Pecan Research, Promotion, and Information Order

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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1223

[Document Number AMS–SC–20–0013; PR–

A1]

Pecan Research, Promotion, and

Information Order

AGENCY

: Agricultural Marketing Service.

ACTION

: Proposed rule.

SUMMARY

: This proposal invites

comments on the establishment of the

Pecan Research, Promotion, and

Information Order (Order). The purpose

of the program would be to strengthen

the position of pecans in the

marketplace, maintain and expand

markets for pecans, and develop new

uses for pecans. The program would be

financed by an assessment on pecan

producers and importers. This proposal

also invites comments on the

procedures for conducting a referendum

to determine whether the continuation

of the proposed Order is favored by

domestic producers and importers of

pecans. In addition, this proposal

announces the Agricultural Marketing

Service’s (AMS) intent to request

approval by the Office of Management

and Budget (OMB) of new information

collection requirements to implement

the program.

DATES

: Comments must be received by

November 23, 2020. Pursuant to the

Paperwork Reduction Act (PRA),

comments on the information collection

burden that would result from this

proposal must be received by November

23, 2020.

ADDRESSES

: Interested persons are

invited to submit written comments

concerning this proposed rule. All

comments must be submitted through

the Federal e-rulemaking portal at

http://www.regulations.gov and should

reference the document number, and the

date and page number of this issue of

the Federal Register. All comments

submitted in response to this proposed

rule will be included in the rulemaking

record and will be made available to the

public. Please be advised that the

identity of the individuals or entities

submitting comments will be made

public at http://www.regulations.gov.

Pursuant to the PRA, 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,

should be sent to the above address.

FOR FURTHER INFORMATION CONTACT

:

Andrea Ricci, Marketing Specialist,

Promotion and Economics Division,

Specialty Crops Program, AMS, USDA,

755 E Nees Avenue #25985, Fresno, CA

93720; telephone: (202) 572–1442; or

electronic mail: Andrea.Ricci@usda.gov.

SUPPLEMENTARY INFORMATION

: This

proposal is issued pursuant to the

Commodity Promotion, Research, and

Information Act of 1996 (1996 Act) (7

U.S.C. 7411–7425).

Executive Orders 12866, 13563, and

13771

Executive Orders 12866 and 13563

direct agencies to assess all costs and

benefits of available regulatory

alternatives and, if regulation is

necessary, to select regulatory

approaches that maximize net benefits

(including potential economic,

environmental, public health and safety

effects, distributive impacts and equity).

Executive Order 13563 emphasizes the

importance of quantifying both costs

and benefits, reducing costs,

harmonizing rules, and promoting

flexibility. This action falls within a

category of regulatory actions that the

Office of Management and Budget

(OMB) exempted from Executive Order

12866 review. Additionally, because

this rule does not meet the definition of

a significant regulatory action, it does

not trigger the requirements contained

in Executive Order 13771. See OMB’s

Memorandum titled ‘‘Interim Guidance

Implementing Section 2 of the Executive

Order of January 30, 2017, titled

‘Reducing Regulation and Controlling

Regulatory Costs’ ’’ (February 2, 2017).

Executive Order 13175

This action has been reviewed in

accordance with the requirements of

Executive Order 13175, Consultation

and Coordination with Indian Tribal

Governments. The review reveals that

this regulation would not have

substantial and direct effects on Tribal

governments and would not have

significant Tribal implications.

Executive Order 12988

This proposal has been reviewed

under Executive Order 12988, Civil

Justice Reform. It is not intended to

have retroactive effect. Section 524 of

the 1996 Act (7 U.S.C. 7423) provides

that it shall not affect or preempt any

other Federal or State law authorizing

promotion or research relating to an

agricultural commodity.

Section 519 of the 1996 Act (7 U.S.C.

7418) provides that a person subject to

an order may file a written petition with

the U.S. Department of Agriculture

(USDA) stating that an order, any

provision of an order, or any obligation

imposed in connection with an order, is

not established in accordance with the

law, and request a modification of an

order or an exemption from an order.

Any petition filed challenging an order,

any provision of an order, or any

obligation imposed in connection with

an order, must be filed within two years

after the effective date of an order,

provision, or obligation subject to

challenge in the petition. The petitioner

would have the opportunity for a

hearing on the petition. Thereafter,

USDA will issue a ruling on the

petition. The 1996 Act provides that the

district court of the United States for

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 USDA’s final ruling.

Background

This proposal invites comments on

the establishment of the Pecan Research,

Promotion, and Information Order

(Order). The program would be financed

by an assessment on producers and

importers and would be administered

by a board of industry members selected

by the Secretary. The initial assessment

rate would be $0.02 per pound of

inshell pecans and $0.04 per pound of

shelled pecans produced within or

imported to the United States. Entities

that produce or import less than 50,000

pounds of inshell pecans (25,000

pounds of shelled pecans) on average

for four fiscal periods (the fiscal period

for which the exemption is claimed and

the previous three fiscal periods) would

be exempt from the payment of

assessments.

The purpose of the program would be

to strengthen the position of pecans in

the marketplace, maintain and expand

markets for pecans, and develop new

uses for pecans. The proposal was

submitted to USDA by the National

Pecan Federation (NPF), an organization

representing pecan growers and shellers

across the United States whose mission

is to promote, protect, and improve

business conditions for the pecan

industry.

This proposal also invites comments

on the procedures for conducting a

referendum to determine whether the

continuation of the proposed Order is

favored by domestic producers and

importers of pecans. A referendum

would be held among eligible domestic

producers and importers no later than

three years after assessments begin to

determine whether they favor

continuation of the program. In

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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

addition, this proposal announces the

intent of AMS to request approval by

OMB of new information collection

requirements to implement the program.

Legal Basis for Action

The proposed Order is authorized

under the 1996 Act which authorizes

USDA to establish agricultural

commodity research and promotion

orders which may include a

combination of promotion, research,

industry information, and consumer

information activities funded by

mandatory assessments. These programs

are designed to maintain and expand

markets and uses for agricultural

commodities.

The 1996 Act provides several

optional provisions that allow the

tailoring of orders for different

commodities. Section 516 of the 1996

Act provides permissive terms for

orders, and other sections provide for

alternatives. For example, section 514 of

the 1996 Act provides for orders

applicable to (1) producers, (2) first

handlers and others in the marketing

chain as appropriate, and (3) importers

(if imports are subject to assessments).

Section 516 states that an order may

include an exemption of de minimis

quantities of an agricultural commodity;

different payment and reporting

schedules; coverage of research,

promotion, and information activities to

expand, improve, or make more efficient

the marketing or use of an agricultural

commodity in both domestic and

foreign markets; provision for reserve

funds; provision for credits for generic

and branded activities; and assessment

of imports.

In addition, section 518 of the 1996

Act provides for referenda to ascertain

approval of an order to be conducted

either prior to its going into effect or

within three years after assessments first

begin under the order. Pursuant to

section 518 of the Act, an order may

also provide for its approval in a

referendum based upon different voting

patterns. Section 515 provides for

establishment of a board from among

producers, first handlers and others in

the marketing chain as appropriate, and

importers, if imports are subject to

assessment.

USDA currently oversees a marketing

order for pecans grown in Alabama,

Arkansas, Arizona, California, Florida,

Georgia, Kansas, Louisiana, Missouri,

Mississippi, North Carolina, New

Mexico, Oklahoma, South Carolina, and

Texas, which is authorized under the

Agricultural Marketing Agreement Act

of 1937, as amended (7 U.S.C. 601–674).

The purpose of marketing orders, in

general, is to stabilize market

conditions, allowing industries to work

together to solve marketing problems,

and to improve profitability. The pecan

marketing order authorizes collection of

industry data; research and promotion

activities; regulations on grade, size,

quality, pack and container; and is

financed by assessments paid by

handlers of pecans grown in the

production area.

The purpose of research and

promotion programs, in general, is to

provide a framework for agricultural

industries to pool their resources and

combine efforts to develop new markets,

strengthen existing markets and conduct

important research and promotion

activities. The proposed pecan research

and promotion program would be

national in scope, financed by an

assessment on pecan producers and

importers, and authorize research and

promotion activities. The purpose of the

proposed Order would be to strengthen

the position of pecans in the

marketplace, maintain and expand

markets for pecans, and develop new

uses for pecans. USDA has not

identified any relevant Federal rules

that duplicate, overlap, or conflict with

this proposed rule.

Industry Background

The pecan industry is comprised of

producers, shellers, accumulators,

wholesalers, and importers that

produce, process, and supply pecans for

market. Pecans include any and all

varieties or sub varieties, inshell or

shelled of the Genus, species: Carya

illinoinensis. Pecans are grown

primarily in Alabama, Arkansas,

Arizona, California, Florida, Georgia,

Kansas, Louisiana, Missouri,

Mississippi, North Carolina, New

Mexico, Oklahoma, South Carolina, and

Texas. According to the most recent

Census of Agriculture (2017), there are

15,608 operations with bearing acreage

of pecans. Bearing acreage is greatest in

Georgia with about 30 percent of the

nationwide total, followed by Texas at

27 percent, Oklahoma at 22 percent,

New Mexico at 11 percent, and Arizona

at 4 percent. These five states generally

account for about 95 percent of U.S.

pecan production.

U.S. Supply and Consumption

Pecans are an alternate bearing crop,

causing variability in production from

year to year. Based on data from the

National Agricultural Statistics Service

(NASS), the 2014 to 2019 six-year

average of total U.S. pecan production

was almost 265 million pounds on an

inshell basis, as shown in Table 1.

Together, Georgia and New Mexico

produced more than half of pecan

production nationwide.

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From 2013 through 2016, pecan

production averaged about 263 million

pounds per year, and reached a peak in

2017 at nearly 305 million pounds. The

following year, however, domestic

production dropped 21 percent due to

the destruction of the Georgia pecan

crop by Hurricane Michael. The trend of

U.S. pecan production is depicted in

Chart 1.

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Table

1.

State

Pecan

Production

1,000

Lbs.

State

Inshell

basis

Georgia

88,000

New

Mexico

80,150

Texas

42,517

Arizona

26,717

Oklahoma

13,533

Louisiana

7,406

California

4,686

Arkansas

2,850

Alabama

1,850

Mississippi

1,150

Missouri

1,090

South

Carolina

350

Florida

145

Total

U.S.

1

264,765

Source:

NASS,

2014-2019

average.

Note:

1Sum

may

not

equal

Total

U.S.

due

to

rounding.

Chart

1.

U.S.

Pecan

Production

(Inshell

basis)

310,000

300,000

290,000

Ul

280,000

..Q

,-:i

0

270,000

0

~

,-I

260,000

250,000

240,000

230,000

2013

2014

2015

2016

2017 2018

2019

Source:

NASS.

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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

In 2018, Hurricane Michael swept

across the southern half of Georgia as a

Category 3 storm. According to the

University of Georgia Pecan Extension,

this storm resulted in a loss of nearly

half the expected 2018 crop and a loss

of 17 percent of the state’s pecan

acreage. The effects of Hurricane

Michael remain present as the 2019

Georgia crop was down nearly 30

percent from the average production of

the six years prior to the storm. Prior to

Hurricane Michael, Georgia was the top

pecan-producing state in the U.S.

Considering this, along with the state’s

recovery efforts, the University of

Georgia Pecan Extension expects

Georgia pecan production to rebound in

the coming years. Pecan production

nationwide began to increase in 2019,

climbing six percent from 2018.

Table 2 shows U.S. pecan supply and

utilization. Domestic production

generally accounts for about 40 percent

of the domestic supply, while imports

account for nearly one-third, with

beginning stocks just under 30 percent.

Almost all pecans imported into the

U.S. are from Mexico. Of these, 70

percent are shelled, and 30 percent are

inshell.

Nearly half of the U.S. supply of

pecans is consumed domestically each

year. Per capita consumption has

trended upward for the last four years,

reaching a high of 1.20 inshell pounds

in 2019. Compared to 2018 and to the

2013 to 2018 six-year average, 2019 per

capita consumption is up 23 percent

and 33 percent, respectively.

Exports

The U.S. exports about 24 percent of

its pecan supply on average each year.

Shelled pecans make up 60 percent of

U.S. pecan exports, while inshell are 40

percent. Europe and Canada are the

primary markets for shelled pecans

with, on average, 49 percent and 24

percent, respectively, of total shelled

exports. In Europe, the largest

consumers of U.S. shelled pecans are

the Netherlands, the United Kingdom,

and Germany with 39 percent, 24

percent, and 15 percent, respectively, of

total shelled exports to Europe. On

average, about 94 percent of U.S. inshell

exports go to Asia. Together, Hong Kong

and China make up 72 percent of the

Asian market for inshell pecan exports

from the United States.

Competition

The pecan industry competes with

other tree nut industries such as

almonds, pistachios and walnuts. As

Table 3 illustrates, sales by volume of

pecans are 95 percent lower than sales

of almonds, 74 percent lower than sales

of walnuts, but 40 percent higher than

sales of pistachios.

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Table

2.

U.S.

Supply

and

Utilization

of

Pecans

(1,000

Lbs.,

Inshell

basis)

Per

Capita

Year

1

Beginning

Ending

5

Consumption

Production

1 1

Utilization

Stocks

(Lbs.

I 6

2013

266,330

183,840 143,285

593,455

166,909 156,450

270,095

0.85

2014

264,150

166,909 186,619

617,678

174,874

167,701

275,103

0.86

2015

254,290

174,874

170,574

599,738

181,390

157,208

261,140

0.81

2016

268,770

181,390

220,069

670,229

204,288

160,469

305,471

0.95

2017

304,850

204,288

176,122

685,260

183,984

188,116

313,160

0.

96

2018

240,930

183,984

230,899

655,813

203,341

135,256

317,216

0.97

2019

255,600 203,341

265,287

724,228

180,055 151,370

392,803

1.

20

2014-2019

6-yr

avg

264,765

185,798

208,262

658,824

187,989 160,020

310,815

0.

96

Pct

of

supply

40%

28% 32% 2

9%

24%

47%

2019

V

2018

6%

11% 15% 10%

-11%

12% 24% 23%

2019

V

2013-2018

6-yr

avg

-4% 11%

41%

14%

-3% -6%

35% 33%

Sources:

1

NASS;

2

Customs

and

Border

Protection;

4

Agricultural

Service.

Notes:

3

Production

+

Beginning

Stocks

+

Imports;

-

(Ending

Stocks

+

Exports);

6

Utilization

I

U.S.

Population.

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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

Prices received by growers, as shown

in Table 4, are 25 percent lower for

pecans than for almonds. Compared to

other nuts, grower-received prices for

pecans are 18 percent lower than those for pistachios, but double those for

walnuts.

Price Trends

Chart 2 shows the trend of prices for

pecans from 2013 to 2019. In recent

years, pecan prices were at their highest

in 2016 before dropping in the following

two years. Prices increased slightly

between 2018 and 2019 but are still

down about 12 percent compared to the

average of the previous six years.

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Table

3.

Shelled

Nut

Sales

(1,000

Lbs.)

Year

Pecans

Almonds

1

Pistachios

Walnuts

2013

106,569

2,010,000

45,400

306,000

2014

101,858

1,870,000

50,800

374,000

2015

87,225

1,900,000

33,100

400,000

2016

116,930

2,140,000

114,400

438,000

2017

126,396

2,270,000

52,807

390,000

2018

88,373

2,280,000

121,000

450,000

2019

115,937

2,550,000

82,000

412,000

2014-2019

6-yr

avg

106,120

2,168,333

75,685

410,667

Pecan

comparison

-95%

40

-74

Source:

NASS.

Note:

1

Almonds

is

shelled

utilized

production.

Table

4.

Grower-Received

Prices

($/Lb.)

Year

Pecans

Almonds

Pistachios

Walnuts

2013

$

1.

73

$

3.21

$

3.48

$

1.

86

2014

$

1.

96

$

4.00

$

3.57

$

1.

67

2015

$

2.20

$

3.13

$

3.29

$

0.84

2016

$

2.59

$

2.39

$

1.

68 $

0.93

2017

$

2.33

$

2.53

$

1.

69

$

1.

25

2018

$

1.

75

$

2.50

$

2.65

$

0.68

2019

$

1.

84 $

2.43

$

2.62

$

0.99

2014-2019

6-yr

avg

$

2.11

$

2.83

$

2.58

$

1.

06

Pecan

comparison

-25%

-18%

100

Source:

NASS.

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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

1

Based on historic compound annual growth

rates (CAGR’s) in global pecan supply and demand

for 10 years from 2008 to 2018; resultant CAGR’s

of 6 percent for global supply and demand applied

to 2018 estimates to forecast 2028 figures.

