# Market Access Program > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2012-11601 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** May 17, 2012 - **Citation:** 77 FR 29474 ## Text DEPARTMENT OF AGRICULTURE Commodity Credit Corporation 7 CFR Part 1485 RIN 0551-AA72 Market Access Program AGENCY: Foreign Agricultural Service and Commodity Credit Corporation, USDA. ACTION: Final rule. SUMMARY: This final rule revises and amends the regulation used to administer the Market Access Program (MAP) by updating and merging the application requirements and the activity plan requirements to reflect the Unified Export Strategy (UES) system currently in place; clarifying the eligibility of activities designed to address international market access issues; modifying the list of eligible and ineligible contributions; revising the portions of the regulation regarding evaluations, contracting procedures, and the compliance review and appeals process; eliminating the Export Incentive Program/Market Access Program (EIP/MAP) as a separate subcomponent; and making other administrative changes for clarity and program integrity. This final rule adopts the substantive provisions of the proposed rule published September 8, 2009, revising and amending MAP regulations, with changes made to reflect public comments to the proposed rule. DATES: Effective Date: This rule is effective May 17, 2012. Applicability Date: This regulation will become applicable for each MAP participant at the beginning of the MAP participant's 2013 program year (i.e., 01/01/2013 or 07/01/2013). FOR FURTHER INFORMATION CONTACT: Mark Slupek, 202-720-1169, U.S. Department of Agriculture, Foreign Agricultural Service, Office of Trade Programs, Program Operations Division, Portals Office Building, Suite 400, 1250 Maryland Avenue SW., Washington, DC 20024; or by phone: (202) 720-4327; or by fax: (202) 720-9361; or by email: podadmin@fas.usda.gov. The U. S. Department of Agriculture (USDA) prohibits discrimination in its programs on the basis of race, color, national origin, sex, religion, sexual orientation, age, disability, political beliefs and marital or familial status. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (braille, large print, audiotape, etc.) should contact the USDA TARGET Center at (202) 720-2600 (Voice and TDD). SUPPLEMENTARY INFORMATION: Executive Order 12866 This rule is issued in conformance with Executive Order 12866. It has been determined to be not significant for the purposes of Executive Order 12866 and was not reviewed by the Office of Management and Budget. A cost-benefit assessment of this rule was not completed. Executive Order 12988 This rule has been reviewed in accordance with Executive Order 12988. This rule does not preempt State or local laws, regulations, or policies unless they present an irreconcilable conflict with this rule. This rule would not be retroactive. Executive Order 12372 This program is not subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. See the notice related to 7 CFR part 3015, subpart V, published at 48 FR 29115 (June 24, 1983). Executive Order 13175 This rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000) that will preempt Tribal law. Executive Order 13132 This rule does not have any substantial direct effect on States, on the relationship between the Federal government and the States, or on the distribution of power and responsibilities among the various levels of government, nor does this rule impose substantial direct compliance costs on State and local governments. Therefore, consultation with the States was not required. Regulatory Flexibility Act The Regulatory Flexibility Act does not apply to this rule because Commodity Credit Corporation (CCC) is not required by 5 U.S.C. 553 or any other law to publish a notice of proposed rulemaking with respect to the subject matter of the rule. Environmental Assessment CCC has determined that this rule does not constitute a major State or Federal action that would significantly affect the human or natural environment. Consistent with the National Environmental Policy Act (NEPA), no environmental assessment or environmental impact statement will be prepared. Unfunded Mandates Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) does not apply to this rule because it does not impose any enforceable duty or contain any unfunded mandate as described under the UMRA. Paperwork Reduction Act of 1995 In accordance with the Paperwork Reduction Act of 1995, FAS has previously received approval from OMB with respect to the information collection required to support this program. The information collection is described below: Title: Foreign Market Development Program (FMD) and Market Access Program (MAP); OMB Control Number: 0551-0026. The current OMB approval of this information collection is scheduled to expire on August 31, 2012. Consequently, CCC will submit a request to OMB under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., for the continued use of this information collection. CCC's request will reflect changes to the new paperwork collection requirements that were made in the final rule in response to public comments. A separate Notice of Request for Extension and Revision of Currently Approved Information Collection for the Market Access Program will be published in the Federal Register for comment. E-Government Act Compliance CCC is committed to complying with the E-Government Act to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services and for other purposes. The forms, regulations, and other information collection activities required to be utilized by a person subject to this rule are available at: http://www.fas.usda.gov. Background Section 203 of the Agricultural Trade Act of 1978, as amended, directs CCC to carry out a program to encourage the development, maintenance, and expansion of commercial export markets for agricultural commodities through cost-share assistance to eligible trade organizations. Such assistance may be provided in the form of CCC funds or CCC-owned commodities. Since the inception of the MAP, CCC has monitored the program closely, strengthened program controls, and implemented changes to improve the effectiveness of the program. In administering the program, CCC is committed to ensuring efficient and effective use of public funds. In this regard, CCC considers an applicant's need for Federal financial assistance, an applicant's use of rigorous performance measurements in its plans, and increasing contribution levels from Participants as important factors in the overall management of the MAP. Summary and Analysis of Comments On May 23, 2007, the CCC published an advance notice of proposed rulemaking and public hearing in the Federal Register (72 FR 28901). This notice was intended to solicit comments on whether to amend and revise the current MAP regulations. In addition, CCC held a public hearing on July 25, 2007, to receive oral and written comments. On September 8, 2009 (74 FR 46027), a proposed rule was published governing the operations of MAP. CCC received nearly 1,300 comments from nonprofit U.S. trade associations, U.S. companies, state organizations, regional trade associations, Participants, and consulting firms in response to the proposed rule. Following is a summary of the comments that specifically address the proposed rule and CCC's responses to these comments. General comments relating to the value of the program, editorial suggestions, and non-substantive comments have been omitted. Sec. 1485.10 General Purpose & Scope Policy Clarifications CCC received 164 comments on this section. Comment: Nineteen respondents expressed their concern with regard to whether previous policy clarifications will remain in effect or if the new MAP regulation will supersede the policy clarifications currently in effect. The respondents asked for clarification on this and stated that if previous policy clarifications remain in effect, that the notices should be incorporated into the new regulation. Response: CCC understands that the commenters are referring to the “Market Access Program notices” available at http://www.fas.usda.gov/mos/programs/mnotice.html. CCC issues these MAP notices for informational purposes. These notices have no legal effect. They are intended to alert MAP Participants of various aspects of CCC's administration of the MAP program. For example, CCC issues MAP notices to alert MAP Participants of procedures for requesting advances, applicable federal pay scale rates, lists of economic and trade sanctions against certain foreign countries, reporting formats and computer codes to use with the UES. The content of some MAP notices were already codified in the proposed rule. In response to the commenters, CCC has incorporated into the final rule several additional MAP notices that CCC has judged to be more substantive in nature. Those MAP notices that have been so codified will be deleted from the FAS Web site. CCC will remove certain other of the remaining MAP notices that are now obsolete or inconsistent with the final rule before or concurrent with the final rule's effective date. The remaining MAP notices will continue to be available on the Web site for informational purposes and reflect details related to CCC's current administration of the MAP program. Comment: One respondent stated that although domestic travel is not addressed in the new MAP regulation, this is one area with respect to which a policy clarification exists. Fourteen additional comments were made regarding E-ticketing and internet purchasing of tickets (not through a travel agency). The respondents stated that this is an area that was previously covered by a policy clarification but is not covered in the new regulation; so the question whether previous policy clarifications will remain in effect or if the new MAP regulation will supersede the policy clarifications applies here as well. Response: Domestic travel was addressed in a limited fashion in the proposed rule at § 1485.17(c)(25), which would have allowed, inter alia, reimbursement, solely in connection with generic promotion, only of domestic travel expenditures associated with meetings of international organizations conducted in the United States. In response to the comment, however, CCC has addressed domestic travel more extensively in several new subsections of § 1485.17(c). New § 1485.17(c)(24) lays out the conditions under which domestic travel related to international retail, trade and consumer exhibits and shows conducted in the United States can be reimbursed. New § 1485.17(c) (25) allows reimbursement for domestic travel for seminars and educational training conducted in the United States. New § 1485.17(c) (26) allows reimbursement of domestic travel expenditures of certain individuals accompanying foreign trade missions or technical teams while traveling in the United States. This change codifies MAP Notice 06-002. MAP Notice 06-002 will be removed from FAS' Web site. CCC has decided to eliminate the provision allowing reimbursement of domestic travel expenditures for a MAP Participant's attendance at meetings of international technical organizations when such meetings are conducted in the United States. These provisions are discussed in more detail in a later response. Domestic travel expenditures are not reimbursable for brand promotion activities. The comments regarding E-ticketing and internet purchase of tickets appear to refer to MAP Notice 02-004. This notice reminds MAP Participants that the reimbursement of allowable travel expenses when using E-Tickets is subject to the availability of sufficient documentation to support the expenses, as is the case with all travel expenses. The notice provides examples of information that such documentation must include, such as the complete routing codes (i.e., layover and flight information for each segment of a trip in which a change of airplane or flight designation is made) and the fare amount charged (i.e., point-to-point faring). The notice also informs MAP Participants that reimbursable travel expenditures include associated reasonable and common fees that travel agents or other ticketing sources may charge for providing E-Ticket itineraries, invoices and/or receipts. The MAP final rule now sets broad guidance on the reimbursement of a MAP Participant's domestic travel. CCC believes the final rule's provisions provide sufficient guidance to MAP Participants and does not believe it necessary to codify MAP Notice 02-004's explanation of the particulars of program administration. MAP Notice 02-004 shall remain on the FAS Web site for informational purposes. Comment: Six respondents asked for further clarification on the types of activities in the U.S. that are reimbursable. Response: In response to the comments, CCC has made a clarification to § 1485.10(c) that, to be reimbursable, all activities that occur in the United States must develop, maintain, or expand the commercial export market for the relevant U.S. agricultural commodity in accordance with the MAP Participant's approved MAP program. Comment: Fourteen respondents recommended that the threshold in the regulations for Miscellaneous/Fixed Asset Category be raised to $500 and proposed that software be subject to the same threshold as fixed assets. Response: These comments refer to a threshold in § 1485.23(d)(2) of the current MAP regulations. This provision was not included in the proposed rule and is not included in the final rule. Section 1485.30 of the MAP final rule provides the final property standards for the program. In addition, MAP Participants are subject to the applicable property management standards described in 7 CFR Parts 3015, 3016 and 3019, depending on the nature of the MAP Participant organization. Comment: One respondent stated more flexibility is needed for electronic communications, which are becoming a more important part of the marketing mix for Participants, both branded and generic. Response: CCC believes that the flexibility provided in § 1485.17(b)(1) and § 1485.17(b)(16) is adequate. Comment: Fourteen respondents stated that FAS refers to miscellaneous communications devices in the new regulations but did not address their usage costs and asked for clarification on whether these costs were reimbursable. Response: CCC believes the reimbursement of the usage costs of various communications devices is already addressed by the various provisions in the MAP final rule. Reimbursement of such communication costs depends on the circumstances under which the communication took place. For example, where usage costs of communications devices are incurred by the MAP Participant's U.S. offices and staff, those costs are not reimbursable pursuant to § 1485.16(c) and § 1485.17(d)(26). If usage costs of communications devices are incurred while on eligible international or domestic travel