessment exemption, a person must operate under an NOP-
approved organic system plan and must produce and market only
commodities eligible for a ``100 percent organic'' label under the NOP
(7 CFR part 205.300-205.311). This applies to all commodities produced
and marketed by the person, not only those covered by the applicable
research and promotion program under which the exemption is sought.
This final rule considers any assessment payer, for the
purpose of
[[Page 2745]]
obtaining an exemption, to be the person that produces and markets the
commodity. Accordingly, the regulatory text has been modified as
appropriate to reflect this, and the definition of ``produce'' as
proposed has been deleted. Therefore, persons other than producers are
no longer required to alter a product. In addition, we have added a
provision wherein products produced and marketed under an organic
system plan but not sold, labeled, or represented as organic would not
disqualify producers from exemption.
An effective date is specified in the regulatory text of
each program providing that the exemption will apply at the next
assessable period following issuance of the Certificate of Exemption.
Other changes made in the final rule include more specific
language concerning the application form, clarifying the information
required of importers, and a change from 30 to 60 days for boards and
councils to grant or deny exemption requests during the first 6 months
following the final rule's effective date.
Miscellaneous changes to some programs' regulatory text
were also made for clarity.
Summary of Comments
We received 132 timely comments from individuals, conventional and
organic farmers, industry organizations, research and promotion boards,
organic trade organizations, a law firm, and a State department of
agriculture. We also received 25 comments from organic farmers past the
close of the comment period, but these did not raise any new issues.
Of the 132 comments timely submitted, 9 were from conventional
farmers, 96 were from organic farmers, 11 were from industry
organizations, 4 were from organic organizations, 7 were from research
and promotion boards, 1 was from an organic cooperative, 1 was from a
State department of agriculture, 2 were from individuals, and 1 was
from a law firm on behalf of an organic dairy. Of the timely comments,
we received 89 form letters.
The comments largely fall into two broad categories. One category
addresses issues of assessment exemption eligibility and application of
the FAIR Act. The other category addresses administrative and
procedural issues.
Issues of Eligibility and Application of the FAIR Act
Definition of Produce: The Farm Bill language states that any
eligible person who produces and markets solely 100 percent organic
products and meets the other specified requirements would be exempt
from the applicable assessments. For the purpose of the proposed rule,
we defined produce to mean ``to grow or produce food, feed, livestock,
or fiber or to receive food, feed, livestock, or fiber and alter that
product by means of feeding, slaughtering, or processing.''
Some commenters stated that the definition of ``produce'' in the
proposed rule was overly broad, not supported by statutory authority,
and that it illegally expanded the application of the exemption to
persons not intended to receive the exemption by including processing
activities, either by processors or importers. Other commenters said
that importers should not be exempt because the altering or processing
would be done after the assessment is paid, because assessments are
collected by the U.S. Customs Service at the time of entry into the
country. In addition, commenters argued that someone who meets the
``produce'' definition should do so for all of the exempt product;
e.g., an importer who imports 10,000 pounds of 100 percent organic beef
and processes 2 pounds should not be exempt from the entire assessment.
Still other commenters commended AMS for recognizing that Congress
intended to exempt not just producers but also handlers, first
handlers, processors, importers, exporters, feeders, and seed stock
producers.
The Farm Bill refers to ``persons who produce,'' not ``producers.''
Therefore, any person who produces--whether a producer, importer,
processor, or other entity--would qualify for exemption, assuming all
of the specified criteria are met. We have reevaluated the definition
of produce and determined that the phrase ``produces and markets''
should apply to the function the person performs that compels the
payment of an assessment. In other words, for producers and seed stock
producers, produce and market means to produce the commodity. For
handlers and first handlers, produce and market means to handle the
commodity; for importers, to import the commodity; for processors, to
process; for feeders, to produce by feeding; and for exporters, to
export. The regulatory text was changed accordingly, and we removed the
definition of produce that appeared in the proposed rule.
Solely 100 Percent Organic: The Farm Bill language states that in
order to be eligible for exemption, the person must produce and market
solely 100 percent organic products and must not produce any
conventional or nonorganic products. The proposed rule was drafted to
state that whatever the person produces must be 100 percent organic--
not just the commodity for which the exemption is sought.
Some commenters encouraged narrow interpretation of the exemption--
that persons must meet the 100 percent definition for everything
produced and that split operations should not qualify for the
exemption. However, numerous commenters, including form letter
submitters, said that a producer should only have to be certified as
100 percent organic for the commodity for which the exemption is
sought. They also stated that by referencing the Organic Foods
Production Act (OFPA), Congress did not limit exemptions for approved
split operations because Congress has determined that a split operation
may produce 100 percent certified organic products. A few commenters
said that rendering a certified organic farmer who produces any non-
organic commodity ineligible for exemption would be in conflict with
the OFPA and Congressional intent.
Furthermore, a large number of commenters, including form letter
submitters, wrote that Congress' use of ``100 percent organic'' meant
that the person's entire product line must be certified as organically
produced and handled and did not refer to the labeling provisions that
distinguish between the organic products bearing various percentages of
organic ingredients.
One commenter said that fluid milk can only be classified as 95
percent or more organic due to the addition of vitamins and that
Congress did not intend to exclude fluid milk processors, and a number
of commenters, including form letter submitters, said this demonstrated
that the rule was drawn too narrowly.
The Farm Bill language requires that a person must produce and
market solely 100 percent organic products in order to receive the
exemption. Because of the construction of the language, we deem ``100
percent organic'' to mean the labeling term described under the NOP and
``solely 100 percent organic products'' to mean every product in the
person's farm or operation. Therefore, our determination is that to be
exempt, a person must produce only products eligible to be labeled as
``100 percent organic,'' and this applies to all commodities, not just
the commodity for which the exemption is sought. To be clear, this
means that split operations will not qualify for exemption. However,
handlers, first handlers, and processors who receive only 100 percent
organic products from split operations will still qualify for
exemption,
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provided they themselves are not certified as split operations.
A small number of commenters stated that some provision should be
made to exempt organic farms in transition. They provided two examples.
In the first example, a certified organic farmer purchases 200 acres of
adjacent land on which conventional hay is currently grown. The farmer
begins to transition the land to make it eligible for organic
certification. During the 3 years that the land is transitioning to
become eligible, the hay may not be sold as organically produced, and
the farmer would lose the exemption if the hay is sold conventionally.
In the second example, a 100 percent organic farm expands its operation
by converting some non-organic crop land to organic. Under NOP rules,
the land must be farmed organically for 3 years to complete the
transition, and during that time, the farmer would not be eligible for
the exemption.
Under the proposed rule, transitional farms, though not
specifically mentioned, were ineligible for exemption because they are
split operations and did not produce 100 percent organic products, and
this is also reflected in the final rule. In the first example, the
farmer would be certified under NOP as a split operation for 3 years
until the transition is complete. Regardless of whether the hay is
sold, it could not be labeled or marketed as 100 percent organic during
the 3-year transition period. Since the farmer must have NOP
certification and meet the threshold of solely 100 percent organic, the
farmer would not be eligible for exemption until the entire farm or
operation was converted to organic production. In the second example,
the farmer owns non-organic crop land and would be certified as a
split-farm operation, therefore making the farmer ineligible for
exemption. Once the 3-year transition is complete and the entire
operation is certified, the farmer would be eligible for exemption.
A large number of commenters, including form letter submitters,
said that an organic producer may be forced to sell an animal
conventionally because of using antibiotics or pesticides or
maintaining a buffer area. They said that, in isolated instances and
for humane purposes, an organic producer may administer antibiotic
treatment. However, that treatment would prevent the animal from being
sold as organic. They also said that organic producers may be ordered
to use chemicals as part of a mandatory disease treatment program, and
those products cannot be sold as organic for 3 years. Furthermore, they
said that under NOP rules, an organic operation must maintain a buffer
area between the organic farm's crops and any neighboring non-organic
fields, and crops harvested from a buffer zone cannot be marketed as
organic. These commenters said that because isolated use of antibiotics
and pesticides would not cause the organic producer to lose NOP
certification and because buffer areas are required by NOP rules,
organic producers should not lose their exemption as the result of
conventional sales under these circumstances. Our determination is that
if the products were produced organically, a conventional sale of those
organic products would not nullify a person's exemption from
assessment. Under the NOP, organic farmers do not lose certification on
their organic farms if they must sell products conventionally, and we
have taken the same view. Therefore, we have determined that as long as
the person maintains NOP certification, producers (including seed stock
producers and feeders) will still meet the threshold of solely 100
percent organic for exemption if: (1) They give an animal antibiotic
treatment or use pesticides or chemicals as a result of mandatory
programs and market the resulting product as conventional, and/or (2)
they sell products from a buffer area; provided they maintain NOP
certification and are not a split operation. The regulatory language of
those programs that assess producers, seed stock producers, and feeders
(beef, blueberries, cotton, dairy, eggs, Hass avocados, honey, lamb,
mushrooms, peanuts, pork, potatoes, soybeans, and watermelons) was
changed accordingly.
However, to be consistent with the requirement to market solely 100
percent organic products, handlers, processors, and other assessment
payers who also are producers may not handle, process, or otherwise
market their nonorganic production, other than to sell it to another
handler or processor. The regulatory language was changed accordingly.
Handlers are assessed under the watermelon program, first handlers are
assessed under the lamb and mango programs, and processors are assessed
under the fluid milk and popcorn programs. Only handlers, first
handlers, and processors that handle or process solely 100 percent
organic products from certified producers are eligible for exemption.
Moreover, if a handler or processor receives products from producers
who produce both 100 percent organic and conventional products,
products from buffer zones, or products treated with antibiotics or
pesticides, that handler or processor is not eligible for exemption. To
be exempt, these handlers or processors must receive and handle or
process solely 100 percent organic products. The producers from whom
they receive products can grow other products conventionally, provided
all of the products the handler or processor receives are eligible to
be labeled as 100 percent organic. However, a handler or processor who
is also a producer under the NOP may not sell products from buffer
zones or treated with antibiotics or pesticides under mandatory
programs and still maintain exemption eligibility.
Administrative and Procedural Issues
Effective Date and Initial Coverage: One commenter believed that
the rule should specify that the exemption is not retroactive. As
provided in this final rule, the exemption is not retroactive, but the
regulatory text was changed to clarify the effective date. The
exemption will apply at the next assessable period following issuance
of the Certificate of Exemption. For some applicants, it will be the
next month; for others, the next fiscal year, and each program's
regulatory language addresses specifics.
Application: A number of commenters, including form letter
submitters, said that persons should not have to apply for exemption
but instead should only have to present the certificate from the USDA-
accredited certifying agent. These commenters said that the certificate
contains sufficient information to permit boards to determine exemption
eligibility, and no additional paperwork should be required.
Several of these commenters commended USDA for proposing reporting
requirements that would solely use the certification documents from a
USDA-accredited certifier to satisfy the eligibility requirements of
``100 percent organic'' as defined by the NOP. The commenters are
correct that the certificate from a USDA-accredited certifying agent
indicates whether the person's farm or operation is certified as
operating under an organic system plan. However, the application
provides additional information that is necessary for boards to
determine whether the person meets the threshold for solely 100 percent
organic and other specified criteria.
Commenters also stated that they agreed with the proposed rule that
the application should include only the following: Name, address, a
copy of the organic exemption certificate, and a signed declaration
that the farmer meets the qualifications for exemption. They said that
if the form requires information beyond what is addressed in the
regulatory text, the public must
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have a chance to comment. While the proposed regulatory text addressed
the information requested on the form as ``name, address, copy of the
organic certificate, and a signed certification * * *,'' the
supplementary information of the proposed rule outlined this
information in greater detail. This included the applicant's name, the
name and address of the company, telephone and fax numbers, a copy of
the organic certification, and a signed certification that the person
meets the qualification for exemption.
Herein, we are clarifying that some additional information is
needed on the form that is part of the person's signed certification.
This includes a list of commodities marketed by the applicant, and
assertions that the applicant is certified, produces solely 100 percent
organic products, and is not a split operation. Also, the form asks for
an e-mail address, but this is optional. The proposed rule estimated
that this form would take 30 minutes to complete, and the information
that was not specifically itemized was and remains included in the
paperwork burden estimate.
These commenters also said that in requiring farmers to certify
that they produce solely 100 percent organic products, the potential
for confusion exists because this terminology differs from the typical
language used by certifying agents. As part of their application,
organic persons must submit a copy of their certification from a USDA-
accredited certifying agent. The boards will evaluate the remainder of
the application to determine whether or not the person meets the
threshold of solely 100 percent organic, though it should be readily
apparent whether the applicant qualifies. Therefore, no changes were
made.
