Federal Register: October 5, 2009 (Volume 74, Number 191)
DOCID: fr05oc09-1 FR Doc E9-23831
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
CFR Citation: 7 CFR Part 1205
NOTICE: RULES
DOCID: fr05oc09-1
DOCUMENT ACTION: Final rule.
SUBJECT CATEGORY:
Cotton Research and Promotion Program: Referendum Procedures
DATES: Effective Date: October 6, 2009.
DOCUMENT SUMMARY:
This final rule establishes procedures which the Department of Agriculture (USDA) will use in conducting a referendum considering amendments to the Cotton Research and Promotion Order (7 CFR part 1205) (Order) implementing section 14202 of the Food, Conservation, and Energy Act of 2008, hereinafter the ``2008 Farm Bill.'' USDA is considering amendments to the Order in a separate action. Referenda among cotton producers and cotton importers are required by the Cotton Research and Promotion Act (Act) to implement, amend, continue, or when appropriate to suspend or terminate the Order or any of its provisions. The provisions of this rule would be used for all such referenda.
SUMMARY:
Cotton Research and Promotion Program: Referendum Procedures
SUPPLEMENTAL INFORMATION
Executive Order 12866
The Office of Management and Budget (OMB) has waived the review process required by Executive Order 12866 for this action.
Executive Order 12988
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. This final rule would not preempt any state or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 12 of the Act, any person subject to an order may file with the Secretary of Agriculture (Secretary) a petition stating that the order, any provision of the plan, or any obligation imposed in connection with the order is not in accordance with law and requesting a modification of the order or to be exempted therefrom. Such person is afforded the opportunity for a hearing on the petition. After the hearing, the Secretary would rule on the petition. The Act provides that the District Court of the United States in any district in which the person is an inhabitant, or has his principal place of business, has jurisdiction to review the Secretary's ruling, provided a complaint is filed within 20 days from the date of the entry of ruling.
Regulatory Flexibility Act and Paperwork Reduction Act
Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) [5 U.S.C. 601612], the Agricultural Marketing Service has considered the economic effect of this action on small entities and has determined that its implementation will not have a significant economic impact on a substantial number of small entities. There are currently approximately 18,000 producers, and approximately 16,000 importers that are subject to the order. In 13 CFR part 121, the Small Business Administration (SBA) defines small agricultural producers as those having annual receipts of no more than $750,000 and small agricultural service firms (handlers) as those having annual receipts of no more than $7.0 million. The majority of these producers and importers are small businesses under the criteria established by the SBA.
This final rule establishes the procedures under which cotton producers and importers vote on whether to implement, amend, continue, or when appropriate to suspend or terminate the Order or any of its provisions. This rule would add a new subpart and establish procedures for all such referenda. The subpart covers definitions, voting, instructions, ballots, the referendum report, and confidentiality of information.
USDA will keep cotton producers and importers who are eligible to vote informed throughout the referendum process to ensure that they are aware of and are able to participate. USDA will also publicize information regarding the referendum process so that trade associations and related industry media can be kept informed.
Voting in a referendum is optional; however, if cotton producers and importers choose to vote, the burden of voting is minimal and necessary to determine whether or not they favor the action to be taken with regards to the Order or any of its provisions.
In accordance with the Office of Management and Budget (OMB) regulation 5 CFR part 1320 that implements the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) the information collection requirements concerning procedures to conduct referenda in connection with the Cotton Research and Promotion Order has been previously approved by OMB and assigned OMB Control Number 05810093.
USDA considered electronic voting, but the use of computers is not universal. Conducting the referendum from Farm Service Agency county offices and the USDA, Washington, DC office would be more cost effective and reliable.
Background
The Act established a national cotton research and promotion programadministered by the Boardthat is financed through cotton producer and cotton importer industry assessments and subject to oversight by AMS. This program of promotion, research, and consumer information is designed to strengthen the position of cotton in the marketplace and to establish, maintain, and expand markets for Upland cotton. The program is funded by assessments levied on each bale or bale equivalent of cotton at a rate of $1 per bale with a supplemental assessment not to exceed one percent of the value of lint of each bale.
