Friday,

January 14, 2005

Part III

Department of 

Agriculture

Agricultural Marketing Service 

7 CFR Parts 900, 1150, etc. 

Exemption of Organic Handlers From 

Assessments for Market Promotion 

Activities Under Marketing Order 

Programs and Exemption of Organic 

Producers From Assessment by Research 

and Promotion Programs; Final Rules

2744 Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service 

7 CFR Parts 1150, 1160, 1205, 1206, 

1207, 1209, 1210, 1215, 1216, 1218, 

1219, 1220, 1230, 1240, 1250, 1260, and 

1280 

[Docket No. PY–02–006] 

RIN 0581–AC15 

Exempting Organic Producers From 

Assessment by Research and 

Promotion Programs

AGENCY: Agricultural Marketing Service, 

USDA.

ACTION: Final rule.

SUMMARY: This final rule amends all 17 

commodity research and promotion 

orders and/or rules and regulations to 

exempt any person receiving and 

handling solely 100 percent organic 

products from paying assessments to 

any research and promotion program 

administered by the Agricultural 

Marketing Service (AMS). To obtain an 

exemption, the person must operate 

under an approved organic system plan 

authorized by the National Organic 

Program (NOP) and produce and market 

only products that are eligible for a 100 

percent organic label under the NOP. A 

separate final rule to exempt any person 

producing and marketing solely 100 

percent organic products from paying 

assessments for market promotion 

activities under certain marketing order 

programs administered by AMS is also 

being published in today’s Federal 

Register.

DATES: Effective February 14, 2005.

FOR FURTHER INFORMATION CONTACT:

Angela C. Snyder, Office of the Deputy 

Administrator, Poultry Programs, 

Agricultural Marketing Service, U.S. 

Department of Agriculture, 1400 

Independence Avenue, SW.; STOP 

0256, Room 3932–South; Washington, 

DC 20250; (202) 720–4476 or (760) 386–

0424; (202) 720–5631 (fax); or e-mail at 

organicassessment@usda.gov.

SUPPLEMENTARY INFORMATION: Prior 

documents in this proceeding: 

Proposed Rule and Invitation for 

Comments on Proposed Amendments: 

Published April 26, 2004 [69 FR 22689]; 

Proposed Rule; Extension of Comment 

Period: Published May 26, 2004 [69 FR 

29907]. 

Executive Order 12866 

This rule has been determined to be 

‘‘not significant’’ for purposes of 

Executive Order 12866 and therefore 

has not been reviewed by the Office of 

Management and Budget.

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 would not 

preempt any State or local laws, 

regulations, or policies, unless they 

present an irreconcilable conflict with 

this rule. 

The Commodity Promotion, Research, 

and Information Act of 1996; Cotton 

Research and Promotion Act; Dairy 

Production Stabilization Act of 1983; 

Egg Research and Consumer Information 

Act; Fluid Milk Promotion Act of 1990; 

Hass Avocado Promotion, Research, and 

Information Act of 2000; Honey 

Research, Promotion, and Consumer 

Information Act; Mushroom Promotion, 

Research, and Consumer Information 

Act of 1990; Popcorn Promotion, 

Research, and Consumer Information 

Act; Pork Promotion, Research, and 

Consumer Information Act of 1985; 

Potato Research and Promotion Act; 

Soybean Promotion, Research, and 

Consumer Information Act; and 

Watermelon Research and Promotion 

Act provide that administrative 

proceedings must be exhausted before 

parties may file suit in court. Under 

these acts, any person subject to an 

order may file a petition with the 

Secretary of Agriculture stating that the 

order, any provision of the order, or any 

obligation imposed in connection with 

the order is not in accordance with law 

and request a modification of the order 

or to be exempted therefrom. The 

petitioner is afforded the opportunity 

for a hearing on the petition. After the 

hearing, the Secretary will make a ruling 

on the petition. The acts provide that 

the district courts of the United States 

in any district in which the person is an 

inhabitant, or has his principal place of 

business, has jurisdiction to review the 

Secretary’s ruling, provided a complaint 

is filed within 20 days from the date of 

the entry of ruling. There are no 

administrative proceedings that must be 

exhausted prior to any judicial 

challenge to the provisions of the Beef 

Promotion and Research Act of 1985. 

Background 

Section 10607 of the Farm Security 

and Rural Investment Act of 2002 (Pub. 

L. 107–171)—known as the 2002 Farm 

Bill—amended Section 501 of the 

Federal Agriculture Improvement and 

Reform Act of 1996 (7 U.S.C. 7401) 

(FAIR Act) on May 13, 2002. The 

amendment exempts any person that 

produces and markets solely 100 

percent organic products, and that does 

not produce any conventional or 

nonorganic products, from paying 

assessments under a commodity 

promotion law with respect to any 

agricultural commodity that is produced 

on a certified organic farm as defined in 

section 2103 of the Organic Foods 

Production Act of 1990 (7 U.S.C. 6502). 

USDA has implemented National 

Organic Program (NOP) requirements at 

7 CFR part 205 to carry out the intent 

of the OFPA. 

The Farm Bill text reads as follows: 

‘‘Notwithstanding any provision of a 

commodity promotion law, a person 

that produces and markets solely 100 

percent organic products, and that does 

not produce any conventional or 

nonorganic products, shall be exempt 

from the payment of an assessment 

under a commodity promotion law with 

respect to any agricultural commodity 

that is produced on a certified organic 

farm (as defined in section 2103 of the 

Organic Foods Production Act of 1990 

(7 U.S.C. 6502)).’’ 

On April 26, 2004, a proposed rule 

was published in the Federal Register

[69 FR 22690] inviting comments on a 

proposal to amend the orders and/or 

rules and regulations of the 16 research 

and promotion programs for which the 

U.S. Department of Agriculture has 

oversight. These amendments would 

establish a provision for organic 

producers and marketers meeting the 

specified criteria and procedures to be 

exempt from paying assessments under 

research and promotion programs.

Interested parties were provided 30 

days to comment on the proposed 

amendments. At the request of a 

commenter, the comment period was 

extended by an additional 30 days to 

June 25, 2004 [69 FR 29907, published 

May 26, 2004]. 

Summary of Changes From the 

Proposed Rule 

This final rule differs from the 

proposed rule in a number of respects. 

• This final rule covers a new 

program for mangos that was 

implemented following publication of 

the proposed rule. Accordingly, a new 

Subpart C is added to 7 CFR part 1206. 

• This final rule clarifies that, for the 

purpose of obtaining an assessment 

exemption, a person must operate under 

an NOP-approved organic system plan 

and must produce and market only 

commodities eligible for a ‘‘100 percent 

organic’’ label under the NOP (7 CFR 

part 205.300–205.311). This applies to 

all commodities produced and marketed 

by the person, not only those covered by 

the applicable research and promotion 

program under which the exemption is 

sought. 

• This final rule considers any 

assessment payer, for the purpose of 

Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 2745

obtaining an exemption, to be the 

person that produces and markets the 

commodity. Accordingly, the regulatory 

text has been modified as appropriate to 

reflect this, and the definition of 

‘‘produce’’ as proposed has been 

deleted. Therefore, persons other than 

producers are no longer required to alter 

a product. In addition, we have added 

a provision wherein products produced 

and marketed under an organic system 

plan but not sold, labeled, or 

represented as organic would not 

disqualify producers from exemption. 

• An effective date is specified in the 

regulatory text of each program 

providing that the exemption will apply 

at the next assessable period following 

issuance of the Certificate of Exemption. 

• Other changes made in the final 

rule include more specific language 

concerning the application form, 

clarifying the information required of 

importers, and a change from 30 to 60 

days for boards and councils to grant or 

deny exemption requests during the first 

6 months following the final rule’s 

effective date. 

• Miscellaneous changes to some 

programs’ regulatory text were also 

made for clarity. 

Summary of Comments 

We received 132 timely comments 

from individuals, conventional and 

organic farmers, industry organizations, 

research and promotion boards, organic 

trade organizations, a law firm, and a 

State department of agriculture. We also 

received 25 comments from organic 

farmers past the close of the comment 

period, but these did not raise any new 

issues.

Of the 132 comments timely 

submitted, 9 were from conventional 

farmers, 96 were from organic farmers, 

11 were from industry organizations, 4 

were from organic organizations, 7 were 

from research and promotion boards, 1 

was from an organic cooperative, 1 was 

from a State department of agriculture, 

2 were from individuals, and 1 was from 

a law firm on behalf of an organic dairy. 

Of the timely comments, we received 89 

form letters. 

The comments largely fall into two 

broad categories. One category 

addresses issues of assessment 

exemption eligibility and application of 

the FAIR Act. The other category 

addresses administrative and procedural 

issues. 

Issues of Eligibility and Application of 

the FAIR Act 

Definition of Produce: The Farm Bill 

language states that any eligible person 

who produces and markets solely 100 

percent organic products and meets the 

other specified requirements would be 

exempt from the applicable 

assessments. For the purpose of the 

proposed rule, we defined produce to 

mean ‘‘to grow or produce food, feed, 

livestock, or fiber or to receive food, 

feed, livestock, or fiber and alter that 

product by means of feeding, 

slaughtering, or processing.’’

Some commenters stated that the 

definition of ‘‘produce’’ in the proposed 

rule was overly broad, not supported by 

statutory authority, and that it illegally 

expanded the application of the 

exemption to persons not intended to 

receive the exemption by including 

processing activities, either by 

processors or importers. Other 

commenters said that importers should 

not be exempt because the altering or 

processing would be done after the 

assessment is paid, because assessments 

are collected by the U.S. Customs 

Service at the time of entry into the 

country. In addition, commenters 

argued that someone who meets the 

‘‘produce’’ definition should do so for 

all of the exempt product; e.g., an 

importer who imports 10,000 pounds of 

100 percent organic beef and processes 

2 pounds should not be exempt from the 

entire assessment. 

Still other commenters commended 

AMS for recognizing that Congress 

intended to exempt not just producers 

but also handlers, first handlers, 

processors, importers, exporters, 

feeders, and seed stock producers. 

The Farm Bill refers to ‘‘persons who 

produce,’’ not ‘‘producers.’’ Therefore, 

any person who produces—whether a 

producer, importer, processor, or other 

entity—would qualify for exemption, 

assuming all of the specified criteria are 

met. We have reevaluated the definition 

of produce and determined that the 

phrase ‘‘produces and markets’’ should 

apply to the function the person 

performs that compels the payment of 

an assessment. In other words, for 

producers and seed stock producers, 

produce and market means to produce 

the commodity. For handlers and first 

handlers, produce and market means to 

handle the commodity; for importers, to 

import the commodity; for processors, 

to process; for feeders, to produce by 

feeding; and for exporters, to export. 

The regulatory text was changed 

accordingly, and we removed the 

definition of produce that appeared in 

the proposed rule. 

Solely 100 Percent Organic: The Farm 

Bill language states that in order to be 

eligible for exemption, the person must 

produce and market solely 100 percent 

organic products and must not produce 

any conventional or nonorganic 

products. The proposed rule was drafted 

to state that whatever the person 

produces must be 100 percent organic—

not just the commodity for which the 

exemption is sought. 

Some commenters encouraged narrow 

interpretation of the exemption—that 

persons must meet the 100 percent 

definition for everything produced and 

that split operations should not qualify 

for the exemption. However, numerous 

commenters, including form letter 

submitters, said that a producer should 

only have to be certified as 100 percent 

organic for the commodity for which the 

exemption is sought. They also stated 

that by referencing the Organic Foods 

Production Act (OFPA), Congress did 

not limit exemptions for approved split 

operations because Congress has 

determined that a split operation may 

produce 100 percent certified organic 

products. A few commenters said that 

rendering a certified organic farmer who 

produces any non-organic commodity 

ineligible for exemption would be in 

conflict with the OFPA and 

Congressional intent. 

Furthermore, a large number of 

commenters, including form letter 

submitters, wrote that Congress’ use of 

‘‘100 percent organic’’ meant that the 

person’s entire product line must be 

certified as organically produced and 

handled and did not refer to the labeling 

provisions that distinguish between the 

organic products bearing various 

percentages of organic ingredients. 

One commenter said that fluid milk 

can only be classified as 95 percent or 

more organic due to the addition of 

vitamins and that Congress did not 

intend to exclude fluid milk processors, 

and a number of commenters, including 

form letter submitters, said this 

demonstrated that the rule was drawn 

too narrowly.

The Farm Bill language requires that 

a person must produce and market 

solely 100 percent organic products in 

order to receive the exemption. Because 

of the construction of the language, we 

deem ‘‘100 percent organic’’ to mean the 

labeling term described under the NOP 

and ‘‘solely 100 percent organic 

products’’ to mean every product in the 

person’s farm or operation. Therefore, 

our determination is that to be exempt, 

a person must produce only products 

eligible to be labeled as ‘‘100 percent 

organic,’’ and this applies to all 

commodities, not just the commodity 

for which the exemption is sought. To 

be clear, this means that split operations 

will not qualify for exemption. 

However, handlers, first handlers, and 

processors who receive only 100 percent 

organic products from split operations 

will still qualify for exemption, 

2746 Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 

provided they themselves are not 

certified as split operations. 

A small number of commenters stated 

that some provision should be made to 

exempt organic farms in transition. 

They provided two examples. In the 

first example, a certified organic farmer 

purchases 200 acres of adjacent land on 

which conventional hay is currently 

grown. The farmer begins to transition 

the land to make it eligible for organic 

certification. During the 3 years that the 

land is transitioning to become eligible, 

the hay may not be sold as organically 

produced, and the farmer would lose 

the exemption if the hay is sold 

conventionally. In the second example, 

a 100 percent organic farm expands its 

operation by converting some nonorganic crop land to organic. Under 

NOP rules, the land must be farmed 

organically for 3 years to complete the 

transition, and during that time, the 

farmer would not be eligible for the 

exemption. 

Under the proposed rule, transitional 

farms, though not specifically 

mentioned, were ineligible for 

exemption because they are split 

operations and did not produce 100 

percent organic products, and this is 

also reflected in the final rule. In the 

first example, the farmer would be 

certified under NOP as a split operation 

for 3 years until the transition is 

complete. Regardless of whether the hay 

is sold, it could not be labeled or 

marketed as 100 percent organic during 

the 3-year transition period. Since the 

farmer must have NOP certification and 

meet the threshold of solely 100 percent 

organic, the farmer would not be eligible 

for exemption until the entire farm or 

operation was converted to organic 

production. In the second example, the 

farmer owns non-organic crop land and 

would be certified as a split-farm 

operation, therefore making the farmer 

ineligible for exemption. Once the 3-

year transition is complete and the 

entire operation is certified, the farmer 

would be eligible for exemption.

A large number of commenters, 

including form letter submitters, said 

that an organic producer may be forced 

to sell an animal conventionally because 

of using antibiotics or pesticides or 

maintaining a buffer area. They said 

that, in isolated instances and for 

humane purposes, an organic producer 

may administer antibiotic treatment. 

However, that treatment would prevent 

the animal from being sold as organic. 

They also said that organic producers 

may be ordered to use chemicals as part 

of a mandatory disease treatment 

program, and those products cannot be 

sold as organic for 3 years. Furthermore, 

they said that under NOP rules, an 

organic operation must maintain a 

buffer area between the organic farm’s 

crops and any neighboring non-organic 

fields, and crops harvested from a buffer 

zone cannot be marketed as organic. 

