Honey Research, Promotion, and Consumer Information Order; Revision of Subpart C- Referendum Procedures

ACTION:

Final rule.

SUMMARY:

This rule revises the procedures which the U.S. Department of Agriculture (USDA or the Department) will use in conducting a referendum to determine whether honey producers, producer-packers, importers, and handlers subject to the Honey Research, Promotion, and Consumer Information Act (Act) favor implementation of changes to the Honey Research, Promotion, and Consumer Information Order (Order) based on the 1998 amendments to the Act. This rule revises the referendum procedures under the Order to allow handlers to vote on changes to the program. These procedures will also be used in future referenda on the program.

DATES:

Effective September 6, 2000.

FOR FURTHER INFORMATION CONTACT:

Kathie M. Birdsell, Research and Promotion Branch, Fruit and Vegetable Programs, AMS, USDA, Stop 0244, 1400 Independence Avenue, SW, Room 2535 South Building, Washington, DC 20250-0244; telephone (202) 720-9915; facsimile (202) 205-2800; e-mail kathie.birdsell@usda.gov.

SUPPLEMENTARY INFORMATION:

The honey research and promotion program operates under the Honey Research, Promotion, and Consumer Information Order (Order) (7 CFR part 1240). The Order is authorized by the Honey Research, Promotion, and Consumer Information Act (Act) [Pub. L. 98-590, 7 U.S.C. 4601-4613]. The Act was amended on June 23, 1998, and requires the U.S. Department of Agriculture (USDA or the Department) to obtain public comments and conduct a national referendum on making similar amendments to the Order.

Prior documents. USDA published proposed referendum procedures in the Federal Register on May 15, 2000 (65 FR 30924) with a 60-day comment period. This final rule addresses the three comments that were received by the June 14, 2000, deadline.

In addition, a proposed rule on amending the Order was published in the Federal Register on February 28, 2000 (65 FR 10600) with a 60-day comment period. USDA is publishing a second proposed rule on the amendments, which reflects the comments which were received, separately in this issue of the Federal Register.

Votable amendments. The votable amendments would: (1) Require the National Honey (Board) to reserve 8 percent of its funds annually for beekeeping and production research; (2) authorize the Board to develop recommendations for purity standards and an inspection and monitoring system in order to enhance the image of honey and honey products; (3) add two handler members who are also importers to the Board; (4) decrease the producer assessment from 1 cent per pound to 0.75 cents per pound; (5) add an assessment of 0.75 cents per pound on handlers; and (6) increase the assessment rate on imports from 1 cent per pound to 1.5 cents per pound.

Automatic amendments. The following amendments will be made to the Order regardless of the outcome of the referendum: (1) Changing the two importer/exporter positions on the Board to two importer positions; (2) eliminating the public member position; (3) revising nomination and eligibility requirements; (4) requiring that at least 50 percent of the Board members be honey producers; (5) providing authority for the Board to develop a voluntary quality assurance program with enforcement by USDA; (6) eliminating the requirement to file for an exemption under the program; and (7) removing obsolete language.

Question and Answer Overview

Why Are These Procedures Being Published?

USDA is going to conduct a referendum on proposed amendments to the honey research and promotion program in September 2000, and revised procedures are needed to allow handlers to vote. The current procedures only allow producers, producer-packers, and importers to vote because they are the only ones who currently pay assessments to the National Honey Board (Board). One of the proposed amendments would require handlers to pay assessments to the Board for the first time. Therefore, the referendum rules are being changed to give handlers the opportunity to vote on whether they want to pay assessments. These procedures are being made public in advance of the referendum to help ensure that members of the honey industry know the eligibility criteria for voting and other pertinent information.

When Is the Referendum?

The voting period for the referendum will be from September 5 through 29, 2000. The Agricultural Marketing Service (AMS) will mail all known eligible voters a ballot, details on the proposed amendments, and voting instructions no later than August 28, 2000.

Who Is Eligible To Vote in the Referendum?

