The final rule exempts organic handlers from paying assessments for market promotion activities.
Requirements under the Final Rule and Changes from the Proposed Rule
- The final rule clarifies that for the purpose of obtaining an assessment exemption, a handler must operate under an approved organic process system plan authorized by the National Organic Program (NOP), and handle or market only products that are eligible for a 100-percent organic product label under the NOP. This applies to all commodities marketed by the person, not only those covered by the applicable marketing order under which the exemption is sought.
- The final rule considers any assessment payer, for the purpose of obtaining an exemption, to be the person who handles the commodity. Accordingly, the regulatory text has been modified as appropriate to reflect this, and the definition of “produce” as proposed has been deleted. (The proposed rule defined “produce” to mean to grow or produce food, feed, livestock, or fiber or to receive food, feed, livestock, or fiber and alter that product by means of feeding, slaughtering, or processing.)
- The final rule clarifies that a handler who handles or markets products produced on buffer zones or chemically-treated products from certified NOP producers is not eligible for an assessment exemption. Further, if an NOP handler is also a certified NOP producer, that handler would not be eligible for exemption unless the non-organic production from his or her production operation is handled by another handler.
- The final rule provides that the exemption will apply at the beginning of the next assessable period following notification to the applicant of approval of the assessment exemption, in writing, by the committee or board. The final rule requires marketing order committees and boards to grant or deny exemption requests within 30 days.
Procedures Concerning the Application Process
The final rule is effective on February 14, 2005. That means that 30 days after publication, committees and boards must be prepared to handle requests for exemptions.
Application for Exemption
Persons must apply for exemption on a form supplied by the committees and boards. AMS developed this form for each committee and board and makes is available in Adobe Portable Document Format (PDF). The form requests the following information: the applicant’s name, company name and address, telephone and fax numbers, email address, a copy of the applicant’s organic farm or organic handling certificate provided by a USDA-accredited certifying agent under the Organic Food Production Act of 1990, and a signed certification that the applicant meets all of the requirements specified for an assessment exemption. This signed certification includes providing a list of commodities marketed by the applicant and assertions that the applicant is not a split operation (under NOP) and produces and is subject to assessments under the Federal marketing order for which the exemption is requested.
Deposition of Exemption Requests
Marketing order committees and boards have 30 days to act on requests. If a person does not quality, committees and boards must notify the person in writing and indicate why the exemption was denied. Reasons for denial include lack of NOP certification and failure to meet the threshold of solely 100 percent organic.
Action Items for Committees and Boards
- As of the effective date of the final rule (February 14, 2005), marketing order committees and boards should have paper copies of the form available, and, if possible, post the PDF-fillable form on their websites.
- As of the effective date of the final rule, committees and boards should make a paper copy of the final rule available to anyone who requests one.
- Committees and boards must notify in writing any person to whom the exemption is denied.
- Committees and boards should compute the applicable assessment rate for any handler approved for an exemption as prescribed in the final rule. The committee’s or board’s estimated non-marketing promotion expenditures exclude the direct costs of marketing promotion and the portion of committee’s or board’s administrative and overhead costs (e.g., salaries, supplies, printing, equipment, rent, contractual expenses, and other applicable costs) to support and administer the marketing promotion activities.