[Federal Register Volume 75, Number 215 (Monday, November 8, 2010)]
[Proposed Rules]
[Pages 68512-68529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28038]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1214
[Document No. AMS-FV-10-0008-PR-1A]
RIN 0581-AD00
Proposed Christmas Tree Promotion, Research, and Information
Order
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule with request for comments.
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SUMMARY: This proposed rule invites comments on the establishment of an
industry-funded promotion, research, and information program for fresh
cut Christmas trees. The proposed Christmas Tree Promotion, Research,
and Information Order (Proposed Order), was submitted to the Department
of Agriculture (Department) by the Christmas Tree Checkoff Task Force,
an industry wide group of producers and importers that support this
proposed program. Under the Proposed Order, producers and importers of
fresh cut Christmas trees would pay an initial assessment of $0.15 per
tree, which would be paid to the proposed Christmas Tree Promotion
Board (Board). This Board would be responsible for administration and
operation of the proposed Order. Producers and importers that
domestically produce or import less than 500 Christmas trees annually
would be exempt from the assessment. The proposed program is authorized
under the Commodity Promotion, Research, and Information Act of 1996
(1996 Act). A referendum will be conducted, among producers and
importers, three years after the
[[Page 68513]]
collection of assessments begin to determine if Christmas tree
producers and importers favor the continuation of this program. This
proposed rule also announces the Agricultural Marketing Service's (AMS)
intention to request approval of new Christmas tree information
collection requirements by the Office of Management and Budget (OMB)
for the operation of the Proposed Order.
DATES: Comments must be received by February 7, 2011. Pursuant to the
Paperwork Reduction Act (PRA), comments on the information collection
burden that would result from this proposal must be received by
February 7, 2011.
ADDRESSES: Interested persons are invited to submit written comments on
the Internet at http://www.regulations.gov or to the Research and
Promotion Branch, Fruit and Vegetable Programs, AMS, USDA, 1400
Independence Avenue, SW., Stop 0244, Room 0632-S, Washington, DC 20250-
0244; fax: (202) 205-2800. All comments should reference the docket
number and the date and page number of this issue of the Federal
Register and will be made available for public inspection in the above
office during regular business hours or can be viewed at http://www.regulations.gov. All comments submitted in response to this
proposed rule will be included in the record and will be made available
to the public. Please be advised that the identity of the individuals
or entities submitting comments will be made public on the Internet at
the address provided above.
Pursuant to PRA, comments regarding the accuracy of the burden
estimate, ways to minimize the burden, including the use of automated
collection techniques or other forms of information technology, or any
other aspect of this collection of information, should be sent to the
above address. In addition, comments concerning the information
collection should also be sent to the Desk Office for Agriculture,
Office of Information and Regulatory Affairs, Office of Management and
Budget, New Executive Office Building, 725 17th Street, NW., Room 725,
Washington, DC 20503.
FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella, Marketing
Specialist, Research and Promotion Branch, Fruit and Vegetable
Programs, AMS, USDA, 1400 Independence Avenue, SW., Room 0632, Stop
0244, Washington, DC 20250-0244; telephone: (301) 334-2891; or
facsimile: (301) 334-2896; or e-mail: [email protected].
SUPPLEMENTARY INFORMATION: This proposed rule is issued pursuant to the
Commodity Promotion, Research, and Information Act of 1996 (1996 Act)
(7 U.S.C. 7411-7425).
Executive Order 12866
This proposed rule has been determined not significant for purposes
of Executive Order 12866 and therefore has not been reviewed by the
Office of Management and Budget (OMB).
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. It is not intended to have retroactive effect.
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 section 519 of the 1996 Act, a person subject to an order may
file a written petition with the Department stating that an order, any
provision of an order, or any obligation imposed in connection with an
order, is not established in accordance with the law, and requesting a
modification of an order or an exemption from an order. Any petition
filed challenging an order, any provision of an order, or any
obligation imposed in connection with an order, shall be filed within
two years after the effective date of an order, provision, or
obligation subject to challenge in the petition. The petitioner will
have the opportunity for a hearing on the petition. Thereafter, the
Department will issue a ruling on the petition. The 1996 Act provides
that the district court of the United States for any district in which
the petitioner resides or conducts business shall have the jurisdiction
to review a final ruling on the petition, if the petitioner files a
complaint for that purpose not later than 20 days after the date of the
entry of the Department's final ruling.
Executive Order 13132
This proposed rule has been reviewed under Executive Order 13132,
Federalism. This Executive Order directs agencies to construe, in
regulations and otherwise, a Federal Statute to preempt State law only
when the statute contains an express preemption provision. Section 524
of the 1996 Act provides that the Act shall not affect or preempt any
other Federal or State law authorizing promotion or research relating
to an agricultural commodity.
The proponent, the Christmas Tree Checkoff Task Force is an
industry wide group of producers and importers that support this
proposed program. They have conducted meetings throughout the United
States with several State and multi-State Christmas tree organizations.
The proposed program is not intended to duplicate any State program.
The proponents have determined that they need a mechanism that would be
sustainable over time. A national Christmas tree research and promotion
program would accomplish this goal.
Summary
This proposed rule invites comments on the establishment of an
industry-funded promotion, research, and information program for fresh
cut Christmas trees. The proposed Christmas Tree Promotion, Research,
and Information Order (Proposed Order), was submitted to the Department
of Agriculture (Department) by the Christmas Tree Checkoff Task Force
(Task Force), an industry wide group of producers and importers that
support this proposed program. Under the Proposed Order, producers and
importers of fresh cut Christmas trees would pay an initial assessment
of $0.15 cents per tree, which would be paid to the Christmas Tree
Promotion Board (Board). This Board would be responsible for
administration and operation of the Proposed Order. Producers and
importers that domestically produce or import less than 500 Christmas
trees annually would be exempt from the assessment. The proposed
program is authorized under the 1996 Act.
A referendum will be conducted, among producers and importers,
three years after the collection of assessments begin to determine if
Christmas tree producers and importers favor the continuation of this
program. This proposed rule also announces the Agricultural Marketing
Service's (AMS) intention to request approval of new Christmas tree
information collection requirements by the OMB for the operation of
Proposed Order.
Authority in 1996 Act
The proposed Order is authorized under the 1996 Act which
authorizes USDA to establish agricultural commodity research and
promotion orders which may include a combination of promotion,
research, industry information, and consumer information activities
funded by mandatory assessments. These programs are designed to
maintain and expand markets and uses for agricultural commodities. As
defined under section 513(1)(D) of the 1996 Act, agricultural
commodities include the products of
[[Page 68514]]
forestry. The proposed Order would provide for the development and
financing of a coordinated program of research, promotion, and
information for Christmas trees.
The 1996 Act provides for a number of optional provisions that
allow the tailoring of orders for different commodities. Section 516 of
the 1996 Act provides permissive terms for orders, and other sections
provide for alternatives. For example, section 514 of the 1996 Act
provides for orders applicable to (1) Producers, (2) first handlers and
others in the marketing chain as appropriate, and (3) importers (if
imports are subject to assessments). Section 516 states that an order
may include an exemption of de minimis quantities of an agricultural
commodity; different payment and reporting schedules; coverage of
research, promotion, and information activities to expand, improve, or
make more efficient the marketing or use of an agricultural commodity
in both domestic and foreign markets; provision for reserve funds;
provision for credits for generic and branded activities; and
assessment of imports.
In addition, section 518 of the 1996 Act provides for referenda to
ascertain approval of an order to be conducted either prior to its
going into effect or within three years after assessments first begin
under the order. An order also may provide for its approval in a
referendum based upon different voting patterns. Section 515 provides
for establishment of a board or council from among producers, first
handlers and others in the marketing chain as appropriate, and
importers, if imports are subject to assessment.
Industry Background
Christmas trees have been commercially sold in the United States
since about 1850, when most were cut from wild stands. In the last 55
to 60 years, Christmas trees have been farmed and harvested as an
agricultural row crop. Most Christmas trees are now grown on or
selected and cut by consumers on tree farms. The U.S. Christmas tree
industry consists of over 12,000 farms producing over 17 million
Christmas trees per year. The best selling Christmas trees are Scotch
pine, Douglas fir, noble fir, Fraser fir, Virginia pine, balsam fir and
white pine.
Christmas trees are grown for retail sale in almost all U.S.
states. Oregon, Michigan, Wisconsin, North Carolina and Pennsylvania
together produce more than 75 percent of the trees produced each year.
During 2007, 47 out of the 50 States contributed to the production of
Christmas trees.
Competition
The fresh cut Christmas tree industry competes directly with the
artificial Christmas tree industry. Artificial Christmas tree companies
advertise heavily throughout the fall and Christmas seasons. According
to data supplied by the proponents artificial tree purchases have
increased from 9.8 million in 2003 to 17.4 million in 2007.
Imports
According to U.S. Department of Commerce, U.S. Census Bureau,
Foreign Trade Statistics, imports of Christmas trees from 2006 through
2008 averaged about 1.9 million trees. During those years, imports from
Canada accounted for 99.72 percent of the total imports. Italy,
Colombia and Mali comprised about .28 million trees or less than one
percent. For the same period, these imports were valued at 27.427
million dollars.
Prices
According to the Task Force, in 2007 the average price per tree for
a Noble was approximately $18.00 and the average price per tree for a
Douglas was $11.00. By averaging these two types of Christmas trees,
prices would be approximately $15 per tree. With 31 million trees cut
in 2007, the value would be approximately $465 million (value at point
of first sale).
Need for a Program
A national research and promotion program for Christmas trees would
help the industry to address the many market problems it currently
faces. According to the Task Force, two main factors currently
affecting Christmas tree sales, both in the domestic market and abroad,
are increased competition and changing consumer habits.
According to additional data supplied by the Task Force, the market
share of fresh Christmas trees in the U.S. from 1965 to 2008 has
declined by 6 percent. In comparison, the market share of artificial
trees has increased 655 percent from 1965 to 2008.
According to the proponent data, sales of fresh cut Christmas trees
decreased by 15 million trees from 37 million trees sold in 1991 down
to 22 million trees sold in 2002. The industry saw an increase in sales
in 2003 through 2007 when the industry conducted a voluntary marketing
campaign which was lead by a small group of producers and retailers.
This voluntary marketing campaign saw sales rebound by 9 million
trees--from 22 million trees sold in 2002 to 31 million trees sold in
2007. Even with the strong sales response to the marketing efforts, the
voluntary marketing program suffers from a lack of funding.
The Christmas tree industry has tried three different times to
conduct promotional programs based on voluntary contributions. Each
time, after about three years, the revenue declined to a point where
the programs were ineffective. The decline in revenue is attributable
to the voluntary nature of these programs. Therefore, the proponents
have determined that they need a mechanism that would be sustainable
over time. They believe that a national Christmas tree research and
promotion program would accomplish this goal.