Most honey producers, producer-packers, importers, and handlers who produced, handled, or imported honey or honey products during calendar years 1998 and 1999 will be eligible to vote in the referendum. However, certain producers, producer-packers, handlers, and importers would not be eligible to vote. If you produced, produced and handled, or imported less than 6,000 pounds of honey or honey products per year and you distributed that honey directly through local retail outlets such as roadside stands, farmers markets, or groceries, you would be ineligible to vote in the referendum unless you voluntarily paid assessments in 1998 and 1999.

How Many Voters Need To Approve the Amendments in Order for Them To Be Made?

In order for the votable amendments to become effective, they must be approved by a majority of the voters in the referendum and those voters must represent 50 percent or more of the honey produced and handled and honey and honey products imported by the voters in the referendum.

If I am a Producer, How Will my Vote Be Counted?

If you are a producer, you are entitled to one vote which includes the number of pounds of honey you produced in 1998 and 1999.

If I am a Producer-packer, How Will my Vote Be Counted?

One of the proposed amendments to the Order would implement a new assessments on handlers. Therefore, as a producer-packer, you will be entitled to one vote as a producer and one vote as a handler. Your producer vote will include the number of pounds of honey you produced during 1998 and 1999, and your handler vote will include the number of pounds of domestic honey you handled during 1998 and 1999.

If I am a Handler, How Will my Vote Be Counted?

You are entitled to one vote as a handler based on the number of pounds of domestic honey you handled during 1998 and 1999. If you also imported honey, you may cast a ballot as an importer on the honey and honey products on which you paid the import assessment in 1998 and 1999.

If I am an Importer, How Will my Vote Be Counted?

You are entitled to cast two ballots, one for the handler portion of your assessments and one for the importer portion of your assessment. Each ballot will include the number of pounds of honey and honey products you imported during 1998 and 1999.

Is a Cooperative Considered a Producer or a Handler for the Purposes of the Referendum?

A cooperative is considered a handler for the purposes of voting in the referendum. Individual producers who belong to cooperatives are entitled to cast a ballot for the domestic honey that they produce. A cooperative may cast a ballot covering the number of pounds of domestic honey handled by the cooperative in 1998 and 1999. If a cooperative is also an importer, the cooperative may also cast a ballot covering the foreign honey and honey products that the cooperative imported as importer of record in 1998 and 1999.

How Can I Vote in the Referendum?

Voting will take place by mail. All known eligible producers, producer-packers, importers, and handlers will receive a ballot and voting instructions in the mail from USDA. Producers, producer-packers, importers, and handlers who believe they are eligible to vote and who do not receive a ballot in the mail may request a ballot by calling a toll-free telephone number. The ballot must be received by USDA by close of business on September 29, 2000.

How will USDA Make Certain That only Eligible Persons Vote in the Referendum?

USDA will use records from the Board concerning persons who have paid assessments or requested an exemption from assessments. In addition, there are penalties for providing false information to the federal government. By signing a ballot, a voter certifies that he or she is eligible to vote and that the information on the ballot is correct. A person who knowingly or willingly provides false information on the ballot is subject to a fine of up to $10,000, imprisonment for up to five years, or both.

How will USDA Make Certain that Every Eligible Person has the Opportunity to Vote?

Persons may call 1-888-729-9917 (toll-free) to request a ballot if they do not receive a ballot and they believe they are eligible to vote. These persons will be required to provide documentation of their eligibility to vote.

Executive Orders 12866 and 12988

This rule has been determined to be “not significant” for purposes of Executive Order (E.O.) 12866 and, therefore, has not been reviewed by the Office of Management and Budget (OMB).

In addition, this rule has been reviewed under E.O.12988, Civil Justice Reform. The rule is not intended to have retroactive effect and would not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

The Act allows producers, producer-packers, importers, and handlers (if covered by the program) to file a written petition with the Secretary of Agriculture (Secretary) if they believe that the Order, any provision of the Order, or any obligation imposed in connection with the Order is not in accordance with law. In the petition, the person may request a modification of the Order or an exemption from the Order. Petitions must be filed no later than two years after: (1) the effective date of the Order, provision, or obligation challenged in the petition; or (2) the date on which the petitioner became subject to the Order, provision, or obligation challenged in the petition. The petitioner will have the opportunity for a hearing on the petition. Afterwards, an Administrative Law Judge (ALJ) will issue a decision. If the petitioner disagrees with the ALJ's ruling, the petitioner has 30 days to appeal to the Judicial Officer, who will issue a ruling on behalf of the Secretary. If the petitioner disagrees with the Secretary's ruling, the petitioner may file, within 20 days, an appeal in the U.S. District Court for the district where the petitioner resides or conducts business.

