2880 Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 1223 

[Document Number AMS–SC–20–0013; FR] 

Pecan Promotion, Research, and 

Information Order 

AGENCY: Agricultural Marketing Service. 

ACTION: Final rule. 

SUMMARY: This rule establishes the 

Pecan Promotion, Research, and 

Information Order (Order). This rule 

also establishes the procedures for 

conducting a referendum to determine 

whether the continuation of the 

proposed Order is favored by domestic 

producers and importers of pecans. In 

addition, this rule announces the 

Agricultural Marketing Service’s (AMS) 

approval of new pecan information 

collection requirements by the Office of 

Management and Budget (OMB) for the 

operation of the Order. 

DATES: Effective Date February 12, 2021. 

Collection of assessments as required by 

§§ 1223.52 and 1223.53 and compliance 

with reporting and recordkeeping 

requirements under §§ 1223.60 and 

1223.61 will begin October 1, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Andrea Ricci, Marketing Specialist, 

Promotion and Economics Division, 

Specialty Crops Program, AMS, USDA, 

755 E Nees Avenue, #25985, Fresno, CA 

93720; telephone: (202) 572–1442; or 

electronic mail: Andrea.Ricci@usda.gov. 

SUPPLEMENTARY INFORMATION: This is 

issued pursuant to the Commodity 

Promotion, Research, and Information 

Act of 1996 (1996 Act) (7 U.S.C. 7411– 

7425). 

As part of this rulemaking process, a 

proposed rule was published in the 

Federal Register on September 22, 2020 

(85 FR 59610). That rule provided for a 

60-day comment period, which ended 

on November 23, 2020. Fifty-four 

comments were received. All comments 

are addressed later in this final rule. 

Executive Orders 12866, 13563, and 

13771 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts and equity). 

Executive Order 13563 emphasizes the 

importance of quantifying both costs 

and benefits, reducing costs, 

harmonizing rules, and promoting 

flexibility. This action falls within a 

category of regulatory actions that the 

Office of Management and Budget 

(OMB) exempted from Executive Order 

12866 review. Additionally, because 

this rule does not meet the definition of 

a significant regulatory action, it does 

not trigger the requirements contained 

in Executive Order 13771. See OMB’s 

Memorandum titled ‘‘Interim Guidance 

Implementing Section 2 of the Executive 

Order of January 30, 2017, titled 

‘Reducing Regulation and Controlling 

Regulatory Costs’ ’’ (February 2, 2017). 

Executive Order 13175 

This action has been reviewed in 

accordance with the requirements of 

Executive Order 13175, Consultation 

and Coordination with Indian Tribal 

Governments. The review reveals that 

this regulation will not have substantial 

and direct effects on Tribal governments 

and will not have significant Tribal 

implications. 

Executive Order 12988 

This action has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. It is not intended to have 

retroactive effect. Section 524 of the 

1996 Act (7 U.S.C. 7423) provides that 

it shall not affect or preempt any other 

Federal or State law authorizing 

promotion or research relating to an 

agricultural commodity. 

Section 519 of the 1996 Act (7 U.S.C. 

7418) provides that a person subject to 

an order may file a written petition with 

the U.S. Department of Agriculture 

(USDA) stating that an order, any 

provision of an order, or any obligation 

imposed in connection with an order, is 

not established in accordance with the 

law, and request a modification of an 

order or an exemption from an order. 

Any petition filed challenging an order, 

any provision of an order, or any 

obligation imposed in connection with 

an order, must be filed within two years 

after the effective date of an order, 

provision, or obligation subject to 

challenge in the petition. The petitioner 

would have the opportunity for a 

hearing on the petition. Thereafter, 

USDA will issue a ruling on the 

petition. The 1996 Act provides that the 

district court of the United States for 

any district in which the petitioner 

resides or conducts business shall have 

the jurisdiction to review a final ruling 

on the petition, if the petitioner files a 

complaint for that purpose not later 

than 20 days after the date of the entry 

of USDA’s final ruling. 

Background 

This rule establishes the Pecan 

Promotion, Research, and Information 

Order (7 CFR part 1223) (Order). The 

purpose of the program is to strengthen 

the position of pecans in the 

marketplace, maintain and expand 

markets for pecans, and develop new 

uses for pecans. The proposal was 

submitted to USDA by the National 

Pecan Federation (NPF), an organization 

representing pecan growers and shellers 

across the United States whose mission 

is to promote, protect, and improve 

business conditions for the pecan 

industry. The program will be financed 

by an assessment on producers and 

importers and will be administered by 

a board of industry members selected by 

the Secretary. The initial assessment 

rate will be $0.02 per pound of inshell 

pecans and $0.04 per pound of shelled 

pecans produced within or imported to 

the United States. Entities that produce 

or import less than 50,000 pounds of 

inshell pecans (25,000 pounds of 

shelled pecans) on average for four 

fiscal periods (the fiscal period for 

which the exemption is claimed and the 

previous three fiscal periods) will be 

exempt from the payment of 

assessments. Assessment collection, 

along with the appropriate reporting 

and recordkeeping, will become 

effective October 1, 2021. This date 

aligns with the Order’s fiscal period. 

A referendum will be conducted 

among producers and importers to 

determine if pecan producers and 

importers favor the continuation of the 

program three years after the collection 

of assessment begins. 

Legal Basis for Action 

The Order is authorized under the 

1996 Act which authorizes USDA to 

establish agricultural commodity 

research and promotion orders which 

may include a combination of 

promotion, research, industry 

information, and consumer information 

activities funded by mandatory 

assessments. These programs are 

designed to maintain and expand 

markets and uses for agricultural 

commodities. 

The 1996 Act provides several 

optional provisions that allow the 

tailoring of orders for different 

commodities. Section 516 of the 1996 

Act provides permissive terms for 

orders, and other sections provide for 

alternatives. For example, section 514 of 

the 1996 Act provides for orders 

applicable to (1) producers, (2) first 

handlers and others in the marketing 

chain as appropriate, and (3) importers 

(if imports are subject to assessments). 

Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 2881 

Section 516 states that an order may 

include an exemption of de minimis 

quantities of an agricultural commodity; 

different payment and reporting 

schedules; coverage of research, 

promotion, and information activities to 

expand, improve, or make more efficient 

the marketing or use of an agricultural 

commodity in both domestic and 

foreign markets; a provision for reserve 

funds; a provision for credits for generic 

and branded activities; and assessment 

of imports. 

In addition, section 518 of the 1996 

Act provides for referenda to ascertain 

approval of an order to be conducted 

either prior to its going into effect or 

within three years after assessments first 

begin under the order. Pursuant to 

section 518 of the 1996 Act, an order 

may also provide for its approval in a 

referendum based upon different voting 

patterns. Section 515 provides for 

establishment of a board from among 

producers, first handlers and others in 

the marketing chain as appropriate, and 

importers, if imports are subject to 

assessment. 

USDA currently oversees a marketing 

order for pecans grown in Alabama, 

Arkansas, Arizona, California, Florida, 

Georgia, Kansas, Louisiana, Missouri, 

Mississippi, North Carolina, New 

Mexico, Oklahoma, South Carolina, and 

Texas, (7 CFR part 986) which is 

authorized under the Agricultural 

Marketing Agreement Act of 1937, as 

amended (7 U.S.C. 601–674). The 

purpose of marketing orders, in general, 

is to stabilize market conditions, 

allowing industries to work together to 

solve marketing problems, and to 

improve profitability. The pecan 

marketing order authorizes collection of 

industry data; research and promotion 

activities; regulations on grade, size, 

quality, pack and container; and is 

financed by assessments paid by 

handlers of pecans grown in the 

production area. 

The purpose of research and 

promotion programs, in general, is to 

provide a framework for agricultural 

industries to pool their resources and 

combine efforts to develop new markets, 

strengthen existing markets and conduct 

important research and promotion 

activities. The pecan research and 

promotion program will be national in 

scope, financed by an assessment on 

pecan producers and importers, and 

authorize research and promotion 

activities. USDA has not identified any 

relevant Federal rules that duplicate, 

overlap, or conflict with this rule. 

Industry Background 

The pecan industry is comprised of 

producers, shellers, accumulators, 

wholesalers, and importers that 

produce, process, and supply pecans for 

market. Pecans include any and all 

varieties or subvarieties, inshell or 

shelled, of Carya illinoinensis. Pecans 

are grown primarily in Alabama, 

Arkansas, Arizona, California, Florida, 

Georgia, Kansas, Louisiana, Missouri, 

Mississippi, North Carolina, New 

Mexico, Oklahoma, South Carolina, and 

Texas. According to the most recent 

Census of Agriculture (2017), there are 

15,608 operations with bearing acreage 

of pecans. Bearing acreage is greatest in 

Georgia with about 30 percent of the 

nationwide total, followed by Texas at 

27 percent, Oklahoma at 22 percent, 

New Mexico at 11 percent, and Arizona 

at 4 percent. These five states generally 

account for about 95 percent of U.S. 

pecan production. 

U.S. Supply and Consumption 

Pecans are an alternate bearing crop, 

causing variability in production from 

year to year. Based on data from the 

National Agricultural Statistics Service 

(NASS), the 2014 to 2019 six-year 

average of total U.S. pecan production 

was almost 265 million pounds on an 

inshell basis, as shown in Table 1. 

Together, Georgia and New Mexico 

produced more than half of pecan 

volume nationwide. 

From 2013 through 2016, pecan 

production averaged about 263 million 

pounds per year, and reached a peak in 

2017 at nearly 305 million pounds. The 

following year, however, domestic 

production dropped 21 percent due to 

the destruction of the Georgia pecan 

crop by Hurricane Michael. The trend of 

U.S. pecan production is depicted in 

Chart 1. 

BILLING CODE 3410–02–P 

2882 Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 

In 2018, Hurricane Michael swept 

across the southern half of Georgia as a 

Category 3 storm. According to the 

University of Georgia Pecan Extension, 

this storm resulted in a loss of nearly 

half the expected 2018 crop and a loss 

of 17 percent of the state’s pecan 

acreage. The effects of Hurricane 

Michael remain present as the 2019 

Georgia crop was down nearly 30 

percent from the average production of 

the six years prior to the storm. Prior to 

Hurricane Michael, Georgia was the top 

pecan-producing state in the U.S. 

Considering this, along with the state’s 

recovery efforts, the University of 

Georgia Pecan Extension expects 

Georgia pecan production to rebound in 

the coming years. Pecan production 

nationwide began to increase in 2019, 

climbing six percent from 2018. 


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Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 2883 

Table 2 shows U.S. pecan supply and 

utilization. Domestic production 

generally accounts for about 40 percent 

of the domestic supply, while imports 

account for nearly one-third, with 

beginning stocks just under 30 percent. 

Almost all pecans imported into the 

U.S. are from Mexico. Of these, 70 

percent are shelled, and 30 percent are 

inshell. 

Nearly half of the U.S. supply of 

pecans is consumed domestically each 

year. Per capita consumption has 

trended upward for the last four years, 

reaching a high of 1.20 inshell pounds 

in 2019. Compared to 2018 and to the 

2013 to 2018 six-year average, 2019 per 

capita consumption is up 23 percent 

and 33 percent, respectively. 

Exports 

The U.S. exports about 24 percent of 

its pecan supply on average each year. 

Shelled pecans make up 60 percent of 

U.S. pecan exports, while inshell are 40 

percent. Europe and Canada are the 

primary markets for shelled pecans 

with, on average, 49 percent and 24 

percent, respectively, of total shelled 

exports. In Europe, the largest 

consumers of U.S. shelled pecans are 

the Netherlands, the United Kingdom, 

and Germany with 39 percent, 24 

percent, and 15 percent, respectively, of 

total shelled exports to Europe. On 

average, about 94 percent of U.S. inshell 

exports go to Asia. Together, Hong Kong 

and China make up 72 percent of the 

Asian market for inshell pecan exports 

from the United States. 

Competition 

The pecan industry competes with 

other tree nut industries such as 

almonds, pistachios and walnuts. As 

Table 3 illustrates, sales by volume of 

pecans are 95 percent lower than sales 

of almonds, 74 percent lower than sales 

of walnuts, but 40 percent higher than 

sales of pistachios. 


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Prices received by growers, as shown 

in Table 4, are 25 percent lower for 

pecans than for almonds. Compared to 

other nuts, grower-received prices for 

pecans are 18 percent lower than those 

for pistachios, but double those for 

walnuts. 

Price Trends 

Chart 2 shows the trend of prices for 

pecans from 2013 to 2019. In recent 

years, pecan prices were at their highest 

in 2016 before dropping in the following 

two years. Prices increased slightly 

between 2018 and 2019 but are still 

down about 12 percent compared to the 

average of the previous six years. 


ER13JA21.003</GPH> ER13JA21.004</GPH>
Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 2885 

1Based on historic compound annual growth 

rates (CAGR’s) in global pecan supply and demand 

for 10 years from 2008 to 2018; resultant CAGR’s 

of 6 percent for global supply and demand applied 

to 2018 estimates to forecast 2028 figures. 

BILLING CODE 3410–02–C 

Need for a Program 

According to the NPF, the greatest 

challenge the pecan industry is facing is 

supply surpassing demand. Data from 

the International Nut and Dried Fruit 

Council and from the research compiled 

by the Boston Consulting Group, 

contracted by the NPF, show that the 

supply of pecans may exceed demand 

by 19 percent in 2028.1 The NPF 

believes the establishment of a national 

research and promotion program for 

pecans will help the industry address 

this challenge. NPF concluded that 

without a program funded by 

assessments from both domestically 

produced and imported pecans, the 

industry will not be able to meet the 

challenge of the approaching supply 

and demand imbalance. 

