[Title 7 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2012 Edition]
[From the U.S. Government Printing Office]



[[Page i]]

          

          Title 7

Agriculture


________________________

Parts 1200 to 1599

                         Revised as of January 1, 2012

          Containing a codification of documents of general 
          applicability and future effect

          As of January 1, 2012
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as 
                    Special Edition of the Federal Register

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 7:
    SUBTITLE B--Regulations of the Department of Agriculture 
      (Continued) 
          Chapter XI--Agricultural Marketing Service 
          (Marketing Agreements and Orders; Miscellaneous 
          Commodities), Department of Agriculture                    5
          Chapter XIV--Commodity Credit Corporation, 
          Department of Agriculture                                395
          Chapter XV--Foreign Agricultural Service, Department 
          of Agriculture                                           997
  Finding Aids:
      Table of CFR Titles and Chapters........................    1037
      Alphabetical List of Agencies Appearing in the CFR......    1057
      List of CFR Sections Affected...........................    1067

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                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 7 CFR 1200.1 refers 
                       to title 7, part 1200, 
                       section 1.

                     ----------------------------

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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, January 1, 2012), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
April 1, 2001, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, 1973-1985, or 1986-2000, published in eleven separate 
volumes. For the period beginning April 1, 2001, a ``List of CFR 
Sections Affected'' is published at the end of each CFR volume.

``[RESERVED]'' TERMINOLOGY

    The term ``[Reserved]'' is used as a place holder within the Code of 
Federal Regulations. An agency may add regulatory information at a 
``[Reserved]'' location at any time. Occasionally ``[Reserved]'' is used 
editorially to indicate that a portion of the CFR was left vacant and 
not accidentally dropped due to a printing or computer error.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
valid, the Director of the Federal Register must approve it. The legal 
effect of incorporation by reference is that the material is treated as 
if it were published in full in the Federal Register (5 U.S.C. 552(a)). 
This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed as 
an approved incorporation by reference, please contact the agency that 
issued the regulation containing that incorporation. If, after 
contacting the agency, you find the material is not available, please 
notify the Director of the Federal Register, National Archives and 
Records Administration, 8601 Adelphi Road, College Park, MD 20740-6001, 
or call 202-741-6010.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Authorities 
and Rules. A list of CFR titles, chapters, subchapters, and parts and an 
alphabetical list of agencies publishing in the CFR are also included in 
this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.

[[Page vii]]

    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-741-6000 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, 8601 Adelphi Road, College Park, MD 
20740-6001 or e-mail fedreg.info@nara.gov.

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CFR Sections Affected), The United States Government Manual, the Federal 
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register.

    Raymond A. Mosley,
    Director,
    Office of the Federal Register.
    January 1, 2012.







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                               THIS TITLE

    Title 7--Agriculture is composed of fifteen volumes. The parts in 
these volumes are arranged in the following order: Parts 1-26, 27-52, 
53-209, 210-299, 300-399, 400-699, 700-899, 900-999, 1000-1199, 1200-
1599, 1600-1759, 1760-1939, 1940-1949, 1950-1999, and part 2000 to end. 
The contents of these volumes represent all current regulations codified 
under this title of the CFR as of January 1, 2012.

    The Food and Nutrition Service current regulations in the volume 
containing parts 210-299, include the Child Nutrition Programs and the 
Food Stamp Program. The regulations of the Federal Crop Insurance 
Corporation are found in the volume containing parts 400-699.

    All marketing agreements and orders for fruits, vegetables and nuts 
appear in the one volume containing parts 900-999. All marketing 
agreements and orders for milk appear in the volume containing parts 
1000-1199.

    For this volume, Michele Bugenhagen was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Michael L. White, assisted by Ann Worley.

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                          TITLE 7--AGRICULTURE




                 (This book contains parts 1200 to 1599)

  --------------------------------------------------------------------

  SUBTITLE B--Regulations of the Department of Agriculture (Continued)

                                                                    Part

chapter xi--Agricultural Marketing Service (Marketing 
  Agreements and Orders; Miscellaneous Commodities), 
  Department of Agriculture.................................        1200

chapter xiv--Commodity Credit Corporation, Department of 
  Agriculture...............................................        1400

chapter xv--Foreign Agricultural Service, Department of 
  Agriculture...............................................        1520

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  Subtitle B--Regulations of the Department of Agriculture (Continued)

[[Page 5]]



  CHAPTER XI--AGRICULTURAL MARKETING SERVICE (MARKETING AGREEMENTS AND 
      ORDERS; MISCELLANEOUS COMMODITIES), DEPARTMENT OF AGRICULTURE




  --------------------------------------------------------------------
Part                                                                Page
1200            Rules of practice and procedure governing 
                    proceedings under research, promotion, 
                    and information programs................           7
1205            Cotton research and promotion...............          16
1206            Mango promotion, research, and information..          63
1207            Potato research and promotion plan..........          77
1208            Processed raspberry promotion, research, and 
                    information order.......................          92
1209            Mushroom promotion, research, and consumer 
                    information order.......................          94
1210            Watermelon research and promotion plan......         115
1212            Honey packers and importers research, 
                    promotion, consumer education and 
                    industry information order..............         138
1214            Christmas tree promotion, research, and 
                    information order.......................         155
1215            Popcorn promotion, research, and consumer 
                    information.............................         170
1216            Peanut promotion, research, and information 
                    order...................................         182
1217            Softwood lumber research, promotion, 
                    consumer education and industry 
                    information order.......................         196
1218            Blueberry promotion, research, and 
                    information order.......................         214
1219            Hass avocado promotion, research, and 
                    information.............................         229
1220            Soybean promotion, research, and consumer 
                    information.............................         248
1221            Sorghum promotion, research, and information 
                    order...................................         273
1230            Pork promotion, research, and consumer 
                    information.............................         296

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1250            Egg research and promotion..................         322
1260            Beef promotion and research.................         341
1270

Wool and mohair advertising and promotion [Reserved]

1280            Lamb promotion, research, and information 
                    order...................................         365
1290            Specialty crop block grant program..........         387
1291            Specialty crop block grant program--farm 
                    bill....................................         389

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PART 1200_RULES OF PRACTICE AND PROCEDURE GOVERNING PROCEEDINGS UNDER
RESEARCH, PROMOTION, AND INFORMATION PROGRAMS--Table of Contents



   Subpart A_Rules of Practice and Procedure Governing Proceedings To 
                      Formulate and Amend an Order

Sec.
1200.1 Words in the singular form.
1200.2 Definitions.
1200.3 Proposals.
1200.4 Reimbursement of Secretary's expenses.
1200.5 Institution of proceedings.
1200.6 Docket number.
1200.7 Judge.
1200.8 Motions and requests.
1200.9 Conduct of the hearing.
1200.10 Oral and written arguments.
1200.11 Certification of the transcript.
1200.12 Copies of the transcript.
1200.13 Administrator's recommended decision.
1200.14 Submission to Secretary.
1200.15 Decision by the Secretary.
1200.16 Execution of the order.
1200.17 Filing, extension of time, effective date of filing, and 
          computation of time.
1200.18 Ex parte communications.
1200.19 Additional documents to be filed with hearing clerk.
1200.20 Hearing before Secretary.

Subpart B_Rules of Practice Governing Proceedings on Petitions to Modify 
  or To Be Exempted from Research, Promotion, and Information Programs

1200.50 Words in the singular form.
1200.51 Definitions.
1200.52 Institution of proceeding.

    Authority: 7 U.S.C. 2111, 2620, 2713, 4509, 4609, 4814, 4909, 6106, 
6306, 6410, 7418, and 7486.



   Subpart A_Rules of Practice and Procedure Governing Proceedings To 
                      Formulate and Amend an Order

    Authority: 7 U.S.C. 2103, 2614, 2704, and 4804.

    Source: 47 FR 44684, Oct. 8, 1982, unless otherwise noted.



Sec. 1200.1  Words in the singular form.

    Words in this subpart in the singular form shall be deemed to import 
the plural, and vice versa, as the case may demand.



Sec. 1200.2  Definitions.

    (a) The term Act means the Cotton Research and Promotion Act, as 
amended [7 U.S.C. 2101-2119]; the Egg Research and Consumer Information 
Act, as amended [7 U.S.C. 2701-2718]; the Pork Promotion, Research, and 
Consumer Information Act [7 U.S.C. 4801-4819]; and the Potato Research 
and Promotion Act, as amended [7 U.S.C. 2611-2627].
    (b) Administrator means the Administrator of the Agricultural 
Marketing Service or any officer or employee of the Department to whom 
authority has been delegated or may hereafter be delegated to act for 
the Administrator.
    (b) Board means the board or council established by the order to 
administer the program.
    (c) Department means the U.S. Department of Agriculture.
    (d) Federal Register means the publication provided for by the 
Federal Register Act, approved July 26, 1935 [44 U.S.C. 1501-1511], and 
acts supplementing and amending it.
    (e) Hearing means that part of the proceeding which involves the 
submission of evidence.
    (f) Judge means any administrative law judge appointed pursuant to 5 
U.S.C. 3105 and assigned to conduct the hearing.
    (g) Hearing means that part of the proceeding that involves the 
submission of evidence.
    (h) Hearing clerk means the Hearing Clerk, U.S. Department of 
Agriculture, Washington, D.C.
    (i) Order means any order or any amendment thereto which may be 
issued pursuant to the Act. The term order shall include plans issued 
under the Acts listed in paragraph (a) of this section.
    (j) Proceeding means a proceeding before the Secretary arising under 
the pertinent section of an Act.
    (k) Secretary means the Secretary of Agriculture of the United 
States, 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 for the Secretary.

[67 FR 44350, July 2, 2002]

[[Page 8]]



Sec. 1200.3  Proposals.

    (a) An order may be proposed by any organization certified pursuant 
to the Act or any interested person affected by the Act, including the 
Secretary. Any person or organization other than the Secretary proposing 
an order shall file with the Administrator a written application, 
together with a copy of the proposal, requesting the Secretary to hold a 
hearing upon the proposal. Upon receipt of such proposal, the 
Administrator shall cause such investigation to be made and such 
consideration to be given as, in the Administrator's opinion, are 
warranted. If the investigation and consideration lead the Administrator 
to conclude that the proposed order will not tend to effectuate the 
declared policy of the Act, or that for other proper reasons a hearing 
should not be held on the proposal, the Administrator shall deny the 
application, and promptly notify the applicant of such denial, which 
notice shall be accompanied by a brief statement of the grounds for the 
denial.
    (b) If the investigation and consideration lead the Administrator to 
conclude that the proposed order will tend to effectuate the declared 
policy of the Act, or if the Secretary desires to propose an order, the 
Administrator shall sign and cause to be served a notice of hearing, as 
provided herein.



Sec. 1200.4  Reimbursement of Secretary's expenses.

    If provided for in the Act or any amendment thereto, expenses 
incurred by the Secretary in preparing or amending the order, 
administering the order, and conducting the referendum shall be 
reimbursed.



Sec. 1200.5  Institution of proceedings.

    (a) Filing and contents of the notice of hearing. The proceeding 
shall be instituted by filing the notice of hearing with the hearing 
clerk. The notice of hearing shall contain a reference to the authority 
under which the order is proposed; shall define the scope of the hearing 
as specifically as may be practicable; shall contain either the terms or 
substance of the proposed order or a description of the subjects and 
issues involved; and shall state the time and place of such hearing, and 
the place where copies of such proposed order may be obtained or 
examined. The time of the hearing shall not be less than 15 days after 
the date of publication of the notice in the Federal Register, as 
provided herein, unless the Administrator shall determine that an 
emergency exists which requires a shorter period of notice, in which 
case the period of notice shall be that which the Administrator may 
determine to be reasonable in the circumstances: Except that in the case 
of hearings on amendments to an order, the time of the hearing may be 
less than 15 days but shall not be less than three days after the date 
of publication in the Federal Register.
    (b) Giving notice of hearing and supplemental publicity. (1) The 
Administrator shall give or cause to be given notice of hearing in the 
following manner:
    (i) By publication of the notice of hearing in the Federal Register;
    (ii) By mailing a copy of the notice of hearing to each organization 
known by the Administrator to be interested therein;
    (iii) By issuing a press release containing the complete text or a 
summary of the contents of the notice of hearing and making the same 
available to such newspapers as, in the Administrator's discretion, are 
best calculated to bring the notice to the attention of the persons 
interested therein; and
    (iv) By forwarding copies of the notice of hearing addressed to 
those Governors of the States and executive heads of territories and 
possessions of the United States and the mayor of the District of 
Columbia that are directly affected by such order.
    (2) Legal notice of the hearing shall be deemed to be given if 
notice is given in the manner provided by paragraph (b)(1)(i) of this 
section; failure to give notice in the manner provided in paragraphs 
(b)(2) (ii), (iii), and (iv) of this section shall not affect the 
legality of the notice.
    (c) Record of notice and supplemental publicity. There shall be 
filed with the hearing clerk or submitted to the judge at the hearing an 
affidavit or certificate of the person giving the notice provided in 
paragraphs (b)(1) (iii) and (iv) of this section. In regard to the

[[Page 9]]

provisions relating to mailing in paragraph (b)(1)(ii) of this section, 
determination by the Administrator that such provisions have been 
complied with shall be filed with the hearing clerk or submitted to the 
judge at the hearing. In the alternative, if notice is not given in the 
manner provided in paragraphs (b)(1) (ii), (iii), and (iv) of this 
section there shall be filed with the hearing clerk or submitted to the 
judge at the hearing a determination by the Administrator that such 
notice is impracticable, unnecessary, or contrary to the public interest 
with a brief statement of the reasons for such determination. 
Determinations by the Administrator as herein provided shall be final.



Sec. 1200.6  Docket number.

    Each proceeding, immediately following its institution, shall be 
assigned a docket number by the hearing clerk and thereafter the 
proceeding may be referred to by such number.



Sec. 1200.7  Judge.

    (a) Assignment. No judge who has any pecuniary interest in the 
outcome of a proceeding shall serve as judge in such proceeding.
    (b) Power of judge. Subject to review by the Secretary, as provided 
elsewhere in this subpart, the judge in any proceeding shall have power 
to:
    (1) Rule upon motions and requests;
    (2) Change the time and place of hearings, and adjourn the hearing 
from time to time or from place to place;
    (3) Administer oaths and affirmations and take affidavits;
    (4) Examine and cross-examine witnesses and receive evidence;
    (5) Admit or exclude evidence;
    (6) Hear oral argument on facts or law; and
    (7) Do all acts and take all measures necessary for the maintenance 
of order at the hearings and the efficient conduct of the proceeding.
    (c) Who may act in absence of judge. In case of the absence of the 
judge or the judge's inability to act, the powers and duties to be 
performed by the judge under this part in connection with a proceeding 
may, without abatement of the proceeding unless otherwise ordered by the 
Secretary, be assigned to any other judge.
    (d) Disqualification of judge. The judge may at any time withdraw as 
judge in a proceeding if such judge deems himself or herself to be 
disqualified. Upon the filing by an interested person in good faith of a 
timely and sufficient affidavit of personal bias or disqualification of 
a judge, the Secretary shall determine the matter as a part of the 
record and decision in the proceeding, after making such investigation 
or holding such hearings, or both, as the Secretary may deem appropriate 
in the circumstances.



Sec. 1200.8  Motions and requests.

    (a) General. (1) All motions and requests shall be filed with the 
hearing clerk, except that those made during the course of the hearing 
may be filed with the judge or may be stated orally and made a part of 
the transcript.
    (2) Except as provided in Sec. 1200.17(b) such motions and requests 
shall be addressed to, and ruled on by, the judge if made prior to 
certification of the transcript pursuant to Sec. 1200.11 or by the 
Secretary if made thereafter.
    (b) Certification to Secretary. The judge may, in his or her 
discretion, submit or certify to the Secretary for decision any motion, 
request, objection, or other question addressed to the judge.



Sec. 1200.9  Conduct of the hearing.

    (a) Time and place. The hearing shall be held at the time and place 
fixed in the notice of hearing, unless the judge shall have changed the 
time or place, in which event the judge shall file with the hearing 
clerk a notice of such change, which notice shall be given in the same 
manner as provided in Sec. 1200.5 (relating to the giving of notice of 
the hearing): Except that if the change in time or place of hearing is 
made less than five days prior to the date previously fixed for the 
hearing, the judge either in addition to or in lieu of causing the 
notice of the change to be given, shall announce, or cause to be 
announced, the change at the time and place previously fixed for the 
hearing.
    (b) Appearances--(1) Right to appear. At the hearing, any interested 
person

[[Page 10]]

shall be given an opportunity to appear, either in person or through 
authorized counsel or representative, and to be heard with respect to 
matters relevant and material to the proceeding. Any interested person 
who desires to be heard in person at any hearing under these rules 
shall, before proceeding to testify, state his or her name, address, and 
occupation. If any such person is appearing through a counsel or 
representative, such person or such counsel or representative shall, 
before proceeding to testify or otherwise to participate in the hearing, 
state for the record the authority to act as such counsel or 
representative, and the names, addresses, and occupations of such person 
and such counsel or representative. Any such person or such counsel or 
representative shall give such other information respecting such 
appearance as the judge may request.
    (2) Debarment of counsel or representative. (i) Whenever, while a 
proceeding is pending before the judge, such judge finds that a person, 
acting as counsel or representative for any person participating in the 
proceeding, is guilty of unethical or unprofessional conduct, the judge 
may order that such person be precluded from further acting as counsel 
or representative in such proceeding. An appeal to the Secretary may be 
taken from any such order, but the proceeding shall not be delayed or 
suspended pending disposition of the appeal: Except that the judge may 
suspend the proceeding for a reasonable time for the purpose of enabling 
the client to obtain other counsel or representative.
    (ii) In case the judge has ordered that a person be precluded from 
further action as counsel or representative in the proceeding, the judge 
within a reasonable time thereafter shall submit to the Secretary a 
report of the facts and circumstances surrounding such order and shall 
recommend what action the Secretary should take respecting the 
appearance of such person as counsel or representative in other 
proceedings before the Secretary. Thereafter the Secretary may, after 
notice and an opportunity for hearing, issue such order respecting the 
appearance of such person as counsel or representative in proceedings 
before the Secretary as the Secretary finds to be appropriate.
    (3) Failure to appear. If any interested person fails to appear at 
the hearing, that person shall be deemed to have waived the right to be 
heard in the proceeding.
    (c) Order of procedure. (1) The judge shall, at the opening of the 
hearing prior to the taking of testimony, have noted as part of the 
record the notice of hearing as filed with the Office of the Federal 
Register and the affidavit or certificate of the giving of notice or the 
determination provided for in Sec. 1200.5(c).
    (2) Evidence shall then be received with respect to the matters 
specified in the notice of the hearing in such order as the judge shall 
announce.
    (d) Evidence--(1) General. The hearing shall be publicly conducted, 
and the testimony given at the hearing shall be reported verbatim.
    (i) Every witness shall, before proceeding to testify, be sworn or 
make affirmation. Cross-examination shall be permitted to the extent 
required for a full and true disclosure of the facts.
    (ii) When necessary, in order to prevent undue prolongation of the 
hearing, the judge may limit the number of times any witness may testify 
to the same matter or the amount of corroborative or cumulative 
evidence.
    (iii) The judge shall, insofar as practicable, exclude evidence 
which is immaterial, irrelevant, or unduly repetitious, or which is not 
of the sort upon which responsible persons are accustomed to rely.
    (2) Objections. If a party objects to the admission or rejection of 
any evidence or to any other ruling of the judge during the hearing, 
such party shall state briefly the grounds of such objection, whereupon 
an automatic exception will follow if the objection is overruled by the 
judge. The transcript shall not include argument or debate thereon 
except as ordered by the judge. The ruling of the judge on any objection 
shall be a part of the transcript. Only objections made before the judge 
may subsequently be relied upon in the proceeding.
    (3) Proof and authentication of official records or documents. An 
official record or document, when admissible for any

[[Page 11]]

purpose, shall be admissible as evidence without the presence of the 
person who made or prepared the same. The judge shall exercise 
discretion in determining whether an official publication of such record 
or document shall be necessary, or whether a copy would be permissible. 
If permissible such a copy should be attested to by the person having 
legal custody of it, and accompanied by a certificate that such person 
has the custody.
    (4) Exhibits. All written statements, charts, tabulations, or 
similar data offered in evidence at the hearing shall, after 
identification by the proponent and upon satisfactory showing of 
authenticity, relevancy, and materiality, be numbered as exhibits and 
received in evidence and made a part of the record. Such exhibits shall 
be submitted in quadruplicate and in documentary form. In case the 
required number of copies is not made available, the judge shall 
exercise discretion as to whether said exhibits shall, when practicable, 
be read in evidence or whether additional copies shall be required to be 
submitted within a time to be specified by the judge. If the testimony 
of a witness refers to a statute, or to a report or document (including 
the record of any previous hearing), the judge, after inquiry relating 
to the identification of such statute, report, or document, shall 
determine whether the same shall be produced at the hearing and 
physically be made a part of the evidence as an exhibit, or whether it 
shall be incorporated into the evidence by reference. If relevant and 
material matter offered in evidence is embraced in a report or document 
(including the record of any previous hearing) containing immaterial or 
irrelevant matter, such immaterial or irrelevant matter shall be 
excluded and shall be segregated insofar as practicable, subject to the 
direction of the judge.
    (5) Official notice. Official notice at the hearing may be taken of 
such matters as are judicially noticed by the courts of the United 
States and of any other matter of technical, scientific, or commercial 
fact of established character: Except that interested persons shall be 
given an adequate period of time, at the hearing or subsequent to it, of 
matters so noticed and shall be given adequate opportunity to show that 
such facts are inaccurate or are erroneously noticed.
    (6) Offer of proof. Whenever evidence is excluded from the record, 
the party offering such evidence may make an offer of proof, which shall 
be included in the transcript. The offer of proof shall consist of a 
brief statement describing the evidence to be offered. If the evidence 
consists of a brief oral statement or of an exhibit, it shall be 
inserted into the transcript in toto. In such event, it shall be 
considered a part of the transcript if the Secretary decides that the 
judge's ruling in excluding the evidence was erroneous. The judge shall 
not allow the insertion of such evidence in toto if the taking of such 
evidence will consume a considerable length of time at the hearing. In 
the latter event, if the Secretary decides that the judge erred in 
excluding the evidence, and that such error was substantial, the hearing 
shall be reopened to permit the taking of such evidence.



Sec. 1200.10  Oral and written arguments.

    (a) Oral argument before the judge. Oral argument before the judge 
shall be in the discretion of the judge. Such argument, when permitted, 
may be limited by the judge to any extent that the judge finds necessary 
for the expeditious disposition of the proceeding and shall be reduced 
to writing and made part of the transcript.
    (b) Briefs, proposed findings, and conclusions. The judge shall 
announce at the hearing a reasonable period of time within which 
interested persons may file with the hearing clerk proposed findings and 
conclusions, and written arguments or briefs, based upon the evidence 
received at the hearing, citing, where practicable, the page or pages of 
the transcript of the testimony where such evidence appears. Factual 
material other than that adduced at the hearing or subject to official 
notice shall not be alluded to therein, and, in any case, shall not be 
considered in the formulation of the order. If the person filing a brief 
desires the Secretary to consider any objection made by such person to a 
ruling of the judge, as provided in Sec. 1200.9(d), that person shall 
include in the brief a

[[Page 12]]

concise statement concerning each such objection, referring, where 
practicable, to the pertinent pages of the transcript.



Sec. 1200.11  Certification of the transcript.

    The judge shall notify the hearing clerk of the close of a hearing 
as soon as possible thereafter and of the time for filing written 
arguments, briefs, proposed findings, and proposed conclusions and shall 
furnish the hearing clerk with such other information as may be 
necessary. As soon as possible after the hearing, the judge shall 
transmit to the hearing clerk an original and three copies of the 
transcript of the testimony and the original and all copies of the 
exhibits not already on file in the office of the hearing clerk. The 
judge shall attach to the original transcript of the testimony a 
certificate stating that, to the best of the judge's knowledge and 
belief, the transcript is a true transcript of the testimony given at 
the hearing, except in such particulars as the judge shall specify, and 
that the exhibits transmitted are all the exhibits as introduced at the 
hearing with such exceptions as the judge shall specify. A copy of such 
certificate shall be attached to each of the copies of the transcript of 
testimony. In accordance with such certificate the hearing clerk shall 
note upon the official record copy, and cause to be noted on other 
copies of the transcript, each correction detailed therein by adding or 
crossing out (but without obscuring the text as originally transcribed) 
at the appropriate place any words necessary to make the same conform to 
the correct meaning, as certified by the judge. The hearing clerk shall 
obtain and file certifications to the effect that such corrections have 
been effectuated in copies other than the official record copy.



Sec. 1200.12  Copies of the transcript.

    (a) During the period in which the proceeding has an active status 
in the Department, a copy of the transcript and exhibits shall be kept 
on file in the office of the hearing clerk where it shall be available 
for examination during official hours of business. Thereafter said 
transcript and exhibits shall be made available by the hearing clerk for 
examination during official hours of business after prior request and 
reasonable notice to the hearing clerk.
    (b) Transcripts of hearings shall be made available to any person at 
actual cost of duplication.

[47 FR 44684, Oct. 8, 1982, as amended at 67 FR 10830, Mar. 11, 2002]



Sec. 1200.13  Administrator's recommended decision.

    (a) Preparation. As soon as practicable following the termination of 
the period allowed for the filing of written arguments or briefs and 
proposed findings and conclusions the Administrator shall file with the 
hearing clerk a recommended decision.
    (b) Contents. The Administrator's recommended decision shall 
include: (1) a preliminary statement containing a description of the 
history of the proceedings, a brief explanation of the material issues 
of fact, law, or discretion presented on the record, and proposed 
findings and conclusions about such issues, including the reasons or 
basis for such proposed findings; (2) a ruling upon each proposed 
finding or conclusion submitted by interested persons; and (3) an 
appropriate proposed order effectuating the Administrator's 
recommendations.
    (c) Exceptions to recommended decision. Immediately following the 
filing of the recommended decision, the Administrator shall give notice 
thereof and opportunity to file exceptions thereto by publication in the 
Federal Register. Within a period of time specified in such notice any 
interested person may file with the hearing clerk exceptions to the 
Administrator's proposed order and a brief in support of such 
exceptions. Such exceptions shall be in writing, shall refer, where 
practicable, to the related pages of the transcript, and may suggest 
appropriate changes in the proposed order.
    (d) Omission of recommended decision. The procedure provided in this 
section may be omitted only if the Secretary finds on the basis of the 
record that due and timely execution of the Secretary's functions 
imperatively and unavoidably requires such omission.

[[Page 13]]



Sec. 1200.14  Submission to Secretary.

    Upon the expiration of the period allowed for filing exceptions or 
upon request of the Secretary, the hearing clerk shall transmit to the 
Secretary the record of the proceeding. Such record shall include: All 
motions and requests filed with the hearing clerk and rulings thereon; 
the certified transcript; any proposed findings or conclusions or 
written arguments or briefs that may have been filed; the 
Administrator's recommended decision, if any; and such exceptions as may 
have been filed.



Sec. 1200.15  Decision by the Secretary.

    After due consideration of the record, the Secretary shall render a 
decision. Such decision shall become a part of the record and shall 
include: (a) a statement of findings and conclusions, including the 
reasons or basis for such findings, upon all the material issues of 
fact, law, or discretion presented on the record, (b) a ruling upon each 
proposed finding and proposed conclusion not previously ruled upon in 
the record, (c) a ruling upon each exception filed by interested 
persons, and (d) either (1) denial of the proposal to issue an order, or 
(2) if the findings upon the record so warrant, an order, the provisions 
of which shall be set forth and such order shall be complete except for 
its effective date and any determinations to be made under Sec. 
1200.16: Except that such order shall not be executed, issued, or made 
effective until and unless the Secretary determines that the 
requirements of Sec. 1200.16 have been met.



Sec. 1200.16  Execution of the order.

    (a) Issuance of the order. The Secretary shall, if the Secretary 
finds that it will tend to effectuate the purposes of the Act, issue and 
make effective the order which was filed as part of the Secretary's 
decision pursuant to Sec. 1200.15: Except that the issuance of such 
order shall have been approved or favored by eligible voters as required 
by the applicable Act.
    (b) Effective date of order. No order shall become effective in less 
than 30 days after its publication in the Federal Register, unless the 
Secretary, upon good cause found and published with the order, fixes an 
earlier effective date.
    (c) Notice of issuance. After issuance of the order, such order 
shall be filed with the hearing clerk, and notice thereof, together with 
notice of the effective date, shall be given by publication in the 
Federal Register.



Sec. 1200.17  Filing, extension of time, effective date of filing, and
computation of time.

    (a) Number of copies. Except as provided otherwise herein, all 
documents or papers required or authorized by the foregoing provisions 
hereof to be filed with the hearing clerk shall be filed in 
quadruplicate. Any documents or papers so required or authorized to be 
filed with the hearing clerk shall be filed with the judge during the 
course of an oral hearing.
    (b) Extension of time. The time for filing of any document or paper 
required or authorized by the foregoing provisions to be filed may be 
extended by the judge (before the record is so certified by the judge) 
or by the Administrator (after the record is so certified by the judge 
but before it is transmitted to the secretary), or by the Secretary 
(after the record is transmitted to the secretary) upon request filed, 
and if, in the judgment of the judge, Administrator, or the Secretary, 
as the case may be, there is good reason for the extension. All rulings 
made pursuant to this paragraph shall be filed with the hearing clerk.
    (c) Effective date of filing. Any document or paper required or 
authorized in this subpart to be filed shall be deemed to be filed at 
the time it is received by the Hearing Clerk.
    (d) Computation of time. Each day, including Saturdays, Sundays, and 
legal public holidays, shall be included in computing the time allowed 
for filing any document or paper: Provided, That when the time for 
filing a document or paper expires on a Saturday, Sunday, or legal 
public holiday, the time allowed for filing the document or paper shall 
be extended to include the following business day.

[47 FR 44684, Oct. 8, 1982, as amended at 67 FR 10830, Mar. 11, 2002]

[[Page 14]]



Sec. 1200.18  Ex parte communications.

    (a) At no stage of the proceeding following the issuance of a notice 
of hearing and prior to the issuance of the Secretary's decision thereon 
shall an employee of the Department who is or may reasonably be expected 
to be involved in the decision process of the proceeding discuss ex 
parte the merits of the proceeding with any person having an interest in 
the proceeding or with any representative of such person: Except that 
procedural matters and status reports shall not be included within the 
limitation: And except further that an employee of the Department who is 
or may reasonably be expected to be involved in the decisional process 
of the proceeding may discuss the merits of the proceeding with such a 
person if all parties known to be interested in the proceeding have been 
given notice and an opportunity to participate. A memorandum of any such 
discussion shall be included in the record of the proceeding.
    (b) No person interested in the proceeding shall make or knowingly 
cause to be made to an employee of the Department who is or may 
reasonably be expected to be involved in the decisional process of the 
proceeding an ex parte communication relevant to the merits of the 
proceeding except as provided in paragraph (a) of this section.
    (c) If an employee of the Department who is or may reasonably be 
expected to be involved in the decisional process of the proceeding 
receives or makes a communication prohibited by this section, the 
Department shall place on the public record of the proceeding:
    (1) All such written communications;
    (2) Memoranda stating the substance of all such oral communications; 
and
    (3) All written responses, and memoranda, stating the substance of 
all oral responses thereto.
    (d) Upon receipt of a communication knowingly made or knowingly 
caused to be made by a party in violation of this section, the 
Department may, to the extent consistent with the interest of justice 
and the policy of the underlying statute, take whatever steps are deemed 
necessary to nullify the effect of such communication.
    (e) For the purposes of this section, ex parte communication means 
any oral or written communication not on the public record with respect 
to which reasonable prior notice to all interested parties is not given, 
but which shall not include requests for status reports (including 
requests on procedural matters) on a proceeding.



Sec. 1200.19  Additional documents to be filed with hearing clerk.

    In addition to the documents or papers required or authorized by the 
foregoing provisions of this subpart to be filed with the hearing clerk, 
the hearing clerk shall receive for filing and shall have custody of all 
papers, reports, records, orders, and other documents which relate to 
the administration of any order and which the Secretary is required to 
issue or to approve.



Sec. 1200.20  Hearing before Secretary.

    The Secretary may act in the place and stead of a judge in any 
proceeding herein. When the Secretary so acts, the hearing clerk shall 
transmit the record to the Secretary at the expiration of the period 
provided for the filing of proposed findings of fact, conclusions, and 
orders, and the Secretary shall then, after due consideration of the 
record, issue the final decision in the proceeding: Except the Secretary 
may issue a tentative decision in which event the parties shall be 
afforded an opportunity to file exceptions before the issuance of the 
final decision.



Subpart B_Rules of Practice Governing Proceedings on Petitions to Modify 
   or To Be Exempted from Research, Promotion and Information Programs

    Authority: 7 U.S.C. 2111, 2620, 2713, 4509, 4609, 4814, 4909, 6008, 
6106, 6306, 6410, 6807, 7106, 7418, 7486, and 7806.

    Source: 60 FR 37326, July 20, 1995, unless otherwise noted.



Sec. 1200.50  Words in the singular form.

    Words in this subpart in the singular form shall be deemed to import 
the

[[Page 15]]

plural, and vice versa, as the case may demand.



Sec. 1200.51  Definitions.

    As used in this subpart, the terms as defined in the Act shall apply 
with equal force and effect. In addition, unless the context otherwise 
requires:
    (a) The term Act means the Commodity Research, Promotion, and 
Information Act of 1996 [7 U.S.C. 7401-7425]; the Cotton Research and 
Promotion Act, as amended [7 U.S.C. 2101-2119]; the Dairy Production 
Stabilization Act of 1983 [7 U.S.C. 4501-4513]; the Egg Research and 
Consumer Information Act, as amended [7 U.S.C. 2701-2718]; the Fluid 
Milk Promotion Act of 1990 [7 U.S.C. 6401-6417]; the Hass Avocado 
Promotion, Research, and Information Act of 2000 [7 U.S.C. 7801-7813]; 
the Honey Research, Promotion, and Consumer Information Act, as amended 
[7 U.S.C. 4601-4612]; the Mushroom Promotion, Research, and Consumer 
Information Act of 1990 [7 U.S.C. 6101-6112]; the Pecan Promotion and 
Research Act of 1990 [7 U.S.C. 6001-6013]; the Popcorn Promotion, 
Research, and Consumer Information Act [7 U.S.C. 7481-7491]; the Pork 
Promotion, Research, and Consumer Information Act [7 U.S.C. 4801-4819]; 
the Potato Research and Promotion Act, as amended [7 U.S.C. 2611-2627]; 
the Sheep Promotion, Research, and Information Act of 1994 [7 U.S.C. 
7101-7111]; the Soybean Promotion, Research, and Consumer Information 
Act [7 U.S.C. 6301-6311]; and the Watermelon Research and Promotion Act, 
as amended, [7 U.S.C. 4901-4916].
    (b) Administrator means the Administrator of the Agricultural 
Marketing Service or any officer or employee of the Department to whom 
authority has been delegated or may hereafter be delegated to act for 
the Administrator.
    (c) Decision means the judge's initial decision and includes the 
judge's:
    (1) Findings of fact and conclusions with respect to all material 
issues of fact, law or discretion, as well as the reasons or basis 
thereof;
    (2) Order; and
    (3) Rulings on findings, conclusions and orders submitted by the 
parties.
    (d) Department means the U.S. Department of Agriculture.
    (e) Hearing means that part of the proceedings which involves the 
submission of evidence.
    (f) Hearing clerk means the Hearing Clerk, U.S. Department of 
Agriculture, Washington, D.C.
    (g) Judge means any administrative law judge, appointed pursuant to 
5 U.S.C. 3105, and assigned to the proceeding involved.
    (h) Order means any order or any amendment thereto which may be 
issued pursuant to the Act. The term order shall include plans issued 
under the Acts listed in paragraph (a) of this section.
    (i) Party includes the Department.
    (j) Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity subject 
to an order or to whom an order is sought to be made applicable, or on 
whom an obligation has been imposed or is sought to be imposed under an 
order.
    (k) Petition includes an amended petition.
    (l) Proceeding means a proceeding before the Secretary arising under 
the pertinent section of an Act.
    (m) Secretary means the Secretary of Agriculture of the United 
States, 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 for the Secretary.

[67 FR 44350, July 2, 2002]



Sec. 1200.52  Institution of proceeding.

    (a) Filing and service of petitions. Any person subject to an order 
desiring to complain that such order or any provision of such order or 
any obligation imposed in connection with an order is not in accordance 
with law, shall file with the hearing clerk, in quintuplicate, a 
petition in writing addressed to the Secretary. Promptly upon receipt of 
the petition in writing the hearing clerk shall transmit a true copy 
thereof to the Administrator and the General Counsel, respectively.
    (b) Contents of petitions. A petition shall contain:
    (1) The correct name, address, and principal place of business of 
the petitioner. If the petitioner is a corporation, such fact shall be 
stated, together

[[Page 16]]

with the name of the State of incorporation, the date of incorporation, 
and the names, addresses, and respective positions held by its officers 
and directors; if an unincorporated association, the names and addresses 
of its officers, and the respective positions held by them; if a 
partnership, the name and address of each partner;
    (2) Reference to the specific terms or provisions of the order, or 
the interpretation or application of such terms or provisions, which are 
complained of;
    (3) A full statement of the facts, avoiding a mere repetition of 
detailed evidence, upon which the petition is based, and which it is 
desired that the Secretary consider, setting forth clearly and concisely 
the nature of the petitioner's business and the manner in which 
petitioner claims to be affected by the terms or provisions of the order 
or the interpretation or application thereof, which are complained of;
    (4) A statement of the grounds on which the terms or provisions of 
the order, or the interpretation or application thereof, which are 
complained of, are challenged as not in accordance with law;
    (5) Requests for the specific relief which the petitioner desires 
the Secretary to grant; and
    (6) An affidavit by the petitioner, or, if the petitioner is not an 
individual, by an officer of the petitioner having knowledge of the 
facts stated in the petition, verifying the petition and stating that it 
is filed in good faith and not for purposes of delay.
    (c) A motion to dismiss a petition: filing, contents, and responses 
to a petition. If the Administrator is of the opinion that the petition, 
or any portion thereof, does not substantially comply, in form or 
content, with the Act or with requirements of paragraph (b) of this 
section, the Administrator may, within 30 days after the service of the 
petition, file with the hearing clerk a motion to dismiss the petition, 
or any portion of the petition, on one or more of the grounds stated in 
this paragraph. Such motion shall specify the grounds for objection to 
the petition and if based, in whole or in part, on allegations of fact 
not appearing on the face of the petition, shall be accompanied by 
appropriate affidavits or documentary evidence substantiating such 
allegations of fact. The motion may be accompanied by a memorandum of 
law. Upon receipt of such motion, the hearing clerk shall cause a copy 
thereof to be served upon the petitioner, together with a notice stating 
that all papers to be submitted in opposition to such motion, including 
any memorandum of law, must be filed by the petitioner with the hearing 
clerk not later than 20 days after the service of such notice upon the 
petitioner. Upon the expiration of the time specified in such notice, or 
upon receipt of such papers from the petitioner, the hearing clerk shall 
transmit all papers which have been filed in connection with the motion 
to the judge for the judge's consideration.
    (d) Further proceedings. Further proceedings on petitions to modify 
or to be exempted from the Order shall be governed by Sec. Sec. 
900.52(c)(2) through 900.71 of the Rules of Practice Governing 
Proceedings on Petitions To Modify or To Be Exempted From Marketing 
Orders. However, each reference to marketing order in the title shall 
mean order.

[47 FR 44684, Oct. 8, 1982, as amended at 67 FR 10830, Mar. 11, 2002]



PART 1205_COTTON RESEARCH AND PROMOTION--Table of Contents



            Subpart_Procedures for Conduct of Sign-up Period

                               Definitions

Sec.
1205.10 Act.
1205.11 Administrator.
1205.12 Cotton.
1205.13 Upland cotton.
1205.14 Department.
1205.15 Farm Service Agency.
1205.16 Order.
1205.17 Person.
1205.18 Producer.
1205.19 Importer.
1205.20 Representative period.
1205.21 Secretary.
1205.22 State.
1205.23 United States.

                               Procedures

1205.24 General.
1205.25 Supervision of sign-up period.
1205.26 Eligibility.
1205.27 Participation in the sign-up period.
1205.28 Counting.

[[Page 17]]

1205.29 Reporting results.
1205.30 Instructions and forms.

   Subpart_Procedures for the Conduct of Referenda in Connection With 
                   Cotton Research and Promotion Order

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.

               Subpart_Cotton Research and Promotion Order

                               Definitions

1205.301 Secretary.
1205.302 Act.
1205.303 Person.
1205.304 Cotton.
1205.305 Upland cotton.
1205.306 Bale.
1205.307 Fiscal period.
1205.308 Cotton Board.
1205.309 Producer.
1205.310 Importer.
1205.311 Handler.
1205.312 Handle.
1205.313 United States.
1205.314 Cotton-producing State.
1205.315 Marketing.
1205.316 Cotton-Producer organization.
1205.317 Cotton-Importer organization.
1205.318 Contracting organization or association.
1205.319 Cotton-producing region.
1205.320 Marketing year.
1205.321 Part and subpart.

                              Cotton Board

1205.322 Establishment and membership.
1205.323 Term of office.
1205.324 Nominations.
1205.325 Selection.
1205.326 Acceptance.
1205.327 Vacancies.
1205.328 Alternate members.
1205.329 Procedure.
1205.330 Compensation and reimbursement.
1205.331 Powers.
1205.332 Duties.

                         Research and Promotion

1205.333 Research and promotion.

                        Expenses and Assessments

1205.334 Expenses.
1205.335 Assessments.
1205.336 ``Importer Reimbursements''.
1205.337 Influencing governmental action.

                       Reports, Books, and Records

1205.338 Reports.
1205.339 Books and records.
1205.340 Confidential treatment.

              Certification of Cotton Producer Organization

1205.341 Certification of cotton producer organization.
1205.342 Certification of cotton importer organizations.

                              Miscellaneous

1205.343 Suspension and termination.
1205.345 Proceedings after termination.
1205.346 Effect of termination or amendment.
1205.347 Personal liability.
1205.348 Separability.

                     Subpart_Members of Cotton Board

1205.401 Definitions.
1205.402 Determination of Cotton Board membership.
1205.403 Nomination procedure.

               Subpart_Cotton Board Rules and Regulations

                               Definitions

1205.500 Terms defined.

                                 General

1205.505 Communication.

                               Assessments

1205.510 Levy of assessments.
1205.511 Payment and collection.
1205.512 Collecting handlers and time of collection of $1 per bale 
          assessment.
1205.513 Collecting handlers and time of collection of the supplemental 
          assessment.
1205.514 Customs Service and the Collection of the $1 per bale 
          assessment.
1205.515 Customs Service and the collection of the supplemental 
          assessment.
1205.516 Reports and remittance to the Cotton Board.
1205.517 Failure to report and remit.
1205.518 Receipts for payment of assessments.
1205.519 Organic exemption.

                             Reimbursements

1205.520 Procedure for obtaining reimbursement.

                           Warehouse Receipts

1205.525 Entry of gin code number.

[[Page 18]]

                           Reports and Records

1205.530 Gin reports and reporting schedule.
1205.531 Records.
1205.532 Retention period for reports and records.
1205.533 Availability of reports and records.

                        Confidential Information

1205.540 Confidential books, records, and reports.
1205.541 OMB control numbers.

Subpart--Fiscal Period [Reserved]

    Authority: 7 U.S.C. 2101-2118 and 7 U.S.C. 7401.



            Subpart_Procedures for Conduct of Sign-up Period

    Source: 62 FR 1660, Jan. 13, 1997, unless otherwise noted.

                               Definitions



Sec. 1205.10  Act.

    The term Act means the Cotton Research and Promotion Act, as amended 
[7 U.S.C 2101-2118; Public Law 89-502, 80 Stat 279, as amended].



Sec. 1205.11  Administrator.

    The term 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.



Sec. 1205.12  Cotton.

    The term cotton means all Upland cotton harvested in the United 
States and all imports of Upland cotton, including the Upland cotton 
content of products derived thereof. The term cotton does not include 
imported cotton for which the assessment is less than the value of $2.00 
per line item entry as established by regulations.

[62 FR 1660, Jan. 13, 1997, as amended at 67 FR 21169, Apr. 30, 2002]



Sec. 1205.13  Upland cotton.

    The term Upland cotton means all cultivated varieties of the species 
Gossypium hirsutum L.



Sec. 1205.14  Department.

    The term Department means the U.S. Department of Agriculture.



Sec. 1205.15  Farm Service Agency.

    The term Farm Service Agency--formerly Agricultural Stabilization 
and Conservation Service (ASCS)--also referred to as ``FSA,'' means the 
Farm Service Agency of the Department.



Sec. 1205.16  Order.

    The term Order means the Cotton Research and Promotion Order.



Sec. 1205.17  Person.

    The term person means any individual 18 years of age or older, or 
any partnership, corporation, association, or any other entity.



Sec. 1205.18  Producer.

    The term producer means any person who shares in a cotton crop, or 
in the proceeds thereof, as an owner of the farm, cash tenant, landlord 
of a share tenant, share tenant, or sharecropper, that planted the 
cotton during the representative period.

[67 FR 21169, Apr. 30, 2002]



Sec. 1205.19  Importer.

    The term importer means any person who enters, or withdraws from 
warehouse, cotton for consumption in the customs territory of the United 
States, and the term import means any such entry.



Sec. 1205.20  Representative period.

    The term representative period means the 2006 calendar year.

[72 FR 51160, Sept. 6, 2007]



Sec. 1205.21  Secretary.

    The term Secretary means the Secretary of Agriculture of the United 
States, or any other officer or employee of the Department to whom 
authority has been delegated to act in the Secretary's stead.



Sec. 1205.22  State.

    The term State means each of the 50 states.

[[Page 19]]



Sec. 1205.23  United States.

    The term United States means the 50 states of the United States of 
America.

                               Procedures



Sec. 1205.24  General.

    A sign-up period will be conducted to determine whether eligible 
producers and importers favor the conduct of a referendum on the 
continuance of the 1991 amendments to the Order.
    (a) If the Secretary determines, based on the results of the sign-up 
period, that at least 10 percent (4,622) or more of the number of cotton 
producers and importers who voted in the 1991 referendum request the 
conduct of a continuance referendum on the 1991 Order amendments, a 
referendum will be held within 12 months after the end of the sign-up 
period. Not more than 20 percent of the total requests counted toward 
the 10 percent figure may be from producers from any one state or from 
importers of cotton.
    (b) If the Secretary determines that fewer than 10 percent (4,622) 
of the number of producers and importers who voted in the 1991 
referendum do not favor a continuance referendum, no referendum will be 
held.



Sec. 1205.25  Supervision of sign-up period.

    The Administrator shall be responsible for conducting the sign-up 
period in accordance with this subpart.



Sec. 1205.26  Eligibility.

    Only persons who meet the eligibility requirements in this subpart 
may participate in the sign-up period. No person is entitled to sign up 
more than once.
    (a) Except as set forth in paragraphs (b) and (c) of this section, 
the following persons are eligible to request the conduct of a 
continuance referendum:
    (1) Any person who was engaged in the production of Upland cotton 
during calendar year 2006; and
    (2) Any person who was an importer of Upland cotton and imported 
Upland cotton in excess of the value of $2.00 per line item entry during 
calendar year 2006.
    (b) A general partnership is not eligible to request a continuance 
referendum, however, the individual partners of an eligible general 
partnership are each entitled to submit a request.
    (c) Where a group of individuals is engaged in the production of 
Upland cotton under the same lease or cropping agreement, only the 
individual or individuals who signed or entered into the lease or 
cropping agreement are eligible to participate in the sign-up period. 
Individuals who are engaged in the production of Upland cotton as joint 
tenants, tenants in common, or owners of community property, are each 
entitled to submit a request if they share in the proceeds of the 
required crop as owners, cash tenants, share tenants, sharecroppers or 
landlords of a fixed rent, standing rent or share tenant.
    (d) An officer or authorized representative of a qualified 
corporation, association, or limited partnership may submit a request on 
behalf of that corporation, association, or limited partnership.
    (e) A guardian, administrator, executor, or trustee of any qualified 
estate or trust may submit a request on behalf of that estate or trust.
    (f) An individual may not submit a request on behalf of another 
individual.
    (g) Participation in the sign-up by proxy or power of attorney is 
not authorized.

[62 FR 1660, Jan. 13, 1997, as amended at 67 FR 21169, Apr. 30, 2002; 72 
FR 51160, Sept. 6, 2007]



Sec. 1205.27  Participation in the sign-up period.

    The sign-up period will be from September 4, 2007, through November 
30, 2007. Those persons who favor the conduct of a continuance 
referendum and who wish to request that USDA conduct such a referendum 
may do so by submitting such request in accordance with this section. 
All requests must be received by the appropriate USDA office by November 
30, 2007.
    (a) Before the sign-up period begins, FSA shall establish a list of 
known, eligible, Upland cotton producers in the country that it serves 
during the representative period, and AMS shall also establish a list of 
known, eligible Upland cotton importers.
    (b) Before the start of the sign-up period, AMS shall mail a request 
form to

[[Page 20]]

each known, eligible, cotton importer. Importers who wish to request a 
referendum and who do not receive a request form in the mail by 
September 4, 2007, may particiapte in the sign-up period by submitting a 
signed, written request for a continuance referendum, along with a copy 
of a U.S. Customs and Border Protection form 7501 showing payment of a 
cotton assessment for calendar year 2006. Importers must submit their 
requests and supporting documents to USDA, FSA, DAFO, Attention: Rick 
Pinkston, P.O. Box 23103, Washington, DC 20026-3103. All requests and 
supporting documents must be received by November 30, 2007.
    (c) Each person on the county FSA office lists may participate in 
the sign-up period. Eligible producers must date and sign their name on 
the ``County FSA Office Sign-up Sheet.'' A person whose name does not 
appear on the county FSA office list may participate in the sign-up 
period.
    Such person must be identified on FSA-578 during the representative 
period or provide documentation that demonstrates that the person was a 
cotton producer during the representative period. Cotton producers not 
listed on the FSA-578 shall submit at least one sales receipt for cotton 
they planted during the representative period. Cotton producers must 
make requests to the county FSA office where the producer's farm is 
located. If the producer's land is in more than one county, the producer 
shall make request at the county officer where FSA administratively 
maintains and processes the producer's farm records. It is the 
responsibility of the person to provide the information need by the 
county FSA office to determine eligibility. It is not the responsibility 
of the county FSA office to obtain this information. If any person whose 
name does not appear on the county FSA office list fails to provide at 
least one sales receipt for the cotton they produced during the 
representative period, the county FSA office shall determine that such 
person is ineligible to participate in the sign-up period, and shall 
note ``ineligible'' in the remarks section next to the person's name on 
the county FSA office sign-up sheet. In lieu of personally appearing at 
a county FSA office, eligible producers may request a sign-up form from 
the county FSA office where the producer's farm is located. If the 
producer's land is in more than one county, the producer shall make the 
request for the sign-up form at the county office where the FSA 
administratively maintains and processes the producer's farm records. 
Such request must be accompanied by a copy of at least one sales receipt 
for cotton they produced during the representative period. The 
appropriate FSA office must receive all completed forms and supporting 
documentation by November 30, 2007.

[72 FR 51161, Sept. 6, 2007]



Sec. 1205.28  Counting.

    County FSA offices and FSA, Deputy Administrator for Field 
Operations (DAFO), shall begin counting requests no later than November 
30, 2007. FSA shall determine the number of eligible persons who favor 
the conduct of a continuance referendum.

[62 FR 1660, Jan. 13, 1997, as amended at 67 FR 21170, Apr. 30, 2002; 72 
FR 51161, Sept. 6, 2007]



Sec. 1205.29  Reporting results.

    (a) Each county FSA office shall prepare and transmit to the state 
FSA office by December 7, 2007, a written report of the number of 
eligible producers who requested the conduct of a referendum, and the 
number of ineligible persons who made requests.
    (b) DAFO shall prepare, by December 7, 2007, a written report of the 
number of eligible importers who requested the conduct of a referendum, 
and the number of ineligible persons who made requests.
    (c) Each state FSA office shall, by December 7, 2007, forward all 
county reports to DAFO. By December 14, 2007, DAFO shall forward its 
report of the total number of eligible producers and importers that 
requested a continuance referendum, through the sign-up period, to the 
Deputy Administrator, Cotton Program, AMS, Stop 0224, 1400 Independence 
Ave., SW., Washington, DC 20250-0224.

[72 FR 51161, Sept. 6, 2007]

[[Page 21]]



Sec. 1205.30  Instructions and forms.

    The Administrator is hereby authorized to prescribe additional 
instructions and forms consistent with the provisions of this subpart to 
govern conduct of the sign-up period.



   Subpart_Procedures for the Conduct of Referenda in Connection With 
                   Cotton Research and Promotion Order

    Source: 74 FR 51070, Oct. 5, 2009, unless otherwise noted.



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. 2101-2118; Pub. L. 89-502, 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 12-month 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 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

[[Page 22]]

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)

[[Page 23]]

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 12-month 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.
    (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

[[Page 24]]

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 20026-3704 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 CN-100 in-person, by mail or by facsimile from FSA county 
offices or through the Internet during the voting period. A completed 
and signed CN-100 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 
CN-100 in-person, 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 CN-100 and supporting 
documentation of CBP Form 7501, must be returned USDA, FSA, DAFO, P.O. 
Box 23704, Washington, DC 20026-3704. 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 in-person 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.

[[Page 25]]

    (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 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.

[[Page 26]]



               Subpart_Cotton Research and Promotion Order

    Source: 31 FR 16758, Dec. 31, 1966, unless otherwise noted.

                               Definitions



Sec. 1205.301  Secretary.

    Secretary means the Secretary of Agriculture of the United States, 
or any officer or employee of the U.S. Department of Agriculture to whom 
authority has heretofore been delegated, or to whom authority may 
hereafter be delegated, to act in his stead.



Sec. 1205.302  Act.

    Act means the Cotton Research and Promotion Act, as amended (7 
U.S.C. 2101-2118; Public Law 89-502, 80 Stat 279, as amended).

[56 FR 64472, Dec. 10, 1991]



Sec. 1205.303  Person.

    Person means any individual, partnership, corporation, association, 
or any other entity.



Sec. 1205.304  Cotton.

    Cotton means:
    (a) All Upland cotton harvested in the United States, and, except as 
used in Sec. Sec. 1205.311 and 1205.335, includes cottonseed of such 
cotton and the products derived from such cotton and its seed, and
    (b) Imports of Upland cotton, including the Upland cotton content of 
the products derived thereof. The term ``cotton'' shall not, however, 
include:
    (1) Any entry of imported cotton by an importer which has a value or 
weight less than a de minimis amount established in regulations issued 
by the Secretary and
    (2) Industrial products as that term is defined by regulation.

[56 FR 64472, Dec. 10, 1991]



Sec. 1205.305  Upland cotton.

    Upland cotton means all cultivated varieties of the species 
Gossypium hirsutum L.

[56 FR 64472, Dec. 10, 1991]



Sec. 1205.306  Bale.

    Except as used in Sec. 1205.322, Bale means the package of lint 
cotton produced at a cotton gin or the amount of processed cotton in a 
manufactured product that is equivalent to a 500 pound bale of lint 
cotton.

[56 FR 64472, Dec. 10, 1991]



Sec. 1205.307  Fiscal period.

    Fiscal period is the 12-month budgetary period and means the 
calendar year unless the Cotton Board, with the approval of the 
Secretary, selects some other 12-months budgetary period.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]



Sec. 1205.308  Cotton Board.

    Cotton Board means the administrative body established pursuant to 
Sec. 1205.318.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]



Sec. 1205.309  Producer.

    Producer means any person who shares in a cotton crop actually 
harvested on a farm, or in the proceeds thereof, as an owner of the 
farm, cash tenant, landlord of a share tenant, share tenant, or 
sharecropper.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]



Sec. 1205.310  Importer.

    Importer means many person who enters, or withdraws from warehouse, 
cotton for consumption in the customs territory of the United States, 
and the term import means any such entry.

[56 FR 64472, Dec. 10, 1991]



Sec. 1205.311  Handler.

    Handler means any person who handles cotton, including the Commodity 
Credit Corporation.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]



Sec. 1205.312  Handle.

    Handle means to harvest, gin, warehouse, compress, purchase, market,

[[Page 27]]

transport, or otherwise acquire ownership or control of cotton.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]



Sec. 1205.313  United States.

    United States means the 50 States of the United States of America.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]



Sec. 1205.314  Cotton-producing State.

    Cotton-producing State means each of the following States and 
combination of States: Alabama; Arizona; Arkansas; California-Nevada; 
Florida; Georgia; Kansas; Louisiana; Mississippi; Missouri-Illinois; New 
Mexico; North Carolina; Oklahoma; South Carolina; Tennessee-Kentucky; 
Texas; Virginia.

