2010-27786. Popcorn Promotion, Research, and Consumer Information Order; Reapportionment

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Final rule.

SUMMARY:

This rule amends the Popcorn Promotion, Research and Consumer Information Order (Order) to reduce the Popcorn Board (Board) membership from nine to five members to reflect the consolidation of the popcorn industry and therefore, fewer popcorn processors in the industry. In accordance with the Popcorn Promotion, Research and Consumer Information Order which is authorized by the Popcorn Promotion, Research and Consumer Information Act (Act), the number of members on the Board may be changed by regulation; provided, that the Board consist of not fewer than four members and not more than nine members. In addition, the Order states that for purposes of nominating and appointing processors to the Board, the Secretary may take into account the geographical distribution of popcorn processors.

DATES:

Effective Date: November 4, 2010.

FOR FURTHER INFORMATION CONTACT:

Deborah Simmons, Marketing Specialist, Research and Promotion Branch, Fruit and Vegetable Programs, AMS, U.S. Department of Agriculture, Stop 0244, 1400 Independence Avenue, SW., Room 0632-S, Washington, DC 20250-0244; telephone: [phone]; facsimile: [phone]; or electronic mail: [e-mail].

SUPPLEMENTARY INFORMATION:

This rule is issued under the Popcorn Promotion, Research, and Consumer Information Order [7 CFR part 1215]. The Order is authorized under the Popcorn Promotion, Research and Consumer Information Act [7 U.S.C. 7481-7491]. This rule amends the Popcorn Promotion, Research and Consumer Information Order to reduce the Popcorn Board membership from nine to five members to reflect the consolidation of the popcorn industry and therefore, fewer popcorn processors in the industry.

Executive Order 12866

The Office of Management and Budget (OMB) has waived the review process required by Executive Order 12866 for this action.

Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. The rule is not intended to have retroactive effect and will not affect or preempt any other State or Federal law authorizing promotion or research relating to an agricultural commodity.

The Act provides that any person subject to an order may file a written petition with the U.S. Department of Agriculture (Department) if they believe that the Order, any provision of the Order, or any obligation imposed in connection with the Order, is not established in accordance with law. In any petition, the person may request a modification of the Order or an exemption from the Order. The petitioner is afforded the opportunity for a hearing on the petition. After a hearing, the Department would rule on the petition. The Act provides that the district court of the United States in any district in which the petitioner resides or conducts business shall have the jurisdiction to review the Department's ruling on the petition, provided a complaint is filed not later than 20 days after the date of the entry of the ruling.

Initial Regulatory Flexibility Act and Paperwork Reduction Act

In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C. 601-612], the Agricultural Marketing Service (AMS) has considered the economic impact of this action on the processors that would be affected by this rule. The purpose of the RFA is to fit regulatory action to scale on businesses subject to such action so that small businesses will not be disproportionately burdened.

Small agricultural service firms which include processors who are covered under the Order, have been defined by the Small Business Administration (13 CFR 121.607) as those having annual receipts of no more than $7 million. Almost 50 percent of the industry is exempt from paying assessments. Based on information from the Board there are currently a total of 40 processors in the industry. Of those, 21 processors pay mandatory assessments into the program. Of the 21 processors, 11 are be classified as small processors representing 7 percent of the popcorn assessed. The top five popcorn producing states are Nebraska, Indiana, Illinois, Ohio and Iowa. In 2009, Indiana, Kansas, Michigan and Ohio had decreases in acreage planted and harvested while Kentucky, Illinois, Iowa, Missouri and Nebraska had increases in acreage planted and harvested over the acreage planted and harvested in 2008. Overall 2009 acreage planted increased by 1 percent and acreage harvested increased by 4 percent over 2008 numbers.

Most of the processors are classified as small businesses under the criteria established by the Small Business Administration. Processors who process and distribute 4 million pounds or less of popcorn annually are exempt from this program. Persons that operate under an approved National Organics program (NOP) (7 CFR part 206) system plan; process only products that are eligible to be labeled as 100 percent organic under the NOP and are not split operations shall be exempt from the payment of assessments.