In 2016, the U.S. pecan industry 

favored the establishment of a marketing 

order for pecans grown in Alabama, 

Arkansas, Arizona, California, Florida, 

Georgia, Kansas, Louisiana, Missouri, 

Mississippi, North Carolina, New 

Mexico, Oklahoma, South Carolina, and 

Texas. The program authorizes 

collection of industry data; research and 

promotion activities; regulation of 

grade, size, quality, pack and container; 

and is financed by assessments paid by 

handlers of pecans grown in the 

production area. Over the past several 

years the marketing order program has 

launched marketing campaigns to 

increase demand for pecans. According 

to the NPF, the research and promotion 

program will benefit domestic 

producers and importers of pecans, 

thereby justifying the collection of 

assessments on both domestic 

production and imports. 

The NPF proposal indicates that 

imported product accounts for 

approximately 39 percent of pecans 

being supplied to the U.S., with 

domestic production accounting for the 

other 61 percent. With mandatory 

assessments being collected only on 

domestic production, this has created a 

gap in the dollars available to fund 

marketing campaigns focused on 

creating increased demand for pecans in 

the U.S. and globally. Per the NPF, the 

increase in domestic production and 

imports has created the need for a 

robust promotion campaign, which 

would only be accomplished through 

financial contribution by both domestic 

producers and importers. The NPF 

concluded that the marketing order 

would continue to have an important 

role within the industry and the intent 

is that the two programs would work 

together to benefit the entire pecan 

industry. 

Provisions of Program 

Pursuant to section 513 of the 1996 

Act, §§ 1223.1 through 1223.25 of 7 CFR 

part 1223 (referred to as the ‘‘Order’’) 

define certain terms that will be used 

throughout the Order. Several of the 

terms are common to all research and 

promotion programs authorized under 

the 1996 Act, while other terms are 

specific to the pecans Order. 

Pursuant to section 515 of the 1996 

Act, §§ 1223.40 through 1223.47 of the 

Order detail the establishment of the 

American Pecan Promotion Board 

(Board), nominations and appointments, 

the term of office, removal and 

vacancies, procedure, compensation and 

reimbursement, powers and duties, and 

prohibited activities. 

Pursuant to sections 516 and 517 of 

the 1996 Act, §§ 1223.50 through 

1223.54 of the Order detail requirements 

regarding the Board’s budget and 

expenses, financial statements, 

assessments, and exemption from 

assessments. 

The Board’s programs and expenses 

shall be funded through assessments on 

producers and importers, other income, 

and other funds available to the Board. 

The Order provides for an initial 

assessment rate of $0.02 per pound on 

all inshell pecans and $0.04 per pound 

on all shelled pecans. Each producer 

will pay on the amount of pecans 

produced in the United States. The 

importer of record will pay assessments 

based on the amount of pecans imported 

to the United States. 

The Order provides that it is the 

responsibility of the first handler to 

collect and remit assessments owed to 

the Board. First handlers will collect 

assessments from each producer based 

on pounds of pecans received. The first 

handler will remit those assessments, 

along with the required reports, to the 

Board. If a producer is acting as its own 

first handler, the producer will be 

required to remit its individual 

assessments. Assessments owed will be 

due to the Board by the 10th calendar 

day of the month following the end of 


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2886 Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 

the previous month. As an example, 

assessments for pecans received in June 

will be due to the Board by July 10th. 

Importer assessments will be 

collected through Customs and Border 

Protection (Customs). If Customs does 

not collect the assessment from an 

importer, the importer will be 

responsible for paying the assessment 

directly to the Board by the 10th 

calendar day of the month following the 

month the pecans were imported into 

the United States. 

The Order provides authority for the 

Board to impose a late payment charge 

and interest for assessments not 

received within 30 calendar days of the 

date assessments were due. The late 

payment charge and rate of interest are 

prescribed in Subpart C of the Order. 

The Order provides for two 

exemptions from assessment 

requirements. First, producers who 

produce domestically and importers 

that import less than 50,000 pounds of 

inshell pecans (25,000 pounds of 

shelled pecans) on average for four 

fiscal periods (the fiscal period for 

which the exemption is claimed and the 

previous three fiscal periods) will be 

exempt. Producers or importers seeking 

an exemption shall apply to the Board 

for an exemption prior to the start of the 

fiscal period. This is an annual 

exemption; entities must reapply each 

year. The Board will issue, if deemed 

appropriate, a certificate of exemption 

to the eligible producer or importer. 

The second exemption under the 

Order is for organic pecans. The 

exemption applies to all certified 

‘‘organic’’ or ‘‘100 percent organic’’ 

pecans, regardless of whether the 

pecans are produced by a person who 

produces conventional or nonorganic 

pecans. Likewise, an importer who 

imports pecans that are certified as 

‘‘organic’’ or ‘‘100 percent organic’’ 

under the NOP, or certified as ‘‘organic’’ 

or ‘‘100 percent organic’’ under a U.S. 

equivalency arrangement established 

under the NOP, will be exempt from the 

payment of assessments. 

Pursuant to section 516 of the 1996 

Act, §§ 1223.55 through 1223.57 of the 

Order detail requirements regarding 

promotion, research and information 

programs, plans and projects authorized 

under the Order. 

Pursuant to section 515 of the 1996 

Act, §§ 1223.60 through 1223.62 of the 

Order specify the reporting and 

recordkeeping requirements under the 

Order as well as requirements regarding 

confidentiality of information. 

Pursuant to section 518 of the 1996 

Act, § 1223.71(a)(1) of the Order 

specifies that a referendum will be 

conducted not later than three years 

after assessments first begin under the 

Order. The Order will not continue 

unless it is approved by a majority of 

those persons voting in the referendum 

for approval. 

Section 1223.71(b) of the Order 

specifies criteria for subsequent 

referenda. Under the Order, a 

referendum will be held to ascertain 

whether the program should continue, 

be amended, or terminated. 

Sections 1223.70 and 1223.72 through 

1223.78 describe the rights of the 

Secretary; authorize the Secretary to 

suspend or terminate the Order when 

deemed appropriate; prescribe 

proceedings after termination; address 

personal liability, separability, and 

amendments; and provide OMB control 

numbers. These provisions are common 

to all research and promotion programs 

authorized under the 1996 Act. 

Sections 1223.100 through 1223.107 

of the Order specify procedures for the 

conduct of referenda. The sections cover 

the definitions, voting instructions, use 

of subagents, ballots, the referendum 

report, and confidentiality of 

information. 

Regulatory Flexibility Analysis 

Pursuant to the requirements set forth 

in the Regulatory Flexibility Act (5 

U.S.C. 601–612), USDA has considered 

the economic impact of this action on 

small entities. USDA has prepared this 

Final Regulatory Flexibility Analysis, 

the purpose of which is to fit regulatory 

actions to the scale of businesses subject 

to such actions in order that small 

businesses will not be unduly or 

disproportionately burdened. 

Need for Regulation 

NPF stated in its proposal that the 

greatest challenge facing the pecan 

industry is supply outpacing demand. 

Based on worldwide planting and crop 

data, NPF estimated that supply would 

exceed demand by 15 percent in 2027. 

NPF believes that the establishment of 

a national research and promotion 

program for pecans, funded by 

assessments on both domestic producers 

and importers, will help the industry 

address this challenge. 

In 2016, the U.S. pecan industry 

favored the establishment of a marketing 

order for pecans grown in Alabama, 

Arkansas, Arizona, California, Florida, 

Georgia, Kansas, Louisiana, Missouri, 

Mississippi, North Carolina, New 

Mexico, Oklahoma, South Carolina, and 

Texas. The program authorizes 

collection of industry data; research and 

promotion activities; regulations on 

grade, size, quality, pack and container; 

and is financed by assessments paid by 

handlers of pecans grown in the 

production area. Over the past several 

years, the marketing order program has 

launched marketing campaigns to 

increase demand for pecans. 

According to the NPF, the research 

and promotion program will benefit 

domestic producers and importers of 

pecans, thereby justifying the collection 

of assessments on both domestic 

production and imports. The NPF 

proposal indicates that imported 

product accounts for approximately 39 

percent of pecans being supplied to the 

United States. With mandatory 

assessments applied to both domestic 

production and imports, the Order will 

be able to fund marketing campaigns 

focused on creating increased demand 

for pecans in the United States and 

globally. The NPF concluded that the 

marketing order would continue to have 

an important role within the industry 

and the intent is that the two programs 

would work together for the benefit of 

the entire pecan industry. The research 

and promotion program would 

concentrate its efforts on activities that 

would maintain and expand markets for 

pecans, strengthening its position in the 

marketplace. The marketing order 

would continue its primary 

responsibility of collection and 

distribution of industry data to 

empower stakeholders with accurate 

and timely information. Additionally, 

the marketing order provides the 

authority for the pecan industry to make 

recommendations on grade, size, 

quality, pack and container 

requirements. 

Objectives of the Action 

The purpose of the Order is to 

strengthen the position of pecans in the 

marketplace, maintain and expand 

markets for pecans, and develop new 

uses for pecans. 

Legal Basis for Action 

The Order is authorized under the 

1996 Act which authorizes USDA to 

establish agricultural commodity 

research and promotion orders which 

may include a combination of 

promotion, research, industry 

information, and consumer information 

activities funded by mandatory 

assessments. These programs are 

designed to maintain and expand 

markets and uses for agricultural 

commodities. 

USDA currently administers a 

marketing order for pecans grown in 

Alabama, Arkansas, Arizona, California, 

Florida, Georgia, Kansas, Louisiana, 

Missouri, Mississippi, North Carolina, 

New Mexico, Oklahoma, South 

Carolina, and Texas which is authorized 

under the Agricultural Marketing 

Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 2887 

Agreement Act of 1937. The purpose of 

marketing orders, in general, is to 

stabilize market conditions, allowing 

industries to work together to solve 

marketing problem, improving 

profitability. Marketing order programs’ 

mandatory assessments are paid by 

handlers within the designated 

production areas. The pecan marketing 

order authorizes collection of industry 

data; research and promotion activities; 

regulations on grade, size, quality, pack 

and container; and is financed by 

assessments paid by handlers of pecans 

grown in the production area. 

The pecan research and promotion 

program is national in scope, financed 

by an assessment on pecan producers 

and importers, and authorizes research 

and promotion activities. The purpose 

of the Order is to strengthen the position 

of pecans in the marketplace, maintain 

and expand markets for pecans, and 

develop new uses for pecans. USDA has 

not identified any relevant Federal rules 

that duplicate, overlap, or conflict with 

this rule. 

Potentially Affected Small Entities 

In 13 CFR part 121, the Small 

Business Administration (SBA) defines 

the threshold at which an operation 

would be considered ‘‘small’’ based on 

its North American Industry 

Classification System (NAICS) Code. For 

Tree Nut Farming operations (NAICS 

Code 111335) and Fruit and Tree Nut 

Combination Farming operations 

(NAICS Code 111336), an operation is 

considered to be ‘‘small’’ if its annual 

receipts total no more than $1 million. 

This standard applies to U.S. pecan 

producers. 

Importers and first handlers of inshell 

and shelled pecans (HTS Codes 

0802901000 and 0802901500, 

respectively) belong to the industry 

classification of Postharvest Crop 

Activities (NAICS Code 115114). 

‘‘Postharvest crop activities’’ include 

nut hulling and shelling, sorting, 

grading, packing, and cooling. An 

operation that meets this definition is 

considered to be ‘‘small’’, per the SBA, 

if its annual receipts equal no more than 

$30 million. Table 5 depicts the number 

of pecan producers, importers, and 

handlers that would be considered 

small under these SBA standards. 

According to the 2017 Census of 

Agriculture, published by NASS in 

2019, there were 15,608 farms with 

pecan bearing acreage. Of these 15,608 

farms, 440 sold pecans whose market 

value met or exceeded $1 million. Based 

on these figures, 97 percent of U.S. 

pecan producers are considered to be 

‘‘small’’ under the SBA standards. 

USDA recognizes the potential 

inclusion in its count of ‘‘small’’ farms 

those farms whose sales of pecans were 

exactly $1 million in market value; 

however, USDA lacks the data to 

remedy this, and the number of farms 

who meet this criterion is likely quite 

small. 

According to data from Customs, 

there were 190 importers of inshell and 

shelled pecans from 2014 to 2019. Of 

these, four importers had a six-year 

average sales value of pecans which 

exceeded $30 million. The portion of 

pecan importers that would be 

considered to be ‘‘small’’ under the SBA 

standards, therefore, is 98 percent. 

The definition of a ‘‘small’’ importer 

also applies to a first handler; that is, 

annual receipts which exceed $30 

million. According to the American 

Pecan Council (APC), there were 104 

first handlers who reported pecans 

handled in crop year 2018. Of these, the 

APC estimates that about 75 percent 

recorded annual receipts exceeding $30 

million. 

Of the 15,902 total entities expected 

to be impacted by this action, including 

producers, importers, and first handlers, 

about 97 percent would be considered 

to be ‘‘small’’ according to their 

respective SBA size standards. While 

the benefits of the Order are difficult to 

quantify, the benefits are expected to 

outweigh the program’s costs. 

Compliance Requirements 

This action imposes a reporting and 

recordkeeping burden on producers, 

importers, and first handlers of pecans. 

Producers and importers who 

domestically produce or import less 

than 50,000 pounds of inshell pecans 

(25,000 pounds of shelled pecans) on 

average for four fiscal periods (the fiscal 

period for which the exemption is 

claimed and the previous three fiscal 

periods) may submit to the Board an 

application for exemption from paying 

assessments. Of the 15,168 domestic 

producers considered to be small under 

SBA standards, 14,618 of them, or 96 

percent, produced less than 50,000 

pounds, inshell, of pecans, and will be 

exempt from assessment. Of the 186 

importers considered to be small under 

SBA standards, 119 of them, or 64 

percent, imported less than 50,000 

pounds, inshell of pecans, and will also 

be exempt from assessment. The 

reporting and recordkeeping burden to 

file an application for exemption from 

assessment will impact a total of 14,737 

producers and importers considered to 

be small under their respective SBA size 

standards. Importers, and first handlers, 

who collect the assessments from 

producers, will be required to file a 

report listing pecans imported or 

received from each producer. This 

report will place a reporting and 

recordkeeping burden on a total of 149 

importers and first handlers considered 

to be small under their SBA size 

standard of annual receipts of no more 

than $30 million. 

