Christmas Tree Tax
If you haven't seen the actual language from the Federal Register on the Christmas Tree "tax" that was announced by the Department of Agriculture, here is the official announcement from the Federal Register:
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[Federal Register Volume 76, Number 216 (Tuesday, November 8, 2011)]
[Rules and Regulations]
[Pages 69094-69110]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-28798]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1214
[Doc. No. AMS-FV-10-0008-FR-1A]
RIN 0581-AD00
Christmas Tree Promotion, Research, and Information Order
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule establishes an industry-funded promotion, research,
and information program for fresh cut Christmas trees. The Christmas
Tree Promotion, Research, and Information Order (Order) is authorized
under the Commodity Promotion, Research, and Information Act of 1996
(1996 Act). The Order will establish a national Christmas Tree
Promotion Board (Board) comprised of 11 producers and one importer.
Under the Order, producers and importers of fresh cut Christmas trees
will pay an initial assessment of fifteen cents per Christmas tree.
Producers and importers that produce or import less than 500 Christmas
trees annually will be exempt from the assessment. A referendum will be
conducted, among producers and importers, three years after the
collection of assessments begin to determine if Christmas tree
producers and importers favor the continuation of this program.
DATES: Effective November 9, 2011.
FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella, Marketing
Specialist, Research and Promotion Division, Fruit and Vegetable
Programs, AMS, USDA, 1400 Independence Avenue SW., Room 1406, Stop
0244, Washington, DC 20250-0244; telephone: (301) 334-2891; or
facsimile: (301) 334-2896; or email: Patricia.Petrella@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This Order is issued pursuant to the
Commodity Promotion, Research, and Information Act of 1996 (1996 Act)
(7 U.S.C. 7411-7425).
As part of this rulemaking process, a proposed rule was published
in the Federal Register on November 8, 2010 (75 FR 68512). That rule
provided for a 60-day comment period which ended on February 7, 2011.
Five hundred comments were received. As requested by a member of
Congress and several North Carolina producers, the comment period was
reopened for 15 days (76 FR 9695, February 22, 2011). That comment
[[Page 69095]]
period ended on March 9, 2011. An additional 65 comments were received.
All comments are addressed later in this rule.
Executive Order 12866
This final rule has been determined not significant for purposes of
Executive Order 12866 and therefore has not been reviewed by the Office
of Management and Budget (OMB).
Executive Order 12988
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 1996 Act provides that it shall not affect or
preempt any other Federal or State law authorizing promotion or
research relating to an agricultural commodity.
Under section 519 of the 1996 Act, a person subject to an order may
file a written petition with the Department stating that an order, any
provision of an order, or any obligation imposed in connection with an
order, is not established in accordance with the law, and requesting a
modification of an order or an exemption from an order. Any petition
filed challenging an order, any provision of an order, or any
obligation imposed in connection with an order, shall be filed within
two years after the effective date of an order, provision, or
obligation subject to challenge in the petition. The petitioner will
have the opportunity for a hearing on the petition. Thereafter, the
Department will issue a ruling on the petition. The 1996 Act provides
that the district court of the United States for any district in which
the petitioner resides or conducts business shall have the jurisdiction
to review a final ruling on the petition, if the petitioner files a
complaint for that purpose not later than 20 days after the date of the
entry of the Department's final ruling.
Executive Order 13132
This final rule has been reviewed under Executive Order 13132,
Federalism. Section 524 of the 1996 Act provides that the Act shall not
affect or preempt any other Federal or State law authorizing promotion
or research relating to an agricultural commodity.
The proponent, the Christmas Tree Checkoff Task Force is an
industry wide group of producers and importers that support this
proposed program. They have conducted meetings throughout the United
States with several State and multi-State Christmas tree organizations.
The proposed program is not intended to duplicate any State program.
The proponents have determined that they need a mechanism that would be
sustainable over time. A national Christmas tree research and promotion
program would accomplish this goal.
Summary
This rule establishes an industry-funded promotion, research, and
information program for fresh cut Christmas trees. The Christmas Tree
Promotion, Research, and Information Order (Order), was submitted to
the Department of Agriculture (Department) by the Christmas Tree
Checkoff Task Force (Task Force), an industry wide group of producers
and importers that support this program. Under the Order, producers and
importers of fresh cut Christmas trees will pay an initial assessment
of $0.15 cents per tree, which would be paid to the Christmas Tree
Promotion Board (Board). This Board will be responsible for
administration and operation of the Order. Producers and importers that
produce or import less than 500 Christmas trees annually will be exempt
from the assessment. The program is authorized under the Commodity
Promotion, Research, and Information Act of 1996 (1996 Act).
A referendum will be conducted, among producers and importers,
three years after the collection of assessments begin to determine if
Christmas tree producers and importers favor the continuation of this
program. A final rule on the referendum procedures will be published in
the Federal Register at a later time. The rule also announces the
Agricultural Marketing Service's (AMS) approval of new Christmas tree
information collection requirements by the OMB for the operation of the
Order.
Authority in 1996 Act
The Order is authorized under the 1996 Act which authorizes USDA to
establish agricultural commodity research and promotion orders which
may include a combination of promotion, research, industry information,
and consumer information activities funded by mandatory assessments.
These programs are designed to maintain and expand markets and uses for
agricultural commodities. As defined under section 513(1)(D) of the
1996 Act, agricultural commodities include fresh cut Christmas trees.
The Order will provide for the development and financing of a
coordinated program of research, promotion, and information for
Christmas trees.
The 1996 Act provides for a number of optional provisions that
allow the tailoring of orders for different commodities. Section 516 of
the 1996 Act provides permissive terms for orders, and other sections
provide for alternatives. For example, section 514 of the 1996 Act
provides for orders applicable to (1) Producers, (2) first handlers and
others in the marketing chain as appropriate, and (3) importers (if
imports are subject to assessments). Section 516 states that an order
may include an exemption of de minimis quantities of an agricultural
commodity; different payment and reporting schedules; coverage of
research, promotion, and information activities to expand, improve, or
make more efficient the marketing or use of an agricultural commodity
in both domestic and foreign markets; provision for reserve funds;
provision for credits for generic and branded activities; and
assessment of imports.
In addition, section 518 of the 1996 Act provides for referenda to
ascertain approval of an order to be conducted either prior to its
going into effect or within three years after assessments first begin
under the order. An order also may provide for its approval in a
referendum based upon different voting patterns. Section 515 provides
for establishment of a board or council from among producers, first
handlers and others in the marketing chain as appropriate, and
importers, if imports are subject to assessment.
Industry Background
Christmas trees have been commercially sold in the United States
since about 1850, when most were cut from wild stands. In the last 55
to 60 years, Christmas trees have been farmed and harvested as an
agricultural row crop. Most Christmas trees are now grown on or
selected and cut by consumers on tree farms. The U.S. Christmas tree
industry consists of over 12,000 farms producing over 17 million
Christmas trees per year. The best selling Christmas trees are Scotch
pine, Douglas fir, noble fir, Fraser fir, Virginia pine, balsam fir and
white pine.
Christmas trees are grown for retail sale in almost all U.S.
states. Oregon, Michigan, Wisconsin, North Carolina and Pennsylvania
together produce more than 75 percent of the trees produced each year.
During 2007, 47 out of the 50 States contributed to the production of
Christmas trees.
Competition
The fresh cut Christmas tree industry competes directly with the
artificial Christmas tree industry. Artificial Christmas tree companies
advertise heavily throughout the fall and Christmas seasons. According
to data
[[Page 69096]]
supplied by the proponents artificial tree purchases have increased
from 9.8 million in 2003 to 17.4 million in 2007.
Imports
According to U.S. Department of Commerce, U.S. Census Bureau,
Foreign Trade Statistics, imports of Christmas trees from 2006 through
2008 averaged about 1.9 million trees. During those years, imports from
Canada accounted for 99.72 percent of the total imports. Italy,
Columbia and Mali comprised about .28 million trees or less than one
percent. For the same period, these imports were valued at $27.427
million dollars.
Prices
According to the Task Force, in 2007 the average price per tree for
a Noble was approximately $18.00 and the average price per tree for a
Douglas was $11.00. By averaging these two types of Christmas trees,
prices would be approximately $15 per tree. With 31 million trees cut
in 2007, the value would be approximately $465 million (value at point
of first sale).
Need for a Program
A national research and promotion program for Christmas trees would
help the industry to address the many market problems it currently
faces. According to the Task Force, two main factors currently
affecting Christmas tree sales, both in the domestic market and abroad,
are increased competition and changing consumer habits.
According to additional data supplied by the Task Force, the market
share of fresh Christmas trees in the U.S. from 1965 to 2008 has
declined by 6 percent. In comparison, the market share of artificial
trees has increased 655 percent from 1965 to 2008.
According to the proponent data, sales of fresh cut Christmas trees
decreased by 15 million trees from 37 million trees sold in 1991 down
to 22 million trees sold in 2002. The industry saw an increase in sales
in 2003 through 2007 when the industry conducted a voluntary marketing
campaign which was lead by a small group of producers and retailers.
This voluntary marketing campaign saw sales rebound by 9 million
trees--from 22 million trees sold in 2002 to 31 million trees sold in
2007. Even with the strong sales response to the marketing efforts, the
voluntary marketing program suffered from a lack of funding.
The Christmas tree industry has tried three different times to
conduct promotional programs based on voluntary contributions. Each
time, after about three years, the revenue declined to a point where
the programs were ineffective. The decline in revenue is attributable
to the voluntary nature of these programs. Therefore, the proponents
have determined that they need a mechanism that would be sustainable
over time. They believe that a national Christmas tree research and
promotion program would accomplish this goal.
Specific Provisions of a Program
Pursuant to section 513 of the 1996 Act, sections 1214.1 through
1214.30 of the Order define certain terms that will be used throughout
the Order, such as Christmas trees, importer and producer. Several of
the terms are common to all research and promotion programs authorized
under the 1996 Act while other terms are specific to the Order.
Sections 1214.47 of the Order will detail the establishment and
membership of the Christmas Tree Promotion Board, nominations and
appointments, the term of office, removal and vacancies, procedure,
reimbursement and attendance, powers and duties, and prohibited
activities.
Sections 1214.50 through 1214.56 of the Order will detail
requirements regarding the Board's budget and expenses, financial
statements, assessments, and exemption from assessments.
The Board's programs and expenses will be funded through
assessments on producers, importers, donations from any person
including those not subject to assessments, other income, and other
funds available to the Board. The Order will provide for an initial
assessment rate of $0.15 per Christmas tree cut and sold domestically
or imported into the United States.