Specific Provisions
Definitions
Pursuant to section 513 of the 1996 Act, sections 1214.1 through
1214.30 of the proposed Order define certain terms that would be used
throughout the Order. Several of the terms are common to all research
and promotion programs authorized under the 1996 Act while other terms
are specific to the proposed Christmas tree Order.
Section 1214.1 would define the term ``Act'' to mean the Commodity
Promotion, Research, and Information Act of 1996 (7 U.S.C. 7411-7425),
and any amendments thereto.
Section 1214.2 would define the term ``Christmas Tree Promotion
Board'' to mean the administrative body established pursuant to Sec.
1214.40.
Section 1214.3 would define the term ``Christmas tree'' to mean any
tree of the coniferous species that is severed or cut from its roots
and marketed as a Christmas tree. The coniferous species include the
botanical group of trees that have needle-like or scale-like leaves.
Section 1214.5 would define the term ``crop year'' to mean August 1
through July 31.
Section 1214.6 would define the term ``Customs'' to mean the U.S.
Customs and Border Protection or U.S. Customs Service, an agency of the
U.S. Department of Homeland Security.
Section 1214.8 would define the term ``fiscal period'' or ``fiscal
year'' to mean the period August 1 through July 31.
Section 1214.9 would define the term ``importer'' to mean any
person importing Christmas trees into the United States in a fiscal
period as a principal or agent, broker, or consignee of any person who
domestically produces Christmas trees outside of the United States for
sale in the United States, and who is listed in the import records as
the importer of record for such Christmas trees.
Section 1214.10 would define the term ``information'' to mean
activities or
[[Page 68515]]
programs designed to disseminate the results of research, new and
existing marketing programs, new and existing marketing strategies, new
and existing uses and applications, and to enhance the image of
Christmas trees.
Section 1214.11 would define the term ``marketing'' to mean the
sale or other disposition of Christmas trees in interstate, foreign, or
intrastate commerce.
Section 1214.13 would define the terms ``part'' and ``subpart.''
The term ``part'' would mean the Christmas Tree Promotion, Research,
and Information Order and all rules, regulations, and supplemental
orders issued pursuant to the Act and the Order. The Order would be a
``subpart'' of the part.
Section 1214.15 would define the terms programs, plans, and
projects to mean research, promotion and information programs, plans,
or projects established under the Order.
Section 1214.16 would define ``produce'' to mean to engage in the
cutting and selling of Christmas trees for the holiday market.
Section 1214.17 would define ``producer'' to mean any person who is
engaged in the production of Christmas trees in the United States, and
who owns, or shares the ownership and risk of loss of production of
Christmas trees or a person who is engaged in the business of
producing, or causing to be domestically produced, Christmas trees
beyond personal use and having value at first point of sale.
Section 1214.18 would define the term ``promotion'' to mean any
action taken, including paid advertising, public relations and other
communications, and promoting the results of research, that presents a
favorable image of Christmas trees to the public and to any and all
consumers and those who influence consumption of Christmas trees with
the intent of improving the perception, markets and competitive
position of Christmas trees and stimulating sales of Christmas trees.
Section 1214.19 would define the term ``research'' to mean any
activity that advances the position of Christmas trees in the market
place that includes, but is not limited to any type of test, study, or
analysis designed to advance the image, desirability, use,
marketability, sales, product development, or quality of Christmas
trees; and the effectiveness of market development and promotion
efforts including competitiveness, efficiency, pest and disease
control, and other aspects of Christmas tree production.
Sections 1214.4, 1214.7, 1214.12, 1214.14, 1214.20, 1214.21,
1214.22, 1214.23, and 1214.24 would define the terms ``conflict of
interest,'' ``Department or UDSA,'' ``Order,'' ``person,''
``Secretary,'' ``State,'' ``suspend,'' ``terminate,'' and ``United
States,'' respectively. The definitions are the same as those specified
in section 513 of the Act.
Establishment of the Board
Pursuant to section 515 of the 1996 Act, Sec. Sec. 1214.40 through
1214.47 of the proposed Order would detail the establishment and
membership of the proposed Christmas Tree Promotion Board, nominations
and appointments, the term of office, removal and vacancies, procedure,
reimbursement and attendance, powers and duties, and prohibited
activities.
Section 1214.40 would specify the Board establishment and
membership. The Board would be composed of 12 members. Eleven members
would be domestic producers and would be allocated to three regions in
the United States based on the volume of Christmas trees domestically
produced from each respective region. The total number of Board members
could not be increased. The 11 members would be allocated as follows:
Region number 1 (Western Region), 5 members; region number 2 (Central
Region), 2 members; and region number 3 (Eastern Region), 4 members.
Specific States and territories within each domestic region would be
specified in Sec. 1214.40(a)(1) of the proposed Order. One member
would be an importer who imports Christmas trees into the United
States.
The Task Force recommended that the Board have no alternate Board
members. It wants to ensure that industry members who seek
representation and serve on the Board are committed to their service
and participate in all Board meetings.
Every 5 years, but no more often than once every 3 years, the Board
must review, based on a 3-year average, the geographical distribution
of the production of Christmas trees within the United States and the
number of Christmas trees imported into the United States. If
warranted, the Board would recommend to the Secretary that the Board
membership be reapportioned appropriately to reflect such changes. Any
changes in Board composition would be implemented by the Secretary
through rulemaking.
Section 1214.41 of the proposed Order would specify Board
nominations and appointments. The initial nominations would be
conducted by the Department. The Department would publicize the
nomination process, using trade press or other means it deems
appropriate, and outreach to all sizes of Christmas tree producers for
the U.S. market. The Department could use regional caucuses, mail or
other methods to elicit potential nominees. The Secretary would select
the members of the Board from the nominations.
Regarding subsequent nominations, the Board staff would solicit
nominations as described in the preceding paragraph. Nominees would
have the opportunity to provide the Board a short background statement
outlining their qualifications and desire to serve on the Board.
Nominees for the initial and subsequent Boards must domestically
produce 500 or more Christmas trees during the crop year to be eligible
to serve on the Board.
Producers who domestically produce Christmas trees in more than one
region could seek nomination in the region where the majority of their
trees are produced. The names of producers would be placed on a ballot
by region. The ballots along with the background statements would be
mailed to producers in each respective region for a vote. Producers who
produce in more than one region could only vote in the region in which
they produce a majority of their Christmas trees. The nominee receiving
the highest number of votes and the nominee receiving the second
highest number of votes shall be submitted to the Department as the
producers' first and second choice nominees.
Importer nominees would be solicited by the Board from those
importers who have paid their assessments to the Board in the most
recent fiscal period. They also must have imported more than 500
Christmas trees during the fiscal period. The names of importer
nominees would then be placed on a ballot. The ballots along with the
background statements would be mailed to importers for a vote. The
nominee receiving the highest number of votes and the nominee receiving
the second highest number of votes shall be submitted to the Department
as the producers' first and second choice nominees. If there is an
insufficient number of nominees from whom to appoint members to the
Board, the Secretary may appoint members in such a manner as the
Secretary determines appropriate.
The Board would submit nominations to the Secretary 90 days before
the new Board term begins. The Secretary would select the members of
the Board from the nominations submitted by the Board (through the
balloting process). In order to provide the Board flexibility, the
Board could recommend to the Secretary modifications to its nomination
procedures. Any such modifications would be implemented
[[Page 68516]]
through rulemaking by the Secretary. Section 1214.42 of the proposed
Order would specify the term of office. With the exception of the
initial Board, each Board member would serve a three-year term or until
the Secretary selected his or her successor. Each term of office would
begin on January 1 and end on December 31. No member could serve more
than two consecutive terms, excluding any term of office less than
three years. For the initial board, the terms of Board members would be
staggered for two, three, and four years.
Section 1214.43 of the proposed Order would specify criteria for
the removal of members and for filling vacancies. If a Board member
ceased to work for a producer or importer or ceased to do business in
the region he or she represented, such position would become vacant.
Additionally, the Board could recommend to the Secretary that a member
be removed from office if the member consistently refused to perform
his or her duties or engaged in dishonest acts or willful misconduct.
The Secretary could remove the member if he or she finds that the
Board's recommendation shows adequate cause. Further, without
recommendation of the Board, a member may be removed by the Secretary
upon showing of adequate cause, including the failure by a member to
submit reports or remit assessments required under this part, if the
Secretary determines that such member's continued service would be
detrimental to the achievement of the purposes of the Act.
If a position became vacant, nominations to fill the vacancy would
be conducted using the nominations process as proposed in Sec. 1214.41
of the Order. A vacancy would not be required to be filled if the
unexpired term is less than six months.
Section 1214.44 of the proposed Order would specify procedures of
the Board. A majority of the Board members (7) would constitute a
quorum. If participation by telephone or other means were permitted,
members participating by such means would count towards the quorum
requirements or other voting requirements as authorized under the
Order. Proxy voting would not be permitted. A motion would carry if
supported by a majority of Board members present.
The proposed Order would also provide for the Board to take action
by mail, telephone, electronic mail, facsimile, or any other electronic
means when the chairperson believes it is necessary. Actions taken
under these procedures would be valid only if all members and the
Secretary were notified of the meeting and all members were provided
the opportunity to vote and a majority of the members present voted in
favor of the action. Additionally, all votes would have to be confirmed
in writing and recorded in Board minutes.
Section 1214.45 of the proposed Order would specify that Board
members or committee members would serve without compensation. However,
Board members or committee members would be reimbursed for reasonable
travel expenses, as approved by the Board, incurred when performing
Board business.
Section 1214.46 of the proposed Order would specify powers and
duties of the Board. These are similar to promotion programs authorized
under the 1996 Act. They include, among other things, to administer the
Order and collect assessments; to develop bylaws and recommend
regulations necessary to administer the Order; to select a chairperson
and other Board officers; to create an executive committee and form
other committees and subcommittees as necessary; to hire staff or
contractors; to provide appropriate notice of meetings to the industry
and USDA and keep minutes of such meetings; to develop programs and
enter into contracts to implement programs; to submit a budget to USDA
for approval within 60 calendars days after assessments are due; to
borrow funds necessary to cover startup costs of the Order; to invest
Board funds appropriately; to recommend changes in the assessment rate
as appropriate and within the limits of the Order; to have its books
audited by an outside certified public accountant at the end of each
fiscal period and at other times as requested by the Secretary; to
report its activities to manufacturers for the U.S. market; to make
public an accounting of funds received and expended; to receive,
investigate and report to the Secretary complaints of violations of the
Order; and to recommend amendments to the Order as appropriate.
