[Federal Register Volume 76, Number 216 (Tuesday, November 8, 2011)]
[Rules and Regulations]
[Pages 69094-69110]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-28798]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1214

[Doc. No. AMS-FV-10-0008-FR-1A]
RIN 0581-AD00


Christmas Tree Promotion, Research, and Information Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule establishes an industry-funded promotion, research, 
and information program for fresh cut Christmas trees. The Christmas 
Tree Promotion, Research, and Information Order (Order) is authorized 
under the Commodity Promotion, Research, and Information Act of 1996 
(1996 Act). The Order will establish a national Christmas Tree 
Promotion Board (Board) comprised of 11 producers and one importer. 
Under the Order, producers and importers of fresh cut Christmas trees 
will pay an initial assessment of fifteen cents per Christmas tree. 
Producers and importers that produce or import less than 500 Christmas 
trees annually will be exempt from the assessment. A referendum will be 
conducted, among producers and importers, three years after the 
collection of assessments begin to determine if Christmas tree 
producers and importers favor the continuation of this program.

DATES: Effective November 9, 2011.

FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella, Marketing 
Specialist, Research and Promotion Division, Fruit and Vegetable 
Programs, AMS, USDA, 1400 Independence Avenue SW., Room 1406, Stop 
0244, Washington, DC 20250-0244; telephone: (301) 334-2891; or 
facsimile: (301) 334-2896; or email: Patricia.Petrella@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This Order is issued pursuant to the 
Commodity Promotion, Research, and Information Act of 1996 (1996 Act) 
(7 U.S.C. 7411-7425).
    As part of this rulemaking process, a proposed rule was published 
in the Federal Register on November 8, 2010 (75 FR 68512). That rule 
provided for a 60-day comment period which ended on February 7, 2011. 
Five hundred comments were received. As requested by a member of 
Congress and several North Carolina producers, the comment period was 
reopened for 15 days (76 FR 9695, February 22, 2011). That comment

[[Page 69095]]

period ended on March 9, 2011. An additional 65 comments were received. 
All comments are addressed later in this rule.

Executive Order 12866

    This final rule has been determined not significant for purposes of 
Executive Order 12866 and therefore has not been reviewed by the Office 
of Management and Budget (OMB).

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
Section 524 of the 1996 Act provides that it shall not affect or 
preempt any other Federal or State law authorizing promotion or 
research relating to an agricultural commodity.
    Under section 519 of the 1996 Act, a person subject to an order may 
file a written petition with the Department stating that an order, any 
provision of an order, or any obligation imposed in connection with an 
order, is not established in accordance with the law, and requesting a 
modification of an order or an exemption from an order. Any petition 
filed challenging an order, any provision of an order, or any 
obligation imposed in connection with an order, shall be filed within 
two years after the effective date of an order, provision, or 
obligation subject to challenge in the petition. The petitioner will 
have the opportunity for a hearing on the petition. Thereafter, the 
Department will issue a ruling on the petition. The 1996 Act provides 
that the district court of the United States for 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 Department's final ruling.

Executive Order 13132

    This final rule has been reviewed under Executive Order 13132, 
Federalism. Section 524 of the 1996 Act provides that the Act shall not 
affect or preempt any other Federal or State law authorizing promotion 
or research relating to an agricultural commodity.
    The proponent, the Christmas Tree Checkoff Task Force is an 
industry wide group of producers and importers that support this 
proposed program. They have conducted meetings throughout the United 
States with several State and multi-State Christmas tree organizations. 
The proposed program is not intended to duplicate any State program. 
The proponents have determined that they need a mechanism that would be 
sustainable over time. A national Christmas tree research and promotion 
program would accomplish this goal.

Summary

    This rule establishes an industry-funded promotion, research, and 
information program for fresh cut Christmas trees. The Christmas Tree 
Promotion, Research, and Information Order (Order), was submitted to 
the Department of Agriculture (Department) by the Christmas Tree 
Checkoff Task Force (Task Force), an industry wide group of producers 
and importers that support this program. Under the Order, producers and 
importers of fresh cut Christmas trees will pay an initial assessment 
of $0.15 cents per tree, which would be paid to the Christmas Tree 
Promotion Board (Board). This Board will be responsible for 
administration and operation of the Order. Producers and importers that 
produce or import less than 500 Christmas trees annually will be exempt 
from the assessment. The program is authorized under the Commodity 
Promotion, Research, and Information Act of 1996 (1996 Act).
    A referendum will be conducted, among producers and importers, 
three years after the collection of assessments begin to determine if 
Christmas tree producers and importers favor the continuation of this 
program. A final rule on the referendum procedures will be published in 
the Federal Register at a later time. The rule also announces the 
Agricultural Marketing Service's (AMS) approval of new Christmas tree 
information collection requirements by the OMB for the operation of the 
Order.

Authority in 1996 Act

    The Order is authorized under the 1996 Act which authorizes USDA to 
establish agricultural commodity research and promotion orders which 
may include a combination of promotion, research, industry information, 
and consumer information activities funded by mandatory assessments. 
These programs are designed to maintain and expand markets and uses for 
agricultural commodities. As defined under section 513(1)(D) of the 
1996 Act, agricultural commodities include fresh cut Christmas trees. 
The Order will provide for the development and financing of a 
coordinated program of research, promotion, and information for 
Christmas trees.
    The 1996 Act provides for a number of optional provisions that 
allow the tailoring of orders for different commodities. Section 516 of 
the 1996 Act provides permissive terms for orders, and other sections 
provide for alternatives. For example, section 514 of the 1996 Act 
provides for orders applicable to (1) Producers, (2) first handlers and 
others in the marketing chain as appropriate, and (3) importers (if 
imports are subject to assessments). Section 516 states that an order 
may include an exemption of de minimis quantities of an agricultural 
commodity; different payment and reporting schedules; coverage of 
research, promotion, and information activities to expand, improve, or 
make more efficient the marketing or use of an agricultural commodity 
in both domestic and foreign markets; provision for reserve funds; 
provision for credits for generic and branded activities; and 
assessment of imports.
    In addition, section 518 of the 1996 Act provides for referenda to 
ascertain approval of an order to be conducted either prior to its 
going into effect or within three years after assessments first begin 
under the order. An order also may provide for its approval in a 
referendum based upon different voting patterns. Section 515 provides 
for establishment of a board or council from among producers, first 
handlers and others in the marketing chain as appropriate, and 
importers, if imports are subject to assessment.

Industry Background

    Christmas trees have been commercially sold in the United States 
since about 1850, when most were cut from wild stands. In the last 55 
to 60 years, Christmas trees have been farmed and harvested as an 
agricultural row crop. Most Christmas trees are now grown on or 
selected and cut by consumers on tree farms. The U.S. Christmas tree 
industry consists of over 12,000 farms producing over 17 million 
Christmas trees per year. The best selling Christmas trees are Scotch 
pine, Douglas fir, noble fir, Fraser fir, Virginia pine, balsam fir and 
white pine.
    Christmas trees are grown for retail sale in almost all U.S. 
states. Oregon, Michigan, Wisconsin, North Carolina and Pennsylvania 
together produce more than 75 percent of the trees produced each year. 
During 2007, 47 out of the 50 States contributed to the production of 
Christmas trees.

Competition

    The fresh cut Christmas tree industry competes directly with the 
artificial Christmas tree industry. Artificial Christmas tree companies 
advertise heavily throughout the fall and Christmas seasons. According 
to data

[[Page 69096]]

supplied by the proponents artificial tree purchases have increased 
from 9.8 million in 2003 to 17.4 million in 2007.

Imports

    According to U.S. Department of Commerce, U.S. Census Bureau, 
Foreign Trade Statistics, imports of Christmas trees from 2006 through 
2008 averaged about 1.9 million trees. During those years, imports from 
Canada accounted for 99.72 percent of the total imports. Italy, 
Columbia and Mali comprised about .28 million trees or less than one 
percent. For the same period, these imports were valued at $27.427 
million dollars.

Prices

    According to the Task Force, in 2007 the average price per tree for 
a Noble was approximately $18.00 and the average price per tree for a 
Douglas was $11.00. By averaging these two types of Christmas trees, 
prices would be approximately $15 per tree. With 31 million trees cut 
in 2007, the value would be approximately $465 million (value at point 
of first sale).

Need for a Program

    A national research and promotion program for Christmas trees would 
help the industry to address the many market problems it currently 
faces. According to the Task Force, two main factors currently 
affecting Christmas tree sales, both in the domestic market and abroad, 
are increased competition and changing consumer habits.
    According to additional data supplied by the Task Force, the market 
share of fresh Christmas trees in the U.S. from 1965 to 2008 has 
declined by 6 percent. In comparison, the market share of artificial 
trees has increased 655 percent from 1965 to 2008.
    According to the proponent data, sales of fresh cut Christmas trees 
decreased by 15 million trees from 37 million trees sold in 1991 down 
to 22 million trees sold in 2002. The industry saw an increase in sales 
in 2003 through 2007 when the industry conducted a voluntary marketing 
campaign which was lead by a small group of producers and retailers. 
This voluntary marketing campaign saw sales rebound by 9 million 
trees--from 22 million trees sold in 2002 to 31 million trees sold in 
2007. Even with the strong sales response to the marketing efforts, the 
voluntary marketing program suffered from a lack of funding.
    The Christmas tree industry has tried three different times to 
conduct promotional programs based on voluntary contributions. Each 
time, after about three years, the revenue declined to a point where 
the programs were ineffective. The decline in revenue is attributable 
to the voluntary nature of these programs. Therefore, the proponents 
have determined that they need a mechanism that would be sustainable 
over time. They believe that a national Christmas tree research and 
promotion program would accomplish this goal.

