[Federal Register: July 13, 2001 (Volume 66, Number 135)]
[Proposed Rules]
[Page 36869-36886]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13jy01-17]
[[Page 36869]]
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Part III
Department of Agriculture
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Agricultural Marketing Service
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7 CFR Part 1219
Proposed Hass Avocado Promotion, Research, and Consumer Information
Order; Proposed Rule,
Hass Avocado Promotion, Research, and Information Order; Subpart B--
Referendum Procedures; Proposed Rule
[[Page 36870]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1219
[FV-01-705-PR#1]
RIN 0581-AB92
Proposed Hass Avocado Promotion, Research, and Consumer
Information Order
AGENCY: Agricultural Marketing Service, USDA
ACTION: Proposed rule with request for comments.
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SUMMARY: The U.S. Department of Agriculture (Department or USDA) is
seeking comments on an industry-funded research, promotion, industry
information, and consumer information program for Hass avocados. A
proposed program--the Hass Avocado Research, Promotion, and Consumer
Information Order (Order)--was submitted to the Department by the
California Avocado Commission (Commission). In addition, Mexican,
Chilean, and New Zealand producers and associations submitted partial
proposals.
Under the proposed Order, producers and importers would pay an
initial assessment of 2.5 cents per pound of Hass domestic and imported
avocados to the Hass Avocado Board (Board). The Board would be
appointed by the Secretary of Agriculture (Secretary) to conduct
research, promotion, industry information, and consumer information
needed for the maintenance, expansion, and development of domestic
markets for Hass avocados.
DATES: Comments must be received by August 27, 2001.
ADDRESSES: Interested persons are invited to submit written comments
concerning the proposed rule to: Docket Clerk, Research and Promotion
Branch, Fruit and Vegetable Division (FV), Agricultural Marketing
Service (AMS), USDA, Stop 0244, 1400 Independence Avenue, SW., Room
2535-S, 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: malinda.farmer@usda.gov. All comments
should reference the docket number and the date and page number of this
issue of the Federal Register. A copy of this proposed rule may be
found at: http://www.ams.usda.gov/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 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 (OMB), Washington, DC 20503.
FOR FURTHER INFORMATION CONTACT: Julie Morin, Research and Promotion
Branch, FV, AMS, USDA, Stop 0244, 1400 Independence Avenue, S.W., Room
2535-S, Washington, DC 20250-0244, telephone (202) 720-6930 or (1)(888)
720-9917, fax (202) 205-2800, e-mail julie.morin@usda.gov.
SUPPLEMENTARY INFORMATION: This proposed Order is issued under the Hass
Avocado Research, Promotion, and Consumer Information Act (Act) [Pub.
L. 104-127], enacted on October 23, 2000.
Question and Answer Overview
Why Is USDA Proposing a Program for Hass Avocados?
The Department received a proposal from the California Avocado
Commission and partial proposals from Hass avocado interests in Chile,
Mexico, and New Zealand. The Department is issuing this rule to obtain
comments on the proposals and the potential impact of the proposed
program on the Hass avocado industry before developing a final proposed
program and conducting a referendum on it.
What Is the Purpose of the Hass Avocado Program?
The purpose of the program is to increase consumption of Hass
avocados in the United States.
Who Will Be Covered by the Program?
Producers and importers of Hass avocados will pay assessments under
the program, and first handlers will be involved in the assessment
collection process.
Who Will Sit on the Board?
The Act provides that there will be a 12-member Board consisting of
seven domestic Hass avocado producers, two importers, and three
additional members who can either be importers or domestic producers.
The three ``swing'' seats will be allocated to producers and importers
so as to assure as nearly as possible that the composition of the Board
reflects the proportion of domestic production and imports supplying
the United States market. The proportion shall be based on the average
volume of domestic production and imports in the United States over the
previous three years. Each member will have an alternate.
How Will Members of the Board Be Selected?
The Order will provide for a nomination and election process to
identify industry members who are interested and willing to serve on
the Board. The Commission will conduct an election to determine who
will be nominated for each domestic producer seat. USDA will conduct an
election among importers or importer associations will nominate persons
to fill the importer seats. Two names must be submitted for each member
and alternate position. From the names submitted, the Secretary will
appoint the members and alternates of the Board.
How Can I Express My Views on the Proposals?
You have 45 days to submit written comments to USDA on the
proposals and also to OMB on the paperwork burden associated with the
proposed order. You may submit your comments by mail, fax, or e-mail as
indicated above. In addition, if you are a producer or importer of Hass
avocados, you will have the opportunity to vote either ``yes'' or
``no'' in a referendum to determine if the program will be implemented.
If the Hass Avocado Program Is Implemented and There Are Concerns About
How It Is Operating, What Can the Secretary Do?
Three years after the program is implemented, the Secretary could
conduct a referendum to determine whether the Hass avocado industry
supports continuation of the program: (1) at any time; (2) at the
request of 30 percent or more of the producers and importers required
to pay assessments; or (3) at the request of the Board.
Executive Orders 12866 and 12988
This proposed rule has been determined to be not significant for
purposes of Executive Order (E.O.) 12866 and therefore has not been
reviewed by OMB.
This proposed rule has been reviewed under E.O. 12988, Civil
Justice Reform. It is not intended to have retroactive effect. Section
1212 of the Act states that the Act may not be construed to preempt or
supersede any other program relating to Hass avocado promotion,
research, industry information, and
[[Page 36871]]
consumer information organized and operated under the laws of the
United States or of a state.
Under Section 1207 of the Act, a person subject to the Order may
file a petition with the 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 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. Thereafter, the
Secretary will issue a ruling on the petition. The Act provides that
the district court of the United States in any district in which the
petitioner resides or conducts business shall have 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.
Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act (RFA) [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 actions
so that small businesses will not be disproportionately burdened.
The California avocado industry initiated this program by asking
the U.S. Congress (Congress) to pass legislation to authorize the
Secretary to create a generic program of promotion and research for
Hass avocados. Congress found that this program is vital to the welfare
of Hass avocado producers and other persons concerned with producing,
marketing, and processing Hass avocados.
This program is intended to: develop and finance an effective and
coordinated program of research, promotion, industry information, and
consumer information regarding Hass avocados; strengthen the position
of the Hass avocado industry in U.S. markets; maintain, develop, and
expand domestic markets for Hass avocados; and treat persons producing,
handling, and importing avocados fairly.
Hass avocado producers and importers must approve the program in a
referendum in advance of its implementation and would serve on the
Board that would administer the program under the Department's
supervision. In addition, any person subject to the program may file
with the Secretary a petition stating that the Order or any provision
of the Order is not in accordance with law and requesting a
modification of the Order or an exemption from the Order.
Administrative proceedings were discussed earlier in this proposed
rule.
In this program, handlers would be required to collect assessments
from producers, file reports, and submit assessments to the Board.
Importers would be required to remit to the Board assessments not
collected by the U.S. Customs Service (Customs) and to file reports
with the Board. Exports of U.S. Hass avocados would be exempt from
assessment. While the proposed Order would impose certain recordkeeping
requirements on producers, handlers, and importers, information
required under the proposed Order could be compiled from records
currently maintained and would involve clerical or accounting skills.
The forms require the minimum information necessary to effectively
carry out the requirements of the program, and their use is necessary
to fulfill the intent of the Act. The estimated cost in providing
information to the Board by the 6,310 respondents (6,000 producers, 100
handlers, 200 importers, and 10 exempt handlers) would be $40,020 for
all producers or $6.67 per producer, $6,500 for all handlers or $65 per
handler, $50 for all importers or $0.25 per importer, and $25 for
exempt handlers or $2.50 per exempt handler. These totals have been
estimated by multiplying total burden hours requested by $10.00 per
hour, a sum deemed to be reasonable should the respondents be
compensated for their time.
The Department would oversee the operation of the program. Three
years after the program is implemented, the Secretary could conduct a
referendum to determine whether the Hass avocado industry supports
continuation of the program at any time, at the request of 30 percent
or more of the producers and importers required to pay assessments, or
at the request of the Board.
There are approximately 6,000 producers, 200 importers, and 100
first handlers of Hass avocados that would be covered by the program.
The program would also affect 10 exempt handlers, a state association
(the Commission), which consists of avocado producers, and several
importer associations.
The Small Business Administration [13 CFR 121.201] defines small
agricultural producers as those having annual receipts of $500,000 or
less annually and small agricultural service firms as those having
annual receipts of $5 million or less. Importers and first handlers
would be considered agricultural service firms. Using these criteria,
most producers and importers to be covered by the proposed program
would be considered small businesses, and most handlers would not. On
August 6, 2001, the threshold for small agricultural producers will be
increased to $750,000. This increase has little import on the
determination of whether those covered by the proposed program would be
considered small businesses.
According to the USDA's National Agricultural Statistics Service
(NASS), total U.S. production of all varieties of avocados during the
1999-2000 season was 181,300 tons, most of which was utilized fresh
except for a small processed quantity that NASS included in fresh
utilization to protect the confidentiality of individual operations.
The value of the 1999-2000 crop was $392 million. Production in 1999-
2000 was up 14 percent from the previous year's total of 159,250 tons,
which had a value of $344 million.
California is the source for practically all of the Hass avocados
handled in the United States. In turn, according to industry sources,
Hass avocados account for about 85 percent of the total California
avocado crop. The California Hass avocado industry consists of
approximately 6,000 producers.
The majority of imported fresh avocados come from Chile, with the
remaining coming from Mexico, the Dominican Republic, and New Zealand.
Data on imports is not collected by variety, but it is believed to be
mostly Hass. Hass avocados are imported both in fresh and processed
form. According to U.S. Census Bureau data, fresh avocado imports
during the 1999-2000 season (November/October) accounted for about 75
percent of the total tonnage of fresh and processed avocados imported.
In 1999-2000, imported fresh avocados totaled 66,237 tons, up from
55,515 tons during the 1998-1999 season.
The total import value for fresh and processed avocados was $137
million in 1999-2000, up from $95 million in 1998-99. Almost all
prepared or preserved avocado imports come from Mexico. The trend in
imports is up, and imports have more than doubled since 1995.
The value of exports in 1999-2000 was $4.9 million, down from $7
million.
The proposed Hass avocado Order would authorize assessments on
producers (to be collected by first handlers) and on importers
(collected by Customs) of Hass avocados at an initial rate of 2.5 cents
a pound. Exports of
[[Page 36872]]
domestic Hass avocados are exempt from assessment. At the initial rate
of assessment, about $10 million will be collected to administer the
program: about 65 percent from domestic production and 35 percent from
imports. The Act authorizes assessments on fresh, frozen, and processed
Hass avocados. However, initially only fresh Hass avocados will be
assessed.
