Kiwifruit Research, Promotion, and Consumer Information Order; Referendum Procedures

DEPARTMENT OF AGRICULTURE

7 CFR Part 1214

[FV-96-708PR]

Kiwifruit Research, Promotion, and Consumer Information Order;

Referendum Procedures

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: The purpose of this rule is to provide procedures which the

Department of Agriculture (Department) will use in conducting the

referendum to determine whether the issuance of the proposed Kiwifruit

Research, Promotion, and Consumer Information Order (Order) is approved

by a majority of the producers and importers voting in the referendum

and that the producers and importers favoring approval produce and

import 50 percent of the total volume of kiwifruit produced and

imported by persons voting in the referendum.

DATES: Comments must be received by November 1, 1996. Pursuant to the

Paperwork Reduction Act, comments on the information collection burden

must be received by December 2, 1996.

[[Page 51392]]

ADDRESSES: Interested persons are invited to submit written comments

concerning this proposed rule to: Research and Promotion Branch, Fruit

and Vegetable Division, Agricultural Marketing Service (AMS), USDA, PO

Box 96456, Room 2535-S, Washington, DC 20090-6456, fax (202) 205-2800.

Three copies of all written material should be submitted, and they will

be made available for public inspection at the Research and Promotion

Branch during regular business hours. All comments should reference the

docket number and the date and page number of this issue of the Federal

Register. Also, pursuant to the Paperwork Reduction Act, send comments

regarding the accuracy of the burden estimate, ways to minimize the

burden, including through the use of automated collection techniques or

other forms of information technology, or any other aspect of this

collection of information, to the above address.

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

Promotion Branch, Fruit and Vegetable Division, AMS, USDA, PO Box

96456, Room 2535-S, Washington, DC 20090-6456, telephone (202) 720-9916

or (888) 720-9917.

SUPPLEMENTARY INFORMATION: This proposed rule is issued under the

Kiwifruit Research, Promotion, and Consumer Information Act (7 U.S.C.

7461-7473), hereinafter referred to as the Act.

This rule provides the procedures under which the referendum would

be conducted.

Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil

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

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

policies, unless they present an irreconcilable conflict with this

rule.

The Act provides that administrative proceedings must be exhausted

before parties may file suit in court. Under section 558 of the Act,

after an Order is implemented, a person subject to the Order may file a

petition with the Secretary stating that the Order or any provision of

the Order, or any obligation imposed in connection with the Order, is

not in accordance with law and requesting a modification of the Order

or an exemption from the Order. The petitioner is afforded the

opportunity for a hearing on the petition. After such hearing, the

Secretary will make a ruling on the petition. The Act provides that the

district courts of the United States in any district in which a person

who is a petitioner resides or carries on business are vested with

jurisdiction to review the Secretary's ruling on the petition, if a

complaint for that purpose is filed within 20 days after the date of

the entry of the ruling.

Executive Order 12866 and Regulatory Flexibility Act

This rule has been determined not significant for purposes of

Executive Order 12866, and therefore has not been reviewed by the

Office of Management and Budget.

In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et

seq.), the Agency is required to examine the impact of the proposed

rule on small entities.

Legislation to create a generic program of promotion and research

for kiwifruit became effective on April 4, 1996.

Section 561 of the Act provides that the Secretary of Agriculture

(Secretary) shall conduct a referendum during the 60-day period

immediately preceding the proposed effective date of an Order to

determine whether the issuance of an Order is favored by a majority of

the producers and importers voting in the referendum. Paragraph (a)(2)

of Section 561 of the Act requires that the Order be approved by a

majority of producers and importers voting in the referendum and that

the producers and importers favoring approval produce and import 50

percent or more of the volume of kiwifruit produced and imported by

persons voting in the referendum.

There are approximately 650 producers, 45 importers, and 65

handlers of kiwifruit that would be covered by the program. Small

agricultural service firms, which would include the handlers and

importers who would be covered under the Order, have been defined by

the Small Business Administration (SBA) (13 CFR 121.601) as those whose

annual receipts are less than $5 million and small agricultural

producers, those who would be required to pay assessments, as those

having annual receipts of $500,000. Only one handler has been

identified to have $5 million in annual sales. In addition, there are

10 producers at or over the $500,000 annual sales receipts threshold.

The Department does not have specific information regarding the size of

importers. However, it could be concluded that the majority of

kiwifruit producers and importers may be classified as small entities.

The Department is aware of kiwifruit producers in California,

Oregon, Pennsylvania, South Carolina, and importers that import

kiwifruit from Chile, New Zealand, and Italy. The Department believes

that these individuals would include the majority of the producers and

importers that would be covered under the program.