[75 FR 24374, May 5, 2010]



Sec. 1205.315  Marketing.

    Marketing includes the sale of cotton or the pledging of cotton to 
the Commodity Credit Corporation as collateral for a price support loan.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]



Sec. 1205.316  Cotton-Producer organization.

    Cotton-Producer organization means any organization which has been 
certified by the Secretary pursuant to Sec. 1205.341.

[56 FR 64472, Dec. 10, 1991]



Sec. 1205.317  Cotton-Importer organization.

    Cotton-Importer organization means any organization which has been 
certified by the Secretary pursuant to Sec. 1205.342.

[56 FR 64472, Dec. 10, 1991]



Sec. 1205.318  Contracting organization or association.

    Contracting organization or association means the organization or 
association with which the Cotton Board has entered into a contract or 
agreement pursuant to Sec. 1205.328(c).

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]



Sec. 1205.319  Cotton-producing region.

    Cotton-producing region means each of the following groups of 
cotton-producing States:
    (a) Southeast Region: Alabama, Florida, Georgia, North Carolina, 
South Carolina, and Virginia;
    (b) Midsouth Region: Arkansas, Louisiana, Mississippi, Missouri-
Illinois, and Tennessee-Kentucky;
    (c) Southwest Region: Kansas, Oklahoma and Texas;
    (d) Western Region: Arizona, California-Nevada, and New Mexico.

[75 FR 24374, May 5, 2010]



Sec. 1205.320  Marketing year.

    Marketing year means a consecutive 12-month period ending on July 
31.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]



Sec. 1205.321  Part and subpart.

    Part means the cotton research and promotion order and all rules, 
regulations and supplemental orders issued pursuant to the act and the 
order, and the aforesaid order shall be a ``subpart'' of such part.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]

                              Cotton Board



Sec. 1205.322  Establishment and membership.

    (a) There is hereby established a Cotton Board composed of:
    (1) Representatives of cotton producers, each of whom shall have an 
alternate, selected by the Secretary from nominations submitted by 
eligible producer organizations within a cotton-producing state, as 
certified pursuant to Sec. 1205.341, or, if the Secretary determines 
that a substantial number of producers are not members of or their 
interests are not represented by any such eligible organizations, from 
nominations made by producers in a manner authorized by the Secretary, 
and
    (2) Representatives of cotton importers, each of whom shall have an 
alternate, selected by the Secretary from nominations submitted by 
eligible importer organizations, as certified pursuant to Sec. 
1205.342, or, if the Secretary determines that a substantial number

[[Page 28]]

of importers are not members of or their interests are not represented 
by any such eligible organization, from nominations made by importers in 
a manner authorized by the Secretary.
    (b) Representation on the Cotton Board shall be as follows:
    (1) Each cotton-producing state shall have at least one member and 
an additional member for each 1 million bales or major fraction (more 
than half) thereof of cotton produced in the state and marketed above 
one million bales during the period specified in the regulations for 
determining Board membership; and
    (2) Cotton importers shall be represented by an appropriate number 
of representatives, as determined by the Secretary, of importers of 
cotton subject to assessment during the period specified in the 
regulations for determining Board membership. That number shall not be 
less than two members. The initial importer representation on the Board 
shall consist of four representatives. The Secretary may, after 
consultation with organizations representing importers, reduce or 
increase the number of importer representatives, in the manner 
prescribed by the Secretary.

[56 FR 64472, Dec. 10, 1991]



Sec. 1205.323  Term of office.

    All members of the Board and their alternatives shall serve for 
terms of three years. Each member and alternate shall continue to serve 
until a successor is selected and has qualified.

[56 FR 64472, Dec. 10, 1991]



Sec. 1205.324  Nominations.

    All nominations authorized under Sec. 1205.322 shall be made within 
such a period of time and in such a manner as the Secretary shall 
prescribe. The eligible producer organizations within each cotton-
producing state, as certified pursuant to Sec. 1205.341, shall caucus 
for the purpose of jointly nominating two qualified persons for each 
member and each alternate member to be selected to represent the cotton 
producers of such cotton-producing state. The eligible importer 
organizations, as certified pursuant to Sec. 1205.342, shall caucus for 
the purpose of jointly nominating two qualified persons for each member 
and alternate member to be selected to represent cotton importers. If 
joint agreement is not reached with respect to the nominees for any such 
position, each such organization may nominate two qualified persons for 
any position on which there is no agreement.

[56 FR 64472, Dec. 10, 1991; 56 FR 66670, Dec. 24, 1991]



Sec. 1205.325  Selection.

    From the nominations made pursuant to Sec. Sec. 1205.322 and 
1205.324, the Secretary shall select the members of the Board and an 
alternate for each member on the basis of representation provided for in 
Sec. Sec. 1205.322 and 1205.323.

[56 FR 64473, Dec. 10, 1991]



Sec. 1205.326  Acceptance.

    Any person selected by the Secretary as a member or as an alternate 
member of the Board shall qualify by filing a written acceptance with 
the Secretary promptly after being notified of such selection.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]



Sec. 1205.327  Vacancies.

    To fill any vacancy occasioned by the failure of any person selected 
as a member or as an alternate member of the Board to qualify, or in the 
event of death, removal, resignation or disqualification of any member 
or alternate member of the Board, a successor for the unexpired term of 
such member or alternate member of the Board shall be nominated and 
selected in the manner specified in Sec. Sec. 1205.322, 1205.324 and 
1205.325.

[56 FR 64473, Dec. 10, 1991]



Sec. 1205.328  Alternate members.

    An alternate member of the Board, during the absence of the member 
for whom the person is the alternate, shall act in the place and stead 
of such member and perform such other duties as assigned. In the event 
of death, removal, resignation or disqualification of a member, the 
alternate for the member shall act for the member until a successor for 
such member is selected

[[Page 29]]

and qualified. In the event that both a producer member of the Board and 
the member's alternate are unable to attend a meeting, the Board may 
designate any other alternate member from the same cotton-producing 
state or region to serve in such member's place and stead of such 
meeting. In the event that both an importer member and the member's 
alternate are unable to attend a meeting, the Board may designate any 
other importer alternate member to serve in such member's place and 
stead at such meeting.

[56 FR 64473, Dec. 10, 1991]



Sec. 1205.329  Procedure.

    A majority of the members of the Board, or alternates acting for 
members, shall constitute a quorum and any action of the Board shall 
require the concurring votes of at least a majority of those present and 
voting. At assembled meetings all votes shall be cast in person. For 
routine and noncontroversial matters which do not require deliberation 
and the exchange of views, and in matters of an emergency nature when 
there is not enough time to call an assembled meeting of the Board, the 
Board may also take action upon the concurring votes of a majority of 
its members by mail, telegraph or telephone, but any such action by 
telephone shall be confirmed promptly in writing.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]



Sec. 1205.330  Compensation and reimbursement.

    The members of the Board, and alternates when acting as members, 
shall serve without compensation but shall be reimbursed for necessary 
expenses, as approved by the Board, incurred by them in the performance 
of their duties under this subpart.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]



Sec. 1205.331  Powers.

    The Board shall have the following powers:
    (a) To administer the provisions of this subpart in accordance with 
its terms and provisions;
    (b) Subject to the approval of the Secretary, to make rules and 
regulations to effectuate the terms and provisions of this subpart 
including the designation of the handler, importer, or other person 
responsible for collecting the assessments authorized by Sec. 1205.335, 
which designation may be of different handlers, importers, or other 
persons, or classes of handlers, importers, or other persons, to 
recognize differences in marketing practices or procedures in any state 
or area;
    (c) To receive, investigate, and report to the Secretary complaints 
of violations of the provisions of this subpart;
    (d) To recommend to the Secretary amendments to this subpart.

[31 FR 16758, Dec. 31, 1966, as amended at 42 FR 4813, Jan. 26, 1977. 
Redesignated and amended at 56 FR 64472, 64473, Dec. 10, 1991]



Sec. 1205.332  Duties.

    The Board shall have the following duties:
    (a) To select from among its members a chairman and such other 
officers as may be necessary for the conduct of its business, and to 
define their duties;
    (b) To appoint or employ such persons as it may deem necessary and 
to determine the compensation and to define the duties of each;
    (c) With the approval of the Secretary, to enter into contracts or 
agreements for the development and submission to it of research and 
promotion plans or projects authorized by Sec. 1205.333, and for the 
carrying out of such plans or projects when approved by the Secretary, 
and for the payment of costs thereof with funds collected pursuant to 
Sec. 1205.335, with an organization or association whose governing body 
consists of cotton producers selected by the cotton-producer 
organizations certified by the Secretary under Sec. 1205.341, in such 
manner that the producers of each cotton-producing state will, to the 
extent practicable, have representation on the governing body of such 
organization in the proportion that the cotton marketed by the producers 
of such state bears to the total marketed by the producers of all 
cotton-producing states. Any such contract or agreement shall provide 
that

[[Page 30]]

such contracting organization or association shall develop and submit 
annually to the Cotton Board, for the purpose of review and making 
recommendations to the Secretary, a program of research, advertising, 
and sales promotion projects, together with a budget, or budgets, which 
shall show the estimated cost to be incurred for such projects, and that 
any such projects shall become effective upon approval by the Secretary. 
Any such contract or agreement shall also provide that the contracting 
organization shall keep accurate records of all its transactions, which 
shall be available to the Secretary and Board on demand, and make an 
annual report to the Cotton Board of activities carried out and an 
accounting for funds received and expended, and such other reports as 
the Secretary may require;
    (d) To review and submit to the Secretary any research and promotion 
plans or projects which have been developed and submitted to it by the 
contracting organization or association, together with its 
recommendations with respect to the approval thereof by the Secretary;
    (e) To submit to the Secretary for his approval budgets on a fiscal 
period basis of its anticipated expenses and disbursements in the 
administration of this subpart, including probable costs of advertising 
and promotion and research and development projects as estimated in the 
budget or budgets submitted to it by the contracting organization or 
association, with the Board's recommendations with respect thereto;
    (f) To maintain such books and records and prepare and submit such 
reports from time to time to the Secretary as he may prescribe, and to 
make appropriate accounting with respect to the receipt and disbursement 
of all funds entrusted to it;
    (g) To cause its books to be audited by a competent public 
accountant at least once each fiscal period and at such other times as 
the Secretary may request, and to submit a copy of each such audit to 
the Secretary;
    (h) To give the Secretary the same notice of meetings of the Board 
as is given to members in order that his representative may attend such 
meetings;
    (i) To act as intermediary between the Secretary and any producer, 
importer, or handler.
    (j) To submit to the Secretary such information as he may request.

[31 FR 16758, Dec. 31, 1966. Redesignated and amended at 56 FR 64472, 
64473, Dec. 10, 1991]

                         Research and Promotion



Sec. 1205.333  Research and promotion.

    The Cotton Board shall in the manner prescribed in Sec. 1205.332(c) 
establish or provide for:
    (a) The establishment, issuance, effectuation, and administration of 
appropriate plans or projects for the advertising and sales promotion of 
cotton and its products, which plans or projects shall be directed 
toward increasing the general demand for cotton or its products in 
accordance with section 6(a) of the act;
    (b) The establishment and carrying on of research and development 
projects and studies with respect to the production, ginning, 
processing, distribution, or utilization of cotton and its products in 
accordance with section 6(b) of the act, to the end that the marketing 
and utilization of cotton may be encouraged, expanded, improved, or made 
more efficient.

[31 FR 16758, Dec. 31, 1966. Redesignated and amended at 56 FR 64472, 
64473, Dec. 10, 1991]

                        Expenses and Assessments



Sec. 1205.334  Expenses.

    (a) The Board is authorized to incur such expenses 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 subpart.
    (b) The Board shall reimburse the Secretary for:
    (1) Expenses up to $300,000 incurred by the Secretary in connection 
with any referendum conducted under the Act and
    (2) Expenses incurred by the Department of Agriculture for 
administrative and supervisory costs up to five employee years annually.

[[Page 31]]

    (c) The Board shall reimburse any agency of the United States 
Government that assists in administering the import provisions of the 
order for a reasonable amount of the expenses incurred by that agency in 
connection therewith.
    (d) The funds to cover such expenses incurred under paragraphs (a), 
(b) and (c) of this section shall be paid from assessments received 
pursuant to Sec. 1205.335.

[42 FR 4813, Jan. 26, 1977. Redesignated and amended at 56 FR 64472, 
64473, Dec. 10, 1991]



Sec. 1205.335  Assessments.

    (a) Each cotton producer or other person for whom cotton is being 
handled shall pay to the handler thereof designated by the Cotton Board 
pursuant to regulations issued by the Secretary and such handler shall 
collect from the producer or other person for whom the cotton, including 
cotton owned by the handler, is being handled, and shall pay to the 
Cotton Board, at such times and in such manner as prescribed by 
regulations issued by the Secretary, assessments as prescribed in 
paragraphs (a) (1) and (2) of this section:
    (1) An assessment at the rate of $1 per bale of cotton handled;
    (2) A supplemental assessment on cotton handled which shall not 
exceed one percent of the value of such cotton as determined by the 
Cotton Board and approved by the Secretary and published in the Cotton 
Board rules and regulations. The rate of the supplemental assessment may 
be increased or decreased by the Cotton Board with the approval of the 
Secretary. The Secretary shall prescribe by regulation whether the 
assessment rate shall be levied on:
    (i) The current value of the cotton, or
    (ii) An average value determined from current and/or historical 
cotton prices and converted to a fixed amount for each bale.
    (b) Each importer of cotton shall pay to the Cotton Board through 
the U.S. Customs Service, or in such other manner and at such times as 
prescribed by regulations issued by the Secretary, assessments as 
prescribed in paragraphs (b)(1) and (2) of this section:
    (1) An assessment of $1 per bale of cotton imported or the bale 
equivalent thereof for cotton products.
    (2) A supplemental assessment on each bale of cotton imported, or 
the bale equivalent thereof for cotton products, which shall not exceed 
one percent of the value of such cotton as determined by the Cotton 
Board and approved by the Secretary and published in the Cotton Board 
rules and regulations. The rate of the supplemental assessment on 
imported cotton shall be the same as that paid on cotton produced in the 
United States. The rate of the supplemental assessment may be increased 
or decreased by the Cotton Board with the approval of the Secretary. The 
Secretary shall prescribe by regulation the value of imported cotton 
based on an average of current and/or historical cotton prices.
    (c) The Secretary may designate by regulation exemptions to 
assessments provided for in this section for the following:
    (1) Entries of products designated by specific Harmonized Tariff 
Schedule numbers which the Secretary determines are composed of U.S. 
cotton or other than Upland cotton, and for;
    (2) Cotton contained in entries of imported cotton and cotton 
products that is U.S. produced cotton or is other than Upland cotton.
    (d) Assessments collected under this section are to be used for such 
expenses and expenditures, including provision for a reasonable reserve, 
as the Secretary finds reasonable and likely to be incurred by the 
Cotton Board and the Secretary under this subpart.

[56 FR 64473, Dec. 10, 1991]



Sec. 1205.336  ``Importer Reimbursements''.

    Any cotton importer against whose imports any assessment is made and 
collected under the authority of the Act who has reason to believe that 
such assessment or any portion of such assessment was made on U.S. 
produced cotton or cotton other than Upland cotton shall have the right 
to demand and receive from the Cotton Board a reimbursement of the 
assessment or portion of the assessment upon submission of proof 
satisfactory to the Board that the importer paid the assessment

[[Page 32]]

and that the cotton was produced in the U.S. or is other than Upland 
cotton. Any such demand shall be made by the importer in accordance with 
regulations and on a form and within a time period prescribed by the 
Board and approved by the Secretary. Such time periods shall provide the 
importer at least 90 days from the date of collection to submit the 
reimbursement form to the Board. Any such reimbursement shall be made 
within 60 days after demand therefor.

[56 FR 64474, Dec. 10, 1991]



Sec. 1205.337  Influencing governmental action.

    No funds collected by the Board under this subpart shall in any 
manner be used for the purpose of influencing governmental policy or 
action except in recommending to the Secretary amendments to this 
subpart.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]

                       Reports, Books, and Records



Sec. 1205.338  Reports.

    Each handler and importer subject to this subpart and importers of 
de minimis amounts of cotton may be required to report to the Cotton 
Board periodically such information as is required by regulations, which 
may include but not be limited to the following:
    (a) Number of bales handled or imported;
    (b) Number of bales on which an assessment was collected;
    (c) Name and address of person from whom the handler has collected 
the assessments on each bale handled or imported;
    (d) Date collection was made on each bale handled or imported.

[56 FR 64474, Dec. 10, 1991]



Sec. 1205.339  Books and records.

    Each handler and importer subject to this subpart and importers of 
de minimis amounts of cotton shall maintain and make available for 
inspection by the Secretary such books and records as are 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 records shall be retained for at least two years 
beyond the marketing year of their applicability.

[56 FR 64474, Dec. 10, 1991]



Sec. 1205.340  Confidential treatment.

    All information obtained from such books, records or reports shall 
be kept confidential by all officers and employees of the Department of 
Agriculture and of the Cotton Board, and only such information so 
furnished or acquired as the Secretary deems relevant shall be disclosed 
by them, and then only in a suit or administrative hearing brought at 
the direction, or upon the request, of the Secretary of Agriculture, or 
to which the Secretary or any officer of the United States is a party, 
and involving this subpart. Nothing in this Sec. 1205.340 shall be 
deemed to prohibit:
    (a) The issuance of general statements based upon the reports of a 
number of handlers or importers subject to this subpart or importers of 
de minimis amounts of cotton, which statements do not identify the 
information furnished by any person, or
    (b) The publication by the direction of the Secretary, of the name 
of any person violating this subpart, together with a statement of the 
particular provisions of this subpart violated by such person.

[56 FR 64474, Dec. 10, 1991]

              Certification of Cotton Producer Organization



Sec. 1205.341  Certification of cotton producer organization.

    Any cotton producer organization within a cotton-producing State may 
request the Secretary for certification of eligibility to participate in 
nominating members and alternate members to represent such State on the 
Cotton Board. Such eligibility shall be based in addition to other 
available information upon a factual report submitted by the 
organization which shall contain information deemed relevant and 
specified by the Secretary for the making of such determination, 
including the following:

[[Page 33]]

    (a) Geographic territory within the State covered by the 
organization's active membership;
    (b) Nature and size of the organization's active membership in the 
State, proportion of total of such active membership accounted for by 
farmers, a map showing the cotton-producing counties in such State in 
which the organization has members, the volume of cotton produced in 
each such county, the number of cotton producers in each such county, 
and the size of the organization's active cotton producer membership in 
each such county;
    (c) The extent to which the cotton producer membership of such 
organization is represented in setting the organization's policies;
    (d) Evidence of stability and permanency of the organization;
    (e) Sources from which the organization's operating funds are 
derived;
    (f) Functions of the organization; and
    (g) The organization's ability and willingness to further the aims 
and objectives of the act.

The primary consideration in determining the eligibility of an 
organization shall be whether its cotton producer membership consists of 
a sufficiently large number of cotton producers who produce a relatively 
significant volume of cotton to reasonably warrant its participation in 
the nomination of members for the Cotton Board. Any cotton producer 
organization found eligible by the Secretary under this Sec. 1205.341 
will be certified by the Secretary, and the Secretary's determination as 
to eligibility is final.

[31 FR 16758, Dec. 31, 1966. Redesignated and amended at 56 FR 64472, 
64474, Dec. 10, 1991]



Sec. 1205.342  Certification of cotton importer organizations.

    Any importer organization may request the Secretary for 
certification of eligibility to participate in nominating members and 
alternate members to represent cotton importers on the Cotton Board. 
Such eligibility shall be based, in addition to other available 
information, upon a factual report submitted by the organization which 
shall contain information deemed relevant and specified by the Secretary 
for the making of such determination, including the following:
    (a) Nature and size of organization's active membership, proportion 
of total active membership accounted for by cotton importers and the 
total amount of cotton imported by the organization's cotton importer 
members;
    (b) The extent to which the cotton importer membership of such 
organization is represented in setting the organization's policies;
    (c) Evidence of stability and permanency of the organization;
    (d) Sources from which the organization's operating funds are 
derived;
    (e) Functions of the organization; and
    (f) The organization's ability and willingness to further the aims 
and objectives of the Act.
    The primary consideration in determining the eligibility of an 
organization shall be whether its membership consist of a sufficient 
large number of cotton importers who import a relatively significant 
volume of cotton to reasonably warrant its participation in the 
nomination of members for the Cotton Board. Any importer organization 
found eligible by the Secretary under this Sec. 1205.342 will be 
certified by the Secretary, and the Secretary's determination as to 
eligibility is final.

[56 FR 64475, Dec. 10, 1991]

                              Miscellaneous



Sec. 1205.343  Suspension and termination.

    (a) The Secretary will, whenever the Secretary finds that this 
subpart or any provision thereof obstructs or does not tend to 
effectuate the declared policy of the Act, terminate or suspend the 
operation of this subpart or such provision.
    (b) The Secretary may conduct a referendum at any time, and shall 
hold a referendum on request of 10 percent or more of the number of 
cotton producers and importers (if subject to the Order) voting in the 
most recent referendum, to determine whether cotton producers and 
importers subject to the Order favor the suspension or termination of 
this subpart, except that in counting such request for a referendum, not 
more than 20 percent of such request may be from producers

[[Page 34]]

from any one state or importers of cotton (if subject to the Order). The 
Secretary shall suspend or terminate such subpart at the end of the 
marketing year whenever the Secretary determines that its suspension or 
termination is approved or favored by a majority of producers and 
importers subject to the Order voting in such referendum who, during a 
representative period determined by the Secretary, have been engaged in 
the production or importation of cotton, and who produced and imported 
more than 50 percent of the volume of cotton produced and imported by 
those voting in the referendum.

[56 FR 64474, Dec. 10, 1991]



Sec. 1205.345  Proceedings after termination.

    (a) Upon the termination of this subpart the Cotton Board shall 
recommend not more than five of its members to the Secretary to serve as 
trustees, for the purpose of liquidating the affairs of the Cotton 
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 Cotton Board under any 
contracts or agreements entered into by it pursuant to Sec. 1205.332 
(c);
    (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 or appropriate to vest in such persons full title 
and right to all funds, property and claims vested in the Board or the 
trustees pursuant to this Sec. 1205.345.
    (c) Any person to whom funds, property or claims have been 
transferred or delivered pursuant to this Sec. 1205.345 shall be 
subject to the same obligation imposed upon the Cotton 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 practicable, in the interest of continuing one or more of 
the cotton research or promotion programs hitherto authorized.

[31 FR 16758, Dec. 31, 1966. Redesignated and amended at 56 FR 64472, 
64475, Dec. 10, 1991]



Sec. 1205.346  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, or (b) 
release or extinguish any violation of this subpart or any regulation 
issued thereunder, or (c) affect or impair any rights or remedies of the 
United States, or of the Secretary, or of any other person, with respect 
to any such violation.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]



Sec. 1205.347  Personal liability.

    No member or alternate member of the Cotton 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 
alternate, except for acts of dishonesty or willful misconduct.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]



Sec. 1205.348  Separability.

    If any provision of this subpart is declared invalid or the 
applicability thereof to any person or circumstances

[[Page 35]]

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.

[31 FR 16758, Dec. 31, 1966. Redesignated at 56 FR 64472, Dec. 10, 1991]



                     Subpart_Members of Cotton Board



Sec. 1205.401  Definitions.

    (a) Cotton Division. Cotton Division means the Cotton Division of 
the Agricultural Marketing Service of the U.S. Department of 
Agriculture.
    (b) Director. Director means the Director of the Cotton Division.

[32 FR 1084, Jan. 31, 1967, as amended at 41 FR 37092, Sept. 2, 1976]



Sec. 1205.402  Determination of Cotton Board membership.

    (a) In determining whether any cotton-producing state is entitled to 
be represented by more than one member of the Cotton Board as provided 
in Sec. 1205.322, average annual production of Upland cotton in terms 
of 480-pound net weight bales for the five most recent marketing years 
will be used as the criteria for determination of such additional 
members.
    (b) In determining whether importers of cotton and cotton-containing 
products are entitled to be represented by more than a minimum of two 
members on the Cotton Board as provided in Sec. 1205.322, the average 
annual volume of imported cotton and the cotton content of imported 
products on which assessments have been collected will be used as the 
criteria for determination of such additional members. This volume of 
cotton will be expressed in terms of 480-pound net weight bales for the 
five most recent calendar years. The initial importer representation on 
the Board shall consist of four importer representatives.
    (c) All members appointed from a state will be entitled to serve a 
full three-year term even though it is determined in a subsequent year 
that a state should have fewer additional members by using the average 
production of the five most recent marketing years as specified in 
paragraph (a) of this section.
    (d) All members appointed to represent importers will be entitled to 
serve a full three-year term even though it is determined in a 
subsequent year that importers should be represented by fewer additional 
members by using the average volume of imports of cotton and the cotton 
content of products on which assessments have been collected as 
specified in paragraph (b) of this section.
    (e) Each year the Director shall:
    (1) Based on the average annual production of Upland cotton in terms 
of 480-pound net weight bales for the five most recent marketing years, 
notify all certified cotton producer organizations in each cotton-
producing state of the number of vacancies to be filled by cotton 
producers on the Cotton Board; and
    (2) Based on the average annual volume of imports of cotton and the 
cotton content of cotton-containing products on which assessments as 
provided for in Sec. 1205.335 have been collected in terms of 480-pound 
net weight bales for the five most recent calendar years, notify all 
certified cotton importer organizations of the number of vacancies to be 
filled by cotton importers on the Cotton Board.

[56 FR 65980, Dec. 20, 1991]



Sec. 1205.403  Nomination procedure.

    (a) The Director shall notify all certified producer organizations 
within each cotton-producing state and all certified importer 
organizations of the location, date, and time of the caucus for 
nominating producer and importer representatives for the Cotton Board as 
specified in Sec. 1205.324. The Director will designate a 
representative from the Cotton Division to attend the caucus meeting of 
cotton producer organizations in each state, and of cotton importer 
organizations. Each eligible cotton producer organization within each 
cotton-producing state and each importer organization will be entitled 
to only one representative at the caucus for the purpose of nominating 
two qualified persons for each member and for each alternate member to 
be selected. The representative of a cotton producer organization shall 
be a cotton

[[Page 36]]

producer and resident of such state, an officer or member of the Board 
of Directors of such organization, and duly and unqualifiedly authorized 
in writing by such organization to make nominations on its behalf. The 
representative of an importer organization shall be an importer of 
cotton and/or products containing cotton, an officer or member of the 
Board of Directors of such organization, and duly and unqualifiedly 
authorized in writing by such organization to make nominations on its 
behalf. The representative of the Director designated to attend the 
caucus meeting of cotton producer organizations in each state and of 
cotton importer organizations will ascertain the qualifications and 
eligibility of each representative of a cotton producer organization or 
cotton importer organization to participate in said meeting and to make 
nominations.
    (b) Each caucus will be conducted as follows:
    (1) The representative from the Cotton Division will act as 
temporary chairperson and will explain the procedure for nominations and 
the duties of the Cotton Board;
    (2) The representatives in attendance from the certified 
organizations will then select a chairperson and secretary;
    (3) At each caucus there will be presented for nomination and there 
will be nominated not less than the number of nominees required under 
the provisions of Sec. Sec. 1205.322, 1205.324, and 1205.402.

[56 FR 65981, Dec. 20, 1991]



               Subpart_Cotton Board Rules and Regulations

    Source: 42 FR 35974, July 13, 1977, unless otherwise noted.

                               Definitions



Sec. 1205.500  Terms defined.

    As used throughout this subpart, unless the context otherwise 
requires, the following terms shall mean:
    (a) ASCS means the Agricultural Stabilization and Conservation 
Service of the U.S. Department of Agriculture.
    (b) Cotton Board means the administrative body established pursuant 
to the Cotton Research and Promotion Order.
    (c) CCC means the Commodity Credit Corporation.
    (d) Current value of Cotton means the gross price per pound of lint 
cotton received by the producer for cotton as shown on the producers' 
settlement document before deductions are made for weight penalties, 
buyer's commission or brokerage fees, marketing fees, the $1 per bale 
cotton research and promotion assessment, picking charges, ginning 
charges, warehouse receiving charges, warehouse storage charges, 
transportation charges or any other charges, plus any amount received by 
a producer in the form of a loan deficiency payment with respect to such 
cotton.
    (e) Form A means Cotton Producer's Note, Form CCC Cotton A.
    (f) Gin code number means the identification number assigned to each 
cotton gin by the Cotton Division, Agricultural Marketing Service, U.S. 
Department of Agriculture.
    (g) Handle means to harvest, gin, warehouse, compress, purchase, 
market, transport, or otherwise acquire ownership or control of cotton.
    (h) Handler means any person who handles cotton, including CCC.
    (i) Marketing means any sale of cotton, or the pledging of cotton to 
CCC as collateral for a price support loan.
    (j) Marketing year means a consecutive 12-month period ending on 
July 31.
    (k) Person means any individual, partnership, corporation, 
association, or any other entity, whether governmental or private.
    (l) Producer means any person who owns or shares in a cotton crop 
(or in the proceeds thereof) as landowner, landlord, tenant, or 
sharecropper.
    (m) Secretary means the Secretary of Agriculture of the United 
States, or any officer or employee of the U.S. Department of Agriculture 
to whom authority has heretofore been delegated, or to whom authority 
may hereafter be delegated, to act in the Secretary's stead.
    (n) Loan deficiency payment means any payment on Upland cotton made 
by the Commodity Credit Corporation to a producer in accordance with 7 
CFR 713.55.

[[Page 37]]

    (o) Importer means any person who enters, or withdraws from 
warehouse, cotton for consumption in the customs territory of the United 
States and import means any such entry.
    (p) Customs Service means the United States Customs Service of the 
United States Department of Treasury.
    (q) Cotton means:
    (1) All Upland cotton harvested in the United States, and, except as 
used in section 7(e) of the Act, includes cottonseed of such cotton and 
the products derived from such cotton and its seed, and
    (2) Imports of Upland cotton, including the Upland cotton content of 
the products derived thereof. The term cotton shall not, however, 
include:
    (i) Any entry of imported cotton by an importer which has a value or 
weight less than a de minimis amount established in regulations issued 
by the Secretary and
    (ii) Industrial products as that term is defined by regulation.
    (r) Industrial products means cotton-containing products which are 
classified in the Harmonized Tariff Schedule of the United States under 
classifications other than textile classifications. Certain cotton-
containing textile products under textile classifications shall also be 
considered to be industrial products, and are therefore not included in 
the table appearing in these regulations as products subject to 
assessment. Such products include, but are not limited to textile 
fabrics coated, impregnated, covered, or laminated, with other 
materials, textile piping and tubing, and belting materials.

[42 FR 35974, July 13, 1977, as amended at 50 FR 10932, Mar. 19, 1985; 
51 FR 6098, Feb. 20, 1986; 51 FR 37705, Oct. 24, 1986; 57 FR 29185, July 
1, 1992]

                                 General



Sec. 1205.505  Communication.

    All reports, requests, applications for reimbursements, and 
communications in connection with the Cotton Research and Promotion 
Order shall be addressed as follows: Cotton Board, Post Office Box 2121, 
Memphis, Tennessee, 38101-2121.

[57 FR 29186, July 1, 1992]

                               Assessments



Sec. 1205.510  Levy of assessments.

    (a) Producer assessments. An assessment of $1 per bale for cotton 
research and promotion is hereby levied on each bale of Upland cotton 
that is produced from cotton harvested and ginned except cotton consumed 
by any governmental agency from its own production. Such assessment 
shall be payable and collected only once on each bale.
    (1) A supplemental assessment for cotton research and promotion in 
addition to the $1 per bale assessment provided for in paragraph (a) of 
this section, is hereby levied on each bale of Upland cotton harvested 
and ginned except cotton consumed by any governmental agency from its 
own production. The supplemental assessment rate shall be levied at the 
rate of five-tenths of one percent of:
    (i) The current value of the cotton multiplied by the number of 
pounds of lint cotton or;
    (ii) The current value of the cotton converted to a fixed amount per 
bale as reflected in the following assessment chart:

                          Assessment Chart \1\
------------------------------------------------------------------------
                                                            Supplemental
                                                             Assessment,
              Current value (cents per pound)                dollars per
                                                                bale
------------------------------------------------------------------------
.00 to 9.99...............................................          0.15
10.00 to 19.99............................................           .40
20.00 to 29.99............................................           .65
30.00 to 39.99............................................           .90
40.00 to 49.99............................................          1.15
50.00 to 59.99............................................          1.40
60.00 to 69.99............................................          1.65
70.00 to 79.99............................................          1.90
80.00 to 89.99............................................          2.15
90.00 to 99.99............................................          2.40
100.00 to 109.99..........................................          2.65
110.00 to 119.99..........................................         2.90
------------------------------------------------------------------------
\1\ Assessment is calculated on \5/10\ of 1 percent of the midpoint of
  each 10[cent] increment, based on a 500 lb. bale and converted to a
  fixed amount per bale.

    (2) Each marketing year the collecting handler must select one of 
the two options for collecting the supplemental assessment as provided 
in paragraph (a)(1) of this section. The handler shall notify the Cotton 
Board as to the method selected at the time the handler files the first 
handler report each marketing year.

[[Page 38]]

    (b) Importer assessment. An assessment for cotton research and 
promotion of $1 per bale is hereby levied on each bale of cotton, or the 
bale equivalent thereof for cotton in cotton-containing products 
identified in the HTS conversion factor table in paragraph (b)(3) of 
this section and imported into the United States on or after July 31, 
1992. The $1 per bale assessment shall be converted to a fixed amount 
per kilogram to facilitate the U.S. Customs Service in collecting this 
assessment.
    (1) A supplemental assessment for cotton research and promotion in 
addition to the $1 per bale assessment provided for in paragraph (b) of 
this section is hereby levied on each bale of cotton or bale equivalent 
of cotton in cotton-containing products, identified in this subpart, 
imported into the United States on or after July 31, 1992. The 
supplemental assessment shall be levied at the rate of five-tenths of 
one percent of the historical value of cotton as determined by the 
Secretary and expressed in paragraph (b)(2) of this section. The rate of 
the supplemental assessment on imported cotton will be the same as that 
levied on cotton produced within the United States. The supplemental 
assessment will be calculated as a fixed amount per kilogram and added 
to the $1 per bale or bale equivalent assessment to facilitate the 
Customs Service in collecting assessments.
    (2) The 12-month average of monthly weighted average prices received 
by U.S. farmers will be calculated annually. Such weighted average will 
be used as the value of imported cotton for the purpose of levying the 
supplemental assessment on imported cotton and will be expressed in 
kilograms. The value of imported cotton for the purpose of levying this 
supplemental assessment is 1.2665 cents per kilogram.
    (3) The following table contains Harmonized Tariff Schedule (HTS) 
classification numbers and corresponding conversion factors and 
assessments. The left column of the following table indicates the HTS 
classifications of imported cotton and cotton-containing products 
subject to assessment. The center column indicates the conversion factor 
for determining the raw fiber content for each kilogram of the HTS. HTS 
numbers for raw cotton have no conversion factor in the table. The right 
column indicates the total assessment per kilogram of the article 
assessed.
    (i) Any line item entry of cotton appearing on Customs entry 
documentation in which the value of the cotton contained therein results 
in the calculation of an assessment of two dollars ($2.00) or less will 
not be subject to assessments as described in this section.
    (ii) In the event that any HTS number subject to assessment is 
changed and such change is merely a replacement of a previous number and 
has no impact on the physical properties, description, or cotton content 
of the product involved, assessments will continue to be collected based 
on the new number.

                         Import Assessment Table
                           [Raw cotton fiber]
------------------------------------------------------------------------
                                                      Conv.
                      HTS No.                         fact.     Cents/kg
------------------------------------------------------------------------
5007106010........................................     0.2713     0.3436
5007106020........................................     0.2713     0.3436
5007906010........................................     0.2713     0.3436
5007906020........................................     0.2713     0.3436
5112904000........................................     0.1085     0.1374
5112905000........................................     0.1085     0.1374
5112909010........................................     0.1085     0.1374
5112909090........................................     0.1085     0.1374
5201000500........................................          0     1.2665
5201001200........................................          0     1.2665
5201001400........................................          0     1.2665
5201001800........................................          0     1.2665
5201002200........................................          0     1.2665
5201002400........................................          0     1.2665
5201002800........................................          0     1.2665
5201003400........................................          0     1.2665
5201003800........................................          0     1.2665
5204110000........................................     1.0526     1.3332
5204190000........................................     0.6316     0.7999
5204200000........................................     1.0526     1.3332
5205111000........................................     1.0000     1.2665
5205112000........................................     1.0000     1.2665
5205121000........................................     1.0000     1.2665
5205122000........................................     1.0000     1.2665
5205131000........................................     1.0000     1.2665
5205132000........................................     1.0000     1.2665
5205141000........................................     1.0000     1.2665
5205142000........................................     1.0000     1.2665
5205151000........................................     1.0000     1.2665
5205152000........................................     1.0000     1.2665
5205210020........................................     1.0440     1.3222
5205210090........................................     1.0440     1.3222
5205220020........................................     1.0440     1.3222
5205220090........................................     1.0440     1.3222
5205230020........................................     1.0440     1.3222
5205230090........................................     1.0440     1.3222
5205240020........................................     1.0440     1.3222
5205240090........................................     1.0440     1.3222
5205260020........................................     1.0440     1.3222

[[Page 39]]

 
5205260090........................................     1.0440     1.3222
5205270020........................................     1.0440     1.3222
5205270090........................................     1.0440     1.3222
5205280020........................................     1.0440     1.3222
5205280090........................................     1.0440     1.3222
5205310000........................................     1.0000     1.2665
5205320000........................................     1.0000     1.2665
5205330000........................................     1.0000     1.2665
5205340000........................................     1.0000     1.2665
5205350000........................................     1.0000     1.2665
5205410020........................................     1.0440     1.3222
5205410090........................................     1.0440     1.3222
5205420021........................................     1.0440     1.3222
5205420029........................................     1.0440     1.3222
5205420090........................................     1.0440     1.3222
5205430021........................................     1.0440     1.3222
5205430029........................................     1.0440     1.3222
5205430090........................................     1.0440     1.3222
5205440021........................................     1.0440     1.3222
5205440029........................................     1.0440     1.3222
5205440090........................................     1.0440     1.3222
5205460021........................................     1.0440     1.3222
5205460029........................................     1.0440     1.3222
5205460090........................................     1.0440     1.3222
5205470021........................................     1.0440     1.3222
5205470029........................................     1.0440     1.3222
5205470090........................................     1.0440     1.3222
5205480020........................................     1.0440     1.3222
5205480090........................................     1.0440     1.3222
5206110000........................................     0.7368     0.9332
5206120000........................................     0.7368     0.9332
5206130000........................................     0.7368     0.9332
5206140000........................................     0.7368     0.9332
5206150000........................................     0.7368     0.9332
5206210000........................................     0.7692     0.9742
5206220000........................................     0.7692     0.9742
5206230000........................................     0.7692     0.9742
5206240000........................................     0.7692     0.9742
5206250000........................................     0.7692     0.9742
5206310000........................................     0.7368     0.9332
5206320000........................................     0.7368     0.9332
5206330000........................................     0.7368     0.9332
5206340000........................................     0.7368     0.9332
5206350000........................................     0.7368     0.9332
5206410000........................................     0.7692     0.9742
5206420000........................................     0.7692     0.9742
5206430000........................................     0.7692     0.9742
5206440000........................................     0.7692     0.9742
5206450000........................................     0.7692     0.9742
5207100000........................................     0.9474     1.1998
5207900000........................................     0.6316     0.7999
5208112020........................................     1.0852     1.3744
5208112040........................................     1.0852     1.3744
5208112090........................................     1.0852     1.3744
5208114020........................................     1.0852     1.3744
5208114040........................................     1.0852     1.3744
5208114060........................................     1.0852     1.3744
5208114090........................................     1.0852     1.3744
5208116000........................................     1.0852     1.3744
5208118020........................................     1.0852     1.3744
5208118090........................................     1.0852     1.3744
5208124020........................................     1.0852     1.3744
5208124040........................................     1.0852     1.3744
5208124090........................................     1.0852     1.3744
5208126020........................................     1.0852     1.3744
5208126040........................................     1.0852     1.3744
5208126060........................................     1.0852     1.3744
5208126090........................................     1.0852     1.3744
5208128020........................................     1.0852     1.3744
5208128090........................................     1.0852     1.3744
5208130000........................................     1.0852     1.3744
5208192020........................................     1.0852     1.3744
5208192090........................................     1.0852     1.3744
5208194020........................................     1.0852     1.3744
5208194090........................................     1.0852     1.3744
5208196020........................................     1.0852     1.3744
5208196090........................................     1.0852     1.3744
5208198020........................................     1.0852     1.3744
5208198090........................................     1.0852     1.3744
5208212020........................................     1.0852     1.3744
5208212040........................................     1.0852     1.3744
5208212090........................................     1.0852     1.3744
5208214020........................................     1.0852     1.3744
5208214040........................................     1.0852     1.3744
5208214060........................................     1.0852     1.3744
5208214090........................................     1.0852     1.3744
5208216020........................................     1.0852     1.3744
5208216090........................................     1.0852     1.3744
5208224020........................................     1.0852     1.3744
5208224040........................................     1.0852     1.3744
5208224090........................................     1.0852     1.3744
5208226020........................................     1.0852     1.3744
5208226040........................................     1.0852     1.3744
5208226060........................................     1.0852     1.3744
5208226090........................................     1.0852     1.3744
5208228020........................................     1.0852     1.3744
5208228090........................................     1.0852     1.3744
5208230000........................................     1.0852     1.3744
5208292020........................................     1.0852     1.3744
5208292090........................................     1.0852     1.3744
5208294020........................................     1.0852     1.3744
5208294090........................................     1.0852     1.3744
5208296020........................................     1.0852     1.3744
5208296090........................................     1.0852     1.3744
5208298020........................................     1.0852     1.3744
5208298090........................................     1.0852     1.3744
5208312000........................................     1.0852     1.3744
5208314020........................................     1.0852     1.3744
5208314040........................................     1.0852     1.3744
5208314090........................................     1.0852     1.3744
5208316020........................................     1.0852     1.3744
5208316040........................................     1.0852     1.3744
5208316060........................................     1.0852     1.3744
5208316090........................................     1.0852     1.3744
5208318020........................................     1.0852     1.3744
5208318090........................................     1.0852     1.3744
5208321000........................................     1.0852     1.3744
5208323020........................................     1.0852     1.3744
5208323040........................................     1.0852     1.3744
5208323090........................................     1.0852     1.3744
5208324020........................................     1.0852     1.3744
5208324040........................................     1.0852     1.3744
5208324060........................................     1.0852     1.3744
5208324090........................................     1.0852     1.3744
5208325020........................................     1.0852     1.3744
5208325090........................................     1.0852     1.3744
5208330000........................................     1.0852     1.3744
5208392020........................................     1.0852     1.3744
5208392090........................................     1.0852     1.3744
5208394020........................................     1.0852     1.3744
5208394090........................................     1.0852     1.3744
5208396020........................................     1.0852     1.3744
5208396090........................................     1.0852     1.3744
5208398020........................................     1.0852     1.3744
5208398090........................................     1.0852     1.3744
5208412000........................................     1.0852     1.3744
5208414000........................................     1.0852     1.3744
5208416000........................................     1.0852     1.3744
5208418000........................................     1.0852     1.3744
5208421000........................................     1.0852     1.3744

[[Page 40]]

 
5208423000........................................     1.0852     1.3744
5208424000........................................     1.0852     1.3744
5208425000........................................     1.0852     1.3744
5208430000........................................     1.0852     1.3744
5208492000........................................     1.0852     1.3744
5208494010........................................     1.0852     1.3744
5208494020........................................     1.0852     1.3744
5208494090........................................     1.0852     1.3744
5208496010........................................     1.0852     1.3744
5208496020........................................     1.0852     1.3744
5208496030........................................     1.0852     1.3744
5208496090........................................     1.0852     1.3744
5208498020........................................     1.0852     1.3744
5208498090........................................     1.0852     1.3744
5208512000........................................     1.0852     1.3744
5208514020........................................     1.0852     1.3744
5208514040........................................     1.0852     1.3744
5208514090........................................     1.0852     1.3744
5208516020........................................     1.0852     1.3744
5208516040........................................     1.0852     1.3744
5208516060........................................     1.0852     1.3744
5208516090........................................     1.0852     1.3744
5208518020........................................     1.0852     1.3744
5208518090........................................     1.0852     1.3744
5208521000........................................     1.0852     1.3744
5208523020........................................     1.0852     1.3744
5208523035........................................     1.0852     1.3744
5208523045........................................     1.0852     1.3744
5208523090........................................     1.0852     1.3744
5208524020........................................     1.0852     1.3744
5208524035........................................     1.0852     1.3744
5208524045........................................     1.0852     1.3744
5208524055........................................     1.0852     1.3744
5208524065........................................     1.0852     1.3744
5208524090........................................     1.0852     1.3744
5208525020........................................     1.0852     1.3744
5208525090........................................     1.0852     1.3744
5208591000........................................     1.0852     1.3744
5208592015........................................     1.0852     1.3744
5208592025........................................     1.0852     1.3744
5208592085........................................     1.0852     1.3744
5208592095........................................     1.0852     1.3744
5208594020........................................     1.0852     1.3744
5208594090........................................     1.0852     1.3744
5208596020........................................     1.0852     1.3744
5208596090........................................     1.0852     1.3744
5208598020........................................     1.0852     1.3744
5208598090........................................     1.0852     1.3744
5209110020........................................     1.0309     1.3057
5209110025........................................     1.0309     1.3057
5209110035........................................     1.0309     1.3057
5209110050........................................     1.0309     1.3057
5209110090........................................     1.0309     1.3057
5209120020........................................     1.0309     1.3057
5209120040........................................     1.0309     1.3057
5209190020........................................     1.0309     1.3057
5209190040........................................     1.0309     1.3057
5209190060........................................     1.0309     1.3057
5209190090........................................     1.0309     1.3057
5209210020........................................     1.0309     1.3057
5209210025........................................     1.0309     1.3057
5209210035........................................     1.0309     1.3057
5209210050........................................     1.0309     1.3057
5209210090........................................     1.0309     1.3057
5209220020........................................     1.0309     1.3057
5209220040........................................     1.0309     1.3057
5209290020........................................     1.0309     1.3057
5209290040........................................     1.0309     1.3057
5209290060........................................     1.0309     1.3057
5209290090........................................     1.0309     1.3057
5209313000........................................     1.0309     1.3057
5209316020........................................     1.0309     1.3057
5209316025........................................     1.0309     1.3057
5209316035........................................     1.0309     1.3057
5209316050........................................     1.0309     1.3057
5209316090........................................     1.0309     1.3057
5209320020........................................     1.0309     1.3057
5209320040........................................     1.0309     1.3057
5209390020........................................     1.0309     1.3057
5209390040........................................     1.0309     1.3057
5209390060........................................     1.0309     1.3057
5209390080........................................     1.0309     1.3057
5209390090........................................     1.0309     1.3057
5209413000........................................     1.0309     1.3057
5209416020........................................     1.0309     1.3057
5209416040........................................     1.0309     1.3057
5209420020........................................     0.9767     1.2370
5209420040........................................     0.9767     1.2370
5209420060........................................     0.9767     1.2370
5209420080........................................     0.9767     1.2370
5209430030........................................     1.0309     1.3057
5209430050........................................     1.0309     1.3057
5209490020........................................     1.0309     1.3057
5209490040........................................     1.0309     1.3057
5209490090........................................     1.0309     1.3057
5209513000........................................     1.0309     1.3057
5209516015........................................     1.0852     1.3744
5209516025........................................     1.0852     1.3744
5209516032........................................     1.0852     1.3744
5209516035........................................     1.0852     1.3744
5209516050........................................     1.0852     1.3744
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[[Page 44]]

 
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5702101000........................................     0.0447     0.0567

[[Page 45]]

 
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[[Page 46]]

 
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6103498014........................................     0.3655     0.4629

[[Page 47]]

 
6103498024........................................     0.2437     0.3086
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6104392010........................................     0.5607     0.7101
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6109100045........................................     1.0022     1.2692
6109100060........................................     1.0022     1.2692
6109100065........................................     1.0022     1.2692

[[Page 48]]

 
6109100070........................................     1.0022     1.2692
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6110202010........................................     1.1214     1.4203
6110202015........................................     1.1214     1.4203
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6110202030........................................     1.1214     1.4203
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6114200005........................................     0.9747     1.2344
6114200010........................................     0.9747     1.2344
6114200015........................................     0.8528     1.0801

[[Page 49]]

 
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6114200035........................................     0.8528     1.0801
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6203191010........................................     0.9865     1.2494
6203191020........................................     0.9865     1.2494
6203191030........................................     0.9865     1.2494

[[Page 50]]

 
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6203199020........................................     0.5549     0.7028
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6204624021........................................     0.9436     1.1951

[[Page 51]]

 
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[[Page 52]]

 
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6211390530........................................     0.1233     0.1562
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6213202000........................................     1.0069     1.2752
6213900700........................................     0.4475     0.5668
6213901000........................................     0.4475     0.5668
6213902000........................................     0.3356     0.4251
6214300000........................................     0.1142     0.1447
6214400000........................................     0.1142     0.1447
6214900010........................................     0.8567     1.0850
6214900090........................................     0.2285     0.2893
6215100025........................................     0.1142     0.1447
6215200000........................................     0.1142     0.1447
6215900015........................................     1.0281     1.3021
6216000800........................................     0.0685     0.0868
6216001300........................................     0.3427     0.4340
6216001720........................................     0.6397     0.8102
6216001730........................................     0.1599     0.2025
6216001900........................................     0.3427     0.4340
6216002110........................................     0.5780     0.7320
6216002120........................................     0.2477     0.3137
6216002410........................................     0.6605     0.8366
6216002425........................................     0.1651     0.2091
6216002600........................................     0.1651     0.2091
6216002910........................................     0.6605     0.8366
6216002925........................................     0.1651     0.2091
6216003100........................................     0.1651     0.2091
6216003300........................................     0.5898     0.7470
6216003500........................................     0.5898     0.7470
6216003800........................................     1.1796     1.4939
6216004100........................................     1.1796     1.4939
6217109510........................................     0.9646     1.2217
6217109520........................................     0.1809     0.2291
6217109530........................................     0.2412     0.3054
6217909003........................................     0.9646     1.2217
6217909005........................................     0.1809     0.2291
6217909010........................................     0.2412     0.3054
6217909025........................................     0.9646     1.2217
6217909030........................................     0.1809     0.2291
6217909035........................................     0.2412     0.3054
6217909050........................................     0.9646     1.2217
6217909055........................................     0.1809     0.2291
6217909060........................................     0.2412     0.3054
6217909075........................................     0.9646     1.2217
6217909080........................................     0.1809     0.2291
6217909085........................................     0.2412     0.3054
6301300010........................................     0.8305     1.0518
6301300020........................................     0.8305     1.0518
6301900030........................................     0.2215     0.2805
6302100005........................................     1.1073     1.4024
6302100008........................................     1.1073     1.4024
6302100015........................................     1.1073     1.4024
6302213010........................................     1.1073     1.4024
6302213020........................................     1.1073     1.4024
6302213030........................................     1.1073     1.4024
6302213040........................................     1.1073     1.4024
6302213050........................................     1.1073     1.4024
6302215010........................................     0.7751     0.9817
6302215020........................................     0.7751     0.9817
6302215030........................................     0.7751     0.9817
6302215040........................................     0.7751     0.9817
6302215050........................................     0.7751     0.9817
6302217010........................................     1.1073     1.4024
6302217020........................................     1.1073     1.4024
6302217030........................................     1.1073     1.4024
6302217040........................................     1.1073     1.4024
6302217050........................................     1.1073     1.4024
6302219010........................................     0.7751     0.9817
6302219020........................................     0.7751     0.9817
6302219030........................................     0.7751     0.9817
6302219040........................................     0.7751     0.9817
6302219050........................................     0.7751     0.9817
6302221010........................................     0.5537     0.7012

[[Page 54]]

 
6302221020........................................     0.3876     0.4909
6302221030........................................     0.5537     0.7012
6302221040........................................     0.3876     0.4909
6302221050........................................     0.3876     0.4909
6302221060........................................     0.3876     0.4909
6302222010........................................     0.3876     0.4909
6302222020........................................     0.3876     0.4909
6302222030........................................     0.3876     0.4909
6302290020........................................     0.2215     0.2805
6302313010........................................     1.1073     1.4024
6302313020........................................     1.1073     1.4024
6302313030........................................     1.1073     1.4024
6302313040........................................     1.1073     1.4024
6302313050........................................     1.1073     1.4024
6302315010........................................     0.7751     0.9817
6302315020........................................     0.7751     0.9817
6302315030........................................     0.7751     0.9817
6302315040........................................     0.7751     0.9817
6302315050........................................     0.7751     0.9817
6302317010........................................     1.1073     1.4024
6302317020........................................     1.1073     1.4024
6302317030........................................     1.1073     1.4024
6302317040........................................     1.1073     1.4024
6302317050........................................     1.1073     1.4024
6302319010........................................     0.7751     0.9817
6302319020........................................     0.7751     0.9817
6302319030........................................     0.7751     0.9817
6302319040........................................     0.7751     0.9817
6302319050........................................     0.7751     0.9817
6302321010........................................     0.5537     0.7012
6302321020........................................     0.3876     0.4909
6302321030........................................     0.5537     0.7012
6302321040........................................     0.3876     0.4909
6302321050........................................     0.3876     0.4909
6302321060........................................     0.3876     0.4909
6302322010........................................     0.5537     0.7012
6302322020........................................     0.3876     0.4909
6302322030........................................     0.5537     0.7012
6302322040........................................     0.3876     0.4909
6302322050........................................     0.3876     0.4909
6302322060........................................     0.3876     0.4909
6302390030........................................     0.2215     0.2805
6302402010........................................     0.9412     1.1921
6302511000........................................     0.5537     0.7012
6302512000........................................     0.8305     1.0518
6302513000........................................     0.5537     0.7012
6302514000........................................     0.7751     0.9817
6302593020........................................     0.5537     0.7012
6302600010........................................     1.1073     1.4024
6302600020........................................     0.9966     1.2622
6302600030........................................     0.9966     1.2622
6302910005........................................     0.9966     1.2622
6302910015........................................     1.1073     1.4024
6302910025........................................     0.9966     1.2622
6302910035........................................     0.9966     1.2622
6302910045........................................     0.9966     1.2622
6302910050........................................     0.9966     1.2622
6302910060........................................     0.9966     1.2622
6302931000........................................     0.4429     0.5610
6302932000........................................     0.4429     0.5610
6302992000........................................     0.2215     0.2805
6303191100........................................     0.8859     1.1220
6303910010........................................     0.6090     0.7713
6303910020........................................     0.6090     0.7713
6303921000........................................     0.2768     0.3506
6303922010........................................     0.2768     0.3506
6303922030........................................     0.2768     0.3506
6303922050........................................     0.2768     0.3506
6303990010........................................     0.2768     0.3506
6304111000........................................     0.9966     1.2622
6304113000........................................     0.1107     0.1402
6304190500........................................     0.9966     1.2622
6304191000........................................     1.1073     1.4024
6304191500........................................     0.3876     0.4909
6304192000........................................     0.3876     0.4909
6304193060........................................     0.2215     0.2805
6304910020........................................     0.8859     1.1220
6304910070........................................     0.2215     0.2805
6304920000........................................     0.8859     1.1220
6304996040........................................     0.2215     0.2805
6505901515........................................     1.1189     1.4170
6505901525........................................     0.5594     0.7085
6505901540........................................     1.1189     1.4170
6505902030........................................     0.9412     1.1921
6505902060........................................     0.9412     1.1921
6505902545........................................     0.5537     0.7012
6507000000........................................     0.3986     0.5049
9404901000........................................     0.2104     0.2665
9404908020........................................     0.9966     1.2622
9404908040........................................     0.9966     1.2622
9404908505........................................     0.6644     0.8415
9404908536........................................     0.0997     0.1262
9404909505........................................     0.6644     0.8415
9404909570........................................     0.2658     0.3366
------------------------------------------------------------------------

    (4) Any entry of cotton that qualifies for informal entry according 
to regulations issued by the Customs Service will not be subject to the 
assessment.
    (5) Imported textile and apparel articles assembled of components 
formed from cotton produced in the Unites States and identified by HTS 
numbers 9819.11.03, 9819.11.06, 9820.11.03, 9820.11.06, 9820.11.09, 
9820.11.12, 9820.11.18, 9820.11.21, 9802.00.8015, 9802.00.9000, 
9802.00.8044, or 9802.00.8046 shall not subject to assessment.
    (6) Imported cotton and products may be exempted by the Cotton Board 
from assessment under this paragraph. Such imported cotton and products 
may include, but are not limited to cotton and the cotton content of 
products which is U.S. produced cotton, or cotton other than Upland 
cotton.
    (i) A request for such exemption must be submitted to the Cotton 
Board by the importer, prior to the importation of the cotton product. 
The Cotton Board will then issue, if deemed appropriate, a numbered 
exemption certificate valid for 1 year from the date of issue. The 
exemption number should be entered by the importer on the Customs entry 
documentation in the appropriate location as determined by the U.S. 
Customs Service.
    (ii) The request for exemption should include:

[[Page 55]]

    (A) the name, address, and importer identification number for the 
importer;
    (B) the HTS classification of the imported product;
    (C) weight of the product for which the exemption is sought;
    (D) estimated date of entry;
    (E) commercial invoices of other such documentation indicating the 
origin or production or type of the cotton fiber used to produce the 
imported product;
    (F) manufacture's description of the imported product.
    (7) The exemption number ``999999999'' shall be entered on the 
Customs entry summary document, in the appropriate location as 
determined by the U.S. Customs Service, by the importer when, based on 
the importer's own determination, the imported product is identified by 
a Harmonized Tariff Schedule classification number which is subject to 
assessment but the particular article contains no cotton.
    (8) Articles imported into the United States temporarily and under 
bond which are classified by the Harmonized Tariff Schedule heading 
which begins with ``9813'' shall not be subject to assessment.
    (9) Articles imported into the U.S. after being exported from the 
U.S. for alterations and which are classified by the Harmonized Tariff 
Schedule subheadings 9802.00.40 and 9802.00.50 shall not be subject to 
assessment.