An exempt handler is a person who would otherwise be considered a
first handler, except that all Hass avocados purchased by the person
have already been subject to assessments under the Order. Others
affected by the program would be the Commission, which would receive 85
percent of the assessments paid by domestic producers, and importer
associations which would receive 85 percent of the assessments paid by
their members. The Association could use the assessment funds to
promote California Hass avocados in the United States, and the importer
associations could use the assessments to promote Hass avocados on a
country-of-origin basis in the United States. The funds remaining with
the Board would be used to promote Hass avocados in the United States.
The Board would also enter into contracts with the Association as
provided for in the Act.
Associations and related industry media would receive news releases
and other information regarding the implementation and referendum
process. Furthermore, all the information would be available
electronically.
If the program is implemented, the Hass avocado industry would
nominate individuals to serve as members and alternates of the Board.
USDA would ensure that the nominees represent the Hass avocado industry
as specified in the Act.
The Board would develop guidelines for compliance with the program.
The Board would recommend changes in the assessment rate; programs,
plans, and projects; a budget; and any rules and regulations that might
be necessary for the administration of the program. Among the rules and
regulations that might be necessary for the administration of the
program would be provisions to assess other types of avocados that are
so similar to the Hass variety that they are indistinguishable to
consumers in fresh form. The Board could also recommend the assessment
of imported frozen and processed Hass avocados. The Board also has the
authority to recommend the exemption of certain processed avocado
products for sale to a retailer if the avocado portion of the products
does not constitute a substantial value of the product. The
administrative expenses of the Board are limited by the Act to no more
than 10 percent of its assessment income.
There is a federal marketing order program for avocados grown in
south Florida [7 CFR part 915]. According to NASS, in Florida, there is
little or no production of Hass avocados. Under the program, Hass
avocados are covered by the grade regulations, but not by the maturity
regulations. Since California is the source for over 95 percent of
avocados produced in the United States and Florida does not produce
Hass avocados, there is little duplication between this Order and the
federal marketing order.
There is also a state avocado program in California, which is
administered by the Commission. The Commission's chief objective is to
increase consumer awareness of and demand for avocados on behalf of the
state's 6,000 growers. The Commission assesses growers a percentage-of-
revenue fee allowed under the California Marketing Act to fund a
variety of market-development programs. In 1998-1999, California
producers paid $13,165,544 in assessments at a rate of 4 cents of the
gross dollar value. In 1999-2000, the assessment rate was 3.5 percent
of the gross dollar value. The Commission's assessment may not exceed
6.5 percent of the gross dollar value of the year's sales of avocados
by all producers to handlers, or which are sold by handlers on behalf
of growers. It also provides that expenditures for administrative
purposes within the maximum assessment shall not exceed 2.5 percent of
the gross dollar value of sales. Handlers collect the assessments and
remit the money to the Commission.
Paragraph (b)(1) of section 1212 of the Act states that nothing in
the Act may be construed to provide for the control of production or
otherwise limit the right of any Hass avocado grower, handler, and
importer to produce, handle, or import Hass avocados. Paragraph (b)(2)
of section 1212 of the Act states that the Order must treat all persons
producing, handling, and importing Hass avocados fairly and that the
Order must be implemented in an equitable manner. Further, paragraph
(c) of section 1212 states that nothing in the Act may be construed to
preempt or supersede any other program relating to Hass avocado
promotion, research, industry information, and consumer information
organized and operated under the laws of the United States or of a
state.
Alternatives to the proposed Hass avocado program are limited by
the Act. The Act requires the Secretary to publish proposals submitted
by the Commission and others for a Hass avocado program. In addition,
the Act is very specific on many provisions which must be included in
the programs. However, the Act does include a few alternatives which
USDA has included as permissive terms--rather than requirement--in this
proposed rule. These alternatives include the identification and
assessment of avocado varieties that are so similar to Hass avocados
that they are indistinguishable to consumers in fresh form, the
exemption of certain processed Hass avocado products for sale to a
retailer if the Hass avocado portion of the products does not
constitute a substantial value of the product, and the identification
and assessment of imported frozen and processed Hass avocado products.
While we have performed this Initial Regulatory Flexibility
Analysis regarding the impact of this proposed rule on small entities,
in order to have as much data as possible for a more comprehensive
analysis of the effects of this rule on small entities, we are inviting
comments concerning potential effects. In particular, we are interested
in determining the number and kind of small entities that may incur
benefits or costs from implementation of this proposed rule and
information on the expected benefits or costs.
Paperwork Reduction Act
In accordance with OMB regulations [5 CFR Part 1320] which
implements the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35],
the information collection and recordkeeping requirements that may be
imposed by this Order have been submitted to OMB for approval. Those
requirements will not become effective prior to OMB review.
Title: National Research, Promotion, and Consumer Information
Programs.
OMB Number: 0581-NEW.
Expiration Date of Approval: NA.
Type of Request: New information collection for advisory committees
and boards and for research and promotion programs.
Abstract: The information collection requirements in this request
are essential to carry out the intent of the Act.
In addition, there will be the additional burden on producers and
importers voting in referenda. The referendum ballot, which represents
the information collection requirement relating to referenda, is
addressed in a proposed rule on referendum procedures that is published
separately in this issue of Federal Register.
[[Page 36873]]
Under the proposed program, first handlers would be required to
collect assessments from producers and file reports with and submit
assessments to the Board. While the proposed Order would impose certain
recordkeeping requirements on producers, handlers, and importers,
information required under the proposed Order could be compiled from
records currently maintained.
The estimated annual cost in providing information to the Board by
the estimated 6,310 respondents (6,000 producers, 100 handlers, 200
importers, and 10 exempt handlers) would be $40,020 for all producers
or $6.67 per producer; $6,500 for all handlers or $65 per handler, $50
for all importers or $0.25 per importer, and $25 for all exempt
handlers or $2.50 per exempt handler. These totals have been estimated
by multiplying total burden hours requested by $10.00 per hour, a sum
deemed to be reasonable should the respondents be compensated for their
time.
The proposed Order's provisions have been carefully reviewed, and
every effort has been made to minimize any unnecessary recordkeeping
costs or requirements, including efforts to utilize information already
maintained by handlers for the Commission.
The proposed forms would require the minimum information necessary
to effectively carry out the requirements of the program, and their use
is necessary to fulfill the intent of the Act. Such information can be
supplied without data processing equipment or outside technical
expertise. In addition, there are no additional training requirements
for individuals filling out reports and remitting assessments to the
Board. The forms would be simple, easy to understand, and place as
small a burden as possible on the person required to file the
information. Collecting information monthly coincides with normal
business practices.
Collecting information less frequently would hinder the Board from
effectively carrying out the provisions of the program. Requiring
reports less frequently than monthly would impose additional
recordkeeping requirements by requiring information from several months
to be consolidated prior to filling out the form rather than just
copying end-of-month figures already available onto the forms. The
timing and frequency of collecting information are intended to meet the
needs of the industry while minimizing the amount of work necessary to
fill out the required reports.
Therefore, there is no practical method for collecting the required
information without the use of these forms.
Information collection requirements that are included in this
proposal include:
(1) A monthly report by each handler who handles Hass avocados.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.50 hours per each respondent
reporting on Hass avocados handled.
Respondents: Handlers.
Estimated Number of Respondents: 100.
Estimated Number of Responses per Respondent: 12.
Estimated Total Annual Burden on Respondents: 600 hours.
(2) A periodic report by each importer who imports Hass avocados.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.25 hours per each importer
respondent reporting on Hass avocados imported.
Respondents: Importers.
Estimated Number of Respondents: 200.
Estimated Number of Responses per Respondent: 1 every ten years
(0.10).
Estimated Total Annual Burden on Respondents: 5 hours.
(3) An exemption application for handlers who will be exempt from
assessments.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.25 hours per response for each
exempt producer and importer.
Respondents: Exempt handlers.
Estimated Number of Respondents: 10.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 2.5 hours.
(4) Voting in the nomination process.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.5 hours per response.
Respondents: Producers and importers.
Estimated Number of Respondents: 6,200.
Estimated Number of Responses per Respondent: 1 every 3 years
(0.33).
Estimated Total Annual Burden on Respondents: 1,023 hours.
(5) A background questionnaire for nominees.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.5 hours per response for each
producer and importer nominated to the Board.
Respondents: Producers and importers.
Estimated Number of Respondents: 24 for the initial nominations to
the Board and approximately 12 respondents annually thereafter.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 12 hours for the
initial nominations to the Board and 6 hours annually thereafter.
(6) A requirement to maintain records sufficient to verify reports
submitted under the Order for two years.
Estimate of Burden: Public recordkeeping burden for keeping this
information is estimated to average 0.5 hours per recordkeeper
maintaining such records.
Recordkeepers: Producers, handlers and importers.
Estimated Number of Recordkeepers: 6,300.
Estimated Total Recordkeeping Hours: 3,150 hours.
Comments are invited on: (a) Whether the proposed collection of
information is necessary for the proper performance of functions of the
Order and the Department's oversight of the program, including whether
the information will have practical utility; (b) the accuracy of the
AMS's estimate of the burden of the proposed collection of information
including the validity of the methodology and assumption used; (c) ways
to enhance the quality, utility, and clarity of the information to be
collected; and (d) ways to minimize the burden of the collection of
information on those who are to respond, including the use of
appropriate automated, electronic, mechanical, or other technological
collections techniques or other forms of information technology.
Comments should reference OMB No. 0581-NEW, the docket number, and
the date and page number of this issue of the Federal Register.
Comments should be sent to the Docket Clerk and the OMB Desk Officer
for Agriculture at the address listed 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.
Background
The Hass Avocado Research, Promotion, and Consumer Information Act
(Act) authorizes the Secretary of Agriculture (Secretary) to establish
a Hass avocado research, promotion, and information program. The
program would be funded by an assessment levied on producers and
importers of 2.5 cents per pound of Hass avocados. The rate could be
raised up to a
[[Page 36874]]
maximum rate of 5 cents per pound. Exports of U.S. Hass avocados would
be exempt from assessment. The Act authorizes assessments on domestic
Hass avocados and on imports of fresh, frozen, and processed Hass
avocados. Initially, only fresh domestic and imported Hass avocados
will be assessed.
The Hass Avocado Board (Board) would use the funds to pay for
research, promotion, industry information, 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.
The Board would be composed of 12 voting members: 7 producers, 2
importers, and 3 producers and importers (swing seats). The three
``swing'' seats will be allocated to producers and importers so as to
assure as nearly possible that the composition of the Board reflects
the proportion of domestic production and imports supplying the United
States market, based on the three-year average of domestic production
and imports.
First handlers would be responsible for the collection of
assessments from the producer and payment to the Board. First handlers
would be required to maintain records for each producer for whom Hass
avocados is handled, including Hass avocados produced by the handler.