The 2009 Board is composed of 38 members and 38 alternate members (23
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producer and 15 importer members and alternate members) and one
consumer advisor. The Act directed the Board to contract with a
separate organization to conduct the research and promotion projects.
The Board contracts with Cotton Incorporated (CI) to conduct the
Program. CI uses assessment dollars to advance the quality of and
demand for cotton fiber through its operating divisions: (1) Global
Product Marketing, (2) Consumer Marketing, (3) Agricultural Research and (4) Textile Research, and (5) Strategic Planning.
This final rule would establish procedures which the USDA will use in conducting referenda under the Act. USDA is proposing amendments to the Order to implement section 14202 of the 2008 Farm Bill (see Secretary's Decision published in the same issue of the Federal Register). Referendum procedures would need to be in place prior for the industry to vote and consider these amendments. Referenda among cotton producers and cotton importers are required by the Act to implement, amend, continue, or when appropriate, to suspend, or to terminate the Order or any of its provisions.
A proposed rule with a request for comments was published in the Federal Register on June 4, 2009 (74 FR 26810), with a 10day comment period. AMS received two comments, one from a cotton growers association and one from a national cotton industry organization. Both comments were in general agreement of the proposed referendum procedures and offered the same suggested changes to the sections 1205.202 and 1205.203.
The commenters recommended correction of duplicative language in section 1205.202 and a reversal of paragraph titles in section 1205.203(a) and (b). Both of these changes have merit and the appropriate changes are made in this action.
The commenters also offered changes for section 1205.203(a) to clarify language concerning eligibility requirements, especially those concerning the specified timeframe needed to import Upland cotton in order for an importer to be eligible to vote in a referendum. The commenters believed that the proposed language was not complete and offered two alternatives to revise the provision. Proposed section 1205.203(a) provided general eligibility requirements that (1) each person who was engaged in the production of Upland cotton during the representative period; and (2) each person who is an importer of Upland cotton and imported Upland cotton during the representative period were eligible to vote. Upon review of this language, these comments have merit. We have revised the provision to include the more appropriate language presented in order to make clear the applicable general eligibility requirements. Finally, the commenters noted that the definition of importer was not limited by a designated period. We are amending for clarity the definition of importer to include the appropriate timeframe.
In addition, USDA has included a clarifying change to the language of section 1205.204 concerning producers who grow Upland cotton in more than one county and identification of their voting office.
Pursuant to 5 U.S.C. 553, it is found and determined good cause that good cause exists for not postponing the effective date of the rule until 30 days after publication in the Federal Register in order to conduct a referendum considering amendments implementing section 14202 of the 2008 Farm Bill (Pub. L. 110246) and to conform to the timeline contained in that section as closely as possible.
List of Subjects in 7 CFR Part 1205
Advertising, Agricultural research, Cotton, Marketing agreements, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble 7 CFR part 1205 is amended as follows:
PART 1205COTTON RESEARCH AND PROMOTION
1. The authority citation for part 1205 continues to read as follows:
Authority: 7 U.S.C. 21012118 and 7 U.S.C. 7401.
2. Part 1205 is amended by adding a new Subpart, consisting of Sec. Sec. 1205.200 through 1205.210, to read as follows:
SubpartProcedures for the Conduct of Referenda in Connection With Cotton Research and Promotion Order
Sec.
1205.200 General.
1205.201 Definitions.
1205.202 Agencies through which a referendum shall be conducted. 1205.203 Voting eligibility.
1205.204 Voting.
1205.205 Canvass of ballots.
1205.206 Reporting results of referendum.
1205.207 Challenge of correctness of county summary of ballots. 1205.208 Disposition of ballots and records.
1205.209 Confidential Information.
1205.210 Additional instructions and forms.
SubpartReferendum Procedures
Sec. 1205.200 General.
Referenda for the purpose of ascertaining whether producers and
importers favor the issuance, continuance, amendment, suspension, or
termination of the Cotton Research and Promotion Order shall be conducted in accordance with this subpart.
