[Federal Register Volume 61, Number 192 (Wednesday, October 2, 1996)]
[Proposed Rules]
[Pages 51378-51391]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24844]



[[Page 51378]]

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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

7 CFR Part 1214

[FV-96-705PR]


Proposed Kiwifruit Research, Promotion, and Consumer Information 
Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The U.S. Department of Agriculture (Department) is seeking 
comments on an industry-funded research, promotion and consumer 
information program for fresh kiwifruit. An Order for the proposed 
program--the Kiwifruit Research, Promotion, and Consumer Information 
Order--was submitted to the Department by the California Kiwifruit 
Commission. In addition, the New Zealand Kiwifruit Marketing Board 
submitted a partial proposal. Under the proposed Order, producers and 
importers would pay an assessment not to exceed 10 cents per 7-pound 
tray of kiwifruit to the proposed National Kiwifruit Board. Composed of 
producers and importers or exporters, the Board would use the 
assessments collected to conduct a generic program of research, 
promotion, and consumer information to maintain, expand, and develop 
markets for kiwifruit. In addition, in accordance with the Paperwork 
Reduction Act of 1995, this proposed rule specifies the public 
reporting burden for the collection of information involved in 
reporting the necessary information to administer the program.

DATES: Comments must be received by December 2, 1996.

ADDRESSES: Interested persons are invited to submit written comments 
concerning the proposed rule to: Research and Promotion Branch, Fruit 
and Vegetable Division, Agricultural Marketing Service (AMS), USDA, 
P.O. Box 96456, Room 2535-S, Washington, DC 20090-6456, fax (202) 205-
2800. Three copies of all written material should be submitted, and 
they will be made available for public inspection at the Research and 
Promotion Branch during regular business hours. All comments should 
reference the docket number and the date and page number of this issue 
of the Federal Register. Also, pursuant to the Paperwork Reduction Act, 
send comments regarding the accuracy of the burden estimate, ways to 
minimize the burden, including through the use of automated collection 
techniques or other forms of information technology, or any other 
aspect of this collection of information, to the above address.

FOR FURTHER INFORMATION CONTACT: Sonia N. Jimenez, Research and 
Promotion Branch, Fruit and Vegetable Division, AMS, USDA, P.O. Box 
96456, Room 2535-S, Washington, DC 20090-6456, telephone (202) 720-9916 
or (1)(888) 720-9917.

SUPPLEMENTARY INFORMATION: This proposed Order is issued under the 
National Kiwifruit Research, Promotion, and Consumer Information Act, 
Subtitle V of the Federal Agricultural Improvement and Reform Act of 
1996 [Pub. L. 104-127], enacted April 4, 1996, hereinafter referred to 
as the Act.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. It is not intended to have retroactive effect. This 
rule would not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under Sec. 558 of the Act, after 
an Order is implemented, a person subject to the Order may file a 
petition with the Secretary stating that the Order or any provision of 
the Order, or any obligation imposed in connection with the Order, is 
not in accordance with law and requesting a modification of the Order 
or an exemption from the Order. The petitioner is afforded the 
opportunity for a hearing on the petition. After such hearing, the 
Secretary will make a ruling on the petition. The Act provides that the 
district courts of the United States in any district in which a person 
who is a petitioner resides or carries on business are vested with 
jurisdiction to review the Secretary's ruling on the petition, if a 
complaint for that purpose is filed within 20 days after the date of 
the entry of the ruling.

Executive Order 12866 and Regulatory Flexibility Act

    This 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.
    In accordance with the Regulatory Flexibility Act [5 U.S.C. 601 et 
seq.], the Agency is required to examine the impact of the proposed 
rule on small entities.
    The kiwifruit industry initiated this program asking the U.S. 
Congress (Congress) to pass legislation to create a generic program of 
promotion and research for kiwifruit. Congress found that this program 
is vital to the welfare of kiwifruit producers and other persons 
concerned with producing, marketing, and processing kiwifruit.
    This program is intended to: develop and finance an effective and 
coordinated program of research, promotion, and consumer information 
regarding kiwifruit; strengthen the position of the kiwifruit industry 
in domestic and foreign markets and maintain, develop, and expand 
markets for kiwifruit; and to treat domestically produced kiwifruit and 
imported kiwifruit equitably.
    The industry support for the program will be determined during a 
referendum to be conducted by the USDA before the program is 
implemented.
    This program was initiated by industry, industry must approve the 
program in a referendum in advance of its implementation, and industry 
members would serve on the promotion board that would administer the 
program under the Department's supervision. In addition, any person 
subject to the program may file with the Secretary a petition stating 
that the order or any provision is not in accordance with law and 
requesting a modification of the order or an exemption from the order. 
Administrative proceedings were discussed earlier in this proposed 
rule.
    In this program, handlers would be required to collect assessments 
from producers, file reports, and submit assessments to the promotion 
board. Importers would be required to remit to the promotion board 
assessments not collected by the U.S. Customs Service and to file 
reports with the promotion board. In addition, exempt producers and 
importers would be required to file an exemption application. While the 
proposed Order would impose certain recordkeeping requirements on 
handlers and importers, information required under the proposed Order 
could be compiled from records currently maintained. The forms require 
the minimum information necessary to effectively carry out the 
requirements of the program, and their use is necessary to fulfill the 
intent of the Act. The estimated cost in providing information to the 
promotion board by the 760 respondents would be $7,842.50 or $10.32 per 
respondent per year.
    The Department would oversee the program operations and, if the 
program is implemented, every 6 years would conduct a referendum to 
determine whether the kiwifruit industry supports continuation of the 
program.
    There are approximately 650 producers, 45 importers, and 65

[[Page 51379]]

handlers of kiwifruit that would be covered by the program. Small 
agricultural service firms, which would include the handlers and 
importers who would be covered under the Order, have been defined by 
the Small Business Administration (SBA) [13 CFR 121.601] as those whose 
annual receipts are less than $5 million and small agricultural 
producers, those who would be required to pay assessments, as those 
having annual receipts of $500,000. Only one handler has been 
identified to have $5 million in annual sales. In addition, there are 
10 producers at or over the $500,000 annual sales receipts threshold. 
The Department does not have specific information regarding the size of 
importers. However, it could be concluded that the majority of 
kiwifruit producers and importers may be classified as small entities.
    The Department is aware of kiwifruit producers in California, 
Oregon, Pennsylvania, South Carolina, and importers that import 
kiwifruit from Chile, New Zealand, and Italy. The Department believes 
that these individuals would include majority of the producers and 
importers that would be covered under the program.
    California is the source for practically all of the kiwifruit 
produced in the United States. The California kiwifruit industry 
consists of approximately 600 producers and 65 handlers. Production 
rose by 119 percent between 1984 and 1994, increasing from 18,000 tons 
to 34,800 tons. In the same period, the value of production increased 
by only 4 percent.
    Most U.S. kiwifruit is utilized fresh. Fresh utilization increased 
by 219 percent between 1984 and 1994, growing from 11,700 tons to 
37,500 tons. The season average price during the same period fell by 54 
percent, declining from $1,000 per ton to $491 per ton. Exports 
accounted for about 29 percent of U.S. fresh utilization during that 
period.
    Between 1992 and 1994, the average annual production per producer, 
including kiwifruit for processing, was 22,365 7-pound trays of 
kiwifruit. The average price was $376 per ton, giving an average return 
of about $29,000 per producer per year. The average value of total 
production (fresh and processed) per year was $16.3 million. A typical 
f.o.b. price during this period was $7.78 per tray, and the average 
amount shipped per handler was about 190,176 trays, yielding an average 
annual revenue per handler of $1.5 million. U.S. importers handled an 
average of 172,163 trays per year per importer. During this period, the 
average value of total imports per year was $17.1 million (f.o.b. 
country of origin). The majority of kiwifruit came from Chile, with the 
remaining coming from New Zealand and Italy.
    The proposed kiwifruit Order would authorize assessment fees on 
producers (to be collected by first handlers) and on importers 
(collected by the U.S. Customs Service) of up to 10 cents per 7-pound 
tray. The board, which will be composed of kiwifruit producer, 
importers, and possibly, exporters, must recommend the assessment rate, 
which is subject to oversight by the Secretary, as are the other rules 
and regulations. At the maximum rate of assessment, the promotion board 
would collect $2.1 million to administer the program. Assessments on 
domestic production are expected to represent 60 percent of the income 
under the program.
    The effect of the assessments will depend on the actual rate 
recommended by the promotion board. At the maximum rate, it is expected 
that the effect on producers would be approximately 8 percent of their 
average return. However, this rule exempts producers of less than 500 
pounds of kiwifruit a year, importers of less than 10,000 pounds a 
year, and kiwifruit sold for processing and sold directly to consumers. 
Furthermore, under the proposed program, the promotion board could 
authorize different reporting schedules based on different marketing 
practices. This could be of benefit specially to small businesses who 
could have a less frequent reporting period diminishing the reporting 
burden for those businesses.
    The Department would keep all these individuals informed throughout 
the program implementation and referendum process to ensure that they 
are aware of and are able to participate in the program implementation 
process. In addition, trade associations and related industry media 
would receive news releases and other information regarding the 
implementation and referendum process. Furthermore, all the information 
would be available through e-mail.
    If the program is implemented, the promotion board would develop 
guidelines for compliance with the program.
    In addition, the kiwifruit industry would nominate individuals to 
serve as members of the promotion board. These individuals would 
recommend the assessment rate, programs and projects, a budget, and any 
other rules and regulations that might be necessary for the 
administration of the program. The USDA would ensure that the nominees 
represent the kiwifruit industry as specified in the Act.
    There is a federal marketing order program for kiwifruit in 
California which is administered by the Kiwifruit Administrative 
Committee (KAC), under USDA supervision. KAC is composed of California 
producers. The marketing order regulations for grade, size, maturity, 
and containers are designed to assure consumers consistently good 
quality California kiwifruit. The marketing order and its regulations 
allow small farmers to compete effectively in an increasingly 
competitive marketplace. Under the marketing order handlers are 
required to submit information pertaining to and pay assessments on 
kiwifruit shipments. The assessment rate recommended by the KAC is 
derived by dividing anticipated expenses by expected shipments of 
kiwifruit. Because that rate is applied to actual shipments, it must be 
established at a rate which will produce sufficient income to pay the 
KAC's expected expenses. The 1995-96 assessment rate was set at 1.5 
cents per tray or tray equivalent of kiwifruit. The 1994-95 rate of 
assessment was 1.0 cent per tray or tray equivalent of kiwifruit. Each 
handler pays an average of $2,000 per year in assessments. The 
estimated reporting burden per year on individual handlers is estimated 
at 4.2 hours or $42.00 per handler under the marketing order.
    The California Kiwifruit Commission (CKC) administers a California 
state program for kiwifruit. The CKC is composed of kiwifruit 
producers, packers, and handlers. In 1995-96 it is estimated that 
producers would pay $1,407,000 in assessments at a rate of 17 cents per 
kiwifruit tray or tray equivalent. Handlers collect the assessments and 
remit the money to the CKC.
    The collection of information required under the proposed order for 
the research and promotion program would be similar to the marketing 
order program. However, the KAC and the promotion board would keep 
their information separate to comply with confidentiality requirements 
under the programs. Furthermore, using the same source of information 
will reduce the burden on producers and handlers of all sizes.
    The CKC is currently participating in a voluntary promotional 
program with Chilean kiwifruit growers to jointly advertise kiwifruit 
in the United States. The CKC is authorized under California state law. 
This program, however, does not provide enough resources to be as 
effective as a national generic program could be. In addition, other 
importing countries and private companies spend considerable amounts of 
resources in

