Olive Oil Promotion, Research, and Information Order; Referendum Procedures

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1217

[FV-99-704-PR]

Olive Oil 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 Olive Oil Promotion, Research, and Information Order (Order)

is favored by the olive oil industry. Approval will be based on a

majority of olive oil first handlers and importers voting in the

referendum. These procedures would also be used for any subsequent

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

referendum. The proposed Order 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 October 25, 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 South Building, 1400

Independence Avenue, SW, Washington, DC 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

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copy of this rule may be found at: www.ams.usda.gov/fv/

rpdocketlist.htm. Pursuant to the Paperwork Reduction Act of 1995

(PRA), also 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. Comments concerning the information 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, DC 20503.

FOR FURTHER INFORMATION CONTACT: Oliver L. Flake or Karen T. Comfort,

Research and Promotion Branch, FV, AMS, USDA, Stop 0244, Room 2535-S,

1400 Independence Avenue, SW, Washington, DC 20250-0244; telephone

(202) 720-9915 or facsimile (202) 205-2800.

SUPPLEMENTARY INFORMATION: A referendum will be conducted to determine

whether the issuance of the proposed Olive Oil Promotion, Research, and

Information Order (Order) (7 CFR part 1217) is favored by a majority of

eligible first handlers and importers voting in the referendum. 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). 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 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 the 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 Olive Oil Association (proponent), has

recommended that the Secretary conduct a referendum in which the Order

must be approved by a majority of those voting in the referendum, and

the voters would be non-exempt first handlers and importers of olive

oil. 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 first

handlers and importers may vote on whether they want an olive oil

promotion, research, and information program to be implemented. First

handlers and importers of 6,000 pounds or more of olive oil annually

would be eligible to vote. The proposed Order provides for an exemption

from assessment for first handlers and importers of less than 6,000

pounds of olive oil. 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.

The United States produces very little olive oil compared to the

amount it imports. Assuming a yield of 18 percent from the olives USDA

reports as utilized for oil, production was 738 tons in 1998, compared

to 648 tons in 1997. Imports, however, were 181,850 tons in 1998 and

180,186 tons in 1997. Italy accounted for 73 percent of imports in

1998, followed by Spain at 11 percent, Turkey at 8 percent, and Greece

at 3 percent. A number of countries provided the remaining 5 percent.

The total value of imports in 1998 was about $347 million, compared to

$432 million in 1997. Exports of oil are significant but are much

smaller than imports. In 1998, the quantity reported was 8,934 tons,

worth $6 million. This compares to 10,323 tons exported in 1997, worth

$7 million. Exports exceed production because some imports are further

processed or repackaged in the United States and then exported.

According to 1996 importer records, over 300 companies import olive

oil into the United States; however, most of these companies import a

very small quantity of oil, with each importing less than 1 percent of

the total amount.

Domestic first handlers of olive oil are located primarily in the

states of Texas and California. We understand that an estimated 70

percent of these first handlers are small entities, handling less than

6,000 pounds of olive oil per year, and would fall within the exemption

from assessment provided in the proposed Order.

Additionally, according to Nielsen Retail Sales data, the retail

sector accounts for 45 percent of the sales of olive oil, the food

service sector accounts for approximately 50 percent, and the

commercial ingredient sector accounts for about 5 percent of olive oil

consumption.

This proposed rule provides the procedures under which olive oil

first handlers 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.

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Of the 43 first handlers, approximately 13 would be eligible to

vote in the first referendum. Of the 360 importers, approximately 320

would be eligible to vote in the first referendum.

There are approximately 13 first handlers and 320 importers of

olive oil who would be subject to the program. Most of the first

handlers and importers would be classified as small businesses under

the criteria established by the Small Business Administration (SBA) (13

CFR 121.601). The SBA defines small agricultural handlers and importers

as those whose annual receipts are less than $5 million.

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 first handlers

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 first handlers and

importers. This rule provides for a ballot to be used by eligible first

handlers and importers in voting in the referendum. The estimated

annual cost of providing the information by an estimated 13 first

handlers who would be eligible to vote would be $6.50 or $0.50 per

first handler and, for the estimated 320 importers who would be

eligible to vote, the annual cost would be $160.00 or $0.50 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 would provide easy access to information for

potential voters through a toll-free telephone line.

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 and kind of small and large 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)

regulations (5 CFR 1320) which implement 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: New collection.

Expiration Date of Approval: November 28, 2001.

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

first handler and importer.

Respondents: First handlers and importers.

Estimated Number of Respondents: 333.