This assessment rate will be reviewed by the Board after the
initial referendum is conducted (3 years after assessments first
begin). The assessment rate cannot be changed during the first three
years of operation of the Order. The assessment rate may be increased
or decreased no more than 2 cents per Christmas tree during the fiscal
period. Any change in the assessment rate within this range will be
subject to rulemaking by the Secretary. The assessment rate shall not
exceed 20 cents per Christmas tree, nor shall it be less than 10 cents
per Christmas tree, unless a majority of producers and importers
approve such other levels of assessments through a referendum conducted
pursuant to this subpart. Importers who import 500 Christmas trees or
more would be required to pay assessments to the Board, if not
collected by Customs.
Importer assessments will be collected through Customs. The Order
will specify a list of numbers of the Harmonized Tariff Schedule of the
United States that will identify Christmas trees subject to
assessments.
The Order will provide authority for the Board to impose a late
payment charge and interest for assessments overdue to the Board. The
late payment charge and rate of interest will be prescribed in the
Order's regulations issued by the Secretary.
Sections 1214.60 through 1214.62 of the Order will detail
requirements regarding promotion, research and information projects
authorized under the Order.
Sections 1214.70 through 1214.72 specify the reporting and
recordkeeping requirements under the Order as well as requirements
regarding confidentiality of information.
Section 1214.81(a)(1) of the Order specifies that the program will
be implemented and a referendum conducted three years after assessments
first begin under the Order. The Order will not continue unless it is
approved by a majority of those persons voting in the referendum for
approval.
Section 1214.81(b) of the Order specifies criteria for subsequent
referenda. Under the Order, a referendum will be held to ascertain
whether the program should continue, be amended, or be terminated.
Section 1214.80 and sections 1214.82 through 1214.88 describe the
rights of the Secretary; authorize the Secretary to suspend or
terminate the Order when deemed appropriate; prescribe proceedings
after termination; address personal liability, separability, and
amendments; and provide OMB control numbers. These provisions are
common to all research and promotion program authorized under the 1996
Act.
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 rule on small
entities. Accordingly, AMS has prepared this final regulatory
flexibility analysis.
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 Small Business Administration defines,
in 13 CFR part 121, small agricultural producers as those having annual
receipts of no more than $750,000 and small agricultural service firms
(producers and importers) as those having annual receipts of no more
than $7.0 million.
[[Page 69097]]
Under these criteria, the majority of the producers that will be
affected by this Order will be considered small entities, while most
importers will not. Producers and importers who cut and sell or
imported less than 500 Christmas trees annually will be exempt from the
assessment. Organic producers and importers would also be exempt from
assessments. The number of entities assessed under the program will be
approximately 3,263. Estimated revenue is expected to be approximately
$2 million of which 10 percent is expected from imported product and 90
percent from domestic product.
According to the Task Force, based on data from the 2007 Census of
Agriculture, there were approximately 12,255 Christmas tree farms that
harvested Christmas trees in the United States. Approximately 25
percent of the producers or 3,100 Christmas tree producers will be
subject to the assessment based on the exemption of those producing
less than 500 trees will be exempt from assessments. Approximately 95
percent of the producers subject to the assessment qualified under the
definition for small business owners. According to the Task Force the
average price for 6 to 7 foot Douglas and Noble fir trees is $11.00 and
$18.00, respectively. During 2007, 47 out of 50 States produced
Christmas trees in the United States. Oregon, Michigan, Wisconsin,
North Carolina, and Pennsylvania together produced more than 75 percent
of the trees harvested in 2007. In 2008, there were approximately 200
importers. Based on the 2008 U.S. Customs data, 163 importers that
imported more than 500 Christmas trees are subject to the assessment
rate under the Order.
This rule establishes an industry-funded research, promotion, and
information program for fresh cut Christmas trees. The program will be
financed by an assessment on Christmas tree producers and importers and
will be administered by a board of industry members selected by the
Secretary. The initial assessment rate will be $0.15 per Christmas tree
cut and sold or imported to the United States and could be increased to
$0.20 per Christmas tree. Entities that cut and sell or import less
than 500 Christmas trees will be exempt. The purpose of the program
will be to strengthen the position of Christmas trees in the
marketplace, and maintain and expand markets for Christmas trees. A
referendum will be held among eligible producers and importers to
determine whether they favor implementation of the program three years
after the first assessments begin. The Order will continue if favored
by a majority of producers and importers voting in the referendum. The
program is authorized under the 1996 Act.
Regarding the economic impact of the Order on affected entities,
Christmas tree producers and importers will be required to pay
assessments to the Board. As previously mentioned, the initial
assessment rate will be $0.15 per Christmas tree cut and sold or
imported to the United States and could be increased to no more than
$0.20 per Christmas tree.
Regarding the impact on the industry as a whole, the Order is
expected to grow demand for fresh cut Christmas trees. The Christmas
tree industry hopes to achieve a stable funding base to promote
Christmas now and into the future.
Regarding alternatives, the Christmas tree industry has already
considered and implemented voluntary programs, but based on past
experiences, these programs only worked in the short term; until monies
were depleted.
This action will impose an additional reporting and recordkeeping
burden on producers and importers of fresh cut Christmas trees.
Producers and importers interested in serving on the Board may be asked
to submit a nomination form to the Board indicating their desire to
serve or nominating another industry member to serve on the Board.
Interested persons will also submit a background statement outlining
their qualifications to serve on the Board. Producers and importers
will have the opportunity to cast a ballot and vote for candidates to
serve on the Board. Producer and importer nominees to the Board will
have to submit a background form to the Secretary to ensure they are
qualified to serve on the Board.
Additionally, producers and importers who domestically produce or
import less than 500 Christmas trees annually could submit a request to
the Board for an exemption from paying assessments on this volume.
Producers and importers also will report regarding their sales/imports
that will accompany their assessments paid to the Board. Producers and
importers who will qualify as 100 percent organic under the NOP could
submit a request to the Board for an exemption from assessments.
Finally, producers and importer who wanted to participate in a
referendum to vote on whether the Order should continue will have to
complete a ballot for submission to the Secretary. These forms were
approved by OMB under OMB Control No. 0581-0267 and 0581-0268. Specific
burdens for the forms are detailed later in this document in the
section titled Paperwork Reduction Act. As with all Federal promotion
programs, reports and forms are periodically reviewed to reduce
information requirements and duplication by industry and public sector
agencies. Finally, USDA has not identified any relevant Federal rules
that duplicate, overlap, or conflict with this rule.
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.
Regarding outreach efforts, as previously mentioned, the Task Force
conducted sessions throughout the United Sates in different States and
regions. These were held in conjunction with regional and state
organization meetings. Approximately 50 sessions were held across the
United States. Input regarding the proposed program was incorporated
into the Task Force's proposal.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the reporting and recordkeeping provisions generated by
this rule have been preapproved by the Office of Management and Budget
(OMB).
Title: Research and Promotion Background Information.
OMB Number for background form AD-755: (approved under OMB No.
0505-0001).
Expiration Date of Approval: 7/31/2012.
Title: Christmas Tree Promotion, Research, and Information Program
(Order).
OMB Numbers: 0581-0268.
Expiration Date of Approval: 12/31/2013.
Type of Request: Approval of a preapproved collection.
Abstract: The information collection requirements in the request
are essential to carry out the intent of the 1996 Act. The information
collection concerns a proposal received by USDA for a national research
and promotion program for the Christmas tree industry. The program will
be financed by an assessment on Christmas tree producers and importers
and will be administered by a board of industry members selected by the
Secretary. The program will provide for an exemption for producers and
importers that cut and sell or import less than 500 Christmas trees
during the year. A referendum will be
[[Page 69098]]
held among eligible producers and importers to determine whether they
favor continuation of the program three years after assessments first
begin. The purpose of the program will be to help increase demand for
fresh cut Christmas trees.
In summary, the information collection requirements under the
program concern Board nominations, refunds of assessments, exemption
applications, and the collection of assessments. For Board nominations,
producers and importers interested in serving on the Board will be
asked to submit a ``Nomination Form'' to the Board indicating their
desire to serve or to nominate another industry member to serve on the
Board. Producers and importers will have the opportunity to submit a
``Nomination Ballot'' to the Board where they will vote for candidates
to serve on the Board. Nominees will also have to submit a background
information form, ``AD-755,'' to the Secretary to ensure they are
qualified to serve on the Board.
Regarding assessments, producers and importers who cut and sell or
import less than 500 Christmas trees annually could submit a request,
``Application for Exemption from Assessments,'' to the Board for an
exemption from paying assessments. Producers and importers may be asked
to submit a ``Sales/Import Report'' that will accompany their
assessments paid to the Board and report the quantity of Christmas
trees cut and sold or imported during the applicable period, the
quantity for which assessments were paid, and the port of entry (for
imports). Importer assessments will be collected by Customs. If Customs
collects the assessment and the importer does not reach the assessable
threshold, the Board will refund such assessments no later than 60
calendar days after receipt from the Board. Customs will remit the
funds to the Board along with this information. Finally, producers and
importers who will qualify as 100 percent organic under the NOP could
submit an ``Organic Exemption Form'' to the Board and request an
exemption from assessments.
Producers and importers will also file a form to request a refund
of assessments paid if the referendum fails to pass. A referendum is
proposed to be conducted three years after the assessments first begin
to determine if producers and importers favor the continuance of the
Order.
There will also be an additional burden on producers and importers
voting in referenda. The referendum ballot, which represents the
information collection requirement relating to referenda, is addressed
in a final rule on referendum procedures which will be published in the
Federal Register at a later time.
Information collection requirements that are included in this
proposal include:
(1) Background Information Form AD-755 (OMB Form No. 0505-0001)
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.5 hour per application.
Respondents: Producers and importers.
Estimated Number of Respondents: 8 (24 for initial nominations to
the Board, 8 in subsequent years.
Estimated Number of Responses per Respondent: 1 every 3 years
(0.3).
Estimated Total Annual Burden on Respondents: 12 hours for the
initial nominations to the Board and 4 hours annually thereafter.
(2) Sales/Import Report by Each Producer or Importer of Christmas Trees
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.5 hours per producer reporting on
Christmas trees sold.
Respondents: Producers and importers.
Estimated number of Respondents: 3,110
Estimated number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 1,555 hours.
(3) An Exemption Application for Producers and Importers Who Are Exempt
From Assessments
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.25 hours per producers or
importer reporting on Christmas trees domestically sold or imported.
Upon approval of an application, producers and importers will receive
exemption certification.
Respondents: Exempt producers and importers.
Estimated number of Respondents: 9,192.
Estimated number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 2,298 hours.
(4) Application for Reimbursement of Assessment
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.25 hours per request for
reimbursement.
Respondents: Importers.
Estimated number of Respondents: 37.
Estimated number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 9.25 hours.
(5) A Requirement to Maintain Records Sufficient To Verify Reports
Submitted Under the Order
Estimate of Burden: Public recordkeeping burden for keeping this
information is estimated to average 0.5 hours per record keeper
maintaining such records.
Recordkeepers: Producers and importers.
