[Federal Register Volume 79, Number 61 (Monday, March 31, 2014)]
[Rules and Regulations]
[Pages 17849-17852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-07024]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 79, No. 61 / Monday, March 31, 2014 / Rules
and Regulations
[[Page 17849]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1210
[Document Number AMS-FV-11-0031]
Watermelon Research and Promotion Plan; Importer Membership
Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule amends the Watermelon Research and Promotion Plan's
(Plan) importer membership requirements to serve on the National
Watermelon Promotion Board (Board). The Board recommended eliminating
the requirement that an importer import more than 50 percent of the
total volume handled and imported in order to qualify as an importer
member. This change allows for additional parties to qualify as an
importer member. The U.S. Department of Agriculture (USDA or
Department) conducted a referendum among eligible producers, handlers,
and importers of watermelons from January 13 through 27, 2014. Seventy-
four percent of those voting in the referendum favored amendment of the
Plan. Additional revisions are made to remove unnecessary language in
the Plan and regulations. Also, a section of the regulations is
clarified and revised accordingly.
DATES: Effective Date: April 1, 2014.
FOR FURTHER INFORMATION CONTACT: Jeanette Palmer, Marketing Specialist,
Promotion and Economics Division, Fruit and Vegetable Program, AMS,
USDA, Stop 0244, 1400 Independence Avenue SW., Room 1406-S, Washington,
DC 20250-0244; telephone: (888) 720-9917 (toll free); Direct line: 202-
720-9915; facsimile: (202) 205-2800; or electronic mail:
[email protected].
SUPPLEMENTARY INFORMATION: This rule is issued under the Watermelon
Research and Promotion Plan [7 CFR part 1210]. The Plan is authorized
under the Watermelon Research and Promotion Act (Act) [7 U.S.C. 4901-
4916].
As part of this rulemaking process, a proposed rule was published
in the Federal Register on February 13, 2013 [78 FR 10104], with a
thirty-day comment period, which closed on March 15, 2013. Sixteen
comments were received by the March 15, 2013, deadline. These comments
were discussed in a second proposed rule and referendum order that was
published in the Federal Register on October 29, 2013 [78 FR 64408].
Pursuant to section 1655 of the Act, a referendum was conducted
among watermelon producers, handlers, and importers to determine
whether they favor amending the Plan to eliminate the requirement that
an importer import more than 50 percent of the total volume handled and
imported in order to qualify as an importer member.
The representative period for establishing voter eligibility for
the referendum was the period January 1 through December 31, 2012.
Section 1653(b) of the Act requires that the amendment be approved by a
majority of watermelon producers, handlers, and importers voting in the
referendum. Producers of 10 acres or more of watermelons, watermelon
handlers, importers of 150,000 or more pounds of watermelons annually,
and importers of less than 150,000 pounds of watermelons annually who
did not apply for and receive reimbursements of assessments during the
representative period were eligible to vote in the referendum.
Additionally, eligible voters had to currently be engaged in the
business of producing, handling or importing watermelons. The
referendum was conducted by mail ballot from January 13, 2014, through
January 27, 2014. Seventy-four percent of those voting in the
referendum favored amendment of the Plan.
Additional revisions are made to remove unnecessary language in
section 1210.363(b) of the Plan and section 1210.602(a) of the
regulations. The language pertains to the conduct of referenda and is
no longer applicable as a result of the Watermelon Research and
Promotion Improvement Act of 1993, amendments to the Watermelon
Research and Promotion Act.
Lastly, section 1210.404(g) of the regulations, which references
importer eligibility requirements, is amended to conform to language
amending section 1210.363(b) of the Plan that has been approved in
referendum.
Executive Order 12866 and Executive Order 13563
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been designated as a ``non-significant
regulatory action'' under section 3(f) of Executive Order 12866.
Accordingly, the Office of Management and Budget (OMB) has waived the
review process.
