Exemption of Organic Products From Assessment Under a Commodity Promotion Law, 82005-82035 [2015-32517]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 80, Number 251 (Thursday, December 31, 2015)]
[Rules and Regulations]
[Pages 82005-82035]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32517]



[[Page 82005]]

Vol. 80

Thursday,

No. 251

December 31, 2015

Part V





Department of Agriculture





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Agricultural Marketing Service





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7 CFR Parts 900, 1150, 1160, et al.





Exemption of Organic Products From Assessment Under a Commodity 
Promotion Law; Final Rule

Federal Register / Vol. 80 , No. 251 / Thursday, December 31, 2015 / 
Rules and Regulations

[[Page 82006]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 900, 1150, 1160, 1205, 1206, 1207, 1208, 1209, 1210, 
1212, 1214, 1215, 1216, 1217, 1218, 1219, 1220, 1221, 1222, 1230, 
1250, 1260, and 1280

[Document Number AMS-FV-14-0032]


Exemption of Organic Products From Assessment Under a Commodity 
Promotion Law

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements the provisions of section 10004 of the 
Agricultural Act of 2014 and modifies the organic assessment exemption 
regulations under 23 Federal marketing orders and 22 research and 
promotion programs (commodity promotion programs). This rule amends the 
current regulations to allow persons that produce, handle, market, 
process, manufacture, feed, or import ``organic'' and ``100 percent 
organic'' products to be exempt from paying assessments associated with 
commodity promotion activities, including paid advertising, conducted 
under a commodity promotion program administered by the Agricultural 
Marketing Service (AMS), regardless of whether the person requesting 
the exemption also produces, handles, markets, processes, manufactures, 
feeds, or imports conventional or nonorganic products. Currently, only 
persons that exclusively produce and market products certified as 100 
percent organic are eligible for an exemption from assessments under 
commodity promotion programs. This rule expands the exemption to cover 
all ``organic'' and ``100 percent organic'' products certified under 
the National Organic Program regardless of whether the person 
requesting the exemption also produces, handles, markets, processes, 
manufactures, feeds, or imports conventional or nonorganic products.

DATES: Effective February 29, 2016.

FOR FURTHER INFORMATION CONTACT: Barry Broadbent, Senior Marketing 
Specialist, or Michelle Sharrow, Branch Chief, Marketing Order and 
Agreement Division, Specialty Crops Program, AMS, USDA, 1400 
Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; 
Telephone: (202) 720-2491, Fax: (202) 720-8938; or email: 
Barry.Broadbent@ams.usda.gov, or Michelle.Sharrow@ams.usda.gov.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding:
    Proposed rule; Published in the Federal Register December 16, 2014 
(79 FR 75006).
    Proposed rule; Extension of comment period; Published in the 
Federal Register January 15, 2015 (80 FR 2060).

Executive Order 12866, Executive Order 13563, and Executive Order 13175

    This final rule is being issued by the Department of Agriculture 
(USDA) with regard to Federal marketing orders in conformance with 
Executive Orders 12866, 13563, and 13175.
    With regard to research and promotion programs, 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 has been 
designated as a ``non-significant regulatory action'' under section 
3(f) of Executive Order 12866. Accordingly, the Office of Management 
and Budget has waived the review process.
    Additionally, with regard to research and promotion programs, 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 will not have 
substantial and direct effects on Tribal governments and will not have 
significant Tribal implications.

Executive Order 12988

Agricultural Marketing Agreement Act of 1937

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect.

Beef Promotion and Research Act of 1985

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
Section 11 of the Beef Promotion and Research Act of 1985 (7 U.S.C. 
2910) provides that it shall not preempt or supersede any other program 
relating to beef promotion organized and operated under the laws of the 
United States or any State.

Commodity Promotion, Research, and Information Act of 1996

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
Section 524 of the Commodity Promotion, Research, and Information Act 
of 1996 (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.

Cotton Research and Promotion Act of 1966

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect.

Dairy Production Stabilization Act of 1983

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
Section 4512(a) of the Dairy Production Stabilization Act of 1983 
provides that nothing in this Act may be construed to preempt or 
supersede any other program relating to dairy product promotion 
organized and operated under the laws of the United States or any 
State.

Egg Research and Consumer Information Act of 1974

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect.

Fluid Milk Promotion Act of 1990

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect.

Hass Avocado Promotion, Research and Information Act of 2000

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
Section 1212(c) of the Hass Avocado Promotion, Research and Information 
Act of 2000 (7 U.S.C. 7811) provides that nothing in this Act may be 
construed to preempt or supersede any program relating to Hass avocado 
promotion, research, industry information, and consumer information 
organized and operated under the laws of the United States or of a 
State.

Mushroom Promotion, Research, and Consumer Information Act of 1990

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
Section 1930 of

[[Page 82007]]

the Mushroom Promotion, Research, and Consumer Information Act of 1990 
(7 U.S.C. 6109) provides that nothing in this Act may be construed to 
preempt or supersede any other program relating to mushroom promotion, 
research, consumer information or industry information organized and 
operated under the laws of the United States or any State. Popcorn 
Promotion, Research, and Consumer Information Act of 1996.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
Section 580 of the Popcorn Promotion, Research, and Consumer 
Information Act (7 U.S.C. 7489) provides that nothing in this Act 
preempts or supersedes any other program relating to popcorn promotion 
organized and operated under the laws of the United States or any 
State.

Potato Research and Promotion Act of 1971

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect.

Pork Promotion, Research and Consumer Information Act of 1985

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
Section 1628 of the Pork Promotion, Research, and Consumer Information 
Act of 1985 (7 U.S.C. 4817) states that the statute is intended to 
occupy the field of promotion and consumer education involving pork and 
pork products and of obtaining funds thereof from pork producers. The 
regulation of such activity (other than a regulation or requirement 
relating to a matter of public health or the provision of State or 
local funds for such activity) that is in addition to or different from 
the Pork Act may not be imposed by a State.

Soybean Promotion, Research, and Consumer Information Act

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
Additionally, section 1974 of the Soybean Promotion, Research, and 
Consumer Information Act (7 U.S.C. 6309) provides, with certain 
exceptions, that nothing in the Soybean Act may be construed to preempt 
or supersede any other program relating to soybean promotion, research, 
consumer information, or industry information organized under the laws 
of the United States or any State. One exception in the Soybean Act 
concerns assessments collected by Qualified State Soybean Boards 
(QSSBs). The exception provides that, to ensure adequate funding of the 
operations of QSSBs under the Soybean Act, no State law or regulation 
may limit or have the effect of limiting the full amount of assessments 
that a QSSB in that State may collect, and which is authorized to be 
credited under the Soybean Act. Another exception concerns certain 
referenda conducted during specified periods by a State relating to the 
continuation of a QSSB or State soybean assessment.

Watermelon Research and Promotion Act

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect.
    This final rule is issued under the 23 Federal marketing orders and 
the 22 research and promotion programs established under the following 
acts: Agricultural Marketing Agreement Act of 1937 (7 U.S.C. 601-674) 
(AMAA); Beef Promotion and Research Act of 1985 (7 U.S.C. 2901-2911); 
Commodity Promotion, Research, and Information Act of 1996 (7 U.S.C. 
7411-7425); Cotton Research and Promotion Act of 1966 (7 U.S.C. 2101-
2118); Dairy Production Stabilization Act of 1983 (7 U.S.C. 4501-4514); 
Egg Research and Consumer Information Act of 1974 (7 U.S.C. 2701-2718); 
Fluid Milk Promotion Act of 1990 (7 U.S.C. 6401-6417); Hass Avocado 
Promotion, Research, and Information Act of 2000 (7 U.S.C. 7801-7813); 
Mushroom Promotion, Research, and Consumer Information Act of 1990 (7 
U.S.C. 6101-6112); Popcorn Promotion, Research, and Consumer 
Information Act of 1996 (7 U.S.C. 7481-7491); Pork Promotion, Research, 
and Consumer Information Act of 1985 (7 U.S.C. 4801-4819); Potato 
Research and Promotion Act of 1971 (7 U.S.C. 2611-2627); Soybean 
Promotion, Research, and Consumer Information Act (7 U.S.C. 6301-6311); 
and Watermelon Research and Promotion Act (7 U.S.C. 4901-4916). These 
acts are collectively referred to as ``commodity promotion laws.''
    The preceding acts provide that administrative proceedings must be 
exhausted before parties may file suit in court. Under those acts, any 
person subject to an order may file a petition with the Secretary of 
Agriculture stating that the order, any provision of the order, or any 
obligation imposed in connection with the order is not in accordance 
with law and request a modification of the order or to be exempted 
therefrom. The petitioner is afforded the opportunity for a hearing on 
the petition. After the hearing, the Secretary will make a ruling on 
the petition. The acts provide that the district courts of the United 
States in any district in which the person is an inhabitant, or has his 
principal place of business, has the jurisdiction to review the 
Secretary's rule, provided a complaint is filed within 20 days from the 
date of the entry of the ruling. There are no administrative 
proceedings that must be exhausted prior to any judicial challenge to 
the provision of the Beef Promotion and Research Act of 1985.

Background

    Section 10004 of the Agricultural Act of 2014 (2014 Farm Bill) 
(Pub. L. 113-79) amended Section 501 of the Federal Agriculture 
Improvement and Reform Act of 1996 (FAIR Act) (7 U.S.C. 7401) on 
February 7, 2014. Section 501 of the FAIR Act establishes certain 
provisions for generic commodity promotion programs created under the 
various commodity promotion laws. Section 501 of the FAIR Act was 
previously amended in May 2002, by Section 10607 of the Farm Security 
and Rural Investment Act (2002 Farm Bill) (Pub. L. 107-171) to exempt 
persons that produced and marketed solely 100 percent organic products, 
and who did not otherwise produce or market any conventional or 
nonorganic products, from the payment of an assessment for commodity 
promotion program activities under a commodity promotion law.
    Section 10004 of the 2014 Farm Bill subsequently expanded the 
organic assessment exemption to apply to any agricultural commodity 
that is certified as ``organic'' or ``100 percent organic'' as defined 
by the National Organic Program (NOP) (7 CFR part 205). The amendment 
further requires the Secretary of Agriculture to promulgate regulations 
concerning the eligibility and compliance procedures necessary to 
implement the exemption. Consistent with that provision of the 2014 
Farm Bill, this final rule amends the organic assessment exemption 
provisions contained in 23 Federal marketing orders and 22 research and 
promotion programs to cover all certified ``organic'' or ``100 percent 
organic'' products of a producer, handler, marketer, processor, 
manufacturer, feeder, or importer regardless of whether the 
agricultural commodity subject to the exemption is produced, handled, 
marketed, processed, manufactured, fed, or imported by a person that 
also produces, handles, markets, processes, manufactures, feeds, or 
imports conventional or nonorganic agricultural products, including 
conventional or

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nonorganic agricultural products of the same agricultural commodity as 
that for which the exemption is claimed.
    On December 16, 2014, a proposed rule was published in the Federal 
Register (79 FR 75006) inviting comments on proposed modifications to 
the organic assessment exemption regulations under 23 Federal marketing 
orders and 22 research and promotion programs. Interested parties were 
provided 30 days to comment on the proposed amendments. The comment 
period initially ended on January 15, 2015. However, at the request of 
14 commenters, 11 of which represented a commodity board/committee/
council, the comment period was extended to February 17, 2015 (80 FR 
2060, published January 15, 2015).
    In this final rule, USDA is making revisions to the general 
regulations affecting the 23 marketing order programs established under 
the AMAA. In addition, USDA is making similar amendments to the orders, 
plans and/or regulations of the 22 research and promotion programs 
administered by AMS. Also, USDA is terminating the existing provisions 
in Sec.  1209.52 of the mushroom research and promotion order that are 
not consistent with amendments to the order's organic assessment 
exemption provisions contained in Sec.  1209.252. The termination of 
Sec.  1209.52(a)(2) and (a)(3) is authorized by Sec.  1209.71(a) of the 
order. Lastly, while the existing organic exemption provisions will 
terminate in Sec.  1209.52 of the order, this rule establishes revised 
organic exemption provisions in section Sec.  1209.252(a) of the 
regulations.
    Consistent with the provisions of the 2014 Farm Bill, this final 
rule modifies the current regulatory provisions that exempt organic 
producers, handlers, first handlers, marketers, processes, 
manufacturers, feeders, and importers from the payment of commodity 
promotion program assessments used to fund commodity promotion 
activities, including paid advertising, under a commodity promotion 
law.

Summary of Changes From the Proposed Rule

    This final rule is different from the proposed rule in a number of 
respects. The final rule has been revised to improve the clarity of 
certain provisions, to maintain conformity with the provisions of the 
FAIR Act, and to establish or promote consistency across all of the 
commodity promotion programs. The modifications to the proposed rule, 
as detailed herein, do not substantially alter the regulatory effect of 
the originally proposed text.
    Specifically, this final rule revises the organic assessment 
exemption eligibility requirements for mushrooms contained in Sec.  
1209.252(a) to add clarity and to promote consistency with the organic 
assessment exemption requirements contained in Sec.  900.700 and the 
other 21 research and promotion orders, plans, and/or regulations.
    In addition, this final rule removes a current provision included 
in 14 research and promotion orders, plans, and/or regulations (7 CFR 
parts 1150, 1205, 1207, 1209, 1210, 1216, 1218, 1219, 1220, 1221, 1230, 
1250, 1260, and 1280) that addresses the exemption eligibility of 
products produced and marketed under an organic system plan but not 
sold, labeled, or represented as organic. The provision was removed to 
align the modified organic assessment exemption regulations with the 
FAIR Act.
    Lastly, this final rule makes technical, non-substantive changes to 
the regulatory text to aid clarity and promote uniformity in all of the 
organic assessment exemption regulations contained herein. This 
includes repositioning certain paragraphs in Sec.  1212.53 to eliminate 
potential confusion between the program's minimum quantity and organic 
assessment exemption procedures.

Summary of Comments

    USDA received 731 timely comments from individuals, conventional 
and organic producers, industry organizations, research and promotion 
boards/councils, marketing order boards/committees, and organic trade 
associations. Of those comments, 550 were in favor of the rule, 10 
opposed the rule, and 33 did not state a position. USDA determined that 
138 of the comments were non-substantive in nature and did not address 
the merits of the proposed rule.
    Fourteen of the comments were submitted by entities requesting an 
extension of the original comment period. Nine of the fourteen entities 
that submitted comments requesting an extension submitted additional 
comments after the comment period extension was granted by USDA.
    Of the substantive comments submitted after the comment period 
extension, 20 were from research and promotion or marketing order 
boards/councils/committees, 15 were from organic agriculture trade 
associations, 5 were from agriculture trade associations, and 5 were 
from large organic handlers.
    The comments largely fall into three broad categories. One category 
addresses issues of eligibility and the application of the FAIR Act. 
Another category addresses issues concerning the assessment exemption 
reporting requirements and safeguards. The last category addresses 
administrative and procedural issues.
    Eligibility of Organic Products Entering Conventional Markets: 
Fourteen of the research and promotion programs' organic assessment 
exemption regulations currently contain a provision specifying that 
agricultural commodities produced and marketed under an organic system 
plan, but not sold, labeled, or represented as organic when the product 
is sold, shall not disqualify a producer from the organic assessment 
exemption. Within the provision, the stated reasons for conventional 
sales of organic products include lack of demand for organic products, 
isolated use of antibiotics for humane purposes, chemical or pesticide 
use as the result of State or emergency spray programs, and crops from 
a buffer area. The provision is currently included in 14 research and 
promotion orders, plans, and/or regulations, but is absent from the 
regulations covering the 8 remaining research and promotion programs 
and from the regulations that cover Federal marketing orders.
    The provision was incorporated into the regulations to ensure that 
incidental non-conformance with the 2002 Farm Bill threshold 
requirement of ``produces and markets solely 100 percent organic 
products'' would not disqualify a producer from eligibility for an 
organic assessment exemption. Without the provision, under a strict 
interpretation of the 2002 Farm Bill statute, a certified organic 
producer under the NOP who produced and marketed any products through 
any conventional marketing channel, for any reason, would be ineligible 
for an organic assessment exemption. The provision was intended to 
reconcile administrative inconsistencies between the 2002 Farm Bill 
language and the intent of Congress in creating the exemption. USDA 
determined that certain common and acceptable production and marketing 
practices of NOP certified organic production operations could be 
allowed without jeopardizing the integrity of the exemption, even if 
some of those practices led to products entering conventional markets.
    Under the provision, organic product produced in excess of demand 
in the organic market is permitted to enter a conventional market 
without jeopardizing the entity's organic assessment exemption status. 
Additionally, it allows product from buffer zones on certified organic 
production operations that could not otherwise be marketed as organic 
in an