In addition, first handlers would be required to file reports regarding
the collection, payment, or remittance of the assessments and the
disposition of exported Hass avocados, which are exempt from
assessment. All information obtained through handler reports would be
kept confidential.
An exempt handler is a person who would otherwise be considered a
first handler, except that all Hass avocados purchased by the person
have already been subject to assessments under the Order. Others
affected by the program would be the Commission, which would receive 85
percent of the assessments paid by domestic producers, and importer
associations which would receive 85 percent of the assessments paid by
their members. The Association could use the assessment funds to
promote California Hass avocados in the United States, and the importer
associations could use the assessments to promote Hass avocados on a
country-of-origin basis in the United States. The funds remaining with
the Board would be used to promote Hass avocados in the United States.
The Board would also enter into contracts with the Association as
provided for in the Act.
The U.S. Customs Service (Customs) would collect assessments on
imported Hass avocados and would remit those assessments to the Board
for a fee.
The Act requires the Department to conduct a referendum during the
60-day period preceding the proposed Order's effective date. Hass
avocado producers and importers would vote in the referendum to
determine whether they favor the Order's implementation. The proposed
Order must be approved by a majority of eligible producers and
importers voting in the referendum. After the program has been in
operation for three years, referenda could be conducted at any time,
when requested by 30 percent of Hass avocado producers and importers
covered by the Order, or when requested by the Board.
The Act provides for the submission of proposals for a Hass avocado
research, promotion, and information Order by industry organizations or
any other interested person affected by the Act.
The Department issued a news release on January 8, 2001, requesting
proposals for an initial Order or portions of an initial Order by
February 7, 2001. A second news release, extending the deadline for
submission of proposals to March 9, 2001, was issued on February 2,
2001.
An entire proposed Order was submitted by the Commission (Proposal
1). In addition, partial proposals were submitted by the Asociacion de
Productores y Empacadores Exportadores de Aguacate de Michoacan (APEAM)
(Proposal 2); the Chilean Exporters Association (ASOEX), Chilean Fruit
Growers Federation (FEDEFRUTA), and Comite de Paltas de Chile (Proposal
3); and the New Zealand Avocado Growers Association (NZAGA) and the New
Zealand Avocado Industry Council (NZAIC) (Proposal 4). The Chilean and
New Zealand proposals have been considered jointly because they are
identical in every respect except for the provision on the importer
definition, which is included in the Chilean comments, but not in the
New Zealand comment. Proposals 2, 3, and 4 contain alternatives to
provisions in Proposal 1 as well as provisions not included in Proposal
1.
Proposal 1
The proposed Order submitted by the Commission is summarized as
follows:
Sections 1219.1 through 1219.26 of the proposed Order define
certain terms, such as Hass avocado, handler, producer, and importer,
which are used in the proposed Order.
Sections 1219.30 through 1219.42 include provisions relating to the
establishment, adjustment, and membership; nominations; appointment;
terms of office; vacancies; reimbursement; powers; and duties of the
Board.
The Board would be the body organized to administer the Order
through the implementation of programs, plans, projects, budgets, and
contracts to promote and disseminate information about Hass avocados,
under the supervision of the Secretary. Further, the Board would be
authorized to incur expenses necessary for the performance of its
duties and to set a reserve fund.
Sections 1219.50 through 1219.57 authorize the collection of
assessments, specify who pays them and how, and specifies persons who
would be exempt from paying the assessment. The assessment rate may not
exceed 5 cents per pound of Hass avocados. The assessment sections also
outline the procedures to be followed by handlers and importers for
remitting assessments; and establish interest charges for unpaid or
late assessments.
Sections 1219.60 through 1219.64 concern reporting and
recordkeeping requirements for persons subject to the Order and protect
the confidentiality of information obtained from such books, records,
or reports and the maintenance of a list of handlers required by the
Act.
Sections 1219.70 through 1214.77 describe the rights of the
Secretary, the authority for the Secretary to suspend or terminate the
Order, proceedings after termination, the effect of termination or
amendment, personal liability of Board members and staff, separability,
amendments, and OMB control number.
The Department has modified the Commission's proposal to make it
consistent with the Act, as necessary as well as provide clarity,
consistency, and correctness with respect to word usage and
terminology. For example, the Department alphabetized definitions in
Secs. 1219.1 through 1219.26; organized sections of the Order to be
more consistent with current programs and renumbered them accordingly;
deleted redundant provisions; deleted referendum procedures and drafted
a separate rule on referendum procedures; and changed the proposal to
make it consistent with the Act and USDA policy.
In the definitions section, the definitions of ``crop year'' and
``Association'' were added to provide clarity, and the definition of
``retailer'' was removed because a specific definition was not
warranted.
In the apportionment of three swing positions in
Sec. 1219.30(b)(3), USDA specified that Customs or USDA may
[[Page 36875]]
provide import data in order to ensure accuracy. Section 1219.31(a)(3)
was changed to indicate that two nominees must be submitted for each
producer vacancy and two nominees must be submitted for each alternate
vacancy because this is the standard practice for similar national
programs. In Sec. 1219.36(d), USDA specified that nominations and
replacement shall not be required if the unexpired term is less than
six months, and, in Sec. 1219.35, a term of office for alternates was
added to enhance administration of the program. In Sec. 1219.36,
authority for the Board to select alternates to fill vacant alternate
positions by majority vote was revised to state that the Board may
select, by majority vote, nominees to submit to the Secretary for
appointment. The Commission's proposal provided for the Board to
appoint the replacement members, but only the Secretary may appoint
persons to serve on the Board as members or alternates. A paragraph on
bylaws was added to Sec. 1219.38 as paragraph (b) to ensure that the
activities of the Board are consistent with the Order. In
Sec. 1219.38(k), the citation for the act which requires periodic
evaluations was corrected so that it complies with provisions of the
Federal Agricultural Improvement and Reform Act of 1996 [7 U.S.C. 7401
et seq.]
Under Sec. 1219.52, the Department revised the Commission's
proposed limitation on administrative expenses of Board to 10 percent
of the funds available for generic promotion and research to reflect
the fact that as much as 85 percent of the assessments collected under
the program could be remitted to the Association and importer
associations. The Act limits the administrative expenses of the Board
in carrying out its generic programs, plans, and projects. In addition,
the provision for the Board to make payments of assessments to the
Association and importer associations within 30 days following the
month in which the assessments were received because this language was
inconsistent with other provisions which require payments to the
Association and importer associations within 30 days of receipt of the
assessments by the Board. USDA modified Sec. 1219.56 to specify that
the Board will apply overpayments of assessments against the amount due
in succeeding months unless the person requests a refund.
A requirement for producers and exempt handlers to maintain records
and file reports with the Board or the Secretary was added to
Sec. 1219.60(a) in order to facilitate enforcement of the Order and to
make the Order consistent with current practice for similar national
programs. In Sec. 1219.61, authority for the Board to use agents to
conduct audits--not just Board and USDA employees--was added to
increase flexibility. Since agents were added in Sec. 1219.61 for
audits, they were also added to Sec. 1219.63(a) on confidentiality to
ensure that information obtained in audits is protected.
Lastly, a section on the rights of the Secretary was added so that
the program would be consistent with other national programs and
specify the rights of the Secretary.
Proposal 2
A partial proposal was submitted by APEAM. APEAM is an association
of persons who export avocados produced in Mexico to the United States.
We are publishing several of the provisions submitted by APEAM.
Other provisions are not being published either because they are
covered by Proposal 1 or because they are not authorized by the Act.
The provisions that are being published for comment are as follows:
(1) A definition of first handler; (2) a definition of fiscal period;
(3) a provision requiring the Department to use data from import
associations, Customs, and the Bureau of the Census for determining the
level of imports in making its determination of the composition of the
initial Board; (4) a provision defining ``substantial activity'' as it
pertains to eligibility requirements for importer members; (5) a
provision authorizing importer associations in general or by country of
origin; (6) a provision authorizing the Secretary to certify only one
importer association per country of origin; (7) authority for importer
associations to include representatives of foreign avocado exporting
industries; (8) a provision authorizing importer associations to invest
funds received from the Board and conduct promotion and research on a
country of origin basis. (9) a provision requiring final payments for a
crop year to be received no later than May 31; and (10) a provision
requiring the administrative staff of the Board to periodically review
the list of Hass avocado producers and requiring the Association to
provide a list of producers to the Secretary or to the administrative
staff of the Board.
The following provisions are not being published because they are
covered by Proposal 1: (1) A provision requiring the Board to remit
funds to importer associations no later than 30 days after such funds
are received by the Board; (2) a requirement to allocate producer and
importer members in the three swing positions in such a manner that, to
the extent possible, importers will have proportional representation on
the Board as a whole; (3) a requirement to reallocate the three swing
positions to producers and importers in such a manner that, to the
extent possible, there will be proportional representation on the Board
as a whole.
The following provisions are not being published because they are
not authorized by the Act: (1) Authority for the Secretary to appoint a
board to govern importer associations; (2) authority for Customs to
send import assessments directly to importer associations; (3) a
requirement for the Board to remit 85 percent of all import assessments
to importer associations; (4) authority for importers to pay
assessments 30 days after the end of the month in which the imported
Hass avocados are sold in the United States; and (5) authority for the
Board to enter into a contract or agreement with an importer
association.
Proposals 3 and 4
Proposal 3 was submitted by ASOEX and FEDEFRUTA and the Chilean
Avocado Committee. ASOEX and FEDFRUTA are the principal trade
associations representing fruit exporters and producers in Chile.
Proposal 4 was submitted by NZAGA and NZAIC. NZAGA is a voluntary
association of avocado growers representing avocado production in New
Zealand.
We are publishing several of the provisions submitted by ASOEX,
FEDEFRUTA, NZAGA, and NZAIC. Other provisions are not being published
either because they are covered by Proposals 1 and 2 or because they
are not authorized by the Act.
The provisions that are being published are: (1) An eligibility
requirement for importer members on the Board; (2) a requirement for
the Board's generic programs to be conducted throughout the year; (3) a
requirement for the Board to consult with the Commission and country-
of-origin importer associations when developing generic programs; (4) a
provision limiting the Board's administrative expenses for generic
programs to 1.5 percent of total assessments; (5) a requirement for
importer associations to be formed as soon as possible after the
effective date of the Order; (6) a requirement for importer
associations to establish bylaws; (7) authority for importer
associations to use existing organizations for establishing their
associations and their promotional and
[[Page 36876]]
research programs; and (8) certification requirements for importer
associations.
Provisions that will not be published because they are covered by
Proposals 1 or 2 are: (1) A requirement for overall representation of
importers on the Board to be based on the proportion of domestic and
import assessments; (2) a requirement for the Secretary to notify all
importer associations on nominations for the initial Board within 30
days of the effective date of the Order; (3) a requirement for the
Secretary to develop nomination procedures for importer members; and
(4) a requirement for the Secretary to prepare a ballot containing the
names of all persons nominated by all importer associations.