In response to one comment, we amended the regulatory text to
reflect that the information required from importer applicants is the
same as that required from other applicants. While that was the intent
of the proposed rule, the regulatory text reflected slightly different
requirements.
We did not adopt a recommendation from several commenters that
would require persons to submit, in lieu of an application, a notice of
eligibility to the applicable board, along with any materials necessary
to demonstrate that eligibility. The commenters also suggested that
persons with less than $5,000 in income be required to file an
affidavit and notify the board of any change in eligibility within 30
days. Our determination is that the notice of eligibility or affidavit
would virtually be the same burden as the application. Moreover, not
only is the application minimally burdensome, but it is also necessary
for boards to annually determine an applicant's eligibility and to
verify compliance.
One commenter drafted a form and suggested its use by applicants,
and an industry organization suggested a three-part form with copies
going to the producer, purchaser, and State council. The information
requested on this form was, in our view, not sufficient to determine
whether the applicant met the criteria for exemption. Therefore, we did
not adopt this suggestion.
Several commenters said that the certification process must be
tightly controlled to prevent abuse. We believe that the process is
sufficiently controlled between the application, documentation, and
compliance measures. Furthermore, the exemption process is consistent
with the process used by those programs with de minimis exemptions.
One commenter said that the paperwork associated with the
exemptions will be costly to the boards and divert funds from promotion
and research and activities. Our response is that while there will be
some expense involved in administering the exemption, we have taken
steps to simplify and standardize the boards' processes and minimize
costs.
Requirement to Reapply Annually: The proposed rule required that
the exempt person must reapply on an annual basis.
One commenter supported annual recertification, but a number of
commenters said that annual recertification is overly burdensome
because NOP certificates are good until suspended, surrendered, or
revoked. These commenters said that this requirement is unnecessary if
the organic certificate is used. Instead, the burden should be on the
farmer to notify the boards of any change in status and then repay any
assessments owed. Some commenters urged AMS to provide strong language
for revoking the exemption when its requirements are no longer
satisfied.
We reviewed this issue and did not remove the requirement to
reapply annually because we believe that in order for boards to
maintain compliance, an annual application is necessary. Boards must
keep up with assessment payers' evolving operations, and an annual
application is preferable to relying on exempt parties to notify boards
of any changes. Without an annual application, persons who thought they
were exempt but should not have been could end up owing a significant
amount of outstanding assessments. The burden of reapplying annually is
negligible compared to the benefits of exemption. Furthermore, this
requirement is consistent with existing rules and regulations
specifying that those who apply for exemption for de minimis reasons
must do so every year.
We did not adopt a suggestion from one commenter that, in lieu of
annual recertification, the research and promotion boards take the
money they have collected from organic producers and use it to send
notifications to collecting handlers (or other parties that collect
assessments from the assessment payer) and to include information about
the organic exemption in all future literature about commodity checkoff
programs. Notification will be made to the industry as a whole through
this rule and a news release, and exempt persons are required to notify
any person who collects and remits their assessments, if applicable, of
their exempt status.
Deadline for Granting Exemptions: The proposed rule stated that the
boards/councils will grant or deny applications for exemption within 30
days.
A handful of commenters said that the 30-day deadline for granting
exemptions is too short. Instead, boards should have 60 days to grant
exemptions. We reviewed this recommendation and are maintaining the 30-
day deadline. This timeframe was included to ensure that qualifying
persons receive the organic exemption in a timely manner. Moreover,
there should be no deliberation based on the information that is
requested on the form; it should be readily apparent whether or not
applicants qualify. However, we recognize that boards may need
additional time up-front to establish procedures. To that end, we
amended the rule to allow boards 60 days to grant exemptions within the
first 6 months of this rule's effective date. After 6 months, the
timeframe will revert to 30 days.
Notification of Denial: One commenter said that the rule should
specify in writing that farmers who are denied the exemption are timely
notified in writing. The regulatory language was amended to reflect
that persons denied the exemption will be notified in writing within
the same timeframe as those granted the exemption.
An organic organization said that the rule should clarify that a
person meeting the requirements of the application is presumed to be
exempt and should further clarify the circumstances under which the
applicant could be denied exemption. To clarify, any person meeting all
criteria will be granted the exemption. Reasons for denial include
[[Page 2748]]
lack of NOP certification, failure to meet the definition of person, or
failure to meet the threshold of solely 100 percent organic.
In addition, we described an appeals process in the supplementary
information.
Recordkeeping: One commenter said that the rule should include a
requirement to maintain exemption records for a term that is consistent
with the term required for keeping records for compliance audits, and
three commenters (one research and promotion board and two industry
organizations) said that the rule should specify that boards and
recordkeepers must maintain records for 7 years for compliance
purposes. We did not adopt either of these suggestions because the
individual orders and/or regulations already address recordkeeping
requirements, and the 7-year period is beyond the 2 years generally
specified.
Two commenters said that the rule should specify an obligation to
make available all records necessary to verify compliance, but we did
not incorporate this suggestion. Recordkeeping requirements are already
spelled out in the various orders and/or regulations, and specifying an
obligation to make these documents available would be redundant.
Collecting Handlers: A few commenters wanted to replace the
provisions requiring the person to provide a copy of the exemption
certificate to each person responsible for collecting and remitting the
assessment. Instead, the person would be required to provide a
correctly completed original and numbered exemption certificate at the
time of sale from a book of certificates obtained from the board. We
did not adopt this suggestion because we believe it is unnecessary and
would put undue burden on the exempt person and the boards.
Several commenters said that for the beef program, the collecting
point (the one who reports to the State beef council) should list
cattle on the monthly remittance report like they would report another
State of origin. We reviewed this recommendation and determined that no
change was needed in the rule. Instead, the boards will develop
guidance or instructions for collecting handlers or whatever party is
responsible for collecting and remitting assessments to report to the
boards any commodity that was not assessed because of the organic
exemption. This reporting would be handled on existing handler or
remittance forms and would not add additional paperwork burden.
One commenter said that the rule should specify that any watermelon
handler that handles both organic and non-organic products cannot
exempt any part of the assessments collected from the producer, nor
from that handler's portion of the assessment for either organic or
non-organic product. In response to this comment, we did not amend the
rule. Under the watermelon program, handlers are assessed in addition
to producers and importers. In the case of a producer selling to a
handler, the producer pays an assessment on watermelons produced, which
the handler collects and remits, and the handler also pays an
assessment on watermelons handled. To be exempt, the producer must meet
the specified criteria; likewise, for the handler to be exempt, the
handler must meet the specified criteria. If the producer is exempt but
the handler is not, the handler must pay assessments on all products
handled. In no case, though, would the handler have to remit an
assessment from an exempt producer on watermelons produced by that
producer.
One commenter said that specific reporting procedures need to be
included for producers and collecting points to ensure that organic and
nonorganic commodities are not mixed and that only certified organic
commodities are subject to the exemption. In response to this comment,
we did not make any changes to the rule. Persons are exempt under this
rule, not commodities. Since only persons certified as 100 percent
organic can be exempt, there should be no question of mixing organic
and nonorganic commodities in terms of the exemption.
Compliance: A number of commenters said that AMS and NOP should
work in active cooperation with the boards on compliance. Another
commenter said that sellers, purchasers, and handlers should be able to
access full disclosure of animals that have been exempt from
assessment; to that end, USDA should maintain a database indicating the
name and address of any exempt person and the period of exemption. A
number of commenters said that the rule should require USDA to provide
quarterly updates to boards showing farmers certified as organic and
those whose certification has been revoked. We are not establishing a
database for public access, but we concur that we should assist the
boards' compliance efforts. Therefore, while no change was made to the
regulatory text, we will share with the boards information in some form
as appropriate for the boards to maintain an effective compliance
program.
We did not adopt suggestions from commenters to specify that a
person claiming organic exemption is subject to a board audit or to
urge board staff to conduct regular audits. Since the boards already
have the authority to conduct audits to maintain or verify compliance,
it was unnecessary to articulate this in the regulatory text.
Harmonized Tariff Schedule (HTS) Numbers: One commenter asked for
clarification on the process by which a board issued an HTS
classification to an importer, while another said that the rule should
specify that boards should consult with the U.S. Customs Service to
establish an HTS number. However, no changes were made to the rule. AMS
will work with the boards to establish HTS numbers, and we do not
believe the process needs to be articulated in the regulatory text.
State Programs: A commenter expressed concern that organic farmers
could incorrectly believe that they are also exempt from paying
assessments required by State law. Similarly, other commenters said
that it should be the boards' responsibility to inform the exempt
person that the exemption only covers national program assessments and
not a State program authorized by State law and that the certificate of
exemption should clearly state that the person is not exempt under any
State law. We did not adopt these suggestions. The 17 programs affected
by this exemption are identified in this final rule as the only
programs for which an organic exemption can be obtained, and we do not
believe it is necessary to articulate this in the regulatory text.
Other Comments: We did not adopt a suggestion from several
commenters that the rule state that the exemption is granted to the
person and not the commodity. We believe the rule is clear that persons
are exempt from paying assessments, not that commodities are exempt
from being assessed.
One commenter expressed concern about the administration and
implementation of the exemption and said that there should be one
governing body controlling certification and exemption requirements.
This commenter suggested that the boards would best be able to spot
forgeries and should therefore be the designated governing body. We
determined that no changes to the rule are necessary. The proposed rule
specified that the boards or their designees administer the exemption.
The reason designees are included is that in the beef program, the
Qualified State Beef Councils are responsible for receiving
assessments, and the Board only receives assessments
[[Page 2749]]
directly in cases where there is no State beef council.
Other commenters said that the rule should specify that the exempt
organic person cannot be owned or affiliated with a person who pays
assessments to a research and promotion board, nor can they be
affiliated with a person who produces conventional products. In
response to these comments, one commenter stated that nothing in the
law permits USDA to make distinctions based on corporate structure. We
reviewed these comments. The Farm Bill specifies that the exemption is
granted to persons that produce and market solely 100 percent organic
products, and a person can be an individual, group of individuals,
corporation, association, cooperative, or other business entity.
Therefore, no changes were made to the rule.
A commenter said that the rule should more strictly and accurately
specify and define those who qualify and do not qualify. However, we
did not believe any changes to the rule were necessary in light of the
comment discussion, supplementary information, and examples contained
herein addressing eligibility.
We did not adopt a suggestion from one commenter to address
importers in the dairy regulations (7 CFR part 1105). Separate
rulemaking to assess importers under the dairy promotion and research
program is not finalized. Consequently, we cannot address the organic
exemption for importers under the dairy promotion and research
regulations until a final rule has been issued and importers become
subject to assessment.
We incorporated, with modification as necessary, certain editorial
comments concerning regulatory text to correct and consolidate
references to assessment payers and clarify provisions in 7 CFR part
1240.
We incorporated, with modification as necessary, a comment
concerning regulatory text in 7 CFR part 1260 to clarify that the board
or a State beef council receives assessments under the beef promotion
and research program.
Provisions of This Rule
The FAIR Act amendment covers research and promotion programs
established under either free-standing legislation (beef, cotton, eggs,
fluid milk, dairy, Hass avocados, honey, mushrooms, popcorn, pork,
potatoes, soybeans, and watermelons) or the Commodity Promotion,
Research, and Information Act of 1996 (blueberries, lamb, mangos, and
peanuts).
When the proposed rule on this organic exemption was issued,
rulemaking to establish a mango program was ongoing. A second proposed
rule on the Mango Promotion, Research and Information Order was
published in the October 9, 2003, issue of the Federal Register [68 FR
58556]. In November 2003, first handlers and importers of mangos voted
to approve a national mango promotion, research, and information order.
A final rule was published on October 4, 2004 [69 FR 59120], and the
mango promotion, research, and information program became effective
November 4, 2004, and was codified at 7 CFR part 1206. The proposed
rule on the organic exemption outlined that if the mango program were
finalized, provisions similar to those proposed for Hass avocados (7
CFR part 1219) would be added to exempt persons producing and marketing
solely 100 percent organic products from paying assessments under a
mango research and promotion program. Consequently, a new Subpart C was
added to 7 CFR part 1206 to establish rules and regulations addressing
how eligible organic first handlers and importers of mangos would
obtain an exemption.
Wholly industry-funded and -operated and charged with creating and
expanding markets for the agricultural commodities they represent,
these programs are overseen by AMS, including review of budgets, plans,
and projects. Producers, handlers, importers, and/or others in the
marketing chain pay assessments to these commodity boards to fund the
programs. Industries voluntarily request these programs. Research and
promotion programs allow industries to establish, finance, and carry
out coordinated programs of research, producer and consumer education,
and promotion to improve, maintain, and develop markets for their
commodities.