Section 1214.47 of the proposed Order would specify prohibited
activities that appear in other promotion programs authorized under the
1996 Act. In summary, neither the Board nor its employees and agents
could engage in actions that would be a conflict of interest; use Board
funds to lobby (influencing legislation or governmental action or
policy, by local, state, national, and foreign governments or
subdivisions thereof, other than recommending to the Secretary
amendments to the Order); or engage in any advertising or activities
that may be false, misleading or disparaging to another agricultural
commodity.
Expenses and Assessments
Pursuant to sections 516 and 517 of the 1996 Act, Sec. Sec.
1214.50 through 1214.56 of the proposed Order detail requirements
regarding the Board's budget and expenses, financial statements,
assessments, and exemption from assessments. Within 60 days after
assessments are due to the Board, and as necessary during the year, the
Board would submit a budget to USDA covering its projected expenses.
The budget must include a summary of anticipated revenue and expenses
for each program along with a breakdown of staff and administrative
expenses. Except for the initial budget, the Board's budgets should
include comparative data for at least one preceding fiscal period.
Assessments are due to the Board on February 15th of each crop
year. Providing the Board sixty days after assessments are due to
develop and submit a budget allow enough time for the budget to be
approved prior to the beginning of the fiscal period (August 1). Also,
this allows the Board to have knowledge of the monies available to
develop promotion, research, or information programs for the upcoming
fiscal period.
Each budget must provide for adequate funds to cover the Board's
anticipated expenses. Any amendment or addition to an approved budget
must be approved by USDA, including shifting of funds from one program,
plan or project to another. Shifts of funds that do not result an
increase in the Board's approved budget would not have to have prior
approval from USDA. For example, if the Board's approved budget
provided for $1 million in consumer advertising and $500,000 in
research projects, a shift of $50,000 from consumer advertising to
research would require USDA approval. However, a shift within the $1
million consumer advertising line item would not require prior USDA
approval.
The Board would be authorized to incur reasonable expenses for its
maintenance and functioning. During its first year of operation, the
Board could borrow funds for startup costs and capital outlay. Any
borrowed funds would be subject to the same fiscal, budget and audit
controls as other funds of the Board.
The Board could also accept voluntary contributions and seek other
funding sources to carry out activities authorized under the Order. Any
contributions received by the Board would be free from encumbrances by
the donor and the Board would retain control over use of the funds.
However,
[[Page 68517]]
the Board could receive funds from outside sources targeted for
specific authorized projects. For example, the Board could receive
Federal grant funds, subject to approval by the Secretary, for a
specific research project. The Board would also be required to
reimburse USDA for costs incurred by USDA in overseeing the Order's
operations, including all costs associated with referenda.
The Board would be limited to spending no more than 10 percent of
its available funds for administration, maintenance, and the
functioning of the Board. Reimbursements to USDA would not be
considered administrative costs. As an example, if the Board received
$2 million in assessments during a fiscal period, and had available
$500,000 in reserve funds, the Board's available funds would be
$2,500,000. In this scenario, the Board would be limited to spending no
more than $250,000 (.10 x $2.5 million) on administrative costs. While
section 515 of the 1996 Act limits such spending to 15 percent of a
board's budget, the Task Force believes that 10 percent is appropriate.
The Board could also maintain a monetary reserve and carry over
excess funds from one fiscal period to the next. However, such reserve
funds could not exceed one fiscal period's budgeted expenses. For
example, if the Board's budgeted expenses for a fiscal period were $2
million, it could carry over no more than $2 million in reserve. With
approval of the Secretary, reserve funds could be used to pay expenses.
The Board could invest its revenue collected under the Order in the
following: (1) Obligations of the United States or any agency of the
United States; (2) general obligations of any State or any political
subdivision of a State; (3) interest bearing accounts or certificates
of deposit of financial institutions that are members of the Federal
Reserve; and (4) obligations fully guaranteed as to principal interest
by the United States.
The Board would be required to submit to USDA financial statements
on a quarterly basis, or at any other time as requested by the
Secretary. Financial statements should include, at a minimum, a balance
sheet, an income statement, and an expense budget.
Assessments
The Board's programs and expenses would be funded through
assessments on producers, importers, donations, other income, and other
funds available to the Board. The Order would provide for an initial
assessment rate of $0.15 per Christmas tree domestically produced or
imported into the United States.
This assessment rate will be reviewed by the Board after the
initial referendum is conducted (3 years after assessments first
begin). The assessment rate cannot be changed during the first three
years of operation of the Order. The assessment rate may be increased
or decreased no more than 2 cents per Christmas tree during the fiscal
period. Any change in the assessment rate within this range would be
subject to rulemaking by the Secretary. The assessment rate shall not
exceed 20 cents per Christmas tree, nor shall it be less than 10 cents
per Christmas tree, unless a majority of producers and importers
approve such other levels of assessments through a referendum conducted
pursuant to this subpart.
The number of entities assessed under the program would be
approximately 3,263. Estimated revenue is expected at $2 million of
which 10 percent is expected from imported product and 90 percent from
domestic product.
Producers would be required to pay their assessments owed to the
Board by February 15th of each fiscal period. Importer assessments
would be collected through Customs. The Order would specify a list of
numbers of the Harmonized Tariff Schedule of the United States that
would identify Christmas trees subject to assessments. If Customs did
not collect the assessment from an importer, then the importer would be
responsible for paying the assessment directly to the Board within 30
calendar days after importation.
The Order would provide authority for the Board to impose a late
payment charge and interest for assessments overdue to the Board. The
late payment charge and rate of interest would be prescribed in the
Order's regulations issued by the Secretary.
Exemptions
The Order would provide for two exemptions. First, producers who
produce domestically less than 500 Christmas trees or importers that
import less than 500 Christmas trees during a fiscal period would be
exempt from paying assessments. Producers or importers would apply to
the Board for an exemption prior to the start of the fiscal period.
This would be an annual exemption; entities would have to reapply each
year. They would have to certify that they expect to produce
domestically or import less than 500 Christmas trees for the applicable
fiscal period. The Board could request past sales or import data to
support the exemption request. The Board would then issue, if deemed
appropriate, a certificate of exemption to the eligible producer or
importer. Once approved, producers would not have to pay assessments to
the Board for the applicable fiscal period. Approved importers would
have their assessments as collected by Customs refunded by the Board
within 60 calendar days after receipt of such assessments by the Board.
No interest would be paid on the assessments collected by Customs.
Producers who did not apply to the Board for an exemption and
domestically produced or imported less than 500 Christmas trees during
the fiscal period would receive a refund from the Board for the
applicable assessments within 30 calendar days after the end of the
fiscal period. Producers who receive an exemption certificate but
domestically produce or import more than 500 Christmas trees during the
fiscal period would have to pay the Board the applicable assessments
owed within 30 calendar days after the end of the fiscal period and
submit any necessary reports to the Board.
The Board could develop additional procedures to administer the
exemption as appropriate. Such procedures would be implemented through
rulemaking by the Secretary.
The second exemption under the proposed Order would be for organic
Christmas trees. A producer who operates under an approved National
Organic Program (NOP) (7 CFR part 205) system plan, only domestically
produces Christmas trees that are eligible to be labeled as 100 percent
organic under the NOP, and is not a split operation would be exempt
from payment of assessments. Likewise, an importer who imports only
Christmas trees that is eligible to be labeled as 100 percent organic
under the NOP and who does not import any nonorganic Christmas trees
would be exempt from the payment of assessments.
Refunds
Pursuant to section 518 of the 1996 Act, section 1214.54 of the
proposed Order would specify the refund procedures if the initial
referendum does not pass. The Task Force has proposed that the proposed
Order be voted in a referendum of producers and importers three years
after assessments first begin under the Order. The Board shall
establish an interest bearing escrow account with a financial
institution that is a member of the Federal Reserve System and will
deposit into such account an amount equal to 10 percent of the
assessments collected during the period beginning on the
[[Page 68518]]
effective date of the Order and ending on the date the Secretary
announces the results of the required referendum.
If the required referendum fails, the Board shall promptly pay
refunds of assessments to all producers and importers that have paid
assessments during the period beginning on the effective date of the
Order and ending on the date the Secretary announces the results of the
required referendum in the manner specified in the proposed Order.
Producers and importers shall notify the Board, in a manner specified
by the Secretary, within 30 days after the announcement of the
referendum of their demand to receive a refund.
If the amount deposited in the escrow account is less than the
amount of all refunds that producers and importers subject to the Order
have a right to receive, the Board shall prorate the amount deposited
in such account among all producers and importers who desire a refund
of assessments paid no later than 90 days after the required referendum
results are announced by the Secretary.
If the proposed Order is approved by the required referendum
conducted under this section, the Board will close the escrow account
and all funds will be available to the Board under section 1214.50.
Promotion, Research and Information
Pursuant to section 516 of the 1996 Act, Sec. Sec. 1214.60 through
1214.62 of the proposed Order would detail requirements regarding
promotion, research and information projects authorized under the
Order. The Board would develop and submit to the Secretary for approval
plans and programs regarding promotion, research, education, and other
activities, including consumer and industry information and advertising
designed to, among other things, build markets for Christmas trees, and
enhance the image and reputation of Christmas trees. The Board would be
required to evaluate each plan and program to ensure that it
contributes to an effective promotion program. Christmas trees of all
origins would have to be treated equally by the Board, and no program,
plan, or project could be false, misleading, or disparage against
another agricultural commodity.
The Order would also require that, at least once every five years,
the Board fund an independent evaluation of the effectiveness of the
Order and programs conducted by the Board. Finally, the Order would
specify that any patents, copyrights, trademarks, inventions, product
formulations and publications developed through the use of funds
received by the Board would be the property of the U.S. Government, as
represented by the Board. These along with any rents, royalties and the
like from their use would be considered income subject to the same
fiscal, budget, and audit controls as other funds of the Board, and
could be licensed with approval of the Secretary.
Reports, Books and Records
Pursuant to section 515 of the 1996 Act, Sec. Sec. 1214.70 through
1214.72 specify the reporting and recordkeeping requirements under the
proposed Order as well as requirements regarding confidentiality of
information.
Producers and importers would be required to submit periodically to
the Board certain information as the Board may request. Specifically,
producers and importers would submit a report to the Board that would
include, but not be limited to, the producers' or importers' name and
address; the number of trees produced or imported; the number of
Christmas trees on which the assessment was paid; and the date the
assessment was paid. Producers and importers would submit this report
at the same time they remit their assessments to the Board. Producers
or importers who received a certificate of exemption from the Board
would not have to submit such a report to the Board. Importers who paid
their assessments through Customs would not have to submit such reports
to the Board because Customs would collect this information upon entry.
However, exempt producers or importers who domestically produced or
imported over the exemption threshold of 500 Christmas trees during the
fiscal period would have to submit such reports to the Board with the
payment of assessments as specified in Sec. 1214.53.