for approved MAP brand or generic promotion activities and are allowed under the U.S. Federal Travel Regulations (41 CFR Parts 301 through 304), they are potentially reimbursable as international or domestic travel expenditures under the circumstances laid out in the applicable provisions in § 1485.17(b) and (c). If usage costs of communications devices are incurred as part of the organization costs for a MAP Participant's overseas office approved in its MAP program agreement and such communications originate overseas, § 1485.17(c)(11) provides that such communications costs are reimbursable for generic promotions so long as the expenditure was made in furtherance of an approved activity. Thus, the monthly service charge for a caller usage plan with unlimited minutes that is incurred primarily in furtherance of an approved activity would be fully reimbursed under MAP. In contrast, under a caller usage plan that charges by the minute, only charges for calls incurred in furtherance of an approved activity would be reimbursed under MAP. Section 1485.11 Definitions CCC received 153 comments on this section. In response to the comments, CCC has edited the definitions as set forth below. In addition, CCC has made minor clarifications to the definitions of “contribution,” “program year,” “SRTG,” and “supergrade.” CCC has also included a new definition for “product samples.” This definition now codifies MAP Notice 11-003, and MAP Notice 11-003 will be removed from FAS' Web site. Finally, CCC has added a new definition for MAP Notice in the MAP final rule. Comment: One respondent recommended that the generic promotions be defined more broadly as “using U.S. commodities from multiple U.S. suppliers or in cases where only one U.S. supplier is selected to supply the commodity in question, that multiple U.S. suppliers had the opportunity to submit bids or compete for the business.” This respondent stated that as long as multiple U.S. companies had the opportunity to compete for that business, it believed promotions with these companies should be considered generic. Another respondent commented that a generic promotion should not be required to support at least two brands since this is difficult when a retailer carries only one. Response: CCC disagrees with the respondents' comments suggesting that a generic promotion not be required to support at least two brands, particularly in the case raised by the respondent, in which a single company has been competitively selected over other bidders. For clarity, CCC has moved the substance of proposed § 1485.17(d), defining what may be considered a generic promotion activity, from the section on MAP “Reimbursement rules” to the definition of “generic promotion” in § 1485.11. Original subsections (e), (f), (g), (h), (i), (j), and (k) in § 1485.17 have been re-designated as (d), (e), (j), (f), (g), (h), and (i), respectively. Comment: Fourteen respondents recommended adding or clarifying definitions for the following terms: Advertising, audits, contractors, direct promotional costs, employees, foreign brand, negative comparison, overhead costs, representative, small purchase threshold, and theme. Response: CCC disagrees with the respondents in regard to the need for additional definitions of these terms, except that it has further clarified the terms “foreign brand” and “theme.” The definition of “generic promotion” now refers to a foreign brand as “a brand owned primarily by foreign interests and being used to market a commodity or product in a foreign market.” Similarly, the definition of “generic promotion” refers to the concept of a “unified theme” as “a dominant idea or motif.” CCC has removed the term “negative comparison” from that definition in response to a different comment. Comment: Fourteen respondents questioned the definition of audits. They stated that audits are mentioned in at least three places with seemingly contradictory provisions. Response: CCC notes the MAP final rule does not define “audit.” However, CCC does not believe it is necessary to define this term, as CCC views this term as generally understood. In response to the comments, however, CCC agrees that the use of the term “audit” in § 1485.21(d)(7) is confusing and has replaced the term “audit” with the term “compliance review” in § 1485.21(d)(7). Comment: Fourteen respondents commented that the use of representatives (branded) in the phrase “no more than two representatives of a single brand participant to exhibit their company's products at a foreign trade show” implied that these individuals have to be employees of the brand (as in § 1485.17(b)(7)). These respondents suggested that this definition be expanded to include others associated with the brand such as distributors, consultants, etc. Response: CCC agrees with the respondents. CCC has modified this section (now § 1485.17(b)(8)) to expand the list of eligible representatives to include: Employees and board members of private companies, employees or members of cooperatives, or any broker, consultant, or marketing representative contracted by the company or cooperative to represent the company or cooperative in sales transactions. CCC notes that MAP Notice 99-003 is now obsolete and will be removed from FAS' Web site. Comment: Sixteen respondents commented that the proposed definition for “notifications” has veered from the original purpose for notifications, which is to notify CCC of significant changes to the MAP Participant's strategic plan. The respondents asked FAS to clarify the definition of notifications and stated the proposed rule would be burdensome to the Participants. Response: CCC agrees with the commenters. Instead of changing the definition of “notification,” however, CCC has modified § 1485.14(i) to change when notifications will be required. Notifications are now required only if a MAP Participant wishes to conduct an entirely new activity or if the Participant wishes to increase the funding level for existing, approved activities by more than $25,000 or 25%, whichever is greater. A MAP Participant may make significant adjustments below that threshold without prior notification to CCC, but must still submit a notification alerting CCC of such adjustments no later than 30 days after the change. Finally, CCC has clarified that minor adjustments to existing, approved activities and/or funding levels do not require notification. Comment: Three respondents recommended that the definition of a small-sized entity be expanded for the program by establishing the size eligibility standard to one not exceeding 150 percent of the current Small Business Administration guidelines. The respondents stated that this recommendation would better align the definition with the actual practice in the food processing industry. Response: CCC disagrees. CCC believes it is consistent with the Administration's National Export Initiative to maintain the same definition of small business as the Small Business Administration. Comment: Fourteen respondents suggested the phrase, “online to MAP and any other USDA market promotion program * * *” in the “UES Web site” definition be changed to “* * * and any other USDA market development program * * *” which is more accurate and the terminology used in the subsequent definition of the Unified Export Strategy (UES). Response: CCC agrees with the respondents and has changed the final rule accordingly. In addition, CCC has added an explicit reference to the MAP program to the end of the definition. Comment: One comment was received recommending each definition be given an identifying number or letter so that it is easier to indicate which definition is being discussed. Response: CCC disagrees. CCC believes that providing the definitions alphabetically is adequate for identifying definitions. Comment: Three respondents stated that because “brand participant” is defined in the proposed regulation to mean only U.S. agricultural cooperatives that are “participating in the MAP brand promotion of another MAP Participant,” the proposed rule does not appear to allow a cooperative to apply for funds to run its own brand program. Therefore, they requested that § 1485.11 (brand participant) and § 1485.13(a) be clarified to make it clear that cooperatives will continue to be eligible to apply directly for a brand promotion program. One respondent stated that currently cooperatives are allowed to contract directly with FAS to participate in the MAP program to promote the brand that their farmers have developed, own and use, to maximize their returns. This respondent stated that it should be allowed to continue to do so, as this was what Congress intended. One respondent stated that the reference to “participating in the brand promotion program of another MAP Participant” does not always apply and should be deleted from the definition. Response: CCC agrees with these comments and has clarified these sections. CCC has modified the definition of “brand participant” to make clear that the term does not include any agricultural cooperatives that are MAP Participants that apply for MAP funds to implement their own brand programs. CCC has also modified the definition of “brand promotion” to include U.S. agricultural cooperatives' promotion of their own brand in their own brand program. CCC has also modified § 1485.15 to delete the phrase “third party” before “brand participants” as redundant, since the definition of brand participant clearly refers to third parties and not the MAP Participant. CCC has also modified § 1485.17(b)(7) (now § 1485.17(b)(8)) to make clear that the travel expenses of representatives of MAP Participants, including U.S. agricultural cooperatives running their own brand programs, at brand promotions at trade shows are also reimbursable. Finally, CCC has modified § 1485.15(d) to refer to “entity” instead of “company” in noting that MAP Participants may not provide assistance to a single entity for brand promotion in a single country for more than 5 years. Comment: One respondent stated that the proposed definition of “foreign third party” implies that the MAP Participant can select a qualified foreign third party with whom to work. The commenter stated if the proposed definition intends to imply that FAS must give approval of foreign third parties with whom Participants work, then it must be deleted. Response: It is not CCC's intention that CCC would review or approve foreign third parties with whom Participants wish to work. CCC has clarified this definition accordingly to state that a foreign third party is a foreign entity with whom a MAP Participant works to promote the export of a U.S. agricultural commodity under the MAP program. Comment: Three respondents commented that in light of the continued development of agricultural products for non-food use, they proposed that this rule be amended to insert “non-durable” between “and any” and “product thereof, excluding tobacco.” Response: CCC disagrees with the respondents' suggestion, as the change would unnecessarily limit the scope of the program. CCC has modified the definition of “U.S. agricultural commodity” to preserve the scope of the program as covering all agricultural commodities, regardless of the type of use to which the agricultural product is put. The definition of U.S. agricultural commodity now refers to “any agricultural commodity, including any food, feed, fiber, forestry product, livestock, or insect of U.S. origin or fish * * *” Sec. 1485.12 Participation Eligibility CCC received 2 comments on this section. Comment: One respondent stated the current MAP regulations allow U.S. agricultural cooperatives to be a MAP Participant. The proposed rule retained this eligibility but qualified “U.S. agricultural cooperative” with the term “nonprofit.” The respondent commented that its understanding is that the term “nonprofit” in § 1485.12(c) and elsewhere in the proposed regulations is not intended to change the eligibility of cooperatives that are currently participating in MAP and which are considered “nonprofit” in the sense that they are entitled to tax treatment afforded by Subchapter T of the Internal Revenue Code Section 1381. The respondent requested that FAS confirm that “a nonprofit U.S. agricultural cooperative” as used in the proposed regulations includes U.S. agricultural cooperatives that are entitled to tax treatment afforded by Subchapter T of the Internal Revenue Code (IRC) Section 1381. Response: CCC confirms that U.S. agricultural cooperatives that are entitled to tax treatment afforded by Subchapter T of the IRC Section 1381 are eligible to participate in the MAP program. CCC has deleted the term “nonprofit” before “U.S. agricultural cooperative” as unnecessary and potentially confusing. CCC has also modified the definition of “brand participant” in § 1485.11 and § 1485.12(c) and made conforming edits to § 1485.13 and § 1485.28(b) to delete the term “nonprofit.” Comment: One respondent stated its concern that the proposed regulation § 1485.13(a) states that “applicants” may apply for the MAP program, but does not define the term “applicant.” The respondent was also concerned that § 1485.12 uses the term “entities” to describe who can “participate” in the MAP, while § 1485.13(a) uses the term “applicant.” The respondent was concerned that the two sections do not cross reference each other and that neither term is defined in § 1485.11 “Definitions.” The respondent also suggested the proposed regulations be revised as necessary to make clear that “a nonprofit U.S. agricultural cooperative” is one of the four entities eligible to participate in MAP under § 1485.12 and is also eligible to be an “applicant” and apply directly for MAP under § 1485.13(a), including for its own brand promotion program. Response: CCC does not share the respondent's concerns. CCC believes it is unnecessary to define the terms “applicant” and “entity.” CCC believes that it is appropriate to use different terms in § 1485.13(a), which deals with those who actually apply to the program and therefore are “applicants,” and § 1485.12, which deals with who, in theory, is eligible to apply. The MAP final rule is clear that to participate in the MAP, an entity must be one of four types of entities, one of which is a U.S. agricultural cooperative. Implicit in the concept of being “eligible” to participate in the MAP is the notion that eligible “entities” are also eligible to be “applicants” to the program. Sec. 1485.13 Application Process CCC received 94 comments on this section. CCC's responses are below. In addition, CCC has included new § 1485.13(d) and (e) to comply with OMB regulations 2 CFR Part 25, “Universal Identifier and Central Contractor Registration (CCR)” and 2 CFR Part 170, “Reporting Subaward and Executive Compensation Information.” 