[57 FR 29432, July 2, 1992]

    Editorial Note: For Federal Register citations affecting Sec. 
1205.510, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 1205.511  Payment and collection.

    (a) The $1 per bale assessment shall be paid by:
    (1) The producer of the cotton to the collecting handler designated 
in Sec. 1205.512, and
    (2) The importer of cotton to the Customs Service as provided in 
Sec. 1205.514.
    (b) The supplemental assessment shall be paid by:
    (1) The producer of the cotton to the collecting handler designated 
in Sec. 1205.513, and
    (2) The importer of cotton to the Customs Service as described in 
Sec. 1205.515.
    (c) If more than one person subject to assessment shares in the 
proceeds received from a bale or bale equivalent, each such person is 
obligated to pay that portion of the assessment that is equivalent to 
that person's proportionate share of the proceeds.
    (d) Failure of the handler to collect the assessments on each bale 
shall not relieve the handler of the handler's obligation to remit the 
assessments to the Cotton Board as required in Sec. Sec. 1205.512, 
1205.513 and 1205.516.

[57 FR 29190, July 1, 1992]



Sec. 1205.512  Collecting handlers and time of collection of $1 per 
bale assessment.

    Collecting handlers and the time of collecting the $1 per bale 
assessment shall be as follows:
    (a) Except as provided in paragraph (b) of this section, any person 
who purchases a bale of cotton from the producer of the cotton shall be 
the collecting handler for such cotton. The handler shall collect the 
assessment at the time the handler first makes any payment or any credit 
to the producer's account for the cotton. The handler shall give the 
producer a receipt indicating payment of the assessment.
    (b) Any cooperative marketing association or other person that 
accepts a bale of cotton from the producer of the cotton under an oral 
or written contract or agreement providing for the marketing of the 
cotton shall be the collecting handler for such cotton. Such association 
or person shall collect the assessment regardless of whether the cotton 
is marketed or tendered to CCC for price support loan. The handler shall 
collect the assessment at the time the handler first makes any cash 
advance, any payment, or any credit to the producer's account for the 
cotton. The handler shall give the producer a receipt indicating payment 
of the assessment.
    (c) For bales of cotton tendered to CCC for Form A loan, except 
bales tendered pursuant to paragraph (b) of this section:
    (1) The ASCS County Office shall be the collecting handler except as 
provided in paragraph (c)(2) of this section. The ASCS County Office 
shall

[[Page 56]]

collect the assessment when it makes disbursement based on the Form A 
loan documents. The producer's copy of the Cotton Producer's Note (Form 
CCC Cotton A) shall show payment of the assessment and shall constitute 
the producer's receipt for payment of the assessment.
    (2) Any person (other than an ASCS County Office) who advances to 
the producer the loan value of the cotton as shown on a Cotton 
Producer's Note (Form CCC Cotton A) shall be the collecting handler for 
such cotton. The handler shall collect the $1 per bale assessment at the 
time the handler makes any advance to the producer on the loan value of 
the cotton. The handler shall give the producer a receipt indicating 
payment of the assessment.
    (d) Any person who purchases cotton in the cotton field where 
produced or who purchases seed cotton or unbaled lint cotton from the 
producer of the cotton shall be the collecting handler. The handler 
shall collect the assessment at the time such cotton is ginned and shall 
give the producer a receipt indicating payment of the assessment. When a 
bale is ginned that contains any such cotton purchased from more than 
one producer, the handler shall collect each producer's proportionate 
share of the assessment and shall give each producer a receipt 
indicating the producer's proportionate share of the assessment payment.
    (e) Any person who purchases cotton from a producer whereby the 
producer agrees to deliver a certain quantity of cotton but retains the 
right to establish the price at some future date shall be the collecting 
handler for such cotton. The handler shall collect the $1 per bale 
assessment at the time final settlement is made on the cotton. The 
handler shall give the producer a receipt indicating payment of the $1 
per bale assessment.
    (f) Any person who consumes domestically or exports cotton of that 
person's own production shall be the collecting handler for such cotton. 
Such handler shall pay the assessment to the Cotton Board at the time 
the cotton is consumed or exported.
    (g) Any person who obtains ownership of a bale of cotton from the 
producer of the cotton by transfer of any kind or by any means, under 
conditions other than those described in paragraph (a), (b), (c), (d) or 
(e) of this section shall be the collecting handler for such cotton. 
Such handler shall collect the assessment at the time such handler takes 
ownership of the cotton. The handler shall give the producer a receipt 
indicating payment of the assessment.
    (h) In the event of a producer's death, bankruptcy, receivership, or 
incapacity to act, the representative of such producer, or the 
producer's estate, or the person acting on behalf of creditors, shall be 
considered the producer for the purposes of this section.

[42 FR 35974, July 31, 1977, as amended at 50 FR 10932, Mar. 19, 1985; 
57 FR 29190, July 1, 1992]



Sec. 1205.513  Collecting handlers and time of collection of the 
supplemental assessment.

    Collecting handlers and the time of collecting the supplemental 
assessment shall be as follows:
    (a) Except as provided in paragraph (b) of this section, any person 
who purchases a bale of cotton from the producer of the cotton shall be 
the collecting handler for such cotton. The handler shall collect the 
supplemental assessment at the time the handler first makes any payment 
or any credit to the producer's account for the cotton. The handler 
shall give the producer a receipt indicating payment of the supplemental 
assessment.
    (b) Any cooperative marketing association or other person that 
accepts a bale of cotton from the producer of the cotton under an oral 
or written contract or agreement providing for the marketing of the 
cotton shall be the collecting handler for such cotton. Such association 
or person shall collect the supplemental assessment regardless of 
whether the cotton is marketed or tendered to CCC for price support 
loan. The handler shall collect the supplemental assessment at the time 
the handler first makes any cash advance, any payment, or any credit to 
the producer's account for the cotton. Supplemental assessments due on 
any subsequent cash advances, payments, or credits to the producer's 
account shall be collected by the handler at the time

[[Page 57]]

final settlement is made on the cotton. The handler shall give the 
producer a receipt each time a supplemental assessment is collected.
    (c) For bales of cotton tendered to CCC for Form A loan, except 
bales tendered pursuant to paragraph (b) of this section:
    (1) The ASCS County Office shall be the collecting handler except as 
provided in paragraph (c)(2) of this section. The ASCS County Office 
shall collect the supplemental assessment when it makes disbursement 
based on the Form A loan value of cotton. The producer's copy of the 
Cotton Producer's Note (Form CCC Cotton A) shall show payment of the 
supplemental assessment and shall constitute the producer's receipt for 
payment of the supplemental assessment.
    (2) Any person (other than an ASCS County Office) who advances to 
the producer the loan value of the cotton as shown on a Cotton 
Producer's Note (Form CCC Cotton A) shall be the collecting handler for 
such cotton. The handler shall collect the supplemental assessment at 
the time the handler makes any advance to the producer on the loan value 
of the cotton. The handler shall give the producer a receipt indicating 
payment of the supplemental assessment.
    (d) With respect to any Upland cotton on which the producer or a 
cooperative marketing association acting on behalf of a producer 
receives a loan deficiency payment, the ASCS County Office or the 
cooperative marketing association shall be the collecting handler of the 
supplemental assessment on the value of the cotton represented by the 
loan deficiency payment at the time such payment is made to the producer 
or the cooperative marketing association. A copy of a document 
reflecting this transaction issued by the ASCS County Office or 
cooperative marketing association shall show the amount collected as the 
supplemental assessment and shall constitute the producer's receipt for 
payment of the supplemental assessment.
    (e) Any person who (1) purchases a producer's equity in cotton 
tendered to CCC for Form A loan or (2) purchases cotton that a producer 
has redeemed from the Form A loan, shall be the collecting handler for 
the portion of the total supplemental assessment not collected under 
paragraph (c) of this section. The handler shall give the producer a 
receipt indicating payment of that portion of the supplemental 
assessment.
    (f) Any person who purchases cotton in the cotton field where 
produced or who purchases seed cotton or unbaled lint cotton from the 
producer of the cotton shall be the collecting handler. The handler 
shall collect the supplemental assessment at the time such cotton is 
ginned and shall give the producer a receipt indicating payment of the 
supplemental assessment. When a bale is ginned and baled that contains 
any such cotton purchased from more than one producer, the handler shall 
collect each producer's proportionate share of the supplemental 
assessment and shall give each producer a receipt indicating the 
producer's proportionate share of the supplemental assessment payment.
    (g) Any person who purchases cotton from a producer whereby the 
producer agrees to deliver a certain quantity of cotton but retains the 
right to establish the price at some future date shall be the collecting 
handler for such cotton. The handler shall collect the supplemental 
assessment at the time final settlement is made on the cotton. The 
handler shall give the producer a receipt indicating payment of the 
supplemental assessment.
    (h) Any person who consumes domestically cotton of that person's own 
production shall be the collecting handler for such cotton. The handler 
shall pay the supplemental assessment at the time of consumption on the 
basis of a market value determined in consultation with the Cotton 
Board.
    (i) Any person who exports cotton of that person's own production 
shall be the collecting handler for such cotton. Such handler shall pay 
the supplemental assessment on the basis of the current value of cotton 
as reflected on the export settlement document.
    (j) Any person who obtains ownership of a bale of cotton from the 
producer of the cotton by transfer of any kind or by any means, under 
conditions other than those described in paragraph (a), (b), (c), (d), 
(e), or (f) of this section

[[Page 58]]

shall be the collecting handler for such cotton. Such handler shall 
collect the supplemental assessment at the time the handler takes 
ownership of the cotton. The handler shall give the producer a receipt 
indicating payment of the supplemental assessment.
    (k) In the event of a producer's death, bankruptcy, receivership, or 
incapacity to act, the representative of such producer or the producer's 
estate, or the person acting on behalf of creditors, shall be considered 
the producer for the purposes of this section.

[42 FR 35974, July 31, 1977, as amended at 50 FR 10932, Mar. 19, 1985; 
51 FR 37705, Oct. 24, 1986; 57 FR 29190, July 1, 1992]



Sec. 1205.514  Customs Service and the Collection of the $1 per bale 
assessment.

    The Collection of the $1 per bale assessment by the Customs Service 
shall be as follows:
    (a) The Customs Service will collect the assessment from the 
importer or from any person acting as principal, agent, broker or 
consignee for cotton or cotton-containing products produced outside the 
United States and imported into the United States. The Customs Service 
will collect the assessment on cotton and cotton-containing products 
identified by Harmonized Tariff Schedule heading numbers in Sec. 
1205.510(b)(2) at the time of importation and forward such assessment as 
per the agreement between the United States Customs Service and the U.S. 
Department of Agriculture.
    (b) In the event of an importer's death, bankruptcy, receivership, 
or incapacity to act, the representative of such importer, or the 
importer's estate, or the person acting on behalf of creditors, shall be 
considered the importer for the purposes of this section.

[57 FR 29191, July 1, 1992]



Sec. 1205.515  Customs Service and the collection of the supplemental
assessment.

    The collection of the supplemental assessment by the Customs Service 
shall be as follows:
    (a) The Customs Service will collect the supplemental assessment 
from any person acting as principal, agent, broker or consignee for 
cotton or cotton-containing products produced outside the United States 
and imported into the United States. Customs Service will collect the 
assessment on all cotton and cotton-containing products identified by 
Harmonized Tariff Schedule heading numbers in Sec. 1205.510(b)(2) at 
the time of importation and forward such assessment as per the agreement 
between the United States Customs Service and the U.S. Department of 
Agriculture.
    (b) In the event of an importer's death, bankruptcy, receivership, 
or incapacity to act, the representative of such importer, or the 
importer's estate, or the person acting on behalf of creditors, shall be 
considered the importer for the purposes of this section.

[57 FR 29191, July 1, 1992]



Sec. 1205.516  Reports and remittance to the Cotton Board.

    (a) Handler reports and remittances. Each collecting handler shall 
transmit assessments to the Cotton Board as follows:
    (1) Reporting periods. Each calendar month shall be a reporting 
period and the period shall end on the close of business on the last day 
of the month.
    (2) Reports. Each collecting handler shall make reports on forms 
made available or approved by the Cotton Board. Each report shall be 
mailed to the Cotton Board and postmarked within ten days after the 
close of the reporting period.
    (i) Collecting handler report. Each collecting handler shall prepare 
a separate report form each reporting period for each gin from which 
such handler handles cotton on which the handler is required to collect 
the assessments during the reporting period. Each report shall be mailed 
in duplicate to the Cotton Board and shall contain the following 
information:
    (A) Date of report;
    (B) Reporting period covered by report;
    (C) Gin code number;
    (D) Name and address of handler;
    (E) Listing of all producers from whom the handler was required to 
collect the assessments, their addresses, total number of bales, and 
total assessment collected and remitted for each producer;

[[Page 59]]

    (F) Date of last report remitting assessments to the Cotton Board.
    (ii) No cotton purchased report. Each collecting handler shall 
submit a no cotton purchased report form for each reporting period in 
which no cotton was handled for which the handler is required to collect 
assessments during the reporting period. A collecting handler who 
handles cotton only during certain months shall file a final no cotton 
purchased report at the conclusion of such handlers marketing season. If 
a collecting handler handles cotton during any month following 
submission of the final report for the handlers marketing season, such 
handler shall send a collecting handler report and remittance to the 
Cotton Board by the 10th day of the month following the month in which 
cotton was handled. The no cotton purchased report shall be signed and 
dated by the handler of the handler's agent.
    (3) Remittances. The collecting handler shall remit all assessments 
to the Cotton Board with the report required in paragraph (a)(2) of this 
section. All remittances sent to the Cotton Board by collecting handlers 
shall be made by check, draft, or money order payable to the order of 
the ``Cotton Board''. All remittances shall be received subject to 
collection and payment at par.
    (4) Interest and late payment charges. (i) There shall be an 
interest charge, at rates prescribed by the Cotton Board with the 
approval of the Secretary, on any handler who is sent a second certified 
mail notice of past-due assessments from the Cotton Board in any one 
marketing year (August 1-July 31).
    (ii) In addition to the interest charge specified in paragraph 
(a)(4)(i) of this section, there shall be a late payment charge on any 
handler whose remittance is not received by the Cotton Board within 10 
days after the close of the reporting period in which interest charges 
were first accrued. The late payment charge shall be 5 percent of the 
unpaid balance before interest charges have accrued.
    (iii) The interest and late payment charges on the unremitted 
assessments for a particular reporting period will be applied from the 
first working day on or following the 20th day of the month in which the 
assessments were due.
    (b) Importer reports and remittance. The United States Customs 
Service will transmit reports and assessments collected on imported 
cotton to the Agricultural Marketing Service according to the agreement 
between the Customs Service and the Agricultural Marketing Service. Upon 
the request of the Cotton Board, an importer shall file with the Board a 
report, for a period of time specified in the request, that includes the 
following information:
    (1) The importer's name and address;
    (2) The quantity of cotton and cotton products imported;
    (3) The amount of the assessment paid on imported cotton and cotton 
products;
    (4) The amount of imported cotton and cotton products on which the 
assessment was not paid to the Customs Service.

[57 FR 29190, July 1, 1992]



Sec. 1205.517  Failure to report and remit.

    (a) Any collecting handler who fails to submit reports and 
remittances according to reporting periods and time schedules required 
in Sec. 1205.516 shall be subject to appropriate action by the Cotton 
Board which may include one or more of the following actions:
    (1) Audits of the collecting handler's books and records to 
determine the amount owed the Cotton Board;
    (2) Requirement that an escrow account for the deposit of 
assessments collected be established. Frequency and schedule of deposits 
and withdrawals from the escrow account shall be determined by the 
Cotton Board with the Approval of the Secretary;
    (3) Referral to the Secretary for appropriate enforcement action;
    (4) Publication of a collecting handler's name in accordance with 
the following provisions:
    (i) The name of any collecting handler will be subject to 
publication if the collecting handler:
    (A) is sent two certified mail notices of past due assessments and/
or collecting handler reports from the Cotton Board in any one marketing 
year (August 1-July 31), or
    (B) is required by the Cotton Board to establish an escrow account 
for depositing assessments, in accordance with paragraph (a)(2) of this 
section,

[[Page 60]]

and does not comply with the deposit procedures established by the 
Cotton Board with approval of the Secretary.
    (ii) The name of any collecting handler who is subject to 
publication will be published by the Cotton Board with the approval of 
the Secretary in a monthly listing during the primary cotton marketing 
season (September through March) and a bi-monthly listing during the 
remainder of the year. The published listing will be distributed by the 
Cotton Board.
    (iii) The Cotton Board, with approval of the Secretary, may notify 
individual producers that the assessments collected by such producer's 
collecting handler, whose name is subject to publication in accordance 
with the provisions of paragraph (a)(4)(i) of this section, have not 
been remitted to the Cotton Board as required.
    (b) Any importer who fails to submit reports to the Cotton Board 
pursuant to request made according to Sec. 1205.516 or assessments to 
the Customs Service, shall be subject to one or more of the following 
actions:
    (1) Audits of the importer's books and records to determine the 
amount owed the Cotton Board.
    (2) A deduction for the amount of any unpaid assessment by the 
Customs Service from the importers surety bond.
    (3) Referral to the Secretary for appropriate enforcement action.

[57 FR 29191, July 1, 1992]



Sec. 1205.518  Receipts for payment of assessments.

    Each collecting handler who is required by Sec. 1205.512 and Sec. 
1205.513 to give the producer a receipt showing payment of cotton 
research and promotion assessments shall provide the producer with an 
invoice or settlement sheet for the cotton. Such document shall serve as 
a receipt shall contain the following information:
    (a) Name and address of collecting handler.
    (b) Gin code number of gin at which cotton was ginned.
    (c) Name and address of producer who paid assessment.
    (d) Number of bales on which assessment was paid.
    (e) Gross price per pound received by the producer.
    (f) Total assessments paid by the producer.
    (g) Date on which assessment was paid by producer.

(Approved by the Office of Management and Budget under control number 
0581-0115)

[42 FR 35974, July 13, 1977, as amended at 49 FR 8420, Mar. 7, 1984. 
Redesignated and amended at 51 FR 6099, Feb. 20, 1986. Further 
redesignated at 57 FR 29190, July 1, 1992]



Sec. 1205.519  Organic exemption.

    (a) A producer who operates 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, except 
as provided for in paragraph (h) of this section; and is not a split 
operation shall be exempt from the payment of assessments.
    (b) To apply for an exemption under this section, an eligible cotton 
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 beginning of the crop year as long as the producer 
continues to be eligible for the exemption.
    (c) The request shall include the following: The producer's name and 
address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined in 
section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), a signed certification that the applicant meets all of the 
requirements specified in paragraph (a) of this section for an 
assessment exemption, and such other information as may be required by 
the Board and with the approval of the Secretary.
    (d) If the producer complies with the requirements of this section, 
the Board will grant the exemption and issue a Certificate of Exemption 
to the producer. For exemption requests received on or before August 15, 
2005, the Board will have 60 days to approve the exemption request; 
after August 15, 2005, the Board will have 30 days to approve the 
exemption request. If the application is disapproved, the Board will 
notify the

[[Page 61]]

applicant of the reason(s) for disapproval within the same timeframe.
    (e) The producer shall provide a copy of the Certificate of 
Exemption to each handler to whom the producer sells cotton. The handler 
shall maintain records showing the exempt producer's name and address 
and the exemption number assigned by the Board.
    (f) An importer who imports only products that are eligible to be 
labeled as 100 percent organic under the NOP (7 CFR part 205) and who is 
not a split operation shall be exempt from the payment of assessments. 
That importer may submit documentation to the Board and request an 
exemption from assessment on 100 percent organic cotton and 100 percent 
organic cotton products--on a form provided by the Board--at any time 
initially and annually thereafter as long as the importer continues to 
be eligible for the exemption. This documentation shall include the same 
information required of producers in paragraph (c) 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 
Harmonized Tariff Schedule (HTS) classification valid for 1 year from 
the date of issue. This HTS classification should be entered by the 
importer on the Customs entry documentation. Any line item entry of 100 
percent organic cotton and cotton products bearing this HTS 
classification assigned by the Board will not be subject to assessments.
    (g) The exemption will apply immediately following the issuance of 
the Certificate of Exemption.
    (h) Agricultural commodities produced and marketed under an organic 
system plan, as described in 7 CFR 205.201, but not sold, labeled, or 
represented as organic, shall not disqualify a producer from exemption 
under this section, except that producers who produce both organic and 
non-organic agricultural commodities as a result of split operations 
shall not qualify for exemption. Reasons for conventional sales include 
lack of demand for organic products, isolated use of antibiotics for 
humane purposes, chemical or pesticide use as the result of State or 
emergency spray programs, and crops from a buffer area as described in 7 
CFR part 205, provided all other criteria are met.

[70 FR 2754, Jan. 14, 2005]

                             Reimbursements



Sec. 1205.520  Procedure for obtaining reimbursement.

    Each importer against whose imports of cotton or cotton-containing 
products any assessments are made and collected may obtain a 
reimbursement on that portion of the assessment that was collected on 
cotton produced in the United States or cotton other than Upland cotton 
by following the procedures prescribed in this section.
    (a) Application form. An importer shall obtain a reimbursement 
application form from the Cotton Board. Such form may be obtained by 
written request to the Cotton Board and the request shall bear the 
importer's signature or the importer's properly-witnessed mark.
    (b) Submission of reimbursement application to Cotton Board. Any 
importer requesting a reimbursement shall mail the application on the 
prescribed form to the Cotton Board. The application shall be postmarked 
within 180 days from the date the assessments were paid on the cotton by 
such importer. The reimbursement application shall show:
    (1) The importer's name, address, phone number and Customs Service 
identification number;
    (2) Weight of the cotton in each HTS category for which the 
reimbursement is requested;
    (3) Subtotal amounts to be reimbursed for each HTS number and grand 
total to be reimbursed;
    (4) Date or inclusive dates on which the assessments were paid;
    (5) The name of the port of entry; and
    (6) Certification by the importer that the cotton was grown in the 
U.S. or is other than Upland cotton.
    (c) Where more than one importer shared in the assessment payment on 
cotton, joint or separate reimbursement application forms may be filed. 
In any such case, the reimbursement

[[Page 62]]

application shall show the names, addresses and proportionate shares of 
assessments paid by all importers. The reimbursement application shall 
bear the signature of each importer seeking reimbursement.
    (d) Proof of payment of the assessment on U.S. produced or other 
than Upland cotton. A copy of the Customs entry form and the commercial 
invoice filed with the Customs Service shall accompany the importer's 
reimbursement application. Within 60 days from the date the properly 
executed application for reimbursement is received by the Cotton Board, 
the Cotton Board shall make reimbursement to the importer. For joint 
applications, the reimbursement shall be made payable to all eligible 
importers signing the reimbursement application. Documentation submitted 
with reimbursement applications shall not be returned to the importer.

[57 FR 29192, July 1, 1992, as amended at 62 FR 22879, Apr. 28, 1997]

                           Warehouse Receipts



Sec. 1205.525  Entry of gin code number.

    The warehouse that first receives a bale for storage after ginning 
shall enter the gin code number of the gin at which the bale was ginned 
on the warehouse receipt issued for the bale.

[57 FR 29192, July 1, 1992]

                           Reports and Records



Sec. 1205.530  Gin reports and reporting schedule.

    (a) Gin reports. Each year each cotton gin in the United States 
shall submit reports to the Cotton Board on forms or certificates made 
available or approved by the Cotton Board as follows:
    (1) End-of-season report. Except as provided in paragraph (a)(2) of 
this section, each gin shall report to the Cotton Board an alphabetical 
listing of producer names, their addresses, and the number of bales 
ginned for each such producer during its ginning season.
    (2) Certificate in Lieu of End-of-Season Report. If a gin is the 
collecting handler on every bale ginned at such gin and collecting 
handler reports and remittances of assessments have been made in 
accordance with Sec. 1205.516, a certification to that effect may be 
made to the Cotton Board in lieu of an end-of-season report.
    (b) Reporting schedule. The schedule for submitting gin reports is 
as follows:
    (1) Each gin that completes ginning operations prior to January 16 
shall make a report to the Cotton Board within 10 days after completion 
of ginning.
    (2) Each gin that operates on or after January 16 will make a report 
to the Cotton Board not later than January 25 covering bales ginned 
through January 15.
    (3) Each gin that operates after January 15 shall make a 
supplemental report to the Cotton Board within 10 days after the close 
of ginning operations covering bales ginned after January 15.

[42 FR 35974, July 13, 1977, as amended at 57 FR 29192, July 1, 1992]



Sec. 1205.531  Records.

    Each handler or importer required to make reports pursuant to this 
subpart shall maintain such books and records as are necessary to verify 
the reports.

[57 FR 29192, July 1, 1992]



Sec. 1205.532  Retention period for reports and records.

    Each handler and importer required to make reports pursuant to this 
subpart shall retain for at least 2 years beyond the marketing year of 
their applicability:
    (a) One copy of the report made to the Cotton Board; and
    (b) Such books and records as are necessary to verify such reports.

[57 FR 29192, July 1, 1992]



Sec. 1205.533  Availability of reports and records.

    Each handler and importer required to make reports pursuant to this 
subpart shall make available for inspection by the Cotton Board, 
including its designated employees, and the Secretary any reports, 
books, or records required under this subpart.

[57 FR 29192, July 1, 1992]

[[Page 63]]

                        Confidential Information



Sec. 1205.540  Confidential books, records, and reports.

    All information obtained from the books, records, and reports of 
handlers and importers shall be kept confidential in the manner and to 
the extent provided for in Sec. 1205.340.

[57 FR 29192, July 1, 1992]



Sec. 1205.541  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 1980, Public Law 96-511, is OMB number 0581-
0093, except Board member nominee information sheets are assigned OMB 
number 0505-0001.

[57 FR 29192, July 1, 1992]

Subpart--Fiscal Period [Reserved]



PART 1206_MANGO PROMOTION, RESEARCH, AND INFORMATION--Table of Contents



 Subpart A Mango Promotion, Research, and Information Order Definitions

Sec.
1206.1 Act.
1206.2 Board.
1206.3 Conflict of interest.
1206.4 Customs.
1206.5 Department.
1206.6 First handler.
1206.7 Fiscal period.
1206.8 Foreign producer.
1206.9 Importer.
1206.10 Information.
1206.11 Mangos.
1206.12 Market or marketing.
1206.13 Order.
1206.14 Part.
1206.15 Person.
1206.16 Producer.
1206.17 Promotion.
1206.18 Research.
1206.19 [Reserved]
1206.20 Secretary.
1206.21 Suspend.
1206.22 Terminate.
1206.23 United States.
1206.24 [Reserved]

                     National Mango Promotion Board

1206.30 Establishment and membership.
1206.31 Nominations and appointments.
1206.32 Term of office.
1206.33 Vacancies.
1206.34 Procedure.
1206.35 Compensation and reimbursement.
1206.36 Powers and duties.
1206.37 Prohibited activities.

                        Expenses and Assessments

1206.40 Budget and expenses.
1206.41 Financial statements.
1206.42 Assessments.
1206.43 Exemptions.

                  Promotion, Research, and Information

1206.50 Programs, plans, and projects.
1206.51 Independent evaluation.
1206.52 Patents, copyrights, trademarks, information, publications, and 
          product formulations.

                       Reports, Books, and Records

1206.60 Reports.
1206.61 Books and records.
1206.62 Confidential treatment.

                              Miscellaneous

1206.70 Right of the Secretary.
1206.71 Referenda.
1206.72 Suspension and termination.
1206.73 Proceedings after termination.
1206.74 Effect of termination or amendment.
1206.75 Personal liability.
1206.76 Separability.
1206.77 Amendments.
1206.78 OMB control number.

                    Subpart B_Referendum Procedures.

1206.100 General.
1206.101 Definitions.
1206.102 Voting.
1206.103 Instructions.
1206.104 Subagents.
1206.105 Ballots.
1206.106 Referendum report.
1206.107 Confidential information.
1206.108 OMB control number.

                     Subpart C_Rules and Regulations

1206.200 Terms defined.
1206.201 Definitions.
1206.202 Exemption for organic mangos.

    Authority: 7 U.S.C. 7411-7425 and 7 U.S.C. 7401.

    Source: 68 FR 58554, Oct. 9, 2003, unless otherwise noted.



 Subpart A_Mango Promotion, Research, and Information Order Definitions

    Source: 69 FR 59122, Oct. 4, 2004, unless otherwise noted.

[[Page 64]]



Sec. 1206.1  Act.

    Act means the Commodity Promotion, Research, and Information Act of 
1996 (7 U.S.C. 7411-7425; Public Law 104-127; 110 Stat. 1029), or any 
amendments thereto.



Sec. 1206.2  Board.

    Board or National Mango Promotion Board means the administrative 
body established pursuant to Sec. 1206.30, or such other name as 
recommended by the Board and approved by the Department.



Sec. 1206.3  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.



Sec. 1206.4  Customs.

    Customs means the Customs and Border Protection of the U.S. 
Department of Homeland Security.



Sec. 1206.5  Department.

    Department means the U.S. 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. 1206.6  First handler.

    First handler means any person, (excluding a common or contract 
carrier), receiving 500,000 or more pounds of mangos from producers in a 
calendar year and who as owner, agent, or otherwise ships or causes 
mangos to be shipped as specified in this Order. This definition 
includes those engaged in the business of buying, selling and/or 
offering for sale; receiving; packing; grading; marketing; or 
distributing mangos in commercial quantities. The term first handler 
includes a producer who handles or markets mangos of the producer's own 
production.



Sec. 1206.7  Fiscal period.

    Fiscal period means a calendar year from January 1 through December 
31, or such other period as recommended by the Board and approved by the 
Department.



Sec. 1206.8  Foreign producer.

    Foreign producer means any person:
    (1) Who is engaged in the production and sale of mangos outside of 
the United States and who owns, or shares the ownership and risk of loss 
of the crop for sale in the U.S. market or
    (2) Who is engaged, outside of the United States, in the business of 
producing, or causing to be produced, mangos beyond the person's own 
family use and having value at first point of sale.



Sec. 1206.9  Importer.

    Importer means any person importing 500,000 or more pounds of mangos 
into the United States in a calendar year as a principal or as an agent, 
broker, or consignee of any person who produces or handles mangos 
outside of the United States for sale in the United States, and who is 
listed as the importer of record for such mangos.



Sec. 1206.10  Information.

    Information means information and programs that are designed to 
develop new markets, marketing strategies, increase market efficiency, 
and activities that are designed to enhance the image of mangos in the 
United States. These include:
    (a) Consumer information, which means any action taken to provide 
information to, and broaden the understanding of, the general public 
regarding the consumption, use, nutritional attributes, and care of 
mangos; and
    (b) Industry information, which means information and programs that 
will lead to the development of new markets, new marketing strategies, 
or increased efficiency for the mango industry, and activities to 
enhance the image of the mango industry.



Sec. 1206.11  Mangos.

    Mangos means all fresh fruit of Mangifera indica L. of the family 
Anacardiaceae.

[[Page 65]]



Sec. 1206.12  Market or marketing.

    Marketing means the sale or other disposition of mangos in the U.S. 
domestic market. To market means to sell or otherwise dispose of mangos 
in interstate or intrastate channels of commerce.



Sec. 1206.13  Order.

    Order means an order issued by the Department 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. 1206.14  Part.

    Part means part 1206 which includes the Mango Promotion, Research, 
and Information Order and all rules, regulations, and supplemental 
orders issued pursuant to the Act and the Order.



Sec. 1206.15  Person.

    Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity.



Sec. 1206.16  Producer.

    Producer means any person who is engaged in the production and sale 
of mangos in the United States and who owns, or shares the ownership and 
risk of loss of, the crop or a person who is engaged in the business of 
producing, or causing to be produced, mangos beyond the person's own 
family use and having value at first point of sale.



Sec. 1206.17  Promotion.

    Promotion means any action taken to present a favorable image of 
mangos to the general public and the food industry for the purpose of 
improving the competitive position of mangos and stimulating the sale of 
mangos in the United States. This includes paid advertising and public 
relations.



Sec. 1206.18  Research.

    Research means any type of test, study, or analysis designed to 
advance the image, desirability, use, marketability, production, product 
development, or quality of mangos, including research relating to 
nutritional value, cost of production, new product development, varietal 
development, nutritional value and benefits, and marketing of mangos.



Sec. 1206.19  [Reserved]



Sec. 1206.20  Secretary.

    Secretary means the Secretary of Agriculture of the United States.



Sec. 1206.21  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. 1206.22  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. 1206.23  United States.

    United States or U.S. means collectively the 50 states, the District 
of Columbia, the Commonwealth of Puerto Rico, and the territories and 
possessions of the United States.



Sec. 1206.24  [Reserved]

                     National Mango Promotion Board



Sec. 1206.30  Establishment and membership.

    (a) Establishment of the National Mango Promotion Board. There is 
hereby established a National Mango Promotion Board composed of eight 
importers, one first handler, two domestic producers, and seven foreign 
producers. The chairperson shall reside in the United States and the 
Board office shall also be located in the United States.
    (b) Importer districts. The importer seats shall be allocated based 
on the volume of mangos imported into the Customs Districts identified 
by their name and Code Number as defined in the Harmonized Tariff 
Schedule of the United States. The initial allocation will be two seats 
for District I, three seats for District II, two seats for District III, 
and one seat for District IV.

[[Page 66]]

    (1) District I includes the Customs Districts of Portland, ME (01), 
St. Albans, VT (02), Boston, MA (04), Providence, RI (05), Ogdensburg, 
NY (07), Buffalo, NY (09), New York City, NY (10), Philadelphia, PA 
(11), Baltimore, MD (13), Norfolk, VA (14), Charlotte, NC (15), 
Charleston, SC (16), Savannah, GA (17), Tampa, FL (18), San Juan, PR 
(49), Virgin Islands of the United States (51), Miami, FL (52) and 
Washington, DC (54).
    (2) District II includes the Customs Districts of Mobile, AL (19), 
New Orleans, LA (20), Port Arthur, TX (21), Laredo, TX (23), 
Minneapolis, MN (35), Duluth, MN (36), Milwaukee, WI (37), Detroit, MI 
(38), Chicago, IL (39), Cleveland, OH (41), St. Louis, MO (45), Houston, 
TX (53), and Dallas-Fort Worth, TX (55).
    (3) District III includes the Customs Districts of El Paso, TX (24), 
Nogales, AZ (26), Great Falls, MT (33), and Pembina, ND (34).
    (4) District IV includes the Customs Districts of San Diego, CA 
(25), Los Angeles, CA (27), San Francisco, CA (28), Columbia-Snake, OR 
(29), Seattle, WA (30), Anchorage, AK (31), and Honolulu, HI (32).
    (c) Adjustment of membership. At least once every five years, the 
Board will review the geographical distribution of production of mangos 
in the United States, the geographical distribution of the importation 
of mangos into the United States, the quantity of mangos produced in the 
United States, and the quantity of mangos imported into the United 
States. The review will be based on Board assessment records and 
statistics from the Department. If warranted, the Board will recommend 
to the Department that membership on the Board be altered to reflect any 
changes in geographical distribution of domestic mango production and 
importation and the quantity of domestic production and imports. To 
ensure equitable representation, additional first handlers may be added 
to the Board to reflect increases in domestic production.

[69 FR 59122, Oct. 4, 2004, as amended at 76 FR 36283, June 22, 2011]



Sec. 1206.31  Nominations and appointments.

    (a) Voting for first handler, importer, and domestic producer 
members will be made by mail ballot.
    (b) There shall be two nominees for each position on the Board.
    (c) Nominations for the initial Board will be handled by the 
Department. Subsequent nominations will be handled by the Board's staff.
    (d) Nominees to fill the first handler member position on the Board 
shall be solicited from all known first handlers. The nominees shall be 
placed on a ballot which will be sent to all first handlers for a vote. 
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 first handlers' first and second choice nominees.
    (e) Nominees to fill the importer positions on the Board shall be 
solicited from all known importers of mangos. The members from each 
district shall select the nominees for two positions on the Board. Two 
nominees shall be submitted for each position. The nominees shall be 
placed on a ballot which will be sent to importers in the districts for 
a vote. For each position, 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 importers' first and second choice 
nominees.
    (f) Nominees to fill the domestic producer member positions on the 
Board shall be solicited from all known domestic producers. The nominees 
shall be placed on a ballot which will be sent to all domestic producers 
for a vote. 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.
    (g) Nominees to fill the foreign producer member positions on the 
Board shall be solicited from organizations of foreign mango producers. 
Each organization shall submit two nominees for each position, and the 
nominees shall be representative of the major countries exporting mangos 
to the United States.

[[Page 67]]

    (h) From the nominations, the Secretary shall select the members of 
the Board.

[69 FR 59122, Oct. 4, 2004, as amended at 76 FR 36283, June 22, 2011]



Sec. 1206.32  Term of office.

    The term of office for first handler, importer, domestic producer, 
and foreign producer members of the Board will be three years, and these 
members may serve a maximum of two consecutive three-year terms. When 
the Board is first established, the first handler, two importers, one 
domestic producer, and two foreign producers will be assigned initial 
terms of four years; three importers, one domestic producer, and two 
foreign producers will be assigned initial terms of three years; and 
three importers and three foreign producers will be assigned initial 
terms of two years. Thereafter, each of these positions will carry a 
full three-year term. Members serving initial terms of two or four years 
will be eligible to serve a second term of three years. Each term of 
office will end on December 31, with new terms of office beginning on 
January 1.

[76 FR 36283, June 22, 2011]



Sec. 1206.33  Vacancies.

    (a) In the event that any member of the Board ceases to be a member 
of the category of members 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 Board member, or if a member of the Board engages in acts of 
dishonesty or willful misconduct, the Board may recommend to the 
Department that the member be removed from office. If the Department 
finds the recommendation of the Board shows adequate cause, the 
Department shall remove such member from office.
    (c) Should any member position become vacant, successors for the 
unexpired term of the member shall be appointed in the manner specified 
in Sec. 1206.31, except that nomination and replacement shall not be 
required if the unexpired term is less than six months.



Sec. 1206.34  Procedure.

    (a) At a Board meeting, it will be considered a quorum when at least 
ten voting members are present.
    (b) At the start of each fiscal period, the Board will select a 
chairperson and vice chairperson who will conduct meetings throughout 
that period.
    (c) All Board members will be notified at least 30 days in advance 
of all Board and committee meetings unless an emergency meeting is 
declared.
    (d) Each voting member of the Board will be entitled to one vote on 
any matter put to the Board, and the motion will carry if supported by 
one vote more than 50 percent of the total votes represented by the 
Board members present.
    (e) It will be considered a quorum at a committee meeting when at 
least one more than half of those assigned to the committee are present. 
Committees may consist of individuals other than Board members, and such 
individuals may vote in committee meetings. Committee members shall 
serve without compensation but shall be reimbursed for reasonable travel 
expenses, as approved by the Board.
    (f) In lieu of voting at a properly convened meeting and, when in 
the opinion of the chairperson of the Board such action is considered 
necessary, the Board may take action if supported by one vote more than 
50 percent of the members by mail, telephone, electronic mail, 
facsimile, or any other means of communication. In that event, all 
members must be notified and provided the opportunity to vote. Any 
action so taken shall have the same force and effect as though such 
action had been taken at a properly convened meeting of the Board. All 
telephone votes shall be confirmed promptly in writing. All votes shall 
be recorded in Board minutes.
    (g) There shall be no voting by proxy.
    (h) The chairperson shall be a voting member and shall reside in the 
U.S.
    (i) The organization of the Board and the procedures for conducting 
meetings of the Board shall be in accordance with its bylaws, which 
shall be established by the Board and approved by the Department.

[[Page 68]]



Sec. 1206.35  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.



Sec. 1206.36  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 Department 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 appropriate;
    (d) To employ persons, other than the 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;
    (e) To develop programs, plans, and projects, and enter into 
contracts or agreements, which must be approved by the Department 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 
Department considers relevant. Furthermore, 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 Department or the Board may require;
    (3) The Department 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.
    (f) To prepare and submit for approval of the Department calendar 
year budgets in accordance with Sec. 1206.40;
    (g) To maintain such records and books and prepare and submit such 
reports and records from time to time to the Department as the 
Department may prescribe; 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;
    (h) To cause its books to be audited by a competent auditor at the 
end of each calendar year and at such other times as the Department may 
request, and to submit a report of the audit directly to the Department;
    (i) To give the Department the same notice of Board and committee 
meetings as is given to members in order that the Department's 
representative(s) may attend such meetings.
    (j) To act as intermediary between the Department and any first 
handler or importer;
    (k) To furnish to the Department any information or records that the 
Department may request;
    (l) To receive, investigate, and report to the Department complaints 
of violations of the Order;
    (m) To recommend to the Department such amendments to the Order as 
the Board considers appropriate; and

[[Page 69]]

    (n) To work to achieve an effective, continuous, and coordinated 
program of promotion, research, consumer information, evaluation, and 
industry information designed to strengthen the mango industry's 
position in the U.S. domestic market; maintain and expand existing 
markets and uses for mangos; and to carry out programs, plans, and 
projects designed to provide maximum benefits to the mango industry.



Sec. 1206.37  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 is a conflict of interest; and
    (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, 
other than recommending to the Department amendments to the Order.

                        Expenses and Assessments



Sec. 1206.40  Budget and expenses.

    (a) At least 60 days prior to the beginning of each calendar year, 
and as may be necessary thereafter, the Board shall prepare and submit 
to the Department a budget for the calendar year covering its 
anticipated expenses and disbursements in administering this subpart. 
Each such 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 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 subpart.
    (c) Subject to this section, any amendment or addition to an 
approved budget must be approved by the Department, including shifting 
funds from one program, plan, or project to another. Shifts of funds 
which do not cause an increase in the Board's approved budget and which 
are consistent with governing bylaws need not have prior approval by the 
Department.
    (d) The Board is authorized to incur such expenses, including 
provision for a reserve, as the Department finds 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 subpart. Such expenses shall be paid from 
funds received by the Board.
    (e) With approval of the Department, 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 funds 
borrowed by the Board shall be expended only for startup costs and 
capital outlays 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. Voluntary contributions shall be free from any encumbrance 
by the donor, and the Board shall retain complete control of their use.
    (g) The Board shall reimburse the Department for all expenses 
incurred by the Department in the implementation, administration, and 
supervision of the Order, including all referendum costs in connection 
with the Order.
    (h) The Board may not expend for administration, maintenance, and 
functioning of the Board in any calendar year an amount that exceeds 15 
percent of the assessments and other income received by the Board for 
that calendar year. Reimbursements to the Department required under 
paragraph (g) of this section, are excluded from this limitation on 
spending.
    (i) 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

[[Page 70]]

do not exceed one fiscal period's budget. Subject to approval by the 
Department, such reserve funds may be used to defray any expenses 
authorized under this part.



Sec. 1206.41  Financial statements.

    (a) As requested by the Department, the Board shall prepare and 
submit financial statements to the Department on a periodic basis. 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 Department 
within 30 days after the end of the time period to which it applies.
    (c) The Board shall submit annually to the Department an annual 
financial statement within 90 days after the end of the calendar year to 
which it applies.



Sec. 1206.42  Assessments.

    (a) The funds to cover the Board's expenses shall be paid from 
assessments on first handlers and importers, donations from any person 
not subject to assessments under this Order, and other funds available 
to the Board and subject to the limitations contained therein.
    (b) The assessment rate shall be \1/2\ cent per pound on all mangos. 
The assessment rate will be reviewed and may be modified by the Board 
with the approval of the Department, after the first referendum is 
conducted as stated in Sec. 1206.71(b). The Department will amend this 
section if the assessment rate is modified.
    (c) Domestic mangos. First handlers of domestic mangos are required 
to pay assessments on all mangos handled for the U.S. market. This 
includes mangos of the first handler's own production.
    (d) Imported mangos. Each importer of mangos shall pay an assessment 
to the Board through Customs on mangos imported for marketing in the 
United States.
    (1) The assessment rate for imported mangos shall be the same or 
equivalent to the rate for mangos produced in the United States.
    (2) The import assessment shall be uniformly applied to imported 
mangos that are identified by the numbers 0804.50.4040 and 0804.50.6040 
in the Harmonized Tariff Schedule of the United States.
    (3) The assessments due on imported mangos shall be paid when they 
enter or are withdrawn for consumption in the United States.
    (e) Each person responsible for remitting assessments under 
paragraph (c) of this section shall remit the amounts due to the Board's 
office on a monthly basis no later than the fifteenth day of the month 
following the month in which the mangos were marketed, in such manner as 
prescribed by the Board.
    (f) A late payment charge shall be imposed on any person failing to 
remit to the Board the total amount for which the person is liable by 
the payment due date established under this section. The amount of the 
late payment charge shall be prescribed by the Department.
    (g) An additional charge shall be imposed on any person subject to a 
late payment charge in the form of interest on the outstanding portion 
of any amount for which the person is liable. The rate of interest shall 
be prescribed by the Department.
    (h) Persons failing to remit total assessments due in a timely 
manner may also be subject to actions under federal debt collection 
procedures.
    (i) The Board may authorize other organizations to collect 
assessments on its behalf with the approval of the Department.



Sec. 1206.43  Exemptions.

    (a) Any first handler or importer of less than 500,000 pounds of 
mangos per calendar year may claim an exemption from the assessments 
required under Sec. 1206.42. Mangos produced domestically and exported 
from the United States may annually claim an exemption from the 
assessments required under Sec. 1206.42.
    (b) A first handler or importer desiring an exemption shall apply to 
the Board, on a form provided by the Board, for a certificate of 
exemption. A

[[Page 71]]

first handler shall certify that the first handler will handle less than 
500,000 pounds of domestic mangos for the fiscal period for which the 
exemption is claimed. An importer shall certify that the importer will 
import less than 500,000 pounds of mangos during the fiscal period for 
which the exemption is claimed.
    (c) Upon receipt of an application, the Board shall determine 
whether an exemption may be granted. The Board then will issue, if 
deemed appropriate, a certificate of exemption to each person who is 
eligible to receive one. It is the responsibility of these persons to 
retain a copy of the certificate of exemption.
    (d) Importers who receive a certificate of exemption shall be 
eligible for reimbursement of assessments collected by Customs. These 
importers shall apply to the Board for reimbursement of any assessments 
paid. No interest will be paid on the assessments collected by Customs. 
Requests for reimbursement shall be submitted to the Board within 90 
days of the last day of the calendar year the mangos were actually 
imported.
    (e) Any person who desires an exemption from assessments for a 
subsequent calendar year shall reapply to the Board, on a form provided 
by the Board, for a certificate of exemption.
    (f) The Board may require persons receiving an exemption from 
assessments to provide to the Board reports on the disposition of exempt 
mangos and, in the case of importers, proof of payment of assessments.

                  Promotion, Research, and Information



Sec. 1206.50  Programs, plans, and projects.

    (a) The Board shall receive and evaluate, or on its own initiative 
develop, and submit to the Department 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 information, with respect to mangos; and
    (2) The establishment and conduct of research with respect to: the 
use, nutritional value and benefits, sale, distribution, and marketing 
of mangos in the United States; the creation of new products thereof, to 
the end that the marketing and use of mangos in the United States may be 
encouraged, expanded, improved, or made more acceptable; and to advance 
the image, desirability, or quality of mangos in the United States.
    (b) No program, plan, or project shall be implemented prior to its 
approval by the Department. 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.
    (d) No program, plan, or project including advertising shall be 
false or misleading or disparaging to another agricultural commodity. 
Mangos of all origins shall be treated equally.



Sec. 1206.51  Independent evaluation.

    The Board shall, not less often than every five years, authorize and 
fund, from funds otherwise available to the Board, an independent 
evaluation of the effectiveness of the Order and other programs 
conducted by the Board pursuant to the Act. The Board shall submit to 
the Department, and make available to the public, the results of each 
periodic independent evaluation conducted under this paragraph.



Sec. 1206.52  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

[[Page 72]]

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 Department Upon termination of this 
subpart, Sec. 1206.73 shall apply to determine disposition of all such 
property.

                       Reports, Books, and Records



Sec. 1206.60  Reports.

    (a) Each first handler will be required to provide to the Board 
periodically such information as may be required by the Board, with the 
approval of the Department, which may include but not be limited to the 
following:
    (1) Number of pounds of domestic mangos handled;
    (2) Number of pounds of domestic mangos on which an assessment was 
paid;
    (3) Name and address of the producers from whom the first handler 
has received mangos;
    (4) Date that assessment payments were made on each pound of 
domestic mangos handled;
    (5) Number of pounds of domestic mangos exported;
    (6) The first handler's tax identification number;
    (b) Each importer may be required to provide to the Board 
periodically such information as may be required by the Board, with the 
approval of the Department, which may include but not be limited to the 
following:
    (1) Number of pounds of mangos imported;
    (2) Number of pounds of mangos on which an assessment was paid;
    (3) Name, address, and tax identification number of the importer; 
and
    (4) Date that assessment payments were made on each pound imported.



Sec. 1206.61  Books and records.

    Each first handler and importer shall maintain and make available 
for inspection by the Department such books and records as are necessary 
to carry out the provisions of this part, any regulations issued under 
this part, including such records as are necessary to verify any reports 
required. Such records shall be retained for at least two years beyond 
the fiscal period of their applicability.



Sec. 1206.62  Confidential treatment.

    All information obtained from books, records, or reports under the 
Act and this part 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, 
first handlers, 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 part, together 
with a statement of the particular provisions of this part violated by 
such person.

[[Page 73]]

                              Miscellaneous



Sec. 1206.70  Right of the Secretary.

    All fiscal matters, programs, plans, or projects, rules or 
regulations, reports, or other substantive actions proposed and prepared 
by the Board shall be submitted to the Secretary for approval.



Sec. 1206.71  Referenda.

    (a) Initial Referendum. The Order shall not become effective unless:
    (1) The Department determines that the Order is consistent with and 
will effectuate the purposes of the Act; and
    (2) The Order is approved by a majority of the first handlers and 
importers voting, who, during a representative period determined by the 
Department, have been engaged in the handling or importation of mangos.
    (b) Subsequent referenda. Every five years, the Department shall 
hold a referendum to determine whether first handlers and importers of 
mangos favor the continuation of the Order. The Order shall continue if 
it is favored by a majority of the first handlers and importers voting 
who, during a representative period determined by the Department, have 
been engaged in the handling or importation of mangos. The Department 
will also conduct a referendum if 10 percent or more of all non-exempt, 
first handlers and importers of mangos request the Department to hold a 
referendum. In addition, the Department may hold a referendum at any 
time.



Sec. 1206.72  Suspension and termination.

    (a) The Department shall suspend or terminate this part or subpart 
or a provision thereof if the Department finds that the subpart or a 
provision thereof obstructs or does not tend to effectuate the purposes 
of the Act, or if the Department determines that this subpart or a 
provision thereof is not favored by persons voting in a referendum 
conducted pursuant to the Act.
    (b) The Department shall suspend or terminate this subpart at the 
end of the marketing year whenever the Department determines that its 
suspension or termination is approved or favored by a majority of the 
first handlers and importers voting who, during a representative period 
determined by the Department, have been engaged in the handling or 
importation of mangos.
    (c) If, as a result of a referendum the Department determines that 
this subpart is not approved, the Department shall:
    (1) Not later than 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. 1206.73  Proceedings after termination.

    (a) Upon the termination of this subpart, the Board shall recommend 
not more than five of its members to the Department to serve as trustees 
for the purpose of liquidating the affairs of the Board. Such persons, 
upon designation by the Department, 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 Department;
    (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 Department 
may direct; and
    (4) Upon request of the Department, 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.

[[Page 74]]

    (d) Any residual funds not required to defray the necessary expenses 
of liquidation shall be turned over to the Department to be disposed of, 
to the extent practical, to one or more mango industry organizations in 
the interest of continuing mango promotion, research, and information 
programs.



Sec. 1206.74  Effect of termination or amendment.

    Unless otherwise expressly provided by the Department, the 
termination or amendment of this part or any subpart 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 part; or
    (b) Release or extinguish any violation of this part; or
    (c) Affect or impair any rights or remedies of the United States, or 
of the Department, or of any other persons with respect to any such 
violation.



Sec. 1206.75  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. 1206.76  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. 1206.77  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 Department.



Sec. 1206.78  OMB control number.

    The control numbers assigned to the information collection 
requirements of this part by the Office of Management and Budget 
pursuant to the Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35, 
are OMB control number 0505-0001 and OMB control number 0581-0209.



                    Subpart B_Referendum Procedures.



Sec. 1206.100  General.

    Referenda to determine whether eligible first handlers and importers 
of mangos favor the issuance, amendment, suspension, or termination of 
the Mango Promotion, Research, and Information Order shall be conducted 
in accordance with this subpart.



Sec. 1206.101  Definitions.

    (a) Administrator means the Administrator of the Agricultural 
Marketing Service, with power to redelegate, or any officer or employee 
of the U.S. Department of Agriculture to whom authority has been 
delegated or may hereafter be delegated to act in the Administrator's 
stead.
    (b) Department means the U.S. 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.
    (c) Eligible first handler means any person, (excluding a common or 
contract carrier), receiving 500,000 or more pounds of mangos from 
producers in a calendar year and who as owner, agent, or otherwise ships 
or causes mangos to be shipped as specified in this Order. This 
definition includes those engaged in the business of buying, selling 
and/or offering for sale; receiving; packing; grading; marketing; or 
distributing mangos in commercial quantities. The term first handler 
includes a producer who handles or markets mangos of the producer's own 
production.
    (d) Eligible importer means any person importing 500,000 or more 
pounds of mangos into the United States in a calendar year as a 
principal or as an agent, broker, or consignee of any person who 
produces or handles mangos outside of the United States for sale in the 
United States, and who is listed as the importer of record for such 
mangos that are identified in the Harmonized Tariff Schedule of the 
United States by

[[Page 75]]

the numbers 0804.50.4040 and 0804.50.6040, during the representative 
period. Importation occurs when mangos originating outside of the United 
States are released from custody by the Customs and Border Protection 
and introduced into the stream of commerce in the United States. 
Included are persons who hold title to foreign-produced mangos 
immediately upon release by the Customs and Border Protection, as well 
as any persons who act on behalf of others, as agents or brokers, to 
secure the release of mangos from the Customs and Border Protection when 
such mangos are entered or withdrawn for consumption in the United 
States.
    (e) Mangos means all fresh fruit of Mangifera indica L. of the 
family Anacardiaceae.
    (f) Order means the Mango Promotion, Research, and Information 
Order.
    (g) Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity. For 
the purpose of this definition, the term ``partnership'' includes, but 
is not limited to:
    (1) A husband and a wife who have title to, or leasehold interest 
in, a mango farm as tenants in common, joint tenants, tenants by the 
entirety, or, under community property laws, as community property; and
    (2) So-called ``joint ventures'' wherein one or more parties to an 
agreement, informal or otherwise, contributed land and others 
contributed capital, labor, management, or other services, or any 
variation of such contributions by two or more parties.
    (h) Referendum agent or agent means the individual or individuals 
designated by the Department to conduct the referendum.
    (i) Representative period means the period designated by the 
Department.
    (j) United States or U.S. means collectively the 50 states, the 
District of Columbia, the Commonwealth of Puerto Rico, and the 
territories and possessions of the United States.



Sec. 1206.102  Voting.

    (a) Each eligible first handler and eligible importer of mangos 
shall be entitled to cast only one ballot in the referendum.
    (b) Proxy voting is not authorized, but an officer or employee of an 
eligible corporate first handler or importer, or an administrator, 
executor, or trustee or an eligible entity may cast a ballot on behalf 
of such entity. Any individual so voting in a referendum shall certify 
that such individual is an officer or employee of the eligible entity, 
or an administrator, executive, or trustee of an eligible entity and 
that such individual has the authority to take such action. Upon request 
of the referendum agent, the individual shall submit adequate evidence 
of such authority.
    (c) All ballots are to be cast by mail, as instructed by the 
Department.



