PART 986—PECANS GROWN IN THE STATES OF ALABAMA, ARKANSAS, ARIZONA, CALIFORNIA, FLORIDA, GEORGIA, KANSAS, LOUISIANA, MISSOURI, MISSISSIPPI, NORTH CAROLINA, NEW MEXICO, OKLAHOMA, SOUTH CAROLINA, AND TEXAS Authority: 7 U.S.C. 601-674. Source: 81 FR 51302, Aug. 4, 2016, unless otherwise noted. Subpart A—Order Regulating Handling of Pecans Definitions § 986.1 Accumulator. Accumulator § 986.2 Act. Act et seq. § 986.3 Affiliation. Affiliation. § 986.4 Blowouts. Blowouts § 986.5 To certify. To certify § 986.6 Confidential data or information. Confidential data or information § 986.7 Container. Container § 986.8 Council. Council § 986.9 Crack. Crack § 986.10 Cracks. Cracks § 986.11 Custom harvester. Custom harvester § 986.12 Department or USDA. Department USDA § 986.13 Disappearance. Disappearance § 986.14 Farm Service Agency. Farm Service Agency § 986.15 Fiscal year. Fiscal year § 986.16 Grade and size. Grade and size § 986.17 Grower. (a) Grower (1) Owns an orchard and harvests its pecans for sale (even if a custom harvester is used); or (2) Is a lessee of a pecan orchard and has the right to sell the harvest (even if the lessee must remit a percentage of the crop or rent to a lessor). (b) The term “grower” shall only include those who produce a minimum of 50,000 pounds of inshell pecans during a representative period (average of four years) or who own a minimum of 30 pecan acres according to the FSA, including acres calculated by the FSA based on pecan tree density. In the absence of any FSA delineation of pecan acreage, the regular definition of an acre will apply. The Council may recommend changes to this definition subject to the approval of the Secretary. § 986.18 Grower-cleaned production. Grower-cleaned production § 986.19 Handler. Handler § 986.20 To handle. To handle § 986.21 Handler inventory. Handler inventory § 986.22 Handler-cleaned production. Handler-cleaned production § 986.23 Hican. Hican Carya § 986.24 Inshell pecans. Inshell pecans § 986.25 Inspection Service. Inspection service § 986.26 Inter-handler transfer. Inter-handler transfer § 986.27 Merchantable pecans. (a) Inshell. Merchantable inshell (b) Shelled. Merchantable shelled § 986.28 Pack. Pack § 986.29 Pecans. (a) Pecans Carya, illinoensis, Carya illinoinensis (syn. C. illinoenses) (1) Native or seedling (2) Improved pecans (3) Substandard pecans (b) The Council, with the approval of the Secretary, may recognize new or delete obsolete varieties or sub-varieties for each category. § 986.30 Person. Person § 986.31 Production area. Production area § 986.32 Proprietary capacity. Proprietary capacity § 986.33 Regions. (a) Regions (1) Eastern Region, (2) Central Region, (3) Western Region, (b) With the approval of the Secretary, the boundaries of any region may be changed pursuant to § 986.58, Reapportionment and reestablishment of regions. § 986.34 Representative period. Representative period § 986.35 Secretary. Secretary § 986.36 Sheller. Sheller Provided, § 986.37 Shelled pecans. Shelled pecans Shelled pecans pecan meats. § 986.38 Stick-tights. Stick-tights § 986.39 Trade supply. Trade supply § 986.40 Unassessed inventory. Unassessed inventory § 986.41 Varieties. Varieties § 986.42 Warehousing. Warehousing § 986.43 Weight. Weight Provided, Administrative Body § 986.45 American Pecan Council. The American Pecan Council is hereby established consisting of 17 members selected by the Secretary, each of whom shall have an alternate member nominated with the same qualifications as the member. The 17 members shall include nine (9) grower seats, six (6) sheller seats, and two (2) at-large seats allocated to one accumulator and one public member. The grower and sheller nominees and their alternates shall be growers and shellers at the time of their nomination and for the duration of their tenure. Grower and sheller members and their alternates shall be selected by the Secretary from nominees submitted by the Council. The two at-large seats shall be nominated by the Council and appointed by the Secretary. (a) Each region shall be allocated the following member seats: (1) Eastern Region: (2) Central Region: (3) Western Region: (b) Within each region, the grower and sheller seats shall be defined as follows: (1) Grower seats: (2) Sheller seats: (c) The Council may recommend, subject to the approval of the Secretary, revisions to the above requirements for grower and sheller seats to accommodate changes within the industry. § 986.46 Council nominations and voting. Nomination of Council members and alternate members shall follow the procedure set forth in this section, or as may be changed as recommended by the Council and approved by the Secretary. All nominees must meet the requirements set forth in §§ 986.45, American Pecan Council, and 986.48, Eligibility, or as otherwise identified by the Secretary, to serve on the Council. (a) Initial members. (b) Successor members. (1) Call for nominations. (ii) If a grower is engaged in producing pecans in more than one region, such grower shall nominate in the region in which they grow the largest volume of their production. (iii) Nominations for the sheller member seats for each region shall be received from shellers in that region on approved forms containing the information stipulated in this section. (iv) If a sheller is engaged in handling in more than one region, such sheller shall nominate in the region in which they shelled the largest volume in the preceding fiscal year. (2) Voting for nominees. (ii) If a grower is engaged in producing pecans in more than one region, such grower shall cast their nomination ballot in the region in which they grow the largest volume of their production. Notwithstanding this stipulation, such grower may vote their volume produced in any or all of the three regions. (iii) Only shellers, through duly authorized officers or employees of