The provisions which are not being published because they are not
authorized by the Act are: (1) A requirement for USDA to serve as an
advisor to importer associations; (2) a requirement for all importers
and country-of-origin producers and exporters to participate in
importer associations; (3) authorization for the assessment of all
varieties of avocados; (4) a requirement for the Board to contract with
importer associations; (5) authority for importers to pay import
assessments 60 days after the sale of avocados in the United States;
(6) a requirement for importer associations to receive 85 percent of
all import assessments, prorated by each country of origin; (7)
authority for producers and importers to receive credit towards their
assessments under the proposed program for contributions to generic
state or country of origin promotion programs at a regional, state, or
local level; (8) authority for importer associations to use import
assessments for reasonable administrative expenses; and (9) a
requirement to include a vote by volume in referenda.
A 30-day comment period is provided on this proposed rule. This
period is deemed appropriate to better effect the implementation time
frames provided for in the Act.
USDA seeks comments on the provisions included in this proposed
rule, the initial regulatory flexibility analysis, and the information
collection burden that would be imposed by this rule. In addition, USDA
requests information on how and when first handlers would collect the
assessments due on domestic Hass avocados and remit the assessments to
the Board and how long after importation occurs does Customs bill
importers and how long Customs allows importers to remit the payment.
On June 25, 2001, the United States Supreme Court issued a decision
in the case of United States v. United Foods, Inc. (United Foods), that
held that the imposition of mandatory assessments to fund generic
mushroom advertising violated the First Amendment insofar as it
required the mushroom industry to subsidize commercial speech with
which they disagreed. The Court expressly declined to reach the
question whether the generic advertising conducted under the mushroom
program constitutes government speech.
The Department will analyze all written views received to date as
well as written comments on the three proposals published below before
issuing a final Order.
List of Subjects in 7 CFR Part 1219
Administrative practice and procedure, Advertising, Consumer
information, Marketing agreements, Hass avocados, Promotion, Reporting
and recordkeeping requirements.
Proposal I
1. Part 1219 is added to read as follows:
PART 1219--HASS AVOCADO PROMOTION, RESEARCH, AND INFORMATION
Subpart A--Hass Avocado Promotion, Research, and Information Order
Definitions
Sec.
1219.1 Act.
1219.2 Association.
1219.3 Conflict of interest.
1219.4 Consumer information.
1219.5 Crop year.
1219.6 Customs.
1219.7 Department.
1219.8 Exempt handler.
1219.9 First handler.
1219.10 Fiscal period or marketing year.
1219.11 Handle.
1219.12 Hass avocado.
1219.13 Hass Avocado Board.
1219.14 Importer.
1219.15 Industry information.
1219.16 Marketing.
1219.17 Order.
1219.18 Part and subpart.
1219.19 Person.
1219.20 Producer.
1219.21 Programs, plans, and projects.
1219.22 Promotion.
1219.23 Research.
1219.24 Secretary.
1219.25 State.
1219.26 United States.
The Hass Avocado Board
1219.30 Establishment and membership.
1219.31 Initial nomination and appointment of producer members and
alternates.
1219.32 Initial nomination and appointment of importer members and
alternates.
1219.33 Subsequent nomination and appointment of Board members and
alternates.
1219.34 Failure to nominate.
1219.35 Term of office.
1219.36 Vacancies.
1219.37 Alternate members.
1219.38 Powers and duties.
1219.39 Board procedure.
1219.40 Committee procedure.
1219.41 Compensation and expenses.
1219.42 Prohibited activities.
Budgets, Expenses, and Assessments
1219.50 Budgets, programs, plans, and projects.
1219.51 Contracts and agreements.
1219.52 Control of administrative costs.
1219.53 Budget and expenses.
1219.54 Assessments.
1219.55 Exemption from assessment.
1219.56 Adjustment of accounts.
1219.57 Patents, copyrights, trademarks, publications, and product
formulations.
Books, Records, and Reports
1219.60 Reports.
1219.61 Books and records.
1219.62 Books and records of the Board.
1219.63 Confidential treatment.
1219.64 List of importers.
Miscellaneous
1219.70 Right of the Secretary.
1219.71 Suspension or termination.
1210.72 Proceedings after termination.
1219.73 Effect of termination or amendment.
1219.74 Personal liability.
1219.75 Separability.
1219.76 Amendments.
1219.77 OMB control numbers.
Subpart B--[Reserved]
Authority: 7 U.S.C. 7801-7813.
Subpart A--Hass Avocado Promotion, Research, and Information Act of
2000
Definitions
Sec. 1219.1 Act.
Act means the Hass Avocado Promotion, Research, and Information Act
of 2000, Pub. L. 106-387, 7 U.S.C. 7801-7813, and any amendments
thereto.
Sec. 1219.2 Association.
Association means an avocado organization established by State
statute in a State with the majority of Hass avocado production in the
United States.
Sec. 1219.3 Conflict of interest.
Conflict of interest means a situation in which a Board member or
employee has a direct or indirect financial interest in a person who
performs a service for, or enters into a contract with, the Board for
anything of economic value.
[[Page 36877]]
Sec. 1219.4 Consumer information.
Consumer information means any action or program that disseminates
or otherwise provides information to consumers and other persons, on
the use, nutritional attributes, and other information that will assist
consumers and other persons in the United States in making evaluations
and decisions regarding the purchase, preparation, and use of Hass
avocados.
Sec. 1219.5 Crop year.
Crop year means the period from November 1 of one year through
October 31 of the following year, or such other one-year period
recommended by the Board and approved by the Secretary.
Sec. 1219.6 Customs.
Customs means the United States Customs Service.
Sec. 1219.7 Department.
Department means the United States Department of Agriculture.
Sec. 1219.8 Exempt handler.
Exempt handler means a person who would otherwise be considered a
first handler, except that all Hass avocados purchased by the person
have already been subject to assessments under the Order. A person who
handles both Hass avocados that have already been subject to
assessments under the Order and Hass avocados that have not been
subject to assessments under the Order is a first handler.
Sec. 1219.9 First handler.
First handler means a person operating in the Hass avocado
marketing system that sells domestic or imported Hass avocados for
consumption in the United States and who is responsible for remitting
assessments to the Board. For the purposes of the Order, the term means
the first person who handles Hass avocados for sale (except a common or
contract carrier of Hass avocados owned by another person), including a
producer who handles Hass avocados for sale of the producer's own
production.
Sec. 1219.10 Fiscal period or marketing year.
Fiscal period or marketing year means the period beginning on
November 1 of any year and extending through the last day of October of
the following year, or such other consecutive 12-month period as shall
be recommended by the Board and approved by the Secretary.
Sec. 1219.11 Handle.
Handle means to pack, process, transport, purchase, or in any other
way to place or cause Hass avocados to which one has title or
possession to be placed in the current of commerce. Such term shall not
include the transportation or delivery of Hass avocados by the producer
thereof to a handler.
Sec. 1219.12 Hass avocado.
Hass avocado means the fruit grown in or imported into the United
States of the species Persea americana Mill., or other type of avocados
that, in the determination of the Board, with approval of the
Secretary, is so similar to the Hass variety avocado as to be
indistinguishable to consumers in fresh form. For the purposes of this
subpart, the term shall include all fruit in fresh, frozen, or any
other processed form.
Sec. 1219.13 Hass Avocado Board.
Hass Avocado Board or the Board means the administrative body
established pursuant to Sec. 1219.40.
Sec. 1219.14 Importer.
Importer means any person who imports Hass avocados into the United
States. The term includes a person who holds title to Hass avocados
produced outside of the United States immediately upon release by
Customs, as well as any person who acts on behalf of others, as an
agent, broker, or consignee, to secure the release of Hass avocados
from Customs and the introduction of the released Hass avocados into
the current of commerce and who is listed in the import records of
Customs as the importer of record for such Hass avocados.
Sec. 1219.15 Industry information.
Industry information means information, programs, and activities
that are designed to increase efficiency in processing, enhance the
development of new markets and marketing strategies, increase marketing
efficiency, and enhance the image of Hass avocados and the Hass avocado
industry in the United States.
Sec. 1219.16 Marketing.
Marketing means any activity related to the sale or other
disposition of Hass avocados in any channel of commerce.
Sec. 1219.17 Order.
Order means this subpart.
Sec. 1219.18 Part and subpart.
Part means the Order and all rules, regulations, and supplemental
orders issued pursuant to the Act and the Order. The Order itself shall
be a subpart of such part.
Sec. 1219.19 Person.
Person means any individual, group of individuals, firm,
partnership, corporation, joint stock company, association,
cooperative, or any other legal entity.
Sec. 1219.20 Producer.
Producer means any person who is engaged in the business of
producing Hass avocados in the United States for commercial use, who
owns, or shares the ownership and risk of loss, of such Hass avocados.
Sec. 1219.21 Programs, plans, and projects.
Programs, plans, and projects means those research, promotion, and
information programs, plans, studies, or projects established pursuant
to Sec. 1219.50.
Sec. 1219.22 Promotion.
Promotion means any action to advance the image, desirability, or
marketability of Hass avocados in the United States, including paid
advertising, sales promotion, and publicity. Promotion activities are
designed to improve the competitive position and stimulate sales of
Hass avocados in the domestic marketplace.
Sec. 1219.23 Research.
Research means any type of test, study, or analysis relating to
market research, market development, and market efforts, or relating to
the use, quality, or nutritional value of Hass avocados, other related
food science research, or research designed to advance the knowledge,
image, desirability, usage, or marketability of Hass avocados in the
United States.
Sec. 1219.24 Secretary.
Secretary means the Secretary of Agriculture of the United States
or any other officer or employee of the Department to whom authority
has heretofore been delegated, or to whom authority may hereafter be
delegated, to act in the Secretary's stead.
Sec. 1219.25 State.
State means any of the several 50 States of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth
of the Northern Mariana Islands, the United States Virgin Islands,
Guam, American Samoa, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
Sec. 1219.26 United States.
United States means collectively the several 50 States of the
United States, the District of Columbia, the Commonwealth of Puerto
Rico, the Commonwealth of the Northern Mariana Islands, the United
States Virgin Islands, Guam, American Samoa, the
[[Page 36878]]
Republic of the Marshall Islands, and the Federated States of
Micronesia.
Hass Avocado Board
Sec. 1219.30 Establishment and membership.
(a) A Hass Avocado Board, hereinafter called the Board, is hereby
established to administer the terms and provisions of this subpart. The
Board shall consist of 12 members nominated by the Hass avocado
industry and appointed by the Secretary as provided in this subpart,
each of whom shall have an alternate nominated and appointed in the
same manner as members of the Board are nominated and appointed. Board
members and alternates shall be domiciled in the United States.