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kiwifruit advertising. The purpose of this proposed program is not to 
restrict the individual promotions but to add a generic promotion 
program for kiwifruit where industry segments pull together resources 
for the benefit of the whole industry.
    The absence of a generic program for kiwifruit may have a negative 
impact on the industry because other commodity groups, specifically for 
competing fruits, conduct promotion activities to maintain and expand 
their markets. The kiwifruit industry would be at a disadvantage 
because individual producers, handlers, and importers would not be able 
to implement and finance such a program without cooperative action. In 
addition, Agricultural Issues Forum, a group of 15 California commodity 
organizations, conducted a study in mid-1995 and reported in early 1996 
that consumers strongly support the concept of farmers working together 
to promote their products, conduct product research, engage in consumer 
education programs, and set quality standards and inspect products. 
Consumers said that they benefited from these activities and were more 
inclined to buy those products. Eighty-one percent of the farmers 
surveyed said that mandated programs were either very important or 
important in promoting products. The survey was conducted among 
farmers, public policy leaders, consumers, retailers, and allied 
industries.
    While we have performed this Initial Regulatory Flexibility 
Analysis regarding the impact of this proposed rule on small entities, 
in order to have all the data necessary for a more comprehensive 
analysis of the effects of this rule on small entities, we are inviting 
comments concerning potential effects. In particular, we are interested 
in determining the number and kind of small entities that may incur 
benefits or costs from implementation of this proposed rule and 
information on the expected benefits or costs.

Paperwork Reduction Act

    In accordance with the Office of Management and Budget (OMB) 
regulation [5 CFR Part 1320] which implements the Paperwork Reduction 
Act of 1995 [44 U.S.C. Chapter 35], the information collection and 
recordkeeping requirements that may be imposed by this order would be 
submitted to OMB for approval. Those requirements would not become 
effective prior to OMB review.
    Title: National Research, Promotion, and Consumer Information 
Programs.
    OMB Number: 0581-0093.
    Expiration Date of Approval: October 31, 1997.
    Type of Request: Revision of a currently approved information 
collection for research and promotion programs.
    Abstract: The information collection requirements in this request 
are essential to carry out the intent of the Act.
    While the proposed Order would impose certain recordkeeping 
requirements on handlers and importers, information required under the 
proposed Order could be compiled from records currently maintained. The 
proposed 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 
maintained by handlers under the federal marketing order program in 
California and the California Kiwifruit Commission. The information 
needed would be taken from financial reports or sales receipts already 
maintained.
    The forms require the minimum information necessary to effectively 
carry out the requirements of the program, and their use is necessary 
to fulfill the intent of the Act. 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 promotion board. 
The forms would be simple, easy to understand, and place as small a 
burden as possible on the person required to file the information.
    Collecting information monthly coincides with normal business 
practices. Collecting information less frequently would hinder the 
promotion board from effectively carrying out the provisions of its 
program. Requiring reports less frequently than monthly would impose 
additional recordkeeping requirements by requiring information from 
several months to be consolidated prior to filling out the form rather 
than just copying end-of-month figures already available onto the 
forms. The timing and frequency of collecting information is intended 
to meet the needs of the industry while minimizing the amount of work 
necessary to fill out the required reports. 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 handlers who are subject to or exempted from the 
provisions of the Act. Therefore, there is no practical method for 
collecting the required information without the use of these forms.
    The estimated cost in providing information to the promotion board 
by the 760 respondents would be $7,842.50 or $10.32 per respondent. 
This total has been estimated by multiplying 784.25 (total burden hours 
requested) by $10.00 per hour, a sum deemed to be reasonable should the 
respondents be compensated for their time.
    Information collection requirements that are included in this 
proposal include:
    (1) A periodic report by each handler who handles kiwifruit.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average .50 hours per each handler 
reporting on kiwifruit handled.
    Respondents: Handlers.
    Estimated Number of Respondents: 65.
    Estimated Number of Responses per Respondent: 12.
    Estimated Total Annual Burden on Respondents: 390 hours.
    (2) A periodic report by each importer who imports kiwifruit.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average .25 hours per each importer 
reporting on kiwifruit imported.
    Respondents: Importers.
    Estimated Number of Respondents: 45.
    Estimated Number of Responses per Respondent: 12.
    Estimated Total Annual Burden on Respondents: 135 hours.
    (3) An exemption application for producers and importers of 
kiwifruit producing less than 500 pounds and importing less than 10,000 
pounds of kiwifruit a year respectively, persons which sell directly to 
consumers or sell kiwifruit for processing who will be exempt from 
assessments and reporting requirements.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average .25 hours per response for each 
exempt producer and importer.
    Respondents: Exempt producers and importers.
    Estimated Number of Respondents: 50.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 12.5 hours.
    (4) A referendum ballot to be used to determine whether producers 
and importers covered by the Order favor implementation or continuance 
of the Order.
    Estimate of Burden: Public reporting burden for this collection of 
information

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is estimated to average .25 hours per response for each producer and 
importer.
    Respondents: Producers and importers.
    Estimated Number of Respondents: 700.
    Estimated Number of Responses per Respondent: 1 every 6 years 
(.16).
    Estimated Total Annual Burden on Respondents: 28 hours.
    (5) Nominations.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average .5 hours per response.
    Respondents: Producers and importers.
    Estimated number of Respondents: 700.
    Estimated Number of Responses per Respondent: 1 every 3 years 
(.33).
    Estimated Total Annual Burden on Respondents: 115.5 hours.
    (6) A request for refund of assessments collected by Customs for 
exempt importers.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average .25 hours per response for each 
exempt importer requesting a refund of assessments collected by 
Customs.
    Respondents: Exempt importers.
    Estimated number of Respondents: 5.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 1.25 hours.
    (7) A background questionnaire for nominees.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average .5 hours per response for each 
producer, importer, and public member nominated to the Board.
    Respondents: Producers, importers, and public member
    Estimated Number of Respondents: 22 for the initial nominations to 
the Board and approximately 12 respondents annually thereafter.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 22 hours for the 
initial nominations to the Board and 12 hours annually thereafter.
    (8) 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 .5 hours per recordkeeper 
maintaining such records.
    Recordkeepers: Handlers and importers.
    Estimated number of Recordkeepers: 160.
    Estimated Total Recordkeeping Hours: 80 hours.
    Comments are invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of functions of the 
Order and the Department's oversight of the program, including whether 
the information will have practical utility; (b) the accuracy of the 
AMS's estimate of the burden of the proposed collection of information 
including the validity of the methodology and assumption used; (c) ways 
to enhance the quality, utility, and clarity of the information to be 
collected; and (d) ways to minimize the burden of the collection of 
information on those who are to respond, including the use of 
appropriate automated, electronic, mechanical, or other technological 
collections techniques or other forms of information technology.
    Comments should reference OMB No. 0581-0093, the docket number, and 
the date and page number of this issue of the Federal Register. 
Comments should be sent to Sonia N. Jimenez at the address listed above 
by December 2, 1996. All comments received will be available for public 
inspection during regular business hours at the same address. All 
responses to this notice will be summarized and included in the request 
for OMB approval.