These commenters said that because 

isolated use of antibiotics and pesticides 

would not cause the organic producer to 

lose NOP certification and because 

buffer areas are required by NOP rules, 

organic producers should not lose their 

exemption as the result of conventional 

sales under these circumstances. Our 

determination is that if the products 

were produced organically, a 

conventional sale of those organic 

products would not nullify a person’s 

exemption from assessment. Under the 

NOP, organic farmers do not lose 

certification on their organic farms if 

they must sell products conventionally, 

and we have taken the same view. 

Therefore, we have determined that as 

long as the person maintains NOP 

certification, producers (including seed 

stock producers and feeders) will still 

meet the threshold of solely 100 percent 

organic for exemption if: (1) They give 

an animal antibiotic treatment or use 

pesticides or chemicals as a result of 

mandatory programs and market the 

resulting product as conventional, and/

or (2) they sell products from a buffer 

area; provided they maintain NOP 

certification and are not a split 

operation. The regulatory language of 

those programs that assess producers, 

seed stock producers, and feeders (beef, 

blueberries, cotton, dairy, eggs, Hass 

avocados, honey, lamb, mushrooms, 

peanuts, pork, potatoes, soybeans, and 

watermelons) was changed accordingly. 

However, to be consistent with the 

requirement to market solely 100 

percent organic products, handlers, 

processors, and other assessment payers 

who also are producers may not handle, 

process, or otherwise market their 

nonorganic production, other than to 

sell it to another handler or processor. 

The regulatory language was changed 

accordingly. Handlers are assessed 

under the watermelon program, first 

handlers are assessed under the lamb 

and mango programs, and processors are 

assessed under the fluid milk and 

popcorn programs. Only handlers, first 

handlers, and processors that handle or 

process solely 100 percent organic 

products from certified producers are 

eligible for exemption. Moreover, if a 

handler or processor receives products 

from producers who produce both 100 

percent organic and conventional 

products, products from buffer zones, or 

products treated with antibiotics or 

pesticides, that handler or processor is 

not eligible for exemption. To be 

exempt, these handlers or processors 

must receive and handle or process 

solely 100 percent organic products. 

The producers from whom they receive 

products can grow other products 

conventionally, provided all of the 

products the handler or processor 

receives are eligible to be labeled as 100 

percent organic. However, a handler or 

processor who is also a producer under 

the NOP may not sell products from 

buffer zones or treated with antibiotics 

or pesticides under mandatory programs 

and still maintain exemption eligibility. 

Administrative and Procedural Issues 

Effective Date and Initial Coverage:

One commenter believed that the rule 

should specify that the exemption is not 

retroactive. As provided in this final 

rule, the exemption is not retroactive, 

but the regulatory text was changed to 

clarify the effective date. The exemption 

will apply at the next assessable period 

following issuance of the Certificate of 

Exemption. For some applicants, it will 

be the next month; for others, the next 

fiscal year, and each program’s 

regulatory language addresses specifics. 

Application: A number of 

commenters, including form letter 

submitters, said that persons should not 

have to apply for exemption but instead 

should only have to present the 

certificate from the USDA-accredited 

certifying agent. These commenters said 

that the certificate contains sufficient 

information to permit boards to 

determine exemption eligibility, and no 

additional paperwork should be 

required. 

Several of these commenters 

commended USDA for proposing 

reporting requirements that would 

solely use the certification documents 

from a USDA-accredited certifier to 

satisfy the eligibility requirements of 

‘‘100 percent organic’’ as defined by the 

NOP. The commenters are correct that 

the certificate from a USDA-accredited 

certifying agent indicates whether the 

person’s farm or operation is certified as 

operating under an organic system plan. 

However, the application provides 

additional information that is necessary 

for boards to determine whether the 

person meets the threshold for solely

100 percent organic and other specified 

criteria.

Commenters also stated that they 

agreed with the proposed rule that the 

application should include only the 

following: Name, address, a copy of the 

organic exemption certificate, and a 

signed declaration that the farmer meets 

the qualifications for exemption. They 

said that if the form requires 

information beyond what is addressed 

in the regulatory text, the public must 

Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 2747

have a chance to comment. While the 

proposed regulatory text addressed the 

information requested on the form as 

‘‘name, address, copy of the organic 

certificate, and a signed certification 

* * *,’’ the supplementary information 

of the proposed rule outlined this 

information in greater detail. This 

included the applicant’s name, the 

name and address of the company, 

telephone and fax numbers, a copy of 

the organic certification, and a signed 

certification that the person meets the 

qualification for exemption. 

Herein, we are clarifying that some 

additional information is needed on the 

form that is part of the person’s signed 

certification. This includes a list of 

commodities marketed by the applicant, 

and assertions that the applicant is 

certified, produces solely 100 percent 

organic products, and is not a split 

operation. Also, the form asks for an email address, but this is optional. The 

proposed rule estimated that this form 

would take 30 minutes to complete, and 

the information that was not specifically 

itemized was and remains included in 

the paperwork burden estimate. 

These commenters also said that in 

requiring farmers to certify that they 

produce solely 100 percent organic 

products, the potential for confusion 

exists because this terminology differs 

from the typical language used by 

certifying agents. As part of their 

application, organic persons must 

submit a copy of their certification from 

a USDA-accredited certifying agent. The 

boards will evaluate the remainder of 

the application to determine whether or 

not the person meets the threshold of 

solely 100 percent organic, though it 

should be readily apparent whether the 

applicant qualifies. Therefore, no 

changes were made. 

In response to one comment, we 

amended the regulatory text to reflect 

that the information required from 

importer applicants is the same as that 

required from other applicants. While 

that was the intent of the proposed rule, 

the regulatory text reflected slightly 

different requirements. 

We did not adopt a recommendation 

from several commenters that would 

require persons to submit, in lieu of an 

application, a notice of eligibility to the 

applicable board, along with any 

materials necessary to demonstrate that 

eligibility. The commenters also 

suggested that persons with less than 

$5,000 in income be required to file an 

affidavit and notify the board of any 

change in eligibility within 30 days. Our 

determination is that the notice of 

eligibility or affidavit would virtually be 

the same burden as the application. 

Moreover, not only is the application 

minimally burdensome, but it is also 

necessary for boards to annually 

determine an applicant’s eligibility and 

to verify compliance. 

One commenter drafted a form and 

suggested its use by applicants, and an 

industry organization suggested a threepart form with copies going to the 

producer, purchaser, and State council. 

The information requested on this form 

was, in our view, not sufficient to 

determine whether the applicant met 

the criteria for exemption. Therefore, we 

did not adopt this suggestion. 

Several commenters said that the 

certification process must be tightly 

controlled to prevent abuse. We believe 

that the process is sufficiently 

controlled between the application, 

documentation, and compliance 

measures. Furthermore, the exemption 

process is consistent with the process 

used by those programs with de minimis

exemptions.

One commenter said that the 

paperwork associated with the 

exemptions will be costly to the boards 

and divert funds from promotion and 

research and activities. Our response is 

that while there will be some expense 

involved in administering the 

exemption, we have taken steps to 

simplify and standardize the boards’

processes and minimize costs. 

Requirement to Reapply Annually:

The proposed rule required that the 

exempt person must reapply on an 

annual basis. 

One commenter supported annual 

recertification, but a number of 

commenters said that annual 

recertification is overly burdensome 

because NOP certificates are good until 

suspended, surrendered, or revoked. 

These commenters said that this 

requirement is unnecessary if the 

organic certificate is used. Instead, the 

burden should be on the farmer to notify 

the boards of any change in status and 

then repay any assessments owed. Some 

commenters urged AMS to provide 

strong language for revoking the 

exemption when its requirements are no 

longer satisfied. 

We reviewed this issue and did not 

remove the requirement to reapply 

annually because we believe that in 

order for boards to maintain 

compliance, an annual application is 

necessary. Boards must keep up with 

assessment payers’ evolving operations, 

and an annual application is preferable 

to relying on exempt parties to notify 

boards of any changes. Without an 

annual application, persons who 

thought they were exempt but should 

not have been could end up owing a 

significant amount of outstanding 

assessments. The burden of reapplying 

annually is negligible compared to the 

benefits of exemption. Furthermore, this 

requirement is consistent with existing 

rules and regulations specifying that 

those who apply for exemption for de 

minimis reasons must do so every year. 

We did not adopt a suggestion from 

one commenter that, in lieu of annual 

recertification, the research and 

promotion boards take the money they 

have collected from organic producers 

and use it to send notifications to 

collecting handlers (or other parties that 

collect assessments from the assessment 

payer) and to include information about 

the organic exemption in all future 

literature about commodity checkoff 

programs. Notification will be made to 

the industry as a whole through this 

rule and a news release, and exempt 

persons are required to notify any 

person who collects and remits their 

assessments, if applicable, of their 

exempt status. 

Deadline for Granting Exemptions:

The proposed rule stated that the 

boards/councils will grant or deny 

applications for exemption within 30 

days. 

A handful of commenters said that the 

30-day deadline for granting exemptions 

is too short. Instead, boards should have 

60 days to grant exemptions. We 

reviewed this recommendation and are 

maintaining the 30-day deadline. This 

timeframe was included to ensure that 

qualifying persons receive the organic 

exemption in a timely manner. 

Moreover, there should be no 

deliberation based on the information 

that is requested on the form; it should 

be readily apparent whether or not 

applicants qualify. However, we 

recognize that boards may need 

additional time up-front to establish 

procedures. To that end, we amended 

the rule to allow boards 60 days to grant 

exemptions within the first 6 months of 

this rule’s effective date. After 6 months, 

the timeframe will revert to 30 days. 

Notification of Denial: One 

commenter said that the rule should 

specify in writing that farmers who are 

denied the exemption are timely 

notified in writing. The regulatory 

language was amended to reflect that 

persons denied the exemption will be 

notified in writing within the same 

timeframe as those granted the 

exemption. 

An organic organization said that the 

rule should clarify that a person meeting 

the requirements of the application is 

presumed to be exempt and should 

further clarify the circumstances under 

which the applicant could be denied 

exemption. To clarify, any person 

meeting all criteria will be granted the 

exemption. Reasons for denial include 

2748 Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 

lack of NOP certification, failure to meet 

the definition of person, or failure to 

meet the threshold of solely 100 percent 

organic. 

In addition, we described an appeals 

process in the supplementary 

information. 

Recordkeeping: One commenter said 

that the rule should include a 

requirement to maintain exemption 

records for a term that is consistent with 

the term required for keeping records for 

compliance audits, and three 

commenters (one research and 

promotion board and two industry 

organizations) said that the rule should 

specify that boards and recordkeepers 

must maintain records for 7 years for 

compliance purposes. We did not adopt 

either of these suggestions because the 

individual orders and/or regulations 

already address recordkeeping 

requirements, and the 7-year period is 

beyond the 2 years generally specified. 

Two commenters said that the rule 

should specify an obligation to make 

available all records necessary to verify 

compliance, but we did not incorporate 

this suggestion. Recordkeeping 

requirements are already spelled out in 

the various orders and/or regulations, 

and specifying an obligation to make 

these documents available would be 

redundant.

Collecting Handlers: A few 

commenters wanted to replace the 

provisions requiring the person to 

provide a copy of the exemption 

certificate to each person responsible for 

collecting and remitting the assessment. 

Instead, the person would be required to 

provide a correctly completed original 

and numbered exemption certificate at 

the time of sale from a book of 

certificates obtained from the board. We 

did not adopt this suggestion because 

we believe it is unnecessary and would 

put undue burden on the exempt person 

and the boards. 

Several commenters said that for the 

beef program, the collecting point (the 

one who reports to the State beef 

council) should list cattle on the 

monthly remittance report like they 

would report another State of origin. We 

reviewed this recommendation and 

determined that no change was needed 

in the rule. Instead, the boards will 

develop guidance or instructions for 

collecting handlers or whatever party is 

responsible for collecting and remitting 

assessments to report to the boards any 

commodity that was not assessed 

because of the organic exemption. This 

reporting would be handled on existing 

handler or remittance forms and would 

not add additional paperwork burden. 

One commenter said that the rule 

should specify that any watermelon 

handler that handles both organic and 

non-organic products cannot exempt 

any part of the assessments collected 

from the producer, nor from that 

handler’s portion of the assessment for 

either organic or non-organic product. 

In response to this comment, we did not 

amend the rule. Under the watermelon 

program, handlers are assessed in 

addition to producers and importers. In 

the case of a producer selling to a 

handler, the producer pays an 

assessment on watermelons produced, 

which the handler collects and remits, 

and the handler also pays an assessment 

on watermelons handled. To be exempt, 

the producer must meet the specified 

criteria; likewise, for the handler to be 

exempt, the handler must meet the 

specified criteria. If the producer is 

exempt but the handler is not, the 

handler must pay assessments on all 

products handled. In no case, though, 

would the handler have to remit an 

assessment from an exempt producer on 

watermelons produced by that 

producer. 

One commenter said that specific 

reporting procedures need to be 

included for producers and collecting 

points to ensure that organic and 

nonorganic commodities are not mixed 

and that only certified organic 

commodities are subject to the 

exemption. In response to this 

comment, we did not make any changes 

to the rule. Persons are exempt under 

this rule, not commodities. Since only 

persons certified as 100 percent organic 

can be exempt, there should be no 

question of mixing organic and 

nonorganic commodities in terms of the 

exemption. 

Compliance: A number of 

commenters said that AMS and NOP 

should work in active cooperation with 

the boards on compliance. Another 

commenter said that sellers, purchasers, 

and handlers should be able to access 

full disclosure of animals that have been 

exempt from assessment; to that end, 

USDA should maintain a database 

indicating the name and address of any 

exempt person and the period of 

exemption. A number of commenters 

said that the rule should require USDA 

to provide quarterly updates to boards 

showing farmers certified as organic and 

those whose certification has been 

revoked. We are not establishing a 

database for public access, but we 

concur that we should assist the boards’

compliance efforts. Therefore, while no 

change was made to the regulatory text, 

we will share with the boards 

information in some form as appropriate 

for the boards to maintain an effective 

compliance program.

We did not adopt suggestions from 

commenters to specify that a person 

claiming organic exemption is subject to 

a board audit or to urge board staff to 

conduct regular audits. Since the boards 

already have the authority to conduct 

audits to maintain or verify compliance, 

it was unnecessary to articulate this in 

the regulatory text. 

Harmonized Tariff Schedule (HTS) 

Numbers: One commenter asked for 

clarification on the process by which a 

board issued an HTS classification to an 

importer, while another said that the 

rule should specify that boards should 

consult with the U.S. Customs Service 

to establish an HTS number. However, 

no changes were made to the rule. AMS 

will work with the boards to establish 

HTS numbers, and we do not believe 

the process needs to be articulated in 

the regulatory text. 

State Programs: A commenter 

expressed concern that organic farmers 

could incorrectly believe that they are 

also exempt from paying assessments 

required by State law. Similarly, other 

commenters said that it should be the 

boards’ responsibility to inform the 

exempt person that the exemption only 

covers national program assessments 

and not a State program authorized by 

State law and that the certificate of 

exemption should clearly state that the 

person is not exempt under any State 

law. We did not adopt these 

suggestions. The 17 programs affected 

by this exemption are identified in this 

final rule as the only programs for 

which an organic exemption can be 

obtained, and we do not believe it is 

necessary to articulate this in the 

regulatory text. 