[[Page 82009]]

organic market outlet to enter the conventional market without 
affecting the entity's organic assessment exemption eligibility. 
Lastly, it allows product that is subjected to chemicals or pesticides 
as a result of a State or emergency spray program, and the isolated use 
of antibiotics for humane purposes, to enter the conventional market 
without penalty.
    In the proposed rule, USDA proposed making modifications to the 
provision and retaining it in the regulations of the 14 research and 
promotion programs that currently contain the language.
    A number of the commenters submitted comments with regard to the 
provision as proposed. Several commenters suggested that the provision 
be expanded to all commodity promotion programs to promote uniformity. 
A number of other commenters assert that the provision creates a free 
rider situation when organic product exempt from assessment is allowed 
to enter the conventional market. They claim that organic product 
exempt from assessment would have an unfair competitive cost advantage 
when competing with conventionally produced product in the conventional 
market. In addition, the commenters asserted that exempt organic 
product in the conventional market would benefit from commodity 
promotion programs without having contributed to the cost of the 
promotion program. The commenters recommended the removal of the 
provision from the 14 programs that currently contain such language to 
rectify the inequitable situation moving forward.
    After further consideration, with the expansion of the organic 
assessment exemption eligibility requirements in the 2014 Farm Bill to 
include split operations, any provision in the organic assessment 
exemption regulations to make allowances for product entering 
conventional markets in an effort to preserve an applicant's 
eligibility for the organic assessment exemption will no longer be 
necessary moving forward. In addition, if perpetuated, the provision 
could facilitate an unfair competitive environment and negatively 
impact conventional producers and marketers.
    Therefore, for the reasons discussed above, USDA has removed the 
aforementioned provision from the 14 research and promotion programs 
that currently have the language in their orders/plans/regulations. As 
such, as a result of the modifications contained herein, all product 
that enters a conventional or non-organic market outlet will be subject 
to assessment in accordance with the respective commodity promotion 
program's order, plan, or regulation.
    Definition of ``Producer'': All of the orders, plans, and/or 
regulations covered under this rule define the entities that are 
subject to the regulatory provisions of the program (e.g. producer, 
handler, marketer, processor, manufacturer, feeder, importer, etc.). 
Many of those orders/plans/regulations have provisions included in such 
definitions under which entities may be exempt from regulation and/or 
the payment of assessments.
    A number of commenters recommended amending the definition of 
``producer'' (also ``handler,'' ``processor,'' and ``importer'') in 
each of the orders, plans, and/or regulations covered under this rule 
for a blanket exclusion of participation from all program activities 
for entities who receive an organic assessment exemption. The 
commenters believe that entities that are exempt from the payment of 
assessments should not be allowed to be appointed board members and 
vote in referenda.
    Currently, eight research and promotion programs specify a minimum 
quantity of product (referred to as the ``de minimis'' amount) that 
must be produced, handled, processed, or imported for an entity to be 
required to pay the commodity promotion assessment (7 CFR parts 1160, 
1206, 1207, 1208, 1209, 1210, 1215, and 1221). For those programs, 
entities that produce, handle, process, or import quantities of product 
below a specified de minimis amount are, by definition, not required to 
pay assessments. The other research and promotion programs do not have 
de minimis as part of the definition of regulated entities, but rather 
within the assessment section of the programs' regulatory provisions.
    Entities that are exempt by definition and/or entities that receive 
an assessment exemption are ineligible for nomination for board 
membership and for voting in referenda. While an entity operating below 
the de minimis level may be exempt from assessment provisions of an 
order/plan/regulation, all regulated entities are required to maintain 
reports to carry out the provisions of the program.
    The Fluid Milk Promotion Program (7 CFR part 1160) is an example of 
a research and promotion program that specifies a de minimis amount in 
the definition. The definition specifically states ``the term fluid 
milk processor shall not include in each of the respective fiscal 
periods those persons who process and market not more than 3,000,000 
pounds of such fluid milk products during the representative month.'' 
As such, since the provisions of the program only apply to fluid milk 
processors, and the definition of fluid milk processor does not include 
entities that process under 3,000,000 pounds of fluid milk a month, an 
entity that processes less than 3,000,000 pounds of fluid milk a month 
is not subject to the assessment provisions of the program, but must 
still report the quantity of fluid milk processed for the 
representative month of each fiscal period to verify its regulatory 
status.
    An example of a research and promotion program that specifies a de 
minimis quantity in its assessment regulation is blueberries. A 
producer under the Blueberry Promotion, Research, and Information Order 
(7 CFR part 1218) is defined as ``any person who grows blueberries in 
the United States for sale in commerce, or a person who is engaged in 
the business of producing, or causing to be produced for any market, 
blueberries beyond the person's own family use and having value at 
first point of sale.'' However, any producer who produces less than 
2,000 pounds of blueberries annually, and applies for such exemption, 
is not required to pay assessments. Blueberry producers who produce 
less than 2,000 pounds of blueberries however continue to be subject to 
the reports, books, and recordkeeping requirements in the blueberry 
order.
    Since representation on the commodity promotion program boards is 
already reserved for regulated entities that financially participate in 
a commodity promotion program, it is unnecessary to amend program 
definitions. This includes all exemptions under these programs, 
including organic exemptions. Under existing procedures for the 
previous more narrowly defined organic exemption, entities that are 
exempt from paying assessments as a result of the organic exemption 
cannot participate in the program. This will not change with the 
expansion of the organic exemption.
    Entities subject to the provisions of an order that produce, 
handle, market, process, manufacture, feed, or import both organic and 
conventional or nonorganic products (split operations), and are granted 
an organic assessment exemption are still subject to assessment on 
their conventional or nonorganic product. Under those circumstances, 
with the payment of any amount of an assessment, no matter how small, 
an entity would be eligible to participate in the program's activities.
    USDA notes that the commenters' recommendation could only be 
applied to the research and promotion programs and not Federal 
marketing orders, as the

[[Page 82010]]

organic assessment exemption for Federal marketing orders only applies 
to the percentage of the assessment that is allocated to fund marketing 
promotion activities. As such, even entities exempt from marketing 
promotion assessments on their organic products will be obligated to 
pay assessments to fund the order's other operational and 
administrative expenses. As a result, entities regulated under a 
marketing order, even if exempt from some percentage of assessment, are 
eligible to participate in the program.
    Based on the above, no changes have been made to the regulations as 
a result of the comments submitted.
    Determination of ``Marketing Promotion Activities'' Under Commodity 
Promotion Laws:
    Under the FAIR Act, a ``commodity promotion law'' is defined as ``a 
Federal law that provides for the establishment and operation of a 
promotion program regarding an agricultural commodity that includes a 
combination of promotion, research, industry information, and/or 
consumer information activities, is funded by mandatory assessments on 
producers or processors, and is designed to maintain or expand markets 
and uses for the commodity'' (7 U.S.C. Sec.  7401(a)). The FAIR Act 
further establishes that the exemption of certified organic products 
from commodity promotion program assessments be limited to ``the 
payment of assessments under a commodity promotion law.''
    When the organic assessment exemption was first established as a 
result of 2002 Farm Bill amendments to the FAIR Act, USDA interpreted 
the law to apply to all of the activities of all established and future 
commodity promotion programs created ``under a commodity promotion 
law,'' as defined. Therefore, USDA amended all of the research and 
promotion programs' plans, orders, and/or regulations to exempt 
entities that were solely 100 percent certified organic from payment of 
the entire amount of a program's assessment.
    However, regarding Federal marketing orders, USDA interpreted the 
FAIR Act to only apply to expenditures directly related to marketing 
promotion activities under a marketing order. Under 7 U.S.C. 
7401(a)(1), the definition of ``commodity promotion law'' specifically 
narrows the term, as it relates to marketing order programs, to just 
include ``the marketing promotion provisions under section 8c(6)(I) of 
the Agricultural Adjustment Act (7 U.S.C. 608c(6)(I)).'' Therefore, in 
the establishment of the organic assessment exemption regulations for 
Federal marketing orders in Sec.  900.700(a), USDA defined the term 
``marketing promotion'' to mean ``marketing research and development 
projects, and marketing promotion, including paid advertising, designed 
to assist, improve, or promote the marketing, distribution, and 
consumption of the applicable commodity.'' Under Sec.  900.700(d), the 
organic assessment exemption is not applicable to the portion of 
assessment that directly funds the other authorized activities of a 
marketing order, such as minimum quality regulation, mandatory 
inspection, container requirements, volume control, or production 
research.
    A number of commenters submitted comments regarding the application 
of the organic assessment exemption to production research. Some of the 
commenters believe that the assessments allocated to fund production 
research projects under a research and promotion program should not be 
subject to an organic assessment exemption. The commenters believe that 
production research has applicability to all production within a 
commodity's industry and that organic entities should contribute to the 
cost along with other entities. In a contrary position, many commenters 
believe that all research, both production and marketing oriented, has 
no benefit to the organic industry and that the organic industry should 
not be expected to fund it. Commenters from both sides of the issue 
submitted proposed changes to be made to the regulations.
    USDA believes that the provisions of the FAIR Act have been 
properly applied under both Federal marketing orders and research and 
promotion programs. Therefore, no changes have been made to the 
regulations as a result of the comments.
Reporting Requirement and Safeguard Issues
    Revised Reporting Requirements: All of the Federal marketing orders 
and research and promotion orders, plans, and/or regulations contain 
reporting requirements for the administration of the organic assessment 
exemption. The current application form necessary for obtaining an 
organic assessment exemption requires, among other things, that the 
applicant list all of the commodities that an applicant produces, 
handles, markets, processes, manufacturers, feeds, or imports. The 
applicant must also certify that all of the commodities listed are 
certified 100 percent organic, even for commodities other than the 
commodity for which the exemption is requested. This has been the 
method employed by USDA to ensure that an operation produced and 
marketed ``solely 100 percent organic products'' as required by the 
FAIR Act prior to the 2014 Farm Bill amendment. This requirement 
translated into a significant amount of the time required by entities 
to fill out the current organic assessment exemption request form.
    The 2014 Farm Bill amendment to the FAIR Act expanded the 
eligibility criteria for organic assessment exemptions to allow split 
operations, which are entities that produce, handle, market, process, 
manufacture, feed, or import organic and conventional or nonorganic 
products within the same business operation. The FAIR Act amendment 
renders the current reporting requirement for full disclosure of all 
commodities produced, handled, marketed, processed, manufactured, fed, 
or imported by an entity unnecessary moving forward, as an applicant no 
longer has to show that they are an exclusively organic operation to be 
granted an organic assessment exemption. As such, the current organic 
assessment exemption application requirements in the regulations have 
been revised to remove the requirement that lists all of an entity's 
commodities on the organic assessment exemption application form.
    In addition, as a result of the modified reporting requirements 
contained in the regulations, the current approved organic assessment 
exemption request forms, Forms AMS-15 and FV-649, will be modified 
accordingly. A more detailed discussion regarding the changes to these 
forms can be found under the Paperwork Reduction Act heading below.
    Many commenters supported the reduction in reporting requirements 
that resulted from this rule. They believed that reducing the paperwork 
burden on organic entities, many of which are small, would benefit the 
organic industry. However, while the commenters believed that the 
reduction in required documentation was a positive step, they 
recommended abandoning the annual reapplication requirement to reduce 
further the paperwork burden on organic entities. They suggest only 
requiring an entity submit an initial application for an organic 
assessment exemption and, if so granted, making the exemption 
perpetual. Additionally, several commenters recommended tying the 
organic assessment exemption to the organic certificate that is issued 
under the NOP by a USDA-accredited certifying agent to a certified 
organic operation, thus continuing eligibility for the organic 
assessment exemption until the applicant either surrenders their 
exemption rights or ceases to operate

[[Page 82011]]

organically. One commenter proposed that greater synergy between the 
USDA-AMS National Organic Program (AMS-NOP) and the commodity promotion 
programs could effectuate the accountability necessary for perpetual 
exemptions moving forward. One option offered by the commenter was the 
utilization of the AMS-NOP database by commodity promotion programs to 
safeguard assessment exemptions. Another commenter suggested requiring 
AMS-NOP to establish, maintain, and provide access to a ``revoked or 
relinquished list'' of operations that have lost organic certification 
that Federal marketing orders and research and promotion programs could 
use to facilitate the monitoring and administration of an exempt 
entity's perpetual status.
    A number of other commenters support increasing the reporting 
requirements to ensure compliance under the expanded organic assessment 
exemption. Under the modified provisions effectuated herein, split 
operations will now be allowed to request and receive organic 
assessment exemptions. As such, entities with some organic products and 
some conventional or nonorganic products will be allowed to request an 
assessment exemption on the organic portion of the products they 
produce or market. Several commenters recommended increasing the 
reporting requirements for these split operations to accurately account 
for the quantity of product that will continue to be subject to 
assessment. They believe that requiring applicants to disclose both the 
anticipated quantities of organic product and conventional or 
nonorganic product that the entity expects to produce, handle, market, 
process, manufacture, feed, or import will aide in maintaining the 
integrity of each program.
    USDA believes that information collection is an important part of 
every commodity promotion program in general, and is integral to the 
oversight of the organic assessment exemption under each of those 
commodity promotion programs specifically. USDA agrees with the 
commenters that recommended increasing the information collection 
regarding the commodity research and promotion programs and will 
further revise Form AMS-15 accordingly. On the request form, applicants 
will be required to self-identify split operations and estimate the 
assessable and non-assessable quantities of product for the year. 
Specifically, applicants must report the estimated total quantity of 
product that the applicant expects to produce, handle, market, process, 
manufacture, feed, or import; the estimated quantity of product that 
will be certified organic; and the estimated quantity of product that 
will be conventional or nonorganic.
    In addition, if needed, all commodity promotion programs have the 
ability, within their orders, plans, and/or regulations, to modify 
their reporting requirements outside the scope of the organic 
assessment exemption request form. If additional information is deemed 
necessary to administer a commodity promotion program and ensure its 
integrity with respect to the organic assessment exemption, the 
respective board/committee/council could initiate rulemaking to that 
effect.
    USDA also believes that it is necessary to require applicants to 
submit an application annually for the proper administration of the 
organic assessment exemption by the boards/committees/councils. The 
oversight of organic assessment exemptions will necessitate the 
collection and retention of current and accurate information regarding 
the exempted entities. Reliance on AMS-NOP to facilitate the collection 
and dissemination of information needed by the commodity promotion 
programs to administer the organic assessment exemption, as suggested 
by commenters, is not practical at this time.
    Therefore, in light of the above discussion, Form AMS-15 will be 
further revised to require the necessary information for commodity 
research and promotion programs to properly administer the organic 
assessment exemption. No additional changes will be made to Form FV-649 
for Federal marketing orders and no changes will be made to the 
regulations as proposed.
    Safeguard Provisions: All of the Federal marketing orders and 
research and promotion programs affected by this rule have safeguards 
built into their regulations to facilitate compliance. The provisions 
most often employed by commodity promotion programs are reporting 
requirements, auditing authority, and civil penalties for 
noncompliance. The combination of these provisions is what would be 
utilized by the boards/committees/councils to safeguard the organic 
assessment exemption provisions of a program.
    A number of commenters submitted recommendations for safeguarding 
the organic assessment exemption against abuse. Some commenters 
suggested mandatory audits of firms that are granted an organic 
assessment exemption. Other commenters suggested including on the 
exemption request form explicit detail of the potential penalties for 
the fraudulent use of an organic assessment exemption (e.g. ``The 
making of any false statement or representation on this form, knowing 
it to be false, is a violation of Title 18, Section 1001 United States 
Code, which provides for the penalty of a fine of $10,000 or 
imprisonment of not more than five years, or both.''). Other 
recommendations included requiring AMS-NOP to submit information 
regarding exempt parties to the commodity promotion programs for 
reconciliation with reports submitted directly by the exempt parties to 
the program.
    USDA will be adding a statement regarding the potential penalties 
for fraudulent use of an organic assessment exemption language to Form 
AMS-15 in an effort to make it more consistent with other exemption 
forms. This is in addition to the other revisions concerning the 
estimated amount of product produced, handled, marketed, processed, 
manufactured, fed, or imported with an estimated quantity of organic 
and conventional or nonorganic product. The other safeguard provisions 
currently contained in the regulations (recordkeeping, reporting, and 
audit requirements) are adequate for ensuring compliance in the 
collection of assessments from conventional or nonorganic entities.
Administrative and Procedural Issues
    A number of commenters recommended that the regulations be modified 
to clearly state that organic producers, handlers, marketers, 
processors, manufacturers, feeders, and importers that are eligible for 
an organic assessment exemption are not obligated to apply for one and 
that they may voluntarily continue to fund a commodity promotion 
program.
    USDA does not believe that the inclusion of a clause of this nature 
in the regulations, or on any form, is necessary, as an organic 
assessment exemption requires that an applicant submit an application 
to become eligible. The default for an entity subject to regulation is 
to pay assessments on all products produced, handled, marketed, 
processed, manufactured, fed, or imported, even entities that produced, 
handled, marketed, processed, manufactured, fed, or imported organic 
products. Therefore, no changes to the regulations will be made as a 
result of this recommendation.
    Two commenters submitted comments regarding the financial impact 
that an organic assessment exemption will have on a commodity promotion 
program's ability to operate. The commenters believe that the