Background

    The Kiwifruit Research, Promotion, and Consumer Information Act 
(Act) authorizes the Secretary of Agriculture (Secretary) to establish 
a national kiwifruit research, promotion, and consumer information 
program. The program would be funded by an assessment levied on 
producers and importers not to exceed 10 cents per 7-pound tray of 
kiwifruit. Kiwifruit sold directly to a consumer by a producer for a 
purpose other than resale and domestic and imported kiwifruit for 
processing are exempt from assessments.
    Assessments would be used to pay for: research, promotion, and 
consumer information; administration, maintenance, and functioning of 
the Board; and expenses incurred by the Secretary in implementing and 
administering the Order, including referendum costs.
    The first handler would be responsible for the collection of 
assessments from the producer and payment to the Board. Handlers would 
be required to maintain records for each producer for whom kiwifruit is 
handled, including kiwifruit produced by the handler. In addition, 
handlers would be required to file reports regarding the collection, 
payment, or remittance of the assessments. All information obtained 
through handler reports would be kept confidential.
    The U.S. Customs Service (Customs) would collect assessments on 
imported kiwifruit and would remit those assessments to the Board for a 
fee.
    The Act requires the Department to conduct a referendum during the 
60-day period preceding the proposed Order's effective date. Kiwifruit 
producers of 500 pounds or more and importers of 10,000 pounds or more 
annually would vote in the referendum to determine whether they favor 
the Order's implementation. The proposed Order must be approved by a 
majority of eligible producers and importers voting in the referendum, 
and producers and importers favoring approval must produce and import 
more than 50 percent of the total volume of kiwifruit produced and 
imported by persons voting in the referendum. Subsequent referenda 
would be conducted every 6 years after the program is in effect or when 
requested by 30 percent of kiwifruit producers and importers covered by 
the Order.
    The Act provides for the submission of proposals for a kiwifruit 
research, promotion, and consumer information Order by industry 
organizations or any other interested person affected by the Act. The 
Act requires that such a proposed Order provide for the establishment 
of a National Kiwifruit Board. The Board would be composed of 11 voting 
members: 6 producers, 4 importers or exporters, and 1 public member. 
Each member shall have an alternate. Members will serve a three-year 
term of office. No member may serve more than two consecutive three-
year terms.
    The Act provides that any person subject to the Order may file with 
the Secretary a petition stating that the Order or any of its 
provisions is not in accordance with law and requesting a modification 
of the Order or an exemption from the Order. The individual would be 
given the opportunity to a hearing on the petition.
    The Department issued a news release on May 6, 1996, requesting 
proposals for an initial Order or portions of an initial Order by May 
17, 1996. A second news release, extending the deadline for submission 
of proposals to June 3, 1996, was issued on May 24, 1996.
    An entire proposed Order was submitted by the California Kiwifruit 
Commission (Commission). The Commission is an industry group created by 
the State of California to promote California kiwifruit. In

[[Page 51382]]

addition, a partial proposal was submitted by the New Zealand Kiwifruit 
Marketing Board (NZKMB). The NZKMB represents all New Zealand exporters 
of kiwifruit into the United States.
    In addition to minor editorial changes, the Department modified the 
Commission's proposed text by: adding the power and duty to investigate 
violations of the Act and Order; deleting a definition for industry 
information because it is not authorized under the Act; revising 
definitions to make them in accordance with the Act; clarifying that 
the collection of assessments from imports would be performed through 
the U.S. Customs Service only; clarifying that the promotion board 
would have complete control over voluntary contributions made to the 
promotion board; clarifying that the assessment rate may only be 
changed prior to a fiscal year; clarifying that the assessment rate may 
only be changed by regulation rather than in the budget; and adding a 
provision regarding federal debt collection procedures. The Commission 
also submitted referendum procedures. The referendum procedures will be 
published separately as a proposed rule in the Federal Register.
    The proposed Order submitted by the Commission is summarized as 
follows:
    Sections 1214.1 through 1214.19 of the proposed Order define 
certain terms, such as kiwifruit, handler, producer, and importer, 
which are used in the proposed Order.
    Sections 1214.30 through 1214.39 include provisions relating to the 
establishment, adjustment, and membership; nominations; appointment; 
terms of office; vacancies; reimbursement; powers; and duties of the 
Board.
    The Board would be the body organized to administer the Order 
through the implementation of programs, plans, projects, budgets, and 
contracts to promote and disseminate information about kiwifruit, under 
the supervision of the Secretary. Further, the Board would be 
authorized to incur expenses necessary for the performance of its 
duties and to set a reserve fund. Sections 1214.40 and 1214.50 provide 
information on these activities.
    Sections 1214.51 through 1214.53 would authorize the collection of 
assessments, specify who pays them and how, and specifies persons who 
would be exempt from paying the assessment. In addition, it would 
prohibit use of funds to influence government policy or action.
    The assessment rate may not exceed 10 cents per 7-pound tray of 
kiwifruit. The actual rate would be recommended by the Board and 
approved by the Secretary through regulation. Direct sales to consumers 
by a producer and kiwifruit for processing are exempt from assessments.
    The assessment sections also outline the procedures to be followed 
by handlers and importers for remitting assessments; establish a 1.5 
percent per month interest charge for unpaid or late assessments; and 
provide for refunds of assessments paid by importers who import less 
than 10,000 pounds of kiwifruit a year.
    Sections 1214.60 through 1214.62 concern reporting and 
recordkeeping requirements for persons subject to the Order and protect 
the confidentiality of information obtained from such books, records, 
or reports.
    Sections 1214.70 through 1214.73 describe the rights of the 
Secretary, authorize the Secretary to suspend or terminate the Order 
when deemed appropriate, and prescribe proceedings after suspension or 
termination.
    Sections 1214.74 through 1214.77 are miscellaneous provisions 
including the provisions involving personal liability of Board members 
and employees; handling of patents, copyrights, inventions, and others; 
amendments to the Order; and separability of Order provisions.
    The proposal from the NZKMB addresses importer and exporter 
representation on the Board and the use of assessments to fund export 
activities that would directly compete with exporting countries 
promotional activities.
    The NZKMB proposed that the Secretary ensure that at least two of 
the four importer/exporter member seats be selected from nominees 
nominated by importers and/or exporters of New Zealand kiwifruit. As an 
alternative it proposed that the Secretary include as a primary 
consideration in the allocation of four importer/exporter member seats, 
the relative expenditure on promotion and marketing of kiwifruit in the 
United States over 10 years by the kiwifruit importer/exporters of the 
various countries of origin of the imported kiwifruit.
    In addition, the NZKMB proposed that the Secretary ensure that all 
programs developed and implemented by the Board be intended to promote 
kiwifruit consumption in the U.S. domestic market only and no 
assessments be used to promote kiwifruit in competing foreign markets.
    In addition to these proposals, the Department has received letters 
from three interested parties regarding the implementation of the 
Order. Since these letters do not include proposals for a program, they 
will be considered during the comment period of this proposed rule.
    The Department will analyze all written views received to date as 
well as written comments on the two proposals published below before 
issuing a final Order.

List of Subjects in 7 CFR Part 1214

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Kiwifruit, Promotion, Reporting and 
recordkeeping requirements.
    The proposals set forth below have not received the approval of the 
Secretary.
    For the reasons set forth in the preamble, it is proposed that 
Title 7 of Chapter XI of the Code of Federal Regulations be amended as 
follows:

Proposal I

    1. Part 1214 is added to read as follows:

PART 1214--KIWIFRUIT RESEARCH, PROMOTION AND CONSUMER INFORMATION 
ORDER

Subpart A--Kiwifruit Research, Promotion, and Consumer Information 
Order

Definitions

Sec.
1214.1  Act.
1214.2  Consumer information.
1214.3  Department.
1214.4  Exporter.
1214.5  Fiscal year.
1214.6  Handler.
1214.7  Importer.
1214.8  Kiwifruit.
1214.9  Marketing.
1214.10  Part and subpart.
1214.11  Person.
1214.12  Processing.
1214.13  Producer.
1214.14  Programs, plans, and projects.
1214.15  Promotion.
1214.16  Promotion Board.
1214.17  Research.
1214.18  Secretary.
1214.19  United States.

National Kiwifruit Board

1214.30  Establishment, adjustment, and membership.
1214.31  Nominations.
1214.32  Acceptance.
1214.33  Appointment.
1214.34  Term of office.
1214.35  Vacancies.
1214.36  Procedure.
1214.37  Compensation and reimbursement.
1214.38  Powers.
1214.39  Duties.

Promotion, Research, and Consumer Information and Industry Information

1214.40  Programs, plans, and projects.

Expenses and Assessments

1214.50  Budget and expenses.

[[Page 51383]]

1214.51  Assessments.
1214.52  Exemption from assessment.
1214.53  Influencing governmental action.

Reports, Books, and Records

1214.60  Reports.
1214.61  Books and records.
1214.62  Confidential treatment.

Miscellaneous

1214.70  Right of the Secretary.
1214.71  Suspension or termination.
1214.72  Proceedings after termination.
1214.73  Effect of termination or amendment.
1214.74  Personal liability.
1214.75  Patents, copyrights, inventions, publications, and product 
formulations.
1214.76  Amendments.
1214.77  Separability.

Subpart B--Rules and Regulations

Definitions

Sec.
1214.100  Terms defined.

Nomination Procedures

1214.110  Nominations.
1214.111  Mail balloting.
1214.112  Appointment.

General

1214.115  Financial statements.

Assessments

1214.120  Payment of assessments.
1214.121  Exemption procedures.

Reports

1214.125  Reports.

Miscellaneous

1214.130  OMB control numbers.

    Authority: 7 U.S.C. 7461-7473.

Subpart A--Kiwifruit, Research, Promotion, and Consumer Information 
Order

Definitions


Sec. 1214.1   Act.

