54310 Federal Register / Vol. 62, No. 201 / Friday, October 17, 1997 / Rules and Regulations

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1214

[FV–96–708FR]

Kiwifruit Research, Promotion, and

Consumer Information Order;

Referendum Procedures

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Final rule.

SUMMARY: This rule provides procedures

which the Department of Agriculture

(Department) will use in conducting the

referendum to determine whether the

issuance of the proposed Kiwifruit

Research, Promotion, and Consumer

Information Order (Order) is approved

by a majority of the producers and

importers voting in the referendum and

that the producers and importers

favoring approval produce and import

50 percent of the total volume of

kiwifruit produced and imported by

persons voting in the referendum.

EFFECTIVE DATE: This rule is effective

November 17, 1997.

FOR FURTHER INFORMATION CONTACT:

Sonia N. Jimenez, Research and

Promotion Branch, Fruit and Vegetable

Division, AMS, USDA, P.O. Box 96456,

Room 2535–S, Washington, DC 20090–

6456, telephone (202) 720–9916 or (888)

720–9917.

SUPPLEMENTARY INFORMATION: This rule

is issued under the Kiwifruit Research,

Promotion, and Consumer Information

Act [7 U.S.C. 7461-7473], hereinafter

referred to as the Act.

This rule provides the procedures

under which the referendum will be

conducted.

Executive Order 12988

This rule has been reviewed under

Executive Order 12988, Civil Justice

Reform. It is not intended to have

retroactive effect. This rule will not

preempt any State or local laws,

regulations, or policies, unless they

present an irreconcilable conflict with

this rule.

The Act provides that administrative

proceedings must be exhausted before

parties may file suit in court. Under

section 558 of the Act [7 U.S.C. 7467],

after an Order is implemented, a person

subject to the Order may file a petition

with the Secretary stating that the Order

or any provision of the Order, or any

obligation imposed in connection with

the Order, is not in accordance with law

and requesting a modification of the

Order or an exemption from the Order.

The petitioner is afforded the

opportunity for a hearing on the

petition. After such hearing, the

Secretary will make a ruling on the

petition. The Act provides that the

district courts of the United States in

any district in which a person who is a

petitioner resides or carries on business

are vested with jurisdiction to review

the Secretary’s ruling on the petition, if

a complaint for that purpose is filed

within 20 days after the date of the entry

of the ruling.

Executive Order 12866 and Regulatory

Flexibility Act

This rule has been determined not

significant for purposes of Executive

Order 12866, and therefore has not been

reviewed by the Office of Management

and Budget.

In accordance with the Regulatory

Flexibility Act [5 U.S.C. 601 et seq.], the

Agency has examined the impact of this

rule on small entities. Accordingly, we

have performed this Final Regulatory

Flexibility Analysis.

Legislation to create a generic

program of promotion and research for

kiwifruit became effective on April 4,

1996.

Section 561 of the Act [7 U.S.C. 7470]

provides that the Secretary of

Agriculture (Secretary) shall conduct a

referendum during the 60-day period

immediately preceding the proposed

effective date of an Order to determine

whether the issuance of an Order is

favored by a majority of the producers

and importers voting in the referendum.

Paragraph (a)(2) of Section 561 of the

Act [7 U.S.C. 7470] requires that the

Order be approved by a majority of

producers and importers voting in the

referendum and that the producers and

importers favoring approval produce

and import 50 percent or more of the

volume of kiwifruit produced and

imported by persons voting in the

referendum.

There are approximately 650

producers, 45 importers, and 65

handlers of kiwifruit that would be

covered by the program. Small

agricultural service firms, which will

include the handlers and importers who

would be covered under the Order, have

been defined by the Small Business

Administration (SBA) [13 CFR 121.601]

as those whose annual receipts are less

than $5 million and small agricultural

producers, those who would be required

to pay assessments, as those having

annual receipts of $500,000. Only one

handler has been identified to have $5

million or more in annual sales. In

addition, there are 10 producers at or

over the $500,000 annual sales receipts

threshold. The Department does not

have specific information regarding the

size of importers. However, it could be

concluded that the majority of kiwifruit

producers and importers may be

classified as small entities.