2 CFR § 25.200 directs federal agencies to include in their regulations issued on or after September 14, 2010 requirements that all applicants for federal financial assistance: (1) Be registered in the CCR prior to submitting an application or plan; (2) maintain an active CCR registration with current information at all times during which it has an active Federal award or an application or plan under consideration by an agency; and (3) provide its DUNS number in each application or plan it submits to the agency. Similarly, pursuant to 2 CFR § 170.200(b), any regulations issued after September 14, 2010 and containing instructions for applicants of grants and cooperative agreements, among other assistance, must require applicants that do not qualify for an exception under 2 CFR § 170.110(b) to have the necessary processes and systems in place to comply with Part 170's reporting requirements if they receive funding. Comment: Two respondents stated that under the current MAP regulations a U.S. agricultural cooperative is eligible to be a MAP Participant and in that capacity to apply directly to CCC for the cooperative's own brand promotion program. The respondents stated that the proposed regulation at § 1485.13(a) appears to unintentionally change this by providing in the fourth sentence that a MAP applicant (i.e., including a nonprofit U.S. agricultural cooperative) “may apply to conduct a generic promotion program, a brand promotion program that provides MAP funds to brand participants for branded promotion, or both.” They requested that FAS confirm that a nonprofit U.S. agricultural cooperative that applies to CCC for its own brand promotion program would be considered a “MAP Participant,” not a “brand participant” since it would enter into a MAP agreement directly with CCC. Response: CCC agrees with the respondents. CCC did not intend to change this policy and has modified § 1485.13(a) accordingly to explicitly state that an applicant who is a U.S. agricultural cooperative may also apply for funds to conduct its own brand promotion program. As noted previously, CCC has also clarified the definition of “brand participant” in § 1485.11 to exclude from that definition any agricultural cooperatives that are MAP Participants that apply for MAP funds to implement their own brand programs. Comment: Twenty-one respondents submitted requests for FAS to clarify that electronic copies of applications are no longer required to be submitted through the UES system and only a hard copy is required to be sent. Response: CCC's intent was not to imply that only a hard copy be sent. Applicants have always had a choice to submit either an electronic copy or a hard copy of their application. CCC believes the MAP final rule clearly maintains that choice, but encourages organizations to submit their applications through the UES system, because this format virtually eliminates paperwork and expedites the FAS processing, review, and reimbursement cycles. Comment: Twenty-one respondents questioned if the online version is still required, could it be submitted in a reasonably short time following the deadline? Response: No. Electronic applications may not be submitted after the deadline. CCC is required to publish a Notice of Funds Availability annually in the Federal Register . This notice provides 60 days to submit applications either electronically or by hard copy. Applications are required to be submitted by the deadline that is published in the annual notice. Comment: Two respondents provided comments regarding § 1485.13(a)(3)(i)(A) and § 1485(a)(3)(i)(B). They stated they support the requirement that Participants submit a strategic plan; however, to reduce the complexity of the UES process, they recommended that the plan submission remain separate from the current UES process. Response: CCC disagrees. CCC will continue to approve applications that it considers to present the best opportunities for developing and expanding export markets for U.S. agricultural commodities. The strategic planning process is a critical part of the application and therefore must be provided within the UES process in order for the applications to be evaluated in a consistent and equitable manner. This is not a change from current practice. Comment: Sixteen respondents provided similar comments that stated that § 1485.13(a)(1)(i)(R) & (S) both appear to require that the applicant's proposed contribution be stated in both dollar terms and as a percentage of CCC resources requested. They stated that they assume this change is not the intention of CCC, because § 1485.25 of the proposed rule implies that the applicant has a choice between stating its proposed contribution either in dollar terms or as a percentage, as is the case under current MAP regulations. The respondents asked for clarification. Response: CCC agrees with the respondents and has changed the final rule to clarify that the applicant has the choice to propose its contribution in dollar terms or as a percentage of resources requested. Section 1485.13(a)(1)(i)(R) & (S) have been eliminated and new § 1485.13(a)(1)(i)(Q) requires applications to include: “Value, in U.S. dollars, of proposed contributions from the applicant or the applicant's proposed contribution stated as a percentage of the total dollar amount of CCC resources requested.” Comment: Sixteen respondents stated that § 1485.13(a)(3)(i)(M), which introduces the requirement for an evaluation plan as part of the MAP application process, seems to imply that the current practice of “performance measures”, Country Progress Reports and regular, formal evaluations is not sufficient. The respondents stated that if this is the case the evaluation plan could become an added bureaucratic burden and asked for further clarification of CCC's intent with this new requirement. They also asked for further clarification on whether the evaluation plan is an additional requirement. Response: The requirement for an evaluation plan is not a new requirement. The Government Performance and Results Act (GPRA) of 1993 (5 U.S.C. 306; 31 U.S.C. 1105, 1115-1119, 3515, 9703-9704) requires performance measurement of Federal programs, including MAP. Section 1485.13(a)(3)(D) of the prior MAP rule required “[a] statement of goals and the applicant's plans for monitoring and evaluating performance towards achieving these goals.” In addition, § 1485.14(b)(6)(v) of the previous rule listed as one of the criteria considered by CCC in choosing applications the adequacy of the applicant's strategic plan in the following category “Description of an evaluation plan and suitability of the plan for performance measurement.” The new final rule merely clarifies the current requirement to increase each applicant's opportunity for success. To clarify that the evaluation plan is not a new requirement, CCC has combined sub-paragraphs (M) and (E) into one sub-paragraph (E) in § 1485.13(a)(3). Comment: Fourteen respondents stated that the specific mention of the submission of an “evaluation plan” in the application process implied that the current submission of goals and performance measures is no longer sufficient. The fourteen respondents also recommended that if such a plan is required, that the Participant's submission be permitted to be brief and generalized. Response: As noted in response to the prior comment, in this final rule, CCC has combined the current regulation's language on goals and performance measures and the new proposed language on evaluation plans into one single sub-paragraph (E) in § 1485.13. CCC notes that evaluation of MAP's effectiveness has been and will continue to be an integral element of program planning and implementation. The adequacy of the evaluation plan has been and will remain one of the criteria in approving applications. Comment: One respondent stated that both § 1485.13(a)(1)(i)(J) and § 1485.14(c)(9) refer to evaluating a request for a brand promotion program based on the percentage of CCC resources that will be made available to small-sized entities. The comment stated that since only small companies are eligible to participate in the branded program, this reference does not appear to be needed and should be deleted. Response: CCC has deleted the references requested by the respondent but for a different reason. The respondent is not correct that only small companies are eligible to participate in the branded program. U.S. agricultural cooperatives are also eligible to participate in the branded program. CCC, however, does not intend for small companies to receive preference over cooperatives. Accordingly, there is no need to determine the percentage of resources made available to small-sized entities, and CCC has eliminated both sections. Large companies remain ineligible for branded programs. Sec. 1485.14 Application Review and Formation of Agreements CCC has edited § 1485.14(b)(3) to make clear that the preference given to organizations with the broadest producer representation/industry participation applies only with respect to nonprofit U.S. trade organizations. CCC has also clarified § 1485.14(e) and (f) to reflect that the approval letter must also be signed by the MAP Participant and that final agreement occurs when both the program agreement or amendment and the approval letter are signed by both parties. In addition, CCC received 130 comments on this section, set forth below. Comment: Fourteen respondents stated under § 1485.14(c)(8) that “overhead costs” and “direct promotional costs” are not defined. Response: CCC believes these terms are generally well-understood and that “direct promotional costs” in specific is self-explanatory. CCC, therefore, does not deem it necessary to define these terms in the final rule. Moreover, this language remains unchanged from the current rule that has been in place for 15 years. Section 1485.14(c) explains the allocation factors used by CCC to determine which applications to approve. Subsection (c)(8), which notes that CCC will review general administrative and overhead costs compared to direct promotional costs, merely reflects CCC's preference that program funds be used for promotional expenses rather than administrative expenses. CCC has modified § 1485.14(c)(8) to make clear that CCC will review proposed MAP-funded general administrative and overhead costs compared to proposed MAP-funded direct promotional costs. Comment: With respect to § 1485.14(c)(8), fourteen respondents questioned how CCC compares salaries of staff with technical expertise and who execute programs with the fees of consultants who do similar work. The respondents stated that they felt the wording made an overly simplistic distinction between administration and promotional expenses. Response: CCC disagrees that the wording of § 1485.14(c)(8) is overly simplistic. However, this comment raises an issue that requires further clarification of § 1485.11's definition of “administrative expenses or costs.” The MAP final rule now deletes the phrase “that are not directly identifiable with a specific market promotion activity” from the proposed definition of administrative expenses or costs. Administrative expenses or costs now are defined as those “expenses or costs of administering, directing, and controlling an organization that is a MAP Participant * * * [including costs related to personnel (including, but not limited to, salaries, benefits, payroll taxes, individual insurance, training)]” regardless of whether they are specifically identifiable with a specific market promotion activity. As proposed § 1485.16(c) and § 1485.17(d)(26) made clear, home office domestic administrative expenses, including salaries of U.S. home office staff who execute MAP activities, are generally not reimbursable under MAP, and the Participant must use its own funds to pay any administrative costs of its U.S. offices. This is not a change from the prior regulations. This change to the definition of “administrative expenses or costs” makes the definition consistent with these sections. Pursuant to § 1485.17(c)(1) and (11), however, MAP funding is available, for generic promotion only, to pay for the compensation of a U.S. citizen employee or U.S. citizen contractor stationed overseas, as well as the administrative costs for overseas offices approved in MAP program agreements. In evaluating applications for MAP funding of overseas offices, as reflected in § 1485.14(c)(8), CCC generally prefers that MAP funding be directed toward promotional expenses rather than administrative expenses. It is true that salaries of overseas office staff with technical expertise are still considered administrative expenses even if the staff execute MAP activities, whereas fees of consultants who do similar work would be classified as promotional expenses. However, applicants are free to explain in their applications what promotional activities overseas office staff are anticipated to conduct. Comment: One respondent stated that the wording in § 1485.14(c)(8) regarding factors affecting allocations does not provide for any distinction when making allocation decisions between time salaried staff spend on “administrative functions” (usually a minor amount of time spent by higher paid staff) and time spent making use of technical expertise to execute programs and provide information to importers and processors, which are the main reasons for employing higher paid staff. Response: See response to prior comment. CCC does not believe that § 1485.14(c)(8) must distinguish between time salaried staff spends on “administrative functions” and time salaried staff spends on executing MAP activities. All time spent by salaried staff is considered general administrative and overhead costs, not direct promotional costs, as clarified in the revised definition of “administrative expenses or costs.” As noted in CCC's response above, applicants are free to explain in their applications what promotional activities overseas office staff are anticipated to conduct. Comment: One respondent in a comment to § 1485.29 stated further clarification was needed regarding the eligibility of contracts with U.S. based organizations that are retained to implement or assist with approved international market development efforts. This respondent stated the proposed regulations do not completely clarify those domestic contracts that would be deemed eligible for reimbursement and those that would not be. Response: CCC's current practice is to reimburse MAP Participants' expenditures for contracts with U.S. based organizations retained to implement or assist with approved international market development efforts, except when the U.S. based organization is also providing administrative services to the MAP Participant's U.S. office(s). In other words, if a U.S. based organization assumes any functions related to the administration, direction or control of the MAP Participant's U.S. office(s) in a program year, then no activity of any type undertaken by this