Administrative Procedures Governing Formulation of a Research and Promotion Order, 23246-23248 [2020-08410]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 85, Number 81 (Monday, April 27, 2020)]
[Proposed Rules]
[Pages 23246-23248]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08410]



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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1200

[Doc. No. AMS-SC-19-0105]


Administrative Procedures Governing Formulation of a Research and 
Promotion Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Department of Agriculture (USDA) invites comments on the 
proposed establishment of administrative procedures to govern 
formulation of new research and promotion programs under the Commodity 
Promotion, Research, and Information Act of 1996 (Act). This rule would 
specify the process for proposing such programs to USDA. The proposed 
rule would further clarify that AMS will continue to require 
associations of producers or individuals proposing new programs to post 
a bond or other collateral to reimburse USDA for the costs of program 
development.

DATES: Comments must be received by May 27, 2020.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. All comments must be submitted through 
the Federal e-rulemaking portal at https://www.regulations.gov and 
should reference the document number and the date and page number of 
this issue of the Federal Register. All comments submitted in response 
to this proposed rule will be included in the rulemaking record and 
will be made available to the public. Please be advised that the 
identity of the individuals or entities submitting comments will be 
made public on the internet at https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Heather Pichelman, Promotion and 
Economics Division, Specialty Crops Program, AMS, USDA, 1400 
Independence Avenue SW, Room 1406-S, Stop 0244, Washington, DC 20250-
0244; telephone: (202) 720-9915; facsimile: (202) 205-2800; or 
electronic mail: [email protected].

SUPPLEMENTARY INFORMATION: As authorized under the Act, this proposed 
rule would add a new subpart D to 7 CFR part 1200--Rules of Practice 
and Procedure Governing Proceedings Under Research, Promotion, and 
Information Programs. Proposed subpart D would address procedures 
specific to the formulation of new programs under the Act.

Executive Orders 12866, 13563, and 13771

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health, and safety effects; distributive impacts; and equity). 
Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, reducing costs, harmonizing rules, and promoting 
flexibility. This action falls within a category of regulatory actions 
that the Office of Management and Budget (OMB) exempted from Executive 
Order 12866 review. Additionally, because this rule does not meet the 
definition of a significant regulatory action, it does not trigger the 
requirements contained in Executive Order 13771. See OMB's Memorandum 
titled ``Interim Guidance Implementing Section 2 of the Executive Order 
of January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs' '' (February 2, 2017).

Executive Order 13175

    This action has been reviewed in accordance with the requirements 
of Executive Order 13175, Consultation and Coordination with Indian 
Tribal Governments. The review reveals that this regulation would not 
have substantial and direct effects on Tribal governments and would not 
have significant Tribal implications.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. It is not intended to have retroactive effect. 7 U.S.C. 
7423 provides that the Act shall not affect or preempt any other 
Federal or State law authorizing promotion or research relating to an 
agricultural commodity.

Background

    This proposed rule invites comments on the procedure to establish 
new research and promotion programs--or orders--under the Act. 7 U.S.C. 
7413(b)(1)(B) authorizes associations of producers of an agricultural 
commodity or other individuals to petition USDA to establish a 
research, promotion, and/or information program with respect to that 
commodity. The purpose of such programs is to provide a framework for 
agricultural industries to pool their resources and combine efforts to 
develop new markets, strengthen existing markets, and conduct important 
research and promotion activities. See 7 U.S.C. 7411(b).
    USDA's Agricultural Marketing Service (AMS) oversees these 
programs. With this proposed rule, AMS seeks to establish procedures 
for formulating new programs so interested parties are aware of the 
process and requirements.
    Proposed Sec.  1200.202(a) would provide that an industry 
association or individuals may file a written proposal for a new 
research and promotion program with the AMS Administrator 
(Administrator). Under proposed Sec.  1200.202(b), the Administrator 
would consider whether there is broad industry support for the proposed 
program and whether proposed provisions of the program are authorized 
under the Act. The Administrator would also evaluate anticipated 
benefits to the industry and the economic feasibility of the program. 
Finally, the Administrator would consider whether the proposed program 
would tend to effectuate the declared policy of the Act. Under proposed 
Sec.  1200.202(c), if the Administrator determined that the program 
would not effectuate the policy of the Act, AMS would deny the proposal 
and would so notify the proponent(s), explaining the grounds for 
denial. Under proposed Sec.  1200.202(d), if the Administrator 
determined that the proposed program would likely effectuate the 
purposes of the Act by benefitting producers, handlers, and importers 
of the commodity, or others in the marketing chain, the Administrator 
would notify the proponent(s) that AMS would proceed with program 
development and, in accordance with proposed Sec.  1200.204, the 
proponent(s) would be required to post a bond or other collateral to 
cover AMS expenses to develop the program.
    The Act provides that once a board is established under an order, 
the Secretary of Agriculture (Secretary) must be reimbursed for all 
expenses incurred in the implementation, administration, and 
supervision of the order, including all referenda costs incurred in 
connection with the order. The board uses assessment funds collected 
from regulated entities to reimburse the Secretary for program 
oversight.
    However, AMS incurs substantial expense in the development process 
leading to program establishment. AMS may conduct industry outreach 
meetings, solicit public input, analyze economic data, draft rulemaking 
documents, and conduct initial referenda. These activities are 
necessary

