Watermelon Research and Promotion Plan; Amendments to the Plan, Rules and Regulations, and Rules of Practice for Petitions

SUMMARY: This final rule amends the Watermelon Research and Promotion

Plan (Plan) to: eliminate the refund provision of the Plan; assess

watermelon importers and add importer member(s) to the Plan; exempt

from assessments producers with less than 10 acres of watermelons

rather than 5 acres and importers of less than 150,000 pounds; cover

all 50 States by the Plan; and revise the criteria for determining the

eligibility of producers to serve on the Board. In addition, conforming

changes would be made to the rules and regulations issued under the

Plan and the rules of practice for petitions.

EFFECTIVE DATE: February 28, 1995.

FOR FURTHER INFORMATION CONTACT: Sonia N. Jimenez, Research and

Promotion Branch, Fruit and Vegetable Division, AMS, USDA, P.O. Box

96456, Room 2535-S, Washington, DC 20090-6456; telephone (202) 720-

9916.

SUPPLEMENTARY INFORMATION: This final rule amends the Watermelon

Research and Promotion Plan [7 CFR part 1210], hereinafter referred as

the Plan. The Plan is effective under the Watermelon Research and

Promotion Act, as amended by the Watermelon Research and Promotion

Improvement Act of 1993, [7 U.S.C. 4901-4916] hereinafter referred as

the Act.

The Department of Agriculture (Department) is issuing this rule in

conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12778, Civil

Justice Reform. It is not intended to have retroactive effect. This

rule will not preempt any State or local laws, regulations, or

policies, unless they present an irreconcilable conflict with this

rule.

The Act provides that administrative proceedings must be exhausted

before parties may file suit in court. Under Sec. 1650 of the Act, a

person subject to the Plan may file a petition with the Secretary

stating that the Plan or any provision of the Plan, or any obligation

imposed in connection with the Plan, is not in accordance with law and

requesting a modification of the Plan or an exemption from the Plan.

The petitioner is afforded the opportunity for a hearing on the

petition. After such hearing, the Secretary will make a ruling on the

petition. The Act provides that the district courts of the United

States in any district in which a person who is a petitioner resides or

carries on business are vested with jurisdiction to review the

Secretary's ruling on the petition, if a complaint for that purpose is

filed within 20 days after the date of the entry of the ruling.

Regulatory Flexibility Act

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Administrator of the Agricultural Marketing Service

(AMS) has considered the economic impact of this rule on small

entities.

The purpose of the RFA is to fit regulatory actions to the scale of

business subject to such actions in order that small businesses will

not be unduly or disproportionately burdened.

There are approximately 750 watermelon handlers and 5,000

watermelon producers in the United States who are subject to the Plan.

There are approximately 140 importers of watermelons. Small

agricultural service firms are defined by the Small Business

Administration [13 CFR 121.601] as those having annual receipts of less

than $5 million and small agricultural producers are defined as those

having annual receipts of less than $500,000. The majority of

watermelon handlers, producers, and importers may be classified as

small entities.

The changes in the Plan, rules and regulations, and rules of

practice for petitions reflect amendments to the Act. The overall

economic impact of these changes is not expected to be significant.

Including all 50 States and the District of Columbia under the Plan

will have little impact. The producer exemption from assessments is

being increased from 5 acres to 10 acres. This change will benefit

small producers because it will increase the exemption level, and small

producers will not have to pay the assessment. The eligibility criteria

for determining if a person is a handler or a producer will not have

any economic impact. The elimination of refunds may have some impact on

a small amount of producers and handlers who are currently entitled to

refunds. There will also be a new burden on importers caused by the

assessment of imports, but importers are currently benefiting from the

activities which promote watermelons without paying assessments. The

research and promotion program is expected to continue to benefit

producers, handlers, and importers subject to the Plan by expanding and

maintaining new and existing markets. Accordingly, the Administrator of

AMS has determined that this rule will not have a significant economic

impact on a substantial number of small entities.

Paperwork Reduction

In accordance with the Paperwork Reduction Act of 1980 [40 U.S.C.

Chapter 35], the information collection requirements contained in the

Plan have previously been approved by the Office of Management and

Budget (OMB) and assigned OMB number 0581-0093. There will be a new

reporting burden on importers, but the burden has been already approved

by the OMB and assigned OMB control number 0581-0093. This action adds

no additional reporting burden.

Background

Under the Plan, the National Watermelon Promotion Board (Board)

administers a nationally coordinated program of research, development,

advertising, and promotion designed to strengthen the watermelon's

position in the market place and to establish, maintain, and expand

markets for domestic watermelons. In the past, this program was

financed by assessments [[Page 10796]] on all producers, except those

persons engaged in the growing of less than five acres of watermelons,

and handlers of watermelons. The Plan specifies that handlers are

responsible for collecting and submitting both the producer and handler

assessments to the Board, reporting their handling of watermelons, and

maintaining records necessary to verify their reporting.