[[Page 82012]]

assessment exemption will force programs to cut back on operations or 
increase assessment rates.
    This action has been undertaken in response to a Congressional 
mandate and is not discretionary. Two commenters recommended that 
language be added to the organic assessment exemption regulations for 
each program to specify that the exemption is only from Federal program 
assessments and that organic entities must still participate in, and 
pay assessments to, any state and regional commodity promotion programs 
that may exist.
    USDA does not control state or regional commodity promotion 
programs. Furthermore, USDA does not address such programs in Federal 
regulations to maintain a clear separation of jurisdictions, 
authorities, and powers. However, USDA acknowledges that some state and 
regional commodity promotion programs work in concert with Federal 
programs. As such, USDA will encourage the boards/committees/councils 
that oversee the Federal commodity promotion programs to remind 
entities that request a Federal organic assessment exemptions that 
there may be state and regional commodity promotion program assessments 
that are not exempted as part of a Federal program exemption.
    One commenter sought confirmation that all future Federal marketing 
orders and research and promotion programs established after the 
effective date of this rule would include an organic assessment 
exemption similar to the provisions contained herein.
    Any new Federal marketing order established under the AMAA would be 
subject to the provisions of Sec.  900.700. In addition, the FAIR Act 
provides that the organic assessment exemption be applied to any 
commodity promotion law. The definition of ``commodity promotion law'' 
in the FAIR Act is extended to ``any other provision of law enacted 
after April 4, 1996, that provides for the establishment and operation 
of an agricultural commodity promotion program.'' Therefore, the 
commenter can reasonably expect that all existing and future commodity 
promotion programs will have an organic assessment exemption provision 
similar to that which is contained herein. However, should an organic 
research and promotion program be established in the future, entities 
that are currently exempt from payment of commodity promotion program 
assessments under an organic exemption may be subject to the assessment 
provisions of an organic research and promotion order.
    One commenter stated that the proposed rule did not define, and was 
not consistent in the use of, the term ``split operation.'' The term 
``split operation'' is found in the current regulatory provisions of 
each order, plan, and/or regulation modified by this rule. The term is 
used interchangeably throughout this rule to describe an entity that 
produces, handles, markets, processes, manufactures, feeds, or imports 
organic products, but also produces, handles, markets, processes, 
manufactures, feeds, or imports conventional or nonorganic products of 
the same or different agricultural commodities. USDA does not believe 
that a separate definition of ``split operation'' is necessary in the 
regulations.
    A commenter questioned the language regarding the eligibility of 
importers to claim an organic assessment exemption. The commenter 
recommended adding language to the proposed regulations to reflect that 
products certified as ``organic'' and ``100 percent organic'' under 
U.S. equivalency arrangements established under the NOP were also 
eligible for the exemption. Language to that effect has been added to 
each of the programs' regulations that assess importers (7 CFR parts 
1150, 1205, 1206, 1207, 1208, 1209, 1210, 1212, 1214, 1217, 1218, 1219, 
1221, 1222, 1230, and 1260).
    One commenter suggested that several of the provisions contained in 
each the various programs are applied inconsistently. Specifically, the 
commenter believes that the regulations concerning the timeframe that a 
commodity promotion program board/committee/council has to approve/
disapprove an application, how exempt individuals demonstrate their 
exemption to other parties, and the effective date of the exemption 
should be consistent among all programs.
    USDA believes that the regulations are as uniform as possible 
within the unique provisions in each of the various commodity promotion 
program orders, plans, and/or regulations. Variations in fiscal 
periods, assessment collection procedures, regulated entities, and 
other factors specific to a program make it difficult to achieve 
complete consistency across all programs. Therefore, no changes have 
been made as a result of these comments.
    Three commenters believe that entities that have been granted an 
organic assessment exemption should be required to disclose their 
exempt status to the parties that purchase their product. The 
commenters have observed that the market price of a commodity often has 
a built in premium to account for payment of an assessment to a 
commodity promotion program and, by not disclosing an organic entity's 
exemption status, an unfair economic advantage could occur. To address 
commenters concerns, AMS will amend the current footnote contained in 
the Federal milk marketing order Class I price announcement related to 
the Fluid Milk Promotion Order (7 CFR part 1160). Currently the 
footnote reads, ``If fluid milk processors market less than 3,000,000 
pounds per month of fluid milk products in consumer packages, they are 
exempt from paying the 20 cents per hundredweight assessment.'' USDA 
will include new language on the Class I price announcements indicating 
organic fluid milk processors may be exempt from the fluid milk 
assessment.
    One commenter had concerns about the organic assessment exemption 
regulations and how they are applied to imported products. The 
commenter did not feel that the regulations, as proposed, were clear on 
the issuance of Harmonized Tariff Schedule (HTS) codes for imported 
products, whether or not U.S. Customs and Border Protection (Customs) 
would first collect then reimburse the assessment, and how a commodity 
promotion program board/committee/council would be able to identify and 
differentiate exempt from non-exempt product. USDA has drafted the 
regulations to align with current Customs practices. Some agricultural 
commodities have HTS codes assigned to organically produced product and 
some do not. As such, some products may be imported under an HTS code 
that applies the organic assessment exemption directly as the product 
enters the U.S. and could, therefore, bypass the collection of 
assessments by Customs. Other commodities may not have an HTS code 
assigned to organically produced product and the assessment may have to 
be collected from, and then subsequently reimbursed to, an exempt 
importer. The procedures for such reimbursements are addressed in each 
of the research and promotion program plans/orders/regulations.
    Therefore, USDA does not believe that the regulations, as proposed, 
should be changed as a result of this comment. However, the regulations 
contained herein could be amended in the future to reflect any 
operational changes from Customs that would make the application of the 
organic assessment exemption more efficient regarding imported product.
    Several commenters expressed concern that extending the organic 
assessment exemption to split

[[Page 82013]]

operations would lead to confusion as to how the exemption will be 
applied when it coincides with a program's minimum quantity provisions. 
They believed that some entities may inaccurately apply both exemption 
provisions and result in an underpayment or nonpayment of assessments.
    First, USDA would like to reiterate that the commenters' concerns 
may only be directed to the provisions of the 22 research and promotion 
programs, as no Federal marketing order contains a de minimis provision 
in its definition of ``handler''. Next, the comments only pertain to 
the 8 programs that have de minimis amounts in their definition of the 
entities that are subject to the provisions of the order/plan/
regulation (7 CFR parts 1160, 1206, 1207, 1208, 1209, 1210, 1215, and 
1221). Therefore, with regards to the research and promotion programs 
with de minimis quantities, USDA would like to clarify how the organic 
assessment exemption will be applied under each of those programs.
    To be eligible for an organic assessment exemption, an entity must 
first be subject to assessment under an order/plan/regulation. This 
means that the total quantity of a program commodity that an entity 
produces, handles, markets, processes, manufactures, feeds or imports 
is greater than the de minimis amount specified in the definition of 
entities subject to the provisions of the order/plan/regulation. In 
determining the total quantity, USDA considers all organic, 
conventional, and nonorganic product in the aggregate, as the 
provisions of each order/plan/regulation cover all of the commodity 
produced, handled, marketed, processed, manufactured, fed, or imported, 
regardless of production method employed in producing those products.
    If an entity is subject to assessment after applying the de minimis 
amount on a total volume basis, then the quantity of organic product 
that the entity produces, handles, markets, processes, manufactures, 
feeds, or imports may be considered for an organic assessment 
exemption. Should the entity be a split operation, the entity would be 
obligated to pay assessments on the portion of the entity's product 
that is conventional or nonorganic, regardless of whether or not the 
quantity of conventional or nonorganic product is below the de minimis 
amount after exempting the organic product. Once the threshold for 
being subject to an order/plan/regulation has been met on a total 
product basis, the entity is subject to the provisions of the program 
and must pay assessments on any nonexempt product.
    In summary, the determination of whether or not an entity is 
subject to the provisions of an order/plan/regulation comes before any 
determination of whether or not the entity may be exempt from any of 
those provisions, including assessment. Simply put, an entity cannot be 
exempted from a provision that it is not subject to. Further, the 
approval of an assessment exemption for some or all of an entity's 
assessable product under an order/plan/regulation cannot be construed 
as a reduction in the total quantity of product produced or marketed by 
that entity. The quantity of product on which an assessment exemption 
is granted cannot be deducted from the entity's total quantity and 
retroactively be applied to the de minimis amount established under the 
order/plan/regulation to determine whether or not the entity is subject 
to the provisions of that order/plan/regulation.
    For example, the de minimis quantity for processors under the 
Popcorn Promotion, Research, and Consumer Information Order (7 CFR part 
1215) is 4 million pounds annually. If a popcorn processor processes 6 
million pounds annually, the processor is subject to the provisions of 
the order and is required to pay assessments on the 6 million pounds. 
If 4 million pounds of the 6 million pounds total are certified 
organic, the processor may request an organic assessment exemption on 
those 4 million pounds. However, the processor must pay the assessment 
on the remaining 2 million pounds, even though that quantity, by 
itself, would be below the de minimis quantity in the definition of a 
popcorn processor. The application of the minimum quantity provisions 
that determine what is subject to an order/plan/regulation are applied 
prior to the application of any assessment exemption and are not 
affected by the same after the fact.
    Lastly, several commenters requested a delay, up to 120 days, in 
the implementation of the revised organic assessment exemption 
provisions to ensure that the expanded organic exemption provisions are 
implemented consistently and accurately throughout all Federal 
marketing orders and research and promotion program boards/committees/
councils. USDA has reviewed the remittance and exemption procedures of 
each commodity promotion program and recognizes that there are 
differences in the timelines that each commodity promotion program 
board/committee/council follows. USDA recognizes that an implementation 
date of 90 to 120 days would be optimal. However, USDA also recognizes 
the significance of the Farm Bill revisions and has determined that an 
implementation date of 60 days is appropriate.
Organic Commodity Promotion Order
    Section 10004 of the 2014 Farm Bill includes a provision stating 
that the organic assessment exemption is effective until the date the 
Secretary issues an organic commodity promotion order under the 
Commodity Promotion, Research, and Information Act of 1996 (7 U.S.C. 
7411-7425). The promulgation of an organic commodity promotion order 
was also authorized under section 10004 of the 2014 Farm Bill.
    The implementation of an organic commodity promotion order would 
follow the same process as other commodity promotion orders overseen by 
USDA; the industry submits a proposal for an order that contains 
analysis, justification, objectives, impact on small businesses, 
evidence of industry support, and the text of the proposed order. USDA 
would then review and publish the proposed order in the Federal 
Register for public comment. If, after reviewing the comments, USDA 
concludes the order has merit and meets legislative intent, a 
referendum would be announced and conducted. If the program was 
approved by industry voters, a final rule would be issued to implement 
the program.
    In May 2015, USDA received an industry proposal for an organic 
commodity promotion order. USDA is currently reviewing the proposal.

Marketing Order Programs

    The FAIR Act organic exemption amendment, as enacted by the 2014 
Farm Bill, covers 23 marketing order programs established under the 
AMAA (Florida citrus--7 CFR part 905; Texas citrus--7 CFR part 906; 
Florida avocados--7 CFR part 915; Washington apricots--7 CFR part 922; 
Washington sweet cherries--7 CFR part 923; Southeastern California 
grapes--7 CFR part 925; Oregon/Washington pears--7 CFR part 927; 
Cranberries grown in the States of Massachusetts, et al.--7 CFR part 
929; Tart cherries grown in the States of Michigan, et al.--7 CFR part 
930; California olives--7 CFR part 932; Colorado potatoes--7 CFR part 
948; Georgia Vidalia onions--7 CFR part 955; Washington/Oregon Walla 
Walla onions--7 CFR part 956; Idaho-Eastern Oregon onions--7 CFR part 
958; Texas onions--7 CFR part 959; Florida tomatoes--7 CFR part 966; 
California almonds--7 CFR part 981; Oregon-Washington hazelnuts--7 CFR 
part 982; California walnuts--7 CFR part 984; Far

[[Page 82014]]

West spearmint oil--7 CFR part 985; California dates--7 CFR part 987; 
California raisins--7 CFR part 989; and California dried prunes--7 CFR 
part 993).
    Federal marketing orders are locally administered by committees 
made up of producers and/or handlers, and often members of the public. 
Marketing order regulations, initiated by industry and enforced by 
USDA, bind the entire industry in the geographical area regulated once 
they are approved by the Secretary of Agriculture. Marketing orders 
employ one or more of the following authorities: (1) Maintain the high 
quality of produce available to the market; (2) standardize packages 
and containers; (3) regulate the flow of product to market; (4) 
establish reserve pools for storable commodities; and (5) authorize 
production research, marketing research and development, and 
advertising. Each unique marketing order helps to promote orderly 
marketing for the specific commodity and region covered by the 
regulation.
    The 23 specific marketing order programs listed above allow for 
market promotion activities designed to assist, improve, or promote the 
marketing, distribution, or consumption of the commodity covered under 
each specific marketing order. Some of these programs also authorize 
market promotion in the form of paid advertising. Promotion activities, 
including paid advertising, are paid for by assessments levied on 
handlers regulated under the various Federal marketing orders.
    Rules of practice and regulations governing all Federal marketing 
orders established under the AMAA are contained in 7 CFR part 900 
General Regulations. Section 900.700 specifies the criteria for 
identifying persons eligible to obtain an assessment exemption for 
marketing promotion activities, including paid advertising; procedures 
for persons to apply for an exemption; procedures for calculating the 
assessment exemption; and other procedural details pertaining to the 23 
marketing order programs that currently engage in, or have the 
authority for, marketing promotion, including paid advertising.
    Currently under those provisions, only handlers that exclusively 
handle or market products that are eligible to be labeled ``100 percent 
organic'' are exempt from the portion of a marketing order assessment 
applicable to an order's marketing promotion activities, including paid 
advertising. As such, organic handlers who handle or market any 
quantity of conventional or nonorganic products in addition to their 
organic products are not currently able to claim an assessment 
exemption on any of the products they handle. The 2014 Farm Bill 
expanded the organic exemption in the FAIR Act to allow all organic 
handlers to apply for an exemption from assessments on products 
certified as ``organic'' or ``100 percent organic,'' regardless of 
whether the handler also handles or markets conventional or nonorganic 
products.
    This final rule modifies the organic assessment exemption 
eligibility criteria contained in Sec.  900.700. The requirements 
contained in that section will be revised to allow organic operations 
that are split operations to apply for and receive an assessment 
exemption on their certified ``organic'' and ``100 percent organic'' 
products, whereas such types of operations are explicitly precluded 
from the organic assessment exemption under the current language. More 
specifically, the eligibility provisions contained in Sec.  900.700(b) 
will be modified to include certified organic handlers that maintain 
split operations. The section will also be amended to provide that 
exempt handlers must continue to pay assessments associated with any 
agricultural products that do not qualify for an exemption under that 
section.
    Handlers who wish to claim the assessment exemption on their 
organic products will continue to be required to submit an application 
to the board or committee, and subsequently be approved, to qualify for 
the organic exemption. However, as a result of the revised eligibility 
requirements contained herein, the specific information that will be 
collected from applicants will change. Some of the information 
collection that is currently necessary for the board or committee to 
administer the organic assessment exemption will no longer be required 
moving forward (e.g. detail of all commodities handled by the entity to 
ensure it is a 100 percent organic operation). As such, Sec.  
900.700(c) will be modified to reflect these changes.

Research and Promotion Programs

    The FAIR Act organic exemption amendment contained in the 2014 Farm 
Bill also covers 22 research and promotion programs established under 
either freestanding legislation (beef, cotton, dairy, eggs, fluid milk, 
Hass avocados, mushrooms, popcorn, pork, potatoes, soybeans, and 
watermelons) or the Commodity Promotion, Research, and Information Act 
of 1996 (blueberries, Christmas trees, honey, lamb, mangos, paper and 
paper-based products, peanuts, processed raspberries, softwood lumber, 
and sorghum).
    Wholly funded and operated by industry, the research and promotion 
programs are charged with creating, maintaining, and expanding markets 
for the agricultural commodities they represent. While these programs 
are overseen by AMS, including the review of all financial budgets, 
marketing plans, and research projects, they are governed by boards and 
councils made up of industry participants. Producers, handlers, 
processors, manufacturers, feeders, importers, and/or others in the 
marketing chain pay assessments to the representative boards and 
councils to fund each program's activities. Industries voluntarily 
request the formation of these programs, which allows them to 
establish, finance, and execute coordinated programs of research, 
producer and consumer education, and generic commodity promotion to 
improve, maintain, and develop markets for their respective 
commodities.
    Under this final rule, the eligibility criteria for obtaining an 
organic assessment exemption, as contained in each of the research and 
promotion orders, plans, and/or regulations, will be revised. The 
requirements for such an exemption will be modified to allow split 
organic operations to apply for and receive an assessment exemption on 
their certified ``organic'' and ``100 percent organic'' products, 
whereas such types of operations are explicitly precluded from the 
assessment exemption under the current provisions in each program. In 
addition, language will be added to provide that exempt producers, 
handlers, marketers, processors, manufacturers, feeders, or importers 
must continue to pay any assessments associated with any agricultural 
products that do not qualify for an exemption.
    Persons who wish to claim the assessment exemption on their organic 
products will continue to be required to submit an application to the 
board or council, and subsequently be approved, to qualify for the 
organic exemption. However, as a result of the revised eligibility 
requirements contained herein, the specific information that will be 
collected from applicants will change. Some of the information 
collection that is currently necessary for the board or council to 
administer the organic assessment exemption will no longer be required 
moving forward (e.g. detail of all commodities produced, handled, 
marketed, processed, manufactured, fed, or imported by the entity to 
ensure it is a 100 percent organic operation). In addition, some

[[Page 82015]]

new information will be required of split operations to ensure 
compliance under the expanded exemption (e.g. declaration of split 
operation; estimated amount of organic product that will be produced, 
handled, marketed, processed, manufactured, fed, or imported by the 
split operation; and estimated total quantity of product that will be 
produced, handled, marketed, processed, manufactured, fed, or imported 
by the split operation). As such, additional modifications will be made 
to Form AMS-15, Organic Exemption Request Form, to account for split 
operations. However, no changes to the section of each order, plan, 
and/or regulation that specifies the information collection 
requirements for the organic assessment exemption will be made.