These forms have been submitted to 

OMB for approval under OMB Control 

No. 0581–NEW. Specific burdens for the 

forms are detailed later in this 

document in the section titled 

Paperwork Reduction Act. As with all 

Federal promotion programs, reports 

and forms are periodically reviewed to 

reduce information requirements and 


ER13JA21.006</GPH>
2888 Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 

duplication by industry and public 

sector agencies. 

Alternatives To Minimize Impacts of the 

Rule 

Regarding alternatives, USDA 

considered de minimis exemptions of 

30 acres of pecans, 1,000 pounds, 

inshell, of pecan volume, and $1 million 

in annual pecan sales receipts. These 

alternatives, which are fully discussed 

in the section titled De Minimis in the 

proposed rule, were rejected in favor of 

the industry-proposed de minimis 

exemption of 50,000 pounds, inshell, or 

25,000 pounds, shelled. USDA also 

considered the alternative of no action; 

that is, the status quo. This alternative, 

however, would leave the pecan 

industry without the tools of a research 

and promotion program to strengthen 

the position of pecans in the 

marketplace, maintain and expand 

markets for pecans, and develop new 

uses for pecans. In place of a research 

and promotion program, the NPF 

discussed amending the Agricultural 

Marketing Agreement Act of 1937, 

which provides authority for the pecan 

marketing order. The NPF stated in its 

proposal for a pecan research and 

promotion program that it decided not 

to move forward with this alternative 

due to the time and costs involved in 

amending U.S. law. 

Outreach 

Regarding outreach efforts, NPF 

conducted sessions earlier in 2020 

throughout the United States in 

different States and regions. Many were 

held in conjunction with regional and 

state organization meetings where both 

pecan producers and importers 

participated. They also presented at the 

National Pecan Shellers Association 

(NPSA) mid-winter conference. NPSA 

supports and promotes the interest of 

pecan shellers and the global industry. 

Approximately 13 sessions were held 

across the United States. NPF also had 

information regarding the proposed 

program published in April 2020 

editions of the ‘‘The Pecan Grower’’ and 

‘‘Pecan South’’ magazines. ‘‘The Pecan 

Grower’’ is the official publication of the 

Georgia Pecan Growers Association, 

with nearly three thousand subscribers 

including growers, researchers, 

extension agents and agribusinesses. 

‘‘Pecan South’’ is a magazine for 

growers, processors, commercial 

vendors, and those interested in pecans. 

It provides to its more than forty-six 

hundred subscribers U.S. pecan 

production information; industry news 

and events; and market-related issues, 

both domestic and international. In the 

articles, NPF elaborated the work it has 

been doing to establish a research and 

promotion program for pecans that 

would assess producers and importers. 

On June 9, 2020, AMS published a 

Notice to Trade alerting the industry 

that it had received a proposal from the 

NPF requesting the establishment of a 

research and promotion program for 

pecans. A proposed rule providing a 60- 

day comment period was published in 

the Federal Register on September 22, 

2020 (85 FR 59610). AMS published a 

Notice to Trade on September 22, 2020, 

alerting the industry that it was seeking 

comments on the proposal. 

Subsequently, AMS sent a postcard and 

an email to all known pecan producers 

and importers notifying them of the 

Federal Register published proposal. 

AMS is committed to complying with 

the E-Government Act, to promote the 

use of the internet and other 

information technologies to provide 

increased opportunities for citizen 

access to Government information and 

services, and for other purposes. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act (PRA) of 1995 (44 U.S.C. 

Chapter 35), AMS requested approval of 

new information collection and 

recordkeeping requirements for the 

pecan program. 

Title: Advisory Committee or 

Research and Promotion Background 

Information. 

OMB Number for background form 

AD–755: (Approved under OMB No. 

0505–0001). 

Expiration Date of Approval: 03/31/ 

2022. 

Title: National Research, Promotion, 

and Consumer Information Programs. 

Expiration Date of Approval: 3 years 

from approval date. 

Type of Request: New information 

collection for research and promotion 

programs. 

Abstract: The information collection 

requirements in the request are essential 

to carry out the intent of the 1996 Act. 

The information collection concerns a 

new national research and promotion 

program for the pecan industry. The 

program will be financed by an 

assessment on pecan producers and 

importers and will be administered by 

a board of industry members selected by 

the Secretary. The program will provide 

for an exemption for producers who 

produce domestically and importers 

that import less than 50,000 pounds of 

inshell pecans (25,000 pounds of 

shelled pecans) on average for four 

fiscal periods (the fiscal period for 

which the exemption is claimed and the 

previous three fiscal periods). A 

referendum will be held among eligible 

producers and importers to determine 

whether they favor implementation of 

the program not later than three years 

after assessments first begin under the 

Order. The purpose of the program will 

be to strengthen the position of pecans 

in the marketplace, maintain and 

expand markets for pecans, and develop 

new uses for pecans within the United 

States. 

In summary, the information 

collection requirements under the 

program concern Board nominations, 

exemption applications, the collection 

and refund of assessments, and 

referenda. For Board nominations, 

producers and importers interested in 

serving on the Board will be asked to 

submit a ‘‘Nomination Form’’ to the 

Board indicating their desire to serve or 

to nominate another industry member to 

serve on the Board. Interested persons 

may also submit a background statement 

outlining qualifications to serve on the 

Board. Except for the initial Board 

nominations, producers and importers 

will have the opportunity to submit a 

‘‘Nomination Ballot’’ to the Board where 

they will vote for candidates to serve on 

the Board. Nominees will also have to 

submit a background information form, 

‘‘AD–755,’’ to the Secretary to ensure 

they are qualified to serve on the Board. 

Organizations representing importers 

will be able to be certified by the 

Secretary and have an opportunity to 

nominate importer members. Those 

such organizations must submit the 

form ‘‘Application for Certification of 

Organization.’’ 

Regarding assessments, producers and 

importers who domestically produce 

and import less than 50,000 pounds of 

inshell pecans (25,000 pounds of 

shelled pecans) on average for four 

fiscal periods (the fiscal period for 

which the exemption is claimed and the 

previous three fiscal periods), will be 

exempt from assessments. Producers or 

importers shall apply to the Board for an 

exemption prior to the start of the fiscal 

period. This will be an annual 

exemption; entities will have to reapply 

each year. Producers or importers may 

submit a request, ‘‘Application for 

Exemption from Assessments,’’ to the 

Board for an exemption from paying 

assessments. Producers and importers 

who qualify as ‘‘organic’’ or ‘‘100 

percent organic’’ under the NOP may 

submit an ‘‘Organic Exemption Form’’ 

to the Board and request an exemption 

from assessments. 

First handlers who receive 

assessments from producers will be 

asked to submit a ‘‘First Handler/ 

Importer Report’’ that will accompany 

their assessments paid to the Board and 

report the quantity of pecans received 

Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 2889 

during the applicable period, the 

quantity for which assessments were 

paid, contact information for whom they 

collected the assessment, and the 

country of export (for imports). 

Additionally, only importers who pay 

their assessments directly to the Board 

will be required to submit a report. As 

previously mentioned, the majority of 

importer assessments will be collected 

by Customs. Customs will remit the 

funds to the Board and the other 

information will be available from 

Customs (i.e., country of export, 

quantity of pecans imported). 

Importers and producers who are 

exempt and whose assessments were 

collected, either by Customs or a first 

handler, may also request a refund of 

any assessments paid to the Board. 

Producers and importers may also file a 

form to request a refund of assessments 

paid if the referendum fails to pass. A 

referendum will be conducted not later 

than three years after the assessments 

first begin to determine if producers and 

importers favor continuance of the 

Order. 

Lastly, producers and importers 

eligible to vote in a referendum will 

have to complete a ballot to determine 

whether the research and promotion 

program would continue. 

Information collection requirements 

that are included in this rule include: 

(1) Nomination Form 

Estimate of Burden: Public 

recordkeeping burden for this collection 

of information is estimated to average 

0.25 hour per application. 

Respondents: Producers and 

importers. 

Estimated Number of Respondents: 

50. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 12.5 hours. 

(2) Background Statement 

Estimate of Burden: Public 

recordkeeping burden for this collection 

of information is estimated to average 

0.25 hour per application. 

Respondents: Producers and 

importers. 

Estimated Number of Respondents: 

50. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 12.5 hours. 

(3) Nomination Ballot 

Estimate of Burden: Public 

recordkeeping burden for this collection 

of information is estimated to average 

0.25 hour per application. 

Respondents: Producers and 

importers. 

Estimated Number of Respondents: 

900. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 225 hours. 

(4) Background Information Form AD– 

755 (OMB Form No. 0505–0001) 

Estimate of Burden: Public reporting 

for this collection of information is 

estimated to average 0.5 hour per 

response for each Board nominee. 

Respondents: Producers and 

importers. 

Estimated number of Respondents: 11 

(34 for initial nominations to the Board, 

0 for the second year, and up to 11 

annually thereafter). 

Estimated number of Responses per 

Respondent: 1 every 3 years. (0.3) 

Estimated Total Annual Burden on 

Respondents: 17 hours for the initial 

nominations to the Board, 0 hours for 

the second year of operation, and up to 

5.5 hours annually thereafter. 

(5) Application for Certification of 

Organization 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 0.25 hour. 

Respondents: Importer organizations. 

Estimated Number of Respondents: 5. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 2.5 hours. 

(6) Application for Exemption From 

Assessments 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 0.25 hour per 

producers or importer reporting on 

pecans produced domestically or 

imported. Upon approval of an 

application, producers and importers 

would receive exemption certification. 

Respondents: Producers and 

importers who produce or import less 

than 50,000 pounds of inshell pecans 

(25,000 pounds of shelled pecans) on 

average for four fiscal periods (the fiscal 

period for which the exemption is 

claimed and the previous three fiscal 

periods). 

Estimated number of Respondents: 

14,737. 

Estimated number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 3,684 hours. 

(7) Organic Exemption Form 

Estimate of Burden: Public 

recordkeeping burden for this collection 

of information is estimated to average 

0.5 hours per exemption form. 

Respondents: Organic producers and 

importers. 

Estimated Number of Respondents: 

50. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 25 hours. 

(8) First Handler/Importer Report 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 0.25 hour per 

first handler or importer. 

Respondents: First handlers who 

collect assessments from producers who 

produce over 50,000 pounds of inshell 

pecans (25,000 pounds of shelled 

pecans) on average for four fiscal 

periods (the current fiscal period and 

the previous three fiscal periods) and 

importers that do not remit through 

Customs. 

Estimated number of Respondents: 

175. 

Estimated number of Responses per 

Respondent: 12. 

Estimated Total Annual Burden on 

Respondents: 525 hours. 

(9) Application for Reimbursement of 

Assessments 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 0.25 hour. 

Respondents: Producers and 

importers. 

Estimated Number of Respondents: 

170. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 42.5 hours. 

(10) Application for Refund of 

Assessments Paid From Escrow 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 0.25 hour. 

Respondents: Producers and 

importers. 

Estimated Number of Respondents: 

900. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 225 hours. 

(11) Referendum Ballot 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 0.25 hour. 

Respondents: Producers and 

importers. 

Estimated Number of Respondents: 

900. 

2890 Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 

Estimated Number of Responses per 

Respondent: 0.14 (after first referendum 

one would occur once every 7 years). 

Estimated Total Annual Burden on 

Respondents: 31.50 hours. 

(12) A Requirement To Maintain 

Records Sufficient To Verify Reports 

Submitted Under the Order 

Estimate of Burden: Public 

recordkeeping burden for keeping this 

information is estimated to average 0.5 

hours per record keeper maintaining 

such records. 

Recordkeepers: Producers, first 

handlers and importers. 

Estimated number of recordkeepers: 

15,902. 

Estimated total recordkeeping hours: 

7,951 hours. 

As noted above, under the program, 

producers through first handlers, and 

importers will be required to pay 

assessments and file reports with and 

submit assessments to the Board 

(importers through Customs). While the 

Order will impose certain recordkeeping 

requirements on producers, first 

handlers, and importers, information 

required under the Order may be 

compiled from records currently 

maintained. Such records shall be 

retained for at least three years beyond 

the fiscal period of their applicability. 

An estimated 15,902 respondents will 

provide information to the Board 

(15,608 producers, 104 first handlers, 

and 190 importers). The estimated cost 

of providing the information to the 

Board by respondents would be 

$606,046. This total has been estimated 

by multiplying 12,753.5 hours by 

($36.08 hourly wage × 0.317 benefits = 

$11.44 (benefits) + $36.08 (wage) = 

$47.52), $47.52 for the average mean 

hourly earnings of producers and 

importers plus benefits. 

Data for computation of the hourly 

rate for producers (Occupation Code 11– 

9013: Farmers, Ranchers, and other 

Agricultural Managers = $38.63) and 

importers (Occupation Code 13–1020: 

Buyers and Purchasing Agents = $33.53) 

was obtained from the U.S. Department 

of Labor’s Bureau of Labor Statistics. 

The average of the producer and 

importer wages is $36.08. Data for 

computation of this hourly wage were 

obtained from the U.S. Department of 

Labor Statistics’ publication, ‘‘May 2019 

National Occupation Employment and 

Wage Estimates in the United States,’’ 

updated May 31, 2019. This publication 

can also be found at the following 

website: https://www.bls.gov/oes/ 

current/oes_nat.htm#45-0000. Data for 

the benefit costs of 31.7 percent was 

obtained by U.S. Department of Labor’s 

Bureau of Labor Statistics press release 

dated Dec. 14, 2018. 