shellers, if applicable, may participate in the nomination of the sheller member nominees and their alternates. Each sheller shall be entitled to cast only one nomination ballot for each of the two sheller seats in their region. (iv) If a sheller is engaged in handling in more than one region, such sheller shall cast their nomination ballot in the region in which they shelled the largest volume in the preceding fiscal year. Notwithstanding this stipulation, such sheller may vote their volume handled in all three regions. (v) If a person is both a grower and a sheller of pecans, such person may not participate in both grower and sheller nominations. Such person must elect to participate either as a grower or a sheller. (3) Nomination procedure for grower seats. (ii) On the ballot, growers shall indicate their vote for the grower nominee candidates for the grower seats and also indicate their average annual volume of inshell pecan production for the preceding four fiscal years. (iii) Seat 1 (iv) Seat 2 (v) Seat 3 (4) Nomination procedure for sheller seats. (ii) Seat 1 (iii) Seat 2 (5) Reports to the Secretary. (6) At-large members. (7) Nomination forms. (i) Grower nomination forms. (A) The name of the nominated grower; (B) The name and signature of the nominating grower; (C) Two additional names and respective signatures of growers in support of the nomination; (D) Any other such information recommended by the Council and approved by the Secretary. (ii) Sheller nomination forms. (A) The name of the nominated sheller; (B) The name and signature of the nominating sheller; (C) One additional name and signature of a sheller in support of the nomination; (D) Any other such information recommended by the Council and approved by the Secretary. (8) Changes to the nomination and voting procedures. § 986.47 Alternate members. (a) Each member of the Council shall have an alternate member to be nominated in the same manner as the member. (b) An alternate for a member of the Council shall act in the place and stead of such member in their absence or in the event of their death, removal, resignation, or disqualification, until the next nomination and elections take place for the Council or the vacancy has been filled pursuant to § 986.48, Eligibility. (c) In the event any member of the Council and their alternate are both unable to attend a meeting of the Council, any alternate for any other member representing the same group as the absent member may serve in the place of the absent member. § 986.48 Eligibility. (a) Each grower member and alternate shall be, at the time of selection and during the term of office, a grower or an officer, or employee, of a grower in the region and in the classification for which nominated. (b) Each sheller member and alternate shall be, at the time of selection and during the term of office, a sheller or an officer or employee of a sheller in the region and in the classification for which nominated. (c) A grower can be a nominee for only one grower member seat. If a grower is nominated for two grower member seats, he or she shall select the seat in which he or she desires to run, and the grower ballot shall reflect that selection. (d) Any member or alternate member who at the time of selection was employed by or affiliated with the person who is nominated shall, upon termination of that relationship, become disqualified to serve further as a member and that position shall be deemed vacant. (e) No person nominated to serve as a public member or alternate public member shall have a financial interest in any pecan grower or handling operation. § 986.49 Acceptance. Each person to be selected by the Secretary as a member or as an alternate member of the Council shall, prior to such selection, qualify by advising the Secretary that if selected, such person agrees to serve in the position for which that nomination has been made. § 986.50 Term of office. (a) Selected members and alternate members of the Council shall serve for terms of four years: Provided (1) Grower member Seat 2 in all regions shall be assigned a two-year term; (2) Grower member Seat 3 in all regions shall, by drawing, identify one member seat to be assigned a two-year term; and, (3) Sheller Seat 2 in all regions shall be assigned a two-year term. (b) Council members and alternates may serve up to two consecutive, four-year terms of office. Subject to paragraph (c) of this section, in no event shall any member or alternate serve more than eight consecutive years on the Council as either a member or an alternate. However, if selected, an alternate having served up to two consecutive terms may immediately serve as a member for two consecutive terms without any interruption in service. The same is true for a member who, after serving for up to two consecutive terms, may serve as an alternate if nominated without any interruption in service. A person having served the maximum number of terms as set forth above may not serve again as a member or an alternate for at least twelve consecutive months. For purposes of determining when a member or alternate has served two consecutive terms, the accrual of terms shall begin following any period of at least twelve consecutive months out of office. (c) Each member and alternate member shall continue to serve until a successor is selected and has qualified. (d) A term of office shall begin as set forth in the by-laws or as directed by the Secretary each year for all members. (e) The Council may recommend, subject to approval of the Secretary, revisions to the start day for the term of office, the number of years in a term, and the number of terms a member or an alternate can serve. § 986.51 Vacancy. Any vacancy on the Council occurring by the failure of any person selected to the Council to qualify as a member or alternate member due to a change in status