organization in the United States or overseas during that program year, including direct promotional services overseas, will be reimbursable with MAP funds. CCC has codified this current practice in new § 1485.17(b)(19). Note that this prohibition does not apply when the U.S. based organization is providing administrative services to an approved MAP funded overseas office (as opposed to the U.S. home office). In that case, the activities provided by the organization are reimbursable whether they are administrative or direct promotion under the MAP final rule, so long as the organization is not also providing administrative services to the MAP Participant's U.S. office(s) in the same program year. Comment: Nineteen respondents provided similar comments in reference to § 1485.14(i), stating that the current notification process serves CCC's and the Participant's purposes. A number of the respondents stated that although they believed some formalization of the process may be necessary, the proposed requirement to notify CCC of any budgetary change that is at least $10,000 or more is burdensome. They stated that approval is only relevant at the constraint level and that acknowledgement of an activity level change would be more appropriate. The respondents also recommended that notification level be increased to $25,000, to reflect the greater impact of an activity funded at this level. Several of the comments stated that the language “may make adjustments only if it submits a notification” implies that any change to an activity, regardless of how minor, requires a notification. The respondents suggested that while the regulations should certainly provide that activities can be changed, details of when a notification is required could be more appropriately addressed in a separate policy clarification. One respondent stated that if CCC has identified the need to track budget changes more closely, they recommend that it adopt a policy based on a percentage change rather than a dollar value and that the percentage be no less than 25 percent of an existing budget amount. The respondent further stated that FAS staff should be required to use the UES system for approving such changes and that approval should not be based on a default period of 15 days. Response: CCC disagrees that the “current notification process” serves CCC's purposes. However, in response to the above comments, CCC has modified § 1485.14(i) to reduce the burden of notifications, adopting several of the changes requested by commenters. For example, CCC has increased the threshold to $25,000 for requiring notification to CCC of changes to existing activities. This notification must occur before the change is implemented, but no approval is required. Similarly, CCC will require notifications for adjustments below that threshold only if the change is significant. No notification is required for minor changes in existing, approved activities or for deleting an activity. Comment: Two respondents stated that MAP Participants' current practice of reallocating funds among brand participants in the MAP Participants' branded programs has allowed MAP Participants to expand brand participation by as much as 40 percent per year. Therefore, they strongly oppose proposed § 1485.14(i)(2)(i), which would require MAP Participants to notify CCC of any increase in the funding level for existing, approved activities addressing a single constraint or opportunity by more than $10,000 or 20 percent of the approved funding level, whichever is greater. They further stated that imposing a hard budget ceiling and requisite advance notification would severely limit the flexibility for MAP Participants with branded programs to reallocate funds from companies that are unable to utilize them in favor of those that can. Response: Respondents are mistaken that § 1485.14(i)(2)(i) requires a MAP Participant to notify CCC of any reallocation of funds among the Participant's branded program participants. The notification requirement does not apply at the brand company level for a MAP Participant operating a brand program. The brand program is approved by CCC at the program level, not at the company level. CCC simply approves of the Participant's brand program in the aggregate; CCC does not review or approve a MAP Participant's allocation of funds among brand participants in its branded program. Comment: Fourteen respondents stated they support the self-certification requirement by small-sized entities participating in a MAP Participant's activities in the branded program area. In addition, CCC received some comments encouraging CCC to be consistent in its policy to exclude large companies from the program. The respondents stated that currently large companies cannot apply and receive MAP funding directly; however, a marketing company representing a large company may obtain assistance through a SRTG. The respondents recommended that the applicant company as well as the brand owner be required to certify that they meet SBA's criteria of being a small company. Response: CCC disagrees with respondents' recommendation that the brand owner certify that it is a small company. It is not CCC's intention to limit the products that small export trading companies can market under the MAP branded program, regardless of the size of the company producing the product marketed. CCC believes that it is appropriate for a small export trading company to promote its ability to consolidate export shipments that include products made by a wide range of companies. Sec. 1485.15 Operational Procedures for Brand Programs CCC received 32 comments on this section. CCC has also modified § 1485.15(c)(6) to include additional terms that are acceptable origin identification, currently set forth in MAP Notice 97-020. In addition, CCC has modified § 1485.15(c)(6) to advise that CCC may temporarily waive the U.S. origin labeling requirement where CCC has determined that such labeling will likely harm sales rather than help them. Comment: Three respondents made similar comments in reference to § 1485.15(a). One respondent recommended that the requirement for an annual submission of program operational procedures be changed to require FAS approval only once, after which FAS would merely be notified of any changes. Two respondents proposed that the review of procedures and documents used to administer the branded program be conducted during the annual compliance review. Response: CCC disagrees with the recommendation to remove the annual requirement and has retained the requirement for an annual submission of program operational procedures even if there are no substantial changes in the procedures. CCC expects that any MAP Participant that is operating a brand program would review its procedures and documents annually. CCC disagrees with the respondents' proposal to have CCC review the procedures during the annual compliance review in lieu of a separate submission. The purpose of the CCC review is to approve a plan at the start of a program year, before the program begins operation. Moreover, during the compliance review, CCC may review the implementation of the plan, rather than the plan itself. In response to other comments requesting additional time for implementation, CCC has delayed the effective date of this final rule until the MAP Participant's 2013 program year (either 01/01/2013 or 07/01/2013). CCC has deleted the requirement in § 1485.15(a) that the MAP Participant must submit its proposed brand program operational procedures not later than 21 days prior to signing participation agreements with brand participants. CCC has modified § 1485.15(a) to note that CCC will notify all new and existing MAP Participants in writing in each Participant's annual approval letter and through the FAS web site as to applicable submission dates and dates for approvals of brand program operation procedures. Comment: Two respondents commented on § 1485.15(a). One respondent requested that FAS confirm that § 1485.15(a) does not apply to a U.S. agricultural cooperative that is a MAP Participant and operates the cooperative's own brand promotion program. Another respondent commented that this section appears to apply to MAP Participants that administer brand promotion programs on behalf of third party brand participants that do not have a direct agreement with CCC. The respondents requested clarification be made on whether this section does not apply to U.S. nonprofit agricultural cooperatives that are MAP Participants operating their own brand program. Response: CCC confirms that § 1485.15(a) applies only to MAP Participants that operate brand promotion programs that include third party brand participants, and does not apply to U.S. agricultural cooperatives that operate their own brand programs. CCC has amended the definition of brand participant in § 1485.11 to make clear it does not include a U.S. agricultural cooperative operating its own brand program. Comment: One respondent stated that § 1485.15(b) and § 1485.15(c) seem to imply that contracts between cooperatives and third party participants be preapproved by CCC each year. The respondent stated that this requirement is unreasonable and burdensome since nonprofit farmer owned cooperatives carefully protect their farmer members and their brand on each and every contract into which they enter. Response: CCC disagrees that § 1485.15(b) and § 1485.15(c) imply that CCC pre-approves a MAP Participant's contracts with brand participants. Section 1485.15(b) simply requires that the MAP Participant's proposed operational procedures be pre-approved by CCC. It does not require CCC to pre-approve individual contracts. Section 1485.15(c) simply sets forth items that must be addressed in each contract with a brand participant. As discussed above, U.S. agricultural cooperatives operating their own brand program are not “brand participants.” Comment: Six respondents stated that § 1485.15(c)(7) should include “small-sized entity or cooperative.” Response: CCC agrees and has made the requested change. Comment: CCC received one comment asking whether a MAP Participant who had previously received an approval from CCC to use origin identification terms other than those appearing in the current regulations would have to re-submit these terms again for approval when the new regulations become effective. Response: CCC understands the commenter to be referring to § 1485.15(c)(6), which lays out the requirement that MAP activities identify the U.S. origin of the promoted products. CCC considers that an approval under the previous regulations would constitute an approval under the new regulations. A MAP Participant would not have to re-submit these terms again for approval under the new regulations. CCC has also modified § 1485.15(c)(6) to include additional terms that are acceptable origin identification, currently set forth in MAP Notice 97-020. Specifically, CCC has added the terms “American”, “United States of America”, as well as any state or territory of the United States of America spelled out in its entirety. Section 1485.15(c)(6) also now clarifies that the use of approved origin terms as a descriptor or in the name of the product (e.g., Texas style chili, Bob's American Pizza) does not satisfy the product origin requirement. Section 1485.15(c)(6) also now encourages the phrases “product of ”, “grown in” or “made in”, but does not require them. MAP Notice 97-020 will be removed from the FAS Web site. In addition, CCC notes that in certain situations, CCC has temporarily waived the requirement to identify the U.S. origin of products promoted under the MAP brand program. For example, current MAP Notice 09-007 temporarily waives this requirement for MAP brand activities conducted in certain Middle East countries. Accordingly, CCC has modified § 1485.15(c)(6) to advise that CCC may temporarily waive the U.S. origin labeling requirement where CCC has determined that such labeling will likely harm sales rather than help them and that such determinations will be announced to MAP Participants via a MAP notice issued on FAS' Web site. MAP Notice 09-007 will continue to be available on the Web site for informational purposes and reflects CCC's current administration of the MAP program. Comment: One respondent stated that 5 years is an unreasonable time to keep records, stating that the IRS requires records to be kept for only 3 years. Response: CCC disagrees with the respondent. The Agricultural Trade Act of 1978, as amended, at 7 U.S.C. 5662(a)(1) requires the Secretary of Agriculture “to require by regulation each exporter or other participant under the [MAP and other] program[s] to maintain all records concerning a program transaction for a period not to exceed 5 years after completion of the program transaction, and to permit the Secretary to have full and complete access, for such 5-year period, to such records.” Comment: Five respondents asked CCC to clarify whether cooperatives were still exempt from the 5-year graduation rule or if this had changed. Response: CCC understands the commenters to be referring to the statutory provision in 7 U.S.C. § 5623 note, which states that MAP assistance may not be provided to promote a specific branded product in a single market for more than 5 years unless the Secretary determines that further assistance is necessary in order to meet the objectives of the program. Currently, CCC exempts U.S. agricultural cooperatives from the 5 year rule. CCC determined in 1998 that continued support for U.S. agricultural cooperatives was necessary to meet MAP's objectives, and that determination remains in place. CCC will publish this determination in a MAP notice on the FAS Web site. Comment: Three similar comments stated that the “Sunset Rule” should be deleted. The respondents suggested that if the rule is maintained, then it should apply to a specific market and not to a country. One respondent stated that the 5-year limitation is the single greatest barrier to program participation and recommended that the country limitation be extended to 8 years per market. Another respondent recommended that export trading companies be considered for exemption from the 5-year limitation, if it can be proven that any additional marketing efforts after 5 years will be for different products beyond those previously marketed. Response: CCC understands the commenters to be referring to the statutory provision in 7 U.S.C. § 5623 note, which states that “[t]he Secretary should not provide assistance under the [MAP] program to promote a specific branded product in a single market for more than 5 years unless the Secretary determines that further assistance is necessary in order to meet the objectives of the program.” Because the 5-year limitation is established by statute, CCC cannot extend the country limitation to 8 years as requested by the respondents. While