The Board would have the flexibility to request additional
information from producers and importers as deemed appropriate to
administer the Order. Additionally, producers and importers, including
those who were exempt, would be required to maintain books and records
needed to verify any required reports. Such books and records must be
made available during normal business hours for inspection by the
Board's or USDA's employees or agents. Producers and importers would be
required to maintain such books and records for two years beyond the
applicable fiscal period.
The Order would also require that all information obtained from
persons subject the Order as a result of proposed recordkeeping and
reporting requirements would be kept confidential by all officers,
employees, and agents of the Board and USDA. Such information could
only be disclosed if the Secretary considered it relevant, and the
information were revealed in a judicial proceeding or administrative
hearing brought at the direction or at the request of the Secretary or
to which the Secretary or any officer of USDA were a party. Other
exceptions for disclosure of confidential information would include the
issuance of general statements based on reports or on information
relating to a number of persons subject to the Order, if the statements
did not identify the information furnished by any person, or the
publication, by direction of the Secretary, of the name of any person
violating the Order and a statement of the particular provisions of the
Order violated.
Miscellaneous Provisions
Referenda
Pursuant to section 518 of the 1996 Act, Sec. 1214.81(a)(1) of the
proposed Order specifies that the program would be implemented and a
referendum conducted three years after assessments first begin under
the Order. The Order would not continue unless it is approved by a
majority of those persons voting in the referendum for approval.
Section 1214.81(b) of the proposed Order specifies criteria for
subsequent referenda. Under the Order, a referendum would be held to
ascertain whether the program should continue, be amended, or be
terminated. This section specifies that a referendum would be held
every seven years to determine whether producers and importers favor
continuation of the Order. The Order would continue if favored by a
majority of producers and importers voting in the referendum.
Additionally, a referendum could be conducted at the request of the
Board. A referendum could also be conducted at the request of 10
percent or more of the number of persons eligible to vote in a
referendum under the Order. Finally, a referendum could be conducted at
any time as determined by the Secretary.
Other Miscellaneous Provisions
Section 1214.80 and Sec. Sec. 1214.82 through 1214.88 describe the
rights of the Secretary; authorize the Secretary to suspend or
terminate the Order when deemed appropriate; prescribe proceedings
after termination; address personal liability, separability, and
amendments; and provide OMB control numbers. These provisions are
common to all research and promotion programs authorized under the 1996
Act.
[[Page 68519]]
Initial Regulatory Flexibility Act Analysis
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. Accordingly, AMS has considered the economic impact of
this action on small entities.
The purpose of the RFA is to fit regulatory actions to the scale of
businesses subject to such actions so that small businesses will not be
disproportionately burdened. The Small Business Administration defines,
in 13 CFR part 121, small agricultural producers as those having annual
receipts of no more than $750,000 and small agricultural service firms
(producers and importers) as those having annual receipts of no more
than $7.0 million.
Under these criteria, the majority of the producers that would be
affected by this Proposed Order would be considered small entities,
while most importers would not. Producers and importers who
domestically produce or imported less than 500 Christmas trees annually
would be exempt from the assessment. Organic producers and importers
also would be exempt from assessments. The number of entities assessed
under the program would be approximately 3,263. Estimated revenue is
expected at $2 million of which 10 percent is expected from imported
product and 90 percent from domestic product.
According to the Task Force, based on data from the 2007 Census of
Agriculture, there were approximately 12,255 Christmas tree farms that
produced Christmas trees in the United States. Approximately 25 percent
of the producers, or 3,100 Christmas tree producers, would be subject
to the assessment based on the exemption of those producing less than
500 trees would be exempt from assessments. Approximately 95 percent of
these producers subject to the assessment would be considered small
entities under SBA criteria. During 2007, 47 out of 50 States produced
Christmas trees in the United States. Oregon, Michigan, Wisconsin,
North Carolina, and Pennsylvania together produced more than 75 percent
of the trees produced in 2007. In 2008, there were approximately 200
importers. Based on the 2008 U.S. Customs data, 163 importers that
imported more than 500 Christmas trees would be subject to the
assessment rate under the proposed Order.
This proposed rule invites comments on a proposed industry-funded
research, promotion, and information program for fresh cut Christmas
trees. The program would be financed by an assessment on Christmas tree
producers and importers and would be administered by a board of
industry members selected by the Secretary. The initial assessment rate
would be $0.15 per Christmas tree domestically produced or imported to
the United States and could be increased to $0.20 per Christmas tree.
Entities that domestically produce or import less than 500 Christmas
trees within a crop year would be exempt. The purpose of the program
would be to strengthen the position of Christmas trees in the
marketplace, and maintain and expand markets for Christmas trees. A
referendum would be held among eligible producers and importers to
determine whether they favor implementation of the program three years
after the first assessments begin. The Order would continue if favored
by a majority of producers and importers voting in the referendum. The
program is authorized under the 1996 Act.
Regarding the economic impact of the proposed Order on affected
entities, Christmas tree producers and importers would be required to
pay assessments to the Board. As previously mentioned, the initial
assessment rate would be $0.15 per Christmas tree domestically produced
or imported to the United States and could be increased to no more than
$0.20 per Christmas tree.
Regarding the impact on the industry as a whole, the proposed
program is expected to help stabilize prices and grow demand for fresh
cut Christmas trees. The Christmas tree industry hopes to achieve a
stable funding base to promote Christmas now and into the future.
Regarding alternatives, the Christmas tree industry has already
considered and implemented voluntary programs, but based on past
experience, these programs only worked in the short term; until monies
were depleted.
This action would impose additional reporting and recordkeeping
burden on producers and importers of fresh cut Christmas trees.
Producers and importers interested in serving on the Board may be asked
to submit a nomination form to the Board indicating their desire to
serve or nominating another industry member to serve on the Board.
Interested persons would also submit a background statement outlining
their qualifications to serve on the Board. Producers and importers
would have the opportunity to cast a ballot and vote for candidates to
serve on the Board. Producer and importer nominees to the Board would
have to submit a background form to the Secretary to ensure they are
qualified to serve on the Board.
Additionally, producers and importers who domestically produce or
import less than 500 Christmas trees annually could submit a request to
the Board for an exemption from paying assessments on this volume.
Producers and importers also would report regarding their sales/imports
that would accompany their assessments paid to the Board. Producers and
importers who would qualify as 100 percent organic under the NOP could
submit a request to the Board for an exemption from assessments.
Finally, producers and importers who wanted to participate in a
referendum to vote on whether the Order should continue would have to
complete a ballot for submission to the Secretary. These forms are
being submitted to OMB for approval under OMB Control No. 0581-NEW.
Specific burdens for the forms are detailed later in this document in
the section titled Paperwork Reduction Act. As with all Federal
promotion programs, reports and forms are periodically reviewed to
reduce information requirements and duplication by industry and public
sector agencies. Finally, USDA has not identified any relevant Federal
rules that duplicate, overlap, or conflict with this proposed rule.
AMS is committed to complying with the E-Government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
Regarding outreach efforts, as previously mentioned, the Task Force
conducted sessions throughout the United Sates in different States and
regions. These were held in conjunction with regional and state
organization meetings. Approximately 50 sessions were held across the
United States. Input regarding the proposed program was incorporated
into the Task Force's 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 and recordkeeping requirements for the
proposed Christmas tree program.
Title: Research and Promotion Background Information.
OMB Number for background form AD-755: (Approved under OMB No.
0505-0001).
Expiration Date of Approval: Awaiting renewal.
[[Page 68520]]
Title: National Research, Promotion, and Consumer Information
Programs.
OMB Number: 0581-NEW.
Expiration Date of Approval: 7/31/2012.
Type of Request: New information collection for research and
promotion programs.
Abstract: The information collection requirements in the request
are essential to carry out the intent of the 1996 Act. The information
collection concerns a proposal received by USDA for a national research
and promotion program for the Christmas tree industry. The program
would be financed by an assessment on Christmas tree producers and
importers and would be administered by a board of industry members
selected by the Secretary. The program would provide for an exemption
for producers and importers that domestically produce or import less
than 500 Christmas trees during the year. A referendum would be held
among eligible producers and importers to determine whether they favor
continuation of the program three years after assessments first begin.
The purpose of the program would be to help increase demand for fresh
cut Christmas trees.
In summary, the information collection requirements under the
program concern Board nominations, refunds of assessments, exemption
applications, and the collection of assessments. For Board nominations,
producers and importers interested in serving on the Board would be
asked to submit a ``Nomination Form'' to the Board indicating their
desire to serve or to nominate another industry member to serve on the
Board. Producers and importers would have the opportunity to submit a
``Nomination Ballot'' to the Board where they would vote for candidates
to serve on the Board. Nominees would also have to submit a background
information form, ``AD-755,'' to the Secretary to ensure they are
qualified to serve on the Board.
Regarding assessments, producers and importers who domestically
produce or import less than 500 Christmas trees annually could submit a
request, ``Application for Exemption from Assessments,'' to the Board
for an exemption from paying assessments. Producers and importers may
be asked to submit a ``Sales/Import Report'' that would accompany their
assessments paid to the Board and report the quantity of Christmas
trees domestically produced or imported during the applicable period,
the quantity for which assessments were paid, and the port of entry
(for imports). As previously mentioned, the majority of importer
assessments would be collected by Customs. Customs would remit the
funds to the Board along with this information. Finally, producers and
importers who would qualify as 100 percent organic under the NOP could
submit an ``Organic Exemption Form'' to the Board and request an
exemption from assessments.
Producers and importers would also file a form to request a refund
of assessments paid if the referendum fails to pass. A referendum is
proposed to be conducted three years after the assessments first begin
to determine if producers and importers favor the continuance of the
Order.
There would also be an additional burden on producers and importers
voting in referenda. The referendum ballot, which represents the
information collection requirement relating to referenda, is addressed
in a proposed rule on referendum procedures which is published
separately in this issue of the Federal Register.
Information collection requirements that are included in this
proposal include:
(1) Background Information Form AD-755 (OMB Form No. 0505-0001)
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.5 hour per application.
Respondents: Producers and importers.
Estimated Number of Respondents: 8 (24 for initial nominations to
the Board, 8 in subsequent years).
Estimated Number of Responses per Respondent: 1 every 3 years
(0.3).
Estimated Total Annual Burden on Respondents: 12 hours for the
initial nominations to the Board and 4 hours annually thereafter.
(2) Sales/Import Report by Each Producer or Importer of Christmas Trees
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.5 hours per producer reporting on
Christmas trees produced.
Respondents: Producers and importers.
Estimated Number of Respondents: 3,110.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 1,555 hours.
(3) An Exemption Application for Producers and Importers Who Are Exempt
From Assessments
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.25 hours per producers or
importer reporting on Christmas trees sold or imported. Upon approval
of an application, producers and importers will receive exemption
certification.