California is the source for practically all of the kiwifruit

produced in the United States. The California kiwifruit industry

consists of approximately 600 producers and 65 handlers. Production

rose by 119 percent between 1984 and 1994, increasing from 18,000 tons

to 34,800 tons. In the same period, the value of production increased

by 4 percent.

Most U.S. kiwifruit is utilized fresh. Fresh utilization increased

by 219 percent between 1984 and 1994, growing from 11,700 tons to

37,500 tons. The season average price during the same period fell by 54

percent, declining from $1,000 per ton to $491 per ton. Exports

accounted for about 29 percent of U.S. fresh utilization during that

period.

Between 1992 and 1994, the average annual production per producer,

including kiwifruit for processing, was 22,365 7-pound trays of

kiwifruit. The average price was $376 per ton, giving an average return

of about $29,000 per producer per year. The average value of total

production (fresh and processed) per year was $16.3 million. A typical

f.o.b. price during this period was $7.78 per tray, and the average

amount shipped per handler was about 190,176 trays, yielding an average

annual revenue per handler of $1.5 million. U.S. importers handled an

average of 172,163 trays per year per importer. During this period, the

average value of total imports per year was $17.1 million (f.o.b.

country of origin). The majority of kiwifruit came from Chile, with the

remaining coming from New Zealand and Italy.

This proposed rule provides the procedures under which kiwifruit

producers and importers may vote on whether they want the kiwifruit

research and promotion program to be implemented. Kiwifruit producers

of 500 pounds or more and importers of 10,000 pounds or more annually

can vote in the referendum. There are approximately 700 eligible

voters.

The Department would keep all these individuals informed throughout

the program implementation and referendum process to ensure that they

are aware of and are able to participate in the program implementation

process. In addition, trade associations and related industry media

would receive news releases and other information regarding the

implementation and referendum process.

[[Page 51393]]

There is a federal marketing order program and a California state

program for kiwifruit. The marketing order regulations for grade, size,

maturity, and containers are designed to assure consumers of

consistently good quality California kiwifruit. The marketing order and

its regulations allow small farmers to compete effectively in an

increasingly competitive marketplace. The California Kiwifruit

Commission (CKC) administers the California state program for

kiwifruit. The CKC is composed of kiwifruit producers, packers, and

handlers. In 1995-96 it is estimated that producers would pay

$1,407,000 in assessments at a rate of 17 cents per kiwifruit tray or

tray equivalent. Handlers collect the assessments and remit the money

to the CKC.

Voting in the referendum is optional. However, if producers and

importers choose to vote, the burden of voting would be offset by the

benefits of having the opportunity to vote on whether they want the

program or not.

The Department considered requiring eligible voters to vote in

person at various Department offices across the country. However,

conducting the referendum from one central location by mail ballot is

more cost effective for this program. Also, the Department would

provide easy access to information for potential voters through a toll

free telephone line.

Paperwork Reduction Act

In accordance with the Office of Management and Budget (OMB)

regulations (5 CFR part 1320) which implements the Paperwork Reduction

Act of 1995 (44 U.S.C. Chapter 35), the referendum ballot, which

represents the information collection and recordkeeping requirements

that may be imposed by this rule has been submitted to OMB for

approval.

Title: National Research, Promotion, and Consumer Information

Programs.

OMB Number: 0581-0093.

Expiration Date of Approval: October 31, 1997.

Type of Request: Revision of a currently approved information

collection for research and promotion programs.

Abstract: The information collection requirements in this request

are essential to carry out the intent of the Act.

The burden associated with the ballot is as follows:

Estimate of Burden: Public reporting burden for this collection of

information is estimated to average .25 hours per response for each

producer and importer.

Respondents: Producers and importers.

Estimated Number of Respondents: 700.

Estimated Number of Responses per Respondent: 1 every 6 years

(.16).

Estimated Total Annual Burden on Respondents: 28 hours.

Because there may be insufficient time for normal clearance

procedures, AMS is seeking temporary approval from OMB for the use of

the ballot for the referendum. The ballot would be added to the other

information collections approved for use under OMB Number 0581-0093.

Comments are invited on: (a) Whether the proposed collection of

information is necessary for the proper performance of functions of the

Order and the Department's oversight of the program, including whether

the information will have practical utility; (b) the accuracy of the

AMS's estimate of the burden of the proposed collection of information

including the validity of the methodology and assumption used; (c) ways

to enhance the quality, utility, and clarity of the information to be

collected; and (d) ways to minimize the burden of the collection of

information on those who are to respond, including the use of

appropriate automated, electronic, mechanical, or other technological

collections techniques or other forms of information technology.

Comments should reference OMB No. 0581-0093, the docket number, and

the date and page number of this issue of the Federal Register.

Comments should be sent to Sonia N. Jimenez at the address listed above

by December 2, 1996. All comments received will be available for public

inspection during regular business hours at the same address. All

responses to this notice will be summarized and included in the request

for OMB approval.