Sec. 1205.201 Definitions.
(a) Act means the Cotton Research and Promotion Act, as amended (7 U.S.C. 21012118; Pub. L. 89502, as amended).
(b) Administrator means the Administrator of the Agricultural
Marketing Service, or any officer or employee of USDA to whom authority has been delegated to act in the Administrator's stead.
(c) Agricultural Marketing Service also referred to as ``AMS''
means the Agricultural Marketing Service of the Department.
(d) Cotton means all Upland cotton harvested in the United States
or imports of Upland cotton, including the Upland cotton content of the
products derived thereof. The term cotton shall not, however, include
any entry of imported cotton by an importer which has a value or weight
less than the de minimis value established by the Secretary or industrial products as that term is defined by regulation.
(e) Upland Cotton means all cultivated varieties of the species Gossypium hirsutum L.
(f) Department means the U.S. Department of Agriculture.
(g) Deputy Administrator means the Deputy Administrator for Field Operations and also referred to as ``DAFO.''
(h) Farm Service Agency also referred to as ``FSA'' means the Farm Service Agency of the Department.
(i)(1) Importer means any person who enters, or withdraws from
warehouse, cotton for consumption in the customs territory of the
United States and who, during a 12month period ending no later than 90
days prior to the conduct of the referendum, imported Upland cotton, and
(2) the term import means any such entry.
(j) Order means the Cotton Research and Promotion Order.
(k) Person means any individual 18 years of age or older, or any
partnership, corporation, association, or any other entity.
(l) Producer means any person who shares in a cotton crop, or in the proceeds thereof, as an owner of the
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farm, cash tenant, landlord of a share tenant, share tenant, or
sharecropper, that planted the cotton during the representative period.
(m) Representative Period means the period designated by the
Secretary pursuant to section 8 of the Act (7 U.S.C. 2107).
(n) Secretary means the Secretary of Agriculture or any other
officer or employee of the Department of Agriculture to whom there has
heretofore been delegated, or to whom there may be hereafter be delegated, the authority to act in the Secretary's stead.
(o) State means each of the 50 states.
(p) United States means 50 states of the United States of America.
(q) Customs and Border Protection means the U.S. Customs and Border
Protection of the Department of Homeland Security. Customs and Border Protection is also referred to as ``CBP.''
Sec. 1205.202 Agencies through which a referendum shall be conducted.
(a) Agricultural Marketing Service. The Administrator shall: (1) Determine the referendum period.
(2) Give producers and importers reasonable advance notice of the referendum
(i) by utilizing without advertising expense, available media of
public information (including, but not being limited to, press and
radio facilities) to announce the dates, places, or methods of voting, and other pertinent information, and
(ii) by such other means as the Administrator may deem advisable.
(3) Provide ballots and related material to be used in the referendum to FSA. The ballots:
(i) shall provide for recording essential information for
ascertaining whether the person voting is an eligible voter, and
(ii) may provide for recording the total amount of Upland cotton
produced by the producer or the total amount of cotton imported by the importer during the appropriate representative period.
(4) Make available to producers through FSA county offices
instructions on voting, an appropriate ballot and, except in the case
of a referendum on the termination or suspension of an order, a summary
of the terms and conditions of the order. The instructions on voting
shall explain the method to be used in determining the amount of Upland
cotton produced during the representative period and shall specify
whether such amount is to be entered on the ballot by the voter, subject to the following terms and conditions:
(i) If a current production year for which harvesting has not been
completed is designated as the representative period, the amount of
Upland cotton produced shall be determined by the FSA county office on
the basis of the acreage planted or in the case of approved prevented
plantings under the disaster payment program, the acreage the person
intended to plant up to the allotted acreage as determined by the FSA
county office, and the established yield for FSA program payment
purposes: Provided, That on farms for which an established yield has
not been established, the county committee shall determine an
established yield based on actual production records on the farm for
the preceding three years, as adjusted for any abnormal conditions, if
available; if not available, on the basis of yield on similar farms in the area.