Sec. 1206.103  Instructions.

    The referendum agent shall conduct the referendum, in the manner 
provided in this subpart, under the supervision of the Administrator. 
The Administrator may prescribe additional instructions, not 
inconsistent with the provisions of this subpart, to govern the 
procedure to be followed by the referendum agent. Such agent shall:
    (a) Determine the period during which ballots may be cast.
    (b) Provide ballots and related material to be used in the 
referendum. The ballot shall provide for recording essential 
information, including that needed for ascertaining whether the person 
voting, or on whose behalf the vote is cast, is an eligible voter.
    (c) Give reasonable public notice of the referendum:
    (1) By utilizing available media or public information sources, 
without incurring advertising expense, to publicize the dates, places, 
method of voting, eligibility requirements, and other pertinent 
information. Such sources of publicity may include, but are not limited 
to, print and radio; and
    (2) By such other means as the agent may deem advisable.
    (d) Mail to eligible first handlers and importers whose names and 
addresses are known to the referendum agent, the instructions on voting, 
a ballot, and a summary of the terms and conditions of the proposed 
Order. No person

[[Page 76]]

who claims to be eligible to vote shall be refused a ballot.
    (e) At the end of the voting period, collect, open, number, and 
review the ballots and tabulate the results in the presence of an agent 
of a third party authorized to monitor the referendum process.
    (f) Prepare a report on the referendum.
    (g) Announce the results to the public.



Sec. 1206.104  Subagents.

    The referendum agent may appoint any individual or individuals 
necessary or desirable to assist the agent in performing such agent's 
functions of this subpart. Each individual so appointed may be 
authorized by the agent to perform any or all of the functions which, in 
the absence or such appointment, shall be performed by the agent.



Sec. 1206.105  Ballots.

    The referendum agent and subagents shall accept all ballots cast. 
However, if an agent or subagent deems that a ballot should be 
challenged for any reason, the agent or subagent shall endorse above 
their signature, on the ballot, a statement to the effect that such 
ballot was challenged, by whom challenged, the reasons therefore, the 
results of any investigations made with respect thereto, and the 
disposition thereof. Ballots invalid under this subpart shall not be 
counted.



Sec. 1206.106  Referendum report.

    Except as otherwise directed, the referendum agent shall prepare and 
submit to the Administrator a report on the results of the referendum, 
the manner in which it was conducted, the extent and kind of public 
notice given, and other information pertinent to the analysis of the 
referendum and its results.



Sec. 1206.107  Confidential information.

    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. 1206.108  OMB control number.

    The control number assigned to the information collection 
requirement in this subpart 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 0581-0209.



                     Subpart C_Rules and Regulations

    Source: 70 FR 2754, Jan. 14, 2005, unless otherwise noted.



Sec. 1206.200  Terms defined.

    Unless otherwise defined in this subpart, the definitions of terms 
used in this subpart shall have the same meaning as the definitions of 
such terms which appear in Subpart A--Mango Promotion, Research, and 
Information Order.



Sec. 1206.201  Definitions.

    Organic Act means section 2103 of the Organic Foods Production Act 
of 1990 (7 U.S.C. 6502).



Sec. 1206.202  Exemption for organic mangos.

    (a) A first handler who operates under an approved National Organic 
Program (NOP) (7 CFR part 205) system plan, handles 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 the payment of assessments.
    (b) To obtain this exemption, an eligible first handler 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 beginning 
of the fiscal period as long as the first handler continues to be 
eligible for the exemption.
    (c) The request shall include the following: The first handler's 
name and address, a copy of the organic farm or organic handling 
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.

[[Page 77]]

    (d) If the first handler complies with the requirements of paragraph 
(a) of this section, the Board will grant an assessment exemption and 
shall issue a Certificate of Exemption to the first handler. For 
exemption requests received on or before August 15, 2005, the Board will 
have 60 days to approve the exemption request; after August 15, 2005, 
the Board will have 30 days to approve the exemption request. If the 
application is disapproved, the Board will notify the applicant of the 
reason(s) for disapproval within the same timeframe.
    (e) An importer who imports only products that are eligible to be 
labeled as 100 percent organic under the NOP (7 CFR part 205) and who is 
not a split operation shall be exempt from the payment of assessments. 
That importer may submit documentation to the Board and request an 
exemption from assessment on 100 percent organic mangos--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 required of first handlers in paragraph 
(c). 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 within the applicable timeframe. The Board will also issue 
the importer a 9-digit alphanumeric Harmonized Tariff Schedule (HTS) 
classification valid for 1 year from the date of issue. This HTS 
classification should be entered by the importer on the Customs entry 
documentation. Any line item entry of 100 percent organic mangos bearing 
this HTS classification assigned by the Board will not be subject to 
assessments.
    (f) The exemption will apply immediately following the issuance of 
the certificate of exemption.



PART 1207_POTATO RESEARCH AND PROMOTION PLAN--Table of Contents



               Subpart_Potato Research and Promotion Plan

                               Definitions

Sec.
1207.301 Secretary.
1207.302 Act.
1207.303 Plan.
1207.304 Person.
1207.305 Producer.
1207.306 Potatoes.
1207.307 Handle.
1207.308 Handler.
1207.309 Board.
1207.310 Fiscal period and marketing year.
1207.311 Programs and projects.
1207.312 Importer.
1207.313 Customs Service.

                     National Potato Promotion Board

1207.320 Establishment and membership.
1207.321 Term of office.
1207.322 Nominations and appointment.
1207.323 Acceptance.
1207.324 Vacancies.
1207.325 Procedure.
1207.326 Compensation and reimbursement.
1207.327 Powers.
1207.328 Duties.

                         Research and Promotion

1207.335 Research and promotion.

                        Expenses and Assessments

1207.341 Budget and expenses.
1207.342 Assessments.
1207.343 [Reserved]
1207.344 Operating reserve.

                       Reports, Books, and Records

1207.350 Reports.
1207.351 Books and records.
1207.352 Confidential treatment.

                              Miscellaneous

1207.360 Influencing governmental action.
1207.361 Right of the Secretary.
1207.362 Suspension or termination.
1207.363 Proceedings after termination.
1207.364 Effect of termination or amendment.
1207.365 Personal liability.
1207.366 Separability.

                      Subpart_Rules and Regulations

                               Definitions

1207.500 Definitions.

                                 General

1207.501 Communications.

[[Page 78]]

1207.502 Determination of membership.
1207.503 Nominations.
1207.504 Term of office.
1207.505 Procedure.
1207.506 Policy.
1207.507 Administrative Committee.
1207.508 USDA costs.

                               Assessments

1207.510 Levy of assessments.
1207.511 Determination of assessable quantity.
1207.512 Designated handler.
1207.513 Payment of assessments.
1207.514 Exemption for organic potatoes.
1207.515 Safeguards.

                                 Records

1207.532 Retention period for records.
1207.533 Availability of records.
1207.534 OMB control number assigned pursuant to the Paperwork Reduction 
          Act.

                        Confidential Information

1207.540 Confidential books, records, and reports.
1207.545 Right of the Secretary.
1207.546 Personal liability.

    Authority: 7 U.S.C. 2611-2627 and 7 U.S.C. 7401.



               Subpart_Potato Research and Promotion Plan

    Source: 37 FR 5008, Mar. 9, 1972, unless otherwise noted.

                               Definitions



Sec. 1207.301  Secretary.

    Secretary means the Secretary of Agriculture of the United States, 
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 his stead.



Sec. 1207.302  Act.

    Act means the Potato Research and Promotion Act, Title III of Public 
Law 91-670, 91st Congress, approved January 11, 1971, 84 Stat. 2041, as 
amended.

[56 FR 40229, Aug. 14, 1991]



Sec. 1207.303  Plan.

    Plan means this potato research and promotion plan issued by the 
Secretary pursuant to the act.



Sec. 1207.304  Person.

    Person means any individual, partnership, corporation, association, 
or other entity.



Sec. 1207.305  Producer.

    Producer means any person engaged in the growing of 5 or more acres 
of potatoes who owns or shares the ownership and risk of loss of such 
potato crop.



Sec. 1207.306  Potatoes.

    Potatoes means any or all varieties of Irish potatoes grown by 
producers in the 50 states of the United States and grown in foreign 
countries and imported into the United States.

[56 FR 40229, Aug. 14, 1991]



Sec. 1207.307  Handle.

    Handle means to grade, pack, process, sell, transport, purchase, or 
in any other way to place potatoes or cause potatoes to be placed in the 
current of commerce. Such term shall not include the transportation or 
delivery of field-run potatoes by the producer thereof to a handler for 
grading, storage, or processing.



Sec. 1207.308  Handler.

    Handler means any person (except a common or contract carrier of 
potatoes owned by another person) who handles potatoes, including a 
producer who handles potatoes of his own production.



Sec. 1207.309  Board.

    Board means the National Potato Promotion Board, hereinafter 
established pursuant to Sec. 1207.320.



Sec. 1207.310  Fiscal period and marketing year.

    Fiscal period and marketing year mean the 12-month period from July 
1 through June 30 of the following year or such other period which may 
be approved by the Secretary.



Sec. 1207.311  Programs and projects.

    Programs and projects mean those research, development, advertising 
or promotion programs or projects developed by the Board pursuant to 
Sec. 1207.335.

[[Page 79]]



Sec. 1207.312  Importer.

    Importer means any person who imports tablestock, frozen or 
processed potatoes for ultimate consumption by humans, or seed potatoes 
into the United States.

[56 FR 40229, Aug. 14, 1991]



Sec. 1207.313  Customs Service.

    Customs Service means the United States Customs Service of the 
United States Department of the Treasury.

[56 FR 40229, Aug. 14, 1991]

                     National Potato Promotion Board



Sec. 1207.320  Establishment and membership.

    (a) There is hereby established a National Potato Promotion Board, 
hereinafter called the ``Board'', composed of producers, importers, and 
a public member appointed by the Secretary. Producer members shall be 
appointed from nominations submitted by producers in the various States 
or groups of States pursuant to Sec. 1207.322. Importer members shall 
be appointed from nominations submitted by importers pursuant to Sec. 
1207.322. The public member shall be nominated by Board members in such 
manner as recommended by the Board and approved by the Secretary, and 
shall be appointed by the Secretary.
    (b) Producer membership upon the Board shall be determined on the 
basis of the potato production reported in the latest Crop Production 
Annual Summary Report issued by the Crop Reporting Board, U.S. 
Department of Agriculture. Unless the Secretary, upon recommendation of 
the Board, determines an alternate basis, for each five million 
hundredweight of such production, or major fraction thereof, produced 
within each State, such State shall be entitled to one member. However, 
each State shall initially be entitled to at least one member.
    (c) The number of importer member positions on the Board shall be 
based on the hundredweights of potatoes, potato products equivalent to 
fresh potatoes, and seed potatoes imported into the United States but 
shall not exceed five importer members. Unless the Secretary, upon 
recommendation of the Board, determines an alternate basis, there shall 
be one importer member position for each 5 million hundredweight, or 
major fraction thereof, of potatoes, potato product equivalents, and 
seed potatoes imported into the United States.
    (d) Any State in which the potato producers fail to respond to an 
officially called nomination meeting may be combined with an adjacent 
State for the purpose of representation on the Board, in which case the 
Board's producer member selected by the Secretary will represent both 
States, but such member's voting power under Sec. 1207.325 shall not be 
increased.
    (e) The Secretary, upon recommendation of the Board, may establish, 
through rule making procedure, districts or groups of States in order to 
change the representation requirements for membership on the Board. In 
such event the voting power of members under Sec. 1207.325 would be 
based upon the total production within the new district or group of 
States.
    (f) Should the Board fail to nominate a public member, the Secretary 
may appoint such member.

[37 FR 5008, Mar. 9, 1972, as amended at 49 FR 20806, May 17, 1984; 49 
FR 31390, Aug. 7, 1984; 56 FR 40229, Aug. 14, 1991]



Sec. 1207.321  Term of office.

    (a) The term of office of Board members shall be 3 years, beginning 
July 1, or such other beginning date as may be approved pursuant to 
regulations.
    (b) The terms of office of the Board's producer members shall be so 
determined that approximately one-third of the terms will expire each 
year. Importer and public member terms shall run concurrently. All 
members serving on the Board on the effective date of this amendment to 
the Plan shall continue serving the term to which they were appointed.
    (c) Board members shall serve during the term of office for which 
they are selected and have qualified, and until their successors are 
selected and have qualified.
    (d) No member shall serve for more than two full successive terms of 
office.

[37 FR 5008, Mar. 9, 1972, as amended at 56 FR 40229, Aug. 14, 1991]

[[Page 80]]



Sec. 1207.322  Nominations and appointment.

    The Secretary shall select the producer, importer, and public 
members of the Board from nominations which may be made in the following 
manner.
    (a) A meeting or meetings of producers shall be held in each State 
to nominate producer members for the Board. For nominations to the 
initial Board the meetings shall be announced by the U.S. Department of 
Agriculture. The Department may call upon other organizations to assist 
in conducting the meetings such as State and national organizations of 
potato producers. Such nomination meetings shall be held not later than 
60 days after the issuance of this subpart. Any organization designated 
to hold such nomination meetings shall give adequate notice of such 
meetings to the potato producers affected; also to the Secretary so that 
a representative of the Secretary, if available, may conduct such 
meetings or act as secretary of such nomination meetings.
    (b) After the establishment of the initial Board, the nominations 
for subsequent Board producer members shall be made by producers at 
meetings in the producing sections or States. The Board shall hold such 
meetings, or cause them to be held, in accordance with rules established 
pursuant to recommendation of the Board.
    (c) Only producers may participate in designating producer nominees. 
Each producer is entitled to one vote only on behalf of himself, his 
partners, agents, subsidiaries, affiliates, and representatives for each 
position for which nominations are being held. If a producer is engaged 
in producing potatoes in more than one State, he shall elect the State 
in which he shall vote. In no event shall he vote in nominations in more 
than one meeting.
    (d) The importer members shall be nominated by importers of 
potatoes, potato products and/or seed potatoes. The number of importer 
members on the Board shall be announced by the Secretary and shall not 
exceed five members. The Board may call upon organizations of potato, 
potato products and/or seed potato importers to assist in nominating 
importers for membership on the Board. If such organizations fail to 
submit nominees or are determined by the Board to not adequately 
represent importers, then the Board may conduct meetings of importers to 
nominate eligible importers for Board member positions. In determining 
if importer organizations adequately represent importers, the Board 
shall consider:
    (1) How many importers belong to the association;
    (2) What percentage of the total number of importers is represented 
by the association;
    (3) Is the association representative of the potato, potato product, 
and seed potato import industry;
    (4) Does the association speak for potato, potato product, and seed 
potato importers; and
    (5) Other relevant information as may be warranted.
    (e) The public member shall be nominated by the producer and 
importer members of the Board. The public member shall have no direct 
financial interest in the commercial production or marketing of potatoes 
except as a consumer and shall not be a director, stockholder, officer 
or employee of any firm so engaged. The Board shall prescribe such 
additional qualifications, administrative rules and procedures for 
selection and voting for each candidate as it deems necessary and the 
Secretary approves.

[37 FR 5008, Mar. 9, 1972, as amended at 49 FR 20806, May 17, 1984; 56 
FR 40229, Aug. 14, 1991]

    Effective Date Note: At 62 FR 46179, Sept. 2, 1997, in Sec. 
1207.322, paragraphs (a) and (d)(1) through (d)(5); in paragraph (b), 
the words ``at meetings'' in the first sentence and the entire last 
sentence; in paragraph (c), the last sentence; and in paragraph (d), the 
last two sentences of the introductory text were suspended, effective 
Sept. 3, 1997.



Sec. 1207.323  Acceptance.

    Each person selected by the Secretary as a member of the Board shall 
qualify by filing a written acceptance with the Secretary promptly after 
being notified of such selection.



Sec. 1207.324  Vacancies.

    To fill any vacancy caused by the failure of any person selected as 
a member of the Board to qualify, or in

[[Page 81]]

the event of the death, removal, resignation, or disqualification of any 
member, a successor shall be nominated and selected in the manner 
specified in Sec. 1207.322. In the event of failure to provide nominees 
for such vacancies, the Secretary may select other eligible persons.



Sec. 1207.325  Procedure.

    (a) Each State (or district or group of States established pursuant 
to Sec. 1207.320) which has a member on the Board shall be entitled to 
not less than one vote for any production up to 1 million hundredweight, 
plus one additional vote for each additional 1 million hundredweight of 
production, or major fraction thereof, as determined by the latest crop 
production annual summary report issued by the Crop Reporting Board, 
U.S. Department of Agriculture. The casting of the votes for each State 
shall be determined by the members of the Board from that State.
    (b) A majority of the Board members shall constitute a quorum and 
any action of the Board shall require a majority of concurring votes of 
those present and voting. At assembled meetings all votes shall be cast 
in person or by duly authorized proxy.
    (c) For routine and noncontroversial matters which do not require 
deliberation and the exchange of views, and for matters of an emergency 
nature when there is not enough time to call an assembled meeting, the 
Board may act upon a majority of concurring votes of its members cast by 
mail, telegraph, or telephone. Any vote cast by telephone shall be 
confirmed promptly in writing.

[37 FR 5008, Mar. 9, 1972, as amended at 57 FR 40083, Sept. 2, 1992]



Sec. 1207.326  Compensation and reimbursement.

    Members of the Board shall serve without compensation but shall be 
reimbursed for reasonable expenses incurred by them in the performance 
of their duties as members of the Board.



Sec. 1207.327  Powers.

    The Board shall have the following powers subject to Sec. 1207.361:
    (a) To administer the provisions of this plan in accordance with its 
terms and conditions;
    (b) To make rules and regulations to effectuate the terms and 
conditions of this plan;
    (c) To receive, investigate, and report to the Secretary complaints 
of violations of this plan; and
    (d) To recommend to the Secretary amendments to this plan.



Sec. 1207.328  Duties.

    The Board shall, among other things, have the following duties:
    (a) To meet and organize and to select from among its members a 
president and such other officers as may be necessary; to select 
committees and subcommittees of Board members to nominate the public 
member; to adopt such rules for the conduct of its business as it may 
deem advisable; and it may establish advisory committees of persons 
other than Board members;
    (b) To employ such persons as it may deem necessary and to determine 
the compensation and define the duties of each; and to protect the 
handling of Board funds through fidelity bonds;
    (c) At the beginning of each fiscal period, to prepare and submit to 
the Secretary for his approval a budget on a fiscal period basis of the 
anticipated expenses in the administration of this plan including the 
probable costs of all programs or projects and to recommend a rate of 
assessment with respect thereto;
    (d) To develop programs and projects and to enter into contracts or 
agreements for the development and carrying out of programs or projects 
of research, development, advertising or promotion, and the payment of 
the costs thereof with funds collected pursuant to this plan;
    (e) To keep minutes, books, and records which clearly reflect all of 
the acts and transactions of the Board. Minutes of each Board meeting 
shall be promptly reported to the Secretary;
    (f) To cause the books of the Board to be audited by a certified 
public accountant at least once each fiscal period, and at such other 
time as the Board may deem necessary. The report of such audit shall 
show the receipt and expenditure of funds collected pursuant to this 
part. Two copies of each such report shall be furnished to the

[[Page 82]]

Secretary and a copy of each such report shall be made available at the 
principal office of the Board for inspection by producers, handlers, and 
importers;
    (g) To give the Secretary the same notice of meetings of the Board 
and its subcommittees as is given to its members;
    (h) To act as intermediary between the Secretary and any producer, 
handler, or importer;
    (i) To furnish the Secretary such information as he may request.
    (j) To prepare and submit to the Secretary such reports from time to 
time as may be prescribed by the Secretary for appropriate accounting 
with respect to the receipt and disbursement of funds entrusted to the 
Board; and

[37 FR 5008, Mar. 9, 1972, as amended at 49 FR 20806, May 17, 1984; 56 
FR 40230, Aug. 14, 1991; 57 FR 40083, Sept. 2, 1992]

                         Research and Promotion



Sec. 1207.335  Research and promotion.

    The Board shall develop and submit to the Secretary for approval any 
programs or projects authorized in this section. Such programs or 
projects shall provide for:
    (a) The establishment, issuance, effectuation and administration of 
appropriate programs or projects for the advertising and promotion of 
potatoes and potato products: Provided, however, That any such program 
or project shall be directed toward increasing the general demand for 
potatoes and potato products;
    (b) Establishing and carrying on research and development projects 
and studies to the end that the marketing and utilization of potatoes 
may be encouraged, expanded, improved, or made more efficient: Provided, 
That quality control, grade standards and supply management programs 
shall not be conducted under, or as a part of, this plan; and
    (c) The development and expansion of potato and potato product sales 
in foreign markets.
    (d) No advertising or promotion program shall make any reference to 
private brand names or use false or unwarranted claims in behalf of 
potatoes or their products or false or unwarranted statements with 
respect to the attributes or use of any competing products.

                        Expenses and Assessments



Sec. 1207.341  Budget and expenses.

    (a) At the beginning of each fiscal period, or as may be necessary 
thereafter, the Board shall prepare and recommend a budget on a fiscal 
period basis of its anticipated expenses and disbursements in the 
administration of this plan, including probable costs of research, 
development, advertising, and promotion. The Board shall also recommend 
a rate of assessment calculated to provide adequate funds to defray its 
proposed expenditures and to provide for a reserve as set forth in Sec. 
1207.344.
    (b) The Board is authorized to incur such expenses for research, 
development, advertising, or promotion of potatoes and potato products, 
such other expenses for the administration, maintenance, and functioning 
of the Board, and any referendum and administrative costs incurred by 
the Department of Agriculture as are approved pursuant to Sec. 
1207.361.

[37 FR 5008, Mar. 9, 1972, as amended at 49 FR 20806, May 17, 1984]



Sec. 1207.342  Assessments.

    (a) The funds to cover the Board's expenses shall be acquired by the 
levying of assessments upon handlers and importers as designated in 
regulations recommended by the Board and issued by the Secretary. Such 
assessments shall be levied at a rate fixed by the Secretary which shall 
not exceed one-half of one per centum of the immediate past ten calendar 
years United States average price received for potatoes by growers as 
reported by the Department of Agriculture and not more than one such 
assessment may be collected on any potatoes.
    (b) Each designated handler, as specified in regulations, shall pay 
assessments to the Board on all potatoes handled by him, including 
potatoes he produced. Assessments shall be paid to the Board at such 
time and in such manner as the Board shall direct pursuant to 
regulations issued hereunder. The designated handler may collect the

[[Page 83]]

assessments from the producer, or deduct such assessments from the 
proceeds paid to the producer on whose potatoes the assessments are 
made, provided he furnishes the producer with evidence of such payment.
    (c) The importer of imported potatoes, potato products, or seed 
potatoes shall pay the assessment to the Board at the time of entry, or 
withdrawal, for consumption of such potatoes and potato products into 
the United States.
    (d) The assessment on imported tablestock potatoes and frozen or 
processed potato products for ultimate consumption by humans and on seed 
potatoes shall be established by the Board so that the effective 
assessment shall be equal to that on domestic production.
    (e) The Board may authorize other organizations to collect 
assessments in its behalf.
    (f) The Board may exempt potatoes used for nonfood purposes, other 
than seed, from the provisions of this plan and shall establish adequate 
safeguards against improper use of such exemptions.

[37 FR 5008, Mar. 9, 1972, as amended at 49 FR 20806, May 17, 1984; 56 
FR 40230, Aug. 14, 1991]



Sec. 1207.343  [Reserved]



Sec. 1207.344  Operating reserve.

    The Board may establish an operating monetary reserve and may carry 
over to subsequent fiscal periods excess funds in a reserve so 
established: Provided, That funds in the reserve shall not exceed 
approximately two fiscal periods' expenses. Such reserve funds may be 
used to defray any expenses authorized under this part.

                       Reports, Books, and Records



Sec. 1207.350  Reports.

    (a) Each designated handler shall maintain a record with respect to 
each producer for whom he handled potatoes and for potatoes handled 
which he himself produced. He shall report to the Board at such times 
and in such manner as it may prescribe by regulations such information 
as may be necessary for the Board to perform its duties under this part. 
Such reports may include, but shall not be limited to, the following:
    (1) Total quantity of potatoes handled for each producer and for 
himself, including those which are exempt under the plan;
    (2) Total quantity of potatoes handled for each producer and for 
himself subject to the plan and assessments, and
    (3) Name and address of each person from whom he collected an 
assessment, the amount collected from each person, and the date such 
collection was made.
    (b) Each importer shall report to the Board at such times and in 
such manner as it may prescribe such information as may be necessary for 
the Board to perform its duties under this part.

[37 FR 5008, Mar. 9, 1972, as amended at 56 FR 40230, Aug. 14, 1991]



Sec. 1207.351  Books and records.

    Each handler or importer subject to this part shall maintain and 
make available for inspection by authorized employees of the Board and 
the Secretary such books and records as are appropriate and necessary to 
carry out the provisions of this Plan and the regulations issued 
thereunder, including such records as are necessary to verify any 
reports required. Such records shall be maintained for at least 2 years 
beyond the marketing year of their applicability.

[37 FR 5008, Mar. 9, 1972, as amended at 56 FR 40230, Aug. 14, 1991]



Sec. 1207.352  Confidential treatment.

    All information obtained from books, records, or reports required 
pursuant to this part shall be kept confidential by all employees of the 
Department of Agriculture and of the Board, and by all contractors and 
agents retained by the Board, and only such information so furnished or 
acquired as the Secretary deems relevant shall be disclosed by them, and 
then only in a suit or administrative hearing brought at the direction, 
or upon the request, of the Secretary, or to which the Secretary or any 
officer of the United States is a party, and involving this Plan. 
Nothing in this section shall be deemed to prohibit:

[[Page 84]]

    (a) The issuance of general statements based upon the reports of a 
number of handlers or importers subject to this Plan, which statements 
do not identify the information furnished by any person; or
    (b) The publication by direction of the Secretary of the name of any 
person violating this Plan, together with a statement of the particular 
provisions of this Plan violated by such person.

[56 FR 40230, Aug. 14, 1991]

                              Miscellaneous



Sec. 1207.360  Influencing governmental action.

    No funds collected by the Board under this plan shall in any matter 
be used for the purpose of influencing governmental policy or action 
except in recommending to the Secretary amendments to this subpart.



Sec. 1207.361  Right of the Secretary.

    All fiscal matters, programs or projects, rules or regulations, 
reports, or other substantive action proposed and prepared by the Board 
shall be submitted to the Secretary for his approval.



Sec. 1207.362  Suspension or termination.

    (a) The Secretary shall, whenever he finds that this plan or any 
provision thereof obstructs or does not tend to effectuate the declared 
policy of the act, terminate or suspend the operation of this plan or 
such provision thereof.
    (b) The Secretary may conduct a referendum at any time, and shall 
hold a referendum on request of the Board or of 10 percent or more of 
the potato producers and importers to determine whether potato producers 
and importers favor termination or suspension of this plan. The 
Secretary shall suspend or terminate such plan at the end of the 
marketing year whenever the Secretary determines that its suspension or 
termination is favored by a majority of the potato producers and 
importers voting in such referendum who, during a representative period 
determined by the Secretary, have been engaged in the production or 
importation of potatoes or potato products, and who produced or imported 
more than 50 percent of the volume of the potatoes or potato products 
produced or imported by the producers and importers voting in the 
referendum.

[37 FR 5008, Mar. 9, 1972, as amended at 56 FR 40230, Aug. 14, 1991]



Sec. 1207.363  Proceedings after termination.

    (a) Upon the termination of this plan, the Board shall recommend not 
more than five 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 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 by it pursuant to this 
plan; (3) account for all receipts and disbursements and deliver all 
property on hand, together with all books and records of the Board and 
of the trustees, to such person or persons as the Secretary may direct; 
and (4) upon the request of the Secretary execute such assignments or 
other instruments necessary or appropriate to vest in such person or 
persons full title and right to all of the funds, property, and claims 
vested in the Board of the trustees pursuant to this section.
    (c) Any person to whom funds, property, or claims have been 
transferred or delivered pursuant to this section shall be subject to 
the same obligation imposed upon the Board and upon the trustee.
    (d) A reasonable effort shall be made by the Board or its trustees 
to return to producers and importers any residual funds not required to 
defray the necessary expenses of liquidation. If it is found impractical 
to return such remaining funds to producers and importers, such funds 
shall be disposed of in such manner as the Secretary may determine to be 
appropriate.

[37 FR 5008, Mar. 9, 1972, as amended at 56 FR 40231, Aug. 14, 1991]

[[Page 85]]



Sec. 1207.364  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, the 
termination of this plan 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 plan or any regulation issued thereunder, or (b) release or 
extinguish any violation of this plan or any regulation issued 
thereunder, or (c) affect or impair any rights or remedies of the United 
States, or of the Secretary, or of any other person, with respect to any 
such violation.



Sec. 1207.365  Personal liability.

    No member of the Board shall be held personally responsible, either 
individually or jointly with others, in any way whatsoever to any person 
for errors in judgments, mistakes, or other acts, either of commission 
or omission, as such member except for acts of willful misconduct, gross 
negligence, or those which are criminal in nature.



Sec. 1207.366  Separability.

    If any provision of this plan is declared invalid or the 
applicability thereof to any person or circumstance is held invalid, the 
validity of the remainder of this plan or applicability thereof to other 
persons or circumstances shall not be affected thereby.



                      Subpart_Rules and Regulations

    Source: 37 FR 17379, Aug. 26, 1972, unless otherwise noted.

                               Definitions



Sec. 1207.500  Definitions.

    (a) Unless otherwise defined in this subpart, definitions of terms 
used in this subpart shall have the same meaning as the definitions of 
such terms which appear in Subpart--Potato Research and Promotion Plan.
    (b) Processor. Processor means any person who commercially processes 
potatoes into potato products, including, but not restricted to, frozen, 
dehydrated, or canned potato products, potato chips and shoestrings, and 
flour.
    (c) Imported frozen or processed potatoes for ultimate consumption 
by humans. Imported frozen or processed potatoes for ultimate 
consumption by humans means products which are imported into the United 
States which the Secretary determines contain a substantial amount of 
potato.

[37 FR 17379, Aug. 26, 1972, as amended at 56 FR 40231, Aug. 14, 1991; 
57 FR 40083, Sept. 2, 1992]

                                 General



Sec. 1207.501  Communications.

    All communications in connection with the Potato Research and 
Promotion Plan shall be addressed to: National Potato Promotion Board, 
7555 East Hampden Avenue, Suite 412, Denver, Colorado 80231.

[59 FR 44036, Aug. 26, 1994]



Sec. 1207.502  Determination of membership.

    (a) Pursuant to Sec. 1207.320 and the recommendation of the Board, 
annual producer memberships on the Board shall be determined on the 
basis of the average potato production of the 3 preceding years in each 
State as set forth in the Crop Production Annual Summary Reports issued 
by the Crop Reporting Board of the U.S. Department of Agriculture.
    (b) Pursuant to Sec. 1207.320 and the recommendation of the Board, 
annual importer memberships on the Board shall be determined on the 
basis of the average potato, potato product, and seed potato importation 
of the 3 preceding years as determined by the Board's records.

[56 FR 40231, Aug. 14, 1991]



Sec. 1207.503  Nominations.

    (a) Pursuant to Sec. 1207.322 of the plan, the Board shall assist 
producers in producing sections or States each year to nominate producer 
members for the Board. Such nominations may be conducted at meetings or 
by mail ballots. One individual shall be nominated for each position to 
become vacant. A list of nominees shall be submitted to the

[[Page 86]]

Secretary for consideration by November 1 of each year.
    (b) Pursuant to Sec. 1207.322 of the plan, the Board shall assist 
importers each year to nominate importer members for the Board. Such 
nominations may be conducted at meetings or by mail ballots.
    (c) Nomination meetings or mail balloting shall be well publicized 
with notice given to producers, importers, and the Secretary at least 10 
days prior to each meeting or mailing of ballots.
    (d) The public member shall be nominated by the producer and 
importer members of the Board.

[37 FR 17379, Aug. 26, 1972, as amended at 49 FR 2093, Jan. 18, 1984; 56 
FR 40231, Aug. 14, 1991; 62 FR 46179, Sept. 2, 1997]



Sec. 1207.504  Term of office.

    (a) The term of office of Board members shall be for three years and 
shall begin March 1 and end on the last day of February.
    (b) Board members shall serve during the term of office for which 
they are selected and have qualified and until their successors are 
selected and have qualified.

[38 FR 7123, Mar. 16, 1973, as amended at 49 FR 2093, Jan. 18, 1984]



Sec. 1207.505  Procedure.

    (a) The procedure for conducting the Board's meetings shall be in 
accordance with the bylaws adopted by the Board on June 7, 1972, and 
approved by the Secretary and any subsequent amendments adopted by the 
Board and approved by the Secretary.
    (b) Each importer member shall be entitled to not less than one 
vote. Importer members shall also be entitled to one additional vote for 
each 1 million hundredweight, or major fraction thereof, on a fresh-
weight basis, of imported tablestock potatoes, potato products, or seed 
potatoes, as determined by data on imports provided by the U.S. 
Department of Agriculture. The casting of such votes shall be determined 
by the importer members.

[62 FR 46179, Sept. 2, 1997]



Sec. 1207.506  Policy.

    (a) It shall be the policy of the Board to carry out an effective 
and continuous coordinated program of marketing research, development, 
advertising, and promotion in order to help maintain and expand existing 
domestic and foreign markets for potatoes and to develop new or improved 
markets.
    (b) It shall be the objective of the Board to carry out programs and 
projects which will provide maximum benefit to the potato industry and 
no undue preference shall be given to any of the various industry 
segments.



Sec. 1207.507  Administrative Committee.

    (a) The Board shall annually select from among its members an 
Administrative Committee composed of producer members as provided for in 
the Board's bylaws, one or more importer members, and the public member. 
Selection shall be made in such manner as the Board may prescribe: 
Except that such committee shall include the Chairperson and seven Vice-
Chairpersons, one of whom shall also serve as the Secretary and 
Treasurer of the Board.
    (b) The Administrative Committee shall act for the Board in 
implementing such marketing research, development, advertising, and/or 
promotion activities as directed by the Board, and shall, subject to 
such direction, be charged with developing and submitting to the 
Secretary for his approval specific programs or projects in the name of 
the Board. The Administrative Committee shall further act for the Board 
in authorizing contracts or agreements for the development and carrying 
out of such programs or projects and the payment of the costs thereof 
with funds collected pursuant to Sec. 1207.342 of the plan.
    (1) The Administrative Committee also shall act for the Board in 
contracting with cooperating agencies for the collection of assessments 
pursuant to Sec. 1207.513(d).
    (2) [Reserved]
    (c) The Board may assign such other administrative powers and duties 
to the Administrative Committee as it shall determine, and the 
Administrative Committee shall act on behalf of

[[Page 87]]

and in the name of the Board in all administrative matters.

[37 FR 17379, Aug. 26, 1972, as amended by Amdt. 6, 42 FR 55879, Oct. 
20, 1977; 44 FR 25621, May 2, 1979; 50 FR 25199, June 18, 1985; 56 FR 
40231, Aug. 14, 1991; 59 FR 44036, Aug. 26, 1994; 71 FR 76901, Dec. 22, 
2006]



Sec. 1207.508  USDA costs.

    Pursuant to Sec. 1207.341 of the Plan the Board shall pay those 
administrative costs incurred by the U.S. Department of Agriculture for 
the conduct of its duties under the Plan as are determined periodically 
by the Secretary. Payment shall be due promptly after billing for such 
costs.

[49 FR 26202, June 27, 1984]

                               Assessments



Sec. 1207.510  Levy of assessments.

    (a) Domestic assessments. (1) An assessment rate of 3 cents per 
hundredweight shall be levied on all potatoes produced within the 50 
states of the United States.
    (2) No assessment shall be levied on potatoes grown in the 50 States 
of the United States by producers of less than 5 acres of potatoes.
    (b) Assessments on imports. (1) An Assessment rate of 3 cents per 
hundredweight shall be levied on all tablestock potatoes imported into 
the United States for ultimate consumption by humans and all seed 
potatoes imported into the United States. An assessment rate of 3 cents 
per hundredweight shall be levied on the fresh weight equivalents of 
imported frozen or processed potatoes for ultimate consumption by 
humans. The importer of imported tablestock potatoes, potato products, 
or seed potatoes shall pay the assessment to the Board through the U.S. 
Customs and Border Protection at the time of entry or withdrawal for 
consumption of such potatoes and potato products into the United States.
    (2) The following conversion factors shall be used to determine the 
fresh weight equivalents of frozen and processed potato products:

Frozen potato products..........................................   .50
Canned potatoes.................................................   .636
Potato chips and shoestring potatoes............................   .245
Dehydrated potato products......................................   .14
Potato starch...................................................   .1111
 

    (3) The Harmonized Tariff Schedule (HTS) categories and assessment 
rates on imported tablestock potatoes and frozen or processed potatoes 
for ultimate consumption by humans and on imported seed potatoes are as 
follows:

------------------------------------------------------------------------
                                                       Assessment
   Tablestock potatoes, frozen or processed    -------------------------
          potatoes, and seed potatoes            Cents/cwt     Cents/kg
------------------------------------------------------------------------
0701.10.0020..................................          3.0        0.066
0701.10.0040..................................          3.0        0.066
0701.90.1000..................................          3.0        0.066
0701.90.5015..................................          3.0        0.066
0701.90.5025..................................          3.0        0.066
0701.90.5035..................................          3.0        0.066
0701.90.5045..................................          3.0        0.066
0701.90.5055..................................          3.0        0.066
0701.90.5065..................................          3.0        0.066
0710.10.0000..................................          6.0        0.132
2004.10.4000..................................          6.0        0.132
2004.10.8020..................................          6.0        0.132
2004.10.8040..................................          6.0        0.132
2005.20.0070..................................        4.716        0.104
0712.90.3000..................................       21.429        0.472
1105.10.0000..................................       21.429        0.472
1105.20.0000..................................       21.429        0.472
2005.20.0040..................................       21.429        0.472
2005.20.0020..................................       12.240         0.27
1108.13.0010..................................         27.0        0.595
------------------------------------------------------------------------

    (4) No assessments shall be levied on otherwise assessable potatoes 
which are contained in imported products wherein potatoes are not a 
principal ingredient.
    (c) Potatoes and potato products used for nonhuman food purposes, 
other than seed, are exempt from assessment but are subject to the 
disposition of exempted potatoes provisions of Sec. 1207.515 of this 
subpart.
    (d) No more than one such assessment shall be made on any potatoes 
or potato products.

[57 FR 40083, Sept. 2, 1992, as amended at 58 FR 3359, Jan. 8, 1993; 59 
FR 44036, Aug. 26, 1994; 71 FR 11296, Mar. 7, 2006; 71 FR 50330, Aug. 
25, 2006; 74 FR 63543, Dec. 4, 2009; 75 FR 14491, Mar. 26, 2010]



Sec. 1207.511  Determination of assessable quantity.

    The assessable quantity of potatoes in any lot shall be determined 
on the basis of utilization. Assessments shall be due on the entire lot 
handled for human consumption, seed, or unspecified purposes if there is 
no accounting made on the basis of the utilization of such lot. However, 
if the accounting identifies all or portions of such lot on the basis of 
utilization, assessments

[[Page 88]]

shall be due only on that portion utilized for human consumption and 
seed.



Sec. 1207.512  Designated handler.

    The assessment on each lot of potatoes produced in the 50 States of 
the United States and handled shall be paid by the designated handler as 
hereafter set forth.
    (a) Unless otherwise provided in paragraphs (a)(8), (b), and (c) of 
this section, the designated handler shall be the first handler of such 
potatoes. The first handler is the person who initially performs a 
handler function as heretofore defined. Such person may be a fresh 
shipper, processor, or other person who first places the potatoes in the 
channels of commerce. A producer who grades, packs, or otherwise 
performs handler functions thereby becomes a handler and as such assumes 
first handler responsibilities under this part. The following examples 
are provided to aid in identification of first handlers who are 
designated handlers:
    (1) Producer delivers field-run potatoes of his own production to a 
handler for preparation for market. The handler in this instance is the 
designated handler, regardless of whether he subsequently handles such 
potatoes for his own account or for the account of the producer.
    (2) Producer delivers field-run potatoes of his own production to a 
handler who takes title to such potatoes and places them in storage for 
subsequent handling. The handler who purchases such potatoes from the 
producer is the designated handler.
    (3) Producer delivers field-run potatoes to a commercial storage 
facility for the purpose of holding such potatoes under his own account 
for later sale. There is no designated handler in this instance since 
such potatoes have not been handled as heretofore defined and no 
assessment is due. The designated handler of such potatoes would be 
identified on the basis of subsequent handling of such potatoes.
    (4) Fresh shipper purchases a lot of potatoes from a producer, packs 
a portion of such potatoes for fresh market, and delivers the balance to 
a processor. The fresh shipper is the designated handler for all 
potatoes in the lot.
    (5) Handler purchases potatoes from a producer's field or storage 
for the purpose of preparing such potatoes for market or for 
transporting such potatoes to storage for subsequent handling. The 
handler who purchases such potatoes from the producer is the designated 
handler.
    (6) Producer packs and sells potatoes of his own production from the 
field, roadside stand, or storage to a consumer, itinerant trucker, or 
other buyer. In performing such handler functions the producer assumes 
the responsibility of designated handler.
    (7) Processor utilizes potatoes of his own production in the 
manufacture of potato chips, frozen, dehydrated, or canned products for 
human consumption. In so handling potatoes, the processor assumes the 
responsibility of designated handler.
    (8) Producer utilizes potatoes of his own production for seed in 
planting his subsequent crop. Such seed potatoes do not enter the 
current of commerce; there is no designated handler in this instance 
since the potatoes have not been handled as heretofore defined and no 
assessment is due. However, seed potatoes sold or shipped to other 
producers for planting or to other persons for subsequent disposition 
enter the current of commerce and are subject to assessment. The 
producer of seed potatoes shall be the designated handler of such 
potatoes shipped to other producers for planting and the assessment is 
due when he first sells or otherwise handles such potatoes. The first 
person who acquires seed potatoes from the producer thereof for 
subsequent disposition other than planting by said person shall be the 
designated handler of such potatoes. However, the seed producer will be 
the designated handler responsible for filing reports and making 
payments, unless he can show that the first person who obtained the 
potatoes from him disposed of them other than by planting. To show this 
the seed producer must submit to the Potato Board the name and address 
of the first person who obtained the potatoes from him and an invoice of 
sale or settlement sheet on which it is indicated that such person will 
be the designated

[[Page 89]]

handler and therefore will be responsible for the payment of the 
assessments. Only by showing this is the seed producer no longer 
considered the designated handler and therefore not liable for the 
assessments.
    (b) Any person who handles potatoes for a producer thereof under 
oral or written contract or agreement providing for the sale thereof 
shall be the designated handler for such potatoes, notwithstanding the 
fact that the producer may have graded, packed, or otherwise handled 
such potatoes and thereby became the first handler of such potatoes.

    Examples. A cooperative marketing association, or other person, who 
makes an accounting to the producer, or pay the proceeds of the sale to 
the producer would be the designated handler responsible for the 
assessment.

    (c) Any processor who purchases potatoes from the producer thereof 
shall be the designated handler even though the producer may have 
graded, packed, or otherwise handled such potatoes and thereby became 
the first handler of such potatoes.

[37 FR 17379, Aug. 26, 1972, as amended by Amdt. 4, 40 FR 7893, Feb. 24, 
1975; Amdt. 7, 43 FR 9133, Mar. 6, 1978; Amdt. 8, 43 FR 51001, Nov. 2, 
1978; 56 FR 40231, Aug. 14, 1991]



Sec. 1207.513  Payment of assessments.

    (a) Time of payment. The assessment on domestically produced 
potatoes shall become due at the time a determination of assessable 
potatoes is made in the normal handling process, pursuant to Sec. 
1207.511. If no determination is made of the utilization of a lot, 
assessments shall be due on the entire lot when it enters the current of 
commerce. The assessment on imported potatoes, potato products, and seed 
potatoes shall become due at the time of entry, or withdrawal, for 
consumption into the United States.
    (b) Responsibility for payment. (1) The designated handler is 
responsible for payment of the assessment on domestically produced 
potatoes. He may pay with no reimbursement from the producer. In the 
alternative, he may collect the assessment from the producer, or deduct 
such assessment from the proceeds paid to the producer on whose potatoes 
the assessment is made, provided he furnishes the producer with evidence 
of such payment. Any such collection or deduction of assessment shall be 
made not later than the time when the assessment becomes payable by the 
handler to the Board. Failure of the handler to collect or deduct such 
assessment does not relieve the handler of his obligation to remit the 
assessment to the Board.
    (2) The Customs Service shall collect payment of assessment on 
imported potatoes, potato products, and seed potatoes from importers and 
forward such assessment per agreement between the Customs Service and 
the U.S. Department of Agriculture. Importers shall be responsible for 
payment of assessment directly to the Board of any assessment due but 
not collected by the Customs Service at the time of entry, or 
withdrawal, for consumption into the United States. An importer may 
apply to the Board for reimbursement of assessments paid on exempted 
products.
    (c) Payment directly to the Board. (1) Except as provided in 
paragraphs (b) and (d) of this section, each designated handler or 
importer shall remit assessments directly to the Board by check, draft, 
or money order payable to the National Potato Promotion Board, or NPPB, 
not later than 10 days after the end of the month such assessment is due 
together with a report (preferably on Board forms) thereon.
    (2) All designated handlers, including a designated handler whose 
own production is handled and assessments to the Board paid by another 
designated handler, shall report to the Board:
    (i) Date of report (which is also date of payment to the Board).
    (ii) The name and address of the designated handler;
    (iii) The period potatoes were handled;
    (iv) The total quantity of potatoes determined to be assessable 
during the period potatoes were handled, pursuant to Sec. 1207.511.
    (3) Designated handlers who collect assessments from producers or 
withhold assessments from their accounts or pay the assessment 
themselves shall also include a list of all such producers whose 
potatoes were handled during the period, their addresses and the

[[Page 90]]

total assessable quantities handled for each such producer.
    (i) In lieu of such a list, the designated handler may substitute 
authentic copies of settlement sheets given to each producer provided 
such settlement sheets contain all the information listed above.
    (ii) The words ``final report'' shall be shown on the last report at 
the close of his marketing season or at the end of each fiscal period if 
such handler markets potatoes on a year-round basis.
    (4) Prepayment of assessment: (i) In lieu of the monthly assessment 
and reporting requirements of paragraph (b) of this section, the Board 
may permit designated handlers to make advance payments of their total 
estimated assessments for the season to the Board prior to their actual 
determination of assessable potatoes. Such procedure may be permitted 
when it is considered by the designated handler to be the more practical 
method of payment.
    (ii) Persons using such procedure shall provide a final annual 
accounting of actual handling and assessments.
    (iii) Specific requirements, instructions, and forms for making such 
advance payments shall be provided by the Board upon request.
    (d) Payment through cooperating agency. The Board may authorize 
other organizations to collect assessments in its behalf. In any State 
or area in which the Board has negotiated an agreement to collect 
assessments with an agency such as a State Potato Commission or a Potato 
Association approved by the Secretary, the designated handler shall pay 
the assessment to such agency in the time and manner, and with such 
identifying information as specified in such agreement. Such an 
agreement shall not provide any cooperating agency with authority to 
collect confidential information from handlers; to qualify, the 
cooperating agency must on its own accord have access to all information 
required by the Board for collection purposes. If the Board requires 
further evidence of payment than provided, it may acquire such evidence 
from individual designated handlers.
    (1) All such agreements are subject to the requirement of Sec. 
1207.352 Confidential treatment, of the plan, the provisions of section 
310(c) of the Act, and all applicable rules and regulations and 
financial safeguards in effect under the Act and the plan; and all 
affected persons shall agree to, and conduct their operations and 
activities in accordance with, such requirements.
    (2) [Reserved]

[37 FR 17379, Aug. 26, 1972, as amended by Amdt. 6, 42 FR 55879, Oct. 
20, 1977; 56 FR 40231, Aug. 14, 1991; 62 FR 46179, Sept. 2, 1997]



Sec. 1207.514  Exemption for organic potatoes.

    (a) A producer who operates 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, except 
as provided for in paragraph (h) of this section; and is not a split 
operation shall be exempt from the payment of assessments.
    (b) To apply for an exemption under this section, the 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 July 1 
as long as the producer continues to be eligible for the exemption.
    (c) The request shall include the following: The producer's name and 
address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined in 
section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), a signed certification that the applicant meets all of the 
requirements specified in paragraph (a) of this section for an 
assessment exemption, and such other information as may be required by 
the Board and with the approval of the Secretary.
    (d) If the producer complies with the requirements of this section, 
the Board will grant the exemption and issue a Certificate of Exemption 
to the producer. For exemption requests received on or before August 15, 
2005, the Board will have 60 days to approve the exemption request; 
after August 15, 2005, the Board will have 30 days to approve the 
exemption request. If the application is disapproved, the Board will 
notify the applicant of the reason(s) for disapproval within the same 
timeframe.

[[Page 91]]

    (e) The producer shall provide a copy of the Certificate of 
Exemption to each handler to whom the producer sells potatoes. The 
handler shall maintain records showing the exempt producer's name and 
address and the exemption number assigned by the Board.
    (f) An importer who imports only products that are eligible to be 
labeled as 100 percent organic under the NOP (7 CFR part 205) and who is 
not a split operation shall be exempt from the payment of assessments. 
That importer may submit documentation to the Board and request an 
exemption from assessment on 100 percent organic potatoes, potato 
products, and seed potatoes--on a form provided by the Board--at any 
time initially and annually thereafter on or before July 1 as long as 
the importer continues to be eligible for the exemption. This 
documentation shall include the same information required of producers 
in paragraph (c) 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 Harmonized Tariff Schedule 
(HTS) classification valid for 1 year from the date of issue. This HTS 
classification should be entered by the importer on the Customs entry 
documentation. Any line item entry of 100 percent organic potatoes, 
potato products, and seed potatoes bearing this HTS classification 
assigned by the Board will not be subject to assessments.
    (g) The exemption will apply immediately following the issuance of 
the Certificate of Exemption.
    (h) Agricultural commodities produced and marketed under an organic 
system plan, as described in 7 CFR 205.201, but not sold, labeled, or 
represented as organic, shall not disqualify a producer from exemption 
under this section, except that producers who produce both organic and 
non-organic agricultural commodities as a result of split operations 
shall not qualify for exemption. Reasons for conventional sales include 
lack of demand for organic products, isolated use of antibiotics for 
humane purposes, chemical or pesticide use as the result of State or 
emergency spray programs, and crops from a buffer area as described in 7 
CFR part 205, provided all other criteria are met.

[70 FR 2755, Jan. 14, 2005]



Sec. 1207.515  Safeguards.

    The Board may require reports by designated handlers and importers 
on the handling, importation, and disposition of exempted potatoes. 
Also, authorized employees of the Board or the Secretary, may inspect 
such books and records as are appropriate and necessary to verify the 
reports on such disposition.

[37 FR 17379, Aug. 26, 1972, as amended at 56 FR 40232, Aug. 14, 1991]

                                 Records



Sec. 1207.532  Retention period for records.

    Each handler and importer required to make reports pursuant to this 
subpart shall maintain and retain such records for at least 2 years 
beyond the end of the marketing year of their applicability:
    (a) One copy of each report made to the Board; and
    (b) Such records as are necessary to verify such reports.

[37 FR 17379, Aug. 26, 1972, as amended at 56 FR 40232, Aug. 14, 1991]



Sec. 1207.533  Availability of records.

    (a) Each handler and importer required to make reports pursuant to 
this subpart shall make available for inspection by authorized employees 
of the Board or the Secretary during regular business hours, such 
records as are appropriate and necessary to verify reports required 
under this subpart.
    (b) Importers shall also maintain for 2 years records on the total 
quantities of potatoes imported and on the total quantities of potato 
products imported, and a record of each importation of potatoes, potato 
products, and seed potatoes including quantity, date, and port of entry, 
and shall make such records available for inspection by authorized 
employees of the Board or the Secretary during regular business hours.

[56 FR 40232, Aug. 14, 1991]

[[Page 92]]



Sec. 1207.534  OMB control number assigned pursuant to the Paperwork 
Reduction Act.

    The information collection requirements contained in this part have 
been approved by the Office of Management and Budget (OMB) under the 
provisions of 44 U.S.C. Chapter 35 and have been assigned OMB Control 
number 0581-0093.

[49 FR 23826, June 8, 1984]

                        Confidential Information



Sec. 1207.540  Confidential books, records, and reports.

    All information obtained from the books, records, and reports of 
handler and importers and all information with respect to refunds of 
assessments made to individual producers and importers shall be kept 
confidential in the manner and to the extent provided for in Sec. 
1207.352 of the Plan.

[56 FR 40232, Aug. 14, 1991]



Sec. 1207.545  Right of the Secretary.

    All fiscal matters, programs or projects, rules or regulations, 
reports, or other substantive action proposed and prepared by the Board 
shall be submitted to the Secretary for his approval.



Sec. 1207.546  Personal liability.

    No member 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, except for acts of willful misconduct, gross 
negligence, or those which are criminal in nature.



PART 1208_PROCESSED RASPBERRY PROMOTION, RESEARCH, AND INFORMATION 
ORDER--Table of Contents



Subpart A [Reserved]

                     Subpart B_Referendum Procedures

Sec.
1208.100 General.
1208.101 Definitions.
1208.102 Voting.
1208.103 Instructions.
1208.104 Subagents.
1208.105 Ballots.
1208.106 Referendum report.
1208.107 Confidential information.
1208.108 OMB control number.

    Authority: 7 U.S.C. 7411-7425; 7 U.S.C. 7401.

    Source:  75 FR 6091, Feb. 8, 2010, unless otherwise noted.

Subpart A [Reserved]



                     Subpart B_Referendum Procedures



Sec. 1208.100  General.

    Referenda to determine whether eligible producers of raspberries for 
processing and importers of processed raspberries favor the issuance, 
amendment, suspension, or termination of the Processed Raspberry 
Promotion, Research, and Information Order shall be conducted in 
accordance with this subpart.



Sec. 1208.101  Definitions.

    (a) Administrator means the Administrator of the Agricultural 
Marketing Service, with power to delegate, or any officer or employee of 
the U.S. Department of Agriculture to whom authority has been delegated 
or may hereafter be delegated to act in the Administrator's stead.
    (b) Department means the U.S. 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.
    (c) Eligible producer means any person who grows 20,000 pounds or 
more of raspberries for processing in the United States for sale in 
commerce, or a person who is engaged in the business of producing, or 
causing to be produced for any market, raspberries for processing beyond 
the person's own family use and having value at first point of sale.
    (d) Eligible importer means any person importing 20,000 or more 
pounds of processed raspberries into the United States in a calendar 
year as a principal or as an agent, broker, or consignee of any person 
who produces or handles processed raspberries outside of the United 
States for sale in the United

[[Page 93]]

States, and who is listed as the importer of record for such processed 
raspberries that are identified in the Harmonized Tariff Schedule of the 
United States by the numbers 0811.20.20.20, during the representative 
period. Importation occurs when processed raspberries originating 
outside of the United States are released from custody by Customs and 
introduced into the stream of commerce in the United States. Included 
are persons who hold title to foreign-produced processed raspberries 
immediately upon release by Customs, as well as any persons who act on 
behalf of others, as agents or brokers, to secure the release of 
processed raspberries from Customs when such processed raspberries are 
entered or withdrawn for consumption in the United States.
    (e) Raspberries mean and include all kinds, varieties, and hybrids 
of cultivated raspberries of the genus ``Rubus'' grown in or imported 
into the United States.
    (f) Processed Raspberries means raspberries which have been frozen, 
dried, pureed, made into juice, or delivered in any other form altered 
by mechanical processes other than fresh.
    (g) Order means the Processed Raspberry Promotion, Research, and 
Information Order.
    (h) Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity. For 
the purpose of this definition, the term ``partnership'' includes, but 
is not limited to:
    (1) A husband and a wife who have title to, or leasehold interest 
in, a raspberry farm as tenants in common, joint tenants, tenants by the 
entirety, or, under community property laws, as community property; and
    (2) So-called ``joint ventures'' wherein one or more parties to an 
agreement, informal or otherwise, contributed land and others 
contributed capital, labor, management, or other services, or any 
variation of such contributions by two or more parties.
    (i) Referendum agent or agent means the individual or individuals 
designated by the Secretary to conduct the referendum.
    (j) Representative period means the period designated by the 
Department.
    (k) United States or U.S. means collectively the 50 states, the 
District of Columbia, the Commonwealth of Puerto Rico, and the 
territories and possessions of the United States.



Sec. 1208.102  Voting.