(b) The membership of the Board shall be divided as follows:
(1) Seven members and their alternates shall be producers of Hass
avocados that are subject to assessments under this subpart;
(2) Two members and their alternates shall be importers of Hass
avocados that are subject to assessments under this subpart; and
(3) Three members shall be producers of Hass avocados that are
subject to assessments under this subpart or importers of Hass avocados
that are subject to assessments under this subpart. Producers and
importers shall be allocated to these positions so as to assure as
nearly as possible that the composition of the 12-member Board reflects
the proportion of domestic production and imports supplying the United
States market. Such proportion shall be based on the Secretary's
determination of the average volume of domestic production and the
average volume of imports into the United States market over the
previous three years. For determining proportional representation on
the initial Board, the Secretary shall determine the domestic level of
production and the level of imports by using data provided by the
California Avocado Commission, the Department of Agriculture, the
Department of Commerce, and Customs.
(c) Three years after the assessment of funds commences pursuant to
this subpart, and at the end of each three-year period thereafter, the
Board shall review the production of domestic Hass avocados in the
United States and the volume of imported Hass avocados on the basis of
the amount of assessments collected from producers and importers over
the immediately preceding three-year period and, if warranted,
recommend to the Secretary the reapportionment of the positions
authorized in paragraph (b)(3) of this section to reflect changes in
the proportion of domestic Hass avocado production to the volume of
imported Hass avocados, to the extent possible in the Act. Any
adjustment under this paragraph shall be subject to the review and
approval of the Secretary.
(d) For purposes of this section, importer means a person who is
involved in, as a substantial activity, the importation of Hass
avocados for sale or marketing in the United States (either directly or
as an agent, broker, or consignee of any person that produces Hass
avocados outside of the United States for sale in the United States),
who is subject to assessments under the Order, and who is listed by
Customs as the importer of record for such Hass avocados.
Sec. 1219.31 Initial nomination and appointment of producer members
and alternates.
(a) The Association will nominate producer members and alternates
to serve on the Board in accordance with the following procedures.
(1) Within 30 days of implementation of this subpart, the
Association shall establish a list of producers in the United States
who are eligible to serve on the Board and notify all producers that
they may nominate persons to serve as members and alternates on the
Board.
(2) After names are received from the producers, the Association
shall prepare a ballot with the names of all persons nominated and mail
it to all producers to allow them the opportunity to vote for the
persons who will represent their interests on the Board.
(3) After tabulating the vote, the Association shall announce the
results and submit two names for each producer member and two names for
each alternate producer member to the Secretary from the persons
receiving the highest number of votes.
(b) The Secretary shall select the producer members and alternates
of the Board from the names submitted by the Association.
Sec. 1219.32 Initial nomination and appointment of importer members
and alternates.
(a) The Department will conduct the nomination process for the
initial importer members and alternates on the Board in accordance with
the following procedures.
(1) Within 30 days of implementation of this subpart, the
Department shall notify all known importers and importer organizations
that they may nominate persons to serve as importer members and
alternates on the Board.
(2) After names are received from the importers and importer
organizations, the Department shall prepare a ballot with the names of
all persons nominated and mail it to all known importers and importer
organizations to allow them the opportunity to vote for the persons who
will represent their interests on the Board.
(3) After tabulating the vote, the Department shall announce the
results and submit two names for each importer member and two names for
each alternate importer member to the Secretary from the persons
receiving the highest number of votes.
(b) The Secretary shall select the importer members and alternates
of the Board from the nominees submitted.
Sec. 1219.33 Subsequent nomination and appointment of Board members
and alternates.
The Board's staff shall announce at least 150 days in advance of
the expiration of members' and alternates' terms that such terms are
expiring and shall solicit nominations in accordance with procedures
recommended by the Board and approved by the Secretary. Nominations for
such positions should be submitted to the Secretary no less than 90
days prior to the expiration of the terms.
Sec. 1219.34 Failure to nominate.
In any case in which producers or importers fail to nominate
individuals for appointment to the Board, the Secretary may appoint
individuals to fill vacancies from the appropriate segments of the
industry.
Sec. 1219.35 Term of office.
The members and alternate members of the Board shall serve for
terms of three years, except the members of the initial Board shall
serve terms as follows: Four members and four alternates shall serve
for two-year terms; four members and four alternates shall serve for
three-year terms; and four members and four alternates shall serve for
four-year terms. No member shall serve more than two consecutive three-
year terms. Members and alternates serving initial two-year or four-
year terms may serve for one additional three-year term. A Board member
may serve as an alternate during the years the member is ineligible for
a member position. Each term of office will end on October 31, with new
terms of office beginning on November 1.
Sec. 1219.36 Vacancies.
(a) In the event any member or alternate of the Board ceases to be
a member of the category of members from which the member was appointed
to the Board, such member or alternate shall be disqualified from
serving on the
[[Page 36879]]
Board and the position shall automatically become vacant.
(b) If a member of the Board consistently refuses to perform the
duties of a member of the Board, or if a member of the Board engages in
acts of dishonesty or willful misconduct, the Board may recommend to
the Secretary that the member be removed from office. If the Secretary
finds that the recommendation of the Board shows adequate cause, the
member shall be removed from office.
(c) Should any Board member position become vacant in the event of
the death, removal, resignation, or disqualification, the alternate of
that member shall automatically assume the position of said member. The
alternate shall serve until the end of the member's normal term. If
there is no alternate member to assume the position of member, the
successor member and alternate shall be nominated and selected in the
manner specified in Secs. 1219.31, 1219.32, or 1219.33.
(d) Should any alternate member become vacant in the event of
death, removal, resignation, or disqualification, the Board may
nominate persons to serve for the unexpired term of such alternate
member. The nomination shall be conducted at a regularly scheduled
Board meeting as soon as practicable after the vacancy occurs. The
Board may solicit the names of nominees from producers and importers
prior to the meeting and from the floor of the meeting. All nominees
must meet the qualifications for nomination. The Board shall submit two
nominees for each vacancy to the Secretary. A vacancy will not be
required to be filled if the unexpired term is less than six months.
Sec. 1219.37 Alternate members.
An alternate member of the Board, during the absence of the member
for whom the person is the alternate, shall act in the place and stead
of such member and perform such duties as assigned. In the event of the
death, removal, resignation, or disqualification of any member, the
alternate for that member shall automatically assume the position of
said member. In the event that both a member of the Board and the
alternate are unable to attend a meeting, the Board may not designate
any other alternate to serve in such member's or alternate's place and
stead for the meeting.
Sec. 1219.38 Powers and duties.
The Board shall have the following powers and duties in addition to
the responsibilities and authorities specified in other sections of
this subpart:
(a) To administer the Order in accordance with its terms and
conditions and to collect assessments;
(b) To develop and recommend to the Secretary for approval such
bylaws as may be necessary for the functioning of the Board and such
rules as may be necessary to administer the Order, including activities
authorized to be carried out under the Order;
(c) To meet, organize, and select from among the members of the
Board a chairperson, other officers, committees, and subcommittees, at
the start of each fiscal period, and at such other times as the Board
determines to be appropriate;
(d) To recommend to the Secretary rules and regulations to
effectuate the terms and conditions of this subpart;
(e) To employ such persons, other than the members, as the Board
considers necessary to assist the Board in carrying out its duties and
to determine the compensation and specify the duties of such persons;
(f) To appoint from its members an executive committee and to
delegate to the committee authority to administer the terms and
provisions of this subpart under the direction of the Board and within
the policies determined by the Board and approved by the Secretary;
(g) To develop budgets for the implementation of this subpart and
submit the budgets to the Secretary for approval and to propose and
develop (or receive and evaluate), approve, and submit to the Secretary
for approval programs, plans, and projects for Hass avocado promotion,
industry information, consumer information, or related research;
(h) To develop and implement after the approval by the Secretary
programs, plans, and projects for Hass avocado promotion, industry
information, consumer information, or related research, to contract or
enter into agreements with appropriate persons to implement the
programs, plans, and projects, and to pay the costs of the
implementation of contracts and agreements with funds collected under
this subpart.
(i) To maintain such records and books and prepare and submit such
reports and records from time to time to the Secretary as the Secretary
may prescribe; to make appropriate accounting with respect to the
receipt and disbursement of all funds entrusted to it; and to keep
records that accurately reflect the actions and transactions of the
Board;
(j) To work to achieve an effective, continuous, and coordinated
program of promotion, research, consumer information, and industry
information designed to strengthen the Hass avocado industry's position
in the domestic marketplace; to maintain and expand existing domestic
markets and uses for Hass avocados; to create new domestic markets; and
to carry out programs, plans, and projects designed to provide maximum
benefits to the Hass avocado industry;
(k) To evaluate on-going and completed programs, plans, and
projects for Hass avocado promotion, industry information, consumer
information, or related research and to comply with the independent
evaluation provisions of the Federal Agricultural Improvement and
Reform Act of 1996 [7 U.S.C. 7401 et seq.];
(l) To receive, investigate, and report to the Secretary complaints
of violations of the Order;
(m) To recommend to the Secretary amendments to this Order;
(n) To invest, pending disbursement under a program, plan, or
project, funds collected through assessments authorized under this Act
only in:
(1) Obligations of the United States or any agency of the United
States;
(2) General obligations of any State or any political subdivision
of a State;
(3) Any interest-bearing account or certificate of deposit of a
bank that is a member of the Federal Reserve System; or
(4) Obligations fully guaranteed as to principal and interest by
the United States, except that income from any such invested funds may
be used only for a purpose for which the invested funds may be used;
(o) To borrow funds necessary for the startup expenses of the
Order;
(p) To cause the books of the Board to be audited by a qualified
independent auditor at the end of each fiscal period and to submit a
report of the audit directly to the Secretary;
(q) To give the Secretary the same notice of meetings and
teleconferences of the Board and its committees as is given to members
in order that the Secretary's representative(s) may attend or
participate in the meetings;
(r) To act as intermediary between the Secretary and any producer,
first handler, or importer;
(s) To periodically prepare and make public reports of its
activities carried out, and at least once each fiscal period, to make
public an accounting of funds received and expended; and
(t) To notify Hass avocado producers, first handlers, and importers
of all Board meetings through news releases or other means.
[[Page 36880]]
Sec. 1219.39 Board procedure.
(a) At a properly convened meeting of the Board, seven (7) members,
including alternates acting in place of members of the Board, shall
constitute a quorum: Provided, that such alternates shall serve only
when the member is absent from a meeting. Any action of the Board shall
require the concurring votes of a majority of those present and voting.
At assembled meetings, all votes shall be cast in person.