Specific Provisions of a Program

    Pursuant to section 513 of the 1996 Act, sections 1214.1 through 
1214.30 of the Order define certain terms that will be used throughout 
the Order, such as Christmas trees, importer and producer. Several of 
the terms are common to all research and promotion programs authorized 
under the 1996 Act while other terms are specific to the Order.
    Sections 1214.47 of the Order will detail the establishment and 
membership of the Christmas Tree Promotion Board, nominations and 
appointments, the term of office, removal and vacancies, procedure, 
reimbursement and attendance, powers and duties, and prohibited 
activities.
    Sections 1214.50 through 1214.56 of the Order will detail 
requirements regarding the Board's budget and expenses, financial 
statements, assessments, and exemption from assessments.
    The Board's programs and expenses will be funded through 
assessments on producers, importers, donations from any person 
including those not subject to assessments, other income, and other 
funds available to the Board. The Order will provide for an initial 
assessment rate of $0.15 per Christmas tree cut and sold domestically 
or imported into the United States.
    This assessment rate will be reviewed by the Board after the 
initial referendum is conducted (3 years after assessments first 
begin). The assessment rate cannot be changed during the first three 
years of operation of the Order. The assessment rate may be increased 
or decreased no more than 2 cents per Christmas tree during the fiscal 
period. Any change in the assessment rate within this range will be 
subject to rulemaking by the Secretary. The assessment rate shall not 
exceed 20 cents per Christmas tree, nor shall it be less than 10 cents 
per Christmas tree, unless a majority of producers and importers 
approve such other levels of assessments through a referendum conducted 
pursuant to this subpart. Importers who import 500 Christmas trees or 
more would be required to pay assessments to the Board, if not 
collected by Customs.
    Importer assessments will be collected through Customs. The Order 
will specify a list of numbers of the Harmonized Tariff Schedule of the 
United States that will identify Christmas trees subject to 
assessments.
    The Order will provide authority for the Board to impose a late 
payment charge and interest for assessments overdue to the Board. The 
late payment charge and rate of interest will be prescribed in the 
Order's regulations issued by the Secretary.
    Sections 1214.60 through 1214.62 of the Order will detail 
requirements regarding promotion, research and information projects 
authorized under the Order.
    Sections 1214.70 through 1214.72 specify the reporting and 
recordkeeping requirements under the Order as well as requirements 
regarding confidentiality of information.
    Section 1214.81(a)(1) of the Order specifies that the program will 
be implemented and a referendum conducted three years after assessments 
first begin under the Order. The Order will not continue unless it is 
approved by a majority of those persons voting in the referendum for 
approval.
    Section 1214.81(b) of the Order specifies criteria for subsequent 
referenda. Under the Order, a referendum will be held to ascertain 
whether the program should continue, be amended, or be terminated.
    Section 1214.80 and sections 1214.82 through 1214.88 describe the 
rights of the Secretary; authorize the Secretary to suspend or 
terminate the Order when deemed appropriate; prescribe proceedings 
after termination; address personal liability, separability, and 
amendments; and provide OMB control numbers. These provisions are 
common to all research and promotion program authorized under the 1996 
Act.

Regulatory Flexibility Act Analysis

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), AMS is required to examine the impact of this rule on small 
entities. Accordingly, AMS has prepared this final regulatory 
flexibility analysis.
    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 Small Business Administration defines, 
in 13 CFR part 121, small agricultural producers as those having annual 
receipts of no more than $750,000 and small agricultural service firms 
(producers and importers) as those having annual receipts of no more 
than $7.0 million.

[[Page 69097]]

    Under these criteria, the majority of the producers that will be 
affected by this Order will be considered small entities, while most 
importers will not. Producers and importers who cut and sell or 
imported less than 500 Christmas trees annually will be exempt from the 
assessment. Organic producers and importers would also be exempt from 
assessments. The number of entities assessed under the program will be 
approximately 3,263. Estimated revenue is expected to be approximately 
$2 million of which 10 percent is expected from imported product and 90 
percent from domestic product.
    According to the Task Force, based on data from the 2007 Census of 
Agriculture, there were approximately 12,255 Christmas tree farms that 
harvested Christmas trees in the United States. Approximately 25 
percent of the producers or 3,100 Christmas tree producers will be 
subject to the assessment based on the exemption of those producing 
less than 500 trees will be exempt from assessments. Approximately 95 
percent of the producers subject to the assessment qualified under the 
definition for small business owners. According to the Task Force the 
average price for 6 to 7 foot Douglas and Noble fir trees is $11.00 and 
$18.00, respectively. During 2007, 47 out of 50 States produced 
Christmas trees in the United States. Oregon, Michigan, Wisconsin, 
North Carolina, and Pennsylvania together produced more than 75 percent 
of the trees harvested in 2007. In 2008, there were approximately 200 
importers. Based on the 2008 U.S. Customs data, 163 importers that 
imported more than 500 Christmas trees are subject to the assessment 
rate under the Order.
    This rule establishes an industry-funded research, promotion, and 
information program for fresh cut Christmas trees. The program will be 
financed by an assessment on Christmas tree producers and importers and 
will be administered by a board of industry members selected by the 
Secretary. The initial assessment rate will be $0.15 per Christmas tree 
cut and sold or imported to the United States and could be increased to 
$0.20 per Christmas tree. Entities that cut and sell or import less 
than 500 Christmas trees will be exempt. The purpose of the program 
will be to strengthen the position of Christmas trees in the 
marketplace, and maintain and expand markets for Christmas trees. A 
referendum will be held among eligible producers and importers to 
determine whether they favor implementation of the program three years 
after the first assessments begin. The Order will continue if favored 
by a majority of producers and importers voting in the referendum. The 
program is authorized under the 1996 Act.
    Regarding the economic impact of the Order on affected entities, 
Christmas tree producers and importers will be required to pay 
assessments to the Board. As previously mentioned, the initial 
assessment rate will be $0.15 per Christmas tree cut and sold or 
imported to the United States and could be increased to no more than 
$0.20 per Christmas tree.
    Regarding the impact on the industry as a whole, the Order is 
expected to grow demand for fresh cut Christmas trees. The Christmas 
tree industry hopes to achieve a stable funding base to promote 
Christmas now and into the future.
    Regarding alternatives, the Christmas tree industry has already 
considered and implemented voluntary programs, but based on past 
experiences, these programs only worked in the short term; until monies 
were depleted.
    This action will impose an additional reporting and recordkeeping 
burden on producers and importers of fresh cut Christmas trees. 
Producers and importers interested in serving on the Board may be asked 
to submit a nomination form to the Board indicating their desire to 
serve or nominating another industry member to serve on the Board. 
Interested persons will also submit a background statement outlining 
their qualifications to serve on the Board. Producers and importers 
will have the opportunity to cast a ballot and vote for candidates to 
serve on the Board. Producer and importer nominees to the Board will 
have to submit a background form to the Secretary to ensure they are 
qualified to serve on the Board.
    Additionally, producers and importers who domestically produce or 
import less than 500 Christmas trees annually could submit a request to 
the Board for an exemption from paying assessments on this volume. 
Producers and importers also will report regarding their sales/imports 
that will accompany their assessments paid to the Board. Producers and 
importers who will qualify as 100 percent organic under the NOP could 
submit a request to the Board for an exemption from assessments.
    Finally, producers and importer who wanted to participate in a 
referendum to vote on whether the Order should continue will have to 
complete a ballot for submission to the Secretary. These forms were 
approved by OMB under OMB Control No. 0581-0267 and 0581-0268. Specific 
burdens for the forms are detailed later in this document in the 
section titled Paperwork Reduction Act. As with all Federal promotion 
programs, reports and forms are periodically reviewed to reduce 
information requirements and duplication by industry and public sector 
agencies. Finally, USDA has not identified any relevant Federal rules 
that duplicate, overlap, or conflict with this rule.
    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 for citizen access to Government information 
and services, and for other purposes.
    Regarding outreach efforts, as previously mentioned, the Task Force 
conducted sessions throughout the United Sates in different States and 
regions. These were held in conjunction with regional and state 
organization meetings. Approximately 50 sessions were held across the 
United States. Input regarding the proposed program was incorporated 
into the Task Force's proposal.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the reporting and recordkeeping provisions generated by 
this rule have been preapproved by the Office of Management and Budget 
(OMB).
    Title: Research and Promotion Background Information.
    OMB Number for background form AD-755: (approved under OMB No. 
0505-0001).
    Expiration Date of Approval: 7/31/2012.
    Title: Christmas Tree Promotion, Research, and Information Program 
(Order).
    OMB Numbers: 0581-0268.
    Expiration Date of Approval: 12/31/2013.
    Type of Request: Approval of a preapproved collection.
    Abstract: The information collection requirements in the request 
are essential to carry out the intent of the 1996 Act. The information 
collection concerns a proposal received by USDA for a national research 
and promotion program for the Christmas tree industry. The program will 
be financed by an assessment on Christmas tree producers and importers 
and will be administered by a board of industry members selected by the 
Secretary. The program will provide for an exemption for producers and 
importers that cut and sell or import less than 500 Christmas trees 
during the year. A referendum will be

[[Page 69098]]

held among eligible producers and importers to determine whether they 
favor continuation of the program three years after assessments first 
begin. The purpose of the program will be to help increase demand for 
fresh cut Christmas trees.
    In summary, the information collection requirements under the 
program concern Board nominations, refunds of assessments, exemption 
applications, and the collection of assessments. For Board nominations, 
producers and importers interested in serving on the Board will be 
asked to submit a ``Nomination Form'' to the Board indicating their 
desire to serve or to nominate another industry member to serve on the 
Board. Producers and importers will have the opportunity to submit a 
``Nomination Ballot'' to the Board where they will vote for candidates 
to serve on the Board. Nominees will also have to submit a background 
information form, ``AD-755,'' to the Secretary to ensure they are 
qualified to serve on the Board.
    Regarding assessments, producers and importers who cut and sell or 
import less than 500 Christmas trees annually could submit a request, 
``Application for Exemption from Assessments,'' to the Board for an 
exemption from paying assessments. Producers and importers may be asked 
to submit a ``Sales/Import Report'' that will accompany their 
assessments paid to the Board and report the quantity of Christmas 
trees cut and sold or imported during the applicable period, the 
quantity for which assessments were paid, and the port of entry (for 
imports). Importer assessments will be collected by Customs. If Customs 
collects the assessment and the importer does not reach the assessable 
threshold, the Board will refund such assessments no later than 60 
calendar days after receipt from the Board. Customs will remit the 
funds to the Board along with this information. Finally, producers and 
importers who will qualify as 100 percent organic under the NOP could 
submit an ``Organic Exemption Form'' to the Board and request an 
exemption from assessments.
    Producers and importers will also file a form to request a refund 
of assessments paid if the referendum fails to pass. A referendum is 
proposed to be conducted three years after the assessments first begin 
to determine if producers and importers favor the continuance of the 
Order.
    There will also be an 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 final rule on referendum procedures which will be published in the 
Federal Register at a later time.
    Information collection requirements that are included in this 
proposal include:
(1) Background Information Form AD-755 (OMB Form No. 0505-0001)
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.5 hour per application.
    Respondents: Producers and importers.
    Estimated Number of Respondents: 8 (24 for initial nominations to 
the Board, 8 in subsequent years.
    Estimated Number of Responses per Respondent: 1 every 3 years 
(0.3).
    Estimated Total Annual Burden on Respondents: 12 hours for the 
initial nominations to the Board and 4 hours annually thereafter.
(2) Sales/Import Report by Each Producer or Importer of Christmas Trees
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.5 hours per producer reporting on 
Christmas trees sold.
    Respondents: Producers and importers.
    Estimated number of Respondents: 3,110
    Estimated number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 1,555 hours.
(3) An Exemption Application for Producers and Importers Who Are Exempt 
From Assessments
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.25 hours per producers or 
importer reporting on Christmas trees domestically sold or imported. 
Upon approval of an application, producers and importers will receive 
exemption certification.
    Respondents: Exempt producers and importers.
    Estimated number of Respondents: 9,192.
    Estimated number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 2,298 hours.
(4) Application for Reimbursement of Assessment
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.25 hours per request for 
reimbursement.
    Respondents: Importers.
    Estimated number of Respondents: 37.
    Estimated number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 9.25 hours.
(5) A Requirement to Maintain Records Sufficient To Verify Reports 
Submitted Under the Order
    Estimate of Burden: Public recordkeeping burden for keeping this 
information is estimated to average 0.5 hours per record keeper 
maintaining such records.
    Recordkeepers: Producers and importers.
    Estimated number of recordkeepers: 12,455.
    Estimated total recordkeeping hours: 6,227.5 hours.
(6) Nomination Form
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.25 hours per application.
    Respondents: Producers and importers.
    Estimated Number of Respondents: 40
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 10.00 hours.
(7) Background Statement
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.25 hour per application.
    Respondents: Producers and importers.
    Estimated Number of Respondents: 40.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 10.00
(8) Nomination Ballot
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.25 hours per application.
    Respondents: Producers and importers.
    Estimated Number of Respondents: 1,200.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 300 hours.
(9) Organic Exemption Form
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.5 hours per exemption form.
    Respondents: Producers and importers.

