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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1209

[FV-97-705IFR]

Mushroom Promotion, Research, and Consumer Information Order;

Referendum Procedures

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule provides procedures which the Department of

Agriculture (Department) will use in conducting the referendum to

determine whether

[[Page 66974]]

mushroom producers and importers favor continuance of the Mushroom

Promotion, Research, and Consumer Information Order (Order). In order

to continue, the Order must be approved by a simple majority of

producers and importers voting in the referendum and that majority must

represent more than 50 percent of the mushrooms produced and imported

by those voting in the referendum. These procedures will also apply to

any subsequent referenda to amend, continue, or terminate the order.

EFFECTIVE DATE: December 24, 1997. Comments must be received by January

22, 1998.

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), 1400

Independence Avenue, Room 2535-S, Stop Code 0244, Washington, DC 20250-

0244, fax: (202) 205-2800. Three copies of all materials 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.

FOR FURTHER INFORMATION CONTACT: Stacey L. Bryson, Research and

Promotion Branch, Fruit and Vegetable Programs, AMS, USDA, 1400

Independence Avenue, Room 2535-S, Stop Code 0244, Washington, DC 20250-

0244, telephone (202) 720-6930 or (888) 720-9917.

SUPPLEMENTARY INFORMATION: This rule is issued under the Mushroom

Promotion, Research, and Consumer Information Act of 1990 (7 U.S.C.

6107-6112), hereinafter referred to as the Act.

This rule provides the procedures under which the referendum will

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. Section

1930 of the Act provides that nothing in the Act may be construed to

preempt or supersede any other program relating to mushroom promotion,

research, consumer information, or industry information organized and

operated under the laws of the United States or any State.

The Act provides that administrative proceedings must be exhausted

before parties may file suit in court. Under Sec. 1927 of the Act,

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

petition with the Secretary of Agriculture (Secretary) stating that the

Order or any provision of the Order, or any obligation imposed in

connection with the Order, is not in accordance with law and requesting

a modification of the Order or an exemption from the Order. The

petitioner is afforded the opportunity for a hearing on the petition.

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

The Act 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

Paperwork Reduction 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 has examined the impact of this rule on small

entities.

The Act became effective on November 20, 1990. The Order, which is

authorized under the Act, became effective on January 8, 1993.

Section 1926 of the Act provides that the Secretary shall conduct a

referendum effective 5 years after the date on which the Order became

effective. The referendum must be conducted among mushroom producers

and importers to ascertain whether they favor continuation,

termination, or suspension of the Order. Paragraph (b)(2) of Sec. 1926

of the Act requires that the Order be approved by a majority of

producers and importers voting in the referendum which majority, on

average, annually produces and imports into the United States more than

50 percent of mushrooms annually produced and imported by all those

persons voting in the referendum.

There are approximately 134 producers and 4 importers of fresh

mushrooms covered by the program. Small agricultural service firms,

which will include the importers who will vote in the referendum, 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 as those having annual receipts of

$500,000. Only one importer has been identified to have $5 million in

annual sales. In addition, there are 134 producers at or over the

$500,000 annual sales receipts threshold. Therefore, it could be

concluded that a majority of producers and importers are not considered

small businesses.

The total volume of mushroom sales in the United States during the

1996-97 production year (July 1, 1996, through June 30, 1997) was 776.7

million pounds (553.8 million pounds for the fresh market and 222.9

million pounds for the processed market). The value of sales for the

crop was $765.8 million. Historically, Pennsylvania produced 45 percent

of total volume of sales, followed by California with 17 percent,

Florida with 5 percent, Ohio with 2 percent, and Michigan with 2

percent. Eighteen other States account for the remainder.

U.S. fresh market exports of mushrooms totaled 5.3 million pounds

from July 1996 through June 1997, with a value of $20 million. Canada

was the principal destination, accounting for about 74 percent of the

poundage and about 38 percent of the value of U.S. exports. Japan

accounted for 14 percent of the quantity exported, and 40 percent of

the value of exports.

Fresh mushroom imports into the United States for the same period

were about 5.1 million pounds, with a value of about $12.1 million.

About 82 percent of that poundage and 86 percent of the value came from

Canada, and about 10 percent of the poundage and about 5 percent of the

value came from the People's Republic of China.

This rule provides the procedures under which mushroom producers

and importers may vote on whether they want the mushroom promotion and

research program to continue. Such a referendum is required by the Act.

There are approximately 138 eligible voters. In addition, these

procedures will apply to any subsequent referenda to amend, continue,

or terminate the order.

The Department will keep all of these individuals informed

throughout the referendum process to ensure that they are aware of and

are able to participate. In addition, trade associations and related

industry media will receive news releases and other information

regarding the referendum.

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

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

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

program to continue or not.

The Department considered requiring eligible voters to vote in

person at various Department offices across the

[[Page 66975]]

country. However, conducting the referendum from one central location

is more cost effective for this program. In addition, the Department

will accept ballots sent by fax as well as by mail. The fax number to

be used will be published soon in the referendum order. The Department

will provide easy access to information for potential voters through a

toll free telephone line.

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 has been

approved by the Office of Management and Budget (OMB) and has been

assigned OMB number 0581-0093. It is estimated that there are 138

producers and importers who will be eligible to vote in the referendum.

It will take an average of 15 minutes for each voter to read the voting

instructions and complete the referendum ballot. The total burden on

the total number of voters will be 34.5 hours.

The Department has not identified any relevant Federal rules that

duplicate, overlap, or conflict with this rule.

Background

The Act authorized the Secretary to establish a national mushroom

promotion, research, and consumer information program. The program is

funded by an assessment levied on producers and importers of more than

500,000 pounds annually. Each producers and importer covered by the

program pays an assessment of 0.45 cents per pound of fresh mushrooms.