Estimated number of recordkeepers: 12,455.
Estimated total recordkeeping hours: 6,227.5 hours.
(6) Nomination Form
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.25 hours per application.
Respondents: Producers and importers.
Estimated Number of Respondents: 40
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 10.00 hours.
(7) Background Statement
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.25 hour per application.
Respondents: Producers and importers.
Estimated Number of Respondents: 40.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 10.00
(8) Nomination Ballot
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.25 hours per application.
Respondents: Producers and importers.
Estimated Number of Respondents: 1,200.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 300 hours.
(9) Organic Exemption Form
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.5 hours per exemption form.
Respondents: Producers and importers.
[[Page 69099]]
Estimated Number of Respondents: 5.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 2.5 hours.
(10) Application for Refund Form
Estimate of Burden: Public recordkeeping burden for this collection
of information is estimated to average 0.5 hours per refund form.
Respondents: Producers and importers.
Estimated Number of Respondents: 325.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 162.5.
As noted above, under the program, producers and importers will be
required to pay assessments and file reports with and submit
assessments to the Board (importers through Customs). While the Order
will impose certain recordkeeping requirements on producers and
importers, information required under the Order could be compiled from
records currently maintained. Such records shall be retained for at
least two years beyond the marketing year of their applicability.
An estimated 12,455 respondents will provide information to the
Board (12,255 producers and 200 importers). The estimated cost of
providing the information to the Board by respondents will be $348,975.
This total has been estimated by multiplying 10,575 total hours
required for reporting and recordkeeping by $33, the average mean
hourly earnings of various occupations involved in keeping this
information. Data for computation of this hourly rate was obtained from
the U.S. Department of Labor Statistics.
The Order's provisions have been carefully reviewed, and every
effort has been made to minimize any unnecessary recordkeeping costs or
requirements, including efforts to utilize information already
submitted under other programs administered by USDA and other state
programs.
The forms will require the minimum information necessary to
effectively carry out the requirements of the program, and their use is
necessary to fulfill the intent of the 1996 Act. Such information can
be supplied without data processing equipment or outside technical
expertise. In addition, there are no additional training requirements
for individuals filling out reports and remitting assessments to the
Board. The forms will be simple, easy to understand, and place as small
a burden as possible on the person required to file the information.
Collecting information quarterly will coincide with normal industry
business practices. The timing and frequency of collecting information
are intended to meet the needs of the industry while minimizing the
amount of work necessary to fill out the required reports. The
requirement to keep records for two years is consistent with normal
industry practices. In addition, the information to be included on
these forms is not available from other sources because such
information relates specifically to individual producers and importers
who are subject to the provisions of the 1996 Act. Therefore, there is
no practical method for collecting the required information without the
use of these forms.
Analysis of Comments
The previous proposed rule concerning this action published in the
Federal Register on November 8, 2010, provided for a 60-day comment
period which ended on February 7, 2011. The comment period was reopened
for 15 days (76 FR 9695, February 22, 2011), as requested by a member
of Congress and several North Carolina producers. That comment period
ended on March 9, 2011. A total of 565 comments were received during
the two comment periods. Of the 565 comments received, 19 were from
U.S. State or regional organizations representing Christmas tree
producers. Two of these organizations representing Texas and Vermont
were in opposition to the proposal, while the others supported the
proposal. Three regional producer organizations from Canada submitted
comments in favor of the proposal. In addition, two State Universities
and one State Department of Agriculture submitted comments in favor of
Christmas tree program.
Of the 565 comments submitted, 398 were in favor of the proposal,
147 were in opposition, nine were duplicates, six were neither for or
against, four requested an extension of the comment period, and one had
no comment. Comments were received from interested parties in 35
different States in the United States with the majority of those
comments from North Carolina, Oregon, Michigan, and Wisconsin. Also,
comments were received from interested parties in four Canadian
provinces and the United Kingdom.
General Comments in Support
The majority of the comments that supported the Order suggested
that the pooling of resources was a significant benefit of a national
mandatory Christmas tree promotion program. Several commenters
mentioned the need to promote the environmental and green benefits of
Christmas trees and how providing education to the public of these
aspects will result in the possible increase in sales. Many commented
that they have seen the successes of other promotional programs and how
beneficial it was to that industry. Commenters suggested promoting
Christmas tree traditions of choosing a Christmas tree as a family
experience.
Some commenters stated that there should not be a 500 Christmas
tree threshold for payment of assessments. These commenters suggested
that all Christmas tree producers should pay the assessment and share
in the cost of promotion.
Section 516(a)(1) of the 1996 Act provides authority for the
Secretary to exempt from an order any de minimis quantity of an
agricultural commodity otherwise covered by the order. However, the
1996 Act does not define the term de minimis and USDA is not limited to
using the definition of de minimis as specified in another law or
agreement. The de minimis quantity is defined for a particular program
and industry. The Task Force reviewed various options for the exemption
and determined that 500 Christmas trees would be appropriate because
such a level would still provide the Board with resources to have a
program that could be successful. USDA agrees that this exemption level
is appropriate and reasonable.
Comments in Support With Modifications
There were 11 comments in support of the Order with modifications.
An association that includes all of the members of the Task Force
and a national association promoting Christmas trees supported the
proposal in general with some suggested modifications.
The first five modifications suggested changes to the Order
language that are not adopted in this final rule. The first
modification was to allow 10 percent of the assessments paid under this
program by producers that are members of State/multi-State associations
to be directed to the State/multi-State associations to carry out local
programs without competing to raise additional funds. This was
originally proposed to USDA by the proponents as a way to foster better
cooperation with associations, however it was not included in the
proposed Order by USDA.
USDA believes that with a mandatory requirement to set aside a
specific percent of the funds collected under the
[[Page 69100]]
program for State/multi-State associations, there may not be adequate
funds remaining to achieve the Board's goals of promoting for the
entire Christmas tree industry as this program expects to raise only 2
million dollars in assessments. Including this language in the order
provisions does not prevent the Board from funding projects with State
or multi-State organizations that they determine could benefit the
entire Christmas tree industry. Therefore, no changes are being made to
the Order language to reflect these comments.
Another suggested modification would change section 1214.46(g) to
allow the Board to contract with companies or organizations for their
staffing needs. Adding this authority to allow the Board to contract
with companies or organizations would provide more flexibility in
meeting its needs for staffing. Such authority already exists in the
proposed Order and permits such contracting under section 1214.46(o)
and therefore, no changes are being made to the Order language to
reflect these comments.
The proponents requested elimination of the organic exemption. This
change was also requested by other commenters. Under authority provided
by 7 U.S.C., the Order exempts producers who operate under an approved
National Organic Program (NOP) (7 CFR part 205) system plan, produce
only products that are eligible to be labeled as 100 percent organic
under the NOP, and are not a split operation, from paying assessments.
Thus, 100 percent organic Christmas trees would be exempt from
assessment under the Order. Therefore, no changes are being made to the
Order language to reflect these comments.
The fourth modification would provide clarifying language in
section 1214.50(c) as provided in the preamble of the proposed rule.
The commenters wanted this section clarified as stated in the preamble
of the proposed Order in regard to shifting of funds from one program,
plan, or project to another. The recently modified Guidelines for AMS
Oversight of Commodity Research and Promotion Programs require approval
by AMS of shifts in program funds from one major area to another.
Therefore, no changes are being made to the Order language to reflect
these comments.
The fifth and last change to the Order concerns the preamble of the
proposed Order which states that if a Board member ceased to work for a
producer or importer or ceased to do business in the region he or she
represented, such position would become vacant. The comment indicated
that in section 1214.41 nominees must domestically produce or import
more than 500 Christmas trees during the most recent fiscal year. That
is an eligibility requirement for Board members, but does not preclude
members from being employees of companies that may be producers or
importers assessed under this order. Therefore, the preamble (75 FR
68516) and Order language correctly specify the eligibility
requirements for Board members. Therefore, no changes are being made to
the Order language to reflect these comments.
The proponents also suggested two modifications that could be
adopted by the Board through informal rulemaking, and therefore require
no changes to the Order language. The first modification would be to
provide for Certificates of Exemptions to be issued every five years
instead of annually. The proponents indicated that production of
individual farms do not vary greatly from year to year because of the
nature of the Christmas trees crop. It normally takes an average of 4
to 10 years to produce a marketable Christmas tree. The proponents
indicated that about 9,000 producers could be eligible for an
exemption. In addition, the proponents indicated that exemption forms
could require a producer to acknowledge that if a producer's situation
changes it would their responsibility to inform the Board. Accordingly,
no changes are made as a result of this suggestion.
The next modification would increase administrative costs from 10
percent, as proposed, to 15 percent as allowable under the Act. The
commenter requested this increase because the start-up costs are likely
to be higher than operating costs in later years with the need to
educate producers about the program. In addition, the commenter
believes a strong compliance element will be important to collecting
assessments and assuring sustainability of the program. USDA is of the
view if indeed there is concern in the industry that the administrative
cost cap be increased to 15 percent, then as authorized by the 1996
Act, upon recommendation of the Board such a change could be
accomplished though informal rulemaking. Therefore, no change to Order
language is made as a result of this suggestion.
The proponents suggested six other modifications that would require
changes to the Order language. The first change will add the refund
procedure to the Order language as described in the preamble. The
procedure would state that producers and importers that produced or
imported 500 Christmas trees or less and did not apply for an exemption
shall receive a refund from the Board within 30 calendar days after the
end of the fiscal period. This procedure was outlined in the preamble
of the proposed Order but not in the Order language. Therefore, section
1214.53(a)(7) was added to the Order language to clarify the procedure
described in the preamble.
The second change would provide that for the initial crop year's
budget which could be largely administrative that repayment of such
expenses would not be considered an administrative expense in
subsequent years. The Act provides that for fiscal years beginning 3 or
more years after the date of the establishment of the Board, the Board
may not expend for administration, maintenance, and functioning of the
Board in a fiscal year an amount that exceeds 15 percent of the
assessment and other income received by the Board. The proposed Order
contains 10 percent as the limit. This language, therefore, permits the
Board to expend more funds in the first three years of startup of the
Order for administration, maintenance and functioning of the Board.
This recommendation is reasonable and the appropriate Order language
will be added to the section reflect this change.
Another change would delete erroneous section numbers from the
table of contents of the Order. The table of contents for the Order
included sections 1214.55 Refunds and 1214.56 Procedures for obtaining
a refund. Provision for these sections is in section 1214.53;
therefore, the reference to these section numbers is removed from the
table of contents.
The fourth change would provide clarification in section 1214.52(e)
regarding the assessments due date. The commenters indicated that the
wording in section 1214.52(e) could be construed as saying that
assessments would not be due until the crop year following the sale of
Christmas trees, or more than 14 months later. This is not the intent
of the language. For the purpose of this program, crop year is defined
as August 1 through July 31, accordingly, producers or importers that
domestically produced or imported over 500 Christmas trees are to pay
their assessments no later than February 15 of the crop year in which
they are produced or imported. Therefore, section 1214.52(e) has been
revised to clarify this change.