The Department is aware of kiwifruit

producers in California, Oregon,

Pennsylvania, South Carolina, and

importers that import kiwifruit from

Chile, New Zealand, and Italy. The

Department believes that these

individuals would include a majority of

the producers and importers that would

be covered under the program. The

Department is also aware that some

individuals may be producers of ‘‘hardy

kiwifruit,’’ a different species of

kiwifruit, known as Actinidia arguta,

which would not be covered under the

proposed program. However, the

Department does not have specific

information regarding how many

individuals produce only the ‘‘hardy

kiwifruit’’ versus the ‘‘fuzzy’’ most

common kiwifruit species, known as

Actinidia deliciosa. Therefore, the total

number of producers believed to be

covered by the program is the same as

in the proposed rule on this action.

Other names for the species Actinidia

arguta (hardy kiwifruit) are baby

kiwifruit, kiwifruit grape, and

kiwiberry. There are no official statistics

on this commodity because it is such a

small and new crop. According to

comments received on the Order

published on October 2, 1996, in the

Federal Register, this species is grown

in California, Oregon, Pennsylvania,

Washington, Virginia, and British

Columbia. The production in Virginia

and Pennsylvania is not commercially

marketed. Oregon production on 5 acres

was a total of 216,000 pounds over the

last 3 years. It takes 3 to 5 years to

harvest the first crop. The hardy

kiwifruit is hand-harvested and packed

in 6-ounce berry baskets like

raspberries. The harvesting, storage,

handling, consumer recognition, and

marketing of this species is completely

different from the most common fuzzy

kiwifruit or Actinidia deliciosa.

Accordingly, we changed the definition

of kiwifruit in the proposed order to

mean all varieties of fresh kiwifruit

classified under the species Actinidia

deliciosa or the genus Actinidia. That

definition of kiwifruit is added in this

rule as well. All references to

‘‘kiwifruit’’ in this document, therefore,

mean the Actinidia deliciosa species.

California is the source for practically

all (99.7 percent) of the kiwifruit

produced in the United States. The

California kiwifruit industry consists of

approximately 600 producers and 65

handlers. Production rose by 75 percent

between 1984 and 1996, increasing from
Federal Register / Vol. 62, No. 201 / Friday, October 17, 1997 / Rules and Regulations 54311

18 thousand tons to 31.5 tons. In the

period from 1984 through 1996, the

value of production fell by 26 percent.

Most U.S. kiwifruit is utilized fresh.

Fresh utilization increased by 123

percent between 1984 and 1996,

growing from 11.7 thousand tons to 26.1

thousand tons. The season average price

during 1984 through 1996 fell by 53

percent, declining from $1,070 per ton

to $502 per ton. Exports accounted for

about 30 percent of U.S. fresh utilization

during that period.

Between 1992 and 1996, the average

annual production per producer,

including kiwifruit for processing, was

99 tons or 28,286 7-pound trays of

kiwifruit. The average price was $406

per ton, giving an average return of

about $40,000 per producer per year. A

typical tray price during this period was

$1.42 per tray, and the average amount

shipped per handler was about 148,276

trays, yielding an average annual

revenue per handler of $210,552. U.S.

importers handled an average of 184,857

trays per year per importer. During this

period, the average value of total

imports per year was $18.3 million

(f.o.b. country of origin). The majority of

kiwifruit came from Chile, with the

remaining coming from New Zealand

and Italy. In 1996, imports totaled 87.9

million pounds, up 5 percent from 1995.

The value of imports in 1996 was $26.5

million.

The proposed rule published in the

Federal Register on October 2, 1996,

provided statistics on production, value

of production, fresh utilization, average

price, average return per producer,

average annual revenue per handler,

and other related statistics that are

different from the statistics provided in

this rule. These changes are due to the

fact that the October 2, 1996, rule relied

on statistics from 1985 through 1995

because 1996 crop year statistics were

not available. When 1996 statistics are

added to the averages, the final averages

change because the domestic 1996 crop

statistics are considerably lower in

terms of production, and fresh

utilization. For example, production

from 1985 to 1995 increased an average

of 119 percent. However, when adding

1996 production, the average from 1985

to 1996 shows an average increase of

only 75 percent. Therefore, adding the

1996 statistics to the averages provided

in the October 2 proposed rule changes

the statistical averages, in some cases

considerably, making the statistics for

production and fresh utilization lower

than previously indicated.

