[Federal Register Volume 63, Number 217 (Tuesday, November 10, 1998)]
[Proposed Rules]
[Pages 62964-62970]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-30119]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1214
[FV-96-705-APR]
Proposed Kiwifruit Research, Promotion, and Consumer Information
Order
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Supplementary Notice of Proposed Rulemaking.
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SUMMARY: This proposed rule would amend an October 17, 1997, proposed
rule which described the proposed Kiwifruit Research, Promotion, and
Consumer Information Order (Order). 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
(Board). The Board would conduct a generic program of research,
promotion, and consumer information to maintain, expand, and develop
markets for kiwifruit under the supervision of the Department of
Agriculture (USDA). The amended proposed rule would revise the Order by
eliminating the requirement that 51 percent of the members of the Board
be domestic kiwifruit producers to reflect the June 23, 1998,
amendments to the National Kiwifruit Research, Promotion, and Consumer
Information Act.
DATES: Comments must be received by January 11, 1999. A referendum
order establishing the voting period for the referendum and the
representative period for voter eligibility will be published at a
later date in the Federal Register.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposed rule to the Docket Clerk, Research and
Promotion Branch, Fruit and Vegetable Programs, Agricultural Marketing
Service (AMS), USDA, Stop 0244, Room 2535-S, 1400 Independence Avenue,
S.W., Washington, D.C. 20250-0244. Comments should be submitted in
triplicate and will be made available for public inspection at the
above address during regular business hours. Comments may also be
submitted electronically to: malinda__e__farmer@usda.gov. All comments
should reference the docket number and the date and page number of this
issue of the Federal Register. A copy of this rule may be found at:
www.ams.usda.gov/fv/rpdocketlist.htm. Pursuant to the Paperwork
Reduction Act of 1995 (PRA), send comments regarding the merits of the
burden estimate, ways to minimize the burden, including the use of
automated collection techniques or other forms of information
technology, or any other aspect of this collection of information to
the above. Comments concerning the information collection associated
with this action should also be sent to the Desk Officer for
Agriculture, Office of Information and Regulatory Affairs, Office of
Management and Budget, Washington, D.C. 20503.
FOR FURTHER INFORMATION CONTACT: Stacey L. Bryson, Research and
[[Page 62965]]
Promotion Branch, Fruit and Vegetable Programs, AMS, USDA, Stop 0244,
1400 Independence Avenue, S.W., Washington, D.C. 20250-0244, fax (202)
205-2800, telephone (888) 720-9917, or e-mail at
stacey__l__bryson@usda.gov.
SUPPLEMENTARY INFORMATION: This proposed rule 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. The Act was amended on June 23, 1998 [Pub. L. 105-185].
Previous documents in connection with this proceeding: a proposed rule
with a request for comments dated September 23, 1996 [61 FR 51378,
October 2, 1996] (first proposed rule) and a proposed rule dated
October 8, 1997 [62 FR 54314, October 17, 1997] (second proposed rule).
In addition, a proposed rule was issued on September 23, 1996 [61 FR
51391, October 2, 1996], to establish procedures for conducting
referenda on the proposed Order. The referendum procedures were made
final on November 17, 1997 [61 FR 54310, October 17, 1997].
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 as
amended [7 U.S.C. 7467], after an Order is implemented, a person
subject to the Order may file a petition with the Secretary of
Agriculture (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 as amended 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
This rule has been determined to be ``not significant'' for
purposes of Executive Order 12866 and, therefore, has not been reviewed
by the Office of Management and Budget (OMB).
Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act [5 U.S.C. 601 et
seq.], the Agency has examined the impact of the previously published
proposed rules on small entities.
The kiwifruit industry initiated this program by asking the U.S.
Congress (Congress) to pass legislation to provide authority for 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.
Industry support for the program will be determined during the
referendum to be conducted by USDA. Dates for the referendum will be
announced by the Secretary no later than 60 days before the referendum.
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 Board that would administer the program
under USDA'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 Board.
Importers would be required to remit to the Board assessments not
collected by the U.S. Customs Service (Customs) and to file reports
with the Board. Exempt producers and importers would be required to
file an exemption application. Producers, importers, and exporters
(persons outside of the United Sates who export kiwifruit into the
United States) would participate in the nomination process and be
eligible to serve as members on the Board. 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 as amended. The estimated cost in providing information to the
Board by the 760 respondents would be $7,842.50 or $10.32 per
respondent per year.
USDA would oversee 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 600 producers, 45 importers, and 65
handlers of kiwifruit that would be covered by the program. In
addition, exporters would be eligible to serve on the Board.