Executive Order 13175
This action has been reviewed in accordance with the requirements
of Executive Order 13175, Consultation and Coordination with Indian
Tribal Governments. The review revealed that this regulation will not
have substantial and direct effects on Tribal governments and will not
have significant Tribal implications.
Executive Order 12988
In addition, this rule has been reviewed under Executive Order
12988, Civil Justice Reform. The rule is not intended to have
retroactive effect.
The Act allows producers, producer-packers, handlers, and importers
to file a written petition with the Secretary of Agriculture
(Secretary) if they believe that the Plan, any provision of the Plan,
or any obligation imposed in connection with the Plan, is not
established in accordance with the law. In any petition, the person may
request a modification of the Plan or an exemption from the Plan. The
petitioner will have the opportunity for a hearing on the petition.
Afterwards, an Administrative Law Judge (ALJ) will issue a decision. If
the petitioner
[[Page 17850]]
disagrees with the ALJ's ruling, the petitioner has 30 days to appeal
to the Judicial Officer, who will issue a ruling on behalf of the
Secretary. If the petitioner disagrees with the Secretary's ruling, the
petitioner may file, within 20 days, an appeal in the U.S. District
Court for the district where the petitioner resides or conducts
business.
Regulatory Flexibility Act and Paperwork Reduction Act
In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C.
601-612], AMS has examined the economic impact of this rule on the
small producers, handlers, and importers affected by this rule. The
purpose of the RFA is to fit regulatory actions to the scale of
businesses subject to such actions in order that small businesses will
not be unduly or 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 (handlers and
importers) as those having annual receipts of no more than $7 million.
Under these definitions, the majority of the producers, handlers, and
importers affected by this rule would be considered small entities.
Producers of fewer than 10 acres of watermelons are exempt from this
program. Importers of less than 150,000 pounds of watermelons per year
are also exempt.
USDA's National Agricultural Statistics Service (NASS) data for the
2012 crop year indicates that about 306 hundredweight (cwt.) of
watermelons were produced per acre within the United States. The 2012
grower price published by NASS was $13.30 per hundredweight. Thus, the
value of watermelon production per acre in 2012 averaged about $4,070
(306 cwt. x $13.30). At that average price, a producer would have to
farm more than 184 acres to receive an annual income from watermelons
of $750,000 ($750,000 divided by $4,070 per acre equals 184).
Accordingly, as previously noted, a majority of the watermelon
producers would be classified as small businesses.
Based on the Board's data, using an average of the freight on board
(f.o.b.) price of $.181 per pound and the number of pounds handled in
2012, none of the watermelon handlers had receipts greater than the $7
million threshold. Therefore, the watermelon handlers would all be
considered small businesses. A handler would have to ship more than 38
million pounds of watermelons to be considered a large entity
(38,674,033 times $.181 f.o.b. equals $7 million).
According to the Board, there are approximately 950 producers, 230
handlers, and 137 importers who are required to pay assessments under
the program.
Based on the watermelon import assessments received for the year
2012, the United States imported watermelons worth over $237 million.
The largest volume of watermelon imports came from Mexico, which
accounted for 86 percent of the total volume in 2012. Other suppliers
of imported watermelons are Guatemala--at 9 percent, and Honduras--at 2
percent. The remaining 3 percent of imported watermelons came from
Costa Rica, Nicaragua, Canada, Dominican Republic, and Panama.
Based on U.S. Customs and Border Protection (Customs) and Board
data, it is estimated that there are about 201 importers of watermelon.
Not all of these importers are required to pay assessments under the
program. Using 2012 Customs data, all of the importers import less than
$7.0 million worth of watermelon annually. Therefore, all of the
watermelon importers would be considered small entities.
The Board's audit records show import assessments for the calendar
years 2010, 2011, and 2012 at $746,043, $855,890, and $824,897,
respectively. Based on this data, the three-year average of import
assessments for watermelon totals $808,943 ($2,426,830 divided by 3).
This represents approximately 30 percent of the total assessments paid
to the Board. Currently, the Board membership distribution consists of
14 producers, 14 handlers, 8 importers, and 1 public member. A final
rule that increased the number of importers on the Board was published
in the July 18, 2011, Federal Register [76 FR 42009].
