[Federal Register: March 3, 2008 (Volume 73, Number 42)]
[Proposed Rules]
[Page 11474-11493]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03mr08-22]
[[Page 11474]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 1212 and 1240
[Docket No. AMS-FV-06-0176; FV-03-704-PR-2A]
RIN 0581-AC37
Establishment of Honey Packers and Importers Research, Promotion,
Consumer Education and Industry Information Order and Termination of
the Honey Research, Promotion, and Consumer Information Order
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule and Referendum Order.
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SUMMARY: This rule proposes a new industry-funded research, promotion,
consumer education, and information order for honey and honey products
under the Commodity Promotion, Research, and Information Act of 1996
(1996 Act). The proposed Honey Packers and Importers Research,
Promotion, Consumer Education and Industry Information Order (Proposed
Order) was submitted to the Department of Agriculture (Department) by
the National Honey Packers and Dealers Association (Association). The
Department is conducting an initial referendum to ascertain whether the
persons to be covered by and assessed under the Proposed Order favor
the Proposed Order prior to it going into effect. The Proposed Order
would replace the existing Honey Research, Promotion, and Consumer
Information Order (Current Order) for honey and honey products and the
Current Order would be terminated. The Current Order is issued under
the Honey Research, Promotion, and Consumer Information Act (Honey
Act). In addition, USDA is announcing that a referendum will be
conducted among eligible honey first handlers and importers to
determine whether they favor the implementation of the Proposed Order.
The Proposed Order would be implemented if it is approved by a majority
of the eligible first handlers and importers voting in a referendum and
by a majority of the volume of those voting in the referendum. A
separate final rule on referendum procedures is being published in this
issue of the Federal Register.
DATES: The voting period is April 2, 2008 through April 16, 2008. To be
eligible to vote, importers and first handlers must have imported or
handled 250,000 or more pounds of honey or honey products during the
representative period from January 1, 2007 through December 31, 2007.
Ballots will be mailed to all known first handlers and importers of
honey or honey products on or before April 2, 2008.
Ballots must be received by the referendum agents no later than the
close business (Eastern time) on April 16, 2008, to be counted.
ADDRESSES: Copies of the Order may be obtained from: Referendum Agent,
Research and Promotion Branch (RPB), Fruit and Vegetable Programs
(FVP), Agricultural Marketing Service (AMS), USDA, Stop 0244, Room
0632-S, 1400 Independence Avenue, SW., Washington, DC 20250-0244; Fax
(202) 205-2800; Toll Free (888) 720-917 or at www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Kathie Notoro, Marketing Specialist,
Research and Promotion Branch, Fruit and Vegetable Programs, AMS, USDA,
Stop 0244, Room 0632-S, 1400 Independence Ave., SW., Washington, DC
20250-0244; telephone (202) 720-9915 or (888)720-9917 (toll free), Fax:
(202) 205-2800 or e-mail kathie.notoro@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under the Commodity
Promotion, Research, and Information Act of 1996 (1996 Act) (7 U.S.C.
7411-7425) and under the Honey Research, Promotion, and Consumer
Information Act (Honey Act) (7 U.S.C. 4601-4613). The Current Order
appears at 7 CFR part 1240.
Pursuant to the 1996 Act, it is hereby directed that a referendum
be conducted to determine whether eligible first handlers and importers
of honey or honey products favor issuance of the Proposed Order. The
Proposed Order is authorized under the 1996 Act.
The representative period for establishing voter eligibility for
the referendum shall be the period from January 1, 2007, through
December 31, 2007. First handlers and importers who have handled more
than 250,000 pounds of honey or honey products, respectively, during
the period from January 1, 2007, through December 31, 2007, are
eligible to vote. The referendum shall be conducted by mail ballot from
April 2, 2008 through April 16, 2008. Ballots must be received by the
referendum agent no later than April 16, 2008, to be counted.
Section 518 of the 1996 Act provides to the Department the
authority to conduct a referendum prior to the Order's effective date.
The Order shall become effective only if it is determined that the
Order has been approved by a majority of those eligible persons voting
for approval who also represent a majority of the volume of honey or
honey products.
In accordance with the OMB regulation [5 CFR 1320] which implements
the Paperwork Reduction Act of 1995 [44 U.S.C. 35], the referendum
ballot, which represents the information collection and recordkeeping
requirements that may be imposed by this rule, was submitted to OMB for
approval and appeared under OMB Number 0581-NEW.
A proposed rule with the Proposed Order was published in the
Federal Register on June 4, 2007 [72 FR 30924], with a 60-day comment
period which closed on August 3, 2007.
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.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is not intended to have retroactive effect.
This rule will not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
rule.
Section 524 of the 1996 Act provides that it shall not affect or
preempt any other Federal or State law authorizing promotion or
research relating to an agricultural commodity.
Under both section 519 of the 1996 Act and section 10 of the Honey
Act, a person subject to an order may file a petition with the
Department stating that the order, any provision of the order, or any
obligation imposed in connection with the order, is not established in
accordance with the law, and requesting a modification of the order or
an exemption from the order. Any such petition must be filed within two
years after the effective date of an order, provision or obligation
subject to challenge. The petitioner would have the opportunity for a
hearing on the petition. Thereafter, the Department would issue a
ruling on the petition. The 1996 Act and the Honey Act provide that the
district court of the United States for any district in which the
petitioner resides or conducts business shall be the jurisdiction to
review a final ruling on the petition, if the petitioner files a
complaint for that purpose not later than 20 days after the date of
entry of the Department's final ruling.
In deciding whether a proposal for an order is consistent with and
will effectuate the purpose of the 1996 Act, the Secretary may consider
the existence of other federal research and
[[Page 11475]]
promotion programs issued under other laws. Taking into account the
duplicative nature of the Proposed Order with the Current Order, the
Department proposed that the Current Order be terminated.
Similar to the Current Order, the goals of the Proposed Order are
to: (1) Develop and finance an effective and coordinated research,
promotion, industry information, and consumer education program for
honey and honey products; (2) strengthen the position of the honey
industry; and (3) develop, maintain, and expand existing markets for
honey and honey products.
Background
While both the Current and the Proposed Order have the same goal in
terms of making positive strides for the honey industry, some of the
main provisions within each order vary significantly between the two
orders. Below is a discussion of some of the differences between the
Current Order and the Proposed Order submitted by the Association. This
comparison is not exhaustive, but it is intended to allow interested
persons a way to distinguish between the two orders.
Current Order: Honey Research, Promotion, and Consumer Information
Order (Part 1240)
The Current Order, authorized by the Honey Act [7 U.S.C. 4601-
4613], became effective on July 21, 1986, after honey producers and
importers voted in favor of the Order. A 12-member board consisting of
seven producers, two handlers, two importers, one officer of a
marketing cooperative, and their alternates, administers the program.
Under the Honey Act, at least 50 percent of the members of the Board
must be honey producers. The Act also provides for the establishment of
a National Honey Nominations Committee consisting of state members for
nominating producer members to the Board. The State members are
nominated by state beekeeper associations. Nominations for handler and
importer members are made by qualified national organizations
representing handler and importer interests, respectively. The national
honey marketing cooperative representative is nominated by a qualified
national honey marketing cooperative. Board reconstitution is every
five years, subject to certain statutory considerations and
restrictions.
Under the Current Order, assessments are collected on honey and
honey products produced in or imported into the 50 States, Puerto Rico,
and the District of Columbia. The funds are collected from producers
and importers and are used by the National Honey Board for market
research and development, advertising and promotion of honey and honey
products, and consumer information. This is done under the oversight of
AMS. The current assessment rate is $0.01 per pound. First handlers are
responsible for collection of producer assessments and payment to the
National Honey Board. The U.S. Customs Service collects the importer
assessments.
Producers and importers marketing less than 6,000 pounds of honey
per year are exempt from paying assessments. In addition, producers who
operate under an approved National Organic Program (NOP) (7 CFR part
205) system plan, produce only products eligible to be labeled as 100
percent organic under the NOP, and are not a split operation, are
exempt from the paying assessments. Similarly, importers who import
only products eligible to be labeled as 100 percent organic under the
NOP, and are not a split operation, are exempt from paying assessments.
Under the Current Order, approximately 2,700 entities are assessed
and approximately $3.6 million is collected annually.
Under the Current Order, handlers, importers, producers, and
producer-packers are required to report certain specified information
to the Board. Persons who have an exemption from assessments also must
report to the Board information.
The Honey Act provides for a number of permissive terms that may be
included in an order. For example, the Honey Act provides authority to
establish minimum purity standards for honey and honey products that
are designed to maintain a positive and wholesome marketing image for
honey and honey products. An inspection and monitoring system and a
voluntary quality assurance program is authorized in connection with
the minimum purity standards. Only a voluntary quality assurance
program has been approved by referendum and therefore appears in the
Current Order.
The Honey Act requires a referendum to establish an order as well
as to authorize a number of order provisions, including handler
representation on the Board, reconstitution of the Board, an
alternative assessment rate as provided by statute on honey producers,
producer-packers, handlers and importers, and an inspection and
monitoring system of a voluntary quality assurance program. Approval is
by a majority vote by number and volume for producers, importers and
when applicable, handlers.
Proposed Order: Honey Packers and Importers Research, Promotion,
Consumer Education and Industry Information Order (Part 1212)
This rule proposes the implementation of a Honey Packers and
Importers Research, Promotion, Consumer Education and Industry
Information Order (Proposed Order). The Department received the
proposal for a new order from the National Honey Packers and Dealers
Association (Association).
The Proposed Order is authorized under the 1996 Act, instead of the
Honey Act, which provides the statutory authority for the Current
Order. The 1996 Act varies from the Honey Act in several ways.
The 1996 Act authorizes the Department, under a generic authority,
to establish agricultural commodity research and promotion orders,
which may include a combination of promotion, research, industry
information, and consumer information activities funded by mandatory
assessments. These programs are designed to maintain and expand markets
and uses for agricultural commodities. The Proposed Order, similar to
the Current Order, would provide for the continued development and
financing of a coordinated program of research, promotion, and
information for honey and honey products.
The 1996 Act provides for a number of optional provisions that
allow the tailoring of orders to the needs of different commodity
groups. Section 516 of the 1996 Act contains permissive terms that may
be included in the orders. For example, Sec. 516 authorizes an order
to provide for exemption of de minimis quantities of an agricultural
commodity; different payment and reporting schedules; coverage of
research, promotion, and information activities to expand, improve, or
make more efficient the marketing or use of an agricultural commodity
covered by the order in both domestic and foreign markets; provision
for reserve funds; provision for credits for generic and branded
activities; and assessment of imports.
Section 518 of the 1996 Act provides for referenda to ascertain
approval of an order to be conducted either prior to its going into
effect or within 3 years after assessments first begin to be collected
under an order. An order also may provide for its approval in a
referendum based upon different voting patterns. In accordance with
Sec. 518(e) of the 1996
[[Page 11476]]
Act, the results of the referendum must be determined in one of three
ways: (1) By a majority of those persons voting; (2) by persons voting
for approval who represent a majority of the volume of the agricultural
commodity; or (3) by a majority of those persons voting for approval
who also represent a majority of the volume of the agricultural
commodity.
Section 518 provides for the Department to: (1) Conduct an initial
referendum, preceding a proposed order's effective date, among persons
who would pay assessments under the proposed order; or (2) implement a
proposed order, pending the conduct of a referendum, among persons
subject to assessments, within three years after assessments first
begin.
For the Proposed Order, the Department is recommending a referendum
be conducted, preceding the Proposed Order's effective date, to
ascertain whether the persons to be covered and assessed favor the
Proposed Order going into effect. Implementation of the Proposed Order
would require the approval of a majority of the first handlers and
importers voting in the referendum, which also represent a majority of
the volume of honey and honey products handled and imported during the
representative period by those voting in the referendum. Specific
procedures to be followed in such referendum are published separately
in this issue of the Federal Register.