The Order’s provisions have been 

carefully reviewed, and every effort has 

been made to minimize any unnecessary 

recordkeeping costs or requirements, 

including efforts to utilize information 

already submitted under other programs 

administered by USDA and other state 

programs. USDA currently oversees a 

marketing order for pecans grown in 

Alabama, Arkansas, Arizona, California, 

Florida, Georgia, Kansas, Louisiana, 

Missouri, Mississippi, North Carolina, 

New Mexico, Oklahoma, South 

Carolina, and Texas, which is 

authorized under the Agricultural 

Marketing Agreement Act of 1937. This 

program collects information to 

facilitate the administration of the 

program. The information collected by 

the marketing order has been carefully 

reviewed and it was determined that the 

information collected could not be 

utilized to facilitate the administration 

of the research and promotion program. 

The forms will require the minimum 

information necessary to effectively 

carry out the requirements of the 

program, and their use is necessary to 

fulfill the intent of the 1996 Act. Such 

information can be supplied without 

data processing equipment or outside 

technical expertise. In addition, there 

are no additional training requirements 

for individuals filling out reports and 

remitting assessments to the Board. The 

forms will be simple, easy to 

understand, and place as small a burden 

as possible on the person required to file 

the information. 

Collecting information monthly will 

coincide with normal industry business 

practices. The timing and frequency of 

collecting information are intended to 

meet the needs of the industry while 

minimizing the amount of work 

necessary to fill out the required reports. 

The requirement to keep records for 

three years is consistent with normal 

industry practices. In addition, the 

information to be included on these 

forms is not available from other sources 

because such information relates 

specifically to individual producers, 

first handlers and importers who are 

subject to the provisions of the 1996 

Act. Therefore, there is no practical 

method for collecting the required 

information without the use of these 

forms. 

In the September 22, 2020, proposed 

rule, comments were also invited on the 

information collection requirements 

prescribed in the Paperwork Reduction 

Act section of this rule. Specifically, 

comments were solicited on: (a) 

Whether the collection of information is 

necessary for the proper performance of 

functions of the Order and USDA’s 

oversight of the Order, including 

whether the information would have 

practical utility; (b) the accuracy of 

USDA’s estimate of the burden of the 

collection of information, including the 

validity of the methodology and 

assumptions used; (c) the accuracy of 

USDA’s estimate of the principal 

producing areas in the United States for 

pecans; (d) the accuracy of USDA’s 

estimate of the number of producers, 

first handlers and importers of pecans 

that will be covered under the program; 

(e) ways to enhance the quality, utility, 

and clarity of the information to be 

collected; and (f) ways to minimize the 

burden of the collection of information 

on those who are to respond, including 

the use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology. 

Four comments were received 

regarding information collection. All 

four commenters believed that the 

estimated recordkeeping burden of 

7,951 hours was overstated by 100 

percent. They reasoned that none of the 

information required by the Order 

would be in addition to any of the 

information normally kept and already 

required by normal accounting, state 

and Federal Tax preparation and other 

USDA programs. The estimated 

recordkeeping burden hours are the 

hours associated with maintaining 

records to verify reports required by the 

Order. While it is understood that some 

of the information required under the 

Order may be compiled from records 

currently maintained, there may be 

additional records not currently 

maintained that would be needed to 

verify the reports required by the Order. 

Furthermore, the estimated burden is 

nominal and is a customary estimated 

burden associated with programs such 

as these. In addition, three of the 

commenters stated that the First 

Handler/Importer Report should be 

estimated at .08333 hours per record 

keeper, not the .5 hours in the proposed 

rule. This was based on their experience 

of having to file similar forms as 

required by the Federal marketing order. 

After further review of the form and 

similar forms required under other 

research and promotion programs, 

USDA decreased the burden estimate to 

0.25 hours. This has been reflected in 

the PRA section above. 

Analysis of Comments 

Fifty-four comments were received in 

response to the proposed rule. Of those 

54 comments, 28 indicated support for 

the proposed action, 16 provided 

general feedback or suggested changes, 

Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 2891 

six opposed the action, two were 

outside the scope of the rulemaking, one 

was a duplicate, and there was one 

standalone comment regarding the PRA 

section. 

General Comments in Support 

A majority of the commenters 

expressed their confidence that the 

proposed program would grow 

consumer demand for pecans, 

expanding markets, while helping offset 

the current imbalance between supply 

and demand. Several commenters found 

that being able to assess both domestic 

and imported product would increase 

the resources available to create demand 

and would allow a more unified 

strategy. Comments were received from 

several state and national pecan 

associations voicing their support for 

the proposed program, agreeing that the 

proposed research and promotion 

program will provide the pecan industry 

with more funds to help promote and 

drive demand. Commenters discussed 

the challenges the pecan industry has 

faced the last several years, and that 

while the proposed program will not 

address all of these challenges, it is a 

step in the right direction. Six 

commenters simply expressed their 

support for the proposed program. 

Comments in Opposition 

Six comments received were opposed 

to the program. Four of the commenters 

stated that producers are already paying 

an assessment for the Federal marketing 

order program, which is tasked with 

promoting pecans, and are not in favor 

of having another promotion program 

that will assess producers. One 

commenter noted that the pecan 

industry already has many national and 

state level trade organizations and that 

the industry does not need another. 

Instead of the proposed program, the 

commenter advocated for a consolidated 

effort and strategy between these 

organizations to insure a more efficient 

research, promotion and marketing 

effort. As is addressed in this rule, 

Federal marketing orders and research 

and promotion orders are created 

pursuant to different laws and provide 

for different activities. The Federal 

marketing order assessment obligations 

are imposed on handlers, although some 

of the costs may be passed on to 

producers. Producers and importers are 

obligated to pay the assessment under 

the research and promotion Order. A 

comment submitted by the American 

Pecan Council (APC) (the Federal 

marketing order governing body) 

committed to ensuring, with the 

establishment of the new Order, that the 

domestic pecan industry does not pay 

more than the total assessment amount 

that is currently obligated under the 

Federal marketing order. It indicated it 

would therefore recommend reducing 

the assessment obligated under the 

Federal marketing order should the 

research and promotion program be 

established. Under Federal marketing 

orders assessment rates are intended to 

be applicable to each fiscal year. The 

pecan marketing order fiscal period is 

October 1 through September 30, which 

is the same as the Order. With the 

assessment obligation under the Order 

beginning October 1, 2021, this would 

allow the APC adequate time to review 

and recommend its assessment rate for 

its 2021–22 fiscal year, ensuring its 

commitment to the industry. 

Commenters noted the continued 

decline in producer price over the last 

couple of years and that producers 

cannot afford to fund this program. 

According to NASS statistics, grower 

received price per pound (in shell basis) 

for the six-year period from 2013–2019, 

have ranged from a low of $1.73 in 

2013, to a high of $2.59 in 2016, with 

the six-year average of $2.11. The 

reported prices for years 2017, 2018, 

and 2019, were $2.33, $1.75, and $1.84, 

respectively. Based on this historical 

information, pecan grower received 

prices for upcoming years could range 

between $1.73 and $2.59 per pound. 

Utilizing these historical figures, the 

estimated assessment cost as a 

percentage of grower received price, 

could range from approximately 1.15 

percent to .78 percent ($0.02 divided by 

$1.73 and $2.59, respectively). While 

there is a cost associated with the 

program, they are expected to be offset 

by the identified benefits of the Order. 

As was stated previously, the purpose of 

the Order would be to create increased 

demand for pecans, strengthening the 

overall viability of the industry. One 

comment stated that the government 

should fund the program instead of 

producers. The 1996 Act prescribes that 

such programs are financed by an 

assessment on producers and importers, 

and does not provide the authority for 

the government to pay for such 

programs. 

One commenter expressed concern 

that exempt producers will not be aware 

of the need to submit a form to apply 

for the exemption and that it is too 

much of a burden on the handler to 

secure those forms from the exempt 

producers. It would be the task of the 

Board to educate the industry on the 

Order provisions, working directly with 

producers who would be required to 

submit the exemption forms. 

Several commenters expressed 

concern regarding the composition of 

the proposed Board, stating that 

assurances need to be made that for the 

producer member positions just 

growers, not dual-role entities such as 

grower/shellers or grower/marketers, are 

represented on the Board. In making 

recommendations to the Secretary for 

appointments to the Board, the Order 

states that industry members should 

consider operation size, production and 

distribution methods, and other factors 

to ensure adequate representation of 

assessed entities. In addition, the Order 

provides that the Board has the 

authority to consider recommending 

additional eligibility requirements for 

members of the Board. 

General Comments and Suggested 

Modifications 

Some comments provided general 

comments or/and suggested 

modifications to the Order. One 

commenter suggested that the 

establishment of the American Pecan 

Promotion Board should be apportioned 

equally among the three identified 

regions, citing that this adjustment 

accounts more fairly for the nature of 

pecan production as an alternate-year 

bearing crop. The 1996 Act requires that 

the composition of the board reflect the 

geographical distribution of production. 

As was discussed in the proposed rule 

in the Establishment of the Board 

section, USDA did an in-depth analysis 

of production data from the past six 

years to account for the nature of pecans 

being an alternate bearing crop. The 

analysis took into consideration the 

crop loss in Georgia due to the 

hurricane in 2018 by applying lesser 

weight to the production volumes of 

2018 and 2019 and placing greater 

weight on the production volumes of 

2014 through 2017. Based on the 

analysis of the available data, the 

distribution of seats among the regions 

reflects the distribution of production in 

those regions. The Order allows for the 

Board to revisit the distribution of seats 

on the Board at least once every five 

years and recommend any changes to 

the Secretary for consideration. 

Three commenters suggested that 

eligible producer members should have 

a majority of their income derived from 

the production of pecans to ensure that 

producer interests are represented on 

the Board. The commenters noted that 

it is common to have vertically 

integrated businesses that do not solely 

identify as producers, but also as 

shellers. The commenters argued that to 

be eligible to represent producers on the 

Board, the majority of income derived 

needs to be from the production of 

pecans and not shelling. One 

commenter believed that industry 

2892 Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 

members should not be able to serve on 

the American Pecan Council and the 

Board at the same time. As was 

previously mentioned, the Order 

provides that when making 

recommendations to the Secretary for 

appointment of members to the Board 

industry members should consider size 

of operations, methods of production 

and distribution, and other factors to 

ensure adequate representation of 

assessed entities. The Order also 

provides that the Board may 

recommend amendments to the 

representation of membership 

provisions. Once the Board is 

established, it could consider 

recommending additional eligibility 

requirements for producer members. 

Three commenters stated that the 

assessment should be higher on 

imported product. The 1996 Act 

requires that, should imports be 

assessed, the rate be comparable to that 

of the domestic product. Two 

commenters sought clarification 

regarding the entity obligated to pay the 

assessment rate required under the 

Federal marketing order in comparison 

to the assessment rate under the 

research and promotion program. 

Domestic handlers are obligated to pay 

assessments under the Federal 

marketing order. Domestic producers 

are obligated to pay assessments under 

the research and promotion program. In 

addition, the laws authorizing these 

programs do not allow for the 

assessment obligation to be met by a 

different entity than those subject to its 

respective law. 

One commenter raised concerns over 

the entity that would conduct referenda 

under the Order, specifically stating that 

the proposed rule did not clearly define 

‘‘referendum agents.’’ All referenda are 

administered by the USDA and its 

employees. Referendum agents are those 

USDA employees who conduct the 

referendum. 

Several commenters expressed that 

the program should first and foremost 

support domestic producers. As was 

stated in the Background section of this 

rule, the purpose of research and 

promotion programs, in general, is to 

provide a framework for agricultural 

industries to pool their resources and 

combine efforts to develop new markets, 

strengthen existing markets and conduct 

important research and generic 

promotion activities. 

One commenter expressed concerns 

regarding the proposed assessment’s 

impact on small growers in Mexico. The 

commenter stated that while importers 

of record will be obligated to pay the 

assessment, the cost will eventually be 

passed-on to the grower. The Order 

obligates the importer of record to pay 

the assessment. Although, some of the 

costs may be passed on to producers, 

these costs are expected to be offset by 

the benefits derived by the operation of 

the Order. Furthermore, contracts 

between grower and importers are 

individual business decisions between 

the two parties. Such business decisions 

are outside the scope of the Order. 

One commenter asked that all 

marketing logos and marketing materials 

be made available, with Board approval, 

to Mexican shellers and importers, for 

promoting pecans in the international 

marketplace. Once a Board is appointed, 

it will work with the industry to 

develop marketing materials and logos 

for industry use to generically promote 

pecans in the marketplace. 

Two commenters asked several 

questions regarding the different 

initiatives regarding research, 

development of uses of pecans, and 

strategic planning. With the 

establishment of the Order and 

appointment of the Board, the Board 

will begin implementing programs, 

plans, and projects addressing research 

and marketing priorities. 

Three commenters raised issues that 

are outside the scope of the authority of 

the Order. Two commenters voiced 

concerns regarding labeling regulations, 

while one commenter suggested 

working with Customs and Border 

Protection to develop new Harmonized 

Tariff codes for pecans. 

In the proposed rule, USDA 

specifically requested comments on the 

proposed de minimis exemption, 

particularly on whether the proposed 

level was appropriate to ensure 

equitable contribution by and 

representation of both domestic 

producers and importers, or if 

modification to the exemption level was 

needed, asking commenters to provide 

data to substantiate any 

recommendations. One commenter 

opposed any exemption from the 

payment of assessments. The 

commenter did not provide data to 

substantiate its recommendation. 

After review and consideration of the 

comments received, USDA is not 

making any changes to the proposed 

rule based on those comments. The 

USDA has determined that this Order is 

consistent with and will effectuate the 

purposes of the 1996 Act. 

List of Subjects in 7 CFR Part 1223 

Administrative practice and 

procedure, Advertising, Consumer 

information, Marketing agreements, 

Pecan promotion, Reporting and 

recordkeeping requirements. 

■ For the reasons set forth in the 

preamble, title 7, chapter XI of the Code 

of Federal Regulations is amended by 

adding part 1223 to read as follows: 

PART 1223—PECAN PROMOTION, 

RESEARCH, AND INFORMATION 

ORDER 

Subpart A—Pecan Promotion, Research, 

and Information Order 

Definitions 

Sec. 