    (a) Each eligible producer of raspberries for processing and 
eligible importer of processed raspberries shall be entitled to cast 
only one ballot in the referendum. However, each producer in a landlord/
tenant relationship or a divided ownership arrangement involving totally 
independent entities cooperating only to process raspberries, in which 
more than one of the parties is a producer or importer, shall be 
entitled to cast one ballot in the referendum covering only such 
producer or importer's share of the ownership.
    (b) Proxy voting is not authorized, but an officer or employee of an 
eligible corporate producer or importer, or an administrator, executor, 
or trustee or an eligible entity may cast a ballot on behalf of such 
entity. Any individual so voting in a referendum shall certify that such 
individual is an officer or employee of the eligible entity, or an 
administrator, executive, or trustee of an eligible entity and that such 
individual has the authority to take such action. Upon request of the 
referendum agent, the individual shall submit adequate evidence of such 
authority.
    (c) All ballots are to be cast by mail as instructed by the 
Department.



Sec. 1208.103  Instructions.

    The referendum agent shall conduct the referendum, in the manner 
provided in this subpart, under the supervision of the Administrator. 
The Administrator may prescribe additional instructions, not 
inconsistent with the provisions of this subpart, to govern the 
procedure to be followed by the referendum agent. Such agent shall:
    (a) Determine the period during which ballots may be cast.
    (b) Provide ballots and related material to be used in the 
referendum. The ballot shall provide for recording essential 
information, including that needed for ascertaining whether the person 
voting, or on whose behalf the vote is cast, is an eligible voter.

[[Page 94]]

    (c) Give reasonable public notice of the referendum:
    (1) By utilizing available media or public information sources, 
without incurring advertising expense, to publicize the dates, places, 
method of voting, eligibility requirements, and other pertinent 
information. Such sources of publicity may include, but are not limited 
to, print and radio; and
    (2) By such other means as the agent may deem advisable.
    (d) Mail to eligible producers and importers whose names and 
addresses are known to the referendum agent, the instructions on voting, 
a ballot, and a summary of the terms and conditions of the proposed 
Order. No person who claims to be eligible to vote shall be refused a 
ballot.
    (e) At the end of the voting period, collect, open, number, and 
review the ballots and tabulate the results in the presence of an agent 
of a third party authorized to monitor the referendum process.
    (f) Prepare a report on the referendum.
    (g) Announce the results to the public.



Sec. 1208.104  Subagents.

    The referendum agent may appoint any individual or individuals 
necessary or desirable to assist the agent in performing such agent's 
functions of this subpart. Each individual so appointed may be 
authorized by the agent to perform any or all of the functions which, in 
the absence of such appointment, shall be performed by the agent.



Sec. 1208.105  Ballots.

    The referendum agent and subagents shall accept all ballots cast. 
However, if an agent or subagent deems that a ballot should be 
challenged for any reason, the agent or subagent shall endorse above 
their signature, on the ballot, a statement to the effect that such 
ballot was challenged, by whom challenged, the reasons therefore, the 
results of any investigations made with respect thereto, and the 
disposition thereof. Ballots invalid under this subpart shall not be 
counted.



Sec. 1208.106  Referendum report.

    Except as otherwise directed, the referendum agent shall prepare and 
submit to the Administrator a report on the results of the referendum, 
the manner in which it was conducted, the extent and kind of public 
notice given, and other information pertinent to the analysis of the 
referendum and its results.



Sec. 1208.107  Confidential information.

    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. 1208.108  OMB control number.

    The control number assigned to the information collection 
requirement in this subpart 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 0581-NEW.



PART 1209_MUSHROOM PROMOTION, RESEARCH, AND CONSUMER INFORMATION 
ORDER--Table of Contents



 Subpart A_Mushroom Promotion, Research, and Consumer Information Order

                               Definitions

Sec.
1209.1 Act.
1209.2 Commerce.
1209.3 Consumer information.
1209.4 Council.
1209.5 Department.
1209.6 First handler.
1209.7 Fiscal year.
1209.8 Importer.
1209.9 Industry information.
1209.10 Marketing.
1209.11 Mushrooms.
1209.12 On average.
1209.13 Part and subpart.
1209.14 Person.
1209.15 Producer.
1209.16 Programs, plans, and projects.
1209.17 Promotion.
1209.18 Region.
1209.19 Research.
1209.20 Secretary.
1209.21 State and United States.

[[Page 95]]

                            Mushroom Council

1209.30 Establishment and membership.
1209.31 Nominations.
1209.32 Acceptance.
1209.33 Appointment.
1209.34 Term of office.
1209.35 Vacancies.
1209.36 Procedure.
1209.37 Compensation and reimbursement.
1209.38 Powers.
1209.39 Duties.

   Promotion, Research, Consumer Information, and Industry Information

1209.40 Programs, plans, and projects.

                        Expenses and Assessments

1209.50 Budget and expenses.
1209.51 Assessments.
1209.52 Exemption from assessment.
1209.53 Influencing governmental action.

                       Reports, Books, and Records

1209.60 Reports.
1209.61 Books and records.
1209.62 Confidential treatment.

                              Miscellaneous

1209.70 Right of the Secretary.
1209.71 Suspension or termination.
1209.72 Proceedings after termination.
1209.73 Effect of termination or amendment.
1209.74 Personal liability.
1209.75 Patents, copyrights, inventions, publications, and product 
          formulations.
1209.76 Amendments.
1209.77 Separability.

                     Subpart B_Rules and Regulations

                               Definitions

1209.200 Terms defined.

                          Nomination Procedures

1209.230 [Reserved]
1209.231 Nominations.
1209.233 Regional caucus chairpersons.
1209.235 Mail balloting.
1209.237 Appointment.

                                 General

1209.239 Financial statements.

                               Assessments

1209.251 Payment of assessments.
1209.252 Exemption procedures.

                                 Reports

1209.260 Reports.

                              Miscellaneous

1209.280 OMB control numbers.

Subpart C_Procedure for the Conduct of Referenda in Connection With the 
      Mushroom Promotion, Research, and Consumer Information Order

1209.300 General.
1209.301 Definitions.
1209.302 Voting.
1209.303 Instructions.
1209.304 Subagents.
1209.305 Ballots.
1209.306 Referendum report.
1209.307 Confidential information.

    Authority: 7 U.S.C. 6101-6112 and 7 U.S.C. 7401.

    Source: 57 FR 31951, July 20, 1992, unless otherwise noted.



 Subpart A_Mushroom Promotion, Research, and Consumer Information Order

    Source: 58 FR 3449, Jan. 8, 1993, unless otherwise noted.

                               Definitions



Sec. 1209.1  Act.

    Act means the Mushroom Promotion, Research, and Consumer Information 
Act of 1990, subtitle B of title XIX of the Food, Agriculture, 
Conservation, and Trade Act of 1990, Pub. L. 101-624, 7 U.S.C. 6101-
6112, and any amendments thereto.



Sec. 1209.2  Commerce.

    Commerce means interstate, foreign, or intrastate commerce.



Sec. 1209.3  Consumer information.

    Consumer information means information and programs that will assist 
consumers and other persons in making evaluations and decisions 
regarding the purchase, preparation, and use of mushrooms.



Sec. 1209.4  Council.

    Council means the administrative body referred to as the Mushroom 
Council established under Sec. 1209.30 of this subpart.

[[Page 96]]



Sec. 1209.5  Department.

    Department means the United States Department of Agriculture.



Sec. 1209.6  First handler.

    First handler means any person who receives or otherwise acquires 
mushrooms from a producer and prepares for marketing or markets such 
mushrooms, or who prepares for marketing or markets mushrooms of that 
person's own production.



Sec. 1209.7  Fiscal year.

    Fiscal year means the 12-month period from January 1 to December 31 
each year, or such other period as recommended by the Council and 
approved by the Secretary.



Sec. 1209.8  Importer.

    Importer means any person who imports, on average, over 500,000 
pounds of mushrooms annually from outside the United States.



Sec. 1209.9  Industry information.

    Industry information means information and programs that will lead 
to the development of new markets and marketing strategies, increased 
efficiency, and activities to enhance the image of the mushroom 
industry.



Sec. 1209.10  Marketing.

    (a) Marketing means the sale or other disposition of mushrooms in 
any channel of commerce.
    (b) To market means to sell or otherwise dispose of mushrooms in any 
channel of commerce.



Sec. 1209.11  Mushrooms.

    Mushrooms means all varieties of cultivated mushrooms grown within 
the United States and marketed for the fresh market, or imported into 
the United States and marketed for the fresh market, except such term 
shall not include mushrooms that are commercially marinated, canned, 
frozen, cooked, blanched, dried, packaged in brine, or otherwise 
processed in such manner as the Council, with the approval of the 
Secretary, may determine.



Sec. 1209.12  On average.

    On average means a rolling average of production or imports during 
the last two fiscal years, or such other period as may be determined by 
the Secretary.



Sec. 1209.13  Part and subpart.

    Part means this mushroom promotion and research order and all rules 
and regulations and supplemental orders issued thereunder, and the term 
subpart means the mushroom promotion and research order.



Sec. 1209.14  Person.

    Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity.



Sec. 1209.15  Producer.

    Producer means any person engaged in the production of mushrooms who 
owns or shares the ownership and risk of loss of such mushrooms and who 
produces, on average, over 500,000 pounds of mushrooms per year.



Sec. 1209.16  Programs, plans, and projects.

    Programs, plans, and projects means promotion, research, consumer 
information, and industry information plans, studies, projects, or 
programs conducted pursuant to this part.



Sec. 1209.17  Promotion.

    Promotion means any action determined by the Secretary to enhance 
the image or desirability of mushrooms, including paid advertising.



Sec. 1209.18  Region.

    Region means one of the described geographic subdivisions of the 
production areas described in Sec. 1209.30 (b) or as later realigned or 
reapportioned pursuant thereto, or the import region described in Sec. 
1209.30(c).



Sec. 1209.19  Research.

    Research means any type of study to advance the image, desirability, 
safety, marketability, production, product development, quality, or 
nutritional value of mushrooms.

[[Page 97]]



Sec. 1209.20  Secretary.

    Secretary means the Secretary of Agriculture of the United States 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. 1209.21  State and United States.

    (a) State means any of the several States, the District of Columbia, 
and the Commonwealth of Puerto Rico.
    (b) United States means collectively the several States of the 
United States of America, the District of Columbia, and the Commonwealth 
of Puerto Rico.

                            Mushroom Council



Sec. 1209.30  Establishment and membership.

    (a) There is hereby established a Mushroom Council of not less than 
four or more than nine members. The Council shall be composed of 
producers appointed by the Secretary under Sec. 1209.33, except that, 
as provided in paragraph (c) of this section, importers shall be 
appointed by the Secretary to the Council under Sec. 1209.33 once 
imports, on average, reach at least 50,000,000 pounds of mushrooms 
annually.
    (b) For purposes of nominating and appointing producers to the 
Council, the United States shall be divided into three geographic 
regions and the number of Council members from each region shall be as 
follows:
    (1) Region 1: All other States including the District of Columbia 
and the Commonwealth of Puerto Rico except for Pennsylvania and 
California--2 Members.
    (2) Region 2: The State of Pennsylvania--4 Members.
    (3) Region 3: The State of California--2 Members.
    (c) Importers shall be represented by a single, separate region, 
referred to as Region 4, consisting of the United States when imports, 
on average, equal or exceed 50,000,000 pounds of mushrooms annually.
    (d) At least every five years, and not more than every three years, 
the Council shall review changes in the geographic distribution of 
mushroom production volume throughout the United States and import 
volume, using the average annual mushroom production and imports over 
the preceding four years, and, based on such review, shall recommend to 
the Secretary reapportionment of the regions established in paragraph 
(b) of this section, or modification of the number of members from such 
regions, as determined under the rules established in paragraph (e), of 
this section or both, as necessary to best reflect the geographic 
distribution of mushroom production volume in the United States and 
representation of imports, if applicable.
    (e) Subject to the nine-member maximum limitation, the following 
procedure will be used to determine the number of members for each 
region to serve on the Council under paragraph (d) of this section:
    (1) Each region that produces, on average, at least 50,000,000 
pounds of mushrooms annually shall be entitled to one representative on 
the Council.
    (2) As provided in paragraph (c) of this section, importers shall be 
represented by a single, separate region, which shall be entitled to one 
representative, if such region imports, on average, at least 50,000,000 
pounds of mushrooms annually.
    (3) If the annual production of a region is greater than 110,000,000 
pounds, but less than or equal to 180,000,000 pounds, the region shall 
be represented by 1 additional member.
    (4) If the annual production of a region is greater than 180,000,000 
pounds, but less than or equal to 260,000,000 pounds, the region shall 
be represented by 2 additional members.
    (5) If the annual production of a region is greater than 260,000,000 
pounds, the region shall be represented by 3 additional members.
    (6) Should, in the aggregate, regions be entitled to levels of 
representation under paragraphs (e)(1), (2), (3), (4) and (5) of this 
section that would exceed the nine-member limit on the Council under the 
Act, the seat or seats assigned shall be assigned to that region or 
those regions with greater on-average production or import volume than 
the other regions otherwise eligible at that increment level.

[[Page 98]]

    (f) In determining the volume of mushrooms produced in the United 
States or imported into the United States for purposes of this section, 
the Council and the Secretary shall:
    (1) Only consider mushrooms produced or imported by producers and 
importers, respectively, as those terms are defined in Sec. Sec. 1209.8 
and 1209.15; and
    (2) Use the information received by the Council under Sec. 1209.60, 
and data published by the Department.
    (g) For purposes of the provisions of this section relating to the 
appointment of producers and importers to serve on the Council, the term 
producer or importer refers to any individual who is a producer or 
importer, respectively, or if the producer or importer is an entity 
other than an individual, an individual who is an officer or employee of 
such producer or importer.

[58 FR 3449, Jan. 8, 1993, as amended at 74 FR 50919, Oct. 2, 2009]



Sec. 1209.31  Nominations.

    All nominations for appointments to the Council under Sec. 1209.33 
shall be made as follows:
    (a) As soon as practicable after this subpart becomes effective, 
nominations for appointment to the initial Council shall be obtained 
from producers by the Secretary. In any subsequent year in which an 
appointment to the Council is to be made, nominations for positions 
whose terms will expire at the end of that year shall be obtained from 
producers, and as appropriate, importers, and certified by the Council 
and submitted to the Secretary by August 1 of such year, or such other 
date as approved by the Secretary.
    (b) Nominations shall be made at regional caucuses of producers or 
importers, or by mail ballot as provided in paragraph (e), in accordance 
with procedures prescribed in this section.
    (c) Except for initial Council members, whose nomination process 
will be initiated by the Secretary, the Council shall issue a call for 
nominations by February 1 of each year in which nominations for an 
appointment to the Council is to be made. The call shall include, at a 
minimum, the following information:
    (1) A list by region of the vacancies for which nominees may be 
submitted and qualifications as to producers and importers.
    (2) The date by which the names of nominees shall be submitted to 
the Secretary for consideration to be in compliance with paragraph (a) 
of this section.
    (3) A list of those States, by region, entitled to participate in 
the nomination process.
    (4) The date, time, and location of any next scheduled meeting of 
the Council, and national and State producer or importer associations, 
if known, and of the regional caucuses, if any.
    (d)(1) Except as provided in paragraph (e), nominations for each 
position shall be made by regional caucus in the region entitled to 
nominate for such position. Notice of such caucus shall be publicized to 
all producers or importers within the region, and to the Secretary, at 
least 30 days prior to the caucus. The notice shall have attached to it 
the call for nominations from the Council and the Department's equal 
opportunity policy. Except with respect to nominations for the initial 
appointments to the Council, the responsibility for convening and 
publicizing the regional caucus shall be that of the Council.
    (2) All producers or importers within the region may participate in 
the caucus. However, if a producer is engaged in the production of 
mushrooms in more than one region or is also an importer, such person's 
participation within a region shall be limited to one vote and shall 
only reflect the volume of such person's production or imports within 
the applicable region.
    (3) The regional caucus shall conduct the selection process for the 
nominees in accordance with procedures to be adopted at the caucus 
subject to the following requirements:
    (i) There shall be two individuals nominated for each open position.
    (ii) Each nominee shall meet the qualifications set forth in the 
call.
    (iii) If a producer nominee is engaged in the production of 
mushrooms in

[[Page 99]]

more than one region or is also an importer, such individual shall 
participate within the region that such individual so elects in writing 
to the Council and such election shall remain controlling until revoked 
in writing to the Council.
    (e) After the regional caucuses for the initial Council, the Council 
may conduct the selection of nominees by mail ballot in lieu of a 
regional caucus.
    (f) When producers or importers are voting for nominees to the 
Council, whether through a regional caucus or a mail ballot, the 
following conditions shall apply:
    (1) Voting for any open position shall be on the basis of:
    (i) One vote per eligible voter; and
    (ii) Volume of on-average production or imports of the eligible 
voter within that region.
    (2) Whenever the producers or importers in a region are choosing 
nominees for one open position on the Council, the proposed nominee with 
the highest number of votes cast and the proposed nominee with the 
highest volume of production or importers voted shall be the nominees 
submitted to the Secretary. If a proposed nominee receives both the 
highest number of votes cast and the highest volume of production or 
imports voted, then the proposed nominee with the second highest number 
of votes cast shall be a nominee submitted to the Secretary along with 
such proposed nominee receiving both the highest number of votes cast 
and the highest volume of production or imports voted.
    (3) Whenever the producers or importers in a region are choosing 
nominees for more than one open position on the Council at the same 
time, the number of the nominations submitted to the Secretary shall 
equal twice the number of such open positions, and for each open 
position shall consist of the proposed nominee with the highest number 
of votes cast and the proposed nominee with the highest volume of 
production or imports voted with respect to that position, subject to 
the rule set out in paragraph (f)(2). An individual shall only be 
nominated for one such open position.
    (4) Voters shall certify on their ballots as to their on-average 
production or import volume within the region involved. Such 
certification may be subject to verification.
    (g)(1) The Secretary may reject any nominee submitted. If there are 
insufficient nominees from which to appoint members to the Council as a 
result of the Secretary's rejecting such nominees, additional nominees 
shall be submitted to the Secretary under the procedures set out in this 
section.
    (2) Whenever producers or importers in a region cannot agree on 
nominees for an open position on the Council under the preceding 
provisions of this section, or whenever they fail to nominate 
individuals for appointment to the Council, the Secretary may appoint 
members in such manner as the Secretary, by regulation, determines 
appropriate.



Sec. 1209.32  Acceptance.

    Each individual nominated for membership on the Council shall 
qualify by filing a written acceptance with the Secretary at the time of 
nomination.



Sec. 1209.33  Appointment.

    From the nominations made pursuant to Sec. 1209.31, the Secretary 
shall appoint the members of the Council on the basis of representation 
provided for in Sec. 1209.30, except that no more than one member may 
be appointed to the Council from nominations submitted by any one 
producer or importer.



Sec. 1209.34  Term of office.

    (a) The members of the Council shall serve for terms of three years, 
except that the members appointed to the initial Council shall serve, 
proportionately, for terms of one, two, and three years.
    (b) Members of the initial Council shall be designated for, and 
shall serve, terms as follows: One producer member each from regions 1, 
2 and 3 shall be appointed for an initial term of one year; one producer 
member each from regions 1, 2, and 3 shall be appointed for an initial 
term of two years; and one producer member each from regions 2, 3, and 4 
shall be appointed for an initial term of three years. Because current 
imports of fresh mushrooms are less than 35,000,000 pounds, the minimum 
established for representation on the

[[Page 100]]

Council, importers will not initially have a member appointed to the 
Council.
    (c)(1) Except with respect to terms of office of the initial 
Council, the term of office for each member of the Council shall begin 
on January 1 or such other date that may be approved by the Secretary.
    (2) The term of office for the initial Council shall begin 
immediately following appointment by the Secretary, except that time in 
the interim period from appointment until the following January 1, or 
such other date that is the generally applicable beginning date for 
terms under paragraph (c)(1) approved by the Secretary, shall not count 
toward the initial term of office.
    (d) Council members shall serve during the term of office for which 
they are appointed and have qualified, and until their successors are 
appointed and have qualified.
    (e)(1) No member shall serve more than two successive three-year 
terms, except as provided in paragraph (e)(2)(ii).
    (2)(i) Those members serving initial terms of two or three years may 
serve one successive three-year term.
    (ii) Those members serving initial terms of one year may serve two 
successive three-year terms.



Sec. 1209.35  Vacancies.

    (a) To fill any vacancy occasioned by the death, removal, 
resignation, or disqualification of any member of the Council, the 
Secretary may appoint a successor from the most recent nominations 
submitted for open positions on the Council assigned to the region that 
the vacant position represents, or the Secretary may obtain nominees to 
fill such vacancy in such manner as the Secretary, by regulation, deems 
appropriate. Each such successor appointment shall be for the remainder 
of the term vacated. A vacancy will not be required to be filled if the 
unexpired term is less than six months.
    (b)(1) No successor appointed to a vacated term of office shall 
serve more than two successive three-year terms on the Council, except 
as provided in paragraph (b)(2)(ii).
    (2)(i) Any successor serving longer than one year may serve one 
successive three-year term.
    (ii) Any successor serving one year or less may serve two successive 
three-year terms.
    (c) If a member of the Council consistently refuses to perform the 
duties of a member of the Council, or if a member of the Council is 
known to be engaged in acts of dishonesty or willful misconduct, the 
Council may recommend to the Secretary that the member be removed from 
office. If the Secretary finds the recommendation of the Council shows 
adequate cause, the Secretary shall remove such member from office. 
Further, without recommendation of the Council, 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.



Sec. 1209.36  Procedure.

    (a) At a properly convened meeting of the Council, a majority of the 
members shall constitute a quorum.
    (b) Each member of the Council will be entitled to one vote on any 
matter put to the Council, and the motion will carry if supported by a 
simple majority of those voting. At assembled meetings of the Council, 
all votes will be cast in person.
    (c) In lieu of voting at a properly convened meeting and, when in 
the opinion of the chairperson of the Council such action is considered 
necessary, the Council may take action upon the concurring votes of a 
majority of its members by mail, telephone, telegraph, or any other 
means of communication, but any such action shall be confirmed promptly 
in writing. In that event, all members must be notified and provided the 
opportunity to vote. Any action so taken shall have the same force and 
effect as though such action had been taken at a properly convened 
meeting of the Council. All votes shall be recorded in Council minutes.
    (d) Meetings of the Council may be conducted by electronic 
communications, provided that each member is

[[Page 101]]

given prior notice of the meeting and has an opportunity to be present 
either physically or by electronic connection.
    (e) The organization of the Council and the procedures for 
conducting meetings of the Council shall be in accordance with its 
bylaws,which shall be established by the Council and approved by the 
Secretary.



Sec. 1209.37  Compensation and reimbursement.

    The members of the Council shall serve without compensation but 
shall be reimbursed for necessary and reasonable expenses, including a 
reasonable per diem allowance, as approved by the Council and the 
Secretary, incurred by such members in the performance of their 
responsibilities under this subpart.



Sec. 1209.38  Powers.

    The Council shall have the following powers:
    (a) To receive and evaluate or, on its own initiative, develop and 
budget for proposed programs, plans, or projects to promote the use of 
mushrooms, as well as proposed programs, plans, or projects for 
research, consumer information, or industry information, and to make 
recommendations to the Secretary regarding such proposals;
    (b) To administer the provisions of this subpart in accordance with 
its terms and provisions;
    (c) To appoint or employ such individuals as it may deem necessary, 
define the duties, and determine the compensation of such individuals;
    (d) To make rules and regulations to effectuate the terms and 
provisions of this subpart;
    (e) To receive, investigate, and report to the Secretary for action 
complaints of violations of the provisions of this subpart;
    (f) To disseminate information to producers, importers, first 
handlers, or industry organizations through programs or by direct 
contact using the public postal system or other systems;
    (g) To select committees and subcommittees of Council members, 
including an executive committee whose powers and membership shall be 
determined by the Council, subject to the approval of the Secretary, and 
to adopt such bylaws and other rules for the conduct of its business as 
it may deem advisable;
    (h) To establish committees which may include individuals other than 
Council members, and pay the necessary and reasonable expenses and fees 
for the members of such committees;
    (i) To recommend to the Secretary amendments to this subpart;
    (j) With the approval of the Secretary, to enter into contracts or 
agreements with national, regional, or State mushroom producer 
organizations, or other organizations or entities, for the development 
and conduct of programs, plans, or projects authorized under Sec. 
1209.40 and with such producer organizations for other services 
necessary for the implementation of this subpart, and for the payment of 
the cost thereof with funds collected and received pursuant to this 
subpart. The Council shall not contract with any producer or importer 
for the purpose of mushroom promotion or research. The Council may lease 
physical facilities from a producer or importer for such promotion or 
research, if such an arrangement is determined to be cost effective by 
the Council and approved by the Secretary. Any contract or agreement 
shall provide that:
    (1) The contractor or agreeing party shall develop and submit to the 
Council 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) Any such program, plan, or project shall become effective upon 
approval of the Secretary;
    (3) The contracting or agreeing party shall keep accurate records of 
all of its transactions and make periodic reports to the Council of 
activities conducted, submit accountings for funds received and 
expended, and make such other reports as the Secretary or the Council 
may require; and the Secretary may audit the records of the contracting 
or agreeing party periodically; and
    (4) Any subcontractor who enters into a contract with a Council 
contractor and who receives or otherwise uses funds allocated by the 
Council shall be subject to the same provisions as the contractor;

[[Page 102]]

    (k) With the approval of the Secretary, to invest, pending 
disbursement pursuant to a program, plan, or project, funds collected 
through assessments provided for in Sec. 1209.51, and any other funds 
received by the Council in, and only in, obligations of the United 
States or any agency thereof, in general obligations of any State or any 
political subdivision thereof, in any interest-bearing account or 
certificate of deposit of a bank that is a member of the Federal Reserve 
System, or in obligations fully guaranteed as to principal and interest 
by the United States;
    (l) To develop and propose to the Secretary programs for good 
agricultural and good handling practices and related activities for 
mushrooms.
    (m) Such other powers as may be approved by the Secretary; and
    (n) To develop and propose to the Secretary voluntary quality and 
grade standards for mushrooms, if the Council determines that such 
quality and grade standards would benefit the promotion of mushrooms.

[58 FR 3449, Jan. 8, 1993, as amended at 74 FR 50920, Oct. 2, 2009]



Sec. 1209.39  Duties.

    The Council shall have the following duties:
    (a) To meet not less than annually, and to organize and select from 
among its members a chairperson and such other officers as may be 
necessary;
    (b) To evaluate or develop, and submit to the Secretary for 
approval, promotion, research, consumer information, and industry 
information programs, plans, or projects;
    (c) To prepare for each fiscal year, and submit to the Secretary for 
approval at least 60 days prior to the beginning of each fiscal year, a 
budget of its anticipated expenses and disbursements in the 
administration of this subpart, as provided in Sec. 2109.50.
    (d) To maintain such books and records, which shall be available to 
the Secretary for inspection and audit, and to prepare and submit such 
reports from time to time to the Secretary, as the Secretary may 
prescribe, and to make appropriate accounting with respect to the 
receipt and disbursement of all funds entrusted to it;
    (e) To prepare and make public, at least annually, a report of its 
activities carried out, and an accounting for funds received and 
expended;
    (f) To cause its financial statements to be prepared in conformity 
with generally accepted accounting principles and to be audited by an 
independent certified public accountant in accordance with generally 
accepted auditing standards at least once each fiscal year and at such 
other times as the Secretary may request, and submit a copy of each such 
audit to the Secretary;
    (g) To give the Secretary the same notice of meetings of the Council 
as is given to members in order that the Secretary, or a representative 
of the Secretary, may attend such meetings;
    (h) To submit to the Secretary such information as may be requested 
pursuant to this subpart;
    (i) To keep minutes, books, and records that clearly reflect all the 
acts and transactions of the Council. Minutes of each Council meeting 
shall be promptly reported to the Secretary;
    (j) To act as intermediary between the Secretary and any producer or 
importer;
    (k) To follow the Department's equal opportunity/civil rights 
policies; and
    (l) To work to achieve an effective, continuous, and coordinated 
program of promotion, research, consumer information, and industry 
information designed to strengthen the mushroom industry's position in 
the marketplace, maintain and expand existing markets and uses for 
mushrooms, develop new markets and uses for mushrooms, and to carry out 
programs, plans, and projects designed to provide maximum benefits to 
the mushroom industry.

   Promotion, Research, Consumer Information, and Industry Information



Sec. 1209.40  Programs, plans, and projects.

    (a) The Council 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:

[[Page 103]]

    (1) The establishment, issuance, effectuation, and administration of 
appropriate programs for promotion, research, consumer information, and 
industry information with respect to mushrooms; and
    (2) The establishment and conduct of research with respect to the 
sale, distribution, marketing, and use of mushrooms and mushroom 
products, and the creation of new products thereof, to the end that 
marketing and use of mushrooms may be encouraged, expanded, improved or 
made more acceptable. However, as prescribed by the Act, nothing in this 
subpart may be construed to authorize mandatory requirements for quality 
control, grade standards, supply management programs, or other programs 
that would control production or otherwise limit the right of individual 
producers to produce mushrooms.
    (b) No program, plan, or project shall be implemented prior to its 
approval by the Secretary. Once a program, plan, or project is so 
approved, the Council shall take appropriate steps to implement it.
    (c) Each programs, plan, or project implemented under this subpart 
shall be reviewed or evaluated periodically by the Council to ensure 
that it contributes to an effective program of promotion, research, 
consumer information, or industry information. If it is found by the 
Council that any such program, plan, or project does not contribute to 
an effective program of promotion, research, consumer information, or 
industry information, then the Council shall terminate such program, 
plan, or project.
    (d) In carrying out any program, plan, or project, no reference to a 
brand name, trade name, or State or regional identification of any 
mushrooms or mushroom product shall be made. In addition, no program, 
plan, or project shall make use of unfair or deceptive acts or practices 
with respect to the quality, value, or use of any competing product.

                        Expenses and Assessments



Sec. 1209.50  Budget and expenses.

    (a)(1) At least 60 days prior to the beginning of each fiscal year, 
and as may be necessary thereafter, the Council shall prepare and submit 
to the Secretary a budget for the fiscal year covering its anticipated 
expenses and disbursements in administering this subpart. Each such 
budget shall include:
    (i) A statement of objectives and strategy for each program, plan, 
or project;
    (ii) A summary of anticipated revenue, with comparative data for at 
least one preceding year;
    (iii) A summary of proposed expenditures for each program, plan, or 
project; and
    (iv) Staff and administrative expense breakdowns, with comparative 
data for at least one preceding year.

Each budget shall include a rate of assessment for such fiscal year 
calculated, subject to Sec. 1209.51(b), to provide adequate funds to 
defray its proposed expenditures and to provide for a reserve as set 
forth in paragraph (f). The Council may change such rate at any time, as 
provided in Sec. 1209.51(b)(5).
    (2)(i) Subject to paragraph (a)(2)(ii), any amendment or addition to 
an approved budget must be approved by the Secretary, including shifting 
of funds from one program, plan, or project to another.
    (ii) Shifts of funds which do not cause an increase in the Council's 
approved budget and which are consistent with governing bylaws need not 
have prior approval by the Secretary.
    (b) The Council is authorized to incur such expenses, including 
provision for a reasonable reserve, as the Secretary finds are 
reasonable and likely to be incurred by the Council for its maintenance 
and functioning, and to enable it to exercise its powers and perform its 
duties in accordance with the provisions of this subpart. Such expenses 
shall be paid from funds received by the Council.
    (c) The Council shall not use funds collected or received under this 
subpart to reimburse, defray, or make payment of expenditures incurred 
in developing, drafting, studying, lobbying on or promoting the 
legislation authorizing this subpart. Such prohibition includes 
reimbursement, defrayment, or payment to mushroom industry associations 
or organizations, producers or importers, lawyers, law firms, or 
consultants.

[[Page 104]]

    (d) The Council may accept voluntary contributions, but these shall 
only be used to pay expenses incurred in the conduct of programs, plans, 
and projects. Such contributions shall be free from any encumbrance by 
the donor and the Council shall retain complete control of their use. 
The donor may recommend that the whole or a portion of the contribution 
be applied to an ongoing program, plan, or project.
    (e) The Council shall reimburse the Secretary, from funds received 
by the Council, for administrative costs incurred by the Secretary in 
implementing and administering this subpart, except for the salaries of 
Department employees incurred in conducting referenda.
    (f) The Council may establish an operating monetary reserve and may 
carry over to subsequent fiscal periods excess funds in any reserve so 
established, except that the funds in the reserve shall not exceed 
approximately one fiscal year's expenses. Such reserve funds may be used 
to defray any expenses authorized under this subpart.
    (g) With the approval of the Secretary, the Council may borrow money 
for the payment of administrative expenses, subject to the same fiscal, 
budget, and audit controls as other funds of the Council.



Sec. 1209.51  Assessments.

    (a) Any first handler initially purchasing, or otherwise placing 
into the current of commerce, mushrooms produced in the United States 
shall, in the manner as prescribed by the Council and approved by the 
Secretary, collect an assessment based upon the number of pounds of 
mushrooms marketed in the United States for the account of the producer, 
and remit the assessment to the Council.
    (b) The rate of assessment effective during any fiscal year shall be 
the rate specified in the budget for such fiscal year approved by the 
Secretary, except that:
    (1) The rate of assessment during the first year this subpart is in 
effect shall be one-quarter of one cent per pound of mushrooms marketed, 
or the equivalent thereof.
    (2) The rate of assessment during the second year this subpart is in 
effect shall not exceed one-third of one cent per pound of mushrooms 
marketed, or the equivalent thereof.
    (3) The rate of assessment during the third year this subpart is in 
effect shall not exceed one-half of one cent per pound of mushrooms 
marketed, or the equivalent thereof.
    (4) The rate of assessment during each of the fourth and following 
years this subpart is in effect shall not exceed one cent per pound of 
mushrooms marketed, or the equivalent thereof.
    (5) The Council may change the rate of assessment for a fiscal year 
at any time with the approval of the Secretary as necessary to reflect 
changed circumstances, except that any such changed rate may not exceed 
the level of assessment specified in paragraphs (b)(1), (2), (3), or 
(4), whichever is applicable.
    (c) Any person marketing mushrooms of that person's own production 
to consumers in the United States, either directly or through retail or 
wholesale outlets, shall be considered a first handler and shall remit 
to the Council an assessment on such mushrooms at the rate per-pound 
then in effect, and in such form and manner prescribed by the Council.
    (d) Only one assessment shall be paid on each unit of mushrooms 
marketed.
    (e)(1) Each importer of mushrooms shall pay an assessment to the 
Council on mushrooms imported for marketing in the United States, 
through the U.S. Customs Service or in such other manner as may be 
established by rules and regulations approved by the Secretary.
    (2) The per-pound assessment rate for imported mushrooms shall be 
the same as the rate provided for mushrooms produced in the United 
States.
    (3) The import assessment shall be uniformly applied to imported 
mushrooms that are identified by the numbers, 0709.51.01 and 0709.59 in 
the Harmonized Tariff Schedule of the United States or any other number 
used to identify fresh mushrooms.
    (4) The assessments due on imported mushrooms shall be paid when the 
mushrooms are entered or withdrawn for consumption in the United States,

[[Page 105]]

or at such other time as may be established by rules and regulations 
prescribed by the Council and approved by the Secretary and under such 
procedures as are provided in such rules and regulations.
    (5) Only one assessment shall be paid on each unit of mushrooms 
imported.
    (f) The collection of assessments under this section shall commence 
on all mushrooms marketed in or imported into the United States on or 
after the date established by the Secretary, and shall continue until 
terminated by the Secretary. If the Council is not constituted on the 
date the first assessments are to be collected, the Secretary shall have 
the authority to receive assessments on behalf of the Council and may 
hold such assessments until the Council is constituted, then remit such 
assessments to the Council.
    (g)(1) Each person responsible for remitting assessments under 
paragraphs (a), (c), or (e) shall remit the amounts due from assessments 
to the Council on a monthly basis no later than the fifteenth day of the 
month following the month in which the mushrooms were marketed, in such 
manner as prescribed by the Council.
    (2)(i) A late payment charge shall be imposed on any person that 
fails to remit to the Council the total amount for which the person is 
liable on or before the payment due date established under this section. 
The amount of the late payment charge shall be prescribed in rules and 
regulations as approved by the Secretary.
    (ii) An additional charge shall be imposed on any person subject to 
a late payment charge, in the form of interest on the outstanding 
portion of any amount for which the person is liable. The rate of 
interest shall be prescribed in rules and regulations as approved by the 
Secretary.
    (3) Any assessment that is determined to be owing at a date later 
than the payment due established under this section, due to a person's 
failure to submit a report to the Council by the payment due date, shall 
be considered to have been payable on the payment due date. Under such a 
situation, paragraphs (g)(2)(i) and (g)(2)(ii) of this section shall be 
applicable.
    (h) The Council, with the approval of the Secretary, may enter into 
agreements authorizing other organizations to collect assessments in its 
behalf. Any such organization shall be required to maintain the 
confidentiality of such information as is required by the Council for 
collection purposes. Any reimbursement by the Council for such services 
shall be based on reasonable charges for services rendered.
    (i) The Council is hereby authorized to accept advance payment of 
assessments for the fiscal year by any person, that shall be credited 
toward any amount for which such person may become liable. The Council 
shall not be obligated to pay interest on any advance payment.

[58 FR 3449, Jan. 8, 1993, as amended at 72 FR 41427, July 30, 2007]



Sec. 1209.52  Exemption from assessment.

    (a) The following persons shall be exempt from assessments under 
this part:
    (1) A person who produces or imports, on average, 500,000 pounds or 
less of mushrooms annually; and
    (2) A producer who operates 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, except 
as provided for in Sec. 1209.252(a)(2)(vi); and is not a split 
operation; and
    (3) An importer who imports only products that are eligible to be 
labeled as 100 percent organic under the NOP (7 CFR part 205) and who is 
not a split operation.
    (b) To claim such exemption, such persons shall apply to the 
Council, in the form and manner prescribed in the rules and regulations.
    (c) Mushrooms produced in the United States that are exported are 
exempt from assessment and are subject to such safeguards as prescribed 
in rules and regulations to prevent improper use of this exemption.
    (d) Domestic and imported mushrooms used for processing are exempt 
from assessment and are subject to such safeguards as prescribed in 
rules

[[Page 106]]

and regulations to prevent improper use of this exemption.

[58 FR 3449, Jan. 8, 1993, as amended at 70 FR 2756, Jan. 14, 2005]



Sec. 1209.53  Influencing governmental action.

    No funds received by the Council under this subpart shall in any 
manner be used for the purpose of influencing legislation or 
governmental policy or action, except to develop and recommend to the 
Secretary amendments to this subpart, and to submit to the Secretary 
proposed voluntary grade and quality standards for mushrooms.

                       Reports, Books and Records



Sec. 1209.60  Reports.

    (a) Each producer marketing mushrooms of that person's own 
production directly to consumers, and each first handler responsible for 
the collection of assessments under Sec. 1209.51(a) shall be required 
to report monthly to the Council, on a form provided by the Council, 
such information as may be required under this subpart or any rules and 
regulations issued thereunder. Such information shall include, but not 
be limited to, the following:
    (1) The first handler's name, address, and telephone number;
    (2) Date of report, which is also the date of payment to the 
Council;
    (3) Period covered by the report;
    (4) The number of pounds of mushrooms purchased, initially 
transferred, or that in any other manner are subject to the collection 
of assessments, and a copy of a certificate of exemption, claiming 
exemption under Sec. 1209.52 from those who claim such exemptions;
    (5) The amount of assessments remitted; and
    (6) The basis, if necessary, to show why the remittance is less than 
the number of pounds of mushrooms determined under paragraph (a)(4) 
multiplied by the applicable assessment rate.
    (b) If determined necessary by the Council and approved by the 
Secretary, each importer shall file with the Council periodic reports, 
on a form provided by the Council, containing at least the following 
information:
    (1) The importer's name, address, and telephone number;
    (2) The quantity of mushrooms entered or withdrawn for consumption 
in the United States during the period covered by the report; and
    (3) The amount of assessments paid to the U.S. Customs Service at 
the time of such entry or withdrawal.
    (c) The words final report shall be shown on the last report at the 
end of each fiscal year.



Sec. 1209.61  Books and records.

    Each persons who is subject to this subpart shall maintain and make 
available for inspection by the Council or the Secretary such books and 
records as are deemed necessary by the Council, with the approval of the 
Secretary, to carry out the provisions of this subpart and any rules and 
regulations issued hereunder, including such books and records as are 
necessary to verify any reports required. Such books and records shall 
be retained for at least two years beyond the fiscal year of their 
applicability.



Sec. 1209.62  Confidential treatment.

    All information obtained from books, records, or reports under the 
Act, this subpart, and the rules and regulations issued thereunder shall 
be kept confidential by all persons, including all employees and former 
employees of the Council, all officers and employees and former officers 
and employees of the Department, and 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 Council members, producers, importers, or 
first handlers. 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 suit 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.

[[Page 107]]

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. 1209.70  Right of the Secretary.

    All fiscal matters, programs, plans, or projects, rules or 
regulations, reports, or other substantive actions proposed and prepared 
by the Council shall be submitted to the Secretary for approval.



Sec. 1209.71  Suspension or termination.

    (a) Whenever the Secretary finds that this subpart or any provision 
thereof obstructs or does not tend to effectuate the declared policy of 
the Act, the Secretary shall terminate or suspend the operation of this 
subpart or such provision thereof.
    (b)(1) Five years after the date on which this subpart becomes 
effective, the Secretary shall conduct a referendum among producers and 
importers to determine whether they favor continuation, termination, or 
suspension of this subpart.
    (2) Effective beginning three years after the date on which this 
subpart becomes effective, the Secretary, on request of a representative 
group comprising 30 percent or more of the number of mushroom producers 
and importers, may conduct a referendum to determine whether producers 
and importers favor termination or suspension of this subpart.
    (3) Whenever the Secretary determines that suspension or termination 
of this subpart is favored by a majority of the mushroom producers and 
importers voting in a referendum under paragraphs (b) (1) or (2) who, 
during a representative period determined by the Secretary, have been 
engaged in producing and importing mushrooms and who, on average, 
annually produced and imported more than 50 percent of the volume of 
mushrooms produced and imported by all those producers and importers 
voting in the referendum, the Secretary shall:
    (i) Suspend or terminate, as appropriate, collection of assessments 
within six months after making such determination; and
    (ii) Suspend or terminate, as appropriate, all activities under this 
subpart in an orderly manner as soon as practicable.
    (4) Referenda conducted under this subsection shall be conducted in 
such manner as the Secretary may prescribe.



Sec. 1209.72  Proceedings after termination.

    (a) Upon the termination of this subpart, the Council shall 
recommend not more than five of its members to the Secretary to serve as 
trustees for the purpose of liquidating the affairs of the Council. Such 
persons, upon designation by the Secretary, shall become trustees of all 
the funds and property owned, in the possession of, or under the control 
of the Council, including any claims unpaid or property not delivered, 
or any other claim existing at the time of such termination.
    (b) The trustees shall:
    (1) Continue in such capacity until discharged by the Secretary;
    (2) Carry out the obligations of the Council under any contract or 
agreement entered into by it under this subpart;
    (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 Council and of the trustees, to such persons as the Secretary may 
direct; and
    (4) Upon the request of the Secretary, execute such assignments or 
other instruments necessary or appropriate to vest in such persons full 
title and right to all of the funds, property, and claims vested in the 
Council or the trustees under this subpart.
    (c) Any person to whom funds, property, or claims have been 
transferred or delivered under this subpart shall be

[[Page 108]]

subject to the same obligations imposed upon the Council 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 used, to the 
extent practicable, in the interest of continuing one or more of the 
promotion, research, consumer information, or industry information 
programs, plans, or projects authorized under this subpart.



Sec. 1209.73  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, the 
termination of this subpart or of any rule and regulation issued under 
this subpart, or the issuance of any amendment to such provisions, shall 
not:
    (a) Affect or waive any right, duty, obligation, or liability that 
shall have arisen or may hereafter arise in connection with any 
provision of this subpart or any such rules or regulations;
    (b) Release or extinguish any violation of this subpart or any such 
rules or regulations; or
    (c) Affect or impair any rights or remedies of the United States, 
the Secretary, or any person with respect to any such violation.



Sec. 1209.74  Personal liability.

    No member or employee of the Council shall be held personally 
responsible, either individually or jointly, in any way whatsoever, to 
any person for errors in judgment, mistakes, or other acts of either 
commission or omission of such member or employee under this subpart, 
except for acts of dishonesty or willful misconduct.



Sec. 1209.75  Patents, copyrights, inventions, publications, and product
formulations.

    Any patents, copyrights, inventions, publications, or product 
formulations developed through the use of funds received by the Council 
under this subpart shall be the property of the United States Government 
as represented by the Council and shall, along with any rents, 
royalties, residual payments, or other income from the rental, sale, 
leasing, franchising, or other uses of such patents, copyrights, 
inventions, publications, or product formulations inure to the benefit 
of the Council and be considered income subject to the same fiscal, 
budget, and audit controls as other funds of the Council. Upon 
termination of this subpart, Sec. 1209.72 shall apply to determine 
disposition of all such property.



Sec. 1209.76  Amendments.

    Amendments to this subpart may be proposed, from time to time, by 
the Council or by any interested person affected by the provisions of 
the Act, including the Secretary.



Sec. 1209.77  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.



                     Subpart B_Rules and Regulations

    Source: 58 FR 8197, Feb. 11, 1993, unless otherwise noted.

                               Definitions



Sec. 1209.200  Terms defined.

    Unless otherwise defined in this subpart, the definitions of terms 
used in this subpart shall have the same meaning as the definitions in 
Subpart A--Mushroom Promotion, Research, and Consumer Information Order 
of this part.

                          Nomination Procedures



Sec. 1209.230  [Reserved]



Sec. 1209.231  Nominations.

    Nominations shall be made at regional caucuses of producers or 
importers, or by mail ballot in accordance with the procedures 
prescribed in Sec. 1209.31 of this part. Proxy voting by producers and 
importers shall not be permitted at a regional caucus or in a mail 
ballot. Each regional caucus and mail ballot shall be scheduled so as to 
ensure that the nominations for each position that will be open at the 
beginning of the following year are received

[[Page 109]]

by the Secretary by August 1, or such other date approved by the 
Secretary.



Sec. 1209.233  Regional caucus chairpersons.

    (a) Regional caucus chairpersons shall be elected by a simple 
majority vote of eligible voters in attendance. Such elections shall be 
coordinated by the Council, except for the initial elections, which 
shall be coordinated by a representative of the Secretary.
    (b) Regional caucus chairpersons will coordinate the entire 
nomination process. In conducting the nominations process, each regional 
caucus chairperson shall ensure that:
    (1) Voting for producer nominees is limited to producers, and voting 
for importer nominees is limited to importers; and
    (2) Producer candidates for nomination are producers, and importer 
candidates for nomination are importers.
    (c) Within 14 days after completion of each regional caucus, each 
chairperson shall provide the Secretary with the following information:
    (1) The identification of that region's two nominees for each open 
position on the Council; and
    (2) A typed copy of the regional caucus's minutes.
    (d) The chairperson of each regional caucus shall provide nominees 
with qualification statements and other specified information. Each 
nominee will be contacted by the chairperson and asked to forward such 
completed documentation to the Council within 14 days after completion 
of the regional caucus, except for the initial nominees, which shall be 
asked to forward such completed documentation to the Secretary.
    (e) The tenure of the chairperson shall only be for the duration of 
the regional caucus and the preparation of required documentation.



Sec. 1209.235  Mail balloting.

    (a) After the initial regional caucuses, the Council may conduct 
nominations of individuals as candidates for appointment to the Council 
by mail ballot in lieu of a regional caucus.
    (b)(1) In the event of a mail ballot, all qualified individuals in a 
region interested in serving as a member on the Council or persons who 
are interested in nominating an individual to serve on the Council shall 
submit to the Council in writing such information as name, mailing 
address, number of pounds of mushrooms produced or imported, or such 
other information as may be required, in order to place such individual 
on the ballot.
    (2) Notice of mail balloting to nominate candidates for a position 
on the Council shall be publicized by the Council to producers or 
importers in the region involved, and to the Secretary, at least 120 
days before the region's nominee ballot is issued.
    (3) In proposing nominees for inclusion on a mail ballot, proposed 
nominations must be received by the Council at least 30 days before the 
region's nominee ballot is issued.
    (c) Once proposed nominations have been submitted from the 
applicable region, the Council shall cause each proposed nomination, if 
the individual qualifies, to be placed on the region's nominee ballot. 
The Council then shall mail a ballot to each known producer or importer 
within the region.
    (d) Distribution of ballots shall be announced by press releases, 
furnishing pertinent information on balloting, issued by the Council 
through newspapers and other publications having general circulation 
among producers in the mushroom producing areas involved or among 
mushroom importers.
    (e) Each producer or importer shall cast a ballot for each open 
position on the Council assigned to the region in accordance with the 
procedures prescribed in Sec. 1209.31 of this part. The completed 
ballot must be returned to the Council or its designee within 30 days 
after the ballot is issued.
    (f) Within 45 days after a mail ballot is issued, the Council shall 
validate the ballots cast, tabulate the votes, and provide the Secretary 
with the results of the vote and the identification of the region's two 
nominees for each open position on the Council.
    (g) The Council shall provide nominees with qualification statements 
and other specified information. Each nominee selected in the mail 
ballot will be contacted by the Council and

[[Page 110]]

asked to forward such completed documentation to the Council within 14 
days of such notification.



Sec. 1209.237  Appointment.

    If an employee, partner, officer, or shareholder of a producer or 
importer is a current member of the Council, no nominee who is also an 
employee, partner, officer, or shareholder of such producer or importer 
shall be appointed to the Council. A Council member shall be 
disqualified from serving on the Council if such individual ceases to be 
affiliated with a producer or importer within the region the Council 
member represents.

                                 General



Sec. 1209.239  Financial statements.

    (a) As requested by the Secretary, the Council shall prepare and 
submit financial statements to the Secretary on a periodic basis. 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 30 days after the end of the time period to which it applies.
    (c) The Council shall submit annually to the Secretary an annual 
financial statement within 90 days after the end of the fiscal year to 
which it applies.

                               Assessments



Sec. 1209.251  Payment of assessments.

    (a) Each first handler responsible for collecting assessments on 
domestic mushrooms shall collect the amounts assessed and remit such 
amounts to the Council on a monthly basis not later than the fifteenth 
day of the month following the month in which the mushrooms were 
marketed to or through the first handler.
    (b) Each producer responsible for paying any assessment amount on 
the producer's own mushrooms shall remit such amount to the Council on a 
monthly basis not later than the fifteenth day of the month following 
the month in which the mushrooms were marketed by the producer.
    (c) Each importer shall be responsible for remittance to the Council 
of any assessment amount not collected by the U.S. Customs Service at 
the time of entry or withdrawal for consumption into the United States. 
Any such assessment amount shall be remitted to the Council on a monthly 
basis not later than the fifteenth day of the month following the month 
of entry or withdrawal for consumption into the United States. Any 
person who imports mushrooms, as principal or as an agent, broker, or 
consignee for any person who produces mushrooms outside the United 
States for marketing in the United States shall be considered an 
importer.
    (d) Remittance shall be by check, draft, or money order payable to 
the Mushroom Council, and shall be accompanied by a report, on a form 
provided by the Council.
    (e) A late payment charge shall be imposed on any first handler or 
importer who fails to make timely remittance to the Council of the total 
assessment amount for which the person is liable. Such late payment 
charge shall be imposed on any assessments not received by the last day 
of the month following the month in which the mushrooms involved were 
marketed or, in the case of imports, not collected by the U.S. Customs 
Service at the time of entry or withdrawal for consumption into the 
United States. This one-time late payment charge shall be 10 percent of 
the assessments due before interest charges have accrued. The late 
payment charge will not be applied to any late payments postmarked 
within 15 days after the end of the month such assessments are due.
    (f) In addition to the late payment charge, interest shall be 
charged at a rate of one and one-half percent per month on the 
outstanding balance, including the late payment charge and any accrued 
interest, of any account that remains delinquent beyond the last day of 
the second month following the month the mushrooms involved were 
marketed. However, first handlers

[[Page 111]]

paying their assessments, in accordance with paragraph (h)(2) of this 
section, will not be subject to the one and one-half percent per month 
interest under this paragraph until the last day of the second month 
after such assessments are due under paragraph (h)(2) of this section. 
In the case of imports, such a rate of interest will be charged to any 
account that remains delinquent on any assessments not collected by the 
U.S. Customs Service at the time of entry or withdrawal for consumption 
into the United States. Such a rate of interest will continue to be 
charged monthly until the outstanding balance is paid to the Council.
    (g) Any assessment determined by the Council at a date later than 
prescribed by this section, because of a person's failure to submit a 
report to the Council when due, shall be considered to have been payable 
by the date it would have been due if the report had been filed on time. 
A late payment charge and monthly interest charges on the outstanding 
balance shall be applicable to such unpaid assessment in accordance with 
paragraphs (e) and (f) of this section.
    (h) In lieu of the monthly assessment payment and reporting 
requirements of Sec. 1209.260 of this subpart and Sec. 1209.60 of this 
part, the Council may permit a first handler to make advance payment of 
the total estimated assessment amount due to the Council for the ensuing 
fiscal year, or portion thereof, prior to the actual determination of 
assessable mushrooms.
    (1) Each person shall provide an initial report estimating 
assessable mushrooms. The Council may request additional information on 
such estimate.
    (2) Each person shall provide a final report of actual marketings 
during the period involved and remit any unpaid assessments not later 
than the fifteenth day of the month following the end of the period 
covered.
    (3) Any person whose prepayment exceeds the amount paid shall be 
reimbursed for the amount of overpayment. The Council shall not, in any 
case, be obligated to pay interest on any advance payment.



Sec. 1209.252  Exemption procedures.

    (a) Types of exemptions and requirements. (1) Any person who 
produces or imports, on average, 500,000 pounds or less of mushrooms 
annually and who desires to claim an exemption from assessments during a 
fiscal year shall apply to the Council, on a form provided by the 
Council, for a Certificate of Exemption. The producer or importer shall 
certify that the person's production or importation of mushrooms shall 
not exceed 500,000 pounds, on average, for the fiscal year for which the 
exemption is claimed. An average shall be calculated by averaging a 
person's estimated production or importation for the fiscal year for 
which an exemption is claimed with the person's production or 
importation in the preceding fiscal year.
    (2) To apply for an exemption for organic mushrooms:
    (i) An eligible mushroom producer shall submit a request for 
exemption to the Council--on a form provided by the Council--at any time 
initially and annually thereafter on or before January 1 as long as the 
producer continues to be eligible for the exemption.
    (ii) The request shall include the following: The producer's name 
and address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined in 
section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), 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 Council and with the approval of 
the Secretary.
    (iii) If the producer complies with the requirements of Sec. 
1209.52 (a)(2), the Council will grant the exemption and issue a 
Certificate of Exemption to the producer. For exemption requests 
received on or before August 15, 2005, the Council will have 60 days to 
approve the exemption request; after August 15, 2005, the Council will 
have 30 days to approve the exemption request. If the application is 
disapproved, the Board will notify the applicant of the reason(s) for 
disapproval within the same timeframe.

[[Page 112]]

    (iv) An eligible importer may submit documentation to the Council 
and request an exemption from assessment on 100 percent organic 
mushrooms--on a form provided by the Council--at any time initially and 
annually thereafter on or before January 1 as long as the importer 
continues to be eligible for the exemption. This documentation shall 
include the same information required of producers. If the importer 
complies with the requirements of this section, the Council will grant 
the exemption and issue a Certificate of Exemption to the importer. The 
Council will also issue the importer a 9-digit alphanumeric Harmonized 
Tariff Schedule (HTS) classification valid for 1 year from the date of 
issue. This HTS classification should be entered by the importer on the 
Customs entry documentation. Any line item entry of 100 percent organic 
mushrooms bearing this HTS classification assigned by the Council will 
not be subject to assessments.
    (v) The exemption will apply immediately following the issuance of 
the Certificate of Exemption.
    (vi) Agricultural commodities produced and marketed under an organic 
system plan, as described in 7 CFR 205.201, but not sold, labeled, or 
represented as organic, shall not disqualify a producer from exemption 
under this section, except that producers who produce both organic and 
non-organic agricultural commodities as a result of split operations 
shall not qualify for exemption. Reasons for conventional sales include 
lack of demand for organic products, isolated use of antibiotics for 
humane purposes, chemical or pesticide use as the result of State or 
emergency spray programs, and crops from a buffer area as described in 7 
CFR part 205, provided all other criteria are met.
    (b) On receipt of an application, the Council shall determine 
whether an exemption may be granted. The Council then will issue, if 
deemed appropriate, a certificate of exemption to each person that is 
eligible to receive one. Each person who is exempt from assessment must 
provide an exemption number to the first handler in order not to be 
subject to collection of an assessment on mushrooms. First handlers and 
importers, except as otherwise authorized by the Council, shall maintain 
records showing the exemptee's name and address along with the exemption 
number assigned by the Council. Importers who are exempt from assessment 
shall be eligible for reimbursement of assessments collected by the U.S. 
Customs Service and shall apply to the Council for reimbursement of such 
assessments paid.
    (c) Any person who desires to renew the exemption from assessments 
for a subsequent fiscal year shall reapply to the Council, on a form 
provided by the Council, for a certificate of exemption.
    (d) The Council may require persons receiving an exemption from 
assessments to provide to the Council reports on the disposition of 
exempt mushrooms.