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 [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 or more in annual sales. In addition,
there are 10 producers at or over the $500,000 annual sales receipts
threshold. Accordingly, the majority of handlers and producers may be
classified as small entities. While USDA does not have specific
information regarding the size of importers, it may be concluded that
the majority of importers may be classified as small entities.
Exporters were not included in the initial Regulatory Flexibility
Analysis regarding the impact of previously published proposed rule. In
order to have all the data necessary for a more comprehensive analysis
of the effects of the proposed Order, we are inviting comments
concerning the potential effects on exporters. In particular, we are
interested in determining the number and size of exporters that may
incur benefits or costs from implementation of this proposed rule and
information on the expected benefits or costs.
USDA is aware of producers in California, Oregon, Pennsylvania, and
South Carolina, and importers that
[[Page 62966]]
import kiwifruit from Chile, New Zealand, and Italy. USDA believes that
these individuals would include a majority of the producers and
importers that would be covered under the program. USDA is also aware
that some individuals may be producers of ``hardy kiwifruit,'' a
different species of kiwifruit, known as Actinidia arguta, which would
not be covered under the proposed program. However, USDA does not have
specific information regarding how many individuals produce only the
``hardy kiwi'' versus the ``fuzzy'' most common kiwifruit species,
known as Actinidia deliciosa.
Other names for the species Actinidia arguta (hardy kiwifruit) are
baby kiwifruit, kiwifruit grape, and kiwiberry. There are no official
statistics on this commodity because it is such a small and new crop.
According to comments received on the first proposed rule, this species
is grown in California, Oregon, Pennsylvania, Washington, and Virginia.
The production in Virginia and Pennsylvania is not commercially
marketed. Oregon production on 5 acres was a total of 216,000 pounds
over the last 3 years. It takes 3 to 5 years to harvest the first crop.
The hardy kiwifruit is hand-harvested and packed in 6-ounce berry
baskets like raspberries. The harvesting, storage, handling, consumer
recognition, and marketing of this species are completely different
from the most common fuzzy kiwifruit or Actinidia deliciosa. All
references to ``kiwifruit'' in this document, therefore, mean the
Actinidia deliciosa species.
California is the source of 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 94 percent between 1984 and 1997, increasing from 36 million
pounds to 70 million pounds annually. In contrast, from 1984 through
1997, the value of production fell 7 percent.
Most U.S. kiwifruit is utilized fresh. Fresh utilization almost
tripled between 1984 and 1997, growing from 24 million pounds to 62.6
million pounds. The season average price from 1984 through 1997 fell 52
percent, declining from $0.54 per pound to $0.26 per pound. Exports
accounted for about 19 percent of U.S. fresh utilization during that
period.
In 1997, California production was 70.0 million pounds. The value
of the 1997 crop was $16.5 million of which $16.2 million represented
fresh utilization. In 1996, production was 63.0 million pounds with a
crop value of $13.2 million. In 1997, 98 percent of production was
utilized in fresh outlets.
U.S. exports of fresh kiwifruit totaled 13.1 million pounds in
1997. The value was $7.1 million. The major destinations included
Canada (66 percent of the U.S. poundage exported), Republic of Korea
(18 percent), and Mexico (7 percent).
In 1997, kiwifruit imports totaled 75.9 million pounds, with a
value of $20.7 million. About 80 percent of imports came from Chile, 14
percent from Italy, and 4 percent from New Zealand. Fresh kiwifruit per
capita consumption in 1996 was 0.55 pounds, down slightly from 0.56
pounds per capita during the 1995 season.
The proposed kiwifruit Order would authorize assessments on
producers (to be collected by first handlers) and on importers
(collected by Customs) of up to 10 cents per 7-pound tray. The Board,
which would be composed of kiwifruit producers, importers, and
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 Board would collect $1.97 million
to administer the program. Assessments on domestic fresh-market
production (62.6 million pounds) are expected to represent 45 percent
of the income under the program.
The effect of the assessments will depend on the actual rate
recommended by the Board. At the maximum rate, it is expected that the
effect on producers would be approximately 5 percent of their average
return. However, the Order would exempt 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 Board could authorize
different reporting schedules based on different marketing practices.
This could be of benefit specially to small businesses for whom a less
frequent reporting period would diminish the reporting burden.
USDA will keep all of these individuals informed throughout the
program implementation and referendum process to ensure that they are
aware of and are able to participate in the implementation process. In
addition, trade associations and related industry media will receive
news releases and other information regarding the implementation and
referendum process. Furthermore, all the information will be available
electronically.