Another change would correct an erroneous section number in section
1214.62. In section 1214.62, section 1214.73 is erroneously referenced.
The reference section number should be section 1214.83.
The last change would correct an erroneous sentence in the Order
language regarding the time producers
[[Page 69101]]
and importers could receive refunds if the delayed referendum fails.
The preamble of the proposed rule specified a procedure that producers
and importers shall notify the Board within 30 days after the
announcement of the referendum (that it has failed) of their demand to
receive a refund. The Order language in section 1214.54(d) specifies
that any producer or importer requesting refund shall submit an
application on the prescribed form to the Board within 60 days from the
date the assessments were paid by such producer or importer but no
later than the date the results of the required referendum are
announced by the Secretary. The preamble language is correct.
Therefore, the Order language in section 1214.54(d) has been corrected
to be consistent with this language.
Finally, one modification was suggested that would clarify language
in the preamble. There is a phrase in the preamble of the proposed
Order (75 FR 68516) that indicates the Board is to report its
activities to manufacturers for the U.S. market. This language was not
correct and should not have appeared in the preamble of the proposed
Order.
Comments in Opposition
There were 21 comments in opposition to the proposal that suggested
key points in the areas of assessments, exemptions, promotion,
referenda, reporting, and other issues. Based on our evaluation of
these comments, no changes will be made the Order. These comments are
discussed below.
Assessments
A commenter expressed concern that the government should assess or
tax imports of artificial trees instead of taxing or assessing
domestically produced Christmas trees. Research and promotion programs
are self help programs that promote an agricultural commodity. The
Christmas tree industry decided to propose under the authority under
the 1996 Act, a program to promote domestic and imported fresh cut
Christmas trees.
The commenter was also concerned about assessing Christmas trees
that are given to charity or trees lost to disease. If Christmas trees
are donated to charity or lost to disease and therefore not sold into
the marketplace, they will not be assessed under the Order.
Exemptions
A commenter also stated that not assessing producers or importers
that produce or import less than 500 Christmas trees is the way for the
proponents to get the program passed in a referendum. The commenter
also stated that the initial exemption for Christmas tree producers was
2500 Christmas trees and the amount in the proposed Order is 500
Christmas trees. The Task Force reviewed various options for the
exemption and determined that 500 Christmas trees would be appropriate
because such a level would still provide the Board with resources to
have a program that could be successful. USDA concurs with this
exemption level because this level would exempt small operations that
would otherwise be burdened by the assessment. Therefore, an exemption
for producers and importers of less than 500 trees is authorized under
the program and consistent with the Act's provisions.
The commenter questioned how the 500 Christmas tree exemptions
would be applied. Under the Order, producers and importers of fewer
than 500 Christmas trees would not be assessed under this Order.
Producers and importers of 500 or more Christmas trees will be assessed
on the total production number of Christmas trees produced or imported.
Promotion
A commenter also stated that the Task Force cited an increase in
sales when a similar marketing program was in existence. The commenter
stated that this is merely a correlation, and no further evidence is
provided establishing that the marketing program caused the increase in
sales. Other commenters also stated that the benefits would not
outweigh the cost of the program.
The Task Force provided that the main reason for the marketing
program's demise was that it was voluntary in nature. Under the
proposed Order, the assessments to fund the program would be mandatory,
therefore, providing consistent funding by stakeholders. In addition,
several comments in favor of the proposed Order supported the
consistent funding which would provide the industry with a workable
program to increase sales. Furthermore, a third party five-year
evaluation is required of all research and promotion programs to
determine the benefits to their industries under section 515(h) of the
1996 Act. These evaluations are available from the Boards and are
posted on the AMS Web site. The industry may terminate the program if
the first evaluation does not show a benefit to the Christmas tree
industry.
A commenter also stated that if USDA promulgates this rule they
should solicit data from other sources, develop a definitive plan for
how to boost Christmas tree sales, and make a projection for the
increase in fresh-cut Christmas tree sales and a cost benefit analysis.
The Act provides authority for the Secretary to appoint a Board
consisting of industry members. The Act states that such a Board must
develop a plan under USDA oversight to promote Christmas trees. USDA
approves the Board's annual budget and marketing plan. In addition, the
Board must conduct a third party program evaluation every five years to
evaluate the effectiveness of the program's activities. All these
documents are discussed at Board meetings, are public information and
available on the Board's Web site. The program evaluation is also
available on AMS's Web site. These documents provide the road map for
the Boards operations and assist the industry in determining if the
program is effective.
Another issue some commenters raised was how much of the funds will
be spent on administrative costs, USDA management, research and other
projects. The Act authorizes that up to 15 percent of the assessments
collected could be used for administrative expenses. However, the
proponent group decided to limit the administrative expenses to 10
percent of the funds collected. USDA costs are based on the time spent
by the USDA on oversight of the program. The majority of the funds are
used for research and promotion of the commodity.
Several of the comments addressed the issue of promotion proposed
under the Order. Some Christmas tree producers stated their opposition
to perceived government intervention in their Christmas tree
operations. They also stated that they preferred to do their own
promotion and did not have any problems selling all of their trees,
thus they did not see any benefit in the proposed program.
Additionally, one commenter stated their belief that the program was
illegal stating that the government can't promote private individuals'
Christmas trees.
The 1996 Act provides the authority for agricultural industries to
develop programs for research and promotion. These programs are
initiated by members of the industry. USDA provides oversight of these
programs and their activities. However, industry Boards that manage
these programs develop their own budgets and marketing plans and
conduct strategic planning for the programs. Although these programs
are mandatory in nature, they do not preclude individuals from
promoting their own commodity.
Another opposition comment stated the belief that Christmas trees
were a
[[Page 69102]]
differentiated product and not an agricultural commodity and therefore,
could not be promoted generically under this program. The 1996 Act
states that the term agricultural commodity means, among other things,
the products of forestry and other commodities raised or produced in
farms. USDA does not agree with this comment and believes Christmas
trees are an agricultural commodity and can be promoted under the Act
authority.
The commenter also stated their belief that ``choose and cut''
producers who provide trees to a distinct market may not realize the
benefits of such a program because generic promotions would not attract
customers to their operations. Various other commenters also stated
that the government should not compel an industry with a variety of
interests to speak with one voice when many are not in agreement.
This Board will consider the views and concerns of every segment of
the industry and provide a marketing plan that benefits the whole
Christmas tree industry. Producers in all sectors have diversified to
provide different types of activities to increase sales and promote
their product. A Christmas tree generic promotion program will not
hinder any producer from continuing this type of activity. A generic
promotion program can work in conjunction with other marketing
activities that individual producers and importers already have
developed or want to develop.
The commenter also suggested that the type of promotion the Board
pursues may not be agreed upon by such commenter and that a one size
fits all advertising campaign blurs distinctions among products in
their industry. Additional commenters stated that the program should
cover research but not promotion efforts. Research and promotion boards
represent all sectors of the industry and the members will bring
different backgrounds and expertise to the Board when developing
marketing strategies. In addition, all meetings are open to the public.
The Board would determine the kinds of activities conducted under the
program based on those authorized under the Act. No changes have been
made to reflect these comments.
The same commenter questioned whether the program will insure that
large stores will water and properly care for Christmas trees to
maintain quality. Many research and promotion programs include an
educational component to those that handle the product. The Board may
decide that one of the needs of the industry is to provide information,
education and training on the handling of Christmas trees to assure
quality of the product to the consumer.
Referenda
A commenter questioned the criteria to determine the referendum
vote. Other commenters did not agree with having a delayed referendum
or having one vote per entity without regard to the volume produced or
imported. Section 518 of the Act provides for a referendum to be
conducted either before the program is in place or three years after
assessments first begin under the order. The proponent group chose the
delayed referendum option. The Act also provides for three options to
the vote: By a majority of those persons voting, by persons voting for
approval who represent a majority of the volume of the agricultural
commodity, or by a majority of those persons voting for approval who
also represent a majority of the volume of the agricultural commodity.
The proponent group recommended counting by vote in order to attempt to
ensure that small businesses have the same vote as large firms.
Accordingly, the Order will be approved in a referendum if a majority
of producers and importers voting in the referendum vote for approval.
Another commenter expressed the opinion that such voting was
unfair. The commenter stated that one farm one vote does not adequately
represent the producers that would be funding the program. The
commenter also stated that the assessment should be on seedling
nurseries since there is no true first handler. In addition, the
commenter stated that there is no control on increasing the assessment.
The Act provides three methods for determining the vote in
referendum. The proponents chose a majority of those persons voting as
the voting method. The proponents also chose to assess producers and
importers since these will directly benefit from the program. Further,
the Order provides that the assessment can only be increased or
decreased by 2 cents during the fiscal period and subject to rulemaking
by the USDA; and it cannot exceed 20 cents or drop below 10 cents per
fiscal period. In order to make any changes in the assessment rate, the
Board would have to make that recommendation to USDA and the USDA will
request comments for the industry before implementing any change in the
assessment rate. No changes have been to the Order to reflect these
concerns.
Reporting
Another issue raised by commenters concerns the reporting burden
under the Order. A commenter stated that the proposed program involves
too much paperwork and that forms should be web-based to allow easy
access. The commenter stated concern that Christmas tree producers were
already reporting information to the other Federal agencies. The
commenter was also concerned that the Board would be counting stumps.
Goals under this program are to minimize reporting burden and eliminate
duplication as much as possible. The Board could coordinate with other
agencies to help insure there are no duplicative efforts. The Board
also may opt to provide the required forms electronically in order to
further reduce the reporting burden to producers and importers.
Another commenter was concerned that the reporting requirements
would require producers to furnish customer information to the Board.
The information required under the program does not contain producer or
importer customer information. Furthermore, pursuant to section 515 of
the 1996 Act, any information collected under the program is kept
confidential.
Another commenter stated concern about how difficult it may be to
terminate such a program once implemented. This program requires that a
referendum be conducted 3 years after implementation and every 7 years
thereafter to determine if producers and importers support continuation
of the program. The industry may also request a referendum if 10
percent of those covered under the program request it. The Secretary
can also suspend or terminate an order or a provision of an order if
the Secretary finds that an order or a provision obstructs or does not
tend to effectuate the purposes of the Act.
Other Issues
Some commenters raised constitutionality concerns. One commenter
raised concerns about a perceived unequal burden of taxation. The
commenter suggested that the exemption provision could affect producers
that produce 500 trees or less because this creates unequal taxation
treatment of Christmas tree producers. However, the assessment provided
for in this type of program is not a tax nor does it yield revenue for
the Federal government. These producer and importers funds raised by
producers and importers are for the benefit of producers and importers.