Background

The Act authorizes the Secretary to establish a national kiwifruit

research, promotion, and consumer information program. The program

would be funded by an assessment levied on producers and importers not

to exceed 10 cents per 7-pound tray of kiwifruit. Producers who produce

less than 500 pounds annually, importers who import less than 10,000

pounds annually, and kiwifruit sold directly to a consumer by a

producer for a purpose other than resale and domestic and imported

kiwifruit for processing are exempt from assessments.

Assessments would be used to pay for: research, promotion, and

consumer information; administration, maintenance, and functioning of

the Board; and expenses incurred by the Secretary in implementing and

administering the Order, including referendum costs.

Section 561 of the Act requires that a referendum be conducted

among eligible producers and importers of kiwifruit to determine

whether they favor implementation of the Order. The Order shall become

effective if it is approved by a majority of producers and importers

voting in the referendum and the producers and importers favoring

approval produce and import more than 50 percent of the total volume of

kiwifruit produced and imported by persons voting in the referendum.

A proposed rule on the Order is published separately in this issue

of the Federal Register.

This proposed rule provides the procedures under which kiwifruit

producers and importers may vote on whether they want the kiwifruit

research and promotion program to be implemented. Kiwifruit producers

of 500 pounds or more and importers of 10,000 pounds or more annually

can vote in the referendum. There are approximately 700 eligible

voters.

This proposed rule would add a new subpart which would establish

procedures to be used in the referendum. This subpart would be in

effect for the referendum period only and would not be part of the Code

of Federal Regulations. This subpart covers definitions, voting,

instructions, use of subagents, ballots, the referendum report, and

confidentiality of information.

All written comments received in response to this rule by the date

specified herein will be considered prior to finalizing this action. We

encourage the industry to pay particular attention to the definitions

to be sure that they are appropriate for the kiwifruit industry.

List of Subjects in 7 CFR Part 1214

Administrative practice and procedure, Advertising, Consumer

information, Marketing agreements, Kiwifruit, Promotion, Reporting and

recordkeeping requirements.

For the reasons set forth in the preamble, it is proposed that

Title 7, chapter XI of the Code of Federal Regulations be amended as

follows:

1. Subpart C is added to proposed Part 1214 to read as follows:

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

ORDER

* * * * *

[[Page 51394]]

Subpart C--Procedure for the Conduct of Referenda in Connection With

the Kiwifruit Research, Promotion, and Consumer Information Order

Sec.

1214.200 General.

1214.201 Definitions.

1214.202 Voting.

1214.203 Instructions.

1214.204 Subagents.

1214.205 Ballots.

1214.206 Referendum report.

1214.207 Confidential information.

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

Subpart C--Procedure for the Conduct of Referenda in Connection

With the Kiwifruit Research, Promotion, and Consumer Information

Order

Sec. 1214.200 General.

A referendum to determine whether eligible producers and importers

favor the issuance of the proposed Kiwifruit Research, Promotion, and

Consumer Information Order shall be conducted in accordance with these

procedures.

Sec. 1214.201 Definitions.

Unless otherwise defined below, the definition of terms used in

these procedures shall have the same meaning as the definitions in the

Order.

(a) Administrator means the Administrator of the Agricultural

Marketing Service, with power to redelegate, or any officer or employee

of the Department to whom authority has been delegated or may hereafter

be delegated to act in the Administrator's stead.

(b) Order means the Kiwifruit Research, Promotion, and Consumer

Information Order.

(c) Referendum agent or agent means the individual or individuals

designated by the Secretary to conduct the referendum.

(d) Representative period means the period designated by the

Secretary.

(e) Person means any individual, group of individuals, partnership,

corporation, association, cooperative, or any other legal entity. For

the purpose of this definition, the term ``partnership'' includes, but

is not limited to:

(1) A husband and wife who has title to, or leasehold interest in,

kiwifruit production facilities and equipment as tenants in common,

joint tenants, tenants by the entirety, or, under community property

laws, as community property, and

(2) So-called ``joint ventures'', wherein one or more parties to

the agreement, informal or otherwise, contributed capital and others

contributed labor, management, equipment, or other services, or any

variation of such contributions by two or more parties so that it

results in the production or importation of kiwifruit and the authority

to transfer title to the kiwifruit so produced or imported.