Who is eligible for exemption under a marketing order?

    This final rule will modify the eligibility requirements for 
organic assessment exemptions that are currently in place for marketing 
order programs. Under this action, persons who are subject to an 
assessment under a designated marketing order, who maintain a valid 
organic certificate, and who handle any assessable agricultural 
commodities that are certified as ``organic'' or ``100 percent 
organic'' (as defined in the NOP) will be eligible for the organic 
assessment exemption under amended requirements in part 900.
    All of the 23 Federal marketing orders impacted by this rule assess 
only handlers (i.e., persons that handle the regulated commodity) to 
fund the operations of the respective programs. Under the current 
organic assessment exemption regulation, which was promulgated as a 
result of the provisions in the 2002 Farm Bill that amended the FAIR 
Act, to qualify for an exemption from a commodity promotion assessment, 
a person--meaning an individual, group of individuals, corporation, 
association, cooperative, or other business entity--must ``produce and 
market'' solely 100 percent organic products, and must not also produce 
or market any conventional or nonorganic products. For the purpose of 
that regulation, ``produce'' was defined as to grow or produce food, 
feed, livestock, or fiber or to receive food, feed, livestock, or fiber 
and alter that product by means of feeding, slaughtering, or 
processing. USDA determined that handlers, processors and producers 
acting as handlers, and importers were also eligible for exemption if 
any of their activities met the definition of ``produce'' as outlined 
above. Additionally, the regulation only provided for granting organic 
assessment exemptions to persons that handle domestic commodities 
regulated under Federal marketing orders and not importers, as 
importers regulated under section 608e of the AMAA (7 U.S.C. 608e-1) 
(section 8e) do not pay assessments. Therefore, importers are not 
eligible for an organic assessment exemption under part 900.
    The 2002 Farm Bill amended the FAIR Act to make organic assessment 
exemptions available to any person that ``produces and markets'' 
organic products, should they also conform to certain other criteria. 
This rule will incorporate the broadened eligibility criteria 
established by the 2014 Farm Bill amendment to the FAIR Act into the 
regulations. Importers of commodities covered by section 8e of the 
Agricultural Marketing Agreement Act of 1937 will remain ineligible for 
an exemption as importers do not pay assessments under marketing order 
programs.
    In addition, the FAIR Act amendment also expanded eligibility to 
cover split organic operations. The requirement that operations be 
``solely'' 100 percent organic was replaced with the requirement that 
operations maintain a ``valid organic certificate'' issued under the 
Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and 
the NOP. Handlers who handle certified ``organic'' and/or ``100 percent 
organic'' products will qualify for an organic assessment exemption 
regardless of whether the commodity subject to the exemption is handled 
by a person that also handles conventional or nonorganic agricultural 
products of the same commodity as that for which the exemption is 
claimed.

Examples

    For all examples, assume that the person handles or markets a 
commodity regulated under a marketing order, is otherwise obligated to 
pay assessments under that order, and that 60 percent of the marketing 
order's budgeted expenses are attributed to market promotion 
activities, including paid advertising:
     A handler who handles all of their volume as certified 
``organic'' or ``100 percent organic'' product (received from certified 
organic producers), and maintains a valid organic certificate under the 
NOP, will be eligible for an organic assessment exemption. The handler 
will be exempt from 100 percent of the portion of the marketing order 
assessment attributed to marketing promotion activities (60 percent). 
The handler will be obligated to pay 40 percent of the assessment rate 
on 100 percent of the product handled. The assessment calculation will 
be: Quantity handled x 40 percent of the assessment rate.
     A handler who handles 20 percent of their volume as 
certified ``organic'' or ``100 percent organic'' product (received from 
certified organic producers) and maintains a valid organic certificate 
under the NOP will be eligible for an organic assessment exemption. The 
handler will be exempt from the portion of the marketing order 
assessment attributed to marketing promotion activities (60 percent) on 
the quantity of the products handled that are organic (20 percent). 
Conversely, the handler will be obligated to pay 40 percent of the 
assessment rate on 20 percent of the product handled and 100 percent of 
the assessment rate on 80 percent of the product handled. The 
assessment calculation will be: (Quantity handled x 20 percent x 40 
percent of the assessment rate) + (quantity handled x 80 percent x 
assessment rate).
     A handler who handles 20 percent of their volume as 
``organic'' or ``100 percent organic'' received from certified organic 
producers, but does NOT maintain a valid organic certificate under the 
NOP, will NOT be eligible for any exemption of their marketing order 
assessments as they do not have proper certification. The handler will 
be obligated to pay 100 percent of the assessment associated with the 
quantity of product handled.
     An importer who imports a commodity that is subject to 
import regulation under section 8e will NOT be eligible for an 
exemption from marketing order assessments as importers are not 
obligated to pay assessments under a marketing order or the import 
regulations.

Who is eligible for exemption under a research and promotion program?

    Just as for Federal marketing orders, this final rule will modify 
the eligibility requirements for organic assessment exemptions that are 
currently in place for research and promotion programs. Under this 
proposed action, persons who are subject to an assessment under a 
designated research and promotion program, who maintain a valid organic 
certificate, and who handle any assessable agricultural commodities 
that are certified as ``organic'' or ``100 percent organic'' (as 
defined in the NOP) will be eligible for an organic assessment 
exemption under amended requirements contained in each of the programs' 
respective orders, plans, and/or regulations. Persons who are importing 
organic products in compliance with a U.S. equivalency arrangement 
established by AMS-NOP

[[Page 82016]]

pursuant to OFPA and the NOP regulations will also be eligible for an 
organic assessment exemption.
    For the 22 research and promotion programs currently enacted, 16 
assess producers, 2 assess handlers, 2 assess manufacturers, 2 assess 
processors, and 16 assess importers. Under the provisions for each of 
the respective programs, some also assess other entities, in addition 
to the named classes, including exporters, feeders, and seed stock 
producers. Any of the entities obligated to pay assessments under one 
of the aforementioned programs is eligible for an organic assessment 
exemption.
    Under the current regulation, organic assessment exemptions are 
available to any person who ``produces or markets solely 100 percent 
organic products'' and conforms to certain requirements. As mentioned 
previously, the recent amendment to the FAIR Act expands the organic 
assessment exemption eligibility to any person that ``produces, 
handles, markets, or imports'' organic products under a ``valid organic 
certificate'' issued under the OFPA and the NOP. This final rule will 
remove the ``solely 100 percent organic'' requirement currently in the 
regulations and allow split operations to request an organic assessment 
exemption for all products that qualify as certified ``organic'' and 
``100 percent organic.'' Also, just as for Federal marketing orders, 
``person'' will continue to mean any individual, group of individuals, 
corporation, association, cooperative, or other business entity engaged 
in any of the aforementioned activities.

Examples

    For all examples, assume that the person produces, handles, 
processes, or imports a commodity regulated under a research and 
promotion program and is otherwise obligated to pay assessments under 
that order:
     A producer who maintains a valid organic certificate under 
the NOP and markets 100 percent of the products they produce as 
certified ``organic'' or ``100 percent organic'' will be eligible for 
an organic exemption on 100 percent of the quantity produced.
     A handler who maintains a valid organic certificate under 
the NOP and handles 20 percent of the products they handle as certified 
``organic'' or ``100 percent organic'' products will be eligible for an 
organic exemption on 20 percent of the total quantity they handle. 
Conversely, the handler will continue to be obligated to pay the full 
assessment on the 80 percent of the total quantity they handle that is 
not ``organic'' or ``100 percent organic.'' The assessment calculation 
will be: Quantity produced x 80 percent x assessment rate.
     A producer who has a split operation (50 percent organic 
and 50 percent conventional or nonorganic) with the combined total of 
production above the de minimis amount and maintains a valid organic 
certificate under NOP for the 50 percent organic product will be 
eligible for an exemption on the organic portion, but must pay on the 
50 percent conventional or nonorganic portion--even though the 
remaining conventional or nonorganic portion is below the de minimis 
amount.
     A processor who processes 20 percent of their volume as 
``organic'' or ``100 percent organic'' products received from certified 
organic producers, but does NOT maintain a valid organic certificate 
under the NOP, will NOT be eligible for any exemption of their 
assessment obligation as they are NOT a certified handling operation. 
The processor will be obligated to pay 100 percent of the assessment 
associated with the quantity of product they processed and marketed.
     An importer who maintains a valid organic certificate 
under the NOP and markets the products that they import as organic 
products, but the producers of the products are NOT certified under the 
NOP, will be eligible for an organic assessment exemption if the 
product is certified as ``organic'' or ``100 percent organic'' under a 
U.S. equivalency arrangement established under the NOP.

Final Regulatory Flexibility Act Analysis

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), AMS is required to examine the impact of this final rule on 
small entities. The purpose of the RFA is to fit regulatory actions to 
the scale of businesses subject to such actions in order that small 
businesses will not be unduly or disproportionately burdened. 
Accordingly, AMS has considered the economic impact of this action on 
small entities and has prepared this final regulatory flexibility 
analysis.

Analysis of Marketing Order Programs

    Marketing orders issued pursuant to the AMAA, and the rules issued 
thereunder, are unique in that they are brought about through group 
action of essentially small entities acting on their own behalf.
    Assessments under marketing order programs are paid by the handlers 
regulated under each of the Federal marketing orders. There are 
approximately 950 handlers regulated under the 23 Federal marketing 
orders with market promotion authority (there are 28 marketing orders 
total--5 do not have authority for market promotion activities). 
Currently, only 10 entities handle or market solely 100 percent organic 
products and claim exemptions from paying assessments for market 
promotion activities, including paid advertising, under the assessment 
exemption regulations contained in Sec.  900.700. USDA believes that as 
many as 20 percent of the entities handling agricultural products under 
the various marketing orders (approximately 190 firms) may handle some 
quantity of organic products, but do not qualify for an assessment 
exemption under the current regulations.
    Small agricultural service firms are defined by the Small Business 
Administration (SBA) as those having annual receipts of less than 
$7,000,000, and small agricultural producers are defined as those 
having annual receipts of less than $750,000 (13 CFR 121.201). All of 
the entities currently approved for an organic assessment exemption 
under the marketing order programs would be classified by SBA as small 
agricultural service firms. In addition, although the exact number of 
potential applicants is unknown, USDA believes that many of the 
entities that will become eligible for an organic assessment exemption 
as a result of this action may also be classified as small firms under 
the SBA classification.
    As previously mentioned, Section 501 of the FAIR Act was amended by 
the 2002 Farm Bill to exempt persons that produced and marketed solely 
100 percent organic products, and were not split operations, from the 
payment of an assessment for commodity promotion activities under a 
commodity promotion law. The amendment required the Secretary to 
promulgate regulations with regard to the eligibility and compliance of 
such organic assessment exemptions. AMS subsequently added Sec.  
900.700 to the General Regulations (7 CFR part 900) governing Federal 
marketing orders to establish the criteria and procedure for obtaining 
an organic assessment exemption.
    On February 7, 2014, the FAIR Act was again amended by the 2014 
Farm Bill to broaden the eligibility criteria for receiving an organic 
assessment exemption under a commodity promotion program. Specifically, 
the 2014 Farm Bill amendment to the FAIR Act exempts persons that 
produce, handle, market, or import products certified as ``organic'' or 
``100 percent organic'' from payment of assessments under a commodity 
promotion program. The exemption applies regardless of

[[Page 82017]]

whether a producer, handler, marketer, or importer also produces, 
handles, markets, or imports conventional or nonorganic products. The 
statute further requires the Secretary to promulgate regulations under 
each of the commodity promotion programs to implement the amendment.
    As required, USDA is amending the general regulations that will 
affect 23 of the 28 Federal marketing orders that have authority for 
market promotion, including paid advertising. These amendments modify 
the current provisions and broaden the eligibility for organic handling 
operations to become exempt from paying assessments on the certified 
``organic'' and ``100 percent organic'' products that they handle, 
regardless of whether the handler is a split operation.
    The 23 marketing order programs affected by this final rule allow 
for promotion activities designed to assist, improve, and promote the 
marketing, distribution, or consumption of the commodities covered 
under the marketing orders. Some of the orders also include authority 
for paid advertising. Expenses necessary to administer the programs are 
paid for by assessments levied on handlers regulated under the various 
marketing orders. Market promotion activities, including paid 
advertising, are only one component of each marketing order's 
regulatory scheme. The assessment exemption for organic products only 
applies to the portion of a marketing order assessment that is 
associated with market promotion activities, including paid 
advertising. All handlers subject to regulation under a marketing order 
are obligated to pay the portion of the assessment that is not directly 
related to market promotion, including paid advertising. This includes 
handlers who are granted an organic assessment exemption.
    Under this final rule, Sec.  900.700 is amended to broaden the 
criteria for persons eligible to obtain an assessment exemption for 
marketing promotion, including paid advertising; streamline the 
procedure for applying for an exemption; modify the procedure for 
calculating the assessment exemption; and revise other procedural 
details necessary to effectuate the 2014 Farm Bill amendment. These 
changes will allow more handlers to qualify for an organic assessment 
exemption than are presently eligible under the current regulations.
    Regarding the impact on affected entities under a marketing order, 
this final rule will impose minimal incurred costs in filing the 
exemption application and in maintaining records needed to verify the 
applicant's exemption status during the period that the entity is 
exempt. Under the revised regulations, applicants will still be 
required to submit an application for exemption on Form FV-649 and 
receive approval from the applicable board or committee to obtain the 
assessment exemption. However, the eligibility criteria has been 
broadened and the amount of documentation required of an applicant has 
been reduced, thus reducing the burden on entities who wish to 
participate. Applicants will continue to submit one application 
annually. The annual burden associated with requests for organic 
assessment exemptions for all of the marketing order industries is 
estimated to total 47.5 hours (190 applicants x 15 minutes) (see the 
Paperwork Reduction Act section below for greater explanation of the 
information collection and recordkeeping burden).
    The total estimated cost burden associated with the information 
collection is estimated to be $712, or $3.75 per applicant. The total 
cost was estimated by multiplying the expected burden hours associated 
with the organic exemption application (47.5 hours) by $15.00 per hour, 
a sum deemed reasonable should an applicant be compensated for their 
time.
    During the 2012-2013 marketing season, assessments for all Federal 
marketing orders totaled approximately $89,700,000. Of that amount, 
about $58,300,000 (or 65 percent) was made available for marketing 
promotion activities, including paid advertising. While there is not 
enough information to generate a reasonable estimate, USDA believes 
about two percent, on average, of the total assessments are for 
commodities that are certified organic. Thus, assessments on organic 
commodities might have totaled as much as $1,794,000 (2 percent of 
$89,700,000). That total might be reduced moving forward by $1,166,000 
(65 percent of $1,794,000--the portion of the assessments made 
available for marketing activities) if all of the approximately 190 
handlers that USDA believes may be eligible were to apply to the 
respective board or committee and be approved for an organic assessment 
exemption under the revised regulations.
    There are approximately 10 handlers that are approved for organic 
assessment exemptions under the current regulation, with a total 
exempted amount of approximately $135,000. The current exemption 
averages approximately $13,500 per handler. Based on the estimate that 
190 handlers might be exempt from assessments under the proposed 
criteria, and an estimated $1,166,000 of potential exemptions, USDA 
estimates that exempted organic handlers may average $6,136 in 
decreased assessments. This amount is less than half of the current 
average. However, the revised eligibility requirements are expected to 
attract more handlers than under the current regulations. Many of those 
handlers may be small entities or may only handle a small percentage of 
organic products relative to the total amount of product handled.
    There is some variation among the 23 marketing orders on the 
percent of assessments used for market promotion activities, including 
paid advertising. Thus, the actual reduction in assessments will differ 
among the various marketing orders. In fact, the amounts allocated for 
marketing promotion activities as a percentage of the total marketing 
order budgets range from less than 5 percent to almost 95 percent. As 
such, the financial impact of this rule to each handler individually, 
and to each of the 23 distinct marketing order programs collectively, 
cannot be accurately estimated. However, several of the affected 
marketing order programs do expect to see large reductions in 
assessment revenue moving forward. The Oregon-Washington Fresh Pear 
Committee anticipates a $362,718 reduction in assessments 
(approximately 3.8 percent of total assessments), the California Almond 
Board expects a reduction of $298,000 (approximately 0.5 percent), and 
the California Raisin Administrative Committee expects a reduction of 
$180,000 (approximately 3.5 percent) as a result of the expanded 
eligibility for organic assessment exemptions. These boards and 
committees will have to adjust programs and reduce budgeted expenses 
accordingly.
    Since this action has the potential to exempt agricultural handling 
entities from assessments, AMS believes that this rule will have a net 
beneficial economic impact on exempted firms. The additional burden 
associated with the additional information collection will be more than 
offset by reduced assessment obligations. The benefits for this final 
rule are not expected to be disproportionately greater or less for 
smaller entities than for larger entities regulated under any of the 23 
marketing order programs.