1223.1 Act. 

1223.2 American Pecan Council. 

1223.3 American Pecan Promotion Board. 

1223.4 Conflict of interest. 

1223.5 Customs or CBP. 

1223.6 Department or USDA. 

1223.7 First handler. 

1223.8 Fiscal period. 

1223.9 Importer. 

1223.10 Information. 

1223.11 Inshell pecans. 

1223.12 Market or marketing. 

1223.13 Order. 

1223.14 Part and subpart. 

1223.15 Pecans. 

1223.16 Person. 

1223.17 Producer. 

1223.18 Programs, plans, and projects. 

1223.19 Promotion. 

1223.20 Research. 

1223.21 Secretary. 

1223.22 Shelled pecans. 

1223.23 Suspend. 

1223.24 Terminate. 

1223.25 United States. 

American Pecan Promotion Board 

1223.40 Establishment and membership. 

1223.41 Nominations and appointments. 

1223.42 Term of office. 

1223.43 Vacancies. 

1223.44 Procedure. 

1223.45 Compensation and reimbursement. 

1223.46 Powers and duties. 

1223.47 Prohibited activities. 

Expenses and Assessments 

1223.50 Budget and expenses. 

1223.51 Financial statements. 

1223.52 Assessments. 

1223.53 Exemption procedures. 

1223.54 Refund escrow accounts. 

Promotion, Research, and Information 

1223.55 Programs, plans, and projects. 

1223.56 Independent evaluation. 

1223.57 Patents, copyrights, trademarks, 

information, publications, and product 

formulations. 

Reports, Books, and Records 

1223.60 Reports. 

1223.61 Books and records. 

1223.62 Confidential treatment. 

Miscellaneous 

1223.70 Right of the Secretary. 

1223.71 Referenda. 

1223.72 Suspension and termination. 

1223.73 Proceedings after termination. 

1223.74 Effect of termination or 

amendment. 

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1223.75 Personal liability. 

1223.76 Separability. 

1223.77 Amendments. 

1223.78 OMB control numbers. 

Subpart B—Referendum Procedures 

1223.100 General. 

1223.101 Definitions. 

1223.102 Voting. 

1223.103 Instructions. 

1223.104 Subagents. 

1223.105 Ballots. 

1223.106 Referendum report. 

1223.107 Confidential information. 

Subpart C—Administrative Provisions 

1223.520 Late payment and interest charges 

for past due assessments. 

Authority: 7 U.S.C. 7411–7425; 7 U.S.C. 

7401. 

Subpart A—Pecan Promotion, 

Research, and Information Order 

Definitions 

§ 1223.1 Act. 

Act means the Commodity Promotion, 

Research, and Information Act of 1996 

(7 U.S.C. 7411–7425), and any 

amendments thereto. 

§ 1223.2 American Pecan Council. 

American Pecan Council or APC 

means that governing body of the 

Federal Marketing Order established 

pursuant to 7 CFR part 986 unless 

otherwise noted. 

§ 1223.3 American Pecan Promotion 

Board. 

American Pecan Promotion Board or 

the Board means the administrative 

body established pursuant to § 1223.40. 

§ 1223.4 Conflict of interest. 

Conflict of interest means a situation 

in which a member or employee of the 

Board has a direct or indirect financial 

interest in a person who performs a 

service for, or enters into a contract 

with, the Board for anything of 

economic value. 

§ 1223.5 Customs or CDP. 

Customs or CBP means Customs and 

Border Protection, an agency of the 

United States Department of Homeland 

Security. 

§ 1223.6 Department or USDA. 

Department or USDA means the U.S. 

Department of Agriculture, or any 

officer or employee of the Department to 

whom authority has heretofore been 

delegated, or to whom authority may 

hereafter be delegated, to act in the 

Secretary’s stead. 

§ 1223.7 First handler. 

First handler means any person who 

receives, shells, cracks, accumulates, 

warehouses, roasts, packs, sells, 

consigns, transports, exports, or ships 

(except as a common or contract carrier 

of pecans owned by another person), or 

in any other way puts inshell or shelled 

pecans in the stream of commerce. The 

term first handler includes a producer 

who handles or markets pecans of the 

producer’s own production. 

§ 1223.8 Fiscal period. 

Fiscal period means October 1 to 

September 30, or such other period as 

recommended by the Board and 

approved by the Secretary. 

§ 1223.9 Importer. 

Importer means any person who 

imports pecans into the United States as 

a principal or as an agent, broker, or 

consignee of any person who produces 

or handles pecans outside of the United 

States for sale in the United States, and 

who is listed in the import records as 

the importer of record for such pecans. 

§ 1223.10 Information. 

Information means information and 

programs that are designed to increase 

efficiency in processing and to develop 

new markets, marketing strategies, 

increase market efficiency, and 

activities that are designed to enhance 

the image of pecans on a national or 

international basis. These include: 

(a) Consumer information, which 

means any action taken to provide 

information to, and broaden the 

understanding of, the general public 

regarding the consumption, use, 

nutritional attributes, and care of 

pecans; and 

(b) Industry information, which 

means information and programs that 

will lead to the development of new 

markets, new marketing strategies, or 

increased efficiency for the pecan 

industry, and activities to enhance the 

image of the pecan industry. 

§ 1223.11 Inshell pecans. 

Inshell pecans are nuts whose kernel 

is maintained inside the shell. 

§ 1223.12 Market or marketing. 

(a) Marketing means the sale or other 

disposition of pecans in any channel of 

commerce. 

(b) To market means to sell or 

otherwise dispose of pecans in 

interstate, foreign, or intrastate 

commerce. 

§ 1223.13 Order. 

Order means an order issued by the 

Secretary under section 514 of the Act 

that provides for a program of generic 

promotion, research, and information 

regarding agricultural commodities 

authorized under the Act. 

§ 1223.14 Part and subpart. 

This part is comprised of all rules, 

regulations, and supplemental orders 

issued pursuant to the Act and the 

Order. The Pecan Promotion, Research, 

and Information Order comprises 

subpart A of this part. 

§ 1223.15 Pecans. 

Pecans means and includes any and 

all varieties or subvarieties, inshell or 

shelled, of Carya illinoinensis grown or 

imported into the United States. 

§ 1223.16 Person. 

Person means any individual, group 

of individuals, partnership, corporation, 

association, cooperative, or any other 

legal entity. 

§ 1223.17 Producer. 

Producer is synonymous with grower 

and means any person engaged in the 

production and sale of pecans in the 

United States who owns, or who shares 

in the ownership and risk of loss of such 

pecans. 

§ 1223.18 Programs, plans, and projects. 

Programs, plans, and projects mean 

those research, promotion, and 

information programs, plans, or projects 

established pursuant to this subpart. 

§ 1223.19 Promotion. 

Promotion means any action taken to 

present a favorable image of pecans to 

the general public and the food industry 

for the purpose of improving the 

competitive position of pecans both in 

the United States and abroad and 

stimulating the sale of pecans. This 

includes paid advertising and public 

relations. 

§ 1223.20 Research. 

Research means any type of test, 

study, or analysis designed to advance 

the image, desirability, use, 

marketability, production, product 

development, or quality of pecans, 

including research relating to 

nutritional value, cost of production, 

new product development, varietal 

development, nutritional value, health 

research, and marketing of pecans. 

§ 1223.21 Secretary. 

Secretary means the Secretary of 

Agriculture of the United States, or any 

officer or employee of the Department to 

whom authority has heretofore been 

delegated, or to whom authority may 

hereafter be delegated, to act in the 

Secretary’s stead. 

§ 1223.22 Shelled pecans. 

Shelled pecans are pecans whose 

shells have been removed leaving only 

edible kernels, kernel pieces or pecan 

2894 Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 

meal. One pound of shelled pecans is 

the equivalent of two pounds inshell 

pecans. 

§ 1223.23 Suspend. 

Suspend means to issue a rule under 

section 553 of title 5, U.S.C., to 

temporarily prevent the operation of an 

order or part thereof during a particular 

period of time specified in the rule. 

§ 1223.24 Terminate. 

Terminate means to issue a rule under 

section 553 of title 5, U.S.C., to cancel 

permanently the operation of an order 

or part thereof beginning on a date 

certain specified in the rule. 

§ 1223.25 United States. 

United States means collectively the 

50 states, the District of Columbia, the 

Commonwealth of Puerto Rico, and the 

territories and possessions of the United 

States. 

American Pecan Promotion Board 

§ 1223.40 Establishment and membership. 

(a) Establishment of the American 

Pecan Promotion Board. There is hereby 

established an American Pecan 

Promotion Board, called the Board in 

this part, comprised of seventeen (17) 

members, appointed by the Secretary 

from nominations as follows: 

(1) Ten (10) producer members: Three 

(3) each from the Eastern Region and 

Central Region and four (4) from the 

Western Region as follows: 

(i) Eastern Region shall mean the 

States of Alabama, Florida, Georgia, 

North Carolina, South Carolina plus any 

states in the United States, the majority 

of whose land mass is in the Eastern 

Time Zone, plus any U.S. territories in 

the Atlantic Ocean; 

(ii) Central Region shall mean the 

States of Arkansas, Kansas, Louisiana, 

Mississippi, Missouri, Oklahoma, Texas 

plus any states in the United States, the 

majority of whose land mass is in the 

Central Time Zone; and 

(iii) Western Region shall mean the 

States of Arizona, California, New 

Mexico plus any states in the United 

States, the majority of whose land mass 

is in the Mountain or Pacific Time 

Zones, plus Alaska and Hawaii and any 

U.S. territories in the Pacific Ocean. 

(2) Seven (7) importers. 

(b) Adjustment of membership. At 

least once every five years, the Board 

will review the geographical 

distribution of United States production 

of pecans and the quantity or value of 

imports. The review will be conducted 

through an audit of state crop 

production and Customs figures and 

Board assessment records. If warranted, 

the Board will recommend to the 

Secretary that the membership on the 

Board be altered to reflect any changes 

in the geographical distribution of 

domestic pecan production and the 

quantity or value of imports. If the level 

of imports fluctuates versus domestic 

pecan production, importer members 

may be added to or reduced from the 

Board. 

(c) Board’s ability to serve the 

diversity of the industry. When making 

recommendations for appointments, the 

industry should take into account the 

diversity of the population served and 

the knowledge, skills, and abilities of 

the members to serve a diverse 

population, size of the operations, 

methods of production and distribution, 

and other distinguishing factors to 

ensure that the recommendations of the 

Board take into account the diverse 

interest of persons responsible for 

paying assessments, and others in the 

marketing chain, if appropriate. 

§ 1223.41 Nominations and appointments. 

(a) Initial nominations for producers 

will be submitted to the Secretary by the 

American Pecan Council (APC), or the 

Department if appropriate. Before 

considering any nominations, the APC 

shall publicize the nomination process, 

using trade press or other means it 

deems appropriate, to reach out to all 

known producers for the U.S. market. 

The APC may use regional caucuses, 

mail or other methods to elicit potential 

nominees. The APC shall submit the 

nominations to the Secretary and 

recommend two nominees for each 

Board position specified in paragraph 

(a)(1) of § 1223.40. The Department will 

conduct initial nominations for the 

importer members. The Secretary shall 

appoint the members of the Board. 

(b) Subsequent nominations shall be 

conducted as follows: 

(1) Nomination of producer members 

will be conducted by the Board. The 

Board staff will seek nominations for 

each vacant producer seat from each 

region from producers who have paid 

their assessments to the Board in the 

most recent fiscal period and who 

produced more than 50,000 pounds of 

inshell pecans (25,000 pounds of 

shelled pecans) on average for four 

fiscal periods (the fiscal period for 

which nominations are being conducted 

and the previous three fiscal periods). 

Producers who produce pecans in more 

than one region may seek nomination 

only in the region in which they 

produce the majority of their pecans. 

Nominations will be submitted to the 

Board office and placed on a ballot that 

will be sent to producers in each region 

for a vote. Producers may only vote in 

the region in which they produce the 

majority of their pecans. The votes shall 

be tabulated for each region with the 

nominee receiving the highest number 

of votes at the top of the list in 

descending order by vote. Two 

candidates for each position shall be 

submitted to the Secretary; and 

(2) Nomination of importer members 

will be conducted by the Board. All 

qualified national organizations 

representing importer interests will 

have the opportunity to nominate 

members to serve on the Board. If the 

Secretary determines that there are no 

qualified national organizations 

representing importer interests, 

individual importers who have paid 

assessments to the Board in the most 

recent fiscal period and imported more 

than 50,000 pounds of inshell pecans 

(25,000 pounds of shelled pecans) on 

average for four fiscal periods (the fiscal 

period for which nominations are being 

conducted and the previous three fiscal 

periods) may submit nominations. The 

names of importer nominees shall be 

placed on a ballot and mailed to 

importers for a vote. The votes shall be 

tabulated with the nominee receiving 

the highest number of votes at the top 

of the list in descending order by vote. 

Two candidates for each importer Board 

position shall be submitted to the 

Secretary. To be certified by the 

Secretary as a qualified national 

organization representing importer 

interests, an organization must meet the 

following criteria, as evidenced by a 

report submitted by the organization to 

the Secretary: 

(i) The organization’s voting 

membership must be comprised 

primarily of importers of pecans; 

(ii) The organization has a history of 

stability and permanency and has been 

in existence for more than one year; 

(iii) The organization must derive a 

portion of its operating funds from 

importers; 

(iv) The organization must 

demonstrate it is willing and able to 

further the Act and Order’s purposes; 

and 

(v) To be certified by the Secretary as 

a qualified national organization 

representing importer interests, an 

organization must agree to take 

reasonable steps to publicize to nonmembers the availability of open Board 

importer positions. 

(c) Producer and importer nominees 

may provide the Board a short 

background statement outlining their 

qualifications to serve on the Board. 

(d) Nominees must be in compliance 

with the applicable provisions of this 

subpart. 