The Watermelon Research and Promotion Improvement Act of 1993
amended the Watermelon Research and Promotion Act by adding importer
members to the Board, among other things. At that time the industry
recommended that an individual who both handles and imports watermelons
may vote for importer members and serve as an importer member if that
person imports 50 percent or more of the combined total volume of
watermelons handled and imported by that person. A final rule was
published in the Federal Register on February 28, 1995 [60 FR 10795]
containing this and other amendments to the program.
At the time of this amendment there was a more clear division of
roles among producers, handlers, and importers. In other words, those
individuals who imported watermelons did not cross over into handling
or producing watermelons as much as they do now. Since then, the
industry has become more consolidated. Of the 137 importers required to
pay assessments, 42 also handle domestically produced watermelons and
would be eligible to serve as either a handler or importer member.
At its February 26, 2011, meeting, the Board voted unanimously to
modify the importer eligibility requirements to serve on the Board. The
Board is having difficulty finding eligible importers to serve on the
Board because of the requirement in the Plan that a person who both
imports and handles watermelons be counted as an importer only if that
person imports 50 percent or more of the combined total volume of
watermelons handled and imported by that person. The Board voted to
eliminate the 50 percent or more requirement of the combined total
volume of watermelons handled and imported by a person to allow more
individuals to become eligible to serve on the Board as importer
members. Individuals who both handle and import will be allowed to
choose which part of the industry they wish to represent, regardless of
the volume handled or imported. The industry believes that this change
will increase importer representation on the Board by allowing more
individuals to be eligible to serve. This action may also increase
diversity on the Board.
The Board considered a second alternative, which was to change the
50 percent or more of the combined total volume of watermelons handled
and imported by the person to 25 percent or more of the combined total
volume of watermelons handled and imported by the person. However, the
Board did not choose this option because they wanted to allow more
importers to be eligible for nomination on the Board and found this
purpose better served if they eliminated the percentage requirement
altogether. Eliminating the percentage requirement for the importer
member will allow for smaller importer businesses to become eligible to
serve as importer members on the Board.
Additional revisions are made to remove unnecessary language in
section 1210.363(b) of the Plan and section 1210.602(a) of the
regulations. The language pertains to the conduct of referenda and is
no longer applicable as a result of the Watermelon Research and
Promotion Improvement Act of 1993 amendments to the Watermelon Research
and Promotion Act.
[[Page 17851]]
As well, section 1210.404(g) of the regulations, which references
importer eligibility requirements, is amended to conform to language
amending section 1210.363(b) of the Plan that has been approved in
referendum.
In accordance with the Office of Management and Budget (OMB)
regulation [5 CFR part 1320] that implements the Paperwork Reduction
Act of 1995 [44 U.S.C. Chapter 35], the information collection and
recordkeeping requirements that are imposed by the Plan have been
approved previously and assigned OMB number 0581-0093, except that the
Board member background questionnaire has been approved under OMB
number 0505-0001.
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 programs.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
Additionally, the estimated numbers in the RFA represent the total
universe of watermelon producers, handlers, and importers--not only
those who were eligible to vote in the referendum.
Background
Under the Plan, the Board administers a nationally coordinated
program of research, development, advertising, and promotion designed
to strengthen the watermelon's position in the market place and to
establish, maintain, and expand markets for watermelons. This program
is financed by assessments on producers growing 10 acres or more of
watermelons, handlers of watermelons, and importers of 150,000 pounds
of watermelons or more per year. The Plan specifies that handlers are
responsible for collecting and submitting both the producer and handler
assessments to the Board, reporting their handling of watermelons, and
maintaining records necessary to verify their reports. Importers are
responsible for payment of assessments to the Board on watermelons
imported into the United States through the U.S. Customs and Border
Protection. This action has no impact on the assessment rates paid by
producers, handlers, and importers.