The commenter also stated that some Texas producers were not in
favor of the proposed Order, that Texas is a sovereign State, and
therefore Texas Christmas tree producers should not be included in the
Order. The 1996 Act
[[Page 69103]]
provides that programs under the Act would be applicable to
agricultural commodities produced in the United States, which is
defined as collectively the 50 States, the District of Columbia, the
Commonwealth of Puerto Rico and the territories and possessions of the
United States.
Another commenter in opposition raised concerns that the proposed
Order may violate the Establishment Clause. The commenter stated that
government speech cannot advocate religion or religious symbols.
USDA considers Christmas trees to be an agricultural commodity
which is reported as such in various USDA crop reports and statistical
data reports (e.g. 2007 Census of Agriculture, National Agricultural
Statistics Service). The Act in section 512 provides for the
establishment of generic promotion, research and information activities
for agricultural commodities, including Christmas trees.
Another commenter in opposition concluded that the rule would fall
outside the purpose of the 1996 Act by favoring one domestic industry-
Christmas tree farming-to the detriment of another domestic industry-
artificial tree manufacturing. The 1996 Act was developed to provide
agricultural industries with a way to develop and expand markets of
agricultural commodities. Promoting fresh cut Christmas trees is within
the scope of the 1996 Act.
Another commenter stated that the proposed rule should be withdrawn
as it was an inappropriate use of government power citing free markets,
limited government, and individual freedom. The Proposed program was
presented to the Department by an industry wide group of producers and
importers who requested that such an industry-funded program be
implemented. USDA has concluded that a research and promotion program
for fresh cut Christmas trees is within the scope of its authority
under the 1996 Act, and therefore is establishing this industry
supported program.
Another comment in opposition stated concern that the Board makeup
unfairly represents big business by its geographic areas and trees
produced. USDA believes that the geographical representation proposed
by the proponent group fairly divides the U.S. production and imports
of Christmas trees. It is USDA policy that the Board consider for
nomination, the diversity of the population served and the knowledge,
skills, and abilities of the members to serve a diverse population,
size of the operations, methods of production and distribution, and
other distinguishing factors to ensure that the Board represents the
diverse interest of persons responsible for paying assessments, and
others in the marketing chain. USDA also makes sure that the
geographical distribution of members closely reflects the distribution
of the production.
After consideration of all relevant materials presented, including
the proposal and comments received, the USDA has determined that this
Order is consistent with and will effectuate the purposes of the 1996
Act.
It is found that good cause exist for not postponing the effective
date of this rule until 30 days after publication in the Federal
Register (5 U.S.C. 553) because given that the collection and
remittance of assessments begin as soon as possible, the initial Board
should be appointed expeditiously in order to carry out the purposes of
the Order.
List of Subjects in 7 CFR Part 1214
Administrative practice and procedure, Advertising, Consumer
information, Marketing agreements, Christmas trees promotion, Reporting
and recordkeeping requirements.
For the reasons set forth in the preamble, Title 7, Chapter XI of
the Code of Federal Regulations is amended by adding part 1214 to read
as follows:
PART 1214--CHRISTMAS TREE PROMOTION, RESEARCH, AND INFORMATION
ORDER
Subpart A--Christmas Tree Promotion, Research, and Information Order
Definitions
Sec.
1214.1 Act.
1214.2 Board.
1214.3 Christmas tree.
1214.4 Conflict of interest.
1214.5 Crop year.
1214.6 Customs.
1214.7 Department.
1214.8 Fiscal Period
1214.9 Importer.
1214.10 Information.
1214.11 Marketing.
1214.12 Order.
1214.13 Part and subpart.
1214.14 Person.
1214.15 Programs, plans, and projects.
1214.16 Produce.
1214.17 Producer.
1214.18 Promotion.
1214.19 Research.
1214.20 Secretary.
1214.21 State.
1214.22 Suspend.
1214.23 Terminate.
1214.24 United States.
Christmas Tree Promotion Board
1214.40 Establishment and membership.
1214.41 Nominations and appointments.
1214.42 Term of office.
1214.43 Vacancies.
1214.44 Procedure.
1214.45 Compensation and reimbursement.
1214.46 Powers and duties.
1214.47 Prohibited activities.
Expenses and Assessments
1214.50 Budget and expenses.
1214.51 Financial statements.
1214.52 Assessments.
1214.53 Exemption from and refunds of assessments.
1214.54 Refund escrow accounts.
Promotion, Research and Information
1214.60 Programs, plans, and projects.
1214.61 Independent evaluation.
1214.62 Patents, copyrights, trademarks, information, publications,
and product formulations.
Reports, Books, and Records
1214.70 Reports.
1214.71 Books and records.
1214.72 Confidential treatment.
Miscellaneous
1214.80 Right of the Secretary.
1214.81 Referenda.
1214.82 Suspension and termination.
1214.83 Proceedings after termination.
1214.84 Effect of termination or amendment.
1214.85 Personal liability.
1214.86 Separability.
1214.87 Amendments.
1214.88 OMB control numbers.
Subpart B--[Reserved]
Authority: 7 U.S.C. 7411-7425; 7 U.S.C. 7401.
Subpart A--Christmas Tree Promotion, Research, and Information
Order
Definitions
Sec. 1214.1 Act.
Act means the Commodity Promotion, Research, and Information Act of
1996 (7 U.S.C. 7411-7425), and any amendments thereto.
Sec. 1214.2 Board.
Board or the Christmas Tree Promotion Board means the
administrative body established pursuant to Sec. 1214.40.
Sec. 1214.3 Christmas tree.
Christmas tree means any tree of the coniferous species, that is
severed or cut from its roots and marketed as a Christmas tree for
holiday use.
Sec. 1214.4 Conflict of interest.
Conflict of interest means a situation in which a member or
employee of the Board has a direct or indirect financial interest in a
person who performs a service for, or enters into a contract with, the
Board for anything of economic value.
[[Page 69104]]
Sec. 1214.5 Crop year.
Crop year means the period August 1 through July 31.
Sec. 1214.6 Customs or CBP.
Customs or CBP means the United States Customs and Border
Protection or U.S. Customs Service, an agency of the United States
Department of Homeland Security.
Sec. 1214.7 Department.
Department means the United States Department of Agriculture or any
officer or employee of the Department to whom authority has heretofore
been delegated, or to whom authority may hereafter be delegated, to act
in the Secretary's stead.
Sec. 1214.8 Fiscal period.
Fiscal period means the period August 1 through July 31.
Sec. 1214.9 Importer.
Importer means any person importing Christmas trees into the United
States in a fiscal period as a principal or as an agent, broker, or
consignee of any person who domestically produces Christmas trees
outside of the United States for sale in the United States, and who is
listed in the import records as the importer of record for such
Christmas trees.
Sec. 1214.10 Information.
Information means information, program, and activities that are
designed to increase efficiency in processing, enhance the development
of new markets and marketing strategies, increase market efficiency,
and enhance the image of Christmas trees and the Christmas tree
industry in the United States.
Sec. 1214.11 Marketing.
Marketing means to sell or otherwise dispose of Christmas trees in
interstate, foreign or intrastate commerce.
Sec. 1214.12 Order.
Order means an order issued by the Secretary under section 514 of
the Act that provides for a program of generic promotion, research, and
information regarding agricultural commodities authorized under the
Act.
Sec. 1214.13 Part and subpart.
Part means the Christmas Tree Promotion, Research, and Information
Order and all rules, regulations, and supplemental orders issued
pursuant to the Act and the Order. The Order shall be a subpart of such
part.
Sec. 1214.14 Person.
Person means any individual, group of individuals, partnership,
corporation, association, cooperative, or any other legal entity.
Sec. 1214.15 Programs, plans and projects.
Programs, plans and projects mean those research, promotion and
information programs, plans, or projects established pursuant to this
Order.
Sec. 1214.16 Produce.
Produce means to engage in the cutting and selling of Christmas
trees for the holiday market.
Sec. 1214.17 Producer.
Producer means any person who is engaged in the production of
Christmas trees in the United States, and who owns, or shares the
ownership and risk of loss of the production of Christmas trees or a
person who is engaged in the business of producing, or causing to be
domestically produced, Christmas trees beyond personal use and having
value at first point of sale.
Sec. 1214.18 Promotion.
Promotion means any action, including paid advertising and public
relations that presents a favorable image of Christmas trees to the
general public with the intent of improving the perception and
competitive position of Christmas trees and stimulating sales of
Christmas trees.
Sec. 1214.19 Research.
Research means any type of test, systematic study, study,
investigation, analysis and/or evaluation designed to advance the
image, desirability, use, marketability, quality, product development,
or production of Christmas trees, including but not limited to research
related to cost of production, market development, testing the
effectiveness of market development and promotional efforts, new
species of Christmas trees and environmental issues relating to the
Christmas tree industry.
Sec. 1214.20 Secretary.
Secretary means the Secretary of Agriculture of the United States,
or any officer or employee of the Department to whom authority has been
delegated, or to whom authority may be delegated, to act in the
Secretary's stead.
Sec. 1214.21 State.
State means any of the several 50 States of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, and the
territories and possessions of the United States.
Sec. 1214.22 Suspend.
Suspend means to issue a rule under section 553 of title 5 U.S.C.
to temporarily prevent the operation of an order or part thereof during
a particular period of time specified in the rule.
Sec. 1214.23 Terminate.
Terminate means to issue a rule under section 553 of title 5 U.S.C.
to cancel permanently the operation of an order or part thereof
beginning on a certain date specified in the rule.
Sec. 1214.24 United States.
United States means collectively the 50 states, the District of
Columbia, the Commonwealth of Puerto Rico, and the territories and
possessions of the United States.
Christmas Tree Promotion Board
Sec. 1214.40 Establishment and membership.
(a) Establishment of the Christmas Tree Promotion Board. There is
hereby established a Christmas Tree Promotion Board, composed of no
more than twelve (12) members as follows:
(1) Producer members from each of the following regions:
(i) Five producer members from Region 1--Western Region
(states from the Pacific Ocean east to the Rocky Mountains): Alaska,
Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New
Mexico, Oregon, Utah, Washington, Wyoming and all U.S. Territories
located in the Pacific Ocean.
(ii) Two producer members from Region 2--Central Region
(states east of the Rocky Mountains to the Great Lakes): Arkansas,
Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri,
Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Texas, and
Wisconsin.
(iii) Four producer members from Region 3--Eastern Region
(states east of the Great Lakes): Alabama, Connecticut, Delaware,
Florida, Georgia, Kentucky, Louisiana, New York, Maine, Maryland,
Massachusetts, Mississippi, New Hampshire, New Jersey, North Carolina,
Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia,
Vermont, Washington, DC, West Virginia, and all U.S. Territories
located in the Atlantic Ocean and Caribbean Sea, including but not
limited to Puerto Rico.