Need for a Program

According to the NPF, the greatest

challenge the pecan industry is facing is

supply surpassing demand. Data from

the International Nut and Dried Fruit

Council and from the research compiled

by the Boston Consulting Group,

contracted by the NPF, show that the

supply of pecans may exceed demand

by 19 percent in 2028.

1

The NPF

believes the establishment of a national

research and promotion program for

pecans would help the industry address

this challenge. NPF concluded that

without a program funded by

assessments from both domestically

produced and imported pecans, the

industry would not be able to meet the

challenge of the approaching supply

and demand imbalance.

In 2016, the U.S. pecan industry

favored the establishment of a marketing

order for pecans grown in Alabama,

Arkansas, Arizona, California, Florida,

Georgia, Kansas, Louisiana, Missouri,

Mississippi, North Carolina, New

Mexico, Oklahoma, South Carolina, and

Texas. The program authorizes

collection of industry data; research and

promotion activities; regulation of

grade, size, quality, pack and container;

and is financed by assessments paid by

handlers of pecans grown in the

production area. Over the past several

years the marketing order program has

launched marketing campaigns to

increase demand for pecans.

According to the NPF, the proposed

research and promotion program will

benefit domestic producers and

importers of pecans, thereby justifying

the collection of assessments on both

domestic production and imports.

The NPF proposal indicates that

imported product accounts for

approximately 39 percent of pecans

being supplied to the U.S., with

domestic production accounting for the

other 61 percent. With mandatory

assessments being collected only on

domestic production, this has created a

gap in the dollars available to fund

marketing campaigns focused on

creating increased demand for pecans in

the U.S. and globally. As domestic

production and imports increase, the

need for a robust promotion campaign is

apparent, which would only be

accomplished with both domestic

producers and importers contributing

financially. The NPF concluded that the

marketing order would continue to have

an important role within the industry

and the intent is that the two programs

would work together to benefit the

entire pecan industry.

Provisions of Proposed Program

Definitions

Pursuant to section 513 of the 1996

Act, §§ 1223.1 through 1223.24 of

proposed 7 CFR part 1223 (referred to as

the proposed Order) define certain

terms that would be used throughout

final 7 CFR part 1223 (referred to as the

Order). Several of the terms are common

to all research and promotion programs

authorized under the 1996 Act, while

other terms are specific to the proposed

Order.

Section 1223.1 would define the term

‘‘Act’’ to mean the Commodity

Promotion, Research, and Information

Act of 1996 (7 U.S.C. 7411–7425), and

any amendments thereto.

Section 1223.2 would define the term

‘‘American Pecan Council’’ or ‘‘APC’’ to

mean that governing body of the Federal

Marketing Order established pursuant to

7 CFR part 986, unless otherwise noted.

As specified in proposed § 1223.41, the

APC would conduct the initial

nominations for producers of the

American Pecan Promotion Board and

submit them to the Secretary.

Section 1223.3 would define the term

‘‘American Pecan Promotion Board’’ or

‘‘Board’’ to mean the administrative

body established pursuant to § 1223.40.

Section 1223.5 would define

‘‘Customs’’ or ‘‘CBP’’ to mean the

Customs and Border Protection, an

agency of the United Sates Department

of Homeland Security.

Section 1223.7 would define ‘‘first

handler’’ to mean any person who

receives, shells, cracks, accumulates,

warehouses, roasts, packs, sells,

consigns, transports, exports, or ships

(except as a common or contract carrier

of pecans owned by another person), or

in any other way puts inshell or shelled

pecans in the stream of commerce. The

term first handler includes a producer

who handles or markets pecans of the

producer’s own production.

Section 1223.8 would define the term

‘‘fiscal period’’ to mean the period from

October 1 to September 30, or such

other period as recommended by the

Board and approved by the Secretary.

Section 1223.10 would define the

term ’’information’’ to mean information

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..Q

$2.70

$2.50

$2.30

~

$2

.10

{f}-

$1.

90

$1.70

$1.50

2013

Source:

NASS.

Chart

2.

Pecan

Prices

2014

2015

2016

2017 2018

2019

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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

and programs that are designed to

increase efficiency in processing and to

develop new markets, marketing

strategies, increase market efficiency,

and activities that are designed to

enhance the image of pecans on a

national or international basis. This

includes consumer information, which

means any action taken to provide

information to, and broaden the

understanding of, the general public

regarding the consumption, use,

nutritional attributes, and care of

pecans. This would also include

industry information, which means

information and programs that would

lead to the development of new markets,

new marketing strategies, or increased

efficiency for the pecan industry, and

activities to enhance the image of the

pecan industry.

Section 1223.11 would define the

term ‘‘inshell pecans’’ to mean nuts

whose kernel is maintained inside the

shell.

Section 1223.12 would define the

terms ‘‘market’’ or ‘‘marketing.’’ The

term ‘‘marketing’’ would mean the sale

or other disposition of pecans in any

channel of commerce. The term

‘‘market’’ would mean to sell or

otherwise dispose of pecans in

interstate, foreign, or intrastate

commerce.

Section 1223.14 would define the

terms ‘‘part’’ and ‘‘subpart.’’ The term

‘‘part’’ would mean all rules,

regulations, and supplemental orders

issued pursuant to the Act and the

Order. The Pecan Promotion, Research,

and Information Order would be a

‘‘subpart’’ (specifically subpart A) of

such part.

Section 1223.15 would define the

term ‘‘pecans’’ to mean and includes

any and all varieties or subvarieties,

inshell or shelled, of the Genus, species:

Carya illinoinensis grown or imported

into the United States.

Section 1223.17 would define the

term ‘‘producer’’ to mean synonymous

with grower and any person engaged in

the production and sale of pecans in the

United States who owns, or who shares

in the ownership and risk of loss of such

pecans.

Section 1223.18 would define the

terms programs, plans, and projects to

mean research, promotion and

information programs, plans, or projects

established under the Order.

Section 1223.19 would define the

term ‘‘promotion’’ to mean any action

taken to present a favorable image of

pecans to the general public and the

food industry for the purpose of

improving the competitive position of

pecans both in the United States and

abroad and stimulating the sale of

pecans. This includes paid advertising

and public relations.

Section 1223.20 would define the

term ‘‘research’’ to mean any type of

test, study, or analysis designed to

advance the image, desirability, use,

marketability, production, product

development, or quality of pecans,

including research relating to

nutritional value, cost of production,

new product development, varietal

development, nutritional value, health

research, and marketing of pecans.

Section 1223.22 would define the

term ‘‘shelled pecans’’ to mean pecans

whose shells have been removed leaving

only edible kernels, kernel pieces or

pecan meal. One pound of shelled

pecans is the equivalent of two pounds

inshell pecans.

Sections 1223.4, 1223.6, 1223.9,

1223.13, 1223.16, 1223.21, 1223.23,

1223.24, and 1223.25 would define the

terms ‘‘conflict of interest,’’

‘‘Department or USDA,’’ ‘‘importer,’’

‘‘Order,’’ ‘‘person,’’ ‘‘Secretary,’’

‘‘suspend,’’ ‘‘terminate,’’ and ‘‘United

States,’’ respectively. The definitions are

the same as or are based on the

definitions specified in section 513 of

the Act.

Establishment of the Board

Pursuant to section 515 of the 1996

Act, §§ 1223.40 through 1223.47 of the

proposed Order would detail the

establishment and membership of the

proposed American Pecan Promotion

Board (Board), nominations and

appointments, term of office, removal

and vacancies, procedure, compensation

and reimbursement, powers and duties,

and prohibited activities.

Section 1223.40 would specify the

Board establishment and membership.

The 1996 Act requires the composition

of a board to reflect the geographical

distribution of production of the

commodity in the U.S. as well as the

quantity or value of the commodity

imported into the United States. In

accordance with this requirement, the

NPF recommended the Board would

consist of 17 members: 10 domestic

producers and 7 importers.

To determine whether the NPF’s

proposed board representation is

reflective of the appropriate

geographical distribution, USDA used

the following resources: The NASS for

U.S. production data; the 2007, 2012,

and 2017 Census of Agriculture

(published by NASS) for bearing acreage

data by state; Customs import data for

shelled and inshell pecans (HTS Codes

0802901500 and 0802901000,

respectively); and the Global

Agricultural Trade System (GATS) of

the Foreign Agricultural Service (FAS)

for data on U.S. exports of inshell

pecans to Mexico. All data presented in

this document is based on a calendar

year for consistency in timeframe. Due

to the alternate-bearing nature of the

crop, USDA concluded that the most

appropriate way to illustrate production

and import volume is a six-year average

of years 2014 through 2019.

U.S. Production

Every five years, following the Census

of Agriculture, NASS reviews

production for each commodity and

evaluates the inclusion of states in its

annual estimating program. Given

limited available resources, NASS has

reduced the number of states included

in its annual estimation of pecan

production to five states as of 2019,

down from 12 states in 2014 after the

2012 Census of Agriculture. NASS had

reported annual estimates of pecan

production for 15 states as early as 2007.

Using bearing acreage data from the

2007, 2012, and 2017 Census of

Agriculture, USDA estimated 2017

production in the seven states for which

no data was issued by NASS. USDA

calculated an average yield per acre for

each of these seven states using bearing

acreage data from the 2007 and 2012

Census of Agriculture and NASS

production data for the corresponding

years. Next, USDA applied these

calculations of yield to bearing acreage

data from the 2017 Census of

Agriculture to estimate 2017

production. Table 5 shows the result.

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59617

Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

In 2018, Hurricane Michael swept

across the southern half of Georgia as a

Category 3 storm. According to the

University of Georgia Pecan Extension,

this storm resulted in a loss of nearly

half the expected 2018 crop and a loss

of 17 percent of the state’s pecan

acreage. The effects of Hurricane

Michael remain present as the 2019

Georgia crop was down nearly 30

percent from the average production of

the six years prior to the storm. To more

accurately represent the geographical

distribution of U.S. pecan production,

USDA adjusted the six-year average of

production for Georgia by applying

weights to each year’s production

figures. Equal weights of 20 percent

were applied to years 2014 through

2017, and weights of 10 percent each

were applied to years 2018 and 2019.

The result, as shown in Table 5, is a six-

year weighted average of 90.9 million

pounds, inshell, of Georgia production.

Prior to Hurricane Michael, Georgia was

the top pecan producer in the United

States. Considering this, along with the

state’s recovery efforts, the University of

Georgia Pecan Extension expects

Georgia pecan production to rebound in

the coming years.

According to the proposal, domestic

board representation would be split into

three regions: Eastern, Central, and

Western. The Eastern Region includes

Alabama, Florida, Georgia, North

Carolina, South Carolina, and any other

U.S. states the majority of whose land

mass is in the Eastern Time Zone, plus

any U.S. territories in the Atlantic

Ocean. The Central Region includes

Arkansas, Kansas, Louisiana,

Mississippi, Missouri, Oklahoma, Texas,

and any other U.S. states the majority of

whose land mass is in the Central Time

Zone. Finally, the Western Region

includes Arizona, California, New

Mexico, and any other U.S. states the

majority of whose land mass is in the

Mountain or Pacific Time Zones, plus

Alaska, Hawaii, and any U.S. territories

in the Pacific Ocean.

Table 6 lists the three regions

including their states and territories,

along with regional six-year average

production, and portion of total U.S.

production. The Eastern and Central

Regions, with 34 percent and 25 percent

of total U.S. production, respectively,

would each have three seats on the

Board as recommended by the NPF. The

Western Region, with 41 percent of total

U.S. production would have four seats

on the Board as recommended by the

NPF, for a total of 10 seats representing

domestic U.S. production.

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Table

5.

Pecan

Production

Volume

by

State

2014-2019

Six-Year

Average

States

Lbs.

(Inshell

basis)

Alabama

Arizona

Arkansas

1

California

Florida

1

G . 2

eorgia

Kansas

1

Louisiana

Mississippi

1

Missouri

1

New

Mexico

North

Carolina

1

Oklahoma

South

Carolina

1

Texas

U.S.

Total

Source:

NASS.

1,850,000

26,783,333

3,102,365

4,686,000

1,958,448

90,900,000

676,226

7,406,000

1,217,850

1,415,427

81,950,000

216,949

13,300,000

714,239

43,366,667

279,543,504

Notes:

1

2017

production

estimated

by

USDA;

2

Georgia

production

estimated

using

a

weighted

average

with

lower

weights

applied

to

production

in

years

2018

and

2019

to

discount

anomalous

effects

of

2018

Hurricane

Michael.

59618

Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

Imports

Regarding import volume, USDA

estimated about 208 million pounds,

inshell, using a six-year average for

years 2014 through 2019. To arrive at

this estimate, USDA considered the

routine industry practice of domestic

inshell pecans being exported to Mexico

for shelling, and then reentering the

United States as shelled kernels. These

shelled kernels may be documented as

imported product, but they were

actually produced in the United States.

To account for this scenario, USDA

deducted from total imports U.S.

exports of inshell pecans to Mexico.

This calculation assumes that all U.S.

inshell pecan exports to Mexico

ultimately return to the United States as

shelled kernels. According to the NPF,

this is a reasonable assumption. The

result of this calculation is shown in

Table 7.

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Table

6.

Pecan

Production

Volume

by

Region

2014-2019

Six-Year

Average

States

Lbs.

(Inshell

basis)

9c

0

of

u

.s.

Alabama

~

Florida

H

~

Georgia

(].J

0

-J...J

-rl

North

Carolina

95,639,636

34%

CTI

(/)

(].J

(U

p::;

South

Carolina

µ:J

Eastern

Time

Zone

States

Atlantic

Territories

Arkansas

Kansas

rl

~

Louisiana

(U 0

H

Mississippi

-J...J

-rl

70,484,535

25%

CTI

~

(].J

Missouri

(].J

p::;

u

Oklahoma

Texas

Central

Time

Zone

States

Arizona

California

~ ~

New

Mexico

H 0

(].J

-rl

Mountain

Time

Zone

States

-J...J

CTI

113,419,333

41%

(/)

(].J

Pacific

Time

Zone

States

(].J

p::;

:s

Alaska

Hawaii

Pacific

Territories

Total

u.

s.

Production

279,543,504

Source:

NASS.

Table

7.

Revised

Pecan

Import

Calculation

2014-2019

Six-Year

Average,

Lbs.

(Inshell

basis)

Total

Imports

1

Exports

2

Revised

Imports

3

244,539,780

36,278,137

208,261,643

Sources:

1

Customs

and

Border

Protection;

2

Foreign

Agricultural

Service.

Notes:

2u.

s.

inshell

exports

to

Mexico;

3

Total

Imports

-

Exports.

59619

Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

In Table 8, revised imports are added

to domestic production to estimate the

total U.S. supply of pecans. With 279.5

million pounds, on an inshell basis,

U.S. production accounts for 57 percent

of the total domestic supply; and, with

just over 208 million pounds, on an

inshell basis, imports account for 43

percent of the total U.S. supply. In its

proposal, the NPF recommended 17

total board members, including ten

domestic producers and seven

importers.

The NPF proposed to have no

alternate Board members. It wants to

ensure that industry members who seek

representation and serve on the Board

are committed to their service and

participate in all Board meetings.

At least once every five years, the

Board must review the geographical

distribution of United States production

of pecans and the quantity or value of

imports. The review would be

conducted through an audit of state crop

production, Customs data, and Board

assessment records. If warranted, the

Board would recommend to the

Secretary of Agriculture that the Board

membership be reapportioned

appropriately to reflect such changes.

The distribution of production between

regions also shall be considered. Any

changes in Board composition would be

implemented by the Secretary through

rulemaking.

Section 1223.41 of the proposed

Order would specify Board nominations

and appointments. The initial

nominations for producers would be

submitted to the Secretary by the

American Pecan Council (APC). The

APC would publicize the nomination

process, using trade press or other

means it deems appropriate. The APC

would use regional caucuses, mail or

other methods to solicit potential

nominees and would work with USDA

to help ensure that all interested

persons are apprised of the nomination

process. The APC would submit the

nominations and recommend two

nominees for each Board position for

the Secretary’s consideration.

USDA would conduct initial importer

nominations. This includes publicizing

the nomination process, using trade

press or other means it deems

appropriate, and conducting outreach to

all importers. USDA would receive the

nominations and submit two nominees

for each Board position for the

Secretary’s consideration.

Regarding subsequent nominations,

the Board would solicit nominations as

described in the following paragraph.

Nominees must produce more than

50,000 pounds of inshell pecans (25,000

pounds of shelled pecans) on average

for four fiscal periods (the fiscal period

for which the nominations are being

conducted and the previous three fiscal

periods).