the statute provides the Secretary the discretion to waive the graduation requirement in individual circumstances where the Secretary believes such further assistance is necessary to achieve the goals of MAP, CCC has no authority to “delete” the “Sunset Rule” as requested by the commenters. CCC also disagrees with the comment that the “Sunset Rule” be applied to a specific market and not to a country. CCC has defined “market” in the proposed and final rules to mean the country or countries targeted by an activity. Lastly, CCC does not have any information that suggests that exempting export trading companies from the 5-year limitation is necessary to achieve the goals of MAP. CCC retains the discretion to waive the 5-year limitation, if CCC determines that further assistance in a particular situation is in the best interests of the MAP. Comment: Two respondents commented that they supported continuing exemptions for international shows that reflect a broad international attendance. Response: CCC understands the commenters to be referring to CCC's practice, as reflected in MAP Notice 09-005, of not counting a Participant's attendance at certain international trade shows when determining whether a specific branded product has been promoted in a single market for more than 5 years. CCC will continue this practice and has codified it in § 1485.15(d) of the MAP final rule. Many international trade shows feature buyers and sellers from many countries. Many of the shows are held in the same country annually or biannually (e.g., SIAL and ANUGA are held in alternating years in France and Germany, respectively). Many U.S. companies attend such shows to meet with buyers from many countries, not just the host countries. However, given that CCC may not provide assistance to a single company for brand promotion in a single country for more than 5 years, many small brand companies would face graduation from a host country after exhibiting at one of these international trade shows for five years, even if the companies have had no other activities in that country and participating in the show is used exclusively as a gateway for developing customers in other countries. Therefore, to further the objectives of MAP, CCC has determined that brand participants' participation in certain international trade shows in foreign countries will not be considered when determining such participants' time in country for purposes of the 5 year graduation requirement. Specifically, as reflected in MAP Notice 09-005, CCC has compiled a list of international trade shows that CCC “exempts” from the graduation requirement. A show on this list meets two requirements: (1) It is a food or agricultural show, with no less than 30% of exhibitors selling food or agricultural products, and (2) it is an international show, meaning it targets buyers, distributors and the like from more than one foreign country and no less than 15% of the show's visitors are from countries other than the host country. CCC is not planning on changing its practice and has codified MAP Notice 09-005 in § 1485.15(d). MAP Notice 09-005 will be removed from the FAS Web site, as parts are now redundant with the final rule, and a new MAP notice will be posted on FAS' Web site listing the international trade shows that CCC “exempts” from the graduation requirement. If a MAP Participant believes that a show should be added to this list, the Participant should contact FAS. Comment: One respondent stated that because they do not have the facilities for conducting investigations of corporate ownership structure, they proposed that the current process of self-certification continue. Response: CCC notes that § 1485.15(c)(7) as proposed allowed brand participants to self-certify as to status as a small-sized entity and that the final rule continues the current process of self-certification. Sec. 1485.16 Contribution Rules CCC received 20 comments on this section. Below are CCC's responses. In addition, CCC has clarified in § 1485.16(c) that a MAP Participant's U.S. office's administrative costs may be included in calculating the amount of contributions the MAP Participant contributes to MAP activities. Similarly, CCC has clarified in § 1485.16(d)(2) that contributions are subject to the MAP regulations and the applicable OMB circulars on cost principles, to the extent these principles do not directly conflict with the provisions of this subpart. In addition, CCC has removed the cross-reference to § 1485.16(c) in § 1485.16(d)(2) as unnecessary. Comment: Fourteen respondents provided similar comments in reference to § 1485.16, stating it would be clearer to begin the subpart by stating that any expense that is listed as eligible for reimbursement can also be considered a contribution if paid with industry funds. The respondents stated that then the list would only need to state what is not eligible as a contribution, the assumption being that anything that is not listed is eligible. They stated this change would greatly reduce the confusion over items which now appear in both places, sometimes with slightly different wording. Response: CCC believes that eligible contributions are clear as presented in § 1485.16. CCC notes that § 1485.16(d)(2)(xxi) specifically provides that “the cost of any activity expressly listed as reimbursable in this subpart” may be considered a contribution if paid with Participant or industry funds. Comment: One respondent stated that this section does not specifically mention industry travel expenses as being counted as a contribution. This respondent stated that it urges FAS to specifically state that industry travel and other industry expenditures that are in support of the broader mission of Participants be listed as eligible to count toward contributions. Response: CCC allows domestic travel expenses paid by the Participant to be counted as a contribution, pursuant to § 1485.16(d)(2)(xvii). Additionally, at § 1485.16(d)(2)(xxi), CCC allows to be counted as a contribution the cost of any activity paid by the Participant and expressly listed as reimbursable in this subpart, which includes travel. In response to the comment, however, CCC has modified the definition of “contribution” in § 1485.11 to include explicitly expenditures made by entities in the MAP Participant's industry in support of the entities' related promotion activities in the markets covered by the MAP Participant's agreement. Comment: One respondent stated the proposed rule § 1485.16(d)(2)(xvi) reads eligible contributions include “fees for participating in U.S. Government activities” and it requested clarification of the term “U.S. Government activities.” Response: From time to time, the U.S. Government financially sponsors activities or endorses activities, particularly overseas, that promote export opportunities. These could include trade shows, trade missions, restaurant promotions, or a variety of other activities. To clarify this further, CCC has modified § 1485.16(d)(2)(xvi) to note that the activities are “U.S. government sponsored or endorsed export promotion activities.” CCC has made a corresponding edit to § 1485.17(d)(21). Comment: One respondent commented that the proposed regulation at § 1485.16(b) provides that “in MAP brand promotion programs, a brand participant shall contribute at least 50 percent of the total eligible expenditures made on each approved brand promotion.” It suggested that to be consistent with the quoted language, and with the understanding that a brand promotion program can be operated by a MAP Participant, as well as a brand participant, the phrase “a brand participant” in § 1485.16(b) should be replaced with “a brand participant or Participant” or similar language. Response: CCC agrees with the comment and has modified § 1485.16(b) accordingly. Sec. 1485.17 Reimbursement CCC received 330 comments on this section. Below are CCC's responses to the comments. In addition, CCC has clarified various provisions. For example, CCC has made explicit in § 1485.17(b) that reimbursements are subject to the MAP regulations and the applicable OMB circulars on cost principles, to the extent these principles do not directly conflict with the provisions of this subpart. CCC has also modified § 1485.17(c)(8) to codify CCC's current practice of requiring MAP Participants to provide documentation establishing the full fare economy class rate to support their reimbursement claims, as well as clarify that international travel expenses for activities that occur inside or outside the United States are reimbursable. In addition, CCC has deleted § 1485.17(c)(9), which provided that per diem was reimbursable, because it is redundant with § 1485.17(c)(8) (which now explicitly includes per diem). Section 1485.17(c)(8) allows the reimbursement of “international travel expenditures,” which include transportation, per diem, and miscellaneous expenses. CCC has also added § 1485.17(b)(17), which allows for reimbursement of international travel expenditures (e.g., transportation, per diem, and miscellaneous expenses) for brand companies participating in foreign trade missions subject to certain conditions. This codifies MAP Notice 03-004. MAP Notice 03-004 will be removed from the FAS Web site. Similarly, CCC has codified MAP Notice 01-004 in new § 1485.17(b)(18). MAP Notice 01-004 describes CCC's longstanding practice of limiting reimbursement of expenditures related to retail, trade, or consumer exhibits or shows, whether held inside or outside the United States, where USDA has sponsored or endorsed a U.S. pavilion at the exhibit or show. In that situation, MAP funds are used to reimburse the travel and/or non-travel expenditures of only those MAP Participants located within the U.S. pavilion. CCC believes it is important to maintain a unified U.S. presence at these shows, with all exhibitors contributing fairly and supporting the U.S. pavilion. MAP Notice 01-004 will be removed from the FAS Web site. Finally, CCC has added a cross reference to § 1485.17(d) in § 1485.17(b) and § 1485.17(c). Comment: Three respondents provided similar comments in reference to § 1485.17(b)(4). Two comments stated that the rule as written may be interpreted to allow the cost of product samples to be reimbursed. The respondents stated that “[a]s written, this rule may be interpreted to allow the cost of promotional samples themselves to be reimbursed. We feel that the existing approach, in which costs of distributing samples are eligible, but the costs of the samples themselves are not, remains appropriate within WTO eligibility. We recommend that this be clarified.” One comment stated that the current MAP regulations limit the reimbursement of giveaways to U.S. dollars and suggested that the maximum reimbursement be increased to reflect inflation since the 1980s. One respondent stated that the purchase of samples locally on a case-by-case basis with a maximum cost per sample not to exceed the allowable cost of a premium should be allowed. Response: CCC's practice has been and continues to be that the cost of product samples is not reimbursable under MAP. In response to the first commenters above, CCC has clarified this issue and modified § 1485.17(b)(4), which provides that the costs of in-store and food service promotions, product demonstrations, and distribution of promotional samples are reimbursable. Section 1485.17(b)(4) now explicitly notes that the purchase of product samples are not reimbursable and replaces the term “promotional samples” with “product samples.” CCC also notes that § 1485.17(d)(5) already specifically prohibits the reimbursement of the cost of product samples. In addition, as noted above, CCC has modified § 1485.11 to include a definition of “product samples.” CCC disagrees with the view that the costs of product samples should be reimbursed. CCC does not agree with the commenter requesting that the current MAP regulation's limit on the reimbursement of giveaways be increased or that it be codified in the MAP final rule. As noted above, CCC observes that the cost of samples of the promoted MAP product are not reimbursable, regardless of whether the samples are giveaways or not. Regarding the reimbursement of giveaways of non-MAP promoted products in general, the MAP final rule is written in a way to allow CCC to counter inflation, without unduly limiting its flexibility. As discussed below in CCC's response to similar comments, rather than specify a reimbursement amount for giveaways in § 1485.17(b)(11), CCC will set a reimbursement limit during the course of its administration of MAP and change that limit, as necessary, with appropriate notice to MAP Participants through written MAP notices posted on FAS' Web site. Comment: Three respondents commented in reference to § 1485.17(b)(8) supporting the inclusion of eligibility of subscriptions. All recommended that CCC change the wording to remove the words “to publications” and instead state that “CCC will reimburse in whole or in part subscriptions that are of a technical, economic, or marketing nature and relevant to the approved activities.” One respondent proposed adding language to allow for expenditures when the internet is used as a staff resource. It gave as an example for market intelligence, economic data, and key policies and procedures to be accessible via their internet site to their international offices and U.S. staff worldwide. Response: CCC agrees with the first general comment and has modified § 1485.17(b)(8) (now § 1485.17(b)(9)), as some appropriate subscriptions could be to web-based information that may not traditionally be thought of as “publications.” CCC has also made a corresponding change to § 1485.16(d)(2)(x). CCC does not agree with the second comment to add language to allow reimbursement of internet expenditures because, as submitted, this appears to be a function of the MAP Participant's home office, and, thus, is not reimbursable under the program unless otherwise authorized in § 1485.17(c)(22). Comment: Fourteen respondents commented regarding proposed § 1485.17(b)(9) (now § 1485.17(b)(10)), which provided that the cost of “demonstrators, interpreters, translators, receptionists, and similar temporary workers who help with the implementation of discrete promotional activities” is reimbursable. These respondents were concerned with the use of the word “discrete” in the preceding language. Several commented that they presume that the use of the term “discrete” applies to or refers to any approved activities such as described in the regulations. The respondents stated that it would be clearer to use the term “individual” rather than “discrete,” as that might better define the activity. Response: CCC agrees with the respondents and has made the suggested change substituting the term “individual” for the term “discrete” in the final rule for clarity. Comment: Fifteen respondents