(b) In lieu of voting at a properly convened meeting and, when in
the opinion of the chairperson of the Board such action is considered
necessary, the Board may take action if supported by one vote more than
50 percent of the members by mail, telephone, electronic mail,
facsimile, or other means of communication. Such alternative means for
the Board taking action may be undertaken for various reasons. These
reasons include the need to address matters of an emergency nature when
there is not enough time to call an assembled meeting of the Board. All
telephone votes shall be confirmed promptly in writing. In that event,
all members must be notified and provided an opportunity to vote. Any
action so taken shall have the same force and effect as though such
action had been taken at a properly convened meeting of the Board. All
votes shall be recorded in the Board minutes.
(c) All Board members and alternates and the Secretary will be
notified at least 10 days in advance of all Board meetings, except the
chairperson of the Board can waive the 10-day notice requirement in
matters of an emergency nature.
(d) Each member of the Board will be entitled to one vote on any
matter put to the Board, and the motion will carry if supported by one
vote more than 50 percent of the total votes represented by the Board
members present.
(e) There shall be no voting by proxy.
(f) The chairperson shall be a voting member of the Board.
Sec. 1219.40 Committee procedure.
(a) The Board may establish committees as deemed necessary to carry
out the purposes and objectives of the Order.
(b) The chairperson of the Board shall appoint all committee
chairpersons and shall appoint all members of each committee after
consultation with the committee chairperson affected. Appointments are
subject to approval by the Board and may be changed from time to time
as determined by the chairperson of the Board with the concurrence of
the Board.
(c) The chairperson of the Board may appoint committee members from
among the Board members and alternates and from the industry in
general.
(d) The rules and procedures under which committees conduct their
activities shall be prescribed in the Board's bylaws.
(e) Committee members and the Secretary will be notified at least
10 days in advance of all committee meetings.
(f) It will be considered a quorum at a committee meeting when at
least one more than half of those assigned to the committee are
present.
(g) There shall be no voting by proxy on committees.
(h) The chairperson of the Board shall be an ex-officio member of
all committees.
Sec. 1219.41 Compensation and expenses.
(a) The members and alternates of the Board and committee members
shall serve without compensation but shall be reimbursed for reasonable
out-of-pocket expenses, as approved by the Board, incurred by them in
the performance of their duties.
(b) The Board shall have in place sufficient internal controls to
prevent reimbursements or expenditures for unreasonable or otherwise
controversial travel and meeting expenses.
Sec. 1219.42 Prohibited activities.
The Board may not engage in and shall prohibit its employees and
agents from engaging in:
(a) Any action that would be a conflict of interest. For the
purposes of this subpart, Board members and employees thereof must
disclose any relationship with any organization or company that has a
contract with the Board or operates a State promotion program. No
member may vote on any matter in which the member or member's business
entity has a financial interest.
(b) Using funds collected under this subpart for the purpose of
influencing legislation or governmental action or policy, by local,
national, and foreign governments, except to develop and make
recommendations to the Secretary as provided for in this subpart.
(c) In a program, plan, or project conducted under this subpart:
(1) Making any reference to private brand names or making false,
misleading, disparaging, or unwarranted claims on behalf of Hass
avocados or
(2) Making any false, misleading, or disparaging statements with
respect to the attributes or use of any agricultural product. This
subsection shall not preclude the Board from offering its programs,
plans, and projects for use by commercial parties under such terms and
conditions as the Board may prescribe as approved by the Secretary.
(d) For the purposes of this section, a reference to State of
origin or country of origin does not constitute a reference to a
private brand name with regard to any funds credited to or disbursed by
the Board to the Association or to any importer association established
in accordance with Sec. 1219.54(l).
Budgets, Expenses, and Assessments
Sec. 1219.50 Budgets, programs, plans, and projects.
(a) The Board shall submit to the Secretary, on a fiscal period
basis, annual budgets of its anticipated expenses and disbursements of
the Board in the administration of this subpart, including the
projected costs of Hass avocado promotion, industry information,
consumer information, and related research programs, plans, and
projects. The first budget, which shall be submitted promptly after the
effective date of this subpart, shall cover such period as may remain
before the beginning of the next fiscal period. If such fiscal period
is 90 days or less, the first budget shall cover such period, as well
as the next fiscal period. Thereafter, the Board shall submit budgets
for each succeeding fiscal period not less than 60 days before the
beginning of such fiscal period.
(b) The Board shall receive and evaluate, or on its own initiative
develop programs, plans and projects for Hass avocado promotion,
industry information, consumer information as well as related research.
The Board shall submit to the Secretary for approval any program, plan,
or project authorized in this subpart. Such programs, plans or projects
shall provide for:
(1) The establishment, implementation, issuance, effectuation,
administration, and evaluation of appropriate programs, plans, or
projects for advertising, sales promotion, other promotion, and
consumer information with respect to Hass avocados directed toward
increasing the general demand for Hass avocados in the United States.
Funds shall be available as necessary to carry out this section;
(2) The establishment, implementation, issuance, effectuation,
administration, and evaluation of appropriate programs, plans, and
projects designed to strengthen the position of the Hass avocado
industry in the domestic marketplace; to maintain, develop, and expand
markets for Hass avocados in the United States; to lead to the
development of new marketing
[[Page 36881]]
strategies; to advance the image and desirability of, increase the
efficiency of, and encourage further development of the Hass avocado
industry; and to provide for the disbursement of necessary funds for
the purposes described in this section;
(3) The establishment, implementation, issuance, effectuation,
administration, and evaluation of programs, plans and projects for
marketing development research; research on the sale, distribution,
marketing, use, quality, and nutritional value of Hass avocados; and
other research with respect to Hass avocado marketing, promotion,
industry information, or consumer information, including the creation
of new products thereof. Information acquired from such plans and
projects shall be disseminated as appropriate. Funds shall be available
as necessary to carry out this subsection; and
(4) The Board to enter into contracts or make agreements for the
development and carrying out of research, promotion, and information,
and pay for the costs of such contracts or agreements with funds
collected pursuant to Sec. 1219.54.
(c) A budget, program, plan, or project for Hass avocados
promotion, industry information, consumer information, or related
research may not be implemented prior to approval of the budget,
program, plan, or project by the Secretary. If the Secretary fails to
provide notice to the Board or approval or disapproval of a budget,
program, plan, or project within 45 days after receipt, such budget,
program, plan, or project shall be deemed approved by the Secretary and
may be implemented by the Board.
(d) The Board, from time to time, may seek advice and consult with
experts from the production, import, wholesale, and retail segments of
the Hass avocado industry to assist in the development of promotion,
industry information, consumer information, and related research
programs, plans, and projects. For these purposes, the Board may
appoint special committees composed of persons other than Board
members. A committee so appointed shall consult directly with the
Board.
Sec. 1219.51 Contracts and agreements.
(a) The Board shall enter into a contract or an agreement with the
Association for the implementation of programs, plans, or projects for
promotion, industry information, consumer information, or related
research with respect to Hass avocados and for the payment of the cost
of the contract or agreement with funds received by the Board under
this subpart. The Board may disburse such funds as necessary for these
purposes after such programs, plans, or projects have been submitted to
and approved by the Secretary.
(b) Any contract or agreement entered into shall provide that the
contracting or agreeing party shall develop and submit to the Board a
program, plan or project, together with a budget that includes the
estimated costs to be incurred for the program, plan or project, and
such program, plan or project shall become effective on the approval of
the Secretary. For such contract or agreement, the contracting or
agreeing party shall:
(1) Keep accurate records of all transactions of the party;
(2) Account for funds received and expended;
(3) Make periodic reports to the Board of activities conducted; and
(4) Make such other reports as the Board or the Secretary shall
require.
(c) The Secretary may audit the records of the contracting or
agreeing party periodically.
(d) Contractors and subcontractors are subject to the provisions of
Sec. 1219.42.
(e) The Board may enter into contracts or agreements for
administrative services, including contracts for employment, as may be
required to conduct its business. To the extent appropriate to the
contract involved, contracts or agreements entered into by the Board
under the authority of this section shall conform to the provisions
described in Sec. 1219.51(b).
Sec. 1219.52 Control of administrative costs.
(a) As soon as practicable after this subpart becomes effective and
after consultation with the Secretary and other appropriate persons,
the Board shall implement a system of cost controls based on normally
accepted business practices to:
(1) Ensure that the costs incurred by the Board in administering
this subpart in any fiscal period shall not exceed 10 percent of the
projected level of assessments and other income received by the Board
for generic promotion and research programs for that fiscal period; and
(2) Cover the minimum administrative activities and personnel
needed to properly administer and enforce this subpart, and conduct,
supervise, and evaluate programs, plans, and projects under this
subpart.
(b) Reimbursements to the Secretary required under Sec. 1219.53(b)
are excluded from the limitation on spending.
(c) To the extent possible, the Board shall use the resources,
staffs, and facilities of existing avocado organizations as provided in
Sec. 1219.54(a).
Sec. 1219.53 Budget and expenses.
(a) The Board is authorized to incur such expenses, including
provision for a reasonable reserve for operating contingencies, as the
Secretary finds are reasonable and likely to be incurred by the Board
for its maintenance and functioning and to enable it to exercise its
powers and perform its duties in accordance with the provisions of this
subpart. Such expenses shall be paid from funds received by the Board,
including assessments, contributions from any person not subject to
assessments under this subpart, and other funds available to the Board.
(b) The Board shall reimburse the Department:
(1) For expenses not to exceed $25,000 incurred by the Secretary in
connection with any referendum conducted under the Act;
(2) For administrative costs incurred by the Secretary for
supervisory work of up to two employee years annually after the Order
or amendment to the Order has been issued and made effective; and
(3) For costs incurred by the Secretary in implementation of the
Order, for enforcement of the Act and the order, for subsequent
referenda conducted the Act, and in defending the Board in litigation
arising out of action taken by the Board or otherwise in defense of the
Order.
(c) The Board shall establish and maintain the minimum level of
annual administrative expenses necessary to efficiently and effectively
carry out the programs authorized by the Act. The Board shall include
its annual administrative expenses as a separate item in its annual
report. The Board shall adhere to its fiduciary responsibilities and
ensure that all monies are spent in accordance with the Act, and the
Order.
(d) With the approval of the Secretary, the Board may borrow money
for the payment of administrative expenses, subject to the same fiscal,
budget, and audit controls as other funds of the Board. Any funds
borrowed by the Board shall be expended only for startup costs and
capital outlays and are limited to the first period of operation of the
Board.
(e) The Board may accept voluntary contributions, but these shall
only be used to pay expenses incurred in the conduct of programs,
plans, and projects. The contributions shall be free from any
encumbrance by the donor, and the Board shall retain complete control
of their use.
[[Page 36882]]
Sec. 1219.54 Assessments.