The Board would seek nominations

for each vacant seat from producers who

paid their assessments to the Board in

the most recent fiscal period. Producers

that produce in more than one region

could seek nomination in only the

region in which they produce the

majority of their pecans. Interested

producers could also submit a

background statement outlining their

qualifications to serve on the Board. The

names of producer nominees would be

placed on a ballot by region. The ballots,

along with any background statements,

would be mailed to producers in each

respective region for a vote. Producers

who produce pecans in more than one

region could only vote in the region in

which they produce the majority of their

pecans. The votes would be tabulated

for each region with the nominee

receiving the highest number of votes at

the top of the list in descending order

by vote. Two candidates for each

position would be submitted to the

Secretary for consideration.

The Board would also solicit

candidates for importer nominees. All

qualified national organizations

representing importers would have the

opportunity to nominate members to

serve on the Board. To be certified by

the Secretary as a qualified national

organization, an organization would

have to have been established for more

than a year; be comprised primarily of

importers of pecans; receive a portion of

its operating funds from importers; and

demonstrate it would be willing and

able to further the Act and Order’s

purposes. Interested importers could

also submit a background statement

outlining their qualifications to serve on

the Board. The names of importer

nominees would then be placed on a

ballot. The ballots, along with any

background statements, would be

mailed to importers for a vote. The votes

would be tabulated with the nominee

receiving the highest number of votes at

the top of the list in descending order

by vote. Two candidates for each

position would then be submitted to the

Secretary for consideration.

The Board would submit nominations

to the Secretary at least six months

before the new Board term begins.

The NPF also recommended that no

two Board members be employed by a

single corporation, company,

partnership, or any other legal entity.

The NPF stated this is to help ensure

that no one entity has control on the

Board.

In order to provide the Board

flexibility, the Board could recommend

to the Secretary modifications to its

nomination procedures. Any such

modifications would be implemented

through rulemaking by the Secretary.

Section 1223.42 of the proposed

Order would specify the term of office.

Except for the initial Board, each Board

member would serve a three-year term

or until the Secretary selected his or her

successor. Each term of office would

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Table

8.

Board

Representation

2014-2019

Six-Year

Average,

Lbs.

(Inshell

basis)

u.

s.

Production

1

Imports

2

Total

U.S.

Supply

3

279,543,504

208,261,643

487,805,148

57%

43%

100%

Sources:

1NASS; 2

Customs

and

Border

Protection,

Foreign

Agricultural

Service.

Notes:

2

Revised

Imports

calculated

in

Table

7

(Total

Imports

-

Exports);

3U.

s.

Production

+

Imports.

59620

Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

begin on October 1 and end on

September 30. No member could serve

more than two consecutive terms,

excluding any term of office less than

three years. For the initial Board, the

members’ terms would be staggered for

two, three, and four years and would be

determined at random. The initial

members would be able to serve one

successive three-year term.

Section 1223.43 of the proposed

Order would specify criteria for the

removal of members and for filling

vacancies. If a Board member ceased to

work for or be affiliated with the

category of members from which the

member was appointed or in the region

he or she represented, such position

would become vacant. The Board could

recommend to the Secretary that a

member be removed from office if the

member consistently refused to perform

his or her duties or engaged in dishonest

acts or willful misconduct. Further,

without recommendation of the Board,

a member may be removed by the

Secretary upon showing of adequate

cause, including the continued failure

by a member to submit reports or remit

assessments required under this part, if

the Secretary determines that such

member’s continued service would be

detrimental to the achievement of the

purposes of the Act. If a position

became vacant, nominations to fill the

vacancy would be conducted using the

nomination process as proposed in

§ 1223.41 of the Order. A vacancy

would not be required to be filled if the

unexpired term is less than six months.

Section 1223.44 of the proposed

Order would specify procedures of the

Board. A majority of the Board members

(9) would constitute a quorum. A

motion would carry if supported by one

vote more than 50 percent of the total

votes represented by the Board members

present. Proxy voting would not be

permitted.

The proposed Order would also

provide for the Board to take action by

mail, telephone, electronic mail,

facsimile, or any other electronic means

when the chairperson believes it is

necessary. Actions taken under these

procedures would be valid only if all

members and the Secretary were

notified of the meeting and all members

were provided the opportunity to vote

and at least nine Board members voted

in favor of the action. Additionally, all

votes would have to be confirmed in

writing and recorded in Board minutes.

The proposed Order would specify

that Board members would serve

without compensation. However, Board

members would be reimbursed for

reasonable travel expenses, as approved

by the Board, incurred when performing

Board business.

Section 1223.46 of the proposed

Order would specify powers and duties

of the Board. These are similar in

promotion programs authorized under

the 1996 Act. They include, among

other things, to administer the Order

and collect assessments; to develop

bylaws and recommend regulations

necessary to administer the Order; to

select a chairperson and other Board

officers; to create committees and

subcommittees as necessary; to hire staff

or contractors; to develop programs and

enter into contracts to implement

programs; to prepare and submit a

budget for approval by USDA in

accordance with the Order; to invest

Board funds appropriately; have its

books audited by an outside certified

public accountant at the end of each

fiscal period and at other times as

requested by the Secretary; to provide

appropriate notice of meetings to the

industry and USDA and keep minutes of

such meetings; to report its activities to

producers and importers; to make

public an accounting of funds received

and expended; to receive, investigate

and report to the Secretary complaints

of violations of the Order; and to

recommend amendments to the Order as

appropriate.

Section 1223.47 of the proposed

Order would specify prohibited

activities that are common to all

promotion programs authorized under

the 1996 Act. In summary, the Board

nor its employees and agents could

engage in actions that would be a

conflict of interest; use Board funds to

lobby (influencing legislation or

governmental action or policy, by local,

state, national, and foreign governments

or subdivision thereof, other than

recommending to the Secretary

amendments to the Order); or engage in

any advertising or activities that may be

false, misleading or disparaging to

another agricultural commodity.

Expenses and Assessments

Pursuant to sections 516 and 517 of

the 1996 Act, §§ 1223.50 through

1223.53 of the proposed Order detail

requirements regarding the Board’s

budget and expenses, financial

statements, assessments, and exemption

from assessments. At least 60 calendar

days before the start of the fiscal period,

and as necessary during the year, the

Board would submit a budget to USDA

covering its projected expenses. The

budget must include a summary of

anticipated revenue and expenses for

each program along with a breakdown

of staff and administrative expenses.

Except for the initial budget, the Board’s

budgets should include comparative

data for at least one preceding fiscal

period.

Each budget must provide for

adequate funds to cover the Board’s

anticipated expenses. Any amendment

or addition to an approved budget must

be approved by USDA, including

shifting of funds from one program, plan

or project to another. Shifts of funds that

do not result in an increase in the

Board’s approved budget would not

need prior approval from USDA. For

example, if the Board’s approved budget

provided for $1 million in consumer

advertising and $500,000 in research

projects, a shift of $50,000 from

consumer advertising to research would

require USDA approval. However, a

shift within the $1 million consumer

advertising line item would not require

prior USDA approval.

The Board would be authorized to

incur reasonable expenses for its

maintenance and functioning. During its

first year of operation, the Board could

borrow funds for startup costs and

capital outlay. Any borrowed funds

would be subject to the same fiscal,

budget and audit controls as other funds

of the Board.

The Board could also accept

voluntary contributions and seek other

funding sources to carry out activities

authorized under the Order. Any

contributions received by the Board

would be free from encumbrances by

the donor and the Board would retain

control over use of the funds. However,

the Board could receive funds from

outside sources targeted for specific

authorized projects. For example, the

Board could receive Federal grant funds,

subject to approval by the Secretary, for

a specific research project. The Board

would also be required to reimburse

USDA for costs incurred by USDA in

overseeing the Order’s operations,

including all costs associated with

referenda.

The Board would be limited to

spending no more than 15 percent of its

assessment and other income received

for administration, maintenance, and

the functioning of the Board for that

fiscal period. This limitation would be

applicable for fiscal periods beginning

three or more years after the

establishment of the Board.

Reimbursements to USDA would not be

considered administrative costs. As an

example, if the Board received $9

million in assessments during fiscal

period five, and $1 million in Federal

grant funding, the Board’s assessment

and other income would be $10 million

for that fiscal period. In this scenario,

the Board would be limited to spending

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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

no more than $1.5 million (.15 × $10

million) on administrative costs.

The Board could also maintain a

monetary reserve and carry over excess

funds from one fiscal period to the next.

However, such reserve funds could not

exceed two fiscal period’s budgeted

expenses. For example, if the Board’s

budgeted expenses for a fiscal period

were $8 million, it could carry over no

more than $16 million in reserve. With

approval of the Secretary, reserve funds

could be used to pay expenses.

The Board could invest its revenue

collected under the Order in the

following: (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) Interest bearing accounts or

certificates of deposit of financial

institutions that are members of the

Federal Reserve; and 4) Obligations

fully guaranteed as to principal interest

by the United States.

The Board would be required to

submit to USDA financial statements on

a monthly or quarterly basis, or at any

other time as requested by the Secretary.

Financial statements should include, at

a minimum, a balance sheet, statement

of activities (budget versus actual), an

income statement, and an expense

budget.

Assessments

The Board’s programs and expenses

would be funded through assessments

on producers and importers, other

income, and other funds available to the

Board. The Order would provide for an

initial assessment rate of $0.02 per

pound of all inshell pecans and $0.04

per pound on all shelled pecans. Each

producer would pay on the amount of

pecans produced in the United States.

The importer of record would pay

assessments based on the amount of

pecans imported to the United States.

The Order provides that it is the

responsibility of the first handler, as

defined in § 1223.7, to collect and remit

assessments owed to the Board. First

handlers would collect assessments

from each producer based on pounds of

pecans received. The first handler

would remit those assessments, along

with the required reports, to the Board.

As an example, first handler A receives

100,000 pounds inshell pecans from

producer X, 250,000 pounds shelled

pecans from producer Y, and 750,000

inshell pecans from producer Z. First

handler A would collect $2,000

(100,000 pounds × $0.02 per pound

inshell pecans) from producer X,

$10,000 (250,000 pounds × $0.04 per

pound shelled pecans) from producer Y,

and $15,000 (750,000 pounds × $0.02

per pound inshell pecan) from producer

Z. First handler A would remit the

assessment collected totaling $27,000

($2,000 + $10,000 + $15,000) to the

Board. If a producer is acting as its own

first handler, the producer would be

required to remit its individual

assessments. Assessments owed would

be due to the Board by the 10th calendar

day of the month following the end of

the previous month. As an example,

assessments for pecans received in June

would be due to the Board by July 10th.

Importer assessments would be

collected through Customs. If Customs

did not collect the assessment from an

importer, the importer would be

responsible for paying the assessment

directly to the Board by the 10th

calendar day of the month following the

end of the previous month after the

pecans were imported into the United

States.

Domestic inshell pecans are routinely

exported to Mexico, shelled, and

imported into the United States as

shelled pecans. The intent of the Order

is not to double assess such pecans. For

pecans produced in the United States,

shipped to locations outside the United

States for shelling, and imported back

into the United States, assessments

would be owed on the pecans produced

in the United States and would be

remitted by the first handler. If

assessments are being collected through

Customs, the importer would need to

request a refund from the Board and

provide proof that assessments had been

previously remitted by the first handler.

For importers who remit assessments

directly to the Board, the importers

would have to provide documentation

that assessments had been paid by the

first handler. As an example, if producer

A, acting as its own first handler,

exports 100,000 pounds of inshell

pecans to Mexico to be shelled, that

individual would be required to remit to

the Board assessments owed on the

100,000 pounds of inshell pecans. When

Importer B imports the 50,000 pounds

of shelled pecans, the importer would

need to provide documentation that

substantiates that assessments were

remitted by the producer A.

Section 1223.52(e)(2) of the Order

would prescribe the Harmonized Tariff

Schedule (HTS) of the United States

categories covered under the program.

Imported commodities are assigned

codes via the HTS with the first

numbers denoting the heading, which is

a broad description of the commodity,

and the subsequent numbers denoting

the subheadings, which specify the

commodity in greater detail. In the

event an HTS number subject to

assessment changed and the change is

merely a replacement of a previous

number and has no impact on the

description of the pecans involved,

assessments would continue to be

collected based on the new number.

Section 1223.520 of the Order would

provide authority for the Board to

impose a late payment charge and

interest for assessments not received

within 30 calendar days of the date

assessments were due. There would be

a one-time late payment charge of five

percent of the assessments due. In

addition, there would be a one percent

per month interest charge on the

outstanding balance, including any late

payment and accrued interest. Interest

would accrue monthly until the

outstanding balance would be paid to

the Board.

De Minimis

The proposed Order would provide

an exemption to assessment of

producers whose production volume

was less than 50,000 pounds of inshell

pecans (25,000 pounds of shelled

pecans) on average for four fiscal

periods (the fiscal period for which the

exemption is claimed and the previous

three fiscal periods). The exemption

would also apply to importers whose

import volume was less than 50,000

pounds of inshell pecans (25,000

pounds of shelled pecans) on average

for four fiscal periods (the fiscal period

for which the exemption is claimed and

the previous three fiscal periods). The

Federal Marketing Order (FMO)

regulating the handling of pecans

defines a producer or grower as one who

produces ‘‘a minimum of 50,000 pounds

of inshell pecans’’ or who owns ‘‘a

minimum of 30 pecan acres’’. Record

evidence in the 2015 FMO promulgation

hearings—including witness testimonies

and a study entitled ‘‘Economic

Analysis of the Implementation of a

Federal Marketing Order for Pecans’’—

verified that 50,000 pounds of inshell

pecans or 30 pecan acres was an

acceptable threshold for distinguishing

a commercial pecan producer from a

hobby farmer.

This proposal prescribes an average of

four fiscal periods of production or

imports to determine whether an entity

is subject to assessment. For quantifying

the number of domestic producers of

pecans, data from the 2017 Census of

Agriculture, representing a single year,

is the best resource available to USDA.

Regarding importers, USDA used a six-

year average instead of a four-year

average to maintain consistency across

analyses in this proposal. Finally, all

data used in this analysis is reflective of

a calendar year, not a fiscal year. NASS,

who publishes the Census of

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Agriculture, reports data on a calendar

year basis. USDA analyzed Customs

data by calendar year for consistency

with NASS. In 2017, NASS estimated

pecan production for 12 states. Every

five years, following the Census of

Agriculture, NASS reviews production

for each commodity and evaluates the

inclusion of states in its annual

estimating program.

To determine the number of domestic

producers that would be assessed or

exempt from assessment, USDA first

estimated the minimum number of acres

required to produce 50,000 pounds,

inshell, of pecans for 12 states. To

accomplish this, USDA divided the de

minimis threshold of 50,000 pounds,

inshell, by the 2017 yield estimates for

each of the 12 states. These yield

estimates, along with the resulting

minimum number of acres to produce

50,000 pounds, inshell, of pecans are

shown in Table 9. Next, USDA used

each state’s minimum number of acres

to find the number of operations that

had pecan bearing acreage that would

enable them to produce at least 50,000

pounds, inshell, of pecans, based on

data from the 2017 Census of

Agriculture.

Table 10 depicts the number of

producers and importers that would be

assessed and exempt from assessment

under the de minimis threshold of

50,000 pounds, inshell, of pecans.

According to the 2017 Census of

Agriculture, there were 15,608

operations with bearing acreage of

pecans in the U.S. in 2017. Based on

data from Customs and Border

Protection (Customs), there were 190

entities that imported shelled or inshell

pecans between 2014 and 2019. USDA

estimates that of the total 15,798

producers and importers of pecans,

1,061, or seven percent, would be

assessed and 14,737, or 93 percent,

would be exempt from assessment.

USDA seeks comment on whether this

de minimis provides a good

representation of the industry for

assessments collected and board

representation.

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Table

9.

2017

State

Yield

and

Minimum

Acreage

for

Assessment

Min.

Acres

for

State

Yield

50,000

Lbs.

(Inshell)

Alabama

220

227

Arizona

1,750

29

Arkansas

257

195

Florida

302

166

Georgia

892

56

Louisiana

650

77

Mississippi

310

161

Missouri

267

187

New

Mexico

2,115

24

North

Carolina

242

207

Oklahoma

163

307

Texas

426

117

Source:

NASS.

Table

10.

Entities

Exempt

and

Assessed

at

De

Minimis

Threshold

Entities

Total

Assessed

Exempt

Producers

1

15,608

990

14,618

Importers

2

190

71

119

Total

15,798

1,061

14,737

Sources:

1NASS,

2017;

2

Customs

and

Border

Protection,

2014-2019

average.

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2

For quantifying the number of domestic

producers of pecans, data from the 2017 Census of

Agriculture, representing a single year, is the best

resource available to USDA. The Census of

Agriculture is only published every five years.

Regarding importers, USDA used a six-year average

to maintain consistency across analyses in this

proposal.

3

In its proposal, NPF estimated that 4,300

growers would be subject to assessment under this

proposed Order, and that assessment revenue

would range from $10.5 million to $11.6 million.