    Act means the National Kiwifruit Research, Promotion, and Consumer 
Information Act, subtitle D of title V of the Federal Agricultural 
Improvement and Reform Act of 1996, Public Law 104-127, 7 U.S.C. 7461-
7473, and any amendments thereto.


Sec. 1214.2  Consumer information.

    Consumer information means any action taken to provide information 
to, and broaden the understanding of, the general public regarding the 
consumption, use, nutritional attributes, and care of kiwifruit.


Sec. 1214.3  Department.

    Department means the United States Department of Agriculture.


Sec. 1214.4  Exporter.

    The term exporter means any person outside the United States who 
exports kiwifruit into the United States.


Sec. 1214.5  Fiscal year.

    Fiscal year means the 12-month period from October 1 to September 
30 each year, or such other period as recommended by the Promotion 
Board and approved by the Secretary.


Sec. 1214.6  Handler.

    Handler means any person, excluding a common carrier, engaged in 
the business of buying and selling, packaging, marketing, or 
distributing kiwifruit as specified in the Order.


Sec. 1214.7  Importer.

    Importer means any person who imports kiwifruit into the United 
States.


Sec. 1214.8  Kiwifruit.

    Kiwifruit means all varieties of fresh kiwifruit grown in or 
imported into the United States.


Sec. 1214.9  Marketing.

    Marketing means to sell or otherwise dispose of kiwifruit into 
interstate, foreign, or intrastate commerce by buying, marketing, 
distribution, or otherwise placing kiwifruit into commerce.


Sec. 1214.10  Part and subpart.

    Part means this kiwifruit research, promotion, and consumer 
information order and all rules and regulations and supplemental orders 
issued thereunder, and the term subpart means the kiwifruit research, 
promotion, and consumer information order.


Sec. 1214.11  Person.

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


Sec. 1214.12  Processing.

    Processing means kiwifruit that are commercially canned, fermented, 
distilled, extracted, preserved, ground, crushed or processed in such 
manner as the Promotion Board, with the approval of the Secretary, may 
determine.


Sec. 1214.13  Producer.

    Producer means any person who grows kiwifruit in the United States 
for sale in commerce.


Sec. 1214.14  Programs, plans, and projects.

    Programs, plans, and projects means promotion, research, and 
consumer information plans, studies, projects, or programs conducted 
pursuant to this part.


Sec. 1214.15  Promotion.

    Promotion means any action taken under this Order including paid 
advertising, to present a favorable image for kiwifruit to the general 
public for the purpose of improving the competitive position of 
kiwifruit and stimulating the sale of kiwifruit.


Sec. 1214.16  Promotion Board.

    Promotion Board means the administrative body referred to as the 
National Kiwifruit Board or otherwise named Kiwifruit Promotion Board 
or Promotion Board established under Sec. 1214.30.


Sec. 1214.17  Research.

    Research means any type of research relating to the use, 
nutritional value, and marketing of kiwifruit conducted for the purpose 
of advancing the image, desirability, marketability, or quality of 
kiwifruit.


Sec. 1214.18  Secretary.

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


Sec. 1214.19  United States.

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

National Kiwifruit Board


Sec. 1214.30  Establishment, adjustment, and membership.

    (a) Establishment of National Kiwifruit Board. There is hereby 
established a National Kiwifruit Board of 11 members appointed by the 
Secretary as follows:
    (1) Six members who are producers (or their representatives) and 
who are not exempt from an assessment.
    (2) Four members who are importers (or their representatives) and 
who are not exempt from an assessment, or are exporters (or their 
representatives).
    (3) One member appointed from the general public.
    (b) Adjustment of membership.
    (1) Subject to the 11 member limit, the Secretary may adjust 
membership on the Promotion Board to accommodate changes in production 
and import levels of kiwifruit, so long as producers comprise not less 
than 51 percent of the membership of the Board.
    (2) At least every five years, and not more than every three years, 
the Promotion Board shall review changes in the volume of domestic and 
imported

[[Page 51384]]

kiwifruit production. If the annual kiwifruit production and imports 
over the preceding four years, indicate that such changes in production 
and import levels have occurred warranting reapportionment, the 
Promotion Board shall recommend to the Secretary reapportionment of 
Board membership subject to the 51 percent requirement.
    (3) In determining the volume of kiwifruit produced in the United 
States or imported into the United States for purposes of this section, 
the Promotion Board and the Secretary shall:
    (i) Only consider kiwifruit produced or imported by producers and 
importers, respectively, as those terms are defined in Sec. 1214.13 and 
1214.7; and
    (ii) Use the information received by the Promotion Board under 
Sec. 1214.60, and data published by the California Kiwifruit 
Commission, U.S. Department of Commerce import statistics and other 
government kiwifruit production data.
    (c) Appointment and nomination--
    (1) Appointment. The Secretary shall appoint the members of the 
Promotion Board from nominations submitted in accordance with this 
section.
    (i) Producers shall be appointed from individuals nominated by 
producers.
    (ii) Importers and exporters shall be appointed from individuals 
nominated by importers and/or exporters.
    (iii) The public representative shall be appointed from nominations 
submitted by the Promotion Board.
    (iv) If producers, importers, or exporters fail to nominate 
individuals for appointment, the Secretary shall appoint members in the 
manner specified in Sec. 1214.31. If the Promotion Board fails to 
nominate a public representative, such member may be appointed by the 
Secretary without a nomination.
    (2) The Secretary shall appoint an alternate for each member of the 
Promotion Board. Alternates shall:
    (i) Be appointed in the same manner for whom such individual is an 
alternate; and
    (ii) Serve on the Promotion Board as a voting member if such member 
is absent or disqualified.
    (3) For purposes of the provisions of this section relating to the 
appointment of producers and importers or exporters to serve on the 
Promotion Board, the term producer, importer, or exporter refers to any 
person who is a producer, importer, or exporter, respectively, or if 
the producer, importer, or exporter is an entity other than an 
individual, an individual who is an officer or employee of such 
producer, importer, or exporter. Persons who qualify to serve as either 
a producer member or an importer member must select the industry group 
that they want to represent.


Sec. 1214.31  Nominations.

    All nominations for appointments to the Promotion Board under 
Sec. 1214.33 shall be made as follows:
    (a) As soon as practicable after this subpart becomes effective, 
nominations for appointment to the initial Promotion Board shall be 
obtained from producers and importers or exporters by the Secretary. In 
any subsequent year in which an appointment to the Promotion Board is 
to be made, nominations for positions whose terms will expire at the 
end of that year shall be obtained from producers, and as appropriate, 
importers or exporters, and certified by the Promotion Board and 
submitted to the Secretary by May 1 of such year, or such other date as 
approved by the Secretary.
    (b) Nominations shall be made through mail ballot in accordance 
with procedures prescribed in this section.
    (c) Except for initial Promotion Board members, whose nomination 
process will be initiated by the Secretary, the Promotion Board shall 
issue a call for nominations by March 1 of each year in which 
nominations for an appointment to the Promotion Board is to be made. 
The call shall include, at a minimum, the following information:
    (1) A list by importer/exporter and producer category of the 
vacancies for which nominee may be submitted.
    (2) The date by which the names of nominees shall be submitted for 
consideration to be in compliance with paragraph (a) of this section.
    (3) Nominations for each position shall be made by mail. Nomination 
forms shall be mailed to all known producers, importers in the United 
States, and kiwifruit exporters and/or exporter organizations where 
possible. The nomination form shall have attached to it the 
requirements of the position, term, eligibility requirements, and the 
Department's equal opportunity policy. Except with respect to 
nominations for the initial appointments to the Promotion Board, 
publicizing the nomination process and vacant positions shall be the 
responsibility of the Promotion Board.
    (4) All producers, importers within the United States, and 
exporters may participate in the nomination process. However, if a 
producer is engaged in the production of kiwifruit and is also an 
importer, such person's participation shall be limited to one vote. The 
following nomination process shall be followed:
    (i) Nomination forms shall be sent to all known producers, 
importers, or exporters. The Promotion Board shall determine the 
eligibility and willingness to serve of all names of the individuals 
listed on the nomination forms returned to the Promotion Board. The 
names of the individuals who are eligible and willing to serve will be 
listed on a selection ballot. The selection ballot will be sent to all 
known producers and importers for final selection of the nominees to be 
sent to the Secretary. Exporters will not be sent a selection ballot.
    (ii) Each nominee shall meet the qualifications set forth in this 
part.
    (iii) If a producer nominee is engaged in the production of 
kiwifruit and is also an importer, such individual shall participate 
within the category that such individual so elects in writing to the 
Promotion Board and such election shall remain controlling until 
revoked in writing to the Promotion Board.
    (d) When producers or importers are voting for nominees to the 
Promotion Board the following provisions shall apply:
    (1) Voting for any open position shall be on the basis of one vote 
per eligible voter.
    (2) Producers will vote for producer positions and importers will 
vote for importer and exporter positions only.
    (3) Whenever the producers or importers are choosing nominees for 
one open position on the Promotion Board, the proposed nominee with the 
highest and second highest number of votes cast shall be the nominees 
submitted to the Secretary.
    (4) Each open position will be a separate position. Alternate and 
member selections will also be held as separate positions. A person 
shall only be nominated for one open member or alternate position.
    (5) Voters shall certify on their ballots as to their eligibility. 
Such certification may be subject to verification.
    (e) The Secretary may reject any nominee submitted. If there are 
insufficient nominees from which to appoint members to the Promotion 
Board as a result of the Secretary's rejecting such nominees, 
additional nominees shall be submitted to the Secretary under the 
procedures set out in this section.
    (f) Whenever producers or importers fail to nominate individuals 
for an open position on the Promotion Board under the preceding 
provisions of this section the Secretary may appoint members in such 
manner as the Secretary determines appropriate.