Regulatory Flexibility Act and Paperwork Reduction Act

Final Regulatory Flexibility Analysis. In accordance with the Regulatory Flexibility Act [5 U.S.C. 601 et seq.], the Agricultural Marketing Service (AMS) has examined the impact of this rule on small entities.

There are approximately 2,885 producers, 400 producer-packers, and 348 importers who currently pay assessments under the Order. In addition, there are 121 handlers who would pay assessments if the votable amendments to the Order are implemented. Small agricultural service firms are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $5 million, and small agricultural producers are defined as those having annual receipts of not more than $500,000. The majority of honey producers, producer-packers, importers, and handlers may be classified as small entities.

Previously, there were approximately 3,633 eligible voters in referenda on the honey program (2,885 producers and 400 producer-packers casting producer ballots and 348 importers casting importer ballots). Under this rule, there will be an additional 869 potential voters (400 producer-packers, 348 importers, and 121 handlers casting handler ballots).

This rule amends the referendum procedures under the Order in accordance with the 1998 changes to sections 4611 and 4613 of the Act. The procedures, as amended, will initially be used to conduct a referendum among producers, producer-packers, importers, and handlers to determine whether they favor implementation of the votable amendments to the Order. The authority to conduct this referendum is provided in section 4613 of the Act, as amended. The automatic amendments will become part of the Order regardless of the outcome of the referendum. USDA will also use the revised procedures for any subsequent referenda involving the continuation, suspension, termination, or amendment of the Order.

Section 4611(b) of the Act provides that the votable amendments to the Order must be approved by a majority of eligible voters who vote. The majority voting in the affirmative must also represent a majority of the quantity of honey and honey products produced, imported, and handled among all those voting. Section 4613(d)(1)(B) also directs that no individual provision of the proposed amendments to the Order shall be subject to a separate vote in the referendum.

Under section 4613(d)(2) of the Act, producers, producer-packers, importers, and handlers owing assessments on honey produced, or honey or honey products imported during the two calendar years preceding the referendum (the representative period) are eligible to vote in the referendum. Since the referendum will be conducted in 2000, the representative period for this referendum will be calendar years 1998 and 1999. Handlers will be allowed to vote in this referendum because section 4613(d)(3)(A) of the Act directs that producer-packers, importers, and handlers will be allowed to vote as if the votable amendments to the Order had been in place during the representative period.

Each current producer who produced honey in 1998 and 1999 will be entitled to cast one ballot which includes the number of pounds of honey produced during 1998 and 1999.

Each producer-packer will be entitled to one vote as a producer and one vote as a handler. The producer vote will include the number of pounds of honey produced in 1998 and 1999. The handler vote will include the number of pounds of domestic honey handled in 1998 and 1999.

Each handler will be entitled to one vote based on the number of pounds of domestic honey handled during 1998 and 1999.

Each importer will be entitled to cast two ballots, one for the handler portion of the assessments and one for the importer portion of the assessments. Each ballot will include the number of pounds of honey and honey products imported during 1998 and 1999.

USDA will keep the honey industry informed throughout the referendum process to ensure that they are aware of and are able to participate in the referendum. USDA will also publicize information regarding the referendum process, so that trade associations and related industry media can be kept informed.

Voting in the referendum is optional. However, if producer-packers, handlers, and importers choose to vote, the burden of casting a ballot would be offset by the benefits of having the opportunity to vote on whether they approve the votable amendments.

The information collection requirements related to this rule are described below and are designed to minimize the burden on producers, producer-packers, importers, and handlers voting in referenda.

The Secretary considered requiring eligible voters vote in person at various USDA offices across the country. The Secretary also considered electronic voting, but the use of computers is not universal. Conducting the referendum from one central location by mail ballot will be more cost-effective and reliable. The Department will provide easy access to information for potential voters through a toll-free telephone line.

There are no federal rules that duplicate, overlap, or conflict with this rule.