In addition, Sec. 518 requires the Department to conduct
subsequent referenda: (1) Not later than seven years after assessments
first begin under the proposed order; or (2) at the request of the
proposed board established under the proposed order; or (3) at the
request of ten percent or more of the number of persons eligible to
vote. In addition to these criteria, the 1996 Act provides that the
Department may conduct a referendum at any time to determine whether
persons eligible to vote favor the continuation, suspension, or
termination of an order or a provision of an order. Expenses incurred
by the Department in implementing and administering the proposed order,
including referenda costs, would be paid from assessments.
Order Assessments
A major difference between the Current and Proposed Orders is that
the Proposed Order provides for assessments to be paid by first
handlers and importers of honey or honey products instead of producers
and importers of such products. The number of entities assessed under
the Proposed Order would be around 75, as compared to the 2,700
presently under the Current Order. The funds generated through the
mandatory assessments on domestically handled and imported honey or
honey products would be used, as it is under the Current Order, to pay
for promotion, research, and consumer and industry information as well
as the administration, maintenance, and functioning of the Board.
Under the Proposed Order, ``first handler'' would be defined to
mean the first person who handles honey or honey products, and would
include a producer who handles his or her own production. In addition,
``handle'' would be defined to mean process, package, sell, transport,
purchase or in any other way place honey or honey products, or cause
them to be placed, in commerce. This term would include selling
unprocessed honey that will be consumed without further processing or
packaging, but would not include the transportation of unprocessed
honey by the producer to a handler or transportation by a commercial
carrier for the account of the first handler or producer.
The Proposed Order would provide that each first handler pay an
assessment to the proposed Board at the rate of $0.01 per pound of
domestically produced honey or honey products that the handler handles.
Under the Current Order, producers must pay an assessment rate of $0.01
per pound of honey produced. The Proposed Order establishes that each
first handler responsible for remitting assessments shall pay the Board
the amount due on a monthly basis no later than the fifteenth day of
the month following the month in which the honey or honey products were
marketed.
The Proposed Order would define ``importer'' to mean any person who
imports honey or honey products from outside the United States for sale
in the United States as a principal or as an agent, broker, or
consignee for any person. An importer is also listed in the import
records as the importer of record for such honey or honey products with
the United States Customs and Border Protection (Customs).
Section 516(f) of the 1996 Act allows assessments on imports at a
rate comparable to the rate for domestics. The Proposed Order treats
importers in the same manner as they are treated under the Current
Order in terms of the assessment rate and collection of assessments:
Each importer would pay an assessment to the Board at the rate of $0.01
per pound of honey or honey products the importer imports into the
United States. An importer must pay the assessment to the Board through
Customs when the honey or honey products being assessed enter the
United States. If Customs does not collect an assessment from an
importer, the importer would be responsible for paying the assessment
directly to the Board.
The assessment levied on domestically handled and imported honey
and honey products would be used to pay for promotion, research, and
consumer education and industry information as well as the
administration, maintenance, and functioning of the Board. Expenses
incurred by the Department in implementing and administering the
Proposed Order, including referenda costs, also would be paid from
assessments.
Persons failing to remit total assessments due in a timely manner
may also be subject to actions under Federal debt collection procedures
as set forth in 7 CFR 3.1 through 3.36 for all research and promotion
programs administered by the Department [60 FR 12533, March 7, 1995].
Persons also would have to pay interest and late payment charges on
late assessments as prescribed in the Proposed Order.
Under the Proposed Order, a first handler who handles less than
250,000 pounds of honey or honey products per year or an importer who
imports less than 250,000 pounds of honey or honey products per year,
would be exempt from paying assessments.
In addition, a first handler who operates under an approved NOP
system plan, handles only products eligible to be labeled as 100
percent organic under the NOP, and is not a split operation, is exempt
from paying assessments under the Proposed Order. An importer who
imports only products eligible to be labeled as 100 percent organic
under the NOP, and is not a split operation, also is exempt from paying
assessments.
The Proposed Order allows the Board to recommend to the Secretary
for approval an increase or decrease to the assessment, as it deems
appropriate by at least a two-thirds vote of members present at a
meeting of the Board. The Board may not recommend an increase in the
assessment of more than $0.02 per pound of honey or honey products and
may not increase the assessment by more than $0.0025 in any single
fiscal year.
Although the 1996 Act allows for credits of assessments for generic
and branded activities, the Association who proposed the new Order did
not elect to include it.
As the Proposed Order establishes that first handlers and importers
will be
[[Page 11477]]
responsible for paying assessments, the Order states that these two
groups will also be responsible for filing specific reports and
maintaining records regarding the amount of honey and honey products
brought to the market. This is different than the Current Order in
which reporting and record maintenance requirements are broader.
First handlers would be required to file reports and maintain
records on the total quantity of honey and honey products acquired
during the reporting period, the quantity of honey processed for sale
from the handler's own production, and the quantity of honey purchased
from a handler or importer responsible for paying the assessment due.
The Board would recommend to the Department specific reporting periods
and dates when such reports are due to the Board.
Unless provided by Customs, importers would be required to report
the total quantity of honey and honey products imported during each
reporting period, and keep a record of each lot of honey and honey
products imported during such period, including the quantity, date,
country of origin, and port of entry. Under the Proposed Order, Customs
would collect assessments on imported honey and honey products and
remit the funds to the Board.
Each first handler and importer, including those who would be
exempt from paying assessments under the Proposed Order, would be
required to maintain any books and records necessary to carry out the
provisions of the Proposed Order for two years beyond the fiscal period
to which they apply. This would include the books and records necessary
to verify any required reports. These books and records would be made
available to the Board's or Department's employees or agents during
normal business hours for inspection if necessary.
Both the Current and Proposed Order provide that all officers,
employees, and agents of the Department and of the Board are required
to keep confidential all information obtained from persons subject to
the Order. This information would be disclosed only if the Department
considers the information relevant, and the information is revealed in
a judicial proceeding or administrative hearing brought at the
direction or on the request of the Department or to which the
Department or any officer of the Department is a party.
However, the issuance of general statements based on reports or on
information relating to a number of persons subject to the Order would
be permitted, if the statements do not identify the information
furnished by any person. Finally, the publication, by direction of the
Department, of the name of any person violating the Order and a
statement of the particular provisions of the Order violated by the
person would be allowed.
It is anticipated that 95 percent of the assessment dollars
presently collected under the Current Order would be collected under
the Proposed Order. This is because the Proposed Order would exempt
first handlers handling and importers importing less than 250,000
pounds of honey or honey products per year. In contrast, under the
Current Order, about 95 percent of current assessment dollars are
collected from approximately 2,700 producers and importers. Producers
and importers who handle less than 6,000 pounds of honey or honey
products are exempt from the assessment under the Current Order. It is
estimated that revenue for the Proposed Order will be around or
slightly more than $3 million. Of this amount, about 64 percent would
be generated by assessments on imported honey and honey products.
It is also believed that the assessment of only first handlers and
importers rather than producers and importers would reduce program
administrative expenses as fewer entities would be paying assessments
and filing reports.
Establishment of the Honey Packers and Importers Board
Section 515 of the 1996 Act provides for the establishment of a
Board consisting of producers, first handlers, and others in the
marketing chain, as appropriate. The Department would appoint members
to the Board from nominees submitted in accordance with a Proposed
Order. The Proposed Order would provide for the establishment of a
Honey Packers and Importers Board to administer the Proposed Order
under AMS oversight. The Association has proposed that the Board be
composed of ten members; including three first handler representatives,
two importer representatives, one importer-handler representative, one
national honey marketing cooperative representative, and three producer
representatives and their alternates.
The Current Board consists of 12 members; seven producers, two
handlers, two importers, one officer of a marketing cooperative, and
their alternates.
On the Proposed Board, the importer representatives must import at
least 75 percent of the honey or honey products they market in the
United States. The importer-handler representative must also import at
least 75 percent of the honey or honey products they market in the
United States and must handle at least 250,000 pounds annually. In
addition, the producer representatives must produce a minimum of
150,000 pounds of honey in the United States annually based on the best
three year average of the most recent five calendar years.
Each term of office on the Board would end on December 31, with new
terms of office beginning on January 1, with the exception of the
initial Board's term of office, as opposed to the Current Order in
which a term of office begins on April 1.
First handlers, producers, and a national honey marketing
cooperative representative would represent those entities in the United
States. Board members from each of these groups would be nominated by
national organizations representing each of them respectively. The
United States would be defined to include collectively the 50 States,
the District of Columbia, the Commonwealth of Puerto Rico and the
territories and possessions of the United States. Honey is produced in
almost all of the 50 States. The top ten producing States in 2006
included North Dakota, South Dakota, California, Florida, Minnesota,
Montana, Texas, Wisconsin, Idaho, and New York.
Importers and the importer-handler on the Board would be nominated
by national organizations representing importers. Such importers and
the importer-handler would represent those individuals who import for
sale honey or honey products into the United States as a principal or
as an agent, broker, or consignee for any person who produces honey or
honey products outside the United States. The importer-handler member
of the Board would be required to import at least 75 percent of the
honey or honey products they market in the United States and must
handle at least 250,000 pounds annually. All qualified national
organizations representing first handlers, producers, importers and
honey-marketing cooperatives would have the opportunity to participate
in a nomination caucus for the purposes of preparing a slate of
candidates for the above positions submitted to the Department for
consideration.
Eligible organizations must submit nominations to the Department
six months before a new term of office begins. To become a qualified
national organization representing first handlers, importers, or
producers under the Proposed Order, each such organization would be
required to meet the following criteria: (1) The majority of its voting
membership must consist of first
[[Page 11478]]
handlers, importers or producers of honey, respectively; (2) it must
have a history of stability and permanency and have been in existence
for more than 1 year; (3) its primary purpose must be to promote honey
first handlers', importers' or producers' welfare; (4) it must derive a
portion of its operating funds from first handlers, importers, or
producers; and(5) it must demonstrate it is willing and able to further
the 1996 Act's purposes. Further, any organization representing first
handlers or producers must represent a substantial number of first
handlers or producers who market or produce a substantial volume of
honey or honey products in at least 20 States. Any organization
representing importers must represent at least a majority of the volume
of honey or honey products imported into the United States.
To be eligible as a qualified national honey-marketing
organization, the Department must certify that an entity qualifies as a
cooperative, as defined in proposed section 1212.42(d). Such entity
shall not be eligible for certification as a qualified national
organization representing producer interests.
If the Department determines that there are no qualified national
organizations representing first handlers, importers, producers, and
honey-marketing cooperatives interests, individuals who have paid their
assessments to the Board in the most recent fiscal year could submit
nominations for those positions specified.
The nomination process in the Proposed Order varies from that in
the Current Order. Under the Current Order, the National Honey
Nominations Committee (Committee), consisting of individuals nominated
by state beekeeper associations and appointed by the Secretary, is the
entity that nominates members and alternates for the Board and submits
such nominations to the Secretary for approval. The Committee picks
producer members from seven regions established based on the production
of honey. The Committee picks handler, importer, and cooperative
members based on recommendations from qualified national organizations
representing each of these groups' individual interests.
Just as in the Current Order, the Proposed Order indicates that the
Board may recommend to the Department that a member be removed from
office if the member consistently refuses to perform his or her duties
or engages in dishonest acts or willful misconduct. The Department may
remove the member if the Department finds that the Board's
recommendation demonstrates cause.
The 1996 Act provides that to ensure fair and equitable
representation, the composition of a board shall reflect the geographic
distinction of the production of the agriculture commodity in the
United States and the quantity or value of the agriculture commodity
imported into the United States.