making the member ineligible to serve, or due to death, removal, or resignation, shall be filled, by a majority vote of the Council for the unexpired portion of the term. However, that person shall fulfill all the qualifications set forth in this part as required for the member whose office that person is to fill. The qualifications of any person to fill a vacancy on the Council shall be certified in writing to the Secretary. The Secretary shall notify the Council if the Secretary determines that any such person is not qualified. § 986.52 Council expenses. The members and their alternates of the Council shall serve without compensation, but shall be reimbursed for the reasonable and necessary expenses incurred by them in the performance of their duties under this part. § 986.53 Powers. The Council shall have the following powers: (a) To administer the provisions of this part in accordance with its terms; (b) To make bylaws, rules and regulations to effectuate the terms and provisions of this part; (c) To receive, investigate, and report to the Secretary complaints of violations of this part; and (d) To recommend to the Secretary amendments to this part. § 986.54 Duties. The duties of the Council shall be as follows: (a) To act as intermediary between the Secretary and any handler or grower; (b) To keep minute books and records which will clearly reflect all of its acts and transactions, and such minute books and records shall at any time be subject to the examination of the Secretary; (c) To furnish to the Secretary a complete report of all meetings and such other available information as he or she may request; (d) To appoint such employees as it may deem necessary and to determine the salaries, define the duties, and fix the bonds of such employees; (e) To cause the books of the Council to be audited by one or more certified public accountants at least once for each fiscal year and at such other times as the Council deems necessary or as the Secretary may request, and to file with the Secretary three copies of all audit reports made; (f) To investigate the growing, shipping and marketing conditions with respect to pecans and to assemble data in connection therewith; (g) To investigate compliance with the provisions of this part; and, (h) To recommend by-laws, rules and regulations for the purpose of administering this part. § 986.55 Procedure. (a) The members of the Council shall select a chairman from their membership, and shall select such other officers and adopt such rules for the conduct of Council business as they deem advisable. (b) The Council may provide for meetings by telephone, or other means of communication, and any vote cast at such a meeting shall be confirmed promptly in writing. The Council shall give the Secretary the same notice of its meetings as is given to members of the Council. (c) Quorum. Provided (1) Actions of the Council with respect to the following issues shall require a two-thirds (12 members) concurring vote of the Council: (i) Establishment of or changes to by-laws; (ii) Appointment or administrative issues relating to the program's manager or chief executive officer; (iii) Budget; (iv) Assessments; (v) Compliance and audits; (vi) Reestablishment of regions and reapportionment or reallocation of Council membership; (vii) Modifying definitions of grower and sheller; (viii) Research or promotion activities under § 986.68; (ix) Grade, quality and size regulation under § 986.69(a)(1) and (2); (x) Pack and container regulation under § 986.69(a)(3); and, (2) Actions of the Council with respect to the securing of commercial bank loans for the purpose of financing start-up costs of the Council and its activities or securing financial assistance in emergency situations shall require a unanimous vote of all members present at an in-person meeting; Provided § 986.56 Right of the Secretary. The members and alternates for members and any agent or employee appointed or employed by the Council shall be subject to removal or suspension by the Secretary at any time. Each and every regulation, decision, determination, or other act shall be subject to the continuing right of the Secretary to disapprove of the same at any time, and, upon such disapproval, shall be deemed null and void, except as to acts done in reliance thereon or in compliance therewith prior to such disapproval by the Secretary. § 986.57 Funds and other property. (a) All funds received pursuant to any of the provisions of this part shall be used solely for the purposes specified in this part, and the Secretary may require the Council and its members to account for all receipts and disbursements. (b) Upon the death, resignation, removal, disqualification, or expiration of the term of office of any member or employee, all books, records, funds, and other property in their possession belonging to the Council shall be delivered to their successor in office or to the Council, and such assignments and other instruments shall be executed as may be necessary to vest in such successor or in the Council full title to all the books, records, funds, and other property in the possession or under the control of such member or employee pursuant to this subpart. § 986.58 Reapportionment and reestablishment of regions. The Council may recommend, subject to approval of the Secretary, reestablishment of regions, reapportionment of members among regions, and may revise the groups eligible for representation on the Council. In recommending any such changes, the following shall be considered: (a) Shifts in acreage within regions and within the production area during recent years; (b) The importance of new production in its relation to existing regions; (c) The equitable relationship between Council apportionment and regions; (d) Changes in industry structure and/or the percentage of crop represented by