Source: https://www.federalregister.gov/documents/2001/07/13/01-17429/proposed-hass-avocado-promotion-research-and-consumer-information-order
Timestamp: 2017-08-18 15:43:16
Document Index: 262635960

Matched Legal Cases: ['art 915', 'art 1320', '§\u20091219', '§\u20091219', '§\u20091219', '§\u20091219', '§\u20091219', '§\u20091219', '§\u20091219', '§\u20091219', '§\u20091219', '§\u20091219', '§\u20091219', '§\u20091219', '§\u20091219', 'art 1219', '§\u20091219', '§\u20091219', 'art 1219', '§\u20091219', 'art 1219']

Federal Register :: Proposed Hass Avocado Promotion, Research, and Consumer Information Order
66 FR 36869
36869-36886 (18 pages)
FV-01-705-PR#1
01-17429
If the Hass Avocado Program Is Implemented and There Are Concerns About How It Is Operating, What Can the Secretary Do?
Subpart A—Hass Avocado Promotion, Research, and Information Act of 2000
Hass Avocado Importer Associations
Budget, Expenses, and Assessments
https://www.federalregister.gov/d/01-17429 https://www.federalregister.gov/d/01-17429
The U.S. Department of Agriculture (Department or USDA) is seeking comments on an industry-funded research, promotion, industry information, and consumer information program for Hass avocados. A proposed program—the Hass Avocado Research, Promotion, and Consumer Information Order (Order)—was submitted to the Department by the California Avocado Commission (Commission). In addition, Mexican, Chilean, and New Zealand producers and associations submitted partial proposals.
Under the proposed Order, producers and importers would pay an initial assessment of 2.5 cents per pound of Hass domestic and imported avocados to the Hass Avocado Board (Board). The Board would be appointed by the Secretary of Agriculture (Secretary) to conduct research, promotion, industry information, and consumer information needed for the maintenance, expansion, and development of domestic markets for Hass avocados.
Interested persons are invited to submit written comments concerning the proposed rule to: Docket Clerk, Research and Promotion Branch, Fruit and Vegetable Division (FV), Agricultural Marketing Service (AMS), USDA, Stop 0244, 1400 Independence Avenue, SW., Room 2535-S, Washington, DC 20250-0244. Comments should be submitted in triplicate and will be made available for public inspection at the above address during regular business hours. Comments may also be submitted electronically to: malinda.farmer@usda.gov. All comments should reference the docket number and the date and page number of this issue of the Federal Register. A copy of this proposed rule may be found at: http://www.ams.usda.gov/​rpdocketlist.htm.
Julie Morin, Research and Promotion Branch, FV, AMS, USDA, Stop 0244, 1400 Independence Avenue, S.W., Room 2535-S, Washington, DC 20250-0244, telephone (202) 720-6930 or (1)(888) 720-9917, fax (202) 205-2800, e-mail julie.morin@usda.gov.
This proposed Order is issued under the Hass Avocado Research, Promotion, and Consumer Information Act (Act) [Pub. L. 104-127], enacted on October 23, 2000.
The Department received a proposal from the California Avocado Commission and partial proposals from Hass avocado interests in Chile, Mexico, and New Zealand. The Department is issuing this rule to obtain comments on the proposals and the potential impact of the proposed program on the Hass avocado industry before developing a final proposed program and conducting a referendum on it.
The Order will provide for a nomination and election process to identify industry members who are interested and willing to serve on the Board. The Commission will conduct an election to determine who will be nominated for each domestic producer seat. USDA will conduct an election among importers or importer associations will nominate persons to fill the importer seats. Two names must be submitted for each member and alternate position. From the names submitted, the Secretary will appoint the members and alternates of the Board.
You have 45 days to submit written comments to USDA on the proposals and also to OMB on the paperwork burden associated with the proposed order. You may submit your comments by mail, fax, or e-mail as indicated above. In addition, if you are a producer or importer of Hass avocados, you will have the opportunity to vote either “yes” or “no” in a referendum to determine if the program will be implemented.
Three years after the program is implemented, the Secretary could conduct a referendum to determine whether the Hass avocado industry supports continuation of the program: (1) at any time; (2) at the request of 30 percent or more of the producers and importers required to pay assessments; or (3) at the request of the Board.
This proposed rule has been determined to be not significant for purposes of Executive Order (E.O.) 12866 and therefore has not been reviewed by OMB.
This proposed rule has been reviewed under E.O. 12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 1212 of the Act states that the Act may not be construed to preempt or supersede any other program relating to Hass avocado promotion, research, industry information, and Start Printed Page 36871consumer information organized and operated under the laws of the United States or of a state.