Under the Proposed Order at least once every five years, but not
more frequently than once in each three year period, the Board would
review the geographical distribution in the United States of the
production of honey covered by the Order and quantity or value of honey
and honey products imported into the United States. The review, based
on a three-year average, would enable the Board to evaluate whether the
Board membership is reflective of the composition of the honey
industry.
Under the Current Order, every five years the Board reviews the
geographical distribution of domestically produced honey and the
quantity of honey imported. The Board then makes recommendations based
on the five-year average annual assessments excluding the two years
containing the highest and lowest disparity between the proportion of
assessments owed from the imported and domestic honey and honey
products.
Just as under the Current Order, Board members could serve terms of
three years and be able to serve a maximum of two consecutive terms
under the Proposed Order. When the Board is first established, one
producer, one first handler, one importer, and the representative of a
national honey cooperative would serve a two-year term. One producer,
one first handler, and the importer-handler representative would serve
a three-year term of office. One producer, one first handler, and one
importer would serve a four-year term of office. This would allow the
terms to be staggered on the Board. No member or alternate may serve
more than two consecutive terms, excluding any initial two-year term of
office. Determination of which of the initial members and their
alternates would serve two year, three year or four year terms, would
be designated by the Department.
In the event that any member or alternate of the Board ceases to be
a member of the category of members from which the member was appointed
to the Board, such position shall become vacant.
Whereas under the Current Order, a quorum is met if there are a
majority of members and at least 50% are producers, under the Proposed
Order, a quorum is met if a majority of members are present and at
least one first handler and one importer are present. Also, under the
Proposed Order, there is a 2/3 vote requirement for recommendations of
a change in assessment.
Other Order Provisions
In addition to differences in the entities assessed and the makeup
of the Board, there are other comparative changes between the Proposed
Order and the Current Order.
There are number of terms not used in the Current Order that are
part of the Proposed Order, including ``first handler'' and ``importer-
handler representative.'' Also, the definition of ``honey products''
was expanded from the Current Order to state that such a product shall
be considered to have honey as a principal ingredient if the product
contains at least 50% honey by weight.
The Proposed Order provides that 5% of the Board's anticipated
revenue must be set aside for production research, while the Current
Order states generally that funding for such research shall be part of
the budget.
The provisions regarding referendum procedures in the Proposed
Order provide for a referendum every seven years. In the Current Order,
a referendum occurs every five years.
The Department modified the Association's proposal to make it
consistent with the 1996 Act and to provide clarity, consistency, and
correctness with respect to word usage and terminology. The Department
also changed the proposal to make it consistent with other similar
national research and promotion programs. Some of the changes made by
the Department to the Association's proposal were: (1) To remove the
term ``handler'' and adopt ``first handler'' as the term to be used
throughout the Proposed Order to be consistent with the 1996 Act; (2)
to add criteria under nominations if a member or alternate is no longer
affiliated with the organization he or she was nominated to represent;
(3) to specify the initial terms of office for the Board to stagger the
terms for future years; (4) to remove any references to the Current
Board or Order; (5) to describe in more detail the powers and duties of
the Board; (6) to add a new section describing reports that need to be
provided by the Board on its financial position; (7) to add a section
on independent evaluation of the effectiveness of any plan or program
conducted by the Board; (8) to add a
[[Page 11479]]
section on patents, copyrights, inventions, product formulation and
publication to specify that these would become the property of the U.S.
government; (9) to add authority to collect first handler and importer
tax identification numbers; (10) to revise referendum requirements;
(11) to add a section on amendments to the Proposed Order; (12) to add
a section to exempt from assessments handlers/importers who operate
under an approved National Organic Program; (13) to delete references
to a standards of identity program or a testing program for honey as
these programs are not authorized under the 1996 Act; and (14) to
clarify the membership on the Board.
While the proposal set forth below has not received the approval of
the Department, it is determined that the Proposed Order is consistent
with and will effectuate the purposes of the 1996 Act.
Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C.
601-612), AMS is required to examine 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 would not be disproportionately burdened.
The 1996 Act authorizes generic promotion, research, and
information programs for agricultural commodities. Development of such
programs under this authority are in the national public interest and
vital to the welfare of the agricultural economy of the United States
and to maintain and expand existing markets and develop new markets and
uses for agricultural commodities through industry-funded, government-
supervised, generic commodity promotion programs.
The Association submitted this Proposed Order to: (1) Develop and
finance an effective and coordinated program of research, promotion,
industry information, and consumer education regarding honey and honey
products; (2) strengthen the position of the honey industry; and (3)
maintain, develop, and expand existing markets for honey and honey
products.
The goals of the Current Order are similar. Therefore, taking into
account the duplicative nature of the Proposed Order with the Current
Order, the Department is proposing that the Current Order be
terminated. It is USDA's intention to have an operational program in
effect under either the Current or Proposed Order.
The Proposed Order is authorized under Commodity Promotion,
Research, Information Act of 1996, while the Current Order is
authorized under the Honey Research, Promotion, and Consumer
Information Act. A major difference between the Current Order and the
Proposed Order is that the Proposed Order provides for assessments to
be paid by first handlers and importers of honey or honey products
rather than producers and importers.
Administrative expenses under the Proposed Order should be reduced
because the number of entities to be assessed under the Proposed Order
would also be reduced. Approximately 2,700 entities are assessed under
the Current Order, while only about 75 entities would be assessed under
the Proposed Order. Administrative costs would be reduced with fewer
entities paying assessments and filing reports, and the assessment
collection process would be simplified.
First handlers, importers, and producers would have the opportunity
to serve on the proposed 10 member Board. Each member would have an
alternate. The Board would consist of three first handler
representatives, three honey producers, two importer representatives,
one importer-handler representative and one representative from a
national honey marketing cooperative. The Secretary would appoint
members to the Board from nominees submitted in accordance with the
Proposed Order. Twelve members serve on the Current Board.
Section 518 of the 1996 Act provides for referenda to ascertain
approval of an order to be conducted either prior to its going into
effect or within 3 years after assessments first begin under the order.
An initial referendum will be conducted prior to putting this Proposed
Order in effect. A referendum order is published herein. The Proposed
Order also provides for approval in a referendum to be based upon: (1)
Approval by a majority of those persons voting; and (2) persons voting
for approval that represent a majority of the volume of honey and honey
products of those voting in the referendum. Every seven years, the
Department shall conduct a referendum to determine whether first
handlers and importers of honey or honey products favor the
continuation, suspension, or termination of the Order. In addition, the
Department could conduct a referendum at any time; at the request of 10
percent or more of the first handlers and importers required to pay
assessments; or at the request of the Board.
There are approximately 45 first handlers and 30 importers of honey
or honey products that would pay assessments under the Proposed Order.
Under the Current Order, approximately 2,000 producers and 659
importers pay assessments. Under the Current Order, entities in the
Board member nomination process include qualified national
organizations representing handler and importer interests, a national
honey market cooperative and state beekeeper associations. The Current
Honey Board consists of 12 members; seven producers, two handlers, two
importers, and one marketing cooperative member. Under the Proposed
Order entities in the Board member nomination process would include,
qualified national organizations representing first handlers,
importers, producers, and cooperative interests. The Proposed Board
would consist of 10 members; three first handlers, two importers, one
importer-handler, three producers, and one marketing cooperative
member.
The Proposed Order also provides for first handlers and importers
to file reports to the Board. In addition, the Proposed Order requires
that qualified national organizations and nominated producers provide
information for the nomination and appointment process to the Proposed
Board. While the Proposed Order would impose certain recordkeeping
requirements on first handlers, importers, and any producers who seek
nomination and appointment to the Board, information required under the
Proposed Order could be compiled from records currently maintained and
would involve existing clerical or accounting skills. The forms require
the minimum information necessary to effectively carry out the
requirements of the Proposed Order, and their use is necessary to
fulfill the intent of the 1996 Act. An estimated 118 respondents would
provide information to the Board. They would be: 45 first handlers, 30
importers, 6 producers (for nominations purposes), 10 certified
organizations (for nomination purposes), 25 handlers/importers exempt
under the program, and 2 organic handlers/importers (for exemption
purposes). The estimated total cost of providing information to the
Board by all respondents would be $11,550. This total has been
estimated by multiplying 350 total hours required for reporting and
recordkeeping by $33, the average mean hourly earnings of various
occupations involved in keeping this information. Data for computation
of this hourly rate was obtained from the U.S. Department of Labor
Statistics. In contrast, under the Current Order, 2,700 respondents
need a total of 7,776
[[Page 11480]]
hours for reporting and recordkeeping for a total cost of $129,459.
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 $6.5 million or less. Using these criteria under
both the Current and the Proposed Order, most producers, first
handlers, cooperative organizations and other nominating organizations
would be considered small businesses, while most importers would not.
National Agricultural Statistic Service (NASS) data reports that
U.S. production of honey, from producers with five or more colonies,
totaled 155 million pounds in 2006. The top ten producing States in
2006 included North Dakota, South Dakota, California, Florida,
Minnesota, Montana, Texas, Wisconsin, Idaho, and New York. To avoid
disclosing data for individual operations, NASS statistics do not
include Connecticut, Delaware, Maryland, Massachusetts, New Hampshire,
Oklahoma, Rhode Island, and South Carolina. NASS reported the value of
honey sold in 2006 was $161,314,000. Honey prices increased during 2006
to 104.2 cents, up 14 percent from 91.8 cents in 2005.
Based on the assessment reports in connection with the Current
Order and recorded by Customs, four countries account for 72 percent of
the honey and honey products imported into the United States. These
countries and their share of the imports are: China (28%); Argentina
(21%); Vietnam (13%); and Canada (10%). Other countries combined
totaled 28 percent of honey and honey products imported to the United
States. Assessment revenue collected from importers of honey or honey
products for 2006 under the Current Order were approximately $2.3
million.
At the initial rate, revenue for the Proposed Order would be
approximately $3 million. This amount is comparable to assessments
collected under the Current Order. In 2006, $3.6 million of assessment
income was collected from the honey industry, of which 36 percent was
from domestic production and 64 percent from imports. In 2006, 155
million pounds of honey or honey products were produced in the United
States, 279.4 million pounds were imported and 7.6 million pounds were
exported. The value of production in 2006 was $161.3 million. The
average price for honey in the U.S. in 2006 was 104.2 cents per pound.
Therefore, the estimated assessment revenue as a percentage of total
grower revenue (using 2006 as a model) could be estimated at 1.8
percent.
The honey industry and consumers would benefit from additional
information that may be conveyed through the plans and projects
regarding honey and honey products. Another benefit to first handlers
and importers of honey or honey products would be that they would have
more representation on the Board and have additional input into Board
decisions regarding the plans and programs under the Proposed Order.
Associations and related industry media would receive news releases
and other information regarding the implementation of the Proposed
Order, termination of the Current Order, and the referendum process.
Furthermore, all information would be available electronically.
The Board could develop guidelines for compliance with the Proposed
Order. The Board could recommend changes in the assessment rate,
programs, plans, projects, budgets, and any rules and regulations that
might be necessary for the administration of the program. The
administrative expenses of the Board are limited by the 1996 Act to no
more than 15 percent of assessment income. This does not include USDA
costs for program oversight.
With regard to alternatives, the 1996 Act itself provides for
authority to tailor a program according to the individual needs of an
industry. Provision is made for permissive terms in an order in Sec.
516 of the 1996 Act, and other sections provide for alternatives. In
tailoring the program to industry needs, a decision also must be made
about the termination or retention of the Current Order.