Analysis of Research and Promotion Programs

    Research and promotion programs established under the various 
commodity promotion acts, and the rules and regulations issued 
thereunder,

[[Page 82018]]

are like marketing orders in that they are uniquely brought about 
through group action of essentially small entities acting on their own 
behalf.
    Producers, handlers, processors, manufacturers, importers, 
exporters, feeders, and seed stock producers pay assessments to the 
national boards and councils that administer the various commodity 
research and promotion programs, or in some cases to other parties 
designated by a board or council to collect assessments. The number of 
entities paying assessments under each of the research and promotion 
programs varies considerably. For example, the mango program receives 
assessments from approximately 198 handlers and importers, while the 
beef program receives assessments from nearly 1 million producers and 
125 importers.
    As mentioned previously, small agricultural service firms are 
defined by the SBA as those having annual receipts of less than 
$7,000,000, and small agricultural producers are defined as those 
having annual receipts of less than $750,000. Many of the handlers, 
importers, manufacturers, exporters, feeders, and seed stock producers 
currently approved for organic assessment exemptions under the research 
and promotion programs would be classified by SBA as small agricultural 
service firms. In addition, most of the producers currently approved 
for exemptions would also be classified as small agricultural 
producers. The exact number and size of the potential applicants that 
will be eligible for an assessment exemption as a result of this action 
is not known. The current and estimated number of respondents filing 
exemption claims appears later in this discussion; however, USDA 
believes that many of the entities that will become eligible for an 
organic assessment exemption under the regulation changes contained 
herein may also be classified as small firms and/or small producers 
under the SBA classification.
    This final rule was initiated as a result of amendments to the FAIR 
Act contained in the 2014 Farm Bill. This rule modifies the organic 
assessment exemption regulations established under each of the 22 
research and promotion programs to revise the eligibility criteria for 
obtaining an organic assessment exemption. As revised, the regulations 
provide that entities that produce, handle, market, process, 
manufacture, feed, or import organic products may be exempt from the 
payment of an assessment under a commodity promotion law with respect 
to any agricultural commodity that is certified as ``organic'' or ``100 
percent organic'' under the NOP. The exemption will apply to the 
certified ``organic'' or ``100 percent organic'' products regardless of 
whether the agricultural commodity subject to the exemption is 
produced, handled, marketed, processed, manufactured, fed, or imported 
by a person that also produces, handles, markets, processes, 
manufactures, feeds, or imports conventional agricultural products. 
This is a change from the previous regulations, which only allowed 
organic assessment exemptions for organic operations that produced and 
marketed solely products that were ``100 percent organic'' as defined 
under the OFPA and were not split operations.
    Under the previous regulations, eligible producers, handlers, 
marketers, processors, manufacturers, exporters, feeders, and importers 
that wished to be exempted from assessment on their certified organic 
products must have first submitted a request for exemption to the 
appropriate board or council on Form AMS-15. This provision does not 
change as a result of this final rule. However, this action does change 
the information collection requirements for requesting an organic 
assessment exemption to reflect the revised eligibility criteria and 
will necessitate modifying Form AMS-15 to reflect the changes 
established by this rule. The modified form will continue to be 
required under the revised regulations to assist the board or council 
in the effective administration of the exemption and to ensure 
compliance with the exemption requirements.
    In preparing this final regulatory flexibility analysis, AMS has 
attempted to identify the entities that will be affected by this final 
rule and examine the potential impact on such entities. AMS has 
determined that this action will have little negative impact on 
entities subject to research and promotion programs. Further, the 
changes will only impose minimal costs incurred in the filing of the 
exemption request and in maintaining records needed to verify the 
applicant's exemption status during the period that the entity is 
exempt. Under the revised regulations, the required information 
collection burden will be about the same for entities who wish to 
initiate or perpetuate an organic assessment exemption. Applicants will 
continue to be required to submit one application annually.
    All of the entities paying assessments to the research and 
promotion programs are eligible to take advantage of the rule changes 
contained herein, provided the parties elect to apply and otherwise 
comply with the exemption requirements as specified under each of the 
individual orders.
    Approximately 1,493 entities are currently approved for organic 
assessment exemptions under the 22 research and promotion programs. 
Organic assessment exemptions for the past year were approximately 
$1,400,000 for all of the programs in aggregate. In 2013, it is 
estimated that the dairy promotion and research program had the largest 
number of exemptions, with 1,150 producers exempt, and the highest 
dollar amount, with nearly 1 million dollars of assessment exemptions. 
Participation in the other programs varied. Ten of the 22 research and 
promotion programs currently do not have any entities approved for 
organic assessment exemptions.
    The estimated number of respondents filing exemption claims with 
the boards or councils after implementation of the changes to the 
regulations is anticipated as follows:

------------------------------------------------------------------------
                                         Current           Estimated
------------------------------------------------------------------------
Beef..............................                 30              2,966
Blueberries.......................                  8                204
Christmas trees...................                  0                  0
Cotton............................                  0        no estimate
Dairy.............................              1,150              1,823
Eggs..............................                  0                 20
Fluid milk........................                  0                 11
Hass avocados.....................                230                771
Honey.............................                  2                327
Lamb..............................                  3                  7
Mangos............................                  3                 75
Mushrooms.........................                  7                246

[[Page 82019]]

 
Paper and Paper-based Packaging...                  0                  0
Peanuts...........................                  0                 85
Popcorn...........................                  0                170
Pork..............................                  5                 18
Potatoes..........................                  6                904
Raspberries.......................                  0                232
Softwood lumber...................                  0                  0
Sorghum...........................                 10                 10
Soybeans..........................                 39              1,930
Watermelons.......................                  0                412
                                   -------------------------------------
    Totals........................              1,493             10,211
------------------------------------------------------------------------

    No respondents are expected from among Christmas tree, paper and 
paper-based packaging, or softwood lumber entities, given the nature of 
their industries. In addition, several of the programs exempt smaller 
entities from assessment--fluid milk processors processing less than 3 
million pounds; egg producers owning 75,000 or fewer hens; raspberry 
producers producing less than 20,000 pounds; mushroom producers 
producing less than 500,000 pounds; honey first handlers handling less 
than 250,000 pounds; popcorn processors processing less than 4 million 
pounds; blueberry producers producing less than 2,000 pounds; and 
sorghum importers importing less than 1,000 bushels of grain or 5,000 
tons of silage. More new respondents would be expected under those 
programs if the smaller entities were not already exempt based on 
minimum quantities.
    Under the revised regulations, the annual burden related to 
submitting requests for organic assessment exemptions for all of the 
entities covered under the 22 research and promotion programs is 
estimated to total 2,552.75 hours (10,211 entities x 15 minutes) (see 
the Paperwork Reduction Act section for more detail). The total 
financial burden associated with the information collection for all 
industries covered by the programs is estimated to be $38,291.25, or 
$3.75 per applicant. The total cost was estimated by multiplying the 
expected burden hours associated with the exemption application 
(2,552.75 hours) by $15.00 per hour, a sum deemed reasonable should an 
applicant be compensated for their time.
    This final rule will allow eligible producers, handlers, first 
handlers, marketers, processors, manufacturers, importers, exporters, 
feeders, and importers to request an exemption from paying assessments 
on products certified as ``organic'' or ``100 percent organic.'' This 
action revises the organic exemption eligibility criteria under each of 
the research and promotion programs, thereby making the exemption 
available to more entities. The revised eligibility criteria are 
expected to increase the total number of participants as well as the 
total amount of organic assessment exemptions under each of the 
programs. The estimated total in organic assessment exemption amounts 
expected to result from revising the eligibility requirements are as 
follows:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Beef....................................................      $2,400,000
Blueberries.............................................     no estimate
Christmas trees.........................................               0
Cotton..................................................     no estimate
Dairy...................................................       4,190,000
Eggs....................................................         742,500
Fluid milk..............................................       4,530,000
Hass avocados...........................................         850,000
Honey...................................................     no estimate
Lamb....................................................         114,000
Mangos..................................................     no estimate
Mushrooms...............................................         132,655
Paper and Paper-based packaging.........................               0
Peanuts.................................................           6,517
Popcorn.................................................     no estimate
Pork....................................................         111,000
Potatoes................................................     no estimate
Raspberries.............................................     no estimate
Softwood lumber.........................................               0
Sorghum.................................................         122,500
Soybeans................................................         427,800
Watermelons.............................................     no estimate
                                                         ---------------
    Total...............................................     $13,626,972
------------------------------------------------------------------------

    There are no estimated assessment exemption amounts for the 
Christmas tree, paper and paper-based-packaging, or softwood lumber 
programs given the nature of these industries. Some boards and councils 
were able to estimate the number of organic production and marketing 
operations within their industries; however, based upon current data, 
there is not enough information to generate a reasonable estimate of 
the potential dollar amount of organic assessment exemptions reported 
as ``no estimate.'' The boards and councils that reported ``no 
estimate'' generally represent programs that estimated small 
percentages of participation amongst their industries. As a result of 
this action, some of the boards and councils listed above may have to 
adjust programs or reduce budgeted expenses in response to organic 
assessment exemptions.
    Since this action has the potential to exempt agricultural 
production, handling, and marketing entities from assessments, this 
rule will have an additional burden associated with the additional 
information collection, which will be more than offset by reduced 
assessment obligations. The benefits for this action are not expected 
to be disproportionately greater or less for small producers, handlers, 
or marketers than for larger entities regulated under any of the 22 
research and promotion programs.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) under 
23 Federal marketing order programs (7 CFR parts 905, 906, 915, 922, 
923, 925, 927, 929, 930, 932, 948, 955, 956, 958, 959, 966, 981, 982, 
984, 985, 987, 989, and 993) and 22 research and promotion programs (7 
CFR parts 1150, 1160, 1205, 1206, 1207, 1208, 1209, 1210, 1212, 1214, 
1215, 1216, 1217, 1218, 1219, 1220, 1221, 1222, 1230, 1250, 1260, and 
1280). Upon publication of this final rule, AMS will submit a 
Justification for Change to OMB for the AMS-15 Exemption Application 
Form for Research and Promotion Programs, OMB No. 0581-0093 National 
Research, Promotion and Consumer Information Programs. AMS will also 
submit a Justification for Change to OMB for the FV-649 Exemption 
Application Form for Marketing Orders, OMB No. 0581-0216 Fruit and 
Vegetable Marketing Orders Certified Organic Handler Marketing 
Promotion Assessment Exemption under 23 Federal Marketing Orders. The 
Justification for Change will request approval for an increase in

[[Page 82020]]

number of respondents and an increase in burden hours for these two 
forms.
    After consideration of all relevant material presented, including 
information submitted by the commenters and other information, it is 
hereby found that this rule, as hereinafter set forth, is consistent 
with and will effectuate the declared policy of the previously 
referenced commodity promotion laws, the 2014 Farm Bill, and the FAIR 
Act.

List of Subjects

7 CFR Part 900

    Administrative practice and procedure, Freedom of information, 
Marketing agreements, Reporting and recordkeeping requirements.

7 CFR Part 1150

    Dairy products, Reporting and recordkeeping requirements, Research.

7 CFR Part 1160

    Milk, Reporting and recordkeeping requirements.

7 CFR Part 1205

    Advertising, Agricultural research, Cotton, Marketing agreements, 
Reporting and recordkeeping requirements.

7 CFR Part 1206

    Administrative practice and procedure, Advertising, Consumer 
information, Agricultural research, Mango, Marketing agreements, 
Reporting and recordkeeping requirements.

7 CFR Part 1207

    Advertising, Agricultural Research, Potatoes, Reporting and 
recordkeeping requirements.

7 CFR Part 1208

    Administrative practice and procedure, Advertising, Agricultural 
research, Marketing agreements, Raspberries, Reporting and 
recordkeeping requirements.

7 CFR Part 1209

    Administrative practice and procedure, Advertising, Agricultural 
research, Mushrooms, Reporting and recordkeeping requirements.

7 CFR Part 1210

    Administrative practice and procedure, Advertising, Agricultural 
research, Reporting and recordkeeping requirements, Watermelons.

7 CFR Part 1212

    Administrative practice and procedure, Advertising, Agricultural 
research, Reporting and recordkeeping requirements.

7 CFR Part 1214

    Administrative practice and procedure, Advertising, Christmas 
trees, Marketing agreements, Reporting and recordkeeping requirements.

7 CFR Part 1215

    Administrative practice and procedures, Advertising, Agricultural 
research, Popcorn, Reporting and recordkeeping requirements.

7 CFR Part 1216

    Administrative practice and procedure, Advertising, Agricultural 
research, Peanuts, Reporting and recordkeeping requirements.

7 CFR Part 1217

    Administrative practice and procedure, Advertising, Marketing 
agreements, Reporting and recordkeeping requirements, Softwood lumber.

7 CFR Part 1218

    Administrative practice and procedure, Advertising, Agricultural 
Research, Blueberries, Reporting and recordkeeping requirements.

7 CFR Part 1219

    Administrative practice and procedure, Advertising, Agricultural 
research, Avocados, Reporting and recordkeeping requirements.

7 CFR Part 1220

    Administrative practice and procedure, Advertising, Agricultural 
research, Reporting and recordkeeping requirements, Soybeans.

7 CFR Part 1221

    Administrative practice and procedure, Advertising, Agricultural 
research, Consumer information, Marketing agreements, Reporting and 
recordkeeping requirements, Sorghum.

7 CFR Part 1222

    Administrative practice and procedure, Advertising, Labeling, 
Marketing agreements, Reporting and recordkeeping requirements.

7 CFR Part 1230

    Administrative practice and procedure, Advertising, Agricultural 
research, Meat and meat products, Reporting and recordkeeping 
requirements.

7 CFR Part 1250

    Administrative practice and procedure, Advertising, Agricultural 
research, Eggs and egg products, Reporting and recordkeeping 
requirements.

7 CFR Part 1260

    Administrative practice and procedure, Advertising, Agricultural 
research, Imports, Meat and meat products, Reporting and recordkeeping 
requirements.

7 CFR Part 1280

    Administrative practice and procedure, Advertising, Agricultural 
research, Meat and meat products, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR parts 900, 1150, 
1160, 1205, 1206, 1207, 1208, 1209, 1210, 1212, 1214, 1215, 1216, 1217, 
1218, 1219, 1220, 1221, 1222, 1230, 1250, 1260, and 1280 are amended as 
follows:

PART 900--GENERAL REGULATIONS

0
1. The authority citation for 7 CFR part 900 continues to read as 
follows:

    Authority:  7 U.S.C. 601-674 and 7 U.S.C. 7401.


0
2. Revise Sec.  900.700 to read as follows:


Sec.  900.700  Exemption from assessments.