If the program is implemented, the Board would develop guidelines
for compliance with the program.
In addition, the kiwifruit industry would nominate individuals to
serve as members of the 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. USDA would ensure that the nominees represent the kiwifruit
industry as specified in the Act as amended.
There is a federal marketing order program for kiwifruit in
California which is administered by the Kiwifruit Administrative
Committee (KAC), also under USDA supervision. KAC is composed of
California producers. The marketing order regulations for grade, size,
maturity, and containers are designed to assure consumers of
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. On August 21,
1998, the assessment rate and assessable unit were decreased from
$0.0225 per tray or tray equivalent to $0.05 per 22-pound volume fill
container or equivalent. The assessment rate of $0.0225 per tray or
tray equivalent approximates $0.0675 per 22-pound volume fill
container. Each handler pays an average of $2,000 per year in
assessments. Under the marketing order, the estimated reporting burden
per year for individual handlers is estimated at 4.2 hours or $42.00
per handler.
The California Kiwifruit Commission (CKC) administers a California
state program for kiwifruit. The CKC is composed of kiwifruit
producers, packers, and handlers. In 1996-97 producers paid $1.4
million in assessments at a rate of $0.17 per tray or tray equivalent.
The CKC has set an assessment rate of $0.17 per 22-pound volume fill
container for the 1998-99 season.
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
[[Page 62967]]
Board would keep their information separate to comply with
confidentiality requirements under the programs. Furthermore, using the
same source of information would reduce the burden on producers and
handlers of all sizes.
In the past, the CKC participated in a voluntary promotional
program with Chilean kiwifruit growers to jointly advertise kiwifruit
in the United States. 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 kiwifruit advertising. The purpose
of the program is not to restrict 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 benefitted 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.
In order to conduct the Regulatory Flexibility Analysis regarding
the impact of the proposed Order on small entities, the first proposed
rule invited comments concerning the potential effects of the proposed
Order. No comments were received concerning the impact of the proposed
Order on small entities. However, as explained earlier in this rule and
in the second proposed rule, ``hardy kiwifruit'' producers would not be
covered under the program because the species Actinidia arguta is
considerably different from the most common ``fuzzy kiwifruit'' species
Actinidia deliciosa. This would have a positive impact on small
businesses since most of the producers of ``hardy kiwifruit'' are
considered small businesses.
In addition, it is expected that the previously published proposed
Order would be very beneficial to the kiwifruit industry, especially
small businesses who would not be able to afford a nationwide
comprehensive program individually.
It is estimated that there are approximately 645 kiwifruit
producers and importers who would be eligible to vote in the
referendum. It would take an average 15 minutes for each voter to read
the voting instructions and complete the referendum ballot. The total
burden on the total number of voters will be 29 hours.
Paperwork Reduction Act
In accordance with OMB regulations [5 CFR Part 1320] which
implement the PRA [44 U.S.C. Chapter 35], and as stated in the previous
proposed rules, the information collection and recordkeeping
requirements that would be imposed by the proposed Order were approved
by OMB on December 16, 1996.
Title: National Research, Promotion, and Consumer Information
Programs.
OMB Number: 0581-0093, except for the background questionnaire (no.
2 below) which is assigned OMB number 0505-0001.
Expiration Date of Approval: November 30, 2000, for 0581-0093 and
November 30, 1998, for 0505-0001.
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 as amended.
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
provisions of the proposed Order 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 CKC. 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 as amended. Such information can be
supplied without data processing equipment or outside technical
expertise. In addition, there are no additional training requirements
for individuals filling out reports and remitting assessments to the
Board. The forms would be simple, easy to understand, and place as
small a burden as possible on the person required to file the
information.
The most recent information indicates that there would be 647
respondents affected by the nomination of Board members provisions of
the proposed Order, which is related to this amended proposed rule: 600
producers, 45 importers or exporters, and 2 public member nominees. The
estimated cost in providing information related to the nomination of
Board members by the 647 respondents would be $1,200 or $1.86 per
respondent. This total has been estimated by multiplying 120 (total
burden hours requested) by $10.00 per hour, a sum deemed to be
reasonable should the respondents be compensated for their time.
The information collection requirements that are related to the
nomination sections of the proposed Order which are affected by this
amended proposed rule are:
(1) Nominations.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.5 hour per response.
Respondents: Producers, importers, and exporters.
Estimated Number of Respondents: 647.