Respondents: Exempt producers and importers.
Estimated Number of Respondents: 9,192.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 2,298 hours.
(4) Application for Reimbursement of Assessment
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.25 hours per request for
reimbursement.
Respondents: Importers.
Estimated Number of Respondents: 37.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 9.25 hours.
(5) 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.
Recordkeepers: Producers and importers.
Estimated Number of Recordkeepers: 12,455.
Estimated Total Recordkeeping Hours: 6,227.5 hours.
(6) Nomination Form
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.25 hours per application.
Respondents: Producers and importers.
Estimated Number of Respondents: 40.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 10.00 hours.
(7) Background Statement
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.25 hour per application.
Respondents: Producers and importers.
Estimated Number of Respondents: 40.
Estimated Number of Responses per Respondent: 1.
[[Page 68521]]
Estimated Total Annual Burden on Respondents: 10.00.
(8) Nomination Ballot
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.25 hours per application.
Respondents: Producers and importers.
Estimated Number of Respondents: 1,200.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 300 hours.
(9) 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: Producers and importers.
Estimated Number of Respondents: 5.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 2.5 hours.
(10) Application for Refund Form
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.5 hours per refund form.
Respondents: Producers, importers and organic producers and
importers.
Estimated Number of Respondents: 325.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 162.5.
As noted above, under the proposed program, producers and importers
would be required to pay assessments and file reports with and submit
assessments to the Board (importers through Customs). While the
proposed Order would impose certain recordkeeping requirements on
producers and importers, information required under the proposed Order
could be compiled from records currently maintained. Such records shall
be retained for at least two years beyond the marketing year of their
applicability.
An estimated 12,455 respondents would provide information to the
Board (12,255 producers and 200 importers). The estimated cost of
providing the information to the Board by respondents would be
$348,975. This total has been estimated by multiplying 10,575 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 programs administered by USDA and other state
programs.
The proposed forms would require the minimum information necessary
to effectively carry out the requirements of the program, and their use
is necessary to fulfill the intent of the 1996 Act. Such information
can be supplied without data processing equipment or outside technical
expertise. In addition, there are no additional training requirements
for individuals filling out reports and remitting assessments to the
Board. The forms would be simple, easy to understand, and place as
small a burden as possible on the person required to file the
information.
Collecting information quarterly 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. In addition, the information to be
included on these forms is not available from other sources because
such information relates specifically to individual producers and
importers who are subject to the provisions of the 1996 Act. Therefore,
there is no practical method for collecting the required information
without the use of these forms.
Request for Public Comment Under the Paperwork Reduction Act
Comments are invited on: (a) Whether the proposed collection of
information is necessary for the proper performance of functions of the
proposed Order and USDA's oversight of the proposed Order, including
whether the information would have practical utility; (b) the accuracy
of USDA's estimate of the burden of the proposed collection of
information, including the validity of the methodology and assumptions
used; (c) the accuracy of USDA's estimate of the principal producing
areas in the United States for Christmas trees; (d) the accuracy of
USDA's estimate of the number of producers and importers of Christmas
trees that would be covered under the program; (e) ways to enhance the
quality, utility, and clarity of the information to be collected; and
(f) ways to minimize the burden of the collection of information on
those who are to respond, including the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology.
Comments concerning the information collection requirements
contained in this action should reference OMB No. 0581-NEW. In
addition, the docket number, date, and page number of this issue of the
Federal Register also should be referenced. Comments should be sent to
the same addresses referenced in the ADDRESSES section of this proposed
rule.
OMB is required to make a decision concerning the collection of
information contained in this proposed rule between 30 and 60 days
after publication. Therefore, a comment to OMB is best assured of
having its full effect if OMB receives it within 30 days of
publication.
USDA made modifications to the proponent's proposal to conform with
other similar national research and promotion programs implemented
under the 1996 Act.
While the proposal set forth below has not received the approval of
USDA, it is determined that this proposed Order is consistent with and
would effectuate the purposes of the 1996 Act.
A 90-day comment period is provided to allow interested persons to
respond to this proposal. All written comments received in response to
this proposed rule by the date specified will be considered prior to
finalizing this action.
List of Subjects in 7 CFR Part 1214
Administrative practice and procedure, Advertising, Consumer
information, Marketing agreements, Christmas trees 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 by
adding part 1214 to read as follows:
PART 1214--CHRISTMAS TREE PROMOTION, RESEARCH, AND INFORMATION
ORDER
Subpart A--Christmas Tree Promotion, Research, and Information Order
Definitions
Sec.
1214.1 Act.
1214.2 Board.
1214.3 Christmas tree.
1214.4 Conflict of interest.
1214.5 Crop year.
1214.6 Customs.
[[Page 68522]]
1214.7 Department.
1214.8 Fiscal period.
1214.9 Importer.
1214.10 Information.
1214.11 Marketing.
1214.12 Order.
1214.13 Part and subpart.
1214.14 Person.
1214.15 Programs, plans, and projects.
1214.16 Produce.
1214.17 Producer.
1214.18 Promotion.
1214.19 Research.
1214.20 Secretary.
1214.21 State.
1214.22 Suspend.
1214.23 Terminate.
1214.24 United States.
Christmas Tree Promotion Board
1214.40 Establishment and membership.
1214.41 Nominations and appointments.
1214.42 Term of office.
1214.43 Vacancies.
1214.44 Procedure.
1214.45 Compensation and reimbursement.
1214.46 Powers and duties.
1214.47 Prohibited activities.
Expenses and Assessments
1214.50 Budget and expenses.
1214.51 Financial statements.
1214.52 Assessments.
1214.53 Exemption from and refunds of assessments.
1214.54 Refund escrow accounts.
1214.55 Refunds.
1214.56 Procedures for obtaining a refund.
Promotion, Research, and Information
1214.60 Programs, plans, and projects.
1214.61 Independent evaluation.
1214.62 Patents, copyrights, trademarks, information, publications,
and product formulations.
Reports, Books, and Records
1214.70 Reports.
1214.71 Books and records.
1214.72 Confidential treatment.
Miscellaneous
1214.80 Right of the Secretary.
1214.81 Referenda.
1214.82 Suspension and termination.
1214.83 Proceedings after termination.
1214.84 Effect of termination or amendment.
1214.85 Personal liability.
1214.86 Separability.
1214.87 Amendments.
1214.88 OMB control numbers.
Subpart B--[Reserved]
Authority: 7 U.S.C. 7411-7425; 7 U.S.C. 7401.
Subpart A--Christmas Tree Promotion, Research, and Information
Order
Definitions
Sec. 1214.1 Act.
Act means the Commodity Promotion, Research, and Information Act of
1996 (7 U.S.C. 7411-7425), and any amendments thereto.
Sec. 1214.2 Board.
Board or the Christmas Tree Promotion Board means the
administrative body established pursuant to Sec. 1214.40.
Sec. 1214.3 Christmas tree.
Christmas tree means any tree of the coniferous species, that is
severed or cut from its roots and marketed as a Christmas tree for
holiday use.
Sec. 1214.4 Conflict of interest.
Conflict of interest means a situation in which a member or
employee of the Board has a direct or indirect financial interest in a
person who performs a service for, or enters into a contract with, the
Board for anything of economic value.
Sec. 1214.5 Crop year.
Crop year means the period August 1 through July 31.
Sec. 1214.6 Customs.
Customs means the United States Customs and Border Protection or
U.S. Customs Service, an agency of the United States Department of
Homeland Security.
Sec. 1214.7 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. 1214.8 Fiscal period.
Fiscal period means the period August 1 through July 31.
Sec. 1214.9 Importer.
Importer means any person importing Christmas trees into the United
States in a fiscal period as a principal or as an agent, broker, or
consignee of any person who domestically produces Christmas trees
outside of the United States for sale in the United States, and who is
listed in the import records as the importer of record for such
Christmas trees.
Sec. 1214.10 Information.
Information means information, program, and activities that are
designed to increase efficiency in processing, enhance the development
of new markets and marketing strategies, increase market efficiency,
and enhance the image of Christmas trees and the Christmas tree
industry in the United States.
Sec. 1214.11 Marketing.
Marketing means to sell or otherwise dispose of Christmas trees in
interstate, foreign or intrastate commerce.
Sec. 1214.12 Order.
Order means an order issued by the Secretary under section 514 of
the Act that provides for a program of generic promotion, research, and
information regarding agricultural commodities authorized under the
Act.
Sec. 1214.13 Part and subpart.
Part means the Christmas Tree Promotion, Research, and Information
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. 1214.14 Person.
Person means any individual, group of individuals, partnership,
corporation, association, cooperative, or any other legal entity.
Sec. 1214.15 Programs, plans, and projects.
Programs, plans and projects mean those research, promotion and
information programs, plans, or projects established pursuant to this
Order.
Sec. 1214.16 Produce.
Produce means to engage in the cutting and selling of Christmas
trees for the holiday market.
Sec. 1214.17 Producer.
Producer means any person who is engaged in the production of
Christmas trees in the United States, and who owns, or shares the
ownership and risk of loss of the production of Christmas trees or a
person who is engaged in the business of producing, or causing to be
domestically produced, Christmas trees beyond personal use and having
value at first point of sale.
Sec. 1214.18 Promotion.
Promotion means any action, including paid advertising and public
relations that presents a favorable image of Christmas trees to the
general public with the intent of improving the perception and
competitive position of Christmas trees and stimulating sales of
Christmas trees.
Sec. 1214.19 Research.
Research means any type of test, systematic study, study,
investigation, analysis and/or evaluation designed to advance the
image, desirability, use, marketability, quality, product development,
or production of Christmas trees, including but not limited to research
related to cost of production, market development, testing the
effectiveness of market development and promotional efforts, new
species of Christmas trees and environmental issues relating to the
Christmas tree industry.
[[Page 68523]]
Sec. 1214.20 Secretary.
Secretary means the Secretary of Agriculture of the United States,
or any officer or employee of the Department to whom authority has been
delegated, or to whom authority may be delegated, to act in the
Secretary's stead.
Sec. 1214.21 State.
State means any of the several 50 States of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, and the
territories and possessions of the United States.
Sec. 1214.22 Suspend.
Suspend means to issue a rule under section 553 of title 5 U.S.C.
to temporarily prevent the operation of an order or part thereof during
a particular period of time specified in the rule.
Sec. 1214.23 Terminate.
Terminate means to issue a rule under section 553 of title 5 U.S.C.
to cancel permanently the operation of an order or part thereof
beginning on a certain date specified in the rule.
Sec. 1214.24 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.
Christmas Tree Promotion Board
Sec. 1214.40 Establishment and membership.