Similar to the Current Order, the Proposed Order is designed to:
(1) Develop and finance an effective and coordinated research,
promotion, industry information, and consumer education program for
honey and honey products; (2) strengthen the position of the honey
industry; and (3) maintain, develop, and expand existing markets for
honey and honey products. Additionally, the Proposed Order would
require first handlers of honey or honey products, instead of honey
producers, to pay assessments to the Board that administers the
program. While assessments would impose some additional costs on first
handlers, the reporting requirements are minimal because handlers under
the Current Order already report to the Honey Board. Also, the costs
are minimal and uniform on all first handlers. These costs should be
offset by the benefits derived by the operation of the Proposed Order.
Under the Proposed Order importers would continue to pay assessments
and be responsible for reporting and recordkeeping.
Section 516 authorizes an order to provide for exemption of de
minimis quantities (the Association has proposed 250,000 pounds or less
as a de minimis quantity) of an agricultural commodity; different
payment and reporting schedules; coverage of research, promotion, and
information activities to expand, improve, or make more efficient the
marketing or use of an agricultural commodity in both domestic and
foreign markets; provision for reserve funds; provision for credits for
generic and branded activities; and assessment of imports.
Also, under authority provided by 7 U.S.C. 7401, the Proposed Order
exempts first handlers who operate under an approved National Organic
Program (NOP) (7 CFR part 205) system plan, handle only products that
are eligible to be labeled as 100 percent organic under the NOP, and
are not a split operation, from paying assessments. The Proposed Order
also states that importers who import only products that are eligible
to be labeled as 100 percent organic under the NOP, and are not a split
operation, shall be exempt from paying assessments.
The Proposed Order includes provisions for domestic market
expansion and improvement, reserve funds, and a referendum to be
conducted prior to implementation of the Proposed Order. Approval would
be based upon a majority of those persons voting for approval who also
represent a majority of the volume of the honey and honey products of
those voting in the referendum. Termination of the Current Order also
is proposed.
If the Current Order is terminated and the Proposed Order
implemented, there would be a decrease in the reporting and
recordkeeping burden cost from $129,459 under the Current Order to
$11,550 under the Proposed Order. The reduced cost is due to a
reduction in the total of individuals required to report. If the
Current Order is not terminated, it would duplicate some of the
provisions proposed under the Proposed Order.
With the exception of the Current Order, the Department has not
identified any relevant Federal rules that duplicate, overlap or
conflict with this proposed rule.
We received comments as a result of the publication of the initial
Regulatory Flexibility Analysis (RFA). Five comments were received
raising concern over small entity representation on the Board, and a
commenter
[[Page 11481]]
questioned the RFA in this regard. These comments are discussed in the
comments section of this proposal.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), AMS announces its intention to request an approval of a
new information collection for the Proposed Honey Program.
Title: Advisory Committee and Research and Promotion Board
Background Information.
OMB Number for background form AD-755: (Approved under OMB No.
0505-0001).
Expiration Date of approval: March 31, 2009.
Title: National Research, Promotion, and Consumer Information
Programs.
OMB Number: 0581-NEW.
Expiration Date of Approval: 3 years from approval date.
Type of Request: New information collection for research and
promotion programs.
Abstract: The information collection requirements in the request
are essential to carry out the intent of the 1996 Act.
Under the Proposed Order, first handlers would be required to pay
assessments to and file reports with the Board. While the Proposed
Order would impose certain recordkeeping requirements on first
handlers, information required under the Proposed Order could be
compiled from records currently maintained by such handlers. Such
records would be retained for at least two years beyond the marketing
year of their applicability.
Under the Proposed Order importers are responsible to pay
assessments. Unless provided by Customs, importers must report the
total quantity of product imported during the reporting period and a
record of each importation of such product during such period, giving
quantity, date, and port of entry. Under the Proposed Order, Customs
would collect assessments on imported honey and honey products and
remit the funds to the Board.
An estimated 118 respondents would provide information to the
Board. They would be: 45 first handlers, 30 importers, 6 producers (for
nominations purposes), 10 certified organizations (for nomination
purposes), 25 handlers/importers exempt under the program, and 2
organic handlers/importers (for exemption purposes). The estimated
total cost of providing information to the Board by all respondents
would be $11,550. This total has been estimated by multiplying 350
total hours required for reporting and recordkeeping by $33, the
average mean hourly earnings of various occupations involved in keeping
this information. Data for computation of this hourly rate was obtained
from the U.S. Department of Labor Statistics.
The Proposed Order's provisions have been carefully reviewed, and
every effort has been made to minimize any unnecessary recordkeeping
costs or requirements, including efforts to utilize information already
submitted under other honey programs administered by the Department.
The proposed forms would require the minimum information necessary
to effectively carry out the requirements of the Proposed Order, and
their use is necessary to fulfill the intent of the 1996 Act. Such
information can be supplied without data processing equipment or
outside technical expertise. In addition, there are no additional
training requirements for individuals filling out reports and remitting
assessments to the Board. The forms would be simple, easy to
understand, and place as small a burden as possible on the person
required to file the information.
Collecting information monthly during the production season would
coincide with normal industry business practices. The timing and
frequency of collecting information are intended to meet the needs of
the industry while minimizing the amount of work necessary to fill out
the required reports. The requirement to keep records for two years is
consistent with normal industry practices. There is no practical method
for collecting the required information without the use of these forms.
If the Current Order is terminated and the Proposed Order
implemented, there would be a decrease in the reporting and
recordkeeping burden cost from $129,459 under the Current Order to
$11,550 under the Proposed Order. The reduced cost is due to a
reduction in the total of individuals required to report from 2,700
under the Current Order to 118 under the Proposed Order.
Information collection requirements that are included in this
proposal include:
(1) A BACKGROUND INFORMATION FORM AD-755 (Approved under OMB Form
No. 0505-0001).
Estimate of Burden: Public reporting for this collection of
information is estimated to average 0.5 hours per response for each
Board nominee.
Respondents: First handlers, importers, producers and cooperative
organizations.
Estimated Number of Respondents: 40 for initial nominations, 13 in
subsequent years.
Estimated Number of Responses per Respondent: 1 every 3 years.
(0.3)
Estimated Total Annual Burden on Respondents: 20 hours for the
initial nominations and 6 hours annually thereafter.
(2) AN EXEMPTION APPLICATION FOR FIRST HANDLERS AND IMPORTERS WHO
WOULD BE EXEMPT FROM ASSESSMENTS.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.25 hours per response for each
exempt first handler and importer.
Respondents: Exempt First handlers and importers.
Estimated Number of Respondents: 25.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 6.25 hours.
(3) MONTHLY REPORT BY EACH FIRST HANDLER OF HONEY.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.5 hours per each first handler
reporting on honey handled.
Respondents: First handlers.
Estimated Number of Respondents: 45.
Estimated Number of Responses per Respondent: 12.
Estimated Total Annual Burden on Respondents: 270 hours.
(4) A REQUIREMENT TO MAINTAIN RECORDS SUFFICIENT TO VERIFY REPORTS
SUBMITTED UNDER THE ORDER.
Estimate of Burden: Public recordkeeping burden for keeping this
information is estimated to average 0.5 hours per recordkeeper
maintaining such records.
Respondents: First handlers and importers.
Estimated Number of Respondents: 118.
Estimated Total Annual Burden of Respondents: 59 hours.
(5) APPLICATION FOR REIMBURSEMENT OF ASSESSMENT.
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.25 hours per request for
reimbursement.
Respondents: First handler and importers.
Estimated Number of Respondents: 20.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 5 hours.
(6) APPLICATION FOR CERTIFICATION OF ORGANIZATIONS.
Estimate of Burden: Public recordkeeping burden for this collection
[[Page 11482]]
of information is estimated to average 0.5 hours per application.
Respondents: First handlers, importers, producers and marketing
cooperatives.
Estimated Number of Respondents: 10.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 5 hours.
(7) NOMINATION APPOINTMENT FORM.
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.5 hours per application.
Respondents: First handlers, importers, producers and marketing
cooperatives.
Estimated Number of Respondents: 10.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 5 hours.
(8) ORGANIC EXEMPTION FORM.
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.5 hours per exemption form.
Respondents: First handlers and importers.
Estimated Number of Respondents: 2.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 1 hour.
Comments were invited on: (a) Whether the proposed collection of
information is necessary for the proper performance of functions of the
Proposed Order and the Department's oversight of the Proposed Order,
including whether the information would have practical utility; (b) the
accuracy of the Department's estimate of the burden of the proposed
collection of information, including the validity of the methodology
and assumption used; (c) ways to enhance the quality, utility, and
clarity of the information to be collected; and (d) ways to minimize
the burden of the collection of information on those who are to
respond, including the use of appropriate automated, electronic,
mechanical, or other technological collection techniques or other forms
of information technology. No comments were received on the collection
of information part of this rule.
Comments
A 60-day comment period was provided to allow interested persons to
respond to this proposal. Seventy-six comments were received on the
Proposed Order by the August 3, 2007, deadline. Comments were received
from honey producers, handlers, importers, industry associations, state
beekeepers associations, a honey co-op, and other interested parties.
Comments received were varied in terms of support for the Proposed
Order and the benefits of it or opposition, representation on the
Proposed Order, transition between the Current Board and the Proposed
Board, voting and termination of the Current Order, extension of the
comment period, suggested modifications, impact if the rule on small
entities, and other miscellaneous comments.
Twenty-one commenters supported the Proposed Order and stated that
the Current Order has been an invaluable asset to the industry but that
due to changes in support it may be voted out in the next referendum.
The commenters also mentioned that the Current Order was approved in
the last two referendums because the importers were assured that a
Proposed Order would be implemented in the near future. The commenters
also stated that a board composed of handlers and importers is the only
way to ensure the long-term survival of the industry.
Three commenters that supported the Proposed Order, stated that
with new challenges such as food safety and international market
issues, the industry needs the Proposed Order more than ever to
continue activities in these areas. Four supportive commenters stated
that that the industry wants to continue a true marketing and promotion
board focusing on the sale of honey.
Five supportive commenters stated that importers and handlers do
not want to continue to take part in the disagreements between the
producer associations and that implementing this Proposed Order would
diminish the conflict because producers would not have to pay into the
Proposed Program.
Three commenters that supported the Proposed Order stated that by
transferring the financial burden of paying assessments to the
handlers, the companies closest to the consumer, they are able to
participate in the funding of the programs that most directly benefit
their businesses. One supportive commenter stated that it would be
beneficial to have handlers assessed and occupy seats on the board as
this is demonstrated by handler's involvement in the Current Program.
Twenty-two commenters stated that the new program provides for
improved cost efficiencies and easier administration. For example, by
decreasing the number of assessment payers, the administrative cost
will decrease, according to the commenters. Also, a simplification of
the nomination process would save on travel costs. Commenters stated
that the Proposed Order will have the same funds as the Current Order
but the assessment payers will go from 4,000 currently to 100 under the
Proposed Order.
Nine commenters that supported the Proposed Order stated that
approximately 70 percent of the assessments paid under the Current
Order are paid by importers and that the importers carried the vote in
the last two referendums in order to maintain the Current Order. Four
commenters also stated their support for the increased importer
representation on the Proposed Board based on their belief that honey
production is labor intensive, and that domestic production will
decrease and imports will increase.
Eight commenters stated that the Proposed Order will be a true
honey board with participation from all segments of the industry. Two
commenters pointed out that under the Current Order, producers pay
around 30 percent of the assessments but represent 58 percent of the
seats on the Current Board. The commenters further stated that under
the Proposed Order, 30 percent of the Board would be producers without
having to pay assessments.
Three commenters were in favor of the Proposed Order but did not
provide any further information.
Eight commenters stated that the Current Order worked well and did
not believe a new order was necessary, and seven of those eight
commenters suggested streamlining the Current Order instead of
developing a new order. The proposal for a new program was submitted by
an association that represents industry participants and with that
proposal, the Department proposed termination of the Current Order.