[58 FR 3449, Jan. 8, 1993, as amended at 70 FR 2756, Jan. 14, 2005]

                                 Reports



Sec. 1209.260  Reports.

    Each first handler shall be required to report monthly to the 
Council such information as may be required under Sec. 1209.60(a) of 
this part. In addition, each first handler shall be required to provide 
the tax identification number or social security number of each producer 
the first handler has dealt with during the time period covered by the 
report.

[58 FR 8197, Feb. 11, 1993, as amended at 60 FR 13614, Mar. 14, 1995]

                              Miscellaneous



Sec. 1209.280  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 1980, 44 U.S.C. 3501 et seq. is OMB control 
number 0581-0093, except for the Council nominee background statement 
form which is assigned OMB control number 0505-0001.

[[Page 113]]



Subpart C_Procedure for the Conduct of Referenda in Connection With the 
      Mushroom Promotion, Research, and Consumer Information Order

    Source: 62 FR 66975, Dec. 23, 1997, unless otherwise noted.



Sec. 1209.300  General.

    A referendum to determine whether eligible producers and importers 
favor the amendment, continuation, suspension, or termination of the 
Mushroom Promotion, Research, and Consumer Information Order shall be 
conducted in accordance with these procedures.

[74 FR 18464, Apr. 23, 2009]



Sec. 1209.301  Definitions.

    Unless otherwise defined below, the definition of terms used in 
these procedures shall have the same meaning as the definitions in the 
Order.
    (a) Administrator means the Administrator of the Agricultural 
Marketing Service, with power to redelegate, or any officer or employee 
of the Department to whom authority has been delegated or may hereafter 
be delegated to act in the Administrator's stead.
    (b) Order means the Mushroom Promotion, Research, and Consumer 
Information Order, including an amendment to the Order.
    (c) Referendum agent or agent means the individual or individuals 
designated by the Secretary to conduct the referendum.
    (d) Representative period means the period designated by the 
Secretary.
    (e) Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity. For 
the purpose of this definition, the term ``partnership'' includes, but 
is not limited to:
    (1) A husband and wife who have title to, or leasehold interest in, 
mushroom production facilities and equipment as tenants in common, joint 
tenants, tenants by the entirety, or, under community property laws, as 
community property, and
    (2) So-called ``joint ventures'', wherein one or more parties to the 
agreement, informal or otherwise, contributed capital and others 
contributed labor, management, equipment, or other services, or any 
variation of such contributions by two or more parties so that it 
results in the production or importation of fresh mushrooms and the 
authority to transfer title to the mushrooms so produced or imported.
    (f) Eligible producer means any person or entity defined as a 
producer who produces, on average, over 500,000 pounds annually of fresh 
mushrooms during the representative period and who:
    (1) Owns or shares in the ownership of mushroom production 
facilities and equipment resulting in the ownership of the mushrooms 
produced;
    (2) Rents mushroom production facilities and equipment resulting in 
the ownership of all or a portion of the mushrooms produced;
    (3) Owns mushroom production facilities and equipment but does not 
manage them and, as compensation, obtains the ownership of a portion of 
the mushrooms produced; or
    (4) Is a party in a landlord-tenant relationship or a divided 
ownership arrangement involving totally independent entities cooperating 
only to produce mushrooms who share the risk of loss and receive a share 
of the mushrooms produced. No other acquisition of legal title to 
mushrooms shall be deemed to result in persons becoming eligible 
producers.
    (g) Eligible importer means any person or entity defined as an 
importer who imports, on average, over 500,000 pounds annually of fresh 
mushrooms during the representative period. Importation occurs when 
commodities originating outside the United States are entered or 
withdrawn from the U.S. Customs Service for consumption in the United 
States. Included are persons who hold title to foreign-produced 
mushrooms immediately upon release by the U.S. Customs Service, as well 
as any persons who act on behalf of others, as agents or brokers, to 
secure the release of mushrooms from the U.S. Customs Service when such 
mushrooms are entered or withdrawn for consumption in the United States.



Sec. 1209.302  Voting.

    (a) Each person who is an eligible producer or importer, as defined 
in this

[[Page 114]]

subpart, at the time of the referendum and during the representative 
period, shall be entitled to cast only one ballot in the referendum. 
However, each producer in a landlord-tenant relationship or a divided 
ownership arrangement involving totally independent entities cooperating 
only to produce mushrooms, in which more than one of the parties is a 
producer, shall be entitled to cast one ballot in the referendum 
covering only such producer's share of the ownership.
    (b) Proxy voting is not authorized, but an officer or employee of an 
eligible corporate producer or importer, or an administrator, executor, 
or trustee of an eligible producing or importing entity may cast a 
ballot on behalf of such producer or importer entity. Any individual so 
voting in a referendum shall certify that such individual is an officer 
or employee of the eligible producer or importer, or an administrator, 
executor, or trustee of an eligible producing or importing entity, and 
that such individual has the authority to take such action. Upon request 
of the referendum agent, the individual shall submit adequate evidence 
of such authority.
    (c) Ballots are to be cast by mail or fax.



Sec. 1209.303  Instructions.

    The referendum agent shall conduct the referendum, in the manner 
herein provided, under the supervision of the Administrator. The 
Administrator may prescribe additional instructions, not inconsistent 
with the provisions hereof, to govern the procedure to be followed by 
the referendum agent. Such agent shall:
    (a) Determine the time of commencement and termination of the period 
during which ballots may be cast.
    (b) Provide ballots and related material to be used in the 
referendum. Ballot material shall provide for recording essential 
information including that needed for ascertaining:
    (1) Whether the person voting, or on whose behalf the vote is cast, 
is an eligible voter;
    (2) The total volume of mushrooms produced by the voting producer 
during the representative period; and
    (3) The total volume of mushrooms imported by the voting importer 
during the representative period.
    (c) Give reasonable advance public notice of the referendum:
    (1) By utilizing available media or public information sources, 
without incurring advertising expense, to publicize the dates, places, 
method of voting, eligibility requirements, and other pertinent 
information. Such sources of publicity may include, but are not limited 
to, print and radio; and
    (2) By such other means as the agent may deem advisable.
    (d) Mail to eligible producers and importers, whose names and 
addresses are known to the referendum agent, the instructions on voting, 
a ballot, and a summary of the terms and conditions of the Order. No 
person who claims to be eligible to vote shall be refused a ballot.
    (e) Collect and safeguard ballots received by fax.
    (f) At the end of the voting period, collect, open, number, and 
review the ballots and tabulate the results.
    (g) Prepare a report on the referendum.
    (h) Prepare an announcement of the results for the public.



Sec. 1209.304  Subagents.

    The referendum agent may appoint any individual or individuals 
deemed necessary or desirable to assist the agent in performing such 
agent's functions hereunder. Each individual so appointed may be 
authorized by the agent to perform any or all of the functions which, in 
the absence of such appointment, shall be performed by the agent.



Sec. 1209.305  Ballots.

    The referendum agent and subagents shall accept all ballots cast; 
but, should they, or any of them, deem that a ballot should be 
challenged for any reason, the agent or subagent shall endorse above 
their signature, on the ballot, a statement to the effect that such 
ballot was challenged, by whom challenged, the reasons therefore, the 
results of any investigations made with respect thereto, and the 
disposition thereof. Ballots invalid under this subpart shall not be 
counted.

[[Page 115]]



Sec. 1209.306  Referendum report.

    Except as otherwise directed, the referendum agent shall prepare and 
submit to the Administrator a report on results of the referendum, the 
manner in which it was conducted, the extent and kind of public notice 
given, and other information pertinent to analysis of the referendum and 
its results.



Sec. 1209.307  Confidential information.

    The ballots and other information or reports that reveal, or tend to 
reveal, the identity or vote of any person covered under the Act shall 
be held confidential and shall not be disclosed.



PART 1210_WATERMELON RESEARCH AND PROMOTION PLAN--Table of Contents



            Subpart A_Watermelon Research and Promotion Plan

                               Definitions

Sec.
1210.301 Secretary.
1210.302 Act.
1210.303 Plan.
1210.304 Board.
1210.305 Watermelon.
1210.306 Producer.
1210.307 Handle.
1210.308 Handler.
1210.309 Person.
1210.310 Fiscal period and marketing year.
1210.311 Programs and projects.
1210.312 Promotion.
1210.313 Research.
1210.314 Importer.
1210.315 United States.

                   National Watermelon Promotion Board

1210.320 Establishment and membership.
1210.321 Nominations and selection.
1210.322 Term of office.
1210.323 Acceptance.
1210.324 Vacancies.
1210.325 Procedure.
1210.326 Compensation and reimbursement.
1210.327 Powers.
1210.328 Duties.

                         Research and Promotion

1210.330 Policy and objective.
1210.331 Programs and projects.

                        Expenses and Assessments

1210.340 Budget and expenses.
1210.341 Assessments.
1210.342 Exemption from assessment.
1210.343 [Reserved]
1210.344 Operating reserve.

                       Reports, Books, and Records

1210.350 Reports.
1210.351 Books and records.
1210.352 Confidential treatment.

                              Miscellaneous

1210.360 Right of the Secretary.
1210.361 Personal liability.
1210.362 Influencing government action.
1210.363 Suspension or termination.
1210.364 Proceedings after termination.
1210.365 Effect of termination or amendment.
1210.366 Separability.
1210.367 Patents, copyrights, inventions, and publications.

                     Subpart B_Nominating Procedures

                      Producer and Handler Members

1210.400 Terms defined.
1210.401 District conventions.
1210.402 Voter and board member nominee eligibility.
1210.403 Voting procedures.

                            Importer Members

1210.404 Importer member nomination and selection.

                              Public Member

1210.405 Public member nominations and selection.

                     Subpart C_Rules and Regulations

                               Definitions

1210.500 Terms defined.

                                 General

1210.501 Realignment of districts.
1210.502 Importer members.
1210.504 Contracts.
1210.505 Department of Agriculture costs.

                               Assessments

1210.515 Levy of assessments.
1210.516 Exemption for organic watermelons.
1210.517 Determination of handler.
1210.518 Payment of assessments.
1210.519 Failure to report and remit.
1210.520 Refunds.
1210.521 Reports of disposition of exempted watermelons.

                                 Records

1210.530 Retention period for records.
1210.531 Availability of records.
1210.532 Confidential books, records, and reports.

                              Miscellaneous

1210.540 OMB assigned numbers.

[[Page 116]]

                     Subpart D_Referendum Procedures

1210.600 General.
1210.601 Definitions.
1210.602 Voting.
1210.603 Instructions.
1210.604 Subagents.
1210.605 Ballots.
1210.606 Referendum report.
1210.607 Confidential information.

    Authority: 7 U.S.C. 4901-4916 and 7 U.S.C. 7401.

    Source: 53 FR 51091, Dec. 20, 1988, unless otherwise noted.



            Subpart A_Watermelon Research and Promotion Plan

    Source: 54 FR 24545, June 8, 1989, unless otherwise noted.

                               Definitions



Sec. 1210.301  Secretary.

    Secretary means the Secretary of Agriculture of the United States 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. 1210.302  Act.

    Act means the Watermelon Research and Promotion Act of 1985 (Title 
XVI, Subtitle C of Pub. L. 99-198, 99th Congress, effective January 1, 
1986, 99 Stat. 1622), as amended.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10797, Feb. 28, 1995]



Sec. 1210.303  Plan.

    Plan means this watermelon research and promotion Plan issued by the 
Secretary pursuant to the Act.



Sec. 1210.304  Board.

    Board means the National Watermelon Promotion Board, hereinafter 
established pursuant to Sec. 1210.320.



Sec. 1210.305  Watermelon.

    Watermelon means all varieties of the Family Curcubitaceae; Genus 
and Species; Citrullus Lanatus, popularly referred to as watermelon 
grown by producers in the United States or imported into the United 
States.

[60 FR 10797, Feb. 28, 1995]



Sec. 1210.306  Producer.

    Producer means any person engaged in the growing of 10 acres or more 
of watermelons including any person who owns or shares the ownership and 
risk of loss of such watermelon crop.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10797, Feb. 28, 1995]



Sec. 1210.307  Handle.

    Handle means to grade, pack, process, sell, transport, purchase, or 
in any other way to place or cause watermelons to which one has title or 
possession to be placed in the current of commerce. Such term shall not 
include the transportation or delivery of field run watermelons by the 
producer thereof to a handler for grading, sizing or processing.



Sec. 1210.308  Handler.

    Handler means any person (except a common or contract carrier of 
watermelons owned by another person) who handles watermelons, including 
a producer who handles watermelons of the producer's own production. For 
the purposes of this subpart, the term ``handler'' means the ``first'' 
person who performs the handling functions.



Sec. 1210.309  Person.

    Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or other entity.



Sec. 1210.310  Fiscal period and marketing year.

    Fiscal period and marketing year mean the 12 month period from 
January 1 to December 31 or such other period which may be approved by 
the Secretary.



Sec. 1210.311  Programs and projects.

    Programs and projects mean those research, development, advertising, 
or promotion programs or projects developed by the Board pursuant to 
Sec. 1210.331.



Sec. 1210.312  Promotion.

    Promotion means any action taken by the Board, pursuant to the Act, 
to present a favorable image for watermelons to the public with the 
express intent of improving the competitive

[[Page 117]]

position of watermelons in the marketplace and stimulating sales of 
watermelons, and shall include, but not be limited to, paid advertising.



Sec. 1210.313  Research.

    Research means any type of systematic study or investigation, and/or 
the evaluation of any study or investigation designed to advance the 
image, desirability, usage, marketability, production, or quality of 
watermelons.



Sec. 1210.314  Importer.

    Importer means any person who imports watermelons into the United 
States as a principal or as an agent, broker, or consignee for any 
person who produces watermelons outside of the United States for sale in 
the United States.

[60 FR 10797, Feb. 28, 1995]



Sec. 1210.315  United States.

    United States means each of the several States and the District of 
Columbia.

[60 FR 10797, Feb. 28, 1995]

                   National Watermelon Promotion Board



Sec. 1210.320  Establishment and membership.

    (a) There is hereby established a National Watermelon Promotion 
Board, hereinafter called the ``Board.'' The Board shall be composed of 
producers, handlers, importers, and one public representative appointed 
by the Secretary. An equal number of producer and handler 
representatives shall be nominated by producers and handlers pursuant to 
Sec. 1210.321. The Board shall also include one or more representatives 
of importers, who shall be nominated in such manner as may be prescribed 
by the Secretary. The public representative shall be nominated by the 
Board members in such manner as may be prescribed by the Secretary. If 
producers, handlers, and importers fail to select nominees for 
appointment to the Board, the Secretary may appoint persons on the basis 
of representation as provided in Sec. 1210.324. If the Board fails to 
adhere to procedures prescribed by the Secretary for nominating a public 
representative, the Secretary shall appoint such representative.
    (b) Membership on the Board shall be determined on the basis of two 
handler and two producer representatives for each of seven districts in 
the contiguous States of the United States. Such districts as hereby 
established have approximately equal production volume according to the 
three-year average production as set forth in the USDA Crop Production 
Annual Summary Reports for 1979, 1980, and 1981. They are:

District #1--South Florida including all areas south of State Highway 
50.
District #2--North Florida including all areas north of State Highway 
50.
District #3--The States of Alabama and Georgia.
District #4--The States of South Carolina, North Carolina, Virginia, 
Delaware, Maryland, West Virginia, Pennsylvania, New Jersey, New York, 
Ohio, Michigan, Connecticut, Rhode Island, Massachusetts, Vermont, New 
Hampshire, and Maine.
District #5--The States of Mississippi, Kentucky, Tennessee, Louisiana, 
Arkansas, Missouri, Illinois, Indiana, Iowa, Kansas, Nebraska, Oklahoma, 
Wisconsin, Minnesota, North Dakota, South Dakota, Colorado, and New 
Mexico.
District #6--The State of Texas.
District #7--The States of Arizona, California, Nevada, Utah, Oregon, 
Idaho, Wyoming, Washington, and Montana.

    (c) After two years, the Board shall review the districts to 
determine whether realignment of the districts is necessary and at least 
every five years thereafter the Board shall make such a review. In 
making such review, it shall give consideration to:
    (1) The most recent three years USDA production reports or Board 
assessment reports if USDA production reports are unavailable;
    (2) Shifts and trends in quantities of watermelon produced, and
    (3) Other relevant factors.

As a result of this review, the Board may realign the districts subject 
to the approval of the Secretary. Any such realignment shall be 
recommended by the Board to the Secretary at least six months prior to 
the date of the call for nominations and shall become effective at least 
30 days prior to such date.
    (d) Importer representation on the Board shall be proportionate to 
the percentage of assessments paid by importers to the Board, except 
that at

[[Page 118]]

least one representative of importers shall serve on the Board.
    (e) Not later than 5 years after the date that importers are subject 
to the Plan, and every 5 years thereafter, the Secretary shall evaluate 
the average annual percentage of assessments paid by importers during 
the 3-year period preceding the date of the evaluation and adjust, to 
the extent practicable, the number of importer representatives on the 
Board.
    (f) The Board consists of 14 producers, 14 handlers, at least one 
importer, and one public member appointed by the Secretary.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10797, Feb. 28, 1995]



Sec. 1210.321  Nominations and selection.

    The Secretary shall appoint the members of the Board from 
nominations to be made in the following manner:
    (a) There shall be two individuals nominated for each vacant 
position.
    (b) The Board shall issue a call for nominations by February first 
of each year in which an election is to be held. The call shall include 
at a minimum, the following information:
    (1) A list of the vacancies and qualifications as to producers and 
handlers by district and to importers nationally for which nominees may 
be submitted.
    (2) The date by which the nominees shall be submitted to the 
Secretary for consideration to be in compliance with Sec. 1210.323 of 
this subpart.
    (3) A list of those States, by district, entitled to participate in 
the nomination process.
    (4) The date, time, and location of any next scheduled meeting of 
the Board, national and State producer or handler associations, 
importers, and district conventions, if any.
    (c) Nominations for producer and handler positions that will become 
vacant shall be made by district convention in the district entitled to 
nominate. Notice of such convention shall be publicized to all producers 
and handlers within such district, and the Secretary at least ten days 
prior to said event. The notice shall have attached to it the call for 
nominations from the Board. The responsibility for convening and 
publicizing the district convention shall be that of the then members of 
the Board from that district.
    (d) Nominations for importers positions that become vacant may be 
made by mail ballot, nomination conventions, or by other means 
prescribed by the Secretary. The Board shall provide notice of such 
vacancies and the nomination process to all importers through press 
releases and any other available means as well as direct mailing to 
known importers. All importers may participate in the nomination 
process: Provided, That a person who both imports and handles 
watermelons may vote for importer members and serve as an importer 
member if that person imports 50 percent or more of the combined total 
volume of watermelons handled and imported by that person.
    (e) All producers and handlers within the district may participate 
in the convention: Provided, That a person that produces and handles 
watermelons may vote for handler members only if the producer purchased 
watermelons from other producers, in a combined total volume that is 
equal to 25 percent or more of the producer's own production; or the 
combined total volume of watermelon handled by the producer from the 
producer's own production and purchases from other producer's production 
is more than 50 percent of the producer's own production; and provided 
further, That if a producer or handler is engaged in the production or 
handling of watermelons in more than one State or district, the producer 
or handler shall participate within the State or district in which the 
producer or handler so elects in writing to the Board and such election 
shall remain controlling until revoked in writing to the Board.
    (f) The district convention chairperson shall conduct the selection 
process for the nominees in accordance with procedures to be adopted at 
each such convention, subject to requirements set in Sec. 1210.321(e).
    (1) No State in Districts 3, 4, 5, and 7 as currently constituted 
shall have more than three producers and handlers representatives 
concurrently on the Board.
    (2) Each State represented at the district convention shall have one 
vote for each producer position and one vote for

[[Page 119]]

each handler position from the District on the Board, which vote shall 
be determined by the producers and handlers from that State by majority 
vote. Each State shall further have an additional vote for each five 
hundred thousand hundredweight volume as determined by the three year 
average annual crop production summary reports of the USDA, or if such 
reports are not published, then the three year average of the Board 
assessment reports; Provided, That for the first two calls for nominees, 
the USDA Crop Production Annual Summary Reports for 1979, 1980, and 1981 
will be controlling as to any additional production volume votes.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10798, Feb. 28, 1995]



Sec. 1210.322  Term of office.

    (a) The term of office of Board members shall be three years.
    (b) Except in the case of mid-term vacancies, the term of office 
shall begin on January 1, or such other date as may be recommended by 
the Board and approved by the Secretary.
    (c) Board members shall serve during the term of office for which 
they are selected and have qualified, and until their successors are 
selected and have qualified.
    (d) No person shall serve more than two successive terms of office.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10798, Feb. 28, 1995; 60 
FR 13515, Mar. 13, 1995]



Sec. 1210.323  Acceptance.

    Each person nominated for membership on the Board shall qualify by 
filing a written acceptance with the Secretary. Such written acceptance 
shall accompany the nominations list required by Sec. 1210.321.



Sec. 1210.324  Vacancies.

    (a) In the event any member of the Board ceases to be a member of 
the category of members 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 
shall remove such member from office. Further, without recommendation of 
the Board, a member may be removed by the Secretary upon showing of 
adequate cause, if the Secretary determines that the person's continual 
services would be detrimental to the purposes of the Act.
    (c) To fill any vacancy caused by the failure of any person selected 
as a member of the Board to qualify, or in the event of the death, 
removal, resignation, or disqualification of any member, a successor 
shall be nominated and selected in the manner specified in Sec. 
1210.321, except that said nomination and replacement shall not be 
required if the unexpired term of office is less than six months. In the 
event of failure to provide nominees for such vacancies, the Secretary 
may appoint other eligible persons.



Sec. 1210.325  Procedure.

    (a) A simple majority of Board members shall constitute a quorum and 
any action of the Board shall require the concurring votes of a majority 
of those present and voting. At assembled meetings all votes shall be 
cast in person.
    (b) For routine and noncontroversial matters which do not require 
deliberation and the exchange of views, and for matters of an emergency 
nature when there is not enough time to call an assembled meeting, the 
Board may act upon a majority of concurring votes of its members cast by 
mail, telegraph, telephone, or by other means of communication; 
Provided, That each member receives an accurate, full, and substantially 
identical explanation of each proposition. Telephone votes shall be 
promptly confirmed in writing. All votes shall be recorded in the Board 
minutes.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10798, Feb. 28, 1995]



Sec. 1210.326  Compensation and reimbursement.

    Board members shall serve without compensation but shall be 
reimbursed for reasonable expenses incurred by

[[Page 120]]

them in the performance of their duties as Board members.



Sec. 1210.327  Powers.

    The Board shall have the following powers subject to Sec. 1210.363:
    (a) To administer the provisions of this Plan in accordance with its 
terms and conditions;
    (b) To make rules and regulations to effectuate the terms and 
conditions of this Plan;
    (c) To require its employees to receive, investigate, and report to 
the Secretary complaints of violations of this Plan; and
    (d) To recommend to the Secretary amendments to this Plan.



Sec. 1210.328  Duties.

    The Board shall, among other things, have the following duties:
    (a) To meet, organize, and select from among its members a president 
and such other officers as may be necessary; to select committees and 
subcommittees of board members; to adopt such rules for the conduct of 
its business as it may deem advisable; and it may establish working 
committees of persons other than Board members.
    (b) To employ such persons as it may deem necessary and to determine 
the compensation and define the duties of each; and to protect the 
handling of Board funds through fidelity bonds;
    (c) To prepare and submit for the Secretary's approval, prior to the 
beginning of each fiscal period, a recommended rate of assessment and a 
fiscal period budget of the anticipated expenses in the administration 
of this Plan, including the probable costs of all programs and projects;
    (d) To develop programs and projects, which must be approved by the 
Secretary before becoming effective, and enter into contracts or 
agreements, with the approval of the Secretary, for the development and 
carrying out of programs or projects of research, development, 
advertising or promotion, and the payment of the costs thereof with 
funds received pursuant to this Plan;
    (e) To keep minutes, books, and records which clearly reflect all of 
the acts and transactions of the Board. Minutes of each Board meeting 
shall be promptly reported to the Secretary;
    (f) To prepare and submit to the Secretary such reports from time to 
time as may be prescribed for appropriate accounting with respect to the 
receipt and disbursement of funds entrusted to the Board;
    (g) To cause the books of the Board to be audited by a certified 
public accountant at least once each fiscal period, and at such other 
time as the Board may deem necessary. The report of such audit shall 
show the receipt and expenditure of funds received pursuant to this 
part. Two copies of each such report shall be furnished to the Secretary 
and a copy of each such report shall be made available at the principal 
office of the Board for inspection by producers, handlers, and 
importers;
    (h) To investigate violations of the Plan and report the results of 
such investigations to the Secretary for appropriate action to enforce 
the provisions of the Plan;
    (i) To periodically prepare, make public, and make available to 
producers, handlers, and importers reports of its activities carried 
out.
    (j) To give the Secretary the same notice of meetings of the Board 
and its subcommittees as is given to its members;
    (k) To act as intermediary between the Secretary and any producer, 
handler, or importer;
    (l) To furnish the Secretary such information as the Secretary may 
request;
    (m) To notify watermelon producers, handlers, and importers of all 
Board meetings through press releases or other means;
    (n) To appoint and convene, from time to time, working committees 
drawn from producers, handlers, importers, and the public to assist in 
the development of research and promotion programs for watermelons; and
    (o) To develop and recommend such rules and regulations to the 
Secretary for approval as may be necessary for the development and 
execution of programs or projects to effectuate the declared purpose of 
the Act.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10798, Feb. 28, 1995]

[[Page 121]]

                         Research and Promotion



Sec. 1210.330  Policy and objective.

    It shall be the policy of the Board to carry out an effective, 
continuous, and coordinated program of research, development, 
advertising, and promotion in order to:
    (a) Strengthen watermelons' competitive position in the marketplace,
    (b) Maintain and expand existing domestic and foreign markets, and
    (c) Develop new or improved markets.

It shall be the objective of the Board to carry out programs and 
projects which will provide maximum benefit to the watermelon industry.



Sec. 1210.331  Programs and projects.

    The Board shall develop and submit to the Secretary for approval any 
programs or projects authorized in this section. Such programs or 
projects shall provide for:
    (a) The establishment, issuance, effectuation and administration of 
appropriate programs or projects for advertising and other sales 
promotion of watermelons designed to strengthen the position of the 
watermelon industry in the marketplace and to maintain, develop, and 
expand markets for watermelon;
    (b) Establishing and carrying out research and development projects 
and studies to the end that the acquisition of knowledge pertaining to 
watermelons or their consumption and use may be encouraged or expanded, 
or to the end that the marketing and use of watermelons may be 
encouraged, expanded, improved, or made more efficient: Provided, That 
quality control, grade standards, supply management programs or other 
programs that would otherwise limit the right of the individual 
watermelon producer to produce watermelons shall not be conducted under, 
or as a part of, this Plan;
    (c) The development and expansion of watermelon sales in foreign 
markets;
    (d) A prohibition on advertising or other promotion programs that 
make any reference to private brand names or use false or unwarranted 
claims on behalf of watermelons or false or unwarranted statements with 
respect to the attributes or use of any competing product;
    (e) Periodic evaluation by the Board of each program or project 
authorized under this Plan to insure that each program or project 
contributes to an effective and coordinated program of research and 
promotion and submission of such evaluation to the Secretary. If the 
Board or the Secretary finds that a program or project does not further 
the purposes of the Act, then the Board or the Secretary shall terminate 
such program or project; and
    (f) The Board to enter into contracts or make agreements for the 
development and carrying out of research and promotion and pay for the 
costs of such contracts or agreements with funds collected pursuant to 
Sec. 1210.341.

                        Expenses and Assessments



Sec. 1210.340  Budget and expenses.

    (a) Prior to the beginning of each fiscal period, or as may be 
necessary thereafter, the Board shall prepare and recommend a budget on 
a fiscal period basis of its anticipated expenses and disbursements in 
the administration of this Plan, including probable costs of research, 
development, advertising, and promotion. The Board shall also recommend 
a rate of assessment calculated to provide adequate funds to defray its 
proposed expenditures and to provide for a reserve as set forth in Sec. 
1210.344.
    (b) The Board is authorized to incur such expenses for research, 
development, advertising, or promotion of watermelons, such other 
expenses for the administration, maintenance, and functioning of the 
Board as may be authorized by the Secretary, and any referendum and 
administrative costs incurred by the Department of Agriculture. The 
funds to cover such expenses shall be paid from assessments received 
pursuant to Sec. 1210.341.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10798, Feb. 28, 1995]



Sec. 1210.341  Assessments.

    (a) During the effective period of this subpart, assessments shall 
be levied on all watermelons produced and first handled in the United 
States and all watermelons imported into the United

[[Page 122]]

States for consumption as human food. No more than one assessment on a 
producer, handler, or importer shall be made on any lot of watermelons. 
The handler shall be assessed an equal amount on a per unit basis as the 
producer. If a person performs both producing and handling functions on 
any same lot of watermelons, both assessments shall be paid by such 
person. In the case of an importer, the assessment shall be equal to the 
combined rate for domestic producers and handlers and shall be paid by 
the importer at the time of entry of the watermelons into the United 
States.
    (b) Assessment rates shall be fixed by the Secretary in accordance 
with section 1647(f) of the Act. No assessments shall be levied on 
watermelons grown by producers of less than 10 acres of watermelons.
    (c) Each handler, as defined, is responsible for payment to the 
Board of both the producer's and the handler's assessment pursuant to 
regulations issued hereunder. The handler may collect producer 
assessments from the producer or deduct such assessments from the 
proceeds paid to the producer on whose watermelons the assessments are 
made. The handler shall maintain separate records for each producer's 
watermelons handled, including watermelons produced by said handler. In 
addition, the handler shall indicate the total quantity of watermelons 
handled by the handler, including those that are exempt under this Plan, 
and such other information as may be prescribed by the Board.
    (d) Each importer shall be responsible for payment of the assessment 
to the Board on watermelons imported into the United States through the 
U.S. Customs Service or in such other manner as may be established by 
rules and regulations approved by the Secretary.
    (e) Producer-handlers and handlers shall pay assessments to the 
Board at such time and in such manner as the Board, with the Secretary's 
approval, directs, pursuant to regulations issued under this part. Such 
regulations may provide for different handlers or classes of handlers 
and different handler payment and reporting schedules to recognize 
differences in marketing practices or procedures used in any State or 
production area.
    (f) There shall be a late payment charge imposed on any handler or 
importer who fails to remit to the Board the total amount for which any 
such handler or importer is liable on or before the payment due date 
established by the Board under paragraph (e) of this section. The amount 
of the late payment charge shall be set by the Board subject to approval 
by the Secretary.
    (g) There shall also be imposed on any handler or importer subject 
to a late payment charge, an additional charge in the form of interest 
on the outstanding portion of any amount for which the handler or 
importer is liable. The rate of such interest shall be prescribed by the 
Board subject to approval by the Secretary.
    (h) The Board is hereby authorized to accept advance payment of 
assessments by handlers and importers that shall be credited toward any 
amount for which the handlers and importers may become liable. The Board 
shall not be obligated to pay interest on any advance payment.
    (i) The Board is hereby authorized to borrow money for the payment 
of administrative expenses subject to the same fiscal, budget, and audit 
controls as other funds of the Board.
    (j) The Board may authorize other organizations to collect 
assessments in its behalf with the approval of the Secretary. Any 
reimbursement by the Board for such services shall be based on 
reasonable charges for services rendered.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10798, Feb. 28, 1995]



Sec. 1210.342  Exemption from assessment.

    (a) The Board may exempt watermelons used for nonfood purposes from 
the provisions of this Plan and shall establish adequate safeguards 
against improper use of such exemptions.
    (b) Importers of less than 150,000 pounds of watermelons per year 
shall be entitled to apply for a refund that is equal to the rate of 
assessment paid by domestic producers.
    (c) The Secretary may adjust the quantity of the weight exemption 
specified in paragraph (b) of this section on

[[Page 123]]

the recommendation of the Board after an opportunity for public notice 
and comment to reflect significant changes in the 5-year average yield 
per acre of watermelons produced in the United States.
    (d) The Board shall have the authority to establish rules, with the 
approval of the Secretary, for certifying whether a person meets the 
definition of a producer under section 1210.306.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10799, Feb. 28, 1995]



Sec. 1210.343  [Reserved]



Sec. 1210.344  Operating reserve.

    The Board may establish an operating monetary reserve and may carry 
over to subsequent fiscal periods excess funds in a reserve so 
established; Provided, That funds in the reserve shall not exceed 
approximately two fiscal periods' expenses. Such reserve funds may be 
used to defray any expenses authorized under this subpart.

                       Reports, Books, and Records



Sec. 1210.350  Reports.

    (a) Each handler shall maintain a record with respect to each 
producer for whom watermelons were handled and for watermelons produced 
and handled by the handler. Handlers shall report to the Board at such 
times and in such manner as the Board may prescribe by regulations 
whatever information as may be necessary in order for the Board to 
perform its duties. Such reports may include, but shall not be limited 
to, the following information:
    (1) Total quantity of watermelons handled for each producer and by 
the handler, including those which are exempt under this Plan;
    (2) Total quantity of watermelons handled for each producer and by 
the handler, on which the producer assessment was collected;
    (3) Name and address of each person from whom an assessment was 
collected, the amount collected from each person, and the date such 
collection was made; and
    (4) Name and address of each person claiming exemption from 
assessment and a copy of each such person's claim of exemption.
    (b) Each importer of watermelons shall maintain a separate record 
that includes a record of:
    (1) The total quantity of watermelons imported into the United 
States that are included under the terms of this Plan;
    (2) The total quantity of watermelons that are exempt from the Plan; 
and
    (3) Such other information as may be prescribed by the Board.
    (c) Each importer shall report to the Board at such times and in 
such manner as it may prescribe such information as may be necessary for 
the Board to perform its duties under this part.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10799, Feb. 28, 1995]



Sec. 1210.351  Books and records.

    Each handler and importer subject to this Plan shall maintain, and 
during normal business hours make available for inspection by employees 
of the Board or Secretary, such books and records as are necessary to 
carry out the provisions of this Plan and the regulations issued 
thereunder, including such records as are necessary to verify any 
required reports. Such records shall be maintained for 2 years beyond 
the fiscal period of their applicability.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10799, Feb. 28, 1995]



Sec. 1210.352  Confidential treatment.

    (a) All information obtained from the books, records, or reports 
required to be maintained under Sec. Sec. 1210.350 and 1210.351 shall 
be kept confidential and shall not be disclosed to the public by any 
person. Only such information as the Secretary deems relevant shall be 
disclosed to the public and then only in a suit 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 Plan: Except that nothing in this subpart 
shall be deemed to prohibit:
    (1) The issuance of general statements based on the reports of a 
number of handlers or importers subject to this Plan if such statements 
do not identify

[[Page 124]]

the information furnished by any person; or
    (2) The publication by direction of the Secretary of the name of any 
person violating this Plan together with a statement of the particular 
provisions of this Plan violated by such person.
    (b) Any disclosure of confidential information by any employee of 
the Board, except as required by law, shall be considered willful 
misconduct.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10799, Feb. 28, 1995]

                              Miscellaneous



Sec. 1210.360  Right of the Secretary.

    All fiscal matters, programs or projects, rules or regulations, 
reports, or other substantive actions proposed and prepared by the Board 
shall be submitted to the Secretary for approval.



Sec. 1210.361  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. 1210.362  Influencing government action.

    No funds received by the Board under this Plan shall in any manner 
be used for the purpose of influencing governmental policy or action, 
except for making recommendations to the Secretary as provided in this 
subpart.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10799, Feb. 28, 1995]



Sec. 1210.363  Suspension or termination.

    (a) Whenever the Secretary finds that this Plan or any provision 
thereof obstructs or does not tend to effectuate the declared policy of 
the Act, the Secretary shall terminate or suspend the operation of this 
Plan or such provision thereof.
    (b) The Secretary may conduct a referendum at any time and shall 
hold a referendum on request of the Board or at least 10 percent of the 
combined total of the watermelon producers, handlers, and importers to 
determine if watermelon producers, handlers, and importers favor 
termination or suspension of this Plan. The Secretary shall suspend or 
terminate this Plan at the end of the marketing year whenever the 
Secretary determines that the suspension or termination is favored by a 
majority of the watermelon producers, handlers, and importers voting in 
such referendum who, during a representative period determined by the 
Secretary, have been engaged in the production, handling, or importing 
of watermelons and who produced, handled, or imported more than 50 
percent of the combined total of the volume of watermelons produced, 
handled, or imported by those producers, handlers, and importers voting 
in the referendum. For purposes of this section, the vote of a person 
who both produces and handles watermelons will be counted as a handler 
vote if the producer purchased watermelons from other producers, in a 
combined total volume that is equal to 25 percent or more of the 
producer's own production; or the combined total volume of watermelon 
handled by the producer from the producer's own production and purchases 
from other producer's production is more than 50 percent of the 
producer's own production. Provided, That the vote of a person who both 
imports and handles watermelons will be counted as an importer vote if 
that person imports 50 percent or more of the combined total volume of 
watermelons handled and imported by that person. Any such referendum 
shall be conducted by mail ballot.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10799, Feb. 28, 1995]



Sec. 1210.364  Proceedings after termination.

    (a) Upon the termination of this Plan, the Board shall recommend not 
more than five 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 funds and 
property then in possession or under control of the Board, including 
claims for any funds unpaid or property not delivered or any other

[[Page 125]]

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 by it pursuant to Sec. 1210.328(d);
    (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 of the trustees, to person or persons as the Secretary may 
direct; and
    (4) Upon the request of the Secretary execute such assignments or 
other instruments necessary or appropriate to vest in such person or 
persons full title and right to all the funds, property, and claims 
vested in the Board or the trustees pursuant to this section.
    (c) Any person to whom funds, property, or claims have been 
transferred or delivered pursuant to this section shall be subject to 
the same obligation imposed upon the Board and upon the trustees.
    (d) A reasonable effort shall be made by the Board or its trustees 
to return to producers, handlers and importers any residual funds not 
required to defray the necessary expenses of liquidation. If it is found 
impractical to return such remaining funds to producers, handlers and 
importers such funds shall be disposed of in such manner as the 
Secretary may determine to be appropriate.

[54 FR 24545, June 8, 1989, as amended at 60 FR 10799, Feb. 28, 1995]



Sec. 1210.365  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, the 
termination of this Plan or 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 Plan or any regulation issued thereunder; or
    (b) Release or extinguish any violation of this Plan or any 
regulation issued thereunder; or
    (c) Affect or impair any rights or remedies of the United States, or 
of the Secretary, or of any other person with respect to any such 
violation.



Sec. 1210.366  Separability.

    If any provision of this Plan is declared invalid or the 
applicability thereof to any person or circumstance is held invalid, the 
validity of the remainder of this Plan or applicability thereof to other 
persons or circumstances shall not be affected thereby.



Sec. 1210.367  Patents, copyrights, inventions, and publications.

    Any patents, copyrights, inventions, product formulations, or 
publications developed through the use of funds collected under the 
provisions of this Plan shall be the property of the United States 
government as represented by the Board. Funds generated by such patents, 
copyrights, inventions, product formulations, or publications shall be 
considered income subject to the same fiscal, budget, and audit controls 
as other funds of the Board. Upon termination of this part, Sec. 
1210.364 shall apply to determine the disposition of all such property.



                     Subpart B_Nominating Procedures

    Source: 54 FR 38205, Sept. 15, 1989, unless otherwise noted.

                      Producer and Handler Members



Sec. 1210.400  Terms defined.

    Unless otherwise defined in this subpart, definitions of terms used 
in this subpart shall have the same meaning as the definitions of such 
terms which appear in Subpart--Watermelon Research and Promotion Plan.



Sec. 1210.401  District conventions.

    (a) Except for the initial district convention in each district, 
which will be called and opened by a representative of the Secretary, 
the Board shall call and open all district conventions.
    (b) District conventions are to be held to nominate producers and 
handlers as candidates for membership on the National Watermelon 
Promotion

[[Page 126]]

Board. Each district, as defined in Sec. 1210.501, is entitled to two 
producer and two handler members on the Board.
    (c) There shall be two individuals nominated for each vacant 
position. In multi-State districts, no one State shall have nominees for 
more than three of the four district positions on the Board.
    (d) All producers and handlers within each district may participate 
in that district's convention: Provided, That they meet the eligibility 
provisions set forth in Sec. 1210.402 of this subpart.
    (e) The convention chairperson shall be elected as provided in Sec. 
1210.403(b) of this subpart.
    (f) The Board member nomination process shall be conducted by the 
chairperson in conformance with the provisions of Sec. 1210.321 of the 
Plan and Sec. 1210.403 of this subpart. At the conclusion of the 
district convention for the initial term of office, the chairperson will 
provide the Secretary with:
    (1) The identification of that district's two nominees for each 
producer and handler position on the Board, and
    (2) A typed copy of the district convention's minutes.

This information must be provided by the chairperson to the Board staff 
in a manner that will ensure receipt, at the address specified in the 
call for the district convention, within 14 calendar days of the 
district convention's completion, but not later than July 8 for 
appointments to become effective on the following January 1. The Board 
staff must forward such information to the Secretary, in a manner that 
will ensure receipt, within 21 calendar days of completion of the 
district convention, but not later than July 15 for appointments to 
become effective on the following January 1. Further, the chairperson 
will immediately arrange for completion of qualification statements and 
other specified information by each nominee, and each nominee shall 
qualify by forwarding such information to the Board's office within 14 
calendar days of completion of the district convention, but not later 
than July 8 for appointments to become effective on the following 
January 1. The Board staff must forward the completed qualification 
statements and other specified information to the Secretary, in a manner 
that will ensure receipt within 21 calendar days of completion of the 
district convention, but not later than July 15 for appointments to 
become effective on the following January 1.

[54 FR 38205, Sept. 15, 1989, as amended at 58 FR 3355, Jan. 8, 1993; 59 
FR 18948, Apr. 21, 1994; 60 FR 10799, Feb. 28, 1995]



Sec. 1210.402  Voter and board member nominee eligibility.

    (a) All producers and handlers within a district may participate in 
their district convention for the purpose of nominating candidates for 
appointment to the Board: Provided, That a producer who both produces 
and handles watermelons may vote for handler member nominees and serve 
as a handler member nominee only if the producer purchased watermelons 
from other producers, in a combined total volume that is equal to 25 
percent or more of the producer's own production or the combined total 
volume of watermelons handled by the producer from the producer's own 
production and purchases from other producer's production is more than 
50 percent of the producer's own production; and Provided further, That 
if a producer or handler is engaged in the production or handling of 
watermelons in more than one State or district, the producer or handler 
shall participate within the State or district in which the producer or 
handler so elects in writing to the Board and such election shall remain 
controlling until revoked in writing to the Board. For the purpose of 
participation in initial nominating conventions, such election shall be 
made in writing, at the address provided, to the Department official 
identified in the call for a district convention.
    (b) Any individual, group of individuals, partnership, corporation, 
association, cooperative or any other entity which is engaged in the 
production, first handling or importing of watermelons is considered a 
person and as such is entitled to only one vote, except that such person 
may cast proxy votes as provided in Sec. 1210.403 and Sec. 1210.404 of 
this subpart.
    (c) All producers and handlers attending their district conventions 
may

[[Page 127]]

be candidates for one or more of the positions of State spokesperson, 
district convention chairperson, and producer or handler nominee.

[54 FR 38205, Sept. 15, 1989, as amended at 60 FR 10799, Feb. 28, 1995]



Sec. 1210.403  Voting procedures.

    (a) Proxy voting by producers and handlers for producer and handler 
nominees shall be permitted at all district conventions: Provided, That 
producers may cast proxy votes for producers only, and handlers may cast 
proxy votes for handlers only. In non-multi-State districts, proxy 
voting shall be permitted for all producer and handler nominee balloting 
to determine the districts' nominees. In multi-State districts, proxy 
voting shall be permitted for all producers and handlers participating 
in a State's balloting to determine the State's nominees. No other proxy 
voting, such as for district convention chairperson, shall be allowed. 
Any person wanting to cast proxy votes must demonstrate authorization to 
do so. Authority to cast a proxy vote on behalf of another person shall 
be demonstrated through documentation containing:
    (1) The proxy voter's name, address, and telephone number;
    (2) Signature and date signed;
    (3) A certification identifying the proxy voter as a producer or a 
handler; and
    (4) A statement identifying the person being given authority by the 
proxy voter to cast the proxy vote.

All proxy documentation must be received by the Board at its 
headquarters address at least two weeks before the district convention 
is scheduled to convene. For the purpose of the initial district 
convention, all proxy documentation must be forwarded to the Department 
representative identified in the call for the district convention in a 
manner that will ensure receipt, at the address specified in the call, 
at least 72 hours before the district convention is scheduled to 
convene. The Board, or in the case of the initial conventions the 
Department representative identified in the call or other representative 
of the Department, may challenge any proxy vote and disqualify any 
challenged vote for cause. In the case of duplicate proxy authorizations 
by any person, only the first authorization, determined by date will be 
allowed. In the case of duplicate dates, the proxy which is received 
first will be allowed.
    (b) In non-multi-State districts, convention chairpersons shall be 
elected by a majority vote of the eligible voters in attendance. In 
multi-State districts, the election shall be by majority vote of all 
States present with each State's vote(s) determined by a majority vote 
of the eligible voters of that State in attendance. Each such State is 
entitled to one vote, plus one additional vote for each 500,000 
hundredweight volume of production in the State as determined by the 
three-year average annual crop production summary reports of the 
Department or, if such reports are not published, then the three-year 
average of the Board's assessment reports: Provided, That for the first 
two conventions, the Department's Crop Production Annual Summary Reports 
for 1979, 1980, and 1981 will be controlling as to any additional 
production volume votes.
    (c) In multi-State districts 3, 4, 5 and 7, the convention 
chairperson will direct the eligible producer voters and handler voters 
from each State to caucus separately for the purpose of electing a State 
spokesperson for each group. Election of each State spokesperson shall 
be by simple majority of all individual voters in attendance. In lieu of 
written ballots, a State spokesperson may be elected by voice vote or a 
show of hands. The role of the State spokesperson is to coordinate State 
voting and to cast all State votes.
    (d) Convention chairpersons will coordinate the entire producer and 
handler nomination process. In conducting the nomination process, each 
convention chairperson will ensure that:
    (1) Voting for producer nominees is limited to producers, and voting 
for handler nominees is limited to handlers; and
    (2) Producer candidates for nomination are producers, and handler 
candidates for nomination are handlers.
    (e) Voting, for producer and handler nominees, in non-multi-State 
districts shall be on the basis of one vote per person, except that 
persons authorized to cast proxy votes shall be allowed to

[[Page 128]]

cast all proxy votes not disallowed by the Board or the Department. 
Election of nominees shall be on the basis of a simple majority of all 
eligible votes cast.
    (f) Voting for producer and handler nominees in multi-State 
districts shall be on a State by State basis. Producers and handlers 
from each State shall caucus separately, at the district convention, for 
the purpose of determining which nominees shall receive their State's 
vote(s) for membership on the Board. Each State's vote(s) shall be based 
on a simple majority of all votes (including proxy votes) cast by 
producers or handlers voting in their State's caucus. Each State 
represented at a multi-State district convention shall have one vote for 
each producer position and one vote for each handler position from the 
district on the Board. Each State shall further have an additional vote 
toward each position for each 500,000 hundredweight volume of production 
in the State as determined by the three-year average annual crop 
production summary reports of the Department or, if such reports are not 
published, then the three-year average of the Board's assessment 
reports: Provided, That for the first two calls for nominees, the 
Department's Crop Production Annual Summary Reports for 1979, 1980, and 
1981 will be controlling as to any additional production volume votes. 
Each State spokesperson will cast the State's vote(s) for each nominee 
position. Election of nominees shall be on the basis of a simple 
majority of all State votes cast.
    (g) During the voting for convention chairperson, State 
spokesperson, and Board member nominee, should no candidate receive the 
required simple majority on the first ballot, the number of candidates 
may be reduced by dropping one or more of the lowest vote recipients 
from the list of candidates. The balloting will be repeated until the 
position is filled.
    (h) Two nominees shall be elected for each of the producer and 
handler positions from each district on the Board. The two nominees for 
each position shall be elected simultaneously. The convention 
chairperson will open the floor to the nomination of candidates for 
possible election as a Board member nominee for each available position. 
Each position will be dealt with separately (i.e., candidates for one 
position will be nominated and then elected before the convention moves 
on to the next available position). Each eligible voter may vote for two 
of the nominees on one ballot. The two nominees receiving the greatest 
number of votes and at least a simple majority of the votes cast will be 
elected as the district's Board member nominees for the position. No 
individual elected as a nominee for Board membership may be a candidate 
on subsequent Board member nominee ballots (i.e., two different producer 
names and two different handler names must be submitted as nominees for 
each producer and handler position from each district to the Secretary 
of Agriculture). There shall be no designation of first and second 
choice nominees.

[54 FR 38205, Sept. 15, 1989, as amended at 58 FR 3355, Jan. 8, 1993]

                            Importer Members



Sec. 1210.404  Importer member nomination and selection.

    (a) The Board shall include one or more representatives of 
importers, who shall be appointed by the Secretary from nominations 
submitted by watermelon importers. Importers' representation on the 
Board shall be proportionate to the percentage of assessments paid by 
importers to the Board, except that at least one representative of 
importers shall serve on the Board if importers are subject to the Plan. 
Nominations for importer positions that become vacant shall be made by 
importers at nomination conventions or by mail ballot.
    (b) The initial nomination of importer members shall be made not 
later than 90 days after the Plan is amended.
    (c) There shall be two individuals nominated for each vacant 
position. The importer receiving the highest number of votes for a 
vacancy shall be the first choice nominee, and the importer receiving 
the second highest number of votes shall be the second choice nominee 
submitted to the Secretary.

[[Page 129]]

    (d) Any individual, group of individuals, partnership, corporation, 
association, cooperative or any other entity which is engaged in the 
production, first handling or importing of watermelons is considered a 
person and as such is entitled to only one vote, except that such person 
may cast proxy votes as provided in paragraph (e)(1) of this section.
    (e) Nomination Conventions. If nominations are made by nomination 
conventions, the Board shall widely publicize such conventions and 
provide importers and the Secretary at least 10 days notice prior to 
each convention.
    (1) Proxy voting by importers shall be permitted at all conventions. 
Any person wanting to cast proxy votes must demonstrate authorization to 
do so. Authority to cast a proxy vote on behalf of another person shall 
be demonstrated through documentation containing:
    (i) The proxy voter's name, address, and telephone number;
    (ii) Signature and date signed;
    (iii) A certification identifying the proxy voter as an importer; 
and
    (iv) A statement identifying the person being given authority by the 
proxy voter to cast the proxy vote.
    (2) The Board shall provide to the Secretary a typed copy of each 
convention's minutes and shall arrange for completion of qualification 
statements and other specified information by each nominee and forward 
such to the Secretary within 14 calendar days of completion of a 
convention.
    (f) Mail balloting. If nominations are conducted by mail ballot, the 
Board shall request importers to submit nominations of eligible 
importers. It is the importer's responsibility to prove the individual's 
eligibility. After the names of nominees are received, the Board shall 
print ballots and ask eligible importers to vote to nominate their 
candidates. After the vote is received, the Board shall tabulate the 
results and shall send to the Department the nominees in order of 
preference. The Board shall provide the Secretary with a report on the 
results, number of importers participating in the vote, and the volume 
of imports, and shall arrange for completion of qualification statements 
and other specified information by each nominee and forward such to the 
Secretary within 14 calendar days of receiving the ballots.
    (g) Any individual who both imports and handles watermelons will be 
considered an importer if that person imports 50 percent or more of the 
combined total volume of watermelons handled and imported by that 
person.

[60 FR 10800, Feb. 28, 1995]

                              Public Member



Sec. 1210.405  Public member nominations and selection.

    (a) The public member shall be nominated by the other members of the 
Board. The public member shall have no direct financial interest in the 
commercial production or marketing of watermelons except as a consumer 
and shall not be a director, stockholder, officer or employee of any 
firm so engaged. The Board shall nominate two individuals for the public 
member position. Voting for public member nominees shall require a 
quorum of the Board and shall be on the basis of one vote per Board 
member. Election of nominees shall be on the basis of a simple majority 
of those present and voting. Such election shall be held prior to August 
1, 1990, and every third August first thereafter. The Board may 
prescribe such additional qualifications, administrative rules and 
procedures for selection and voting for public member nominees as it 
deems necessary and the Secretary approves.
    (b) Each person nominated for the position of public member on the 
Board shall qualify by filing a written acceptance with the Secretary 
within 14 calendar days of completion of the Board meeting at which 
public member nominees were selected.

[55 FR 13256, Apr. 10, 1990. Redesignated and amended at 60 FR 10800, 
Feb. 28, 1995]



                     Subpart C_Rules and Regulations

    Source: 55 FR 13256, Apr. 10, 1990, unless otherwise noted.

[[Page 130]]

                               Definitions



Sec. 1210.500  Terms defined.

    Unless otherwise defined in this subpart, definitions of terms used 
in this subpart shall have the same meaning as the definitions of such 
terms which appear in subpart--Watermelon Research and Promotion Plan.

                                 General



Sec. 1210.501  Realignment of districts.

    Pursuant to Sec. 1210.320(c) of the Plan, the districts shall be as 
follows:
    (a) District 1--The Florida counties of Brevard, Broward, Charlotte, 
Collier, Dade, Desoto, Glades, Hardee, Hendry, Highlands, Hillsborough, 
Indian River, Lake, Lee, Manatee, Martin, Monroe, Okeechobee, Orange, 
Osceola, Palm Beach, Pasco, Pinellas, Polk, Sarasota, Seminole, St. 
Lucie, and Volusia.
    (b) District 2--The Florida counties of Alachua, Baker, Bay, 
Bradford, Calhoun, Citrus, Clay, Columbia, Dixie, Duval, Escambia, 
Flagler, Franklin, Gadsden, Gilchrist, Gulf, Hamilton, Hernando, Holmes, 
Jackson, Jefferson, Lafayette, Leon, Levy, Liberty, Madison, Marion, 
Nassau, Okaloosa, Putnam, Santa Rosa, St. Johns, Sumter, Suwannee, 
Taylor, Union, Wakulla, Walton, and Washington, and the States of North 
Carolina and South Carolina.
    (c) District 3--The State of Georgia.
    (d) District 4--The States of Alabama, Connecticut, Delaware, 
Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, 
New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, 
Tennessee, Virginia, Vermont, Wisconsin, West Virginia, and Washington, 
DC.
    (e) District 5--The State of California.
    (f) District 6--The State of Texas.
    (g) District 7--The States of Alaska, Arkansas, Arizona, Colorado, 
Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, 
Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, 
Oregon, South Dakota, Utah, Washington, and Wyoming.

[76 FR 42012, July 18, 2011]



Sec. 1210.502  Importer members.

    Pursuant to Sec. 1210.320(d) of the Plan, there are eight importer 
representatives on the Board based on the proportionate percentage of 
assessments paid by importers to the Board.

[76 FR 42012, July 18, 2011]



Sec. 1210.504  Contracts.

    The Board, with the approval of the Secretary, may enter into 
contracts or make agreements with persons for the development and 
submission to it of programs or projects authorized by the Plan and for 
carrying out such programs or projects. Contractors shall agree to 
comply with the provisions of this part. Subcontractors who enter into 
contracts or agreements with a Board contractor and who receive or 
otherwise utilize funds allocated by the Board shall be subject to the 
provisions of this part. All records of contractors and subcontractors 
applicable to contracts entered into by the Board are subject to audit 
by the Secretary.



Sec. 1210.505  Department of Agriculture costs.

    Pursuant to Sec. 1210.340, the Board shall reimburse the Department 
of Agriculture for referendum and administrative costs incurred by the 
Department with respect to the Plan. The Board shall pay those costs 
incurred by the Department for the conduct of Department duties under 
the Plan as determined periodically by the Secretary. The Department 
will bill the Board monthly and payment shall be due promptly after the 
billing of such costs. Funds to cover such expenses shall be paid from 
assessments collected pursuant to Sec. 1210.341.

[55 FR 13256, Apr. 10, 1990, as amended at 60 FR 10800 Feb. 28, 1995]

                               Assessments



Sec. 1210.515  Levy of assessments.