(2) One Importer member.
(b) Adjustment of membership. At least once every five years upon
implementation of the Order, but not more frequently than once every
three years, the Board will review the geographic distribution of
United States production of Christmas trees and the quantity and source
of Christmas tree imports. The review will be conducted through State
crop production figures and Board assessment records,
[[Page 69105]]
including the amount of assessments collected from importers, or other
government data. If warranted, the Board will recommend to the
Secretary that membership on the Board be altered to reflect any
changes in geographic distribution of domestic Christmas tree
production and the quantity of imports. Provided, that there shall be
at least one importer member on the Board. Such adjustments shall not
increase the total number of Board members. The adjustments to the
Board membership would be submitted to the Secretary by Board
recommendation and be implemented by the Secretary through rulemaking.
Sec. 1214.41 Nominations and appointments.
(a) Voting for producer members will be made by mail ballot,
electronic mail, in person, or by facsimile.
(b) Nominations for the initial Board will be conducted by the
Department. Subsequent nominations will be conducted by the Board.
(c) The Board shall outreach to all segments of the Christmas tree
industry and solicit nominations as described in paragraphs (d) and (e)
of this section. Nominees must domestically produce or import more than
500 Christmas trees during the most recent fiscal period.
(d) Nomination of producer members will be conducted by the Board.
The Board staff will seek nominations for each vacant producer seat
from each region from producers who have paid their assessments to the
Board in the most recent fiscal period. Producers who produce Christmas
trees in more than one region may seek nomination only in the region in
which they produce the majority of their Christmas trees. For selection
to the initial Board, the Secretary will notify producers to request
nominations to the Board. Subsequent nominations will be submitted to
the Board office and placed on a ballot that will be sent to producers
in each region for a vote. Producers who produce Christmas trees in
more than one region may only vote in the region in which they produce
the majority of their Christmas trees. The nominee receiving the
highest number of votes and the nominee receiving the second highest
number of votes shall be submitted to the Department as the producers'
first and second choice nominees. The Board shall submit nominations to
the Secretary not less than 90 days prior to the expiration of the term
of office.
(e) Nominations for the importer member(s) will be conducted by the
Board. The Board will solicit importer nominations from those importers
who have paid their assessments to the Board in the most recent fiscal
period. For selection to the initial Board, the Secretary will notify
importers to request nominations to the Board. Subsequent nominations
will be submitted to the Board office and placed on a ballot that will
be sent to importers for a vote. The Board shall submit those
nominations to the Secretary not less than 90 days prior to the
expiration of the term of office. Two nominees for each importer
position will be submitted to the Secretary for consideration.
(f) From the nominations, the Secretary shall select the members of
the Board for each position on the Board. Members will serve until
their successors have been appointed by the Secretary.
Sec. 1214.42 Term of office.
Board members will serve for a term of three years and be able to
serve a maximum of two consecutive three-year terms. When the Board is
first established, the members will be assigned initial terms of two,
three, and four years. Initial terms will be staggered to assure
continuity of the Board. The term of office will begin on January 1 and
conclude on December 31. Members serving the initial term of two and
four years will be eligible to serve a second term of three-years.
Thereafter, each of the positions will carry a full three-year term.
Board members shall serve during the term of office for which they have
been appointed and qualified, and until their successors are appointed
and have qualified.
Sec. 1214.43 Vacancies.
(a) In the event that any member of the Board ceases to be a member
of the category of membership from which the member was appointed to
the Board, such position shall automatically become vacant.
(b) If a member of the Board consistently refuses to perform the
duties of a member of the Board, or if a member of the Board engages in
acts of dishonesty or willful misconduct, the Board may recommend to
the Secretary that the member be removed from office. If the Secretary
finds the recommendation of the Board shows adequate cause, the
Secretary may remove such member from office. Further, without
recommendation of the Board, a member may be removed by the Secretary
upon showing of adequate cause, including the failure by a member to
submit reports or remit assessments required under this part, if the
Secretary determines that such member's continued service would be
detrimental to the achievement of the purposes of the Act.
(c) Should any member position become vacant, successors for the
unexpired terms of such member shall be appointed in the manner
specified in Sec. 1214.41. A vacancy will not be required to be filled
if the unexpired term is less than six months.
Sec. 1214.44 Procedure.
(a) At a Board meeting, it will be considered a quorum when a
majority of the Board members is present.
(b) All Board members will receive a minimum of 14 days advance
notice of all Board and committee meetings, except when emergency
circumstances exist and meetings need to be held prior to the advance
notice.
(c) Each member of the Board will be entitled to one vote on any
matter put to the Board. For any action of the Board to pass, at least
a majority of the Board members present must vote in support of such
action.
(d) The Board may appoint committees as necessary. It will be
considered a quorum at a committee meeting when at least a majority of
those appointed to the committee are present. Committees may consist of
persons other than Board members, and such persons may vote in
committee meetings as the Board shall determine. These committee
members shall serve without compensation, but shall be reimbursed for
reasonable travel expenses, as approved by the Board.
(e) In lieu of voting at a properly convened meeting, and when, in
the opinion of the Board's chairperson, such action is considered
necessary, the Board may take action by mail, telephone, electronic
mail, facsimile, or any other means of communication. Any action taken
under this procedure is valid only if:
(1) All members and the Secretary are notified and the members are
provided the opportunity to vote;
(2) A majority of the members vote in favor of the action; and
(3) All votes are promptly confirmed in writing and recorded in the
Board minutes.
(f) There shall be no voting by proxy.
(g) The chairperson shall be a voting member.
Sec. 1214.45 Compensation and reimbursement.
The members of the Board shall serve without compensation but shall
be reimbursed for reasonable travel expenses, as approved by the Board,
incurred by them in the performance of their duties as Board members.
[[Page 69106]]
Sec. 1214.46 Powers and duties.
The Board shall have the following powers and duties:
(a) To administer the Order in accordance with its terms and
conditions and to collect assessments;
(b) To develop and recommend to the Secretary for approval such
bylaws as may be necessary for the functioning of the Board, and such
rules as may be necessary to administer the Order, including activities
authorized to be carried out under the Order;
(c) To meet, organize, and select from among the members of the
Board a chairperson, other officers, committees, and subcommittees, as
the Board determines to be appropriate, provided that the committee and
subcommittee members may also include individuals other than Board
members;
(d) To notify producers and importers of all Board meetings through
press releases or other means;
(e) To give the Secretary the same notice of meetings of the Board
and committees as is given to members, including committee members if
committee members are not members of the Board, in order that the
Secretary's representative(s) may attend such meetings, and to keep and
report minutes of each meeting of the Board and all committees to the
Secretary;
(f) To appoint and convene, from time to time, committees that may
include importers, exporters, producers or other members of the
Christmas tree industry and public to assist in the development of
research, promotion, advertising, and information programs for
Christmas trees;
(g) To employ persons, other than members, as the Board considers
necessary to assist the Board in carrying out its duties and to
determine the compensation and specify the duties of such persons;
(h) To act as an intermediary between the Secretary and any
producer or importer;
(i) To furnish to the Secretary any information or records that the
Secretary may request;
(j) To receive, investigate, and report to the Secretary complaints
of violations of the Order;
(k) To maintain such records and books and prepare and submit such
reports and records from time to time to the Secretary as the Secretary
may require and to make the records available to the Secretary for
inspection and audit; to make appropriate accounting with respect to
the receipt and disbursement of all funds entrusted to it; and to keep
records that accurately reflect the actions and transactions of the
Board;
(l) To recommend to the Secretary such amendments to the Order as
the Board considers appropriate;
(m) To develop and carry out generic promotion, research, and
information activities relating to Christmas trees;
(n) To work to achieve an effective, continuous, and coordinated
program of promotion, research, evaluation, and information designed to
strengthen the Christmas tree industry's position in the marketplace;
maintain and expand existing markets for Christmas trees; and to carry
out programs, plans, and projects designed to provide maximum benefits
to the Christmas tree industry;
(o) To develop programs, plans, and projects, and enter into
contracts or agreements, which must be approved by the Secretary before
becoming effective, for the development and carrying out of programs or
projects of research, information, or promotion, and the payment of
costs thereof with funds collected pursuant to this subpart. Each
contract or agreement shall provide that any person who enters into a
contract or agreement with the Board shall develop and submit to the
Board a proposed activity; keep accurate records of all of its
transactions relating to the contract or agreement; account for funds
received and expended in connection with the contract or agreement;
make periodic reports to the Board of activities conducted under the
contract or agreement; and make such other reports available as the
Board or the Secretary considers necessary. Any contract or agreement
shall provide that:
(1) The contractor or agreeing party shall develop and submit to
the Board a program, plan, or project together with a budget or budgets
that shall show the estimated cost to be incurred for such program,
plan, or project;
(2) The contractor or agreeing party shall keep accurate records of
all its transactions and make periodic reports to the Board of
activities conducted, submit accounting for funds received and
expended, and make such other reports as the Secretary or the Board may
require;
(3) The Secretary may audit the records of the contracting or
agreeing party periodically; and
(4) Any subcontractor who enters into a contract with a Board
contractor and who receives or otherwise uses funds allocated by the
Board shall be subject to the same provisions as the contractor;
(p) To prepare and submit for approval of the Secretary, within 60
days after assessments are due to the Board, rates of assessment and a
fiscal period budget of the anticipated expenses to be incurred in the
administration of the Order, in accordance with Sec. 1214.50;
(q) To borrow funds necessary for the startup expenses of the
order;
(r) To invest assessments collected under this part in accordance
with Sec. 1214.50;
(s) To pay the cost of the activities with assessments collected
under Sec. 1214.52;
(t) To recommend adjustments to the assessments as provided in
Sec. 1214.52;
(u) To periodically prepare, make public and to make available to
producers and importers, reports of its activities and, at least once
each fiscal period, to make public an accounting of funds received and
expended; and
(v) To cause its books to be audited by an independent certified
public accountant at the end of each fiscal period and at such other
times as the Secretary may request, and to submit a report of the audit
directly to the Secretary.
Sec. 1214.47 Prohibited activities.
The Board may not engage in, and shall prohibit the employees and
agents of the Board from engaging in:
(a) Any action that would be a conflict of interest;
(b) Using funds collected by the Board under the Order to undertake
any action for the purpose of influencing legislation or governmental
action or policy, by local, state, national, and foreign governments or
any subdivision thereof, other than recommending to the Secretary
amendments to the Order; and
(c) No program, plan, or project including advertising shall be
false or misleading or disparaging to another agricultural commodity.
Christmas trees of all origins shall be treated equally.
Expenses and Assessments
Sec. 1214.50 Budget and expenses.