    (a) This section specifies criteria for identifying persons 
eligible to obtain an exemption from the portion of the assessment used 
to fund marketing promotion activities under a marketing order and the 
procedures for applying for such an exemption under 7 CFR parts 905, 
906, 915, 922, 923, 925, 927, 929, 930, 932, 948, 955, 956, 958, 959, 
966, 981, 982, 984, 985, 987, 989, 993, and such other parts (included 
in 7 CFR parts 905 through 998) covering marketing orders for fruits, 
vegetables, and specialty crops as may be established or amended to 
include market promotion. For the purposes of this section, the term 
``assessment period'' means fiscal period, fiscal year, crop year, or 
marketing year as defined under these parts; the term ``marketing 
promotion'' means marketing research and development projects or 
marketing promotion, including paid advertising designed to assist, 
improve, or promote the marketing, distribution, or consumption of the 
applicable commodity.
    (b) A handler who operates under an approved National Organic 
Program (7 CFR part 205) (NOP) organic handling system plan and is 
subject to assessments under a part or parts specified in paragraph (a) 
of this section may be exempt from the portion of the assessment 
applicable to marketing promotion, including paid advertising, provided 
that:

[[Page 82021]]

    (1) Only agricultural commodities certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP) are eligible for exemption;
    (2) The exemption shall apply to all certified ``organic'' or ``100 
percent organic'' (as defined in the NOP) products of a handler 
regardless of whether the agricultural commodity subject to the 
exemption is handled by a person that also handles conventional or 
nonorganic agricultural products of the same agricultural commodity as 
that for which the exemption is claimed;
    (3) The handler 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);
    (4) Any handler so exempted shall continue to be obligated to pay 
assessments under such part or parts specified that are associated with 
any agricultural products that do not qualify for an exemption under 
this section; and
    (5) For exempted products, any handler so exempted shall be 
obligated to pay the portion of the assessment associated with the 
other authorized activities under such part or parts other than 
marketing promotion, including paid advertising.
    (c) Assessment exemption application. (1) To be exempt from paying 
assessments for these purposes under a part or parts listed in 
paragraph (a) of this section, the handler shall submit an application 
to the board or committee established under the applicable part or 
parts prior to or during the assessment period. This application, Form 
FV-649, ``Certified Organic Handler Application for Exemption from 
Market Promotion Assessments Paid Under Federal Marketing Orders,'' 
shall include:
    (i) The date, applicable committee or board, and Federal marketing 
order number;
    (ii) The applicant's full name, company name, address, telephone 
and fax numbers, and email address;
    (iii) Certification that the applicant maintains a valid 
certificate of organic operation under the OFPA and the NOP;
    (iv) Certification that the applicant handles or markets organic 
products eligible to be labeled ``organic'' or ``100 percent organic'' 
under the NOP;
    (v) Certification that the applicant is otherwise subject to 
assessments under the Federal marketing order program for which the 
exemption is requested;
    (vi) The number of organic certified producers for whom they handle 
or market product (including the applicant);
    (vii) A requirement that the applicant attach a copy of their 
certificate of organic operation and all applicable producer 
certificates of organic operation issued by a USDA-accredited 
certifying agent under the OFPA and the NOP;
    (viii) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (ix) Such other information as the committee or board may require, 
with the approval of the Secretary.
    (2) The handler shall file the application with the committee or 
board, prior to or during the applicable assessment period, and 
annually thereafter, as long as the handler continues to be eligible 
for the exemption. If the person complies with the requirements of this 
section and is eligible for an assessment exemption, the committee or 
board will approve the exemption request and provide written 
notification of such to the applicant within 30 days. If the 
application is disapproved, the committee or board will provide written 
notification of the reason(s) for such disapproval within the same 
timeframe.
    (3) The exemption will apply at the beginning of the next 
assessable period following notification of approval of the assessment 
exemption, in writing, by the committee or board.
    (d) Assessment exemption calculation. (1) The applicable assessment 
rate for any handler approved for an exemption shall be computed by 
dividing the committee's or board's estimated non-marketing promotion 
expenditures by the committee's or board's estimated total expenditures 
approved by the Secretary and applying that percentage to the 
assessment rate applicable to all persons for the assessment period. 
The modified assessment rate shall then be applied to the quantity of 
certified ``organic'' or ``100 percent organic'' products handled under 
an approved organic assessment exemption as provided in paragraph 
(c)(2) of this section. Products handled not subject to an approved 
organic assessment exemption shall be assessed at the assessment rate 
applicable to all persons for the assessment period. The committee's or 
board's estimated non-marketing promotion expenditures shall exclude 
the direct costs of marketing promotion and the portion of committee's 
or board's administrative and overhead costs (e.g., salaries, supplies, 
printing, equipment, rent, contractual expenses, and other applicable 
costs) to support and administer the marketing promotion activities.
    (2) If a committee or board does not plan to conduct any market 
promotion activities in a fiscal year, the committee or board may 
submit a certification to that effect to the Secretary, and as long as 
no assessments for such fiscal year are used for marketing promotion 
projects, or the administration of projects are funded by a previous 
fiscal period's assessments, the committee or board may assess all 
handlers, regardless of their organic status, the full assessment rate 
applicable to the assessment period.
    (3) For each assessment period, the Secretary shall review the 
portion of the assessment rate applicable to marketing promotion for 
persons eligible for an exemption and, if appropriate, approve the 
assessment rate.
    (4) When the requirements of this section for exemption no longer 
apply to a handler, the handler shall inform the committee or board 
within 30 days and pay the full assessment on all remaining assessable 
product for all committee or board assessments from the date the 
handler no longer is eligible to the end of the assessment period.
    (5) Within 30 days following the applicable assessment period, the 
committee or board shall re-compute the applicable assessment rate for 
handlers exempt under this section based on the actual expenditures 
incurred during the applicable assessment period. The Secretary shall 
review, and if appropriate, approve any change in the portion of the 
assessment rate for market promotion applicable to exempt handlers, and 
authorize adjustments for any overpayments or collection of 
underpayments.

PART 1150--DAIRY PROMOTION PROGRAM

0
3. The authority citation for 7 CFR part 1150 continues to read as 
follows:

    Authority:  7 U.S.C. 4501-4514 and 7 U.S.C. 7401.


0
4. In Sec.  1150.157, remove paragraph (i), redesignate paragraph (j) 
as paragraph (i), and revise paragraphs (a), (b), (c), (d), (e), (g), 
and newly redesignated paragraph (i) to read as follows:


Sec.  1150.157  Assessment exemption.

    (a) A producer described in Sec.  1150.152(a)(1) and (2) who 
operates 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:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP) are eligible for exemption;

[[Page 82022]]

    (2) The exemption shall apply to all certified ``organic'' or ``100 
percent organic'' (as defined in the NOP) products of the 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;
    (3) 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
    (4) 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.
    (b) To apply for exemption under this section, a producer subject 
to assessments pursuant to Sec.  1150.152(a)(1) and (2) shall submit a 
request to the Board on an Organic Exemption Request Form (Form AMS-15) 
at any time during the year initially, and annually thereafter on or 
before July 1, for as long as the producer continues to be eligible for 
the exemption.
    (c) A producer request for exemption shall include the following:
    (1) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (2) Certification that the applicant maintains a valid organic 
certificate issued under the OFPA and the NOP;
    (3) Certification that the applicant produces organic products 
eligible to be labeled ``organic'' or ``100 percent organic'' under the 
NOP;
    (4) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (5) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (6) Such other information as may be required by the Board, with 
the approval of the Secretary.
    (d) 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.
    (e) A producer approved for exemption under this section shall 
provide a copy of the Certificate of Exemption to each person 
responsible for remitting assessments to the Board on behalf of the 
producer pursuant to Sec.  1150.152(a).
* * * * *
    (g) An importer who imports products 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 on those products. Such importer may submit 
documentation to the Board and request an exemption from assessment on 
certified ``organic'' or ``100 percent organic'' dairy products on an 
Organic Exemption Request Form (Form AMS-15) at any time initially, and 
annually thereafter on or before July 1, as long as the importer 
continues to be eligible for the exemption. This documentation shall 
include the same information required of producers in paragraph (c) 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. The Board will also issue the importer an 
alphanumeric number valid for 1 year from the date of issue. This 
alphanumeric number should be entered by the importer on the CBP entry 
documentation. Any line item entry of ''organic'' or ``100 percent 
organic'' dairy products bearing this alphanumeric number assigned by 
the Board will not be subject to assessments. 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.
* * * * *
    (i) An importer who is exempt from payment of assessments under 
paragraph (g) of this section shall be eligible for reimbursement of 
assessments collected by the CBP on certified ``organic'' or ``100 
percent organic'' dairy products and may apply to the Secretary for a 
reimbursement. The importer would be required to submit satisfactory 
proof to the Secretary that the importer paid the assessment on exempt 
organic products.

PART 1160--FLUID MILK PROMOTION PROGRAM

0
5. The authority citation for 7 CFR part 1160 continues to read as 
follows:

    Authority:  7 U.S.C. 6401-6417 and 7 U.S.C. 7401.


0
6. In Sec.  1160.215, revise paragraphs (b) through (e) to read as 
follows:


Sec.  1160.215  Assessment exemption.

* * * * *
    (b) A fluid milk processor described in Sec.  1160.211(a) who 
operates under an approved National Organic Program (7 CFR part 205) 
(NOP) organic handling system plan may be exempt from the payment of 
assessments under this part, provided that:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP) are eligible for exemption;
    (2) The exemption shall apply to all certified ``organic'' or ``100 
percent organic'' (as defined in the NOP) products of a fluid milk 
processor regardless of whether the agricultural commodity subject to 
the exemption is processed by a person that also processes conventional 
or nonorganic agricultural products of the same agricultural commodity 
as that for which the exemption is claimed;
    (3) The fluid milk processor 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
    (4) Any fluid milk processor 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.
    (c) To apply for an assessment exemption, a fluid milk processor 
described in Sec.  1160.211(a) shall submit a request to the Board on 
an Organic Exemption Request Form (Form AMS-15) at any time during the 
year initially, and annually thereafter on or before July 1, for as 
long as the processor continues to be eligible for the exemption.
    (d) A fluid milk processor request for exemption shall include the 
following information:
    (1) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (2) Certification that the applicant maintains a valid organic 
certificate issued under the OFPA and the NOP;
    (3) Certification that the applicant processes organic products 
eligible to be labeled ``organic'' or ``100 percent organic'' under the 
NOP;
    (4) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (5) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and

[[Page 82023]]

    (6) Such other information as may be required by the Board, with 
the approval of the Secretary.
    (e) If a fluid milk processor complies with the requirements of 
this section, the Board will grant an assessment exemption and issue a 
Certificate of Exemption to the processor within 30 days. If the 
application is disapproved, the Board will notify the applicant of the 
reason(s) for disapproval within the same timeframe.
* * * * *

PART 1205--COTTON RESEARCH AND PROMOTION

0
7. The authority citation for 7 CFR part 1205 continues to read as 
follows:

    Authority:  7 U.S.C. 2101-2118.


0
8. In Sec.  1205.519, revise paragraphs (a), (b), (c), (d), (e), (f), 
and (h) to read as follows:


Sec.  1205.519  Organic exemption.

    (a) A producer who operates 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:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP) are eligible for exemption;
    (2) 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;
    (3) 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 the OFPA (7 CFR 
part 205); and
    (4) 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.
    (b) To apply for an exemption under this section, an eligible 
cotton producer shall submit a request for exemption to the Board on an 
Organic Exemption Request Form (Form AMS-15) at any time initially, and 
annually thereafter on or before the beginning of the crop year, as 
long as the producer continues to be eligible for the exemption.
    (c) A producer request for exemption shall include the following:
    (1) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (2) Certification that the applicant maintains a valid certificate 
of organic operation issued under the OFPA and the NOP;
    (3) Certification that the applicant produces and/or imports 
organic products eligible to be labeled ``organic'' or ``100 percent 
organic'' under the NOP;
    (4) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (5) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (6) Such other information as may be required by the Board, with 
the approval of the Secretary.
    (d) 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.
    (e) A producer approved for exemption under this section shall 
provide a copy of the Certificate of Exemption to each handler to whom 
the producer sells cotton. The handler shall maintain records showing 
the exempt producer's name and address and the exemption number 
assigned by the Board.
    (f) An importer who imports products 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 on those products. Such importer may submit 
documentation to the Board and request an exemption from assessment on 
certified ``organic'' or ``100 percent organic'' cotton and cotton 
products on an Organic Exemption Request Form (Form AMS-15) at any time 
initially, and annually thereafter, as long as the importer continues 
to be eligible for the exemption. This documentation shall include the 
same information required of producers in paragraph (c) 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. The Board will also issue the importer an 
alphanumeric number valid for 1 year from the date of issue. This 
alphanumeric number should be entered by the importer on the Customs 
entry documentation. Any line item entry of ``organic'' or ``100 
percent organic'' cotton and cotton products bearing this alphanumeric 
number assigned by the Board will not be subject to assessments. 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.
* * * * *
    (h) An importer who is exempt from payment of assessments under 
paragraph (f) of this section shall be eligible for reimbursement of 
assessments collected by Customs on certified ``organic'' or ``100 
percent organic'' cotton and cotton products and may apply to the 
Secretary for a reimbursement. The importer would be required to submit 
satisfactory proof to the Secretary that the importer paid the 
assessment on exempt organic products.

PART 1206--MANGO PROMOTION, RESEARCH, AND INFORMATION

0
9. The authority citation for 7 CFR part 1206 continues to read as 
follows:

    Authority:  7 U.S.C. 7411-7425 and 7 U.S.C. 7401.


0
10. In Sec.  1206.202, revise paragraphs (a), (b), (c), (d), and (e) 
and add paragraph (g) to read as follows:


Sec.  1206.202  Exemption for organic mangos.

    (a) A first handler who operates under an approved National Organic 
Program (7 CFR part 205) (NOP) organic handling system plan may be 
exempt from the payment of assessments under this part, provided that:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP) are eligible for exemption;
    (2) The exemption shall apply to all certified ``organic'' or ``100 
percent organic'' (as defined in the NOP) products handled by the first 
handler regardless of whether the agricultural commodity subject to the 
exemption is handled by a person that also handles conventional or 
nonorganic agricultural products of the same agricultural commodity as 
that for which the exemption is claimed;
    (3) The first handler 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
    (4) Any first handler so exempted shall continue to be obligated to 
pay assessments under this part that are

[[Page 82024]]

associated with any agricultural products that do not qualify for an 
exemption under this section.
    (b) To apply for exemption under this section, an eligible first 
handler shall submit a request for exemption to the Board 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 first handler continues to be eligible for the exemption.
    (c) A first handler request for exemption shall include the 
following:
    (1) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (2) Certification that the applicant maintains a valid certificate 
of organic operation issued under the OFPA and the NOP;
    (3) Certification that the applicant handles organic products 
eligible to be labeled ``organic'' or ``100 percent organic'' under the 
NOP;
    (4) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (5) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (6) Such other information as may be required by the Board, with 
the approval of the Secretary.
    (d) If a first handler complies with the requirements of this 
section, the Board will grant an assessment exemption and issue a 
Certificate of Exemption to the first handler within 30 days. If the 
application is disapproved, the Board will notify the applicant of the 
reason(s) for disapproval within the same timeframe.
    (e) An importer who imports products 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, shall be exempt from 
the payment of assessments on those products. Such importer may submit 
documentation to the Board and request an exemption from assessment on 
certified ``organic'' or ``100 percent organic'' mangos 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 exemption. This 
documentation shall include the same information required of first 
handlers in paragraph (c) 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. If Customs collects the assessment on exempt 
product 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. 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.
* * * * *
    (g) An importer who is exempt from payment of assessments under 
paragraph (e) of this section shall be eligible for reimbursement of 
assessments collected by the CBP on certified ``organic'' or ``100 
percent organic'' mangos and may apply to the Secretary for a 
reimbursement. The importer would be required to submit satisfactory 
proof to the Secretary that the importer paid the assessment on exempt 
organic products.

PART 1207--POTATO RESEARCH AND PROMOTION PLAN

0
11. The authority citation for 7 CFR part 1207 continues to read as 
follows:

    Authority:  7 U.S.C. 2611-2627 and 7 U.S.C. 7401.


0
12. In Sec.  1207.514, revise paragraphs (a), (b), (c), (d), (e), and 
(f), and remove paragraph (h) to read as follows:


Sec.  1207.514  Exemption for organic potatoes.

    (a) A producer who operates 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:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP) are eligible for exemption;
    (2) 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;
    (3) 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
    (4) 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.
    (b) To apply for exemption under this section, the producer shall 
submit a request to the Board on an Organic Exemption Request Form 
(Form AMS-15) at any time during the year initially, and annually 
thereafter on or before July 1, for as long as the producer continues 
to be eligible for the exemption.
    (c) The producer request for exemption shall include the following:
    (1) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (2) Certification that the applicant maintains a valid certificate 
of organic operation issued under the OFPA and the NOP;
    (3) Certification that the applicant produces organic products 
eligible to be labeled ``organic'' or ``100 percent organic'' under the 
NOP;
    (4) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (5) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (6) Such other information as may be required by the Board, with 
the approval of the Secretary.
    (d) 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.
    (e) A producer approved for exemption under this section shall 
provide a copy of the Certificate of Exemption to each handler to whom 
the producer sells potatoes. The handler shall maintain records showing 
the exempt producer's name and address and the exemption number 
assigned by the Board.
    (f) An importer who imports products 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.

[[Page 82025]]

equivalency arrangement established under the NOP, shall be exempt from 
the payment of assessments on those products. Such importer may submit 
documentation to the Board and request an exemption from assessment on 
certified ``organic'' or ``100 percent organic'' potatoes, potato 
products, and seed potatoes on an Organic Exemption Request Form (Form 
AMS-15) at any time initially, and annually thereafter on or before 
July 1, as long as the importer continues to be eligible for the 
exemption. This documentation shall include the same information 
required of producers in paragraph (c) 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. If 
Customs collects the assessment on exempt product 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. 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.
* * * * *

PART 1208--PROCESSED RASPBERRY PROMOTION, RESEARCH, AND INFORMATION 
ORDER

0
13. The authority citation for 7 CFR part 1208 continues to read as 
follows:

    Authority:  7 U.S.C. 7411-7425; 7 U.S.C. 7401.


0
14. In Sec.  1208.53, revise paragraph (d) to read as follows:


Sec.  1208.53  Exemption and reimbursement procedures.