Under this proposal, language would be added to the orders, plans,
and/or regulations of each program specifying the criteria for
identifying persons eligible to obtain an assessment exemption and
procedures for applying for an exemption. The provision would be
tailored to each of the 17 programs, all of which have structural and
operational distinctions. The result would be some procedural
differences between the programs' regulatory language. For example,
under the cotton program, producers would be required to reapply for
exemption every year on or before the beginning of the crop year [see
Sec. 1205.519(b)]. Under the watermelon program, however, producers
and handlers would reapply for exemption on or before January 1 of each
year [see Sec. 1210.516(b)].
Who Is Eligible for Exemption
To be eligible for an exemption, the person must be subject to an
assessment under a research and promotion program administered by AMS.
Of the 17 research and promotion programs covered under this proposed
rule, 14 assess producers. Most of these programs also assess other
entities, including handlers, first handlers, importers, exporters,
feeders, and seed stock producers. One program assesses first handlers
and importers, and two programs assess processors.
The FAIR Act amendment specifies that to be exempt from a commodity
promotion assessment, a person--meaning an individual, group of
individuals, corporation, association, cooperative, or other business
entity--must produce and market solely 100 percent organic products and
must not produce any nonorganic or conventional products. For purposes
of this rule, produce and market means the function the person performs
requiring the payment of an assessment. For producers and seed stock
producers, it means to produce the commodity; for handlers and first
handlers, it means to handle; for importers, it means to import; for
processors, it means to process; for feeders, to produce by feeding;
and for exporters, to export.
Regardless, to be exempt, all persons must possess certification
from a USDA-accredited certifying agent and certify that the farm or
handling operation meets the requirements of 100 percent organic as
defined in 7 CFR part 205 and other specified criteria. Exemption
eligibility is based on a three-prong test: (1) The person must be a
certified organic producer or operator; (2) the person must be eligible
to label all products as 100 percent organic as described in 7 CFR part
205; and (3) the 100 percent organic labeling eligibility applies to
every commodity the person produces and markets.
Selling an organic product in the conventional marketplace does not
nullify the exemption eligibility of a producer, seed stock producer,
or feeder. A person who produces and markets agricultural commodities
under an approved organic system plan and is not a split operation as
described under the NOP will not be disqualified from exemption when
the agricultural commodities produced and marketed under the plan are
not sold, labeled, or represented as organic. In other words, if
products are certified as 100 percent organic, a person who sells some
of these products in the conventional marketplace is not disqualified
from the exemption. There could be a variety of
[[Page 2750]]
reasons why a producer, seed stock producer, or feeder would sell
organic products through conventional channels. These include lack of
demand for organic products or lack of sufficient organic markets.
Examples
A farmer grows 100 percent organic soybeans and 100
percent organic corn. The farmer is eligible for exemption under the
soybean promotion, research, and consumer information program.
A farmer grows 100 percent organic soybeans and
conventional corn. While the farmer's soybean land may be certified as
operating under an organic system plan, the farmer is a split operation
and is therefore not eligible for exemption under the soybean
promotion, research, and consumer information program because the
farmer's production is not solely 100 percent organic.
An importer imports only 100 percent organic boxed beef.
The importer is eligible for exemption under the beef promotion and
research program.
A farmer grows 100 percent organic soybeans but, because
of a State-mandated disease eradication program, must sell the affected
soybeans conventionally for the next 3 years. Assuming the farmer
remains certified, the farmer is eligible for exemption under the
soybean promotion, research, and consumer information program, even
during the 3-year period.
A watermelon handler receives solely 100 percent organic
watermelons. One of the handler's producers is required by the State
government to spray all or a portion of the watermelons with chemicals
to eradicate a disease. The producer maintains NOP certification during
the 3-year period in which the watermelons must be sold conventionally,
during which time the handler handles this producer's watermelons. The
handler is not eligible for exemption.
A certified producer grows soybeans which are 100 percent
organic. The producer purchases neighboring land that has grown
conventional soybeans and plans to farm that land organically. Under
NOP rules, it will be 3 years before that newly acquired land can be
certified. The producer is not eligible for exemption under the soybean
promotion, research, and consumer information program because the
producer does not meet the threshold of solely 100 percent organic.
A watermelon handler receives solely 100 percent organic
watermelons from a watermelon producer who also grows conventional
products and is certified under NOP as a split farm operation. The
handler handles only 100 percent organic products. The handler is
eligible for exemption.
A fluid milk processor processes organic milk, but the
milk does not meet the threshold of 100 percent organic as defined
under NOP because of the addition of vitamins. The fluid milk processor
is not eligible for exemption.
Procedures
According to the 2002 Farm Bill, any person that produces and
markets solely 100 percent organic products, and that does not produce
any conventional or non-organic products, is exempt from paying
assessments under a commodity promotion law with respect to any
agricultural commodity that is produced on a certified organic farm as
defined in 7 CFR 205. Produce and market means the function the person
performs that requires the payment of assessment. For producers,
produce and market means to produce the commodity. For handlers, it
means to handle; for importers, to import; for processors, to process;
etc.
To be exempt from paying assessments under a research and promotion
program administered by AMS, the person would submit an application--
``Organic Exemption Request Form''--to the applicable board or council.
The form would need to be submitted to the board, council, or other
party designated by the board or council prior to or during the initial
applicable assessment period and annually thereafter as long as the
applicant continues to be eligible for the exemption. This application
would include the applicant's name, name and address of the company,
telephone and fax numbers, a copy of the applicant's organic farm or
organic handling operation certificate provided by a USDA-accredited
certifying agent under the Organic Foods Production Act of 1990 (7
U.S.C. 6502), and a signed certification that the applicant meets all
of the requirements specified for an assessment exemption. This signed
declaration includes additional information necessary to demonstrate
eligibility.
If the applicant complies with these requirements and is eligible
for an assessment exemption, the board or council would approve the
exemption and notify the applicant. For the first 6 months following
the rule's effective date, boards or councils will have 60 days to
approve the exemption request. After that, boards or councils will have
30 days to approve the exemption request.
If the application is disapproved, the board or council would
notify the applicant of the reason(s) for disapproval within the same
timeframe. Applicants may appeal if a board or council does not approve
their exemption requests. The first appeal level would be the board or
council. If the applicant is still not satisfied with the decision made
by the committee or board on appeal, the applicant may appeal to USDA.
All decisions of USDA will be final.
For the purpose of assuring fair and consistent treatment of all
persons applying for organic assessment exemptions, USDA has the right
to review any decision made by the boards or councils.
Most of the programs require that the person responsible for
remitting assessments on behalf of the exempt party maintain a record
of that party's exemption. In most cases, this is a handler maintaining
a record of an exempt producer.
Paperwork Reduction Act
The provisions of the proposed rule were carefully reviewed, and
every effort was made to minimize information collection requirements
and still ensure effective administration of the exemption. In
accordance with OMB regulations [5 CFR 1320], which implement the
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information
collection and recordkeeping requirements that are imposed by this rule
were submitted to OMB as a reinstatement with change under control
number 0581-0217.
This action will enable organic producers and marketers to apply
for exemption under the following 17 research and promotion programs: 7
CFR parts 1150, 1160, 1205, 1206, 1207, 1209, 1210, 1215, 1216, 1218,
1219, 1220, 1230, 1240, 1250, 1260, and 1280. Producers and marketers
include producers, handlers, first handlers, processors, exporters,
feeders, and seed stock producers.
Form AMS-15, Organic Exemption Request Form, was described in the
proposed rule as requiring the applicant's name, name and address of
the company, telephone and fax numbers, a copy of the applicant's
organic farm or organic handling certificate provided by a USDA-
accredited certifying agent under the Organic Foods Production Act of
1990 (7 U.S.C. 6502), and a signed certification that the applicant
meets all of the requirements specified for an assessment exemption.
This signed certification includes providing certain additional
information. This is a list of
[[Page 2751]]
commodities marketed by the applicant and assertions that the applicant
is not a split operation and produces and markets only products
eligible to be labeled as 100 percent organic. Also, the form asks for
an e-mail address, but this is optional.
As a result of comments received, the Organic Exemption Request
Form was modified to eliminate some information that was part of the
signed certification that we no longer deemed applicable and add some
information that was determined to be necessary. This revised
information has no affect on the burden or description of the form.
Title: Organic Producer and Marketer Exemption from Assessment
Under Research and Promotion Programs
OMB Number: 0581-0217.
Type of Request: Reinstatement, with change, of a previously
approved collection for which approval has expired.
Abstract: The information collection requirements in this request
are essential to carry out the intent of the 2002 Farm Bill in
exempting from assessment persons who produce and market solely 100
percent organic products.
The request for approval of the new information collection is as
follows:
Form AMS-15, Organic Exemption Request Form:
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 30 minutes per response.
Respondents: Eligible Certified Organic Producers and Marketers.
Estimated Number of Respondents: 2,165.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 1,082.5 hours.
Most of the programs require that the person responsible for
remitting assessments on behalf of the exempt party maintain a record
of that party's exemption. In most cases, this is a handler maintaining
a record of an exempt producer. The burdens on these persons for such
recordkeeping requirements are included in the information collection
requests previously approved for all of the programs--Hass avocados
under OMB control number 0581-0197, beef and pork under 0590-0001, lamb
under 0581-0198, mangos under 0581-0209, and the rest under 0581-0093.
The information collection will be used only by authorized
representatives of USDA, including AMS staff, and authorized
representatives of the boards and councils or their designees.
Authorized representatives of the boards and councils (or their
designees) will be the primary users of the information, and AMS will
be the secondary user.
Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.) (RFA), the Agricultural Marketing Service (AMS) has examined the
impact of the proposed rule on small entities. The purpose of the RFA
is to fit regulatory actions to the scale of businesses subject to such
actions so that small businesses will not be disproportionately
burdened.
As previously mentioned, producers, handlers, first handlers,
processors, importers, exporters, feeders, and seed stock producers pay
assessments to the national boards or councils that administer various
commodity research and promotion programs, or in some cases to other
parties designated by a board or council to collect assessments.
Initiated as a result of the 2002 Farm Bill, which amended Section 501
of the Federal Agricultural Improvement and Reform Act of 1996 (FAIR
Act), this rule exempts from assessment those entities that produce and
market solely 100 percent organic products.
To obtain the exemption, eligible producers, handlers, first
handlers, processors, importers, exporters, feeders, and seed stock
producers must submit a request for exemption to the appropriate board
or council on a form. While the rule imposes certain reporting and
recordkeeping requirements on these entities, the form requires the
minimum information necessary to effectively administer the exemption
provision, and its use is necessary for compliance purposes.
In preparing its initial regulatory flexibility analysis, AMS
attempted to identify the entities that would be affected by the
proposed rule and to examine the potential impact on such entities.
However, information was not available to allow AMS to determine
whether any importers would be covered by this proposed rule under the
beef and pork programs. In addition, information was not available to
allow AMS to identify the respondents under the lamb program as
producers, first handlers, feeders, exporters, and seed stock
producers, so AMS addressed the lamb program in the aggregate to
determine the economic impact. Because a provision for mangos was
included in this final rule, information on mangos was obtained and
used to prepare the final regulatory flexibility analysis.
The estimated respondents providing new information to the boards
or councils and the burden associated with the information collections
is as follows. There would be an estimated 2,165 respondents providing
new information to the boards or councils under the following programs:
Beef: 167 producers, number of importers unknown (167 total).
Blueberries: 7 producers, 0 importers (7 total).
Cotton: 100 producers, 10 importers (110 total).
Dairy: 600 producers.
Eggs: 0 producers.
Fluid milk: 0 processors.
Hass avocados: 60 producers, 0 importers (60 total).
Honey: 10 producers, 0 importers (10 total).
Lamb: 40 respondents (including producers, first handlers, feeders,
seed stock producers, and exporters).
Mangos: 1 first handler, 5 importers (6 total).
Mushrooms: 2 producers, 0 importers (2 total).
Peanuts: 54 producers.
Popcorn: 0 processors.
Pork: 18 producers, number of importers unknown (18 total).
Potatoes: 35 producers, 0 importers (35 total).
Soybeans: 1,028 producers.
Watermelons: 27 producers, 1 handler, 0 importers (28 total).
No respondents were identified for the fluid milk, popcorn, and egg
programs. The fluid milk and egg programs exempt smaller entities from
assessment--fluid milk processors processing 3 million pounds or less
during the first month of the fiscal period and egg producers owning
75,000 or fewer laying hens. Among assessment payers, no solely 100
percent organic processors or producers are known; if they exist, they
are already exempt for de minimis reasons. No popcorn processors that
produce (as defined in this rule) solely 100 percent organic product
were identified because of the current nature of the popcorn industry.