Because the Department has determined that the proposal is consistent
with and will effectuate the purposes of the 1996 Act, it has initiated
rulemaking to consider the Proposed Order. Further, the proponents of
the Proposed Order have indicated that the intention is to continue the
programs implemented under the Current Order in the Proposed Order, if
approved. In addition, a referendum will be conducted to determine if
this Proposed Order has the industry's support.
One commenter stated that the Proposed Order would result in less
scrutiny of fair labeling, less promotion, reduced resources for
research, restricted fair trade, and reduced food safety for consumers.
One commenter stated that under the Proposed Order, there would be less
money for bee research. The Proposed Order, as the
[[Page 11483]]
Current Order, authorizes programs of promotion, research, and
information. Under the Proposed Order, the intent is to continue the
same level of programs. In addition, as two commenters in support of
the Proposed Order stated, five percent of the total assessments
collected under the Proposed Order would be earmarked for research.
According to the commenters, this would benefit the industry as a
whole.
Thirteen commenters stated that representation on the Proposed
Board minimizes producer representation and that it will result in
producers losing their influence on setting policy and direction on the
honey industry unless beekeepers of all sizes are represented. Five
commenters stated that the requirement of a producer to produce over
150,000 pounds of honey to be eligible to serve would eliminate many
producers from serving on the Proposed Board. The commenters raised
concerns over small producer representation on the Board, and a
commenter questioned the RFA in this regard. The number of producer
members under the Proposed Order (three), is in fact less than the
number under the Current Order (seven). The Proposed Board represents a
cross section of the entire honey industry. The Board includes three
first handler representatives, two importer representatives, one
importer-handler representative, three producer representatives, and
one marketing cooperative representative. However, under the Proposed
Order, only handlers and importers will pay assessments to the Proposed
Board, and producers will not. The Proposed Order goal is to maintain
and expand markets for honey and honey products. Finally, Small
producers, as well as the entire honey industry, will benefit from the
Proposed Order. Accordingly, the Department believes that the producer
representation as proposed is appropriate.
Four commenters stated their concern for filling handler and
importer positions on the Proposed Board as there have been challenges
in the past with finding handlers and importers willing to serve on the
Current Board. There are approximately 45 handlers and 30 importers
that would be covered under the Proposed Order. The Proposed Order
requires that three handlers and two importers be appointed to the
Proposed Board. The Department believes that there is a reasonable
number of individuals that would be covered under the Proposed Order
from which nominees for appointments to Board positions may be
obtained.
Three commenters stated that allowing the Proposed Order to take
over all the promotional materials of the Current Order would put honey
producers at a disadvantage. Three commenters stated that the Proposed
Order would support more importation of honey and not support the
American beekeepers and domestic honey production, unlike the Current
Order which they believe promotes honey generically and not one side
over the other. The 1996 Act, under which the Proposed Order is
authorized, like the Honey Act, requires that all promotions be generic
in nature. Accordingly, the Proposed Order would promote honey and
honey products generically.
Two commenters stated their concern that the definition of, and
ability of consumers to purchase, pure honey will be lost if the
Proposed Order and Board are implemented. Another commenter stated that
eliminating the Current Program and starting a new program would create
a gap related to the purity of honey that would be detrimental to the
industry. Under the Current Order, the board is authorized to develop
and carry out a voluntary quality assurance program concerning purity
standards for honey and honey products. However, there is no authority
for such a program under the 1996 Act.
One commenter stated that the assessment rate of $0.01 per pound
will actually be paid by the producers anyway as packers will pass it
on to the producers. The assessment will be imposed on first handlers
and importers who would pay assessments under the Proposed Order.
Business decisions on how to manage assessments, including whether to
pass back the cost of assessments to producers, are made by handlers
and importers based on their respective business practices and are not
within the scope of this rule.
Three commenters expressed appreciation for the Current Order's
staff work, and the research and market development programs conducted
under it. Two commenters stated that the Current Order is doing a great
job at honey promotion and consumer education and that it should stay
the same.
Four commenters stated their concern that there would not be a
seamless transition between the Current Order and the Proposed Order,
which would leave the honey industry vulnerable without a program for
four to six months. Five commenters raised concerns about the future of
the Current Order, the staff, the funds available, and assets that
would be lost if the Current Order is terminated, or what would happen
if a crisis arises during the transition between the Current Order and
the Proposed Order.
It is the Department's intention to make the transition between the
Current Order and the Proposed Order, if approved in referendum, as
smooth as possible. Section 1240.63 of the Current Order states that
upon termination of the Order, the current board shall recommend to the
Secretary not more than five of its members to serve as trustees for
the purpose of liquidating the affairs of the board. Those individuals,
upon designation by the Secretary, would become trustees of all funds
and property of the board. It is expected that the trustees of the
Current Order would continue operations until the Proposed Order is in
place, making the transition as seamless as possible.
Seven commenters who supported the Proposed Order stated that it is
very important to have a quick and smooth transition from the Current
Order to the Proposed Order in order to maintain the experienced staff,
assets of the board, and existing programs. The same type of programs
can continue under the Proposed Order. However, Current Order assets
cannot be transferred over to the Proposed Order Program. Staff
decisions concerning the Proposed Program will be made by the Proposed
Order's Board. One commenter requested that the Current Board collect
all the necessary domestic and importing statistical data that would be
needed by the Proposed Board to help ensure a smoother transition.
Seven commenters also stated that all major honey associations
support the transition to the Proposed Order.
One commenter supported the Proposed Order if the assets and
programs of the Current Order are transferred to the Proposed Order.
The commenter was also in favor of a U.S. honey producer program. As
stated previously, the same types of programs can continue under the
Proposed Order, however, Current Order assets cannot be transferred to
the Proposed Order Program. It is the trustee's task to dispose of
funds and assets of the Current Board in accordance with the Act and
the Order.
One commenter proposed to: Redesign the nominations committee,
assess producers $0.02 per pound, eliminate importers assessments under
the Current Order and create a U.S. honey board. The proposed rule
published in the Federal Register did not request comments on changes
to the Current Order. However, the Department is considering a proposed
program for U.S. honey that would address the concerns in this comment.
[[Page 11484]]
One commenter requested that if the Board is to request a $0.01 per
pound assessment, then co-op members should get a rebate. The 1996 Act
provides authority for credits for farmer cooperatives branded
activities. Under the Proposed Program, this authority was not
executed.
One commenter stated that the Secretary should convene
representatives of the two proposed honey programs into a negotiated
rulemaking session with the goal of considering a single honey research
and promotion board to serve the entire industry. The Department
disagrees with these comments given the state of the current rulemaking
effort.
Five commenters stated their objection to the fact that producers
will not vote on whether to continue or terminate the Current Order but
instead packers and importers will vote on whether to implement the
Proposed Order. Taking into account the duplicative nature of the
Proposed Program with the Current Program, the Department has
determined that the Current Order be terminated if the Proposed Order
is approved in referendum.
Six commenters stated that the U.S. honey producers submitted a
proposal for a U.S. honey program and that it should be voted on by the
industry at the same time as the Proposed Order in this rule. However,
the proposal for a U.S. honey program is under consideration by the
Department at this time.
Six commenters requested that the comment period on this rule be
extended because beekeepers do not read the Federal Register, the major
honey publications have not announced the Proposed Order comment
period, the Current Board only sent a notification to a select group,
and the comment period came during one of the beekeepers' busiest times
of the year.
The proposal to terminate the Current Order and implement a new
Order has been under discussion by the industry for over three years
and has been discussed at several Board and industry meetings, and the
Current Board did send information to all assessment payers under the
Current Program. In addition, the Department issued a news release to
industry publications. Furthermore, the July/August issue of the
American Beekeeping Federation newsletter contained a lengthy article
about the proposed rule and invited beekeepers to comment on the rule.
Finally, a 60-day comment period was provided for all interested
parties to submit comments on this proposal. Based on all these points,
the Department did not extend the comment period.
Eight commenters stated that there is no need to extend the comment
period on the Proposed Order and that doing so would potentially harm
the industry. The commenters also stated that the industry had ample
time to evaluate the proposal and asked the Department to stay with the
original schedule. Another commenter stated that the industry received
a great deal of information on this Proposed Order and that a steering
committee was formed to address issues of concern. In addition,
according to the commenter, the Proposed Order has been a topic of
discussion at every annual meeting of every group in the industry for
several years.
One commenter expressed food safety concerns regarding imported
honey. Under the Proposed Order, activities for food safety are limited
to research and information. There is no authority for the development
of food safety standards for honey under the 1996 Act.
The commenter also expressed concern regarding the effect of
pesticides on honeybees. Extensive research is being done regarding the
decline of honeybees in the U.S. under the Current Order and the
proponents of the Proposed Order indicated that such research would be
continued under that Order.
One commenter stated that honey is too expensive and that the price
needs to be reduced. One commenter stated that the Current Order is not
doing anything to stop imported honey that is priced well below the
U.S. market value for honey. The purpose of the Current Order as well
as the Proposed Order is to maintain and expand markets for honey and
honey products and does not regulate price. Accordingly, these comments
are not within the scope of this rule.
One commenter stated that the Current Order does not help the
farmers with disaster payments and pest research. Under the Current and
Proposed Orders, there is authority to conduct pest research if
proposed by the Board and approved by the Secretary. In fact, the
Current Board has allocated funds to conduct research related to Colony
Collapse Disorder in the past years. Under the Proposed Order, five
percent of assessments collected would be allocated to research
projects. However, programs for disaster payments are not authorized
and therefore are not within the scope of this rule.
One commenter provided a comment on the Occupational Safety Health
Administration's proposed rule on explosives. This comment was intended
for another regulation and it is outside the scope of this rule.
No comments were received related to the information collection
requirement of this Proposed Order.
The Department made a nonsubstantive change to the Proposed Order
to clarify that the Secretary has the authority to receive assessments
and invest them on behalf of the Board if the Board is not in place by
the date the first assessments are due.
The Proposed Order is summarized as follows: Section 1212.1 through
Section 1212.32 of the Proposed Order define certain terms, such as
honey, first handler, and importer.
Sections 1212.40 through 1212.48 of the Proposed Order include
provisions relating to the Honey Packers and Importers Board. These
provisions cover establishment and membership; term of office;
nominations and appointments; removal and vacancies; procedure,
reimbursement and attendance; powers; duties; and reapportionment of
the Honey Packers and Importers Board, which is the governing body
authorized to administer the Proposed Order through the implementation
of programs, plans, projects, budgets, contracts to promote and
disseminate information about honey, subject to oversight by the
Department.
Sections 1212.50 through 1212.55 cover budget review and approval;
financial statements; authorize the collection assessments; specify how
assessments would be used; specify who pays the assessment and how;
exemptions; and authorize the imposition of a late-payment charge on
past-due assessments.
The Association recommends a proposed assessment rate of $0.01 per
pound for domestic honey and imported honey and honey products. The
assessment rate will be reviewed and may be modified with the approval
of the Department, after the first referendum is conducted as stated in
section 1212.81(a)(1). Persons failing to remit total assessments due
in a timely manner may also be subject to actions under federal debt
collections procedures as set forth in 7 CFR 3.1 through 3.36 for all
research and promotion programs administered by USDA [60 FR 12533,
March 7, 1995].
Sections 1212.60 through 1212.62 address programs, plans, and
projects; require the Honey Packers and Importers Board to periodically
conduct an independent review of its overall program; and address
patents, copyrights, trademarks, information, publications, and product
formulations developed through the use of assessment funds.
[[Page 11485]]
Sections 1212.70 through 1212.72 concern reporting and
recordkeeping requirements for persons subject to the Proposed Order
and protect the confidentiality of information from such books,
records, or reports.
Sections 1212.80 through 1212.88 describe the rights of the
Secretary of Agriculture (Secretary); address referenda; authorize the
Secretary to suspend or terminate the Proposed Order when deemed
appropriate; prescribe proceedings after suspension or termination; and
address personal liability, separability, amendments, and the OMB
control number.