(a) Within 60 days after assessments are due to the Board, and as
may be necessary thereafter, the Board shall prepare and submit to the
Secretary a budget for the fiscal period covering its anticipated
expenses and disbursements in administering this part. Each budget
shall include:
(1) A statement of objectives and strategy for each program, plan,
or project;
(2) A summary of anticipated revenue, with comparative data or at
least one preceding year, except for the initial budget;
(3) A summary of proposed expenditures for each program, plan, or
project; and
(4) Staff and administrative expense breakdowns, with comparative
data for
[[Page 69107]]
at least one preceding year, except for the initial budget.
(b) Each budget shall provide adequate funds to defray its proposed
expenditures and to provide for a reserve as set forth in this part.
(c) Subject to this section, any amendment or addition to an
approved budget must be approved by the Secretary, including shifting
funds from one program, plan, or project to another.
(d) The Board is authorized to incur such expenses, including
provision for a reserve, as the Secretary finds are reasonable and
likely to be incurred by the Board for its maintenance and functioning,
and to enable it to exercise its powers and perform its duties in
accordance with the provisions of this part. Such expenses shall be
paid from funds received by the Board.
(e) With approval of the Secretary, the Board may borrow money for
the payment of administrative expenses, subject to the same fiscal,
budget, and audit controls as other funds of the Board. Any such funds
borrowed by the Board shall be expended for startup costs and are
limited to the first year of operation of the Board.
(f) The Board may accept voluntary contributions, but these shall
only be used to pay expenses incurred in the conduct of programs,
plans, and projects approved by the Secretary. Such contributions shall
be free from any encumbrance by the donor and the Board shall retain
complete control of their use.
(g) In accordance with Sec. 1214.54, the Board shall deposit funds
in a refund escrow account and shall not use such funds for expenses,
except as provided for in that section.
(h) The Board may also receive funds provided through the
Department's Foreign Agricultural Service or from other sources, with
the approval of the Secretary, for authorized activities.
(i) The Board shall reimburse the Secretary for all expenses
incurred by the Secretary in the implementation, administration,
enforcement, and supervision of the Order, including all referendum
costs in connection with the Order.
(j) For fiscal years beginning 3 or more years after the date of
the establishment of the Board, the Board may not expend for
administration, maintenance, and functioning of the Board in a fiscal
year an amount that exceeds 10 percent of the assessment and other
income received by the Board. Reimbursements to the Secretary required
under paragraph (i) of this section are excluded from this limitation
on spending.
(k) The Board may establish an operating monetary reserve and may
carry over to subsequent fiscal periods excess funds in any reserve so
established: Provided: That, the funds in the reserve do not exceed one
fiscal period's budget of expenses. Subject to approval by the
Secretary, such reserve funds may be used to defray any expenses
authorized under this part.
(l) Pending disbursement of assessments and all other revenue under
a budget approved by the Secretary, the Board may invest assessments
and all other revenues collected under this section in:
(1) Obligations of the United States or any agency of the United
States;
(2) General obligations of any State or any political subdivision
of a State;
(3) Interest bearing accounts or certificates of deposit of
financial institutions that are members of the Federal Reserve System;
or
(4) Obligations fully guaranteed as to principal interest by the
United States.
Sec. 1214.51 Financial statements.
(a) The Board shall prepare and submit quarterly financial
statements to the Secretary, or at any other time requested by the
Secretary. Each such financial statement shall include, but not be
limited to, a balance sheet, income statement, and expense budget. The
expense budget shall show expenditures during the time period covered
by the report, year-to-date expenditures, and the unexpended budget.
(b) Each financial statement shall be submitted to the Secretary
within 45 days after the end of the time period to which it applies.
(c) The Board shall submit annually to the Secretary an annual
financial statement within 90 days after the end of the fiscal period
to which it applies.
Sec. 1214.52 Assessments.
(a) The funds to cover the Board's expenses shall be paid from
assessments on producers, importers, and donations from any person
including those not subject to assessments under this Order, and other
funds available to the Board including those collected pursuant to
Sec. 1214.62 and subject to the limitations contained therein.
(b) The payment of assessments on domestic Christmas trees that are
cut and sold will be the responsibility of the producer who produces
the Christmas trees or causes the trees to be cut.
(c) Each importer of Christmas trees shall pay the assessment to
the Board on Christmas trees imported for marketing in the United
States, through Customs. If Customs does not collect an assessment from
an importer, the importer will be responsible for paying the assessment
directly to the Board 30 calendar days after importation.
(1) The assessment rate for imported Christmas trees shall be the
same or equivalent to the rate for Christmas trees domestically
produced in the United States.
(2) The import assessment shall be uniformly applied to imported
Christmas trees that are identified by the numbers 0604.91.00.20,
0604.91.00.40, and 0604.91.00.60 in the Harmonized Tariff Schedule of
the United States or any other numbers used to identify Christmas trees
in that schedule.
(3) The assessments due on imported Christmas trees shall be paid
when they enter into the United States.
(d) Such assessments shall be levied at an initial rate of 15 cents
per Christmas tree domestically produced or imported into the United
States. The assessment rate will be reviewed by the Board, after the
initial referendum is conducted pursuant to this subpart. The
assessment rate may be increased or decreased no more than 2 cents per
Christmas tree during the fiscal period. Any change in the assessment
rate shall be subject to rulemaking by the Department. The assessment
rate shall not exceed 20 cents per Christmas tree, nor shall it be less
than 10 cents per Christmas tree, unless a majority of producers and
importers approve such other levels of assessment through a referendum
conducted pursuant to this subpart.
(e) All assessment payments and reports will be submitted to the
office of the Board. All assessment payments are to be received no
later than February 15 of the crop year in which they are produced or
imported. A late payment charge, may be imposed on any producer or
importer who fails to remit to the Board, the total amount for which
any such producer or importer is liable on or before the due date
established by the Board. In addition to the late payment charge, an
interest charge may be imposed on the outstanding amount for which the
producer or importer is liable. The rate for late payment and interest
charges shall be specified by the Secretary through rulemaking.
(f) Persons failing to remit total assessments due in a timely
manner may also be subject to actions under federal debt collection
procedures.
(g) The Board may authorize other organizations to collect
assessments on its behalf with the approval of the Secretary.
[[Page 69108]]
Sec. 1214.53 Exemption from and refunds of assessments.
(a) Producers that domestically produce and importers that import
less than 500 Christmas trees.
(1) Any producer who domestically produces less than 500 Christmas
trees who desires to claim an exemption from assessments as provided in
Sec. 1214.52 shall file an application on a form provided by the
Board, for a certificate of exemption. Such producer shall certify that
he/she will domestically produce less than 500 trees for the fiscal
period for which the exemption is claimed. It is the responsibility of
the producer to retain a copy of the certificate of exemption.
(2) Any importer who imports less than 500 trees in a fiscal period
who desires to claim an exemption from assessments as provided in Sec.
1214.52 shall file an application on a form provided by the Board, for
a certificate of exemption. Such importer shall certify that the
importer's total imports of Christmas trees are fewer than 500 trees
for the fiscal period for which the exemption is claimed. It is the
responsibility of the importer to retain a copy of the certificate of
exemption.
(3) On receipt of an exemption application, the Board shall
determine whether an exemption may be granted. The Board will then
issue, if deemed appropriate, a certificate of exemption to the
producer or importer which is eligible to receive one.
(4) The Board, with the Secretary's approval, may require persons
receiving an exemption from assessments to provide to the Board reports
on the disposition of exempt Christmas trees and, in the case of
importers, proof of payment of assessments.
(5) The exemption will apply immediately following the issuance of
the certificate of exemption.
(6) Producers and importers who received an exemption certificate
from the Board but domestically produced or imported more than 500
Christmas trees during the fiscal period shall pay the Board the
applicable assessments owed and submit any necessary reports to the
Board pursuant to Sec. 1214.70.
(7) Producers and importers who did not apply to the Board for an
exemption and domestically produced or imported less than 500 Christmas
trees during the fiscal period shall receive a refund from the Board
for the applicable assessments within 30 calendar days after the end of
the fiscal year. Board staff shall determine the assessments paid and
refund the amount due to the producers and importers accordingly.
(8) The Board may develop additional procedures as it deems
necessary for accurately accounting for this exemption. Such procedures
shall be implemented through rulemaking by the Secretary.
(b) Assessment refunds to importers. (1) Importers who are exempt
from assessment shall be eligible for a refund of assessments collected
by Customs during the applicable fiscal period. No interest will be
paid on assessments collected by Customs. The Board shall refund such
importers their assessments as collected by Customs no later than 60
calendar days after receipt by the Board.
(c) Organic. (1) Organic Act means section 2103 of the Organic
Foods Production Act of 1990 (7 U.S.C. 6502).
(2) A producer who domestically produces Christmas trees under an
approved National Organic Program (NOP) (7 CFR part 205) system plan,
produces only products that are eligible to be labeled as 100 percent
organic under the NOP and is not a split operation shall be exempt from
payment of assessments. To obtain an organic exemption, an eligible
producer shall submit a request for exemption to the Board, on a form
provided by the Board, at any time initially and annually thereafter on
or before the start of the fiscal period as long as such producer
continues to be eligible for the exemption. The request shall include
the following: The producer's name and address; a copy of the organic
operation certificate provided by a USDA-accredited certifying agent as
defined in the Organic Act, a signed certification that the applicant
meets all of the requirements specified for an assessment exemption,
and such other information as may be required by the Board and with the
approval of the Secretary. The Board shall have 30 calendar days to
approve the exemption request. If the exemption is not granted, the
Board will notify the applicant and provide reasons for the denial
within the same time frame.
(3) An importer who imports only Christmas trees that are eligible
to be labeled as 100 percent organic under the NOP and is not a split
operation shall be exempt from the payment of assessments. To obtain an
organic exemption, an eligible importer must submit documentation to
the Board and request an exemption from assessment on 100 percent of
organic Christmas trees, on a form provided by the Board, 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 as
required by producers in paragraph (c)(2) 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 a 9-digit alphanumeric
number of the United States classification 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 100
percent organic Christmas trees bearing this alphanumeric number
assigned by the Board will not be subject to assessments.
(4) Importers who are exempt from assessment in paragraph (c)(3) of
this section shall also be eligible for reimbursement of assessments
collected by Customs and may apply to the Board for a reimbursement.
The importer would be required to submit satisfactory proof to the
Board that the importer paid the assessment on exempt organic products.
(5) The exemption will apply immediately following the issuance of
the exemption certificate.
Sec. 1214.54 Refund escrow accounts.
(a) The Board shall establish an interest bearing escrow account
with a financial institution that is a member of the Federal Reserve
System and will deposit into such account an amount equal to 10 percent
of the assessments collected during the period beginning on the
effective date of the Order and ending on the date the Secretary
announces the results of the required referendum.