U.S. production of watermelons is estimated through the use of U.S.

shipment statistics. Shipments of U.S.-produced watermelons totaled

about 1,895.6 million pounds in 1993, 7 percent less than in 1992.

Imports of watermelons in 1993 totalled 343.5 million pounds, an

increase of 12 percent. Therefore, domestic production is about six

times as great as the volume of imports.

A referendum was conducted in 1989 to determine if majority of

watermelon growers and handlers favored the passage of an industry

funded research and promotion program for watermelons. The Plan was

intended to collect assessments for research and promotion of

watermelons. At that time, any individual not favoring the program

could request a refund of the assessments paid by that individual.

Procedures to request a refund of assessments were explained in the

Plan.

A proposed rule was published in the Federal Register on April 14,

1994 [59 FR 17739]. That rule contained the proposed amendments to the

Plan, rules and regulations, rules of practice for petitions, and

referendum procedures. In order to have the referendum procedures in

place for the referendum, the Department decided to separately make

final the referendum procedures. A final rule was published in the

Federal Register on August 30, 1994 [59 FR 44613] containing the

referendum procedures. A proposed rule containing the proposed

amendments to the Plan, rules and regulations, rules of practice for

petitions, and ordering that a referendum be conducted was published

separately on August 30, 1994 [59 FR 44646].

The deadline for comments on the proposed amendments published on

April 14 was May 16, 1994. Twenty-one comments were received. The

comments were addressed in the rules published on August 30, 1994.

A referendum was conducted in November 1994 among watermelon

producers, handlers, and importers to determine whether they favor: (1)

eliminating the provisions for assessment refunds and (2) implementing

assessments on imported watermelons and adding importer member(s) to

the Board.

The voting period was from November 1 through November 30, 1994.

Ballots were mailed to all known eligible watermelon producers,

handlers, and importers on October 14, 1994.

Sonia N. Jimenez and Martha B. Ransom were designated as the

referendum agents of the Secretary of Agriculture to conduct this

referendum. The Procedure for the Conduct of Referenda in Connection

with the Watermelon Research and Promotion Plan were used to conduct

the referendum.

The results of the referendum indicate that 61 percent of those who

voted in the referendum favor elimination of refunds of assessments

under the program and that 81 percent of those who voted in the

referendum favor assessing watermelon imports and adding watermelon

importers to the Board.

A simple majority of votes was required to approve each of the two

changes.

The amendments to the Act authorize an assessment on watermelons

imported into the United States and the addition of importer members to

the Board. Watermelon imports enter the country primarily during the

winter season. Imports of watermelons in 1993 totalled 343.5 million

pounds. The assessment rate for imports will be the combined total

assessment rate paid by producers and handlers of domestic watermelons.

The current assessment rate for producers is 2 cents per hundredweight

and for handlers is 2 cents per hundredweight. The combined assessment

rate for importers, therefore, will be 4 cents per hundredweight.

Assessments will be paid at the time the watermelons enter the country.

The collection of assessments on imported watermelons will be expected

to generate an additional $137,400 per year in revenue to the Board. In

order to make these changes, this rule amends sections 1210.305,

1210.320, 1210.321, 1210.328, 1210.341, 1210.350, 1210.351, 1210.352,

1210.363, and 1210.364 of the Plan; sections 1210.402 and 1210.405 of

the nomination procedures; and sections 1210.515, 1210.518, 1210.519,

1210.521, 1210.530, 1210.531, and 1210.532 of the rules and

regulations. In addition, a new section 1210.314 will be added to the

Plan.

To facilitate the collection of assessments on imported

watermelons, the Secretary proposes that the Customs Service of the

Department of the Treasury be designated as the collecting agency for

assessments levied on such imports. Other commodity research and

promotion programs utilize the Customs Service as a means of collecting

assessments on imported products, and the Customs Service is agreeable

to collecting these watermelon assessments. An agreement between the

USDA and the Customs Service will be entered into to implement this

action. In order to make this change, this rule would amend section

1210.518 of the Rules and Regulations.

The importer representation on the Board will be proportionate to

the percentage of assessments paid by importers to the Board, except

that at least one representative of importers will serve on the Board

if importers are subject to the Plan. This representation will enable

importers to participate in developing the Board's programs, plans, and

projects, and express their views and concerns on how Board funds are

used if imports are assessed under the Plan. Importers will nominate

individuals to serve as importer members on the Board, and as required

for other members of the Board, two nominees would be submitted to the

Secretary for each vacancy. The Act requires the number of importers

members to be proportionate to the assessments paid by importers. It is

necessary to calculate the number of initial importer members on the

volume of imports because imports are not currently being assessed.