Sec. 1214.32  Acceptance.

    Each individual nominated for membership on the Promotion Board

[[Page 51385]]

shall qualify by filing a written acceptance with the Secretary at the 
time of nomination. Such acceptance shall represent the nominee's 
willingness to serve if selected and to operate in accordance with the 
provisions of this part.


Sec. 1214.33  Appointment.

    From the nominations made pursuant to this subsection, the 
Secretary shall appoint the members and alternates.


Sec. 1214.34  Term of office.

    (a) The members and alternates of the Promotion Board shall serve 
for terms of three years, except that five members and their alternates 
appointed to the initial Promotion Board shall be appointed for a term 
of two years and six members and their alternates shall be appointed 
for a term of three years.
    (b)(1) Except with respect to terms of office of the initial 
Promotion Board, the term of office for each member and alternate of 
the Promotion Board shall begin on July 1 or such other date that may 
be approved by the Secretary.
    (2) The term of office for the initial Promotion Board shall begin 
immediately following appointment by the Secretary, except that time in 
the interim period from appointment until the following July 1, or such 
other date that is the generally applicable beginning date for terms 
under paragraph (b)(1) of this section approved by the Secretary, shall 
not count toward the tenure limitation of office.
    (c) Promotion Board members shall serve during the term of office 
for which they are appointed and have qualified, and until their 
successors are appointed and have qualified.
    (d)(1) No member shall serve more than two successive three-year 
terms, except as provided in paragraph (d)(2) of this section and 
Sec. 1214.35(b)(1). Members serving two consecutive three-year terms 
are eligible to serve as alternates, and alternates serving two 
consecutive three-year terms are eligible to serve two three-year terms 
as members.
    (2) Those members serving initial terms of two years may serve one 
successive three-year term.


Sec. 1214.35  Vacancies.

    (a) To fill any vacancy occasioned by the death, removal, 
resignation, or disqualification of any member of the Promotion Board, 
the alternate of that member shall automatically assume the position of 
said member. If an alternate member position becomes vacant, the 
Secretary shall appoint an alternate member in the manner specified in 
Sec. 1214.31. Each successor appointment shall be for the remainder of 
the term vacated. A vacancy will not be required to be filled if the 
unexpired term is less than six months.
    (b)(1) No successor appointed to a vacated term of office shall 
serve more than two successive three-year terms on the Promotion Board, 
except as provided in paragraph (b)(2)(ii) of this section.
    (2)(i) Any successor serving longer than one year may serve one 
successive three-year term.
    (ii) Any successor serving one year or less may serve two 
successive three-year terms.
    (c) If a member of the Promotion Board consistently refuses to 
perform the duties of a member of the Promotion Board, or if a member 
of the Promotion Board is engaged in acts of dishonesty or willful 
misconduct, the Promotion Board may recommend to the Secretary that the 
member be removed from office. If the Secretary finds the 
recommendation of the Promotion Board shows adequate cause, the 
Secretary shall remove such member from office. Further, without 
recommendation of the Promotion 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.


Sec. 1214.36  Procedure.

    (a) At a properly convened meeting of the Promotion Board, a 
majority of the members shall constitute a quorum.
    (b) Each member of the Promotion Board will be entitled to one vote 
on any matter put to the Promotion Board. At assembled meetings of the 
Promotion Board, all votes will be cast in person.
    (1) A motion, except a motion to set an assessment rate, will carry 
if supported by a simple majority of those voting.
    (2) Motions to establish an assessment rate shall require a two-
thirds vote of a quorum of the Promotion Board for passage.
    (c) Meetings of the Promotion Board may be conducted by other means 
of communications, provided that each member is given prior notice of 
the meeting and has an opportunity to be present either physically or 
by electronic connection.
    (d) In lieu of voting at a properly convened meeting and, when in 
the opinion of the chairperson of the Promotion Board such action is 
considered necessary, the Promotion Board may take action upon the 
concurring votes of a majority of its members by mail, telephone, 
electronic mail, facsimile, or any other means of communication, and, 
if appropriate, confirmed promptly in writing. In that event, all 
members must be notified and provided the opportunity to vote. Any 
action so taken shall have the same force and effect as though such 
action had been taken at a properly convened meeting of the Promotion 
Board. All votes shall be recorded in Promotion Board minutes.
    (e) The organization of the Promotion Board and the procedures for 
conducting meetings of the Promotion Board shall be in accordance with 
its bylaws, which shall be established by the Promotion Board and 
approved by the Secretary.


Sec. 1214.37  Compensation and reimbursement.

    The members and alternate members of the Promotion Board shall 
serve without compensation but shall be reimbursed for necessary and 
reasonable expenses or a reasonable per diem allowance, as approved by 
the Promotion Board and the Secretary, incurred by such members in the 
performance of their responsibilities under this subpart.


Sec. 1214.38  Powers.

    The Promotion Board shall have the following powers:
    (a) To receive and evaluate or, on its own initiative, develop and 
budget for proposed programs, plans, or projects to promote the use of 
kiwifruit, as well as proposed programs, plans, or projects for 
research and consumer information, and to make recommendations to the 
Secretary regarding such proposals;
    (b) To administer the provisions of this subpart in accordance with 
its terms and provisions;
    (c) To appoint or employ such individuals as it may deem necessary, 
define the duties, and determine the compensation of such individuals. 
The Board shall seek, to the extent possible, to employ or contract 
with personnel who are already associated with state chartered 
organizations involved in promoting kiwifruit;
    (d) To make rules and regulations to effectuate the terms and 
provisions of this subpart;
    (e) To receive, investigate, and report to the Secretary for action 
complaints of violations of the provisions of this subpart;
    (f) To establish committees and subcommittees of Promotion Board 
members, including an executive committee whose powers and

[[Page 51386]]

membership shall be determined by the Promotion Board, subject to the 
approval of the Secretary, and to adopt such bylaws and other rules for 
the conduct of its business as it may deem advisable;
    (g) To establish committees which may include individuals other 
than Promotion Board members, and pay the necessary and reasonable 
expenses and fees for the members of such committees;
    (h) To recommend to the Secretary amendments to this subpart;
    (i) With the approval of the Secretary, to enter into contracts or 
agreements for the development and conduct of programs, plans, or 
projects authorized under Sec. 1214.40 and for other services necessary 
for the implementation of this subpart, and for the payment of the cost 
thereof with funds collected and received pursuant to this subpart. The 
Promotion Board shall not contract with any person covered by the 
program or serving on the promotion board for the purpose of kiwifruit 
programs, plans, or projects. Any contract or agreement shall provide 
that:
    (1) The contractor or agreeing party shall develop and submit to 
the Promotion 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) Any such program, plan, or project shall become effective upon 
approval of the Secretary;
    (3) The contracting or agreeing party shall keep accurate records 
of all of its transactions and make periodic reports to the Promotion 
Board of activities conducted, submit accounting for funds received and 
expended, and make such other reports as the Secretary or the Promotion 
Board may require; and the Secretary may audit the records of the 
contracting or agreeing party periodically; and
    (4) Any subcontractor who enters into a contract with a Promotion 
Board contractor and who receives or otherwise uses funds allocated by 
the Promotion Board shall be subject to the same provisions as the 
contractor;
    (j) With the approval of the Secretary, to invest, pending 
disbursement pursuant to a program, plan, or project, funds collected 
through assessments provided for in Sec. 1214.51, and any other funds 
received by the Promotion Board in, and only in, obligations of the 
United States or any agency thereof, in any interest-bearing account or 
certificate of deposit of a bank that is a member of the Federal 
Reserve System, or in obligations fully guaranteed as to principal and 
interest by the United States;
    (k) To require its employees to receive, investigate, and report to 
the Secretary complaints of violations of this part; and
    (l) Such other powers as may be approved by the Secretary.


Sec. 1214.39   Duties.

    The Promotion Board shall have the following duties:
    (a) To meet not less than two times per year, and to organize and 
select from among its members a chairperson and such other officers as 
may be necessary;
    (b) To evaluate or develop, and submit to the Secretary for 
approval, promotion, research, and consumer information programs, plans 
or projects;
    (c) To prepare for each fiscal year, and submit to the Secretary 
for approval at least 60 days prior to the beginning of each fiscal 
year, a budget of its anticipated expenses and disbursements in the 
administration of this subpart and a marketing plan with all the 
programs, plans, and projects as provided in Secs. 1214.40 and 1214.50.
    (d) To maintain such books and records, which shall be available to 
the Secretary for inspection and audit, and to prepare and submit such 
reports from time to time to the Secretary, as the Secretary may 
prescribe, and to make appropriate accounting with respect to the 
receipt and disbursement of all funds entrusted to it;
    (e) To prepare and make public, at least annually, a report of its 
activities carried out, and an accounting for funds received and 
expended;
    (f) To cause its financial statements to be prepared in conformity 
with generally accepted accounting principles and to be audited by an 
independent certified public accountant in accordance with generally 
accepted auditing standards at least once each fiscal year and at such 
other times as the Secretary may request, and submit a copy of each 
such audit to the Secretary;
    (g) To give the Secretary the same notice of meetings of the 
Promotion Board as is given to members in order that the Secretary, or 
a representative of the Secretary, may attend such meetings;
    (h) To submit to the Secretary such information as may be requested 
pursuant to this subpart;
    (i) To keep minutes, books, and records that clearly reflect all 
the acts and transactions of the Promotion Board. Minutes of each Board 
meeting shall be promptly reported to the Secretary.
    (j) To act as intermediary between the Secretary and any industry 
member;
    (k) To follow the Department's equal opportunity/civil rights 
policies; and
    (l) To work to achieve an effective, continuous, and coordinated 
program of promotion, research, consumer information, evaluation and 
industry information designed to strengthen the kiwifruit industry's 
position in the marketplace, maintain and expand existing markets and 
uses for kiwifruit, develop new markets and uses for kiwifruit, and to 
carry out programs, plans, and projects designed to provide maximum 
benefits to the kiwifruit industry.
    (m) To conduct periodic review or evaluation of each program, plan, 
or project to ensure that it contributes to an effective program of 
research, promotion, and consumer information.
    (n) Not less than every 5 years, authorize and fund, from funds 
otherwise available to the Promotion Board, an independent evaluation 
of the effectiveness of the programs conducted by the Promotion Board. 
The Promotion Board shall submit to the Secretary, and make available 
to the public, the results of each periodic independent evaluation 
conducted under this section.
    (o) To investigate violations of the Order and report the results 
of such investigations to the Secretary for appropriate action to 
enforce the provisions of the Order.

