Blueberry Promotion, Research, and Information Order; Referendum Procedures

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1218

[FV-99-702-PR]

Blueberry Promotion, Research, and Information Order; Referendum

Procedures

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule with request for comments.

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

Department of Agriculture (USDA or the Department) will use in

conducting a referendum to determine whether the issuance of the

proposed Blueberry Promotion, Research, and Information Order (Order)

is favored by the blueberry industry. Approval will be determined by

producers and importers voting for approval who represent a majority of

the volume of blueberries. These procedures would also be used for any

subsequent referendum under the Order, if it is approved in the initial

referendum. The proposal is being published in a separate document.

This proposed program would be implemented under the Commodity

Promotion, Research, and Information Act of 1996 (Act).

DATES: Comments must be received by September 20, 1999.

ADDRESSES: Interested persons are invited to submit written comments

concerning this proposed rule to: Docket Clerk, Research and Promotion

Branch, Fruit and Vegetable Programs (FV), Agricultural Marketing

Service (AMS), USDA, Stop 0244, Room 2535-S, 1400 Independence Avenue,

S.W., Washington, D.C. 20250-0244. Comments should be submitted in

triplicate and will be made available for public inspection at the

above address during regular business hours. Comments may also be

submitted electronically to: [email protected]. All comments

should reference the docket number and the date and page number of this

issue of the Federal Register. A copy of this rule may be found at:

www.ams.usda.gov/fv/rpdocketlist.htm.

Pursuant to the Paperwork Reduction Act (PRA), send comments

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

burden, including 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. Comments concerning the

information

[[Page 39804]]

collection under the PRA should also be sent to the Desk Officer for

Agriculture, Office of Information and Regulatory Affairs, Office of

Management and Budget, Washington, D.C. 20503.

FOR FURTHER INFORMATION CONTACT: Oliver L. Flake, Research and

Promotion Branch, Fruit and Vegetable Programs, AMS, USDA, Stop 0244,

1400 Independence Avenue, S.W., Room 2535-S, Washington, D.C. 20250-

0244; telephone (202) 720-5976 or fax (202) 205-2800.

SUPPLEMENTARY INFORMATION: A referendum will be conducted among

eligible blueberry producers and importers to determine whether the

issuance of the proposed Blueberry Promotion, Research, and Information

Order (Order) (7 CFR Part 1218) is favored by those who would pay

assessments under the program. Approval will be determined by persons

voting for approval who represent a majority of the volume of

blueberries. The Order is authorized under the Commodity Promotion,

Research, and Information Act of 1996 (Act) [Pub. L. 104-427, 7 U.S.C.

7401-7425]. It would cover domestic and imported cultivated blueberries

(hereinafter called blueberries). A proposed Order is being published

separately in the Federal Register.

Executive Order 12988

This proposed rule has been reviewed under Executive Order 12988,

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

Section 524 of the Act provides that the Act shall not affect or

preempt any other Federal or State law authorizing promotion or

research relating to an agricultural commodity.

Under Section 519 of the Act, a person subject to the order may

file a petition with the Secretary of Agriculture (Secretary) stating

that the order, any provision of the order, or any obligation imposed

in connection with the order, is not established in accordance with the

law, and requesting a modification of the order or an exemption from

the order. Any petition filed challenging the order, any provision of

the order or any obligation imposed in connection with the order, shall

be filed within two years after the effective date of the order,

provision or obligation subject to challenge in the petition. The

petitioner will have the opportunity for a hearing on the petition. The

Act provides that the district court of the United States for any

district in which the petitioner resides or conducts business shall be

the jurisdiction to review a final ruling on the petition, if the

petitioner files a complaint for that purpose not later than 20 days

after the date of entry of the Secretary's final ruling.

Executive Order 12866

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.

Regulatory Flexibility Act

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. The purpose of the RFA is to fit regulatory

actions to the scale of businesses subject to such action so that small

businesses will not be disproportionately burdened.

The Act, which authorizes the Secretary to consider industry

proposals for generic programs of promotion, research, and information

for agricultural commodities, became effective on April 4, 1996. The

Act provides for alternatives within the terms of a variety of

provisions.

Paragraph (e) of Section 518 of the Act provides three options for

determining industry approval of a new research and promotion program:

(1) By a majority of those voting; (2) by a majority of the volume of

the agricultural commodity voted in the referendum; or (3) by a

majority of those persons voting who also represent a majority of the

volume of the agricultural commodity voted in the referendum. In

addition, section 518 of the Act provides for referenda to ascertain

approval of an order to be conducted either prior to its going into

effect or within three years after assessments first begin under the

order. The North American Blueberry Council, Inc. (proponent), has

recommended that the Secretary conduct a referendum in which approval

of the Order would be based on producers and importers voting for

approval who represent a majority of the volume of blueberries. The

proponent also has recommended that a referendum be conducted prior to

the proposed Order going into effect.