provided similar comments in regard to proposed § 1485.17(b)(10) (now § 1485.17(b)(11)), which provided that the cost of giveaways, awards, prizes, gifts and other similar promotional materials is reimbursable, subject to such reimbursement limitation as CCC may, from time to time, determine and announce in writing to all MAP Participants and on the FAS Web site. The respondents stated that they presume that announcements pertaining to the reimbursement limitations will be in the form of Program Announcements or similar instruments. Four stated that they agree with the need for flexibility in this area and supported CCC's approach. Response: CCC understands that the commenters are referring to CCC's practice of issuing Market Access Program notices. MAP Notice 97-002 currently sets out a $1.00 reimbursement limit for promotional items (which does not include product samples). It also sets out the conditions under which such reimbursement is available. CCC has determined to codify MAP Notice 97-002, in part. Section 1485.17(b)(11), which allows reimbursement for giveaways, awards, prizes, gifts and other similar promotional materials, now notes that reimbursement is available only when: (1) the items are described in detail with a per unit cost in an approved strategic plan and (2) distribution of the promotional item is not contingent upon the consumer, or other target audience, purchasing a good or service to receive the promotional item. CCC believes that specifying a dollar amount in the new MAP regulations is unnecessarily restrictive and does not provide CCC sufficient flexibility to deal with changing economic circumstances such as inflation. Therefore, rather than specify a reimbursement amount in § 1485.17(b)(11), CCC will retain the proposed rule's discretion. Thus, CCC will set a reimbursement limit during the course of its administration of MAP and change that limit, as necessary, with appropriate notice to MAP Participants through written MAP notices posted on FAS' Web site. MAP Notice 97-002 will be removed from the FAS Web site, and a new notice will be issued setting forth a reimbursement allowance for giveaways, awards, prizes, gifts and other similar promotional materials. Comment: One respondent commented in reference to § 1485.17(b)(12) and couponing. The commenter suggested that CCC allow ads to be reimbursed if the ad contains coupons for other products but does not contain a coupon for MAP Participant products. Response: CCC confirms that reimbursement is allowed if ads contain coupons for other products but do not contain a coupon for MAP Participant products. In response to the commenter, CCC has revised § 1485.17(b)(12) (now § 1485.17(b)(13)) to make clear that only the design, production and distribution of coupons for products other than the MAP Participant's promoted products are reimbursable. In addition, CCC has revised § 1485.17(b)(1), which allows advertising to be reimbursed, including advertising of price discounts, to make clear that advertising associated with coupons or price discounts for MAP-promoted products is not reimbursable. CCC has also modified both provisions to note that if otherwise reimbursable advertising or coupon activities include both coupons or price discounts for products other than the MAP Participant's promoted products as well as for the MAP-promoted products, expenditures for such activities will not be reimbursed in whole or in part (e.g., expenditures may not be prorated and submitted for reimbursement). This codifies MAP Notice 05-001, which will be removed from the FAS Web site. Finally, CCC has modified § 1485.17(d)(9) to clarify that CCC will not reimburse the cost of any coupon redemption or price discounts “of the MAP promoted commodity.” Comment: Sixteen similar comments were received regarding § 1485.17(b)(12) and the design, production and distribution of coupons. The respondents requested that CCC clarify if this section is applicable to both branded and generic. Three comments stated that they strongly support the clarification to incorporate the eligibility of coupon design, production and distribution. In addition, eighteen respondents stated that clarification was needed regarding what is covered as “branded,” as “generic,” or as both, throughout the regulations. Two respondents stated that the language listed in § 1485.17(b)(1) through § 1485.17(b)(15) seems to describe expenses eligible for entities conducting a branded program, and that expenses listed from § 1485.17(c) through § 1485.17(d) addressed generic only. They requested clarification if this understanding was correct. Another similar comment was received which stated that more specificity was needed for branded and generic reimbursement rules. One respondent stated that since Web site costs were previously not considered an eligible branded expense and the eligibility of subscription costs and audit costs do not appear to pertain to the branded program, they would like confirmation that CCC now intended for these expenses to be eligible for both the generic and branded programs. Two respondents stated that in reference to § 1485.17(c)(16), the proposed rule should make it clear that branded programs are specifically included. Response: CCC has modified § 1485.17(b) to clarify that it addresses both brand and generic promotional activities. Therefore, all subparagraphs under § 1485.17(b) are applicable to both generic and branded programs, including § 1485.17(b)(9) (allowing subscription costs), § 1485.17(b)(13) (allowing certain coupon costs), § 1485.17(b)(14) (allowing certain audit costs) and § 1485.17(b)(16) (allowing Web site costs). Section 1485.17(c) addresses generic promotional activities only. Section 1485.17(d) was removed and the text of that section added to the definition of generic promotion in § 1485.11. Subsequent subsections of § 1485.17 have been reordered. As discussed above, CCC does not reimburse the design, production or distribution of coupons for the MAP Participant's promoted products. CCC has modified § 1485.17(b)(12) (now § 1485.17(b)(13)) to make this clear. Finally, CCC disagrees with the respondents who requested that branded programs be included in § 1485.17(c)(15), which reimburses market research for generic promotions only. That section will remain applicable only to generic promotions. Comment: Fourteen respondents commented in reference to “audits” referenced in § 1485.17(b)(13) (which allowed for reimbursement of an audit of a MAP Participant that was required by the applicable parts of this title if the MAP is the Participant's largest source of federal funding), § 1485.17(c)(17) (which allowed for reimbursement of independent evaluations or audits not otherwise required by CCC if performed to ensure compliance with program agreement or regulatory requirements), and § 1485.17(e)(16) (which provided that CCC will not reimburse Participants for independent evaluations or audits if CCC determines such evaluation or audit is needed to confirm past or ensure future program agreement or regulatory compliance). The respondents requested further clarity on when CCC will pay for an audit. They also stated that references to “applicable parts of this title” should be avoided and instead, clear language should be provided. For example, the respondents asked whether, in light of § 1485.17(b)(13), which provides for reimbursement for A-133 audits, § 1485.17(c)(17) means MAP will pay for other audits that give the Participant assurances that it is in compliance with MAP rules, i.e., operational or forensic audits. Six respondents also provided similar comments in reference to § 1485.17(e)(16), questioning if all financial audits were not reimbursable. The respondents also asked if OMB Circular A-133 audits were reimbursable given that this is not required by CCC but by the federal government. Response: In response to these comments, CCC has modified § 1485.17(b)(13) (now § 1485.17(b)(14)) to clarify that this section refers to OMB Circular A-133 audits. Thus, for brand and generic promotions, such audits are reimbursable if the MAP is the MAP Participant's largest source of Federal funding. Also in response to these comments, CCC has clarified § 1485.17(c)(17) (now § 1485.17(c)(16)). That section now provides that it is subject to the limitations set out in § 1485.17(d)(which now lists items for which CCC will not reimburse Participants). CCC has also deleted the reference to ensuring compliance with “regulatory requirements” in this section. Section 1485.17(c)(16) now provides that for generic promotions only, independent evaluations and audits not otherwise required by CCC to ensure compliance with program requirements are reimbursable. CCC observes, however, that, as noted in new § 1485.17(d)(31), expenditures associated with a MAP Participant's creation or review of its fraud prevention program, contracting procedures, or brand program operational procedures are not reimbursable. With respect to the comments questioning whether § 1485.17(e)(16) prohibits reimbursement of all financial audits, CCC confirms that 1485.17(e)(16) (now § 1485.17(d)(16)) prohibits reimbursement only of evaluations or audits that are required by CCC to confirm past or to ensure future program agreement or regulatory compliance. This is not a change from the current regulations. Finally, CCC notes that this section does not prohibit reimbursement of OMB Circular A-133 audits, which is specifically allowed, under the appropriate circumstances, per § 1485.17(b)(14). CCC disagrees with the comments that the MAP final rule should avoid references to “applicable parts of this title.” As noted in § 1485.10 of both the proposed and final rules, USDA regulations other than the MAP final rule also apply to USDA recipients of federal financial assistance. Some regulations apply to all MAP Participants. Others apply only to certain categories of MAP Participants. Because of the varied nature of MAP Participants, it would be unwieldy to specify which other regulations apply and when for each provision in the MAP final rule. However, in response to the comment, wherever the MAP final rule has explicitly referred to “applicable parts of this title,” CCC has added illustrative examples of what parts potentially apply to different MAP Participants. In addition, CCC notes that § 1485.10(b) provides an illustrative list of other USDA regulations of general application that may apply to MAP and MAP Participants. The section also puts MAP Participants on notice that they must comply with the relevant provisions of the CCC Charter Act and Title VI of the Civil Rights Act of 1964 and related civil rights regulations and policies. Finally, in response to the comments, CCC has also added new § 1485.10(b)(4), which lists additional laws and regulations that are applicable to MAP Participants. Comment: Fourteen similar comments stated that previous policy guidance announced reimbursement of the costs of developing, updating, and servicing non-branded web sites on the internet and stated that they seek clarification on whether this new regulation supersedes the previous guidance. Three comments also stated that they strongly supported web site development expenses being eligible for both branded and generic programs. Response: CCC understands that the commenters are referring to CCC's practice of issuing Market Access Program notices. CCC issues these MAP notices for informational purposes. While these notices have no legal effect, they alert MAP Participants to information regarding the administration of the MAP program that CCC believes is beneficial to share with MAP Participants. CCC confirms that the MAP final rule sets out the reimbursement rules for MAP Participants and supersedes all prior inconsistent guidance. Specifically, § 1485.17(b)(15) (now § 1485.17(b)(16)), applicable to both brand and generic activities, and § 1485.17(c)(31), applicable to generic activities, provide that CCC will reimburse, in part or in whole, the cost of developing, updating and servicing certain types of Web sites. In response to the comments, however, CCC has modified § 1485.17(c)(31) to include additional conditions regarding Web site content that CCC currently requires as a condition of reimbursement, as reflected in MAP Notice 01-003. MAP Notice 01-003 has thus been codified and will be removed from FAS' Web site. Section 1485.17(c)(31) now provides that expenditures associated with developing, updating, and servicing Web sites on the Internet are reimbursable if the Web sites: (1) Contain a message related to exporting or international trade, (2) include a discernible “link” to the FAS/Washington homepage or an FAS overseas homepage, and (3) have been specifically approved by the appropriate FAS commodity division. Expenditures related to Web sites or portions of Web sites that are accessible only to an organization's members are not reimbursable. Reimbursement claims for Web sites that include any sort of “members only” sections must be prorated to exclude the costs associated with those areas subject to restricted access. Finally, CCC notes that § 1485.16(b) provides that in MAP brand promotion programs, MAP Participants must contribute at least 50% of the total eligible expenditures made on each approved brand promotion. At this time, CCC reimburses qualified Web site expenses 100% for generic promotions and 50% for brand promotions. Comment: Ten respondents provided comments in regard to § 1485.17(c)(8). They questioned under what circumstances business class travel would be reimbursed. The commentators stated that they felt it would be reasonable to be reimbursed for business class rate for flights over a specific duration (i.e. over 12 hours). Response: CCC recognizes that circumstances might arise where business class flights may be necessary. Thus, CCC has modified § 1485.17(c)(8) of the proposed rule. Originally, that section as proposed provided that CCC would determine a policy regarding the appropriate circumstances when business class rates would be acceptable and announce that policy in writing to all MAP Participants and on the FAS Web site. CCC has now articulated in § 1485.17(c)(8) the limited circumstances under which CCC, after prior written approval, will reimburse air travel up to the business class rate. These circumstances are the following: (a) Regularly scheduled flights between origin and destination points do not offer economy class (or equivalent) airfare and the MAP Participant receives written documentation from its travel agent to that effect at the time the tickets are purchased; (b) Business class air travel is necessary to accommodate an eligible traveler's disability. Such disability must be substantiated in writing by a physician; and (c) An eligible traveler's origin and/or destination are outside of the continental United