Promotion, Research, and Consumer Information


Sec. 1214.40   Programs, plans, and projects.

    (a) The Promotion 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 consumer 
information with respect to kiwifruit; and
    (2) The establishment and conduct of research with respect to the 
use, nutritional value, sale, distribution, and marketing, of kiwifruit 
and kiwifruit products, and the creation of new products thereof, to 
the end that marketing and use of kiwifruit may be encouraged, 
expanded, improved, or made more acceptable and to advance the image, 
desirability, or quality of kiwifruit.
    (b) No program, plan, or project shall be implemented prior to its 
approval by the Secretary. Once a program, plan, or project is so 
approved, the Promotion Board shall take appropriate steps to implement 
it.

[[Page 51387]]

    (c) Each program, plan, or project implemented under this subpart 
shall be reviewed or evaluated periodically by the Promotion Board to 
ensure that it contributes to an effective program of promotion, 
research, or consumer information. If it is found by the Promotion 
Board that any such program, plan, or project does not contribute to an 
effective program of promotion, research, or consumer information, then 
the Promotion Board shall terminate such program, plan, or project.
    (d) No program, plan, or project shall make any false claims on 
behalf of kiwifruit or use unfair or deceptive acts or practices with 
respect to the quality, value, or use of any competing product. 
Kiwifruit of all origins shall be treated equally. All promotions shall 
be generic in nature.

Expenses and Assessments


Sec. 1214.50   Budget and expenses.

    (a)(1) At least 60 days prior to the beginning of each fiscal year, 
and as may be necessary thereafter, the Promotion Board shall prepare 
and submit to the Secretary a budget for the fiscal year covering its 
anticipated expenses and disbursements in administering this subpart. 
Each such budget shall include:
    (i) A statement of objectives and strategy for each program, plan, 
or project;
    (ii) A summary of anticipated revenue, with comparative data for at 
least one preceding year;
    (iii) A summary of proposed expenditures for each program, plan, or 
project; and
    (iv) Staff and administrative expense breakdowns, with comparative 
data for at least one preceding year.
    (2) Each budget shall provide adequate funds to defray its proposed 
expenditures and to provide for a reserve as set forth in paragraph (f) 
of this section.
    (3)(i) Subject to paragraph (a)(3)(ii) of this section, any 
amendment or addition to an approved budget must be approved by the 
Secretary, including shifting of funds from one program, plan, or 
project to another.
    (ii) Shifts of funds which do not cause an increase in the 
Promotion Board's approved budget and which are consistent with 
governing bylaws need not have prior approval by the Secretary.
    (b) The Promotion Board is authorized to incur such expenses, 
including provision for a reasonable reserve, as the Secretary finds 
are reasonable and likely to be incurred by the Promotion 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 
subpart. Such expenses shall be paid from funds received by the 
Promotion Board.
    (c) The Promotion Board may accept voluntary contributions, but 
these shall only be used to pay expenses incurred in the conduct of 
programs, plans, and projects. Such contributions shall be free from 
any encumbrance by the donor and the Promotion Board shall retain 
complete control of their use.
    (d) The Promotion Board shall reimburse the Secretary, from funds 
received by the Promotion Board, for administrative costs incurred by 
the Secretary in implementing and administering this subpart, including 
the salaries of Department employees and costs incurred in conducting 
referenda.
    (e) The Promotion Board may establish an operating monetary reserve 
and may carry over to subsequent fiscal periods excess funds in any 
reserve so established. Such reserve funds may be used to defray any 
expenses authorized under this subpart.
    (f) With the approval of the Secretary, the Promotion Board may 
borrow money for the payment of administrative expenses, subject to the 
same fiscal, budget, and audit controls as other funds of the Promotion 
Board. This provision is limited to the first year of operation of the 
Promotion Board.


Sec. 1214.51  Assessments.

    (a) Any handler initially purchasing, or otherwise placing into 
interstate, foreign, or intrastate commerce, kiwifruit produced in the 
United States shall, in the manner as prescribed by the Promotion Board 
and approved by the Secretary, collect an assessment based upon the 
number of pounds of kiwifruit marketed in the United States for the 
account of the producer, and remit the assessment to the Promotion 
Board.
    (b) The rate of assessment effective during any fiscal year shall 
be the rate specified in the budget for such fiscal year approved by 
the Secretary, except that:
    (1) The rate of assessment shall not exceed $0.10 per seven pound 
tray of kiwifruit or the equivalent thereof.
    (2) The rate of assessment for a fiscal year may be changed at the 
beginning of the fiscal year only and by regulation as necessary to 
reflect changed circumstances, except that any such changed rate may 
not exceed the level of assessment specified in paragraph (b)(1) of 
this section.
    (c) Any person marketing kiwifruit of that person's own production 
into the channels of commerce in the United States, through retail or 
wholesale outlets, shall be considered a handler and shall remit to the 
Promotion Board an assessment on such kiwifruit at the rate then in 
effect, at such time and in such form and manner prescribed by the 
Promotion Board, with the approval of the Secretary.
    (d)(1) Each importer of kiwifruit shall pay an assessment to the 
Promotion Board on kiwifruit imported for marketing in the United 
States, through the U.S. Customs Service. A person acting as a 
principal or as an agent, broker, or consignee for any person who 
produces kiwifruit outside the United States shall be considered an 
importer.
    (2) The assessment rate for imported kiwifruit shall be the same or 
equivalent to the rate provided for kiwifruit produced in the United 
States.
    (3) The import assessment shall be uniformly applied to imported 
kiwifruit that are identified by the number, 0709.51.0000, in the 
Harmonized Tariff Schedule of the United States or any other number 
used to identify fresh kiwifruit.
    (4) The assessments due on imported kiwifruit shall be paid when 
the kiwifruit are entered or withdrawn for consumption in the United 
States.
    (5) Only one assessment shall be paid on each unit of kiwifruit 
imported.
    (e)(1) Each person responsible for remitting assessments under 
paragraphs (a), (c), or (f) of this section, and importers if the U.S. 
Customs Service fails to collect the assessment, shall remit the 
assessments due to the Promotion Board on a monthly basis no later than 
the fifteenth day of the month following the month in which the 
kiwifruit were marketed, in such manner as prescribed by the Promotion 
Board.
    (2)(i) The Promotion Board shall impose a late payment charge on 
any person that fails to remit to the Promotion Board the total amount 
for which the person is liable on or before the payment due date 
established under this section. The amount of the late payment charge 
shall be prescribed in rules and regulations as approved by the 
Secretary.
    (ii) The Promotion Board shall impose an additional charge on any 
person subject to a late payment charge, in the form of interest on the 
outstanding portion of any amount for which the person is liable. The 
rate of interest shall be prescribed in rules and regulations as 
approved by the Secretary.
    (3) Any assessment that is determined to be owing at a date later 
than the payment due established under this section, due to a person's 
failure to

[[Page 51388]]

submit a report to the Promotion Board by the payment due date, shall 
be considered to have been payable on the payment due date. Under such 
a situation, paragraphs (e)(2)(i) and (e)(2)(ii) of this section shall 
be applicable.
    (4) Persons failing to remit total assessments due in a timely 
manner may also be subject to penalties and actions under federal debt 
collection procedures as set forth in 7 CFR 3.1 through 3.36.
    (f) The Promotion Board, with the approval of the Secretary, may 
enter into agreements authorizing other state mandated organizations to 
collect assessments in its behalf. Any such organization shall be 
required to maintain the confidentiality of such information as is 
required by the Promotion Board for collection purposes. Any 
reimbursement by the Promotion Board for such services shall be based 
on reasonable charges for services rendered.
    (g) The Promotion Board is hereby authorized to accept advance 
payment of assessments for the fiscal year by any person, that shall be 
credited toward any amount for which such person may become liable. The 
Promotion Board shall not be obligated to pay interest on any advance 
payment.
    (h) Except for the first year of operation of the promotion board, 
expenses for the administration, maintenance, and functioning of the 
board may not exceed 30 percent of the budget for a year.


Sec. 1214.52  Exemption from assessment.