There are currently 14 producers and 14 handlers on the Board. This is

the equivalent of one domestic industry member for every 67.7 million

pounds of domestic production. Based on the average annual volume of

imports during the last 3-year period (323.1 hundredweight), four

importers would be added to the current Board. In order to make this

change, this rule would amend sections 1210.320, 1210.321, and

1210.401.

The Act provides for the elimination of refunds of assessments

after passed in the referendum. The refund provision has been in effect

since the beginning of the program. Refunds have been increasing every

year from 9 percent in 1990 to almost 29 percent in 1993. The

elimination of the refund provision from the Plan is estimated to

provide the Board with additional $250,000 per year for research and

promotion activities. In order to make this change, this rule amends

sections 1210.343 and 1210.520.

The Act increases the acreage for exempt producers from ``less than

5 acres'' to ``less than 10 acres'' of watermelons. Importers of less

than 150,000 pounds of watermelons per year will be entitled to apply

for a refund which will be the producer equivalent of the import

assessments. The 150,000- [[Page 10797]] pound exemption level for

importers is the level determined to be equivalent to 10 acres of

watermelons for domestic producers. In addition, the Act provides that

the Board has the authority to establish rules for producers to certify

whether they are exempt from the assessments. In order to make these

changes, this rule amends sections 1210.341, 1210.342, 1210.518, and

1210.521.

The Act also increases applicability of the law from the 48

contiguous States to the 50 States and the District of Columbia. This

amendment would expand the Plan to cover producers, handlers, and

importers in Hawaii, Alaska, and the District of Columbia. In order to

make these changes, this rule amends section 1210.305 and would add a

new section 1210.315.

Section 1647(f) of the Act permits changes in the assessment rate

through notice and comment rulemaking. No change to the Plan is

necessary to implement this amendment to the Act because section

1210.341 of the Plan states that assessment rates shall be fixed by the

Secretary in accordance with section 1647(f) of the Act.

The Act provides that a producer is eligible to serve on the Board

as a representative of handlers (1) if a producer purchases watermelons

from other producers in a combined total volume that is equal to 25

percent or more of the producer's own production or (2) if the combined

total volume of watermelons handled by the producer from the producer's

own production and purchases from other producer's production is more

than 50 percent of the producer's own production. This provision

facilitates the eligibility of producers and handlers to serve on the

Board as representatives of their specific group. In order to make

these changes, this rule amends sections 1210.321, 1210.363, 1210.368,

and 1210.402.

The Act also provides that all future promulgation and amendment

referenda do not have to be conducted at Extension Service county

offices. This procedure proved to be expensive and difficult to

administer. The Act now allows referenda to be conducted by mail ballot

which reduces the costs involved in conducting referenda and

facilitates a more timely tabulation of the results. In order to make

this change, this rule amends section 1210.363.

In addition, the Act changes the criteria for determining the

outcome of referenda. The Act previously provided that the Plan should

not be effective unless approved by not less than two-thirds of the

producers and handlers voting in the referendum, or producers and

handlers of not less than two-thirds of the watermelons produced and

handled during the representative period by producers and handlers

voting in the referendum, and by not less than a majority of the

producers and a majority of the handlers voting in the referendum. The

Act now specifies that the determination of the results of a referendum

should be on the basis of a simple majority of the producers, handlers,

and importers voting in the referendum. In order to make this change,

this rule amends section 1210.363.

Furthermore, section 1210.252 will be revised to correct a wording

error made during the promulgation of the Plan and section 1210.322

will be revised to delete obsolete language.

In addition, section 1210.325 will be changed to reflect a change

in the number of Board members that constitute a majority. This

revision reflects the addition of importer members to the Board.

Section 1210.505 will be amended to reflect the fact that the

Department issues user fee bills to the Board monthly rather than

quarterly.

In addition, miscellaneous conforming changes will be made to

sections 1210.251, 1210.302, 1210.328, 1210.340, and 1210.362.

Minor changes are made in this final rule for the purpose of

clarity.

After consideration of all relevant material presented, it is found

that this regulation, as set forth herein, tends to effectuate the

declared policy of the Act.

Pursuant to 5 U.S.C. 553, it is also found and determined that good

cause exists for not postponing the effective date of this action until

30 days after publication in the Federal Register because: (1) This

rule amends the Plan and the Rules and Regulations issued thereunder,

in accordance with the provisions of the Act as amended by the

Watermelon Research and Promotion Improvement Act of 1993; (2)

watermelon producers, handlers, and importers voted in November 1994 to

implement two of the major changes; and (3) no useful purpose will be

served in delaying the effective date until 30 days after publication

of this final rule. Therefore, this final rule will be effective on the

date of publication in the Federal Register.