various industry entities; and (e) Other relevant factors. Expenses, Assessments, and Marketing Policy § 986.60 Budget. As soon as practicable before the beginning of each fiscal year, and as may be necessary thereafter, the Council shall prepare a budget of income and expenditures necessary for the administration of this part. The Council may recommend a rate of assessment calculated to provide adequate funds to defray its proposed expenditures. The Council shall present such budget to the Secretary with an accompanying report showing the basis for its calculations, and all shall be subject to Secretary approval. § 986.61 Assessments. (a) Each handler who first handles inshell pecans shall pay assessments to the Council. Assessments collected each fiscal year shall defray expenses which the Secretary finds reasonable and likely to be incurred by the Council during that fiscal year. Each handler's share of assessments paid to the Council shall be equal to the ratio between the total quantity of inshell pecans handled by them as the first handler thereof during the applicable fiscal year, and the total quantity of inshell pecans handled by all regulated handlers in the production area during the same fiscal year. The payment of assessments for the maintenance and functioning of the Council may be required under this part throughout the period it is in effect irrespective of whether particular provisions thereof are suspended or become inoperative. Handlers may avail themselves of an inter-handler transfer, as provided for in § 986.62, Inter-handler transfers. (b) Based upon a recommendation of the Council or other available data, the Secretary shall fix three base rates of assessment for inshell pecans handled during each fiscal year. Such base rates shall include one rate of assessment for any or all varieties of pecans classified as native and seedling; one rate of assessment for any or all varieties of pecans classified as improved; and one rate of assessment for any pecans classified as substandard. (c) Upon implementation of this part and subject to the approval of the Secretary, initial assessment rates per classification shall be set within the following prescribed ranges: Native and seedling classified pecans shall be assessed at one-cent to two-cents per pound; improved classified pecans shall be assessed at two-cents to three-cents per pound; and, substandard classified pecans shall be assessed at one-cent to two-cents per pound. These assessment ranges shall be in effect for the initial four years of the order. (d) Subsequent assessment rates shall not exceed two percent of the aggregate of all prices in each classification across the production area based on Council data, or the average of USDA reported average price received by growers for each classification, in the preceding fiscal year as recommended by the Council and approved by the Secretary. After four years from the implementation of this part, the Council may recommend, subject to the approval of the Secretary, revisions to this calculation or assessment ranges. (e) The Council, with the approval of the Secretary, may revise the assessment rates if it determines, based on information including crop size and value, that the action is necessary, and if the revision does not exceed the assessment limitation specified in this section and is made prior to the final billing of the assessment. (f) In order to provide funds for the administration of the provisions of this part during the first part of a fiscal year, before sufficient operating income is available from assessments, the Council may accept the payment of assessments in advance and may also borrow money for such purposes; Provided (g) If a handler does not pay assessments within the time prescribed by the Council, the assessment may be increased by a late payment charge and/or an interest rate charge at amounts prescribed by the Council with approval of the Secretary. (h) On August 31 of each year, every handler warehousing inshell pecans shall be identified as the first handler of those pecans and shall be required to pay the assessed rate on the category of pecans in their possession on that date. The terms of this paragraph may be revised subject to the recommendation of the Council and approval by the Secretary. (i) On August 31 of each year, all inventories warehoused by growers from the current fiscal year shall cease to be eligible for inter-handler transfer treatment. Instead, such inventory will require the first handler that handles such inventory to pay the assessment thereon in accordance with the prevailing assessment rates at the time of transfer from the grower to the said handler. The terms of this paragraph may be revised subject to the recommendation of the Council and approval by the Secretary. § 986.62 Inter-handler transfers. Any handler inside the production area, except as provided for in § 986.61(h) and (i), Assessments, may transfer inshell pecans to another handler inside the production area for additional handling, and any assessments or other marketing order requirements with respect to pecans so transferred may be assumed by the receiving handler. The Council, with the approval of the Secretary, may establish methods and procedures, including necessary reports, to maintain accurate records for such transfers. All inter-handler transfers will be documented by forms or electronic transfer receipts approved by the Council, and all forms or electronic transfer receipts used for inter-handler transfers shall require that copies be sent to the selling party, the receiving party, and the Council. Such forms must state which handler has the assessment responsibilities. § 986.63 Contributions. The Council may accept voluntary contributions. Such contributions may only be accepted if they are free from any encumbrances or