This rule provides the procedures

under which kiwifruit producers and

importers may vote on whether they

want the kiwifruit research and

promotion program to be implemented.

Kiwifruit producers of 500 pounds or

more and importers of 10,000 pounds or

more annually can vote in the

referendum. There are approximately

700 eligible voters.

The Department will keep all these

individuals informed throughout the

program implementation and

referendum process to ensure that they

are aware of and are able to participate

in the program implementation process.

In addition, trade associations and

related industry media will receive

news releases and other information

regarding the implementation and

referendum process.

There is a federal marketing order

program and a California state program

for kiwifruit. The marketing order

regulations for grade, size, maturity, and

containers are designed to assure

consumers of consistently good quality

California kiwifruit. The marketing

order and its regulations allow small

farmers to compete effectively in an

increasingly competitive marketplace.

The California Kiwifruit Commission

(CKC) administers the California state

program for kiwifruit. The CKC is

composed of kiwifruit producers,

packers, and handlers.

In 1996–97 it is estimated that

producers would pay $1.15 million in

assessments at a rate of 17 cents per

kiwifruit tray or tray equivalent.

Handlers collect the assessments and

remit the money to the CKC.

Voting in the referendum is optional.

However, if producers and importers

choose to vote, the burden of voting will

be offset by the benefits of having the

opportunity to vote on whether they

want the program or not.

The Department considered requiring

eligible voters to vote in person at

various Department offices across the

country. However, conducting the

referendum from one central location by

mail ballot is more cost effective for this

program. Also, the Department will

provide easy access to information for

potential voters through a toll free

telephone line.

Paperwork Reduction Act

In accordance with the Office of

Management and Budget (OMB)

regulations [5 CFR Part 1320] which

implements the Paperwork Reduction

Act of 1995 [44 U.S.C. Chapter 35], the

referendum ballot has been approved by

the Office of Management and Budget

(OMB) and has been assigned OMB

number 0581–0093.

Title: National Research, Promotion,

and Consumer Information Programs.

OMB Number: 0581–0093.

Expiration Date of Approval: October

31, 1997.

Type of Request: Revision of a

currently approved information

collection for research and promotion

programs.

Abstract: The information collection

requirements in this request are

essential to carry out the intent of the

Act.

The burden associated with the ballot

is as follows:

Estimate of Burden: Public reporting

burden for this collection of information

is estimated to average .25 hours per

response for each producer and

importer.

Respondents: Producers and

importers.

Estimated Number of Respondents:

700.

Estimated Number of Responses per

Respondent: 1 every 6 years (.16).

Estimated Total Annual Burden on

Respondents: 29 hours.

No comments were received

concerning the collection of

information, the accuracy of the

estimated burden, or ways to enhance or

minimize the collection of information.

Background

The Act authorizes the Secretary to

establish a national kiwifruit research,

promotion, and consumer information

program. The program would be funded

by an assessment levied on producers

and importers not to exceed 10 cents per

7-pound tray of kiwifruit. Producers

who produce less than 500 pounds

annually, importers who import less

than 10,000 pounds annually, and

kiwifruit sold directly to a consumer by

a producer for a purpose other than

resale and domestic and imported

kiwifruit for processing are exempt from

assessments.

Assessments would be used to pay

for: research, promotion, and consumer

information; administration,

maintenance, and functioning of the

Board; and expenses incurred by the

Secretary in implementing and

administering the Order, including

referendum costs.

Section 561 of the Act [7 CFR part

7470] requires that a referendum be

conducted among eligible producers

and importers of kiwifruit to determine

whether they favor implementation of

the Order. The Order shall become

effective if it is approved by a majority

of producers and importers voting in the

referendum and the producers and

importers favoring approval produce

and import more than 50 percent of the

total volume of kiwifruit produced and

imported by persons voting in the

referendum.
54312 Federal Register / Vol. 62, No. 201 / Friday, October 17, 1997 / Rules and Regulations

A proposed rule containing the

proposed Order was published in the

October 2, 1996, issue of the Federal

Register [61 FR 51378]. A proposal

containing that proposed order that will

be subject to referendum is being

published separately in this issue of the

Federal Register.