* * * * *
    (d) Organic exemption. (1) A producer of raspberries for processing 
who operates 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 Council on an Organic Exemption Request 
Form (Form AMS-15) at any time during the year initially, and annually 
thereafter on or before the beginning 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 provided by a USDA-accredited 
certifying agent under the OFPA and the NOP;
    (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 Council, with 
the approval of the Secretary.
    (4) If a producer complies with the requirements of this section, 
the Council will grant an assessment exemption and issue a Certificate 
of Exemption to the producer within 30 days. If the application is 
disapproved, the Council will notify the applicant of the reason(s) for 
disapproval within the same timeframe.
    (5) An importer who imports products 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 on those products. Such importer may submit 
documentation to the Council and request an exemption from assessment 
on certified ``organic'' or ``100 percent organic'' processed 
raspberries 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 (d)(3) of this section. If the 
importer complies with the requirements of this section, the Council 
will grant the exemption and issue a Certificate of Exemption to the 
importer within the applicable timeframe. If Customs collects the 
assessment on exempt product that is identified as ``organic'' by a 
number in the Harmonized Tariff Schedule, the Council 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 
Council for a reimbursement of assessments paid, and the importer must 
submit satisfactory proof to the Council that the importer paid the 
assessment on exempt organic product. 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.
* * * * *

PART 1209--MUSHROOM PROMOTION, RESEARCH, AND CONSUMER INFORMATION 
ORDER

0
15. The authority citation for 7 CFR part 1209 continues to read as 
follows:

    Authority:  7 U.S.C. 6101-6112 and 7 U.S.C. 7401.


0
16. In Sec.  1209.52, revise paragraph (a) to read as follows:


Sec.  1209.52  Exemption from assessment.

    (a) The following persons shall be exempt from assessments under 
this part:
    (1) A person who produces or imports, on average, 500,000 pounds or 
less of mushrooms annually shall be exempt from assessments under this 
part.

[[Page 82026]]

    (2) [Reserved]
* * * * *

0
17. In Sec.  1209.252,
0
a. Revise the section heading;
0
b. Redesignate paragraph (a)(2) as paragraph (a)(3);
0
c. Add new paragraph (a)(2); and
0
d. Revise newly redesignated paragraph (a)(3).
    The revision and addition read as follows:


Sec.  1209.252  Exemptions and exemption procedures.

    (a) * * *
    (2) In addition to the exemption provided for in Sec.  1209.52, a 
producer or importer who operates under an approved National Organic 
Program (7 CFR part 205) (NOP) organic production or handling 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 
or importer regardless of whether the agricultural commodity subject to 
the exemption is produced or imported by a person that also produces or 
imports conventional or nonorganic agricultural products of the same 
agricultural commodity as that for which the exemption is claimed;
    (iii) The producer or importer 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 or importer 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.
    (3) To apply for an exemption for organic mushrooms:
    (i) An eligible mushroom producer shall submit a request for 
exemption to the Council on an Organic Exemption Request Form (Form 
AMS-15) at any time initially, and annually thereafter on or before 
January 1, as long as the producer continues to be eligible for the 
exemption.
    (ii) A producer request for exemption shall include the following:
    (A) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (B) Certification that the applicant maintains a valid certificate 
of organic operation issued under the OFPA and the NOP;
    (C) Certification that the applicant produces organic products 
eligible to be labeled ``organic'' or ``100 percent organic'' under the 
NOP;
    (D) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (E) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (F) Such other information as may be required by the Council, with 
the approval of the Secretary.
    (iii) If a producer complies with the requirements of this section, 
the Council will grant an assessment exemption and issue a Certificate 
of Exemption to the producer within 30 days. If the application is 
disapproved, the Council will notify the applicant of the reason(s) for 
disapproval within the same timeframe.
    (iv) An eligible mushroom importer shall submit a request for 
exemption from assessment on imported certified ``organic'' or ``100 
percent organic'' mushrooms, or mushrooms certified as ``organic'' or 
``100 percent organic'' under a U.S. equivalency arrangement 
established under the NOP, on an Organic Exemption Request Form (Form 
AMS-15) at any time initially, and annually thereafter on or before 
January 1, as long as the importer continues to be eligible for the 
exemption. This documentation shall include the same information 
required of producers in paragraph (a)(4)(ii) of this section. If the 
importer complies with the requirements of this section, the Council 
will grant the exemption and issue a Certificate of Exemption to the 
importer. If Customs collects the assessment on exempt product that is 
identified as ``organic'' by a number in the Harmonized Tariff 
Schedule, the Council 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 Council for a reimbursement of 
assessments paid, and the importer must submit satisfactory proof to 
the Council that the importer paid the assessment on exempt organic 
product. 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.
    (v) The exemption will apply immediately following the issuance of 
the Certificate of Exemption.
* * * * *

PART 1210--WATERMELON RESEARCH AND PROMOTION PLAN

0
18. The authority citation for 7 CFR part 1210 continues to read as 
follows:

    Authority: 7 U.S.C. 4901-4916 and 7 U.S.C. 7401.

0
19. In Sec.  1210.516, revise paragraphs (a), (b), (c), (d), and (f) 
and remove paragraph (h) to read as follows:


Sec.  1210.516  Exemption for organic watermelons.

    (a) A producer or handler who operates under an approved National 
Organic Program (7 CFR part 205) (NOP) organic production or handling 
system plan may be exempt from the payment of assessments under this 
part, provided that:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP) are eligible for exemption;
    (2) The exemption shall apply to all certified ``organic'' or ``100 
percent organic'' (as defined in the NOP) products of a producer or 
handler regardless of whether the agricultural commodity subject to the 
exemption is produced or handled by a person that also produces or 
handles conventional or nonorganic agricultural products of the same 
agricultural commodity as that for which the exemption is claimed;
    (3) The producer or handler 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 
the OFPA (7 CFR part 205); and
    (4) Any producer or handler 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.
    (b) To apply for exemption under this section, an eligible producer 
or handler shall submit a request to the Board on an Organic Exemption 
Request Form (Form AMS-15) at any time during the year initially, and 
annually thereafter on or before January 1, for as long as the producer 
or handler continues to be eligible for the exemption.
    (c) The request for exemption shall include the following:
    (1) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (2) Certification that the applicant maintains a valid certificate 
of organic

[[Page 82027]]

operation issued under the OFPA and the NOP;
    (3) Certification that the applicant produces or handles organic 
products eligible to be labeled ``organic'' or ``100 percent organic'' 
under the NOP;
    (4) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (5) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (6) Such other information as may be required by the Board, with 
the approval of the Secretary.
    (d) If a producer or handler complies with the requirements of this 
section, the Board will grant an assessment exemption and issue a 
Certificate of Exemption to the producer or handler within 30 days. If 
the application is disapproved, the Board will notify the applicant of 
the reason(s) for disapproval within the same timeframe.
* * * * *
    (f) An importer who imports products 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 on those products. Such importer may submit 
documentation to the Board and request an exemption from assessment on 
certified ``organic'' or ``100 percent organic'' watermelons on an 
Organic Exemption Request Form (Form AMS-15) at any time initially, and 
annually thereafter on or before January 1, as long as the importer 
continues to be eligible for the exemption. This documentation shall 
include the same information required of producers in paragraph (c) 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. If Customs collects the assessment on exempt 
product 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. 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.
* * * * *

PART 1212--HONEY PACKERS AND IMPORTERS RESEARCH, PROMOTION, 
CONSUMER EDUCATION AND INDUSTRY INFORMATION ORDER

0
20. The authority citation for 7 CFR part 1212 continues to read as 
follows:

    Authority: 7 U.S.C. 7411-7425; 7 U.S.C. 7401.


0
21. In Sec.  1212.53,
0
a. Redesignate paragraph (b) as paragraph (c) and paragraph (c) as 
paragraph (b); and
0
b. Revise newly redesignated paragraph (c) and paragraphs (e) and (g).
    The revisions read as follows:


Sec.  1212.53  Exemption from assessment.

* * * * *
    (c) A first handler or importer who operates under an approved 
National Organic Program (7 CFR part 205) (NOP) organic handling system 
plan may be exempt from the payment of assessments under this part, 
provided that:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP), or certified as ``organic'' 
or ``100 percent organic'' under a U.S. equivalency arrangement 
established under the NOP, are eligible for exemption;
    (2) The exemption shall apply to all certified ``organic'' or ``100 
percent organic'' (as defined in the NOP) products of a first handler 
or importer regardless of whether the agricultural commodity subject to 
the exemption is handled or imported by a person that also handles or 
imports conventional or nonorganic agricultural products of the same 
agricultural commodity as that for which the exemption is claimed;
    (3) The first handler or importer 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
    (4) Any first handler or importer 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.
    (5) Persons eligible for an organic assessment exemption as 
provided this section may apply for such an exemption by submitting a 
request to the Board on an Organic Exemption Request Form (Form AMS-15) 
at any time during the year initially, and annually thereafter on or 
before January 1, as long as the first handler or importer continues to 
be eligible for the exemption.
    (i) A first handler or importer request for exemption shall include 
the following:
    (A) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (B) Certification that the applicant maintains a valid certificate 
of organic operation issued under the OFPA and the NOP;
    (C) Certification that the applicant handles or imports organic 
products eligible to be labeled ``organic'' or ``100 percent organic'' 
under the NOP;
    (D) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (E) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (F) Such other information as may be required by the Board, with 
the approval of the Secretary.
    (ii) Upon receipt of an application, the Board shall determine 
whether an exemption may be granted and issue a Certificate of 
Exemption to the first handler or importer within 30 calendar days. If 
the application is disapproved, the Board will notify the applicant of 
the reason(s) for disapproval within the same timeframe. It is the 
responsibility of the first handler or importer to retain a copy of the 
certificate of exemption.
* * * * *
    (e) Exempt importers shall be eligible for reimbursement of 
assessments collected by Customs.
    (1) Importers exempt under paragraph (a) of this section must apply 
to the Board for reimbursement of any assessment paid. No interest will 
be paid on the assessment collected by Customs. Requests for 
reimbursement must be submitted to the Board within 90 days of the last 
day of the calendar year the honey or honey products were imported.
    (2) If Customs collects the assessment on exempt product under 
paragraph (b) 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

[[Page 82028]]

reimbursement of assessments paid, and the importer must submit 
satisfactory proof to the Board that the importer paid the assessment 
on exempt organic product.
* * * * *
    (g) Any person who desires an exemption from assessments for a 
subsequent calendar year shall reapply to the Board for a certificate 
of exemption.
* * * * *

PART 1214--CHRISTMAS TREE PROMOTION, RESEARCH, AND INFORMATION 
ORDER

0
22. The authority citation for 7 CFR part 1214 continues to read as 
follows:

    Authority:  7 U.S.C. 7411-7425; 7 U.S.C. 7401.

0
23. In Sec.  1214.53, revise paragraph (c) to read as follows:


Sec.  1214.53  Exemption from and refunds of assessments.

* * * * *
    (c) Organic. (1) A producer who domestically produces Christmas 
trees 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 year 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 Christmas trees 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'' Christmas trees 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.

PART 1215--POPCORN PROMOTION, RESEARCH, AND CONSUMER INFORMATION

0
24. The authority citation for 7 CFR part 1215 continues to read as 
follows:

    Authority:  7 U.S.C. 7481-7491 and 7 U.S.C. 7401.

0
25. In Sec.  1215.52, revise paragraph (b) to read as follows:


Sec.  1215.52  Exemption from assessment.

* * * * *
    (b) Persons that operate under an approved National Organic Program 
(7 CFR part 205) (NOP) organic handling system plan may be exempt from 
the payment of assessments under this part, provided that:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP) are eligible for exemption;
    (2) The exemption shall apply to all certified ``organic'' or ``100 
percent organic'' (as defined in the NOP) products of a processor 
regardless of whether the agricultural commodity subject to the 
exemption is processed by a person that also processes conventional or 
nonorganic agricultural products of the same agricultural commodity as 
that for which the exemption is claimed;
    (3) The processor 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
    (4) Any processor 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.
* * * * *

0
26. In Sec.  1215.300:
0
a. Revise paragraph (b);
0
b. Redesignate paragraphs (c) through (f) as paragraphs (d) through 
(g), respectively;

[[Page 82029]]

0
c. Add new paragraph (c); and
0
d. Revise newly redesignated paragraph (d).
    The revisions and addition read as follows:


Sec.  1215.300  Exemption procedures.

* * * * *
    (b) Persons eligible for an organic assessment exemption as 
provided in Sec.  1215.52(b) may apply for such an exemption by 
submitting a request to the Board on an Organic Exemption Request Form 
(Form AMS-15) at any time during the year initially, and annually 
thereafter on or before January 1, as long as the processor continues 
to be eligible for the exemption.
    (c) A processor request for exemption shall include the following:
    (1) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (2) Certification that the applicant maintains a valid certificate 
of organic operation issued under the OFPA and the NOP;
    (3) Certification that the applicant processes organic products 
eligible to be labeled ``organic'' or ``100 percent organic'' under the 
NOP;
    (4) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (5) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (6) Such other information as may be required by the Board, with 
the approval of the Secretary.
    (d) Upon receipt of an application, the Board shall determine 
whether an exemption may be granted and issue a Certificate of 
Exemption to the processor within 30 calendar days. If the application 
is disapproved, the Board will notify the applicant of the reason(s) 
for disapproval within the same timeframe.
* * * * *

PART 1216--PEANUT PROMOTION, RESEARCH, AND INFORMATION ORDER

0
27. The authority citation for 7 CFR part 1216 continues to read as 
follows:

    Authority:  7 U.S.C. 7411-7425 and 7 U.S.C. 7401.

0
28. In Sec.  1216.56, revise paragraphs (a), (b), (c), and (d) and 
remove paragraph (g) to read as follows:


Sec.  1216.56  Exemption for organic peanuts.

    (a) A producer who operates 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:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP) are eligible for exemption;
    (2) 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;
    (3) 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 OPFA (7 CFR part 
205); and
    (4) 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.
    (b) In order to apply for this exemption, an eligible peanut 
producer shall submit a request to the Board on an Organic Exemption 
Request Form (Form AMS-15) at any time during the year initially, and 
annually thereafter on or before August 1, for as long as the producer 
continues to be eligible for the exemption.
    (c) A producer request for exemption shall include the following:
    (1) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (2) Certification that the applicant maintains a valid organic 
certificate issued under the OFPA and the NOP;
    (3) Certification that the applicant produces organic products 
eligible to be labeled ``organic'' or ``100 percent organic'' under the 
NOP;
    (4) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (5) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (6) Such other information as may be required by the Board, with 
the approval of the Secretary.
    (d) 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.
* * * * *

PART 1217--SOFTWOOD LUMBER RESEARCH, PROMOTION, CONSUMER EDUCATION 
AND INDUSTRY INFORMATION ORDER

0
29. The authority citation for 7 CFR part 1217 continues to read as 
follows:

    Authority: 7 U.S.C. 7411-7425; 7 U.S.C. 7401.

0
30. In Sec.  1217.53, revise paragraph (d) to read as follows:


Sec.  1217.53  Exemption from assessment.

* * * * *
    (d) Organic. (1) A domestic manufacturer of softwood lumber 
products who operates under an approved National Organic Program (7 CFR 
part 205) (NOP) organic handling 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 
manufacturer regardless of whether the agricultural commodity subject 
to the exemption is manufactured by a person that also manufactures 
conventional or nonorganic agricultural products of the same 
agricultural commodity as that for which the exemption is claimed;
    (iii) The manufacturer 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 manufacturer 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 
manufacturer shall submit a request to the Board on an Organic 
Exemption Request Form (Form AMS-15) at any time during the year 
initially, and annually thereafter on or before the start of the fiscal 
year, for as long as the manufacturer continues to be eligible for the 
exemption.
    (3) A manufacturer request for exemption shall include the 
following:
    (i) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;

[[Page 82030]]

    (ii) Certification that the applicant maintains a valid certificate 
of organic operation issued under the OFPA and the NOP;
    (iii) Certification that the applicant manufactures 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 under the OFPA and the NOP;
    (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 manufacturer complies with the requirements of this 
section, the Board will grant an assessment exemption and issue a 
Certificate of Exemption to the manufacturer within 30 calendar 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 softwood lumber that is 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'' softwood lumber on an Organic 
Exemption Request Form (Form AMS-15) at any time initially, and 
annually thereafter on or before the beginning of the fiscal year, as 
long as the importer continues to be eligible for the exemption. This 
documentation shall include the same information required of a 
manufacturer in paragraph (d)(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 (d)(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 
a Certificate of Exemption.

PART 1218--BLUEBERRY PROMOTION, RESEARCH, AND INFORMATION ORDER

0
31. The authority citation for 7 CFR part 1218 continues to read as 
follows:

    Authority:  7 U.S.C. 7411-7425 and 7 U.S.C. 7401.


0
32. In Sec.  1218.53:
0
a. Revise paragraphs (c) and (d);
0
b. Remove paragraph (g);
0
c. Redesignate paragraphs (h) through (k) as paragraphs (i) through 
(l), respectively;
0
d. Redesignate paragraphs (e) and (f) as paragraphs (g) and (h), 
respectively;
0
e. Add new paragraphs (e) and (f); and
0
f. Revise newly redesignated paragraphs (g) and (j).
    The revisions and additions read as follows:


Sec.  1218.53  Exemption procedures.