[[Page 69099]]

    Estimated Number of Respondents: 5.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 2.5 hours.
(10) Application for Refund Form
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.5 hours per refund form.
    Respondents: Producers and importers.
    Estimated Number of Respondents: 325.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 162.5.
    As noted above, under the program, producers and importers will be 
required to pay assessments and file reports with and submit 
assessments to the Board (importers through Customs). While the Order 
will impose certain recordkeeping requirements on producers and 
importers, information required under the Order could be compiled from 
records currently maintained. Such records shall be retained for at 
least two years beyond the marketing year of their applicability.
    An estimated 12,455 respondents will provide information to the 
Board (12,255 producers and 200 importers). The estimated cost of 
providing the information to the Board by respondents will be $348,975. 
This total has been estimated by multiplying 10,575 total hours 
required for reporting and recordkeeping by $33, the average mean 
hourly earnings of various occupations involved in keeping this 
information. Data for computation of this hourly rate was obtained from 
the U.S. Department of Labor Statistics.
    The Order's provisions have been carefully reviewed, and every 
effort has been made to minimize any unnecessary recordkeeping costs or 
requirements, including efforts to utilize information already 
submitted under other programs administered by USDA and other state 
programs.
    The forms will 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 1996 Act. Such information can 
be supplied without data processing equipment or outside technical 
expertise. In addition, there are no additional training requirements 
for individuals filling out reports and remitting assessments to the 
Board. The forms will be simple, easy to understand, and place as small 
a burden as possible on the person required to file the information.
    Collecting information quarterly will coincide with normal industry 
business practices. The timing and frequency of collecting information 
are intended to meet the needs of the industry while minimizing the 
amount of work necessary to fill out the required reports. The 
requirement to keep records for two years is consistent with normal 
industry practices. In addition, the information to be included on 
these forms is not available from other sources because such 
information relates specifically to individual producers and importers 
who are subject to the provisions of the 1996 Act. Therefore, there is 
no practical method for collecting the required information without the 
use of these forms.

Analysis of Comments

    The previous proposed rule concerning this action published in the 
Federal Register on November 8, 2010, provided for a 60-day comment 
period which ended on February 7, 2011. The comment period was reopened 
for 15 days (76 FR 9695, February 22, 2011), as requested by a member 
of Congress and several North Carolina producers. That comment period 
ended on March 9, 2011. A total of 565 comments were received during 
the two comment periods. Of the 565 comments received, 19 were from 
U.S. State or regional organizations representing Christmas tree 
producers. Two of these organizations representing Texas and Vermont 
were in opposition to the proposal, while the others supported the 
proposal. Three regional producer organizations from Canada submitted 
comments in favor of the proposal. In addition, two State Universities 
and one State Department of Agriculture submitted comments in favor of 
Christmas tree program.
    Of the 565 comments submitted, 398 were in favor of the proposal, 
147 were in opposition, nine were duplicates, six were neither for or 
against, four requested an extension of the comment period, and one had 
no comment. Comments were received from interested parties in 35 
different States in the United States with the majority of those 
comments from North Carolina, Oregon, Michigan, and Wisconsin. Also, 
comments were received from interested parties in four Canadian 
provinces and the United Kingdom.

General Comments in Support

    The majority of the comments that supported the Order suggested 
that the pooling of resources was a significant benefit of a national 
mandatory Christmas tree promotion program. Several commenters 
mentioned the need to promote the environmental and green benefits of 
Christmas trees and how providing education to the public of these 
aspects will result in the possible increase in sales. Many commented 
that they have seen the successes of other promotional programs and how 
beneficial it was to that industry. Commenters suggested promoting 
Christmas tree traditions of choosing a Christmas tree as a family 
experience.
    Some commenters stated that there should not be a 500 Christmas 
tree threshold for payment of assessments. These commenters suggested 
that all Christmas tree producers should pay the assessment and share 
in the cost of promotion.
    Section 516(a)(1) of the 1996 Act provides authority for the 
Secretary to exempt from an order any de minimis quantity of an 
agricultural commodity otherwise covered by the order. However, the 
1996 Act does not define the term de minimis and USDA is not limited to 
using the definition of de minimis as specified in another law or 
agreement. The de minimis quantity is defined for a particular program 
and industry. The Task Force reviewed various options for the exemption 
and determined that 500 Christmas trees would be appropriate because 
such a level would still provide the Board with resources to have a 
program that could be successful. USDA agrees that this exemption level 
is appropriate and reasonable.

Comments in Support With Modifications

    There were 11 comments in support of the Order with modifications.
    An association that includes all of the members of the Task Force 
and a national association promoting Christmas trees supported the 
proposal in general with some suggested modifications.
    The first five modifications suggested changes to the Order 
language that are not adopted in this final rule. The first 
modification was to allow 10 percent of the assessments paid under this 
program by producers that are members of State/multi-State associations 
to be directed to the State/multi-State associations to carry out local 
programs without competing to raise additional funds. This was 
originally proposed to USDA by the proponents as a way to foster better 
cooperation with associations, however it was not included in the 
proposed Order by USDA.
    USDA believes that with a mandatory requirement to set aside a 
specific percent of the funds collected under the

[[Page 69100]]

program for State/multi-State associations, there may not be adequate 
funds remaining to achieve the Board's goals of promoting for the 
entire Christmas tree industry as this program expects to raise only 2 
million dollars in assessments. Including this language in the order 
provisions does not prevent the Board from funding projects with State 
or multi-State organizations that they determine could benefit the 
entire Christmas tree industry. Therefore, no changes are being made to 
the Order language to reflect these comments.
    Another suggested modification would change section 1214.46(g) to 
allow the Board to contract with companies or organizations for their 
staffing needs. Adding this authority to allow the Board to contract 
with companies or organizations would provide more flexibility in 
meeting its needs for staffing. Such authority already exists in the 
proposed Order and permits such contracting under section 1214.46(o) 
and therefore, no changes are being made to the Order language to 
reflect these comments.
    The proponents requested elimination of the organic exemption. This 
change was also requested by other commenters. Under authority provided 
by 7 U.S.C., the Order exempts producers who operate under an approved 
National Organic Program (NOP) (7 CFR part 205) system plan, produce 
only products that are eligible to be labeled as 100 percent organic 
under the NOP, and are not a split operation, from paying assessments. 
Thus, 100 percent organic Christmas trees would be exempt from 
assessment under the Order. Therefore, no changes are being made to the 
Order language to reflect these comments.
    The fourth modification would provide clarifying language in 
section 1214.50(c) as provided in the preamble of the proposed rule. 
The commenters wanted this section clarified as stated in the preamble 
of the proposed Order in regard to shifting of funds from one program, 
plan, or project to another. The recently modified Guidelines for AMS 
Oversight of Commodity Research and Promotion Programs require approval 
by AMS of shifts in program funds from one major area to another. 
Therefore, no changes are being made to the Order language to reflect 
these comments.
    The fifth and last change to the Order concerns the preamble of the 
proposed Order which states that if a Board member ceased to work for a 
producer or importer or ceased to do business in the region he or she 
represented, such position would become vacant. The comment indicated 
that in section 1214.41 nominees must domestically produce or import 
more than 500 Christmas trees during the most recent fiscal year. That 
is an eligibility requirement for Board members, but does not preclude 
members from being employees of companies that may be producers or 
importers assessed under this order. Therefore, the preamble (75 FR 
68516) and Order language correctly specify the eligibility 
requirements for Board members. Therefore, no changes are being made to 
the Order language to reflect these comments.
    The proponents also suggested two modifications that could be 
adopted by the Board through informal rulemaking, and therefore require 
no changes to the Order language. The first modification would be to 
provide for Certificates of Exemptions to be issued every five years 
instead of annually. The proponents indicated that production of 
individual farms do not vary greatly from year to year because of the 
nature of the Christmas trees crop. It normally takes an average of 4 
to 10 years to produce a marketable Christmas tree. The proponents 
indicated that about 9,000 producers could be eligible for an 
exemption. In addition, the proponents indicated that exemption forms 
could require a producer to acknowledge that if a producer's situation 
changes it would their responsibility to inform the Board. Accordingly, 
no changes are made as a result of this suggestion.
    The next modification would increase administrative costs from 10 
percent, as proposed, to 15 percent as allowable under the Act. The 
commenter requested this increase because the start-up costs are likely 
to be higher than operating costs in later years with the need to 
educate producers about the program. In addition, the commenter 
believes a strong compliance element will be important to collecting 
assessments and assuring sustainability of the program. USDA is of the 
view if indeed there is concern in the industry that the administrative 
cost cap be increased to 15 percent, then as authorized by the 1996 
Act, upon recommendation of the Board such a change could be 
accomplished though informal rulemaking. Therefore, no change to Order 
language is made as a result of this suggestion.
    The proponents suggested six other modifications that would require 
changes to the Order language. The first change will add the refund 
procedure to the Order language as described in the preamble. The 
procedure would state that producers and importers that produced or 
imported 500 Christmas trees or less and did not apply for an exemption 
shall receive a refund from the Board within 30 calendar days after the 
end of the fiscal period. This procedure was outlined in the preamble 
of the proposed Order but not in the Order language. Therefore, section 
1214.53(a)(7) was added to the Order language to clarify the procedure 
described in the preamble.
    The second change would provide that for the initial crop year's 
budget which could be largely administrative that repayment of such 
expenses would not be considered an administrative expense in 
subsequent years. The Act provides that for fiscal years beginning 3 or 
more years after the date of the establishment of the Board, the Board 
may not expend for administration, maintenance, and functioning of the 
Board in a fiscal year an amount that exceeds 15 percent of the 
assessment and other income received by the Board. The proposed Order 
contains 10 percent as the limit. This language, therefore, permits the 
Board to expend more funds in the first three years of startup of the 
Order for administration, maintenance and functioning of the Board. 
This recommendation is reasonable and the appropriate Order language 
will be added to the section reflect this change.
    Another change would delete erroneous section numbers from the 
table of contents of the Order. The table of contents for the Order 
included sections 1214.55 Refunds and 1214.56 Procedures for obtaining 
a refund. Provision for these sections is in section 1214.53; 
therefore, the reference to these section numbers is removed from the 
table of contents.
    The fourth change would provide clarification in section 1214.52(e) 
regarding the assessments due date. The commenters indicated that the 
wording in section 1214.52(e) could be construed as saying that 
assessments would not be due until the crop year following the sale of 
Christmas trees, or more than 14 months later. This is not the intent 
of the language. For the purpose of this program, crop year is defined 
as August 1 through July 31, accordingly, producers or importers that 
domestically produced or imported over 500 Christmas trees are to pay 
their assessments no later than February 15 of the crop year in which 
they are produced or imported. Therefore, section 1214.52(e) has been 
revised to clarify this change.
    Another change would correct an erroneous section number in section 
1214.62. In section 1214.62, section 1214.73 is erroneously referenced. 
The reference section number should be section 1214.83.
    The last change would correct an erroneous sentence in the Order 
language regarding the time producers