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to progress toward program establishment. Typical expenses for these 
preliminary activities may include, but not be limited to, employee 
time and travel, supplies, printing, and mailing.
    In some cases, the proponent industry may elect to defer an initial 
referendum for up to three years after the program is established. In 
other cases, despite all efforts of the proponent and AMS to develop a 
new program, ultimately the proposed program may not be established. 
Nevertheless, under either of these scenarios, AMS will have already 
incurred expenses related to program development.
    Section 7417(a)(2) of the Act provides that the Secretary can 
require the industry seeking a new program to post a bond or other 
collateral to cover the cost of the initial referendum. Proposed Sec.  
1200.201 would define cost of the referendum to mean all the expenses 
AMS incurs in the development of a potential new program, including the 
cost of conducting an initial referendum.
    The amount of the bond or collateral required under proposed Sec.  
1200.204 would be based on unique factors like the projected number of 
staff hours involved, the amount of staff travel necessary for 
outreach, the size and complexity of the proposed program, and the 
number of industry members to be polled in an initial referendum. This 
would ensure that AMS would be reimbursed on a timely basis for all 
expenses related to program development, even if the initial referendum 
is deferred or if the program is not established.
    Section 1200.202(e) of the proposed rule would provide that once 
AMS has worked with industries or individuals to develop a proposed 
order, AMS would publish notice of the proposal in the Federal Register 
to allow the public to comment on the proposed program. Based on 
comments, AMS would determine whether to proceed with program 
establishment.
    Under Sec.  1200.203 of the proposed rule, if AMS determined to 
proceed with program establishment, the Administrator could conduct an 
initial referendum among the producers, handlers, and importers who 
would be subject to assessment under the program in order to determine 
whether they favor establishment of the program. The Act provides that 
USDA could also establish the program and defer the initial referendum 
for up to three years after the program is established. See 7 U.S.C. 
7417(b). In either case, referendum voters would be those entities who, 
during a representative period determined by the Administrator, 
produced, handled, and/or imported the agricultural commodity. For 
referendum expenses incurred after a board is established, the 
Secretary will be reimbursed by the board appointed to administer the 
program, as provided by the Act. See 7 U.S.C. 7417(f).
    Under proposed Sec.  1200.205, if at any time during the 
development process, based on public comments, referendum votes, or 
other information available, AMS determined that the proposed program 
would not tend to effectuate the policy of the Act, the Administrator 
would terminate proceedings and would collect reimbursement for program 
development expenses from the bond or collateral posted by the program 
proponent(s).
    The proposed rule would also make other administrative provisions 
related to establishment of a new program. Section 1200.201 of the 
proposed rule would define other terms necessary for administration of 
the regulation. Section 1200.206 would provide for the issuance, 
effectuation, and publication of the new order.

Initial Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), requires 
agencies to consider the economic impact of each rule on small 
entities. The purpose of the RFA is to fit regulatory actions to the 
scale of businesses subject to such actions so that small businesses 
will not be disproportionately burdened. The purpose of research, 
promotion, and information programs is to benefit all sizes of 
producers, handlers, and importers of an agricultural commodity.
    The Act makes it possible for producer associations or other 
individuals engaged in specific agricultural commodity industries to 
submit a proposal for a new program. It is impossible for AMS to 
determine which industries may seek research and promotion programs in 
the future or to determine the number or size of business entities that 
might propose such programs. The expenses necessary for each program's 
development depend on factors such as projected staff hours to develop 
the program, travel expenses related to outreach, size and complexity 
of the proposed program, and the size of the industry to be polled in a 
referendum. Based on its experience with past program proposals, AMS 
estimates that expenses for typical program development range from 
$80,000 to $150,000. Thus, under the proposed rule, proponents could be 
required to post bonds or other collateral to cover those amounts if 
AMS agreed to proceed with proposed program development. Costs to 
individuals or businesses would depend on the number of entities in 
each proponent group. Given that we don't know the identity or business 
size of future program proponents, AMS cannot determine what economic 
impact this proposed rule might have on small entities. Based on 
experience with proponents seeking to establish new programs under the 
Act, AMS believes that this rule is unlikely to have a significant 
economic impact on a substantial number of small entities.
    There would be no new direct costs associated with the 
implementation of the proposed rule. The proposed rule codifies 
procedures for proposing new research and promotion programs under the 
Act that have been practiced since the Act's adoption in 1996. In 
addition to specifying the program proposal process, the rule would 
clarify that the cost of the referendum to be covered by the required 
bond or collateral would include all the costs associated with program 
development.

Paperwork Reduction Act

    No information collection or recordkeeping requirements are imposed 
on the public by this proposed rule. Accordingly, OMB clearance is not 
required by the Paperwork Reduction Act of 1995, 44 U.S.C. 3501, 
Chapter 35.
    As with all Federal promotion programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.

E-Government Act

    AMS is committed to complying with the E-Government Act, to promote 
the use of the internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.