This proposed rule would establish the procedures under which

producers and importers may vote on whether they want a blueberry

promotion, research, and information program to be implemented.

Blueberry producers and importers of 2,000 pounds or more of

blueberries annually would be eligible to vote. The proposed order

provides for an exemption from assessments for producers and importers

of less than 2,000 pounds of fresh and processed blueberries. This

proposal would add a new subpart which establishes procedures to

conduct an initial and future referenda. The proposed subpart covers

definitions, voting instructions, use of subagents, ballots, the

referendum report, and confidentiality of information.

There are approximately 1,287 producers, 200 first handlers, 120

importers, and 4 exporters of blueberries who would be subject to the

program. It is estimated that 1,132 producers and 75 importers would be

eligible to vote in the first referendum. Most of the producers would

be classified as small businesses under the criteria established by the

Small Business Administration (SBA) [13 CFR 121.601]. Most importers

and first handlers would not be classified as small businesses. The SBA

defines small agricultural handlers as those whose annual receipts are

less than $5 million, and small agricultural producers are defined as

those having annual receipts of not more than $500,000 annually.

According to USDA's National Agricultural Statistics Service

(NASS), total production of cultivated blueberries was 172.9 million

pounds in 1997, up 35 percent from the 1996 output. Approximately 70.2

million pounds of the total were utilized for fresh market sale and

99.4 million pounds were used for processing (primarily frozen).

Blueberries are grown in 35 states. Commercial production operations

are located in Michigan (44 percent), New Jersey (19 percent), Oregon

(12 percent), Georgia 9 percent), North Carolina (5 percent),

Washington (5 percent), Indiana and Florida (2 percent each), and all

other states (2 percent). Farm value for the 1997 cultivated blueberry

crop was $141 million, compared with $113.6 million a year earlier.

U.S. frozen blueberry per capita consumption has been declining

rapidly in recent years, decreasing from 0.38 pounds in 1996 to 0.33

pounds in 1997. From calendar year 1991 through 1995, U.S. per capita

consumption of frozen blueberries averaged 0.43 pounds.

The United States exported 6.3 million pounds of fresh cultivated

blueberries in 1997, valued at $7.9 million. Canada is the principal

destination for U.S. exports--accounting for nearly 79 percent of the

total in 1997. Other key markets included Switzerland (7 percent), the

United Kingdom (5 percent), and Germany (3 percent). The remaining

export volume of fresh cultivated blueberries primarily went to other

European and Asian countries.

U.S. exports of frozen cultivated blueberries totaled 22.1 million

pounds

[[Page 39805]]

in 1997 and were valued at $9.9 million. The largest U.S. export market

is Canada, accounting for 90 percent of the total quantity in 1997.

Japan was the second largest U.S. market for frozen cultivated

blueberries, accounting for 8 percent of the total. The remaining 2

percent of U.S. exports were sent mainly to other Asian and European

countries.

In 1997, the United States imported 13.9 million pounds of fresh

cultivated blueberries worth $10.8 million. Imports from Canada alone

accounted for 89 percent of the total. Other important fresh cultivated

blueberry import sources were Chile with 9 percent of the total and New

Zealand with 2 percent. Small amounts were also imported from Mexico

and Honduras.

In 1997, total imports of frozen cultivated blueberries were 9.8

million pounds and were valued at $8.5 million. The vast majority of

U.S. frozen blueberry imports (about 96 percent) came from Canada in

1997. U.S. imports of frozen cultivated blueberries from Chile

represented 2 percent of the total, while Mexico accounted for 1

percent of the total. The rest of the 1997 import volume originated

from the Netherlands, Costa Rica and Colombia.

This proposed rule provides the procedures under which blueberry

producers and importers may vote on whether they want the Order to be

implemented. In accordance with the provisions of the Act, subsequent

referenda may be conducted, and it is anticipated that the proposed

procedures would apply. There are approximately 1132 producers and 75

importers who will be eligible to vote in the first referendum.

USDA will keep 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. USDA

will also publicize information regarding the referendum process so

that trade associations and related industry media can be kept

informed.

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 or not they want

to be covered by the program.

The information collection requirements contained in this proposed

rule are designed to minimize the burden on producers and importers.