restrictions on their use and the Council shall retain complete control of their use. The Council may receive contributions from both within and outside of the production area. § 986.64 Accounting. (a) Assessments collected in excess of expenses incurred shall be accounted for in accordance with one of the following: (1) Excess funds not retained in a reserve, as provided in paragraph (a)(2) of this section shall be refunded proportionately to the persons from whom they were collected; or (2) The Council, with the approval of the Secretary, may carry over excess funds into subsequent fiscal periods as reserves: Provided (i) To defray expenses during any fiscal period prior to the time assessment income is sufficient to cover such expenses; (ii) To cover deficits incurred during any fiscal period when assessment income is less than expenses; (iii) To defray expenses incurred during any period when any or all provisions of this part are suspended or are inoperative; and (iv) To cover necessary expenses of liquidation in the event of termination of this part. (b) Upon such termination, any funds not required to defray the necessary expenses of liquidation shall be disposed of in such manner as the Secretary may determine to be appropriate. To the extent practical, such funds shall be returned pro rata to the persons from whom such funds were collected. (c) All funds received by the Council pursuant to the provisions of this part shall be used solely for the purposes specified in this part and shall be accounted for in the manner provided for in this part. The Secretary may at any time require the Council and its members to account for all receipts and disbursements. (d) Upon the removal or expiration of the term of office of any member of the Council, such member shall account for all receipts and disbursements and deliver all property and funds in their possession to the Council, and shall execute such assignments and other instruments as may be necessary or appropriate to vest in the Council full title to all of the property, funds, and claims vested in such member pursuant to this part. (e) The Council may make recommendations to the Secretary for one or more of the members thereof, or any other person, to act as a trustee for holding records, funds, or any other Council property during periods of suspension of this subpart, or during any period or periods when regulations are not in effect and if the Secretary determines such action appropriate, he or she may direct that such person or persons shall act as trustee or trustees for the Council. § 986.65 Marketing policy. By the end of each fiscal year, the Council shall make a report and recommendation to the Secretary on the Council's proposed marketing policy for the next fiscal year. Each year such report and recommendation shall be adopted by the affirmative vote of at least two-thirds ( 2/3 (a) Estimate of the grower-cleaned production and handler-cleaned production in the area of production for the fiscal year; (b) Estimate of disappearance; (c) Estimate of the improved, native, and substandard pecans; (d) Estimate of the handler inventory on August 31, of inshell and shelled pecans; (e) Estimate of unassessed inventory; (f) Estimate of the trade supply, taking into consideration imports, and other factors; (g) Preferable handler inventory of inshell and shelled pecans on August 31 of the following year; (h) Projected prices in the new fiscal year; (i) Competing nut supplies; and (j) Any other relevant factors. Authorities Relating to Research, Promotion, Data Gathering, Packaging, Grading, Compliance, and Reporting § 986.67 Recommendations for regulations. Upon complying with § 986.65, Marketing policy, the Council may propose regulations to the Secretary whenever it finds that such proposed regulations may assist in effectuating the declared policy of the Act. § 986.68 Authority for research and promotion activities. The Council, with the approval of the Secretary, may establish or provide for the establishment of production research, marketing research and development projects, and marketing promotion, including paid generic advertising, designed to assist, improve, or promote the marketing, distribution, and consumption or efficient production of pecans including product development, nutritional research, and container development. The expenses of such projects shall be paid from funds collected pursuant to this part. § 986.69 Authorities regulating handling. (a) The Council may recommend, subject to the approval of the Secretary, regulations that: (1) Establish handling requirements or minimum tolerances for particular grades, sizes, or qualities, or any combination thereof, of any or all varieties or classifications of pecans during any period; (2) Establish different handling requirements or minimum tolerances for particular grades, sizes, or qualities, or any combination thereof for different varieties or classifications, for different containers, for different portions of the production area, or any combination of the foregoing, during any period; (3) Fix the size, capacity, weight, dimensions, or pack of the container or containers, which may be used in the packaging, transportation, sale, preparation for market, shipment, or other handling of pecans; and (4) Establish inspection and certification requirements for the purposes of (a)(1) through (3) of this section. (b) Regulations issued hereunder may be amended, modified, suspended, or terminated whenever it is determined: (1) That such action is warranted upon recommendation of the Council and approval by the Secretary, or other available information; or (2) That regulations issued hereunder no longer tend to effectuate the declared policy of the Act. (c) The authority to regulate as put forward in this subsection shall not in any way constitute authority