Other Comments: We did not adopt a 

suggestion from several commenters 

that the rule state that the exemption is 

granted to the person and not the 

commodity. We believe the rule is clear 

that persons are exempt from paying 

assessments, not that commodities are 

exempt from being assessed. 

One commenter expressed concern 

about the administration and 

implementation of the exemption and 

said that there should be one governing 

body controlling certification and 

exemption requirements. This 

commenter suggested that the boards 

would best be able to spot forgeries and 

should therefore be the designated 

governing body. We determined that no 

changes to the rule are necessary. The 

proposed rule specified that the boards 

or their designees administer the 

exemption. The reason designees are 

included is that in the beef program, the 

Qualified State Beef Councils are 

responsible for receiving assessments, 

and the Board only receives assessments 

Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 2749

directly in cases where there is no State 

beef council. 

Other commenters said that the rule 

should specify that the exempt organic 

person cannot be owned or affiliated 

with a person who pays assessments to 

a research and promotion board, nor can 

they be affiliated with a person who 

produces conventional products. In 

response to these comments, one 

commenter stated that nothing in the 

law permits USDA to make distinctions 

based on corporate structure. We 

reviewed these comments. The Farm 

Bill specifies that the exemption is 

granted to persons that produce and 

market solely 100 percent organic 

products, and a person can be an 

individual, group of individuals, 

corporation, association, cooperative, or 

other business entity. Therefore, no 

changes were made to the rule. 

A commenter said that the rule 

should more strictly and accurately 

specify and define those who qualify 

and do not qualify. However, we did not 

believe any changes to the rule were 

necessary in light of the comment 

discussion, supplementary information, 

and examples contained herein 

addressing eligibility. 

We did not adopt a suggestion from 

one commenter to address importers in 

the dairy regulations (7 CFR part 1105). 

Separate rulemaking to assess importers 

under the dairy promotion and research 

program is not finalized. Consequently, 

we cannot address the organic 

exemption for importers under the dairy 

promotion and research regulations 

until a final rule has been issued and 

importers become subject to assessment. 

We incorporated, with modification 

as necessary, certain editorial comments 

concerning regulatory text to correct and 

consolidate references to assessment 

payers and clarify provisions in 7 CFR 

part 1240. 

We incorporated, with modification 

as necessary, a comment concerning 

regulatory text in 7 CFR part 1260 to 

clarify that the board or a State beef 

council receives assessments under the 

beef promotion and research program. 

Provisions of This Rule 

The FAIR Act amendment covers 

research and promotion programs 

established under either free-standing 

legislation (beef, cotton, eggs, fluid milk, 

dairy, Hass avocados, honey, 

mushrooms, popcorn, pork, potatoes, 

soybeans, and watermelons) or the 

Commodity Promotion, Research, and 

Information Act of 1996 (blueberries, 

lamb, mangos, and peanuts).

When the proposed rule on this 

organic exemption was issued, 

rulemaking to establish a mango 

program was ongoing. A second 

proposed rule on the Mango Promotion, 

Research and Information Order was 

published in the October 9, 2003, issue 

of the Federal Register [68 FR 58556]. 

In November 2003, first handlers and 

importers of mangos voted to approve a 

national mango promotion, research, 

and information order. A final rule was 

published on October 4, 2004 [69 FR 

59120], and the mango promotion, 

research, and information program 

became effective November 4, 2004, and 

was codified at 7 CFR part 1206. The 

proposed rule on the organic exemption 

outlined that if the mango program were 

finalized, provisions similar to those 

proposed for Hass avocados (7 CFR part 

1219) would be added to exempt 

persons producing and marketing solely 

100 percent organic products from 

paying assessments under a mango 

research and promotion program. 

Consequently, a new Subpart C was 

added to 7 CFR part 1206 to establish 

rules and regulations addressing how 

eligible organic first handlers and 

importers of mangos would obtain an 

exemption. 

Wholly industry-funded and 

-operated and charged with creating and 

expanding markets for the agricultural 

commodities they represent, these 

programs are overseen by AMS, 

including review of budgets, plans, and 

projects. Producers, handlers, importers, 

and/or others in the marketing chain 

pay assessments to these commodity 

boards to fund the programs. Industries 

voluntarily request these programs. 

Research and promotion programs allow 

industries to establish, finance, and 

carry out coordinated programs of 

research, producer and consumer 

education, and promotion to improve, 

maintain, and develop markets for their 

commodities. 

Under this proposal, language would 

be added to the orders, plans, and/or 

regulations of each program specifying 

the criteria for identifying persons 

eligible to obtain an assessment 

exemption and procedures for applying 

for an exemption. The provision would 

be tailored to each of the 17 programs, 

all of which have structural and 

operational distinctions. The result 

would be some procedural differences 

between the programs’ regulatory 

language. For example, under the cotton 

program, producers would be required 

to reapply for exemption every year on 

or before the beginning of the crop year 

[see § 1205.519(b)]. Under the 

watermelon program, however, 

producers and handlers would reapply 

for exemption on or before January 1 of 

each year [see § 1210.516(b)]. 

Who Is Eligible for Exemption 

To be eligible for an exemption, the 

person must be subject to an assessment 

under a research and promotion 

program administered by AMS. Of the 

17 research and promotion programs 

covered under this proposed rule, 14 

assess producers. Most of these 

programs also assess other entities, 

including handlers, first handlers, 

importers, exporters, feeders, and seed 

stock producers. One program assesses 

first handlers and importers, and two 

programs assess processors. 

The FAIR Act amendment specifies 

that to be exempt from a commodity 

promotion assessment, a person—

meaning an individual, group of 

individuals, corporation, association, 

cooperative, or other business entity—

must produce and market solely 100 

percent organic products and must not 

produce any nonorganic or conventional 

products. For purposes of this rule, 

produce and market means the function 

the person performs requiring the 

payment of an assessment. For 

producers and seed stock producers, it 

means to produce the commodity; for 

handlers and first handlers, it means to 

handle; for importers, it means to 

import; for processors, it means to 

process; for feeders, to produce by 

feeding; and for exporters, to export. 

Regardless, to be exempt, all persons 

must possess certification from a USDAaccredited certifying agent and certify 

that the farm or handling operation 

meets the requirements of 100 percent 

organic as defined in 7 CFR part 205 

and other specified criteria. Exemption 

eligibility is based on a three-prong test: 

(1) The person must be a certified 

organic producer or operator; (2) the 

person must be eligible to label all 

products as 100 percent organic as 

described in 7 CFR part 205; and (3) the 

100 percent organic labeling eligibility 

applies to every commodity the person 

produces and markets. 

Selling an organic product in the 

conventional marketplace does not 

nullify the exemption eligibility of a 

producer, seed stock producer, or 

feeder. A person who produces and 

markets agricultural commodities under 

an approved organic system plan and is 

not a split operation as described under 

the NOP will not be disqualified from 

exemption when the agricultural 

commodities produced and marketed 

under the plan are not sold, labeled, or 

represented as organic. In other words, 

if products are certified as 100 percent 

organic, a person who sells some of 

these products in the conventional 

marketplace is not disqualified from the 

exemption. There could be a variety of 

2750 Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 

reasons why a producer, seed stock 

producer, or feeder would sell organic 

products through conventional 

channels. These include lack of demand 

for organic products or lack of sufficient 

organic markets. 

Examples

• A farmer grows 100 percent organic 

soybeans and 100 percent organic corn. 

The farmer is eligible for exemption 

under the soybean promotion, research, 

and consumer information program. 

• A farmer grows 100 percent organic 

soybeans and conventional corn. While 

the farmer’s soybean land may be 

certified as operating under an organic 

system plan, the farmer is a split 

operation and is therefore not eligible 

for exemption under the soybean 

promotion, research, and consumer 

information program because the 

farmer’s production is not solely 100 

percent organic. 

• An importer imports only 100 

percent organic boxed beef. The 

importer is eligible for exemption under 

the beef promotion and research 

program. 

• A farmer grows 100 percent organic 

soybeans but, because of a Statemandated disease eradication program, 

must sell the affected soybeans 

conventionally for the next 3 years. 

Assuming the farmer remains certified, 

the farmer is eligible for exemption 

under the soybean promotion, research, 

and consumer information program, 

even during the 3-year period. 

• A watermelon handler receives 

solely 100 percent organic watermelons. 

One of the handler’s producers is 

required by the State government to 

spray all or a portion of the watermelons 

with chemicals to eradicate a disease. 

The producer maintains NOP 

certification during the 3-year period in 

which the watermelons must be sold 

conventionally, during which time the 

handler handles this producer’s 

watermelons. The handler is not eligible 

for exemption. 

• A certified producer grows 

soybeans which are 100 percent organic. 

The producer purchases neighboring 

land that has grown conventional 

soybeans and plans to farm that land 

organically. Under NOP rules, it will be 

3 years before that newly acquired land 

can be certified. The producer is not 

eligible for exemption under the 

soybean promotion, research, and 

consumer information program because 

the producer does not meet the 

threshold of solely 100 percent organic. 

• A watermelon handler receives 

solely 100 percent organic watermelons 

from a watermelon producer who also 

grows conventional products and is 

certified under NOP as a split farm 

operation. The handler handles only 

100 percent organic products. The 

handler is eligible for exemption. 

• A fluid milk processor processes 

organic milk, but the milk does not meet 

the threshold of 100 percent organic as 

defined under NOP because of the 

addition of vitamins. The fluid milk 

processor is not eligible for exemption. 

Procedures

According to the 2002 Farm Bill, any 

person that produces and markets solely 

100 percent organic products, and that 

does not produce any conventional or 

non-organic products, is exempt from 

paying assessments under a commodity 

promotion law with respect to any 

agricultural commodity that is produced 

on a certified organic farm as defined in 

7 CFR 205. Produce and market means 

the function the person performs that 

requires the payment of assessment. For 

producers, produce and market means 

to produce the commodity. For 

handlers, it means to handle; for 

importers, to import; for processors, to 

process; etc. 

To be exempt from paying 

assessments under a research and 

promotion program administered by 

AMS, the person would submit an 

application—‘‘Organic Exemption 

Request Form’’—to the applicable board 

or council. The form would need to be 

submitted to the board, council, or other 

party designated by the board or council 

prior to or during the initial applicable 

assessment period and annually 

thereafter as long as the applicant 

continues to be eligible for the 

exemption. This application would 

include the applicant’s name, name and 

address of the company, telephone and 

fax numbers, a copy of the applicant’s 

organic farm or organic handling 

operation certificate provided by a 

USDA-accredited certifying agent under 

the Organic Foods Production Act of 

1990 (7 U.S.C. 6502), and a signed 

certification that the applicant meets all 

of the requirements specified for an 

assessment exemption. This signed 

declaration includes additional 

information necessary to demonstrate 

eligibility. 

If the applicant complies with these 

requirements and is eligible for an 

assessment exemption, the board or 

council would approve the exemption 

and notify the applicant. For the first 6 

months following the rule’s effective 

date, boards or councils will have 60 

days to approve the exemption request. 

After that, boards or councils will have 

30 days to approve the exemption 

request. 

If the application is disapproved, the 

board or council would notify the 

applicant of the reason(s) for 

disapproval within the same timeframe. 

Applicants may appeal if a board or 

council does not approve their 

exemption requests. The first appeal 

level would be the board or council. If 

the applicant is still not satisfied with 

the decision made by the committee or 

board on appeal, the applicant may 

appeal to USDA. All decisions of USDA 

will be final. 

For the purpose of assuring fair and 

consistent treatment of all persons 

applying for organic assessment 

exemptions, USDA has the right to 

review any decision made by the boards 

or councils. 

Most of the programs require that the 

person responsible for remitting 

assessments on behalf of the exempt 

party maintain a record of that party’s 

exemption. In most cases, this is a 

handler maintaining a record of an 

exempt producer. 

Paperwork Reduction Act 

The provisions of the proposed rule 

were carefully reviewed, and every 

effort was made to minimize 

information collection requirements and 

still ensure effective administration of 

the exemption. In accordance with OMB 

regulations [5 CFR 1320], which 

implement the Paperwork Reduction 

Act of 1995 (44 U.S.C. Chapter 35), the 

information collection and 

recordkeeping requirements that are 

imposed by this rule were submitted to 

OMB as a reinstatement with change 

under control number 0581–0217. 

This action will enable organic 

producers and marketers to apply for 

exemption under the following 17 

research and promotion programs: 7 

CFR parts 1150, 1160, 1205, 1206, 1207, 

1209, 1210, 1215, 1216, 1218, 1219, 

1220, 1230, 1240, 1250, 1260, and 1280. 

Producers and marketers include 

producers, handlers, first handlers, 

processors, exporters, feeders, and seed 

stock producers.

Form AMS–15, Organic Exemption 

Request Form, was described in the 

proposed rule as requiring the 

applicant’s name, name and address of 

the company, telephone and fax 

numbers, a copy of the applicant’s 

organic farm or organic handling 

certificate provided by a USDAaccredited certifying agent under the 

Organic Foods Production Act of 1990 

(7 U.S.C. 6502), and a signed 

certification that the applicant meets all 

of the requirements specified for an 

assessment exemption. This signed 

certification includes providing certain 

additional information. This is a list of 

Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 2751

commodities marketed by the applicant 

and assertions that the applicant is not 

a split operation and produces and 

markets only products eligible to be 

labeled as 100 percent organic. Also, the 

form asks for an e-mail address, but this 

is optional. 

As a result of comments received, the 

Organic Exemption Request Form was 

modified to eliminate some information 

that was part of the signed certification 

that we no longer deemed applicable 

and add some information that was 

determined to be necessary. This 

revised information has no affect on the 

burden or description of the form. 

Title: Organic Producer and Marketer 

Exemption from Assessment Under 

Research and Promotion Programs 

OMB Number: 0581–0217. 

Type of Request: Reinstatement, with 

change, of a previously approved 

collection for which approval has 

expired. 

Abstract: The information collection 

requirements in this request are 

essential to carry out the intent of the 

2002 Farm Bill in exempting from 

assessment persons who produce and 

market solely 100 percent organic 

products. 

The request for approval of the new 

information collection is as follows: 

Form AMS–15, Organic Exemption 

Request Form:

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 30 minutes per 

response. 

Respondents: Eligible Certified 

Organic Producers and Marketers. 

Estimated Number of Respondents:

2,165. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 1,082.5 hours. 

Most of the programs require that the 

person responsible for remitting 

assessments on behalf of the exempt 

party maintain a record of that party’s 

exemption. In most cases, this is a 

handler maintaining a record of an 

exempt producer. The burdens on these 

persons for such recordkeeping 

requirements are included in the 

information collection requests 

previously approved for all of the 

programs—Hass avocados under OMB 

control number 0581–0197, beef and 

pork under 0590–0001, lamb under 

0581–0198, mangos under 0581–0209, 

and the rest under 0581–0093. 

The information collection will be 

used only by authorized representatives 

of USDA, including AMS staff, and 

authorized representatives of the boards 

and councils or their designees. 