Estimated Number of Responses per Respondent: 1 every 3 years
(0.33).
Estimated Total Annual Burden on Respondents: 108 hours.
(2) A background questionnaire for nominees.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.5 hours per response for each
producer, importer, exporter, and public member nominated to the Board.
Respondents: Producers, importers or exporters, 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.
Comments are invited on: (a) Whether the proposed collection of
information
[[Page 62968]]
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 USDA'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
collection techniques or other forms of information technology.
OMB is required to make a decision concerning the collection of
information contained in this rule between 30 and 60 days after
publication. Therefore, a comment to OMB is best assured of having its
full effect if OMB receives it within 30 days of publication.
Comments concerning the burden for the nomination process should
reference OMB No. 0581-0093. Comments addressing the nomination
background information form should reference OMB No. 0505-0001. In
addition, the docket number, date, and page number of this issue of the
Federal Register also should be referenced. Comments should be sent to
the USDA Docket Clerk and the OMB Desk Officer for Agriculture at the
addresses and by the deadline listed above.
Background
The Act became effective on April 4, 1996. It authorizes the
Secretary to implement a promotion program for kiwifruit, which would
be administered by an 11-member industry board appointed by the
Secretary.
Under the program, producers of 500 or more pounds of kiwifruit per
year and importers of 10,000 pounds or more of kiwifruit per year would
be assessed at a rate not to exceed 10 cents per 7-pound tray of
kiwifruit. There are approximately 600 producers, 45 importers, and 65
handlers of kiwifruit that would be covered by the program. In addition
to the de minimis exemptions for producers and importers, U.S.
kiwifruit for processing would be exempt from assessment. The maximum
assessment rate would generate about $2 million annually. 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.
Customs would collect assessments on imported kiwifruit and would
remit those assessments to the Board for a fee.
The Act requires the Secretary 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 Secretary would give serious consideration to requests
for referendum when requested by a group representing a considerable
amount of the volume covered by the program.
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 promotion Board. The promotion Board would be composed of 11
voting members, who would be producers, importers or exporters, and a
public member. Each member would have an alternate. Members would 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 Secretary 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 CKC. In 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, USDA modified the CKC's
proposed text to conform with provisions of the Act and to clarify
certain other provisions of the proposed order. USDA published the
CKC's and the NSKMB's proposals for public comment in the Federal
Register on October 2, 1996 [61 FR 51378]. The deadline for comments
was December 2, 1996. Seventy-five comments were received. Comments
were received from eight Chilean kiwifruit growers or grower
associations, 31 Chilean kiwifruit exporters or exporter associations,
one international exporter association, 26 importers of Chilean
kiwifruit, two U.S. growers, the CKC, four universities, and the
embassies of Australia and New Zealand. Seventy-three of the comments
opposed implementation of the Order as proposed on October 2, 1996.
USDA analyzed the comments and made several changes to the proposed
Order to address commenters' concerns. One of the commenters' issues,
however, was not addressed because the provisions at issue were
consistent with the then relevant provisions of the Act. This issue
related to the composition of the initial Board and the requirement
that 51 percent of the members of the Board be domestic producers,
regardless of the percentage of assessments paid by importers. These
provisions are contained in Sec. 1214.30 of the proposed Order.
A revised proposed Order was published in the Federal Register on
October 17, 1997 [62 FR 54314]. At the same time, USDA announced that a
referendum on the proposed Order, as revised by that proposed rule,
would be conducted.
After the publication of that proposed rule, the CKC requested the
Secretary to delay the referendum until the Act could be amended to
remove the requirement that 51 percent of the Board members be domestic
producers. Subsequently, on June 23, 1998, the Act was amended [Pub. L.
105-185] to remove the 51 percent requirement as well as to provide
that future
[[Page 62969]]
amendments of the Order could become effective without an industry
referendum. The first amendment requires changes in Sec. 1214.30 of the
proposed Order. In addition, a conforming change is needed in
Sec. 1214.76 to indicate that the Act has been amended.
Therefore, this action would revise Secs. 1214.30 and 1214.76 to
reflect the amendments to the Act.
In the earlier proposed rules, Sec. 1214.30(a) provided that the
initial Board would be composed of six producers, four importers and/or
exporters, and one public member. This section would be revised by this
proposed rule to state that, for the initial Board, the number of
producer and importers or exporters on the Board would be apportioned,
by the Secretary, on the basis of the average annual kiwifruit
production and imports over the preceding four years.
To determine the four-year average, we have calculated domestic
production and imports for the last four seasons (1994-95 through 1997-
98) as shown in the accompanying chart.