This final rule provides the

procedures under which kiwifruit

producers and importers may vote on

whether they want the kiwifruit

research and promotion program to be

implemented. Kiwifruit producers of

500 pounds or more and importers of

10,000 pounds or more annually can

vote in the referendum. There are

approximately 700 eligible voters.

This final rule will add a new subpart

which establishes procedures to be used

in the referendum. This subpart covers

definitions, voting, instructions, use of

subagents, ballots, the referendum

report, and confidentiality of

information.

A proposed rule with a request for

comments on the referendum

procedures was published in the

October 2, 1996, issue of the Federal

Register [61 FR 51391]. No comments

were received on the proposal.

However, comments were received on

the proposed Order regarding the

definition of kiwifruit. The commenters

expressed that some individuals may be

producers of ‘‘hardy kiwifruit,’’ a

different species of kiwifruit, known as

Actinidia arguta. Other names for this

species (hardy kiwifruit) are baby

kiwifruit, kiwifruit grape, and

kiwiberry. There are no official statistics

on this commodity because it is such a

small and new crop. According to

comments received on the proposed

Order this species is grown in

California, Oregon, Pennsylvania,

Washington, Virginia, and British

Columbia. The production in Virginia

and Pennsylvania is not commercially

marketed. Oregon production on 5 acres

was a total of 216,000 pounds over the

last 3 years. It takes 3 to 5 years to

harvest the first crop. The hardy

kiwifruit is hand-harvested and packed

in 6-ounce berry baskets like

raspberries. The harvesting, storage,

handling, consumer recognition, and

marketing of this species is completely

different from the most common fuzzy

kiwifruit or Actinidia deliciosa.

Accordingly, we changed the definition

of kiwifruit in the proposed order to

mean all varieties of fresh kiwifruit

classified under the species Actinidia

deliciosa or the genus Actinidia. That

definition of kiwifruit is added in this

rule as well. All references to

‘‘kiwifruit’’ in this document, therefore,

mean the Actinidia deliciosa species.

Accordingly, no changes to the text of

the regulation as proposed are made in

this final rule, except for the addition of

the definition of kiwifruit that appears

in the proposed order. After

consideration of all relevant material

presented, it is found that this final rule

effectuates the declared policy of the

Act.

List of Subjects in 7 CFR Part 1214

Administrative practice and

procedure, Advertising, Consumer

information, Marketing agreements,

Kiwifruit, 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 as

follows:

1. Part 1214 is added to read as

follows:

PART 1214—KIWIFRUIT RESEARCH,

PROMOTION, AND CONSUMER

INFORMATION ORDER

Subpart A—Reserved

Subpart B—Reserved

Subpart C—Procedure for the Conduct of

Referenda in Connection With the Kiwifruit

Research, Promotion, and Consumer

Information Order

Sec.

1214.200 General.

1214.201 Definitions.

1214.202 Voting.

1214.203 Instructions.

1214.204 Subagents.

1214.205 Ballots.

1214.206 Referendum report.

1214.207 Confidential information.

Authority: 7 U.S.C. 7461–7473.

Subpart C—Procedure for the Conduct

of Referenda in Connection With the

Kiwifruit Research, Promotion, and

Consumer Information Order

§ 1214.200 General.

A referendum to determine whether

eligible producers and importers favor

the issuance of a proposed Kiwifruit

Research, Promotion, and Consumer

Information Order shall be conducted in

accordance with this subpart.

§ 1214.201 Definitions.

Unless otherwise defined in this

section, the definition of terms used in

this subpart shall have the same

meaning as the definitions in the Order.

(a) Administrator means the

Administrator of the Agricultural

Marketing Service, with power to

redelegate, or any officer or employee of

the Department to whom authority has

been delegated or may hereafter be

delegated to act in the Administrator’s

stead.

(b) Order means the Kiwifruit

Research, Promotion, and Consumer

Information Order.

(c) Referendum agent or agent means

the individual or individuals designated

by the Secretary to conduct the

referendum.

(d) Representative period means the

period designated by the Secretary.