Authorized representatives of the boards 

and councils (or their designees) will be 

the primary users of the information, 

and AMS will be the secondary user. 

Regulatory Flexibility Act 

In accordance with the Regulatory 

Flexibility Act (5 U.S.C. 601 et seq.) 

(RFA), the Agricultural Marketing 

Service (AMS) has examined the impact 

of the proposed rule on small entities. 

The purpose of the RFA is to fit 

regulatory actions to the scale of 

businesses subject to such actions so 

that small businesses will not be 

disproportionately burdened. 

As previously mentioned, producers, 

handlers, first handlers, processors, 

importers, exporters, feeders, and seed 

stock producers pay assessments to the 

national boards or councils that 

administer various commodity research 

and promotion programs, or in some 

cases to other parties designated by a 

board or council to collect assessments. 

Initiated as a result of the 2002 Farm 

Bill, which amended Section 501 of the 

Federal Agricultural Improvement and 

Reform Act of 1996 (FAIR Act), this rule 

exempts from assessment those entities 

that produce and market solely 100 

percent organic products. 

To obtain the exemption, eligible 

producers, handlers, first handlers, 

processors, importers, exporters, 

feeders, and seed stock producers must 

submit a request for exemption to the 

appropriate board or council on a form. 

While the rule imposes certain reporting 

and recordkeeping requirements on 

these entities, the form requires the 

minimum information necessary to 

effectively administer the exemption 

provision, and its use is necessary for 

compliance purposes. 

In preparing its initial regulatory 

flexibility analysis, AMS attempted to 

identify the entities that would be 

affected by the proposed rule and to 

examine the potential impact on such 

entities. However, information was not 

available to allow AMS to determine 

whether any importers would be 

covered by this proposed rule under the 

beef and pork programs. In addition, 

information was not available to allow 

AMS to identify the respondents under 

the lamb program as producers, first 

handlers, feeders, exporters, and seed 

stock producers, so AMS addressed the 

lamb program in the aggregate to 

determine the economic impact. 

Because a provision for mangos was 

included in this final rule, information 

on mangos was obtained and used to 

prepare the final regulatory flexibility 

analysis. 

The estimated respondents providing 

new information to the boards or 

councils and the burden associated with 

the information collections is as follows. 

There would be an estimated 2,165 

respondents providing new information 

to the boards or councils under the 

following programs: 

Beef: 167 producers, number of 

importers unknown (167 total). 

Blueberries: 7 producers, 0 importers 

(7 total). 

Cotton: 100 producers, 10 importers 

(110 total). 

Dairy: 600 producers. 

Eggs: 0 producers. 

Fluid milk: 0 processors. 

Hass avocados: 60 producers, 0 

importers (60 total). 

Honey: 10 producers, 0 importers (10 

total). 

Lamb: 40 respondents (including 

producers, first handlers, feeders, seed 

stock producers, and exporters). 

Mangos: 1 first handler, 5 importers (6 

total).

Mushrooms: 2 producers, 0 importers 

(2 total). 

Peanuts: 54 producers. 

Popcorn: 0 processors. 

Pork: 18 producers, number of 

importers unknown (18 total). 

Potatoes: 35 producers, 0 importers 

(35 total). 

Soybeans: 1,028 producers. 

Watermelons: 27 producers, 1 

handler, 0 importers (28 total). 

No respondents were identified for 

the fluid milk, popcorn, and egg 

programs. The fluid milk and egg 

programs exempt smaller entities from 

assessment—fluid milk processors 

processing 3 million pounds or less 

during the first month of the fiscal 

period and egg producers owning 

75,000 or fewer laying hens. Among 

assessment payers, no solely 100 

percent organic processors or producers 

are known; if they exist, they are already 

exempt for de minimis reasons. No 

popcorn processors that produce (as 

defined in this rule) solely 100 percent 

organic product were identified because 

of the current nature of the popcorn 

industry. 

The burden associated with the 

information collection would be 

$10,825.00 for all respondents, or $5.00 

per respondent. These totals have been 

estimated by multiplying the burden 

hours associated with the exemption 

request form by $10.00 per hour, a sum 

deemed to be reasonable should the 

respondents be compensated for their 

time. 

Under the 17 research and promotion 

programs, those assessed pay 

assessments to the boards and councils 

that administer the programs. The total 

annual collections and assessment rates 

for each board or council are as follows: 

Beef: $83.6 million; $1 per head. 

2752 Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 

Blueberries: $1.5 million; $12 per ton. 

Cotton: $65.2 million; $1 per bale plus 

0.5 percent of the value of the lint in 

each bale. 

Dairy: $255.0 million; 15 cents per 

cwt. 

Eggs: $19.7 million; 10 cents per 30-

dozen case of eggs. 

Fluid milk: $106.2 million; 20 cents 

per cwt. 

Hass avocados: $16.3 million; 2.5 

cents per pound. 

Honey: $3.6 million; 1 cent per 

pound. 

Lamb: $3.5 million; $0.005 per pound 

of live weight, $0.30 per head on lambs 

purchased for slaughter. 

Mangos: $2.5 million; 0.5 cents per 

pound. 

Mushrooms: $1.7 million; .002 cents 

per pound. 

Peanuts: $6.7 million; 1 percent of the 

value of the peanuts.

Popcorn: $558,000; 6 cents per cwt. 

Pork: $47.8 million; 0.40 percent of 

the market value. 

Potatoes: $8.6 million; 2 cents per 

cwt. 

Soybeans: $77.8 million; 1⁄2 of 1 

percent of the net market value. 

Watermelons: $1.5 million; 2 cents 

per cwt for domestic watermelons 

produced, 2 cents per cwt for domestic 

watermelons first handled, 4 cents per 

cwt for imported watermelons. 

The Small Business Administration 

[13 CFR 121.201] defines small 

agricultural producers as those having 

annual receipts of $750,000 or less 

annually and small agricultural service 

firms as those having annual receipts of 

$5 million or less. These include 

producers, feeders, and seed stock 

producers. Importers, exporters, 

handlers, and first handlers would be 

considered agricultural service firms. 

Using these criteria, most if not all of 

the agricultural producers and 

agricultural service firms covered by 

this rule would be considered small 

businesses. 

This rule allows producers and 

marketers of solely 100 percent organic 

products to request an exemption from 

paying assessments. These exemptions 

were estimated by multiplying the 

exempt volume by the assessment rate, 

and the amounts for exempt entities 

would be as follows: 

Beef: producers—$15,197; 

importers—unknown. 

Blueberries: producers—$5,833; 

importers—$0 ($5,833 total). 

Cotton: producers—$52,000; 

importers—$25,000 ($77,000 total). 

Dairy: producers—$1.33 million. 

Eggs: producers—$0. 

Fluid milk: processors—$0. 

Hass avocados: producers—$91,000; 

importers—$0 ($91,000 total). 

Honey: producers—$11,174; 

importers—$0 ($11,174 total). 

Lamb: $2,987 total (includes 

producers, first handlers, feeders, seed 

stock producers, and exporters). 

Mangos: $30,000 (includes first 

handlers and importers). 

Mushrooms: producers—$14,400; 

importers—$0 ($14,400 total). 

Peanuts: producers—$18,690. 

Popcorn: processors—$0. 

Pork: producers—$966; importers—

unknown. 

Potatoes: producers—$45,000; 

importers—$0 ($45,000 total). 

Soybeans: producers—$40,273.

Watermelons: producers—$17,890; 

handlers—$950; importers—$0 ($18,840 

total). 

Therefore, the estimated net economic 

impact of this rule on the respondents 

is as follows:

Program Paperwork

burden costs 

Exemption from 

assessments Net amount 

Beef ........................................................................................................................................ $835 $15,197 $14,362 

Blueberries ............................................................................................................................. 35 5,833 5,798 

Cotton .................................................................................................................................... 550 77,000 76,450 

Dairy ....................................................................................................................................... 3,000 1,330,000 1,327,000 

Eggs ....................................................................................................................................... 0 0 0 

Fluid milk ................................................................................................................................ 0 0 0 

Hass avocados ...................................................................................................................... 300 91,000 90,700 

Honey ..................................................................................................................................... 50 11,174 11,124 

Lamb ...................................................................................................................................... 200 2,987 2,787 

Mangos .................................................................................................................................. 60 30,000 29,940 

Mushrooms ............................................................................................................................ 10 14,400 14,390 

Peanuts .................................................................................................................................. 270 18,690 18,420 

Popcorn .................................................................................................................................. 0 0 0 

Pork ........................................................................................................................................ 90 966 876 

Potatoes ................................................................................................................................. 175 45,000 44,825 

Soybeans ............................................................................................................................... 5,140 40,273 35,133 

Watermelons .......................................................................................................................... 140 18,840 18,700 

Total ............................................................................................................................ 10,825 1,701,360 1,690,505 

Based on the above figures, this rule 

should have only a beneficial economic 

effect on small entities. 

Reports and forms are periodically 

reviewed to reduce information 

requirements and duplication by 

industry and public sector agencies. In 

addition, USDA has not identified any 

relevant Federal rules that duplicate, 

overlap, or conflict with this rule. 

With regard to alternatives, the FAIR 

Act required USDA to take this action, 

which will lessen the assessment costs 

for persons who produce and market 

solely 100 percent organic products. In 

drafting the exemption procedures, 

every effort has been made to minimize 

the burden on the persons impacted and 

to simplify the process. The anticipated 

assessment reductions for eligible 

persons are expected to greatly 

outweigh the costs related to the 

additional reporting.

List of Subjects 

7 CFR Part 1150 

Dairy products, Reporting and 

recordkeeping requirements, Research. 

7 CFR Part 1160 

Fluid milk products, Milk, Promotion. 

7 CFR Part 1205 

Advertising, Agricultural Research, 

Cotton, Reporting and recordkeeping 

requirements. 

7 CFR Part 1206 

Administrative practice and 

procedure, Advertising, Consumer 

information, Mangos, Marketing 

agreements, Promotion, Reporting and 

recordkeeping requirements. 

Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 2753

7 CFR Part 1207 

Advertising, Agricultural research, 

Potatoes, Reporting and recordkeeping 

requirements. 

7 CFR Part 1209 

Advertising, Agricultural Research, 

Marketing agreements, Mushrooms, 

Reporting and recordkeeping 

requirements. 

7 CFR Part 1210 

Administrative practice and 

procedure, Advertising, Agricultural 

research, Reporting and recordkeeping 

requirements, Watermelons. 

7 CFR Part 1215 

Administrative practice and 

procedure, Advertising, Consumer 

information, Marketing agreements, 

Popcorn, Promotion, Reporting and 

recordkeeping requirements. 

7 CFR Part 1216 

Administrative practice and 

procedure, Advertising, Consumer 

information, Marketing agreements, 

Peanut promotion, Reporting and 

recordkeeping requirements. 

7 CFR Part 1218 

Administrative practice and 

procedure, Advertising, Blueberries, 

Consumer information, Marketing 

agreements, Blueberry promotion, 

Reporting and recordkeeping 

requirements. 

7 CFR Part 1219 

Administrative practice and 

procedure, Advertising, Consumer 

information, Hass avocados, Marketing 

agreements, Promotion, Reporting and 

recordkeeping requirements. 

7 CFR Part 1220 

Administrative practice and 

procedure, Advertising, Agricultural 

research, Marketing agreements, 

Soybeans and soybean products, 

Reporting and recordkeeping 

requirements. 

7 CFR Part 1230 

Administrative practice and 

procedure, Advertising, Agricultural 

research, Marketing agreement, Meat 

and meat products, Pork and pork 

products. 

7 CFR Part 1240 

Advertising, Agricultural research, 

Honey, Imports, Reporting and 

recordkeeping requirements. 

7 CFR Part 1250 

Administrative practice and 

procedure, Advertising, Agricultural 

research, Eggs and egg products, 

Reporting and recordkeeping 

requirements. 

7 CFR Part 1260 

Administrative practice and 

procedure, Advertising, Agricultural 

research, Imports, Marketing 

agreements, Meat and meat products, 

Reporting and recordkeeping 

requirements. 

7 CFR Part 1280 

Administrative practice and 

procedure, Advertising, Consumer 

information, Lamb and lamb products, 

Marketing agreements, Reporting and 

recordkeeping requirements.

■ For the reasons set forth in the 

preamble, 7 CFR parts 1150, 1160, 1205, 

1206, 1207, 1209, 1210, 1215, 1216, 

1218, 1219, 1220, 1230, 1240, 1250, 

1260, and 1280 are amended as follows:

PART 1150—DAIRY PROMOTION

■ 1. The authority citation for part 1150 

is revised to read as follows:

Authority: 7 U.S.C. 4501–4514 and 7 

U.S.C. 7401.

■ 2. Add a new § 1150.157 to read as 

follows:

§ 1150.157 Assessment exemption. 

(a) A producer described in 

§ 1150.152 (a) and (b) who operates 

under an approved National Organic 

Program (NOP) (7 CFR part 205) system 

plan; produces only products that are 

eligible to be labeled as 100 percent 

organic under the NOP, except as 

provided for in paragraph (h) of this 

section; and is not a split operation shall 

be exempt from the payment of 

assessments. 

(b) To apply for an exemption under 

this section, a producer pursuant to 

§ 1150.152 (a) and (b) shall submit a 

request for exemption to the Board on 

a form provided by the Board at any 

time initially and annually thereafter on 

or before July 1 as long as the producer 

continues to be eligible for the 

exemption. 

(c) The request shall include the 

following: the producer’s name and 

address, a copy of the organic farm or 

organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in section 

2103 of the Organic Foods Production 

Act of 1990 (7 U.S.C. 6502), a signed 

certification that the applicant meets all 

of the requirements specified in 

paragraph (a) of this section for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. 

(d) If a producer described in 

§ 1150.152 (a) and (b) complies with the 

requirements of this section, the Board 

will grant an assessment exemption and 

issue a Certificate of Exemption to the 

producer. For exemption requests 

received on or before August 15, 2005, 

the Board will have 60 days to approve 

the exemption request; after August 15, 

2005, the Board will have 30 days to 

approve the exemption request. If the 

application is disapproved, the Board 

will notify the applicant of the reason(s) 

for disapproval within the same 

timeframe. 

(e) The producer described in 

paragraph (c) of this section shall 

provide a copy of the Certificate of 

Exemption to each person responsible 

for remitting assessments to the Board 

on behalf of the producer pursuant to 

§ 1150.152. 

(f) The person responsible for 

remitting assessments to the Board 

pursuant to § 1150.152 shall maintain 

records showing the exempt producer’s 

name and address and the exemption 

number assigned by the Board pursuant 

to § 1150.172.

(g) The exemption will apply not later 

than the last day of the month following 

the Certificate of Exemption issuance 

date. 

(h) Agricultural commodities 

produced and marketed under an 

organic system plan, as described in 7 

CFR 205.201, but not sold, labeled, or 

represented as organic, shall not 

disqualify a producer from exemption 

under this section, except that 

producers who produce both organic 

and non-organic agricultural 

commodities as a result of split 

operations shall not qualify for 

exemption. Reasons for conventional 

sales include lack of demand for organic 

products, isolated use of antibiotics for 

humane purposes, chemical or pesticide 

use as the result of State or emergency 

spray programs, and crops from a buffer 

area as described in 7 CFR part 205, 

provided all other criteria are met.