for the Council to recommend volume regulation, such as reserve pools, producer allotments, or handler withholding requirements which limit the flow of product to market for the purpose of reducing market supply. (d) The Council may recommend, subject to the approval of the Secretary, rules and regulations to effectuate this subpart. § 986.70 Handling for special purposes. Regulations in effect pursuant to § 986.69, Authorities regulating handling, may be modified, suspended, or terminated to facilitate handling of pecans for: (a) Relief or charity; (b) Experimental purposes; and (c) Other purposes which may be recommended by the Council and approved by the Secretary. § 986.71 Safeguards. The Council, with the approval of the Secretary, may establish through rules such requirements as may be necessary to establish that shipments made pursuant to § 986.70, Handling for special purposes, were handled and used for the purpose stated. § 986.72 Notification of regulation. The Secretary shall promptly notify the Council of regulations issued or of any modification, suspension, or termination thereof. The Council shall give reasonable notice thereof to industry participants. Reports, Books, and Other Records § 986.75 Reports of handler inventory. Each handler shall submit to the Council in such form and on such dates as the Council may prescribe, reports showing their inventory of inshell and shelled pecans. § 986.76 Reports of merchantable pecans handled. Each handler who handles merchantable pecans at any time during a fiscal year shall submit to the Council in such form and at such intervals as the Council may prescribe, reports showing the quantity so handled and such other information pertinent thereto as the Council may specify. § 986.77 Reports of pecans received by handlers. Each handler shall file such reports of their pecan receipts from growers, handlers, or others in such form and at such times as may be required by the Council with the approval of the Secretary. § 986.78 Other handler reports. Upon request of the Council made with the approval of the Secretary each handler shall furnish such other reports and information as are needed to enable the Council to perform its duties and exercise its powers under this part. § 986.79 Verification of reports. For the purpose of verifying and checking reports filed by handlers on their operations, the Secretary and the Council, through their duly authorized representatives, shall have access to any premises where pecans and pecan records are held. Such access shall be available at any time during reasonable business hours. Authorized representatives of the Council or the Secretary shall be permitted to inspect any pecans held and any and all records of the handler with respect to matters within the purview of this part. Each handler shall maintain complete records on the receiving, holding, and disposition of all pecans. Each handler shall furnish all labor necessary to facilitate such inspections at no expense to the Council or the Secretary. Each handler shall store all pecans held by him in such manner as to facilitate inspection and shall maintain adequate storage records which will permit accurate identification with respect to inspection certificates of respective lots and of all such pecans held or disposed of theretofore. The Council, with the approval of the Secretary, may establish any methods and procedures needed to verify reports. § 986.80 Certification of reports. All reports submitted to the Council as required in this part shall be certified to the Secretary and the Council as to the completeness and correctness of the information contained therein. § 986.81 Confidential information. All reports and records submitted by handlers to the Council, which include data or information constituting a trade secret or disclosing the trade position, or financial condition or business operations of the handler shall be kept in the custody of one or more employees of the Council and shall be disclosed to no person except the Secretary. § 986.82 Books and other records. Each handler shall maintain such records of pecans received, held and disposed of by them as may be prescribed by the Council for the purpose of performing its duties under this part. Such books and records shall be retained and be available for examination by authorized representatives of the Council and the Secretary for the current fiscal year and the preceding three (3) fiscal years. Additional Provisions § 986.86 Exemptions. (a) Any handler may handle inshell pecans within the production area free of the requirements of this part if such pecans are handled in quantities not exceeding 1,000 inshell pounds during any fiscal year. (b) Any handler may handle shelled pecans within the production area free of the requirements of this part if such pecans are handled in quantities not exceeding 500 shelled pounds during any fiscal year. (c) Mail order sales are not exempt sales under this part. (d) The Council, with the approval of the Secretary, may establish such rules, regulations, and safeguards, and require such reports, certifications, and other conditions, as are necessary to ensure compliance with this part. § 986.87 Compliance. Except as provided in this subpart, no handler shall handle pecans, the handling of which has been prohibited by the Secretary in accordance with provisions of this part, or the rules and regulations thereunder. § 986.88 Duration of immunities. The benefits, privileges, and immunities conferred by virtue of this part shall cease upon termination hereof, except with respect to acts done under and during the existence of this part. § 986.89 Separability. If any provision of this part is declared invalid, or the applicability thereof to any person, circumstance, or thing is held invalid, the validity of the remaining provisions