Source: https://www.federalregister.gov/documents/2015/09/03/2015-21880/blueberry-promotion-research-and-information-order-expanding-the-membership-of-the-us-highbush
Timestamp: 2017-08-24 09:26:19
Document Index: 46131831

Matched Legal Cases: ['art 1218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218', '§\u20091218']

A Rule by the Agricultural Marketing Service on 09/03/2015
53257-53263 (7 pages)
https://www.federalregister.gov/d/2015-21880 https://www.federalregister.gov/d/2015-21880
Start Preamble Start Printed Page 53257
Maureen T. Pello, Marketing Specialist, Promotion and Economics Division, Fruit and Vegetable Program, AMS, USDA, P.O. Box 831, Beavercreek, Oregon 97004; telephone: (503) 632-8848; facsimile (202) 205-2800; or electronic mail: Maureen.Pello@ams.usda.gov.
This rule is issued under the Order (7 CFR part 1218). The Order is authorized under the Commodity Promotion, Research, and Information Act of 1996 (1996 Act) (7 U.S.C. 7411-7425).
This rule expands the membership of the Council under the Order. The Council administers the Order with oversight by USDA. Under the program, assessments are collected from domestic producers and importers and used for research and promotion projects designed to increase the demand for highbush blueberries. This rule increases the number of Council members from 16 to 20, adding two producers, one importer, and one exporter. This will help ensure that the Council reflects the geographical distribution of domestic blueberry production and imports into the United States. This rule also adds eligibility requirements for the public member, clarifies the Council's nomination procedures and its ability to serve the diversity of the industry, and increases the number of members needed for a quorum. This rule also prescribes late payment and interest charges on past due assessments. These changes will help facilitate program administration. All of these actions were unanimously recommended by the Council at its meeting on October 3, 2014.
Of the remaining six Council members and alternates, three members and alternates are importers. One member and alternate must be an exporter, defined in § 1218.40 as a blueberry producer currently shipping blueberries into the United States from the largest foreign blueberry production area, based on a three-year average (currently Chile). One member and alternate must be a first handler, defined in § 1218.40 as a United States based independent or cooperative organization which is a producer/shipper of domestic blueberries. Finally, one member and alternate must represent the public.
Section 1218.40(b) of the Order specifies that, at least once every five years, the Council will review the geographical distribution of the production of blueberries in the United Start Printed Page 53258States and the quantity of imports. The review is conducted through an audit of state crop production figures and Council assessment records. If warranted, the Council will recommend to the Secretary that its membership be altered to reflect changes in the geographical distribution of domestic blueberry production and the quantity of imports. If the level of imports increases, importer members and alternates may be added to the Council.
After reviewing state production data, the Council recommended revising its membership so that one producer member and alternate from each of the top eight producing blueberry states have seats on the Council, based upon the average of the total tons produced over the previous 3 years. Thus, the number of state positions on the Council will be increased from six to eight. Based upon recent production figures, this will allow North Carolina and Florida to each have a state member and alternate seat on the Council. Section 1218.40(a)(2) is revised accordingly.
The Council also reviewed import data and compared it to domestic data. Table 2 below shows the domestic (U.S.) production figures and quantity of imports from 2011-2013 as well as assessments paid for domestic and imported blueberries for those years. The table also shows the 3-year average of domestic production, imports and assessments paid for 2011-2013.
As shown in Table 2, the quantity of imported blueberries as well as assessments paid by importers has increased from 2011-2013. Based upon a 3-year average of total assessments paid under the program, domestic blueberries account for 59 percent of assessments paid and imports account for 41 percent of assessments paid. Additionally, based on a 3-year average of the total tonnage covered under the program, domestic production accounts for 64 percent of the tonnage and imports account for 36 percent of the tonnage.Start Printed Page 53259
Upon reviewing import data, the Council recommended adding one importer member and one alternate to its membership. This will increase the number of importer positions from three to four. The Council also recommended adding one exporter member and one alternate to its membership to represent foreign producers currently shipping blueberries into the United States from the second largest foreign blueberry production area, based on a 3-year average. This will increase the number of exporter positions from one to two, allowing exporters from both Chile and Canada to be represented on the Council. Section 1218.40(a) of the Order is amended accordingly.
Thus, the number of Council members will increase from 16 to 20. Of the 20 members, 12 will be domestic producers, 4 will be importers, 2 will be exporters, and 1 each will be a handler and public member. Of the 18 Council members representing domestic producers, importers and exporters, 66.7 percent will represent the domestic industry and 33.3 percent of the Council will represent imports or foreign production. This will realign the Council's membership to better reflect the geographic distribution of domestic and imported blueberries.
The Council reviewed other Order provisions regarding its membership and operations. The Council recommended revising paragraph (a)(6) of § 1218.40 to clarify eligibility requirements for the public member and alternate member positions. Specifically, the Council recommended that the public member and alternate not be a blueberry producer, handler, importer, exporter or have a financial interest in the production, sales, marketing or distribution of blueberries.