(a) Establishment of the Christmas Tree Promotion Board. There is
hereby established a Christmas Tree Promotion Board, composed of no
more than twelve (12) members as follows:
(1) Producer members from each of the following regions:
(i) Five producer members from Region 1--Western Region
(states from the Pacific Ocean east to the Rocky Mountains): Alaska,
Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New
Mexico, Oregon, Utah, Washington, Wyoming and all U.S. Territories
located in the Pacific Ocean.
(ii) Two producer members from Region 2--Central Region
(states east of the Rocky Mountains to the Great Lakes): Arkansas,
Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri,
Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Texas, and
Wisconsin.
(iii) Four producer members from Region 3--Eastern Region
(states east of the Great Lakes): Alabama, Connecticut, Delaware,
Florida, Georgia, Kentucky, Louisiana, New York, Maine, Maryland,
Massachusetts, Mississippi, New Hampshire, New Jersey, North Carolina,
Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia,
Vermont, Washington, D.C., West Virginia, and all U.S. Territories
located in the Atlantic Ocean and Caribbean Sea, including but not
limited to Puerto Rico.
(2) One Importer member.
(b) Adjustment of membership. At least once every five years upon
implementation of the Order, but not more frequently than once every
three years, the Board will review the geographic distribution of
United States production of Christmas trees and the quantity and source
of Christmas tree imports. The review will be conducted through State
crop production figures and Board assessment records, including the
amount of assessments collected from importers, or other government
data. If warranted, the Board will recommend to the Secretary that
membership on the Board be altered to reflect any changes in geographic
distribution of domestic Christmas tree production and the quantity of
imports. Provided, that there shall be at least one importer member on
the Board. Such adjustments shall not increase the total number of
Board members. The adjustments to the Board membership would be
submitted to the Secretary by Board recommendation and be implemented
by the Secretary through rulemaking.
Sec. 1214.41 Nominations and appointments.
(a) Voting for producer members will be made by mail ballot,
electronic mail, in person, or by facsimile.
(b) Nominations for the initial Board will be conducted by the
Department. Subsequent nominations will be conducted by the Board.
(c) The Board shall outreach to all segments of the Christmas tree
industry and solicit nominations as described in paragraphs (d) and (e)
of this section. Nominees must domestically produce or import more than
500 Christmas trees during the most recent fiscal period.
(d) Nomination of producer members will be conducted by the Board.
The Board staff will seek nominations for each vacant producer seat
from each region from producers who have paid their assessments to the
Board in the most recent fiscal period. Producers who produce Christmas
trees in more than one region may seek nomination only in the region in
which they produce the majority of their Christmas trees. For selection
to the initial Board, the Secretary would notify producers to request
nominations to the Board. Subsequent nominations will be submitted to
the Board office and placed on a ballot that will be sent to producers
in each region for a vote. Producers who produce Christmas trees in
more than one region may only vote in the region in which they produce
the majority of their Christmas trees. The nominee receiving the
highest number of votes and the nominee receiving the second highest
number of votes shall be submitted to the Department as the producers'
first and second choice nominees. The Board shall submit nominations to
the Secretary not less than 90 days prior to the expiration of the term
of office.
(e) Nominations for the importer member(s) will be conducted by the
Board. The Board will solicit importer nominations from those importers
who have paid their assessments to the Board in the most recent fiscal
period. For selection to the initial Board, the Secretary would notify
importers to request nominations to the Board. Subsequent nominations
will be submitted to the Board office and placed on a ballot that will
be sent to importers for a vote. The Board shall submit those
nominations to the Secretary not less than 90 days prior to the
expiration of the term of office. Two nominees for each importer
position will be submitted to the Secretary for consideration.
(f) From the nominations, the Secretary shall select the members of
the Board for each position on the Board. Members will serve until
their successors have been appointed by the Secretary.
Sec. 1214.42 Term of office.
Board members will serve for a term of three years and be able to
serve a maximum of two consecutive three-year terms. When the Board is
first established, the members will be assigned initial terms of two,
three, and four years. Initial terms will be staggered to assure
continuity of the Board. The term of office will begin on January 1 and
conclude on December 31. Members serving the initial term of two and
four years will be eligible to serve a second term of three years.
Thereafter, each of the positions will carry a full three year term.
Board members shall serve during the term of office for which they have
been appointed and qualified, and until their successors are appointed
and have qualified.
Sec. 1214.43 Vacancies.
(a) In the event that any member of the Board ceases to be a member
of the category of membership from which the member was appointed to
the Board, such position shall automatically become vacant.
[[Page 68524]]
(b) If a member of the Board consistently refuses to perform the
duties of a member of the Board, or if a member of the Board engages in
acts of dishonesty or willful misconduct, the Board may recommend to
the Secretary that the member be removed from office. If the Secretary
finds the recommendation of the Board shows adequate cause, the
Secretary may remove such member from office. Further, without
recommendation of the Board, a member may be removed by the Secretary
upon showing of adequate cause, including the failure by a member to
submit reports or remit assessments required under this part, if the
Secretary determines that such member's continued service would be
detrimental to the achievement of the purposes of the Act.
(c) Should any member position become vacant, successors for the
unexpired terms of such member shall be appointed in the manner
specified in Sec. 1214.41. A vacancy will not be required to be filled
if the unexpired term is less than six months.
Sec. 1214.44 Procedure.
(a) At a Board meeting, it will be considered a quorum when a
majority of the Board members is present.
(b) All Board members will receive a minimum of 14 days advance
notice of all Board and committee meetings, except when emergency
circumstances exist and meetings need to be held prior to the advance
notice.
(c) Each member of the Board will be entitled to one vote on any
matter put to the Board. For any action of the Board to pass, at least
a majority of the Board members present must vote in support of such
action.
(d) The Board may appoint committees as necessary. It will be
considered a quorum at a committee meeting when at least a majority of
those appointed to the committee are present. Committees may consist of
persons other than Board members, and such persons may vote in
committee meetings as the Board shall determine. These committee
members shall serve without compensation, but shall be reimbursed for
reasonable travel expenses, as approved by the Board.
(e) In lieu of voting at a properly convened meeting, and when, in
the opinion of the Board's chairperson, such action is considered
necessary, the Board may take action by mail, telephone, electronic
mail, facsimile, or any other means of communication. 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) A majority of the members vote in favor of the action; and
(3) All votes are promptly confirmed in writing and recorded in the
Board minutes.
(f) There shall be no voting by proxy.
(g) The chairperson shall be a voting member.
Sec. 1214.45 Compensation and reimbursement.
The members of the Board shall serve without compensation but shall
be reimbursed for reasonable travel expenses, as approved by the Board,
incurred by them in the performance of their duties as Board members.
Sec. 1214.46 Powers and duties.
The Board shall have the following powers and duties:
(a) To administer the Order in accordance with its terms and
conditions and to collect assessments;
(b) To develop and recommend to the Secretary for approval such
bylaws as may be necessary for the functioning of the Board, and such
rules as may be necessary to administer the Order, including activities
authorized to be carried out under the Order;
(c) To meet, organize, and select from among the members of the
Board a chairperson, other officers, committees, and subcommittees, as
the Board determines to be appropriate, provided that the committee and
subcommittee members may also include individuals other than Board
members;
(d) To notify producers and importers of all Board meetings through
press releases or other means;
(e) To give the Secretary the same notice of meetings of the Board
and committees as is given to members, including committee members if
committee members are not members of the Board, in order that the
Secretary's representative(s) may attend such meetings, and to keep and
report minutes of each meeting of the Board and all committees to the
Secretary;
(f) To appoint and convene, from time to time, committees that may
include importers, exporters, producers or other members of the
Christmas tree industry and public to assist in the development of
research, promotion, advertising, and information programs for
Christmas trees;
(g) To employ persons, other than members, as the Board considers
necessary to assist the Board in carrying out its duties and to
determine the compensation and specify the duties of such persons;
(h) To act as intermediary between the Secretary and any producer
or importer;
(i) To furnish to the Secretary any information or records that the
Secretary may request;
(j) To receive, investigate, and report to the Secretary complaints
of violations of the Order;
(k) To maintain such records and books and prepare and submit such
reports and records from time to time to the Secretary as the Secretary
may require and to make the records available to the Secretary for
inspection and audit; to make appropriate accounting with respect to
the receipt and disbursement of all funds entrusted to it; and to keep
records that accurately reflect the actions and transactions of the
Board;
(l) To recommend to the Secretary such amendments to the Order as
the Board considers appropriate;
(m) To develop and carry out generic promotion, research, and
information activities relating to Christmas trees;
(n) To work to achieve an effective, continuous, and coordinated
program of promotion, research, evaluation, and information designed to
strengthen the Christmas tree industry's position in the marketplace;
maintain and expand existing markets for Christmas trees; and to carry
out programs, plans, and projects designed to provide maximum benefits
to the Christmas tree industry;
(o) To develop programs, plans, and projects, and enter into
contracts or agreements, which must be approved by the Secretary before
becoming effective, for the development and carrying out of programs or
projects of research, information, or promotion, and the payment of
costs thereof with funds collected pursuant to this subpart. Each
contract or agreement shall provide that any person who enters into a
contract or agreement with the Board shall develop and submit to the
Board a proposed activity; keep accurate records of all of its
transactions relating to the contract or agreement; account for funds
received and expended in connection with the contract or agreement;
make periodic reports to the Board of activities conducted under the
contract or agreement; and make such other reports available as the
Board or the Secretary considers necessary. Any contract or agreement
shall provide that:
(1) The contractor or agreeing party shall develop and submit to
the Board a program, plan, or project together with a budget or budgets
that shall show the estimated cost to be incurred for such program,
plan, or project;
(2) The contractor or agreeing party shall keep accurate records of
all its transactions and make periodic reports
[[Page 68525]]
to the Board of activities conducted, submit accounting for funds
received and expended, and make such other reports as the Secretary or
the Board may require;
(3) The Secretary may audit the records of the contracting or
agreeing party periodically; and
(4) Any subcontractor who enters into a contract with a Board
contractor and who receives or otherwise uses funds allocated by the
Board shall be subject to the same provisions as the contractor;
(p) To prepare and submit for approval of the Secretary, within 60
days after assessments are due to the Board, rates of assessment and a
fiscal period budget of the anticipated expenses to be incurred in the
administration of the Order, in accordance with Sec. 1214.50;
(q) To borrow funds necessary for the startup expenses of the
order;
(r) To invest assessments collected under this part in accordance
with Sec. 1214.50;
(s) To pay the cost of the activities with assessments collected
under Sec. 1214.52;
(t) To recommend adjustments to the assessments as provided in
Sec. 1214.52;
(u) To periodically prepare, make public and to make available to
producers and importers, reports of its activities and, at least once
each fiscal period, to make public an accounting of funds received and
expended; and
(v) To cause its books to be audited by an independent certified
public accountant at the end of each fiscal period and at such other
times as the Secretary may request, and to submit a report of the audit
directly to the Secretary.