The variance in the number of assessed growers and

the amount of assessment revenue estimated by

USDA and by NPF is due to differing methods of

analysis, and different assumptions made.

Using NASS data, USDA estimates

2017 pecan production to amount to

more than 316 million pounds, inshell.

Customs data shows total imports of

shelled and inshell pecans to average

244.5 million pounds, on an inshell

basis, from 2014 to 2019.

2

Together,

total volume of pecans in the U.S.

market is almost 561 million pounds,

inshell, as shown in Table 11. Assessed

volume amounts to 251 million pounds,

inshell, for producers and 244 million

pounds, inshell, for importers. Total

assessed volume multiplied by the

assessment rate of $0.02 per pound of

inshell pecans (equivalent to $0.04 per

pound of shelled pecans) results in a

total assessment revenue of nearly $10

million.

3

In addition to the proposed

exemption of 50,000 pounds of pecans

on an inshell basis or 25,000 pounds of

pecans on a shelled basis, USDA

considered other options for a de

minimis threshold. First, USDA

considered a de minimis exemption for

growers with less than 30 acres of

pecans, aligning with one of the

definitions of producer or grower in the

FMO. A de minimis exemption of less

than 30 acres could not apply to pecan

importers, and therefore would not be

fairly applied to all those subject to the

program. Thus, this exemption is not

contained in this proposal.

In the pecan FMO, handlers who

handle at least 1,000 pounds of pecans,

on an inshell basis, are subject to

assessment. If this de minimis

exemption of less than 1,000 pounds of

pecans, on an inshell basis, were

applied to pecan growers, then about 50

percent of growers would be subject to

assessment. Of these assessed growers,

nearly half would operate between 5

and 15 bearing acres of pecans, therefore

placing a significant burden on smaller

growers to fund the program. Thus, this

exemption is not contained in this

proposal.

Finally, USDA considered a de

minimis exemption which mirrors the

definition of a small pecan grower and

small pecan importer according to the

Small Business Administration (SBA).

The SBA size standard for a small pecan

grower is annual sales receipts of no

more than $1 million. The SBA size

standard for small pecan importer

(equivalent to ‘‘Postharvest crop

activities’’) is annual receipts equal to

no more than $30 million. Tying the de

minimis exemption to these differing

SBA size standards becomes

problematic when considering equitable

contributions to the proposed program.

This is true not only when evaluating

contributions from each sector but also

within the respective sectors. A de

minimis exemption tied to annual sales

receipts may overly burden growers and

importers who produce or import high

annual sales receipts of pecans.

AMS seeks comments on the

proposed de minimis exemption,

particularly on whether the proposed

level is appropriate to ensure equitable

contribution and representation from

both domestic producers and importers,

or if modification to the exemption level

is needed. Please provide data to

substantiate any recommendation.

Exemptions

The proposed Order would provide

for two exemptions. First, as described

in the previous section, producers who

produce domestically and importers

that import less than 50,000 pounds of

inshell pecans (25,000 pounds of

shelled pecans) on average for four

fiscal periods (the fiscal period for

which the exemption is claimed and the

previous three fiscal periods) would be

exempt.

Producers or importers seeking an

exemption would apply to the Board for

an exemption prior to the start of the

fiscal period. This would be an annual

exemption; entities would have to

reapply each year. They would have to

certify that they expect to produce

domestically or import less than 50,000

pounds of inshell pecans (25,000

pounds of shelled pecans) on average

for four fiscal periods (the fiscal period

for which the exemption is claimed and

the previous three fiscal periods). The

Board could request documentation to

support the exemption claim, such as

past sales or import data. The Board

would then issue, if deemed

appropriate, a certificate of exemption

to the eligible producer or importer.

Producers and importers who

received an exemption but domestically

produced or imported more than 50,000

pounds of inshell pecans (25,000

pounds of shelled pecans) on average

for four fiscal periods (the fiscal period

for which the exemption is claimed and

the previous three fiscal periods) during

the fiscal period would be obligated to

pay the applicable assessments.

Producers and importers who are

exempt from assessments would be

eligible for a refund of assessments

collected. Requests for assessment

refunds would be submitted to the

Board within 90 days of the last day of

the fiscal period when assessments were

collected. The Board would refund such

assessments no later than 60 calendar

days after receipt of information

justifying the exemption.

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Table

11.

Estimated

Volume

and

Assessment

Revenue

Entities

Volume

(Lbs.,

Inshell

Basis)

Assessment

Total

Assessed

Revenue

Producers

1

316,171,267

251,309,740

$

5,026,195

Importers

2

244,539,780 243,662,767

$

4,873,255

Total

560,711,047

494,972,508

$

9,899,450

Sources:

1NASS,

2017;

2

Customs

and

Border

Protection,

2014-2019

average.

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The Board could develop additional

procedures to administer the exemption

as appropriate. Such procedures would

be implemented through rulemaking by

the Secretary.

The second exemption under the

proposed Order would be for organic

pecans. Under section 501 of the

Federal Agriculture Improvement and

Reform Act of 1996 (FAIR Act) (7 U.S.C.

7401), a producer who operates under

an approved National Organic Program

(NOP) (7 CFR part 205) system plan, and

domestically produces pecans that are

certified ‘‘organic’’ or ‘‘100 percent

organic’’ (as defined in the NOP) would

be eligible for exemption. The

exemption would apply to all certified

‘‘organic’’ or ‘‘100 percent organic’’

pecans regardless of whether the pecans

are produced by a person who produces

conventional or nonorganic pecans.

Likewise, an importer who imports

pecans that are certified as ‘‘organic’’ or

‘‘100 percent organic’’ under the NOP,

or certified as ‘‘organic’’ or ‘‘100 percent

organic’’ under a U.S. equivalency

arrangement established under the NOP,

would be exempt from the payment of

assessments.

Refunds From Escrow Account

Pursuant to section 517 of the 1996

Act, § 1223.54 of the proposed Order

would specify the refund procedures if

the initial referendum does not pass.

The NPF has proposed that the

proposed Order be voted in a

referendum of producers and importers

no later than three years after

assessments first begin under the Order.

The Board shall establish an interest

bearing escrow account with a financial

institution that is a member of the

Federal Reserve System and would

deposit into such account an amount

equal to ten percent of the assessments

collected during the period beginning

on the effective date of the Order and

ending on the date the Secretary

announces the results of the required

referendum.

If the required referendum fails, the

Board shall promptly pay refunds of

assessments to all producers and

importers that have paid assessments

during the period beginning on the

effective date of the Order and ending

on the date the Secretary announces the

results of the required referendum in the

manner specified in the proposed Order.

Producers and importers shall notify the

Board, in a manner specified by the

Secretary, within 60 days after the

announcement of the referendum of

their demand to receive a refund.

If the amount deposited in the escrow

account is less than the amount of all

refunds that producers and importers

subject to the Order have a right to

receive, the Board shall prorate the

amount deposited in such account

among all producers and importers who

desire a refund of assessments paid no

later than 90 days after the required

referendum results are announced by

the Secretary.

If the proposed Order is approved by

the required referendum conducted

under this section, the Board would

close the escrow account and all funds

would be available to the Board under

§ 1223.50.

Promotion, Research and Information

Pursuant to section 516 of the 1996

Act, §§ 1223.55 through 1223.57 of the

proposed Order would detail

requirements regarding promotion,

research and information programs,

plans and projects authorized under the

Order. The Board would develop and

submit to the Secretary for approval

programs, plans and projects regarding

promotion, research, education, and

other activities, including consumer and

industry information and advertising

designed to, among other things,

maintain and expand markets for

pecans, and develop new uses for

pecans. The Board would be required to

evaluate each plan and program to

ensure that it contributes to an effective

promotion program. The Order would

also require that, at least once every five

years, the Board fund an independent

evaluation of the effectiveness of the

Order and programs conducted by the

Board.

Finally, the Order would specify that

any patents, copyrights, trademarks,

inventions, product formulations and

publications developed through the use

of funds received by the Board would be

the property of the U.S. Government, as

represented by the Board. These along

with any rents, royalties and the like

from their use would be considered

income subject to the same fiscal,

budget, and audit controls as other

funds of the Board, and could be

licensed with approval of the Secretary.

Reports, Books and Records

Pursuant to section 515 of the 1996

Act, §§ 1223.60 through 1223.62 specify

the reporting and recordkeeping

requirements under the proposed Order

as well as requirements regarding

confidentiality of information.

Producers and first handlers would be

required to submit periodically to the

Board certain information as the Board

may request. Since first handlers would

be obligated to collect and remit

assessments owed to the Board, the first

handlers would be required to submit a

report at the time assessments are

remitted. Producers who are acting as

their own first handler would also be

required to submit a report at the time

assessments are remitted. Specifically,

the report submitted to the Board would

include, but is not be limited to, the

producer and handlers’ name, address,

and telephone number; the pounds

produced or handled; and the pounds of

pecans for which assessments were

paid. Producers who received a

certificate of exemption from the Board

would not have to submit such a report

to the Board.

Likewise, importers who pay their

assessments directly to the Board would

be required to submit a report to the

Board that would include, but not be

limited to, the importer’s name, address,

and telephone number; the pounds of

pecans imported to the United States;

the pounds of pecans for which

assessments were paid. Importers would

submit this report at the same time they

remit their assessments to the Board.

Importers who paid their assessments

through Customs would not have to

submit such reports because Customs

would collect this information upon

entry.

Additionally, producers, first

handlers and importers including those

who were exempt, would be required to

maintain books and records needed to

verify any required reports. Such books

and records would be required to be

made available during normal business

hours for inspection by the Board’s or

USDA’s employees or agents. Producers,

first handlers, and importers would be

required to maintain such books and

records for three years beyond the

applicable fiscal period.

The Order would also require that all

information obtained from persons

subject to the Order as a result of

proposed recordkeeping and reporting

requirements would be kept

confidential by all officers, employees,

and agents of the Board and USDA.

Such information could only be

disclosed if the Secretary considered it

relevant, and the information were

revealed in a judicial proceeding or

administrative hearing brought at the

direction or at the request of the

Secretary or to which the Secretary or

any officer of USDA were a party. Other

exceptions for disclosure of confidential

information would include the issuance

of general statements based on reports

or on information relating to a number

of persons subject to the Order, if the

statements did not identify the

information furnished by any person, or

the publication, by direction of the

Secretary, of the name of any person

violating the Order and a statement of

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the particular provisions of the Order

violated.

Miscellaneous Provisions

Referenda

Pursuant to section 518 of the 1996

Act, § 1223.71(a)(1) of the proposed

Order specifies that the program would

be implemented, and a referendum

conducted not later than three years

after assessments first begin under the

Order. The Order would continue if

approved by a majority of producers and

importers voting in the referendum

who, during a representative period

determined by the Secretary, were

engaged in the production or

importation of pecans into the United

States.

Section 1223.71(b) of the proposed

Order specifies criteria for subsequent

referenda. Under the Order, a

referendum would be held to ascertain

whether the program should continue,

be amended, or terminated. This section

specifies that a referendum would be

held every seven years to determine

whether producers and importers favor

continuation of the Order. The Order

would continue if favored by a majority

of producers and importers voting in the

referendum. Additionally, a referendum

could be conducted at the request of the

Board. A referendum could also be

conducted at the request of 10 percent

or more of the number of persons

eligible to vote in a referendum under

the Order. Finally, a referendum could

be conducted at any time as determined

by the Secretary.

Other Miscellaneous Provisions

Sections 1223.70 and 1223.72 through

1223.78 describe the rights of the

Secretary; authorize the Secretary to

suspend or terminate the Order when

deemed appropriate; prescribe

proceedings after termination; address

personal liability, separability, and

amendments; and provide OMB control

numbers. These provisions are common

to all research and promotion program

authorized under the 1996 Act.

Referenda Procedures

Sections 1223.100 through 1223.107

of the proposed Order would specify

procedures for the conduct of referenda.

The sections cover the definitions,

voting instructions, use of subagents,

ballots, the referendum report, and

confidentiality of information.

Producers and importers eligible to vote

in the referenda would mean any

person, during the representative

period, that was subject to the Order.

Each eligible producer or importer

would be entitled to cast only one

ballot. USDA would conduct the

referenda. USDA would announce the

voting period; mail ballots to eligible

producers and importers; tabulate the

results; prepare a report; and announce

the results to the public. The ballots and

other information or reports that would

disclose any person’s vote would be

held confidential. The procedures

would be applicable for the initial

referendum and future referenda.

Initial Regulatory Flexibility Analysis

Pursuant to the requirements set forth

in the Regulatory Flexibility Act (5

U.S.C. 601–612), USDA has considered

the economic impact of this action on

small entities. USDA has prepared this

Initial Regulatory Flexibility Analysis,

the purpose of which is to fit regulatory

actions to the scale of businesses subject

to such actions in order that small

businesses would not be unduly or

disproportionately burdened.

Need for Regulation

NPF stated in its proposal that the

greatest challenge facing the pecan

industry is supply outpacing demand.

Based on worldwide planting and crop

data, NPF estimates that supply would

exceed demand by 15 percent in 2027.

NPF believes that the establishment of

a national research and promotion

program for pecans, funded by

assessments on both domestic producers

and importers, would help the industry

address this challenge.

In 2016, the U.S. pecan industry

favored the establishment of a marketing

order for pecans grown in Alabama,

Arkansas, Arizona, California, Florida,

Georgia, Kansas, Louisiana, Missouri,

Mississippi, North Carolina, New

Mexico, Oklahoma, South Carolina, and

Texas. The program authorizes

collection of industry data; research and

promotion activities; regulations on

grade, size, quality, pack and container;

and is financed by assessments paid by

handlers of pecans grown in the

production area. Over the past several

years, the marketing order program has

launched marketing campaigns to

increase demand for pecans.

According to the NPF, the proposed

research and promotion program will

benefit domestic producers and

importers of pecans, thereby justifying

the collection of assessments on both

domestic production and imports. The

NPF proposal indicates that imported

product accounts for approximately 39

percent of pecans being supplied to the

United States. With mandatory

assessments applied to both domestic

production and imports, the proposed

Order would be able to fund marketing

campaigns focused on creating

increased demand for pecans in the

United States and globally. The NPF

concluded that the marketing order

would continue to have an important

role within the industry and the intent

is that the two programs would work

together for the benefit of the entire

pecan industry. The research and

promotion program would concentrate

its efforts on activities that would

maintain and expand markets for

pecans, strengthening its position in the

marketplace. The marketing order

would continue its primary

responsibility of collection and

distribution of industry data to

empower stakeholders with accurate

and timely information. Additionally,

the marketing order provides the

authority for the pecan industry to

recommend on grade, size, quality, pack

and container requirements.

Objectives of the Action

The purpose of the program would be

to strengthen the position of pecans in

the marketplace, maintain and expand

markets for pecans, and develop new

uses for pecans.

Legal Basis for Action

The proposed Order is authorized

under the 1996 Act which authorizes

USDA to establish agricultural

commodity research and promotion

orders which may include a

combination of promotion, research,

industry information, and consumer

information activities funded by

mandatory assessments. These programs

are designed to maintain and expand

markets and uses for agricultural

commodities.

USDA currently administers a

marketing order for pecans grown in

Alabama, Arkansas, Arizona, California,

Florida, Georgia, Kansas, Louisiana,

Missouri, Mississippi, North Carolina,

New Mexico, Oklahoma, South

Carolina, and Texas which is authorized

under the Agricultural Marketing

Agreement Act of 1937. The purpose of

marketing orders, in general, is to

stabilize market conditions, allowing

industries to work together to solve

marketing problem, improving

profitability. Marketing order programs’

mandatory assessments are paid by

handlers within the designated

production areas. The pecan marketing

order authorizes collection of industry

data; research and promotion activities;

regulations on grade, size, quality, pack

and container; and is financed by

assessments paid by handlers of pecans

grown in the production area.

The proposed pecan research and

promotion program is national in scope,

financed by an assessment on pecan

producers and importers, and authorizes

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research and promotion activities. The

purpose of the proposed Order would be

to strengthen the position of pecans in

the marketplace, maintain and expand

markets for pecans, and develop new

uses for pecans. USDA has not

identified any relevant Federal rules

that duplicate, overlap, or conflict with

this proposed rule.

Potentially Affected Small Entities

In 13 CFR part 121, the Small

Business Administration (SBA) defines

the threshold at which an operation

would be considered ‘‘small’’ based on

its North American Industry

Classification System (NAICS) Code. For

Tree Nut Farming operations (NAICS

Code 111335) and Fruit and Tree Nut

Combination Farming operations

(NAICS Code 111336), an operation is

considered to be ‘‘small’’ if its annual

receipts total no more than $1 million.

This standard applies to U.S. pecan

producers.

Importers and first handlers of inshell

and shelled pecans (HTS Codes

0802901000 and 0802901500,

respectively) belong to the industry

classification of Postharvest Crop

Activities (NAICS Code 115114).