The Council also recommended adding language to the Order to clarify its ability to serve the diversity of the industry. The Council recommended adding a new paragraph (c) to § 1218.40 to specify that, when the industry makes recommendations for nominees to serve on the Council, it should take into account the diversity of the population served and the knowledge, skills, and abilities of the members to serve a diverse population, size of the operations, methods of production and distribution, and other distinguishing factors to ensure that the recommendations of the Council take into account the diverse interest of persons responsible for paying assessments, and others in the marketing chain, if appropriate.
The Council recommended minor revisions to § 1218.41 of the Order regarding nominations and appointments. The procedures to nominate state and regional producers, as well as importers, exporters, first handlers, and public members will not change. The section is merely revised to add clarity regarding the process for nominating members in states with and without a state blueberry commission or marketing order.
The Council also recommended adding language to § 1218.41 to expand the number of nominees submitted to the Secretary for consideration. Paragraph (a) of § 1218.41 currently provides that, when a state has a blueberry commission or marketing order in place, the state commission or committee will nominate members to serve on the Council. At least two nominees must be recommended to the Secretary for each member and each alternate position. The Council recommended that other qualified persons who are interested in serving in the respective state positions but are not nominated by their State marketing order or commission be designated by the State organization and/or Council as additional nominees for consideration by the Secretary. Section 1218.41(a) is revised accordingly.
Likewise, paragraph (d) of § 1218.41 currently provides that nominations for the importer, exporter, first handler, and public member positions be made by the Council. Two nominees for each member and each alternate position are submitted to the Secretary for consideration. The Council recommended that other qualified persons who are interested in serving in these positions but are not recommended by the Council be designated by the Council as additional nominees for consideration by the Secretary. The current paragraph (d) in § 1218.41 is modified accordingly and becomes paragraph (c).
The Council also recommended adding a new paragraph (d) to § 1218.41 to specify that producer, handler and importer nominees must be in compliance with the Order's provisions regarding the payment of assessments and filing of reports. This will help ensure that only persons in compliance with the Order's obligations serve on the Council. Further, this section will clarify that producer and importer nominees must produce or import, respectively, 2,000 pounds or more of highbush blueberries annually. This Start Printed Page 53260will bring the Order in line with how the program has been administered since its inception. Section 1218.41 is revised accordingly.
The Council recommended revisions to § 1218.45 regarding procedures. First, the Council recommended increasing the number of members needed for a quorum. Paragraph (a) of § 1218.45 currently specifies that nine members are needed for a quorum, which is a majority of the current 16-member Council. Increasing the number of Council members to 20 warrants increasing the number members needed for a quorum to 11, which will be a majority of the 20-member Council.
The Council also recommended adding flexibility to its procedures so that members participating in Council meetings may cast votes on issues either in person or by electronic or other means as deemed appropriate. Specifically, a new paragraph (f) is added to § 1218.45 to specify that all votes at meetings of the Council and committees may be cast in person or by electronic voting or other means as the Council and Secretary deem appropriate to allow members participating by telephone or other electronic means to cast votes.
The Order specifies that the funds to cover the Council's expenses shall be paid from assessments on producers and importers, donations from persons not subject to assessments and from other funds available to the Council. First handlers are responsible for collecting and submitting reports and producer assessments to the Council. Handlers must also maintain records necessary to verify their reports. Importers are responsible for paying assessments to the Council on highbush blueberries imported into the United States through the U.S. Customs and Border Protection (Customs). The Order also provides for two exemptions. Producers and importers who produce or import less than 2,000 pounds of blueberries annually, and producers and importers of organic blueberries are exempt from the payment of assessments.
The Council recommended prescribing rates of late payment and interest charges for past due assessments in the Order's regulations. A late payment charge will be imposed upon handlers who fail to pay their assessments to the Council within 30 calendar days of the date when assessments are due. This one-time late payment charge will be 5 percent of the assessments due before interest charges have accrued.
Additionally, interest at a rate of 1 percent per month on the outstanding balance, including any late payment and accrued interest, will be added to any accounts for which payment has not been received within 30 calendar days of the date when assessments are due. Interest will continue to accrue monthly until the outstanding balance is paid to the Council.
This action is expected to help facilitate program administration by providing an incentive for entities to remit their assessments in a timely manner, with the intent of creating a fair and equitable process among all assessed entities. Accordingly, a new Subpart C is added to the Order for provisions implementing the blueberry Order, and a new § 1218.520 is added to Subpart C. Late payment charges and interest on past due assessments are not applicable for assessments on imported blueberries because the assessments are collected by Customs at the time of entry.
In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS is required to examine the impact of this final rule on small entities. Accordingly, AMS has considered the economic impact of this action on such entities.
There are approximately 2,000 domestic producers, 80 first handlers and 200 importers of highbush blueberries covered under the program. Dividing the highbush blueberry crop value for 2013, $715,958,000,[7] by the number of producers (2,000) yields an average annual producer revenue estimate of $357,979. It is estimated that in 2013, about 60 percent of the first handlers shipped under $7.0 million worth of highbush blueberries. Based on 2013 Customs data, it is estimated that almost 90 percent of the importers shipped under $7.0 million worth of highbush blueberries. Based on the foregoing, the majority of producers, first handlers and importers may be classified as small entities. We do not have information concerning the number of exporters and their size.