    (a) Producers who produce less than 500 pounds of kiwifruit 
annually shall be exempted from assessment.
    (b) Importers who import less than 10,000 pounds of kiwifruit per 
year shall be exempted from assessment.
    (c) Sales of kiwifruit made directly from the producer to a 
consumer for a purpose other than resale are exempt from assessment.
    (d) Domestic and imported kiwifruit used for processing are exempt 
from assessment. The Promotion Board shall develop a list of approved 
processors.
    (e) To claim an exemption, a producer or importer shall submit an 
application to the Promotion Board stating the basis on which the 
person claims the exemption for such year.
    (f) If, after a person claims an exemption from assessments for any 
year under this paragraph, and such person no longer meets the 
requirements of this paragraph for an exemption, such person shall file 
a report with the Board in the form and manner prescribed by the Board 
and pay an assessment on all the kiwifruit produced or imported by such 
person during the year for which the person claimed the exemption.
    (g) Exempted individuals are subject to such safeguards as 
prescribed in rules and regulations in this part to prevent improper 
use of this exemption.


Sec. 1214.53   Influencing governmental action.

    No funds received by the Promotion Board under this subpart shall 
in any manner be used for the purpose of influencing legislation or 
governmental policy or action, except to develop and recommend to the 
Secretary amendments to this subpart.

Reports, Books, and Records


Sec. 1214.60   Reports.

    (a) Each producer marketing kiwifruit of that person's own 
production for resale, and each handler responsible for the collection 
of assessments under Sec. 1214.51(a) shall be required to report 
monthly to the Promotion Board, on a form provided by the Promotion 
Board, such information as may be required under this subpart or any 
rules and regulations issued in this part. Such information shall 
include, but not be limited to, the following:
    (1) The handler's name, address, telephone number, and social 
security number or Employer Identification Number;
    (2) Date of report, which is also the date of payment to the 
Promotion Board;
    (3) Period covered by the report; and
    (4) The number of kiwifruit containers, weight, size, and type 
purchased, initially transferred or that in any other manner are 
subject to the collection of assessments, and a copy of a certificate 
of exemption, claiming exemption under Sec. 1214.52 from those who 
claim such exemptions;
    (b) If determined necessary by the Promotion Board and approved by 
the Secretary, each importer shall file with the Promotion Board 
periodic reports, on a form provided by the Promotion Board, containing 
at least the following information:
    (1) The importer's name, address, telephone number, and social 
security number or Employer Identification Number;
    (2) The quantity of kiwifruit entered or withdrawn for consumption 
in the United States during the period covered by the report; and
    (3) The amount of assessments paid to the U.S. Customs Service at 
the time of such entry or withdrawal.
    (c) For persons who have an exemption from assessments under 
Sec. 1214.52, such information as deemed necessary by the Board, and 
approved by the Secretary, concerning the exemption including 
disposition of exempted kiwifruit.


Sec. 1214.61   Books and records.

    Each person who is subject to this subpart shall maintain and make 
available for inspection by the Promotion Board staff or the Secretary 
such books and records as are deemed necessary by the Promotion Board, 
with the approval of the Secretary, to carry out the provisions of this 
subpart and any rules and regulations issued in this part, including 
such books and records as are necessary to verify any reports required. 
Such books and records shall be retained for at least two years beyond 
the fiscal year of their applicability.


Sec. 1214.62   Confidential treatment.

    All information obtained from books, records, or reports under the 
Act, this subpart, and the rules and regulations issued in this part 
shall be kept confidential by all persons, including all employees and 
former employees of the Promotion 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 Promotion Board members, 
producers, importers, exporters, or handlers. 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 by judicial order in a suit 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. 1214.70   Right of the Secretary.

    All fiscal matters, programs, plans, or projects, rules or 
regulations, reports, or other substantive actions proposed and

[[Page 51389]]

prepared by the Promotion Board shall be submitted to the Secretary for 
approval.


Sec. 1214.71   Suspension or termination.

    (a) Whenever the Secretary finds that this subpart or any provision 
thereof obstructs or does not tend to effectuate the declared purpose 
of the Act, the Secretary shall terminate or suspend the operation of 
this subpart or such provision thereof.
    (b)(1) Six years after the date on which this subpart becomes 
effective, and at the end of every six-year period thereafter; the 
Secretary shall conduct a referendum among producers and importers to 
determine whether they favor continuation, termination, or suspension 
of this subpart.
    (2) The Secretary shall also hold a referendum:
    (i) At the request of the Promotion Board; or
    (ii) If not less than 30 percent of the kiwifruit producers and 
importers subject to assessments under the Order submit a petition 
requesting a referendum be held.
    (3) Whenever the Secretary determines that suspension or 
termination of this subpart is favored by a majority of the kiwifruit 
producers and importers voting in a referendum under paragraphs (b) (1) 
or (2) of this section who, during a representative period determined 
by the Secretary, have been engaged in producing and importing 
kiwifruit and who, on average, annually produced and imported more than 
50 percent of the volume of kiwifruit produced and imported by all 
those producers and importers voting in the referendum, the Secretary 
shall:
    (i) Suspend or terminate, as appropriate, collection of assessments 
within six months after making such determination; and
    (ii) Suspend or terminate, as appropriate, all activities under 
this subpart in an orderly manner as soon as practicable.
    (4) Referenda conducted under this subsection shall be conducted in 
such manner as the Secretary may prescribe.


Sec. 1214.72   Proceedings after termination.

    (a) Upon the termination of this subpart, the Promotion Board shall 
recommend not more than five of its members to the Secretary to serve 
as trustees for the purpose of liquidating the affairs of the Promotion 
Board. Such persons, upon designation by the Secretary, shall become 
trustees for all the funds and property owned, in the possession of, or 
under the control of the Promotion Board, including any claims unpaid 
or property not delivered, or any other claim existing at the time of 
such termination.
    (b) The trustees shall:
    (1) Continue in such capacity until discharged by the Secretary;
    (2) Carry out the obligations of the Promotion Board under any 
contract or agreement entered into by it under this subpart;
    (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 Promotion Board and of the trustees, to such persons as the 
Secretary may direct; and
    (4) Upon the request of the Secretary, execute such assignments or 
other instruments necessary or appropriate to vest in such persons full 
title and right to all of the funds, property, and claims vested in the 
Promotion Board or the trustees under this subpart.
    (c) Any person to whom funds, property, or claims have been 
transferred or delivered under this subpart shall be subject to the 
same obligations imposed upon the Promotion 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 
used, to the extent practicable, in the interest of continuing one or 
more of the promotion, research, consumer information, or industry 
information programs, plans, or projects authorized under this subpart.


Sec. 1214.73  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, the 
termination of this subpart or of any rule and regulation issued in 
this part, or the issuance of any amendment to such provisions, shall 
not:
    (a) Affect or waive any right, duty, obligation, or liability that 
shall have arisen or may hereafter arise in connection with any 
provision of this subpart or any rules or regulations issued in this 
part
    (b) Release or extinguish any violation of this subpart or any such 
rules or regulations issued in this part; or
    (c) Affect or impair any rights or remedies of the United States, 
the Secretary, or any person with respect to any such violation.


Sec. 1214.74  Personal liability.

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


Sec. 1214.75  Patents, copyrights, inventions, publications, and 
product formulations.

    Any patents, copyrights, inventions, publications, or product 
formulations developed through the use of funds received by the 
Promotion Board under this subpart shall be the property of the United 
States Government as represented by the Promotion Board and shall, 
along with any rents, royalties, residual payments, or other income 
from the rental, sale, leasing, franchising, or other uses of such 
patents, copyrights, inventions, publications, or product formulations 
inure to the benefit of the Promotion Board. Upon termination of 
certain provisions in this subpart, Sec. 1214.72 shall apply to 
determine disposition of all such property.


Sec. 1214.76  Amendments.

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


Sec. 1214.77  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.

Subpart B--Rules and Regulations

Definitions


Sec. 1214.100  Terms defined.

    Unless otherwise defined in this subpart, the definitions of terms 
used in this subpart shall have the same meaning as the definitions in 
Subpart A--Kiwifruit Research, Promotion, and Consumer Information 
Order of this part.

Nomination Procedures


Sec. 1214.110  Nominations.

    Nominations shall be made by mail ballot in accordance with the 
procedures prescribed in Sec. 1214.31. Each mail ballot shall be 
scheduled so as to ensure that the nominations for each position that 
will be open at the beginning of the following year are received by the 
Secretary by May 1, or such other date approved by the Secretary.

[[Page 51390]]

Sec. 1214.111  Mail balloting.

    (a) The Promotion Board shall conduct nominations of individuals as 
candidates for appointment to the Promotion Board by mail nomination 
form.
    (b)(1) Notice of mail balloting to nominate candidates for a 
position on the Promotion Board shall be publicized by the Promotion 
Board to producers, importers, kiwifruit exporter organizations and to 
the Secretary, by March 1 of each year.
    (2) Nomination forms will be used to collect names of individuals 
to be placed on a ballot to be sent to producers and importers to 
select the individuals for the Secretary's appointment. Completed 
nomination forms must be returned to the Promotion Board prior to March 
30.
    (c) Once proposed nominations have been submitted, the Promotion 
Board shall cause each proposed nomination, if the individual 
qualifies, to be placed on the producer or importer ballot. The 
Promotion Board then shall mail a ballot to each known producer or 
importer.
    (d) Each producer or importer shall cast a ballot for each open 
position on the Promotion Board assigned to the producers or importers/
exporters in accordance with the procedures prescribed in Sec. 1214.31. 
The completed ballot must be returned to the Promotion Board or its 
designee within 30 days after the ballot is issued.
    (e) Within 45 days after a mail ballot is issued, the Promotion 
Board shall validate the ballots cast, tabulate the votes, and provide 
the Secretary with the results of the vote and the identification of 
the top two vote getters for each open position on the Promotion Board.
    (f) The Promotion Board shall provide nominees with qualification 
statements and other specified information. Each nominee selected in 
the mail ballot will be contacted by the Promotion Board and asked to 
forward such completed documentation to the Promotion Board within 14 
days of such notification.