‘‘Postharvest crop activities’’ include

nut hulling and shelling, sorting,

grading, packing, and cooling. An

operation that meets this definition is

considered to be ‘‘small’’, per the SBA,

if its annual receipts equal no more than

$30 million. Table 12 depicts the

number of pecan producers, importers,

and handlers that would be considered

small under these SBA standards.

According to the 2017 Census of

Agriculture, published by NASS in

2019, there were 15,608 farms with

pecan bearing acreage. Of these 15,608

farms, 440 sold pecans whose market

value met or exceeded $1 million. Based

on these figures, 97 percent of U.S.

pecan producers are considered to be

‘‘small’’ under the SBA standards.

USDA recognizes the potential

inclusion in its count of ‘‘small’’ farms

those farms whose sales of pecans were

exactly $1 million in market value;

however, USDA lacks the data to

remedy this, and the number of farms

who meet this criterion is likely quite

small.

According to data from Customs,

there were 190 importers of inshell and

shelled pecans from 2014 to 2019. Of

these, four importers had a six-year

average sales value of pecans which

exceeded $30 million. The portion of

pecan importers that would be

considered to be ‘‘small’’ under the SBA

standards, therefore, is 98 percent.

The definition of a ‘‘small’’ importer

also applies to a first handler; that is,

annual receipts which exceed $30

million. According to the American

Pecan Council (APC), there were 104

first handlers who reported pecans

handled in crop year 2018. Of these, the

APC estimates that about 75 percent

recorded annual receipts exceeding $30

million.

Of the 15,902 total entities expected

to be impacted by this action, including

producers, importers, and first handlers,

about 97 percent would be considered

to be ‘‘small’’ according to their

respective SBA size standards.

Compliance Requirements

This proposal would impose a

reporting and recordkeeping burden on

producers, importers, and first handlers

of pecans. Producers and importers who

domestically produce or import less

than 50,000 pounds of inshell pecans

(25,000 pounds of shelled pecans) on

average for four fiscal periods (the fiscal

period for which the exemption is

claimed and the previous three fiscal

periods) could submit to the Board an

application for exemption from paying

assessments. Of the 15,168 domestic

producers considered to be small under

SBA standards, 14,618 of them, or 96

percent, produced less than 50,000

pounds, inshell, of pecans, and would

be exempt from assessment. Of the 186

importers considered to be small under

SBA standards, 119 of them, or 64

percent, imported less than 50,000

pounds, inshell of pecans, and would

also be exempt from assessment. The

reporting and recordkeeping burden to

file an application for exemption from

assessment would impact a total of

14,737 producers and importers

considered to be small under their

respective SBA size standards.

Importers, and first handlers, who

collect the assessments from producers,

would be required to file a report listing

pecans imported or received from each

producer. This report would place a

reporting and recordkeeping burden on

a total of 149 importers and first

handlers considered to be small under

their SBA size standard of annual

receipts of no more than $30 million.

These forms are being submitted to

OMB for approval under OMB Control

No. 0581–NEW. Specific burdens for the

forms are detailed later in this

document in the section titled

Paperwork Reduction Act. As with all

Federal promotion programs, reports

and forms are periodically reviewed to

reduce information requirements and

duplication by industry and public

sector agencies.

Alternatives To Minimize Impacts of

the Rule

Regarding alternatives, USDA

considered de minimis exemptions of

30 acres of pecans, 1,000 pounds,

inshell, of pecan volume, and $1 million

in annual pecan sales receipts. These

alternatives, which are fully discussed

in the section titled De Minimis, were

rejected in favor of the industry-

proposed de minimis exemption of

50,000 pounds, inshell, or 25,000

pounds, shelled. USDA also considered

the alternative of no action; that is, the

status quo. This alternative, however,

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EP22SE20.036</GPH>

Table

12.

Entities

Considered

Small

According

to

SBA

Size

Standards

Entities

Total

Small

Large

Producers

1

15,608

15,168

440

Importers

2

190

186

4

Handlers

3

104

78

26

Total

15,902 15,432

470

Sources:

1

NASS

2017

Census

of

Agriculture;

2

Customs

and

Border

Protection,

2014-2019

average;

3

American

Pecan

Council,

2018

crop

year.

Notes:

1

Small

is

annual

receipts

no

greater

than

$1

million;

2'3

Small

is

annual

receipts

no

greater

than

$30

million.

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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

would leave the pecan industry without

the tools of a research and promotion

program to strengthen the position of

pecans in the marketplace, maintain and

expand markets for pecans, and develop

new uses for pecans. In place of a

research and promotion program, the

NPF discussed amending the

Agricultural Marketing Agreement Act

of 1937, which provides authority for

the pecan marketing order. The NPF

stated in its proposal for a pecan

research and promotion program that it

decided not to move forward with this

alternative due to the time and costs

involved in amending U.S. law.

Outreach

Regarding outreach efforts, NPF

conducted sessions earlier in 2020

throughout the United States in

different States and regions. Many were

held in conjunction with regional and

state organization meetings where both

pecan producers and importers

participated. They also presented at the

National Pecan Shellers Association

(NPSA) mid-winter conference. NPSA

supports and promotes the interest of

pecan shellers and the global industry.

Approximately 13 sessions were held

across the United States. NPF also had

information regarding the proposed

program published in April 2020

editions of the ‘‘The Pecan Grower’’ and

‘‘Pecan South’’ magazines. ‘‘The Pecan

Grower’’ is the official publication of the

Georgia Pecan Growers Association,

with nearly three-thousand subscribers

including growers, researchers,

extension agents and agribusinesses.

‘‘Pecan South’’ is a magazine for

growers, processors, commercial

vendors, and those interested in pecans.

It provides to its forty-six hundred plus

subscribers U.S. pecan production

information; industry news and events;

and market-related issues, both

domestic and international. In the

articles, NPF elaborated the work it has

been doing to establish a research and

promotion program for pecans that

would assess producers and importers.

AMS is committed to complying with

the E-Government Act, to promote the

use of the internet and other

information technologies to provide

increased opportunities for citizen

access to Government information and

services, and for other purposes.

Paperwork Reduction Act

In accordance with the Paperwork

Reduction Act of 1995 (44 U.S.C.

Chapter 35), AMS announces its

intention to request an approval of a

new information collection and

recordkeeping requirements for the

proposed pecan program.

Title: Advisory Committee or

Research and Promotion Background

Information.

OMB Number for background form

AD–755: (Approved under OMB No.

0505–0001).

Expiration Date of Approval: 03/31/

2022.

Title: National Research, Promotion,

and Consumer Information Programs.

Expiration Date of Approval: 3 years

from approval date.

Type of Request: New information

collection for research and promotion

programs.

Abstract: The information collection

requirements in the request are essential

to carry out the intent of the 1996 Act.

The information collection concerns a

proposal received by USDA for a

national research and promotion

program for the pecan industry. The

program would be financed by an

assessment on pecan producers and

importers and would be administered

by a board of industry members selected

by the Secretary. The program would

provide for an exemption for producers

who produce domestically and

importers that import less than 50,000

pounds of inshell pecans (25,000

pounds of shelled pecans) on average

for four fiscal periods (the fiscal period

for which the exemption is claimed and

the previous three fiscal periods). A

referendum would be held among

eligible producers and importers to

determine whether they favor

implementation of the program not later

than three years after assessments first

begin under the Order. The purpose of

the program would be to strengthen the

position of pecans in the marketplace,

maintain and expand markets for

pecans, and develop new uses for

pecans within the United States.

In summary, the information

collection requirements under the

program concern Board nominations,

exemption applications, the collection

and refund of assessments, and

referenda. For Board nominations,

producers and importers interested in

serving on the Board would be asked to

submit a ‘‘Nomination Form’’ to the

Board indicating their desire to serve or

to nominate another industry member to

serve on the Board. Interested persons

could also submit a background

statement outlining qualifications to

serve on the Board. Except for the initial

Board nominations, producers and

importers would have the opportunity

to submit a ‘‘Nomination Ballot’’ to the

Board where they would vote for

candidates to serve on the Board.

Nominees would also have to submit a

background information form, ‘‘AD–

755,’’ to the Secretary to ensure they are

qualified to serve on the Board.

Organizations representing importers

would be able to be certified by the

Secretary and have an opportunity to

nominate importer members. Those

such organizations would submit form

‘‘Application for Certification of

Organization.’’

Regarding assessments, producers and

importers who domestically produce

and import less than 50,000 pounds of

inshell pecans (25,000 pounds of

shelled pecans) on average for four

fiscal periods (the fiscal period for

which the exemption is claimed and the

previous three fiscal periods), would be

exempt from assessments. Producers or

importers would apply to the Board for

an exemption prior to the start of the

fiscal period. This would be an annual

exemption; entities would have to

reapply each year. Producers or

importers could submit a request,

‘‘Application for Exemption from

Assessments,’’ to the Board for an

exemption from paying assessments.

Producers and importers who would

qualify as ‘‘organic’’ or ‘‘100 percent

organic’’ under the NOP could submit

an ‘‘Organic Exemption Form’’ to the

Board and request an exemption from

assessments.

First handlers who receive

assessments from producers would be

asked to submit a ‘‘First Handler/

Importer Report’’ that would accompany

their assessments paid to the Board and

report the quantity of pecans received

during the applicable period, the

quantity for which assessments were

paid, contact information for whom they

collected the assessment, and the

country of export (for imports).

Additionally, only importers who pay

their assessments directly to the Board

would be required to submit a report. As

previously mentioned, the majority of

importer assessments would be

collected by Customs. Customs would

remit the funds to the Board and the

other information would be available

from Customs (i.e., country of export,

quantity of pecans imported).

Importers and producers who are

exempt and whose assessments were

collected, either by Customs or a first

handler, could also request a refund of

any assessments paid to the Board.

Producers and importers would also file

a form to request a refund of

assessments paid if the referendum fails

to pass. A referendum is proposed to be

conducted three years after the

assessments first begin to determine if

producers and importers favor

continuance of the Order.

Lastly, producers and importers

eligible to vote in a referendum would

have to complete a ballot to determine

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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

whether the research and promotion

program would continue.

Information collection requirements

that are included in this proposal

include:

(1) Nomination Form

Estimate of Burden: Public

recordkeeping burden for this collection

of information is estimated to average

0.25 hour per application.

Respondents: Producers and

importers.

Estimated Number of Respondents:

50.

Estimated Number of Responses per

Respondent: 1.

Estimated Total Annual Burden on

Respondents: 12.5 hours.

(2) Background Statement

Estimate of Burden: Public

recordkeeping burden for this collection

of information is estimated to average

0.25 hour per application.

Respondents: Producers and

importers.

Estimated Number of Respondents:

50.

Estimated Number of Responses per

Respondent: 1.

Estimated Total Annual Burden on

Respondents: 12.5 hours.

(3) Nomination Ballot

Estimate of Burden: Public

recordkeeping burden for this collection

of information is estimated to average

0.25 hour per application.

Respondents: Producers and

importers.

Estimated Number of Respondents:

900.

Estimated Number of Responses per

Respondent: 1.

Estimated Total Annual Burden on

Respondents: 225 hours.

(4) Background Information FormAD–

755 (OMB Form No. 0505–0001)

Estimate of Burden: Public reporting

for this collection of information is

estimated to average 0.5 hour per

response for each Board nominee.

Respondents: Producers and

importers.

Estimated Number of Respondents: 11

(34 for initial nominations to the Board,

0 for the second year, and up to 11

annually thereafter).

Estimated Number of Responses per

Respondent: 1 every 3 years. (0.3)

Estimated Total Annual Burden on

Respondents: 17 hours for the initial

nominations to the Board, 0 hours for

the second year of operation, and up to

5.5 hours annually thereafter.

(5) Application for Certification of

Organization

Estimate of Burden: Public reporting

burden for this collection of information

is estimated to average 0.25 hour.

Respondents: Importer organizations.

Estimated Number of Respondents: 5.

Estimated Number of Responses per

Respondent: 1.

Estimated Total Annual Burden on

Respondents: 2.5 hours.

(6) Application for Exemption From

Assessments

Estimate of Burden: Public reporting

burden for this collection of information

is estimated to average 0.25 hour per

producers or importer reporting on

pecans produced domestically or

imported. Upon approval of an

application, producers and importers

would receive exemption certification.

Respondents: Producers and

importers who produce or import less

than 50,000 pounds of inshell pecans

(25,000 pounds of shelled pecans) on

average for four fiscal periods (the fiscal

period for which the exemption is

claimed and the previous three fiscal

periods).

Estimated Number of Respondents:

14,737.

Estimated Number of Responses per

Respondent: 1.

Estimated Total Annual Burden on

Respondents: 3,684 hours.

(7) Organic Exemption Form

Estimate of Burden: Public

recordkeeping burden for this collection

of information is estimated to average

0.5 hours per exemption form.

Respondents: Organic producers and

importers.

Estimated Number of Respondents:

50.

Estimated Number of Responses per

Respondent: 1.

Estimated Total Annual Burden on

Respondents: 25 hours.

(8) First Handler/Importer Report

Estimate of Burden: Public reporting

burden for this collection of information

is estimated to average 0.5 hour per first

handler or importer.

Respondents: First handlers who

collect assessments from producers who

produce over 50,000 pounds of inshell

pecans (25,000 pounds of shelled

pecans) on average for four fiscal

periods (the fiscal period for which the

exemption is claimed and the previous

three fiscal periods) and importers that

do not remit through Customs.

Estimated Number of Respondents:

175.

Estimated Number of Responses per

Respondent: 12.

Estimated Total Annual Burden on

Respondents: 1,050 hours.

(9) Application for Reimbursement of

Assessments

Estimate of Burden: Public reporting

burden for this collection of information

is estimated to average 0.25 hour.

Respondents: Producers and

importers.

Estimated Number of Respondents:

170.

Estimated Number of Responses per

Respondent: 1.

Estimated Total Annual Burden on

Respondents: 42.5 hours.

(10) Application for Refund of

Assessments Paid From Escrow

Estimate of Burden: Public reporting

burden for this collection of information

is estimated to average 0.25 hour.

Respondents: Producers and

importers.

Estimated Number of Respondents:

900.

Estimated Number of Responses per

Respondent: 1.

Estimated Total Annual Burden on

Respondents: 225 hours.

(11) Referendum Ballot

Estimate of Burden: Public reporting

burden for this collection of information

is estimated to average 0.25 hour.

Respondents: Producers and

importers.

Estimated Number of Respondents:

900.

Estimated Number of Responses per

Respondent: 0.14 (after first referendum

they would occur once every 7 years).

Estimated Total Annual Burden on

Respondents: 31.50 hours.

(12) A Requirement To Maintain

Records Sufficient To Verify Reports

Submitted Under the Order

Estimate of Burden: Public

recordkeeping burden for keeping this

information is estimated to average 0.5

hours per record keeper maintaining

such records.

Recordkeepers: Producers, first

handlers and importers.

Estimated number of recordkeepers:

15,902.

Estimated total recordkeeping hours:

7,951 hours.

As noted above, under the proposed

program, producers through first

handlers, and importers would be

required to pay assessments and file

reports with and submit assessments to

the Board (importers through Customs).

While the proposed Order would

impose certain recordkeeping

requirements on producers, first

handlers, and importers, information

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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

required under the proposed Order

could be compiled from records

currently maintained. Such records

shall be retained for at least three years

beyond the fiscal period of their

applicability.

An estimated 15,902 respondents

would provide information to the Board

(15,608 producers, 104 first handlers,

and 190 importers). The estimated cost

of providing the information to the

Board by respondents would be

$630,994. This total has been estimated

by multiplying 13,278.5 hours by

($36.08 hourly wage × 0.317 benefits =

$11.44 (benefits) + $36.08 (wage) =

$47.52), $47.52 for the average mean

hourly earnings of producers and

importers plus benefits.

Data for computation of the hourly

rate for producers (Occupation Code 11–

9013: Farmers, Ranchers, and other

Agricultural Managers = $38.63) and

importers (Occupation Code 13–1020:

Buyers and Purchasing Agents = $33.53)

was obtained from the U.S. Department

of Labor’s Bureau of Labor Statistics.

The average of the producer and

importer wages is $36.08. Data for

computation of this hourly wage were

obtained from the U.S. Department of

Labor Statistics’ publication, ‘‘May 2019

National Occupation Employment and

Wage Estimates in the United States,’’

updated May 31, 2019. This publication

can also be found at the following

website: https://www.bls.gov/oes/

current/oes_nat.htm#45-0000. Data for

the benefit costs of 31.7 percent was

obtained by U.S. Department of Labor’s

Bureau of Labor Statistics press release

dated Dec. 14, 2018.