and the applicability thereof to any other person, circumstance, or thing shall not be affected thereby. § 986.90 Derogation. Nothing contained in this part is or shall be construed to be in derogation of, or in modification of, the rights of the Secretary or of the United States to exercise any powers granted by the Act or otherwise, or, in accordance with such powers, to act in the premises whenever such action is deemed advisable. § 986.91 Liability. No member or alternate of the Council nor any employee or agent thereof, shall be held personally responsible, either individually or jointly with others, in any way whatsoever, to any party under this part or to any other person for errors in judgment, mistakes, or other acts, either of commission or omission, as such member, alternate, agent or employee, except for acts of dishonesty, willful misconduct, or gross negligence. The Council may purchase liability insurance for its members and officers. § 986.92 Agents. The Secretary may name, by designation in writing, any person, including any officer or employee of the USDA or the United States to act as their agent or representative in connection with any of the provisions of this part. § 986.93 Effective time. The provisions of this part and of any amendment thereto shall become effective at such time as the Secretary may declare, and shall continue in force until terminated in one of the ways specified in § 986.94. § 986.94 Termination. (a) The Secretary may at any time terminate this part. (b) The Secretary shall terminate or suspend the operation of any or all of the provisions of this part whenever he or she finds that such operation obstructs or does not tend to effectuate the declared policy of the Act. (c) The Secretary shall terminate the provisions of this part applicable to pecans for market or pecans for handling at the end of any fiscal year whenever the Secretary finds, by referendum or otherwise, that such termination is favored by a majority of growers; Provided (d) The Secretary shall conduct a referendum within every five-year period beginning from the implementation of this part, to ascertain whether continuance of the provisions of this part applicable to pecans are favored by two-thirds by number or volume of growers voting in the referendum. The Secretary may terminate the provisions of this part at the end of any fiscal year in which the Secretary has found that continuance of this part is not favored by growers who, during an appropriate period of time determined by the Secretary, have been engaged in the production of pecans in the production area: Provided (e) The provisions of this part shall, in any event, terminate whenever the provisions of the Act authorizing them cease to be in effect. § 986.95 Proceedings after termination. (a) Upon the termination of this part, the Council members serving shall continue as joint trustees for the purpose of liquidating all funds and property then in the possession or under the control of the Council, including claims for any funds unpaid or property not delivered at the time of such termination. (b) The joint trustees shall continue in such capacity until discharged by the Secretary; from time to time accounting for all receipts and disbursements; delivering all funds and property on hand, together with all books and records of the Council and of the joint trustees to such person as the Secretary shall direct; and, upon the request of the Secretary, executing such assignments or other instruments necessary and appropriate to vest in such person full title and right to all of the funds, property, or claims vested in the Council or in said joint trustees. (c) Any funds collected pursuant to this part and held by such joint trustees or such person over and above the amounts necessary to meet outstanding obligations and the expenses necessarily incurred by the joint trustees or such other person in the performance of their duties under this subpart, as soon as practicable after the termination hereof, shall be returned to the handlers pro rata in proportion to their contributions thereto. (d) Any person to whom funds, property, or claims have been transferred or delivered by the Council, upon direction of the Secretary, as provided in this part, shall be subject to the same obligations and duties with respect to said funds, property, or claims as are imposed upon said joint trustees. § 986.96 Amendments. Amendments to this part may be proposed from time to time by the Council or by the Secretary. § 986.97 Counterparts. Handlers may sign an agreement with the Secretary indicating their support for this marketing order. This agreement may be executed in multiple counterparts by each handler. If more than fifty percent of the handlers, weighted by the volume of pecans handled during an appropriate period of time determined by the Secretary, enter into such an agreement, then a marketing agreement shall exist for the pecans marketing order. This marketing agreement shall not alter the terms of this part. Upon the termination of this part, the marketing agreement has no further force or effect. § 986.98 Additional parties. After this part becomes effective, any handler may become a party to the marketing agreement if a counterpart is executed by the handler and delivered to the Secretary. § 986.99 Order with marketing agreement. Each signatory handler hereby requests the Secretary to issue, pursuant to the Act, an order for regulating the handling of pecans in the same manner as is provided for in this agreement. Subpart B—Administrative Provisions § 986.161 Assessment rate. On and after October 1, 2021, assessment rates of $0.01 per pound for pecans classified as improved, $0.00 per pound for pecans classified as native and seedling, and $0.00 per pound for pecans classified as substandard pecans are