Paperwork Reduction Act. This rule will increase the information collection burden previously approved by OMB for the honey program referendum ballot by adding 869 additional potential voters (described above). As required by OMB regulations (5 CFR part 1320) which implement the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the revised referendum ballot was submitted to OMB and has been approved for use under OMB Number 0581-0093.

The estimated number of additional potential voters (respondents) indicated in the May 15, 2000, proposed rule has been increased from 550 to 869. This increase reflects a comment submitted by the Board which correctly pointed out that all 348 importers will be eligible to cast votes as handlers. Therefore, the estimated additional burden under the revised ballot has been revised as shown below.

Title: National Research, Promotion, and Consumer Information Programs.

OMB Number: 0581-0093.

Expiration Date of Approval: November 30, 2000.

Type of Request: Revision of a currently approved information collection for research and promotion programs.

Abstract: The information collection requirements in this request are essential to carry out the intent of the Act. The increase in burden associated with the ballot is as follows:

Estimate of Burden: Public reporting burden for this collection of information is estimated to average 0.25 hours per response.

Respondents: Handlers and producer-packers and importers voting as handlers.

Estimated Number of Respondents: 869.

Estimated Number of Responses per Respondent: 1 every 5 years (0.2).

Estimated Total Annual Burden on Respondents: 43 hours [343 hours (requested)−300 hours (currently approved) = 43 hours (increase)].

The estimated additional annual cost of providing the information by 869 persons eligible to vote as handlers would be $430.00 or $0.50 per voter. The increase of 43 total burden hours has been added to the previous burden total of 300 hours under OMB No. 0581-0093.

Background

As stated above, Congress amended the Act on June 23, 1998. The amendments to the Act authorize the Secretary to make related changes to the Order after conducting an industry-wide referendum on the votable amendments.

The votable amendments would: (1) Require the National Honey (Board) to reserve 8 percent of its funds annually for beekeeping and production research; (2) authorize the Board to develop recommendations for purity standards and an inspection and monitoring system in order to enhance the image of honey and honey products; (3) add two handler members who are also importers to the Board; (4) decrease the producer assessment from 1 cent per pound to 0.75 cents per pound; (5) add an assessment of 0.75 cents per pound on handlers; and (6) increase the assessment rate on imports from 1 cent per pound to 1.5 cents per pound.

The following amendments will automatically be made to the Order regardless of the outcome of the referendum: (1) Changing the two importer/exporter positions on the Board to two importer positions; (2) eliminating the public member position; (3) revising nomination and eligibility requirements; (4) requiring that at least 50 percent of the Board members be honey producers; (5) providing authority for the Board to develop a voluntary quality assurance program with enforcement by USDA; (6) eliminating the requirement to file for an exemption under the program; and (7) removing obsolete language.

This rule allows producer-packers, importers, and handlers to cast ballots as handlers in the referendum on the votable amendments to the Order and in future referenda, if the votable amendments are approved. Previously, only producers, producer-packers in their capacity as producers, and importers were eligible to vote. In addition, the revised procedures specify that only producers, producer-packers in their capacity as producers, and importers will be eligible to vote in future referenda if the votable amendments are not approved in the upcoming referendum.

The amended referendum procedures in this final rule will replace Subpart—Procedure for the conduct of Referenda in Connection With the Honey, Research, Promotion, and Consumer Information Order (7 CFR 1240.200-1240.207). The revised subpart will be redesignated as Subpart C—Referendum Procedures and will include sections covering definitions, voting, instructions, subagents, ballots, referendum report, and confidential information. While the definitions for producer, producer-packer, and handler in the existing order will not change as a result of the February 28, 2000, proposed rule on amendments to the Order, the definition of importer in the referendum procedures will be changed to be consistent with the proposed definition of importer in the Order.

In addition, this rule will redesignate Subpart—General Rules and Regulations ( 7 CFR 1240.100-1240.125) as subpart B.

Comments on the revised referendum procedures. In response to the May 15, 2000, proposed rule on these procedures, a producer, a honey industry group, and the Board submitted comments. All three comments expressed concern that there may be confusion regarding handlers' voting rights. They correctly pointed out that each voter is entitled to vote the poundage on which the voter would pay assessments if the amendments are approved in the referendum. Therefore, to clarify that handler ballots only include domestic honey, we have inserted the word “domestic” where appropriate in the supplementary information portions of this rule and in the definition of “eligible handler” in § 1240.201(e) of the procedures.