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 submitted under

other programs administered by USDA

and other state programs. USDA

currently oversees a marketing order for

pecans grown in Alabama, Arkansas,

Arizona, California, Florida, Georgia,

Kansas, Louisiana, Missouri,

Mississippi, North Carolina, New

Mexico, Oklahoma, South Carolina, and

Texas, which is authorized under the

Marketing Agricultural Agreement Act

of 1937. This program collects

information to facilitate the

administration of the program. The

information collected by the marketing

order has been carefully reviewed and it

was determined that the information

collected could not be utilized to

facilitate the administration of the

research and promotion program. 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 1996 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

would coincide with normal industry

business practices. 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. The requirement to keep

records for three years is consistent with

normal industry practices. In addition,

the information to be included on these

forms is not available from other sources

because such information relates

specifically to individual producers,

first handlers and importers who are

subject to the provisions of the 1996

Act. Therefore, there is no practical

method for collecting the required

information without the use of these

forms.

Request for Public Comment Under the

Paperwork Reduction Act

Comments are invited on: (a) Whether

the proposed collection of information

is necessary for the proper performance

of functions of the proposed Order and

USDA’s oversight of the proposed

Order, including whether the

information would have practical

utility; (b) the accuracy of USDA’s

estimate of the burden of the proposed

collection of information, including the

validity of the methodology and

assumptions used; (c) the accuracy of

USDA’s estimate of the principal

producing areas in the United States for

pecans; (d) the accuracy of USDA’s

estimate of the number of producers,

first handlers and importers of pecans

that would be covered under the

program; (e) ways to enhance the

quality, utility, and clarity of the

information to be collected; and (f) ways

to minimize the burden of the collection

of information on those who are to

respond, including the use of

appropriate automated, electronic,

mechanical, or other technological

collection techniques or other forms of

information technology.

Comments concerning the

information collection requirements

contained in this action should

reference OMB No. 0581–NEW. In

addition, the docket number, date, and

page number of this issue of the Federal

Register also should be referenced.

Comments should be sent to the same

addresses referenced in the

ADDRESSES

section of this rule.

OMB is required to make a decision

concerning the collection of information

contained in this rule between 30 and

60 days after publication. Therefore, a

comment to OMB is best assured of

having its full effect if OMB receives it

within 30 days of publication.

USDA made modifications to the

proponent’s proposal to conform with

other similar national research and

promotion programs implemented

under the 1996 Act.

While the proposal set forth below

has not received the approval of USDA,

it is determined that this proposed

Order is consistent with and would

effectuate the purposes of the 1996 Act.

A 60-day comment period is provided

to allow interested persons to respond

to this proposal. All written comments

received in response to this rule by the

date specified will be considered prior

to finalizing this action.

List of Subjects in 7 CFR Part 1223

Administrative practice and

procedure, Advertising, Consumer

information, Marketing agreements,

Pecan promotion, Reporting and

recordkeeping requirements.

■For the reasons set forth in the

preamble, it is proposed that title 7,

chapter XI of the Code of Federal

Regulations be amended by adding part

1223 to read as follows:

PART 1223—PECAN PROMOTION,

RESEARCH, AND INFORMATION

ORDER

Subpart A—Pecan Promotion, Research,

and Information Order

Definitions

Sec.

1223.1 Act.

1223.2 American Pecan Council.

1223.3 American Pecan Promotion Board.

1223.4 Conflict of interest.

1223.5 Customs or CBP.

1223.6 Department or USDA.

1223.7 First handler.

1223.8 Fiscal period.

1223.9 Importer.

1223.10 Information.

1223.11 Inshell pecans.

1223.12 Market or marketing.

1223.13 Order.

1223.14 Part and subpart.

1223.15 Pecans.

1223.16 Person.

1223.17 Producer.

1223.18 Programs, plans, and projects.

1223.19 Promotion.

1223.20 Research.

1223.21 Secretary.

1223.22 Shelled pecans.

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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

1223.23 Suspend.

1223.24 Terminate.

1223.25 United States.

American Pecan Promotion Board

1223.40 Establishment and membership.

1223.41 Nominations and appointments.

1223.42 Term of office.

1223.43 Vacancies.

1223.44 Procedure.

1223.45 Compensation and reimbursement.

1223.46 Powers and duties.

1223.47 Prohibited activities.

Expenses and Assessments

1223.50 Budget and expenses.

1223.51 Financial statements.

1223.52 Assessments.

1223.53 Exemption procedures.

1223.54 Refund escrow accounts.

Promotion, Research, and Information

1223.55 Programs, plans, and projects.

1223.56 Independent evaluation.

1223.57 Patents, copyrights, trademarks,

information, publications, and product

formulations.

Reports, Books, and Records

1223.60 Reports.

1223.61 Books and records.

1223.62 Confidential treatment.

Miscellaneous

1223.70 Right of the Secretary.

1223.71 Referenda.

1223.72 Suspension and termination.

1223.73 Proceedings after termination.

1223.74 Effect of termination or

amendment.

1223.75 Personal liability.

1223.76 Separability.

1223.77 Amendments.

1223.78 OMB control numbers.

Subpart B—Referendum Procedures

1223.100 General.

1223.101 Definitions.

1223.102 Voting.

1223.103 Instructions.

1223.104 Subagents.

1223.105 Ballots.

1223.106 Referendum report.

1223.107 Confidential information.

Subpart C—Administrative Provisions

1223.520 Late payment and interest charges

for past due assessments.

Authority: 7 U.S.C. 7411–7425; 7 U.S.C.

7401.

Subpart A—Pecan Promotion,

Research, and Information Order

Definitions

§ 1223.1 Act.

Act means the Commodity Promotion,

Research, and Information Act of 1996

(7 U.S.C. 7411–7425), and any

amendments thereto.

§ 1223.2 American Pecan Council.

American Pecan Council or APC

means that governing body of the

Federal Marketing Order established

pursuant to 7 CFR part 986 unless

otherwise noted.

§ 1223.3 American Pecan Promotion

Board.

American Pecan Promotion Board or

the Board means the administrative

body established pursuant to § 1223.40.

§ 1223.4 Conflict of interest.

Conflict of interest means a situation

in which a member or employee of the

Board 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.

§ 1223.5 Customs or CBP.

Customs or CBP means Customs and

Border Protection, an agency of the

United States Department of Homeland

Security.

§ 1223.6 Department or USDA.

Department or USDA means the U.S.

Department of Agriculture, or any

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.

§ 1223.7 First handler.

First handler means any person who

receives, shells, cracks, accumulates,

warehouses, roasts, packs, sells,

consigns, transports, exports, or ships

(except as a common or contract carrier

of pecans owned by another person), or

in any other way puts inshell or shelled

pecans in the stream of commerce. The

term first handler includes a producer

who handles or markets pecans of the

producer’s own production.

§ 1223.8 Fiscal period.

Fiscal period means October 1 to

September 30, or such other period as

recommended by the Board and

approved by the Secretary.

§ 1223.9 Importer.

Importer means any person who

imports pecans into the United States as

a principal or as an agent, broker, or

consignee of any person who produces

or handles pecans outside of the United

States for sale in the United States, and

who is listed in the import records as

the importer of record for such pecans.

§ 1223.10 Information.

Information means information and

programs that are designed to increase

efficiency in processing and to develop

new markets, marketing strategies,

increase market efficiency, and

activities that are designed to enhance

the image of pecans on a national or

international basis. These include:

(a) Consumer information, which

means any action taken to provide

information to, and broaden the

understanding of, the general public

regarding the consumption, use,

nutritional attributes, and care of

pecans; and

(b) Industry information, which

means information and programs that

will lead to the development of new

markets, new marketing strategies, or

increased efficiency for the pecan

industry, and activities to enhance the

image of the pecan industry.

§ 1223.11 Inshell pecans.

Inshell pecans are nuts whose kernel

is maintained inside the shell.

§ 1223.12 Market or marketing.

(a) Marketing means the sale or other

disposition of pecans in any channel of

commerce.

(b) To market means to sell or

otherwise dispose of pecans in

interstate, foreign, or intrastate

commerce.

§ 1223.13 Order.

Order means an order issued by the

Secretary under section 514 of the Act

that provides for a program of generic

promotion, research, and information

regarding agricultural commodities

authorized under the Act.

§ 1223.14 Part and subpart.

This part is comprised of all rules,

regulations, and supplemental orders

issued pursuant to the Act and the

Order. The Pecan Promotion, Research,

and Information Order comprises

subpart A of this part.

§ 1223.15 Pecans.

Pecans means and includes any and

all varieties or subvarieties, inshell or

shelled, of the Genus, species: Carya

illinoinensis grown or imported into the

United States.

§ 1223.16 Person.

Person means any individual, group

of individuals, partnership, corporation,

association, cooperative, or any other

legal entity.

§ 1223.17 Producer.

Producer is synonymous with grower

and means any person engaged in the

production and sale of pecans in the

United States who owns, or who shares

in the ownership and risk of loss of such

pecans.

§ 1223.18 Programs, plans, and projects.

Programs, plans, and projects mean

those research, promotion, and

information programs, plans, or projects

established pursuant to this subpart.

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§ 1223.19 Promotion.

Promotion means any action taken to

present a favorable image of pecans to

the general public and the food industry

for the purpose of improving the

competitive position of pecans both in

the United States and abroad and

stimulating the sale of pecans. This

includes paid advertising and public

relations.

§ 1223.20 Research.

Research means any type of test,

study, or analysis designed to advance

the image, desirability, use,

marketability, production, product

development, or quality of pecans,

including research relating to

nutritional value, cost of production,

new product development, varietal

development, nutritional value, health

research, and marketing of pecans.

§ 1223.21 Secretary.

Secretary means the Secretary of

Agriculture of the United States, or any

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.

§ 1223.22 Shelled pecans.

Shelled pecans are pecans whose

shells have been removed leaving only

edible kernels, kernel pieces or pecan

meal. One pound of shelled pecans is

the equivalent of two pounds inshell

pecans.

§ 1223.23 Suspend.

Suspend means to issue a rule under

section 553 of title 5, U.S.C., to

temporarily prevent the operation of an

order or part thereof during a particular

period of time specified in the rule.

§ 1223.24 Terminate.

Terminate means to issue a rule under

section 553 of title 5, U.S.C., to cancel

permanently the operation of an order

or part thereof beginning on a date

certain specified in the rule.

§ 1223.25 United States.

United States means collectively the

50 states, the District of Columbia, the

Commonwealth of Puerto Rico, and the

territories and possessions of the United

States.

American Pecan Promotion Board

§ 1223.40 Establishment and membership.

(a) Establishment of the American

Pecan Promotion Board. There is hereby

established an American Pecan

Promotion Board, called the Board in

this part, comprised of seventeen (17)

members, appointed by the Secretary

from nominations as follows:

(1) Ten (10) producer members: Three

(3) each from the Eastern Region and

Central Region and four (4) from the

Western Region as follows:

(i) Eastern Region shall mean the

States of Alabama, Florida, Georgia,

North Carolina, South Carolina plus any

states in the United States, the majority

of whose land mass is in the Eastern

Time Zone, plus any U.S. territories in

the Atlantic Ocean;

(ii) Central Region shall mean the

States of Arkansas, Kansas, Louisiana,

Mississippi, Missouri, Oklahoma, Texas

plus any states in the United States, the

majority of whose land mass is in the

Central Time Zone; and

(iii) Western Region shall mean the

States of Arizona, California, New

Mexico plus any states in the United

States, the majority of whose land mass

is in the Mountain or Pacific Time

Zones, plus Alaska and Hawaii and any

U.S. territories in the Pacific Ocean.

(2) Seven (7) importers.

(b) Adjustment of membership. At

least once every five years, the Board

will review the geographical

distribution of United States production

of pecans and the quantity or value of

imports. The review will be conducted

through an audit of state crop

production and Customs figures and

Board assessment records. If warranted,

the Board will recommend to the

Secretary that the membership on the

Board be altered to reflect any changes

in the geographical distribution of

domestic pecan production and the

quantity or value of imports. If the level

of imports fluctuates versus domestic

pecan production, importer members

may be added to or reduced from the

Board.

(c) Board’s ability to serve the

diversity of the industry. When making

recommendations for appointments, the

industry should take into account the

diversity of the population served and

the knowledge, skills, and abilities of

the members to serve a diverse

population, size of the operations,

methods of production and distribution,

and other distinguishing factors to

ensure that the recommendations of the

Board take into account the diverse

interest of persons responsible for

paying assessments, and others in the

marketing chain, if appropriate.

§ 1223.41 Nominations and appointments.

(a) Initial nominations for producers

will be submitted to the Secretary by the

American Pecan Council (APC), or the

Department if appropriate. Before

considering any nominations, the APC

shall publicize the nomination process,

using trade press or other means it

deems appropriate, to reach out to all

known producers for the U.S. market.

The APC may use regional caucuses,

mail or other methods to elicit potential

nominees. The APC shall submit the

nominations to the Secretary and

recommend two nominees for each

Board position specified in paragraph

(a)(1) of § 1223.40. The Department will

conduct initial nominations for the

importer members. The Secretary shall

appoint the members of the Board.

(b) Subsequent nominations shall be

conducted as follows:

(1) Nomination of producer members

will be conducted by the Board. The

Board staff will seek nominations for

each vacant producer seat from each

region from producers who have paid

their assessments to the Board in the

most recent fiscal period and who

produced more than 50,000 pounds of

inshell pecans (25,000 pounds of

shelled pecans) on average for four

fiscal periods (the fiscal period for

which nominations are being conducted

and the previous three fiscal periods).

Producers who produce pecans in more

than one region may seek nomination

only in the region in which they

produce the majority of their pecans.

Nominations will be submitted to the

Board office and placed on a ballot that

will be sent to producers in each region

for a vote. Producers may only vote in

the region in which they produce the

majority of their pecans. The votes shall

be tabulated for each region with the

nominee receiving the highest number

of votes at the top of the list in

descending order by vote. Two

candidates for each position shall be

submitted to the Secretary; and

(2) Nomination of importer members

will be conducted by the Board. All

qualified national organizations

representing importer interests will

have the opportunity to nominate

members to serve on the Board. If the

Secretary determines that there are no

qualified national organizations

representing importer interests,

individual importers who have paid

assessments to the Board in the most

recent fiscal period and imported more

than 50,000 pounds of inshell pecans

(25,000 pounds of shelled pecans) on

average for four fiscal periods (the fiscal

period for which nominations are being

conducted and the previous three fiscal

periods) may submit nominations. The

names of importer nominees shall be

placed on a ballot and mailed to

importers for a vote. The votes shall be

tabulated with the nominee receiving

the highest number of votes at the top

of the list in descending order by vote.

Two candidates for each importer Board

position shall be submitted to the

Secretary. To be certified by the

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Secretary as a qualified national

organization representing importer

interests, an organization must meet the

following criteria, as evidenced by a

report submitted by the organization to

the Secretary:

(i) The organization’s voting

membership must be comprised

primarily of importers of pecans;

(ii) The organization has a history of

stability and permanency and has been

in existence for more than one year;

(iii) The organization must derive a

portion of its operating funds from

importers;

(iv) The organization must

demonstrate it is willing and able to

further the Act and Order’s purposes;

and

(v) To be certified by the Secretary as

a qualified national organization

representing importer interests, an

organization must agree to take

reasonable steps to publicize to non-

members the availability of open Board

importer positions.

(c) Producer and importer nominees

may provide the Board a short

background statement outlining their

qualifications to serve on the Board.

(d) Nominees must be in compliance

with the applicable provisions of this

subpart.

(e) The Board must submit

nominations to the Secretary at least six

months before the new Board term

begins. The Secretary shall appoint the

members of the Board.

(f) No two members shall be

employed by a single corporation,

company, partnership, or any other legal

entity.

(g) The Board may recommend to the

Secretary modifications to its

nomination procedures as it deems

appropriate. Any such modifications

shall be implemented through

rulemaking by the Secretary.

§ 1223.42 Term of office.

(a) With the exception of the initial

Board, each Board member will serve a

three-year term or until the Secretary

selects his or her successor. Each term

of office shall begin on October 1 and

end on September 30. No member may

serve more than two consecutive terms,

excluding any term of office less than

three years.

(b) For the initial board, the terms of

Board members shall be staggered for

two, three, and four years.

Determination of which of the initial

members shall serve a term of two,

three, or four years shall be determined

at random. Those members serving an

initial term of two, three, or four years

may serve one successive three-year

term.

§ 1223.43 Vacancies.

(a) In the event that any member of

the Board ceases to work for or be

affiliated with the category of members

from which the member was appointed

to the Board, such 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 the

recommendation of the Board shows

adequate cause, the Secretary shall

remove such member from office.

(c) Without recommendation of the

Board, a member may be removed by

the Secretary upon showing of adequate

cause, including the continued failure

by a member to submit reports or remit

assessments required under this part, if

the Secretary determines that such

member’s continued service would be

detrimental to the achievement of the

purposes of the Act.