The burden associated with the information collection would be
$10,825.00 for all respondents, or $5.00 per respondent. These totals
have been estimated by multiplying the burden hours associated with the
exemption request form by $10.00 per hour, a sum deemed to be
reasonable should the respondents be compensated for their time.
Under the 17 research and promotion programs, those assessed pay
assessments to the boards and councils that administer the programs.
The total annual collections and assessment rates for each board or
council are as follows:
Beef: $83.6 million; $1 per head.
[[Page 2752]]
Blueberries: $1.5 million; $12 per ton.
Cotton: $65.2 million; $1 per bale plus 0.5 percent of the value of
the lint in each bale.
Dairy: $255.0 million; 15 cents per cwt.
Eggs: $19.7 million; 10 cents per 30-dozen case of eggs.
Fluid milk: $106.2 million; 20 cents per cwt.
Hass avocados: $16.3 million; 2.5 cents per pound.
Honey: $3.6 million; 1 cent per pound.
Lamb: $3.5 million; $0.005 per pound of live weight, $0.30 per head
on lambs purchased for slaughter.
Mangos: $2.5 million; 0.5 cents per pound.
Mushrooms: $1.7 million; .002 cents per pound.
Peanuts: $6.7 million; 1 percent of the value of the peanuts.
Popcorn: $558,000; 6 cents per cwt.
Pork: $47.8 million; 0.40 percent of the market value.
Potatoes: $8.6 million; 2 cents per cwt.
Soybeans: $77.8 million; \1/2\ of 1 percent of the net market
value.
Watermelons: $1.5 million; 2 cents per cwt for domestic watermelons
produced, 2 cents per cwt for domestic watermelons first handled, 4
cents per cwt for imported watermelons.
The Small Business Administration [13 CFR 121.201] defines small
agricultural producers as those having annual receipts of $750,000 or
less annually and small agricultural service firms as those having
annual receipts of $5 million or less. These include producers,
feeders, and seed stock producers. Importers, exporters, handlers, and
first handlers would be considered agricultural service firms. Using
these criteria, most if not all of the agricultural producers and
agricultural service firms covered by this rule would be considered
small businesses.
This rule allows producers and marketers of solely 100 percent
organic products to request an exemption from paying assessments. These
exemptions were estimated by multiplying the exempt volume by the
assessment rate, and the amounts for exempt entities would be as
follows:
Beef: producers--$15,197; importers--unknown.
Blueberries: producers--$5,833; importers--$0 ($5,833 total).
Cotton: producers--$52,000; importers--$25,000 ($77,000 total).
Dairy: producers--$1.33 million.
Eggs: producers--$0.
Fluid milk: processors--$0.
Hass avocados: producers--$91,000; importers--$0 ($91,000 total).
Honey: producers--$11,174; importers--$0 ($11,174 total).
Lamb: $2,987 total (includes producers, first handlers, feeders,
seed stock producers, and exporters).
Mangos: $30,000 (includes first handlers and importers).
Mushrooms: producers--$14,400; importers--$0 ($14,400 total).
Peanuts: producers--$18,690.
Popcorn: processors--$0.
Pork: producers--$966; importers--unknown.
Potatoes: producers--$45,000; importers--$0 ($45,000 total).
Soybeans: producers--$40,273.
Watermelons: producers--$17,890; handlers--$950; importers--$0
($18,840 total).
Therefore, the estimated net economic impact of this rule on the
respondents is as follows:
----------------------------------------------------------------------------------------------------------------
Paperwork Exemption from
Program burden costs assessments Net amount
----------------------------------------------------------------------------------------------------------------
Beef......................................................... $835 $15,197 $14,362
Blueberries.................................................. 35 5,833 5,798
Cotton....................................................... 550 77,000 76,450
Dairy........................................................ 3,000 1,330,000 1,327,000
Eggs......................................................... 0 0 0
Fluid milk................................................... 0 0 0
Hass avocados................................................ 300 91,000 90,700
Honey........................................................ 50 11,174 11,124
Lamb......................................................... 200 2,987 2,787
Mangos....................................................... 60 30,000 29,940
Mushrooms.................................................... 10 14,400 14,390
Peanuts...................................................... 270 18,690 18,420
Popcorn...................................................... 0 0 0
Pork......................................................... 90 966 876
Potatoes..................................................... 175 45,000 44,825
Soybeans..................................................... 5,140 40,273 35,133
Watermelons.................................................. 140 18,840 18,700
------------------
Total.................................................. 10,825 1,701,360 1,690,505
----------------------------------------------------------------------------------------------------------------
Based on the above figures, this rule should have only a beneficial
economic effect on small entities.
Reports and forms are periodically reviewed to reduce information
requirements and duplication by industry and public sector agencies. In
addition, USDA has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this rule.
With regard to alternatives, the FAIR Act required USDA to take
this action, which will lessen the assessment costs for persons who
produce and market solely 100 percent organic products. In drafting the
exemption procedures, every effort has been made to minimize the burden
on the persons impacted and to simplify the process. The anticipated
assessment reductions for eligible persons are expected to greatly
outweigh the costs related to the additional reporting.
List of Subjects
7 CFR Part 1150
Dairy products, Reporting and recordkeeping requirements, Research.
7 CFR Part 1160
Fluid milk products, Milk, Promotion.
7 CFR Part 1205
Advertising, Agricultural Research, Cotton, Reporting and
recordkeeping requirements.
7 CFR Part 1206
Administrative practice and procedure, Advertising, Consumer
information, Mangos, Marketing agreements, Promotion, Reporting and
recordkeeping requirements.
[[Page 2753]]
7 CFR Part 1207
Advertising, Agricultural research, Potatoes, Reporting and
recordkeeping requirements.
7 CFR Part 1209
Advertising, Agricultural Research, Marketing agreements,
Mushrooms, Reporting and recordkeeping requirements.
7 CFR Part 1210
Administrative practice and procedure, Advertising, Agricultural
research, Reporting and recordkeeping requirements, Watermelons.
7 CFR Part 1215
Administrative practice and procedure, Advertising, Consumer
information, Marketing agreements, Popcorn, Promotion, Reporting and
recordkeeping requirements.
7 CFR Part 1216
Administrative practice and procedure, Advertising, Consumer
information, Marketing agreements, Peanut promotion, Reporting and
recordkeeping requirements.
7 CFR Part 1218
Administrative practice and procedure, Advertising, Blueberries,
Consumer information, Marketing agreements, Blueberry promotion,
Reporting and recordkeeping requirements.
7 CFR Part 1219
Administrative practice and procedure, Advertising, Consumer
information, Hass avocados, Marketing agreements, Promotion, Reporting
and recordkeeping requirements.
7 CFR Part 1220
Administrative practice and procedure, Advertising, Agricultural
research, Marketing agreements, Soybeans and soybean products,
Reporting and recordkeeping requirements.
7 CFR Part 1230
Administrative practice and procedure, Advertising, Agricultural
research, Marketing agreement, Meat and meat products, Pork and pork
products.
7 CFR Part 1240
Advertising, Agricultural research, Honey, Imports, Reporting and
recordkeeping requirements.
7 CFR Part 1250
Administrative practice and procedure, Advertising, Agricultural
research, Eggs and egg products, Reporting and recordkeeping
requirements.
7 CFR Part 1260
Administrative practice and procedure, Advertising, Agricultural
research, Imports, Marketing agreements, Meat and meat products,
Reporting and recordkeeping requirements.
7 CFR Part 1280
Administrative practice and procedure, Advertising, Consumer
information, Lamb and lamb products, Marketing agreements, Reporting
and recordkeeping requirements.
0
For the reasons set forth in the preamble, 7 CFR parts 1150, 1160,
1205, 1206, 1207, 1209, 1210, 1215, 1216, 1218, 1219, 1220, 1230, 1240,
1250, 1260, and 1280 are amended as follows:
PART 1150--DAIRY PROMOTION
0
1. The authority citation for part 1150 is revised to read as follows:
Authority: 7 U.S.C. 4501-4514 and 7 U.S.C. 7401
.0
2. Add a new Sec. 1150.157 to read as follows:
Sec. 1150.157 Assessment exemption.
(a) A producer described in Sec. 1150.152 (a) and (b) who operates
under an approved National Organic Program (NOP) (7 CFR part 205)
system plan; produces only products that are eligible to be labeled as
100 percent organic under the NOP, except as provided for in paragraph
(h) of this section; and is not a split operation shall be exempt from
the payment of assessments.
(b) To apply for an exemption under this section, a producer
pursuant to Sec. 1150.152 (a) and (b) shall submit a request for
exemption to the Board on a form provided by the Board at any time
initially and annually thereafter on or before July 1 as long as the
producer continues to be eligible for the exemption.
(c) The request shall include the following: the producer's name
and address, a copy of the organic farm or organic handling operation
certificate provided by a USDA-accredited certifying agent as defined
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C.
6502), a signed certification that the applicant meets all of the
requirements specified in paragraph (a) of this section for an
assessment exemption, and such other information as may be required by
the Board and with the approval of the Secretary.
(d) If a producer described in Sec. 1150.152 (a) and (b) complies
with the requirements of this section, the Board will grant an
assessment exemption and issue a Certificate of Exemption to the
producer. For exemption requests received on or before August 15, 2005,
the Board will have 60 days to approve the exemption request; after
August 15, 2005, the Board will have 30 days to approve the exemption
request. If the application is disapproved, the Board will notify the
applicant of the reason(s) for disapproval within the same timeframe.
(e) The producer described in paragraph (c) of this section shall
provide a copy of the Certificate of Exemption to each person
responsible for remitting assessments to the Board on behalf of the
producer pursuant to Sec. 1150.152.
(f) The person responsible for remitting assessments to the Board
pursuant to Sec. 1150.152 shall maintain records showing the exempt
producer's name and address and the exemption number assigned by the
Board pursuant to Sec. 1150.172.
(g) The exemption will apply not later than the last day of the
month following the Certificate of Exemption issuance date.
(h) Agricultural commodities produced and marketed under an organic
system plan, as described in 7 CFR 205.201, but not sold, labeled, or
represented as organic, shall not disqualify a producer from exemption
under this section, except that producers who produce both organic and
non-organic agricultural commodities as a result of split operations
shall not qualify for exemption. Reasons for conventional sales include
lack of demand for organic products, isolated use of antibiotics for
humane purposes, chemical or pesticide use as the result of State or
emergency spray programs, and crops from a buffer area as described in
7 CFR part 205, provided all other criteria are met.
PART 1160--FLUID MILK PROMOTION
0
3. The authority citation for part 1160 is revised to read as follows:
Authority: 7 U.S.C. 6401-6417 and 7 U.S.C. 7401.
0
4. In Sec. 1160.211, paragraph (a)(1) is revised to read as follows:
Sec. 1160.211 Assessments.
(a)(1) Each fluid milk processor shall pay to the Board or its
designated agent an assessment of $.20 per hundredweight of fluid milk
products processed and marketed commercially in consumer-type packages
in the
[[Page 2754]]
United States by such fluid milk processor. Any fluid milk processor
who markets milk of its own production directly to consumers as
prescribed under section 113(g) of the Dairy Production Stabilization
Act of 1983 (7 U.S.C. 4504(g)), and not exempt under Sec. 1160.108 or
Sec. 1160.215, shall also pay the assessment under this subpart. The
Secretary shall have the authority to receive assessments on behalf of
the Board.
* * * * *
0
5. A new Sec. 1160.215 is added to read as follows:
Sec. 1160.215 Assessment exemption.
(a) No assessment shall be required on fluid milk products exported
from the United States.
(b) A fluid milk processor described in Sec. 1160.211(a) who
operates under an approved National Organic Program (NOP) (7 CFR part
205) system plan; processes only products that are eligible to be
labeled as 100 percent organic under the NOP; and is not a split
operation shall be exempt from the payment of assessments.
(c) To apply for an assessment exemption, a fluid milk processor
described in Sec. 1160.211(a) shall submit a request for exemption to
the Board on a form provided by the Board at any time initially and
annually thereafter on or before July 1 as long as the fluid milk
processor continues to be eligible for the assessment exemption.
(d) The request shall include the following: The fluid milk
processor's name and address, a copy of the organic farm or organic
handling operation certificate provided by a USDA-accredited certifying
agent as defined in section 2103 of the Organic Foods Production Act of
1990 (7 U.S.C. 6502), a signed certification that the applicant meets
all of the requirements specified in paragraph (b) of this section for
an assessment exemption, and such other information as may be required
by the Board and with the approval of the Secretary.