(e) The Board must submit 

nominations to the Secretary at least six 

Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 2895 

months before the new Board term 

begins. The Secretary shall appoint the 

members of the Board. 

(f) No two members shall be 

employed by a single corporation, 

company, partnership, or any other legal 

entity. 

(g) The Board may recommend to the 

Secretary modifications to its 

nomination procedures as it deems 

appropriate. Any such modifications 

shall be implemented through 

rulemaking by the Secretary. 

§ 1223.42 Term of office. 

(a) With the exception of the initial 

Board, each Board member will serve a 

three-year term or until the Secretary 

selects his or her successor. Each term 

of office shall begin on October 1 and 

end on September 30. No member may 

serve more than two consecutive terms, 

excluding any term of office less than 

three years. 

(b) For the initial board, the terms of 

Board members shall be staggered for 

two, three, and four years. 

Determination of which of the initial 

members shall serve a term of two, 

three, or four years shall be determined 

at random. Those members serving an 

initial term of two, three, or four years 

may serve one successive three-year 

term. 

§ 1223.43 Vacancies. 

(a) In the event that any member of 

the Board ceases to work for or be 

affiliated with the category of members 

from which the member was appointed 

to the Board, such position shall 

automatically become vacant. 

(b) If a member of the Board 

consistently refuses to perform the 

duties of a member of the Board, or if 

a member of the Board engages in acts 

of dishonesty or willful misconduct, the 

Board may recommend to the Secretary 

that the member be removed from office. 

If the Secretary finds the 

recommendation of the Board shows 

adequate cause, the Secretary shall 

remove such member from office. 

(c) Without recommendation of the 

Board, a member may be removed by 

the Secretary upon showing of adequate 

cause, including the continued failure 

by a member to submit reports or remit 

assessments required under this part, if 

the Secretary determines that such 

member’s continued service would be 

detrimental to the achievement of the 

purposes of the Act. 

(d) Should the position of a member 

become vacant, successors for the 

unexpired terms of such member shall 

be appointed in the manner specified in 

§§ 1223.40 and 1223.41, except that said 

nomination and replacement shall not 

be required if said unexpired terms are 

less than six months. 

§ 1223.44 Procedure. 

(a) At a Board meeting, it will be 

considered a quorum when a majority of 

members are present. 

(b) At the start of each fiscal period, 

the Board will select a chairperson and 

vice chairperson who will conduct 

meetings and appoint committee 

membership throughout that period. 

(c) All Board and committee members 

will receive a minimum of 10 days 

advance notice of all Board and 

committee meetings, unless an 

emergency meeting is declared by the 

Chairperson. 

(d) Each member of the Board will be 

entitled to one vote on any matter put 

to the Board, and the motion will carry 

if supported by one vote more than 50 

percent of the total votes represented by 

the Board members present. 

(e) It will be considered a quorum at 

a committee meeting when at least one 

more than half of those assigned to the 

committee are present. Committees may 

also consist of individuals other than 

Board members and such individuals 

may vote in committee meetings. These 

committee members shall be appointed 

by the Chairperson and shall serve 

without compensation but shall be 

reimbursed for reasonable travel 

expenses, as approved by the Board. 

(f) In lieu of voting at a properly 

convened meeting and, when in the 

opinion of the Chairperson of the Board 

such action is considered necessary, the 

Board may take action if supported by 

one vote more than 50 percent of the 

members by mail, telephone, electronic 

mail, facsimile, or any other means of 

communication, and all telephone votes 

shall be confirmed promptly in writing. 

In that event, all members and the 

Secretary must be notified, and all 

members must be provided the 

opportunity to vote. Any action so taken 

shall have the same force and effect as 

though such action had been taken at a 

properly convened meeting of the 

Board. All votes shall be recorded in 

Board minutes. 

(g) There shall be no voting by proxy. 

(h) The Chairperson shall be a voting 

member. 

(i) The organization of the Board and 

the procedures for the conducting of 

meetings of the Board shall be in 

accordance with its bylaws, which shall 

be established by the Board and 

approved by the Secretary. 

§ 1223.45 Compensation and 

reimbursement. 

The members of the Board when 

acting as members, shall serve without 

compensation but shall be reimbursed 

for reasonable travel expenses, as 

approved by the Board, incurred by 

them in the performance of their duties 

as Board members. 

§ 1223.46 Powers and duties. 

The Board shall have the following 

powers and duties: 

(a) To administer this subpart in 

accordance with its terms and 

conditions and to collect assessments; 

(b) To develop and recommend to the 

Secretary for approval such bylaws as 

may be necessary for the functioning of 

the Board, and such rules as may be 

necessary to administer this subpart, 

including activities authorized to be 

carried out under this subpart; 

(c) To meet, organize, and select from 

among the members of the Board a 

chairperson, other officers, committees, 

and subcommittees, as the Board 

determines to be appropriate; 

(d) To employ persons, other than the 

Board members, or to enter into 

contracts, other than with Board 

members, as the Board considers 

necessary to assist the Board in carrying 

out its duties and to determine the 

compensation and specify the duties of 

such persons, or to determine the 

contractual terms of such parties; 

(e) To develop programs and projects, 

and enter into contracts or agreements, 

which must be approved by the 

Secretary before becoming effective, for 

the development and carrying out of 

programs or projects of research, 

information, or promotion, and the 

payment of costs thereof with funds 

collected pursuant to this subpart. Each 

contract or agreement shall provide that 

any person who enters into a contract or 

agreement with the Board shall develop 

and submit to the Board a proposed 

activity; keep accurate records of all of 

its transactions relating to the contract 

or agreement; account for funds 

received and expended in connection 

with the contract or agreement; make 

periodic reports to the Board of 

activities conducted under the contract 

or agreement; and make such other 

reports available as the Board or the 

Secretary considers relevant. Any 

contract or agreement shall provide that: 

(1) The contractor or agreeing party 

shall develop and submit to the Board 

a program, plan, or project together with 

a budget or budgets that shall show the 

estimated cost to be incurred for such 

program, plan, or project; 

(2) The contractor or agreeing party 

shall keep accurate records of all its 

transactions and make periodic reports 

to the Board of activities conducted, 

submit accounting for funds received 

and expended, and make such other 

2896 Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 

reports as the Secretary or the Board 

may require; 

(3) The Secretary may audit the 

records of the contracting or agreeing 

party periodically; and 

(4) Any subcontractor who enters into 

a contract with a Board contractor and 

who receives or otherwise uses funds 

allocated by the Board shall be subject 

to the same provisions as the contractor; 

(f) To prepare and submit for approval 

of the Secretary fiscal period budgets in 

accordance with § 1223.50; 

(g) To invest assessments collected 

under this part in accordance with 

§ 1223.50; 

(h) To maintain such records and 

books and prepare and submit such 

reports and records from time to time to 

the Secretary as the Secretary may 

prescribe; to make appropriate 

accounting with respect to the receipt 

and disbursement of all funds entrusted 

to it; and to keep records that accurately 

reflect the actions and transactions of 

the Board; 

(i) To cause its books to be audited by 

a competent auditor at the end of each 

fiscal period and at such other times as 

the Secretary may request, and to 

submit a report of the audit directly to 

the Secretary; 

(j) To give the Secretary the same 

notice of meetings of the Board as is 

given to members in order that the 

Secretary’s representative(s) may attend 

such meetings, and to keep and report 

minutes of each meeting of the Board to 

the Secretary; 

(k) To act as intermediary between the 

Secretary and any producer, first 

handler, or importer; 

(l) To furnish to the Secretary any 

information or records that the Secretary 

may request; 

(m) To receive, investigate, and report 

to the Secretary complaints of violations 

of this subpart; 

(n) To recommend to the Secretary 

such amendments to this subpart as the 

Board considers appropriate; and 

(o) To work to achieve an effective, 

continuous, and coordinated program of 

promotion, research, consumer 

information, evaluation, and industry 

information designed to strengthen the 

pecan industry’s position in the 

marketplace; maintain and expand 

existing markets and uses for pecans; 

and to carry out programs, plans, and 

projects designed to provide maximum 

benefits to the pecan industry. 

§ 1223.47 Prohibited activities. 

The Board may not engage in, and 

shall prohibit the employees and agents 

of the Board from engaging in: 

(a) Any action that would be a conflict 

of interest; and 

(b) Using funds collected by the Board 

under this subpart to undertake any 

action for the purpose of influencing 

legislation or governmental action or 

policy, by local, state, national, and 

foreign governments, other than 

recommending to the Secretary 

amendments to this subpart. 

(c) No program, plan, or project 

including advertising shall be false or 

misleading or disparaging to another 

agricultural commodity. Pecans of all 

origins shall be treated equally. 

Expenses and Assessments 

§ 1223.50 Budget and expenses. 

(a) At least 60 days prior to the 

beginning of each fiscal period, and as 

may be necessary thereafter, the Board 

shall prepare and submit to the 

Secretary a budget for the fiscal period 

covering its anticipated expenses and 

disbursements in administering this 

subpart. Each such budget shall include: 

(1) A statement of objectives and 

strategy for each program, plan, or 

project; 

(2) A summary of anticipated revenue, 

with comparative data for at least one 

preceding year (except for the initial 

budget); 

(3) A summary of proposed 

expenditures for each program, plan, or 

project; and 

(4) Staff and administrative expense 

breakdowns, with comparative data for 

at least one preceding year (except for 

the initial budget). 

(b) Each budget shall provide 

adequate funds to defray its proposed 

expenditures and to provide for a 

reserve as set forth in this subpart. 

(c) Subject to this section, any 

amendment or addition to an approved 

budget must be approved by the 

Secretary, including shifting funds from 

one program, plan, or project to another. 

Shifts of funds which do not cause an 

increase in the Board’s approved budget 

and which are consistent with 

governing bylaws need not have prior 

approval by the Secretary. 

(d) The Board is authorized to incur 

such expenses, including provision for 

a reasonable reserve, as the Secretary 

finds are reasonable and likely to be 

incurred by the Board for its 

maintenance and functioning, and to 

enable it to exercise its powers and 

perform its duties in accordance with 

the provisions of this subpart. Such 

expenses shall be paid from funds 

received by the Board. 

(e) With approval of the Secretary, the 

Board may borrow money for the 

payment of administrative expenses, 

subject to the same fiscal, budget, and 

audit controls as other funds of the 

Board. Any funds borrowed by the 

Board shall be expended only for 

startup costs and capital outlays and are 

limited to the first year of operation of 

the Board. 

(f) The Board may accept voluntary 

contributions, but these shall only be 

used to pay expenses incurred in the 

conduct of programs, plans, and 

projects. Such contributions shall be 

free from any encumbrance by the donor 

and the Board shall retain complete 

control of their use. 

(g) The Board may also receive funds 

provided through the Department’s 

Foreign Agricultural Service or from 

other sources, for authorized activities. 

(h) The Board shall reimburse the 

Secretary for all expenses incurred by 

the Secretary in the implementation, 

administration, and supervision of this 

subpart, including all referendum costs 

in connection with this subpart. 

(i) For fiscal periods beginning three 

(3) or more years after the date of the 

establishment of the Board, the Board 

may not expend for administration, 

maintenance, and functioning of the 

Board in any fiscal period an amount 

that exceeds 15 percent of the 

assessments and other income received 

by the Board for that fiscal period. 

Reimbursements to the Secretary 

required under paragraph (h) of this 

section are excluded from this 

limitation on spending. 

(j) The Board may establish an 

operating monetary reserve and may 

carry over to subsequent fiscal periods 

excess funds in any reserve so 

established: Provided that the funds in 

the reserve do not exceed the last two 

fiscal periods’ budget of expenses. 

Subject to approval by the Secretary, 

such reserve funds may be used to 

defray any expenses authorized under 

this part. 

(k) Pending disbursement of 

assessments and all other revenue under 

a budget approved by the Secretary, the 

Board may invest assessments and all 

other revenues collected under this part 

in: 

(1) Obligations of the United States or 

any agency of the United States; 

(2) General obligations of any State or 

any political subdivision of a State; 

(3) Interest bearing accounts or 

certificates of deposit of financial 

institutions that are members of the 

Federal Reserve System; 

(4) Obligations fully guaranteed as to 

principal interest by the United States; 

or 

(5) Other investments as authorized 

by the Secretary. 

Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 2897 

§ 1223.51 Financial statements. 

(a) The Board shall prepare and 

submit financial statements to the 

Secretary on a monthly or quarterly 

basis or at any other time as requested 

by the Secretary. Each such financial 

statement shall include, but not be 

limited to, a balance sheet, income 

statement, and expense budget. The 

expense budget shall show expenditures 

during the time period covered by the 

report, year-to-date expenditures, and 

the unexpended budget. 

(b) Each financial statement shall be 

submitted to the Secretary within 30 

days after the end of the time period to 

which it applies. 

(c) The Board shall submit annually to 

the Secretary an annual financial 

statement within 90 days after the end 

of the fiscal period to which it applies. 

§ 1223.52 Assessments. 

(a) The funds to cover the Board’s 

expenses shall be paid from assessments 

on producers and importers, other 

income of the Board, and other funds 

available to the Board including those 

collected pursuant to § 1223.57 and 

subject to the limitations contained in 

§ 1223.57. 

(b) Each producer shall pay an 

assessment per pound of pecans 

produced in the United States. The 

collection of assessments on pecans 

produced in the United States will be 

the responsibility of the first handler 

receiving the pecans from producers. In 

the case of the producer acting as its 

own first handler, the producer will be 

required to collect and remit its 

individual assessments. 

(1) First handlers may remit 

assessments to a third-party collection 

agent under this subpart. 

(2) First handlers may also remit 

assessments directly to the Board. 

(c) Such assessments shall be levied at 

$0.02 per pound on all inshell pecans 

and $0.04 per pound on all shelled 

pecans. The assessment rate may be 

reviewed and modified with the 

approval of the Secretary. A change in 

the assessment rate is subject to 

rulemaking by the Secretary. 