(d) Should the position of a member

become vacant, successors for the

unexpired terms of such member shall

be appointed in the manner specified in

§§ 1223.40 and 1223.41, except that said

nomination and replacement shall not

be required if said unexpired terms are

less than six months.

§ 1223.44 Procedure.

(a) At a Board meeting, it will be

considered a quorum when a majority of

members are present.

(b) At the start of each fiscal period,

the Board will select a chairperson and

vice chairperson who will conduct

meetings and appoint committee

membership throughout that period.

(c) All Board and committee members

will receive a minimum of 10 days

advance notice of all Board and

committee meetings, unless an

emergency meeting is declared by the

Chairperson.

(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) 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. Committees may

also consist of individuals other than

Board members and such individuals

may vote in committee meetings. These

committee members shall be appointed

by the Chairperson and shall serve

without compensation but shall be

reimbursed for reasonable travel

expenses, as approved by the Board.

(f) 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 any other means of

communication, and all telephone votes

shall be confirmed promptly in writing.

In that event, all members and the

Secretary must be notified and all

members must be provided the

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

Board minutes.

(g) There shall be no voting by proxy.

(h) The Chairperson shall be a voting

member.

(i) The organization of the Board and

the procedures for the conducting of

meetings of the Board shall be in

accordance with its bylaws, which shall

be established by the Board and

approved by the Secretary.

§ 1223.45 Compensation and

reimbursement.

The members of the Board when

acting as members, shall serve without

compensation but shall be reimbursed

for reasonable travel expenses, as

approved by the Board, incurred by

them in the performance of their duties

as Board members.

§ 1223.46 Powers and duties.

The Board shall have the following

powers and duties:

(a) To administer this subpart 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 this subpart,

including activities authorized to be

carried out under this subpart;

(c) To meet, organize, and select from

among the members of the Board a

chairperson, other officers, committees,

and subcommittees, as the Board

determines to be appropriate;

(d) To employ persons, other than the

Board members, or to enter into

contracts, other than with Board

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, or to determine the

contractual terms of such parties;

(e) To develop programs and projects,

and enter into contracts or agreements,

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which must be approved by the

Secretary before becoming effective, for

the development and carrying out of

programs or projects of research,

information, or promotion, and the

payment of costs thereof with funds

collected pursuant to this subpart. Each

contract or agreement shall provide that

any person who enters into a contract or

agreement with the Board shall develop

and submit to the Board a proposed

activity; keep accurate records of all of

its transactions relating to the contract

or agreement; account for funds

received and expended in connection

with the contract or agreement; make

periodic reports to the Board of

activities conducted under the contract

or agreement; and make such other

reports available as the Board or the

Secretary considers relevant. Any

contract or agreement shall provide that:

(1) The contractor or agreeing party

shall develop and submit to the Board

a program, plan, or project together with

a budget or budgets that shall show the

estimated cost to be incurred for such

program, plan, or project;

(2) The contractor or agreeing party

shall keep accurate records of all its

transactions and make periodic reports

to the Board of activities conducted,

submit accounting for funds received

and expended, and make such other

reports as the Secretary or the Board

may require;

(3) The Secretary may audit the

records of the contracting or agreeing

party periodically; and

(4) Any subcontractor who enters into

a contract with a Board contractor and

who receives or otherwise uses funds

allocated by the Board shall be subject

to the same provisions as the contractor;

(f) To prepare and submit for approval

of the Secretary fiscal period budgets in

accordance with § 1223.50;

(g) To invest assessments collected

under this part in accordance with

§ 1223.50;

(h) 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;

(i) To cause its books to be audited by

a competent auditor at the end of each

fiscal period and at such other times as

the Secretary may request, and to

submit a report of the audit directly to

the Secretary;

(j) To give the Secretary the same

notice of meetings of the Board as is

given to members in order that the

Secretary’s representative(s) may attend

such meetings, and to keep and report

minutes of each meeting of the Board to

the Secretary;

(k) To act as intermediary between the

Secretary and any producer, first

handler, or importer;

(l) To furnish to the Secretary any

information or records that the Secretary

may request;

(m) To receive, investigate, and report

to the Secretary complaints of violations

of this subpart;

(n) To recommend to the Secretary

such amendments to this subpart as the

Board considers appropriate; and

(o) To work to achieve an effective,

continuous, and coordinated program of

promotion, research, consumer

information, evaluation, and industry

information designed to strengthen the

pecan industry’s position in the

marketplace; maintain and expand

existing markets and uses for pecans;

and to carry out programs, plans, and

projects designed to provide maximum

benefits to the pecan industry.

§ 1223.47 Prohibited activities.

The Board may not engage in, and

shall prohibit the employees and agents

of the Board from engaging in:

(a) Any action that would be a conflict

of interest; and

(b) Using funds collected by the Board

under this subpart to undertake any

action for the purpose of influencing

legislation or governmental action or

policy, by local, state, national, and

foreign governments, other than

recommending to the Secretary

amendments to this subpart.

(c) No program, plan, or project

including advertising shall be false or

misleading or disparaging to another

agricultural commodity. Pecans of all

origins shall be treated equally.

Expenses and Assessments

§ 1223.50 Budget and expenses.

(a) At least 60 days prior to the

beginning of each fiscal period, and as

may be necessary thereafter, the Board

shall prepare and submit to the

Secretary a budget for the fiscal period

covering its anticipated expenses and

disbursements in administering this

subpart. Each such budget shall include:

(1) A statement of objectives and

strategy for each program, plan, or

project;

(2) A summary of anticipated revenue,

with comparative data for at least one

preceding year (except for the initial

budget);

(3) A summary of proposed

expenditures for each program, plan, or

project; and

(4) Staff and administrative expense

breakdowns, with comparative data for

at least one preceding year (except for

the initial budget).

(b) Each budget shall provide

adequate funds to defray its proposed

expenditures and to provide for a

reserve as set forth in this subpart.

(c) Subject to this section, any

amendment or addition to an approved

budget must be approved by the

Secretary, including shifting funds from

one program, plan, or project to another.

Shifts of funds which do not cause an

increase in the Board’s approved budget

and which are consistent with

governing bylaws need not have prior

approval by the Secretary.

(d) The Board is authorized to incur

such expenses, including provision for

a reasonable reserve, 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.

(e) With 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 year of operation of

the Board.

(f) The Board may accept voluntary

contributions, but these shall only be

used to pay expenses incurred in the

conduct of programs, plans, and

projects. Such contributions shall be

free from any encumbrance by the donor

and the Board shall retain complete

control of their use.

(g) The Board may also receive funds

provided through the Department’s

Foreign Agricultural Service or from

other sources, for authorized activities.

(h) The Board shall reimburse the

Secretary for all expenses incurred by

the Secretary in the implementation,

administration, and supervision of this

subpart, including all referendum costs

in connection with this subpart.

(i) For fiscal periods beginning three

(3) or more years after the date of the

establishment of the Board, the Board

may not expend for administration,

maintenance, and functioning of the

Board in any fiscal period an amount

that exceeds 15 percent of the

assessments and other income received

by the Board for that fiscal period.

Reimbursements to the Secretary

required under paragraph (h) of this

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section are excluded from this

limitation on spending.

(j) The Board may establish an

operating monetary reserve and may

carry over to subsequent fiscal periods

excess funds in any reserve so

established: Provided that the funds in

the reserve do not exceed the last two

fiscal periods’ budget of expenses.

Subject to approval by the Secretary,

such reserve funds may be used to

defray any expenses authorized under

this part.

(k) Pending disbursement of

assessments and all other revenue under

a budget approved by the Secretary, the

Board may invest assessments and all

other revenues collected under this part

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) Interest bearing accounts or

certificates of deposit of financial

institutions that are members of the

Federal Reserve System;

(4) Obligations fully guaranteed as to

principal interest by the United States;

or

(5) Other investments as authorized

by the Secretary.

§ 1223.51 Financial statements.

(a) The Board shall prepare and

submit financial statements to the

Secretary on a monthly or quarterly

basis or at any other time as requested

by the Secretary. Each such financial

statement shall include, but not be

limited to, a balance sheet, income

statement, and expense budget. The

expense budget shall show expenditures

during the time period covered by the

report, year-to-date expenditures, and

the unexpended budget.

(b) Each financial statement shall be

submitted to the Secretary within 30

days after the end of the time period to

which it applies.

(c) The Board shall submit annually to

the Secretary an annual financial

statement within 90 days after the end

of the fiscal period to which it applies.

§ 1223.52 Assessments.

(a) The funds to cover the Board’s

expenses shall be paid from assessments

on producers and importers, other

income of the Board, and other funds

available to the Board including those

collected pursuant to § 1223.57 and

subject to the limitations contained in

§ 1223.57.

(b) Each producer shall pay an

assessment per pound of pecans

produced in the United States. The

collection of assessments on pecans

produced in the United States will be

the responsibility of the first handler

receiving the pecans from producers. In

the case of the producer acting as its

own first handler, the producer will be

required to collect and remit its

individual assessments.

(1) First handlers may remit

assessments to a third-party collection

agent under this subpart.

(2) First handlers may also remit

assessments directly to the Board.

(c) Such assessments shall be levied at

$0.02 per pound on all inshell pecans

and $0.04 per pound on all shelled

pecans. The assessment rate may be

reviewed and modified with the

approval of the Secretary. A change in

the assessment rate is subject to

rulemaking by the Secretary.

(d) All assessment payments and

reports will be submitted to the office of

the Board. All assessment payments for

a fiscal period are to be received no later

than the 10th of the month following the

end of the previous month. A late

payment charge shall be imposed on

any producer and importer who fails to

remit to the Board, the total amount for

which any such producer and importer

is liable on or before the due date

established by the Board on forms

approved by the Secretary. In addition

to the late payment charge, an interest

charge shall be imposed on the

outstanding amount for which the

producer and importer is liable. The rate

of interest shall be prescribed in

regulations issued by the Secretary.

(e) Each importer of pecans shall pay

an assessment to the Board on pecans

imported for marketing in the United

States, through Customs.

(1) The assessment rate for imported

pecans shall be the same or equivalent

to the rate for pecans produced in the

United States.

(2) The import assessment shall be

uniformly applied to imported pecans

that are identified by the number

0802.90.10.00 and 0802.90.15.00 in the

Harmonized Tariff Schedule (HTS) of

the United States or any other numbers

used to identify pecans in that schedule.

(3) In the event that any HTS number

is subject to assessment is changed and

such change is merely a replacement of

a previous number and has no impact

on the description of pecans, assessment

will continue to be collected based on

the new numbers.

(4) The assessment due on imported

pecans shall be paid when they enter, or

are withdrawn from warehouse, for

consumption in the United States.

(5) If Customs does not collect an

assessment from an importer, the

importer is responsible for paying the

assessment directly to the Board no later

than the 10th of the month following the

end of the previous month after the

assessed pecans were imported into the

United States.

(f) Persons failing to remit total

assessments due in a timely manner

may also be subject to actions under

Federal debt collection procedures.

(g) The Board may authorize other

organizations to collect assessments on

its behalf with the approval of the

Secretary.

§ 1223.53 Exemption procedures.

(a) De minimis. An exemption from

payment of assessments as provided in

§ 1223.52, shall be provided to

producers that domestically produce

and importers that import less than

50,000 pounds of inshell pecans (25,000

pounds of shelled pecans) on average

for four fiscal periods (the fiscal period

for which the exemption is claimed and

the previous three fiscal periods) as

follows:

(1) Any producer who desires to claim

an exemption from assessments shall

file an application on a form provided

by the Board, for a certificate of

exemption for each fiscal period

claiming an exemption. Such producer

shall certify that it will domestically

produce less than 50,000 pounds of

inshell pecans (25,000 pounds of

shelled pecans) on average for four

fiscal periods (the fiscal period for

which the exemption is claimed and the

previous three fiscal periods). It is the

responsibility of the producer to retain

a copy of the certificate of exemption.

(2) Any importer who desires to claim

an exemption from assessments shall

file an application on a form provided

by the Board, for a certificate of

exemption for each fiscal period

claiming an exemption. Such importer

shall certify that it will import less than

50,000 pounds of inshell pecans (25,000

pounds of shelled pecans) on average

for four fiscal periods (the fiscal period

for which the exemption is claimed and

the previous three fiscal periods). It is

the responsibility of the importer to

retain a copy of the certificate of

exemption.

(3) On receipt of an exemption

application, the Board shall determine

whether an exemption may be granted

for that fiscal period. The Board will

then issue, if deemed appropriate, a

certificate of exemption to the producer

or importer which is eligible to receive

one covering that fiscal period. The

Board may request persons applying for

the exemption to provide supporting

documentation, such as past sales

receipts or import data.

(4) The Board, with the Secretary’s

approval, may require persons receiving

an exemption from assessments to

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provide to the Board reports on the

disposition of exempt pecans and, in the

case of importers, proof of payment of

assessments.

(5) The exemption will apply

immediately following the issuance of

the certificate of exemption.

(6) Producers and importers who

received an exemption certificate from

the Board but domestically produced or

imported more than 50,000 pounds of

inshell pecans (25,000 shelled of

pecans) on average for four fiscal

periods (the fiscal period for which the

exemption is claimed and the previous

three fiscal periods) during the fiscal

period shall pay the Board the

applicable assessments owed and

submit any necessary reports to the

Board pursuant to § 1223.60.

(b) Assessment refunds. Importers and

producers who are exempt from

assessment shall be eligible for a refund

of assessments collected, either by

Customs or a first handler. Requests for

such assessment refunds must be

submitted to the Board within 90 days

of the last day in the fiscal period when

assessments were collected on such

producer’s or importer’s pecans. No

interest will be paid on such

assessments. The Board shall refund

such assessments no later than 60

calendar days after receipt by the Board

of information justifying the exemption

from assessment.

(c) Organic. (1) A producer who

domestically produces pecans under an

approved National Organic Program (7

CFR part 205) (NOP) organic production

system plan may be exempt from the

payment of assessments under this part,

provided that:

(i) Only agricultural products certified

as ‘‘organic’’ or ‘‘100 percent organic’’

(as defined in the NOP) are eligible for

exemption;

(ii) The exemption shall apply to all

certified ‘‘organic’’ or ‘‘100 percent

organic’’ (as defined in the NOP)

products of a producer regardless of

whether the agricultural commodity

subject to the exemption is produced by

a person that also produces

conventional or nonorganic agricultural

products of the same agricultural

commodity as that for which the

exemption is claimed;

(iii) The producer maintains a valid

certificate of organic operation as issued

under the Organic Foods Production Act

of 1990 (7 U.S.C. 6501–6522) (OFPA)

and the NOP regulations issued under

OFPA (7 CFR part 205); and

(iv) Any producer so exempted shall

continue to be obligated to pay

assessments under this part that are

associated with any agricultural

products that do not qualify for an

exemption under this section.

(2) To apply for exemption under this

section, an eligible producer shall

submit a request to the Board on an

Organic Exemption Request Form (Form

AMS–15) at any time during the fiscal

period initially, and annually thereafter

on or before the start of the fiscal period,

for as long as the producer continues to

be eligible for the exemption.

(3) A producer request for exemption

shall include the following:

(i) The applicant’s full name,

company name, address, telephone and

fax numbers, and email address;

(ii) Certification that the applicant

maintains a valid certificate of organic

operation issued under the OFPA and

the NOP;

(iii) Certification that the applicant

produces organic products eligible to be

labeled ‘‘organic’’ or ‘‘100 percent

organic’’ under the NOP;

(iv) A requirement that the applicant

attach a copy of their certificate of

organic operation issued by a USDA-

accredited certifying agent;

(v) Certification, as evidenced by

signature and date, that all information

provided by the applicant is true; and

(vi) Such other information as may be

required by the Board, with the

approval of the Secretary.

(4) If a producer complies with the

requirements of this section, the Board

will grant an assessment exemption and

issue a Certificate of Exemption to the

producer within 30 days. If the

application is disapproved, the Board

will notify the applicant of the reason(s)

for disapproval within the same

timeframe.

(5) An importer who imports pecans

that are eligible to be labeled as

‘‘organic’’ or ‘‘100 percent organic’’

under the NOP, or certified as ‘‘organic’’

or ‘‘100 percent organic’’ under a U.S.

equivalency arrangement established

under the NOP, may be exempt from the

payment of assessments. Such importer

may submit documentation to the Board

and request an exemption from

assessment on certified ‘‘organic’’ or

‘‘100 percent organic’’ pecans on an

Organic Exemption Request Form (Form

AMS–15) at any time initially, and

annually thereafter on or before the

beginning of the fiscal period, as long as

the importer continues to be eligible for

the exemption. This documentation

shall include the same information

required of a producer in paragraph

(c)(3) of this section. If the importer

complies with the requirements of this

section, the Board will grant the

exemption and issue a Certificate of

Exemption to the importer within the

applicable timeframe. Any importer so

exempted shall continue to be obligated

to pay assessments under this part that

are associated with any imported

agricultural products that do not qualify

for an exemption under this section.