PART 1160—FLUID MILK PROMOTION

■ 3. The authority citation for part 1160 

is revised to read as follows:

Authority: 7 U.S.C. 6401–6417 and 7 

U.S.C. 7401.

■ 4. In § 1160.211, paragraph (a)(1) is 

revised to read as follows:

§ 1160.211 Assessments. 

(a)(1) Each fluid milk processor shall 

pay to the Board or its designated agent 

an assessment of $.20 per 

hundredweight of fluid milk products 

processed and marketed commercially 

in consumer-type packages in the 

2754 Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 

United States by such fluid milk 

processor. Any fluid milk processor 

who markets milk of its own production 

directly to consumers as prescribed 

under section 113(g) of the Dairy 

Production Stabilization Act of 1983 (7 

U.S.C. 4504(g)), and not exempt under 

§ 1160.108 or § 1160.215, shall also pay 

the assessment under this subpart. The 

Secretary shall have the authority to 

receive assessments on behalf of the 

Board.

* * * * *

■ 5. A new § 1160.215 is added to read 

as follows:

§ 1160.215 Assessment exemption. 

(a) No assessment shall be required on 

fluid milk products exported from the 

United States. 

(b) A fluid milk processor described 

in § 1160.211(a) who operates under an 

approved National Organic Program 

(NOP) (7 CFR part 205) system plan; 

processes only products that are eligible 

to be labeled as 100 percent organic 

under the NOP; and is not a split 

operation shall be exempt from the 

payment of assessments. 

(c) To apply for an assessment 

exemption, a fluid milk processor 

described in § 1160.211(a) shall submit 

a request for exemption to the Board on 

a form provided by the Board at any 

time initially and annually thereafter on 

or before July 1 as long as the fluid milk 

processor continues to be eligible for the 

assessment exemption. 

(d) The request shall include the 

following: The fluid milk processor’s 

name and address, a copy of the organic 

farm or organic handling operation 

certificate provided by a USDAaccredited certifying agent as defined in 

section 2103 of the Organic Foods 

Production Act of 1990 (7 U.S.C. 6502), 

a signed certification that the applicant 

meets all of the requirements specified 

in paragraph (b) of this section for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. 

(e) The Board will grant an 

assessment exemption to any fluid milk 

processor meeting the criteria in 

§ 1160.215(b) and issue a Certificate of 

Exemption to the fluid milk processor. 

For exemption requests received on or 

before August 15, 2005, the Board will 

have 60 days to approve the exemption 

request; after August 15, 2005, the Board 

will have 30 days to approve the 

exemption request. If the application is 

disapproved, the Board will notify the 

applicant of the reason(s) for 

disapproval within the same timeframe. 

(f) The exemption will apply not later 

than the last day of the month following 

the Certificate of Exemption issuance 

date.

PART 1205—COTTON RESEARCH 

AND PROMOTION

■ 6. The authority citation for part 1205 

is revised to read as follows:

Authority: 7 U.S.C. 2101–2118 and 7 

U.S.C. 7401.

■ 7. A new § 1205.519 is added to read 

as follows:

§ 1205.519 Organic exemption. 

(a) A producer who operates under an 

approved National Organic Program 

(NOP) (7 CFR part 205) system plan; 

produces only products that are eligible 

to be labeled as 100 percent organic 

under the NOP, except as provided for 

in paragraph (h) of this section; and is 

not a split operation shall be exempt 

from the payment of assessments. 

(b) To apply for an exemption under 

this section, an eligible cotton producer 

shall submit a request for exemption to 

the Board—on a form provided by the 

Board—at any time initially and 

annually thereafter on or before the 

beginning of the crop year as long as the 

producer continues to be eligible for the 

exemption. 

(c) The request shall include the 

following: The producer’s name and 

address, a copy of the organic farm or 

organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in section 

2103 of the Organic Foods Production 

Act of 1990 (7 U.S.C. 6502), a signed 

certification that the applicant meets all 

of the requirements specified in 

paragraph (a) of this section for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. 

(d) If the producer complies with the 

requirements of this section, the Board 

will grant the exemption and issue a 

Certificate of Exemption to the 

producer. For exemption requests 

received on or before August 15, 2005, 

the Board will have 60 days to approve 

the exemption request; after August 15, 

2005, the Board will have 30 days to 

approve the exemption request. If the 

application is disapproved, the Board 

will notify the applicant of the reason(s) 

for disapproval within the same 

timeframe. 

(e) The producer shall provide a copy 

of the Certificate of Exemption to each 

handler to whom the producer sells 

cotton. The handler shall maintain 

records showing the exempt producer’s 

name and address and the exemption 

number assigned by the Board.

(f) An importer who imports only 

products that are eligible to be labeled 

as 100 percent organic under the NOP 

(7 CFR part 205) and who is not a split 

operation shall be exempt from the 

payment of assessments. That importer 

may submit documentation to the Board 

and request an exemption from 

assessment on 100 percent organic 

cotton and 100 percent organic cotton 

products—on a form provided by the 

Board—at any time initially and 

annually thereafter as long as the 

importer continues to be eligible for the 

exemption. This documentation shall 

include the same information required 

of producers in paragraph (c) of this 

section. If the importer complies with 

the requirements of this section, the 

Board will grant the exemption and 

issue a Certificate of Exemption to the 

importer. The Board will also issue the 

importer a 9-digit alphanumeric 

Harmonized Tariff Schedule (HTS) 

classification valid for 1 year from the 

date of issue. This HTS classification 

should be entered by the importer on 

the Customs entry documentation. Any 

line item entry of 100 percent organic 

cotton and cotton products bearing this 

HTS classification assigned by the 

Board will not be subject to 

assessments. 

(g) The exemption will apply 

immediately following the issuance of 

the Certificate of Exemption. 

(h) Agricultural commodities 

produced and marketed under an 

organic system plan, as described in 7 

CFR 205.201, but not sold, labeled, or 

represented as organic, shall not 

disqualify a producer from exemption 

under this section, except that 

producers who produce both organic 

and non-organic agricultural 

commodities as a result of split 

operations shall not qualify for 

exemption. Reasons for conventional 

sales include lack of demand for organic 

products, isolated use of antibiotics for 

humane purposes, chemical or pesticide 

use as the result of State or emergency 

spray programs, and crops from a buffer 

area as described in 7 CFR part 205, 

provided all other criteria are met.

PART 1206—MANGO PROMOTION, 

RESEARCH, AND INFORMATION

■ 8. The authority citation for part 1206 

is revised to read as follows:

Authority: 7 U.S.C. 7411–7425 and 7 

U.S.C. 7401.

■ 9. Add a new Subpart C—Rules and 

Regulations to read as follows:

Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 2755

Subpart C—Rules and Regulations

§ 1206.200 Terms defined. 

Unless otherwise defined in this 

subpart, the definitions of terms used in 

this subpart shall have the same 

meaning as the definitions of such terms 

which appear in Subpart A—Mango 

Promotion, Research, and Information 

Order.

§ 1206.201 Definitions. 

Organic Act means section 2103 of the 

Organic Foods Production Act of 1990 

(7 U.S.C. 6502).

§ 1206.202 Exemption for organic mangos. 

(a) A first handler who operates under 

an approved National Organic Program 

(NOP) (7 CFR part 205) system plan, 

handles only products that are eligible 

to be labeled as 100 percent organic 

under the NOP, and is not a split 

operation shall be exempt from the 

payment of assessments. 

(b) To obtain this exemption, an 

eligible first handler shall submit a 

request for exemption to the Board—on 

a form provided by the Board—at any 

time initially and annually thereafter on 

or before the beginning of the fiscal 

period as long as the first handler 

continues to be eligible for the 

exemption. 

(c) The request shall include the 

following: The first handler’s name and 

address, a copy of the organic farm or 

organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in the 

Organic Act, a signed certification that 

the applicant meets all of the 

requirements specified for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. 

(d) If the first handler complies with 

the requirements of paragraph (a) of this 

section, the Board will grant an 

assessment exemption and shall issue a 

Certificate of Exemption to the first 

handler. For exemption requests 

received on or before August 15, 2005, 

the Board will have 60 days to approve 

the exemption request; after August 15, 

2005, the Board will have 30 days to 

approve the exemption request. If the 

application is disapproved, the Board 

will notify the applicant of the reason(s) 

for disapproval within the same 

timeframe. 

(e) An importer who imports only 

products that are eligible to be labeled 

as 100 percent organic under the NOP 

(7 CFR part 205) and who is not a split 

operation shall be exempt from the 

payment of assessments. That importer 

may submit documentation to the Board 

and request an exemption from 

assessment on 100 percent organic 

mangos—on a form provided by the 

Board—at any time initially and 

annually thereafter on or before the 

beginning of the fiscal period as long as 

the importer continues to be eligible for 

the exemption. This documentation 

shall include the same information 

required of first handlers in paragraph 

(c). 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. The 

Board will also issue the importer a 9-

digit alphanumeric Harmonized Tariff 

Schedule (HTS) classification valid for 1 

year from the date of issue. This HTS 

classification should be entered by the 

importer on the Customs entry 

documentation. Any line item entry of 

100 percent organic mangos bearing this 

HTS classification assigned by the 

Board will not be subject to 

assessments. 

(f) The exemption will apply 

immediately following the issuance of 

the certificate of exemption.

PART 1207—POTATO RESEARCH 

AND PROMOTION

■ 10. The authority citation for part 1207 

is revised to read as follows:

Authority: 7 U.S.C. 2611–2627 and 7 

U.S.C. 7401.

■ 11. A new § 1207.514 is added to read 

as follows:

§ 1207.514 Exemption for organic 

potatoes. 

(a) A producer who operates under an 

approved National Organic Program 

(NOP) (7 CFR part 205) system plan; 

produces only products that are eligible 

to be labeled as 100 percent organic 

under the NOP, except as provided for 

in paragraph (h) of this section; and is 

not a split operation shall be exempt 

from the payment of assessments.

(b) To apply for an exemption under 

this section, the producer shall submit 

a request for exemption to the Board—

on a form provided by the Board—at 

any time initially and annually 

thereafter on or before July 1 as long as 

the producer continues to be eligible for 

the exemption. 

(c) The request shall include the 

following: The producer’s name and 

address, a copy of the organic farm or 

organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in section 

2103 of the Organic Foods Production 

Act of 1990 (7 U.S.C. 6502), a signed 

certification that the applicant meets all 

of the requirements specified in 

paragraph (a) of this section for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. 

(d) If the producer complies with the 

requirements of this section, the Board 

will grant the exemption and issue a 

Certificate of Exemption to the 

producer. For exemption requests 

received on or before August 15, 2005, 

the Board will have 60 days to approve 

the exemption request; after August 15, 

2005, the Board will have 30 days to 

approve the exemption request. If the 

application is disapproved, the Board 

will notify the applicant of the reason(s) 

for disapproval within the same 

timeframe. 

(e) The producer shall provide a copy 

of the Certificate of Exemption to each 

handler to whom the producer sells 

potatoes. The handler shall maintain 

records showing the exempt producer’s 

name and address and the exemption 

number assigned by the Board. 

(f) An importer who imports only 

products that are eligible to be labeled 

as 100 percent organic under the NOP 

(7 CFR part 205) and who is not a split 

operation shall be exempt from the 

payment of assessments. That importer 

may submit documentation to the Board 

and request an exemption from 

assessment on 100 percent organic 

potatoes, potato products, and seed 

potatoes—on a form provided by the 

Board—at any time initially and 

annually thereafter on or before July 1 

as long as the importer continues to be 

eligible for the exemption. This 

documentation shall include the same 

information required of producers in 

paragraph (c) of this section. If the 

importer complies with the 

requirements of this section, the Board 

will grant the exemption and issue a 

Certificate of Exemption to the importer. 

The Board will also issue the importer 

a 9-digit alphanumeric Harmonized 

Tariff Schedule (HTS) classification 

valid for 1 year from the date of issue. 

This HTS classification should be 

entered by the importer on the Customs 

entry documentation. Any line item 

entry of 100 percent organic potatoes, 

potato products, and seed potatoes 

bearing this HTS classification assigned 

by the Board will not be subject to 

assessments. 

(g) The exemption will apply 

immediately following the issuance of 

the Certificate of Exemption. 

(h) Agricultural commodities 

produced and marketed under an 

organic system plan, as described in 7 

CFR 205.201, but not sold, labeled, or 

represented as organic, shall not 

disqualify a producer from exemption 

2756 Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 

under this section, except that 

producers who produce both organic 

and non-organic agricultural 

commodities as a result of split 

operations shall not qualify for 

exemption. Reasons for conventional 

sales include lack of demand for organic 

products, isolated use of antibiotics for 

humane purposes, chemical or pesticide 

use as the result of State or emergency 

spray programs, and crops from a buffer 

area as described in 7 CFR part 205, 

provided all other criteria are met.

PART 1209—MUSHROOM 

PROMOTION, RESEARCH, AND 

CONSUMER INFORMATION

■ 12. The authority citation for part 1209 

is revised to read as follows:

Authority: 7 U.S.C. 6101–6112 and 7 

U.S.C. 7401.

■ 13. In § 1209.52, revise paragraph (a) to 

read as follows:

§ 1209.52 Exemption from assessment. 

(a) The following persons shall be 

exempt from assessments under this 

part: 

(1) A person who produces or 

imports, on average, 500,000 pounds or 

less of mushrooms annually; and 

(2) A producer who operates under an 

approved National Organic Program 

(NOP) (7 CFR part 205) system plan; 

produces only products that are eligible 

to be labeled as 100 percent organic 

under the NOP, except as provided for 

in § 1209.252(a)(2)(vi); and is not a split 

operation; and 

(3) An importer who imports only 

products that are eligible to be labeled 

as 100 percent organic under the NOP 

(7 CFR part 205) and who is not a split 

operation.

* * * * *

■ 14. In § 1209.252, revise paragraph (a) 

to read as follows:

§ 1209.252 Exemption procedures. 

(a) Types of exemptions and 

requirements. (1) Any person who 

produces or imports, on average, 

500,000 pounds or less of mushrooms 

annually and who desires to claim an 

exemption from assessments during a 

fiscal year shall apply to the Council, on 

a form provided by the Council, for a 

Certificate of Exemption. The producer 

or importer shall certify that the 

person’s production or importation of 

mushrooms shall not exceed 500,000 

pounds, on average, for the fiscal year 

for which the exemption is claimed. An 

average shall be calculated by averaging 

a person’s estimated production or 

importation for the fiscal year for which 

an exemption is claimed with the 

person’s production or importation in 

the preceding fiscal year. 

(2) To apply for an exemption for 

organic mushrooms: 

(i) An eligible mushroom producer 

shall submit a request for exemption to 

the Council—on a form provided by the 

Council—at any time initially and 

annually thereafter on or before January 

1 as long as the producer continues to 

be eligible for the exemption. 

(ii) The request shall include the 

following: The producer’s name and 

address, a copy of the organic farm or 

organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in section 

2103 of the Organic Foods Production 

Act of 1990 (7 U.S.C. 6502), a signed 

certification that the applicant meets all 

of the requirements specified for an 

assessment exemption, and such other 

information as may be required by the 

Council and with the approval of the 

Secretary. 