U.S. Production and Imports of Kiwifruit
----------------------------------------------------------------------------------------------------------------
Domestic
production Imports Total Percent Percent
Year \1\ \2\ (million (million (million domestic imports
pounds) pounds) pounds)
----------------------------------------------------------------------------------------------------------------
1997-98...................................... 62.6 \3\ 79.3 \3\ 141.9 \3\ 44.1 \3\ 55.9
1996-97...................................... 52.2 83.2 135.4 38.6 61.4
1995-96...................................... 65.0 81.1 146.1 44.5 55.5
1994-95...................................... 75.0 79.4 154.4 48.6 51.4
4-year average............................... ............. ........... ........... 43.9 56.1
----------------------------------------------------------------------------------------------------------------
\1\ September 1 through August 31.
\2\ Fresh utilization because the proposed program would not cover kiwifruit for processing.
\3\ Projected; includes imports through July 1998.
Based on this analysis, the four-year average for domestic
production in the U.S. fresh market is 43.9 percent, and the four-year
average of imports in the U.S. fresh market is 56.1. Therefore, if the
initial Board seats were allocated as of the date of this rule, the
Secretary would appoint four producers, six importers or exporters, and
one public member to the Board. However, if the proposed promotion
program is implemented, the Secretary will use the most current
information available at the time of implementation in determining the
allocation of seats on the initial Board.
Section 1214.30(a) (1) and (2) stated that the Kiwifruit Board
would be composed of six producers and four importers. This section has
been revised to state that the Kiwifruit Board would be composed of ten
producers and importers or exporters (or their representatives) based
on the proportional representation of the level of domestic production
and imports of kiwifruit, as determined by the Secretary.
Sections 1214.30(b) (1) and (2) stated that membership of the Board
could be adjusted to accommodate changes in production and import
levels of kiwifruit as long as producers comprise not less than 51
percent of the membership of the Board. These sections are revised to
remove the 51 percent requirement.
In addition, this rule would revise Sec. 1214.76 to add ``as
amended,'' after the word ``Act''.
This action makes no other changes to the text of the Order
provisions as they appeared in the October 1997 proposed rule.
For the Order to become effective, the Order must be approved by a
majority of kiwifruit producers and importers voting in a referendum,
with such majority producing or importing more than 50 percent of the
total volume of kiwifruit produced and imported by persons voting in
the referendum.
The previously published proposed Order 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
[[Page 62970]]
the Order; and separability of Order provisions.
USDA will analyze all comments received in response to this
proposed rule and make any necessary changes to the proposed Order.
Then, as appropriate, the Secretary will issue a referendum order,
which will establish the voting period, representative period, and
method of voting and designate the referendum agents.
List of Subjects in 7 CFR Part 1214
Administrative practice and procedure, Advertising, Consumer
information, Marketing agreements, Kiwifruit, Promotion, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, it is proposed that the
proposed rule establishing Title 7 of Chapter XI of the Code of Federal
Regulations and published at 62 FR 54314 on October 17, 1997, be
further amended as follows:
1. In Sec. 1214.30, paragraphs (a), (b) (1) and (2) are revised to
read as follows:
PART 1214--KIWIFRUIT RESEARCH, PROMOTION, AND CONSUMER INFORMATION
ORDER
Subpart A--Kiwifruit Research, Promotion, and Consumer Information
Order
* * * * *
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. Ten members shall
be producers (or their representatives) who are not exempt from
assessment, exporters (or their representatives), or importers (or
their representatives) who are not exempt from assessment. One member
shall be appointed from the general public. The number of members
allocated to domestic producers, exporters, and importers shall be
based on a proportional representation of the level of domestic
production and imports of kiwifruit, as determined by the Secretary.
The Secretary shall consider average annual domestic production and
imports during the four years which immediately precede the effective
date of the Order.
(b) Adjustment of Membership. (1) Subject to the 11-member limit,
the Secretary may adjust membership on the Promotion Board to
accommodate changes in domestic production and import levels of
kiwifruit.
(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 kiwifruit covered by this part. If 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 reapportionment of Board
membership, for approval of the Secretary.
* * * * *
Sec. 1214.76 [Amended]
2. Section 1214.76 is amended by adding the phrase ``as amended,''
after the word ``Act''.
Dated: November 4, 1998.
Enrique E. Figueroa,
Administrator, Agricultural Marketing Service.
[FR Doc. 98-30119 Filed 11-9-98; 8:45 am]
BILLING CODE 3410-02-P