This rule provides for a ballot to be used by eligible producers and

importers to vote in the referendum. The estimated annual cost of

providing the information by an estimated 1,132 producers (1,287-155

exempt producers) would be $556.00 or $.50 per producer and for an

estimated 75 importers (120-45 exempt importers) would be $37.50 or

$.50 per importer.

The Secretary considered requiring eligible voters to vote in

person at various USDA offices across the country. The Secretary also

considered electronic voting, but the use of computers is not

universal, current technology is not reliable enough to ensure that

electronic ballots would be received in a readable format, and

technology is insufficient at this time to provide sufficient

safeguards of voters' confidentiality. Conducting the referendum from

one central location by mail ballot would be more cost-effective and

reliable. The Department will provide easy access to information for

potential voters through a toll-free telephone line. The Department

will also accept ballots sent by facsimile (fax) machine. A pilot of

this method was conducted during a recent referendum for another

program. A fax machine was dedicated to the receipt of ballots.

There are no federal rules that duplicate, overlap, or conflict

with this rule.

We have performed this Initial Regulatory Flexibility Analysis

regarding the impact of this proposed rule on small entities. However,

in order to obtain all of the data necessary for a comprehensive

analysis, we invite comments concerning the potential effects of this

proposed rule. In particular, we are interested in obtaining more

information on the number of small entities that may incur benefits or

costs from the implementation of this proposed rule and information on

the expected benefits or costs.

Paperwork Reduction Act

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

regulation (5 CFR 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: November 30, 2000.

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 0.25 hours per response for each

producer and importer.

Respondents: Producers and importers.

Estimated Number of Respondents: 1207.

Estimated Number of Responses per Respondent: 1 every 5 years

(0.2).

Estimated Total Annual Burden on Respondents: 1,208 hours.

The estimated annual cost of providing the information by an

estimated 1,132 producers (1,287-155 exempt producers) would be $556.00

or $.50 per producer and for an estimated 75 importers (120-45 exempt

importers) would be $37.50 or $.50 per importer.

The ballot will 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 and whether it will have practical utility;

(b) the accuracy of USDA's estimate of the burden of the proposed

collection of information, including the validity of the methodology

and assumptions 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 collection techniques or other forms

of information technology.

Comments concerning the information collection requirements

contained in this action 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 the USDA Docket Clerk and the OMB

Desk Officer for Agriculture at the addresses and within the time

frames specified above. 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.

OMB is required to make a decision concerning the collection of

information contained in this rule between 30 and 60 days after

publication. Therefore, a comment to OMB is best assured of having its

full effect if OMB receives it within 30 days of publication.

[[Page 39806]]

Background

The Act authorizes the Secretary, under generic authority, to

establish agricultural commodity research and promotion orders. The

North American Blueberry Council, Inc. (proponent) has requested the

establishment of a Blueberry Promotion, Research, and Information Order

(Order) pursuant to the Act. The proposed Order would provide for the

development and financing of an effective and coordinated program of

promotion, research, and information for fresh and processed

blueberries. The program would be funded by an assessment levied on

producers (to be collected by handlers) and importers (to be collected

by the U.S. Customs Service at time of entry into the United States) at

a rate of $12 per ton. In the proposed Order, blueberries are defined

as cultivated blueberries grown in or imported into the United States

of the genus Vaccinium Corymbosum and Ashei, including the northern

highbush, southern highbush, and rabbit eye varieties, and excluding

the lowbush (native) blueberry Vaccinium Angustifolium.

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

consumer information; administration, maintenance, and functioning of

the U.S.A. Blueberry Council; and expenses incurred by the Secretary in

implementing and administering the Order, including referendum costs.

Section 518 of the Act requires that a referendum be conducted

among eligible blueberry producers and importers to determine whether

they favor the Order. In addition, section 518 of the Act provides for

referenda to ascertain approval of an order to be conducted either

prior to its going into effect or within three years after assessments

first begin under the order. According to a proposed rule that is

published separately in this issue of the Federal Register, the Order

would become effective if it is approved during the initial referendum,

which will be held before the program is implemented. Approval will be

determined by producers and importers voting for approval who represent

a majority of the volume of blueberries. Producers and importers of

2,000 pounds or more of blueberries annually will be eligible to vote.

This proposed rule establishes the procedures under which producers

and importers may vote on whether they want the blueberry promotion,

research, and information program to be implemented. There are

approximately 1207 eligible voters.

This proposed rule would add a new subpart which would establish

procedures to be used in this and future referenda.