(ii) On farms in which more than one eligible voter is engaged in
production, the vote cast by each voter shall represent only the amount
of Upland cotton that is the voter's share of the crop, or proceeds thereof.
(iii) If an eligible voter is engaged in production of Upland
cotton on more than one farm, such voter is entitled to only one vote
but any vote cast by such voter shall represent the total amount of
Upland cotton that is that voter's share of the crop, or proceeds
thereof, on all such farms: Provided, That only farms for which records
are maintained by the FSA county office designated as the voter's
polling place shall be considered unless the voter, prior to the
expiration of the referendum period, establishes to the satisfaction of
such county office the voter's share of the crop, or proceeds thereof, on an additional farm or farms.
(5) Make available to importers through FSA instructions on voting,
an appropriate ballot and, except in the case of a referendum on the
termination or suspension of an order, a summary of the terms and
conditions of the order. The instructions on voting shall explain the
appropriate method to be used in determining the amount of cotton
imported during the representative period and specify whether such
amount is to be entered on the ballot. If applicable, the following terms and conditions apply:
(i) For importer entities in which more than one importer is
eligible to vote, the vote cast by each importer shall represent only
the amount in weight or value of cotton imported by each eligible voter.
(ii) If an eligible importer is engaged in importation of cotton as
more than one importer entity, such voter is entitled to only one vote
but any vote cast by such voter shall represent the total amount in
weight or value, of cotton in the voters share of cotton imported from
each such importer entity: Provided, that only the importer entities
for which records are maintained by CBP or other source determined by
the Administrator shall be considered unless the voter, prior to the
expiration of the referendum period, establishes to the satisfaction of
the Administrator the voters share, in weight or value, of the imported cotton.
(b) Farm Service Agency. Except for the functions specified in
paragraph (a) of this section the Deputy Administrator shall be in
charge of and responsible for conducting the referendum. Each FSA
county office shall be in charge and responsible for conducting such
referendum in its State. Each county office shall be responsible for
the proper holding of such referendum in its county. It shall be the
duty of each FSA county office to conduct each referendum in a fair,
unbiased, and impartial manner in accordance with the regulations in this subpart.
Sec. 1205.203 Voting eligibility.
(a) General eligibility requirements. The following persons shall be eligible to vote in an announced referendum
(1) each person who was engaged in the production of Upland cotton during the representative period; and
(2) each person who is an importer of Upland cotton and who, during
a 12month period ending no later than 90 days prior to the conduct of the referendum, imported Upland cotton.
(b) Special eligibility requirements. (1)(i) A person may qualify
as an eligible voter by meeting the eligibility requirements, but no
such person shall be entitled to more than one vote regardless of the
number of importing entities or Upland cotton farms in which the person
is interested or the number of communities, counties, or States in
which are located farms in which such person is interested: Provided,
however, That the individual members of a qualified partnership shall
each have one vote, but the partnership as such shall not have a vote
and an individual who qualifies as an eligible voter by reason of that
individual's separate farming or importing operations will be entitled
to one vote even though that person is interested in an entity such as
(but not limited to) a corporation which is also eligible as a voter
and entitled to one vote. A person who, as a guardian, administrator,
executor, or trustee engages in the production of Upland cotton or
importation of cotton will be eligible to vote in such a fiduciary
capacity if, in such a capacity, that person qualifies as an eligible voter.
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(ii) In such cases the person for whom he or she is acting in a
fiduciary capacity will not be eligible to vote. An individual may, if
otherwise eligible, cast a ballot in his or her individual capacity
although that person may also cast a ballot as a guardian,
administrator, executor, or trustee. An individual who holds more than
one fiduciary position may vote as a fiduciary in each case in which
that person is otherwise eligible, as for example, if an individual is
administrator of estate X, he or she may cast a ballot as administrator
of estate X, and if the same individual is administrator of estate Y,
he or she may cast another ballot as administrator or estate Y.