Under Section 1207 of the Act, a person subject to the Order may file a petition with the Secretary stating that the Order, any provision of the Order, or any obligation imposed in connection with the Order, is not established in accordance with law, and requesting a modification of the Order or an exemption from the Order. Any petition filed challenging the Order, any provision of the Order, or any obligation imposed in connection with the Order, shall be filed within two years after the effective date of the Order, provision, or obligation subject to challenge in the petition. The petitioner will have the opportunity for a hearing on the petition. Thereafter, the Secretary will issue a ruling on the petition. The Act provides that the district court of the United States in any district in which the petitioner resides or conducts business shall have the jurisdiction to review a final ruling on the petition, if the petitioner files a complaint for that purpose not later than 20 days after the date of the entry of the Secretary's final ruling.
In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C. 601 et seq.], the Agency is required to examine 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.
The California avocado industry initiated this program by asking the U.S. Congress (Congress) to pass legislation to authorize the Secretary to create a generic program of promotion and research for Hass avocados. Congress found that this program is vital to the welfare of Hass avocado producers and other persons concerned with producing, marketing, and processing Hass avocados.
Hass avocado producers and importers must approve the program in a referendum in advance of its implementation and would serve on the Board that would administer the program under the Department's supervision. In addition, any person subject to the program may file with the Secretary a petition stating that the Order or any provision of the Order is not in accordance with law and requesting a modification of the Order or an exemption from the Order. Administrative proceedings were discussed earlier in this proposed rule.
In this program, handlers would be required to collect assessments from producers, file reports, and submit assessments to the Board. Importers would be required to remit to the Board assessments not collected by the U.S. Customs Service (Customs) and to file reports with the Board. Exports of U.S. Hass avocados would be exempt from assessment. While the proposed Order would impose certain recordkeeping requirements on producers, handlers, and importers, information required under the proposed Order could be compiled from records currently maintained and would involve clerical or accounting skills. The forms require the minimum information necessary to effectively carry out the requirements of the program, and their use is necessary to fulfill the intent of the Act. The estimated cost in providing information to the Board by the 6,310 respondents (6,000 producers, 100 handlers, 200 importers, and 10 exempt handlers) would be $40,020 for all producers or $6.67 per producer, $6,500 for all handlers or $65 per handler, $50 for all importers or $0.25 per importer, and $25 for exempt handlers or $2.50 per exempt handler. These totals have been estimated by multiplying total burden hours requested by $10.00 per hour, a sum deemed to be reasonable should the respondents be compensated for their time.
The Department would oversee the operation of the program. Three years after the program is implemented, the Secretary could conduct a referendum to determine whether the Hass avocado industry supports continuation of the program at any time, at the request of 30 percent or more of the producers and importers required to pay assessments, or at the request of the Board.
There are approximately 6,000 producers, 200 importers, and 100 first handlers of Hass avocados that would be covered by the program. The program would also affect 10 exempt handlers, a state association (the Commission), which consists of avocado producers, and several importer associations.
The Small Business Administration [13 CFR 121.201] defines small agricultural producers as those having annual receipts of $500,000 or less annually and small agricultural service firms as those having annual receipts of $5 million or less. Importers and first handlers would be considered agricultural service firms. Using these criteria, most producers and importers to be covered by the proposed program would be considered small businesses, and most handlers would not. On August 6, 2001, the threshold for small agricultural producers will be increased to $750,000. This increase has little import on the determination of whether those covered by the proposed program would be considered small businesses.
According to the USDA's National Agricultural Statistics Service (NASS), total U.S. production of all varieties of avocados during the 1999-2000 season was 181,300 tons, most of which was utilized fresh except for a small processed quantity that NASS included in fresh utilization to protect the confidentiality of individual operations. The value of the 1999-2000 crop was $392 million. Production in 1999-2000 was up 14 percent from the previous year's total of 159,250 tons, which had a value of $344 million.
California is the source for practically all of the Hass avocados handled in the United States. In turn, according to industry sources, Hass avocados account for about 85 percent of the total California avocado crop. The California Hass avocado industry consists of approximately 6,000 producers.
The majority of imported fresh avocados come from Chile, with the remaining coming from Mexico, the Dominican Republic, and New Zealand. Data on imports is not collected by variety, but it is believed to be mostly Hass. Hass avocados are imported both in fresh and processed form. According to U.S. Census Bureau data, fresh avocado imports during the 1999-2000 season (November/October) accounted for about 75 percent of the total tonnage of fresh and processed avocados imported. In 1999-2000, imported fresh avocados totaled 66,237 tons, up from 55,515 tons during the 1998-1999 season.
The value of exports in 1999-2000 was $4.9 million, down from $7 million.
The proposed Hass avocado Order would authorize assessments on producers (to be collected by first handlers) and on importers (collected by Customs) of Hass avocados at an initial rate of 2.5 cents a pound. Exports of Start Printed Page 36872domestic Hass avocados are exempt from assessment. At the initial rate of assessment, about $10 million will be collected to administer the program: about 65 percent from domestic production and 35 percent from imports. The Act authorizes assessments on fresh, frozen, and processed Hass avocados. However, initially only fresh Hass avocados will be assessed.