(6) If Customs collects the assessment

on exempt product under paragraph

(c)(5) of this section that is identified as

‘‘organic’’ by a number in the

Harmonized Tariff Schedule, the Board

must reimburse the exempt importer the

assessments paid upon receipt of such

assessments from Customs. For all other

exempt organic product for which

Customs collects the assessment, the

importer may apply to the Board for a

reimbursement of assessments paid, and

the importer must submit satisfactory

proof to the Board that the importer

paid the assessment on exempt organic

product.

(7) The exemption will apply

immediately following the issuance of

the Certificate of Exemption.

§ 1223.54 Refund escrow accounts.

(a) The Board shall establish an

interest bearing escrow account with a

financial institution that is a member of

the Federal Reserve System and will

deposit into such account an amount

equal to 10 percent of the assessments

collected during the period beginning

on the effective date of the Order and

ending on the date the Secretary

announces the results of the required

referendum.

(b) If the Order is not approved by the

required referendum, the Board shall

promptly pay refunds of assessments to

all producers and importers that have

paid assessments during the period

beginning on the effective date of the

Order and ending on the date the

Secretary announces the results of the

required referendum in the manner

specified in paragraph (c) of this

section.

(c) If the amount deposited in the

escrow account is less than the amount

of all refunds that producers and

importers subject to this subpart have a

right to receive, the Board shall prorate

the amount deposited in such account

among all producers and importers who

desire a refund of assessments paid no

later than 90 days after the required

referendum results are announced by

the Secretary.

(d) Any producer or importer

requesting a refund shall submit an

application on the prescribed form to

the Board within 60 days from the date

the results of the required referendum

are announced by the Secretary. The

producer and importer shall also submit

documentation to substantiate that

assessments were paid. Any such

demand shall be made by such producer

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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Proposed Rules

or importer in accordance with the

provisions of this subpart and in a

manner consistent with the regulations

in this part.

(e) If the Order is approved by the

required referendum conducted under

§ 1223.71 then:

(1) The escrow account shall be

closed; and,

(2) The funds shall be available to the

Board for disbursement under § 1223.50.

Promotion, Research, and Information

§ 1223.55 Programs, plans, and projects.

(a) The Board shall receive and

evaluate, or on its own initiative

develop, and submit to the Secretary for

approval any program, plan, or project

authorized under this subpart. Such

programs, plans, or projects shall

provide for:

(1) The establishment, issuance,

effectuation, and administration of

appropriate programs for promotion,

research, and information, including

producer and consumer information,

with respect to pecans; and

(2) The establishment and conduct of

research with respect to the use,

nutritional value, sale, distribution, and

marketing of pecans, and the creation of

new products thereof, to the end that

the marketing and use of pecans may be

encouraged, expanded, improved, or

made more acceptable and to advance

the image, desirability, or quality of

pecans.

(b) No program, plan, or project shall

be implemented prior to its approval by

the Secretary. Once a program, plan, or

project is so approved, the Board shall

take appropriate steps to implement it.

(c) Each program, plan, or project

implemented under this subpart shall be

reviewed or evaluated periodically by

the Board to ensure that it contributes

to an effective program of promotion,

research, or information. If it is found by

the Board that any such program, plan,

or project does not contribute to an

effective program of promotion,

research, or information, then the Board

shall terminate such program, plan, or

project.

§ 1223.56 Independent evaluation.

The Board shall, not less often than

every five years, authorize and fund,

from funds otherwise available to the

Board, an independent evaluation of the

effectiveness of the Order and other

programs conducted by the Board

pursuant to the Act. The Board shall

submit to the Secretary, and make

available to the public, the results of

each periodic independent evaluation

conducted under this section.

§ 1223.57 Patents, copyrights, trademarks,

information, publications, and product

formulations.

Patents, copyrights, trademarks,

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, sales, leasing,

franchising, or other uses of such

patents, copyrights, trademarks,

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 by the Secretary. Upon

termination of this subpart, § 1223.73

shall apply to determine disposition of

all such property.

Reports, Books, and Records

§ 1223.60 Reports.

(a) Each first handler, producer, or

importer subject to this subpart shall be

required to provide to the Board

periodically such information as

required by the Board, with the

approval of the Secretary, which may

include but not be limited to the

following:

(1) First handler must report or

producer acting as its own first handler:

(i) Number of pounds handled;

(ii) Number of pounds on which an

assessment was collected;

(iii) Name, address and other contact

information from whom the first

handler has collected the assessments

on each pound handled; and

(iv) Date collection was made on each

pound handled.

(2) Unless provided by Customs,

importer must report:

(i) Number of pounds imported;

(ii) Number of pounds on which an

assessment was paid;

(iii) Name, address, and other contact

information of the importer; and

(iv) Date assessment was paid on each

pound imported.

(b) These reports shall accompany the

payment of the collected assessments.

§ 1223.61 Books and records.

Each producer, first handler, and

importer subject to this subpart shall

maintain and make available for

inspection by the Secretary such books

and records as are necessary to carry out

the provisions of this part, including

such records as are necessary to verify

any reports required. Such records shall

be retained for at least 3 years beyond

the fiscal period of their applicability.

§ 1223.62 Confidential treatment.

All information obtained from books,

records, or reports under the Act and

this part shall be kept confidential by all

persons, including all employees and

former employees of the Board, all

officers and employees and former

officers and employees of contracting

and subcontracting agencies or agreeing

parties having access to such

information. Such information shall not

be available to Board members,

producers, importers, or first handlers.

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 by them, and then only in a

judicial proceeding or administrative

hearing brought at the direction, or on

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 section

shall be deemed to prohibit:

(a) The issuance of general statements

based upon the reports of the number of

persons subject to this subpart or

statistical data collected therefrom,

which statements will not identify the

information furnished by any person;

and

(b) 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.

Miscellaneous

§ 1223.70 Right of the Secretary.

All fiscal matters, programs, plans, or

projects, rules or regulations, reports, or

other substantive actions proposed and

prepared by the Board shall be

submitted to the Secretary for approval.

§ 1223.71 Referenda.

(a) Required referendum. For the

purpose of ascertaining whether the

persons subject to this subpart favor the

continuation, suspension, amendment,

or termination of this subpart, the

Secretary shall conduct a referendum

among persons subject to assessments

under § 1223.52 who, during a

representative period determined by the

Secretary, have engaged in the

production or importation of pecans:

(1) The required referendum shall be

conducted not later than 3 years after

assessments first begin under the Order;

and

(2) The Order will be approved in a

referendum if a majority of producers

and importers vote for approval in the

referendum.

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(b) Subsequent referenda. The

Secretary shall conduct subsequent

referenda:

(1) For the purpose of ascertaining

whether producers and importers favor

the continuation, suspension, or

termination of the Order;

(2) Every seven years the Secretary

shall hold a referendum to determine

whether producers and importers of

pecans favor the continuation of the

Order. The Order shall continue if it is

favored by a majority of producers and

importers voting for approval in the

referendum who have been engaged in

the production or importation of pecans;

(3) At the request of the Board

established in this subpart;

(4) At the request of 10 percent or

more of the number of persons eligible

to vote in a referendum as set forth

under the Order; or

(5) At any time as determined by the

Secretary.

§ 1223.72 Suspension and termination.

(a) The Secretary shall suspend or

terminate this part or subpart or a

provision thereof if the Secretary finds

that this part or subpart or a provision

thereof obstructs or does not tend to

effectuate the purposes of the Act, or if

the Secretary determines that this part

or subpart or a provision thereof is not

favored by persons voting in a

referendum conducted pursuant to the

Act.

(b) The Secretary shall suspend or

terminate this subpart at the end of the

fiscal period whenever the Secretary

determines that its suspension or

termination is approved or favored by a

majority of producers and importers

voting for approval who, during a

representative period determined by the

Secretary, have been engaged in the

production or importation of pecans.

(c) If, as a result of a referendum the

Secretary determines that this subpart is

not approved, the Secretary shall:

(1) Not later than 180 days after

making the determination, suspend or

terminate, as the case may be, collection

of assessments under this subpart; and

(2) As soon as practical, suspend or

terminate, as the case may be, activities

under this subpart in an orderly

manner.

§ 1223.73 Proceedings after termination.

(a) Upon the termination of this

subpart, the Board shall recommend not

more than three of its members to the

Secretary 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 then in

the possession 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 pursuant to this

subpart;

(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 the

trustees, to such person or persons as

the Secretary may direct; and

(4) Upon request of the Secretary

execute such assignments or other

instruments necessary and appropriate

to vest in such person’s title and right

to all funds, property, and claims vested

in the Board or the trustees pursuant to

this subpart.

(c) Any person to whom funds,

property, or claims have been

transferred or delivered pursuant to this

subpart shall be subject to the same

obligations imposed upon the Board and

upon the trustees.

(d) Any residual funds not required to

defray the necessary expenses of

liquidation shall be turned over to the

Secretary to be disposed of, to the extent

practical, to the pecan producer

organizations in the interest of

continuing pecan promotion, research,

and information programs.

§ 1223.74 Effect of termination or

amendment.

Unless otherwise expressly provided

by the Secretary, the termination of this

part, or the issuance of any amendment

to this part, 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

part; or

(b) Release or extinguish any violation

of this part; or

(c) Affect or impair any rights or

remedies of the United States, or of the

Secretary or of any other persons, with

respect to any such violation.

§ 1223.75 Personal liability.

No member or employee 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 commission or

omission, as such member or employee,

except for acts of dishonesty or willful

misconduct.

§ 1223.76 Separability.

If any provision of this subpart is

declared invalid or the applicability

thereof to any person or circumstances

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.

§ 1223.77 Amendments.

Amendments to this subpart may be

proposed from time to time by the Board

or by any interested person affected by

the provisions of the Act, including the

Secretary.

§ 1223.78 OMB control numbers.

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 0581–NEW,

except for the Board nominee

background statement form which is

assigned OMB control number 0505–

0001.

Subpart B—Referendum Procedures

§ 1223.100 General.

Referenda to determine whether

eligible pecan producers and importers

favor the issuance, amendment,

suspension, or termination of the Pecan

Promotion, Research, and Information

Order shall be conducted in accordance

with this subpart.

§ 1223.101 Definitions.

(a) Administrator means the

Administrator of the Agricultural

Marketing Service, with power to

redelegate, or any officer or employees

of the U.S. Department of Agriculture to

whom authority has been delegated or

may hereafter be delegated to act in the

Administrator’s stead.

(b) Eligible importer means any

person who, during the representative

period, was subject to the Order and

required to pay assessments on pecans

imported into the United States.

(c) Eligible producer means any

person who, during the representative

period, was subject to the Order and

required to pay assessments on pecans

produced in the United States.

(d) Order means subpart A of this

part, the Pecan Promotion, Research,

and Information Order.

(e) Pecans means and includes any

and all varieties or subvarieties, inshell

and shelled, of Carya illinoinensis

grown or imported into the United

States.

(f) Person means any individual,

group of individuals, partnership,

corporation, association, cooperative, or

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any other legal entity. For the purpose

of this paragraph (f), the term

‘‘partnership’’ includes, but is not

limited to:

(1) A husband and a wife who have

title to, or leasehold interest in, a pecan

farm as tenants in common, joint

tenants, tenants by the entirety, or,

under community property laws, as

community property; and

(2) So-called ‘‘joint ventures’’ wherein

one or more parties to an agreement,

informal or otherwise, contributed land

and others contributed capital, labor,

management, or other services, or any

variation of such contributions by two

or more parties.

(g) Referendum agent or agent means

the individual or individuals designated

by the Secretary to conduct the

referendum.

(h) Representative period means the

period designated by the Secretary.

(i) United States means collectively

the 50 states, the District of Columbia,

the Commonwealth of Puerto Rico, and

the territories and possessions of the

United States.

§ 1223.102 Voting.

(a) Each person who is an eligible

producer or an eligible importer, as

defined in this subpart, at the time of

the referendum and during the

representative period, shall be entitled

to cast only one ballot in the

referendum. However, each producer in

a landlord-tenant relationship or a

divided ownership arrangement

involving totally independent entities

cooperating only to produce pecans, in

which more than one of the parties is a

producer, shall be entitled to cast one

ballot in the referendum covering only

such producer’s share of the ownership.

(b) Proxy voting is not authorized, but

an officer or employee of a corporate

producer or importer, or an

administrator, executor, or trustee or an

eligible entity may cast a ballot on

behalf of such person. Any individual

so voting in a referendum shall certify

that such individual is an officer or

employee of the eligible entity, or an

administrator, executive, or trustee of an

eligible entity and that such individual

has the authority to take such action.

Upon request of the referendum agent,

the individual shall submit adequate

evidence of such authority.

(c) All ballots are to be cast by mail,

overnight delivery, electronic mail,

facsimile, or by other means as

instructed by the Secretary.

§ 1223.103 Instructions.

The referendum agent shall conduct

the referendum, in the manner provided

in this section, under the supervision of

the Administrator. The Administrator

may prescribe additional instructions,

not inconsistent with the provisions in

this section, to govern the procedure to

be followed by the referendum agent.

Such agent shall:

(a) Determine the period during

which ballots may be cast.

(b) Provide ballots and related

material to be used in the referendum.

The ballot shall provide for recording

essential information, including that

needed for ascertaining whether the

person voting, or on whose behalf the

vote is cast, is an eligible voter.

(c) Give reasonable public notice of

the referendum:

(1) By utilizing available media or

public information sources, without

incurring advertising expense, to

publicize the dates, places, method of

voting, eligibility requirements, and

other pertinent information. Such

sources of publicity may include, but

are not limited to, print and radio; and

(2) By such other means as the agent

may deem advisable.

(d) Mail to eligible producers and

eligible importers whose names and

addresses are known to the referendum

agent, the instructions on voting, a

ballot, and a summary of the terms and

conditions of the proposed Order. No

person who claims to be eligible to vote

shall be refused a ballot.

(e) At the end of the voting period,

collect, open, number, and review the

ballots and tabulate the results in the

presence of an agent of a third party

authorized to monitor the referendum

process.

(f) Prepare a report on the referendum.

(g) Announce the results to the public.

§ 1223.104 Subagents.

The referendum agent may appoint

any individual or individuals necessary

or desirable to assist the agent in

performing the referendum agent’s

functions listed in this subpart. Each

individual so appointed may be

authorized by the agent to perform any

or all of the functions which, in the

absence of such appointment, shall be

performed by the agent.

§ 1223.105 Ballots.

The referendum agent and subagents

shall accept all ballots cast. However, if

the agent or subagent deems that a ballot

should be challenged for any reason, the

agent or subagent shall endorse above

their signature, on the ballot, a

statement to the effect that such ballot

was challenged, by whom challenged,

the reasons therefore, the results of any

investigations made with respect

thereto, and the disposition thereof.

Ballots invalid under this subpart shall

not be counted.

§ 1223.106 Referendum report.

Except as otherwise directed, the

referendum agent shall prepare and

submit to the Administrator a report on

the results of the referendum, the

manner in which it was conducted, the

extent and kind of public notice given,

and other information pertinent to the

analysis of the referendum and its

results.

§ 1223.107 Confidential information.

The ballots and other information or

reports that reveal, or tend to reveal, the

vote of any person covered under the

Act and the voting list shall be held

confidential and shall not be disclosed.

Subpart C—Administrative Provisions

§ 1223.520 Late payment and interest

charges for past due assessments.

(a) A late payment charge will be

imposed on any producer, first handler

or importer who fails to make timely

remittance to the Board of the total

assessments for which they are liable.

The late payment will be imposed on

any assessments not received within 30

calendar days of the date when

assessments are due. This one-time late

payment charge will be 5 percent of the

assessments due before interest charges

have accrued.

(b) In addition to the late payment

charge, 1 percent per month interest on

the outstanding balance, including any

late payment and accrued interest, will

be added to any accounts for which

payment has not been received within

30 calendar days of the date when

assessments are due. Interest will

continue to accrue monthly until the

outstanding balance is paid to the

Board.

Bruce Summers,

Administrator, Agricultural Marketing

Service.

[FR Doc. 2020–19031 Filed 9–21–20; 8:45 am]

BILLING CODE P

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Published date	22 September 2020
Citation	85 FR 59610
Record Number	2020-19031
Section	Proposed rules
Court	Agricultural Marketing Service

Pecan Research, Promotion, and Information Order

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Over 2 million registered users

Over 100 Countries

Thousands of Data Sources

Find What You Need, Quickly

Over 2 million registered users