Estimated Number of Responses per Respondent: 1 every 5 years

(0.2).

Estimated Total Annual Burden on Respondents: 16.65 hours.

The estimated annual cost of providing the information by an

estimated 13 first handlers would be $6.50 or $0.50 per first handler

and for an estimated 320 importers would be $160.00 or $0.50 per

importer.

The ballot will be added to the other information collections

approved for use under a OMB Number yet to be determined.

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 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 collection techniques or other forms

of information technology.

Comments concerning the information collection requirements

contained in this action should reference 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.

Background

The Act authorizes the Secretary, under generic authority, to

establish agricultural commodity research and promotion orders. The

North American Olive Oil Association (proponent) has requested the

establishment of an Olive Oil 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 olive oil. The program

would be funded by an assessment levied on first handlers and importers

(to be collected by the U.S. Customs Service at time of entry into the

United States) at a rate of $0.01 per pound. In the proposed Order,

olive oil is defined as the oil obtained solely from the fruit of the

olive tree (Olea europaea sativa Hoffm. Et Link) and for the purposes

of these referendum rules and the Order, includes olive pomace oil.

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

consumer information; administration, maintenance, and functioning of

the Olive Oil Council; and expenses incurred by the Secretary in

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implementing and administering the Order, including referendum costs.

Section 518 of the Act requires that a referendum be conducted

among eligible olive oil first handlers 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 based on a majority of the olive oil

first handlers and importers voting in the referendum. First handlers

and importers of 6,000 pounds or more of olive oil annually would be

eligible to vote.

This proposed rule establishes the procedures under which first

handlers and importers may vote on whether they want the olive oil

promotion, research, and information program to be implemented. There

are approximately 333 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 olive oil industry.

List of Subjects in 7 CFR Part 1217

Administrative practice and procedure, Advertising, Olive Oil,

Consumer Information, Marketing agreements, Olive Oil 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:

PART 1217--OLIVE OIL PROMOTION, RESEARCH, AND INFORMATION ORDER--

[PROPOSED]

1. The authority citation for proposed part 1217 published

elsewhere in this Federal Register continues to read as follows:

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

2. Subpart B is added to proposed part 1217 to read as follows:

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

the Olive Oil Promotion, Research, and Information Order

Sec.

1217.100 General.

1217.101 Definitions.

1217.102 Voting.

1217.103 Instructions.

1217.104 Subagents.

1217.105 Ballots.

1217.106 Referendum report.

1217.107 Confidential information.

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

With the Olive Oil Promotion, Research, and Information Order

Sec. 1217.100 General.

Referenda to determine whether eligible olive oil first handlers

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

of the Olive Oil Promotion, Research, and Information Order shall be

conducted in accordance with this subpart.

Sec. 1217.101 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) Olive oil means the oil obtained solely from the fruit of the

olive tree (Olea europaea sativa Hoffm. Et Link) and for the purposes

of these regulations, includes pomace oil.

(c) Eligible importer means any person who imported 6,000 pounds or

more of olive oil, that is identified by the numbers 1509.10.20,

1509.10.40, 1509.90.20, 1509.90.40, 1510.00.40, and 1510.00.60 in the

Harmonized Tariff Schedule of the United States. 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 olive

oil 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 olive oil from the U.S. Customs Service when such olive

oil is entered or withdrawn for consumption in the United States.

(d) Eligible first handler means any person who buys or takes

possession of 6,000 pounds or more of olive oil from a producer for

marketing. If a producer markets the olive oil directly to consumers,

the producer shall be considered to be the first handler with respect

to olive oil produced by the producer.

(e) Order means the Olive Oil Promotion, Research, and Information

Order.

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

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

(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. 1217.102 Voting.

(a) Each person who is an eligible first handler 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.

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

an eligible corporate first handler 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, as instructed by the

Secretary.

Sec. 1217.103 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:

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(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 first handlers 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 by the Administrator to monitor the

referendum process.

(f) Prepare a report on the referendum.

(g) Announce the results to the public.

Sec. 1217.104 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. 1217.105 Ballots.

The referendum agent and subagents shall accept all ballots cast.

However, if an agent or subagent deems that a ballot should be

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

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

ballot was questioned, by whom, the reasons therefore, the results of

any investigations made with respect thereto, if any, and the

disposition thereof. Ballots invalid under this subpart shall not be

counted.

Sec. 1217.106 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. 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: August 18, 1999.

Eric M. Forman,

Acting Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 99-22106 Filed 8-25-99; 8:45 am]

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