The Department has determined that this Proposed Order is
consistent with and will effectuate the purposes of the 1996 Act.
For the Proposed Order to become effective, it must be approved by
a majority of the eligible importers and first handlers voting in the
referendum and by a majority of the volume of those voting in the
referendum.
Referendum Order
Sonia Jimenez, Marlene Betts, and Kathie Notoro, of the USDA, AMS,
Research and Promotion Branch, are designated as the referendum agents
to conduct this referendum. The referendum procedures [7 CFR 1212.100
through 1212.108], which were issued pursuant to the Act, shall be used
to conduct the referendum.
The referendum agents will mail registration instructions to all
known eligible first handlers and importers in advance of the
referendum. Any first handler or importer who does not receive
registration instructions should contact the referendum agent cited
under the ``for further information'' section no later than one week
before the end of the registration period. Prior to the first day of
the voting period, the referendum agents will mail the ballots to be
cast in the referendum and voting instructions to all eligible voters.
Persons who are first handlers and importers during the representative
period are eligible to vote. Any eligible first handler and importer
who does not receive a ballot should contact the referendum agent cited
under the ``For Further Information'' section no later than one week
before the end of the voting period. Ballots must be received by the
referendum agents by the close of business (Eastern Time) on or before
April 16, 2008, to be counted.
List of Subjects in 7 CFR Parts 1212 and 1240
Administrative practice and procedure, Advertising, Consumer
Education, Honey and Honey products, Marketing agreements, Promotion,
Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, it is proposed that
Title 7, Chapter XI of the Code of Federal Regulations be amended as
follows:
1. Part 1212 is amended by adding subpart A to read as follows:
PART 1212--HONEY PACKERS AND IMPORTERS RESEARCH, PROMOTION,
CONSUMER EDUCATION AND INDUSTRY INFORMATION ORDER
Subpart A--Honey Packers and Importers Research, Promotion, Consumer
Education, and Industry Information Order
Definitions
Sec.
1212.1 Act.
1212.2 Board.
1212.3 Conflict of interest.
1212.4 Department.
1212.5 Exporter.
1212.6 First handler.
1212.7 Fiscal period for marketing year.
1212.8 Handle.
1212.9 Honey.
1212.10 Honey products.
1212.11 Importer.
1212.12 Importer-Handler Representative.
1212.13 Information.
1212.14 Marketing.
1212.15 Order.
1212.16 Part and subpart.
1212.17 Person.
1212.18 Plans and programs.
1212.19 Producer.
1212.20 Promotion.
1212.21 Qualified national organization representing handler
interests.
1212.22 Qualified national organization representing importer
interests.
1212.23 Qualified national organization representing producer
interests.
1212.24 Qualified national organization representing cooperative
interests.
1212.25 Referendum.
1212.26 Research.
1212.27 Secretary.
1212.28 Suspend.
1212.29 State.
1212.30 Terminate.
1212.31 United States.
1212.32 United States Customs Service.
Honey Packers and Importers Board
1212.40 Establishment and membership.
1212.41 Term of office.
1212.42 Nominations and appointments.
1212.43 Removal and vacancies.
1212.44 Procedure.
1212.45 Reimbursement and attendance.
1212.46 Powers.
1212.47 Duties.
1212.48 Reapportionment of Board membership.
Expenses and Assessments
1212.50 Budget and expenses.
1212.51 Financial Statements.
1212.52 Assessments.
1212.53 Exemption from assessment.
1212.54 Operating reserve.
1212.55 Prohibition on use of funds.
Promotion, Research, and Information
1212.60 Promotion, Research, and Information.
1212.61 Independent evaluation.
1212.62 Patents, copyrights, inventions, product formulations, and
publications.
Reports, Books, and Records
1212.70 Reports.
1212.71 Books and records.
1212.72 Confidential treatment.
Miscellaneous
1212.80 Right of the Secretary.
1212.81 Referenda.
1212.82 Suspension or termination.
1212.83 Proceedings after termination.
1212.84 Effect of termination or amendment.
1212.85 Personal liability.
1212.86 Separability.
1212.87 Amendments.
1212.88 OMB Control Numbers.
Authority: 7 U.S.C. 7411-7425; 7 U.S.C. 7401.
Subpart A--Honey Packers and Importers Research, Promotion,
Consumer Education, and Industry Information Order
Definitions
Sec. 1212.1 Act.
``Act'' means the Commodity Promotion, Research, and Information
Act of 1996, (7 U.S.C. 7411-7425), and any amendments to that Act.
Sec. 1212.2 Board.
``Board'' or ``Honey Packers and Importers Board'' means the
administrative body established pursuant to Sec. 1212.40, or such
other name as recommended by the Board and approved by the Department.
Sec. 1212.3 Conflict of interest.
``Conflict of interest'' means a situation in which a member or
employee of the Board has a direct or indirect financial interest in a
person who performs a service for, or enters into a contract with, the
Board for anything of economic value.
Sec. 1212.4 Department.
``Department'' means the United States Department of Agriculture,
or any officer or employee of the Department to whom authority has
heretofore been delegated, or to whom authority may hereafter be
delegated, to act in the Secretary's stead.
Sec. 1212.5 Exporter.
``Exporter'' means any person who exports honey or honey products
from the United States.
[[Page 11486]]
Sec. 1212.6 First handler.
``First handler'' means the first person who buys or takes
possession of honey or honey products from a producer for marketing. If
a producer markets honey or honey products directly to consumers, that
producer shall be considered to be the first handler with respect to
the honey produced by the producer.
Sec. 1212.7 Fiscal period.
``Fiscal period'' means a calendar year from January 1 through
December 31, or such other period as recommended by the Board and
approved by the Secretary.
Sec. 1212.8 Handle.
``Handle'' means to process, package, sell, transport, purchase or
in any other way place honey or honey products, or cause them to be
placed, in commerce. This term includes selling unprocessed honey that
will be consumed without further processing or packaging. This term
does not include the transportation of unprocessed honey by the
producer to a handler or transportation by a commercial carrier of
honey, whether processed or unprocessed for the account of the first
handler or producer.
Sec. 1212.9 Honey.
``Honey'' means the nectar and saccharine exudations of plants that
are gathered, modified, and stored in the comb by honeybees, including
comb honey.
Sec. 1212.10 Honey products.
``Honey products'' mean products where honey is a principal
ingredient. For purposes of this subpart, a product shall be considered
to have honey as a principal ingredient if the product contains at
least 50% honey by weight.
Sec. 1212.11 Importer.
``Importer'' means any person who imports for sale honey or honey
products into the United States as a principal or as an agent, broker,
or consignee of any person who produces honey or honey products outside
the United States for sale in the United States, and who is listed in
the import records as the importer of record for such honey or honey
products.
Sec. 1212.12 Importer-Handler Representative.
``Importer-Handler Representative'' means any person who is an
importer and first handler, who must import at least 75 percent of the
honey they market in the United States and must handle at least 250,000
pounds annually.
Sec. 1212.13 Information.
``Information'' means activities or programs designed to develop
new and existing markets, new and existing marketing strategies and
increased efficiency and activities to enhance the image of honey and
honey products. These include:
(a) Consumer education, which means any action taken to provide
information to, and broaden the understanding of, the general public
regarding the consumption, use, nutritional attributes, and care of
honey and honey products; and
(b) Industry information, which means information and programs that
will lead to the development of new markets, new marketing strategies,
or increased efficiency for the honey industry, and activities to
enhance the image of the honey industry.
Sec. 1212.14 Market or marketing.
(a) ``Marketing'' means the sale or other disposition of honey or
honey products in any channel of commerce.
(b) ``Market'' means to sell or otherwise dispose of honey or honey
products in interstate, foreign, or intrastate commerce.
Sec. 1212.15 Order.
``Order'' means the Honey Packers and Importers Research,
Promotion, Consumer Education and Industry Information Order.
Sec. 1212.16 Part and subpart.
``Part'' means the Honey Packers and Importers Research, Promotion,
Consumer Education, and Industry Information Order (Order) and all
rules, regulations, and supplemental orders issued pursuant to the Act
and the Order. The Order shall be a ``subpart'' of such part.
Sec. 1212.17 Person.
``Person'' means any individual, group of individuals, partnership,
corporation, association, cooperative, or any other legal entity.
Sec. 1212.18 Plans and programs.
``Plans and programs'' means those research, promotion and
information programs, plans, or projects established pursuant to this
Order.
Sec. 1212.19 Producer.
``Producer'' means any person who is engaged in the production and
sale of honey in any State and who owns, or shares the ownership and
risk of loss of the production of honey or a person who is engaged in
the business of producing, or causing to be produced, honey beyond
personal use and having value at first point of sale.
Sec. 1212.20 Promotion.
``Promotion'' means any action, including paid advertising and
public relations that presents a favorable image for honey or honey
products to the public and food industry with the intent of improving
the perception and competitive position of honey and stimulating sales
of honey or honey products.
Sec. 1212.21 Qualified national organization representing first
handler interests.
``Qualified national organization representing first handler
interests'' means an organization that the Secretary certifies as being
eligible to nominate first handler and alternate first handler members
of the Board under Sec. 1212.42.
Sec. 1212.22 Qualified national organization representing importer
interests.
``Qualified national organization representing importer interests''
means an organization that the Secretary certifies as being eligible to
nominate importer, importer-handler, and alternate importer and
importer-handler members of the Board under Sec. 1212.42.
Sec. 1212.23 Qualified national organization representing producer
interests.
``Qualified national organization representing producer interests''
means an organization that the Secretary certifies as being eligible to
nominate producer and alternate producer members of the Board under
Sec. 1212.42.
Sec. 1212.24 Qualified national organization representing cooperative
interests.
``Qualified national organization representing cooperative
interests'' means an organization that the Secretary certifies as being
eligible to nominate cooperative and alternate cooperative members of
the Board under Sec. 1212.42.
Sec. 1212.25 Referendum.
``Referendum'' means a referendum to be conducted by the Secretary
pursuant to the Act whereby first handlers and importers shall be given
the opportunity to vote to determine whether the implementation of or
continuance of this part is favored by a majority of eligible persons
voting in the referendum and a majority of volume voting in the
referendum.
Sec. 1212.26 Research.
``Research'' means any type of test, study, or analysis designed to
advance the image, desirability, use, marketability, production,
product development, or quality of honey and honey products, including
research relating to nutritional value, cost of production, new product
development, and testing the effectiveness of market
[[Page 11487]]
development and promotion efforts. Such term shall also include studies
on bees to advance the cost effectiveness, competitiveness, efficiency,
pest and disease control, and other management aspects of beekeeping,
honey production, and honey bees.
Sec. 1212.27 Secretary.
``Secretary'' means the Secretary of Agriculture of the United
States, or any other officer or employee of the Department to whom the
Secretary delegated the authority to act on his or her behalf.
Sec. 1212.28 Suspend.
``Suspend'' means to issue a rule under Sec. 553 of U.S.C. title 5
to temporarily prevent the operation of an order or part thereof during
a particular period of time specified in the rule.
Sec. 1212.29 State.
``State'' means any of the fifty States of the United States of
America, the District of Columbia, the Commonwealth of Puerto Rico, and
the territories and possessions of the United States.
Sec. 1212.30 Terminate.
``Terminate'' means to issue a rule under Sec. 553 of U.S.C. Title
5 to cancel permanently the operation of an order beginning on a date
certain specified in the rule.
Sec. 1212.31 United States.
``United States'' means collectively the 50 States, the District of
Columbia, the Commonwealth of Puerto Rico, and the territories and
possessions of the United States.
Sec. 1212.32 United States Customs Service.