This rule amends §§ 1218.40, 1218.41 and 1218.45 of the Order regarding Council membership, nominations, and procedures, respectively. The Council administers the Order with oversight by USDA. Under the program, assessments are collected from domestic producers and importers and used for research and promotion projects designed to increase the demand for highbush blueberries. This rule increases the number of Council members from 16 to 20, adding two producers, one importer, and one exporter. This will help ensure that the Council reflects the geographical distribution of domestic blueberry production and imports into the United States. Authority for this action is provided in § 1218.40(b) of the Order and section 515(b) of the 1996 Act.
This rule also prescribes charges for past due assessments under the Order. A new § 1218.520 will be added to the Start Printed Page 53261Order specifying a one-time late payment charge of 5 percent of the assessments due and interest at a rate of 1 percent per month on the outstanding balance, including any late payment and accrued interest. This section will be included in a new Subpart C—Provisions for Implementing the Blueberry Promotion, Research and Information Order. Authority for this action is provided in § 1218.52(e) of the Order and section 517(e) of the 1996 Act.
Regarding the economic impact of the rule on affected entities, expanding the Council membership and other changes to the Order's membership provisions impose no additional costs on industry members. Eligible producers, importers and exporters interested in serving on the Council would have to complete a background questionnaire. Those requirements are addressed later in this rule in the section titled Reporting and Recordkeeping Requirements.
Prescribing charges for past due assessments imposes no additional costs on handlers who pay their assessments on time. It merely provides an incentive for entities to remit their assessments in compliance with the Order. For all entities who are delinquent in paying assessments, both large and small, the charges will be applied the same. As for the impact on the industry as a whole, this action helps facilitate program administration by providing an incentive for entities to remit their assessments in a timely manner, with the intent of creating a fair and equitable process among all assessed entities.
Additionally, as previously mentioned, the Order also provides for two exemptions. Producers and importers who produce or import less than 2,000 pounds of blueberries annually, and producers and importers of organic blueberries are exempt from the payment of assessments. Of the 2,000 producers, it is estimated that 1,860 producers and 180 importers produce or import over the 2,000-pound threshold and pay assessments under the program.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection and recordkeeping requirements that are imposed by the Order have been approved previously under OMB control number 0581-0093. Eligible producers, importers, exporters, handlers, and public members interested in serving on the Council must complete a background questionnaire (Form AD-755) to verify their eligibility. This rule results in no changes to the information collection and recordkeeping requirements previously approved and imposes no additional reporting and recordkeeping burden on blueberry producers, importers, exporters, handlers or public members.
AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities or citizen access to Government information and services, and for other purposes.
Regarding outreach efforts, this action was discussed by the Council at meetings in October 2012, in 2013, and at executive and subcommittee meetings held in 2014. The Council met in October 2014 and unanimously made its recommendations. All of the Council's meetings are open to the public and interested persons are invited to participate and express their views.
A proposed rule concerning this action was published in the Federal Register on May 8, 2015 (80 FR 26469). The Council mailed copies of the rule to all known highbush blueberry producers and importers of record. The Council also included notifications about the proposed rule in its newsletters and posted the proposal on its Web site. Finally, the proposal was made available through the Internet by USDA and the Office of the Federal Register. A 60-day comment period ending July 7, 2015 was provided to allow interested persons to submit comments.
One comment was received during the comment period. The commenter supported the proposed changes regarding the Council's membership, but recommended changes to the proposed interest and late payment charges for delinquent assessments. The commenter expressed concern with imposing a fixed interest rate on late assessments and opined that a fixed rate could become unreasonable if future interest rates fluctuated. The commenter also recommended that the late payment charge be capped at 3 percent of the assessments due rather than the proposed rate of 5 percent.
USDA has concluded that the proposed 1 percent fixed interest rate per month on outstanding balances due the Council and the proposed 5 percent charge on late assessments, are both reasonable fees. Under the blueberry program, assessments on domestic blueberries are due once per year to the Council (by November 30). Thus, handlers have all year to make their one payment to the Council. Handlers will also have a 30-day grace period before interest or late payment charges are applied. Additionally, the rates are comparable to those specified in other research and promotion programs. Finally, if the Council determined different rates were warranted, it could make that recommendation to USDA and the rates could be revised through Start Printed Page 53262rulemaking. Thus, no changes have been made to the proposed rule based on this comment.
2. In § 1218.40, revise the introductory text of paragraph (a), revise paragraphs (a)(2), (3), (4), and (6) and add a new paragraph (c) to read as follows:
5. Add Subpart C, consisting of § 1218.520, to read as follows:
(a) A late payment charge will be imposed on any handler who fails to make timely remittance to the Council of the total assessments for which they are liable. The late payment will be imposed on any assessments not received within 30 calendar days of the date when assessments are due. This one-time late payment charge will be 5 percent of the assessments due before interest charges have accrued.Start Printed Page 53263
[FR Doc. 2015-21880 Filed 9-2-15; 8:45 am]