An exempt handler is a person who would otherwise be considered a first handler, except that all Hass avocados purchased by the person have already been subject to assessments under the Order. Others affected by the program would be the Commission, which would receive 85 percent of the assessments paid by domestic producers, and importer associations which would receive 85 percent of the assessments paid by their members. The Association could use the assessment funds to promote California Hass avocados in the United States, and the importer associations could use the assessments to promote Hass avocados on a country-of-origin basis in the United States. The funds remaining with the Board would be used to promote Hass avocados in the United States. The Board would also enter into contracts with the Association as provided for in the Act.
The Board would develop guidelines for compliance with the program. The Board would recommend changes in the assessment rate; programs, plans, and projects; a budget; and any rules and regulations that might be necessary for the administration of the program. Among the rules and regulations that might be necessary for the administration of the program would be provisions to assess other types of avocados that are so similar to the Hass variety that they are indistinguishable to consumers in fresh form. The Board could also recommend the assessment of imported frozen and processed Hass avocados. The Board also has the authority to recommend the exemption of certain processed avocado products for sale to a retailer if the avocado portion of the products does not constitute a substantial value of the product. The administrative expenses of the Board are limited by the Act to no more than 10 percent of its assessment income.
There is a federal marketing order program for avocados grown in south Florida [7 CFR part 915]. According to NASS, in Florida, there is little or no production of Hass avocados. Under the program, Hass avocados are covered by the grade regulations, but not by the maturity regulations. Since California is the source for over 95 percent of avocados produced in the United States and Florida does not produce Hass avocados, there is little duplication between this Order and the federal marketing order.
There is also a state avocado program in California, which is administered by the Commission. The Commission's chief objective is to increase consumer awareness of and demand for avocados on behalf of the state's 6,000 growers. The Commission assesses growers a percentage-of-revenue fee allowed under the California Marketing Act to fund a variety of market-development programs. In 1998-1999, California producers paid $13,165,544 in assessments at a rate of 4 cents of the gross dollar value. In 1999-2000, the assessment rate was 3.5 percent of the gross dollar value. The Commission's assessment may not exceed 6.5 percent of the gross dollar value of the year's sales of avocados by all producers to handlers, or which are sold by handlers on behalf of growers. It also provides that expenditures for administrative purposes within the maximum assessment shall not exceed 2.5 percent of the gross dollar value of sales. Handlers collect the assessments and remit the money to the Commission.
Alternatives to the proposed Hass avocado program are limited by the Act. The Act requires the Secretary to publish proposals submitted by the Commission and others for a Hass avocado program. In addition, the Act is very specific on many provisions which must be included in the programs. However, the Act does include a few alternatives which USDA has included as permissive terms—rather than requirement—in this proposed rule. These alternatives include the identification and assessment of avocado varieties that are so similar to Hass avocados that they are indistinguishable to consumers in fresh form, the exemption of certain processed Hass avocado products for sale to a retailer if the Hass avocado portion of the products does not constitute a substantial value of the product, and the identification and assessment of imported frozen and processed Hass avocado products.
In accordance with OMB regulations [5 CFR Part 1320] which implements the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35], the information collection and recordkeeping requirements that may be imposed by this Order have been submitted to OMB for approval. Those requirements will not become effective prior to OMB review.
In addition, there will be the additional burden on producers and importers voting in referenda. The referendum ballot, which represents the information collection requirement relating to referenda, is addressed in a proposed rule on referendum procedures that is published separately in this issue of Federal Register. Start Printed Page 36873
The estimated annual cost in providing information to the Board by the estimated 6,310 respondents (6,000 producers, 100 handlers, 200 importers, and 10 exempt handlers) would be $40,020 for all producers or $6.67 per producer; $6,500 for all handlers or $65 per handler, $50 for all importers or $0.25 per importer, and $25 for all exempt handlers or $2.50 per exempt handler. These totals have been estimated by multiplying total burden hours requested by $10.00 per hour, a sum deemed to be reasonable should the respondents be compensated for their time.
(1) A monthly report by each handler who handles Hass avocados.
Recordkeepers: Producers, handlers and importers.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of functions of the Order and the Department's oversight of the program, including whether the information will have practical utility; (b) the accuracy of the AMS's estimate of the burden of the proposed collection of information including the validity of the methodology and assumption used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collections techniques or other forms of information technology.
Comments should reference OMB No. 0581-NEW, the docket number, and the date and page number of this issue of the Federal Register. Comments should be sent to the Docket Clerk and the OMB Desk Officer for Agriculture at the address listed above. All comments received will be available for public inspection during regular business hours at the same address. All responses to this notice will be summarized and included in the request for OMB approval.