Sec. 1214.112  Appointment.

    If an employee, partner, officer, or shareholder of a producer, 
importer or exporter is a current member of the Promotion Board, no 
nominee who is also an employee, partner, officer, or shareholder of 
such producer, importer, or exporter shall be appointed to the 
Promotion Board. A Promotion Board member shall be disqualified from 
serving on the Promotion Board if such individual ceases to be 
affiliated with a producer, importer, or exporter the Promotion Board 
member represents.

General


Sec. 1214.115  Financial Statements.

    (a) As requested by the Secretary, the Promotion Board shall 
prepare and submit financial statements to the Secretary on a periodic 
basis. 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 30 days after the end of the time period to which it applies.
    (c) The Promotion Board shall submit annually to the Secretary an 
annual financial statement within 90 days after the end of the fiscal 
year to which it applies.

Assessments


Sec. 1214.120  Payment of assessments.

    (a) Each handler responsible for collecting assessments on domestic 
kiwifruit shall collect the amounts assessed and remit such amounts to 
the Promotion Board on a monthly basis not later than the fifteenth day 
of the month following the month in which the kiwifruit were marketed 
to or through the handler, whatever comes first.
    (b) A state mandated organization may collect producer assessments 
from handlers then remit the funds to the Promotion Board on a monthly 
basis. The state mandated program collecting the assessments must 
provide access to records for the purpose of periodic audit.
    (c) Each producer who is also a handler responsible for paying any 
assessment amount on the producer's own kiwifruit shall complete a 
shipment data form to the Promotion Board not later than the fifteenth 
day of the month following the month in which the kiwifruit were 
marketed by the producer. An invoice will be sent to the producer for 
the amount owed.
    (d) Each importer shall be responsible for remittance to the 
Promotion Board of any assessment amount not collected by the U.S. 
Customs Service at the time of entry or withdrawal for consumption into 
the United States. Any such assessment amount shall be remitted to the 
Promotion Board on a monthly basis not later than the fifteenth day of 
the month following the month of entry or withdrawal for consumption 
into the United States. Any person who imports kiwifruit, as principal 
or as an agent, broker, or consignee for any person who produces 
kiwifruit outside the United States shall be considered an importer.
    (e) Remittance shall be by check, draft, or money order payable to 
the National Kiwifruit Board or Kiwifruit Promotion Board, and shall be 
accompanied by a report, on a form provided by the Promotion Board.
    (f) The Promotion Board shall impose a late payment charge on any 
handler or importer who fails to make timely remittance to the 
Promotion Board of the total assessment amount for which the person is 
liable. Such late payment charge shall be imposed on any assessments 
not received by the last day of the month following the month in which 
the kiwifruit involved were marketed or, in the case of imports, not 
collected by the U.S. Customs Service at the time of entry or 
withdrawal for consumption into the United States. This one-time late 
payment charge shall be 10 percent of the assessments due before 
interest charges have accrued. The late payment charge will not be 
applied to any late payments postmarked within 15 days after the end of 
the month such assessments are due.
    (g) In addition to the late payment charge, the Promotion Board 
shall charge interest at a rate of 1.5 percent per month on the 
outstanding balance, including the late payment charge and any accrued 
interest, of any account that remains delinquent beyond the last day of 
the second month following the month the Kiwifruit involved were 
marketed. However, handlers paying their assessments, in accordance 
with paragraph (i)(2) of this section, will not be subject to the 1.5 
percent per month interest under this paragraph until the last day of 
the second month after such assessments were due under paragraph (i)(2) 
of this section. In the case of imports, such a rate of interest will 
be charged to any account that remains delinquent on any assessments 
not collected by the U.S. Customs Service at the time of entry or 
withdrawal for consumption into the United States. Such a rate of 
interest will continue to be charged monthly until the outstanding 
balance is paid to the Promotion Board.
    (h) Any assessment determined by the Promotion Board at a date 
later than prescribed by this section, because of a person's failure to 
submit a report to the Promotion Board when due, shall be considered to 
have been payable by the date it would have been due if the report had 
been filed on time. A late payment charge and monthly interest charges 
on the outstanding balance shall be applicable to such unpaid 
assessment in accordance with paragraphs (f) and (g) of this section.

[[Page 51391]]

    (i) In lieu of the monthly assessment payment and reporting 
requirements of Secs. 1214.125 and 1214.60, the Promotion Board may 
permit a handler to make advance payment of the total estimated 
assessment amount due to the Promotion Board for the ensuing fiscal 
year, or portion thereof, prior to the actual determination of 
assessable kiwifruit.
    (j) Any person whose prepayment exceeds the amount paid shall be 
reimbursed for the amount of overpayment. The Promotion Board shall 
not, in any case, be obligated to pay interest on any advance payment.


Sec. 1214.121  Exemption procedures.

    (a) Any producer who produces less than 500 pounds of kiwifruit 
annually or who produces kiwifruit for processing and who desires to 
claim an exemption from assessments during a fiscal year as provided in 
Sec. 1214.52 shall apply to the Promotion Board, on a form provided by 
the Promotion Board, for a certificate of exemption. Such producer 
shall certify that their production of kiwifruit shall be less than 500 
pounds, for the fiscal year for which the exemption is claimed. Any 
importer who imports less than 10,000 pounds of kiwifruit annually or 
who imports kiwifruit for processing and who desires to claim an 
exemption from assessments during a fiscal year as provided in 
Sec. 1214.52 of this part shall apply to the Promotion Board, on a form 
provided by the Promotion Board, for a certificate of exemption. Such 
importer shall certify that their importation of kiwifruit shall not 
exceed 10,000 pounds, for the fiscal year for which the exemption is 
claimed.
    (b) On receipt of an application, the Promotion Board shall 
determine whether an exemption may be granted. The Promotion Board then 
will issue, if deemed appropriate, a certificate of exemption to each 
person that is eligible to receive one. Each person who is exempt from 
assessment must provide an exemption number to the first handler in 
order not to be subject to collection of an assessment on kiwifruit. 
Handlers and importers, except as otherwise authorized by the Promotion 
Board, shall maintain records showing the exemptee's name and address 
along with the exemption number assigned by the Promotion Board.
    (c) Importers who are exempt from assessment shall be eligible for 
reimbursement of assessments collected by the U.S. Customs Service and 
shall apply to the Promotion Board for reimbursement of such 
assessments paid. No interest will be paid on assessments collected by 
the U.S. Customs Service and determined to be exempt at a later time. 
Requests for reimbursement shall be submitted to the Board within 90 
days of the last day of the year the kiwifruit were actually imported.
    (d) Any person who desires to renew the exemption from assessments 
for a subsequent fiscal year shall reapply to the Promotion Board, on a 
form provided by the Promotion Board, for a certificate of exemption.
    (e) The Promotion Board may require persons receiving an exemption 
from assessments to provide to the Promotion Board reports on the 
disposition of exempt kiwifruit and, in the case of importers, proof of 
payment of assessments.

Reports


Sec. 1214.125  Reports.

    Each handler or producer that is also a handler shall be required 
to report monthly to the Promotion Board such information as may be 
required under Sec. 1214.60. In addition, each handler may be required 
to provide the farm identification number or social security number of 
each producer the handler has dealt with during the time period covered 
by the report.

Miscellaneous


Sec. 1214.130  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 0581-0093, except for the Promotion Board nominee background 
statement form which is assigned OMB control number 0505-0001.

Proposal II

    2. Part 1214 is added as set forth in Proposal I with the exception 
that paragraph (c)(4) would be added to Sec. 1214.30 and paragraph (e) 
would be added to Sec. 1214.40 to read as follows:


Sec. 1214.30  Establishment, adjustment, and membership.

* * * * *
    (c) * * *
    (4) For the purpose of nominating and appointing members of the 
Board, the Secretary will ensure that at least two of the persons 
appointed to and serving on the Board are selected from nominees 
nominated by importers and/or exporters of New Zealand kiwifruit.


Sec. 1214.40  Programs, plans, and projects.

* * * * *
    (e) The Secretary shall ensure that all programs developed and 
implemented by the Board are intended to promote kiwifruit consumption 
in the U.S. domestic market. No program shall be implemented by the 
Board the purpose or major effect of which is the promotion of exports 
of U.S.-- produced kiwifruit in foreign markets.

 Proposal III

    3. Part 1214 is added as set forth in Proposal I with the exception 
that paragraph (c)(4) would be added to Sec. 1214.30 to read as 
follows:


Sec. 1214.30  Establishment, adjustment, and membership.

* * * * *
    (c) * * *
    (4) For the purposes of nominating and appointing members of the 
Board, the Secretary will include as a primary consideration in the 
allocation of the four importer/exporter seats on the Board, the 
relative expenditure on promotion and marketing of kiwifruit in the 
United States that has been made over the previous 10 years by the 
kiwifruit importer/exporters of the various countries of origin of the 
kiwifruit imported.

    Dated: September 23, 1996.
Lon Hatamiya,
Administrator.
[FR Doc. 96-24844 Filed 10-1-96; 8:45 am]
BILLING CODE 3410-02-P