[[Page 69101]]

and importers could receive refunds if the delayed referendum fails. 
The preamble of the proposed rule specified a procedure that producers 
and importers shall notify the Board within 30 days after the 
announcement of the referendum (that it has failed) of their demand to 
receive a refund. The Order language in section 1214.54(d) specifies 
that any producer or importer requesting refund shall submit an 
application on the prescribed form to the Board within 60 days from the 
date the assessments were paid by such producer or importer but no 
later than the date the results of the required referendum are 
announced by the Secretary. The preamble language is correct. 
Therefore, the Order language in section 1214.54(d) has been corrected 
to be consistent with this language.
    Finally, one modification was suggested that would clarify language 
in the preamble. There is a phrase in the preamble of the proposed 
Order (75 FR 68516) that indicates the Board is to report its 
activities to manufacturers for the U.S. market. This language was not 
correct and should not have appeared in the preamble of the proposed 
Order.

Comments in Opposition

    There were 21 comments in opposition to the proposal that suggested 
key points in the areas of assessments, exemptions, promotion, 
referenda, reporting, and other issues. Based on our evaluation of 
these comments, no changes will be made the Order. These comments are 
discussed below.
Assessments
    A commenter expressed concern that the government should assess or 
tax imports of artificial trees instead of taxing or assessing 
domestically produced Christmas trees. Research and promotion programs 
are self help programs that promote an agricultural commodity. The 
Christmas tree industry decided to propose under the authority under 
the 1996 Act, a program to promote domestic and imported fresh cut 
Christmas trees.
    The commenter was also concerned about assessing Christmas trees 
that are given to charity or trees lost to disease. If Christmas trees 
are donated to charity or lost to disease and therefore not sold into 
the marketplace, they will not be assessed under the Order.
Exemptions
    A commenter also stated that not assessing producers or importers 
that produce or import less than 500 Christmas trees is the way for the 
proponents to get the program passed in a referendum. The commenter 
also stated that the initial exemption for Christmas tree producers was 
2500 Christmas trees and the amount in the proposed Order is 500 
Christmas trees. The Task Force reviewed various options for the 
exemption and determined that 500 Christmas trees would be appropriate 
because such a level would still provide the Board with resources to 
have a program that could be successful. USDA concurs with this 
exemption level because this level would exempt small operations that 
would otherwise be burdened by the assessment. Therefore, an exemption 
for producers and importers of less than 500 trees is authorized under 
the program and consistent with the Act's provisions.
    The commenter questioned how the 500 Christmas tree exemptions 
would be applied. Under the Order, producers and importers of fewer 
than 500 Christmas trees would not be assessed under this Order. 
Producers and importers of 500 or more Christmas trees will be assessed 
on the total production number of Christmas trees produced or imported.
Promotion
    A commenter also stated that the Task Force cited an increase in 
sales when a similar marketing program was in existence. The commenter 
stated that this is merely a correlation, and no further evidence is 
provided establishing that the marketing program caused the increase in 
sales. Other commenters also stated that the benefits would not 
outweigh the cost of the program.
    The Task Force provided that the main reason for the marketing 
program's demise was that it was voluntary in nature. Under the 
proposed Order, the assessments to fund the program would be mandatory, 
therefore, providing consistent funding by stakeholders. In addition, 
several comments in favor of the proposed Order supported the 
consistent funding which would provide the industry with a workable 
program to increase sales. Furthermore, a third party five-year 
evaluation is required of all research and promotion programs to 
determine the benefits to their industries under section 515(h) of the 
1996 Act. These evaluations are available from the Boards and are 
posted on the AMS Web site. The industry may terminate the program if 
the first evaluation does not show a benefit to the Christmas tree 
industry.
    A commenter also stated that if USDA promulgates this rule they 
should solicit data from other sources, develop a definitive plan for 
how to boost Christmas tree sales, and make a projection for the 
increase in fresh-cut Christmas tree sales and a cost benefit analysis. 
The Act provides authority for the Secretary to appoint a Board 
consisting of industry members. The Act states that such a Board must 
develop a plan under USDA oversight to promote Christmas trees. USDA 
approves the Board's annual budget and marketing plan. In addition, the 
Board must conduct a third party program evaluation every five years to 
evaluate the effectiveness of the program's activities. All these 
documents are discussed at Board meetings, are public information and 
available on the Board's Web site. The program evaluation is also 
available on AMS's Web site. These documents provide the road map for 
the Boards operations and assist the industry in determining if the 
program is effective.
    Another issue some commenters raised was how much of the funds will 
be spent on administrative costs, USDA management, research and other 
projects. The Act authorizes that up to 15 percent of the assessments 
collected could be used for administrative expenses. However, the 
proponent group decided to limit the administrative expenses to 10 
percent of the funds collected. USDA costs are based on the time spent 
by the USDA on oversight of the program. The majority of the funds are 
used for research and promotion of the commodity.
    Several of the comments addressed the issue of promotion proposed 
under the Order. Some Christmas tree producers stated their opposition 
to perceived government intervention in their Christmas tree 
operations. They also stated that they preferred to do their own 
promotion and did not have any problems selling all of their trees, 
thus they did not see any benefit in the proposed program. 
Additionally, one commenter stated their belief that the program was 
illegal stating that the government can't promote private individuals' 
Christmas trees.
    The 1996 Act provides the authority for agricultural industries to 
develop programs for research and promotion. These programs are 
initiated by members of the industry. USDA provides oversight of these 
programs and their activities. However, industry Boards that manage 
these programs develop their own budgets and marketing plans and 
conduct strategic planning for the programs. Although these programs 
are mandatory in nature, they do not preclude individuals from 
promoting their own commodity.
    Another opposition comment stated the belief that Christmas trees 
were a

[[Page 69102]]

differentiated product and not an agricultural commodity and therefore, 
could not be promoted generically under this program. The 1996 Act 
states that the term agricultural commodity means, among other things, 
the products of forestry and other commodities raised or produced in 
farms. USDA does not agree with this comment and believes Christmas 
trees are an agricultural commodity and can be promoted under the Act 
authority.
    The commenter also stated their belief that ``choose and cut'' 
producers who provide trees to a distinct market may not realize the 
benefits of such a program because generic promotions would not attract 
customers to their operations. Various other commenters also stated 
that the government should not compel an industry with a variety of 
interests to speak with one voice when many are not in agreement.
    This Board will consider the views and concerns of every segment of 
the industry and provide a marketing plan that benefits the whole 
Christmas tree industry. Producers in all sectors have diversified to 
provide different types of activities to increase sales and promote 
their product. A Christmas tree generic promotion program will not 
hinder any producer from continuing this type of activity. A generic 
promotion program can work in conjunction with other marketing 
activities that individual producers and importers already have 
developed or want to develop.
    The commenter also suggested that the type of promotion the Board 
pursues may not be agreed upon by such commenter and that a one size 
fits all advertising campaign blurs distinctions among products in 
their industry. Additional commenters stated that the program should 
cover research but not promotion efforts. Research and promotion boards 
represent all sectors of the industry and the members will bring 
different backgrounds and expertise to the Board when developing 
marketing strategies. In addition, all meetings are open to the public. 
The Board would determine the kinds of activities conducted under the 
program based on those authorized under the Act. No changes have been 
made to reflect these comments.
    The same commenter questioned whether the program will insure that 
large stores will water and properly care for Christmas trees to 
maintain quality. Many research and promotion programs include an 
educational component to those that handle the product. The Board may 
decide that one of the needs of the industry is to provide information, 
education and training on the handling of Christmas trees to assure 
quality of the product to the consumer.
Referenda
    A commenter questioned the criteria to determine the referendum 
vote. Other commenters did not agree with having a delayed referendum 
or having one vote per entity without regard to the volume produced or 
imported. Section 518 of the Act provides for a referendum to be 
conducted either before the program is in place or three years after 
assessments first begin under the order. The proponent group chose the 
delayed referendum option. The Act also provides for three options to 
the vote: By a majority of those persons voting, by persons voting for 
approval who represent a majority of the volume of the agricultural 
commodity, or by a majority of those persons voting for approval who 
also represent a majority of the volume of the agricultural commodity. 
The proponent group recommended counting by vote in order to attempt to 
ensure that small businesses have the same vote as large firms. 
Accordingly, the Order will be approved in a referendum if a majority 
of producers and importers voting in the referendum vote for approval.
    Another commenter expressed the opinion that such voting was 
unfair. The commenter stated that one farm one vote does not adequately 
represent the producers that would be funding the program. The 
commenter also stated that the assessment should be on seedling 
nurseries since there is no true first handler. In addition, the 
commenter stated that there is no control on increasing the assessment.
    The Act provides three methods for determining the vote in 
referendum. The proponents chose a majority of those persons voting as 
the voting method. The proponents also chose to assess producers and 
importers since these will directly benefit from the program. Further, 
the Order provides that the assessment can only be increased or 
decreased by 2 cents during the fiscal period and subject to rulemaking 
by the USDA; and it cannot exceed 20 cents or drop below 10 cents per 
fiscal period. In order to make any changes in the assessment rate, the 
Board would have to make that recommendation to USDA and the USDA will 
request comments for the industry before implementing any change in the 
assessment rate. No changes have been to the Order to reflect these 
concerns.
Reporting
    Another issue raised by commenters concerns the reporting burden 
under the Order. A commenter stated that the proposed program involves 
too much paperwork and that forms should be web-based to allow easy 
access. The commenter stated concern that Christmas tree producers were 
already reporting information to the other Federal agencies. The 
commenter was also concerned that the Board would be counting stumps. 
Goals under this program are to minimize reporting burden and eliminate 
duplication as much as possible. The Board could coordinate with other 
agencies to help insure there are no duplicative efforts. The Board 
also may opt to provide the required forms electronically in order to 
further reduce the reporting burden to producers and importers.
    Another commenter was concerned that the reporting requirements 
would require producers to furnish customer information to the Board. 
The information required under the program does not contain producer or 
importer customer information. Furthermore, pursuant to section 515 of 
the 1996 Act, any information collected under the program is kept 
confidential.
    Another commenter stated concern about how difficult it may be to 
terminate such a program once implemented. This program requires that a 
referendum be conducted 3 years after implementation and every 7 years 
thereafter to determine if producers and importers support continuation 
of the program. The industry may also request a referendum if 10 
percent of those covered under the program request it. The Secretary 
can also suspend or terminate an order or a provision of an order if 
the Secretary finds that an order or a provision obstructs or does not 
tend to effectuate the purposes of the Act.
Other Issues
    Some commenters raised constitutionality concerns. One commenter 
raised concerns about a perceived unequal burden of taxation. The 
commenter suggested that the exemption provision could affect producers 
that produce 500 trees or less because this creates unequal taxation 
treatment of Christmas tree producers. However, the assessment provided 
for in this type of program is not a tax nor does it yield revenue for 
the Federal government. These producer and importers funds raised by 
producers and importers are for the benefit of producers and importers.
    The commenter also stated that some Texas producers were not in 
favor of the proposed Order, that Texas is a sovereign State, and 
therefore Texas Christmas tree producers should not be included in the 
Order. The 1996 Act