The Hass Avocado Research, Promotion, and Consumer Information Act (Act) authorizes the Secretary of Agriculture (Secretary) to establish a Hass avocado research, promotion, and information program. The program would be funded by an assessment levied on producers and importers of 2.5 cents per pound of Hass avocados. The rate could be raised up to a Start Printed Page 36874maximum rate of 5 cents per pound. Exports of U.S. Hass avocados would be exempt from assessment. The Act authorizes assessments on domestic Hass avocados and on imports of fresh, frozen, and processed Hass avocados. Initially, only fresh domestic and imported Hass avocados will be assessed.
The Hass Avocado Board (Board) would use the funds to pay for research, promotion, industry information, and consumer information; administration, maintenance, and functioning of the Board; and expenses incurred by the Secretary in implementing and administering the Order, including referendum costs.
The U.S. Customs Service (Customs) would collect assessments on imported Hass avocados and would remit those assessments to the Board for a fee.
The Act requires the Department to conduct a referendum during the 60-day period preceding the proposed Order's effective date. Hass avocado producers and importers would vote in the referendum to determine whether they favor the Order's implementation. The proposed Order must be approved by a majority of eligible producers and importers voting in the referendum. After the program has been in operation for three years, referenda could be conducted at any time, when requested by 30 percent of Hass avocado producers and importers covered by the Order, or when requested by the Board.
The Act provides for the submission of proposals for a Hass avocado research, promotion, and information Order by industry organizations or any other interested person affected by the Act.
The Department issued a news release on January 8, 2001, requesting proposals for an initial Order or portions of an initial Order by February 7, 2001. A second news release, extending the deadline for submission of proposals to March 9, 2001, was issued on February 2, 2001.
An entire proposed Order was submitted by the Commission (Proposal 1). In addition, partial proposals were submitted by the Asociacion de Productores y Empacadores Exportadores de Aguacate de Michoacan (APEAM) (Proposal 2); the Chilean Exporters Association (ASOEX), Chilean Fruit Growers Federation (FEDEFRUTA), and Comite de Paltas de Chile (Proposal 3); and the New Zealand Avocado Growers Association (NZAGA) and the New Zealand Avocado Industry Council (NZAIC) (Proposal 4). The Chilean and New Zealand proposals have been considered jointly because they are identical in every respect except for the provision on the importer definition, which is included in the Chilean comments, but not in the New Zealand comment. Proposals 2, 3, and 4 contain alternatives to provisions in Proposal 1 as well as provisions not included in Proposal 1.
The proposed Order submitted by the Commission is summarized as follows:
Sections 1219.1 through 1219.26 of the proposed Order define certain terms, such as Hass avocado, handler, producer, and importer, which are used in the proposed Order.
The Board would be the body organized to administer the Order through the implementation of programs, plans, projects, budgets, and contracts to promote and disseminate information about Hass avocados, under the supervision of the Secretary. Further, the Board would be authorized to incur expenses necessary for the performance of its duties and to set a reserve fund.
Sections 1219.50 through 1219.57 authorize the collection of assessments, specify who pays them and how, and specifies persons who would be exempt from paying the assessment. The assessment rate may not exceed 5 cents per pound of Hass avocados. The assessment sections also outline the procedures to be followed by handlers and importers for remitting assessments; and establish interest charges for unpaid or late assessments.
Sections 1219.70 through 1214.77 describe the rights of the Secretary, the authority for the Secretary to suspend or terminate the Order, proceedings after termination, the effect of termination or amendment, personal liability of Board members and staff, separability, amendments, and OMB control number.
The Department has modified the Commission's proposal to make it consistent with the Act, as necessary as well as provide clarity, consistency, and correctness with respect to word usage and terminology. For example, the Department alphabetized definitions in §§ 1219.1 through 1219.26; organized sections of the Order to be more consistent with current programs and renumbered them accordingly; deleted redundant provisions; deleted referendum procedures and drafted a separate rule on referendum procedures; and changed the proposal to make it consistent with the Act and USDA policy.
In the apportionment of three swing positions in § 1219.30(b)(3), USDA specified that Customs or USDA may Start Printed Page 36875provide import data in order to ensure accuracy. Section 1219.31(a)(3) was changed to indicate that two nominees must be submitted for each producer vacancy and two nominees must be submitted for each alternate vacancy because this is the standard practice for similar national programs. In § 1219.36(d), USDA specified that nominations and replacement shall not be required if the unexpired term is less than six months, and, in § 1219.35, a term of office for alternates was added to enhance administration of the program. In § 1219.36, authority for the Board to select alternates to fill vacant alternate positions by majority vote was revised to state that the Board may select, by majority vote, nominees to submit to the Secretary for appointment. The Commission's proposal provided for the Board to appoint the replacement members, but only the Secretary may appoint persons to serve on the Board as members or alternates. A paragraph on bylaws was added to § 1219.38 as paragraph (b) to ensure that the activities of the Board are consistent with the Order. In § 1219.38(k), the citation for the act which requires periodic evaluations was corrected so that it complies with provisions of the Federal Agricultural Improvement and Reform Act of 1996 [7 U.S.C. 7401 et seq.]