* * * * *
    (c) A producer who operates 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:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP) are eligible for exemption;
    (2) 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;
    (3) 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
    (4) 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.
    (d) To apply for exemption under this section, a producer shall 
submit a request to the Council on an Organic Exemption Request Form 
(Form AMS-15) at any time during the year initially, and annually 
thereafter on or before January 1, for as long as the producer 
continues to be eligible for the exemption.
    (e) A producer request for exemption shall include the following:
    (1) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (2) Certification that the applicant maintains a valid certificate 
of organic operation issued under the OFPA and the NOP;
    (3) Certification that the applicant produces organic products 
eligible to be labeled ``organic'' or ``100 percent organic'' under the 
NOP;
    (4) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (5) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (6) Such other information as may be required by the Council, with 
the approval of the Secretary.
    (f) If a producer complies with the requirements of this section, 
the Council will grant an assessment exemption and issue a Certificate 
of Exemption to the producer within 30 days. If the application is 
disapproved, the Council will notify the applicant of the reason(s) for 
disapproval within the same timeframe.
    (g) An importer who imports products 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 on those products. Such importer may submit 
documentation to the Council and request an exemption from assessment 
on certified ``organic'' or ``100 percent organic'' blueberries on an 
Organic Exemption Request Form (Form AMS-15) at any time initially, and 
annually thereafter on or before January 1, as long as the importer 
continues to be eligible for the exemption. This documentation shall 
include the same information required of producers in paragraph (e) of 
this section. If the importer complies with the requirements of this 
section, the Council will grant the exemption and issue a Certificate 
of Exemption to the importer. If Customs and Border Protection 
(Customs) collects the assessment on exempt product that is identified 
as ``organic'' by a number in the Harmonized Tariff Schedule, the

[[Page 82031]]

Council 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 Council for a reimbursement of assessments paid, and the 
importer must submit satisfactory proof to the Council that the 
importer paid the assessment on exempt organic product. 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.
* * * * *
    (j) Importers who are exempt from payment of assessments shall be 
eligible for reimbursement of assessments collected by Customs and may 
apply to the Council for a reimbursement of such assessments paid. No 
interest will be paid on assessments collected by Customs. Requests for 
reimbursement shall be submitted to the Council within 90 days of the 
last day of the year the blueberries were actually imported.
* * * * *

PART 1219--HASS AVOCADO PROMOTION, RESEARCH, AND INFORMATION

0
33. The authority citation for 7 CFR part 1219 continues to read as 
follows:

    Authority:  7 U.S.C. 7801-7813 and 7 U.S.C. 7401.

0
34. In Sec.  1219.202, revise paragraphs (a), (b), (c), (d), and (f) 
and remove paragraph (h) to read as follows:


Sec.  1219.202  Exemption for organic Hass avocados.

    (a) A producer who operates 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:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP) are eligible for exemption;
    (2) 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;
    (3) 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
    (4) 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.
    (b) To apply for exemption under this section, an eligible Hass 
avocado producer shall submit a request to the Board on an Organic 
Exemption Request Form (Form AMS-15) at any time during the year 
initially, and annually thereafter on or before November 1, for as long 
as the producer continues to be eligible for the exemption.
    (c) A producer request for exemption shall include the following:
    (1) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (2) Certification that the applicant maintains a valid certificate 
of organic operation issued under the OFPA and the NOP;
    (3) Certification that the applicant produces organic products 
eligible to be labeled ``organic'' or ``100 percent organic'' under the 
NOP;
    (4) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (5) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (6) Such other information as may be required by the Board, with 
the approval of the Secretary.
    (d) 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.
* * * * *
    (f) An importer who imports products 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 on those products. Such importer may submit 
documentation to the Board and request an exemption from assessment on 
certified ``organic'' or ``100 percent organic'' Hass avocados on an 
Organic Exemption Request Form (Form AMS-15) at any time initially, and 
annually thereafter on or before November 1, as long as the importer 
continues to be eligible for the exemption. This documentation shall 
include the same information required of producers in paragraph (c) 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. If Customs collects the assessment on exempt 
product 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. 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.
* * * * *

PART 1220--SOYBEAN PROMOTION, RESEARCH, AND CONSUMER INFORMATION

0
35. The authority citation for 7 CFR part 1220 continues to read as 
follows:

    Authority:  7 U.S.C. 6301-6311 and 7 U.S.C. 7401.


0
36. In Sec.  1220.302, revise paragraphs (a), (b), (c), and (d) and 
remove paragraph (g) to read as follows:


Sec.  1220.302  Exemption.

    (a) A producer who operates 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:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP) are eligible for exemption;
    (2) 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;
    (3) The producer maintains a valid certificate of organic operation 
as issued

[[Page 82032]]

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
    (4) 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.
    (b) To apply for an exemption under this section, the producer 
shall submit a request to the Board on an Organic Exemption Request 
Form (Form AMS-15) at any time during the year initially, and annually 
thereafter on or before January 1, for as long as the producer 
continues to be eligible for the exemption.
    (c) A producer request for exemption shall include the following:
    (1) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (2) Certification that the applicant maintains a valid certificate 
of organic operation issued under the OFPA and the NOP;
    (3) Certification that the applicant produces organic products 
eligible to be labeled ``organic'' or ``100 percent organic'' under the 
NOP;
    (4) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (5) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (6) Such other information as may be required by the Board, with 
the approval of the Secretary.
    (d) 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.
* * * * *

PART 1221--SORGHUM PROMOTION, RESEARCH, AND INFORMATION ORDER

0
37. The authority citation for 7 CFR part 1221 continues to read as 
follows:

    Authority:  7 U.S.C. 7411-7425 and 7 U.S.C. 7401.


0
38. In Sec.  1221.117, revise paragraphs (g), (h), (i), and (j) and 
remove paragraph (m) to read as follows:


Sec.  1221.117  Exemptions.

* * * * *
    (g) A producer or importer who operates under an approved National 
Organic Program (7 CFR part 205) (NOP) organic production or handling 
system plan may be exempt from the payment of assessments under this 
part, provided that:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP), or certified as ``organic'' 
or ``100 percent organic'' under a U.S. equivalency arrangement 
established under the NOP, are eligible for exemption;
    (2) The exemption shall apply to all certified ``organic'' or ``100 
percent organic'' (as defined in the NOP) products of a producer or 
importer regardless of whether the agricultural commodity subject to 
the exemption is produced or imported by a person that also produces or 
imports conventional or nonorganic agricultural products of the same 
agricultural commodity as that for which the exemption is claimed;
    (3) The producer or importer 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
    (4) Any producer or importer 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.
    (h) To apply for an exemption under this section, the applicant 
shall submit a request to the Board on an Organic Exemption Request 
Form (Form AMS-15) at any time during the year initially, and annually 
thereafter on or before January 1, for as long as the producer or 
importer continues to be eligible for the exemption.
    (i) A producer or importer request for exemption shall include the 
following:
    (1) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (2) Certification that the applicant maintains a valid certificate 
of organic operation issued under the OFPA and the NOP;
    (3) Certification that the applicant produces or imports organic 
products eligible to be labeled ``organic'' or ``100 percent organic'' 
under the NOP;
    (4) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (5) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (6) Such other information as may be required by the Board, with 
the approval of the Secretary.
    (j) If the applicant complies with the requirements of this 
section, the Board will grant an assessment exemption and issue a 
Certificate of Exemption to the producer or importer within 30 days. If 
the application is disapproved, the Board will notify the applicant of 
the reason(s) for disapproval within the same timeframe.
* * * * *

PART 1222--PAPER AND PAPER-BASED PACKAGING PROMOTION, RESEARCH AND 
INFORMATION ORDER

0
39. The authority citation for 7 CFR part 1222 continues to read as 
follows:

    Authority:  7 U.S.C. 7411-7425; 7 U.S.C. 7401.


0
40. In Sec.  1222.53, revise paragraph (b) to read as follows:


Sec.  1222.53  Exemption from assessment.

* * * * *
    (b) Organic. (1) A manufacturer who operates under an approved 
National Organic Program (7 CFR part 205) (NOP) organic handling 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 
manufacturer regardless of whether the agricultural commodity subject 
to the exemption is manufactured by a person that also manufactures 
conventional or nonorganic agricultural products of the same 
agricultural commodity as that for which the exemption is claimed;
    (iii) The manufacturer 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 manufacturer 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 
manufacturer shall submit a request to the Board on an Organic 
Exemption Request Form (Form AMS-15) at any time during the year

[[Page 82033]]

initially, and annually thereafter on or before the start of the fiscal 
year, as long as the manufacturer continues to be eligible for the 
exemption.
    (3) A manufacturer 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 manufactures 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 under the OFPA and the NOP;
    (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 manufacturer complies with the requirements of this 
section, the Board will grant an assessment exemption and issue a 
Certificate of Exemption to the manufacturer within 30 calendar 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 paper and paper-based packaging that is 
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'' paper and paper-based packaging 
on an Organic Exemption Request Form (Form AMS-15) at any time 
initially, and annually thereafter on or before the beginning of the 
fiscal year, as long as the importer continues to be eligible for the 
exemption. This documentation shall include the same information 
required of a manufacturer in paragraph (b)(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 (b)(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 
a Certificate of Exemption.

PART 1230--PORK PROMOTION, RESEARCH, AND CONSUMER INFORMATION

0
41. The authority citation for 7 CFR part 1230 continues to read as 
follows:

    Authority:  7 U.S.C. 4801-4819 and 7 U.S.C. 7401.


0
42. In Sec.  1230.102, revise paragraphs (a), (b), (c), (d), (g), and 
(i) to read as follows:


Sec.  1230.102  Exemption.

    (a) A producer who operates 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:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP) are eligible for exemption;
    (2) 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;
    (3) 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
    (4) 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.
    (b) To apply for exemption under this section, a producer shall 
submit a request to the Board on an Organic Exemption Request Form 
(Form AMS-15) at any time during the year initially, and annually 
thereafter on or before January 1, for as long as the producer 
continues to be eligible for the exemption.
    (c) A producer request for exemption shall include the following:
    (1) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (2) Certification that the applicant maintains a valid certificate 
of organic operation issued under the OFPA and the NOP;
    (3) Certification that the applicant produces organic products 
eligible to be labeled ``organic'' or ``100 percent organic'' under the 
NOP;
    (4) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (5) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (6) Such other information as may be required by the Board, with 
the approval of the Secretary.
    (d) 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.
* * * * *
    (g) An importer who imports products 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 on those products. Such importer may submit 
documentation to the Board and request an exemption from assessment on 
certified ``organic'' or ``100 percent organic'' porcine animals or 
pork and pork products on an Organic Exemption Request Form (Form AMS-
15) at any time initially, and annually thereafter on or before January 
1, as long as the importer continues to be eligible for the exemption. 
This documentation shall include the same information required of 
producers in paragraph (c) 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

[[Page 82034]]

importer. The Board will also issue the importer an alphanumeric number 
valid for 1 year from the date of issue. This alphanumeric number 
should be entered by the importer on the Customs entry documentation. 
Any line item entry of ``organic'' or ``100 percent organic'' porcine 
animals or pork and pork products bearing this alphanumeric number 
assigned by the Board will not be subject to assessments. 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.
* * * * *
    (i) An importer who is exempt from payment of assessments under 
paragraph (g) of this section shall be eligible for reimbursement of 
assessments collected by Customs on certified ``organic'' or ``100 
percent organic'' porcine animals or pork and pork products and may 
apply to the Secretary for a reimbursement. The importer would be 
required to submit satisfactory proof to the Secretary that the 
importer paid the assessment on exempt organic products.

PART 1250--EGG RESEARCH AND PROMOTION

0
43. The authority citation for 7 CFR part 1250 continues to read as 
follows:

    Authority:  7 U.S.C. 2701-2718 and 7 U.S.C. 7401.


0
44. In Sec.  1250.530, revise paragraph (b) to read as follows:


Sec.  1250.530  Certification of exempt producers.

* * * * *
    (b) Organic Production. (1) A producer who operates 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, a producer shall 
submit a request to the Board on an Organic Exemption Request Form 
(Form AMS-15) at any time during the year initially, and annually 
thereafter on or before January 1, for as long 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 under the OFPA and the NOP;
    (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) The producer shall provide a copy of the Certificate of 
Exemption to each handler to whom the producer sells eggs. The handler 
shall maintain records showing the exempt producer's name and address 
and the exemption number assigned by the Board.
    (6) The exemption will apply at the first reporting period 
following the issuance of the Certificate of Exemption.
* * * * *

PART 1260--BEEF PROMOTION AND RESEARCH

0
45. The authority citation for 7 CFR part 1260 continues to read as 
follows:

    Authority:  7 U.S.C. 2901-2911 and 7 U.S.C. 7401.


0
46. In Sec.  1260.302, revise paragraphs (a), (b), (c), (d), (g), and 
(i) to read as follows:


Sec.  1260.302  Organic exemption.

    (a) A producer who operates 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:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP) are eligible for exemption;
    (2) 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;
    (3) 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
    (4) 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.
    (b) To apply for exemption under this section, a producer shall 
submit a request to the Board or QSBC on an Organic Exemption Request 
Form (Form AMS-15) at any time during the year initially, and annually 
thereafter on or before January 1, for as long as the producer 
continues to be eligible for the exemption.
    (c) A producer request for exemption shall include the following:
    (1) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (2) Certification that the applicant maintains a valid certificate 
of organic operation issued under the OFPA and the NOP;
    (3) Certification that the applicant produces organic products 
eligible to be labeled ``organic'' or ``100 percent organic'' under the 
NOP;
    (4) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;

[[Page 82035]]

    (5) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (6) Such other information as may be required by the Board, with 
the approval of the Secretary.
    (d) If a producer complies with the requirements of this section, 
the Board or QSBC will grant an assessment exemption and issue a 
Certificate of Exemption to the producer within 30 days. If the 
application is disapproved, the Board or QSBC will notify the applicant 
of the reason(s) for disapproval within the same timeframe.
* * * * *
    (g) An importer who imports products 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 on those products. Such importer may submit 
documentation to the Board and request an exemption from assessment on 
certified ``organic'' or ``100 percent organic'' cattle or beef and 
beef products on an Organic Exemption Request Form (Form AMS-15) at any 
time initially, and annually thereafter on or before January 1, as long 
as the importer continues to be eligible for the exemption. This 
documentation shall include the same information required of producers 
in paragraph (c) 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. The Board will also 
issue the importer an alphanumeric number valid for 1 year from the 
date of issue. This alphanumeric number should be entered by the 
importer on the Customs entry documentation. Any line item entry of 
``organic'' or ``100 percent organic'' cattle or beef and beef products 
bearing this alphanumeric number assigned by the Board will not be 
subject to assessments. 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.
* * * * *
    (i) An importer who is exempt from payment of assessments under 
paragraph (g) of this section shall be eligible for reimbursement of 
assessments collected by Customs on certified ``organic'' or ``100 
percent organic'' cattle or beef and beef products and may apply to the 
Secretary for a reimbursement. The importer would be required to submit 
satisfactory proof to the Secretary that the importer paid the 
assessment on exempt organic products.

PART 1280--LAMB PROMOTION, RESEARCH, AND INFORMATION ORDER

0
47. The authority citation for 7 CFR part 1280 continues to read as 
follows:

    Authority:  7 U.S.C. 7411-7425 and 7 U.S.C. 7401.


0
48. In Sec.  1280.406, revise paragraphs (a), (b), (c), and (d) and 
remove paragraph (h) to read as follows:


Sec.  1280.406  Exemption.

    (a) A producer, seed stock producer, feeder, handler, or exporter 
who operates under an approved National Organic Program (7 CFR part 
205) (NOP) organic production or handling system plan may be exempt 
from the payment of assessments under this part, provided that:
    (1) Only agricultural products certified as ``organic'' or ``100 
percent organic'' (as defined in the NOP) are eligible for exemption;
    (2) The exemption shall apply to all certified ``organic'' or ``100 
percent organic'' (as defined in the NOP) products of a producer, 
handler, or exporter regardless of whether the agricultural commodity 
subject to the exemption is produced, handled, or exported by a person 
that also produces, handles, or exports conventional or nonorganic 
agricultural products of the same agricultural commodity as that for 
which the exemption is claimed;
    (3) The producer, handler, or exporter 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
    (4) Any person 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.
    (b) To apply for exemption under this section, the person shall 
submit a request to the Board on an Organic Exemption Request Form 
(Form AMS-15) at any time during the year initially, and annually 
thereafter on or before January 1, for as long as the producer 
continues to be eligible for the exemption.
    (c) The request for exemption shall include the following:
    (1) The applicant's full name, company name, address, telephone and 
fax numbers, and email address;
    (2) Certification that the applicant maintains a valid certificate 
of organic operation issued under the OFPA and the NOP;
    (3) Certification that the applicant produces, handles, or exports 
organic products eligible to be labeled ``organic'' or ``100 percent 
organic'' under the NOP;
    (4) A requirement that the applicant attach a copy of their 
certificate of organic operation issued by a USDA-accredited certifying 
agent under the OFPA and the NOP;
    (5) Certification, as evidenced by signature and date, that all 
information provided by the applicant is true; and
    (6) Such other information as may be required by the Board, with 
the approval of the Secretary.
    (d) If a person complies with the requirements of this section, the 
Board will grant an assessment exemption and issue a Certificate of 
Exemption to the applicant within 30 days. If the application is 
disapproved, the Board will notify the applicant of the reason(s) for 
disapproval within the same timeframe.
* * * * *

    Dated: December 21, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2015-32517 Filed 12-30-15; 8:45 am]
 BILLING CODE 3410-02-P