(e) The Board will grant an assessment exemption to any fluid milk
processor meeting the criteria in Sec. 1160.215(b) and issue a
Certificate of Exemption to the fluid milk processor. For exemption
requests received on or before August 15, 2005, the Board will have 60
days to approve the exemption request; after August 15, 2005, the Board
will have 30 days to approve the exemption request. If the application
is disapproved, the Board will notify the applicant of the reason(s)
for disapproval within the same timeframe.
(f) The exemption will apply not later than the last day of the
month following the Certificate of Exemption issuance date.
PART 1205--COTTON RESEARCH AND PROMOTION
0
6. The authority citation for part 1205 is revised to read as follows:
Authority: 7 U.S.C. 2101-2118 and 7 U.S.C. 7401.
0
7. A new Sec. 1205.519 is added to read as follows:
Sec. 1205.519 Organic exemption.
(a) A producer who operates under an approved National Organic
Program (NOP) (7 CFR part 205) system plan; produces only products that
are eligible to be labeled as 100 percent organic under the NOP, except
as provided for in paragraph (h) of this section; and is not a split
operation shall be exempt from the payment of assessments.
(b) To apply for an exemption under this section, an eligible
cotton producer shall submit a request for exemption to the Board--on a
form provided by the Board--at any time initially and annually
thereafter on or before the beginning of the crop year as long as the
producer continues to be eligible for the exemption.
(c) The request shall include the following: The producer's name
and address, a copy of the organic farm or organic handling operation
certificate provided by a USDA-accredited certifying agent as defined
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C.
6502), a signed certification that the applicant meets all of the
requirements specified in paragraph (a) of this section for an
assessment exemption, and such other information as may be required by
the Board and with the approval of the Secretary.
(d) If the producer complies with the requirements of this section,
the Board will grant the exemption and issue a Certificate of Exemption
to the producer. For exemption requests received on or before August
15, 2005, the Board will have 60 days to approve the exemption request;
after August 15, 2005, the Board will have 30 days to approve the
exemption request. If the application is disapproved, the Board will
notify the applicant of the reason(s) for disapproval within the same
timeframe.
(e) The producer shall provide a copy of the Certificate of
Exemption to each handler to whom the producer sells cotton. The
handler shall maintain records showing the exempt producer's name and
address and the exemption number assigned by the Board.
(f) An importer who imports only products that are eligible to be
labeled as 100 percent organic under the NOP (7 CFR part 205) and who
is not a split operation shall be exempt from the payment of
assessments. That importer may submit documentation to the Board and
request an exemption from assessment on 100 percent organic cotton and
100 percent organic cotton products--on a form provided by the Board--
at any time initially and annually thereafter as long as the importer
continues to be eligible for the exemption. This documentation shall
include the same information required of producers in paragraph (c) 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. The Board will also issue the importer a 9-
digit alphanumeric Harmonized Tariff Schedule (HTS) classification
valid for 1 year from the date of issue. This HTS classification should
be entered by the importer on the Customs entry documentation. Any line
item entry of 100 percent organic cotton and cotton products bearing
this HTS classification assigned by the Board will not be subject to
assessments.
(g) The exemption will apply immediately following the issuance of
the Certificate of Exemption.
(h) Agricultural commodities produced and marketed under an organic
system plan, as described in 7 CFR 205.201, but not sold, labeled, or
represented as organic, shall not disqualify a producer from exemption
under this section, except that producers who produce both organic and
non-organic agricultural commodities as a result of split operations
shall not qualify for exemption. Reasons for conventional sales include
lack of demand for organic products, isolated use of antibiotics for
humane purposes, chemical or pesticide use as the result of State or
emergency spray programs, and crops from a buffer area as described in
7 CFR part 205, provided all other criteria are met.
PART 1206--MANGO PROMOTION, RESEARCH, AND INFORMATION
0
8. The authority citation for part 1206 is revised to read as follows:
Authority: 7 U.S.C. 7411-7425 and 7 U.S.C. 7401.
0
9. Add a new Subpart C--Rules and Regulations to read as follows:
[[Page 2755]]
Subpart C--Rules and Regulations
Sec. 1206.200 Terms defined.
Unless otherwise defined in this subpart, the definitions of terms
used in this subpart shall have the same meaning as the definitions of
such terms which appear in Subpart A--Mango Promotion, Research, and
Information Order.
Sec. 1206.201 Definitions.
Organic Act means section 2103 of the Organic Foods Production Act
of 1990 (7 U.S.C. 6502).
Sec. 1206.202 Exemption for organic mangos.
(a) A first handler who operates under an approved National Organic
Program (NOP) (7 CFR part 205) system plan, handles only products that
are eligible to be labeled as 100 percent organic under the NOP, and is
not a split operation shall be exempt from the payment of assessments.
(b) To obtain this exemption, an eligible first handler shall
submit a request for exemption to the Board--on a form provided by the
Board--at any time initially and annually thereafter on or before the
beginning of the fiscal period as long as the first handler continues
to be eligible for the exemption.
(c) The request shall include the following: The first handler's
name and address, a copy of the organic farm or organic handling
operation certificate provided by a USDA-accredited certifying agent as
defined in the Organic Act, a signed certification that the applicant
meets all of the requirements specified for an assessment exemption,
and such other information as may be required by the Board and with the
approval of the Secretary.
(d) If the first handler complies with the requirements of
paragraph (a) of this section, the Board will grant an assessment
exemption and shall issue a Certificate of Exemption to the first
handler. For exemption requests received on or before August 15, 2005,
the Board will have 60 days to approve the exemption request; after
August 15, 2005, the Board will have 30 days to approve the exemption
request. If the application is disapproved, the Board will notify the
applicant of the reason(s) for disapproval within the same timeframe.
(e) An importer who imports only products that are eligible to be
labeled as 100 percent organic under the NOP (7 CFR part 205) and who
is not a split operation shall be exempt from the payment of
assessments. That importer may submit documentation to the Board and
request an exemption from assessment on 100 percent organic mangos--on
a form provided by the Board--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 first
handlers in paragraph (c). 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. The Board will also issue the importer a 9-digit
alphanumeric Harmonized Tariff Schedule (HTS) classification valid for
1 year from the date of issue. This HTS classification should be
entered by the importer on the Customs entry documentation. Any line
item entry of 100 percent organic mangos bearing this HTS
classification assigned by the Board will not be subject to
assessments.
(f) The exemption will apply immediately following the issuance of
the certificate of exemption.
PART 1207--POTATO RESEARCH AND PROMOTION
0
10. The authority citation for part 1207 is revised to read as follows:
Authority: 7 U.S.C. 2611-2627 and 7 U.S.C. 7401.
0
11. A new Sec. 1207.514 is added to read as follows:
Sec. 1207.514 Exemption for organic potatoes.
(a) A producer who operates under an approved National Organic
Program (NOP) (7 CFR part 205) system plan; produces only products that
are eligible to be labeled as 100 percent organic under the NOP, except
as provided for in paragraph (h) of this section; and is not a split
operation shall be exempt from the payment of assessments.
(b) To apply for an exemption under this section, the producer
shall submit a request for exemption to the Board--on a form provided
by the Board--at any time initially and annually thereafter on or
before July 1 as long as the producer continues to be eligible for the
exemption.
(c) The request shall include the following: The producer's name
and address, a copy of the organic farm or organic handling operation
certificate provided by a USDA-accredited certifying agent as defined
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C.
6502), a signed certification that the applicant meets all of the
requirements specified in paragraph (a) of this section for an
assessment exemption, and such other information as may be required by
the Board and with the approval of the Secretary.
(d) If the producer complies with the requirements of this section,
the Board will grant the exemption and issue a Certificate of Exemption
to the producer. For exemption requests received on or before August
15, 2005, the Board will have 60 days to approve the exemption request;
after August 15, 2005, the Board will have 30 days to approve the
exemption request. If the application is disapproved, the Board will
notify the applicant of the reason(s) for disapproval within the same
timeframe.
(e) The producer shall provide a copy of the Certificate of
Exemption to each handler to whom the producer sells potatoes. The
handler shall maintain records showing the exempt producer's name and
address and the exemption number assigned by the Board.
(f) An importer who imports only products that are eligible to be
labeled as 100 percent organic under the NOP (7 CFR part 205) and who
is not a split operation shall be exempt from the payment of
assessments. That importer may submit documentation to the Board and
request an exemption from assessment on 100 percent organic potatoes,
potato products, and seed potatoes--on a form provided by the Board--at
any time initially and annually thereafter on or before July 1 as long
as the importer continues to be eligible for the exemption. This
documentation shall include the same information required of producers
in paragraph (c) 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. The Board will also
issue the importer a 9-digit alphanumeric Harmonized Tariff Schedule
(HTS) classification valid for 1 year from the date of issue. This HTS
classification should be entered by the importer on the Customs entry
documentation. Any line item entry of 100 percent organic potatoes,
potato products, and seed potatoes bearing this HTS classification
assigned by the Board will not be subject to assessments.
(g) The exemption will apply immediately following the issuance of
the Certificate of Exemption.
(h) Agricultural commodities produced and marketed under an organic
system plan, as described in 7 CFR 205.201, but not sold, labeled, or
represented as organic, shall not disqualify a producer from exemption
[[Page 2756]]
under this section, except that producers who produce both organic and
non-organic agricultural commodities as a result of split operations
shall not qualify for exemption. Reasons for conventional sales include
lack of demand for organic products, isolated use of antibiotics for
humane purposes, chemical or pesticide use as the result of State or
emergency spray programs, and crops from a buffer area as described in
7 CFR part 205, provided all other criteria are met.
PART 1209--MUSHROOM PROMOTION, RESEARCH, AND CONSUMER INFORMATION
0
12. The authority citation for part 1209 is revised to read as follows:
Authority: 7 U.S.C. 6101-6112 and 7 U.S.C. 7401.
0
13. In Sec. 1209.52, revise paragraph (a) to read as follows:
Sec. 1209.52 Exemption from assessment.
(a) The following persons shall be exempt from assessments under
this part:
(1) A person who produces or imports, on average, 500,000 pounds or
less of mushrooms annually; and
(2) A producer who operates under an approved National Organic
Program (NOP) (7 CFR part 205) system plan; produces only products that
are eligible to be labeled as 100 percent organic under the NOP, except
as provided for in Sec. 1209.252(a)(2)(vi); and is not a split
operation; and
(3) An importer who imports only products that are eligible to be
labeled as 100 percent organic under the NOP (7 CFR part 205) and who
is not a split operation.
* * * * *
0
14. In Sec. 1209.252, revise paragraph (a) to read as follows:
Sec. 1209.252 Exemption procedures.
(a) Types of exemptions and requirements. (1) Any person who
produces or imports, on average, 500,000 pounds or less of mushrooms
annually and who desires to claim an exemption from assessments during
a fiscal year shall apply to the Council, on a form provided by the
Council, for a Certificate of Exemption. The producer or importer shall
certify that the person's production or importation of mushrooms shall
not exceed 500,000 pounds, on average, for the fiscal year for which
the exemption is claimed. An average shall be calculated by averaging a
person's estimated production or importation for the fiscal year for
which an exemption is claimed with the person's production or
importation in the preceding fiscal year.
(2) To apply for an exemption for organic mushrooms:
(i) An eligible mushroom producer shall submit a request for
exemption to the Council--on a form provided by the Council--at any
time initially and annually thereafter on or before January 1 as long
as the producer continues to be eligible for the exemption.
(ii) The request shall include the following: The producer's name
and address, a copy of the organic farm or organic handling operation
certificate provided by a USDA-accredited certifying agent as defined
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C.
6502), a signed certification that the applicant meets all of the
requirements specified for an assessment exemption, and such other
information as may be required by the Council and with the approval of
the Secretary.
(iii) If the producer complies with the requirements of Sec.
1209.52 (a)(2), the Council will grant the exemption and issue a
Certificate of Exemption to the producer. For exemption requests
received on or before August 15, 2005, the Council will have 60 days to
approve the exemption request; after August 15, 2005, the Council will
have 30 days to approve the exemption request. If the application is
disapproved, the Board will notify the applicant of the reason(s) for
disapproval within the same timeframe.