Under § 1219.52, the Department revised the Commission's proposed limitation on administrative expenses of Board to 10 percent of the funds available for generic promotion and research to reflect the fact that as much as 85 percent of the assessments collected under the program could be remitted to the Association and importer associations. The Act limits the administrative expenses of the Board in carrying out its generic programs, plans, and projects. In addition, the provision for the Board to make payments of assessments to the Association and importer associations within 30 days following the month in which the assessments were received because this language was inconsistent with other provisions which require payments to the Association and importer associations within 30 days of receipt of the assessments by the Board. USDA modified § 1219.56 to specify that the Board will apply overpayments of assessments against the amount due in succeeding months unless the person requests a refund.
A requirement for producers and exempt handlers to maintain records and file reports with the Board or the Secretary was added to § 1219.60(a) in order to facilitate enforcement of the Order and to make the Order consistent with current practice for similar national programs. In § 1219.61, authority for the Board to use agents to conduct audits—not just Board and USDA employees—was added to increase flexibility. Since agents were added in § 1219.61 for audits, they were also added to § 1219.63(a) on confidentiality to ensure that information obtained in audits is protected.
We are publishing several of the provisions submitted by APEAM. Other provisions are not being published either because they are covered by Proposal 1 or because they are not authorized by the Act.
The provisions that are being published for comment are as follows: (1) A definition of first handler; (2) a definition of fiscal period; (3) a provision requiring the Department to use data from import associations, Customs, and the Bureau of the Census for determining the level of imports in making its determination of the composition of the initial Board; (4) a provision defining “substantial activity” as it pertains to eligibility requirements for importer members; (5) a provision authorizing importer associations in general or by country of origin; (6) a provision authorizing the Secretary to certify only one importer association per country of origin; (7) authority for importer associations to include representatives of foreign avocado exporting industries; (8) a provision authorizing importer associations to invest funds received from the Board and conduct promotion and research on a country of origin basis. (9) a provision requiring final payments for a crop year to be received no later than May 31; and (10) a provision requiring the administrative staff of the Board to periodically review the list of Hass avocado producers and requiring the Association to provide a list of producers to the Secretary or to the administrative staff of the Board.
The following provisions are not being published because they are covered by Proposal 1: (1) A provision requiring the Board to remit funds to importer associations no later than 30 days after such funds are received by the Board; (2) a requirement to allocate producer and importer members in the three swing positions in such a manner that, to the extent possible, importers will have proportional representation on the Board as a whole; (3) a requirement to reallocate the three swing positions to producers and importers in such a manner that, to the extent possible, there will be proportional representation on the Board as a whole.
The following provisions are not being published because they are not authorized by the Act: (1) Authority for the Secretary to appoint a board to govern importer associations; (2) authority for Customs to send import assessments directly to importer associations; (3) a requirement for the Board to remit 85 percent of all import assessments to importer associations; (4) authority for importers to pay assessments 30 days after the end of the month in which the imported Hass avocados are sold in the United States; and (5) authority for the Board to enter into a contract or agreement with an importer association.
Proposal 3 was submitted by ASOEX and FEDEFRUTA and the Chilean Avocado Committee. ASOEX and FEDFRUTA are the principal trade associations representing fruit exporters and producers in Chile. Proposal 4 was submitted by NZAGA and NZAIC. NZAGA is a voluntary association of avocado growers representing avocado production in New Zealand.
We are publishing several of the provisions submitted by ASOEX, FEDEFRUTA, NZAGA, and NZAIC. Other provisions are not being published either because they are covered by Proposals 1 and 2 or because they are not authorized by the Act.
The provisions that are being published are: (1) An eligibility requirement for importer members on the Board; (2) a requirement for the Board's generic programs to be conducted throughout the year; (3) a requirement for the Board to consult with the Commission and country-of-origin importer associations when developing generic programs; (4) a provision limiting the Board's administrative expenses for generic programs to 1.5 percent of total assessments; (5) a requirement for importer associations to be formed as soon as possible after the effective date of the Order; (6) a requirement for importer associations to establish bylaws; (7) authority for importer associations to use existing organizations for establishing their associations and their promotional and Start Printed Page 36876research programs; and (8) certification requirements for importer associations.