List of Subjects in 7 CFR Part 1210

Agricultural promotion, Agricultural research, Market development,

Reporting and recordkeeping requirements, Watermelons.

For the reasons set forth in the preamble, part 1210, chapter XI of

title 7 is amended as follows:

PART 1210--WATERMELON RESEARCH AND PROMOTION PLAN

1. The authority citation for 7 CFR part 1210 continues to read as

follows:

Authority: 7 U.S.C. 4901-4916.

Subpart--Rules of Practice Governing Proceedings on Petitions To

Modify or To Be Exempted From Plans

Sec. 1210.251 [Amended]

2. In Section 1210.251, paragraph (a) is amended by removing ``;''

and adding in its place ``, as amended;''.

Sec. 1210.252 [Amended]

3. In Section 1210.252, paragraph (b)(3) is amended by removing the

word ``order'' and adding in its place ``Plan''.

Subpart--Watermelon Research and Promotion Plan

Sec. 1210.302 [Amended]

4. Section 1210.302 is amended by adding ``, as amended'' at the

end of the sentence.

5. Section 1210.305 is revised to read as follows:

Sec. 1210.305 Watermelon.

``Watermelon'' means all varieties of the Family Curcubitaceae;

Genus and Species; Citrullus Lanatus, popularly referred to as

watermelon grown by producers in the United States or imported into the

United States.

Sec. 1210.306 [Amended]

6. Section 1210.306 is amended by removing the word ``five'' and

adding in its place ``10''.

7. A new Sec. 1210.314 is added to read as follows:

Sec. 1210.314 Importer.

``Importer'' means any person who imports watermelons into the

United States as a principal or as an agent, broker, or consignee for

any person who produces watermelons outside of the United States for

sale in the United States.

8. A new section 1210.315 is added to read as follows:

Sec. 1210.315 United States.

``United States'' means each of the several States and the District

of Columbia.

9. Section 1210.320 is amended by revising paragraph (a) and adding

new paragraphs (d), (e), and (f) to read as follows:

Sec. 1210.320 Establishment and membership.

(a) There is hereby established a National Watermelon Promotion

Board, hereinafter called the ``Board.'' The [[Page 10798]] Board shall

be composed of producers, handlers, importers, and one public

representative appointed by the Secretary. An equal number of producer

and handler representatives shall be nominated by producers and

handlers pursuant to Sec. 1210.321. The Board shall also include one or

more representatives of importers, who shall be nominated in such

manner as may be prescribed by the Secretary. The public representative

shall be nominated by the Board members in such manner as may be

prescribed by the Secretary. If producers, handlers, and importers fail

to select nominees for appointment to the Board, the Secretary may

appoint persons on the basis of representation as provided in

Sec. 1210.324. If the Board fails to adhere to procedures prescribed by

the Secretary for nominating a public representative, the Secretary

shall appoint such representative.

* * * * *

(d) Importer representation on the Board shall be proportionate to

the percentage of assessments paid by importers to the Board, except

that at least one representative of importers shall serve on the Board.

(e) Not later than 5 years after the date that importers are

subject to the Plan, and every 5 years thereafter, the Secretary shall

evaluate the average annual percentage of assessments paid by importers

during the 3-year period preceding the date of the evaluation and

adjust, to the extent practicable, the number of importer

representatives on the Board.

(f) The Board consists of 14 producers, 14 handlers, at least one

importer, and one public member appointed by the Secretary.

10. Section 1210.321 is amended by redesignating paragraphs (a),

(b), and (c) as (b), (c), and (e) respectively; redesignating paragraph

(d) as paragraph (f); removing new paragraph (f)(1) and redesignating

new paragraphs (f)(2) and (f)(3) as paragraphs (f)(1) and (f)(2);

revising new paragraphs (b) introductory text, (b)(1), (b)(4), (e), (f)

introductory text, and (f)(1); removing in new paragraph (c) the word

``positions'' and adding in its place the phrase ``producer and handler

positions''; and adding new paragraphs (a) and (d) to read as follows:

Sec. 1210.321 Nominations and selection.

* * * * *

(a) There shall be two individuals nominated for each vacant

position.

(b) The Board shall issue a call for nominations by February first

of each year in which an election is to be held. The call shall include

at a minimum, the following information:

(1) A list of the vacancies and qualifications as to producers and

handlers by district and to importers nationally for which nominees may

be submitted.

* * * * *

(4) The date, time, and location of any next scheduled meeting of

the Board, national and State producer or handler associations,

importers, and district conventions, if any.

