[Federal Register Volume 62, Number 201 (Friday, October 17, 1997)]
[Rules and Regulations]
[Pages 54310-54313]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-27323]



[[Page 54309]]

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Part III





Department of Agriculture





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Agricultural Marketing Service



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7 CFR Part 1214



Kiwifruit Research, Promotion, Consumer Information Order and 
Referendum Procedures; Final Rule and Proposed Rule

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

[[Page 54310]]



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.

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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

[[Page 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.

[[Page 54312]]

    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


Sec. 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.


Sec. 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

[[Page 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.


Sec. 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.


Sec. 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.


Sec. 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.


Sec. 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.


Sec. 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.


Sec. 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