(d) All assessment payments and 

reports will be submitted to the office of 

the Board. All assessment payments for 

a fiscal period are to be received no later 

than the 10th of the month following the 

end of the previous month. A late 

payment charge shall be imposed on 

any producer and importer who fails to 

remit to the Board, the total amount for 

which any such producer and importer 

is liable on or before the due date 

established by the Board on forms 

approved by the Secretary. In addition 

to the late payment charge, an interest 

charge shall be imposed on the 

outstanding amount for which the 

producer and importer is liable. The rate 

of interest shall be prescribed in 

regulations issued by the Secretary. 

(e) Each importer of pecans shall pay 

an assessment to the Board on pecans 

imported for marketing in the United 

States, through Customs. 

(1) The assessment rate for imported 

pecans shall be the same or equivalent 

to the rate for pecans produced in the 

United States. 

(2) The import assessment shall be 

uniformly applied to imported pecans 

that are identified by the number 

0802.90.10.00 and 0802.90.15.00 in the 

Harmonized Tariff Schedule (HTS) of 

the United States or any other numbers 

used to identify pecans in that schedule. 

(3) In the event that any HTS number 

is subject to assessment is changed and 

such change is merely a replacement of 

a previous number and has no impact 

on the description of pecans, assessment 

will continue to be collected based on 

the new numbers. 

(4) The assessment due on imported 

pecans shall be paid when they enter, or 

are withdrawn from warehouse, for 

consumption in the United States. 

(5) If Customs does not collect an 

assessment from an importer, the 

importer is responsible for paying the 

assessment directly to the Board no later 

than the 10th of the month following the 

month the assessed pecans were 

imported into the United States. 

(f) Persons failing to remit total 

assessments due in a timely manner 

may also be subject to actions under 

Federal debt collection procedures. 

(g) The Board may authorize other 

organizations to collect assessments on 

its behalf with the approval of the 

Secretary. 

§ 1223.53 Exemption procedures. 

(a) De minimis. An exemption from 

payment of assessments as provided in 

§ 1223.52, shall be provided to 

producers that domestically produce 

and importers that import less than 

50,000 pounds of inshell pecans (25,000 

pounds of shelled pecans) on average 

for four fiscal periods (the fiscal period 

for which the exemption is claimed and 

the previous three fiscal periods) as 

follows: 

(1) Any producer who desires to claim 

an exemption from assessments shall 

file an application on a form provided 

by the Board, for a certificate of 

exemption for each fiscal period 

claiming an exemption. Such producer 

shall certify that it will domestically 

produce less than 50,000 pounds of 

inshell pecans (25,000 pounds of 

shelled pecans) on average for four 

fiscal periods (the fiscal period for 

which the exemption is claimed and the 

previous three fiscal periods). It is the 

responsibility of the producer to retain 

a copy of the certificate of exemption. 

(2) Any importer who desires to claim 

an exemption from assessments shall 

file an application on a form provided 

by the Board, for a certificate of 

exemption for each fiscal period 

claiming an exemption. Such importer 

shall certify that it will import less than 

50,000 pounds of inshell pecans (25,000 

pounds of shelled pecans) on average 

for four fiscal periods (the fiscal period 

for which the exemption is claimed and 

the previous three fiscal periods). It is 

the responsibility of the importer to 

retain a copy of the certificate of 

exemption. 

(3) On receipt of an exemption 

application, the Board shall determine 

whether an exemption may be granted 

for that fiscal period. The Board will 

then issue, if deemed appropriate, a 

certificate of exemption to the producer 

or importer which is eligible to receive 

one covering that fiscal period. The 

Board may request persons applying for 

the exemption to provide supporting 

documentation, such as past sales 

receipts or import data. 

(4) The Board, with the Secretary’s 

approval, may require persons receiving 

an exemption from assessments to 

provide to the Board reports on the 

disposition of exempt pecans and, in the 

case of importers, proof of payment of 

assessments. 

(5) The exemption will apply 

immediately following the issuance of 

the certificate of exemption. 

(6) Producers and importers who 

received an exemption certificate from 

the Board but domestically produced or 

imported more than 50,000 pounds of 

inshell pecans (25,000 shelled of 

pecans) on average for four fiscal 

periods (the fiscal period for which the 

exemption is claimed and the previous 

three fiscal periods) during the fiscal 

period shall pay the Board the 

applicable assessments owed and 

submit any necessary reports to the 

Board pursuant to § 1223.60. 

(b) Assessment refunds. Importers and 

producers who are exempt from 

assessment shall be eligible for a refund 

of assessments collected, either by 

Customs or a first handler. Requests for 

such assessment refunds must be 

submitted to the Board within 90 days 

of the last day in the fiscal period when 

assessments were collected on such 

producer’s or importer’s pecans. No 

interest will be paid on such 

assessments. The Board shall refund 

such assessments no later than 60 

calendar days after receipt by the Board 

2898 Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 

of information justifying the exemption 

from assessment. 

(c) Organic. (1) A producer who 

domestically produces pecans under an 

approved National Organic Program (7 

CFR part 205) (NOP) organic production 

system plan may be exempt from the 

payment of assessments under this part, 

provided that: 

(i) Only agricultural products certified 

as ‘‘organic’’ or ‘‘100 percent organic’’ 

(as defined in the NOP) are eligible for 

exemption; 

(ii) The exemption shall apply to all 

certified ‘‘organic’’ or ‘‘100 percent 

organic’’ (as defined in the NOP) 

products of a producer regardless of 

whether the agricultural commodity 

subject to the exemption is produced by 

a person that also produces 

conventional or nonorganic agricultural 

products of the same agricultural 

commodity as that for which the 

exemption is claimed; 

(iii) The producer maintains a valid 

certificate of organic operation as issued 

under the Organic Foods Production Act 

of 1990 (7 U.S.C. 6501–6522) (OFPA) 

and the NOP regulations issued under 

OFPA (7 CFR part 205); and 

(iv) Any producer so exempted shall 

continue to be obligated to pay 

assessments under this part that are 

associated with any agricultural 

products that do not qualify for an 

exemption under this section. 

(2) To apply for exemption under this 

section, an eligible producer shall 

submit a request to the Board on an 

Organic Exemption Request Form (Form 

AMS–15) at any time during the fiscal 

period initially, and annually thereafter 

on or before the start of the fiscal period, 

for as long as the producer continues to 

be eligible for the exemption. 

(3) A producer request for exemption 

shall include the following: 

(i) The applicant’s full name, 

company name, address, telephone and 

fax numbers, and email address; 

(ii) Certification that the applicant 

maintains a valid certificate of organic 

operation issued under the OFPA and 

the NOP; 

(iii) Certification that the applicant 

produces organic products eligible to be 

labeled ‘‘organic’’ or ‘‘100 percent 

organic’’ under the NOP; 

(iv) A requirement that the applicant 

attach a copy of their certificate of 

organic operation issued by a USDAaccredited certifying agent; 

(v) Certification, as evidenced by 

signature and date, that all information 

provided by the applicant is true; and 

(vi) Such other information as may be 

required by the Board, with the 

approval of the Secretary. 

(4) If a producer complies with the 

requirements of this section, the Board 

will grant an assessment exemption and 

issue a Certificate of Exemption to the 

producer within 30 days. If the 

application is disapproved, the Board 

will notify the applicant of the reason(s) 

for disapproval within the same 

timeframe. 

(5) An importer who imports pecans 

that are eligible to be labeled as 

‘‘organic’’ or ‘‘100 percent organic’’ 

under the NOP, or certified as ‘‘organic’’ 

or ‘‘100 percent organic’’ under a U.S. 

equivalency arrangement established 

under the NOP, may be exempt from the 

payment of assessments. Such importer 

may submit documentation to the Board 

and request an exemption from 

assessment on certified ‘‘organic’’ or 

‘‘100 percent organic’’ pecans on an 

Organic Exemption Request Form (Form 

AMS–15) at any time initially, and 

annually thereafter on or before the 

beginning of the fiscal period, as long as 

the importer continues to be eligible for 

the exemption. This documentation 

shall include the same information 

required of a producer in paragraph 

(c)(3) of this section. If the importer 

complies with the requirements of this 

section, the Board will grant the 

exemption and issue a Certificate of 

Exemption to the importer within the 

applicable timeframe. Any importer so 

exempted shall continue to be obligated 

to pay assessments under this part that 

are associated with any imported 

agricultural products that do not qualify 

for an exemption under this section. 

(6) If Customs collects the assessment 

on exempt product under paragraph 

(c)(5) of this section that is identified as 

‘‘organic’’ by a number in the 

Harmonized Tariff Schedule, the Board 

must reimburse the exempt importer the 

assessments paid upon receipt of such 

assessments from Customs. For all other 

exempt organic product for which 

Customs collects the assessment, the 

importer may apply to the Board for a 

reimbursement of assessments paid, and 

the importer must submit satisfactory 

proof to the Board that the importer 

paid the assessment on exempt organic 

product. 

(7) The exemption will apply 

immediately following the issuance of 

the Certificate of Exemption. 

§ 1223.54 Refund escrow accounts. 

(a) The Board shall establish an 

interest bearing escrow account with a 

financial institution that is a member of 

the Federal Reserve System and will 

deposit into such account an amount 

equal to 10 percent of the assessments 

collected during the period beginning 

on the effective date of the Order and 

ending on the date the Secretary 

announces the results of the required 

referendum. 

(b) If the Order is not approved by the 

required referendum, the Board shall 

promptly pay refunds of assessments to 

all producers and importers that have 

paid assessments during the period 

beginning on the effective date of the 

Order and ending on the date the 

Secretary announces the results of the 

required referendum in the manner 

specified in paragraph (c) of this 

section. 

(c) If the amount deposited in the 

escrow account is less than the amount 

of all refunds that producers and 

importers subject to this subpart have a 

right to receive, the Board shall prorate 

the amount deposited in such account 

among all producers and importers who 

desire a refund of assessments paid no 

later than 90 days after the required 

referendum results are announced by 

the Secretary. 

(d) Any producer or importer 

requesting a refund shall submit an 

application on the prescribed form to 

the Board within 60 days from the date 

the results of the required referendum 

are announced by the Secretary. The 

producer and importer shall also submit 

documentation to substantiate that 

assessments were paid. Any such 

demand shall be made by such producer 

or importer in accordance with the 

provisions of this subpart and in a 

manner consistent with the regulations 

in this part. 

(e) If the Order is approved by the 

required referendum conducted under 

§ 1223.71 then: 

(1) The escrow account shall be 

closed; and, 

(2) The funds shall be available to the 

Board for disbursement under § 1223.50. 

Promotion, Research, and Information 

§ 1223.55 Programs, plans, and projects. 

(a) The Board shall receive and 

evaluate, or on its own initiative 

develop, and submit to the Secretary for 

approval any program, plan, or project 

authorized under this subpart. Such 

programs, plans, or projects shall 

provide for: 

(1) The establishment, issuance, 

effectuation, and administration of 

appropriate programs for promotion, 

research, and information, including 

producer and consumer information, 

with respect to pecans; and 

(2) The establishment and conduct of 

research with respect to the use, 

nutritional value, sale, distribution, and 

marketing of pecans, and the creation of 

new products thereof, to the end that 

the marketing and use of pecans may be 

Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 2899 

encouraged, expanded, improved, or 

made more acceptable and to advance 

the image, desirability, or quality of 

pecans. 

(b) No program, plan, or project shall 

be implemented prior to its approval by 

the Secretary. Once a program, plan, or 

project is so approved, the Board shall 

take appropriate steps to implement it. 

(c) Each program, plan, or project 

implemented under this subpart shall be 

reviewed or evaluated periodically by 

the Board to ensure that it contributes 

to an effective program of promotion, 

research, or information. If it is found by 

the Board that any such program, plan, 

or project does not contribute to an 

effective program of promotion, 

research, or information, then the Board 

shall terminate such program, plan, or 

project. 

§ 1223.56 Independent evaluation. 

The Board shall, not less often than 

every five years, authorize and fund, 

from funds otherwise available to the 

Board, an independent evaluation of the 

effectiveness of the Order and other 

programs conducted by the Board 

pursuant to the Act. The Board shall 

submit to the Secretary, and make 

available to the public, the results of 

each periodic independent evaluation 

conducted under this section. 

§ 1223.57 Patents, copyrights, trademarks, 

information, publications, and product 

formulations. 

Patents, copyrights, trademarks, 

information, publications, and product 

formulations developed through the use 

of funds received by the Board under 

this subpart shall be the property of the 

U.S. Government as represented by the 

Board and shall, along with any rents, 

royalties, residual payments, or other 

income from the rental, sales, leasing, 

franchising, or other uses of such 

patents, copyrights, trademarks, 

information, publications, or product 

formulations, inure to the benefit of the 

Board; shall be considered income 

subject to the same fiscal, budget, and 

audit controls as other funds of the 

Board; and may be licensed subject to 

approval by the Secretary. Upon 

termination of this subpart, § 1223.73 

shall apply to determine disposition of 

all such property. 

Reports, Books, and Records 

§ 1223.60 Reports. 

(a) Each first handler, producer, or 

importer subject to this subpart shall be 

required to provide to the Board 

periodically such information as 

required by the Board, with the 

approval of the Secretary, which may 

include but not be limited to the 

following: 

(1) First handler must report or 

producer acting as its own first handler: 

(i) Number of pounds handled; 

(ii) Number of pounds on which an 

assessment was collected; 

(iii) Name, address and other contact 

information from whom the first 

handler has collected the assessments 

on each pound handled; and 

(iv) Date collection was made on each 

pound handled. 

(2) Unless provided by Customs, 

importer must report: 

(i) Number of pounds imported; 

(ii) Number of pounds on which an 

assessment was paid; 

(iii) Name, address, and other contact 

information of the importer; and 

(iv) Date assessment was paid on each 

pound imported. 

(b) These reports shall accompany the 

payment of the collected assessments. 

§ 1223.61 Books and records. 