[[Page 69103]]

provides that programs under the Act would be applicable to 
agricultural commodities produced in the United States, which is 
defined as collectively the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico and the territories and possessions of the 
United States.
    Another commenter in opposition raised concerns that the proposed 
Order may violate the Establishment Clause. The commenter stated that 
government speech cannot advocate religion or religious symbols.
    USDA considers Christmas trees to be an agricultural commodity 
which is reported as such in various USDA crop reports and statistical 
data reports (e.g. 2007 Census of Agriculture, National Agricultural 
Statistics Service). The Act in section 512 provides for the 
establishment of generic promotion, research and information activities 
for agricultural commodities, including Christmas trees.
    Another commenter in opposition concluded that the rule would fall 
outside the purpose of the 1996 Act by favoring one domestic industry-
Christmas tree farming-to the detriment of another domestic industry-
artificial tree manufacturing. The 1996 Act was developed to provide 
agricultural industries with a way to develop and expand markets of 
agricultural commodities. Promoting fresh cut Christmas trees is within 
the scope of the 1996 Act.
    Another commenter stated that the proposed rule should be withdrawn 
as it was an inappropriate use of government power citing free markets, 
limited government, and individual freedom. The Proposed program was 
presented to the Department by an industry wide group of producers and 
importers who requested that such an industry-funded program be 
implemented. USDA has concluded that a research and promotion program 
for fresh cut Christmas trees is within the scope of its authority 
under the 1996 Act, and therefore is establishing this industry 
supported program.
    Another comment in opposition stated concern that the Board makeup 
unfairly represents big business by its geographic areas and trees 
produced. USDA believes that the geographical representation proposed 
by the proponent group fairly divides the U.S. production and imports 
of Christmas trees. It is USDA policy that the Board consider for 
nomination, 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 Board represents the 
diverse interest of persons responsible for paying assessments, and 
others in the marketing chain. USDA also makes sure that the 
geographical distribution of members closely reflects the distribution 
of the production.
    After consideration of all relevant materials presented, including 
the proposal and comments received, the USDA has determined that this 
Order is consistent with and will effectuate the purposes of the 1996 
Act.
    It is found that good cause exist for not postponing the effective 
date of this rule until 30 days after publication in the Federal 
Register (5 U.S.C. 553) because given that the collection and 
remittance of assessments begin as soon as possible, the initial Board 
should be appointed expeditiously in order to carry out the purposes of 
the Order.

List of Subjects in 7 CFR Part 1214

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Christmas trees promotion, Reporting 
and recordkeeping requirements.

    For the reasons set forth in the preamble, Title 7, Chapter XI of 
the Code of Federal Regulations is amended by adding part 1214 to read 
as follows:

PART 1214--CHRISTMAS TREE PROMOTION, RESEARCH, AND INFORMATION 
ORDER

Subpart A--Christmas Tree Promotion, Research, and Information Order

Definitions

Sec.
1214.1 Act.
1214.2 Board.
1214.3 Christmas tree.
1214.4 Conflict of interest.
1214.5 Crop year.
1214.6 Customs.
1214.7 Department.
1214.8 Fiscal Period
1214.9 Importer.
1214.10 Information.
1214.11 Marketing.
1214.12 Order.
1214.13 Part and subpart.
1214.14 Person.
1214.15 Programs, plans, and projects.
1214.16 Produce.
1214.17 Producer.
1214.18 Promotion.
1214.19 Research.
1214.20 Secretary.
1214.21 State.
1214.22 Suspend.
1214.23 Terminate.
1214.24 United States.

Christmas Tree Promotion Board

1214.40 Establishment and membership.
1214.41 Nominations and appointments.
1214.42 Term of office.
1214.43 Vacancies.
1214.44 Procedure.
1214.45 Compensation and reimbursement.
1214.46 Powers and duties.
1214.47 Prohibited activities.

Expenses and Assessments

1214.50 Budget and expenses.
1214.51 Financial statements.
1214.52 Assessments.
1214.53 Exemption from and refunds of assessments.
1214.54 Refund escrow accounts.

Promotion, Research and Information

1214.60 Programs, plans, and projects.
1214.61 Independent evaluation.
1214.62 Patents, copyrights, trademarks, information, publications, 
and product formulations.

Reports, Books, and Records

1214.70 Reports.
1214.71 Books and records.
1214.72 Confidential treatment.

Miscellaneous

1214.80 Right of the Secretary.
1214.81 Referenda.
1214.82 Suspension and termination.
1214.83 Proceedings after termination.
1214.84 Effect of termination or amendment.
1214.85 Personal liability.
1214.86 Separability.
1214.87 Amendments.
1214.88 OMB control numbers.
Subpart B--[Reserved]

    Authority: 7 U.S.C. 7411-7425; 7 U.S.C. 7401.

Subpart A--Christmas Tree Promotion, Research, and Information 
Order

Definitions


Sec.  1214.1  Act.

    Act means the Commodity Promotion, Research, and Information Act of 
1996 (7 U.S.C. 7411-7425), and any amendments thereto.


Sec.  1214.2  Board.

    Board or the Christmas Tree Promotion Board means the 
administrative body established pursuant to Sec.  1214.40.


Sec.  1214.3  Christmas tree.

    Christmas tree means any tree of the coniferous species, that is 
severed or cut from its roots and marketed as a Christmas tree for 
holiday use.


Sec.  1214.4  Conflict of interest.

    Conflict of interest means a situation in which a member or 
employee of the Board 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.

[[Page 69104]]

Sec.  1214.5  Crop year.

    Crop year means the period August 1 through July 31.


Sec.  1214.6  Customs or CBP.

    Customs or CBP means the United States Customs and Border 
Protection or U.S. Customs Service, an agency of the United States 
Department of Homeland Security.


Sec.  1214.7  Department.

    Department means the United States Department of Agriculture or any 
officer or employee of the Department to whom authority has heretofore 
been delegated, or to whom authority may hereafter be delegated, to act 
in the Secretary's stead.


Sec.  1214.8  Fiscal period.

    Fiscal period means the period August 1 through July 31.


Sec.  1214.9  Importer.

    Importer means any person importing Christmas trees into the United 
States in a fiscal period as a principal or as an agent, broker, or 
consignee of any person who domestically produces Christmas trees 
outside of the United States for sale in the United States, and who is 
listed in the import records as the importer of record for such 
Christmas trees.


Sec.  1214.10  Information.

    Information means information, program, and activities that are 
designed to increase efficiency in processing, enhance the development 
of new markets and marketing strategies, increase market efficiency, 
and enhance the image of Christmas trees and the Christmas tree 
industry in the United States.


Sec.  1214.11  Marketing.

    Marketing means to sell or otherwise dispose of Christmas trees in 
interstate, foreign or intrastate commerce.


Sec.  1214.12  Order.

    Order means an order issued by the Secretary under section 514 of 
the Act that provides for a program of generic promotion, research, and 
information regarding agricultural commodities authorized under the 
Act.


Sec.  1214.13  Part and subpart.

    Part means the Christmas Tree Promotion, Research, and Information 
Order and all rules, regulations, and supplemental orders issued 
pursuant to the Act and the Order. The Order shall be a subpart of such 
part.


Sec.  1214.14  Person.

    Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity.


Sec.  1214.15  Programs, plans and projects.

    Programs, plans and projects mean those research, promotion and 
information programs, plans, or projects established pursuant to this 
Order.


Sec.  1214.16  Produce.

    Produce means to engage in the cutting and selling of Christmas 
trees for the holiday market.


Sec.  1214.17  Producer.

    Producer means any person who is engaged in the production of 
Christmas trees in the United States, and who owns, or shares the 
ownership and risk of loss of the production of Christmas trees or a 
person who is engaged in the business of producing, or causing to be 
domestically produced, Christmas trees beyond personal use and having 
value at first point of sale.


Sec.  1214.18  Promotion.

    Promotion means any action, including paid advertising and public 
relations that presents a favorable image of Christmas trees to the 
general public with the intent of improving the perception and 
competitive position of Christmas trees and stimulating sales of 
Christmas trees.


Sec.  1214.19  Research.

    Research means any type of test, systematic study, study, 
investigation, analysis and/or evaluation designed to advance the 
image, desirability, use, marketability, quality, product development, 
or production of Christmas trees, including but not limited to research 
related to cost of production, market development, testing the 
effectiveness of market development and promotional efforts, new 
species of Christmas trees and environmental issues relating to the 
Christmas tree industry.


Sec.  1214.20  Secretary.

    Secretary means the Secretary of Agriculture of the United States, 
or any officer or employee of the Department to whom authority has been 
delegated, or to whom authority may be delegated, to act in the 
Secretary's stead.


Sec.  1214.21  State.

    State means any of the several 50 States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, and the 
territories and possessions of the United States.


Sec.  1214.22  Suspend.

    Suspend means to issue a rule under section 553 of title 5 U.S.C. 
to temporarily prevent the operation of an order or part thereof during 
a particular period of time specified in the rule.


Sec.  1214.23  Terminate.

    Terminate means to issue a rule under section 553 of title 5 U.S.C. 
to cancel permanently the operation of an order or part thereof 
beginning on a certain date specified in the rule.


Sec.  1214.24  United States.

    United States means collectively the 50 states, the District of 
Columbia, the Commonwealth of Puerto Rico, and the territories and 
possessions of the United States.

Christmas Tree Promotion Board


Sec.  1214.40  Establishment and membership.