(f) Eligible producer means any person or entity defined as a

producer who produced 500 pounds or more of kiwifruit during the

representative period and who:

(1) Owns or shares in the ownership of kiwifruit production

facilities and equipment resulting in the ownership of the kiwifruit

produced;

(2) Rents kiwifruit production facilities and equipment resulting

in the ownership of all or a portion of the kiwifruit produced;

(3) Owns kiwifruit production facilities and equipment but does not

manage them and, as compensation, obtains the ownership of a portion of

the kiwifruit produced; or

(4) Is a party in a landlord-tenant relationship or a divided

ownership arrangement involving totally independent entities

cooperating only to produce kiwifruit who share the risk of loss and

receive a share of the kiwifruit produced. No other acquisition of

legal title to kiwifruit shall be deemed to result in persons becoming

eligible producers.

(g) Eligible importer means any person or entity defined as an

importer who imported 10,000 pounds or more during the representative

period. Importation occurs when commodities originating outside the

United States are entered or withdrawn from the U.S. Customs Service

for consumption in the United States. Included are persons who hold

title to foreign-produced kiwifruit immediately upon release by the

U.S. Customs Service, as well as any persons who act on behalf of

others, as agents or broker, to secure the release of kiwifruit from

the U.S. Customs Service when such kiwifruit are entered or withdrawn

for consumption in the United States.

Sec. 1214.202 Voting.

(a) Each person who is an eligible producer or importer, as defined

in this subpart, at the time of the referendum and during the

representative period, shall be entitled to cast only one ballot in the

referendum. However, each producer in a landlord-tenant relationship or

a divided ownership arrangement involving totally independent entities

cooperating only to produce kiwifruit, in which more than one of the

parties is a producer, shall be entitled to cast one ballot in the

referendum covering only such producer's share of the ownership.

(b) Proxy voting is not authorized, but an officer or employee of

an eligible corporate producer or importer, or an administrator,

executor, or trustee of an eligible producing or importing entity may

cast a ballot on behalf of such producer or importer entity. Any

individual so voting in a referendum shall certify that such individual

is an officer or employee of the eligible producer or importer, or an

administrator, executor, or trustee of an eligible producing or

importing entity, and that such individual has the authority to take

such action. Upon request of the referendum agent, the individual shall

submit adequate evidence of such authority.

(c) All ballots are to be cast by mail.

Sec. 1214.203 Instructions.

The referendum agent shall conduct the referendum, in the manner

herein provided, under the supervision of the Administrator. The

Administrator may prescribe additional instructions, not inconsistent

with the provisions hereof, to govern the procedure to be followed by

the referendum agent. Such agent shall:

(a) Determine the time of commencement and termination of the

period during which ballots may be cast.

(b) Provide ballots and related material to be used in the

referendum. Ballot material shall provide for recording essential

information including that needed for ascertaining:

(1) Whether the person voting, or on whose behalf the vote is cast,

is an eligible voter;

(2) The total volume of kiwifruit produced by the voting producer

during the representative period; and

(3) The total volume of kiwifruit imported by the voting importer

during the representative period.

(c) Give reasonable advance public notice of the referendum:

(1) By utilizing available media or public information sources,

without incurring advertising expense, to publicize the dates, places,

method of voting, eligibility requirements, and other pertinent

information. Such sources of publicity may include, but are not limited

to, print and radio; and

(2) By such other means as the agent may deem advisable.

(d) Mail to eligible producers and importers, whose names and

addresses are known to the referendum agent, the instructions on

voting, a ballot, and a summary of the terms and conditions of the

proposed Order. No person who claims to be eligible to vote shall be

refused a ballot.

(e) At the end of the voting period, collect, open, number, and

review the ballots and tabulate the results in

[[Page 51395]]

presence of an agent of the Office of Inspector General.

(f) Prepare a report on the referendum.

(g) Announce the results to the public.

Sec. 1214.204 Subagents.

The referendum agent may appoint any individual or individuals

deemed necessary or desirable to assist the agent in performing such

agent's functions hereunder. Each individual so appointed may be

authorized by the agent to perform any or all of the functions which,

in the absence of such appointment, shall be performed by the agent.

Sec. 1214.205 Ballots.

The referendum agent and subagents shall accept all ballots cast;

but, should they, or any of them, deem that a ballot should be

challenged for any reason, the agent or subagent shall endorse above

their signature, on the ballot, a statement to the effect that such

ballot was challenged, by whom challenged, the reasons therefore, the

results of any investigations made with respect thereto, and the

disposition thereof. Ballots invalid under this subpart shall not be

counted.

Sec. 1214.206 Referendum report.

Except as otherwise directed, the referendum agent shall prepare

and submit to the Administrator a report on results of the referendum,

the manner in which it was conducted, the extent and kind of public

notice given, and other information pertinent to analysis of the

referendum and its results.

Sec. 1214.207 Confidential information.

The ballots and other information or reports that reveal, or tend

to reveal, the vote of any person covered under the Act and the voting

list shall be held confidential and shall not be disclosed.

Dated: September 23, 1996.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 96-24843 Filed 10-1-96; 8:45 am]

BILLING CODE 3410-02-P