Membership on the Board consists of two producers and two handlers
for each of the seven districts established by the Plan, at least one
importer, and one public member. The Board currently consists of 37
members: 14 producers, 14 handlers, 8 importers, and 1 public member. A
final rule to increase the number of importers on the Board was
published in the July 18, 2011, Federal Register [76 FR 42009].
The Watermelon Research and Promotion Improvement Act of 1993
amended the Watermelon Research and Promotion Act by adding importer
members to the Board, among other things. At that time the industry
recommended that an individual who both handles and imports watermelons
may vote for importer members and serve as an importer member only if
that person imports 50 percent or more of the combined total volume of
watermelons handled and imported by that person. A final rule was
published in the Federal Register on February 28, 1995 [60 FR 10795],
containing this and other amendments to the program. At the time of
this amendment there was a more clear division of roles among
producers, handlers, and importers. In other words, those individuals
who imported watermelons did not cross over into handling or producing
watermelons as much as they do now. Since then, the industry has become
more consolidated. Of the 137 importers required to pay assessments, 42
also handle watermelons and would be eligible to serve as either a
handler or importer member.
At its February 26, 2011, meeting, the Board voted unanimously to
modify the importer eligibility requirements to serve on the Board. The
Board is having difficulty finding eligible importers to serve on the
Board because of the requirement in the Plan that a person who both
imports and handles watermelon is counted as an importer only if that
person imports 50 percent or more of the combined total volume of
watermelons handled and imported by that person. The Board voted to
eliminate the 50 percent or more requirement of the combined total
volume of watermelons handled and imported by a person to allow more
individuals to become eligible to serve on the Board as importers.
Individuals who both handle and import will be allowed to choose which
part of the industry they wish to represent, regardless of the volume
handled or imported. The Board believes that this change will increase
the importer representation on the Board by allowing more individuals
to be eligible to serve. This action may also increase diversity on the
Board.
Accordingly, this rule amends section 1210.321(d) of the Plan to
specify that a person who both imports and handles watermelons may
participate in the nomination process and serve on the Board as either
an importer or handler, but not both. The change to this section was
the only section voted on and approved in the referendum.
Notwithstanding the discussion that appeared in the proposed rule
published at 78 FR 64408, a conforming change is made to section
1210.404(g) in Subpart B--Nominating Procedures of Part 1210. This
section also pertains to importer eligibility requirements for Board
representation.
Pursuant to Section 1654 of the Act, section 1210.363(b) is amended
to remove language that no longer effectuates the purpose of the Act.
Specifically, the sentences concerning counting votes as producer,
handler, or importer votes based on volume are terminated in accordance
with section 1654(a) of the Act. Section 1210.363(b) pertains to
referenda to suspend or terminate the Plan or any provision thereof.
The language removed did not affect the way the amendatory referendum
was conducted or how the results were determined.
A conforming change is made to section 1210.602(a) of Subpart D--
Referendum Procedures of the Plan to remove similar language. This also
no longer effectuates the purpose of the Act.
The Department published the proposal for public comment in the
February 13, 2013, Federal Register [78 FR 10104]. The comment period
ended March 15, 2013. Sixteen comments were received by the deadline.
These comments were discussed in the October 29, 2013, proposed rule
published in the Federal Register [78 FR 64408], which included a
referendum order.
General Findings
As previously mentioned, the Department conducted a referendum
among eligible watermelon producers, handlers, and importers from
January 13, 2014, through January 27, 2014, to determine whether they
favor amending the Plan's importer member requirements to serve on the
Board. The representative period for establishing voter eligibility was
January 1, 2012, through December 31, 2012. Producers of 10 or more
acres of watermelon, watermelon handlers, importers of 150,000 or more
pounds of watermelons annually, and importers who import less than
150,000 pounds of watermelons annually and did not apply for and
receive assessment reimbursements during the representative period were
eligible to vote in the referendum. Additionally, eligible voters had
to be currently engaged in the business of producing, handling or
importing watermelons.