Provisions that will not be published because they are covered by Proposals 1 or 2 are: (1) A requirement for overall representation of importers on the Board to be based on the proportion of domestic and import assessments; (2) a requirement for the Secretary to notify all importer associations on nominations for the initial Board within 30 days of the effective date of the Order; (3) a requirement for the Secretary to develop nomination procedures for importer members; and (4) a requirement for the Secretary to prepare a ballot containing the names of all persons nominated by all importer associations.
The provisions which are not being published because they are not authorized by the Act are: (1) A requirement for USDA to serve as an advisor to importer associations; (2) a requirement for all importers and country-of-origin producers and exporters to participate in importer associations; (3) authorization for the assessment of all varieties of avocados; (4) a requirement for the Board to contract with importer associations; (5) authority for importers to pay import assessments 60 days after the sale of avocados in the United States; (6) a requirement for importer associations to receive 85 percent of all import assessments, prorated by each country of origin; (7) authority for producers and importers to receive credit towards their assessments under the proposed program for contributions to generic state or country of origin promotion programs at a regional, state, or local level; (8) authority for importer associations to use import assessments for reasonable administrative expenses; and (9) a requirement to include a vote by volume in referenda.
A 30-day comment period is provided on this proposed rule. This period is deemed appropriate to better effect the implementation time frames provided for in the Act.
USDA seeks comments on the provisions included in this proposed rule, the initial regulatory flexibility analysis, and the information collection burden that would be imposed by this rule. In addition, USDA requests information on how and when first handlers would collect the assessments due on domestic Hass avocados and remit the assessments to the Board and how long after importation occurs does Customs bill importers and how long Customs allows importers to remit the payment.
The Department will analyze all written views received to date as well as written comments on the three proposals published below before issuing a final Order.
1. Part 1219 is added to read as follows:
Subpart A—Hass Avocado Promotion, Research, and Information Order Definitions
Conflict of interest means a situation in which a Board member or employee has a direct or indirect financial interest in a person who performs a service for, or enters into a contract with, the Board for anything of economic value. Start Printed Page 36877
Hass avocado means the fruit grown in or imported into the United States of the species Persea americana Mill., or other type of avocados that, in the determination of the Board, with approval of the Secretary, is so similar to the Hass variety avocado as to be indistinguishable to consumers in fresh form. For the purposes of this subpart, the term shall include all fruit in fresh, frozen, or any other processed form.
United States means collectively the several 50 States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the United States Virgin Islands, Guam, American Samoa, the Start Printed Page 36878Republic of the Marshall Islands, and the Federated States of Micronesia.
(3) Three members shall be producers of Hass avocados that are subject to assessments under this subpart or importers of Hass avocados that are subject to assessments under this subpart. Producers and importers shall be allocated to these positions so as to assure as nearly as possible that the composition of the 12-member Board reflects the proportion of domestic production and imports supplying the United States market. Such proportion shall be based on the Secretary's determination of the average volume of domestic production and the average volume of imports into the United States market over the previous three years. For determining proportional representation on the initial Board, the Secretary shall determine the domestic level of production and the level of imports by using data provided by the California Avocado Commission, the Department of Agriculture, the Department of Commerce, and Customs.
(d) For purposes of this section, importer means a person who is involved in, as a substantial activity, the importation of Hass avocados for sale or marketing in the United States (either directly or as an agent, broker, or consignee of any person that produces Hass avocados outside of the United States for sale in the United States), who is subject to assessments under the Order, and who is listed by Customs as the importer of record for such Hass avocados.
(b) The Secretary shall select the producer members and alternates of the Board from the names submitted by the Association.
(2) After names are received from the importers and importer organizations, the Department shall prepare a ballot with the names of all persons nominated and mail it to all known importers and importer organizations to allow them the opportunity to vote for the persons who will represent their interests on the Board.
(b) The Secretary shall select the importer members and alternates of the Board from the nominees submitted.
(a) In the event any member or alternate of the Board ceases to be a member of the category of members from which the member was appointed to the Board, such member or alternate shall be disqualified from serving on the Start Printed Page 36879Board and the position shall automatically become vacant.
(t) To notify Hass avocado producers, first handlers, and importers of all Board meetings through news releases or other means. Start Printed Page 36880
(c) All Board members and alternates and the Secretary will be notified at least 10 days in advance of all Board meetings, except the chairperson of the Board can waive the 10-day notice requirement in matters of an emergency nature.
(2) Making any false, misleading, or disparaging statements with respect to the attributes or use of any agricultural product. This subsection shall not preclude the Board from offering its programs, plans, and projects for use by commercial parties under such terms and conditions as the Board may prescribe as approved by the Secretary.
(d) For the purposes of this section, a reference to State of origin or country of origin does not constitute a reference to a private brand name with regard to any funds credited to or disbursed by the Board to the Association or to any importer association established in accordance with § 1219.54(l).