(iv) An eligible importer may submit documentation to the Council
and request an exemption from assessment on 100 percent organic
mushrooms--on a form provided by the Council--at any time initially and
annually thereafter on or before January 1 as long as the importer
continues to be eligible for the exemption. This documentation shall
include the same information required of producers. If the importer
complies with the requirements of this section, the Council will grant
the exemption and issue a Certificate of Exemption to the importer. The
Council will also issue the importer a 9-digit alphanumeric Harmonized
Tariff Schedule (HTS) classification valid for 1 year from the date of
issue. This HTS classification should be entered by the importer on the
Customs entry documentation. Any line item entry of 100 percent organic
mushrooms bearing this HTS classification assigned by the Council will
not be subject to assessments.
(v) The exemption will apply immediately following the issuance of
the Certificate of Exemption.
(vi) Agricultural commodities produced and marketed under an
organic system plan, as described in 7 CFR 205.201, but not sold,
labeled, or represented as organic, shall not disqualify a producer
from exemption under this section, except that producers who produce
both organic and non-organic agricultural commodities as a result of
split operations shall not qualify for exemption. Reasons for
conventional sales include lack of demand for organic products,
isolated use of antibiotics for humane purposes, chemical or pesticide
use as the result of State or emergency spray programs, and crops from
a buffer area as described in 7 CFR part 205, provided all other
criteria are met.
* * * * *
PART 1210--WATERMELON RESEARCH AND PROMOTION
0
15. The authority citation for part 1210 is revised to read as follows:
Authority: 7 U.S.C. 4901-4916 and 7 U.S.C. 7401.
0
16. A new Sec. 1210.516 is added to read as follows:
Sec. 1210.516 Exemption for organic watermelons.
(a) A producer who produces only products that are eligible to be
labeled as 100 percent organic under the National Organic Program (NOP)
(7 CFR part 205), except as provided for in paragraph (h) of this
section, or a handler who handles only products that are eligible to be
labeled as 100 percent organic under the NOP; and who operates under an
approved NOP system plan, and is not a split operation shall be exempt
from the payment of assessments.
(b) To apply for this exemption, the producer or handler shall
submit the request to the Board--on a form provided by the Board--at
any time initially and annually thereafter on or before January 1 as
long as the producer or handler continues to be eligible for the
exemption.
(c) The request shall include the following: The applicant's name
and address, a copy of the organic farm or organic handling operation
certificate provided by a USDA-accredited certifying agent as defined
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C.
6502), a signed certification that the applicant meets all of the
requirements specified for an assessment exemption, and such other
information as may be required by the Board and with the approval of
the Secretary.
[[Page 2757]]
(d) If the producer or handler complies with the requirements of
this section, the Board will approve the exemption and issue a
Certificate of Exemption to the producer or handler. For exemption
requests received on or before August 15, 2005, the Board will have 60
days to approve the exemption request; after August 15, 2005, the Board
will have 30 days to approve the exemption request. If the application
is disapproved, the Board will notify the applicant of the reason(s)
for disapproval within the same timeframe.
(e) The producer shall provide a copy of the Certificate of
Exemption to each handler to whom the producer sells watermelons. The
handler shall maintain records showing the exempt producer's name and
address and the exemption number assigned by the Board.
(f) An importer imports only products that are eligible to be
labeled as 100 percent organic under the NOP (7 CFR part 205) and who
is not a split operation shall be exempt from the payment of
assessments. That importer may submit documentation to the Board and
request an exemption from assessment on 100 percent organic
watermelons. The importer may request the exemption--on a form provided
by the Board--at any time initially and annually thereafter on or
before January 1, as long as the importer continues to be eligible for
the exemption. This documentation shall include the same information
required of producers and handlers in paragraph (c) 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. The Board will also issue the importer a 9-digit alphanumeric
Harmonized Tariff Schedule (HTS) classification valid for 1 year from
the date of issue. This HTS classification should be entered by the
importer on the Customs entry documentation. Any line item entry of 100
percent organic watermelons bearing this HTS classification assigned by
the Board will not be subject to assessments.
(g) The exemption will apply immediately following the issuance of
the Certificate of Exemption.
(h) Agricultural commodities produced and marketed under an organic
system plan, as described in 7 CFR 205.201, but not sold, labeled, or
represented as organic, shall not disqualify a producer from exemption
under this section, except that producers who produce both organic and
non-organic agricultural commodities as a result of split operations
shall not qualify for exemption. Reasons for conventional sales include
lack of demand for organic products, isolated use of antibiotics for
humane purposes, chemical or pesticide use as the result of State or
emergency spray programs, and crops from a buffer area as described in
7 CFR part 205, provided all other criteria are met.
PART 1215--POPCORN PROMOTION, RESEARCH, AND CONSUMER INFORMATION
0
17. The authority citation for part 1215 is revised to read as follows:
Authority: 7 U.S.C. 7481-7491 and 7 U.S.C. 7401.
0
18. Section 1215.52 is revised to read as follows:
Sec. 1215.52 Exemption from assessment.
(a) Persons that process and distribute 4 million pounds or less of
popcorn annually, based on the previous year, shall be exempted from
assessment.
(b) Persons that operate under an approved National Organic Program
(NOP) (7 CFR part 205) system plan; process only products that are
eligible to be labeled as 100 percent organic under the NOP; and are
not split operations shall be exempt from the payment of assessments.
(c) To claim an exemption, persons shall apply to the Board, in the
form and manner prescribed in the rules and regulations.
0
19. Section 1215.300 is amended by:
0
(a) Revising paragraphs (b) and (c);
0
(b) Redesignating paragraph (d) as paragraph (f);
0
(c) Adding new paragraphs (d) and (e).
The revisions read as follows:
Sec. 1215.300 Exemption procedures.
* * * * *
(b) Persons that process solely 100 percent organic products and
that do not process any conventional or nonorganic products as provided
in Sec. 1215.52 paragraph (b) of this part may apply for an exemption
by submitting a request for exemption to the Board on a form provided
by the Board at any time initially. The request shall include the
following: The applicant's name and address, a copy of the organic farm
or organic handling operation certificate provided by a USDA-accredited
certifying agent as defined in section 2103 of the Organic Foods
Production Act of 1990 (7 U.S.C. 6502), a signed certification that the
applicant meets all of the requirements specified for an assessment
exemption, and such other information as may be required by the Board
and with the approval of the Secretary.
(c) Upon receipt of an application, the Board shall determine
whether an exemption may be granted and issue a Certificate of
Exemption to the producer. For exemption requests received on or before
August 15, 2005, the Board will have 60 days to approve the exemption
request; after August 15, 2005, the Board will have 30 days to approve
the exemption request. If the application is disapproved, the Board
will notify the applicant of the reason(s) for disapproval within the
same timeframe.
(d) Any person who desires to renew the exemption from assessments
for a subsequent fiscal year shall reapply to the Board by January 1 of
that year.
(e) The exemption will apply at the first reporting period
following the issuance of the Certificate of Exemption.
* * * * *
PART 1216--PEANUT PROMOTION, RESEARCH, AND INFORMATION
0
20. The authority citation for part 1216 is revised to read as follows:
Authority: 7 U.S.C. 7411-7425 and 7 U.S.C. 7401.
0
21. Section 1216.56 is added to read as follows:
Sec. 1216.56 Exemption for organic peanuts.
(a) A producer who operates under an approved National Organic
Program (NOP) (7 CFR part 205) system plan; produces only products that
are eligible to be labeled as 100 percent organic under the NOP, except
as provided for in paragraph (g) of this section; and is not a split
operation shall be exempt from the payment of assessments.
(b) In order to apply for this exemption, an eligible peanut
producer shall submit a request for exemption to the Board--on a form
provided by the Board--at any time initially and annually thereafter on
or before August 1 as long as the producer continues to be eligible for
the exemption.
(c) The request shall include the following: The producer's name
and address, a copy of the organic farm or organic handling operation
certificate provided by a USDA-accredited certifying agent as defined
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C.
6502), a signed certification that the applicant meets all of the
requirements specified for an assessment exemption, and such other
information as may be required by the Board and with the approval of
the Secretary.
(d) If the producer complies with the requirements of this section,
the Board will approve the exemption and issue a
[[Page 2758]]
Certificate of Exemption to the producer. For exemption requests
received on or before August 15, 2005, the Board will have 60 days to
approve the exemption request; after August 15, 2005, the Board will
have 30 days to approve the exemption request. If the application is
disapproved, the Board will notify the applicant of the reason(s) for
approval within the same timeframe.
(e) The producer shall provide a copy of the Certificate of
Exemption to each handler to whom the producer sells peanuts. The
handler shall maintain records showing the exempt producer's name and
address and the exemption number assigned by the Board.
(f) The exemption will apply at the first reporting period
following the issuance of the Certificate of Exemption.
(g) Agricultural commodities produced and marketed under an organic
system plan, as described in 7 CFR 205.201, but not sold, labeled, or
represented as organic, shall not disqualify a producer from exemption
under this section, except that producers who produce both organic and
non-organic agricultural commodities as a result of split operations
shall not qualify for exemption. Reasons for conventional sales include
lack of demand for organic products, isolated use of antibiotics for
humane purposes, chemical or pesticide use as the result of State or
emergency spray programs, and crops from a buffer area as described in
7 CFR part 205, provided all other criteria are met.
PART 1218--BLUEBERRY PROMOTION, RESEARCH, AND INFORMATION
0
22. The authority citation for part 1218 is revised to read as follows:
Authority: 7 U.S.C. 7411-7425 and 7 U.S.C. 7401.
0
23. Section 1218.53 is amended by redesignating paragraphs (b) through
(e) as (h) through (k), adding new paragraphs (b) through (g), and
revising paragraph (a) to read as follows:
Sec. 1218.53 Exemption procedures.
(a) Any producer who produces less than 2,000 pounds of blueberries
annually shall be exempt from the payment of assessments. Such producer
may apply to the USACBC--on a form provided by the USACBC--for a
certificate of exemption. Such producer shall certify that the
producer's production of blueberries shall be less than 2,000 pounds
for the fiscal year for which the exemption is claimed.
(b) Any importer who imports less than 2,000 pounds of fresh and
frozen blueberries annually shall be exempt from the payment of
assessments. Such importer may apply to the USACBC--on a form provided
by the USACBC--for a certificate of exemption. Such importer shall
certify that the importer's importation of fresh and frozen blueberries
shall not exceed 2,000 pounds for the fiscal year for which the
exemption is claimed.
(c) A producer who operates under an approved National Organic
Program (NOP) (7 CFR part 205) system plan; produces only products that
are eligible to be labeled as 100 percent organic under the NOP, except
as provided for in paragraph (g) of this section; and is not a split
operation shall be exempt from the payment of assessments.
(d) To apply for this exemption, a producer shall submit a request
for exemption to the USACBC--on a form provided by the USACBC--at any
time initially and annually thereafter on or before January 1 as long
as the producer continues to be eligible for the exemption. The request
shall include the following: The producer's name and address, with a
copy of the organic farm or organic handling operation certificate
provided by a USDA-accredited certifying agent as defined in section
2103 of the Organic Foods Production Act of 1990 (7 CFR part 205), a
signed certification that the applicant meets all of the requirements
specified for an assessment exemption, and such other information as
may be required by the Board and with the approval of the Secretary. If
a producer complies with the requirements in paragraph (c) of this
section, the USACBC will grant an assessment exemption and issue a
certification of exemption to the producer. For exemption requests
received on or before August 15, 2005, the USACBC will have 60 days to
approve the exemption request; after August 15, 2005, the USACBC will
have 30 days to approve the exemption request. If the application is
disapproved, the USACBC will notify the applicant of the reason(s) for
disapproval within the same timeframe.
(e) An importer who imports only products that are eligible to be
labeled as 100 percent organic under the NOP (7 CFR part 205) and who
is not a split operation shall be exempt from the payment of
assessments. That importer may submit documentation to the Board and
request an exemption from assessment on 100 percent organic fresh and
frozen blueberries--on a form provided by the USACBC--at any time
initially and annually thereafter on or before January 1 as long as the
importer continues to be eligible for the exemption. This documentation
shall include the same information required of producers in paragraph
(d) of this section. If the importer complies with the requirements of
this section, the USACBC will grant the exemption and issue a
Certificate of Exemption to the importer. The USACBC will also issue
the importer a 9-digit alphanumeric Harmonized Tariff Schedule (HTS)
classification valid for 1 year from the date of issue. This HTS
classification should be entered by the importer on the Customs entry
documentation. Any line item entry of 100 percent organic fresh and
frozen blueberries bearing this HTS classification assigned by the
USACBC will not be subject to assessments.
(f) The exemption will apply immediately following the issuance of
the Certificate of Exemption.