[[Page 17852]]
Seventy-four percent of those voting favored the amendment to the Plan.
After consideration of all relevant matters presented, including
the Board's recommendation, the comments received, and the referendum
results, it is hereby found that amending section 1210.321(d) of the
Plan and section 1210.404 of the regulations will tend to effectuate
the declared policy of the Act. It is further found that the sentences
concerning counting votes as producer, handler, or importer votes in
section 1210.363(b) of the Plan and in section 1210.602(a) of the
regulations in Subpart D--Referendum Procedures, do not effectuate the
declared policy of the Act, and they are hereby terminated.
Additional Finding
Pursuant to 5 U.S.C. 553, it is also found that good cause exists
for not postponing the effective date of this action until 30 days
after publication in the Federal Register because this action needs to
be in effect as soon as possible to allow sufficient time for
completion of the nomination process and appointments for the term of
office beginning January 1, 2015. Further, the amendment was approved
in a referendum of producers, handlers, and importers.
List of Subjects in 7 CFR Part 1210
Administrative practice and procedure, Advertising, Consumer
information, Marketing agreements, Reporting and recordkeeping
requirements, Watermelon promotion.
For the reasons set forth in the preamble, part 1210, Chapter XI of
Title 7 is amended as follows:
PART 1210--WATERMELON RESEARCH AND PROMOTION PLAN
0
1. The authority citation for 7 CFR part 1210 continues to read as
follows:
Authority: 7 U.S.C. 4901-4916 and 7 U.S.C. 7401.
0
2. In Sec. 1210.321, paragraph (d) is revised to read as follows:
Sec. 1210.321 Nomination and selection.
* * * * *
(d) Nominations for importer positions that become vacant may be
made by mail ballot, nomination conventions, or by other means
prescribed by the Secretary. The Board shall provide notice of such
vacancies and the nomination process to all importers through press
releases and any other available means as well as direct mailing to
known importers. All importers may participate in the nomination
process. A person who both imports and handles watermelons may
participate in the nomination process and serve on the Board as either
an importer or handler, but not both.
* * * * *
0
3. In Sec. 1210.363, paragraph (b) is revised to read as follows:
Sec. 1210.363 Suspension or termination.
* * * * *
(b) The Secretary may conduct a referendum at any time and shall
hold a referendum on request of the Board or at least 10 percent of the
combined total of the watermelon producers, handlers, and importers to
determine if watermelon producers, handlers, and importers favor
termination or suspension of this Plan. The Secretary shall suspend or
terminate this Plan at the end of the marketing year whenever the
Secretary determines that the suspension or termination is favored by a
majority of the watermelon producers, handlers, and importers voting in
such referendum who, during a representative period determined by the
Secretary, have been engaged in the production, handling, or importing
of watermelons and who produced, handled, or imported more than 50
percent of the combined total of the volume of watermelons produced,
handled, or imported by those producers, handlers, and importers voting
in the referendum. Any such referendum shall be conducted by mail
ballot.
0
4. In Sec. 1210.404, revise paragraph (g) to read as follows:
Sec. 1210.404 Importer member nomination and selection.
* * * * *
(g) A person who both imports and handles watermelons may
participate in the nomination process and serve on the Board as either
an importer or handler, but not both.
0
5. In Sec. 1210.602, paragraph (a) is revised to read as follows:
Sec. 1210.602 Voting.
(a) Each person who is an eligible producer, handler, or importer
as defined in this subpart, at the time of the referendum and who also
was a producer, handler, or importer during the representative period,
shall be entitled to one vote in the referendum: Provided, That each
producer in a landlord-tenant relationship or a divided ownership
arrangement involving totally independent entities cooperating only to
produce watermelons in which more than one of the parties is a
producer, shall be entitled to one vote in the referendum covering only
that producer's share of the ownership.
* * * * *
Dated: March 11, 2014.
Rex A. Barnes,
Associate Administrator.
[FR Doc. 2014-07024 Filed 3-28-14; 8:45 am]
BILLING CODE 3410-02-P