(2) The establishment, implementation, issuance, effectuation, administration, and evaluation of appropriate programs, plans, and projects designed to strengthen the position of the Hass avocado industry in the domestic marketplace; to maintain, develop, and expand markets for Hass avocados in the United States; to lead to the development of new marketing Start Printed Page 36881strategies; to advance the image and desirability of, increase the efficiency of, and encourage further development of the Hass avocado industry; and to provide for the disbursement of necessary funds for the purposes described in this section;
(3) The establishment, implementation, issuance, effectuation, administration, and evaluation of programs, plans and projects for marketing development research; research on the sale, distribution, marketing, use, quality, and nutritional value of Hass avocados; and other research with respect to Hass avocado marketing, promotion, industry information, or consumer information, including the creation of new products thereof. Information acquired from such plans and projects shall be disseminated as appropriate. Funds shall be available as necessary to carry out this subsection; and
(1) Ensure that the costs incurred by the Board in administering this subpart in any fiscal period shall not exceed 10 percent of the projected level of assessments and other income received by the Board for generic promotion and research programs for that fiscal period; and
(3) For costs incurred by the Secretary in implementation of the Order, for enforcement of the Act and the order, for subsequent referenda conducted the Act, and in defending the Board in litigation arising out of action taken by the Board or otherwise in defense of the Order.
(c) The Board shall establish and maintain the minimum level of annual administrative expenses necessary to efficiently and effectively carry out the programs authorized by the Act. The Board shall include its annual administrative expenses as a separate item in its annual report. The Board shall adhere to its fiduciary responsibilities and ensure that all monies are spent in accordance with the Act, and the Order.
(e) The Board may accept voluntary contributions, but these shall only be used to pay expenses incurred in the conduct of programs, plans, and projects. The contributions shall be free from any encumbrance by the donor, and the Board shall retain complete control of their use. Start Printed Page 36882
(3) The first handler shall maintain a separate record of the domestic Hass avocados of each producer whose domestic Hass avocados are handled, including the domestic Hass avocados owned by the handler and domestic Hass avocados that are exported. For the purposes of this section, a producer who is also a handler shall be considered the first handler of domestic Hass avocados produced by such producer, and the first handler shall be the first person who packs the domestic Hass avocados for sale at the wholesale or retail level.
(l) An association of Hass avocado importers established pursuant to State law or certified by the Secretary shall receive an amount of assessment funds equal to 85 percent of the assessments paid on Hass avocados imported by its members. Such funds shall be remitted to such importer association no later than 30 days after such funds are received by the Board. In addition, such funds and any proceeds from the investment of such funds shall be used by the importer association to finance promotion, research, consumer information, and industry information programs, plans, and projects in the United States. However, no such funds shall be used for any administrative expenses incurred by the importer association.
(m) An association of avocado importers is eligible to receive assessment funds and any proceeds from the investment of such funds only if such importer association is:
(n) In general, assessment funds received by the Board shall be used:
(1) For payment of costs incurred in implementing and administering this subpart; Start Printed Page 36883
(3) To cover the administrative costs incurred by the Secretary in implementing and administering this Act, except for the limits on expenses of the Secretary set forth in § 1219.53(b).
(o) The Board may establish an operating monetary reserve which may carry over to subsequent fiscal periods: Provided, That the funds in the reserve do not exceed one fiscal period's budget. Subject to approval by the Secretary, reserve funds may be used to defray any expenses authorized under this part.
(a) All information obtained from the books, records, or reports under this Act, this subpart, and the regulations issued thereunder shall be kept confidential and shall not be disclosed to the public by any person, including all current and former employees and agents of the Department, the Board, and contracting and subcontracting agencies or agreeing parties having access to such information. Only those persons having a specific need for such information to effectively administer the provisions of this subpart shall have access to such information. Only such information so obtained as the Secretary deems relevant shall be disclosed, and then only in a judicial proceeding or administrative hearing brought at the direction, or upon the request, of the Secretary, or to which the Secretary or any officer of the United States is a party, and involving this subpart. Nothing in this subpart shall be deemed to prohibit:
(2) The publication, by direction of the Secretary, of the name of any person who has been adjudged to have violated this subpart, together with a statement of the particular provisions of this subpart violated by such person. Start Printed Page 36884
The administrative staff of the Board shall periodically review the list of importers of Hass avocados to determine whether persons on the list are subject to this subpart. On the request of the Secretary, Customs shall provide to the Secretary or the administrative staff of the Board a list of importers of Hass avocados.
(a) The Secretary shall suspend or terminate this part or subpart or a provision thereof if the Secretary finds that the subpart or a provision thereof obstructs or does not tend to effectuate the purposes of the Act, or if the Secretary determines that this subpart or a provision thereof is not favored by persons voting in a referendum conducted pursuant to the Order or the Act.