(g) Agricultural commodities produced and marketed under an organic
system plan, as described in 7 CFR 205.201, but not sold, labeled, or
represented as organic, shall not disqualify a producer from exemption
under this section, except that producers who produce both organic and
non-organic agricultural commodities as a result of split operations
shall not qualify for exemption. Reasons for conventional sales include
lack of demand for organic products, isolated use of antibiotics for
humane purposes, chemical or pesticide use as the result of State or
emergency spray programs, and crops from a buffer area as described in
7 CFR part 205, provided all other criteria are met.
* * * * *
PART 1219--HASS AVOCADO PROMOTION, RESEARCH, AND INFORMATION
0
24. The authority citation for part 1219 is revised to read as follows:
Authority: 7 U.S.C. 7801-7813 and 7 U.S.C. 7401.
0
25. In part 1219, add a new Subpart C--Rules and Regulations to read as
follows:
Subpart C--Rules and Regulations
Sec. 1219.200 Terms defined.
Unless otherwise defined in this subpart, the definitions of terms
used in this subpart shall have the same meaning as the definitions of
such terms which appear in Subpart A--Hass Avocado Promotion, Research,
and Information Order of this part.
Sec. 1219.201 Definitions.
Organic Act means section 2103 of the Organic Foods Production Act
of 1990 (7 U.S.C. 6502).
[[Page 2759]]
Sec. 1219.202 Exemption for organic Hass avocados.
(a) A producer who operates under an approved National Organic
Program (NOP) (7 CFR part 205) system plan; only produces products that
are eligible to be labeled as 100 percent organic under the NOP, except
as provided for in paragraph (h) of this section; and is not a split
operation shall be exempt from the payment of assessments.
(b) To obtain this exemption, an eligible Hass avocado producer
shall submit a request for exemption to the Board--on a form provided
by the Board--at any time initially and annually thereafter on or
before November 1 as long as the producer continues to be eligible for
the exemption.
(c) The request shall include the following: the producer's name
and address, a copy of the organic farm or organic handling operation
certificate provided by a USDA-accredited certifying agent as defined
in the Organic Act, a signed certification that the applicant meets all
of the requirements specified for an assessment exemption, and such
other information as may be required by the Board and with the approval
of the Secretary.
(d) If the producer complies with the requirements of paragraph (a)
of this section, the Board will grant an assessment exemption and shall
issue a Certificate of Exemption to the producer. For exemption
requests received on or before August 15, 2005, the Board will have 60
days to approve the exemption request; after August 15, 2005, the Board
will have 30 days to approve the exemption request. If the application
is disapproved, the Board will notify the applicant of the reason(s)
for disapproval within the same timeframe.
(e) The producer shall provide a copy of the Certificate of
Exemption to each handler to whom the producer sells Hass avocados. The
handler shall maintain records showing the exempt producer's name and
address and the exemption number assigned by the Board.
(f) An importer who imports only products that are eligible to be
labeled as 100 percent organic under the NOP (7 CFR part 205) and who
is not a split operation shall be exempt from the payment of
assessments. That importer may submit documentation to the Board and
request an exemption from assessment on 100 percent organic Hass
avocados--on a form provided by the Board--at any time initially and
annually thereafter on or before November 1 as long as the importer
continues to be eligible for the exemption. This documentation shall
include the same information required of producers in paragraph (c) 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. The Board will also issue the importer a 9-
digit alphanumeric Harmonized Tariff Schedule (HTS) classification
valid for 1 year from the date of issue. This HTS classification should
be entered by the importer on the Customs entry documentation. Any line
item entry of 100 percent organic Hass avocados bearing this HTS
classification assigned by the Board will not be subject to
assessments.
(g) The exemption will apply immediately following the issuance of
the Certificate of Exemption.
(h) Agricultural commodities produced and marketed under an organic
system plan, as described in 7 CFR 205.201, but not sold, labeled, or
represented as organic, shall not disqualify a producer from exemption
under this section, except that producers who produce both organic and
non-organic agricultural commodities as a result of split operations
shall not qualify for exemption. Reasons for conventional sales include
lack of demand for organic products, isolated use of antibiotics for
humane purposes, chemical or pesticide use as the result of State or
emergency spray programs, and crops from a buffer area as described in
7 CFR part 205, provided all other criteria are met.
PART 1220--SOYBEAN PROMOTION, RESEARCH, AND CONSUMER INFORMATION
0
26. The authority citation for part 1220 is revised to read as follows:
Authority: 7 U.S.C. 6301-6311 and 7 U.S.C. 7401.
0
27. A new Sec. 1220.302 is added to read as follows:
Sec. 1220.302 Exemption.
(a) A producer who operates under an approved National Organic
Program (NOP) (7 CFR part 205) system plan; produces only products that
are eligible to be labeled as 100 percent organic under the NOP, except
as provided for in paragraph (g) of this section; and is not a split
operation shall be exempt from the payment of assessments.
(b) To apply for an exemption under this section, the producer
shall submit the request to the Board or other party as designated by
the Board--on a form provided by the Board--at any time initially and
annually thereafter on or before January 1 as long as the producer
continues to be eligible for the exemption.
(c) The request shall include the following: the producer's name
and address, a copy of the organic farm or organic handling operation
certificate provided by a USDA-accredited certifying agent as defined
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C.
6502), a signed certification that the applicant meets all of the
requirements specified for an assessment exemption, and such other
information as may be required by the Board and with the approval of
the Secretary.
(d) If the producer complies with the requirements of this section,
the Board or designee will grant the exemption and issue a Certificate
of Exemption to the producer. For exemption requests received on or
before August 15, 2005, the Board will have 60 days to approve the
exemption request; after August 15, 2005, the Board will have 30 days
to approve the exemption request. If the application is disapproved,
the Board will notify the applicant of the reason(s) for disapproval
within the same timeframe.
(e) The producer shall provide a copy of the Certificate of
Exemption to each first purchaser. The first purchaser shall maintain
records showing the exempt producer's name and address and the
exemption number assigned by the Board.
(f) The exemption will apply at the first reporting period
following the issuance of the exemption.
(g) Agricultural commodities produced and marketed under an organic
system plan, as described in 7 CFR 205.201, but not sold, labeled, or
represented as organic, shall not disqualify a producer from exemption
under this section, except that producers who produce both organic and
non-organic agricultural commodities as a result of split operations
shall not qualify for exemption. Reasons for conventional sales include
lack of demand for organic products, isolated use of antibiotics for
humane purposes, chemical or pesticide use as the result of State or
emergency spray programs, and crops from a buffer area as described in
7 CFR part 205, provided all other criteria are met.
PART 1230--PORK PROMOTION, RESEARCH, AND CONSUMER INFORMATION
0
28. The authority citation for part 1230 is revised to read as follows:
[[Page 2760]]
Authority: 7 U.S.C. 4801-4819 and 7 U.S.C. 7401.
0
29. A new Sec. 1230.102 is added to read as follows:
Sec. 1230.102 Exemption.
(a) A producer who operates under an approved National Organic
Program (NOP) (7 CFR part 205) system plan; produces only products that
are eligible to be labeled as 100 percent organic under the NOP, except
as provided for in paragraph (i) of this section; and is not a split
operation shall be exempt from the payment of assessments.
(b) To apply for an exemption under this section, the producer
shall submit the request to the Board--on a form provided by the
Board--at any time initially and annually thereafter on or before
January 1 as long as the producer continues to be eligible for the
exemption.
(c) The request shall include the following: the producer's name
and address, a copy of the organic farm or organic handling operation
certificate provided by a USDA-accredited certifying agent as defined
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C.
6502), a signed certification that the applicant meets all of the
requirements specified for an assessment exemption, and such other
information as may be required by the Board and with the approval of
the Secretary.
(d) If the producer complies with the requirements of this section,
the Board will grant the exemption and issue a Certificate of Exemption
to the producer. For exemption requests received on or before August
15, 2005, the Board will have 60 days to approve the exemption request;
after August 15, 2005, the Board will have 30 days to approve the
exemption request. If the application is disapproved, the Board will
notify the applicant of the reason(s) for disapproval within the same
timeframe.
(e) The producer shall provide a copy of the Certificate of
Exemption to each person responsible for collecting and remitting the
assessment to the Board.
(f) The person responsible for collecting and remitting the
assessment to the Board shall maintain records showing the exempt
producer's name and address and the exemption number assigned by the
Board.
(g) An importer who imports only products that are eligible to be
labeled as 100 percent organic under the NOP (7 CFR part 205) and who
is not a split operation shall be exempt from the payment of
assessments. That importer may submit documentation to the Board and
request an exemption from assessment on 100 percent organic porcine
animals or pork and pork products--on a form provided by the Board--at
any time initially and annually thereafter on or before January 1 as
long as the importer continues to be eligible for the exemption. This
documentation shall include the same information required of producers
in paragraph (c) 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. The Board will also
issue the importer a 9-digit alphanumeric Harmonized Tariff Schedule
(HTS) classification valid for 1 year from the date of issue. This HTS
classification should be entered by the importer on the Customs entry
documentation. Any line item entry of 100 percent organic porcine
animals or pork and pork products bearing this HTS classification
assigned by the Board will not be subject to assessments.
(h) The exemption will apply immediately following the issuance of
the Certificate of Exemption.
(i) Agricultural commodities produced and marketed under an organic
system plan, as described in 7 CFR 205.201, but not sold, labeled, or
represented as organic, shall not disqualify a producer from exemption
under this section, except that producers who produce both organic and
non-organic agricultural commodities as a result of split operations
shall not qualify for exemption. Reasons for conventional sales include
lack of demand for organic products, isolated use of antibiotics for
humane purposes, chemical or pesticide use as the result of State or
emergency spray programs, and crops from a buffer area as described in
7 CFR part 205, provided all other criteria are met.
PART 1240--HONEY RESEARCH, PROMOTION, AND CONSUMER INFORMATION
0
30. The authority citation for part 1240 continues to read as follows:
Authority: 7 U.S.C. 4601-4612 and 7 U.S.C. 7401.
0
31. Section 1240.42 is amended by:
0
(a) Redesignating paragraph (d) as paragraph (e).
0
(b) Revising paragraph (c).
0
(c) Adding new paragraph (d).
The revisions read as follows:
Sec. 1240.42 Exemption from assessment.
* * * * *
(c) If, after a person has been exempt from paying assessments for
any year pursuant to this section, and the person no longer meets the
requirements of paragraphs (a) and (b) of this section for exemption,
the person shall file a report with the Board in the form and manner
prescribed by the Board and pay an assessment on or before March 15 of
the subsequent year on all honey or honey products produced or imported
by such person during the year for which the person claimed the
exemption.
(d) A producer who operates under an approved National Organic
Program (NOP) (7 CFR part 205) system plan; produces only products that
are eligible to be labeled as 100 percent organic under the NOP, except
as provided for in Sec. 1240.114 (f); and is not a split operation
shall be exempt from the payment of assessments. An importer who
imports only products that are eligible to be labeled as 100 percent
organic under the NOP (7 CFR part 205) and who is not a split operation
shall be exempt from the payment of assessments.
* * * * *
0
32. Amend Sec. 1240.50 by revising paragraph (d) to read as follows:
Sec. 1240.50 Reports.
* * * * *
(d) For persons who have an exemption from assessments under Sec.
1240.42, such information as deemed necessary by the Board, and
approved by the Secretary, concerning the exemption including
disposition of exempted honey.
0
33. Revise Sec. 1240.114 to read as follows:
Sec. 1240.114 Exemption procedures.
(a) To obtain a Certificate of Exemption for organic honey, an
eligible producer shall submit a request for exemption to the Board--on
a form provided by the Board--at any time initially and annually
thereafter on or before January 1 as long as the producer continues to
be eligible for the exemption. The request shall include the following:
The producer's name and address, a copy of the organic farm or organic
handling operation certificate provided by a USDA-accredited certifying
agent as defined in section 2103 of the Organic Foods Production Act of
1990 (7 U.S.C. 6502), a signed certification that the applicant meets
all of the requirements specified for an assessment exemption, and such
other information as may be required by the Board and with the approval
of the Secretary.
(b) If the producer complies with the requirements of this section,
the Board will approve the exemption and issue a
[[Page 2761]]
Certificate of Exemption to the producer. For exemption requests
received on or before August 15, 2005, the Board will have 60 days to
approve the exemption request; after August 15, 2005, the Board will
have 30 days to approve the exemption request. If the application is
disapproved, the Board will notify the applicant of the reason(s) for
disapproval within the same timeframe.
(c) A producer receiving an organic exemption shall provide a copy
of the Certificate of Exemption to each first handler, producer-packer,
importer, and exporter to whom the producer sells honey. The handler
shall maintain records showing the exempt producer's name and address
and the exemption number assigned by the Board.