(2) Where a group of several persons, such as a spouse or marital
partner, and children, or unrelated individuals, are engaged in the
production of Upland cotton under the same lease or cropping agreement,
only the person or persons who signed or entered into the lease or
cropping agreement shall be eligible to vote. In the event two or more
persons are engaged in the production of Upland cotton as joint
tenants, tenants in common, or owners of community property, each such
person shall be entitled to one vote if otherwise qualified. For
example, a husband or a wife is eligible to vote if he or she shares
with his or her spouse in the proceeds of the required crop as an
owner, cash tenant, share tenant, sharecropper or landlord of a fixed
rent, standing rent or share tenant. Thus, if a husband and wife are
tenants or sharecropper on a farm, jointly responsible under the rental
or sharecropping agreement, both are eligible to vote. This is true
whether the rental or sharecropping agreement is written, signed by
both parties, or oral, provided both husband and wife made the oral
agreement. A minor is not disqualified from voting solely because of
minority if otherwise eligible and the minor is not less than 18 years of age.
(c) Voting by proxy prohibited. There shall be no voting by proxy
or agent but a duly authorized officer of a corporation, association or their legal entity may cast its vote.
Sec. 1205.204 Voting.
(a) Place of voting. The FSA county office serving the county in
which the producer's farm is located shall be the producer's polling
place. For a person not participating in an FSA program, the
opportunity to vote in a referendum will be provided at the FSA county
office serving the county where the person owns or rents land. If a
person's operation is located in several counties, the voting office
shall be determined based on the major portion of the operation's
location. The U.S. Department of Agriculture, FSA, DAFO, P.O. Box
23704, Washington, DC 200263704 shall be the polling place for all cotton importers.
(b) Register of eligible voters. The FSA county office shall
establish a register of known eligible producer voters prior to the
referendum. AMS shall establish a register of known eligible importer
voters prior to the referendum and provide the list to FAS.
(c) Voting. (1) For Upland producers to vote, eligible persons may
obtain form CN100 inperson, by mail or by facsimile from FSA county
offices or through the Internet during the voting period. A completed
and signed CN100 and supporting documentation, such as a sales receipt
or remittance form, must be returned to the appropriate FSA county
office. Forms obtained via the Internet will be located at http://
www.ams.usda.gov/Cotton. Upon request by Upland producers, ballots shall be mailed by FSA county offices.
(2) For cotton importers to vote, eligible persons may obtain form
CN100 inperson, by mail or by facsimile from USDA, FSA in Washington,
D.C. or through the Internet during the voting period. In addition,
before the referendum, USDA shall mail a request form to each known,
eligible, cotton importer. A completed and signed CN100 and supporting
documentation of CBP Form 7501, must be returned USDA, FSA, DAFO, P.O.
Box 23704, Washington, DC 200263704. Forms obtained via the Internet
will be located at http://www.ams.usda.gov/Cotton.
(d) Returning ballot to polling place. Each person to whom a ballot
is issued by Internet, mail, facsimile, or inperson shall only be
allowed to vote in the referendum by completing and signing the ballot,
placing it in an envelope, and delivering or mailing it to the
appropriate polling place. In order to be eligible for tabulation,
voted ballots must be received at the polling place during the period
established for holding the referendum. A ballot shall be considered to have been received during the referendum period if:
(1) In the case of the ballot delivered to the polling place, it
was received in the office prior to the close of the work day on the final day of the referendum period, or
(2) In the case of the mailed ballot, it was postmarked not later
than midnight of the final day of the referendum period and was
received in the polling place prior to the start of canvassing the ballots.
(e) Placing ballots in ballot box. Notwithstanding the fact that a
ballot(s) may be later challenged by FSA county office or a
representative of FSA, envelopes containing ballots received at the
polling place during the referendum period shall remain unopened and
shall be placed immediately in a ballot box provided by FSA for
producers and importers. Such ballot box shall be arranged so that
ballots cannot be read or moved without breaking the seal on the container.
Sec. 1205.205 Canvass of ballots.