Sec. 1214.47 Prohibited activities.
The Board may not engage in, and shall prohibit the employees and
agents of the Board from engaging in:
(a) Any action that would be a conflict of interest;
(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 or
any subdivision thereof, other than recommending to the Secretary
amendments to the Order; and
(c) No program, plan, or project including advertising shall be
false or misleading or disparaging to another agricultural commodity.
Christmas trees of all origins shall be treated equally.
Expenses and Assessments
Sec. 1214.50 Budget and expenses.
(a) Within 60 days after assessments are due to the Board, and as
may be necessary thereafter, the Board shall prepare and submit to the
Secretary a budget for the fiscal period covering its anticipated
expenses and disbursements in administering this part. Each 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 part.
(c) Subject to this section, any amendment or addition to an
approved budget must be approved by the Secretary, including shifting
funds from one program, plan, or project to another.
(d) The Board is authorized to incur such expenses, including
provision for a reserve, as the Secretary finds are reasonable and
likely to be incurred by the Board for its maintenance and functioning,
and to enable it to exercise its powers and perform its duties in
accordance with the provisions of this part. Such expenses shall be
paid from funds received by the Board.
(e) With approval of the Secretary, the Board may borrow money for
the payment of administrative expenses, subject to the same fiscal,
budget, and audit controls as other funds of the Board. Any such funds
borrowed by the Board shall be expended for startup costs 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 approved by the Secretary. Such contributions shall
be free from any encumbrance by the donor and the Board shall retain
complete control of their use.
(g) In accordance with Sec. 1214.54, the Board shall deposit funds
in a refund escrow account and shall not use such funds for expenses,
except as provided for in that section.
(h) 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.
(i) The Board shall reimburse the Secretary for all expenses
incurred by the Secretary in the implementation, administration,
enforcement, and supervision of the Order, including all referendum
costs in connection with the Order.
(j) The Board may not expend for administration, maintenance, and
functioning of the Board in any fiscal period an amount that exceeds 10
percent of the assessments and other income received by or available to
the Board for that fiscal period. Reimbursements to the Secretary
required under paragraph (i) of this section are excluded from this
limitation on spending.
(k) 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 of expenses. Subject to approval by the
Secretary, such reserve funds may be used to defray any expenses
authorized under this part.
(l) Pending disbursement of assessments and all other revenue under
a budget approved by the Secretary, the Board may invest assessments
and all other revenues collected under this section in:
(1) Obligations of the United States or any agency of the United
States;
(2) General obligations of any State or any political subdivision
of a State;
(3) Interest bearing accounts or certificates of deposit of
financial institutions that are members of the Federal Reserve System;
or
(4) Obligations fully guaranteed as to principal interest by the
United States.
Sec. 1214.51 Financial statements.
(a) The Board shall prepare and submit quarterly financial
statements to the Secretary, or at any other time requested by the
Secretary. Each such financial statement shall include, but not be
limited to, a balance sheet, income statement, and expense budget. The
expense budget shall show expenditures during the time period covered
by the report, year-to-date expenditures, and the unexpended budget.
(b) Each financial statement shall be submitted to the Secretary
within 45 days after the end of the time period to which it applies.
(c) The Board shall submit annually to the Secretary an annual
financial statement within 90 days after the end of the fiscal period
to which it applies.
Sec. 1214.52 Assessments.
(a) The funds to cover the Board's expenses shall be paid from
assessments on producers, importers, and donations
[[Page 68526]]
from any person including those not subject to assessments under this
Order, and other funds available to the Board including those collected
pursuant to Sec. 1214.62 and subject to the limitations contained
therein.
(b) The payment of assessments on domestic Christmas trees that are
cut and sold will be the responsibility of the producer who produces
the Christmas trees or causes the trees to be cut.
(c) Each importer of Christmas trees shall pay the assessment to
the Board on Christmas trees imported for marketing in the United
States, through Customs. If Customs does not collect an assessment from
an importer, the importer would be responsible for paying the
assessment directly to the Board 30 calendar days after importation.
(1) The assessment rate for imported Christmas trees shall be the
same or equivalent to the rate for Christmas trees domestically
produced in the United States.
(2) The import assessment shall be uniformly applied to imported
Christmas trees that are identified by the numbers 0604.91.00.20,
0604.91.00.40, and 0604.91.00.60 in the Harmonized Tariff Schedule of
the United States or any other numbers used to identify Christmas trees
in that schedule.
(3) The assessments due on imported Christmas trees shall be paid
when they enter into the United States.
(d) Such assessments shall be levied at an initial rate of 15 cents
per Christmas tree domestically produced or imported into the United
States. The assessment rate will be reviewed by the Board, after the
initial referendum is conducted pursuant to this subpart. The
assessment rate may be increased or decreased no more than 2 cents per
Christmas tree during the fiscal period. Any change in the assessment
rate shall be subject to rulemaking by the Department. The assessment
rate shall not exceed 20 cents per Christmas tree, nor shall it be less
than 10 cents per Christmas tree, unless a majority of producers and
importers approve such other levels of assessment through a referendum
conducted pursuant to this subpart.
(e) All assessment payments and reports will be submitted to the
office of the Board. All assessment payments are to be received no
later than February 15 of the crop year following for producers and
importers of Christmas trees. A late payment charge, may be imposed on
any producer or importer who fails to remit to the Board, the total
amount for which any such producer or importer is liable on or before
the due date established by the Board. In addition to the late payment
charge, an interest charge may be imposed on the outstanding amount for
which the producer or importer is liable. The rate for late payment and
interest charges shall be specified by the Secretary through
rulemaking.
(f) Persons failing to remit total assessments due in a timely
manner may also be subject to actions under Federal debt collection
procedures.
(g) The Board may authorize other organizations, to collect
assessments on its behalf with the approval of the Secretary.
Sec. 1214.53 Exemption from and refunds of assessments.
(a) Producers that domestically produce and importers that import
less than 500 Christmas trees. (1) Any producer who domestically
produces less than 500 Christmas trees who desires to claim an
exemption from assessments as provided in Sec. 1214.52 shall file an
application on a form by the Board, for a certificate of exemption.
Such producer shall certify that he/she will domestically produce less
than 500 trees for the fiscal period for which the exemption is
claimed. It is the responsibility of the producer to retain a copy of
the certificate of exemption.
(2) Any importer who imports less than 500 trees in a fiscal period
who desires to claim an exemption from assessments as provided in Sec.
1214.52 shall file an application on a form by the Board, for a
certificate of exemption. Such importer shall certify that the
importer's total imports of Christmas trees are fewer than 500 trees
for the fiscal period for which the exemption is claimed. It is the
responsibility of the importer to retain a copy of the certificate of
exemption.
(3) On receipt of an exemption application, the Board shall
determine whether an exemption may be granted. The Board will then
issue, if deemed appropriate, a certificate of exemption to the
producer or importer which is eligible to receive one.
(4) The Board, with the Secretary's approval, may require persons
receiving an exemption from assessments to provide to the Board reports
on the disposition of exempt Christmas trees and, in the case of
importers, proof of payment of assessments.
(5) The exemption will apply immediately following the issuance of
the certificate of exemption.
(6) Producers and importers who received an exemption certificate
from the Board but domestically produced or imported more than 500
Christmas trees during the fiscal period shall pay the Board the
applicable assessments owed and submit any necessary reports to the
Board pursuant to Sec. 1214.70.
(7) The Board may develop additional procedures as it deems
necessary for accurately accounting for this exemption. Such procedures
shall be implemented through rulemaking by the Secretary.
(b) Assessment refunds to importers. (1) Importers who are exempt
from assessment shall be eligible for a refund of assessments collected
by Customs during the applicable fiscal period. No interest will be
paid on assessments collected by Customs. The Board shall refund such
importers their assessments as collected by Customs no later than 60
calendar days after receipt by the Board.
(c) Organic. (1) Organic Act means section 2103 of the Organic
Foods Production Act of 1990 (7 U.S.C. 6502).
(2) A producer who domestically produces Christmas trees under an
approved National Organic Program (NOP) (7 CFR part 205) system plan,
produces only products that are eligible to be labeled as 100 percent
organic under the NOP and is not a split operation shall be exempt from
payment of assessments. To obtain an organic exemption, an eligible
producer shall submit a request for exemption to the Board, on a form
provided by the Board, at any time initially and annually thereafter on
or before the start of the fiscal period as long as such producer
continues to be eligible for the exemption. The request shall include
the following: The producer's name and address; a copy of the organic
operation certificate provided by a USDA-accredited certifying agent as
defined in the Organic Act, a signed certification that the applicant
meets all of the requirements specified for an assessment exemption,
and such other information as may be required by the Board and with the
approval of the Secretary. The Board shall have 30 calendar days to
approve the exemption request. If the exemption is not granted, the
Board will notify the applicant and provide reasons for the denial
within the same time frame.
(3) An importer who imports only Christmas trees 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. To obtain an
organic exemption, an eligible importer must submit documentation to
the Board and request an exemption from assessment on 100 percent of
organic Christmas trees, on a form provided by the Board, at any time
initially and annually thereafter on or before the beginning of the
fiscal period as long as the importer continues to be eligible for the
[[Page 68527]]
exemption. This documentation shall include the same information as
required by producers in paragraph (c)(2) of this section. If the
importer complies with the requirements of this section, the Board will
grant the exemption and issue a Certificate of Exemption to the
importer. The Board will also issue the importer a 9-digit alphanumeric
Harmonized Tariff Schedule of the United States (HTSUS) classification
valid for 1 year from the date of issue. This HTSUS classification
should be entered by the importer on the Customs entry documentation.
Any line item entry of 100 percent organic Christmas trees bearing this
HTSUS classification assigned by the Board will not be subject to
assessments.
(4) Importers who are exempt from assessment in paragraph (c)(3) of
this section shall also be eligible for reimbursement of assessments
collected by Customs and may apply to the Board for a reimbursement.
The importer would be required to submit satisfactory proof to the
Board that the importer paid the assessment on exempt organic products.
(5) The exemption will apply immediately following the issuance of
the exemption certificate.
Sec. 1214.54 Refund escrow accounts.
(a) The Board shall establish an interest bearing escrow account
with a financial institution that is a member of the Federal Reserve
System and will deposit into such account an amount equal to 10 percent
of the assessments collected during the period beginning on the
effective date of the Order and ending on the date the Secretary
announces the results of the required referendum.
(b) If the Order is not approved by the required referendum, the
Board shall promptly pay refunds of assessments to all producers and
importers that have paid assessments during the period beginning on the
effective date of the Order and ending on the date the Secretary
announces the results of the required referendum in the manner
specified in paragraph (c) of this section.