(iii) If the producer complies with the 

requirements of § 1209.52 (a)(2), the 

Council will grant the exemption and 

issue a Certificate of Exemption to the 

producer. For exemption requests 

received on or before August 15, 2005, 

the Council will have 60 days to 

approve the exemption request; after 

August 15, 2005, the Council will have 

30 days to approve the exemption 

request. If the application is 

disapproved, the Board will notify the 

applicant of the reason(s) for 

disapproval within the same timeframe. 

(iv) An eligible importer may submit 

documentation to the Council and 

request an exemption from assessment 

on 100 percent organic mushrooms—on 

a form provided by the Council—at any 

time initially and annually thereafter on 

or before January 1 as long as the 

importer continues to be eligible for the 

exemption. This documentation shall 

include the same information required 

of producers. If the importer complies 

with the requirements of this section, 

the Council will grant the exemption 

and issue a Certificate of Exemption to 

the importer. The Council will also 

issue the importer a 9-digit 

alphanumeric Harmonized Tariff 

Schedule (HTS) classification valid for 1 

year from the date of issue. This HTS 

classification should be entered by the 

importer on the Customs entry 

documentation. Any line item entry of 

100 percent organic mushrooms bearing 

this HTS classification assigned by the 

Council will not be subject to 

assessments. 

(v) The exemption will apply 

immediately following the issuance of 

the Certificate of Exemption. 

(vi) Agricultural commodities 

produced and marketed under an 

organic system plan, as described in 7 

CFR 205.201, but not sold, labeled, or 

represented as organic, shall not 

disqualify a producer from exemption 

under this section, except that 

producers who produce both organic 

and non-organic agricultural 

commodities as a result of split 

operations shall not qualify for 

exemption. Reasons for conventional 

sales include lack of demand for organic 

products, isolated use of antibiotics for 

humane purposes, chemical or pesticide 

use as the result of State or emergency 

spray programs, and crops from a buffer 

area as described in 7 CFR part 205, 

provided all other criteria are met.

* * * * *

PART 1210—WATERMELON 

RESEARCH AND PROMOTION

■ 15. The authority citation for part 1210 

is revised to read as follows:

Authority: 7 U.S.C. 4901–4916 and 7 

U.S.C. 7401.

■ 16. A new § 1210.516 is added to read 

as follows:

§ 1210.516 Exemption for organic 

watermelons. 

(a) A producer who produces only 

products that are eligible to be labeled 

as 100 percent organic under the 

National Organic Program (NOP) (7 CFR 

part 205), except as provided for in 

paragraph (h) of this section, or a 

handler who handles only products that 

are eligible to be labeled as 100 percent 

organic under the NOP; and who 

operates under an approved NOP 

system plan, and is not a split operation 

shall be exempt from the payment of 

assessments. 

(b) To apply for this exemption, the 

producer or handler shall submit the 

request to the Board—on a form 

provided by the Board—at any time 

initially and annually thereafter on or 

before January 1 as long as the producer 

or handler continues to be eligible for 

the exemption.

(c) The request shall include the 

following: The applicant’s name and 

address, a copy of the organic farm or 

organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in section 

2103 of the Organic Foods Production 

Act of 1990 (7 U.S.C. 6502), a signed 

certification that the applicant meets all 

of the requirements specified for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. 

Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 2757

(d) If the producer or handler 

complies with the requirements of this 

section, the Board will approve the 

exemption and issue a Certificate of 

Exemption to the producer or handler. 

For exemption requests received on or 

before August 15, 2005, the Board will 

have 60 days to approve the exemption 

request; after August 15, 2005, the Board 

will have 30 days to approve the 

exemption request. If the application is 

disapproved, the Board will notify the 

applicant of the reason(s) for 

disapproval within the same timeframe. 

(e) The producer shall provide a copy 

of the Certificate of Exemption to each 

handler to whom the producer sells 

watermelons. The handler shall 

maintain records showing the exempt 

producer’s name and address and the 

exemption number assigned by the 

Board. 

(f) An importer imports only products 

that are eligible to be labeled as 100 

percent organic under the NOP (7 CFR 

part 205) and who is not a split 

operation shall be exempt from the 

payment of assessments. That importer 

may submit documentation to the Board 

and request an exemption from 

assessment on 100 percent organic 

watermelons. The importer may request 

the exemption—on a form provided by 

the Board—at any time initially and 

annually thereafter on or before January 

1, as long as the importer continues to 

be eligible for the exemption. This 

documentation shall include the same 

information required of producers and 

handlers in paragraph (c) of this section. 

If the importer complies with the 

requirements of this section, the Board 

will grant the exemption and issue a 

Certificate of Exemption to the importer. 

The Board will also issue the importer 

a 9-digit alphanumeric Harmonized 

Tariff Schedule (HTS) classification 

valid for 1 year from the date of issue. 

This HTS classification should be 

entered by the importer on the Customs 

entry documentation. Any line item 

entry of 100 percent organic 

watermelons bearing this HTS 

classification assigned by the Board will 

not be subject to assessments. 

(g) The exemption will apply 

immediately following the issuance of 

the Certificate of Exemption. 

(h) Agricultural commodities 

produced and marketed under an 

organic system plan, as described in 7 

CFR 205.201, but not sold, labeled, or 

represented as organic, shall not 

disqualify a producer from exemption 

under this section, except that 

producers who produce both organic 

and non-organic agricultural 

commodities as a result of split 

operations shall not qualify for 

exemption. Reasons for conventional 

sales include lack of demand for organic 

products, isolated use of antibiotics for 

humane purposes, chemical or pesticide 

use as the result of State or emergency 

spray programs, and crops from a buffer 

area as described in 7 CFR part 205, 

provided all other criteria are met.

PART 1215—POPCORN PROMOTION, 

RESEARCH, AND CONSUMER 

INFORMATION

■ 17. The authority citation for part 1215 

is revised to read as follows:

Authority: 7 U.S.C. 7481–7491 and 7 

U.S.C. 7401.

■ 18. Section 1215.52 is revised to read 

as follows:

§ 1215.52 Exemption from assessment. 

(a) Persons that process and distribute 

4 million pounds or less of popcorn 

annually, based on the previous year, 

shall be exempted from assessment. 

(b) Persons that operate under an 

approved National Organic Program 

(NOP) (7 CFR part 205) system plan; 

process only products that are eligible to 

be labeled as 100 percent organic under 

the NOP; and are not split operations 

shall be exempt from the payment of 

assessments. 

(c) To claim an exemption, persons 

shall apply to the Board, in the form and 

manner prescribed in the rules and 

regulations.

■ 19. Section 1215.300 is amended by:

■ (a) Revising paragraphs (b) and (c);

■ (b) Redesignating paragraph (d) as 

paragraph (f);

■ (c) Adding new paragraphs (d) and (e).

The revisions read as follows:

§ 1215.300 Exemption procedures.

* * * * *

(b) Persons that process solely 100 

percent organic products and that do 

not process any conventional or 

nonorganic products as provided in 

§ 1215.52 paragraph (b) of this part may 

apply for an exemption by submitting a 

request for exemption to the Board on 

a form provided by the Board at any 

time initially. The request shall include 

the following: The applicant’s name and 

address, a copy of the organic farm or 

organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in section 

2103 of the Organic Foods Production 

Act of 1990 (7 U.S.C. 6502), a signed 

certification that the applicant meets all 

of the requirements specified for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. 

(c) Upon receipt of an application, the 

Board shall determine whether an 

exemption may be granted and issue a 

Certificate of Exemption to the 

producer. For exemption requests 

received on or before August 15, 2005, 

the Board will have 60 days to approve 

the exemption request; after August 15, 

2005, the Board will have 30 days to 

approve the exemption request. If the 

application is disapproved, the Board 

will notify the applicant of the reason(s) 

for disapproval within the same 

timeframe. 

(d) Any person who desires to renew 

the exemption from assessments for a 

subsequent fiscal year shall reapply to 

the Board by January 1 of that year.

(e) The exemption will apply at the 

first reporting period following the 

issuance of the Certificate of Exemption.

* * * * *

PART 1216—PEANUT PROMOTION, 

RESEARCH, AND INFORMATION

■ 20. The authority citation for part 1216 

is revised to read as follows:

Authority: 7 U.S.C. 7411–7425 and 7 

U.S.C. 7401.

■ 21. Section 1216.56 is added to read as 

follows:

§ 1216.56 Exemption for organic peanuts. 

(a) A producer who operates under an 

approved National Organic Program 

(NOP) (7 CFR part 205) system plan; 

produces only products that are eligible 

to be labeled as 100 percent organic 

under the NOP, except as provided for 

in paragraph (g) of this section; and is 

not a split operation shall be exempt 

from the payment of assessments. 

(b) In order to apply for this 

exemption, an eligible peanut producer 

shall submit a request for exemption to 

the Board—on a form provided by the 

Board—at any time initially and 

annually thereafter on or before August 

1 as long as the producer continues to 

be eligible for the exemption. 

(c) The request shall include the 

following: The producer’s name and 

address, a copy of the organic farm or 

organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in section 

2103 of the Organic Foods Production 

Act of 1990 (7 U.S.C. 6502), a signed 

certification that the applicant meets all 

of the requirements specified for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. 

(d) If the producer complies with the 

requirements of this section, the Board 

will approve the exemption and issue a 

2758 Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 

Certificate of Exemption to the 

producer. For exemption requests 

received on or before August 15, 2005, 

the Board will have 60 days to approve 

the exemption request; after August 15, 

2005, the Board will have 30 days to 

approve the exemption request. If the 

application is disapproved, the Board 

will notify the applicant of the reason(s) 

for approval within the same timeframe. 

(e) The producer shall provide a copy 

of the Certificate of Exemption to each 

handler to whom the producer sells 

peanuts. The handler shall maintain 

records showing the exempt producer’s 

name and address and the exemption 

number assigned by the Board. 

(f) The exemption will apply at the 

first reporting period following the 

issuance of the Certificate of Exemption. 

(g) Agricultural commodities 

produced and marketed under an 

organic system plan, as described in 7 

CFR 205.201, but not sold, labeled, or 

represented as organic, shall not 

disqualify a producer from exemption 

under this section, except that 

producers who produce both organic 

and non-organic agricultural 

commodities as a result of split 

operations shall not qualify for 

exemption. Reasons for conventional 

sales include lack of demand for organic 

products, isolated use of antibiotics for 

humane purposes, chemical or pesticide 

use as the result of State or emergency 

spray programs, and crops from a buffer 

area as described in 7 CFR part 205, 

provided all other criteria are met.

PART 1218—BLUEBERRY 

PROMOTION, RESEARCH, AND 

INFORMATION

■ 22. The authority citation for part 1218 

is revised to read as follows:

Authority: 7 U.S.C. 7411–7425 and 7 

U.S.C. 7401.

■ 23. Section 1218.53 is amended by 

redesignating paragraphs (b) through (e) 

as (h) through (k), adding new 

paragraphs (b) through (g), and revising 

paragraph (a) to read as follows:

§ 1218.53 Exemption procedures. 

(a) Any producer who produces less 

than 2,000 pounds of blueberries 

annually shall be exempt from the 

payment of assessments. Such producer 

may apply to the USACBC—on a form 

provided by the USACBC—for a 

certificate of exemption. Such producer 

shall certify that the producer’s 

production of blueberries shall be less 

than 2,000 pounds for the fiscal year for 

which the exemption is claimed. 

(b) Any importer who imports less 

than 2,000 pounds of fresh and frozen 

blueberries annually shall be exempt 

from the payment of assessments. Such 

importer may apply to the USACBC—on 

a form provided by the USACBC—for a 

certificate of exemption. Such importer 

shall certify that the importer’s 

importation of fresh and frozen 

blueberries shall not exceed 2,000 

pounds for the fiscal year for which the 

exemption is claimed. 

(c) A producer who operates under an 

approved National Organic Program 

(NOP) (7 CFR part 205) system plan; 

produces only products that are eligible 

to be labeled as 100 percent organic 

under the NOP, except as provided for 

in paragraph (g) of this section; and is 

not a split operation shall be exempt 

from the payment of assessments. 

(d) To apply for this exemption, a 

producer shall submit a request for 

exemption to the USACBC—on a form 

provided by the USACBC—at any time 

initially and annually thereafter on or 

before January 1 as long as the producer 

continues to be eligible for the 

exemption. The request shall include 

the following: The producer’s name and 

address, with a copy of the organic farm 

or organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in section 

2103 of the Organic Foods Production 

Act of 1990 (7 CFR part 205), a signed 

certification that the applicant meets all 

of the requirements specified for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. If a producer complies with 

the requirements in paragraph (c) of this 

section, the USACBC will grant an 

assessment exemption and issue a 

certification of exemption to the 

producer. For exemption requests 

received on or before August 15, 2005, 

the USACBC will have 60 days to 

approve the exemption request; after 

August 15, 2005, the USACBC will have 

30 days to approve the exemption 

request. If the application is 

disapproved, the USACBC will notify 

the applicant of the reason(s) for 

disapproval within the same timeframe.

(e) An importer who imports only 

products that are eligible to be labeled 

as 100 percent organic under the NOP 

(7 CFR part 205) and who is not a split 

operation shall be exempt from the 

payment of assessments. That importer 

may submit documentation to the Board 

and request an exemption from 

assessment on 100 percent organic fresh 

and frozen blueberries—on a form 

provided by the USACBC—at any time 

initially and annually thereafter on or 

before January 1 as long as the importer 

continues to be eligible for the 

exemption. This documentation shall 

include the same information required 

of producers in paragraph (d) of this 

section. If the importer complies with 

the requirements of this section, the 

USACBC will grant the exemption and 

issue a Certificate of Exemption to the 

importer. The USACBC will also issue 

the importer a 9-digit alphanumeric 

Harmonized Tariff Schedule (HTS) 

classification valid for 1 year from the 

date of issue. This HTS classification 

should be entered by the importer on 

the Customs entry documentation. Any 

line item entry of 100 percent organic 

fresh and frozen blueberries bearing this 

HTS classification assigned by the 

USACBC will not be subject to 

assessments. 

(f) The exemption will apply 

immediately following the issuance of 

the Certificate of Exemption. 

(g) Agricultural commodities 

produced and marketed under an 

organic system plan, as described in 7 

CFR 205.201, but not sold, labeled, or 

represented as organic, shall not 

disqualify a producer from exemption 

under this section, except that 

producers who produce both organic 

and non-organic agricultural 

commodities as a result of split 

operations shall not qualify for 

exemption. Reasons for conventional 

sales include lack of demand for organic 

products, isolated use of antibiotics for 

humane purposes, chemical or pesticide 

use as the result of State or emergency 

spray programs, and crops from a buffer 

area as described in 7 CFR part 205, 

provided all other criteria are met.

* * * * *

PART 1219—HASS AVOCADO 

PROMOTION, RESEARCH, AND 

INFORMATION

■ 24. The authority citation for part 1219 

is revised to read as follows:

Authority: 7 U.S.C. 7801–7813 and 7 

U.S.C. 7401.

■ 25. In part 1219, add a new Subpart 

C—Rules and Regulations to read as 

follows:

Subpart C—Rules and Regulations

§ 1219.200 Terms defined. 