(d) An importer who is eligible to be exempt from the payment of
assessments on imported organic honey and honey products may request an
exemption from assessment on 100 percent organic honey and honey
products--on a form provided by the Board--at any time initially and on
or before January 1 as long as the importer continues to be eligible
for the exemption. This documentation shall include the same
information required of producers and producer-packers in paragraph (a)
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. The Board will also issue the importer a 9-
digit alphanumeric Harmonized Tariff Schedule (HTS) classification
valid for 1 year from the date of issue. This HTS classification should
be entered by the importer on the Customs entry documentation. Any line
item entry of 100 percent organic honey and honey products bearing this
HTS classification assigned by the Board will not be subject to
assessments.
(e) The exemption will apply immediately following issuance of the
Certificate of Exemption.
(f) Agricultural commodities produced and marketed under an organic
system plan, as described in 7 CFR 205.201, but not sold, labeled, or
represented as organic, shall not disqualify a producer from exemption
under this section, except that producers who produce both organic and
non-organic agricultural commodities as a result of split operations
shall not qualify for exemption. Reasons for conventional sales include
lack of demand for organic products, isolated use of antibiotics for
humane purposes, chemical or pesticide use as the result of State or
emergency spray programs, and crops from a buffer area as described in
7 CFR part 205, provided all other criteria are met.
0
34. In Sec. 1240.115, revise paragraph (b)(1) to read as follows:
Sec. 1240.115 Levy of assessments.
* * * * *
(b) * * *
(1) Any persons other than importers holding a valid exemption
certificate pursuant to Sec. 1240.42 during the 12-month period ending
on December 31;
* * * * *
0
35. Amend Sec. 1240.118 by revising the first sentence to read as
follows:
Sec. 1240.118 Reports of disposition of exempted honey.
The Board may require reports by first handlers, producer-packers,
importers, or any persons who receive an exemption from assessments
under Sec. 1240.42 on the handling and disposition of exempted honey.
* * *
0
36. Revise Sec. 1240.120 to read as follows:
Sec. 1240.120 Retention period for records.
Each producer, first handler, producer-packer, importer, or any
person who receives an exemption from assessments under Sec. 1240.42
and is required to make reports pursuant to this subpart shall maintain
and retain for at least two years beyond the marketing year of their
applicability:
(a) One copy of each report made to the Board;
(b) Records of all exempt producers, producer-packers, and
importers including certification of exemption as necessary to verify
the address of such exempt person; and
(c) Such records as are necessary to verify such reports.
0
37. Revise Sec. 1240.121 to read as follows:
Sec. 1240.121 Availability of records.
Each producer, first handler, producer-packer, importer, or any
person who receives an exemption from assessments under Sec. 1240.42
and is required to make reports pursuant to this subpart shall make
available for inspection by authorized employees of the Board or the
Secretary during regular business hours, such records as are
appropriate and necessary to verify reports required under this
subpart.
0
38. Revise Sec. 1240.122 to read as follows:
Sec. 1240.122 Confidential books, records, and reports.
All information obtained from the books, records, and reports of
producers, first handlers, producer-packers, importers or any persons
who receive an exemption from assessments under Sec. 1240.42 and all
information with respect to refunds of assessments made to individual
producers and importers shall be kept confidential in the manner and to
the extent provided for in Sec. 1240.52 of the Order.
PART 1250--EGG RESEARCH AND PROMOTION
0
39. The authority citation for part 1250 is revised to read as follows:
Authority: 7 U.S.C. 2701-2718 and 7 U.S.C. 7401.
0
40. Revise Sec. 1250.530 to read as follows:
Sec. 1250.530 Certification of exempt producers.
(a) Number of laying hens. Egg producers not subject to the
provisions of the Act pursuant to Sec. 1250.348 shall file with all
handlers to whom they sell eggs a statement certifying their exemption
from the provisions of the Act in accordance with the criterion of
Sec. 1250.348. Certification shall be made on forms approved and
provided by the Egg Board to collecting handlers for use by exempt
producers. The certification form shall be filed with each handler on
or before January 1 of each year as long as the producer continues to
do business with the handler. A copy of the certificate of exemption
shall be forwarded to the Egg Board by the handler within 30 days of
receipt. The certification shall list the following: the name and
address of the producer, the basis for producer exemption according to
the requirements of Sec. 1250.348, and the signature of the producer.
(b) Organic Production. A producer who operates under an approved
National Organic Program (NOP) (7 CFR part 205) system plan; only
produces products that are eligible to be labeled as 100 percent
organic under the NOP, except as provided for in paragraph (b)(6) of
this section; and is not a split operation shall be exempt from the
payment of assessments.
(1) To apply for an exemption under this section, a producer shall
submit a request for exemption to the Board on a form provided by the
Board at any time initially and annually thereafter on or before
January 1 as long as the producer continues to be eligible for the
exemption.
(2) The request shall include the following: the producer's name
and address, a copy of the organic farm or organic handling operation
certificate provided by a USDA-accredited certifying agent as defined
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C.
6502), a signed
[[Page 2762]]
certification that the applicant meets all of the requirements
specified in paragraph (b) of this section for an assessment exemption,
and such other information as may be required by the Board and with the
approval of the Secretary.
(3) If the producer complies with the requirements of this section,
the Board will grant an assessment exemption and issue a certificate of
exemption to the producer. For exemption requests received on or before
August 15, 2005, the Board will have 60 days to approve the exemption
request; after August 15, 2005, the Board will have 30 days to approve
the exemption request. If the application is disapproved, the Board
will notify the applicant of the reason(s) for disapproval within the
same timeframe.
(4) The producer shall provide a copy of the certificate of
exemption to each handler to whom the producer sells eggs. The handler
shall maintain records showing the exempt producer's name and address
and the exemption number assigned by the Board.
(5) The exemption will apply at the first reporting period
following the issuance of the Certificate of Exemption.
(6) Agricultural commodities produced and marketed under an organic
system plan, as described in 7 CFR 205.201, but not sold, labeled, or
represented as organic, shall not disqualify a producer from exemption
under this section, except that producers who produce both organic and
non-organic agricultural commodities as a result of split operations
shall not qualify for exemption. Reasons for conventional sales include
lack of demand for organic products, isolated use of antibiotics for
humane purposes, chemical or pesticide use as the result of State or
emergency spray programs, and crops from a buffer area as described in
7 CFR part 205, provided all other criteria are met.
(c) If the exempt producer no longer qualifies for an exemption as
specified in Sec. 1250.348 or 1250.530(b), that producer shall notify,
within 10 days, all handlers with whom the producer has filed a
Certificate of Exemption.
PART 1260--BEEF PROMOTION AND RESEARCH
0
41. The authority citation for part 1260 is revised to read as follows:
Authority: 7 U.S.C. 2901-2911 and 7 U.S.C. 7401.
0
42. A new Sec. 1260.302 is added to read as follows:
Sec. 1260.302 Organic exemption.
(a) A producer who operates under an approved National Organic
Program (NOP) (7 CFR part 205) system plan; only produces products that
re eligible to be labeled as 100 percent organic under the NOP, except
as provided for in paragraph (i) of this section; and is not a split
operation shall be exempt from the payment of assessments.
(b) To apply for an exemption under this section, the producer
shall submit the request to the Board or QSBC--on a form provided by
the Board or QSBC--at any time initially and annually thereafter on or
before January 1 as long as the producer continues to be eligible for
the exemption.
(c) The request shall include the following: the producer's name
and address, a copy of the organic farm or organic handling operation
certificate provided by a USDA-accredited certifying agent as defined
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C.
6502), a signed certification that the applicant meets all of the
requirements specified for an assessment exemption, and such other
information as may be required by the Board and with the approval of
the Secretary.
(d) If the producer complies with the requirements of this section,
the Board or QSBC will grant the exemption and issue a Certificate of
Exemption to the producer. For exemption requests received on or before
August 15, 2005, the Board or QSBC will have 60 days to approve the
exemption request; after August 15, 2005, the Board or QSBC will have
30 days to approve the exemption request. If the application is
disapproved, the Board will notify the applicant of the reason(s) for
disapproval within the same timeframe.
(e) The producer shall provide a copy of the Certificate of
Exemption to each person responsible for collecting and remitting the
assessment.
(f) The person responsible for collecting and remitting the
assessment shall maintain records showing the exempt producer's name
and address and the exemption number assigned by the Board or QSBC.
(g) An importer who imports only products that are eligible to be
labeled as 100 percent organic under the NOP (7 CFR part 205) and who
is not a split operation shall be exempt from the payment of
assessments. That importer may submit documentation to the Board and
request an exemption from assessment on 100 percent organic cattle or
beef and beef products--on a form provided by the Board--at any time
initially and annually thereafter on or before January 1 as long as the
importer continues to be eligible for the exemption. This documentation
shall include the same information required of producers in paragraph
(c) 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. The Board will also issue the
importer a 9-digit alphanumeric Harmonized Tariff Schedule (HTS)
classification valid for 1 year from the date of issue. This HTS
classification should be entered by the importer on the Customs entry
documentation. Any line item entry of 100 percent organic cattle or
beef and beef products bearing this HTS classification assigned by the
Board will not be subject to assessments.
(h) The exemption will apply immediately following the issuance of
the Certificate of Exemption.
(i) Agricultural commodities produced and marketed under an organic
system plan, as described in 7 CFR 205.201, but not sold, labeled, or
represented as organic, shall not disqualify a producer from exemption
under this section, except that producers who produce both organic and
non-organic agricultural commodities as a result of split operations
shall not qualify for exemption. Reasons for conventional sales include
lack of demand for organic products, isolated use of antibiotics for
humane purposes, chemical or pesticide use as the result of State or
emergency spray programs, and crops from a buffer area as described in
7 CFR part 205, provided all other criteria are met.
PART 1280--LAMB PROMOTION, RESEARCH, AND INFORMATION ORDER
0
43. The authority citation for part 1280 is revised to read as follows:
Authority: 7 U.S.C. 7411-7425 and 7 U.S.C. 7401.
0
44. A new Sec. 1280.406 is added to read as follows:
Sec. 1280.406 Exemption.
(a) A producer, seed stock producer, or feeder who produces
(including producing by feeding) only products that are eligible to be
labeled as 100 percent organic under the National Organic Program (NOP)
(7 CFR part 205), except as provided for in paragraph (h) of this
section; a handler who handles only products that are eligible to be
labeled as 100 percent organic under the NOP; or an exporter who
exports only products that are eligible to be labeled as 100 percent
[[Page 2763]]
organic under the NOP; and who operates under an approved NOP system
plan and is not a split operation.
(b) To apply for an exemption under this section, the person shall
submit the request to the Board--on a form provided by the Board--at
any time initially and annually thereafter on or before January 1 as
long as the person continues to be eligible for the exemption.
(c) The request shall include the following: the person's name and
address, a copy of the organic farm or organic handling operation
certificate provided by a USDA-accredited certifying agent as defined
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C.
6502), a signed certification that the applicant meets all of the
requirements specified for an assessment exemption, and such other
information as may be required by the Board and with the approval of
the Secretary.
(d) If the person complies with the requirements of this section,
the Board will grant the exemption and issue a Certificate of Exemption
to the producer. For exemption requests received on or before August
15, 2005, the Board will have 60 days to approve the exemption request;
after August 15, 2005, the Board will have 30 days to approve the
exemption request. If the application is disapproved, the Board will
notify the applicant of the reason(s) for disapproval within the same
timeframe.
(e) An exempt producer shall provide a copy of the Certificate of
Exemption to each person to whom the producer sells ovine animals or
lamb and lamb products. The Certificate of Exemption must accompany the
ovine animals through the production chain to the person responsible
for remitting the assessment to the Board.
(f) The person shall maintain records showing the exempt producer's
name and address and the exemption number assigned by the Board.
(g) The exemption will apply at the first reporting period
following the issuance of the exemption.
(h) Agricultural commodities produced and marketed under an organic
system plan, as described in 7 CFR 205.201, but not sold, labeled, or
represented as organic, shall not disqualify a producer, seed stock
producer, or feeder from exemption under this section, except that
persons producing or feeding both organic and non-organic agricultural
commodities as a result of split operations shall not qualify for
exemption. Reasons for conventional sales include lack of demand for
organic products, isolated use of antibiotics for humane purposes,
chemical or pesticide use as the result of State or emergency spray
programs, and crops from a buffer area as described in 7 CFR part 205,
provided all other criteria are met.
Dated: January 5, 2005.
Kenneth C. Clayton,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 05-573 Filed 1-13-05; 8:45 am]
BILLING CODE 3410-02-P