    (a) Establishment of the Christmas Tree Promotion Board. There is 
hereby established a Christmas Tree Promotion Board, composed of no 
more than twelve (12) members as follows:
    (1) Producer members from each of the following regions:
    (i) Five producer members from Region 1--Western Region 
(states from the Pacific Ocean east to the Rocky Mountains): Alaska, 
Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New 
Mexico, Oregon, Utah, Washington, Wyoming and all U.S. Territories 
located in the Pacific Ocean.
    (ii) Two producer members from Region 2--Central Region 
(states east of the Rocky Mountains to the Great Lakes): Arkansas, 
Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, 
Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Texas, and 
Wisconsin.
    (iii) Four producer members from Region 3--Eastern Region 
(states east of the Great Lakes): Alabama, Connecticut, Delaware, 
Florida, Georgia, Kentucky, Louisiana, New York, Maine, Maryland, 
Massachusetts, Mississippi, New Hampshire, New Jersey, North Carolina, 
Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia, 
Vermont, Washington, DC, West Virginia, and all U.S. Territories 
located in the Atlantic Ocean and Caribbean Sea, including but not 
limited to Puerto Rico.
    (2) One Importer member.
    (b) Adjustment of membership. At least once every five years upon 
implementation of the Order, but not more frequently than once every 
three years, the Board will review the geographic distribution of 
United States production of Christmas trees and the quantity and source 
of Christmas tree imports. The review will be conducted through State 
crop production figures and Board assessment records,

[[Page 69105]]

including the amount of assessments collected from importers, or other 
government data. If warranted, the Board will recommend to the 
Secretary that membership on the Board be altered to reflect any 
changes in geographic distribution of domestic Christmas tree 
production and the quantity of imports. Provided, that there shall be 
at least one importer member on the Board. Such adjustments shall not 
increase the total number of Board members. The adjustments to the 
Board membership would be submitted to the Secretary by Board 
recommendation and be implemented by the Secretary through rulemaking.


Sec.  1214.41  Nominations and appointments.

    (a) Voting for producer members will be made by mail ballot, 
electronic mail, in person, or by facsimile.
    (b) Nominations for the initial Board will be conducted by the 
Department. Subsequent nominations will be conducted by the Board.
    (c) The Board shall outreach to all segments of the Christmas tree 
industry and solicit nominations as described in paragraphs (d) and (e) 
of this section. Nominees must domestically produce or import more than 
500 Christmas trees during the most recent fiscal period.
    (d) Nomination of producer members will be conducted by the Board. 
The Board staff will seek nominations for each vacant producer seat 
from each region from producers who have paid their assessments to the 
Board in the most recent fiscal period. Producers who produce Christmas 
trees in more than one region may seek nomination only in the region in 
which they produce the majority of their Christmas trees. For selection 
to the initial Board, the Secretary will notify producers to request 
nominations to the Board. Subsequent nominations will be submitted to 
the Board office and placed on a ballot that will be sent to producers 
in each region for a vote. Producers who produce Christmas trees in 
more than one region may only vote in the region in which they produce 
the majority of their Christmas trees. The nominee receiving the 
highest number of votes and the nominee receiving the second highest 
number of votes shall be submitted to the Department as the producers' 
first and second choice nominees. The Board shall submit nominations to 
the Secretary not less than 90 days prior to the expiration of the term 
of office.
    (e) Nominations for the importer member(s) will be conducted by the 
Board. The Board will solicit importer nominations from those importers 
who have paid their assessments to the Board in the most recent fiscal 
period. For selection to the initial Board, the Secretary will notify 
importers to request nominations to the Board. Subsequent nominations 
will be submitted to the Board office and placed on a ballot that will 
be sent to importers for a vote. The Board shall submit those 
nominations to the Secretary not less than 90 days prior to the 
expiration of the term of office. Two nominees for each importer 
position will be submitted to the Secretary for consideration.
    (f) From the nominations, the Secretary shall select the members of 
the Board for each position on the Board. Members will serve until 
their successors have been appointed by the Secretary.


Sec.  1214.42  Term of office.

    Board members will serve for a term of three years and be able to 
serve a maximum of two consecutive three-year terms. When the Board is 
first established, the members will be assigned initial terms of two, 
three, and four years. Initial terms will be staggered to assure 
continuity of the Board. The term of office will begin on January 1 and 
conclude on December 31. Members serving the initial term of two and 
four years will be eligible to serve a second term of three-years. 
Thereafter, each of the positions will carry a full three-year term. 
Board members shall serve during the term of office for which they have 
been appointed and qualified, and until their successors are appointed 
and have qualified.


Sec.  1214.43  Vacancies.

    (a) In the event that any member of the Board ceases to be a member 
of the category of membership from which the member was appointed to 
the Board, such position shall automatically become vacant.
    (b) If a member of the Board consistently refuses to perform the 
duties of a member of the Board, or if a member of the Board engages in 
acts of dishonesty or willful misconduct, the Board may recommend to 
the Secretary that the member be removed from office. If the Secretary 
finds the recommendation of the Board shows adequate cause, the 
Secretary may remove such member from office. Further, without 
recommendation of the Board, a member may be removed by the Secretary 
upon showing of adequate cause, including the failure by a member to 
submit reports or remit assessments required under this part, if the 
Secretary determines that such member's continued service would be 
detrimental to the achievement of the purposes of the Act.
    (c) Should any member position become vacant, successors for the 
unexpired terms of such member shall be appointed in the manner 
specified in Sec.  1214.41. A vacancy will not be required to be filled 
if the unexpired term is less than six months.


Sec.  1214.44  Procedure.

    (a) At a Board meeting, it will be considered a quorum when a 
majority of the Board members is present.
    (b) All Board members will receive a minimum of 14 days advance 
notice of all Board and committee meetings, except when emergency 
circumstances exist and meetings need to be held prior to the advance 
notice.
    (c) Each member of the Board will be entitled to one vote on any 
matter put to the Board. For any action of the Board to pass, at least 
a majority of the Board members present must vote in support of such 
action.
    (d) The Board may appoint committees as necessary. It will be 
considered a quorum at a committee meeting when at least a majority of 
those appointed to the committee are present. Committees may consist of 
persons other than Board members, and such persons may vote in 
committee meetings as the Board shall determine. These committee 
members shall serve without compensation, but shall be reimbursed for 
reasonable travel expenses, as approved by the Board.
    (e) In lieu of voting at a properly convened meeting, and when, in 
the opinion of the Board's chairperson, such action is considered 
necessary, the Board may take action by mail, telephone, electronic 
mail, facsimile, or any other means of communication. Any action taken 
under this procedure is valid only if:
    (1) All members and the Secretary are notified and the members are 
provided the opportunity to vote;
    (2) A majority of the members vote in favor of the action; and
    (3) All votes are promptly confirmed in writing and recorded in the 
Board minutes.
    (f) There shall be no voting by proxy.
    (g) The chairperson shall be a voting member.


Sec.  1214.45  Compensation and reimbursement.

    The members of the Board shall serve without compensation but shall 
be reimbursed for reasonable travel expenses, as approved by the Board, 
incurred by them in the performance of their duties as Board members.

[[Page 69106]]

Sec.  1214.46  Powers and duties.

    The Board shall have the following powers and duties:
    (a) To administer the Order in accordance with its terms and 
conditions and to collect assessments;
    (b) To develop and recommend to the Secretary for approval such 
bylaws as may be necessary for the functioning of the Board, and such 
rules as may be necessary to administer the Order, including activities 
authorized to be carried out under the Order;
    (c) To meet, organize, and select from among the members of the 
Board a chairperson, other officers, committees, and subcommittees, as 
the Board determines to be appropriate, provided that the committee and 
subcommittee members may also include individuals other than Board 
members;
    (d) To notify producers and importers of all Board meetings through 
press releases or other means;
    (e) To give the Secretary the same notice of meetings of the Board 
and committees as is given to members, including committee members if 
committee members are not members of the Board, in order that the 
Secretary's representative(s) may attend such meetings, and to keep and 
report minutes of each meeting of the Board and all committees to the 
Secretary;
    (f) To appoint and convene, from time to time, committees that may 
include importers, exporters, producers or other members of the 
Christmas tree industry and public to assist in the development of 
research, promotion, advertising, and information programs for 
Christmas trees;
    (g) To employ persons, other than members, as the Board considers 
necessary to assist the Board in carrying out its duties and to 
determine the compensation and specify the duties of such persons;
    (h) To act as an intermediary between the Secretary and any 
producer or importer;
    (i) To furnish to the Secretary any information or records that the 
Secretary may request;
    (j) To receive, investigate, and report to the Secretary complaints 
of violations of the Order;
    (k) To maintain such records and books and prepare and submit such 
reports and records from time to time to the Secretary as the Secretary 
may require and to make the records available to the Secretary for 
inspection and audit; to make appropriate accounting with respect to 
the receipt and disbursement of all funds entrusted to it; and to keep 
records that accurately reflect the actions and transactions of the 
Board;
    (l) To recommend to the Secretary such amendments to the Order as 
the Board considers appropriate;
    (m) To develop and carry out generic promotion, research, and 
information activities relating to Christmas trees;
    (n) To work to achieve an effective, continuous, and coordinated 
program of promotion, research, evaluation, and information designed to 
strengthen the Christmas tree industry's position in the marketplace; 
maintain and expand existing markets for Christmas trees; and to carry 
out programs, plans, and projects designed to provide maximum benefits 
to the Christmas tree industry;
    (o) To develop programs, plans, and projects, and enter into 
contracts or agreements, which must be approved by the Secretary before 
becoming effective, for the development and carrying out of programs or 
projects of research, information, or promotion, and the payment of 
costs thereof with funds collected pursuant to this subpart. Each 
contract or agreement shall provide that any person who enters into a 
contract or agreement with the Board shall develop and submit to the 
Board a proposed activity; keep accurate records of all of its 
transactions relating to the contract or agreement; account for funds 
received and expended in connection with the contract or agreement; 
make periodic reports to the Board of activities conducted under the 
contract or agreement; and make such other reports available as the 
Board or the Secretary considers necessary. Any contract or agreement 
shall provide that:
    (1) The contractor or agreeing party shall develop and submit to 
the Board a program, plan, or project together with a budget or budgets 
that shall show the estimated cost to be incurred for such program, 
plan, or project;
    (2) The contractor or agreeing party shall keep accurate records of 
all its transactions and make periodic reports to the Board of 
activities conducted, submit accounting for funds received and 
expended, and make such other reports as the Secretary or the Board may 
require;
    (3) The Secretary may audit the records of the contracting or 
agreeing party periodically; and
    (4) Any subcontractor who enters into a contract with a Board 
contractor and who receives or otherwise uses funds allocated by the 
Board shall be subject to the same provisions as the contractor;
    (p) To prepare and submit for approval of the Secretary, within 60 
days after assessments are due to the Board, rates of assessment and a 
fiscal period budget of the anticipated expenses to be incurred in the 
administration of the Order, in accordance with Sec.  1214.50;
    (q) To borrow funds necessary for the startup expenses of the 
order;
    (r) To invest assessments collected under this part in accordance 
with Sec.  1214.50;
    (s) To pay the cost of the activities with assessments collected 
under Sec.  1214.52;
    (t) To recommend adjustments to the assessments as provided in 
Sec.  1214.52;
    (u) To periodically prepare, make public and to make available to 
producers and importers, reports of its activities and, at least once 
each fiscal period, to make public an accounting of funds received and 
expended; and
    (v) To cause its books to be audited by an independent certified 
public accountant at the end of each fiscal period and at such other 
times as the Secretary may request, and to submit a report of the audit 
directly to the Secretary.