(a) Except as provided in Sec. 1219.55, the initial rate of
assessment shall be 2.5 cents per pound on fresh Hass avocados produced
and handled in the United States and on fresh Hass avocados imported
into the United States. An equivalent rate shall be assessed on
processed and frozen Hass avocados on which an assessment has not been
paid. Such equivalent rate will be assessed on processed or frozen Hass
avocados upon the recommendation of the Board with the approval of the
Secretary. The rate of assessment may be increased or decreased as
recommended by the Board and approved by the Secretary. Such an
increase or decrease may occur not more than once annually. Any change
in the assessment rate shall be announced by the Board at least 30 days
prior to going into effect and shall not be subject to a vote in a
referendum. The maximum assessment rate authorized is 5 cents per
pound. No more than one assessment shall be made on any Hass avocados.
(b) Domestic assessments. The collection of assessments on domestic
Hass avocados will be the responsibility of the first handler.
(1) In the case of a producer acting as the producer's own first
handler, the producer will be required to collect and remit the
assessments due to the Board.
(2) Each first handler shall collect from the producer and pay to
the Board an assessment of 2.5 cents per pound in accordance with this
subpart. Assessments shall be remitted by each first handler to the
Board or its agent within 30 days after the end of the month in which
the sale or non-sale transfer subject to assessment under this subpart
took place.
(3) The first handler shall maintain a separate record of the
domestic Hass avocados of each producer whose domestic Hass avocados
are handled, including the domestic Hass avocados owned by the handler
and domestic Hass avocados that are exported. For the purposes of this
section, a producer who is also a handler shall be considered the first
handler of domestic Hass avocados produced by such producer, and the
first handler shall be the first person who packs the domestic Hass
avocados for sale at the wholesale or retail level.
(4) Assessment of other types of fresh avocados may be added at the
recommendation of the Board with the approval of the Secretary.
(c) Import assessments. Each importer of fresh Hass avocados shall
pay an assessment to the Board through Customs on fresh Hass avocados
imported for marketing in the United States.
(1) The assessment rate for imported fresh Hass avocados shall be
the same or equivalent to the rate for fresh Hass avocados produced and
handled in the United States.
(2) The import assessment shall be uniformly applied to imported
fresh Hass avocados that are identified by the number 08-04.00.00.10 in
the Harmonized Tariff Schedule of the United States or any other
numbers to identify fresh Hass avocados. Assessments on other types of
imported fresh avocados or on processed Hass avocados, such as
prepared, preserved, or frozen Hass avocados or Hass avocado paste,
puree, and oil will be added at the recommendation of the Board with
the approval of the Secretary.
(3) The assessments due on imported Hass avocados shall be paid
when they are released from custody by Customs and introduced into the
stream of commerce in the United States.
(d) All assessment payments and reports will be submitted to the
Board's office. All final payments for a crop year are to be received
no later than November 30 of that year, unless the Board determines
that assessments due from the first handler shall be paid to the Board
at a different time and manner, with approval of the Secretary.
(e) A late payment charge prescribed by the Secretary shall be
imposed on any first handler who fails to remit to the Board the total
amount for which any such handler is liable on or before the due date.
In addition to the late payment charge, an interest charge shall be
imposed on the outstanding amount for which the handler is liable. The
rate of interest shall be prescribed by the Secretary. The timeliness
of a payment to the Board shall be based on the date the payment is
actually received by the Board.
(f) Regulations issued by the Secretary may provide for different
first handler payment schedules of assessments on domestic Hass
avocados, so as to recognize differences in marketing or purchasing
practices and procedures.
(g) Persons failing to remit total assessments due in a timely
manner may also be subject to actions under federal debt collection
procedures.
(h) The Board may authorize other organizations to collect
assessments on its behalf with approval of the Secretary.
(i) The collection of assessments shall commence on or after a date
established by the Secretary and shall continue until terminated by the
Secretary. If the Board is not constituted on the date the first
assessments are to be remitted, the Secretary shall have the authority
to receive assessments on behalf of the Board and may hold such
assessments in an interest-bearing account until the Board is
constituted and the funds are transferred to the Board.
(j) To facilitate the payment of assessments under this section,
the Board shall publish lists of first handlers required to remit
assessments under this subpart and exempt handlers.
(k) The Association shall receive an amount of assessment funds
equal to 85 percent of the assessments paid on Hass avocados produced
in such State. Such funds shall be remitted to such State organization
no later than 30 days after such funds are received by the Board. In
addition, such funds and any proceeds from the investment of such funds
shall be used by the Association to finance promotion, research,
consumer information, and industry information programs, plans, and
projects in the United States. However, no such funds shall be used for
any administrative expenses incurred by the Association.
(l) An association of Hass avocado importers established pursuant
to State law or certified by the Secretary shall receive an amount of
assessment funds equal to 85 percent of the assessments paid on Hass
avocados imported by its members. Such funds shall be remitted to such
importer association no later than 30 days after such funds are
received by the Board. In addition, such funds and any proceeds from
the investment of such funds shall be used by the importer association
to finance promotion, research, consumer information, and industry
information programs, plans, and projects in the United States.
However, no such funds shall be used for any administrative expenses
incurred by the importer association.
(m) An association of avocado importers is eligible to receive
assessment funds and any proceeds from the investment of such funds
only if such importer association is:
(1) Established pursuant to State law that requires detailed State
regulation comparable to that applicable to the State organization of
domestic avocado producers, as determined by the Secretary; or
(2) Certified by the Secretary as meeting the requirements
applicable to the Board as to its operations and obligations, including
budgets, programs, plans, projects, audits, conflicts of interest, and
reimbursements for administrative costs incurred by the Secretary.
(n) In general, assessment funds received by the Board shall be
used:
(1) For payment of costs incurred in implementing and administering
this subpart;
[[Page 36883]]
(2) To provide for a reasonable reserve to be maintained from
assessments to be available for contingencies; and
(3) To cover the administrative costs incurred by the Secretary in
implementing and administering this Act, except for the limits on
expenses of the Secretary set forth in Sec. 1219.53(b).
(o) The Board may establish an operating monetary reserve which may
carry over to subsequent fiscal periods: Provided, That the funds in
the reserve do not exceed one fiscal period's budget. Subject to
approval by the Secretary, reserve funds may be used to defray any
expenses authorized under this part.
Sec. 1219.55 Exemption from assessment.
(a) Any sale of Hass avocados for export from the United States is
exempt from assessment.
(b) The Board may require persons receiving an exemption from
assessments to provide to the Board reports on the disposition of
exempt Hass avocados.
Sec. 1219.56 Adjustments of accounts.
Whenever the Board or the Secretary determines through an audit of
a person's reports, records, books, or accounts or by some other means
that additional money is due to the Board, the person shall be notified
of the amount due. The person shall then remit any amount due the Board
by the next date for remitting assessments. Overpayments shall be
credited to the account of the person remitting the overpayment and
shall be applied against any amounts due in succeeding months unless
the person requests a refund of the overpayment.
Sec. 1219.57 Patents, copyrights, trademarks, publications, and
product formulations.
(a) Any patents, copyrights, trademarks, inventions, information,
publications, and product formulations developed through the use of
funds received by the Board under this subpart shall be the property of
the U.S. Government as represented by the Board, and shall, along with
any rents, royalties, residual payments, or other income from the
rental, sale, leasing, franchising, or other uses of such patents,
copyrights, trademarks, inventions, information, publications, or
product formulations, inure to the benefit of the Board; shall be
considered income subject to the same fiscal, budget, and audit
controls as other funds of the Board; and may be licensed subject to
approval of the Secretary. Section 1219.72 describes the procedures for
termination.
(b) Should patents, copyrights, trademarks, inventions,
publications, or product formulations be developed through the use of
funds collected by the Board under this subpart and funds contributed
by another organization or person, ownership and related rights to such
patents, copyrights, trademarks, inventions, publications, or product
formulations shall be determined by agreement between the Board and the
party contributing funds towards the development of such patent,
copyright, trademark, invention, publication, or product formulation in
a manner consistent with paragraph (a) of this section.
Reports, Books, and Records
Sec. 1219.60 Reports.
(a) Each first handler of domestic Hass avocados, producer, and
importer subject to this subpart shall report to the administrative
staff of the Board, at such times and in such manner as the Board may
prescribe, such information as may be necessary for the Board to
perform its duties.
(b) First handler reports shall include, but shall not be limited
to, the following:
(1) Number of pounds of domestic Hass avocados received during the
reporting period;
(2) Number of pounds on which assessments were collected;
(3) Assessments collected during the reporting period;
(4) Name and address of person(s) from whom the first handler
collected the assessments on each pound handled;
(5) Date collection was made on each pound handled;
(6) Record of assessments paid, including a statement from the
handler that assessments have been paid on all domestic Hass avocados
handled during the reporting period; and
(7) Number of pounds exported.
(c) Each importer subject to this subpart may be required to report
the following:
(1) Number of pounds of Hass avocados imported during the reporting
period;
(2) Number of pounds on which an assessment was paid;
(3) Name and address of the importer;
(4) Date collection was made on each pound imported and to whom
payment was made; and
(5) Record of each importation of Hass avocados during such period,
giving quantity, variety, date, and port of entry.
Sec. 1219.61 Books and records.
Each producer, first handler, and importer subject to this subpart
shall maintain and make available for inspection by the employees and
agents of the Board and the Secretary, such books and records as are
necessary to carry out the provisions of this subpart, and the
regulations issued thereunder, including such records as are necessary
to verify any reports required. Books and records shall be retained for
at least two years beyond the fiscal period of their applicability.
Sec. 1219.62 Books and records of the Board.
(a) The Board shall maintain such books and records as the
Secretary may require. Such books and records shall be made available
upon request by the Secretary for inspection and audit.
(b) The Board shall prepare and submit to the Secretary, from time
to time, such reports as the Secretary may require.
(c) The Board shall account for the receipt and disbursement of all
the funds entrusted to the Board.
(d) The Board shall cause the books and records of the Board to be
audited by an independent auditor at the end of each fiscal period. A
report of each audit shall be submitted to the Secretary.
Sec. 1219.63 Confidential treatment.
(a) All information obtained from the books, records, or reports
under this Act, this subpart, and the regulations issued thereunder
shall be kept confidential and shall not be disclosed to the public by
any person, including all current and former employees and agents of
the Department, the Board, and contracting and subcontracting agencies
or agreeing parties having access to such information. Only those
persons having a specific need for such information to effectively
administer the provisions of this subpart shall have access to such
information. Only such information so obtained as the Secretary deems
relevant shall be disclosed, and then only in a judicial proceeding or
administrative hearing brought at the direction, or upon the request,
of the Secretary, or to which the Secretary or any officer of the
United States is a party, and involving this subpart. Nothing in this
subpart shall be deemed to prohibit:
(1) The issuance of general statements based upon the reports of
the number of persons subject to this subpart or statistical data
collected from such reports, if such statements do not identify the
information furnished by any person; or
(2) The publication, by direction of the Secretary, of the name of
any person who has been adjudged to have violated this subpart,
together with a statement of the particular provisions of this subpart
violated by such person.