(c) If the amount deposited in the escrow account is less than the
amount of all refunds that producers and importers subject to the Order
have a right to receive, the Board shall prorate the amount deposited
in such account among all producers and importers who desire a refund
of assessments paid no later than 90 days after the required referendum
results are announced by the Secretary.
(d) Any producer or importer requesting a refund shall submit an
application on the prescribed form to the Board within 60 days from the
date the assessments were paid by such producer or importer but no
later than the date the results of the required referendum are
announced by the Secretary. The producer and importer shall also submit
documentation to substantiate that assessments were paid. Any such
demand shall be made by such producer or importer in accordance with
the provisions of this subpart and in a manner consistent with
regulations recommended by the Board and prescribed by the Secretary.
(e) If the Order is approved by the required referendum conducted
under Sec. 1214.71 then:
(1) The escrow account shall be closed; and,
(2) The funds shall be available to the Board for disbursement
under Sec. 1214.50.
Promotion, Research, and Information
Sec. 1214.60 Programs, plans, and projects.
(a) The Board shall receive and evaluate, or on its own initiative,
develop and submit to the Secretary for approval any program, plan, or
project authorized under this subpart. Such programs, plans, or
projects shall provide for:
(1) The establishment, issuance, effectuation, and administration
of appropriate programs for promotion, research, and information,
including producer and consumer industry information, with respect to
Christmas trees;
(2) The establishment and conduct of research with respect to the
image, desirability, use, marketability, quality, product development
or production of Christmas trees, to the end that the marketing and use
of Christmas trees may be encouraged, expanded, improved, or made more
acceptable and to advance the image, desirability, or quality of
Christmas trees.
(b) A program, plan, or project may not be implemented prior to
approval of the program, plan, or project by the Secretary. Once a
program, plan, or project is so approved, the Board shall take
appropriate steps to implement it.
(c) Each program, plan, or project implemented under this subpart
shall be reviewed or evaluated periodically by the Board to ensure that
it contributes to an effective program of promotion, research, or
information. If it is found by the Board that any such program, plan,
or project does not contribute to an effective program of promotion,
research, or information, then the Board shall terminate such program,
plan, or project.
Sec. 1214.61 Independent evaluation.
The Board shall, not less often than once every five years,
authorize and fund, from funds otherwise available to the Board, an
independent evaluation of the effectiveness of the Order and programs
conducted by the Board pursuant to the Act. The Board shall submit to
the Secretary, and make available to the public, the results of each
periodic independent evaluation conducted under this paragraph.
Sec. 1214.62 Patents, copyrights, trademarks, information,
publications, and product formulations.
Patents, copyrights, trademarks, information, publications, and
product formulations developed through the use of funds received by the
Board under this subpart shall be the property of the U.S. Government
as represented by the Board and shall, along with any rents, royalties,
residual payments, or other income from the rental, sales, leasing,
franchising, or other uses of such patents, copyrights, trademarks,
information, publications, or product formulations, inure to the
benefit of the Board, shall be considered income subject to the same
fiscal, budget, and audit controls as other funds of the Board, and may
be licensed subject to approval by the Secretary. Upon termination of
this subpart, Sec. 1214.73 shall apply to determine disposition of all
such property.
Reports, Books, and Records
Sec. 1214.70 Reports.
(a) Each producer and importer subject to this subpart shall be
required to provide to the Board periodically such information as
required by the Board, with the approval of the Secretary, which may
include but not be limited to the following:
(1) Number of trees produced or total imports;
(2) Number of Christmas trees on which an assessment was paid;
(3) Name and address of producer or importer; and
(4) Date assessment was paid on each Christmas tree produced or
imported.
(b) All reports required under Sec. 1214.70 are due to the Board
by February 15 of the crop year.
(c) This report shall accompany the payment of the collected
assessments.
Sec. 1214.71 Books and records.
Each producer and importer subject to this subpart, including those
who are exempt under this subpart, shall maintain any books and records
necessary to carry out the provisions of this subpart and the
regulations issued thereunder, including such records as
[[Page 68528]]
are necessary to verify any reports required. Such books and records
must be made available during normal business hours for inspection by
the Board's or Secretary's employees or agents. Such records shall be
retained for at least two years beyond the fiscal period of their
applicability.
Sec. 1214.72 Confidential treatment.
All information obtained from books, records, or reports under the
Act, this subpart, and the regulations issued thereunder shall be kept
confidential by all persons, including all employees and former
employees of the Board, all officers and employees and former officers
and employees of contracting and subcontracting agencies or agreeing
parties having access to such information. Such information shall not
be available to Board members, producers, or importers. Only those
persons having a specific need for such information to effectively
administer the provisions of this subpart shall have access to such
information. Only such information so obtained as the Secretary deems
relevant shall be disclosed by them, and then only in a judicial
proceeding or administrative hearing brought at the direction, or on
the request, of the Secretary, or to which the Secretary or any officer
of the United States is a party, and involving this subpart. Nothing in
this section shall be deemed to prohibit:
(a) The issuance of general statements based upon the reports of
the number of persons subject to this subpart or statistical data
collected therefrom, which statements do not identify the information
furnished by any person; and
(b) The publication, by direction of the Secretary, of the name of
any person who has been adjudged to have violated this subpart,
together with a statement of the particular provisions of this subpart
violated by such person.
Miscellaneous
Sec. 1214.80 Right of the Secretary.
All fiscal matters, programs, plans, or projects, rules or
regulations, contracts, reports, or other substantive actions proposed
or prepared by the Board shall be submitted to the Secretary for
approval.
Sec. 1214.81 Referenda.
(a) Required referendum. For the purpose of ascertaining whether
the persons subject to this Order favor the continuation, suspension,
amendment, or termination of this Order, the Secretary shall conduct a
referendum among persons subject to assessments under Sec. 1214.52
who, during a representative period determined by the Secretary, have
engaged in the production or importation of Christmas trees:
(1) The first referendum shall be conducted not later than 3 years
after assessments first begin under the Order;
(2) The order will be approved in a referendum if a majority of
producers and importers vote for approval in the referendum.
(b) Subsequent referenda. The Secretary shall conduct subsequent
referenda:
(1) For the purpose of ascertaining whether producers and importers
favor the continuation, suspension, or termination of the Order;
(2) Every seven years the Secretary shall hold a referendum to
determine whether producers and importers of Christmas trees favor the
continuation of the Order. The Order shall continue if it is favored by
a majority of producers and importers voting for approval in the
referendum who have been engaged in the production or importation of
Christmas trees;
(3) At the request of the Board established in this Order;
(4) At the request of 10 percent or more of the number of persons
eligible to vote in a referendum as set forth under the Order; or
(5) At any time as determined by the Secretary.
Sec. 1214.82 Suspension or termination.
(a) The Secretary shall suspend or terminate this part or subpart
or a provision thereof, if the Secretary finds that the subpart or a
provision thereof obstructs or does not tend to effectuate the purpose
of the Act, or if the Secretary determines that this subpart or a
provision thereof is not favored by persons voting in a referendum
conducted pursuant to the Act.
(b) The Secretary shall suspend or terminate this subpart at the
end of the fiscal period whenever the Secretary determines that its
suspension or termination is favored by a majority of producers and
importers voting in a referenda who, during a representative period
determined by the Secretary, have been engaged in the production or
importation of Christmas trees.
(c) If, as a result of a referendum the Secretary determines that
this subpart is not approved, the Secretary shall:
(1) Not later than one hundred and eighty (180) days after making
the determination, suspend or terminate, as the case may be, collection
of assessments under this subpart; and
(2) As soon as practical, suspend or terminate, as the case may be,
activities under this subpart in an orderly manner.
Sec. 1214.83 Proceedings after termination.
(a) Upon the termination of this subpart, the Board shall recommend
not more than three of its members to the Secretary to serve as
trustees for the purpose of liquidating the affairs of the Board. Such
persons, upon designation by the Secretary, shall become trustees of
all of the funds and property then in the possession or under control
of the Board, including claims for any funds unpaid or property not
delivered, or any other claim existing at the time of such termination.
(b) The said trustees shall:
(1) Continue in such capacity until discharged by the Secretary;
(2) Carry out the obligations of the Board under any contracts or
agreements entered into pursuant to the Order;
(3) From time to time account for all receipts and disbursements
and deliver all property on hand, together with all books and records
of the Board and the trustees, to such person or persons as the
Secretary may direct; and
(4) Upon request of the Secretary execute such assignments or other
instruments necessary and appropriate to vest in such persons title and
right to all funds, property and claims vested in the Board or the
trustees pursuant to the Order.
(c) Any person to whom funds, property or claims have been
transferred or delivered pursuant to the Order shall be subject to the
same obligations imposed upon the Board and upon the trustees.
(d) Any residual funds not required to defray the necessary
expenses of liquidation shall be turned over to the Secretary to be
disposed of, to the extent practical, to one or more Christmas tree
organizations in the United States in the interest of continuing
Christmas tree promotion, research, and information programs.
Sec. 1214.84 Effect of termination or amendment.
Unless otherwise expressly provided by the Secretary, the
termination of this subpart or of any regulation issued pursuant
thereto, or the issuance of any amendment to either thereof, shall not:
(a) Affect or waive any right, duty, obligation or liability which
shall have arisen or which may thereafter arise in connection with any
provision of this subpart or any regulation issued thereunder.
(b) Release or extinguish any violation of this subpart or any
regulation issued thereunder.
(c) Affect or impair any rights or remedies of the United States,
or of the
[[Page 68529]]
Secretary or of any other persons, with respect to any such violation.
Sec. 1214.85 Personal liability.
No member or employee of the Board shall be held personally
responsible, either individually or jointly with others, in any way
whatsoever, to any person for errors in judgment, mistakes, or other
acts, either of commission or omission, as such member or employee,
except for acts of dishonesty or willful misconduct.
Sec. 1214.86 Separability.
If any provision of this subpart is declared invalid or the
applicability thereof to any person or circumstances is held invalid,
the validity of the remainder of this subpart or the applicability
thereof to other persons or circumstances shall not be affected
thereby.
Sec. 1214.87 Amendments.
Amendments to this subpart may be proposed from time to time by the
Board or by any interested person affected by the provisions of the
Act, including the Secretary.
Sec. 1214.88 OMB control numbers.
The control number assigned to the information collection
requirements by the Office of Management and Budget pursuant to the
Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35, is OMB control
number 0505-0001, and OMB control number 0581-NEW.
Subpart B--[Reserved]
Dated: November 2,2010.
David R. Shipman,
Acting Administrator.
[FR Doc. 2010-28038 Filed 11-5-10; 8:45 am]
BILLING CODE 3410-02-P