List of Subjects in 7 CFR Part 1200

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

    For the reasons set forth in the preamble, AMS proposes to amend 7 
CFR part 1200 as follows:

PART 1200--RULES OF PRACTICE AND PROCEDURE GOVERNING PROCEEDINGS 
UNDER RESEARCH, PROMOTION, AND INFORMATION PROGRAMS

0
1. The authority citation for part 1200 continues to read as follows:


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    Authority: 7 U.S.C. 2101-2119, 2611-2627, 2701-2718, 2901-2911, 
4501-4514, 4801-4819, 4901-4916, 6101-6112, 6301-6311, 6401-6417, 
7411-7425, 7481-7491, and 7801-7813.

0
2. In part 1200, add subpart D, consisting of Sec. Sec.  1200.200 
through 1200.206, to read as follows:

Subpart D--Administrative Procedures Governing Formulation of a 
Research and Promotion Order

Sec.
1200.200 General.
1200.201 Definitions.
1200.202 Proposals.
1200.203 Initial referendum.
1200.204 Reimbursement of Secretary's expenses.
1200.205 Termination of proceedings.
1200.206 Execution of the order.

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

Subpart D--Administrative Procedures Governing Formulation of a 
Research and Promotion Order


Sec.  1200.200  General.

    The terms defined/specified in this subpart shall apply to all 
research and promotion programs authorized under the Act.


Sec.  1200.201   Definitions.

    Act means the Commodity Research, Promotion, and Information Act of 
1996 (7 U.S.C. 7411-7425).
    Administrator means the Administrator of the Agricultural Marketing 
Service or any officer or employee of the United States Department of 
Agriculture to whom authority has been delegated or may hereafter be 
delegated to act for the Administrator.
    Cost of the Referendum means all USDA expenditures related to 
development of an order proposal, including, but not limited to, 
salaries, travel, supplies, printing, mailing, and shipping, and any 
costs related to an initial referendum.
    Order means any order which may be issued pursuant to the Act.
    Secretary means the United States Secretary of Agriculture or any 
officer or employee of the United States Department of Agriculture to 
whom authority has been delegated or may hereafter be delegated to act 
for the Secretary.


Sec.  1200.202  Proposals.

    (a) An order may be proposed by any association of producers of an 
agricultural commodity, by any person that may be affected by the 
issuance of an order with respect to an agricultural commodity, or by 
the Secretary. Any person or organization other than the Secretary 
proposing an order shall file with the Administrator a written 
proposal.
    (b) Upon receipt of a proposal, the Administrator shall investigate 
and evaluate the proposal.
    (c) If the proposal is submitted by an association of producers of 
the agricultural commodity or by any person that may be affected by the 
issuance of an order, and the investigation and consideration lead the 
Administrator to conclude that the proposed order will not tend to 
effectuate the declared policy of the Act, the Administrator shall deny 
the proposal. The Administrator will promptly notify the proponent(s) 
of such denial, which will be accompanied by a brief statement of the 
grounds for the denial.
    (d) If the proposal was submitted by an association of producers of 
the agricultural commodity or by any person that may be affected by the 
issuance of an order and the investigation and consideration lead the 
Administrator to conclude that an order will tend to effectuate the 
declared policy of the Act, the Administrator will promptly notify the 
proponent(s) of such conclusion, and the proponent(s) will be required 
to post a bond or other collateral in accordance with Sec.  1200.204.
    (e) If the Administrator concludes that an order will tend to 
effectuate the declared policy of the Act, the Administrator shall 
publish the proposed order in the Federal Register and give due notice 
and opportunity for public comment on the proposed order.


Sec.  1200.203  Initial referendum.

    For the purpose of ascertaining whether the persons to be covered 
by an order favor the order going into effect, the Administrator may 
conduct an initial referendum among persons to be subject to an 
assessment under the order who, during a representative period 
determined by the Administrator, engaged in the production or handling 
of the agricultural commodity or the importation of the agricultural 
commodity.


Sec.  1200.204   Reimbursement of Secretary's expenses.

    The Administrator may require any person or organization proposing 
an order to post a bond or other collateral to cover the cost of the 
referendum as defined in Sec.  1200.201.


Sec.  1200.205   Termination of proceedings.

    If at any time during development of a new program the 
Administrator concludes, based on public comments, referendum votes, or 
other available information, that an order will not tend to effectuate 
the declared policy of the Act, the Administrator shall terminate the 
proceedings and collect reimbursements from the bond or other 
collateral posted pursuant to Sec.  1200.204 for any expenses incurred 
in development of the proposed program.


Sec.  1200.206  Execution of the order.

    (a) Issuance of the order. The Administrator shall, if the 
Administrator finds that it will tend to effectuate the purposes of the 
Act, issue the final order.
    (b) Effective date of order. No order shall become effective in 
less than 30 days after its publication in the Federal Register, unless 
the Administrator, upon good cause found and published with the order, 
fixes an earlier effective date.
    (c) Notice of issuance. After the Administrator issues the order, 
AMS will publish notice of the order's issuance in the Federal 
Register.

Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-08410 Filed 4-24-20; 8:45 am]
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