The 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 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 blueberry industry.

List of Subjects in 7 CFR Part 1218

Administrative practice and procedure, Advertising, Blueberries,

Consumer information, Marketing agreements, 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:

PART 1218--BLUEBERRY PROMOTION, RESEARCH, AND INFORMATION ORDER

1. The authority citation for part 1218 continues to read as

follows:

Authority: 7 U.S.C. 7401-7425.

2. Subpart B is added to proposed part 1218 to read as follows:

Subpart B--Procedure for the Conduct of Referenda in Connection with

the Blueberry Promotion, Research, and Information Order

Sec.

1218.100 General.

1218.101 Definitions.

1218.102 Voting.

1218.103 Instructions.

1218.104 Subagents.

1218.105 Ballots.

1218.106 Referendum report.

1218.107 Confidential information.

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

with the Blueberry Promotion, Research, and Information Order

Sec. 1218.100 General.

Referenda to determine whether eligible blueberry producers and

importers favor the issuance, amendment, suspension, or termination of

the Blueberry Promotion, Research, and Information Order shall be

conducted in accordance with this subpart.

Sec. 1218.101 Definitions.

(a) Administrator means the Administrator of the Agricultural

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

of the U.S. Department of Agriculture to whom authority has been

delegated or may hereafter be delegated to act in the Administrator's

stead.

(b) Blueberries means cultivated blueberries grown in or imported

into the United States of the genus Vaccinium Corymbosum and Ashei,

including the northern highbush, southern highbush, and rabbit eye

varieties, and excluding the lowbush (native) blueberry Vaccinium

Angustifolium.

(c) Eligible importer means any person who imported 2,000 pounds or

more of fresh or processed blueberries, that are identified by the

numbers 0810.40.0028 and 0811.90.2028, respectively, in the Harmonized

Tariff Schedule of the United States or any other numbers used to

identify fresh and frozen blueberries. 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

blueberries 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 blueberries from the U.S. Customs Service when

such blueberries are entered or withdrawn for consumption in the United

States.

(d) Eligible producer means any person who produced 2,000 pounds or

more of blueberries in the United States during the representative

period who:

(1) Owns, or shares the ownership and risk of loss of, the crop;

(2) Rents blueberry production facilities and equipment resulting

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

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

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

the blueberries produced; or

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

ownership arrangement involving totally independent entities

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

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

legal title to blueberries shall be deemed to result in persons

becoming eligible producers.

(e) Order means the Blueberry Promotion, Research, and Information

Order.

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

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

the purpose of this definition, the term

[[Page 39807]]

``partnership'' includes, but is not limited to:

(1) A husband and a wife who have title to, or leasehold interest

in, a blueberry farm 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 an

agreement, informal or otherwise, contributed land and others

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

variation of such contributions by two or more parties.

(g) Processed blueberries means blueberries which have been frozen,

dried, pureed, or made into juice.

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

designated by the Secretary to conduct the referendum.

(i) Representative period means the period designated by the

Secretary.

(j) United States means collectively the 50 states, the District of

Columbia, the Commonwealth of Puerto Rico, and the territories and

possessions of the United States.

Sec. 1218.102 Voting.

(a) Each person who is an eligible producer or an eligible

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 blueberries, 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 or an eligible entity may cast a ballot on behalf

of such entity. Any individual so voting in a referendum shall certify

that such individual is an officer or employee of the eligible entity,

or an administrator, executive, or trustee of an eligible 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 or by facsimile, as

instructed by the Secretary.

Sec. 1218.103 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 period during which ballots may be cast.

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

referendum. The ballot shall provide for recording essential

information, including that needed for ascertaining whether the person

voting, or on whose behalf the vote is cast, is an eligible voter.

(c) Give reasonable 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 the presence of an agent

of a third party authorized to monitor the referendum process.

(f) Prepare a report on the referendum.

(g) Announce the results to the public.

Sec. 1218.104 Subagents.

The referendum agent may appoint any individual or individuals

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. 1218.105 Ballots.

The referendum agent and subagents shall accept all ballots cast.

However, if an agent or subagent deems 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. 1218.106 Referendum report.

Except as otherwise directed, the referendum agent shall prepare

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

referendum, the manner in which it was conducted, the extent and kind

of public notice given, and other information pertinent to the analysis

of the referendum and its results.

Sec. 1218.107 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: July 16, 1999.

Robert C. Keeney, Deputy Administrator,

Fruit and Vegetable Programs

[FR Doc. 99-18690 Filed 7-21-99; 8:45 am]

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