(a) Canvassing procedure. Canvassing of returned ballots shall take
place as soon as possible after the opening of the FSA offices on the
fifth day following the close of the referendum period. Such canvassing
shall be in the presence of at least one member of the FSA county
office for producer ballots or an FSA representative for importer
ballots and shall be open to the public. The canvassing and ballots
shall be handled in such a manner so that no member of the public may
see how any person voted in the referendum. The county office or FSA
representative shall supervise the opening of the sealed ballot box,
the opening of the envelopes containing the ballots and a determination as to:
(1) The number of eligible voters favoring the Order and where necessary, the amount of cotton represented by them,
(2) The number of eligible voters disapproving the Order and, where necessary, the amount of cotton represented by them.
(3) The number of ballots cast by voters found to be ineligible to vote in the referendum, and
(4) The number of spoiled ballots. The ballots determined to be
spoiled or cast by ineligible voters shall not be considered as
approving or disapproving the Order, and the persons who cast such
ballots shall not be regarded as participating in the referendum.
(b) Spoiled ballots. A ballot shall be considered as a spoiled ballot if:
(1) It is mutilated or marked in such a way that it is not possible
to determine with certainty how the ballot was intended to be counted, or
(2) It does not contain the signature of the voter, or the voter's properly witnessed mark.
(c) Challenge of ballots. A producer ballot may be challenged by
the member of the FSA county office and the importer ballot may be
challenged by the representative of FSA. Before a challenged ballot is
either counted or declared invalid, a determination shall be made by the FSA county office or representative of FSA as to the
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eligibility of the voter to vote in the referendum.
Sec. 1205.206 Reporting results of referendum.
(a) Each FSA county office shall transmit a written county summary
of ballots showing the results of the referendum in its county to its State office.
(b) Each State office shall transmit a written summary of the
referendum results from the county offices within its State to DAFO,
and DAFO will provide a copy to the AMS. AMS will make the results
available for public inspection for a period of 5 years following the end of the referendum period.
(c) AMS shall prepare and submit to the Secretary a report as to
the results of the referendum. The Secretary shall then publically proclaim the results of the referendum.
Sec. 1205.207 Challenge of correctness of county summary of ballots.
The FSA state offices shall make a prompt investigation and decision in case of any dispute or challenge regarding the correctness of the county summary of ballots in any county: Provided, That no dispute of challenge shall be investigated unless it is brought to the attention of the State FSA office within 3 days after receipt by the FSA State office of the county summary of ballots from such county. Sec. 1205.208 Disposition of ballots and records.
The FSA county office shall seal the voted ballots, challenged
ballots found to be ineligible, spoiled ballots, register sheets, and
summary sheets for the county in one or more envelopes or packages,
plainly marked with the identification of the referendum, the date and
the names of the county and State, and place them under lock and key in
a safe place under the custody of the FSA county office for a period of
45 days after the referendum period. If no notice to the contrary is
received by the end of such time, and after the ballots and other
records have been examined by a representative of the State FSA office,
the voted ballots and challenged ballots shall be destroyed, but the
registers and county summary sheets shall be filed for a period of 5 years in the office of the FSA county office.
Sec. 1205.209 Confidential information.
(a) The ballots cast or the manner in which any person voted and
all information furnished to, compiled by, or in the possession of the referendum agent shall be regarded as confidential.
(b) The ballots and other information or reports that reveal, or
tend to reveal, the vote of any person covered under the Order and the
voter list shall be strictly confidential and shall not be disclosed. Sec. 1205.210 Additional instructions and forms.
AMS is hereby authorized to prescribe additional instructions and
forms not inconsistent with the provisions of this subpart for the use
of State and County FSA offices in conducting a referendum. Such
additional instructions may include procedures for FSA county and State
offices to report and announce the results of the preliminary count of the votes in the county and the State.
Dated: September 28, 2009.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
FOR FURTHER INFORMATION CONTACT
Shethir M. Riva, Chief, Research and Promotion Staff, Cotton and Tobacco Programs, AMS, USDA, Stop 0224, 1400 Independence Ave., SW., Room 2637S, Washington, DC 202500224, telephone (202) 7206603, facsimile (202) 6901718, or email at shethir.riva@ams.usda.gov. A copy of this final rule may also be found at: http://www.regulations.gov.