``United States Customs Service'' or ``Customs'' means the United
States Customs and Border Protection, an agency of the Department of
Homeland Security.
Honey Packers and Importers Board
Sec. 1212.40 Establishment and membership.
The Honey Packers and Importers Board is established to administer
the terms and provisions of this part. The Board shall have ten
members, composed of three first handler representatives, two importer
representatives, one importer-handler representative, three producer
representatives, and one marketing cooperative representative. The
importer-handler representative must import at least 75 percent of the
honey or honey products they market in the United States and handle at
least 250,000 pounds annually. In addition, the producer
representatives must produce a minimum of 150,000 pounds of honey in
the United States annually based on the best three year average of the
most recent five calendar years, as certified by producers. The
Secretary will appoint members to the Board from nominees submitted in
accordance with Sec. 1212.42. The Secretary shall also appoint an
alternate for each member.
Sec. 1212.41 Term of office.
With the exception of the initial Board, each Board member and
alternate will serve a three-year term or until the Secretary selects
his or her successor. No member or alternate may serve more than two
consecutive terms, excluding any initial two-year term of office. The
terms of the initial Board members shall be staggered for two, three,
and four-year terms. For the initial Board, one producer, one first
handler, one importer, and the representative of a national honey
cooperative will serve a two-year term of office. One producer, one
first handler, and the importer-handler representative, will serve a
three-year term of office. One producer, one first handler, and one
importer will serve a four-year term of office. Determination of which
of the initial members and their alternates shall serve two year, three
year or four year terms, shall be designated by the Secretary.
Thereafter, each of these positions will carry a full three-year term.
Members serving initial terms of two or four years will be eligible to
serve a second term of three years. Each term of office will end on
December 31, with new terms of office beginning on January 1. If this
part becomes effective on a date such that the initial period is less
than six months in duration, then the tolling of time for purposes of
this subsection shall not begin until the beginning of the first 12-
month fiscal period.
Sec. 1212.42 Nominations and appointments.
All nominations to the Board will be made as follows:
(a) All qualified national organizations representing first handler
interests will have the opportunity to participate in a nomination
caucus and will, to the extent practical, submit as a group a single
slate of nominations to the Secretary for the first handler positions
and the alternate positions on the Board. If the Secretary determines
that there are no qualified national organizations representing first
handler interests, individual first handlers who have paid assessments
to the Board in the most recent fiscal period may submit nominations.
For the initial Board, persons that meet the definition of first
handlers as defined in this subpart will certify such qualification and
upon certification, if qualified, may submit nominations.
(b) All qualified national organizations representing importer
interests will have the opportunity to participate in a nomination
caucus and will, to the extent practical, submit as a group a single
slate of nominations to the Secretary for importer positions, for the
importer-handler position and for the alternate positions on the Board.
If the Secretary determines that there are no qualified national
organizations representing importer interests, individual importers who
have paid assessments to the Board in the most recent fiscal period may
submit nominations. For the initial Board, persons that meet the
definition of importer as defined in this subpart will certify such
qualification and upon certification, if qualified, may submit
nominations.
(c) All qualified national organizations representing producer
interests will have the opportunity to participate in a nomination
caucus and will, to the extent practical, submit as a group a single
slate of nominations to the Secretary for the producer positions and
the producer alternate positions on the Board. If the Secretary
determines that there are no qualified national organizations
representing producer interests, individual producers may submit
nominations to the Secretary. For the initial Board, persons that meet
the definition of producer as defined in this subpart will certify such
qualification and upon certification, if qualified, may submit
nominations.
(d) For the purposes of this subpart, a national honey-marketing
cooperative means any entity that is organized under the Capper-
Volstead Act (7 U.S.C. 291) or state law as a cooperative and markets
honey or honey products in at least 20 states. All national honey-
marketing cooperatives that are first handlers will have the
opportunity to participate in a nomination caucus and will, to the
extent practical, submit as a group a single slate of nominations to
the Secretary of persons who serve as an officer, director, or employee
of a national honey marketing cooperative for the cooperative position
and the alternate position on the Board.
(e) Eligible organizations, cooperatives, producers, first
handlers, or importers must submit nominations to the Secretary six
months before the new Board term begins. At least two nominees for each
position to be filled must be submitted.
(f) Qualified national organization representing first handler
interests. To be certified by the Secretary as a qualified national
organization
[[Page 11488]]
representing first handler interests, an organization must meet the
following criteria, as evidenced by a report submitted by the
organization to the Secretary:
(1) The organization's voting membership must be comprised
primarily of first handlers of honey or honey products;
(2) The organization must represent a substantial number of first
handlers who market a substantial volume of honey or honey products in
at least 20 states;
(3) The organization has a history of stability and permanency and
has been in existence for more than one year;
(4) The organization must have as a primary purpose promoting honey
first handlers' economic welfare;
(5) The organization must derive a portion of its operating funds
from first handlers; and
(6) The organization must demonstrate it is willing and able to
further the Act's purposes.
(g) Qualified national organization representing importer
interests. To be certified as a qualified national organization
representing importer interests, an organization must meet the
following criteria, as evidenced by a report submitted by the
organization to the Secretary:
(1) The organization's importer membership must represent at least
a majority of the volume of honey or honey products imported into the
United States;
(2) The organization has a history of stability and permanency and
has been in existence for more than one year;
(3) The organization must have as a primary purpose promoting honey
importers' economic welfare;
(4) The organization must derive a portion of its operating funds
from importers; and
(5) The organization must demonstrate it is willing and able to
further the Act's purposes.
(h) Qualified national organization representing producer
interests. To be certified by the Secretary as a qualified national
organization representing producer interests, an organization must meet
the following criteria, as evidenced by a report submitted by the
organization to the Secretary:
(1) The organization's membership must be comprised primarily of
honey producers;
(2) The organization must represent a substantial number of
producers who produce a substantial volume of honey in at least 20
states;
(3) The organization has a history of stability and permanency and
has been in existence for more than one year;
(4) The organization must have as one of its primary purposes
promoting honey producers' economic welfare;
(5) The organization must derive a portion of its operating funds
from producers; and
(6) The organization must demonstrate it is willing and able to
further the Act's purposes.
(i) To be certified by the Secretary as a qualified national
organization representing first handler, producer or importer
interests, an organization must agree to:
(1) Take reasonable steps to publicize to non-members the
availability of open Board first handler, producer or importer
positions; and
(2) Consider nominating a non-member first handler, producer or
importer, if he or she expresses an interest in serving on the Board.
(j) National honey-marketing cooperative. The Secretary can certify
that an entity qualifies as a national honey-marketing cooperative, as
defined in Sec. 1212.42(d). Such entity shall not be eligible for
certification as a qualified national organization representing
producer interests.
Sec. 1212.43 Removal and vacancies.
(a) In the event that any member or alternate of the Board ceases
to be a member of the category of members from which the member was
appointed to the Board, such position shall become vacant.
(b) The Board may recommend to the Secretary that a member be
removed from office if the member consistently refuses to perform his
or her duties or engages in dishonest acts or willful misconduct. The
Secretary may remove the member if he or she finds that the Board's
recommendation show adequate cause.
(c) A vacancy for any reason will be filled as follows:
(1) If a member position becomes vacant, the alternate for that
position will serve the remainder of the member's term. In accordance
with Sec. 1212.42, the Secretary will request nominations for a
replacement alternate and will appoint a nominee to serve the remainder
of the term. The Secretary does not have to appoint a replacement if
the unexpired term is less than six months.
(2) If both a member and alternate position become vacant, in
accordance with Sec. 1212.42, the Secretary will request nominations
for replacements and appoint a member and alternate to serve the
remainder of the term. The Secretary does not have to appoint a new
member or alternate if the unexpired term for the position is less than
six months.
(3) No successor appointed to a vacated term of office shall serve
more than two successive three-year terms on the Board.
Sec. 1212.44 Procedure.
(a) A majority of the Board members will constitute a quorum so
long as at least one of the members present is an importer member and
one of the members present is a first handler member. An alternate will
be counted for the purpose of determining a quorum only if a member
from his or her membership class is absent or disqualified from
participating. Any Board action will require the concurring votes of a
majority of those present and voting; with the exception of the two-
thirds vote requirement in Sec. 1212.52(f). All votes at meetings will
be cast in person. The Board must give timely notice of all Board and
committee meetings to members and alternates.
(b) The Board may take action by any means of communication when,
in the opinion of the Board chairperson, an emergency requires that
action must be taken before a meeting can be called. Any action taken
under this procedure is valid only if:
(1) All members and the Secretary are notified and the members are
provided the opportunity to vote;
(2) Each proposition is explained accurately, fully, and
substantially identically to each member;
(3) With the exception of the two-thirds vote requirement in Sec.
1212.52(f), a majority of the members vote in favor of the action; and
(4) All votes are promptly confirmed in writing and recorded in the
Board minutes.
Sec. 1212.45 Reimbursement and attendance.
Board members and alternates, when acting as members, will serve
without compensation but will be reimbursed for reasonable travel
expenses, as approved by the Board, that they incur when performing
Board business. The Board may request that alternates attend any
meeting even if their respective members are expected to attend or
actually attend the meeting.
Sec. 1212.46 Powers.
The Board shall have the following powers subject to Sec. 1212.80:
(a) Administer this subpart in accordance with its terms and
provisions of the Act;
(b) Require its employees to receive, investigate, and report to
the Secretary complaints of violations of this part;
(c) Recommend adjustments to the assessments as provided in this
part;
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(d) Recommend to the Secretary amendments to this part;
(e) Establish, issue, and administer appropriate programs for
promotion, research, and information including consumer and industry
information, and advertising designed to strengthen the honey
industry's position in the marketplace and to maintain, develop, and
expand domestic and foreign markets for honey and honey products; and
(f) Invest assessments collected and other funds received pursuant
to the Order and use earnings from invested assessments to pay for
activities carried out pursuant to the Order.
Sec. 1212.47 Duties.
The Board shall have, among other things, the following duties:
(a) To meet and organize, and to select from among its members a
chairperson and such other officers as may be necessary; to select
committees and subcommittees from its membership and other industry
representatives; and to develop and recommend such rules, regulations,
and by-laws to the Secretary for approval to conduct its business as it
may deem advisable;
(b) To employ or contract with such persons as it may deem
necessary and to determine the compensation and define the duties of
each; and to protect the handling of Board funds through fidelity
bonds;
(c) To prepare and submit to the Secretary for approval 60 days in
advance of the beginning of a fiscal period, a budget of anticipated
expenses in the administration of this part including the probable
costs of all programs and plans and to recommend a rate of assessment
with respect thereto.
(d) To investigate violations of this part and report the results
of such investigations to the Secretary for appropriate action to
enforce the provisions of this part.
(e) To establish, issue, and administer appropriate programs for
promotion, research, and information including consumer and industry
information, and advertising designed to strengthen the honey
industry's position in the marketplace and to maintain, develop, and
expand domestic and foreign markets for honey and honey products.
(f) To maintain minutes, books, and records and prepare and submit
to the Secretary such reports from time to time as may be required for
appropriate accounting with respect to the receipt and disbursement of
funds entrusted to it.
(g) To periodically prepare and make public and to make available
to first handlers, producers, and importers reports of its activities
and, at least once each fiscal period, to make public an accounting of
funds received and expended.
(h) To cause its books to be audited by a certified public
accountant at the end of each fiscal period and to submit a copy of
each audit to the Secretary.
(i) To submit to the Secretary such information pertaining to this
part or subpart as he or she may request.
(j) To give the Secretary the same notice of Board meetings and
committee meetings that is given to members in order that the
Secretary's representative(s) may attend such meetings, and to keep and
report minutes of each meeting to the Secretary.
(k) To notify first handlers, importers, and producers of all Board
meetings through press releases or other means.