Assessments are 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 1926 of the Act provides that the Secretary of Agriculture

(Secretary) shall conduct a referendum effective 5 years after the date

on which the Order became effective. The Order became effective on

January 8, 1993. The referendum must be conducted among mushroom

producers and importers to ascertain whether they favor continuation,

termination, or suspension of the Order. Paragraph (b)(2) of Sec. 1926

of the Act requires that the Order be approved by a majority of

producers and importers voting in the referendum which majority, on

average, annually produces and imports into the United States more than

50 percent of mushrooms annually produced and imported by all those

persons voting in the referendum. Only mushroom producers and importers

who either produced or imported, on average, over 500,000 pounds of

mushrooms annually during the representative period will be eligible to

vote in the referendum. Producers and importers will be required to

certify the pounds of mushrooms they either produced or imported during

the representative period.

In accordance with Sec. 1923 of the Act, a producer is defined in

the Order as any person engaged in the production of mushrooms who owns

or shares the ownership and risk of loss of such mushrooms and who

produces, on average, over 500,000 pounds of mushrooms per year.

Importer is defined as any person who imports, on average, over 500,000

pounds of mushrooms annually from outside the United States.

This rule provides the procedures under which mushroom producers

and importers may vote on whether they want the mushroom promotion and

research program to continue. There are approximately 138 eligible

voters. These procedures are similar to those published (57 FR 31948)

prior to the mushroom order going into effect. This interim final rule,

however, provides that ballots are to be cast only by mail or fax and

not at polling places.

Persons voting in a referendum will certify their eligibility to

vote and will designate their status as either a mushroom producer or

importer. Producers and importers will be required to certify the

pounds of mushrooms they either produced or imported during the

representative period. The representative period will be announced in a

referendum order at a later date.

This rule will add a new subpart which establishes procedures to be

used in a referendum. 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.

After consideration of all relevant material, it is found that the

order provisions subject to this action tend to effectuate the declared

policy of the Act.

Pursuant to the provisions in 5 U.S.C. 553, it is found and

determined upon good cause that it is impracticable, unnecessary, and

contrary to the public interest to give preliminary notice prior to

putting this action into effect and that good cause exists for not

postponing the effective date of this rule until 30 days after

publication in the Federal Register, because: (1) This action provides

procedures to be used in connection with the referendum which will take

place in early 1998; (2) the Act requires that a referendum be

conducted 5 years after the date on which an order became effective;

(3) these procedures are very similar to procedures used in other

programs and to the procedures used for the initial referendum on the

mushroom program; and (4) the 30-day comment period will provide

interested persons sufficient time to comment prior to the issuance of

a final rule.

List of Subjects in 7 CFR Part 1209

Administrative practice and procedure, Advertising, Agricultural

research, Marketing agreements, Mushrooms, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, Title 7, chapter XI of

the Code of Federal Regulations is amended as follows:

PART 1209--MUSHROOM PROMOTION, RESEARCH, AND CONSUMER INFORMATION

ORDER

1. The authority citation for part 1209 continues to read as

follows:

Authority: 7 U.S.C. 6101-6112.

2. In part 1209, subpart C is added to read as follows:

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

With the Mushroom Promotion, Research, and Consumer Information

Order

Sec.

1209.300 General.

1209.301 Definitions.

1209.302 Voting.

1209.303 Instructions.

1209.304 Subagents.

1209.305 Ballots.

1209.306 Referendum report.

1209.307 Confidential information.

Sec. 1209.300 General.

A referendum to determine whether eligible producers and importers

favor continuation of the Mushroom Promotion, Research, and Consumer

Information Order shall be conducted in accordance with these

procedures.

Sec. 1209.301 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

[[Page 66976]]

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

delegated to act in the Administrator's stead.

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

Information Order, including an amendment to the 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 have title to, or leasehold interest in,

mushroom 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 fresh mushrooms and the

authority to transfer title to the mushrooms so produced or imported.

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

producer who produces, on average, over 500,000 pounds annually of

fresh mushrooms during the representative period and who:

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

facilities and equipment resulting in the ownership of the mushrooms

produced;

(2) Rents mushroom production facilities and equipment resulting in

the ownership of all or a portion of the mushrooms produced;

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

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

the mushrooms produced; or

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

ownership arrangement involving totally independent entities

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

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

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

eligible producers.

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

importer who imports, on average, over 500,000 pounds annually of fresh

mushrooms 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

mushrooms immediately upon release by the U.S. Customs Service, as well

as any persons who act on behalf of others, as agents or brokers, to

secure the release of mushrooms from the U.S. Customs Service when such

mushrooms are entered or withdrawn for consumption in the United

States.

Sec. 1209.302 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 mushrooms, 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) Ballots are to be cast by mail or fax.

Sec. 1209.303 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 mushrooms produced by the voting producer

during the representative period; and

(3) The total volume of mushrooms 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

Order. No person who claims to be eligible to vote shall be refused a

ballot.

(e) Collect and safeguard ballots received by fax.

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

review the ballots and tabulate the results.

(g) Prepare a report on the referendum.

(h) Prepare an announcement of the results for the public.

Sec. 1209.304 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. 1209.305 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.

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Ballots invalid under this subpart shall not be counted.

Sec. 1209.306 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. 1209.307 Confidential information.

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

to reveal, the identity or vote of any person covered under the Act

shall be held confidential and shall not be disclosed.

Dated: December 11, 1997.

Sharon Bomer Lauritsen,

Associate Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 97-32812 Filed 12-22-97; 8:45 am]

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