(3) From time to time account for all receipts and disbursements and deliver all property on hand, together with all books and records of the Board and of the trustees, to such person or persons as the Secretary may direct; and (4) Upon the request of the Secretary, execute such assignments or other instruments necessary and appropriate to vest in such persons title and right to all of the funds, property, and claims vested in the Board or the trustees pursuant to the Order.
(a) Affect or waive any right, duty, obligation, or liability which shall have arisen or which may thereafter arise in connection with any provision of this subpart or any such rule or regulation issued thereunder; or (b) Release or extinguish any violation of this subpart or of any rule or regulation issued thereunder; or (c) Affect or impair any rights or remedies of the United States, or of the Secretary or of any person, with respect to any such violation.
The control number assigned to the information collection requirements by the Office of Management and Budget pursuant to the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, is OMB control number ___.[1]
3. Part 1219 is added as set forth in Proposal 1 with the following changes:
First handler means the first person operating in the Hass avocado marketing system that sells domestic or imported Hass avocados in the United States for domestic consumption, and who is responsible for remitting assessments to the Board. The term includes an importer or producer who sells directly to consumers of Hass avocados that the importer has imported into the United States or the producer has produced in the United States.
Fiscal period or marketing year means the period beginning on April 1 of any year and extending through the last day of March of the following year.
(3) Three members shall be producers of Hass avocados that are subject to assessments under this subpart or importers of Hass avocados that are subject to assessments under this subpart. Producers and importers shall be allocated to these positions so as to assure as nearly as possible that the composition of the 12-member Board reflects the proportion of domestic production and imports supplying the United States market. Such proportion shall be based on the Secretary's determine of the average volume of domestic production and the average volume of imports into the United States market over the previous three years. For determining proportional representation on the initial Board, the Secretary shall determine the domestic level of production using data provided by the Association and the Department and shall determine the level of imports by using data provided by importer associations, the U.S. Customs Service, and the Bureau of the Census.
(d) For purposes of this section, importer means a person who is involved in, as a substantial activity, the importation of Has avocados into the United States and who is subject to assessments under the Order. To be deemed to have a substantial activity in the importation and marketing of Hass avocados, the person must have imported 75 percent or more of the total annual volume of all Hass avocados produced, handled, or imported by such person.
§ 1219.__
(a) Hass avocado importer associations may be established pursuant to the terms and provisions of this section. An importer association may represent all importers of Hass avocados or importers of Hass avocados from a particular foreign country. An importer association which meets the requirements applicable to the Board with respect to budgets, plans, projects, audits, conflicts of interest, and reimbursements for administrative costs incurred by the Secretary shall be certified by the Secretary. The Secretary may not certify more than one importer association per country of origin.
(b) An importer association may be composed of importers as well as representatives of the foreign avocado exporting industries.
(d) All final assessment payments and reports will be submitted to the office of the Board. All final payments for a crop year are to be received no later than May 31 of that year, unless the Board determines that assessments due from the first handler shall be paid to the Board at a different time and manner, with the approval of the Secretary.
(l) An association of Hass avocado importers shall receive an amount of assessment funds equal to the product obtained by multiplying the aggregate amount of assessments attributable to the pounds of Hass avocados imported by its member importers by 85 percent. Such funds shall be remitted to such importer association no later than 30 days after such funds are received by the Board. Such funds shall be used by the importer association for the financing of promotion, research, consumer information, and industry information programs, plans, and projects in the United States. An importer association representing importers of Hass avocados from a single foreign country may finance the promotion and research on a country of origin basis rather than a generic basis. However, no such funds shall be used for any administrative expenses of such importer association.
The administrative staff of the Board shall periodically review the list of producers of Hass avocados to determine whether persons on the list are subject to this subpart. On the request of the Secretary or the Board, the Association shall provide to the Secretary or the administrative staff of the Board the list of producers of Hass avocados.
4. Part 1219 is added as set forth in Proposal 1 with the following changes:
(d) In order for a person to be eligible to serve on the Board as an importer representative, Hass avocado imports must constitute 75 percent or more of such person's combined total annual volume of Hass avocados produced, handled, or imported by that person.
(f) The Board shall consult with both the Association and country of origin importer associations on programs, plans, and projects for generic promotions.
(1) Ensure that the costs incurred by the Board in administering this subpart in any fiscal year shall not exceed 1.5 percent of total assessments; and * * *
(u) Importer associations shall be established by importers and country of origin producers and exporters within a reasonable amount of time after the effective date of this subpart. The country of origin importer associations should establish their own bylaws and may use existing organizations for establishment of their associations and coordination of their promotional and research efforts.
(v) For the purposes of the Order, the information required for certification of the country of origin importer associations by the Secretary may include, but is not limited to, the following:
1. OMB will assign a control number after it has approved the information collection requirements of this subpart.
[FR Doc. 01-17429 Filed 7-10-01; 8:45 am]