Each producer, first handler, and 

importer subject to this subpart shall 

maintain and make available for 

inspection by the Secretary such books 

and records as are necessary to carry out 

the provisions of this part, including 

such records as are necessary to verify 

any reports required. Such records shall 

be retained for at least 3 years beyond 

the fiscal period of their applicability. 

§ 1223.62 Confidential treatment. 

All information obtained from books, 

records, or reports under the Act and 

this part shall be kept confidential by all 

persons, including all employees and 

former employees of the Board, all 

officers and employees and former 

officers and employees of contracting 

and subcontracting agencies or agreeing 

parties having access to such 

information. Such information shall not 

be available to Board members, 

producers, importers, or first handlers. 

Only those persons having a specific 

need for such information to effectively 

administer the provisions of this subpart 

shall have access to such information. 

Only such information so obtained as 

the Secretary deems relevant shall be 

disclosed by them, and then only in a 

judicial proceeding or administrative 

hearing brought at the direction, or on 

the request, of the Secretary, or to which 

the Secretary or any officer of the 

United States is a party and involving 

this subpart. Nothing in this section 

shall be deemed to prohibit: 

(a) The issuance of general statements 

based upon the reports of the number of 

persons subject to this subpart or 

statistical data collected therefrom, 

which statements will not identify the 

information furnished by any person; 

and 

(b) The publication, by direction of 

the Secretary, of the name of any person 

who has been adjudged to have violated 

this subpart, together with a statement 

of the particular provisions of this 

subpart violated by such person. 

Miscellaneous 

§ 1223.70 Right of the Secretary. 

All fiscal matters, programs, plans, or 

projects, rules or regulations, reports, or 

other substantive actions proposed and 

prepared by the Board shall be 

submitted to the Secretary for approval. 

§ 1223.71 Referenda. 

(a) Required referendum. For the 

purpose of ascertaining whether the 

persons subject to this subpart favor the 

continuation, suspension, amendment, 

or termination of this subpart, the 

Secretary shall conduct a referendum 

among persons subject to assessments 

under § 1223.52 who, during a 

representative period determined by the 

Secretary, have engaged in the 

production or importation of pecans: 

(1) The required referendum shall be 

conducted not later than 3 years after 

assessments first begin under the Order; 

and 

(2) The Order will be approved in a 

referendum if a majority of producers 

and importers vote for approval in the 

referendum. 

(b) Subsequent referenda. The 

Secretary shall conduct subsequent 

referenda: 

(1) For the purpose of ascertaining 

whether producers and importers favor 

the continuation, suspension, or 

termination of the Order; 

(2) Every seven years the Secretary 

shall hold a referendum to determine 

whether producers and importers of 

pecans favor the continuation of the 

Order. The Order shall continue if it is 

favored by a majority of producers and 

importers voting for approval in the 

referendum who have been engaged in 

the production or importation of pecans; 

(3) At the request of the Board 

established in this subpart; 

(4) At the request of 10 percent or 

more of the number of persons eligible 

to vote in a referendum as set forth 

under the Order; or 

(5) At any time as determined by the 

Secretary. 

§ 1223.72 Suspension and termination. 

(a) The Secretary shall suspend or 

terminate this part or subpart or a 

provision thereof if the Secretary finds 

that this part or subpart or a provision 

thereof obstructs or does not tend to 

effectuate the purposes of the Act, or if 

2900 Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 

the Secretary determines that this part 

or subpart or a provision thereof is not 

favored by persons voting in a 

referendum conducted pursuant to the 

Act. 

(b) The Secretary shall suspend or 

terminate this subpart at the end of the 

fiscal period whenever the Secretary 

determines that its suspension or 

termination is approved or favored by a 

majority of producers and importers 

voting for approval who, during a 

representative period determined by the 

Secretary, have been engaged in the 

production or importation of pecans. 

(c) If, as a result of a referendum the 

Secretary determines that this subpart is 

not approved, the Secretary shall: 

(1) Not later than 180 days after 

making the determination, suspend or 

terminate, as the case may be, collection 

of assessments under this subpart; and 

(2) As soon as practical, suspend or 

terminate, as the case may be, activities 

under this subpart in an orderly 

manner. 

§ 1223.73 Proceedings after termination. 

(a) Upon the termination of this 

subpart, the Board shall recommend not 

more than three of its members to the 

Secretary to serve as trustees for the 

purpose of liquidating the affairs of the 

Board. Such persons, upon designation 

by the Secretary, shall become trustees 

of all of the funds and property then in 

the possession or under control of the 

Board, including claims for any funds 

unpaid or property not delivered, or any 

other claim existing at the time of such 

termination. 

(b) The said trustees shall: 

(1) Continue in such capacity until 

discharged by the Secretary; 

(2) Carry out the obligations of the 

Board under any contracts or 

agreements entered into pursuant to this 

subpart; 

(3) From time to time account for all 

receipts and disbursements and deliver 

all property on hand, together with all 

books and records of the Board and the 

trustees, to such person or persons as 

the Secretary may direct; and 

(4) Upon request of the Secretary 

execute such assignments or other 

instruments necessary and appropriate 

to vest in such person’s title and right 

to all funds, property, and claims vested 

in the Board or the trustees pursuant to 

this subpart. 

(c) Any person to whom funds, 

property, or claims have been 

transferred or delivered pursuant to this 

subpart shall be subject to the same 

obligations imposed upon the Board and 

upon the trustees. 

(d) Any residual funds not required to 

defray the necessary expenses of 

liquidation shall be turned over to the 

Secretary to be disposed of, to the extent 

practical, to the pecan producer 

organizations in the interest of 

continuing pecan promotion, research, 

and information programs. 

§ 1223.74 Effect of termination or 

amendment. 

Unless otherwise expressly provided 

by the Secretary, the termination of this 

part, or the issuance of any amendment 

to this part, shall not: 

(a) Affect or waive any right, duty, 

obligation, or liability which shall have 

arisen, or which may thereafter arise in 

connection with any provision of this 

part; or 

(b) Release or extinguish any violation 

of this part; or 

(c) Affect or impair any rights or 

remedies of the United States, or of the 

Secretary or of any other persons, with 

respect to any such violation. 

§ 1223.75 Personal liability. 

No member or employee of the Board 

shall be held personally responsible, 

either individually or jointly with 

others, in any way whatsoever, to any 

person for errors in judgment, mistakes, 

or other acts, either of commission or 

omission, as such member or employee, 

except for acts of dishonesty or willful 

misconduct. 

§ 1223.76 Separability. 

If any provision of this subpart is 

declared invalid or the applicability 

thereof to any person or circumstances 

is held invalid, the validity of the 

remainder of this subpart or the 

applicability thereof to other persons or 

circumstances shall not be affected 

thereby. 

§ 1223.77 Amendments. 

Amendments to this subpart may be 

proposed from time to time by the Board 

or by any interested person affected by 

the provisions of the Act, including the 

Secretary. 

§ 1223.78 OMB control numbers. 

The control number assigned to the 

information collection requirements by 

the Office of Management and Budget 

pursuant to the Paperwork Reduction 

Act of 1995, 44 U.S.C. Chapter 35, is 

OMB control number 0581–NEW, 

except for the Board nominee 

background statement form which is 

assigned OMB control number 0505– 

0001. 

Subpart B—Referendum Procedures 

§ 1223.100 General. 

Referenda to determine whether 

eligible pecan producers and importers 

favor the issuance, amendment, 

suspension, or termination of the Pecan 

Promotion, Research, and Information 

Order shall be conducted in accordance 

with this subpart. 

§ 1223.101 Definitions. 

(a) Administrator means the 

Administrator of the Agricultural 

Marketing Service, with power to 

redelegate, or any officer or employees 

of the U.S. Department of Agriculture to 

whom authority has been delegated or 

may hereafter be delegated to act in the 

Administrator’s stead. 

(b) Eligible importer means any 

person who, during the representative 

period, was subject to the Order and 

required to pay assessments on pecans 

imported into the United States. 

(c) Eligible producer means any 

person who, during the representative 

period, was subject to the Order and 

required to pay assessments on pecans 

produced in the United States. 

(d) Order means subpart A of this 

part, the Pecan Promotion, Research, 

and Information Order. 

(e) Pecans means and includes any 

and all varieties or subvarieties, inshell 

and shelled, of Carya illinoinensis 

grown or imported into the United 

States. 

(f) Person means any individual, 

group of individuals, partnership, 

corporation, association, cooperative, or 

any other legal entity. For the purpose 

of this paragraph (f), the term 

‘‘partnership’’ includes, but is not 

limited to: 

(1) A husband and a wife who have 

title to, or leasehold interest in, a pecan 

farm as tenants in common, joint 

tenants, tenants by the entirety, or, 

under community property laws, as 

community property; and 

(2) So-called ‘‘joint ventures’’ wherein 

one or more parties to an agreement, 

informal or otherwise, contributed land 

and others contributed capital, labor, 

management, or other services, or any 

variation of such contributions by two 

or more parties. 

(g) Referendum agent or agent means 

the individual or individuals designated 

by the Secretary to conduct the 

referendum. 

(h) Representative period means the 

period designated by the Secretary. 

(i) United States means collectively 

the 50 states, the District of Columbia, 

the Commonwealth of Puerto Rico, and 

the territories and possessions of the 

United States. 

§ 1223.102 Voting. 

(a) Each person who is an eligible 

producer or an eligible importer, as 

defined in this subpart, at the time of 

Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 2901 

the referendum and during the 

representative period, shall be entitled 

to cast only one ballot in the 

referendum. However, each producer in 

a landlord-tenant relationship or a 

divided ownership arrangement 

involving totally independent entities 

cooperating only to produce pecans, in 

which more than one of the parties is a 

producer, shall be entitled to cast one 

ballot in the referendum covering only 

such producer’s share of the ownership. 

(b) Proxy voting is not authorized, but 

an officer or employee of a corporate 

producer or importer, or an 

administrator, executor, or trustee or an 

eligible entity may cast a ballot on 

behalf of such person. Any individual 

so voting in a referendum shall certify 

that such individual is an officer or 

employee of the eligible entity, or an 

administrator, executive, or trustee of an 

eligible entity and that such individual 

has the authority to take such action. 

Upon request of the referendum agent, 

the individual shall submit adequate 

evidence of such authority. 

(c) All ballots are to be cast by mail, 

overnight delivery, electronic mail, 

facsimile, or by other means as 

instructed by the Secretary. 

§ 1223.103 Instructions. 

The referendum agent shall conduct 

the referendum, in the manner provided 

in this section, under the supervision of 

the Administrator. The Administrator 

may prescribe additional instructions, 

not inconsistent with the provisions in 

this section, to govern the procedure to 

be followed by the referendum agent. 

Such agent shall: 

(a) Determine the period during 

which ballots may be cast. 

(b) Provide ballots and related 

material to be used in the referendum. 

The ballot shall provide for recording 

essential information, including that 

needed for ascertaining whether the 

person voting, or on whose behalf the 

vote is cast, is an eligible voter. 

(c) Give reasonable public notice of 

the referendum: 

(1) By utilizing available media or 

public information sources, without 

incurring advertising expense, to 

publicize the dates, places, method of 

voting, eligibility requirements, and 

other pertinent information. Such 

sources of publicity may include, but 

are not limited to, print and radio; and 

(2) By such other means as the agent 

may deem advisable. 

(d) Mail to eligible producers and 

eligible importers whose names and 

addresses are known to the referendum 

agent, the instructions on voting, a 

ballot, and a summary of the terms and 

conditions of the proposed Order. No 

person who claims to be eligible to vote 

shall be refused a ballot. 

(e) At the end of the voting period, 

collect, open, number, and review the 

ballots and tabulate the results in the 

presence of an agent of a third party 

authorized to monitor the referendum 

process. 

(f) Prepare a report on the referendum. 

(g) Announce the results to the public. 

§ 1223.104 Subagents. 

The referendum agent may appoint 

any individual or individuals necessary 

or desirable to assist the agent in 

performing the referendum agent’s 

functions listed in this subpart. Each 

individual so appointed may be 

authorized by the agent to perform any 

or all of the functions which, in the 

absence of such appointment, shall be 

performed by the agent. 

§ 1223.105 Ballots. 

The referendum agent and subagents 

shall accept all ballots cast. However, if 

the agent or subagent deems that a ballot 

should be challenged for any reason, the 

agent or subagent shall endorse above 

their signature, on the ballot, a 

statement to the effect that such ballot 

was challenged, by whom challenged, 

the reasons therefore, the results of any 

investigations made with respect 

thereto, and the disposition thereof. 

Ballots invalid under this subpart shall 

not be counted. 

§ 1223.106 Referendum report. 

Except as otherwise directed, the 

referendum agent shall prepare and 

submit to the Administrator a report on 

the results of the referendum, the 

manner in which it was conducted, the 

extent and kind of public notice given, 

and other information pertinent to the 

analysis of the referendum and its 

results. 

§ 1223.107 Confidential information. 

The ballots and other information or 

reports that reveal, or tend to reveal, the 

vote of any person covered under the 

Act and the voting list shall be held 

confidential and shall not be disclosed. 

Subpart C—Administrative Provisions 

§ 1223.520 Late payment and interest 

charges for past due assessments. 

(a) A late payment charge will be 

imposed on any producer, first handler 

or importer who fails to make timely 

remittance to the Board of the total 

assessments for which they are liable. 

The late payment will be imposed on 

any assessments not received within 30 

calendar days of the date when 

assessments are due. This one-time late 

payment charge will be 5 percent of the 

assessments due before interest charges 

have accrued. 

(b) In addition to the late payment 

charge, 1 percent per month interest on 

the outstanding balance, including any 

late payment and accrued interest, will 

be added to any accounts for which 

payment has not been received within 

30 calendar days of the date when 

assessments are due. Interest will 

continue to accrue monthly until the 

outstanding balance is paid to the 

Board. 

Bruce Summers, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2021–00328 Filed 1–12–21; 8:45 am] 

BILLING CODE 3410–02–P