    (a) An assessment of three cents per hundredweight shall be levied 
on all watermelons produced for ultimate consumption as human food, and 
an assessment of three cents per hundredweight shall be levied on all 
watermelons first handled for ultimate consumption as human food. An 
assessment of six cents per hundredweight

[[Page 131]]

shall be levied on all watermelons imported into the United States for 
ultimate consumption as human food at the time of entry in the United 
States.
    (b) The import assessment shall be uniformly applied to imported 
watermelons that are identified by the numbers 0807.11.30 and 0807.11.40 
in the Harmonized Tariff Scheudle of the United States of any other 
number used to identify fresh watermelons for consumption as human food. 
The U.S. Customs Service (USCS) will collect assessments on such 
watermelons at the time of entry and will forward such assessment as per 
the agreement between USCS and USDA. Any importer or agent who is exempt 
from payment of assessments may submit the Board adequate proof of the 
volume handled by such importer for the exemption to be granted.
    (c) Watermelons used for non-human food purposes are exempt from 
assessment requirements but are subject to the safeguard provisions of 
Sec. 1210.521.

[55 FR 13256, Apr. 10, 1990, as amended at 60 FR 10800, Feb. 28, 1995; 
72 FR 41428, July 30, 2007; 72 FR 61051, Oct. 29, 2007]



Sec. 1210.516  Exemption for organic watermelons.

    (a) A producer who produces only products that are eligible to be 
labeled as 100 percent organic under the National Organic Program (NOP) 
(7 CFR part 205), except as provided for in paragraph (h) of this 
section, or a handler who handles only products that are eligible to be 
labeled as 100 percent organic under the NOP; and who operates under an 
approved NOP system plan, and is not a split operation shall be exempt 
from the payment of assessments.
    (b) To apply for this exemption, the producer or handler shall 
submit the request to the Board--on a form provided by the Board--at any 
time initially and annually thereafter on or before January 1 as long as 
the producer or handler continues to be eligible for the exemption.
    (c) The request shall include the following: The applicant's name 
and address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined in 
section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), 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.
    (d) If the producer or handler complies with the requirements of 
this section, the Board will approve the exemption and issue a 
Certificate of Exemption to the producer or handler. For exemption 
requests received on or before August 15, 2005, the Board will have 60 
days to approve the exemption request; after August 15, 2005, the Board 
will have 30 days to approve the exemption request. If the application 
is disapproved, the Board will notify the applicant of the reason(s) for 
disapproval within the same timeframe.
    (e) The producer shall provide a copy of the Certificate of 
Exemption to each handler to whom the producer sells watermelons. The 
handler shall maintain records showing the exempt producer's name and 
address and the exemption number assigned by the Board.
    (f) An importer imports only products that are eligible to be 
labeled as 100 percent organic under the NOP (7 CFR part 205) and who is 
not a split operation shall be exempt from the payment of assessments. 
That importer may submit documentation to the Board and request an 
exemption from assessment on 100 percent organic watermelons. The 
importer may request the exemption--on a form provided by the Board--at 
any time initially and annually thereafter on or before January 1, as 
long as the importer continues to be eligible for the exemption. This 
documentation shall include the same information required of producers 
and handlers in paragraph (c) 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 Harmonized 
Tariff Schedule (HTS) classification valid for 1 year from the date of 
issue. This HTS classification should be entered by the importer on the 
Customs entry documentation. Any line

[[Page 132]]

item entry of 100 percent organic watermelons bearing this HTS 
classification assigned by the Board will not be subject to assessments.
    (g) The exemption will apply immediately following the issuance of 
the Certificate of Exemption.
    (h) Agricultural commodities produced and marketed under an organic 
system plan, as described in 7 CFR 205.201, but not sold, labeled, or 
represented as organic, shall not disqualify a producer from exemption 
under this section, except that producers who produce both organic and 
non-organic agricultural commodities as a result of split operations 
shall not qualify for exemption. Reasons for conventional sales include 
lack of demand for organic products, isolated use of antibiotics for 
humane purposes, chemical or pesticide use as the result of State or 
emergency spray programs, and crops from a buffer area as described in 7 
CFR part 205, provided all other criteria are met.

[70 FR 2756, Jan. 14, 2005]



Sec. 1210.517  Determination of handler.

    The producer and handler assessments on each lot of watermelons 
handled shall be paid by the handler. Unless otherwise provided in this 
section, the handler responsible for payment of assessments shall be the 
first handler of such watermelons. The first handler is the person who 
initially performs a handling function as heretofore defined. Such 
person may be a fresh shipper, processor, or other person who first 
places the watermelons in the current of commerce.
    (a) The following examples are provided to aid in the identification 
of first handlers:
    (1) Producer grades, packs, and sells watermelons of own production 
to a handler. In this instance, it is the handler, not the producer, who 
places the watermelons in the current of commerce. The handler is 
responsible for payment of the assessments.
    (2) Producer packs and sells watermelons of that producer's own 
production from the field, roadside stand, or storage to a consumer, 
trucker, retail or wholesales outlet, or other buyer who is not a 
handler of watermelons. The producer places the watermelons in the 
current of commerce and is the first handler.
    (3) Producer purchases watermelons from another producer. The 
producer purchasing the watermelons is the first handler.
    (4) Producer delivers field-run watermelons of own production to a 
handler for preparation for market and entry into the current of 
commerce. The handler, in this instance, is the first handler, 
regardless of whether the handler subsequently handles such watermelons 
for the account of the handler or for the account of the producer.
    (5) Producer delivers field-run watermelons of own production to a 
handler for preparation for market and return to the producer for sale. 
The producer in this instance, is the first handler, except when the 
producer subsequently sells such watermelons to a handler.
    (6) Producer delivers watermelons of own production to a handler who 
takes title to such watermelons. The handler who purchases such 
watermelons from the producer is the first handler.
    (7) Producer supplies watermelons to a cooperative marketing 
association which sells or markets the watermelons and makes an 
accounting to the producer, or pays the proceeds of the sale to the 
producer. In this instance, the cooperative marketing association 
becomes the first handler upon physical delivery to such cooperative.
    (8) Handler purchases watermelons from a producer's field for the 
purpose of preparing such watermelons for market or for transporting 
such watermelons to storage for subsequent handling. The handler who 
purchases such watermelons from the producer is the first handler.
    (9) Broker/Commission House receives watermelons from a producer and 
sells such watermelons in the Broker's/Commission House's name. In this 
instance, the Broker/Commission House is the first handler, regardless 
of whether the Broker/ Commission House took title to such watermelons.
    (10) Broker/Commission House, without taking title or possession of 
watermelons, sells such watermelons in the name of the producer. In this 
instance, the producer is the first handler.

[[Page 133]]

    (11) Processor utilizes watermelons of own production in the 
manufacture of rind pickles, frozen, dehydrated, extracted, or canned 
products for human consumption. In so handling watermelons the processor 
is the first handler.
    (12) Processor purchases watermelons from the producer thereof. In 
this instance, the processor is the first handler even though the 
producer may have graded, packed, or otherwise handled such watermelons.
    (b) In the event of a handler's death, bankruptcy, receivership, or 
incapacity to act, the representative of the handler or the handler's 
estate shall be considered the handler of the watermelons for the 
purpose of this subpart.

[55 FR 13256, Apr. 10, 1990, as amended at 58 FR 3356, Jan. 8, 1993]



Sec. 1210.518  Payment of assessments.

    (a) Time of payment. The assessment on domestically produced 
watermelons shall become due at the time the first handler handles the 
watermelons for non-exempt purposes. The assessment on imported 
watermelons shall become due at the time of entry, or withdrawal, into 
the United States.
    (b) Responsibility for payment. (1) The first handler is responsible 
for payment of both the producer's and the handler's assessment. The 
handler may collect the producer's assessment from the producer or 
deduct such producer's assessment from the proceeds paid to the producer 
on whose watermelons the producer assessment is made. Any such 
collection or deduction of producer assessment shall be made not later 
than the time when the first handler handles the watermelons.
    (2) The U.S. Customs Service shall collect assessments on imported 
watermelons from importers and forward such assessments under an 
agreement between the U.S. Customs Service and the U.S. Department of 
Agriculture. Importers shall be responsible for payment of assessments 
directly to the Board of any assessments due but not collected by the 
U.S. Customs Service at the time of entry, or withdrawal, on watermelons 
imported into the United States for human consumption.
    (c) Payment direct to the Board. (1) Except as provided in paragraph 
(b) and (e) of this section, each handler and importer shall remit the 
required producer and handler assessments, pursuant to Sec. 1210.341 of 
the Plan, directly to the Board not later than 30 days after the end of 
the month such assessments are due. Remittance shall be by check, draft, 
or money order payable to the National Watermelon Promotion Board, or 
NWPB, and shall be accompanied by a report, preferably on Board forms, 
pursuant to Sec. 1210.350. To avoid late payment charges, the 
assessments must be mailed to the Board and postmarked within 30 days 
after the end of the month such assessments are due.
    (2) Pursuant to Sec. 1210.350 of the Plan, each handler shall file 
with the Board a report for each month that assessable watermelons were 
handled. All handler reports shall contain at least the following 
information:
    (i) The handler's name, address, and telephone number;
    (ii) Date of report (which is also the date of payment to the 
Board);
    (iii) Period covered by the report;
    (iv) Total quantity of watermelons handled during the reporting 
period;
    (v) Date of last report remitting assessments to the Board; and
    (vi) Listing of all persons for whom the handler handled 
watermelons, their addresses, hundredweight handled, and total 
assessments remitted for each producer. In lieu of such a list, the 
handler may substitute copies of settlement sheets given to each person 
or computer generated reports, provided such settlement sheets or 
computer reports contain all the information listed above.
    (vii) Name, address, and hundredweight handled for each person 
claiming exemption for assessment.
    (viii) If the handler handled watermelons for persons engaged in the 
growing of less than 10 acres of watermelons, the report shall indicate 
the name and address of such person and the quantity of watermelons 
handled for such person.
    (3) The words ``final report'' shall be shown on the last report at 
the close of the handler's marketing season or at the end of each fiscal 
period if such handler markets assessable watermelons on a year-round 
basis.

[[Page 134]]

    (4) Prepayment of assessments. (i) In lieu of the monthly assessment 
and reporting requirements of paragraph (b) of this section, the Board 
may permit handlers to make an advance payment of their total estimated 
assessments for the crop year to the Board prior to their actual 
determination of assessable watermelons. The Board shall not be 
obligated to pay interest on any advance payment.
    (ii) Handlers using such procedures shall provide a final annual 
report of actual handling and remit any unpaid assessments not later 
than 30 days after the end of the last month of the designated handler's 
marketing season or at the end of each fiscal period if such handler 
markets assessable watermelons on a year-round basis.
    (iii) Handlers using such procedures shall, after filing a final 
annual report, receive a reimbursement of any overpayment of 
assessments.
    (iv) Handlers using such procedures shall, at the request of the 
Board to verify a producer's refund claim, provide the Board with a 
handling report on any and all producers for whom the handler has 
provided handling services but has not yet filed a handling report with 
the Board.
    (v) Specific requirements, instructions, and forms for making such 
advance payments shall be provided by the Board on request.
    (d) Late payment charges and interest. (1) A late payment charge 
shall be imposed on any handler and importer who fails to make timely 
remittance to the Board of the total producer and handler and importer 
assessments for which any such handler and importer is liable. Such late 
payment shall be imposed on any assessments not received before the 
fortieth day after the end of the month such assessments are due. This 
one-time late payment charge shall be 10 percent of the assessments due 
before interest charges have accrued. The late payment charge will not 
be applied to any late payments postmarked within 30 days after the end 
of the month such assessments are due.
    (2) In addition to the late payment charge, one and one-half percent 
per month interest on the outstanding balance, including the late 
payment charge and any accrued interest, will be added to any accounts 
for which payment has not been received by the last day of the second 
month following the month of handling; Provided, that, handlers paying 
their assessments in accordance with paragraph (c)(4)(ii), will not be 
subject to the one and one-half percent per month interest under this 
paragraph until the last day of the second month after such assessments 
are due under paragraph (c)(4)(ii). Such interest will continue monthly 
until the outstanding balance is paid to the Board.
    (e) Payment through cooperating agency. The Board may enter into 
agreements, subject to approval of the Secretary, authorizing other 
organizations, such as a regional watermelon association or State 
watermelon board, to collect assessments in its behalf. In any State or 
area in which the Board has entered into such an agreement, the 
designated handler shall pay the assessment to such agency in the time 
and manner, and with such identifying information as specified in such 
agreement. Such an agreement shall not provide any cooperating agency 
with authority to collect confidential information from handlers or 
producers. To qualify, the cooperating agency must on its own accord 
have access to all information required by the Board for collection 
purposes. If the Board requires further evidence of payment than 
provided by the cooperating agency, it may acquire such evidence from 
individual handlers. All such agreements are subject to the requirements 
of the Act, Plan, and all applicable rules and regulations under the Act 
and the Plan.

[55 FR 13256, Apr. 10, 1990; 55 FR 20443, May 17, 1990, as amended at 56 
FR 15808, Apr. 18, 1991; 60 FR 10801, Feb. 28, 1995]



Sec. 1210.519  Failure to report and remit.

    Any handler and importer who fails to submit reports and remittances 
according to the provisions of Sec. 1210.518 shall be subject to 
appropriate action by the Board which may include one or more of the 
following actions:
    (a) Audit of the handler's and importer's books and records to 
determine the amount owed the Board.

[[Page 135]]

    (b) Establishment of an escrow account for the deposit of 
assessments collected. Frequency and schedule of deposits and 
withdrawals from the escrow account shall be determined by the Board 
with the approval of the Secretary.
    (c) Referral to the Secretary for appropriate enforcement action.

[55 FR 13256, Apr. 10, 1990, as amended at 60 FR 10801, Feb. 28, 1995]



Sec. 1210.520  Refunds.

    Each importer of less than 150,000 pounds of watermelons during any 
calendar year shall be entitled to apply for a refund of the assessments 
paid in an amount equal to the amount paid by domestic producers.
    (a) Application form. The Board shall make available to all 
importers a refund application form.
    (b) Submission of refund application to the Board. The refund 
application form shall be submitted to the Board within 90 days of the 
last day of the year the watermelons were actually imported. The refund 
application form shall contain the following information:
    (1) Importer's name and address;
    (2) Number of hundredweight of watermelon on which refund is 
requested;
    (3) Total amount to be refunded;
    (4) Proof of payment as described below; and
    (5) Importer's signature.
    (c) Proof of payment of assessment. Evidence of payment of 
assessments satisfactory to the Board shall accompany the importer's 
refund application. An importer must submit a copy of the importer's 
report or a cancelled check. Evidence submitted with a refund 
application shall not be returned to the applicant.
    (d) Payment of refund. Immediately after receiving the properly 
executed application for refund, the Board shall make remittance to the 
applicant.

[60 FR 10801, Feb. 28, 1995]



Sec. 1210.521  Reports of disposition of exempted watermelons.

    The Board may require reports by handlers or importers on the 
handling/importing and disposition of exempted watermelons and/or on the 
handling of watermelons for persons engaged in growing less than 10 
acres of watermelons or in the case of importers, the importing of less 
than 150,000 pounds per year. Authorized employees of the Board or the 
Secretary may inspect such books and records as are appropriate and 
necessary to verify the reports on such disposition.

[60 FR 10801, Feb. 28, 1995]

                                 Records



Sec. 1210.530  Retention period for records.

    Each handler and importer required to make reports pursuant to this 
subpart shall maintain and retain for at least 2 years beyond the 
marketing year of their applicability:
    (a) One copy of each report made to the Board; and
    (b) Such records as are necessary to verify such reports.

[55 FR 13256, Apr. 10, 1990, as amended at 60 FR 10801, Feb. 28, 1995]



Sec. 1210.531  Availability of records.

    Each handler and importer required to make reports pursuant to this 
subpart shall make available for inspection and copying by authorized 
employees of the Board or the Secretary during regular business hours, 
such records as are appropriate and necessary to verify reports required 
under this subpart.

[55 FR 13256, Apr. 10, 1990, as amended at 60 FR 10801, Feb. 28, 1995]



Sec. 1210.532  Confidential books, records, and reports.

    All information obtained from the books, records, and reports of 
handlers and importers and all information with respect to refunds of 
assessments made to importers shall be kept confidential in the manner 
and to the extent provided for in Sec. 1210.352.

[60 FR 10801, Feb. 28, 1995]

                              Miscellaneous



Sec. 1210.540  OMB assigned numbers.

    The information collection and recordkeeping requirements contained 
in this part have been approved by the Office of Management and Budget 
(OMB)

[[Page 136]]

under the provisions of 44 U.S.C. chapter 35 and have been assigned OMB 
Control Number 0581-0093, except that Board member nominee background 
information sheets are assigned OMB Control Number 0505-0001.

[58 FR 3356, Jan. 8, 1993]



                     Subpart D_Referendum Procedures

    Source: 66 FR 56388, Nov. 7, 2001; 67 FR 17907, Apr. 12, 2002, 
unless otherwise noted.



Sec. 1210.600  General.

    Referenda to determine whether eligible producers, handlers, and 
importers favor the continuation, suspension, termination, or amendment 
of the Watermelon Research and Promotion Plan shall be conducted in 
accordance with this subpart.



Sec. 1210.601  Definitions.

    Unless otherwise defined in this section, the definition of terms 
used in these procedures shall have the same meaning as the definitions 
in the Plan.
    (a) Administrator means the Administrator of the Agricultural 
Marketing Service, with power to redelegate, or any officer or employee 
of the Department to whom authority has been delegated or may hereafter 
be delegated to act in the Administrator's stead.
    (b) Department means the United States Department of Agriculture.
    (c) Eligible handler means any person (except a common contract 
carrier of watermelons owned by another person) who handles watermelons, 
including a producer who handles watermelons of the producer's own 
production, subject to the provisions of Sec. 1210.602(a) of this 
chapter, who handles watermelons as a person performing a handling 
function and either:
    (1) Takes title or possession of watermelons from a producer and 
directs the grading, packing, transporting, and selling of the 
watermelons in the current of commerce;
    (2) Purchases watermelons from producers;
    (3) Purchases watermelons from handlers;
    (4) Purchases watermelons from importers; or
    (5) Arranges the sale or transfer of watermelons from one party to 
another and takes title or possesssion of the watermelons: Provided, 
That harvest crews and common carriers who collect and transport 
watermelons from the field to a handler are not handlers and that 
retailers, wholesale retailers, foodservice distributors, and 
foodservice operators are not handlers.
    (d) Eligible importer means any person who imports 150,000 pounds or 
more watermelons annually into the United States as principal or as an 
agent, broker, or consignee for any person who produces watermelons 
outside the United States for sale in the United States. An importer who 
imports less than 150,000 pounds of watermelons annually and did not 
apply for and receive reimbursement of assessments is also an eligible 
importer.
    (e) Eligible producer means any person who is engaged in the growing 
of 10 or more acres of watermelons, including any person who owns or 
shares the ownership and risk of loss of such watermelon crop. A person 
who shares the ownership and risk of loss includes a person who:
    (1) Owns and farms land, resulting in ownership, by said producer, 
of the watermelons produced thereon;
    (2) Rents and farms land, resulting in ownership, by said producer, 
of all or a portion of the watermelons produced thereon; or
    (3) Owns land which said producer does not farm and, as rental for 
such land, obtains the ownership of a portion of the watermelons 
produced thereon. Ownership of, or leasehold interest in land, and the 
acquisition, in any manner other than set forth in this subpart, of 
legal title to the watermelons grown on said land, shall not be deemed 
to result in such owners or lessees becoming producers. Persons who 
produce watermelons for non-food uses are not producers for the purposes 
of this subpart.
    (f) Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other entity. For the 
purpose of this definition, the term partnership includes, but is not 
limited to:

[[Page 137]]

    (1) A husband and wife who have title to, or leasehold interest in, 
land as tenants in common, joint tenants, tenants by the entirety, or, 
under community property laws, as community property, and
    (2) So-called joint ventures wherein one or more parties to the 
agreement, informal or otherwise, contributed land and others 
contributed capital, labor, management, equipment, or other services, or 
any variation of such contributions by two or more parties, so that it 
results in the production, handling, or importation of watermelons for 
market and the authority to transfer title to the watermelons so 
produced, handled, or imported.
    (g) Referendum agent or agent means the individual or individuals 
designated by the Secretary to conduct the referendum.
    (h) Representative period means the period designated by the 
Secretary pursuant to the Act.



Sec. 1210.602  Voting.

    (a) Each person who is an eligible producer, handler, or importer as 
defined in this subpart, at the time of the referendum and who also was 
a producer, handler, or importer during the representative period, shall 
be entitled to one vote in the referendum: Provided, That each producer 
in a landlord-tenant relationship or a divided ownership arrangement 
involving totally independent entities cooperating only to produce 
watermelons in which more than one of the parties is a producer, shall 
be entitled to one vote in the referendum covering only that producer's 
share of the ownership: Provided further, That the vote of a person who 
both produces and handles watermelons will be counted as a handler vote 
if the producer purchased watermelons from other producers, in a 
combined total volume that is equal to 25 percent or more of the 
producer's own production; or the combined total volume of watermelon 
handled by the producer from the producer's own production and purchased 
from other producer's production is more than 50 percent of the 
producer's own production: Provided further, That the vote of a person 
who both imports and handles watermelons will be counted as an importer 
vote if that person imports 50 percent or more of the combined total 
volume of watermelons handled and imported by that person.
    (b) Proxy voting is not authorized, but an officer or employee of a 
corporate producer, handler, or importer, or an administrator, executor, 
or trustee of a producing, handling, or importing entity may cast a 
ballot on behalf of such entity. Any individual so voting in a 
referendum shall certify that the individual is an officer, employee of 
the producer, handler, or importer, or an administrator, executor, or 
trustee of a producing, handling, or importing entity and that the 
individual has the authority to take such action. Upon request of the 
referendum agent, the individual shall submit adequate evidence of such 
authority.
    (c) Casting of ballots. All ballots are to be cast as instructed by 
the Secretary.



Sec. 1210.603  Instructions.

    The referendum agent shall conduct the referendum, in the manner 
provided in this section, under the supervision of the Administrator. 
The Administrator may prescribe additional instructions, not 
inconsistent with the provisions in this section, to govern the 
procedure to be followed by the referendum agent. Such agent shall:
    (a) Determine the period during which ballots may be cast.
    (b) Provide ballots and related material to be used in the 
referendum. The ballot shall provide for recording essential 
information, including that needed for ascertaining whether the person 
voting, or on whose behalf the vote is cast, is an eligible voter.
    (c) Give reasonable public notice of the referendum:
    (1) By utilizing available media or public information sources, 
without incurring advertising expense, to publicize the voting period, 
method of voting, eligibility requirements, and other pertinent 
information. Such sources of publicity may include, but are not limited 
to, print and radio; and
    (2) By such other means as said agent may deem advisable.
    (d) Mail to eligible producers; importers; and in the case of an 
order assessing handlers, handlers whose names

[[Page 138]]

and addresses are known to the referendum agent; the instructions on 
voting; a ballot; and a summary of the terms and conditions to be voted 
upon. No person who claims to be eligible to vote shall be refused a 
ballot. However, such persons may be required to submit evidence of 
their eligibility.
    (e) At the end of the voting period, collect, open, number, and 
review the ballots and tabulate the results in the presence of an agent 
of a third party authorized to monitor the referendum process.
    (f) Prepare a report on the referendum.
    (g) Announce the results to the public.



Sec. 1210.604  Subagents.

    The referendum agent may appoint any individual or individuals 
necessary to assist the agent in performing such agent's functions 
hereunder. Each individual so appointed may be authorized by the agent 
to perform any or all of the functions which, in the absence of such 
appointment, shall be performed by the agent.



Sec. 1210.605  Ballots.

    The referendum agent and subagents shall accept all ballots cast. 
However, if an agent or subagent deems that a ballot should be 
questioned for any reason, the agent or subagent shall endorse above 
their signature, on the ballot, a statement to the effect that such 
ballot was questioned, by whom questioned, why the ballot was 
questioned, the results of any investigation made with respect to the 
questionable ballot, and the disposition of the questionable ballot. 
Ballots invalid under this subpart shall not be counted.



Sec. 1210.606  Referendum report.

    Except as otherwise directed, the referendum agent shall prepare and 
submit to the Administrator a report on the results of the referendum, 
the manner in which it was conducted, the extent and kind of public 
notice given, and other information pertinent to analysis of the 
referendum and its results.



Sec. 1210.607  Confidential information.

    All ballots cast and their contents and all other information or 
reports furnished to, compiled by, or in possession of, the referendum 
agent or subagents that reveal, or tend to reveal, the identity or vote 
of any producer, handler, or importer of watermelons shall be held 
strictly confidential and shall not be disclosed.



PART 1212_HONEY PACKERS AND IMPORTERS RESEARCH, PROMOTION, CONSUMER 
EDUCATION AND INDUSTRY INFORMATION ORDER--Table of Contents



  Subpart A_Honey Packers and Importers Research, Promotion, Consumer 
                Education, and Industry Information Order

                               Definitions

Sec.
1212.1 Act.
1212.2 Board.
1212.3 Conflict of interest.
1212.4 Department.
1212.5 Exporter.
1212.6 First handler.
1212.7 Fiscal period for marketing year.
1212.8 Handle.
1212.9 Honey.
1212.10 Honey products.
1212.11 Importer.
1212.12 Importer-Handler Representative.
1212.13 Information.
1212.14 Market or marketing.
1212.15 Order.
1212.16 Part and subpart.
1212.17 Person.
1212.18 Plans and programs.
1212.19 Producer.
1212.20 Promotion.
1212.21 Qualified national organization representing handler interests.
1212.22 Qualified national organization representing importer interests.
1212.23 Qualified national organization representing producer interests.
1212.24 Qualified national organization representing cooperative 
          interests.
1212.25 Referendum.
1212.26 Research.
1212.27 Secretary.
1212.28 Suspend.
1212.29 State.
1212.30 Terminate.
1212.31 United States.
1212.32 United States Customs Service.

                    Honey Packers and Importers Board

1212.40 Establishment and membership.
1212.41 Term of office.

[[Page 139]]

1212.42 Nominations and appointments.
1212.43 Removal and vacancies.
1212.44 Procedure.
1212.45 Reimbursement and attendance.
1212.46 Powers.
1212.47 Duties.
1212.48 Reapportionment of Board membership.

                        Expenses and Assessments

1212.50 Budget and expenses.
1212.51 Financial statements.
1212.52 Assessments.
1212.53 Exemption from assessment.
1212.54 Operating reserve.
1212.55 Prohibition on use of funds.

                  Promotion, Research, and Information

1212.60 Programs, plans, and projects.
1212.61 Independent evaluation.
1212.62 Patents, copyrights, inventions, product formulations, and 
          publications.

                       Reports, Books, and Records

1212.70 Reports.
1212.71 Books and records.
1212.72 Confidential treatment.

                              Miscellaneous

1212.80 Right of the Secretary.
1212.81 Referenda.
1212.82 Suspension or termination.
1212.83 Proceedings after termination.
1212.84 Effect of termination or amendment.
1212.85 Personal liability.
1212.86 Separability.
1212.87 Amendments.
1212.88 OMB Control Numbers.

                     Subpart B_Referendum Procedures

1212.100 General.
1212.101 Definitions.
1212.102 Voting.
1212.103 Instructions.
1212.104 Subagents.
1212.105 Ballots.
1212.106 Referendum report.
1212.107 Confidential information.
1212.108 OMB control number.

    Authority: 7 U.S.C. 7411-7425; 7 U.S.C. 7401.

    Source: 73 FR 11472, Mar. 3, 2008.



  Subpart A_Honey Packers and Importers Research, Promotion, Consumer 
                Education, and Industry Information Order

    Source: 73 FR 29397, May 21, 2008, unless otherwise noted.

                               Definitions



Sec. 1212.1  Act.

    ``Act'' means the Commodity Promotion, Research, and Information Act 
of 1996, (7 U.S.C. 7411-7425), and any amendments to that Act.



Sec. 1212.2  Board.

    ``Board'' or ``Honey Packers and Importers Board'' means the 
administrative body established pursuant to Sec. 1212.40, or such other 
name as recommended by the Board and approved by the Department.



Sec. 1212.3  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.



Sec. 1212.4  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. 1212.5  Exporter.

    ``Exporter'' means any person who exports honey or honey products 
from the United States.



Sec. 1212.6  First handler.

    ``First handler'' means the first person who buys or takes 
possession of honey or honey products from a producer for marketing. If 
a producer markets honey or honey products directly to consumers, that 
producer shall be considered to be the first handler with respect to the 
honey produced by the producer.



Sec. 1212.7  Fiscal period.

    ``Fiscal period'' means a calendar year from January 1 through 
December 31, or such other period as recommended by the Board and 
approved by the Secretary.

[[Page 140]]



Sec. 1212.8  Handle.

    ``Handle'' means to process, package, sell, transport, purchase or 
in any other way place honey or honey products, or causes them to be 
placed, in commerce. This term includes selling unprocessed honey that 
will be consumed without further processing or packaging. This term does 
not include the transportation of unprocessed honey by the producer to a 
handler or transportation by a commercial carrier of honey, whether 
processed or unprocessed for the account of the first handler or 
producer.



Sec. 1212.9  Honey.

    ``Honey'' means the nectar and saccharine exudations of plants that 
are gathered, modified, and stored in the comb by honeybees, including 
comb honey.



Sec. 1212.10  Honey products.

    ``Honey products'' mean products where honey is a principal 
ingredient. For purposes of this subpart, a product shall be considered 
to have honey as a principal ingredient if the product contains at least 
50% honey by weight.



Sec. 1212.11  Importer.

    ``Importer'' means any person who imports for sale honey or honey 
products into the United States as a principal or as an agent, broker, 
or consignee of any person who produces honey or honey products outside 
the United States for sale in the United States, and who is listed in 
the import records as the importer of record for such honey or honey 
products.



Sec. 1212.12  Importer-Handler Representative.

    ``Importer-Handler Representative'' means any person who is an 
importer and first handler, who must import at least 75 percent of the 
honey they market in the United States and must handle at least 250,000 
pounds annually.



Sec. 1212.13  Information.

    ``Information'' means activities or programs designed to develop new 
and existing markets, new and existing marketing strategies and 
increased efficiency and activities to enhance the image of honey and 
honey products. These include:
    (a) Consumer education, which means any action taken to provide 
information to, and broaden the understanding of, the general public 
regarding the consumption, use, nutritional attributes, and care of 
honey and honey products; and
    (b) Industry information, which means information and programs that 
will lead to the development of new markets, new marketing strategies, 
or increased efficiency for the honey industry, and activities to 
enhance the image of the honey industry.



Sec. 1212.14  Market or marketing.

    (a) ``Marketing'' means the sale or other disposition of honey or 
honey products in any channel of commerce.
    (b) ``Market'' means to sell or otherwise dispose of honey or honey 
products in interstate, foreign, or intrastate commerce.



Sec. 1212.15  Order.

    ``Order'' means the Honey Packers and Importers Research, Promotion, 
Consumer Education and Industry Information Order.



Sec. 1212.16  Part and subpart.

    ``Part'' means the Honey Packers and Importers Research, Promotion, 
Consumer Education, and Industry Information Order (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. 1212.17  Person.

    ``Person'' means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity.



Sec. 1212.18  Plans and programs.

    ``Plans and programs'' mean those research, promotion and 
information programs, plans, or projects established pursuant to this 
Order.



Sec. 1212.19  Producer.

    ``Producer'' means any person who is engaged in the production and 
sale of honey in any State and who owns, or shares the ownership and 
risk of loss of

[[Page 141]]

the production of honey or a person who is engaged in the business of 
producing, or causing to be produced, honey beyond personal use and 
having value at first point of sale.



Sec. 1212.20  Promotion.

    ``Promotion'' means any action, including paid advertising and 
public relations that presents a favorable image for honey or honey 
products to the public and food industry with the intent of improving 
the perception and competitive position of honey and stimulating sales 
of honey or honey products.



Sec. 1212.21  Qualified national organization representing first handler
interests.

    ``Qualified national organization representing first handler 
interests'' means an organization that the Secretary certifies as being 
eligible to nominate first handler and alternate first handler members 
of the Board under Sec. 1212.42.



Sec. 1212.22  Qualified national organization representing importer 
interests.

    ``Qualified national organization representing importer interests'' 
means an organization that the Secretary certifies as being eligible to 
nominate importer, importer-handler, and alternate importer and 
importer-handler members of the Board under Sec. 1212.42.



Sec. 1212.23  Qualified national organization representing producer 
interests.

    ``Qualified national organization representing producer interests'' 
means an organization that the Secretary certifies as being eligible to 
nominate producer and alternate producer members of the Board under 
Sec. 1212.42.



Sec. 1212.24  Qualified national organization representing cooperative 
interests.

    ``Qualified national organization representing cooperative 
interests'' means an organization that the Secretary certifies as being 
eligible to nominate cooperative and alternate cooperative members of 
the Board under Sec. 1212.42.



Sec. 1212.25  Referendum.

    ``Referendum'' means a referendum to be conducted by the Secretary 
pursuant to the Act whereby first handlers and importers shall be given 
the opportunity to vote to determine whether the implementation of or 
continuance of this part is favored by a majority of eligible persons 
voting in the referendum and a majority of volume voted in the 
referendum.



Sec. 1212.26  Research.

    ``Research'' means any type of test, study, or analysis designed to 
advance the image, desirability, use, marketability, production, product 
development, or quality of honey and honey products, including research 
relating to nutritional value, cost of production, new product 
development, testing the effectiveness of market development and 
promotion efforts. Such term shall also include studies on bees to 
advance the cost effectiveness, competitiveness, efficiency, pest and 
disease control, and other management aspects of beekeeping, honey 
production, and honey bees.



Sec. 1212.27  Secretary.

    ``Secretary'' means the Secretary of Agriculture of the United 
States, or any other officer or employee of the Department to whom 
authority the Secretary delegated the authority to act on his or her 
behalf.



Sec. 1212.28  Suspend.

    ``Suspend'' means to issue a rule under 5 U.S.C. 553 to temporarily 
prevent the operation of an order or part thereof during a particular 
period of time specified in the rule.



Sec. 1212.29  State.

    ``State'' means any of the fifty States of the United States of 
America, the District of Columbia, the Commonwealth of Puerto Rico and 
the territories and possessions of the United States.



Sec. 1212.30  Terminate.

    ``Terminate'' means to issue a rule under 5 U.S.C. 553 to cancel 
permanently the operation of an order or

[[Page 142]]

part thereof beginning on a date certain specified in the rule.



Sec. 1212.31  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.



Sec. 1212.32  United States Customs Service.

    ``United States Customs Service'' or ``Customs'' means the United 
States Customs and Border Protection, an agency of the Department of 
Homeland Security.

                    Honey Packers and Importers Board



Sec. 1212.40  Establishment and membership.

    The Honey Packers and Importers Board is established to administer 
the terms and provisions of this part. The Board shall have ten members, 
composed of three first handler representatives, two importer 
representatives, one importer-handler representative, three producer 
representatives, and one marketing cooperative representative. The 
importer-handler representative must import at least 75 percent of the 
honey or honey products they market in the United States and handle at 
least 250,000 pounds annually. In addition, the producer representatives 
must produce a minimum of 150,000 pounds of honey in the United States 
annually based on the best three-year average of the most recent five 
calendar years, as certified by producers. The Secretary will appoint 
members to the Board from nominees submitted in accordance with Sec. 
1212.42. The Secretary shall also appoint an alternate for each member.



Sec. 1212.41  Term of office.

    With the exception of the initial Board, each Board member and 
alternate will serve a three-year term or until the Secretary selects 
his or her successor. No member or alternate may serve more than two 
consecutive terms, excluding any initial two-year term of office. The 
terms of the initial Board members shall be staggered for two-, three-, 
and four-year terms. For the initial Board, one producer, one first 
handler, one importer, and the representative of a national honey 
cooperative will serve a two-year term of office. One producer, one 
first handler, and the importer-handler representative, will serve a 
three-year term of office. One producer, one first handler, and one 
importer will serve a four-year term of office. Determination of which 
of the initial members and their alternates shall serve two-year, three-
year or four-year terms, shall be designated by the Secretary. 
Thereafter, each of these positions will carry a full three-year term. 
Members serving initial terms of two or four years will be eligible to 
serve a second term of three years. Each term of office will end on 
December 31, with new terms of office beginning on January 1. If this 
part becomes effective on a date such that the initial period is less 
than six months in duration, then the tolling of time for purposes of 
this subsection shall not begin until the beginning of the first 12-
month fiscal period.



Sec. 1212.42  Nominations and appointments.

    All nominations to the Board will be made as follows:
    (a) All qualified national organizations representing first handler 
interests will have the opportunity to participate in a nomination 
caucus and will, to the extent practical, submit as a group a single 
slate of nominations to the Secretary for the first handler positions 
and the alternate positions on the Board. If the Secretary determines 
that there are no qualified national organizations representing first 
handler interests, individual first handlers who have paid assessments 
to the Board in the most recent fiscal period may submit nominations. 
For the initial Board, persons that meet the definition of first 
handlers as defined in this subpart will certify their qualification and 
upon certification, if qualified, may submit nominations.
    (b) All qualified national organizations representing importer 
interests will have the opportunity to participate in a nomination 
caucus and will, to the extent practical, submit as a group a single 
slate of nominations to the Secretary for importer positions,

[[Page 143]]

for the importer-handler position and for the alternate positions on the 
Board. If the Secretary determines that there are no qualified national 
organizations representing importer interests, individual importers who 
have paid assessments to the Board in the most recent fiscal period may 
submit nominations. For the initial Board, persons that meet the 
definition of importer as defined in this subpart will certify such 
qualification and upon certification, if qualified, may submit 
nominations.
    (c) All qualified national organizations representing producer 
interests will have the opportunity to participate in a nomination 
caucus and will, to the extent practical, submit as a group a single 
slate of nominations to the Secretary for the producer positions and the 
producer alternate positions on the Board. If the Secretary determines 
that there are no qualified national organizations representing producer 
interests, individual producers may submit nominations to the Secretary. 
For the initial Board, persons that meet the definition of producer as 
defined in this subpart will certify such qualification and upon 
certification, if qualified, may submit nominations.
    (d) For the purposes of this subpart, a national honey-marketing 
cooperative means any entity that is organized under the Capper-Volstead 
Act (7 U.S.C. 291) or state law as a cooperative and markets honey or 
honey products in at least 20 states. All national honey-marketing 
cooperatives that are first handlers will have the opportunity to 
participate in a nomination caucus and will, to the extent practical, 
submit as a group a single slate of nominations to the Secretary of 
persons who serve as an officer, director, or employee of a national 
honey marketing cooperative for the cooperative position and the 
alternate position on the Board.
    (e) Eligible organizations, cooperatives, producers, first handlers 
or importers must submit nominations to the Secretary six months before 
the new Board term begins. At least two nominees for each position to be 
filled must be submitted.
    (f) Qualified national organization representing first handler 
interests. To be certified by the Secretary as a qualified national 
organization representing first handler interests, an organization must 
meet the following criteria, as evidenced by a report submitted by the 
organization to the Secretary:
    (1) The organization's voting membership must be comprised primarily 
of first handlers of honey or honey products;
    (2) The organization must represent a substantial number of first 
handlers who market a substantial volume of honey or honey products in 
at least 20 states;
    (3) The organization has a history of stability and permanency and 
has been in existence for more than one year;
    (4) The organization must have as a primary purpose promoting honey 
first handlers' economic welfare;
    (5) The organization must derive a portion of its operating funds 
from first handlers; and
    (6) The organization must demonstrate it is willing and able to 
further the Act's purposes.
    (g) Qualified national organization representing importer interests. 
To be certified as a qualified national organization representing 
importer interests, an organization must meet the following criteria, as 
evidenced by a report submitted by the organization to the Secretary:
    (1) The organization's importer membership must represent at least a 
majority of the volume of honey or honey products imported into the 
United States;
    (2) The organization has a history of stability and permanency and 
has been in existence for more than one year;
    (3) The organization must have as a primary purpose promoting honey 
importers' economic welfare;
    (4) The organization must derive a portion of its operating funds 
from importers; and
    (5) The organization must demonstrate it is willing and able to 
further the Act's purposes.
    (h) Qualified national organization representing producer interests. 
To be certified by the Secretary as a qualified national organization 
representing producer interests, an organization

[[Page 144]]

must meet the following criteria, as evidenced by a report submitted by 
the organization to the Secretary:
    (1) The organization's membership must be comprised primarily of 
honey producers;
    (2) The organization must represent a substantial number of 
producers who produce a substantial volume of honey in at least 20 
states;
    (3) The organization has a history of stability and permanency and 
has been in existence for more than one year;
    (4) The organization must have as one of its primary purposes 
promoting honey producers' economic welfare;
    (5) The organization must derive a portion of its operating funds 
from producers; and
    (6) The organization must demonstrate it is willing and able to 
further the Act's purposes.
    (i) To be certified by the Secretary as a qualified national 
organization representing first handler, producer or importer interests, 
an organization must agree to:
    (1) Take reasonable steps to publicize to non-members the 
availability of open Board first handler, producer or importer 
positions; and
    (2) Consider nominating a non-member first handler, producer or 
importer, if he or she expresses an interest in serving on the Board.
    (j) National honey-marketing cooperative. The Secretary can certify 
that an entity qualifies as a national honey-marketing cooperative, as 
defined in Sec. 1212.42(d). Such an entity shall not be eligible for 
certification as a qualified national organization representing producer 
interests.



Sec. 1212.43  Removal and vacancies.

    (a) In the event that any member or alternate of the Board ceases to 
be a member of the category of members from which the member was 
appointed to the Board, such position shall become vacant.
    (b) The Board may recommend to the Secretary that a member be 
removed from office if the member consistently refuses to perform his or 
her duties or engages in dishonest acts or willful misconduct. The 
Secretary may remove the member if he or she finds that the Board's 
recommendation shows adequate cause.
    (c) A vacancy for any reason will be filled as follows:
    (1) If a member position becomes vacant, the alternate for that 
position will serve the remainder of the member's term. In accordance 
with Sec. 1212.42, the Secretary will request nominations for a 
replacement alternate and will appoint a nominee to serve the remainder 
of the term. The Secretary does not have to appoint a replacement if the 
unexpired term is less than six months.
    (2) If both a member position and an alternate position become 
vacant, in accordance with Sec. 1212.42, the Secretary will request 
nominations for replacements and appoint a member and alternate to serve 
the remainder of the term. The Secretary does not have to appoint a new 
member or alternate if the unexpired term for the position is less than 
six months.
    (3) No successor appointed to a vacated term of office shall serve 
more than two successive three-year terms on the Board.



Sec. 1212.44  Procedure.

    (a) A majority of the Board members will constitute a quorum so long 
as at least one of the members present is an importer member and one of 
the members present is a first handler member. An alternate will be 
counted for the purpose of determining a quorum only if a member from 
his or her membership class is absent or disqualified from 
participating. Any Board action will require the concurring votes of a 
majority of those present and voting; with the exception of the two-
thirds vote requirement in Sec. 1212.52(f). All votes at meetings will 
be cast in person. The Board must give timely notice of all Board and 
committee meetings to members and alternates.
    (b) The Board may take action by any means of communication when, in 
the opinion of the Board chairperson, an emergency requires that action 
must be taken before a meeting can be called. 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;

[[Page 145]]

    (2) Each proposition is explained accurately, fully, and 
substantially identically to each member;
    (3) With the exception of the two-thirds vote requirement in Sec. 
1212.52(f), a majority of the members vote in favor of the action; and
    (4) All votes are promptly confirmed in writing and recorded in the 
Board minutes.



Sec. 1212.45  Reimbursement and attendance.

    Board members and alternates, when acting as members, will serve 
without compensation but will be reimbursed for reasonable travel 
expenses, as approved by the Board, that they incur when performing 
Board business. The Board may request that alternates attend any meeting 
even if their respective members are expected to attend or actually 
attend the meeting.



Sec. 1212.46  Powers.

    The Board shall have the following powers subject to Sec. 1212.80:
    (a) Administer this subpart in accordance with its terms and 
provisions of the Act;
    (b) Require its employees to receive, investigate, and report to the 
Secretary complaints of violations of this part;
    (c) Recommend adjustments to the assessments as provided in this 
part;
    (d) Recommend to the Secretary amendments to this part;
    (e) Establish, issue, and administer appropriate programs and enter 
into contracts or agreements with the approval of the Secretary for 
promotion, research, and information programs and plans including 
consumer and industry information, and advertising designed to 
strengthen the honey industry's position in the marketplace and to 
maintain, develop, and expand domestic and foreign markets for honey and 
honey products; and
    (f) Invest assessments collected and other funds received pursuant 
to the Order and use earnings from invested assessments to pay for 
activities carried out pursuant to the Order.



Sec. 1212.47  Duties.

    The Board shall have, among other things, the following duties:
    (a) To meet and organize, and to select from among its members a 
chairperson and such other officers as may be necessary; to select 
committees and subcommittees from its membership and other industry 
representatives; and to develop and recommend such rules, regulations, 
and by-laws to the Secretary for approval to conduct its business as it 
may deem advisable;
    (b) To employ or contract with such persons as it may deem necessary 
and to determine the compensation and define the duties of each; and to 
protect the handling of Board funds through fidelity bonds;
    (c) To prepare and submit to the Secretary for approval 60 days in 
advance of the beginning of a fiscal period, a budget of anticipated 
expenses in the administration of this part including the probable costs 
of all programs and plans and to recommend a rate of assessment with 
respect thereto.
    (d) To investigate violations of this part and report the results of 
such investigations to the Secretary for appropriate action to enforce 
the provisions of this part.
    (e) To establish, issue, and administer appropriate programs and 
enter into contracts or agreements with the approval of the Secretary 
for promotion, research, and information including consumer and industry 
information, and advertising designed to strengthen the honey industry's 
position in the marketplace and to maintain, develop, and expand 
domestic and foreign markets for honey and honey products.
    (f) To maintain minutes, books, and records and prepare and submit 
to the Secretary such reports from time to time as may be required for 
appropriate accounting with respect to the receipt and disbursement of 
funds entrusted to it.
    (g) To periodically prepare and make public and to make available to 
first handlers, producers, and importers reports of its activities and, 
at least once each fiscal period, to make public an accounting of funds 
received and expended.
    (h) To cause its books to be audited by a certified public 
accountant at the end of each fiscal period and to submit a copy of each 
audit to the Secretary.

[[Page 146]]

    (i) To submit to the Secretary such information pertaining to this 
part or subpart as he or she may request.
    (j) To give the Secretary the same notice of Board meetings and 
committee meetings that is given to members in order that the 
Secretary's representative(s) may attend such meetings, and to keep and 
report minutes of each meeting to the Secretary.
    (k) To notify first handlers, importers, and producers of all Board 
meetings through press releases or other means.
    (l) To appoint and convene, from time to time, working committees or 
subcommittees that may include first handlers, importers, exporters, 
producers, members of the wholesale or retail outlets for honey, or 
other members of the honey industry and the public to assist in the 
development of research, promotion, advertising, and information 
programs for honey and honey products.
    (m) To develop and recommend such rules and regulations to the 
Secretary for approval as may be necessary for the development and 
execution of plans or activities to effectuate the declared purpose of 
the Act.
    (n) To provide any patents, copyrights, inventions, product 
formulations, or publications developed through the use of funds 
collected under the provisions of 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 
Department.



Sec. 1212.48  Reapportionment of Board membership.

    At least once in each 5-year period, but not more frequently than 
once in each 3-year period, the Board shall:
    (a) Review, based on a three-year average, the geographical 
distribution in the United States of the production of honey and the 
quantity or value of the honey and honey products imported into the 
United States; and
    (b) If warranted, recommend to the Secretary the reapportionment of 
the Board membership to reflect changes in the geographical distribution 
of the production of honey and the quantity or value of the honey and 
honey products imported into the United States.

                        Expenses and Assessments



Sec. 1212.50  Budget and expenses.

    (a) At least 60 days prior to the beginning of each fiscal period, 
and as may be necessary thereafter; the Board shall prepare and submit 
to the Department a budget for the fiscal period covering its 
anticipated expenses and disbursements in administering this subpart. 
The budget shall allocate five percent (5%) of the Board's anticipated 
revenue from assessments each fiscal period for production research and 
research relating to the production of honey.
    Each such 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 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 subpart.
    (c) Subject to this section, any amendment or addition to an 
approved budget must be approved by the Department, including shifting 
funds from one program, plan, or project to another. Shifts of funds 
which do not cause an increase in the Board's approved budget and which 
are consistent with governing bylaws need not have prior approval by the 
Department.
    (d) The Board is authorized to incur such expenses, including 
provision for a

[[Page 147]]

reserve, as the Department finds 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 subpart. Such expenses shall be paid from funds 
received by the Board.
    (e) With approval of the Department, 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 funds 
borrowed by the Board shall be expended only for startup costs and 
capital outlays 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. Voluntary contributions shall be free from any encumbrance 
by the donor, and the Board shall retain complete control of their use.
    (g) The Board shall reimburse the Department for all expenses 
incurred by the Department in the implementation, administration, 
enforcement and supervision of the Order, including all referendum costs 
in connection with the Order.
    (h) The Board may not expend for administration, maintenance, and 
functioning of the Board in any calendar year an amount that exceeds 15 
percent of the assessments and other income received by the Board for 
that calendar year. Reimbursements to the Department required under 
paragraph (g) of this section, are excluded from this limitation on 
spending.
    (i) 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.



Sec. 1212.51  Financial statements.

    (a) The Board shall prepare and submit financial statements to the 
Department on a periodic basis. 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 Department 
within 30 days after the end of the time period to which it applies.
    (c) The Board shall submit annually to the Department an annual 
financial statement within 90 days after the end of the calendar year to 
which it applies.



Sec. 1212.52  Assessments.

    (a) The Board will cover its expenses by levying in a manner 
prescribed by the Secretary an assessment on first handlers and 
importers.
    (b) Each first handler shall pay an assessment to the Board at the 
rate of $0.01 per pound of domestically produced honey or honey products 
the first handler handles. A producer shall pay the Board the assessment 
on all honey or honey products for which the producer is the first 
handler.
    (c) Each first handler responsible for remitting assessments under 
paragraph (b) of this section shall remit the amounts due to the Board's 
office on a monthly basis no later than the fifteenth day of the month 
following the month in which the honey or honey products were marketed.
    (d) Each importer shall pay an assessment to the Board at the rate 
of $0.01 per pound of honey or honey products the importer imports into 
the United States. An importer shall pay the assessment to the Board 
through the United States Customs Service (Customs) when the honey or 
honey products being assessed enters the United States. If Customs does 
not collect an assessment from an importer, the importer is responsible 
for paying the assessment to the Board.
    (e) The import assessment recommended by the Board and approved by 
the Secretary shall be uniformly applied to imported honey or honey 
products that are identified as HTS heading numbers 0409.00.00 and 
2106.90.9988 by the Harmonized Tariff Schedule of the United States.
    (f) The Board may recommend to the Secretary an increase or decrease 
in the assessment as it deems appropriate by at least a two-thirds vote 
of members present at a meeting of the Board.

[[Page 148]]

The Board may not recommend an increase in the assessment of more than 
$0.02 per pound of honey or honey products and may not increase the 
assessment by more than $0.0025 in any single fiscal year.
    (g) In situations of late payment:
    (1) The Board shall impose a late payment charge on any first 
handler or importer who fails to remit to the Board the total amount for 
which the first handler or importer is liable on or before the payment 
due date the Board recommends. The amount of the late payment charge 
shall be prescribed by the Department.
    (2) The Board shall require any first handler or importer subject to 
a late payment charge to pay interest on the unpaid assessments for 
which the first handler or importer is liable. The rate of interest 
shall be prescribed by the Department.
    (3) First handlers or importers who fail to remit total assessments 
in a timely manner may also be subject to actions under federal debt 
collection procedures.
    (h) Advance payment. The Board may accept advance payment of 
assessments from first handlers or importers that will be credited 
toward any amount for which the first handlers or importers may become 
liable. The Board does not have to pay interest on any advance payment.
    (i) If the Board is not in place by the date the first assessments 
are to be collected, the Secretary shall have the authority to receive 
assessments and invest them on behalf of the Board, and shall pay such 
assessments and any interest earned to the Board when it is formed.



Sec. 1212.53  Exemption from assessment.

    (a) A first handler who handles less than 250,000 pounds of honey or 
honey products per calendar year or an importer who imports less than 
250,000 pounds of honey or honey products per calendar year is exempt 
from paying assessments.
    (b) A first handler who operates under an approved National Organic 
Program (NOP) (7 CFR part 205) system plan, handles 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 the payment of assessments. 
An importer who imports 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 the payment of assessments.
    (c) A first handler or importer desiring an exemption shall apply to 
the Board, on a form provided by the Board, for a certificate of 
exemption. A first handler shall certify that the first handler will 
handle less than 250,000 of honey and honey products for the calendar 
year for which the exemption is claimed. An importer shall certify that 
the importer will import less than 250,000 pounds of honey and honey 
products during the calendar year for which the exemption is claimed.
    (d) Upon receipt of an application, the Board shall determine 
whether an exemption may be granted. The Board will then issue, if 
deemed appropriate, a certificate of exemption to each person who is 
eligible to receive one. It is the responsibility of these persons to 
retain a copy of the certificate of exemption.
    (e) Exempt importers shall be eligible for reimbursement of 
assessments collected by Customs. These importers shall apply to the 
Board for reimbursement of any assessment paid. No interest will be paid 
on the assessment collected by Customs. Requests for reimbursement shall 
be submitted to the Board within 90 days of the last day of the calendar 
year the honey or honey products were imported.
    (f) If a person has been exempt from paying assessments for any 
calendar year under this section and no longer meets the requirements 
for an exemption, the person shall file a report with the Board in the 
form and manner prescribed by the Board and begin to pay the assessment 
on all honey or honey products handled or imported.
    (g) Any person who desires an exemption from assessments for a 
subsequent calendar year shall reapply to the Board, on a form provided 
by the Board, for a certificate of exemption.
    (h) The Board may recommend to the Secretary that honey and honey 
products exported from the United States

[[Page 149]]

be exempt from this subpart and recommend procedures for refunding 
assessments paid on exported honey and honey products and any necessary 
safeguards to prevent improper use of this exemption.



Sec. 1212.54  Operating reserve.

    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. Subject to approval by the Department, such 
reserve funds may be used to defray any expenses authorized under this 
part.



Sec. 1212.55  Prohibition on use of funds.

    (a) The Board may not engage in, and shall prohibit the employees 
and agents of the Board from engaging in:
    (1) Any action that is a conflict of interest;
    (2) Except as otherwise provided in paragraph (b) of this section, 
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, other 
than recommending to the Secretary amendments to the Order.
    (3) A program, plan or project conducted pursuant to this subpart 
that includes false or misleading claims on behalf of honey or honey 
products.
    (4) Any advertising, including promotion, research and information 
activities authorized that may be false or misleading or disparaging to 
another agricultural commodity.
    (b) The prohibition in paragraph (a)(2) of this section shall not 
apply:
    (1) To the development and recommendation of amendments to this 
subpart; or
    (2) To the communication to appropriate government officials, in 
response to a request made by the officials, of information relating to 
the conduct, implementation, or results of promotion, research, consumer 
information, education, industry information, or producer information 
activities authorized under this subpart.

                  Promotion, Research, and Information



Sec. 1212.60  Programs, plans and projects.

    (a) Scope of activities. The Board must develop and submit to the 
Secretary for approval plans and programs authorized by this section. 
The plans and programs may provide for:
    (1) Establishing, issuing, and administering appropriate programs 
for promotion, research, and information including consumer and industry 
information, and advertising designed to strengthen the honey industry's 
position in the marketplace and to maintain, develop, and expand 
domestic and foreign markets for honey and honey products;
    (2) Establishing and conducting research and development activities 
to encourage and expand the acquisition of knowledge about honey and 
honey products, their consumption and use, or to encourage, expand or 
improve the quality, marketing, and utilization of honey and honey 
products;
    (3) Conducting activities that may lead to developing new markets or 
marketing strategies for honey and honey products;
    (4) Conducting activities related to production issues or bee 
research activities; and
    (5) Conducting activities designed to make the honey industry more 
efficient, to improve the quality of honey or to enhance the image of 
honey and honey products and the honey industry.
    (b) No program, plan, or project shall be implemented prior to its 
approval by the Department. Once a program, plan, or project is so 
approved, the Board shall take appropriate steps to implement it.
    (c) The Board must periodically evaluate each plan and program 
authorized under this part to ensure that it contributes to an effective 
and coordinated program of research, promotion and information. The 
Board must submit the evaluations to the Secretary. If the Board and the 
Secretary find that a plan or program does not further the purposes of 
the Act, then such plan or program should be terminated.

[[Page 150]]



Sec. 1212.61  Independent evaluation.

    The Board must authorize and fund not less than once every five 
years an independent evaluation of the effectiveness of this subpart and 
the plans and programs conducted by the Board under the Act. The Board 
must submit this independent evaluation to the Secretary and make the 
results available to the public.



Sec. 1212.62  Patents, copyrights, inventions, product formulations, 
and publications.

    Except for a reasonable royalty paid by the Board to the inventor of 
a patented invention, any patents, copyrights, inventions, product 
formulations, or publications developed through the use of funds 
collected under the provisions of 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 
Department. Upon termination of this Order, Sec. 1212.83 shall apply to 
determine disposition of all such property.

                       Reports, Books, and Records



Sec. 1212.70  Reports.