States and the scheduled flight time, beginning with the scheduled departure time, ending with the scheduled arrival time, and including stopovers and changes of planes, exceeds 14 hours. In such case, per diem and other allowable expenses will also be reimbursable for the day of arrival. However, no expenses will be reimbursable for a rest period or for any non-work days (e.g., weekends, holidays, personal leave, etc.) immediately following the date of arrival. Alternatively, in lieu of reimbursing up to the business class rate in such circumstances, CCC will reimburse economy class airfare plus per diem and other allowable travel expenses related to a rest period of up to 24 hours, either en route or upon arrival at the destination. For a trip with multiple destinations, each origin/destination combination will be considered separately when applying the 14 hour rule for eligibility of reimbursement of business class travel or rest period expenses. A stopover is the time a traveler spends at an airport, other than the originating or destination airport, which is a normally scheduled part of a flight. A change of planes is the time a traveler spends at an airport, other than the originating or destination airport, to disembark from one flight and embark on another. All travel should follow a direct or usually traveled route. Under no circumstances should a traveler select flights in a manner that extends the scheduled flight time to beyond 14 hours in part to secure eligibility for reimbursement of business class travel. CCC believes that requiring CCC's prior written approval will allow both MAP Participants and CCC to confirm that the Participants meet the circumstances that may justify air travel in excess of the full fare economy rate. Comment: One respondent stated its opposition to § 1485.17(e)(15), given that refundable airline tickets are often “triple or more the cost of non-refundable tickets”. The respondent stated that this rule has the effect of substantially increasing overall travel costs under the program and also that the ability to claim an occasional non-refundable airline ticket and associated fees, especially for an international buyer (whose travel is both less predictable and less accountable) would be vastly exceeded by the overall higher costs for the less restrictive tickets. The respondent also asked for clarification of “travel restricted by a U.S. government action” and asked if denial by U.S. officials of a visa request constituted a restriction by a U.S. Government action. Response: CCC disagrees. Section 1485.17(e)(15) (now § 1485.17(d)(15)) provides that CCC will not reimburse the cost of any unused non-refundable airline tickets or associated fees, except where travel was restricted by U.S. government action or advisory. The commenter has provided no data that the effect of this proposed section would increase overall travel costs under MAP. This is not a change from the current MAP rule, and CCC does not have any reason to believe that this policy has increased costs to the MAP program beyond what it would have been had the commenter's proposal been adopted. Finally, CCC notes that denial of a visa request would not constitute a restriction by a U.S. Government action. “Travel restricted by a U.S. government action” would include, for example, if all travel from a country was prohibited due to an epidemic. Comment: Several respondents questioned whether airline change fees are reimbursable. Response: Yes. Airline change fees are reimbursable provided that such fees meet certain conditions. CCC understands that, in order to most effectively use their MAP funding, Participants at times purchase airline tickets at a price that is less than the full fare economy rate. If a Participant purchases a ticket for less than the full fare economy rate and subsequently changes the ticket, a change fee may be incurred. CCC considers this change fee to be reimbursable up to the point that the sum of the ticket purchase price and any ticket change fees equal, but do not exceed, the full fare economy rate. To clarify, if the sum of the ticket purchase price and any ticket change fees exceed the full fare economy rate, only the full fare economy rate is reimbursable. Section 1485.17(b)(8), § 1485.17(b)(17) and § 1485.17(c)(8) have been modified to specify that program-related international air transportation, including any fees for modifying the originally purchased ticket, will be reimbursed at a rate not to exceed the full fare economy rate, as allowed under the U.S. Federal Travel Regulations (41 CFR parts 301 through 304). Comment: Seventeen respondents provided similar comments in reference to § 1485.17(c)(13), which stated that more flexibility is needed for electronic communications, which are becoming a more important part of the marketing mix for Participants, both branded and generic. Fourteen of the respondents stated that the cost of service is the largest component of the costs of most devices, such as smartphones, and it is recommended that CCC include as reimbursable a monthly allowance. They stated that as with giveaways and international travel, the determinant CCC statement may be added from time to time to allow for future flexibility. One respondent stated that it recommends that the cost of using these devices be included as reimbursable expenses and that the provisions of the regulations avoid the burdensome requirements of logging individual calls in minutes or sessions. Another commented that the regulations should provide for payment of monthly service fees for portable electronic devices for staff stationed overseas, provided the devices are primarily used for Participant market development purposes. Response: Section 1485.17(c)(13) of the proposed rule provided that, for generic promotions only, CCC would reimburse the cost of the purchase, lease, or repair of, or insurance premiums for, capital goods that have an expected useful life of at least 1 year, including portable electronic communications devices (including mobile phones, wireless email devices, personal digital assistants). That section does not deal with reimbursability of usage costs of electronic devices. CCC adopts § 1485.17(c)(13) as proposed (now § 1485.17(c)(12)). As previously discussed in response to a comment, CCC believes the reimbursability of the usage costs of various communications devices is already adequately addressed by the various provisions in the MAP final rule. Reimbursability of such communication costs depends on the circumstances under which the communication took place. CCC refers to its prior response on this issue. CCC has issued several MAP notices that provide further information on CCC's current practice of reimbursing telephone calls. MAP Notice 03-006 details CCC's allowances for program-related, emergency and personal telephone and internet expenses while on eligible travel. This Notice will remain on the FAS Web site. MAP Notice 99-009 (redundant with MAP Notice 03-006) and MAP Notice 98-017 (discussing reimbursement of wireless phone airtime devoted to program activities and now redundant) will be removed from the FAS Web site. CCC disagrees with the commenter who requested that the regulations avoid the burdensome requirements of logging individual calls in minutes or sessions to claim reimbursement. CCC notes that all reimbursement claims must be substantiated by sufficient supporting documentation per § 1485.21(d)(6). In order to claim reimbursement for usage costs, therefore, the MAP Participant must identify the costs to be reimbursed. Thus, as CCC has noted above, the monthly service charge for a caller usage plan with unlimited minutes must be incurred primarily in furtherance of an approved activity and the Participant is responsible for documenting that such plan was used primarily in further of an approved activity. In contrast, under a caller usage plan that charges by the minute, only charges for calls incurred in furtherance of an approved activity would be reimbursed under MAP and the Participant is responsible for detailing which calls are properly reimbursed with MAP funds. Comment: The respondents asked if § 1485.17(e)(16) means that CCC will reimburse for audits of subcontractors. Response: No, all of the listings under § 1485.17(e) (now § 1485.17(d)) are not reimbursable. Comment: One respondent stated that reimbursement for market research should be moved under subheading (b), thus allowing for reimbursement for market research under both generic and branded programs. Response: CCC disagrees with the suggested comment to make market research eligible for both branded and generic programs. CCC intends that market research funded under the program be available throughout the relevant industry, not only to a single company or cooperative. Comment: Four respondents provided similar comments in reference to § 1485.17(c)(20) (now § 1485.17(c)(19)), which provides that for generic promotions only, CCC will reimburse the cost of STRE (sales and trade relations expenditures made on breakfast, lunch, dinner, receptions, and refreshments at approved activities, including miscellaneous courtesies such as checkroom fees, taxi fares and tips; and decorations for a special promotional occasion). The respondents requested that CCC clarify that STRE incurred in the United States at approved activities that demonstrated a positive impact on agricultural exports, be eligible for reimbursement under MAP. One commenter asked for further clarification of STRE regulations incurred in foreign and domestic markets. Response: Generally, STRE incurred outside of the United States is reimbursable. CCC, however, agrees that under certain limited circumstances, STRE may be critical to the success of an activity being carried out in the United States. Therefore, CCC has modified § 1485.17(c)(19) to clarify that STRE incurred outside the United States is reimbursable and that STRE incurred within the United States may be reimbursed under MAP upon prior written approval by CCC. As with all reimbursable expenses, such STRE must be incurred in conjunction with an approved MAP activity. In response to the request for further clarification of STRE, CCC has codified, in part, MAP Notice 97-016 in § 1485.17(c)(19). That section now specifies that MAP Participants are required to use the American Embassy representational funding guidelines for breakfasts, lunches, dinners and receptions. MAP Participants may exceed Embassy guidelines only when they have received written authorization from the FAS Agricultural Counselor at the Embassy. The amount of unauthorized STRE expenses that exceed the guidelines will not be reimbursed. MAP Participants must pay the difference between the total cost of STRE events and the appropriate amount as determined by the guidelines. MAP Notice 97-016 will be removed from the FAS Web site. Comment: Seven comments were received stating miscellaneous courtesies such as checkroom fees, taxi fares and tips, and decorations for special purposes should not fall under Sales and Trade Related Expenses (STRE) and should be fully covered under MAP as separate expense categories. Response: Congress has given CCC discretion to operate and manage the MAP. In doing so, CCC must balance benefits to MAP Participants against limited financial resources. Under the current MAP regulations, STRE incurred outside of the United States is reimbursable for generic promotions only. In response to other comments to the MAP proposed rule, CCC has modified § 1485.17(c)(19) to allow reimbursement of STRE incurred in conjunction with an approved generic promotion taking place within the United States upon prior written approval by CCC. CCC, however, disagrees with these commenters that miscellaneous courtesies should be considered separately from STRE. Comment: One respondent commented that it did not see language that includes authorization to use program funds to cover costs associated with participation in trade shows and fairs held within the United States. The respondent stated that many are international in nature and have very strong participation from overseas, and it recommended that the rules specifically include language to allow program funds to be used for Participant staff to participate in such trade shows. Response: CCC agrees with the commenter and has clarified this issue in § 1485.17(b)(7), § 1485.17(c)(8) and § 1485.17(c)(24) of this final rule. It has been CCC's practice to reimburse non-travel expenditures associated with retail, trade and consumer exhibits and shows held inside the United States under certain circumstances. Accordingly, CCC has codified, in relevant part, MAP Notice 09-006 in § 1485.17(b)(7)) of the MAP final rule. Section 1485.17(b)(7) now provides, in part, that, for both generic and branded promotions, non-travel expenditures associated with retail, trade and consumer exhibits and shows held inside the United States are reimbursable, subject to certain conditions set out in § 1485.17(b)(7). In addition, the MAP final rule expands reimbursement to other related expenses. Specifically, § 1485.17(c)(24) now provides that, for generic promotions only, domestic travel expenditures for such exhibits and shows conducted in the United States are reimbursable, subject to certain conditions and upon prior written approval by CCC. Section 1485.17(c)(8) also now specifically allows reimbursement of international travel expenses for an exhibit or show held inside the United States, subject to certain conditions. For brand promotion, neither domestic nor international travel expenses are reimbursable for retail, trade, or consumer exhibits or shows held inside the United States. These sections allow reimbursement of eligible expenses related to exhibits and shows held inside the United States only if the exhibit or show is: (1) A food or agricultural show with no less than 30% of exhibitors selling food or agricultural products, (2) an international show that targets buyers, distributors and the like from more than one foreign country and no less than 15% of its visitors are from countries other than the host country, and (3) an exhibit or show that the MAP Participant has not participated in within the last three years using funds from a source other than the MAP. MAP Notice 09-006 will be removed from the FAS Web site. A new MAP notice will be posted on FAS' Web site listing the retail, trade and consumer exhibits and shows held inside the United States for which MAP reimbursement is currently allowed by CCC. In addition, MAP Notice 97-004, which addresses when brand companies are allowed to use MAP funds for expenses associated with domestic trade shows, is now inconsistent with the MAP final rule and will be removed from FAS' web site. Below is a chart summarizing the reimbursement rules for international exhibits and shows