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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/fr%3A99-22106

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** August 26, 1999
- **Citation:** 64 FR 46765

## Text

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.

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

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

[[Page 46766]]

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.

[[Page 46767]]

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

[[Page 46768]]

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:

[[Page 46769]]

(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]
BILLING CODE 3410-02-P

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A99-22106. Public record. Not legal advice.