(l) To appoint and convene, from time to time, working committees
or subcommittees that may include first handlers, importers, exporters,
producers, members of the wholesale or retail outlets for honey, or
other members of the honey industry and the public to assist in the
development of research, promotion, advertising, and information
programs for honey and honey products.
(m) To develop and recommend such rules and regulations to the
Secretary for approval as may be necessary for the development and
execution of plans or activities to effectuate the declared purpose of
the Act.
(n) To provide any patents, copyrights, inventions, product
formulations, or publications developed through the use of funds
collected under the provisions of this subpart shall be the property of
the U.S. Government, as represented by the Board, and shall along with
any rents, royalties, residual payments, or other income from the
rental, sales, leasing, franchising, or other uses of such patents,
copyrights, trademarks, information, publications, or product
formulations, inure to the benefit of the Board; shall be considered
income subject to the same fiscal, budget, and audit controls as other
funds of the Board; and may be licensed subject to approval by the
Department.
Sec. 1212.47 Reapportionment of Board membership.
At least once in each 5-year period, but not more frequently than
once in each 3-year period, the Board shall:
(a) Review, based on a three-year average, the geographical
distribution in the United States of the production of honey and the
quantity or value of the honey and honey products imported into the
United States; and
(b) If warranted, recommend to the Secretary the reapportionment of
the Board membership to reflect changes in the geographical
distribution of the production of honey and the quantity or value of
the honey and honey products imported into the United States.
Expenses and Assessments
Sec. 1212.50 Budget and expenses.
(a) At least 60 days prior to the beginning of each fiscal period,
and as may be necessary thereafter; the Board shall prepare and submit
to the Department a budget for the fiscal period covering its
anticipated expenses and disbursements in administering this subpart.
The budget shall allocate five percent (5%) of the Board's anticipated
revenue from assessments each fiscal period for production research and
research relating to the production of honey. Each such budget shall
include:
(1) A statement of objectives and strategy for each program, plan,
or project;
(2) A summary of anticipated revenue, with comparative data or at
least one preceding year (except for the initial budget);
(3) A summary of proposed expenditures for each program, plan, or
project; and
(4) Staff and administrative expense breakdowns, with comparative
data for at least one preceding year (except for the initial budget).
(b) Each budget shall provide adequate funds to defray its proposed
expenditures and to provide for a reserve as set forth in this subpart.
(c) Subject to this section, any amendment or addition to an
approved budget must be approved by the Department, including shifting
funds from one program, plan, or project to another. Shifts of funds
which do not cause an increase in the Board's approved budget and which
are consistent with governing bylaws need not have prior approval by
the Department.
(d) The Board is authorized to incur such expenses, including
provision for a reserve, as the Department finds reasonable and likely
to be incurred by the Board for its maintenance and functioning, and to
enable it to exercise its powers and perform its duties in accordance
with the provisions of this subpart. Such expenses shall be paid from
funds received by the Board.
(e) With approval of the Department, the Board may borrow money for
the payment of administrative expenses, subject to the same fiscal,
budget, and
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audit controls as other funds of the Board. Any funds borrowed by the
Board shall be expended only for startup costs and capital outlays and
are limited to the first year of operation of the Board.
(f) The Board may accept voluntary contributions, but these shall
only be used to pay expenses incurred in the conduct of programs,
plans, and projects. Voluntary contributions shall be free from any
encumbrance by the donor, and the Board shall retain complete control
of their use.
(g) The Board shall reimburse the Department for all expenses
incurred by the Department in the implementation, administration,
enforcement and supervision of the Order, including all referendum
costs in connection with the Order.
(h) The Board may not expend for administration, maintenance, and
functioning of the Board in any calendar year an amount that exceeds 15
percent of the assessments and other income received by the Board for
that calendar year. Reimbursements to the Department required under
paragraph (g) of this section are excluded from this limitation on
spending.
(i) The Board may also receive funds provided through the
Department's Foreign Agricultural Service or from other sources, with
the approval of the Secretary, for authorized activities.
Sec. 1212.51 Financial statements.
(a) The Board shall prepare and submit financial statements to the
Department on a periodic basis. Each such financial statement shall
include, but not be limited to, a balance sheet, income statement, and
expense budget. The expense budget shall show expenditures during the
time period covered by the report, year-to-date expenditures, and the
unexpended budget.
(b) Each financial statement shall be submitted to the Department
within 30 days after the end of the time period to which it applies.
(c) The Board shall submit annually to the Department an annual
financial statement within 90 days after the end of the calendar year
to which it applies.
Sec. 1212.52 Assessments.
(a) The Board will cover its expenses by levying in a manner
prescribed by the Secretary an assessment on first handlers and
importers.
(b) Each first handler shall pay an assessment to the Board at the
rate of $0.01 per pound of domestically produced honey or honey
products the first handler handles. A producer shall pay the Board the
assessment on all honey or honey products for which the producer is the
first handler.
(c) Each first handler responsible for remitting assessments under
paragraph (b) of this section shall remit the amounts due to the
Board's office on a monthly basis no later than the fifteenth day of
the month following the month in which the honey or honey products were
marketed.
(d) Each importer shall pay an assessment to the Board at the rate
of $0.01 per pound of honey or honey products the importer imports into
the United States. An importer shall pay the assessment to the Board
through the United States Customs Service (Customs) when the honey or
honey products being assessed enter the United States. If Customs does
not collect an assessment from an importer, the importer is responsible
for paying the assessment to the Board.
(e) The import assessment recommended by the Board and approved by
the Secretary shall be uniformly applied to imported honey or honey
products that are identified as HTS heading number 0409.00.00 and
2106.90.9988 by the Harmonized Tariff Schedule of the United States.
(f) The Board may recommend an increase or decrease in the
assessment as it deems appropriate by at least a two-thirds vote of
members present at a meeting of the Board with the approval of the
Secretary. The Board may not recommend an increase in the assessment of
more than $0.02 per pound of honey or honey products and may not
increase the assessment by more than $0.0025 in any single fiscal year.
(g) In situations of late payment:
(1) The Board shall impose a late payment charge on any first
handler or importer who fails to remit to the Board the total amount
for which the first handler or importer is liable on or before the
payment due date the Board establishes. The amount of the late payment
charge shall be prescribed by the Department.
(2) The Board shall require any first handler or importer subject
to a late payment charge to pay interest on the unpaid assessments for
which the first handler or importer is liable. The rate of interest
shall be prescribed by the Department.
(3) First handlers or importers who fail to remit total assessments
in a timely manner may also be subject to actions under federal debt
collection procedures.
(h) Advance payment. The Board may accept advance payment of
assessments from first handlers or importers that will be credited
toward any amount for which the first handlers or importers may become
liable. The Board does not have to pay interest on any advance payment.
(i) If the Board is not in place by the date the first assessments
are to be collected, The Secretary shall have the authority to receive
assessments and invest them on behalf of the Board, and shall pay such
assessments and any interest earned to the Board when it is formed.
Sec. 1212.53 Exemption from assessment.
(a) A first handler who handles less than 250,000 pounds of honey
or honey products per calendar year or an importer who imports less
than 250,000 pounds of honey or honey products per calendar year is
exempt from paying assessments.
(b) 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.
An importer who imports 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) A first handler or importer desiring an exemption shall apply
to the Board, on a form provided by the Board, for a certificate of
exemption. A first handler shall certify that the first handler will
handle less than 250,000 of honey and honey products for the calendar
year for which the exemption is claimed. An importer shall certify that
the importer will import less than 250,000 pounds of honey and honey
products during the calendar year for which the exemption is claimed.
(d) Upon receipt of an application, the Board shall determine
whether an exemption may be granted. The Board will then issue, if
deemed appropriate, a certificate of exemption to each person who is
eligible to receive one. It is the responsibility of these persons to
retain a copy of the certificate of exemption.
(e) Exempt importers shall be eligible for reimbursement of
assessments collected by Customs. These importers shall apply to the
Board for reimbursement of any assessment paid. No interest will be
paid on the assessment collected by Customs. Requests for reimbursement
shall be submitted to the Board within 90 days of the last day of the
calendar year the honey or honey products were imported.
(f) If a person has been exempt from paying assessments for any
calendar
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year under this section and no longer meets the requirements for an
exemption, the person shall file a report with the Board in the form
and manner prescribed by the Board and begins to pay the assessment on
all honey or honey products handled or imported.
(g) Any person who desires an exemption from assessments for a
subsequent calendar year shall reapply to the Board, on a form provided
by the Board, for a certificate of exemption.
(h) The Board may recommend to the Secretary that honey and honey
products exported from the United States be exempt from this subpart
and recommend procedures for refunding assessments paid on exported
honey and honey products and any necessary safeguards to prevent
improper use of this exemption.
Sec. 1212.54 Operating reserve.
The Board may establish an operating monetary reserve and may carry
over to subsequent fiscal periods excess funds in any reserve so
established: Provided that the funds in the reserve do not exceed one
fiscal period's budget. Subject to approval by the Department, such
reserve funds may be used to defray any expenses authorized under this
part.
Sec. 1212.55 Prohibition on use of funds.
(a) The Board may not engage in, and shall prohibit the employees
and agents of the Board from engaging in:
(1) Any action that is a conflict of interest;
(2) Except as otherwise provided in paragraph (b) using funds
collected by the Board under the Order to undertake any action for the
purpose of influencing legislation or governmental action or policy, by
local, state, national, and foreign governments, other than
recommending to the Secretary amendments to the Order.
(3) A program, plan or project conducted pursuant to this subpart
that includes false or misleading claims on behalf of honey or honey
products.
(4) Any advertising, including promotion, research and information
activities authorized that may be false or misleading or disparaging to
another agricultural commodity.
(b) The prohibition in paragraph (a)(2) of this section shall not
apply:
(1) To the development and recommendation of amendments to this
subpart; or
(2) To the communication to appropriate government officials, in
response to a request made by the officials, of information relating to
the conduct, implementation, or results of promotion, research,
consumer information, education, industry information, or producer
information activities authorized under this subpart.
Promotion, Research, and Information
Sec. 1212.60 Programs, plans and projects.
(a) Scope of activities. The Board must develop and submit to the
Secretary for approval plans and programs authorized by this section.
The plans and programs may provide for:
(1) Establishing, issuing, and administering appropriate programs
for promotion, research, and information including consumer and
industry information, and advertising designed to strengthen the honey
industry's position in the marketplace and to maintain, develop, and
expand domestic and foreign markets for honey and honey products;
(2) Establishing and conducting research and development activities
to encourage and expand the acquisition of knowledge about honey and
honey products, their consumption and use, or to encourage, expand or
improve the quality, marketing, and utilization of honey and honey
products;
(3) Conducting activities that may lead to developing new markets
or marketing strategies for honey and honey products;
(4) Conducting activities related to production issues or bee
research activities; and
(5) Conducting activities designed to make the honey industry more
efficient, to improve the quality of honey or to enhance the image of
honey and honey products and the honey industry.
(b) No program, plan, or project shall be implemented prior to its
approval by the Department. Once a program, plan, or project is so
approved, the Board shall take appropriate steps to implement it.
(c) The Board must periodically evaluate each plan and program
authorized under this part to ensure that it contributes to an
effective and coordinated program of research, promotion and
information. The Board must submit the evaluations to the Secretary. If
the Board and the Secretary find that a plan or program does not
further the purposes of the Act, then such plan or program should be
terminated.
Sec. 1212.61 Independent evaluation.
The Board must authorize and fund not less than once every five
years an independent evaluation of the effectiveness of this subpart
and the plans and programs conducted by the Board under the Act. The
Board must submit this independent evaluation to the Secretary and make
the results available to the public.
Sec. 1212.62 Patents, copyrights, inventions, product formulations,
and publications.
Except for a reasonable royalty paid by the Board to the inventor
of a patented inventio