The Board's comment also expressed concern about handlers who also produce and import honey and about handlers who purchase honey from producer-packers or importers. This issue relates to the fact that a person may meet more than one voting criteria and may be eligible to cast more than one ballot. The Board also requested that AMS utilize three separate ballots. It has been determined that these comments do not require any additional changes to the referendum procedures, but AMS has decided to utilize three separate ballots. One ballot will be for producers and producer-packers covering the pounds of honey produced. A second ballot will be for the pounds of domestic honey handled by producer-packers and handlers. The third ballot will be for importers (including producers, producer-packers, and handlers who are also importers) and cover the pounds of foreign honey and honey products imported. Similarly, importers will also be entitled to cast a handler ballot for the handler portion of the assessments they would pay on imported honey and honey products if the votable amendments are approved.

The Board's comment also raised additional issues. The Board stated that the terminology in the Question and Answer Overview (Q&A's) incorrectly characterized the importer's voting rights as one vote as a producer and one vote as an importer. The comment quoted the Act which states that each importer shall have one vote as an importer and one vote as a handler. The comment has been adopted and the terminology corrected in the Q&A's and elsewhere in this final rule.

The Board also requested USDA to include the penalty for filing false information with USDA in the Q&A's, and this comment has been adopted.

In addition, the Board requested an explanation of the voting rights of cooperatives and producers who market honey through cooperatives. This comment has been adopted, and the Q&A's now include discussion on this subject.

The Board also requested that the number of ballots cast and the number of ballots determined to be invalid be included in the referendum report. Although this is information normally appears in the report, we have revised § 1240.206 to specify that the referendum report include this information.

Lastly, the Board requested USDA to publish the names of all voters on a web site for a period of two days following the voting deadline to allow persons to challenge voters via e-mail. Although USDA understands the value of a challenge process, the Act prevents the Department from adopting the comment. Section 12(d) of the Act states that “The ballots and other information or reports that reveal, or tend to reveal, the identity or vote of any producer, importer, or handler of honey or honey products shall be held strictly confidential and shall not be disclosed.”

Adoption of proposed changes. This final rule adopts with change the amendments which were published in the May 15, 2000, proposed rule. The changes provide that handlers, producer-packers, and importers may cast ballots as handlers in the upcoming referendum on votable amendments to the Order. In addition, this rule revises the definition of importer so that the definition of this term is identical in the referendum procedures and in the amended Order. This rule also redesignates the rules and regulations subpart of the honey program as Subpart B and designates the referendum procedures as subpart C. As a result of comments received, this rule also slightly revises the definition of “eligible handler” to clarify that handlers vote on the basis of the domestic honey or honey products handled.

Additional USDA change. The Department has decided to change the name of the subpart containing these referendum procedures in the interest of plain language in regulations. The original name, which was also included in the May 15, 2000, proposed rule, was “Procedure for the Conduct of Referenda in Connection With the Honey Research, Promotion, and Consumer Information Order.” This final rule shortens the name to “Referendum Procedures.”

List of Subjects in 7 CFR Part 1240

• Administrative practice and procedure
• Advertising
• Consumer information
• Marketing agreements
• Honey promotion
• Reporting and recordkeeping requirements

For the reasons set forth in the preamble, Part 1240 of Title 7, Chapter XI of the Code of Federal Regulations, is amended as follows:

PART 1240—HONEY RESEARCH, PROMOTION, AND CONSUMER INFORMATION

1. Revise the authority citation for 7 CFR Part 1240 to read as follows:

Authority: 7 U.S.C. 4601-4613 and 7 U.S.C. 7401.

2. Revise the heading for Subpart—General Rules and Regulations to read as follows:

Subpart B—General Rules and Regulations

3. Designate Subpart—Procedure for the Conduct of Referenda in Connection with the Honey Research, Promotion, and Consumer Information Order as Subpart C and revise it to read as follows:

Subpart C—Referendum Procedures