The Board currently consists of 9 members which represent small, medium and large processors in the industry.

The Board voted during its October 5, 2009, conference call to request that the Secretary reduce the number of members from nine to five and to appoint persons to reflect the consolidation of the popcorn industry and therefore, fewer popcorn processors in the industry who will equitably make up the board between large, medium and small processors. The Board will continue to strive for diversity within the industry.

Nominations and appointments to the Board are conducted pursuant to sections 1215.22, 1215.23, and 1215.25 of the Order. Appointments to the Board are made by the Secretary from a slate of nominated candidates. Pursuant to section 1215.22(3)(i) of the Order, nominations for each position shall be made by processors, and be submitted to the Secretary for appointment to the Board. The Order requires that two nominees be submitted for each vacant position.

The Department has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

Background

The Order became effective on July 22, 1997, and it is authorized under the Act. The Board is composed of nine processors. Nominations take into consideration the geographical distribution of popcorn production. The States that currently have representation on the Board are Nebraska, Indiana, Iowa, Missouri and Colorado. Based on information from the Board, in 2008, the top five popcorn producing states were Nebraska, Indiana, Illinois, Ohio and Iowa.

Under the Order, the Board administers a nationally coordinated program of promotion, research, consumer information and industry information designed to strengthen the position of popcorn in the marketplace, and to maintain and expand domestic and foreign markets and uses for popcorn. This program is financed by assessments on processors who process and distribute 4 million pounds or more of popcorn annually. The current rate of assessment is 6 cents per hundredweight of popcorn. The Order specifies that processors are responsible for submitting the assessment to the Board and maintaining records necessary to verify their reporting(s). Processors who processes and distributes less than 4 million pounds of popcorn annually are exempt from this assessment.

On October 5, 2009, the Board voted to decrease its membership from nine to five.

A proposed rule was published in the Federal Register on June 4, 2010 [75 FR 31730]. Copies of the rule were made available through the Internet by the Department and the Office of the Federal Register. That rule provided a 30-day comment period which ended July 6, 2010. One comment was received by the deadline.

This rule amends the Popcorn Promotion, research and Consumer Information Order (Order) to reduce the Popcorn Board (Board) membership from nine to five members to reflect the consolidation of the popcorn industry and therefore, fewer popcorn processors in the industry.

Summary of Comments

In response to the proposed rule, the Department received one comment in support of the proposed amendment to the Order to reduce the Popcorn Board membership from nine to five members to reflect the consolidation of the popcorn industry and therefore, fewer popcorn processors in the industry.

Accordingly, the Department is not making any changes to the proposed rule based on this comment.

Pursuant to 5 U.S.C. 553, it is also found and determined that good cause exists for not postponing the effective date of this action until 30 days after publication in the Federal Register because a final rule needs to be in effect before the Board makes a call for nominations for the term of office beginning January 1, 2011.

List of Subjects in 7 CFR Part 1215

• Administrative practice and procedure
• Advertising
• Consumer information
• Marketing agreements
• Popcorn promotion
• Reporting and recordkeeping requirements

For the reasons set forth in the preamble, 7 CFR part 1215 is amended as follows:

PART 1215—POPCORN PROMOTION, RESEARCH, AND CONSUMER INFORMATION ORDER

1. The authority citation for 7 CFR part 1215 continues to read as follows:

Authority: 7 U.S.C. 7481-7491; 7 U.S.C. 7401.

2. In § 1215.21, paragraph (a) is revised to read as follows:

§ 1215.21

Establishment and membership.

(a) There is hereby established a Popcorn Board of five members. The number of members on the board may be changed by rulemaking: Provided, that the Board consist of not fewer than four members and not more than nine members. The Board shall be composed of popcorn processors appointed by the Secretary under § 1215.24.

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Dated: October 25, 2010.

Robert C. Keeney,

Acting Associate Administrator, Agricultural Marketing Service.