* * * * *

(d) Nominations for importers positions that become vacant may be

made by mail ballot, nomination conventions, or by other means

prescribed by the Secretary. The Board shall provide notice of such

vacancies and the nomination process to all importers through press

releases and any other available means as well as direct mailing to

known importers. All importers may participate in the nomination

process: Provided, That a person who both imports and handles

watermelons may vote for importer members and serve as an importer

member if that person imports 50 percent or more of the combined total

volume of watermelons handled and imported by that person.

(e) All producers and handlers within the district may participate

in the convention: Provided, That a person that produces and handles

watermelons may vote for handler members only if the producer purchased

watermelons from other producers, in a combined total volume that is

equal to 25 percent or more of the producer's own production; or the

combined total volume of watermelon handled by the producer from the

producer's own production and purchases from other producer's

production is more than 50 percent of the producer's own production;

and provided further, That if a producer or handler is engaged in the

production or handling of watermelons in more than one State or

district, the producer or handler shall participate within the State or

district in which the producer or handler so elects in writing to the

Board and such election shall remain controlling until revoked in

writing to the Board.

(f) The district convention chairperson shall conduct the selection

process for the nominees in accordance with procedures to be adopted at

each such convention, subject to requirements set in Sec. 1210.321(e).

(1) No State in Districts 3, 4, 5, and 7 as currently constituted

shall have more than three producers and handlers representatives

concurrently on the Board.

* * * * *

11. Section 1210.322 is amended by revising paragraphs (a), (b),

and (d) to read as follows:

Sec. 1210.322 Term of office.

(a) The term of office of Board members shall be three years.

(b) Except in the case of mid-term vacancies, the term of office

shall begin on January 1, or such other date as may be recommended by

the Board and approved by the Secretary.

* * * * *

(d) No person shall serve more than two successive terms of office.

12. Section 1210.325 is amended by revising paragraph (a) to read

as follows:

Sec. 1210.325 Procedure.

(a) A simple majority of Board members shall constitute a quorum

and any action of the Board shall require the concurring votes of a

majority of those present and voting. At assembled meetings all votes

shall be cast in person.

* * * * *

Sec. 1210.328 [Amended]

13. Section 1210.328 is amended by removing in paragraphs (d) and

(g) the word ``collected'' and adding in its place ``received'';

removing in paragraphs (g), (i), and (m) the phrase ``and handlers''

and adding in its place ``, handlers, and importers''; removing in

paragraph (k) the phrase ``or handler'' and adding in its place ``,

handler or importer''; and removing in paragraph (n) the word

``handlers'' and adding in its place ``handlers, importers,''.

Sec. 1210.340 [Amended]

14. Section 1210.340 is amended by removing in paragraph (b) the

word ``collected'' and adding in its place ``received''.

15. Section 1210.341 is amended by revising paragraphs (a), and

(b); redesignating paragraphs (d) through (i) as (e) through (j);

revising redesignated paragraph (e); adding a new paragraph (d);

removing in redesignated paragraphs (f) and (g) the word ``handler''

wherever it appears and adding in its place ``handler or importer'';

removing in redesignated paragraph (h) the word ``handlers'' wherever

it appears and adding in its place ``handlers and importers''; and

removing redesignated in paragraph (f) the letter ``(d)'' and adding in

its place ``(e)'' to read as follows:

Sec. 1210.341 Assessments.

(a) During the effective period of this subpart, assessments shall

be levied on all watermelons produced and first handled in the United

States and all [[Page 10799]] watermelons imported into the United

States for consumption as human food. No more than one assessment on a

producer, handler, or importer shall be made on any lot of watermelons.

The handler shall be assessed an equal amount on a per unit basis as

the producer. If a person performs both producing and handling

functions on any same lot of watermelons, both assessments shall be

paid by such person. In the case of an importer, the assessment shall

be equal to the combined rate for domestic producers and handlers and

shall be paid by the importer at the time of entry of the watermelons

into the United States.

(b) Assessment rates shall be fixed by the Secretary in accordance

with section 1647(f) of the Act. No assessments shall be levied on

watermelons grown by producers of less than 10 acres of watermelons.

* * * * *

(d) Each importer shall be responsible for payment of the

assessment to the Board on watermelons imported into the United States

through the U.S. Customs Service or in such other manner as may be

established by rules and regulations approved by the Secretary.

(e) Producer-handlers and handlers shall pay assessments to the

Board at such time and in such manner as the Board, with the

Secretary's approval, directs, pursuant to regulations issued under

this part. Such regulations may provide for different handlers or

classes of handlers and different handler payment and reporting

schedules to recognize differences in marketing practices or procedures

used in any State or production area.