held outside and inside the United States: Exhibits and shows outside U.S. Exhibits and shows inside U.S. Generic promotion Non-travel expenditures: Reimbursable (§ 1485.17(b)(7)) Non-travel expenditures: Reimbursable subject to conditions (§ 1485.17(b)(7)). International travel expenditures: Reimbursable (§ 1485.17(c)(8)) International travel expenditures: Reimbursable subject to conditions (§ 1485.17(c)(8)). Domestic travel expenditures: Reimbursable subject to prior written approval and subject to conditions (§ 1485.17(c)(24)). Brand promotion Non-travel expenditures: Reimbursable (§ 1485.17(b)(7)) Non-travel expenditures: Reimbursable subject to conditions (§ 1485.17(b)(7)). International travel: Reimbursable up to 2 people (§ 1485.17(b)(8)) International travel: Not reimbursable. Domestic travel: Not reimbursable. Comment: Twenty-five respondents provided similar comments stating that the phrasing was unclear in § 1485.17(c)(24), which includes “Expenditures associated with conducting international staff conferences.” The respondents requested that CCC clarify whether trade shows, seminars, educational training, international staff conferences, and meetings of international organizations are all eligible for reimbursement in the United States and overseas. Several of the respondents questioned if this included international conferences taking place in the United States and if so, whether that included travel. One respondent stated that it was unclear whether the international travel costs associated with having the industry's trade representative attend the conference would be eligible. Twenty-five respondents commented in reference to § 1485.17(c)(25) and asked for clarification of “international organizations.” Three respondents proposed that the language be amended to include “and meetings of an international focus within the United States.” One stated that this section was confusing and implied that reimbursement for travel for trade shows, seminars, and educational training was authorized only for those events that are conducted outside the United States. The respondent asked for clarification on this and stated that it believed that was not the intent of CCC, as it would severely limit the use of MAP funds to educate foreign target audiences through courses and programs conducted in the United States. Response: CCC agrees that the phrasing in § 1485.17(c)(25) was unclear and has replaced it with new §§ 1485.17(c)(23)-(26). Regarding commenters' request to clarify whether international staff conferences conducted in the United States and overseas are eligible for reimbursement, CCC observes initially that expenditures related to international staff conferences are reimbursable for generic promotions only. CCC has added a new § 1485.17(c)(23), which provides that non-travel expenditures related to conducting international staff conferences are reimbursable, regardless of whether the conferences are held in or outside the United States. These conferences are gatherings of the international staff of the MAP Participant. CCC further notes that international travel expenditures to such conferences for MAP Participants, whether held outside the United States or in the United States, are already reimbursable in accordance with § 1485.17(c)(8). Thus, under § 1485.17(c)(8), international travel costs associated with having the industry's trade representative attend the Participant's staff conference would be eligible if the individual is an employee or overseas contractor of the MAP Participant. Thus, in sum, for generic promotions only, both international travel expenditures and non-travel expenditures for international staff conferences are reimbursable, whether the conference is held outside the United States or in the United States. Domestic travel expenditures to attend such international staff conferences are not reimbursable. For brand promotions, no expenditures of any kind associated with international staff conferences are eligible for reimbursement. In response to commenters' request to clarify whether trade shows conducted in the United States and overseas are eligible for reimbursement, CCC has added new § 1485.17(c)(24). That section allows reimbursement, for generic promotions only, subject to § 1485.17(b)(18), of domestic travel expenditures related to international retail, trade and consumer exhibits and shows conducted in the United States upon prior written approval by CCC. CCC refers to its prior response to a similar comment above regarding eligibility of domestic travel and non-travel expenditures associated with participation in exhibits and shows held outside or inside the United States. In response to commenters' request to clarify whether seminars and educational training conducted in the United States and overseas are eligible for reimbursement, CCC has added new § 1485.17(b)(6) and new § 1485.17(c)(25). Section 1485.17(b)(6) provides that, for both generic and brand promotions, non-travel expenditures associated with seminars and educational training, whether conducted inside or outside the United States, are reimbursable. Further, for generic promotions, international travel expenditures associated with seminars and educational training conducted inside or outside the United States are already reimbursable under § 1485.17(c)(8). And, for generic promotions, new § 1485.17(c)(25) now reimburses domestic travel for seminars and educational training conducted in the United States. For brand promotions, no travel expenditures associated with seminars or educational training, whether conducted inside or outside the United States, are eligible for reimbursement. The chart below summarizes the reimbursement rules for seminars and educational training. Seminars and educational training outside U.S. Seminars and educational training inside U.S. Generic promotion Non-travel expenditures: Reimbursable (§ 1485.17(b)(6) Non-travel expenditures: Reimbursable subject to conditions (§ 1485.17(b)(6)). International travel expenditures: Reimbursable (§ 1485.17(c)(8)) International travel expenditures: Reimbursable (§ 1485.17(c)(8)). Domestic travel expenditures: Reimbursable (§ 1485.17(c)(25)). Brand promotion Non-travel expenditures: Reimbursable (§ 1485.17(b)(6)) Non-travel expenditures: Reimbursable (§ 1485.17(b)(6)). International travel: Not reimbursable International travel: Not reimbursable. Domestic travel: Not reimbursable. CCC acknowledges the respondents' request for clarification of the term “international organizations” and their request to reimburse domestic travel to “meetings of an international focus within the United States.” Due to difficulties in defining the criteria for eligible international organizations and meetings with an international focus, CCC has decided to eliminate the provision allowing reimbursement of domestic travel expenditures for a MAP Participant's attendance at meetings of international technical organizations and declines to expand reimbursement to include “meetings with an international focus.” Unless such attendance falls within another covered category of reimbursement for domestic travel, domestic travel for these purposes will not be reimbursable under the MAP final rule. Finally, as noted previously, CCC has codified MAP Notice 06-002 in new § 1485.17(c)(26). That section now allows, for generic promotion only, the reimbursement of domestic travel expenditures of a MAP Participant employee, a MAP Participant board member, or a state department of agriculture employee paid by the MAP Participant when such individual accompanies foreign trade missions or technical teams when such missions or teams are traveling in the United States. Such trade missions or technical team visits must be identified in the MAP Participant's UES and must have been approved by CCC. MAP Notice 06-002 will be removed from the FAS Web site. Comment: Ten respondents commented in reference to § 1485.17(c)(31) and questioned if this included educational seminars in the United States and abroad. Three comments stated they supported the inclusion of activities that are intended to improve market access and therefore recommended the insertion of “or other appropriate activities” following “educational training” and before “designed to improve market access.” Response: CCC notes that § 1485.17(c)(31) is now rendered redundant by § 1485.17(b)(6), § 1485.17(c)(8), and § 1485.17(c)(25). Non-travel expenditures associated with seminars and educational training conducted inside or outside the United States are already reimbursable as noted above pursuant to § 1485.17(b)(6). International and domestic travel expenditures for such activities are reimbursable, for generic promotion only, pursuant to § 1485.17(c)(8) and § 1485.17(c)(25). The intention of proposed § 1485.17(c)(31) was to specifically permit reimbursement of educational seminars, whether in the United States or abroad, where such seminars are intended to address market constraints such as temporary or permanent trade barriers. CCC, however, agrees with the comments that other activities in addition to educational training can achieve this objective. Given that, and the fact educational training is already covered in other subsections of the MAP final rule, CCC consequently has modified § 1485.17(c)(31) (now § 1485.17(c)(32)) to permit reimbursement for expenditures not otherwise prohibited from reimbursement that are associated with an activity held in the United States or abroad designed to improve market access by specifically addressing temporary, permanent, or impending technical barriers to trade that prohibit or threaten U.S. exports of agricultural commodities. Comment: Twenty respondents commented in reference to proposed § 1485.17(d) suggesting the sentence “A generic promotion activity may also involve the use of specific company names, logos or brand names” be clarified to read “specific U.S. company names, logos, or brand names.” The respondents stated that the absence of this clarification gives the impression that two foreign brands have to participate in activities, which would be impossible in the case of store brands. The respondents further commented on the phrase, “At least two U.S. companies participate.” Several of the comments stated that it was not often possible to garner two brands for participation in a generic promotion where brands are specifically identified. One respondent stated that this requirement was so onerous that it would significantly affect their ability to conduct promotions at retail. The respondents stated that some brands may choose not to participate; so this new regulation would limit the ability of a MAP Participant to undertake a generic promotion activity. They recommended that if the MAP Participant can demonstrate that all available brands are invited to participate then the final number of promotion participants would not have an impact on the eligibility of the activity for reimbursement. Response: CCC agrees with the respondents in regard to adding the clarification of “U.S.” to the reference to specific company names, logos, or brand names, and has modified the definition of generic promotion in § 1485.11 accordingly. CCC has also added “U.S.” as a qualifier for promoting separate items from multiple U.S. companies under a generic promotion. However, CCC disagrees with the respondents in regard to requiring two brands for participation and will keep this requirement in the final rule to avoid any appearance of promoting a single brand under a generic promotional activity. The text of proposed § 1485.17(d) has been moved into the definition of “generic promotion” in § 1485.11. § 1485.17 has been re-ordered. Comment: One respondent recommended that this section be rewritten as follows: “A generic promotion activity may include the promotion of a foreign brand if the foreign brand uses the promoted U.S. agricultural commodity. A generic promotion activity may also involve the use of specific company names, logos, or brand names. However, in that case, the MAP Participant must ensure that all U.S. and/or foreign companies seeking to promote such U.S. agricultural commodity in the market have an equal opportunity to participate in the market and that at least two companies participate.” Response: CCC disagrees with the respondent, and the final rule will continue to reflect that a generic promotional activity may include the promotion of a foreign brand only if the foreign brand uses the promoted U.S. agricultural commodity from multiple U.S. suppliers. The text of proposed § 1485.17(d) has been moved into the definition of “generic promotion” in § 1485.11. § 1485.17 has been re-ordered. Comment: Fifteen respondents stated in reference to § 1485.17(d) that most foreign brands are developed for the local companies to add value and be competitive in the market and are not generally designed to be the way for U.S. products to enter the market. The objective should be to encourage foreign brands to incorporate U.S. agricultural commodities, but the phrase, “and is the primary market access to the targeted market for the U.S. agricultural commodity” appears to limit it. The respondents questioned what exactly does the phrase itself mean, and recommended that this section be rewritten or deleted altogether. Response: CCC believes that foreign brands are often very useful for increasing U.S. exports generically. Multiple foreign brands may use U.S. products, however, and a single foreign brand does not need to provide the “primary market access to the targeted market.” Thus, CCC agrees with the respondents and has modified the proposed text of § 1485.17(d) to remove the phrase as requested. The text of proposed § 1485.17(d) has been moved into the definition of “generic promotion” in § 1485.11. § 1485.17 has been re-ordered. Comment: Sixteen respondents commented in reference to § 1485.17(d) that since Participants are currently allowed to promote foreign brands that are composed of U.S. commodities, this rule would place the U.S. companies at a disadvantage because Participants could promote their foreign competitors and not U.S. companies. The respondents suggested removing this language to open it up to Participants promoting U.S. company names, logos, or brand names that compete with foreign brands in their market. Response: CCC believes that § 1485.17(d) in the proposed rule has been misunderstood in reference to the promotion of a foreign brand. Promoting a foreign brand constitutes a generic activity promoting the U.S. commodity because the foreign brand uses the promoted commodity from multiple U.S. suppliers. In contrast, promoting a single U.S. brand would constitute a branded activity. While § 1485.17(d) specifically states that a generic pr [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2012-11601. Public record. Not legal advice.