(b) If the Order is not approved by the required referendum, the
Board shall promptly pay refunds of assessments to all producers and
importers that have paid assessments during the period beginning on the
effective date of the Order and ending on the date the Secretary
announces the results of the required referendum in the manner
specified in paragraph (c) of this section.
(c) If the amount deposited in the escrow account is less than the
amount of all refunds that producers and importers subject to the Order
have a right to receive, the Board shall prorate the amount deposited
in such account among all producers and importers who desire a refund
of assessments paid no later than 90 days after the required referendum
results are announced by the Secretary.
(d) Any producer or importer requesting a refund shall submit an
application on the prescribed form to the Board within 30 days after
the announcement of the referendum results of their request for a
refund of the
[[Page 69109]]
assessments that they paid. The producers and importer requesting a
refund shall also submit documentation to substantiate that assessments
were paid. Any such demand shall be made by such producer or importer
in accordance with the provisions of this subpart and in a manner
consistent with regulations recommended by the Board and prescribed by
the Secretary.
(e) If the Order is approved by the required referendum conducted
under Sec. 1214.71 then:
(1) The escrow account shall be closed; and,
(2) The funds shall be available to the Board for disbursement
under Sec. 1214.50.
Promotion, Research and Information
Sec. 1214.60 Programs, plans, and projects.
(a) The Board shall receive and evaluate, or on its own initiative,
develop and submit to the Secretary for approval any program, plan, or
project authorized under this subpart. Such programs, plans, or
projects shall provide for:
(1) The establishment, issuance, effectuation, and administration
of appropriate programs for promotion, research, and information,
including producer and consumer industry information, with respect to
Christmas trees;
(2) The establishment and conduct of research with respect to the
image, desirability, use, marketability, quality, product development
or production of Christmas trees, to the end that the marketing and use
of Christmas trees may be encouraged, expanded, improved, or made more
acceptable and to advance the image, desirability, or quality of
Christmas trees.
(b) A program, plan, or project may not be implemented prior to
approval of the program, plan, or project by the Secretary. Once a
program, plan, or project is so approved, the Board shall take
appropriate steps to implement it.
(c) Each program, plan, or project implemented under this subpart
shall be reviewed or evaluated periodically by the Board to ensure that
it contributes to an effective program of promotion, research, or
information. If it is found by the Board that any such program, plan,
or project does not contribute to an effective program of promotion,
research, or information, then the Board shall terminate such program,
plan, or project.
Sec. 1214.61 Independent evaluation.
The Board shall, not less often than once every five years,
authorize and fund, from funds otherwise available to the Board, an
independent evaluation of the effectiveness of the Order and programs
conducted by the Board pursuant to the Act. The Board shall submit to
the Secretary, and make available to the public, the results of each
periodic independent evaluation conducted under this paragraph.
Sec. 1214.62 Patents, copyrights, trademarks, information,
publications, and product formulations.
Patents, copyrights, trademarks, information, publications, and
product formulations developed through the use of funds received by the
Board under this subpart shall be the property of the U.S. Government
as represented by the Board and shall, along with any rents, royalties,
residual payments, or other income from the rental, sales, leasing,
franchising, or other uses of such patents, copyrights, trademarks,
information, publications, or product formulations, inure to the
benefit of the Board, shall be considered income subject to the same
fiscal, budget, and audit controls as other funds of the Board, and may
be licensed subject to approval by the Secretary. Upon termination of
this subpart, Sec. 1214.83 shall apply to determine disposition of all
such property.
Reports, Books, and Records
Sec. 1214.70 Reports.
(a) Each producer and importer subject to this subpart shall be
required to provide to the Board periodically such information as
required by the Board, with the approval of the Secretary, which may
include but not be limited to the following:
(1) Number of trees produced or total imports;
(2) Number of Christmas trees on which an assessment was paid;
(3) Name and address of producer or importer; and
(4) Date assessment was paid on each Christmas tree produced or
imported.
(b) All reports required under Sec. 1214.70 are due to the Board
by February 15 of the crop year.
(c) This report shall accompany the payment of the collected
assessments.
Sec. 1214.71 Books and records.
Each producer and importer subject to this subpart, including those
who are exempt under this subpart, shall maintain any books and records
necessary to carry out the provisions of this subpart and the
regulations issued thereunder, including such records as are necessary
to verify any reports required. Such books and records must be made
available during normal business hours for inspection by the Board's or
Secretary's employees or agents. Such records shall be retained for at
least two years beyond the fiscal period of their applicability.
Sec. 1214.72 Confidential treatment.
All information obtained from books, records, or reports under the
Act, this subpart, and the regulations issued thereunder shall be kept
confidential by all persons, including all employees and former
employees of the Board, all officers and employees and former officers
and employees of contracting and subcontracting agencies or agreeing
parties having access to such information. Such information shall not
be available to Board members, producers, or importers. Only those
persons having a specific need for such information to effectively
administer the provisions of this subpart shall have access to such
information. Only such information so obtained as the Secretary deems
relevant shall be disclosed by them, and then only in a judicial
proceeding or administrative hearing brought at the direction, or on
the request, of the Secretary, or to which the Secretary or any officer
of the United States is a party, and involving this subpart. Nothing in
this section shall be deemed to prohibit:
(a) The issuance of general statements based upon the reports of
the number of persons subject to this subpart or statistical data
collected therefrom, which statements do not identify the information
furnished by any person; and
(b) The publication, by direction of the Secretary, of the name of
any person who has been adjudged to have violated this subpart,
together with a statement of the particular provisions of this subpart
violated by such person.
Miscellaneous
Sec. 1214.80 Right of the Secretary.
All fiscal matters, programs, plans, or projects, rules or
regulations, contracts, reports, or other substantive actions proposed
or prepared by the Board shall be submitted to the Secretary for
approval.
Sec. 1214.81 Referenda.
(a) Required referendum. For the purpose of ascertaining whether
the persons subject to this Order favor the amendment, continuation,
suspension, amendment, or termination of this Order, the Secretary
shall conduct a referendum among persons subject to assessments under
Sec. 1214.52 who, during a representative period determined by the
Secretary, have engaged in the production or importation of Christmas
trees:
[[Page 69110]]
(1) The first referendum shall be conducted not later than 3 years
after assessments first begin under the Order;
(2) The order will be approved in a referendum if:
(i) A majority of producers and importers vote for approval in the
referendum.
(b) Subsequent referenda. The Secretary shall conduct subsequent
referenda:
(1) For the purpose of ascertaining whether producers and importers
favor the continuation, suspension, or termination of the Order;
(2) Every seven years the Secretary shall hold a referendum to
determine whether producers and importers of Christmas trees favor the
continuation of the Order. The Order shall continue if it is favored by
a majority of producers and importers voting for approval in the
referendum who have been engaged in the production or importation of
Christmas trees;
(3) At the request of the Board established in this Order;
(4) At the request of 10 percent or more of the number of persons
eligible to vote in a referendum as set forth under the Order; or
(5) At any time as determined by the Secretary.
Sec. 1214.82 Suspension or termination.
(a) The Secretary shall suspend or terminate this part or subpart
or a provision thereof, if the Secretary finds that the subpart or a
provision thereof obstructs or does not tend to effectuate the purpose
of the Act, or if the Secretary determines that this subpart or a
provision thereof is not favored by persons voting in a referendum
conducted pursuant to the Act.
(b) The Secretary shall suspend or terminate this subpart at the
end of the fiscal period whenever the Secretary determines that its
suspension or termination is favored by a majority of producers and
importers voting in a referenda who, during a representative period
determined by the Secretary, have been engaged in the production or
importation of Christmas trees.
(c) If, as a result of a referendum the Secretary determines that
this subpart is not approved, the Secretary shall:
(1) Not later than one hundred and eighty (180) days after making
the determination, suspend or terminate, as the case may be, collection
of assessments under this subpart; and
(2) As soon as practical, suspend or terminate, as the case may be,
activities under this subpart in an orderly manner.
Sec. 1214.83 Proceedings after termination.
(a) Upon the termination of this subpart, the Board shall recommend
not more than three of its members to the Secretary to serve as
trustees for the purpose of liquidating the affairs of the Board. Such
persons, upon designation by the Secretary, shall become trustees of
all of the funds and property then in the possession or under control
of the Board, including claims for any funds unpaid or property not
delivered, or any other claim existing at the time of such termination.
(b) The said trustees shall:
(1) Continue in such capacity until discharged by the Secretary;
(2) Carry out the obligations of the Board under any contracts or
agreements entered into pursuant to the Order;
(3) From time to time account for all receipts and disbursements
and deliver all property on hand, together with all books and records
of the Board and the trustees, to such person or persons as the
Secretary may direct; and
(4) Upon request of the Secretary execute such assignments or other
instruments necessary and appropriate to vest in such persons title and
right to all funds, property and claims vested in the Board or the
trustees pursuant to the Order.
(c) Any person to whom funds, property or claims have been
transferred or delivered pursuant to the Order shall be subject to the
same obligations imposed upon the Board and upon the trustees.
(d) Any residual funds not required to defray the necessary
expenses of liquidation shall be turned over to the Secretary to be
disposed of, to the extent practical, to one or more Christmas tree
organizations in the United States in the interest of continuing
Christmas tree promotion, research, and information programs.
Sec. 1214.84 Effect of termination or amendment.
Unless otherwise expressly provided by the Secretary, the
termination of this subpart or of any regulation issued pursuant
thereto, or the issuance of any amendment to either thereof, shall not:
(a) Affect or waive any right, duty, obligation or liability which
shall have arisen or which may thereafter arise in connection with any
provision of this subpart or any regulation issued thereunder.
(b) Release or extinguish any violation of this subpart or any
regulation issued thereunder.
(c) Affect or impair any rights or remedies of the United States,
or of the Secretary or of any other persons, with respect to any such
violation.
Sec. 1214.85 Personal liability.
No member or employee of the Board shall be held personally
responsible, either individually or jointly with others, in any way
whatsoever, to any person for errors in judgment, mistakes, or other
acts, either of commission or omission, as such member or employee,
except for acts of dishonesty or willful misconduct.
Sec. 1214.86 Separability.
If any provision of this subpart is declared invalid or the
applicability thereof to any person or circumstances is held invalid,
the validity of the remainder of this subpart or the applicability
thereof to other persons or circumstances shall not be affected
thereby.
Sec. 1214.87 Amendments.
Amendments to this subpart may be proposed from time to time by the
Board or by any interested person affected by the provisions of the
Act, including the Secretary.
Sec. 1214.88 OMB control numbers.
The control number assigned to the information collection
requirements by the Office of Management and Budget pursuant to the
Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, is OMB control
number 0505-0001, and OMB control number 0581-0267 and 0581-0268.
Subpart B--[Reserved]
Dated: November 1, 2011.
David R. Shipman,
Acting Administrator.
[FR Doc. 2011-28798 Filed 11-7-11; 8:45 am]
BILLING CODE 3410-02-P