* * * * *

16. Section 1210.342 is amended by designating the existing text as

paragraph (a) and adding new paragraphs (b), (c), and (d) to read as

follows:

Sec. 1210.342 Exemption from assessment.

* * * * *

(b) Importers of less than 150,000 pounds of watermelons per year

shall be entitled to apply for a refund that is equal to the rate of

assessment paid by domestic producers.

(c) The Secretary may adjust the quantity of the weight exemption

specified in paragraph (b) of this section on the recommendation of the

Board after an opportunity for public notice and comment to reflect

significant changes in the 5-year average yield per acre of watermelons

produced in the United States.

(d) The Board shall have the authority to establish rules, with the

approval of the Secretary, for certifying whether a person meets the

definition of a producer under section 1210.306.

Sec. 1210.343 [Removed and Reserved]

17. Section 1210.343 is removed and reserved.

18. Section 1210.350 is amended by redesignating paragraphs (a)

through (d) as (a) (1) through (4); designating the introductory

paragraph as paragraph (a) introductory text; and adding new paragraphs

(b) and (c) to read as follows:

Sec. 1210.350 Reports.

* * * * *

(b) Each importer of watermelons shall maintain a separate record

that includes a record of:

(1) the total quantity of watermelons imported into the United

States that are included under the terms of this Plan;

(2) the total quantity of watermelons that are exempt from the

Plan; and

(3) such other information as may be prescribed by the Board.

(c) Each importer shall report to the Board at such times and in

such manner as it may prescribe such information as may be necessary

for the Board to perform its duties under this part.

Sec. 1210.351 [Amended]

19. Section 1210.351 is amended by removing the word ``handler''

and adding in its place ``handler and importer'' and removing the word

``two'' and adding in its place ``2''.

Sec. 1210.352 [Amended]

20. Section 1210.352 is amended by removing in paragraph (a)(1) the

word ``handlers'' and adding in its place ``handlers or importers''.

Sec. 1210.362 [Amended]

21. Section 1210.362 is amended by removing the word ``collected''

and adding in its place ``received''; and removing the word ``plan''

and adding in its place ``Plan''.

22. Section 1210.363 is amended by revising paragraph (b) to read

as follows:

Sec. 1210.363 Suspension or termination.

* * * * *

(b) The Secretary may conduct a referendum at any time and shall

hold a referendum on request of the Board or at least 10 percent of the

combined total of the watermelon producers, handlers, and importers to

determine if watermelon producers, handlers, and importers favor

termination or suspension of this Plan. The Secretary shall suspend or

terminate this Plan at the end of the marketing year whenever the

Secretary determines that the suspension or termination is favored by a

majority of the watermelon producers, handlers, and importers voting in

such referendum who, during a representative period determined by the

Secretary, have been engaged in the production, handling, or importing

of watermelons and who produced, handled, or imported more than 50

percent of the combined total of the volume of watermelons produced,

handled, or imported by those producers, handlers, and importers voting

in the referendum. For purposes of this section, the vote of a person

who both produces and handles watermelons will be counted as a handler

vote if the producer purchased watermelons from other producers, in a

combined total volume that is equal to 25 percent or more of the

producer's own production; or the combined total volume of watermelon

handled by the producer from the producer's own production and

purchases from other producer's production is more than 50 percent of

the producer's own production. Provided, That the vote of a person who

both imports and handles watermelons will be counted as an importer

vote if that person imports 50 percent or more of the combined total

volume of watermelons handled and imported by that person. Any such

referendum shall be conducted by mail ballot.

Sec. 1210.364 [Amended]

23. Section 1210.364 is amended by removing in paragraph (d) the

phrase ``and handlers'' and adding in its place ``, handlers and

importers''.

24. The subpart heading ``Subpart--Procedures for Nominating

Producer and Handler Members to the National Watermelon Promotion

Board'' is revised; and a new undesignated center heading is added to

read as follows:

Subpart--Procedures for Nominating Members to the National

Watermelon Promotion Board

Producer and Handler Members

25. In Section 1210.401, paragraph (b) is revised to read as

follows:

Sec. 1210.401 District conventions.

* * * * *

(b) District conventions are to be held to nominate producers and

handlers as candidates for membership on the National Watermelon

Promotion Board. Each district, as defined in Sec. 1210.501, is

entitled to two producer and two handler members on the Board.

* * * * *

26. Section 1210.402 is amended by revising paragraph (a); removing

in paragraph (b) the phrase ``or first handling'' and adding in its

place ``, first handling or importing''; and removing [[Page 10800]] in

paragraph (b) the phrase ``Sec. 1210.403'' and adding in its place

``Sec. 1210.403 and Sec. 1210.404'' to read as follows:

Sec. 1210.402 Voter and board member nominee eligibility.