established. [87 FR 22110, Apr. 14, 2022] § 986.162 Inter-handler transfers. (a) Inter-handler transfers of inshell pecans, pursuant to § 986.62, shall be reported to the Council on APC Form 4. Handlers shall file reports by the tenth day of the month following the first transfer between two handlers. Should the tenth day of the month fall on a weekend or holiday, reports are due by the first business day following the tenth day of the month. This report must be renewed each fiscal year. The report shall contain the following information: (1) The fiscal year covered by the report; (2) The names and signatures for both the transferring and receiving handler; and (3) Handler assuming the reporting and assessment obligations on the pecans transferred. (b) [Reserved] [85 FR 19654, Apr. 8, 2020] § 986.175 Handler inventory. (a) Handlers shall submit to the Council a year-end inventory report following August 31 each fiscal year. Handlers shall file such reports by September 10. Should September 10 fall on a weekend, reports are due by the first business day following September 10. Such reports shall be reported to the Council on APC Form 5 and include: (1) The name and address of the handler; (2) The total weight and type of inshell pecans in inventory, regardless of country of origin; (3) The total weight and type of shelled pecans in inventory, regardless of country of origin; (4) The total weight and type of inshell pecans committed, not shipped, for export and domestic shipments, and any uncommitted inventory, regardless of country of origin; (5) The total weight and type of shelled pecans committed, not shipped, for export and domestic shipments, and any uncommitted inventory, regardless of country of origin; (6) The combined total inventory for inshell and shelled pecans calculated on an inshell basis, and combined weight committed, not shipped, for exports and domestic shipments, and any uncommitted inventory; (7) Total weight and type of domestic pecans handled for the fiscal year; (8) Total assessments owed, assessments paid to date, and remaining assessments due to be paid by the due date of the year-end inventory report for the fiscal year; (9) The average price paid for all inshell pecans purchased during the fiscal year regardless of how the pecans are handled, including pecans from outside the production area; and (10) The average yield of shelled pecans per pound of inshell pecans shelled during the fiscal year. (b) [Reserved] [82 FR 56155, Nov. 28, 2017, as amended at 84 FR 8411, Mar. 8, 2019; 85 FR 19654, Apr. 8, 2020] § 986.177 Reports of pecans received by handlers. (a) Summary report. (1) The name and address of the handler; (2) The month covered by the report; (3) The total weight and type of inshell pecans received during the reporting period; (4) The total weight and type of inshell pecans received year to date; (5) Assessments due on pecans received during the reporting period to be paid by the due date of the report; (6) The weight of all shipments of pecans, inshell and shelled, and inter-handler transfers shipped and received during the reporting period; (7) The weight of all shipments of pecans, inshell and shelled, and inter-handler transfers shipped and received in the previous month and year to date; (8) Total inventory held by handler; (9) All the inventory committed (pecans not shipped, but sold or otherwise obligated) whether for domestic sale or export; and, (10) The weight of all shelled or inshell pecans under contract for purchase from other handlers. (b) Pecans purchased outside the United States and inshell pecans exported to Mexico for shelling and returned to the United States as shelled meats. (1) The name and address of the handler; (2) The month covered by the report; (3) The date the pecans were imported; (4) The country of origin; (5) The total weight of shelled and inshell pecans received, and the weight by variety for improved pecans received; (6) The weight of inshell pecans exported to Mexico for shelling; (7) The date shelled pecans returned to the United States after shelling in Mexico; (8) The weight of shelled pecans returned to the United States after shelling in Mexico; and (9) The total weight of inshell pecans exported to Mexico for shelling, and shelled pecans returned from Mexico, year to date. [83 FR 7361, Feb. 21, 2018, as amended at 85 FR 19654, Apr. 8, 2020] § 986.178 Other reports. (a) Exports by country of destination. (1) The name and address of the handler; (2) The month covered by the report; (3) The total weight of pecans shipped for export, whether inshell, shelled, or substandard during the reporting period; (4) The total weight of pecans shipped for export, whether inshell, shelled, or substandard during the previous period and year to date; and, (5) The destination(s) of such exports. (b) Exports by country of destination. (1) The name and address of the handler; (2) The month covered by the report; (3) The total weight of pecans shipped for export, whether inshell, shelled, or substandard during the reporting period; (4) The total weight of pecans shipped for export, whether inshell, shelled, or substandard during the previous period and year to date; and, (5) The destination(s) of such exports. (c) Inshell pecans exported to Mexico for shelling and returned to the United States as shelled meats. (1) The name and address of the handler; (2) The month covered by the report; (3) The date of inshell shipment(s); (4) The weight of pecans exported for shelling; (5) The date shelled pecans returned to the United States after shelling; (6) The weight of shelled pecans returned to the United States after shelling; and (7) The total weight of inshell pecans exported to Mexico for shelling, and shelled pecans returned from Mexico, year to date. [83 FR 7361, Feb. 21, 2018, as amended at 85 FR 19655, Apr. 8, 2020]