Unless otherwise defined in this 

subpart, the definitions of terms used in 

this subpart shall have the same 

meaning as the definitions of such terms 

which appear in Subpart A—Hass 

Avocado Promotion, Research, and 

Information Order of this part.

§ 1219.201 Definitions. 

Organic Act means section 2103 of the 

Organic Foods Production Act of 1990 

(7 U.S.C. 6502).

Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 2759

§ 1219.202 Exemption for organic Hass 

avocados. 

(a) A producer who operates under an 

approved National Organic Program 

(NOP) (7 CFR part 205) system plan; 

only produces products that are eligible 

to be labeled as 100 percent organic 

under the NOP, except as provided for 

in paragraph (h) of this section; and is 

not a split operation shall be exempt 

from the payment of assessments. 

(b) To obtain this exemption, an 

eligible Hass avocado producer shall 

submit a request for exemption to the 

Board—on a form provided by the 

Board—at any time initially and 

annually thereafter on or before 

November 1 as long as the producer 

continues to be eligible for the 

exemption. 

(c) The request shall include the 

following: the producer’s name and 

address, a copy of the organic farm or 

organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in the 

Organic Act, a signed certification that 

the applicant meets all of the 

requirements specified for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. 

(d) If the producer complies with the 

requirements of paragraph (a) of this 

section, the Board will grant an 

assessment exemption and shall issue a 

Certificate of Exemption to the 

producer. For exemption requests 

received on or before August 15, 2005, 

the Board will have 60 days to approve 

the exemption request; after August 15, 

2005, the Board will have 30 days to 

approve the exemption request. If the 

application is disapproved, the Board 

will notify the applicant of the reason(s) 

for disapproval within the same 

timeframe. 

(e) The producer shall provide a copy 

of the Certificate of Exemption to each 

handler to whom the producer sells 

Hass avocados. The handler shall 

maintain records showing the exempt 

producer’s name and address and the 

exemption number assigned by the 

Board. 

(f) An importer who imports only 

products that are eligible to be labeled 

as 100 percent organic under the NOP 

(7 CFR part 205) and who is not a split 

operation shall be exempt from the 

payment of assessments. That importer 

may submit documentation to the Board 

and request an exemption from 

assessment on 100 percent organic Hass 

avocados—on a form provided by the 

Board—at any time initially and 

annually thereafter on or before 

November 1 as long as the importer 

continues to be eligible for the 

exemption. This documentation shall 

include the same information required 

of producers in paragraph (c) of this 

section. If the importer complies with 

the requirements of this section, the 

Board will grant the exemption and 

issue a Certificate of Exemption to the 

importer. The Board will also issue the 

importer a 9-digit alphanumeric 

Harmonized Tariff Schedule (HTS) 

classification valid for 1 year from the 

date of issue. This HTS classification 

should be entered by the importer on 

the Customs entry documentation. Any 

line item entry of 100 percent organic 

Hass avocados bearing this HTS 

classification assigned by the Board will 

not be subject to assessments. 

(g) The exemption will apply 

immediately following the issuance of 

the Certificate of Exemption.

(h) Agricultural commodities 

produced and marketed under an 

organic system plan, as described in 7 

CFR 205.201, but not sold, labeled, or 

represented as organic, shall not 

disqualify a producer from exemption 

under this section, except that 

producers who produce both organic 

and non-organic agricultural 

commodities as a result of split 

operations shall not qualify for 

exemption. Reasons for conventional 

sales include lack of demand for organic 

products, isolated use of antibiotics for 

humane purposes, chemical or pesticide 

use as the result of State or emergency 

spray programs, and crops from a buffer 

area as described in 7 CFR part 205, 

provided all other criteria are met.

PART 1220—SOYBEAN PROMOTION, 

RESEARCH, AND CONSUMER 

INFORMATION

■ 26. The authority citation for part 1220 

is revised to read as follows:

Authority: 7 U.S.C. 6301–6311 and 7 

U.S.C. 7401.

■ 27. A new § 1220.302 is added to read 

as follows:

§ 1220.302 Exemption. 

(a) A producer who operates under an 

approved National Organic Program 

(NOP) (7 CFR part 205) system plan; 

produces only products that are eligible 

to be labeled as 100 percent organic 

under the NOP, except as provided for 

in paragraph (g) of this section; and is 

not a split operation shall be exempt 

from the payment of assessments. 

(b) To apply for an exemption under 

this section, the producer shall submit 

the request to the Board or other party 

as designated by the Board—on a form 

provided by the Board—at any time 

initially and annually thereafter on or 

before January 1 as long as the producer 

continues to be eligible for the 

exemption. 

(c) The request shall include the 

following: the producer’s name and 

address, a copy of the organic farm or 

organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in section 

2103 of the Organic Foods Production 

Act of 1990 (7 U.S.C. 6502), a signed 

certification that the applicant meets all 

of the requirements specified for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. 

(d) If the producer complies with the 

requirements of this section, the Board 

or designee will grant the exemption 

and issue a Certificate of Exemption to 

the producer. For exemption requests 

received on or before August 15, 2005, 

the Board will have 60 days to approve 

the exemption request; after August 15, 

2005, the Board will have 30 days to 

approve the exemption request. If the 

application is disapproved, the Board 

will notify the applicant of the reason(s) 

for disapproval within the same 

timeframe. 

(e) The producer shall provide a copy 

of the Certificate of Exemption to each 

first purchaser. The first purchaser shall 

maintain records showing the exempt 

producer’s name and address and the 

exemption number assigned by the 

Board. 

(f) The exemption will apply at the 

first reporting period following the 

issuance of the exemption. 

(g) Agricultural commodities 

produced and marketed under an 

organic system plan, as described in 7 

CFR 205.201, but not sold, labeled, or 

represented as organic, shall not 

disqualify a producer from exemption 

under this section, except that 

producers who produce both organic 

and non-organic agricultural 

commodities as a result of split 

operations shall not qualify for 

exemption. Reasons for conventional 

sales include lack of demand for organic 

products, isolated use of antibiotics for 

humane purposes, chemical or pesticide 

use as the result of State or emergency 

spray programs, and crops from a buffer 

area as described in 7 CFR part 205, 

provided all other criteria are met.

PART 1230—PORK PROMOTION, 

RESEARCH, AND CONSUMER 

INFORMATION

■ 28. The authority citation for part 1230 

is revised to read as follows:

2760 Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 

Authority: 7 U.S.C. 4801–4819 and 7 

U.S.C. 7401.

■ 29. A new § 1230.102 is added to read 

as follows:

§ 1230.102 Exemption. 

(a) A producer who operates under an 

approved National Organic Program 

(NOP) (7 CFR part 205) system plan; 

produces only products that are eligible 

to be labeled as 100 percent organic 

under the NOP, except as provided for 

in paragraph (i) of this section; and is 

not a split operation shall be exempt 

from the payment of assessments. 

(b) To apply for an exemption under 

this section, the producer shall submit 

the request to the Board—on a form 

provided by the Board—at any time 

initially and annually thereafter on or 

before January 1 as long as the producer 

continues to be eligible for the 

exemption. 

(c) The request shall include the 

following: the producer’s name and 

address, a copy of the organic farm or 

organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in section 

2103 of the Organic Foods Production 

Act of 1990 (7 U.S.C. 6502), a signed 

certification that the applicant meets all 

of the requirements specified for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. 

(d) If the producer complies with the 

requirements of this section, the Board 

will grant the exemption and issue a 

Certificate of Exemption to the 

producer. For exemption requests 

received on or before August 15, 2005, 

the Board will have 60 days to approve 

the exemption request; after August 15, 

2005, the Board will have 30 days to 

approve the exemption request. If the 

application is disapproved, the Board 

will notify the applicant of the reason(s) 

for disapproval within the same 

timeframe. 

(e) The producer shall provide a copy 

of the Certificate of Exemption to each 

person responsible for collecting and 

remitting the assessment to the Board. 

(f) The person responsible for 

collecting and remitting the assessment 

to the Board shall maintain records 

showing the exempt producer’s name 

and address and the exemption number 

assigned by the Board. 

(g) An importer who imports only 

products that are eligible to be labeled 

as 100 percent organic under the NOP 

(7 CFR part 205) and who is not a split 

operation shall be exempt from the 

payment of assessments. That importer 

may submit documentation to the Board 

and request an exemption from 

assessment on 100 percent organic 

porcine animals or pork and pork 

products—on a form provided by the 

Board—at any time initially and 

annually thereafter on or before January 

1 as long as the importer continues to 

be eligible for the exemption. This 

documentation shall include the same 

information required of producers in 

paragraph (c) of this section. If the 

importer complies with the 

requirements of this section, the Board 

will grant the exemption and issue a 

Certificate of Exemption to the importer. 

The Board will also issue the importer 

a 9-digit alphanumeric Harmonized 

Tariff Schedule (HTS) classification 

valid for 1 year from the date of issue. 

This HTS classification should be 

entered by the importer on the Customs 

entry documentation. Any line item 

entry of 100 percent organic porcine 

animals or pork and pork products 

bearing this HTS classification assigned 

by the Board will not be subject to 

assessments. 

(h) The exemption will apply 

immediately following the issuance of 

the Certificate of Exemption. 

(i) Agricultural commodities 

produced and marketed under an 

organic system plan, as described in 7 

CFR 205.201, but not sold, labeled, or 

represented as organic, shall not 

disqualify a producer from exemption 

under this section, except that 

producers who produce both organic 

and non-organic agricultural 

commodities as a result of split 

operations shall not qualify for 

exemption. Reasons for conventional 

sales include lack of demand for organic 

products, isolated use of antibiotics for 

humane purposes, chemical or pesticide 

use as the result of State or emergency 

spray programs, and crops from a buffer 

area as described in 7 CFR part 205, 

provided all other criteria are met.

PART 1240—HONEY RESEARCH, 

PROMOTION, AND CONSUMER 

INFORMATION

■ 30. The authority citation for part 1240 

continues to read as follows:

Authority: 7 U.S.C. 4601–4612 and 7 

U.S.C. 7401.

■ 31. Section 1240.42 is amended by:

■ (a) Redesignating paragraph (d) as 

paragraph (e).

■ (b) Revising paragraph (c).

■ (c) Adding new paragraph (d).

The revisions read as follows:

§ 1240.42 Exemption from assessment.

* * * * *

(c) If, after a person has been exempt 

from paying assessments for any year 

pursuant to this section, and the person 

no longer meets the requirements of 

paragraphs (a) and (b) of this section for 

exemption, the person shall file a report 

with the Board in the form and manner 

prescribed by the Board and pay an 

assessment on or before March 15 of the 

subsequent year on all honey or honey 

products produced or imported by such 

person during the year for which the 

person claimed the exemption. 

(d) A producer who operates under an 

approved National Organic Program 

(NOP) (7 CFR part 205) system plan; 

produces only products that are eligible 

to be labeled as 100 percent organic 

under the NOP, except as provided for 

in § 1240.114 (f); and is not a split 

operation shall be exempt from the 

payment of assessments. An importer 

who imports only products that are 

eligible to be labeled as 100 percent 

organic under the NOP (7 CFR part 205) 

and who is not a split operation shall be 

exempt from the payment of 

assessments.

* * * * *

■ 32. Amend § 1240.50 by revising 

paragraph (d) to read as follows:

§ 1240.50 Reports.

* * * * *

(d) For persons who have an 

exemption from assessments under 

§ 1240.42, such information as deemed 

necessary by the Board, and approved 

by the Secretary, concerning the 

exemption including disposition of 

exempted honey.

■ 33. Revise § 1240.114 to read as 

follows:

§ 1240.114 Exemption procedures. 

(a) To obtain a Certificate of 

Exemption for organic honey, an eligible 

producer shall submit a request for 

exemption to the Board—on a form 

provided by the Board—at any time 

initially and annually thereafter on or 

before January 1 as long as the producer 

continues to be eligible for the 

exemption. The request shall include 

the following: The producer’s name and 

address, a copy of the organic farm or 

organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in section 

2103 of the Organic Foods Production 

Act of 1990 (7 U.S.C. 6502), a signed 

certification that the applicant meets all 

of the requirements specified for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. 

(b) If the producer complies with the 

requirements of this section, the Board 

will approve the exemption and issue a 

Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 2761

Certificate of Exemption to the 

producer. For exemption requests 

received on or before August 15, 2005, 

the Board will have 60 days to approve 

the exemption request; after August 15, 

2005, the Board will have 30 days to 

approve the exemption request. If the 

application is disapproved, the Board 

will notify the applicant of the reason(s) 

for disapproval within the same 

timeframe. 

(c) A producer receiving an organic 

exemption shall provide a copy of the 

Certificate of Exemption to each first 

handler, producer-packer, importer, and 

exporter to whom the producer sells 

honey. The handler shall maintain 

records showing the exempt producer’s 

name and address and the exemption 

number assigned by the Board. 

(d) An importer who is eligible to be 

exempt from the payment of 

assessments on imported organic honey 

and honey products may request an 

exemption from assessment on 100 

percent organic honey and honey 

products—on a form provided by the 

Board—at any time initially and on or 

before January 1 as long as the importer 

continues to be eligible for the 

exemption. This documentation shall 

include the same information required 

of producers and producer-packers in 

paragraph (a) of this section. If the 

importer complies with the 

requirements of this section, the Board 

will grant the exemption and issue a 

Certificate of Exemption to the importer. 

The Board will also issue the importer 

a 9-digit alphanumeric Harmonized 

Tariff Schedule (HTS) classification 

valid for 1 year from the date of issue. 

This HTS classification should be 

entered by the importer on the Customs 

entry documentation. Any line item 

entry of 100 percent organic honey and 

honey products bearing this HTS 

classification assigned by the Board will 

not be subject to assessments. 

(e) The exemption will apply 

immediately following issuance of the 

Certificate of Exemption. 

(f) Agricultural commodities 

produced and marketed under an 

organic system plan, as described in 7 

CFR 205.201, but not sold, labeled, or 

represented as organic, shall not 

disqualify a producer from exemption 

under this section, except that 

producers who produce both organic 

and non-organic agricultural 

commodities as a result of split 

operations shall not qualify for 

exemption. Reasons for conventional 

sales include lack of demand for organic 

products, isolated use of antibiotics for 

humane purposes, chemical or pesticide 

use as the result of State or emergency 

spray programs, and crops from a buffer 

area as described in 7 CFR part 205, 

provided all other criteria are met.

■ 34. In § 1240.115, revise paragraph 

(b)(1) to read as follows:

§ 1240.115 Levy of assessments.

* * * * *

(b) * * * 

(1) Any persons other than importers 

holding a valid exemption certificate 

pursuant to § 1240.42 during the 12-

month period ending on December 31;

* * * * *

■ 35. Amend § 1240.118 by revising the 

first sentence to read as follows:

§ 1240.118 Reports of disposition of 

exempted honey. 

The Board may require reports by first 

handlers, producer-packers, importers, 

or any persons who receive an 

exemption from assessments under 

§ 1240.42 on the handling and 

disposition of exempted honey. * * *

■ 36. Revise § 1240.120 to read as 

follows:

§ 1240.120 Retention period for records. 