(a) All producers and handlers within a district may participate in

their district convention for the purpose of nominating candidates for

appointment to the Board: Provided, That a producer who both produces

and handles watermelons may vote for handler member nominees and serve

as a handler member nominee only if the producer purchased watermelons

from other producers, in a combined total volume that is equal to 25

percent or more of the producer's own production or the combined total

volume of watermelons handled by the producer from the producer's own

production and purchases from other producer's production is more than

50 percent of the producer's own production; and Provided further, That

if a producer or handler is engaged in the production or handling of

watermelons in more than one State or district, the producer or handler

shall participate within the State or district in which the producer or

handler so elects in writing to the Board and such election shall

remain controlling until revoked in writing to the Board. For the

purpose of participation in initial nominating conventions, such

election shall be made in writing, at the address provided, to the

Department official identified in the call for a district convention.

* * * * *

27. A new undesignated center heading and section 1210.404 are

added to read as follows:

Importer Members

Sec. 1210.404 Importer member nomination and selection.

(a) The Board shall include one or more representatives of

importers, who shall be appointed by the Secretary from nominations

submitted by watermelon importers. Importers' representation on the

Board shall be proportionate to the percentage of assessments paid by

importers to the Board, except that at least one representative of

importers shall serve on the Board if importers are subject to the

Plan. Nominations for importer positions that become vacant shall be

made by importers at nomination conventions or by mail ballot.

(b) The initial nomination of importer members shall be made not

later than 90 days after the Plan is amended.

(c) There shall be two individuals nominated for each vacant

position. The importer receiving the highest number of votes for a

vacancy shall be the first choice nominee, and the importer receiving

the second highest number of votes shall be the second choice nominee

submitted to the Secretary.

(d) Any individual, group of individuals, partnership, corporation,

association, cooperative or any other entity which is engaged in the

production, first handling or importing of watermelons is considered a

person and as such is entitled to only one vote, except that such

person may cast proxy votes as provided in paragraph (e)(1) of this

section.

(e) Nomination Conventions. If nominations are made by nomination

conventions, the Board shall widely publicize such conventions and

provide importers and the Secretary at least 10 days notice prior to

each convention.

(1) Proxy voting by importers shall be permitted at all

conventions. Any person wanting to cast proxy votes must demonstrate

authorization to do so. Authority to cast a proxy vote on behalf of

another person shall be demonstrated through documentation containing:

(i) The proxy voter's name, address, and telephone number;

(ii) Signature and date signed;

(iii) A certification identifying the proxy voter as an importer;

and

(iv) A statement identifying the person being given authority by

the proxy voter to cast the proxy vote.

(2) The Board shall provide to the Secretary a typed copy of each

convention's minutes and shall arrange for completion of qualification

statements and other specified information by each nominee and forward

such to the Secretary within 14 calendar days of completion of a

convention.

(f) Mail balloting. If nominations are conducted by mail ballot,

the Board shall request importers to submit nominations of eligible

importers. It is the importer's responsibility to prove the

individual's eligibility. After the names of nominees are received, the

Board shall print ballots and ask eligible importers to vote to

nominate their candidates. After the vote is received, the Board shall

tabulate the results and shall send to the Department the nominees in

order of preference. The Board shall provide the Secretary with a

report on the results, number of importers participating in the vote,

and the volume of imports, and shall arrange for completion of

qualification statements and other specified information by each

nominee and forward such to the Secretary within 14 calendar days of

receiving the ballots.

(g) Any individual who both imports and handles watermelons will be

considered an importer if that person imports 50 percent or more of the

combined total volume of watermelons handled and imported by that

person.

Sec. 1210.503 [Redesignated as Sec. 1210.405]

28. Section 1210.503 is redesignated as Sec. 1210.405, the first

sentence of paragraph (a) is revised, and a new undesignated center

heading is added to read as follows:

Public Member

Sec. 1210.405 Public member nominations and selection.

(a) The public member shall be nominated by the other members of

the Board. * * *

* * * * *

Subpart--Rules and Regulations

Sec. 1210.505 [Amended]

29. Section 1210.505 is amended by removing the word ``quarterly''

and adding in its place ``monthly''.

30. Section 1210.515 is amended by revising paragraph (a);

redesignating paragraph (b) as (c); and adding a new paragraph (b) to

read as follows:

Sec. 1210.515 Levy of assessments.

(a) An assessment of two cents per hundredweight shall be levied on

all watermelons produced for ultimate consumption as human food, and an

assessment of two cents per hundredweight shall be levied on all

watermelons first handled for ultimate consumption as human food. An

assessment of four cents per hundredweight shall be levied on all

watermelons imported into the United States for ultimate consumption as

human food at the time of entry in the United States.