Sec.  1214.47  Prohibited activities.

    The Board may not engage in, and shall prohibit the employees and 
agents of the Board from engaging in:
    (a) Any action that would be a conflict of interest;
    (b) Using funds collected by the Board under the Order to undertake 
any action for the purpose of influencing legislation or governmental 
action or policy, by local, state, national, and foreign governments or 
any subdivision thereof, other than recommending to the Secretary 
amendments to the Order; and
    (c) No program, plan, or project including advertising shall be 
false or misleading or disparaging to another agricultural commodity. 
Christmas trees of all origins shall be treated equally.

Expenses and Assessments


Sec.  1214.50  Budget and expenses.

    (a) Within 60 days after assessments are due to the Board, and as 
may be necessary thereafter, the Board shall prepare and submit to the 
Secretary a budget for the fiscal period covering its anticipated 
expenses and disbursements in administering this part. Each budget 
shall include:
    (1) A statement of objectives and strategy for each program, plan, 
or project;
    (2) A summary of anticipated revenue, with comparative data or at 
least one preceding year, except for the initial budget;
    (3) A summary of proposed expenditures for each program, plan, or 
project; and
    (4) Staff and administrative expense breakdowns, with comparative 
data for

[[Page 69107]]

at least one preceding year, except for the initial budget.
    (b) Each budget shall provide adequate funds to defray its proposed 
expenditures and to provide for a reserve as set forth in this part.
    (c) Subject to this section, any amendment or addition to an 
approved budget must be approved by the Secretary, including shifting 
funds from one program, plan, or project to another.
    (d) The Board is authorized to incur such expenses, including 
provision for a reserve, as the Secretary finds are reasonable and 
likely to be incurred by the Board for its maintenance and functioning, 
and to enable it to exercise its powers and perform its duties in 
accordance with the provisions of this part. Such expenses shall be 
paid from funds received by the Board.
    (e) With approval of the Secretary, the Board may borrow money for 
the payment of administrative expenses, subject to the same fiscal, 
budget, and audit controls as other funds of the Board. Any such funds 
borrowed by the Board shall be expended for startup costs and are 
limited to the first year of operation of the Board.
    (f) The Board may accept voluntary contributions, but these shall 
only be used to pay expenses incurred in the conduct of programs, 
plans, and projects approved by the Secretary. Such contributions shall 
be free from any encumbrance by the donor and the Board shall retain 
complete control of their use.
    (g) In accordance with Sec.  1214.54, the Board shall deposit funds 
in a refund escrow account and shall not use such funds for expenses, 
except as provided for in that section.
    (h) The Board may also receive funds provided through the 
Department's Foreign Agricultural Service or from other sources, with 
the approval of the Secretary, for authorized activities.
    (i) The Board shall reimburse the Secretary for all expenses 
incurred by the Secretary in the implementation, administration, 
enforcement, and supervision of the Order, including all referendum 
costs in connection with the Order.
    (j) For fiscal years beginning 3 or more years after the date of 
the establishment of the Board, the Board may not expend for 
administration, maintenance, and functioning of the Board in a fiscal 
year an amount that exceeds 10 percent of the assessment and other 
income received by the Board. Reimbursements to the Secretary required 
under paragraph (i) of this section are excluded from this limitation 
on spending.
    (k) The Board may establish an operating monetary reserve and may 
carry over to subsequent fiscal periods excess funds in any reserve so 
established: Provided: That, the funds in the reserve do not exceed one 
fiscal period's budget of expenses. Subject to approval by the 
Secretary, such reserve funds may be used to defray any expenses 
authorized under this part.
    (l) Pending disbursement of assessments and all other revenue under 
a budget approved by the Secretary, the Board may invest assessments 
and all other revenues collected under this section in:
    (1) Obligations of the United States or any agency of the United 
States;
    (2) General obligations of any State or any political subdivision 
of a State;
    (3) Interest bearing accounts or certificates of deposit of 
financial institutions that are members of the Federal Reserve System; 
or
    (4) Obligations fully guaranteed as to principal interest by the 
United States.


Sec.  1214.51  Financial statements.

    (a) The Board shall prepare and submit quarterly financial 
statements to the Secretary, or at any other time requested by the 
Secretary. Each such financial statement shall include, but not be 
limited to, a balance sheet, income statement, and expense budget. The 
expense budget shall show expenditures during the time period covered 
by the report, year-to-date expenditures, and the unexpended budget.
    (b) Each financial statement shall be submitted to the Secretary 
within 45 days after the end of the time period to which it applies.
    (c) The Board shall submit annually to the Secretary an annual 
financial statement within 90 days after the end of the fiscal period 
to which it applies.


Sec.  1214.52  Assessments.

    (a) The funds to cover the Board's expenses shall be paid from 
assessments on producers, importers, and donations from any person 
including those not subject to assessments under this Order, and other 
funds available to the Board including those collected pursuant to 
Sec.  1214.62 and subject to the limitations contained therein.
    (b) The payment of assessments on domestic Christmas trees that are 
cut and sold will be the responsibility of the producer who produces 
the Christmas trees or causes the trees to be cut.
    (c) Each importer of Christmas trees shall pay the assessment to 
the Board on Christmas trees imported for marketing in the United 
States, through Customs. If Customs does not collect an assessment from 
an importer, the importer will be responsible for paying the assessment 
directly to the Board 30 calendar days after importation.
    (1) The assessment rate for imported Christmas trees shall be the 
same or equivalent to the rate for Christmas trees domestically 
produced in the United States.
    (2) The import assessment shall be uniformly applied to imported 
Christmas trees that are identified by the numbers 0604.91.00.20, 
0604.91.00.40, and 0604.91.00.60 in the Harmonized Tariff Schedule of 
the United States or any other numbers used to identify Christmas trees 
in that schedule.
    (3) The assessments due on imported Christmas trees shall be paid 
when they enter into the United States.
    (d) Such assessments shall be levied at an initial rate of 15 cents 
per Christmas tree domestically produced or imported into the United 
States. The assessment rate will be reviewed by the Board, after the 
initial referendum is conducted pursuant to this subpart. The 
assessment rate may be increased or decreased no more than 2 cents per 
Christmas tree during the fiscal period. Any change in the assessment 
rate shall be subject to rulemaking by the Department. The assessment 
rate shall not exceed 20 cents per Christmas tree, nor shall it be less 
than 10 cents per Christmas tree, unless a majority of producers and 
importers approve such other levels of assessment through a referendum 
conducted pursuant to this subpart.
    (e) All assessment payments and reports will be submitted to the 
office of the Board. All assessment payments are to be received no 
later than February 15 of the crop year in which they are produced or 
imported. A late payment charge, may be imposed on any producer or 
importer who fails to remit to the Board, the total amount for which 
any such producer or importer is liable on or before the due date 
established by the Board. In addition to the late payment charge, an 
interest charge may be imposed on the outstanding amount for which the 
producer or importer is liable. The rate for late payment and interest 
charges shall be specified by the Secretary through rulemaking.
    (f) Persons failing to remit total assessments due in a timely 
manner may also be subject to actions under federal debt collection 
procedures.
    (g) The Board may authorize other organizations to collect 
assessments on its behalf with the approval of the Secretary.

[[Page 69108]]

Sec.  1214.53  Exemption from and refunds of assessments.

    (a) Producers that domestically produce and importers that import 
less than 500 Christmas trees.
    (1) Any producer who domestically produces less than 500 Christmas 
trees who desires to claim an exemption from assessments as provided in 
Sec.  1214.52 shall file an application on a form provided by the 
Board, for a certificate of exemption. Such producer shall certify that 
he/she will domestically produce less than 500 trees for the fiscal 
period for which the exemption is claimed. It is the responsibility of 
the producer to retain a copy of the certificate of exemption.
    (2) Any importer who imports less than 500 trees in a fiscal period 
who desires to claim an exemption from assessments as provided in Sec.  
1214.52 shall file an application on a form provided by the Board, for 
a certificate of exemption. Such importer shall certify that the 
importer's total imports of Christmas trees are fewer than 500 trees 
for the fiscal period for which the exemption is claimed. It is the 
responsibility of the importer to retain a copy of the certificate of 
exemption.
    (3) On receipt of an exemption application, the Board shall 
determine whether an exemption may be granted. The Board will then 
issue, if deemed appropriate, a certificate of exemption to the 
producer or importer which is eligible to receive one.
    (4) The Board, with the Secretary's approval, may require persons 
receiving an exemption from assessments to provide to the Board reports 
on the disposition of exempt Christmas trees and, in the case of 
importers, proof of payment of assessments.
    (5) The exemption will apply immediately following the issuance of 
the certificate of exemption.
    (6) Producers and importers who received an exemption certificate 
from the Board but domestically produced or imported more than 500 
Christmas trees during the fiscal period shall pay the Board the 
applicable assessments owed and submit any necessary reports to the 
Board pursuant to Sec.  1214.70.
    (7) Producers and importers who did not apply to the Board for an 
exemption and domestically produced or imported less than 500 Christmas 
trees during the fiscal period shall receive a refund from the Board 
for the applicable assessments within 30 calendar days after the end of 
the fiscal year. Board staff shall determine the assessments paid and 
refund the amount due to the producers and importers accordingly.
    (8) The Board may develop additional procedures as it deems 
necessary for accurately accounting for this exemption. Such procedures 
shall be implemented through rulemaking by the Secretary.
    (b) Assessment refunds to importers. (1) Importers who are exempt 
from assessment shall be eligible for a refund of assessments collected 
by Customs during the applicable fiscal period. No interest will be 
paid on assessments collected by Customs. The Board shall refund such 
importers their assessments as collected by Customs no later than 60 
calendar days after receipt by the Board.
    (c) Organic. (1) Organic Act means section 2103 of the Organic 
Foods Production Act of 1990 (7 U.S.C. 6502).
    (2) A producer who domestically produces Christmas trees 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 and is not a split operation shall be exempt from 
payment of assessments. To obtain an organic exemption, 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 the start of the fiscal period as long as such 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 
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. The Board shall have 30 calendar days to 
approve the exemption request. If the exemption is not granted, the 
Board will notify the applicant and provide reasons for the denial 
within the same time frame.
    (3) An importer who imports only Christmas trees 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. To obtain an 
organic exemption, an eligible importer must submit documentation to 
the Board and request an exemption from assessment on 100 percent of 
organic Christmas trees, 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 as 
required by producers in paragraph (c)(2) 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 
number of the United States classification valid for 1 year from the 
date of issue. This alphanumeric number should be entered by the 
importer on the Customs entry documentation. Any line item entry of 100 
percent organic Christmas trees bearing this alphanumeric number 
assigned by the Board will not be subject to assessments.
    (4) Importers who are exempt from assessment in paragraph (c)(3) of 
this section shall also be eligible for reimbursement of assessments 
collected by Customs and may apply to the Board for a reimbursement. 
The importer would be required to submit satisfactory proof to the 
Board that the importer paid the assessment on exempt organic products.
    (5) The exemption will apply immediately following the issuance of 
the exemption certificate.