Each producer, first handler, 

producer-packer, importer, or any 

person who receives an exemption from 

assessments under § 1240.42 and is 

required to make reports pursuant to 

this subpart shall maintain and retain 

for at least two years beyond the 

marketing year of their applicability: 

(a) One copy of each report made to 

the Board; 

(b) Records of all exempt producers, 

producer-packers, and importers 

including certification of exemption as 

necessary to verify the address of such 

exempt person; and 

(c) Such records as are necessary to 

verify such reports.

■ 37. Revise § 1240.121 to read as 

follows:

§ 1240.121 Availability of records. 

Each producer, first handler, 

producer-packer, importer, or any 

person who receives an exemption from 

assessments under § 1240.42 and is 

required to make reports pursuant to 

this subpart shall make available for 

inspection by authorized employees of 

the Board or the Secretary during 

regular business hours, such records as 

are appropriate and necessary to verify 

reports required under this subpart.

■ 38. Revise § 1240.122 to read as 

follows:

§ 1240.122 Confidential books, records, 

and reports. 

All information obtained from the 

books, records, and reports of 

producers, first handlers, producerpackers, importers or any persons who 

receive an exemption from assessments 

under § 1240.42 and all information 

with respect to refunds of assessments 

made to individual producers and 

importers shall be kept confidential in 

the manner and to the extent provided 

for in § 1240.52 of the Order.

PART 1250—EGG RESEARCH AND 

PROMOTION

■ 39. The authority citation for part 1250 

is revised to read as follows:

Authority: 7 U.S.C. 2701–2718 and 7 

U.S.C. 7401.

■ 40. Revise § 1250.530 to read as 

follows:

§ 1250.530 Certification of exempt 

producers. 

(a) Number of laying hens. Egg 

producers not subject to the provisions 

of the Act pursuant to § 1250.348 shall 

file with all handlers to whom they sell 

eggs a statement certifying their 

exemption from the provisions of the 

Act in accordance with the criterion of 

§ 1250.348. Certification shall be made 

on forms approved and provided by the 

Egg Board to collecting handlers for use 

by exempt producers. The certification 

form shall be filed with each handler on 

or before January 1 of each year as long 

as the producer continues to do 

business with the handler. A copy of the 

certificate of exemption shall be 

forwarded to the Egg Board by the 

handler within 30 days of receipt. The 

certification shall list the following: the 

name and address of the producer, the 

basis for producer exemption according 

to the requirements of § 1250.348, and 

the signature of the producer. 

(b) Organic Production. A producer 

who operates under an approved 

National Organic Program (NOP) (7 CFR 

part 205) system plan; only produces 

products that are eligible to be labeled 

as 100 percent organic under the NOP, 

except as provided for in paragraph 

(b)(6) of this section; and is not a split 

operation shall be exempt from the 

payment of assessments. 

(1) To apply for an exemption under 

this section, a producer shall submit a 

request for exemption to the Board on 

a form provided by the Board at any 

time initially and annually thereafter on 

or before January 1 as long as the 

producer continues to be eligible for the 

exemption. 

(2) The request shall include the 

following: the producer’s name and 

address, a copy of the organic farm or 

organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in section 

2103 of the Organic Foods Production 

Act of 1990 (7 U.S.C. 6502), a signed 

2762 Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 

certification that the applicant meets all 

of the requirements specified in 

paragraph (b) of this section for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. 

(3) If the producer complies with the 

requirements of this section, the Board 

will grant an assessment exemption and 

issue a certificate of exemption to the 

producer. For exemption requests 

received on or before August 15, 2005, 

the Board will have 60 days to approve 

the exemption request; after August 15, 

2005, the Board will have 30 days to 

approve the exemption request. If the 

application is disapproved, the Board 

will notify the applicant of the reason(s) 

for disapproval within the same 

timeframe. 

(4) The producer shall provide a copy 

of the certificate of exemption to each 

handler to whom the producer sells 

eggs. The handler shall maintain records 

showing the exempt producer’s name 

and address and the exemption number 

assigned by the Board. 

(5) The exemption will apply at the 

first reporting period following the 

issuance of the Certificate of Exemption. 

(6) Agricultural commodities 

produced and marketed under an 

organic system plan, as described in 7 

CFR 205.201, but not sold, labeled, or 

represented as organic, shall not 

disqualify a producer from exemption 

under this section, except that 

producers who produce both organic 

and non-organic agricultural 

commodities as a result of split 

operations shall not qualify for 

exemption. Reasons for conventional 

sales include lack of demand for organic 

products, isolated use of antibiotics for 

humane purposes, chemical or pesticide 

use as the result of State or emergency 

spray programs, and crops from a buffer 

area as described in 7 CFR part 205, 

provided all other criteria are met. 

(c) If the exempt producer no longer 

qualifies for an exemption as specified 

in § 1250.348 or 1250.530(b), that 

producer shall notify, within 10 days, 

all handlers with whom the producer 

has filed a Certificate of Exemption.

PART 1260—BEEF PROMOTION AND 

RESEARCH

■ 41. The authority citation for part 1260 

is revised to read as follows:

Authority: 7 U.S.C. 2901–2911 and 7 

U.S.C. 7401.

■ 42. A new § 1260.302 is added to read 

as follows:

§ 1260.302 Organic exemption. 

(a) A producer who operates under an 

approved National Organic Program 

(NOP) (7 CFR part 205) system plan; 

only produces products that re eligible 

to be labeled as 100 percent organic 

under the NOP, except as provided for 

in paragraph (i) of this section; and is 

not a split operation shall be exempt 

from the payment of assessments.

(b) To apply for an exemption under 

this section, the producer shall submit 

the request to the Board or QSBC—on a 

form provided by the Board or QSBC—

at any time initially and annually 

thereafter on or before January 1 as long 

as the producer continues to be eligible 

for the exemption. 

(c) The request shall include the 

following: the producer’s name and 

address, a copy of the organic farm or 

organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in section 

2103 of the Organic Foods Production 

Act of 1990 (7 U.S.C. 6502), a signed 

certification that the applicant meets all 

of the requirements specified for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. 

(d) If the producer complies with the 

requirements of this section, the Board 

or QSBC will grant the exemption and 

issue a Certificate of Exemption to the 

producer. For exemption requests 

received on or before August 15, 2005, 

the Board or QSBC will have 60 days to 

approve the exemption request; after 

August 15, 2005, the Board or QSBC 

will have 30 days to approve the 

exemption request. If the application is 

disapproved, the Board will notify the 

applicant of the reason(s) for 

disapproval within the same timeframe. 

(e) The producer shall provide a copy 

of the Certificate of Exemption to each 

person responsible for collecting and 

remitting the assessment. 

(f) The person responsible for 

collecting and remitting the assessment 

shall maintain records showing the 

exempt producer’s name and address 

and the exemption number assigned by 

the Board or QSBC. 

(g) An importer who imports only 

products that are eligible to be labeled 

as 100 percent organic under the NOP 

(7 CFR part 205) and who is not a split 

operation shall be exempt from the 

payment of assessments. That importer 

may submit documentation to the Board 

and request an exemption from 

assessment on 100 percent organic cattle 

or beef and beef products—on a form 

provided by the Board—at any time 

initially and annually thereafter on or 

before January 1 as long as the importer 

continues to be eligible for the 

exemption. This documentation shall 

include the same information required 

of producers in paragraph (c) of this 

section. If the importer complies with 

the requirements of this section, the 

Board will grant the exemption and 

issue a Certificate of Exemption to the 

importer. The Board will also issue the 

importer a 9-digit alphanumeric 

Harmonized Tariff Schedule (HTS) 

classification valid for 1 year from the 

date of issue. This HTS classification 

should be entered by the importer on 

the Customs entry documentation. Any 

line item entry of 100 percent organic 

cattle or beef and beef products bearing 

this HTS classification assigned by the 

Board will not be subject to 

assessments. 

(h) The exemption will apply 

immediately following the issuance of 

the Certificate of Exemption. 

(i) Agricultural commodities 

produced and marketed under an 

organic system plan, as described in 7 

CFR 205.201, but not sold, labeled, or 

represented as organic, shall not 

disqualify a producer from exemption 

under this section, except that 

producers who produce both organic 

and non-organic agricultural 

commodities as a result of split 

operations shall not qualify for 

exemption. Reasons for conventional 

sales include lack of demand for organic 

products, isolated use of antibiotics for 

humane purposes, chemical or pesticide 

use as the result of State or emergency 

spray programs, and crops from a buffer 

area as described in 7 CFR part 205, 

provided all other criteria are met.

PART 1280—LAMB PROMOTION, 

RESEARCH, AND INFORMATION 

ORDER

■ 43. The authority citation for part 1280 

is revised to read as follows:

Authority: 7 U.S.C. 7411–7425 and 7 

U.S.C. 7401.

■ 44. A new § 1280.406 is added to read 

as follows:

§ 1280.406 Exemption. 

(a) A producer, seed stock producer, 

or feeder who produces (including 

producing by feeding) only products 

that are eligible to be labeled as 100 

percent organic under the National 

Organic Program (NOP) (7 CFR part 

205), except as provided for in 

paragraph (h) of this section; a handler 

who handles only products that are 

eligible to be labeled as 100 percent 

organic under the NOP; or an exporter 

who exports only products that are 

eligible to be labeled as 100 percent 

Federal Register / Vol. 70, No. 10 / Friday, January 14, 2005 / Rules and Regulations 2763

organic under the NOP; and who 

operates under an approved NOP 

system plan and is not a split operation. 

(b) To apply for an exemption under 

this section, the person shall submit the 

request to the Board—on a form 

provided by the Board—at any time 

initially and annually thereafter on or 

before January 1 as long as the person 

continues to be eligible for the 

exemption. 

(c) The request shall include the 

following: the person’s name and 

address, a copy of the organic farm or 

organic handling operation certificate 

provided by a USDA-accredited 

certifying agent as defined in section 

2103 of the Organic Foods Production 

Act of 1990 (7 U.S.C. 6502), a signed 

certification that the applicant meets all 

of the requirements specified for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. 

(d) If the person complies with the 

requirements of this section, the Board 

will grant the exemption and issue a 

Certificate of Exemption to the 

producer. For exemption requests 

received on or before August 15, 2005, 

the Board will have 60 days to approve 

the exemption request; after August 15, 

2005, the Board will have 30 days to 

approve the exemption request. If the 

application is disapproved, the Board 

will notify the applicant of the reason(s) 

for disapproval within the same 

timeframe. 

(e) An exempt producer shall provide 

a copy of the Certificate of Exemption to 

each person to whom the producer sells 

ovine animals or lamb and lamb 

products. The Certificate of Exemption 

must accompany the ovine animals 

through the production chain to the 

person responsible for remitting the 

assessment to the Board. 

(f) The person shall maintain records 

showing the exempt producer’s name 

and address and the exemption number 

assigned by the Board. 

(g) The exemption will apply at the 

first reporting period following the 

issuance of the exemption. 

(h) Agricultural commodities 

produced and marketed under an 

organic system plan, as described in 7 

CFR 205.201, but not sold, labeled, or 

represented as organic, shall not 

disqualify a producer, seed stock 

producer, or feeder from exemption 

under this section, except that persons 

producing or feeding both organic and 

non-organic agricultural commodities as 

a result of split operations shall not 

qualify for exemption. Reasons for 

conventional sales include lack of 

demand for organic products, isolated 

use of antibiotics for humane purposes, 

chemical or pesticide use as the result 

of State or emergency spray programs, 

and crops from a buffer area as 

described in 7 CFR part 205, provided 

all other criteria are met.

Dated: January 5, 2005. 

Kenneth C. Clayton, 

Associate Administrator, Agricultural 

Marketing Service.

[FR Doc. 05–573 Filed 1–13–05; 8:45 am] 

BILLING CODE 3410–02–P

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service 

7 CFR Part 900 

[Docket No. FV03–900–1 FR] 

Exemption of Organic Handlers From 

Assessments for Market Promotion 

Activities Under Marketing Order 

Programs

AGENCY: Agricultural Marketing Service, 

USDA.

ACTION: Final rule.

SUMMARY: This rule implements the 

provisions of section 10607 of the 2002 

Farm Bill and exempts handlers subject 

to marketing order requirements from 

paying assessments for market 

promotion activities, including paid 

advertising, to marketing order 

committees and boards. To obtain an 

exemption, the handler must operate 

under an approved organic process 

system plan authorized by the National 

Organic Program (NOP), and handle or 

market only products that are eligible 

for a 100 percent organic product label 

under the NOP. The Agricultural 

Marketing Service (AMS), that oversees 

and works with the committees and 

boards in administering the programs, 

has identified 28 marketing order 

programs for which assessment 

exemptions may be established. A 

separate final rule to exempt any person 

producing and marketing solely 100 

percent organic products from paying 

assessments to any national research 

and promotion program administered by 

AMS also is being published in today’s 

Federal Register.

DATES: Effective February 14, 2005.

FOR FURTHER INFORMATION CONTACT:

George Kelhart or Jay Guerber, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

Agricultural Marketing Service, U.S. 

Department of Agriculture, 1400 

Independence Avenue SW., STOP 0237, 

Room 2525–South, Washington, DC 

20250–0237; Telephone: (202) 720–

2491; Fax: (202) 720–8938; or E-mail: 

George.Kelhart@usda.gov.

Small businesses may request 

information on complying with this 

regulation by contacting Jay Guerber, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA, 1400 Independence 

Avenue SW., Stop 0237, Washington, 

DC 20250–0237; telephone: (202) 720–

2491; Fax: (202) 720–8938; or E-mail: 

Jay.Guerber@usda.gov.

SUPPLEMENTARY INFORMATION: Prior 

documents in this proceeding: 

Proposed rule; Published in the 

Federal Register December 2, 2003 (68 

FR 67381). 

Proposed rule; Extension of comment 

period; Published in the Federal 

Register December 30, 2003 (68 FR 

75148). 

Executive Order 12866 

This final rule is being issued by the 

Department of Agriculture (USDA) in 

conformance with Executive Order 

12866. 

Executive Order 12988 

This final rule has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. It is not intended to 

have retroactive effect. This final rule 

would not preempt any State or local 

laws, regulations, or policies, unless 

they present an irreconcilable conflict 

with this rule. 

The Agricultural Marketing 

Agreement Act of 1937 (7 U.S.C. 601–

674)(Act or AMAA), under which the 28 

marketing order programs are 

established, provides that 

administrative proceedings must be 

exhausted before parties may file suit in 

court. Under the Act, any person subject 

to an order may file a petition with 

USDA stating that the order, any 

provision of the order, or any obligation 

imposed in connection with the order is 

not in accordance with law and request 

a modification of the order, or to be 

exempted therefrom. The petitioner is 

afforded the opportunity for a hearing 

on the petition. After the hearing, USDA 

would make a ruling on the petition. 

The Act provides that the district court 

of the United States in any district in 

which the person is an inhabitant, or 

has his or her principal place of 

business, has jurisdiction to review 

USDA’s ruling, provided a complaint is 

filed within 20 days from the date of the 

entry of the ruling. 

Background 

Section 10607 of the Farm Security 

and Rural Investment Act (Pub. L. 107–

171; 2002 Farm Bill) was enacted May 

13, 2002. Section 501 of the Federal