(b) The import assessment shall be uniformly applied to imported

watermelons that are identified by the numbers 0807.10.30007 and

0807.10.40005 in the Harmonized Tariff Schedule of the United States or

any other number used to identify fresh watermelons for consumption as

human food. The U.S. Customs Service (USCS) will collect assessments on

such watermelons at the time of entry and will forward such assessment

as per the agreement between USCS and USDA. Any importer or agent who

is exempt from payment of assessments may submit the Board adequate

proof of the volume handled by such importer for the exemption to be

granted.

* * * * *

31. Section 1210.518 is amended by revising paragraphs (a) and (b);

[[Page 10801]] removing in paragraph (c)(1) the letter ``(e)'' and

adding in its place ``(b) and (e)'' and removing the word ``handler''

and adding in its place ``handler and importer''; removing in paragraph

(c)(2)(viii) the word ``five'' and adding in its place ``10''; and

removing in paragraph (d)(1) the word ``handler'' wherever it appears

and adding in its place ``handler and importer'' to read as follows:

Sec. 1210.518 Payment of assessments.

(a) Time of payment. The assessment on domestically produced

watermelons shall become due at the time the first handler handles the

watermelons for non-exempt purposes. The assessment on imported

watermelons shall become due at the time of entry, or withdrawal, into

the United States.

(b) Responsibility for payment.

(1) The first handler is responsible for payment of both the

producer's and the handler's assessment. The handler may collect the

producer's assessment from the producer or deduct such producer's

assessment from the proceeds paid to the producer on whose watermelons

the producer assessment is made. Any such collection or deduction of

producer assessment shall be made not later than the time when the

first handler handles the watermelons.

(2) The U.S. Customs Service shall collect assessments on imported

watermelons from importers and forward such assessments under an

agreement between the U.S. Customs Service and the U.S. Department of

Agriculture. Importers shall be responsible for payment of assessments

directly to the Board of any assessments due but not collected by the

U.S. Customs Service at the time of entry, or withdrawal, on

watermelons imported into the United States for human consumption.

* * * * *

Sec. 1210.519 [Amended]

32. Section 1210.519 is amended by removing in the introductory

paragraph the word ``handler'' and adding in its place ``handler and

importer''; by removing in paragraph (a) the word ``handler's'' and

adding in its place ``handler's and importer's''; and removing the word

``Watermelon'' from the introductory paragraph and paragraphs (a) and

(b).

33. Section 1210.520 is revised to read as follows:

Sec. 1210.520 Refunds.

Each importer of less than 150,000 pounds of watermelons during any

calendar year shall be entitled to apply for a refund of the

assessments paid in an amount equal to the amount paid by domestic

producers.

(a) Application form. The Board shall make available to all

importers a refund application form.

(b) Submission of refund application to the Board. The refund

application form shall be submitted to the Board within 90 days of the

last day of the year the watermelons were actually imported. The refund

application form shall contain the following information:

(1) Importer's name and address;

(2) Number of hundredweight of watermelon on which refund is

requested;

(3) Total amount to be refunded;

(4) Proof of payment as described below; and

(5) Importer's signature.

(c) Proof of payment of assessment. Evidence of payment of

assessments satisfactory to the Board shall accompany the importer's

refund application. An importer must submit a copy of the importer's

report or a cancelled check. Evidence submitted with a refund

application shall not be returned to the applicant.

(d) Payment of refund. Immediately after receiving the properly

executed application for refund, the Board shall make remittance to the

applicant.

34. Section 1210.521 is revised to read as follows:

Sec. 1210.521 Reports of disposition of exempted watermelons.

The Board may require reports by handlers or importers on the

handling/importing and disposition of exempted watermelons and/or on

the handling of watermelons for persons engaged in growing less than 10

acres of watermelons or in the case of importers, the importing of less

than 150,000 pounds per year. Authorized employees of the Board or the

Secretary may inspect such books and records as are appropriate and

necessary to verify the reports on such disposition.

Sec. 1210.530 [Amended]

35. Section 1210.530 is amended by removing the word ``handler''

from the introductory text and adding in its place ``handler and

importer''.

Sec. 1210.531 [Amended]

36. Section 1210.531 is amended by removing the word ``handler''

and adding in its place ``handler and importer''.

37. Section 1210.532 is revised to read as follows:

Sec. 1210.532 Confidential books, records, and reports.

All information obtained from the books, records, and reports of

handlers and importers and all information with respect to refunds of

assessments made to importers shall be kept confidential in the manner

and to the extent provided for in Sec. 1210.352.

Dated: February 21, 1995.

Lon Hatamiya,

Administrator.

[FR Doc. 95-4736 Filed 2-27-95; 8:45 am]

BILLING CODE 3410-02-P