(e) Person means any individual,

group of individuals, partnership,

corporation, association, cooperative, or

any other legal entity. For the purpose

of this definition, the term

‘‘partnership’’ includes, but is not

limited to:

(1) A husband and wife who has title

to, or leasehold interest in, kiwifruit

production facilities and equipment 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 the

agreement, informal or otherwise,

contributed capital and others

contributed labor, management,

equipment, or other services, or any

variation of such contributions by two

or more parties so that it results in the

production or importation of kiwifruit

and the authority to transfer title to the

kiwifruit so produced or imported.

(f) Eligible producer means any

person or entity defined as a producer

who produced 500 pounds or more of

kiwifruit during the representative

period and who:

(1) Owns or shares in the ownership

of kiwifruit production facilities and

equipment resulting in the ownership of

the kiwifruit produced;

(2) Rents kiwifruit production

facilities and equipment resulting in the

ownership of all or a portion of the

kiwifruit produced;

(3) Owns kiwifruit production

facilities and equipment but does not

manage them and, as compensation,

obtains the ownership of a portion of

the kiwifruit produced; or

(4) Is a party in a landlord-tenant

relationship or a divided ownership

arrangement involving totally

independent entities cooperating only to

produce kiwifruit who share the risk of

loss and receive a share of the kiwifruit

produced. No other acquisition of legal

title to kiwifruit shall be deemed to

result in persons becoming eligible

producers.

(g) Eligible importer means any person

or entity defined as an importer who

imported 10,000 pounds or more during

the representative period. Importation

occurs when commodities originating

outside the United States are entered or

withdrawn from the U.S. Customs
Federal Register / Vol. 62, No. 201 / Friday, October 17, 1997 / Rules and Regulations 54313

Service for consumption in the United

States. Included are persons who hold

title to foreign-produced kiwifruit

immediately upon release by the U.S.

Customs Service, as well as any persons

who act on behalf of others, as agents or

broker, to secure the release of kiwifruit

from the U.S. Customs Service when

such kiwifruit are entered or withdrawn

for consumption in the United States.

(h) Kiwifruit means all varieties of

fresh kiwifruit classified under the

species Actinidia deliciosa or the genus

Actinidia, whose fruit is a large berry,

oval in shape, with a brown skin

covered in hairs, which are grown in or

imported into the United States.

§ 1214.202 Voting.

(a) Each person who is an eligible

producer or importer, as defined in this

subpart, at the time of 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 kiwifruit, 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 an eligible

corporate producer or importer, or an

administrator, executor, or trustee of an

eligible producing or importing entity

may cast a ballot on behalf of such

producer or importer entity. Any

individual so voting in a referendum

shall certify that such individual is an

officer or employee of the eligible

producer or importer, or an

administrator, executor, or trustee of an

eligible producing or importing 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.

§ 1214.203 Instructions.

The referendum agent shall conduct

the referendum, in the manner provided

in this subpart, under the supervision of

the Administrator. The Administrator

may prescribe additional instructions,

not inconsistent with the provisions of

this section, to govern the procedure to

be followed by the referendum agent.

Such agent shall:

(a) Determine the time of

commencement and termination of the

period during which ballots may be

cast.

(b) Provide ballots and related

material to be used in the referendum.

Ballot material shall provide for

recording essential information

including that needed for ascertaining:

(1) Whether the person voting, or on

whose behalf the vote is cast, is an

eligible voter;

(2) The total volume of kiwifruit

produced by the voting producer during

the representative period; and

(3) The total volume of kiwifruit

imported by the voting importer during

the representative period.

(c) Give reasonable advance 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

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

presence of an agent of the Office of

Inspector General.

(f) Prepare a report on the referendum.

(g) Announce the results to the public.

§ 1214.204 Subagents.

The referendum agent may appoint

any individual or individuals deemed

necessary or desirable to assist the agent

in performing such agent’s functions 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.

§ 1214.205 Ballots.

The referendum agent and subagents

shall accept all ballots cast; but, should

they, or any of them, deem 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.

§ 1214.206 Referendum report.

Except as otherwise directed, the

referendum agent shall prepare and

submit to the Administrator a report on

results of the referendum, the manner in

which it was conducted, the extent and

kind of public notice given, and other

information pertinent to analysis of the

referendum and its results.

§ 1214.207 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.

Dated: October 8, 1997.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable

Programs.

[FR Doc. 97–27323 Filed 10–16–97; 8:45 am]

BILLING CODE 3410–02–U