Sec.  1214.54  Refund escrow accounts.

    (a) The Board shall establish an interest bearing escrow account 
with a financial institution that is a member of the Federal Reserve 
System and will deposit into such account an amount equal to 10 percent 
of the assessments collected during the period beginning on the 
effective date of the Order and ending on the date the Secretary 
announces the results of the required referendum.
    (b) If the Order is not approved by the required referendum, the 
Board shall promptly pay refunds of assessments to all producers and 
importers that have paid assessments during the period beginning on the 
effective date of the Order and ending on the date the Secretary 
announces the results of the required referendum in the manner 
specified in paragraph (c) of this section.
    (c) If the amount deposited in the escrow account is less than the 
amount of all refunds that producers and importers subject to the Order 
have a right to receive, the Board shall prorate the amount deposited 
in such account among all producers and importers who desire a refund 
of assessments paid no later than 90 days after the required referendum 
results are announced by the Secretary.
    (d) Any producer or importer requesting a refund shall submit an 
application on the prescribed form to the Board within 30 days after 
the announcement of the referendum results of their request for a 
refund of the

[[Page 69109]]

assessments that they paid. The producers and importer requesting a 
refund shall also submit documentation to substantiate that assessments 
were paid. Any such demand shall be made by such producer or importer 
in accordance with the provisions of this subpart and in a manner 
consistent with regulations recommended by the Board and prescribed by 
the Secretary.
    (e) If the Order is approved by the required referendum conducted 
under Sec.  1214.71 then:
    (1) The escrow account shall be closed; and,
    (2) The funds shall be available to the Board for disbursement 
under Sec.  1214.50.

Promotion, Research and Information


Sec.  1214.60  Programs, plans, and projects.

    (a) The Board shall receive and evaluate, or on its own initiative, 
develop and submit to the Secretary for approval any program, plan, or 
project authorized under this subpart. Such programs, plans, or 
projects shall provide for:
    (1) The establishment, issuance, effectuation, and administration 
of appropriate programs for promotion, research, and information, 
including producer and consumer industry information, with respect to 
Christmas trees;
    (2) The establishment and conduct of research with respect to the 
image, desirability, use, marketability, quality, product development 
or production of Christmas trees, to the end that the marketing and use 
of Christmas trees may be encouraged, expanded, improved, or made more 
acceptable and to advance the image, desirability, or quality of 
Christmas trees.
    (b) A program, plan, or project may not be implemented prior to 
approval of the program, plan, or project by the Secretary. Once a 
program, plan, or project is so approved, the Board shall take 
appropriate steps to implement it.
    (c) Each program, plan, or project implemented under this subpart 
shall be reviewed or evaluated periodically by the Board to ensure that 
it contributes to an effective program of promotion, research, or 
information. If it is found by the Board that any such program, plan, 
or project does not contribute to an effective program of promotion, 
research, or information, then the Board shall terminate such program, 
plan, or project.


Sec.  1214.61  Independent evaluation.

    The Board shall, not less often than once every five years, 
authorize and fund, from funds otherwise available to the Board, an 
independent evaluation of the effectiveness of the Order and programs 
conducted by the Board pursuant to the Act. The Board shall submit to 
the Secretary, and make available to the public, the results of each 
periodic independent evaluation conducted under this paragraph.


Sec.  1214.62  Patents, copyrights, trademarks, information, 
publications, and product formulations.

    Patents, copyrights, trademarks, information, publications, and 
product formulations developed through the use of funds received by the 
Board under this subpart shall be the property of the U.S. Government 
as represented by the Board and shall, along with any rents, royalties, 
residual payments, or other income from the rental, sales, leasing, 
franchising, or other uses of such patents, copyrights, trademarks, 
information, publications, or product formulations, inure to the 
benefit of the Board, shall be considered income subject to the same 
fiscal, budget, and audit controls as other funds of the Board, and may 
be licensed subject to approval by the Secretary. Upon termination of 
this subpart, Sec.  1214.83 shall apply to determine disposition of all 
such property.

Reports, Books, and Records


Sec.  1214.70  Reports.

    (a) Each producer and importer subject to this subpart shall be 
required to provide to the Board periodically such information as 
required by the Board, with the approval of the Secretary, which may 
include but not be limited to the following:
    (1) Number of trees produced or total imports;
    (2) Number of Christmas trees on which an assessment was paid;
    (3) Name and address of producer or importer; and
    (4) Date assessment was paid on each Christmas tree produced or 
imported.
    (b) All reports required under Sec.  1214.70 are due to the Board 
by February 15 of the crop year.
    (c) This report shall accompany the payment of the collected 
assessments.


Sec.  1214.71  Books and records.

    Each producer and importer subject to this subpart, including those 
who are exempt under this subpart, shall maintain any books and records 
necessary to carry out the provisions of this subpart and the 
regulations issued thereunder, including such records as are necessary 
to verify any reports required. Such books and records must be made 
available during normal business hours for inspection by the Board's or 
Secretary's employees or agents. Such records shall be retained for at 
least two years beyond the fiscal period of their applicability.


Sec.  1214.72  Confidential treatment.

    All information obtained from books, records, or reports under the 
Act, this subpart, and the regulations issued thereunder shall be kept 
confidential by all persons, including all employees and former 
employees of the Board, all officers and employees and former officers 
and employees of contracting and subcontracting agencies or agreeing 
parties having access to such information. Such information shall not 
be available to Board members, producers, or importers. 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 by them, and then only in a judicial 
proceeding or administrative hearing brought at the direction, or on 
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 section shall be deemed to prohibit:
    (a) The issuance of general statements based upon the reports of 
the number of persons subject to this subpart or statistical data 
collected therefrom, which statements do not identify the information 
furnished by any person; and
    (b) 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.

Miscellaneous


Sec.  1214.80  Right of the Secretary.

    All fiscal matters, programs, plans, or projects, rules or 
regulations, contracts, reports, or other substantive actions proposed 
or prepared by the Board shall be submitted to the Secretary for 
approval.


Sec.  1214.81  Referenda.

    (a) Required referendum. For the purpose of ascertaining whether 
the persons subject to this Order favor the amendment, continuation, 
suspension, amendment, or termination of this Order, the Secretary 
shall conduct a referendum among persons subject to assessments under 
Sec.  1214.52 who, during a representative period determined by the 
Secretary, have engaged in the production or importation of Christmas 
trees:

[[Page 69110]]

    (1) The first referendum shall be conducted not later than 3 years 
after assessments first begin under the Order;
    (2) The order will be approved in a referendum if:
    (i) A majority of producers and importers vote for approval in the 
referendum.
    (b) Subsequent referenda. The Secretary shall conduct subsequent 
referenda:
    (1) For the purpose of ascertaining whether producers and importers 
favor the continuation, suspension, or termination of the Order;
    (2) Every seven years the Secretary shall hold a referendum to 
determine whether producers and importers of Christmas trees favor the 
continuation of the Order. The Order shall continue if it is favored by 
a majority of producers and importers voting for approval in the 
referendum who have been engaged in the production or importation of 
Christmas trees;
    (3) At the request of the Board established in this Order;
    (4) At the request of 10 percent or more of the number of persons 
eligible to vote in a referendum as set forth under the Order; or
    (5) At any time as determined by the Secretary.


Sec.  1214.82  Suspension or termination.

    (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 purpose 
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 Act.
    (b) The Secretary shall suspend or terminate this subpart at the 
end of the fiscal period whenever the Secretary determines that its 
suspension or termination is favored by a majority of producers and 
importers voting in a referenda who, during a representative period 
determined by the Secretary, have been engaged in the production or 
importation of Christmas trees.
    (c) If, as a result of a referendum the Secretary determines that 
this subpart is not approved, the Secretary shall:
    (1) Not later than one hundred and eighty (180) days after making 
the determination, suspend or terminate, as the case may be, collection 
of assessments under this subpart; and
    (2) As soon as practical, suspend or terminate, as the case may be, 
activities under this subpart in an orderly manner.


Sec.  1214.83  Proceedings after termination.

    (a) Upon the termination of this subpart, the Board shall recommend 
not more than three of its members to the Secretary to serve as 
trustees for the purpose of liquidating the affairs of the Board. Such 
persons, upon designation by the Secretary, shall become trustees of 
all of the funds and property then in the possession or under control 
of the Board, including claims for any funds unpaid or property not 
delivered, or any other claim existing at the time of such termination.
    (b) The said trustees shall:
    (1) Continue in such capacity until discharged by the Secretary;
    (2) Carry out the obligations of the Board under any contracts or 
agreements entered into pursuant to the Order;
    (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 the trustees, to such person or persons as the 
Secretary may direct; and
    (4) Upon request of the Secretary execute such assignments or other 
instruments necessary and appropriate to vest in such persons title and 
right to all funds, property and claims vested in the Board or the 
trustees pursuant to the Order.
    (c) Any person to whom funds, property or claims have been 
transferred or delivered pursuant to the Order shall be subject to the 
same obligations imposed upon the Board and upon the trustees.
    (d) Any residual funds not required to defray the necessary 
expenses of liquidation shall be turned over to the Secretary to be 
disposed of, to the extent practical, to one or more Christmas tree 
organizations in the United States in the interest of continuing 
Christmas tree promotion, research, and information programs.


Sec.  1214.84  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, the 
termination of this subpart or of any regulation issued pursuant 
thereto, or the issuance of any amendment to either thereof, shall not:
    (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 regulation issued thereunder.
    (b) Release or extinguish any violation of this subpart or any 
regulation issued thereunder.
    (c) Affect or impair any rights or remedies of the United States, 
or of the Secretary or of any other persons, with respect to any such 
violation.


Sec.  1214.85  Personal liability.

    No member or employee of the Board shall be held personally 
responsible, either individually or jointly with others, in any way 
whatsoever, to any person for errors in judgment, mistakes, or other 
acts, either of commission or omission, as such member or employee, 
except for acts of dishonesty or willful misconduct.


Sec.  1214.86  Separability.

    If any provision of this subpart is declared invalid or the 
applicability thereof to any person or circumstances is held invalid, 
the validity of the remainder of this subpart or the applicability 
thereof to other persons or circumstances shall not be affected 
thereby.


Sec.  1214.87  Amendments.

    Amendments to this subpart may be proposed from time to time by the 
Board or by any interested person affected by the provisions of the 
Act, including the Secretary.


Sec.  1214.88  OMB control numbers.

    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 0505-0001, and OMB control number 0581-0267 and 0581-0268.

Subpart B--[Reserved]

    Dated: November 1, 2011.
David R. Shipman,
Acting Administrator.
[FR Doc. 2011-28798 Filed 11-7-11; 8:45 am]
BILLING CODE 3410-02-P