[[Page 36884]]
(b) Any disclosure of any confidential information by any employee
or agent of the Board shall be considered willful misconduct.
(c) No information on how a person voted in a referendum conducted
under the Act shall be made public.
Sec. 1219.64 List of importers.
The administrative staff of the Board shall periodically review the
list of importers of Hass avocados to determine whether persons on the
list are subject to this subpart. On the request of the Secretary,
Customs shall provide to the Secretary or the administrative staff of
the Board a list of importers of Hass avocados.
Miscellaneous
Sec. 1219.70 Right of the Secretary.
All fiscal matters, programs, plans, and projects, contracts, rules
or regulations, reports, or other substantive actions proposed and
prepared by the Board shall be submitted to the Secretary for approval.
Sec. 1219.71 Suspension or termination.
(a) The Secretary shall suspend or terminate this part or subpart
or a provision thereof if the Secretary finds that the subpart or a
provision thereof obstructs or does not tend to effectuate the purposes
of the Act, or if the Secretary determines that this subpart or a
provision thereof is not favored by persons voting in a referendum
conducted pursuant to the Order or the Act.
(b) The Secretary shall suspend or terminate this subpart at the
end of the marketing year whenever the Secretary determines that its
suspension or termination is approved or favored by a majority of the
producers and importers voting who, during a representative period
determined by the Secretary, have been engaged in the production or
importation of Hass avocados.
(c) If, as a result of a referendum, the Secretary determines that
this subpart is not approved, the Secretary shall:
(1) Suspend or terminate, as appropriate, the collection of
assessments not later than 180 days after making such determination;
and
(2) Suspend or terminate, as appropriate, all activities under this
subpart in an orderly manner as soon as practicable.
Sec. 1219.72 Proceedings after termination.
(a) Upon the termination of this subpart, the Board shall recommend
to the Secretary not more than five of its members to serve as trustees
for the purpose of liquidating the affairs of the Board. Such persons,
upon designation by the Secretary, shall become trustees of all of the
funds and property owned, in possession of or under control of the
Board, including claims for any funds unpaid or property not delivered
or any other claim existing at the time of such termination.
(b) The said trustees shall:
(1) Continue in such capacity until discharged by the Secretary;
(2) Carry out the obligations of the Board under any contracts or
agreements entered into by it pursuant to the Order;
(3) From time to time account for all receipts and disbursements
and deliver all property on hand, together with all books and records
of the Board and of the trustees, to such person or persons as the
Secretary may direct; and (4) Upon the request of the Secretary,
execute such assignments or other instruments necessary and appropriate
to vest in such persons title and right to all of the funds, property,
and claims vested in the Board or the trustees pursuant to the Order.
(c) Any person to whom funds, property, or claims have been
transferred or delivered pursuant to the Order shall be subject to the
same obligations imposed upon the Board and the trustees.
(d) Any residual funds not required to defray the necessary
expenses of liquidation shall be returned to the persons who
contributed such funds, or paid assessments, or, if not practicable,
shall be turned over to the Secretary to be distributed to authorized
Hass avocado producer and importer organizations in the interest of
continuing Hass avocado promotion, research, and information programs.
Sec. 1219.73 Effect of termination or amendment.
Unless otherwise expressly provided by the Secretary, the
termination of this subpart or any regulation issued thereunder, or the
issuance of any amendment to either thereof, shall not:
(a) Affect or waive any right, duty, obligation, or liability which
shall have arisen or which may thereafter arise in connection with any
provision of this subpart or any such rule or regulation issued
thereunder; or (b) Release or extinguish any violation of this subpart
or of any rule or regulation issued thereunder; or (c) Affect or impair
any rights or remedies of the United States, or of the Secretary or of
any person, with respect to any such violation.
Sec. 1219.74 Personal liability.
No member, alternate member, employee, or agent of the Board shall
be held personally responsible, either individually or jointly with
others, in any way whatsoever, to any person for errors in judgment,
mistakes, or other acts, either of Association or omission, as such
member, alternate, employee, or agent, except for acts of dishonesty or
willful misconduct.
Sec. 1219.75 Separability.
If any provision of this subpart is declared invalid or the
applicability thereof to any person or circumstance is held invalid,
the validity of the remainder of this subpart, or the applicability
thereof to other persons or circumstances shall not be affected
thereby.
Sec. 1219.76 Amendments.
Amendments to this subpart may be proposed, from time to time, by
the Board or by any interested persons affected by the provisions of
the Act, including the Secretary. Except for changes in the assessment
rate, the provisions of the Act applicable to the Order are applicable
to any amendment of the Order.
Sec. 1219.77 OMB control number.
The control number assigned to the information collection
requirements by the Office of Management and Budget pursuant to the
Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, is OMB control
number ______.\1\
---------------------------------------------------------------------------
\1\ OMB will assign a control number after it has approved the
information collection requirements of this subpart.
---------------------------------------------------------------------------
Proposal 2
3. Part 1219 is added as set forth in Proposal 1 with the following
changes:
* * * * *
Definitions
* * * * *
Sec. 1219.9 First handler.
First handler means the first person operating in the Hass avocado
marketing system that sells domestic or imported Hass avocados in the
United States for domestic consumption, and who is responsible for
remitting assessments to the Board. The term includes an importer or
producer who sells directly to consumers of Hass avocados that the
importer has imported into the United States or the producer has
produced in the United States.
Sec. 1219.10 Fiscal period or marketing year.
Fiscal period or marketing year means the period beginning on April
1 of any year and extending through the last day of March of the
following year.
* * * * *
[[Page 36885]]
Hass Avocado Board
Sec. 1219.30 Establishment and membership.
(a) * * *
(b) * * *
(3) Three members shall be producers of Hass avocados that are
subject to assessments under this subpart or importers of Hass avocados
that are subject to assessments under this subpart. Producers and
importers shall be allocated to these positions so as to assure as
nearly as possible that the composition of the 12-member Board reflects
the proportion of domestic production and imports supplying the United
States market. Such proportion shall be based on the Secretary's
determine of the average volume of domestic production and the average
volume of imports into the United States market over the previous three
years. For determining proportional representation on the initial
Board, the Secretary shall determine the domestic level of production
using data provided by the Association and the Department and shall
determine the level of imports by using data provided by importer
associations, the U.S. Customs Service, and the Bureau of the Census.
* * * * *
(d) For purposes of this section, importer means a person who is
involved in, as a substantial activity, the importation of Has avocados
into the United States and who is subject to assessments under the
Order. To be deemed to have a substantial activity in the importation
and marketing of Hass avocados, the person must have imported 75
percent or more of the total annual volume of all Hass avocados
produced, handled, or imported by such person.
Hass Avocado Importer Associations
Sec. 1219.____ Establishment and membership.
(a) Hass avocado importer associations may be established pursuant
to the terms and provisions of this section. An importer association
may represent all importers of Hass avocados or importers of Hass
avocados from a particular foreign country. An importer association
which meets the requirements applicable to the Board with respect to
budgets, plans, projects, audits, conflicts of interest, and
reimbursements for administrative costs incurred by the Secretary shall
be certified by the Secretary. The Secretary may not certify more than
one importer association per country of origin.
(b) An importer association may be composed of importers as well as
representatives of the foreign avocado exporting industries.
* * * * *
Budgets, Expenses, and Assessments
Sec. 1219.54 Assessments.
* * * * *
(d) All final assessment payments and reports will be submitted to
the office of the Board. All final payments for a crop year are to be
received no later than May 31 of that year, unless the Board determines
that assessments due from the first handler shall be paid to the Board
at a different time and manner, with the approval of the Secretary.
* * * * *
(l) An association of Hass avocado importers shall receive an
amount of assessment funds equal to the product obtained by multiplying
the aggregate amount of assessments attributable to the pounds of Hass
avocados imported by its member importers by 85 percent. Such funds
shall be remitted to such importer association no later than 30 days
after such funds are received by the Board. Such funds shall be used by
the importer association for the financing of promotion, research,
consumer information, and industry information programs, plans, and
projects in the United States. An importer association representing
importers of Hass avocados from a single foreign country may finance
the promotion and research on a country of origin basis rather than a
generic basis. However, no such funds shall be used for any
administrative expenses of such importer association.
* * * * *
Books, Records, and Reports
Sec. 1219.65 List of producers.
The administrative staff of the Board shall periodically review the
list of producers of Hass avocados to determine whether persons on the
list are subject to this subpart. On the request of the Secretary or
the Board, the Association shall provide to the Secretary or the
administrative staff of the Board the list of producers of Hass
avocados.
Proposals 3 and 4
4. Part 1219 is added as set forth in Proposal 1 with the following
changes:
* * * * *
Hass Avocado Board
Sec. 1219.30 Establishment and membership.
* * * * *
(d) In order for a person to be eligible to serve on the Board as
an importer representative, Hass avocado imports must constitute 75
percent or more of such person's combined total annual volume of Hass
avocados produced, handled, or imported by that person.
* * * * *
Budget, Expenses, and Assessments
Sec. 1219.50 Budgets, programs, plans, and projects.
* * * * *
(e) Programs must be conducted throughout the year to reflect the
periods when imported and domestic Hass avocados are in the U.S.
marketplace.
(f) The Board shall consult with both the Association and country
of origin importer associations on programs, plans, and projects for
generic promotions.
* * * * *
Sec. 1219.52 Control of administrative costs.
(a) * * *
(1) Ensure that the costs incurred by the Board in administering
this subpart in any fiscal year shall not exceed 1.5 percent of total
assessments; and * * *
* * * * *
Sec. 1219.54 Assessments.
* * * * *
(u) Importer associations shall be established by importers and
country of origin producers and exporters within a reasonable amount of
time after the effective date of this subpart. The country of origin
importer associations should establish their own bylaws and may use
existing organizations for establishment of their associations and
coordination of their promotional and research efforts.
(v) For the purposes of the Order, the information required for
certification of the country of origin importer associations by the
Secretary may include, but is not limited to, the following:
(1) Evidence of incorporation under any state law with all
appropriate legal requirements;
(2) Evidence that the association is composed of importers that are
located in any state and subject to assessments under the Order, no
matter where the association has been incorporated or in which state
the importers reside;
(3) Certification of the association's ability and willingness to
further the aims and objectives of the Order;
(4) Evidence of stability and permanency; and
(5) A description of the functions of the association.
* * * * *
[[Page 36886]]
Dated: July 5, 2001.
Kenneth C. Clayton,
Acting Administrator.
[FR Doc. 01-17429 Filed 7-10-01; 8:45 am]
BILLING CODE 3410-02-P
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