    (a) Each first handler or importer subject to this part must report 
to the Board, at the time and in the manner it prescribes, and subject 
to the approval of the Secretary, the information the Board deems 
necessary to perform its duties.
    (b) First handlers must report:
    (1) The total quantity of honey and honey products acquired during 
the reporting period;
    (2) The total quantity of honey and honey products handled during 
the period;
    (3) The quantity of honey processed for sale from the first 
handler's own production;
    (4) The quantity of honey and honey products purchased from a first 
handler or importer responsible for paying the assessment due pursuant 
to this Order;
    (5) The date that assessment payments were made on honey and honey 
products handled; and
    (6) The first handler's tax identification number.
    (c) Unless provided by Customs, importers must report:
    (1) The total quantity of honey and honey products imported during 
the reporting period;
    (2) A record of each lot of honey or honey products imported during 
such period, including the quantity, date, country of origin, and port 
of entry; and
    (3) The importer of record's tax identification number.
    (d) The Board may request any other information from first handlers 
and importers that it deems necessary to perform its duties under this 
subpart, subject to the approval of the Secretary.
    (e) The Board, with the Secretary's approval, may request that 
persons claiming an exemption from assessments under Sec. 1212.52(b) or 
(d) must provide it with any information it deems necessary about the 
exemption, including, without limitation, the disposition of exempted 
honey or honey products.



Sec. 1212.71  Books and records.

    Each first handler and importer, including those who are exempt 
under this subpart, must maintain any books and records necessary to 
carry out the provisions of this part, and any regulations issued under 
this part, including the books and records necessary to verify any 
required reports. Books and records must be made available during normal 
business hours for inspection by the Board's or Secretary's employees or 
agents. A first handler or importer must maintain the books and records 
for two years beyond the fiscal period to which they apply.



Sec. 1212.72  Confidential treatment.

    All information obtained from books, records, or reports under the 
Act and this part shall be kept confidential by all persons, including 
all employees and former employees of the Board, all

[[Page 151]]

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, 
first handlers, 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 
thereof, 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 part, together 
with a statement of the particular provisions of this part violated by 
such person.

                              Miscellaneous



Sec. 1212.80  Right of the Secretary.

    All fiscal matters, programs or projects, contracts, rules or 
regulations, reports, or other actions proposed and prepared by the 
Board shall be submitted to the Secretary for approval.



Sec. 1212.81  Referenda.

    (a) After the initial referendum, the Secretary shall conduct 
subsequent referenda;
    (1) Every seven years, to determine whether first handlers and 
importers of honey or honey products favor the continuation, suspension, 
or termination of the Order. The Order shall continue if it is favored 
by a majority of first handlers and importers voting in the referendum 
and a majority of volume voting in the referendum who, during a 
representative period determined by the Secretary, have been engaged in 
the handling or importation of honey or honey products;
    (2) At the request of the Board established in this Order;
    (3) At the request of ten (10) percent or more of the number of 
persons eligible to vote under the Order; or
    (4) Whenever the Department deems that a referendum is necessary.
    (b) Approval of order. Approval in a referendum shall be established 
by a majority of eligible persons voting in the referendum and a 
majority of volume voting in the referendum who are first handlers or 
importers during the representative period by those voting as 
established by the Secretary.
    (c) Manner of conducting referenda. A referendum conducted under 
this section shall be conducted in the manner determined by the 
Secretary to be appropriate.



Sec. 1212.82  Suspension or termination.

    The Secretary shall suspend or terminate the operation of this part 
or subpart or any provision thereof, if the Secretary finds that this 
part or subpart or the provision obstructs or does not tend to 
effectuate the declared policy of the Act.



Sec. 1212.83  Proceedings after termination.

    (a) If this subpart terminates, the Board shall recommend to the 
Secretary up to five of its members to serve as trustees for the purpose 
of liquidating the Board's affairs. Such persons, upon designation by 
the Secretary, will become trustees of any funds and property the Board 
possesses or controls at that time and any existing claims it has, 
including, without limitation, claims for any unpaid or undelivered 
funds or property.
    (b) The trustees will:
    (1) Serve until discharged by the Secretary;
    (2) Carry out the Board's obligations under any contracts or 
agreements entered into pursuant to the Order;
    (3) Account from time to time for all receipts and disbursements and 
deliver all property on hand, together with all the Board's and 
trustees' books and records to any person the Secretary directs; and

[[Page 152]]

    (4) Execute at the Secretary's direction any assignments or other 
instruments necessary or appropriate to vest in any person full title 
and right to all of the funds, property, and claims owned by the Board 
or the trustees under this subpart.
    (c) Any person to whom funds, property, or claims have been 
transferred or delivered pursuant to the Order will be subject to the 
same obligations imposed upon Board and the trustees.
    (d) Any residual funds not required to defray the necessary expenses 
of liquidation shall be turned over to the Department to be disposed of, 
to the extent practical, to one or more honey industry organizations in 
the interest of continuing honey promotion, research, and information 
programs.



Sec. 1212.84  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, terminating or 
amending this subpart or any regulation issued under it will not:
    (a) Affect or waive any right, duty, obligation, or liability that 
arose or may arise in connection with any provision of this part;
    (b) Release or extinguish any violation of this part; or
    (c) Affect or impair any rights or remedies of the United States or 
any person with respect to any violation.



Sec. 1212.85  Personal liability.

    No member, alternate member, or employee of the Board may 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 a member, alternate 
member, or employee, except for acts of dishonesty or willful 
misconduct.



Sec. 1212.86  Separability.

    If any provision of this subpart is declared invalid or the 
applicability of it to any person or circumstance is held invalid, the 
validity of the remainder of this subpart, or the applicability of it to 
other persons or circumstances will not be affected.



Sec. 1212.87  Amendments.

    Amendments to this Order may be proposed from time to time by the 
Board or any interested person affected by the provisions of the Act, 
including the Department.



Sec. 1212.88  OMB control number.

    The control number assigned to the information collection 
requirements in this part 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-[NEW, to be 
assigned by OMB].



                     Subpart B_Referendum Procedures



Sec. 1212.100  General.

    Referenda to determine whether eligible first handlers and importers 
of honey and honey products favor the issuance, continuance, amendment, 
suspension, or termination of the Honey Packers and Importers Research, 
Promotion, Consumer Education, and Industry Information Order shall be 
conducted in accordance with this subpart.



Sec. 1212.101  Definitions.

    (a) Administrator means the Administrator of the Agricultural 
Marketing Service, with power to re-delegate, or any officer or employee 
of the U.S. Department of Agriculture to whom authority has been 
delegated or may hereafter be delegated to act in the Administrator's 
stead.
    (b) Department means the U.S. 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.
    (c) Eligible first handler means any person (excluding a common or 
contract carrier) who handled 250,000 or more pounds of domestic honey 
and honey products during the representative period, who first buys or 
takes possession of honey or honey products from a producer for 
marketing. If a producer markets the honey directly to

[[Page 153]]

consumers, the producer shall be considered the first handler with 
respect to the honey produced by the producer.
    (d) Eligible importer means any person who imports 250,000 or more 
pounds of honey and honey products into the United States as a principal 
or as an agent, broker, or consignee of any person who produces or 
handles honey or honey products outside of the United States for sale in 
the United States, and who is listed as the importer of record for such 
honey or honey products that are identified in the Harmonized Tariff 
Schedule of the United States by the numbers 0409.00.00 and 
2106.90.9988, during the representative period. Importation occurs when 
honey or honey products originating outside of the United States are 
released from custody by the United States Customs and Border 
Protection, referred to as the U.S. Customs Service, and introduced into 
the stream of commerce in the United States. Included are persons who 
hold title to foreign produced honey or honey products immediately upon 
release by the U.S. Customs Service, as well as any persons who acts on 
behalf of others, as agents or brokers, to secure the release of honey 
or honey products from the U.S. Customs Service when such honey or honey 
products are entered or withdrawn for consumption in the United States.
    (e) Handle means to process, package, sell, transport, purchase or 
in any other way place honey or honey products, or cause them to be 
placed, in commerce. This term includes selling unprocessed honey that 
will be consumed without further processing or packaging. This term does 
not include the transportation of unprocessed honey by the producer to a 
handler or transportation by a commercial carrier of honey, whether 
processed or unprocessed for the account of the first handler or 
producer.
    (f) Honey means the nectar and saccharine exudations of plants that 
are gathered, modified, and stored in the comb by honeybees, including 
comb honey.
    (g) Honey products mean products where honey is a principal 
ingredient. For purposes of this subpart, a product shall be considered 
to have honey as a principal ingredient, if the product contains at 
least 50 percent honey by weight.
    (h) Order means the Honey Packers and Importers Research, Promotion, 
Consumer Education and Industry Information Order.
    (i) Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity. For 
the purpose of this definition, the term ``partnership'' includes, but 
is not limited to:
    (1) A husband and a wife who have title to, or leasehold interest 
in, honey bee colonies or beekeeping equipment as tenants in common, 
joint tenants, tenants by the entirety, or, under community property 
laws, as community property; and
    (2) So-called ``joint ventures'' wherein one or more parties to an 
agreement, informal or otherwise, contributed land and others 
contributed capital, labor, management, equipment, or other services, or 
any variation of such contributions by two or more parties, so that it 
results in the production, handling, or importation of honey or honey 
products for market and the authority to transfer title to the honey or 
honey products so produced, handled or imported.
    (j) Referendum agent or agent means the individual or individuals 
designated by the Department to conduct the referendum.
    (k) Representative period means the period designated by the 
Department.
    (l) United States or U.S. means collectively the 50 states, the 
District of Columbia, the Commonwealth of Puerto Rico, and the 
territories and possessions of the United States.



Sec. 1212.102  Voting.

    (a) Each eligible first handler and eligible importer of honey or 
honey products shall be entitled to cast only one ballot in the 
referendum.
    (b) Proxy voting is not authorized, but an officer or employee of an 
eligible corporate first handler or importer, or an administrator, 
executor, or trustee or an eligible entity may cast a ballot on behalf 
of such entity. Any individual so voting in a referendum shall certify 
that such individual is an officer or employee of the eligible entity, 
or an administrator, executive, or

[[Page 154]]

trustee of an eligible entity and that such individual has the authority 
to take such action. Upon request of the referendum agent, the 
individual shall submit adequate evidence of such authority.
    (c) All ballots are to be cast by mail, as instructed by the 
Department.



Sec. 1212.103  Instructions.

    (a) Referenda. The Order shall not become effective unless the 
Department determines that the Order is consistent with and will 
effectuate the purposes of the Act; and for initial and subsequent 
referenda the Order is favored by a majority of eligible persons voting 
in the referendum and a majority of volume voting in the referendum who, 
during a representative period determined by the Department, have been 
engaged in the handling or importation of honey or honey products and 
are subject to assessments under this Order and excluding those exempt 
from assessment under the Order.
    (b) The referendum agent shall conduct the referendum, in the manner 
provided in this subpart, under the supervision of the Administrator. 
The Administrator may prescribe additional instructions, not 
inconsistent with the provisions of this subpart, to govern the 
procedure to be followed by the referendum agent. Such agent shall:
    (1) Determine the period during which ballots may be cast.
    (2) Provide ballots and related material to be used in the 
referendum. The ballot shall provide for recording essential 
information, including that needed for ascertaining whether the person 
voting, or on whose behalf the vote is cast, is an eligible voter.
    (3) Give reasonable public notice of the referendum:
    (i) By utilizing available media or public information sources, 
without incurring advertising expense, to publicize the dates, places, 
method of voting, eligibility requirements, and other pertinent 
information. Such sources of publicity may include, but are not limited 
to, print and radio; and
    (ii) By such other means as the agent may deem advisable.
    (4) Mail to eligible first handlers and importers whose names and 
addresses are known to the referendum agent, the instructions on voting, 
a ballot, and a summary of the terms and conditions of the proposed 
Order. No person who claims to be eligible to vote shall be refused a 
ballot.
    (5) At the end of the voting period, collect, open, number, and 
review the ballots and tabulate the results in the presence of an agent 
of a third party authorized to monitor the referendum process.
    (6) Prepare a report on the referendum.
    (7) Announce the results to the public.



Sec. 1212.104  Subagents.

    The referendum agent may appoint any individual or individuals 
necessary or desirable to assist the agent in performing such agent's 
functions of this subpart. Each individual so appointed may be 
authorized by the agent to perform any or all of the functions which, in 
the absence of such appointment, shall be performed by the agent.



Sec. 1212.105  Ballots.

    The referendum agent and subagents shall accept all ballots cast. 
However, if an agent or subagent deems that a ballot should be 
challenged for any reason, the agent or subagent shall endorse above 
their signature, on the ballot, a statement to the effect that such 
ballot was challenged, by whom challenged, the reasons therefore, the 
results of any investigations made with respect thereto, and the 
disposition thereof. Ballots invalid under this subpart shall not be 
counted.



Sec. 1212.106  Referendum report.

    Except as otherwise directed, the referendum agent shall prepare and 
submit to the Administrator a report on the results of the referendum, 
the manner in which it was conducted, the extent and kind of public 
notice given, and other information pertinent to the analysis of the 
referendum and its results.



Sec. 1212.107  Confidential information.

    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

[[Page 155]]

strictly confidential and shall not be disclosed.



Sec. 1212.108  OMB control number.

    The control number assigned to the information collection 
requirement in this subpart 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, OMB control number 0581-0217, and OMB 
control number 0581-[NEW, to be assigned by OMB].



PART 1214_CHRISTMAS TREE PROMOTION, RESEARCH, AND INFORMATION 
ORDER--Table of Contents



   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 or CBP.
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_Referendum Procedures

1214.100 General.
1214.101 Definitions.
1214.102 Voting.
1214.103 Instructions.
1214.104 Subagents.
1214.105 Ballots.
1214.106 Referendum report.
1214.107 Confidential information.
1214.108 OMB control number.

    Authority: 7 U.S.C. 7411-7425; 7 U.S.C. 7401.

    Source: 76 FR 69103, Nov. 8, 2011, unless otherwise noted.



   Subpart A_Christmas Tree Promotion, Research, and Information Order

    Editorial Note: At 76 FR 71241, November 17, 2011, subpart A of 7 
CFR 1214, published November 8, 2011 (76 FR 69094), is stayed 
indefinitely.

                               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.

[[Page 156]]



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.



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

[[Page 157]]

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

[[Page 158]]

through State crop production figures and Board assessment records, 
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.

[[Page 159]]



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.



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;

[[Page 160]]

    (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;

[[Page 161]]

    (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 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

[[Page 162]]

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

[[Page 163]]

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.



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

[[Page 164]]

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

[[Page 165]]

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 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.

[[Page 166]]

                       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:
    (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:

[[Page 167]]

    (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:

[[Page 168]]

    (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_Referendum Procedures

    Source: 76 FR 69113, Nov. 8, 2011, unless otherwise noted.



Sec. 1214.100  General.

    Referenda to determine whether eligible domestic producers and 
importers of Christmas trees favor the continuance, amendment, 
suspension, or termination of the Christmas Tree Promotion, Research, 
and Information Order shall be conducted in accordance with this 
subpart.



Sec. 1214.101  Definitions.

    (a) Administrator means the Administrator of the Agricultural 
Marketing Service, with power to delegate, or any officer or employee of 
the U.S. Department of Agriculture to whom authority has been delegated 
or may hereafter be delegated to act in the Administrator's stead.
    (b) Customs means the United States Customs and Border Protection or 
U.S. Customs Service, an agency of the United States Department of 
Homeland Security.
    (c) Department means the U.S. 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.
    (d) Eligible domestic producer means any person who domestically 
produces more than 500 Christmas trees annually in the United States, 
and who:
    (1) Owns, or shares the ownership and risk of loss of the production 
of Christmas trees;
    (2) Rents Christmas tree production land, facilities and/or 
equipment resulting in the ownership of all or a portion of the 
Christmas trees domestically produced;
    (3) Owns Christmas tree production facilities and equipment but does 
not manage them and, as compensation, obtains the ownership of a portion 
of the Christmas trees domestically produced; or
    (4) Is a party in a landlord-tenant relationship or a divided 
ownership arrangement involving totally independent entities cooperating 
only to domestically produce Christmas trees who share the risk of loss 
and receive a share of the Christmas trees domestically produced. No 
other acquisition of legal title to Christmas trees shall be

[[Page 169]]

deemed to result in persons becoming eligible domestic producers.
    (e) Eligible importer means any person importing more than 500 
Christmas trees annually into the United States as a principal or as an 
agent, broker, or consignee of any person who domestically produces or 
handles Christmas trees outside of the United States for sale in the 
United States, and who is listed as the importer of record for such 
Christmas trees that are identified in the Harmonized Tariff Schedule of 
the United States by the numbers 0604.91.00.20, 0604.91.00.40, and 
0604.91.00.60 during the representative period. Importation occurs when 
Christmas trees originating outside of the United States are released 
from custody by Customs and introduced into the stream of commerce in 
the United States. Included are persons who hold title to foreign-
produced Christmas trees immediately upon release by Customs, as well as 
any persons who act on behalf of others, as agents or brokers, to secure 
the release of Christmas trees from Customs when such Christmas trees 
are entered or withdrawn for consumption in the United States.
    (f) 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.
    (g) Order means the Christmas Tree Promotion, Research, and 
Information Order.
    (h) Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity. For 
the purpose of this definition, the term ``partnership'' includes, but 
is not limited to:
    (1) A husband and a wife who have title to, or leasehold interest 
in, a Christmas tree farm as tenants in common, joint tenants, tenants 
by the entirety, or, under community property laws, as community 
property; and
    (2) So-called ``joint ventures'' wherein one or more parties to an 
agreement, informal or otherwise, contributed land and others 
contributed capital, labor, management, or other services, or any 
variation of such contributions by two or more parties.
    (i) Referendum agent or agent means the individual or individuals 
designated by the Department to conduct the referendum.
    (j) Representative period means the period designated by the 
Department.
    (j) United States or U.S. means collectively the 50 states, the 
District of Columbia, the Commonwealth of Puerto Rico, and the 
territories and possessions of the United States.



Sec. 1214.102  Voting.

    (a) Each eligible domestic producer and eligible importer of 
Christmas trees shall be entitled to cast only one ballot in the 
referendum. However, each domestic producer in a landlord/tenant 
relationship or a divided ownership arrangement involving totally 
independent entities cooperating only to domestically produce Christmas 
trees, in which more than one of the parties is a domestic producer or 
importer, shall be entitled to cast one ballot in the referendum 
covering only such domestic producer or importer's share of the 
ownership.
    (b) Proxy voting is not authorized, but an officer or employee of an 
eligible corporate domestic producer or importer, or an administrator, 
executor, or trustee or an eligible entity may cast a ballot on behalf 
of such entity. Any individual so voting in a referendum shall certify 
that such individual is an officer or employee of the eligible entity, 
or an administrator, executive, or trustee of an eligible entity and 
that such individual has the authority to take such action. Upon request 
of the referendum agent, the individual shall submit adequate evidence 
of such authority.
    (c) All ballots are to be cast by mail as instructed by the 
Department.
    (d) Eligible domestic producers or eligible importers may be asked 
to provide proof of sales or acreage as proof of eligibility to vote in 
any referendum.



Sec. 1214.103  Instructions.

    The referendum agent shall conduct the referendum, in the manner 
provided in this subpart, under the supervision of the Administrator. 
The Administrator may prescribe additional instructions, not 
inconsistent with the provisions of this subpart, to govern

[[Page 170]]

the procedure to be followed by the referendum agent. Such agent shall:
    (a) Determine the period during which ballots may be cast.
    (b) Provide ballots and related material to be used in the 
referendum. The ballot shall provide for recording essential 
information, including that needed for ascertaining whether the person 
voting, or on whose behalf the vote is cast, is an eligible voter.
    (c) Give reasonable public notice of the referendum:
    (1) By utilizing available media or public information sources, 
without incurring advertising expense, to publicize the dates, places, 
method of voting, eligibility requirements, and other pertinent 
information. Such sources of publicity may include, but are not limited 
to, print and radio; and
    (2) By such other means as the agent may deem advisable.
    (d) Mail to eligible domestic producers and importers whose names 
and addresses are known to the referendum agent, the instructions on 
voting, a ballot, and a summary of the terms and conditions of the 
proposed Order. No person who claims to be eligible to vote shall be 
refused a ballot.
    (e) At the end of the voting period, collect, open, number, and 
review the ballots and tabulate the results in the presence of an agent 
of a third party authorized to monitor the referendum process.
    (f) Prepare a report on the referendum.
    (g) Announce the results to the public.



Sec. 1214.104  Subagents.

    The referendum agent may appoint any individual or individuals 
necessary or desirable to assist the agent in performing such agent's 
functions of this subpart. Each individual so appointed may be 
authorized by the agent to perform any or all of the functions which, in 
the absence of such appointment, shall be performed by the agent.



Sec. 1214.105  Ballots.

    The referendum agent and subagents shall accept all ballots cast. 
However, if an agent or subagent deems that a ballot should be 
challenged for any reason, the agent or subagent shall endorse above 
their signature, on the ballot, a statement to the effect that such 
ballot was challenged, by whom challenged, the reasons therefore, the 
results of any investigations made with respect thereto, and the 
disposition thereof. Ballots invalid under this subpart shall not be 
counted.



Sec. 1214.106  Referendum report.

    Except as otherwise directed, the referendum agent shall prepare and 
submit to the Administrator a report on the results of the referendum, 
the manner in which it was conducted, the extent and kind of public 
notice given, and other information pertinent to the analysis of the 
referendum and its results.



Sec. 1214.107  Confidential information.

    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. 1214.108  OMB control number.

    The control number assigned to the information collection 
requirement in this subpart 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 0581-0267.



PART 1215_POPCORN PROMOTION, RESEARCH, AND CONSUMER INFORMATION--Table
of Contents



  Subpart A_Popcorn Promotion, Research, and Consumer Information Order

                               Definitions

Sec.
1215.1 Act.
1215.2 Board.
1215.3 Board member.
1215.4 Commerce.
1215.5 Consumer information.
1215.6 Department.
1215.7 Fiscal year.
1215.8 Industry information.
1215.9 Marketing.
1215.10 Part and subpart.
1215.11 Person.
1215.12 Popcorn.
1215.13 Process.
1215.14 Processor.

[[Page 171]]

1215.15 Programs, plans, and projects.
1215.16 Promotion.
1215.17 Research.
1215.18 Secretary.
1215.19 State.
1215.20 United States.

                              Popcorn Board

1215.21 Establishment and membership.
1215.22 Nominations and appointment.
1215.23 Acceptance.
1215.24 Term of office.
1215.25 Vacancies.
1215.26 Removal.
1215.27 Procedure.
1215.28 Compensation and reimbursement.
1215.29 Powers.
1215.30 Duties.

   Promotion, Research, Consumer Information, and Industry Information

1215.40 Programs, plans, and projects.
1215.41 Contracts.

                        Expenses and Assessments

1215.50 Budget and expenses.
1215.51 Assessments.
1215.52 Exemption from assessment.
1215.53 Influencing governmental action.

                       Reports, Books, and Records

1215.60 Reports.
1215.61 Books and records.
1215.62 Confidential treatment.

                              Miscellaneous

1215.70 Right of the Secretary.
1215.71 Suspension or termination.
1215.72 Proceedings after termination.
1215.73 Effect of termination or amendment.
1215.74 Personal liability.
1215.75 Patents, copyrights, inventions, publications, and product 
          formulations.
1215.76 Amendments.
1215.77 Separability.

                     Subpart B_Rules and Regulations

                               Definitions

1215.100 Terms defined.

                          Exemption Procedures

1215.300 Exemption procedures.

                              Miscellaneous

1215.400 OMB control numbers.

    Authority: 7 U.S.C. 7481-7491 and 7 U.S.C. 7401.

    Source: 62 FR 39389, July 22, 1997, unless otherwise noted.



  Subpart A_Popcorn Promotion, Research, and Consumer Information Order

                               Definitions



Sec. 1215.1  Act.

    Act means the Popcorn Promotion, Research, and Consumer Information 
Act of 1995, Subtitle E of Title V of the Federal Agriculture 
Improvement and Reform Act of 1996, Pub. L. 104-127, 7 U.S.C. 7481-7491, 
and any amendments thereto.



Sec. 1215.2  Board.

    Board means the Popcorn Board established under section 575(b) of 
the Act.



Sec. 1215.3  Board member.

    Board member means an officer or employee of a processor appointed 
by the Secretary to serve on the Popcorn Board as a representative of 
that processor.



Sec. 1215.4  Commerce.

    Commerce means interstate, foreign, or intrastate commerce.



Sec. 1215.5  Consumer information.

    Consumer information means information and programs that will assist 
consumers and other persons in making evaluations and decisions 
regarding the purchasing, preparing, and use of popcorn.



Sec. 1215.6  Department.

    Department means the United States Department of Agriculture.



Sec. 1215.7  Fiscal year.

    Fiscal year means the 12-month period from January 1 through 
December 31 each year, or such other period as recommended by the Board 
and approved by the Secretary.



Sec. 1215.8  Industry information.

    Industry information means information and programs that will lead 
to the development of new markets, new marketing strategies, or 
increased efficiency for the popcorn industry, or activities to enhance 
the image of the popcorn industry.

[[Page 172]]



Sec. 1215.9  Marketing.

    Marketing means the sale or other disposition of unpopped popcorn 
for human consumption in a channel of commerce but shall not include 
sales or disposition to or between processors.



Sec. 1215.10  Part and subpart.

    Part means the Popcorn Promotion, Research, and Consumer Information 
Order and all rules and regulations and supplemental orders issued 
thereunder, and the term subpart means the Popcorn Promotion, Research, 
and Consumer Information Order.



Sec. 1215.11  Person.

    Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity.



Sec. 1215.12  Popcorn.

    Popcorn means unpopped popcorn (Zea Mays L) that is commercially 
grown, processed in the United States by shelling, cleaning, or drying, 
and introduced into a channel of commerce.



Sec. 1215.13  Process.

    Process means to shell, clean, dry, and prepare popcorn for the 
market, but does not include packaging popcorn for the market without 
also engaging in another activity described in this paragraph.



Sec. 1215.14  Processor.

    Processor means a person engaged in the preparation of unpopped 
popcorn for the market who owns or who shares the ownership and risk of 
loss of such popcorn and who processes and distributes over 4 million 
pounds of popcorn in the market per year.



Sec. 1215.15  Programs, plans, and projects.

    Programs, plans, and projects means promotion, research, consumer 
information, and industry information plans, studies, projects, or 
programs conducted pursuant to this part.



Sec. 1215.16  Promotion.

    Promotion means any action, including paid advertising, to enhance 
the image or desirability of popcorn.



Sec. 1215.17  Research.

    Research means any type of study to advance the image, desirability, 
marketability, production, product development, quality, or nutritional 
value of popcorn.



Sec. 1215.18  Secretary.

    Secretary means the Secretary of Agriculture of the United States 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. 1215.19  State.

    State means each of the 50 States and the District of Columbia.



Sec. 1215.20  United States.

    United States means all of the States.

                              Popcorn Board



Sec. 1215.21  Establishment and membership.

    (a) There is hereby established a Popcorn Board of five members. The 
number of members on the board may be changed by rulemaking: Provided, 
that the Board consist of not fewer than four members and not more than 
nine members. The Board shall be composed of popcorn processors 
appointed by the Secretary under Sec. 1215.24.
    (b) For purposes of nominating and appointing processors to the 
Board, the Secretary shall, to the extent practicable, take into account 
the geographic distribution of popcorn production.
    (c) No more than one officer or employee of a processor may serve as 
a Board member at the same time.

[62 FR 39389, July 22, 1997, as amended at 75 FR 67610, Nov. 3, 2010]



Sec. 1215.22  Nominations and appointment.

    (a) All nominations for appointments to the Board established under 
Sec. 1215.21 shall be made as follows:
    (1) As soon as practicable after the effective date of this subpart, 
nominations for appointment to the initial

[[Page 173]]

Board shall be obtained from processors by the Secretary. In any 
subsequent year in which an appointment to the Board is to be made, 
nominations for positions for which the term will expire at the end of 
that year shall be obtained from processors at least six months prior to 
the expiration of terms.
    (2) Except for initial Board members, whose nomination process will 
be initiated by the Secretary, the Board shall issue a call for 
nominations in each year for which an appointment to the Board is to be 
made. The call shall include, at a minimum, the following information:
    (i) A list of the vacancies for which nominees may be submitted and 
qualifications for nomination; and
    (ii) The date by which the names of nominees shall be submitted to 
the Secretary for consideration to be in compliance with paragraph (a) 
of this section.
    (3)(i) Nominations for each position shall be made by processors. 
Notice shall be publicized to all processors.
    (ii) All processors may participate in submitting nominations.
    (4) Two nominees must be submitted for each vacancy. If processors 
fail to nominate a sufficient number of nominees, additional nominees 
shall be obtained in a manner prescribed by the Secretary.
    (b) The Secretary shall appoint the members of the Board from 
nominations made in accordance with paragraph (a).
    (1) The Secretary may reject any nominee submitted. If there is an 
insufficient number of nominees from whom to appoint members to the 
Board as a result of the Secretary's rejecting such nominees, additional 
nominees shall be submitted to the Secretary in a manner prescribed by 
the Secretary.
    (2) Whenever processors cannot agree on nominees for a position on 
the Board under the preceding provisions of this section, or whenever 
they fail to nominate individuals for appointment to the Board, the 
Secretary may appoint members in such a manner as the Secretary 
determines appropriate.
    (3) If a processor nominates more than one officer or employee, only 
one may be appointed to the Board by the Secretary.



Sec. 1215.23  Acceptance.

    Each individual nominated for membership of the Board shall qualify 
by filing a written acceptance with the Secretary at the time of 
nomination.



Sec. 1215.24  Term of office.

    (a) The members of the Board shall serve for terms of three years, 
except that members appointed to the initial Board shall serve, to the 
extent practicable, proportionately for terms of two, three, and four 
years.
    (b)(1) Except with respect to terms of office of the initial Board, 
the term of office for each Board member shall begin on the date the 
member is seated at the Board's annual meeting or such other date that 
may be approved by the Secretary.
    (2) The term of office for the initial Board member shall begin 
immediately following the appointment by the Secretary.
    (c) Board members shall serve during the term of office for which 
they are appointed and have qualified, and until their successors are 
appointed and have qualified.
    (d) No Board member may serve more than two consecutive three-year 
terms, except as provided in Sec. 1215.25(d). Initial members serving 
two- or four-year terms may serve one successive three-year term.



Sec. 1215.25  Vacancies.

    (a) To fill any vacancy occasioned by the death, removal, 
resignation, or disqualification of any member of the Board, the 
Secretary may appoint a successor from the most recent nominations 
submitted for positions on the Board or the Secretary may obtain 
nominees to fill such vacancy in such a manner as the Secretary deems 
appropriate.
    (b) Each such successor appointment shall be for the remainder of 
the term vacated.
    (c) A vacancy will not be required to be filled if the unexpired 
term is less than six months.
    (d) If an unexpired term is less than 1.5 years, serving the term 
shall not

[[Page 174]]

prevent the appointee from serving two successive three-year terms.
    (e) A Board member shall be disqualified from serving on the Board 
if such individual ceases to be affiliated with the processor the member 
represents.



Sec. 1215.26  Removal.

    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 is known to be 
engaged in acts of dishonesty or willful misconduct, the Board may 
recommend to the Secretary that the member be removed 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 will be 
detrimental to the achievement of the purposes of the Act.



Sec. 1215.27  Procedure.

    (a) At a properly convened meeting of the Board, a majority of the 
members shall constitute a quorum.
    (b) Each member of the Board will be entitled to one vote on any 
matter put to the Board, and the motion will carry if supported by a 
simple majority of those voting. At assembled meetings of the Board, all 
votes will be cast in person.
    (c) In lieu of voting at a properly convened meeting and, when in 
the opinion of the chairperson of the Board such action is considered 
necessary, the Board may take action upon the concurring votes by a 
majority of its members by mail, telephone, facsimile, or any other 
means of communication. If appropriate, any such action shall be 
confirmed promptly in writing. In that event, all members must be given 
prior notice and provided the opportunity to vote. Any action so taken 
shall have the same force and effect as though such action had been 
taken at a properly convened meeting of the Board. All votes shall be 
recorded in Board minutes.
    (d) Meetings of the Board may be conducted by electronic 
communications, provided that each member is given prior notice of the 
meeting and has the opportunity to be present either physically or by 
electronic connection.
    (e) The organization of the Board and the procedures for conducting 
meetings of the Board shall be in accordance with its bylaws, which 
shall be established by the Board and approved by the Secretary.



Sec. 1215.28  Compensation and reimbursement.

    The members of the Board shall serve without compensation but shall 
be reimbursed for necessary and reasonable expenses incurred by such 
members in the performance of their responsibilities under this subpart.



Sec. 1215.29  Powers.

    The Board shall have the following powers:
    (a) To administer the Order in accordance with its terms and 
provisions;
    (b) To make rules and regulations to effectuate the terms and 
provisions of the Order;
    (c) To select committees and subcommittees of Board members, 
including an executive committee, and to adopt such bylaws and other 
rules for the conduct of its business as it may deem advisable;
    (d) To appoint or employ such individuals as it may deem necessary, 
define the duties, and determine the compensation of such individuals;
    (e) To disseminate information to processors or industry 
organizations through programs or by direct contact using the public 
postal system or other systems;
    (f) To propose, receive, evaluate and approve budgets, plans and 
projects of popcorn promotion, research, consumer information and 
industry information, as well as to contract with the approval of the 
Secretary with appropriate persons to implement plans and projects;
    (g) To receive, investigate, and report to the Secretary for action 
any complaints of violations of the Order;
    (h) To recommend to the Secretary amendments to the order;
    (i) To accept or receive voluntary contributions;
    (j) To invest, pending disbursement pursuant to a program, plan or 
project,

[[Page 175]]

funds collected through assessments authorized under this Act provided 
for in Sec. 1215.51, and any other funds received by the Board in, and 
only in, obligations of the United States or any agency thereof, in 
general obligations of any State or any political subdivision thereof, 
in any interest bearing account or certificate of deposit or a bank that 
is a member of the Federal Reserve System, or in obligations fully 
guaranteed as to principal and interest by the United States;
    (k) With the approval of the Secretary, to enter into contracts or 
agreements with national, regional, or State popcorn processor 
organizations, or other organizations or entities, for the development 
and conduct of programs, plans or projects authorized under Sec. 
1215.40 and for the payment of the cost of such programs with 
assessments received pursuant to this subpart; and
    (l) Such other powers as may be approved by the Secretary.



Sec. 1215.30  Duties.

    The Board shall have the following duties:
    (a) To meet not less than annually, and to organize and select from 
among its members a chairperson and such other officers as may be 
necessary;
    (b) To evaluate or develop, and submit to the Secretary for 
approval, promotion, research, consumer information, and industry 
information programs, plans or projects;
    (c) To prepare for each fiscal year, and submit to the Secretary for 
approval at least 60 days prior to the beginning of each fiscal year, a 
budget of its anticipated expenses and disbursements in the 
administration of this subpart, as provided in Sec. 1215.50;
    (d) To maintain such books and records, which shall be available to 
the Secretary for inspection and audit, and to prepare and submit such 
reports from time to time to the Secretary, as the Secretary may 
prescribe, and to make appropriate accounting with respect to the 
receipt and disbursement of all funds entrusted to it;
    (e) To prepare and make public, at least annually, a report of its 
activities carried out, and an accounting for funds received and 
expended;
    (f) To cause its financial statements to be prepared in conformity 
with generally accepted accounting principles and to be audited by an 
independent certified public accountant in accordance with generally 
accepted auditing standards at least once each fiscal year and at such 
other times as the Secretary may request, and submit a copy of each such 
audit to the Secretary;
    (g) To give the Secretary the same notice of meetings of the Board 
as is given to members in order that the Secretary, or a representative 
of the Secretary, may attend such meetings;
    (h) To submit to the Secretary such information as may be requested 
pursuant to this subpart;
    (i) To keep minutes, books and records that clearly reflect all the 
acts and transactions of the Board. Minutes of each Board meeting shall 
be promptly reported to the Secretary;
    (j) To act as intermediary between the Secretary and any processor;
    (k) To investigate violations of the Act, order, and regulations 
issued under the order, conduct audits, and report the results of such 
investigations and audits to the Secretary for appropriate action to 
enforce the provisions of the Act, order, and regulations; and
    (l) To work to achieve an effective, continuous, and coordinated 
program of promotion, research, consumer information, and industry 
information designed to strengthen the popcorn industry's position in 
the marketplace, maintain and expand existing markets and uses for 
popcorn, develop new markets and uses for popcorn, and to carry out 
programs, plans, and projects designed to provide maximum benefits to 
the popcorn industry.

   Promotion, Research, Consumer Information, and Industry Information



Sec. 1215.40  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:

[[Page 176]]

    (1) The establishment, issuance, effectuation, and administration of 
appropriate programs for promotion, research, consumer information, and 
industry information with respect to popcorn; and
    (2) The establishment and conduct of research with respect to the 
sale, distribution, marketing, and use of popcorn, and the creation of 
new uses thereof, to the end that the marketing and use of popcorn may 
be encouraged, expanded, improved, or made more acceptable.
    (b) No program, plan, or project shall be implemented prior to its 
approval by the Secretary. Once a program, plan, or project is so 
approved, the Board may 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, consumer 
information, or industry 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, consumer information, or industry 
information, then the Board shall terminate such program, plan, or 
project.
    (d) In carrying out any program, plan, or project, no reference to a 
brand name, trade name, or State or regional identification of any 
popcorn will be made. In addition, no program, plan, or project shall 
make use of unfair or deceptive acts or practices with respect to the 
quality, value, or use of any competing product.



Sec. 1215.41  Contracts.

    The Board shall not contract with any processor for the purpose of 
promotion or research. The Board may lease physical facilities from a 
processor for such promotion or research, if such an arrangement is 
determined to be cost effective by the Board and approved by the 
Secretary. Any contract or agreement shall provide that:
    (a) 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;
    (b) Any such program, plan, or project shall become effective upon 
approval by the Secretary;
    (c) The contracting or agreeing party shall keep accurate records of 
all of its transactions and make periodic reports to the Board of 
activities conducted, submit accountings for funds received and 
expended, and make such other reports as the Secretary or the Board may 
require; and the Secretary may audit the records of the contracting or 
agreeing party periodically; and
    (d) 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.

                        Expenses and Assessments



Sec. 1215.50  Budget and expenses.

    (a) At least 60 days prior to the beginning of each fiscal year, and 
as may be necessary thereafter, the Board shall prepare and submit to 
the Secretary a budget for the fiscal year covering its anticipated 
expenses and disbursements in administering this subpart.
    (b) Each budget shall include:
    (1) A rate of assessment for such fiscal year calculated, subject to 
Sec. 1215.51(b), to provide adequate funds to defray its proposed 
expenditures and to provide for a reserve as set forth in paragraph (g) 
of this section;
    (2) A statement of the objectives and strategy for each program, 
plan, or project;
    (3) A summary of anticipated revenue, with comparative data for at 
least one preceding year;
    (4) A summary of proposed expenditures for each program, plan, or 
project; and
    (5) Staff and administrative expense breakdowns, with comparative 
data for at least one preceding year.
    (c) In budgeting plans and projects of promotion, research, consumer 
information, and industry information, the Board shall expend assessment 
and contribution funds on:

[[Page 177]]

    (1) Plans and projects for popcorn marketed in the United States or 
Canada in proportion to the amount of assessments projected to be 
collected on domestically marketed popcorn (including Canada); and
    (2) Plans and projects for exported popcorn in proportion to the 
amount of assessments projected to be collected on exported popcorn 
(excluding Canada).
    (d) The Board is authorized to incur such reasonable expenses, 
including provision for a reasonable 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 subpart. Such expenses 
shall be paid from funds received by the Board.
    (e) 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 encumbrances by the donor and the Board shall retain complete 
control of their use. The Board may also receive funds provided through 
the Foreign Agricultural Service of the United States Department of 
Agriculture for foreign marketing activities.
    (f) As stated in section 75(f)(4)(A)(ii) of the Act, the Board shall 
reimburse the Secretary, from funds received by the Board, for costs 
incurred by the Secretary in implementing and administering this 
subpart: Provided, That the costs incurred by the Secretary to be 
reimbursed by the Board, excluding legal costs to defend and enforce the 
order, shall not exceed 15 percent of the projected annual revenues of 
the Board.
    (g) The Board may establish an operating monetary reserve and may 
carry over to subsequent fiscal periods excess funds in any reserve so 
established, except that the funds in this reserve shall not exceed 
approximately one fiscal year's expenses. Such reserve funds may be used 
to defray any expenses authorized under this subpart.
    (h) With the 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 during its first 
year of operation only.



Sec. 1215.51  Assessments.

    (a) Any processor marketing popcorn in the United States or for 
export shall pay an assessment on such popcorn at the time of 
introduction to market at a rate as established in Sec. 1215.51(c) and 
shall remit such assessment to the Board in such form and manner as 
prescribed by the Board.
    (b) Any person marketing popcorn of that person's own production to 
consumers in the United States either directly or through retail or 
wholesale outlets, shall remit to the Board an assessment on such 
popcorn at the rate set forth in paragraph Sec. 1215.51(c), and in such 
form and manner as prescribed by the Board.
    (c) Except as otherwise provided, the rate of assessment shall be 5 
cents per hundredweight of popcorn. The rate of assessment may be raised 
or lowered as recommended by the Board and approved by the Secretary, 
but shall not exceed 8 cents per hundredweight in any fiscal year.
    (d) The collection of assessments under this section shall commence 
on all popcorn processed in the United States on or after the date 
established by the Secretary, and shall continue until terminated by the 
Secretary. If the Board is not constituted on the date the first 
assessments are to be collected, the Secretary shall have the authority 
to receive assessments on behalf of the Board and may hold such 
assessments until the Board is constituted, then remit such assessments 
to the Board.
    (e) Each person responsible for remitting assessments under 
paragraphs (a) and (b) of this section shall remit the amounts due from 
assessments to the Board on a quarterly basis no later than the last day 
of the month following the last month in the previous quarter in which 
the popcorn was marketed, in such manner as prescribed by the Board.
    (f) The Board shall impose a late payment charge on any person who 
fails to remit to the Board the total amount

[[Page 178]]

for which the person is liable on or before the payment due date 
established under this section. The amount of the late payment charge 
shall be prescribed in rules and regulations as approved by the 
Secretary.
    (g) The Board shall impose an additional charge on any person 
subject to a late payment charge, in the form of interest on the 
outstanding portion of any amount for which the person is liable. The 
rate of interest shall be prescribed in rules and regulations as 
approved by the Secretary.
    (h) In addition, persons failing to remit total assessments due in a 
timely manner may also be subject to penalties and actions under federal 
debt collection procedures as set forth in 7 CFR 3.1 through 3.36.
    (i) Any assessment that is determined to be owing at a date later 
than the payment due established under this section, due to a person's 
failure to submit a report to the Board by the payment due date, shall 
be considered to have been payable on the payment due date. Under such a 
situation, paragraphs (f), (g), and (h) of this section shall be 
applicable.
    (j) The Board, with the approval of the Secretary, may enter into 
agreements authorizing other organizations or entities to collect 
assessments on its behalf. Any such organization or entity shall be 
required to maintain the confidentiality of such information as is 
required by the Board for collection purposes. Any reimbursement by the 
Board for such services shall be based on reasonable charges for 
services rendered.
    (k) The Board is hereby authorized to accept advance payment of 
assessments for the fiscal year by any person, that shall be credited 
toward any amount for which such person may become liable. The Board 
shall not be obligated to pay interest on any advance payment.



Sec. 1215.52  Exemption from assessment.

    (a) Persons that process and distribute 4 million pounds or less of 
popcorn annually, based on the previous year, shall be exempted from 
assessment.
    (b) Persons that operate under an approved National Organic Program 
(NOP) (7 CFR part 205) system plan; process only products that are 
eligible to be labeled as 100 percent organic under the NOP; and are not 
split operations shall be exempt from the payment of assessments.
    (c) To claim an exemption, persons shall apply to the Board, in the 
form and manner prescribed in the rules and regulations.

[70 FR 2757, Jan. 14, 2005]



Sec. 1215.53  Influencing governmental action.

    No funds received by the Board under this subpart shall in any 
manner be used for the purpose of influencing legislation or 
governmental policy or action, except to develop and recommend to the 
Secretary amendments to this subpart.

                       Reports, Books, and Records



Sec. 1215.60  Reports.

    (a) Each processor marketing popcorn directly to consumers, and each 
processor responsible for the remittance of assessments under Sec. 
1215.51, shall be required to report quarterly to the Board, on a form 
provided by the Board, such information as may be required under this 
subpart or any rule and regulations issued thereunder. Such information 
shall be subject to Sec. 1215.62 and include, but not be limited to, 
the following:
    (1) The processor's name, address, telephone number, and Social 
Security Number or Employer Identification Number;
    (2) The date of report, which is also the date of payment to the 
Board;
    (3) The period covered by the report;
    (4) The number of pounds of popcorn marketed or in any other manner 
are subject to the collection of assessments;
    (5) The amount of assessments remitted;
    (6) The basis, if necessary, to show why the remittance is less than 
the number of pounds of popcorn divided by 100 and multiplied by the 
applicable assessment rate; and
    (7) The amount of assessments remitted on exports (not including 
Canada).

[[Page 179]]

    (b) The words ``final report'' shall be shown on the last report at 
the end of each fiscal year.



Sec. 1215.61  Books and records.

    Each person who is subject to this subpart shall maintain and make 
available for inspection by the Board or the Secretary such books and 
records as are deemed necessary by the Board, with the approval of the 
Secretary, to carry out the provisions of this subpart and any rules and 
regulations issued hereunder, including such books and records as are 
necessary to verify any reports required. Such books and records shall 
be retained for at least two years beyond the fiscal year of their 
applicability.



Sec. 1215.62  Confidential treatment.

    (a) All information obtained from books, records, or reports under 
the Act, this subpart, and the rule and regulations issued thereunder 
shall be kept confidential by all persons, including all employees, 
agents, and former employees and agents of the Board; all officers, 
employees, agents, and former officers, employees, and agents of the 
Department; and all officers, employees, agents, and former officers, 
employees, and agents of contracting and subcontracting agencies or 
agreeing parties having access to such information. Such information 
shall not be available to Board members or processors. Only those 
persons having a specific need for such information to administer 
effectively the provisions of this part 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 suit 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 part.
    (b) No information obtained under the authority of this part may be 
made available to any agency or officer of the Federal Government for 
any purpose other than the implementation of the Act and any 
investigatory or enforcement action necessary for the implementation of 
the Act.
    (c) Nothing in paragraph (a) of this section may be deemed to 
prohibit:
    (1) The issuance of general statements based upon the reports of the 
number of persons subject to this part or statistical data collected 
therefrom, which statements do not identify the information furnished by 
any person;
    (2) The publication, by direction of the Secretary, of the name of 
any person who has violated this part, together with a statement of the 
particular provisions of this part violated by such person.
    (d) Any person who knowingly violated the provisions of this 
section, on conviction, shall be subject to a fine of not more than 
$1,000 or to imprisonment for not more than 1 year, or both, or if the 
person is an officer, employee, or agent of the Board or the Department, 
that person shall be removed from office or terminated from employment 
as applicable.

                              Miscellaneous



Sec. 1215.70  Right of the Secretary.

    All fiscal matters, programs, plans, or projects, contracts, rules 
or regulations, reports, or other substantive actions proposed and 
prepared by the Board shall be submitted to the Secretary for approval.



Sec. 1215.71  Suspension or termination.

    (a) Whenever the Secretary finds that this subpart or any provision 
thereof obstructs or does not tend to effectuate the declared policy of 
the Act, the Secretary shall terminate or suspend the operation of this 
subpart or such provision thereof.
    (b) The Secretary may conduct additional referenda to determine 
whether processors favor termination or suspension of this subpart three 
years after the effective date, on the request of a representative group 
comprising 30 percent or more of the number of processors who have been 
engaged in processing during a representative period as determined by 
the Secretary.
    (c) Whenever the Secretary determines that suspension or termination 
of this subpart is favored by two-thirds or more of the popcorn 
processors voting in a referendum under paragraph

[[Page 180]]

(b) of this section who, during a representative period determined by 
the Secretary, have been engaged in the processing, the Secretary shall:
    (1) Suspend or terminate, as appropriate, collection of assessments 
within six months after making such determination; and
    (2) Suspend or terminate, as appropriate, all activities under this 
subpart in an orderly manner as soon as practicable.
    (d) Referenda conducted under this subsection shall be conducted in 
such manner as the Secretary may prescribe.



Sec. 1215.72  Proceedings after termination.

    (a) Upon the termination of this subpart, the Board shall recommend 
not more than five 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 the 
funds and property owned, in the possession of, or under the control of 
the Board, including any claims unpaid or property not delivered, or any 
other claim existing at the time of such termination.
    (b) The trustees shall:
    (1) Continue in such capacity until discharged by the Secretary;
    (2) Carry out the obligations of the Board under any contract or 
agreement entered into by it under this subpart;
    (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 of the trustees, to such persons as the Secretary may 
direct; and
    (4) Upon the request of the Secretary, execute such assignments or 
other instruments necessary or appropriate to vest in such other persons 
full title and right to all of the funds, property, and claims vested in 
the Board or the trustees under this subpart.
    (c) Any person to whom funds, property, or claims have been 
transferred or delivered under this subpart 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 used, to the 
extent practicable, in the interest of continuing one or more of the 
promotion, research, consumer information or industry information 
programs, plans, or projects authorized under this subpart.



Sec. 1215.73  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, the 
termination of this subpart or of any rule and regulation issued under 
this subpart, or the issuance of any amendment to such provisions, shall 
not:
    (a) Affect or waive any right, duty, obligation, or liability that 
shall have arisen or may hereafter arise in connection with any 
provision of this subpart or any such rules or regulations;
    (b) Release or extinguish any violation of this subpart or any such 
rules or regulations; or
    (c) Affect or impair any rights or remedies of the United States, 
the Secretary, or any person with respect to any such violation.



Sec. 1215.74  Personal liability.

    No member or employee of the Board shall be held personally 
responsible, either individually or jointly, in any way whatsoever, to 
any person for errors in judgment, mistakes, or other acts of either 
commission or omission of such member or employee under this subpart, 
except for acts of dishonesty or willful misconduct.



Sec. 1215.75  Patents, copyrights, inventions, publications, and product
formulations.

    Any patents, copyrights, inventions, publications, or product 
formulations developed through the use of funds received by the Board 
under this subpart shall be the property of the United States Government 
as represented by the Board and shall, along with any rents, royalties, 
residual payments, or other income from the rental, sale, leasing, 
franchising, or other uses of such patents, copyrights, inventions, 
publications, or product formulations inure to the benefit of the Board 
and be considered income subject to the same fiscal, budget, and audit 
controls as

[[Page 181]]

other funds of the Board. Upon termination of this subpart, Sec. 
1215.72 shall apply to determine disposition of all such property.



Sec. 1215.76  Amendments.

    Amendments to this subpart may be proposed, from time to time, by 
the Board or by any interested persons affected by the provisions of the 
Act, including the Secretary.



Sec. 1215.77  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.



                     Subpart B_Rules and Regulations

                               Definitions



Sec. 1215.100  Terms defined.

    Unless otherwise defined in this subpart, the definitions of terms 
used in this subpart shall have the same meaning as the definitions in 
Subpart A--Popcorn Promotion, Research, and Consumer Information Order 
of this part.

                          Exemption Procedures



Sec. 1215.300  Exemption procedures.

    (a) Any processor who markets 4 million pounds or less of popcorn 
annually and who desires to claim an exemption from assessments during a 
fiscal year as provided in Sec. 1214.52 of this part shall apply to the 
Board, on a form provided by the Board, for a certificate of exemption. 
Such processor shall certify that the processor's marketing of popcorn 
during the previous fiscal year was 4 million pounds or less.
    (b) Persons that process solely 100 percent organic products and 
that do not process any conventional or nonorganic products as provided 
in Sec. 1215.52 paragraph (b) of this part may apply for an exemption 
by submitting a request for exemption to the Board on a form provided by 
the Board at any time initially. The request shall include the 
following: The applicant's name and address, a copy of the organic farm 
or organic handling operation certificate provided by a USDA-accredited 
certifying agent as defined in section 2103 of the Organic Foods 
Production Act of 1990 (7 U.S.C. 6502), 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.
    (c) Upon receipt of an application, the Board shall determine 
whether an exemption may be granted and issue a Certificate of Exemption 
to the producer. For exemption requests received on or before August 15, 
2005, the Board will have 60 days to approve the exemption request; 
after August 15, 2005, the Board will have 30 days to approve the 
exemption request. If the application is disapproved, the Board will 
notify the applicant of the reason(s) for disapproval within the same 
timeframe.
    (d) Any person who desires to renew the exemption from assessments 
for a subsequent fiscal year shall reapply to the Board by January 1 of 
that year.
    (e) The exemption will apply at the first reporting period following 
the issuance of the Certificate of Exemption.
    (f) The Board may require persons receiving an exemption from 
assessments to provide to the Board reports on the disposition of exempt 
popcorn.

[62 FR 39389, July 22, 1997, as amended at 70 FR 2757, Jan. 14, 2005]

                              Miscellaneous



Sec. 1215.400  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 0581-0093, except for the Promotion Board nominee background 
statement form which is assigned OMB control number 0505-0001.

[[Page 182]]



PART 1216_PEANUT PROMOTION, RESEARCH, AND INFORMATION ORDER--Table of
Contents



       Subpart A_Peanut Promotion, Research, and Information Order

                               Definitions

Sec.
1216.1 Act.
1216.2-1216.3 [Reserved]
1216.4 Board.
1216.5 Conflict of interest.
1216.6 [Reserved]
1216.7 Department.
1216.8 Farm Service Agency.
1216.9 Farmers stock peanuts.
1216.10 First handler.
1216.11 Fiscal year.
1216.12 Handle.
1216.13 Information.
1216.14 Market.
1216.15 Minor peanut-producing states.
1216.16 Order.
1216.17 Part and subpart.
1216.18 Peanuts.
1216.19 Peanut producer organization.
1216.20 Person.
1216.21 Primary peanut-producing states.
1216.22 Producer.
1216.23 Promotion.
1216.24 [Reserved]
1216.25 Research.
1216.26 Secretary.
1216.27 Suspend.
1216.28 State.
1216.29 Terminate.
1216.30 United States.

                          National Peanut Board

1216.40 Establishment and membership.
1216.41 Nominations.
1216.42 Selection.
1216.43 Term of office.
1216.44 Vacancies.
1216.45 Alternate members.
1216.46 Procedure.
1216.47 Compensation and reimbursement.
1216.48 Powers and duties.
1216.49 Prohibited activities.

                        Expenses and Assessments

1216.50 Budget and expenses.
1216.51 Assessments.
1216.52 Programs, plans, and projects.
1216.53 Independent evaluation.
1216.54 Operating reserve.
1216.55 Investment of funds.
1216.56 Exemption for organic peanuts.

                       Reports, Books, and Records

1216.60 Reports.
1216.61 Books and records.
1216.62 Confidential treatment.

             Certification of Peanut Producer Organizations

1216.70 Certification.

                              Miscellaneous

1216.80 Right of the Secretary.
1216.81 Implementation of the Order.
1216.82 Suspension and termination.
1216.83 Proceedings after termination.
1216.84 Effect of termination or amendment.
1216.85 Personal liability.
1216.86 Separability.
1216.87 Amendments.
1216.88 Patents, copyrights, trademarks, information, publications, and 
          product formulations.

Subpart B_Procedure for the Conduct of Referenda in Connection With the 
            Peanut Promotion, Research, and Information Order

1216.100 General.
1216.101 Definitions.
1216.102 Voting.
1216.103 Instructions.
1216.104 Subagents.
1216.105 Ballots.
1216.106 Referendum report.
1216.107 Confidential information.

    Authority: 7 U.S.C. 7411-7425 and 7 U.S.C. 7401.

    Source: 64 FR 20105, Apr. 23, 1999, unless otherwise noted.



       Subpart A_Peanut Promotion, Research, and Information Order

    Source: 64 FR 41256, July 29, 1999, unless otherwise noted.

                               Definitions



Sec. 1216.1  Act.

    Act means the Commodity Promotion, Research, and Information Act of 
1996 (7 U.S.C. 7401-7425; Public Law 104-127, 110 Stat. 1029), or any 
amendments thereto.



Sec. Sec. 1216.2-1216.3  [Reserved]



Sec. 1216.4  Board.

    Board means the administrative body referred to as the National 
Peanut Board established pursuant to Sec. 1216.40.



Sec. 1216.5  Conflict of interest.

    Conflict of interest means a situation in which a member or employee 
of the Board has a direct or indirect financial

[[Page 183]]

interest in a person who performs a service for, or enters into a 
contract with, the Board for anything of economic value.



Sec. 1216.6  [Reserved]



Sec. 1216.7  Department.

    Department means the U.S. Department of Agriculture.



Sec. 1216.8  Farm Service Agency.

    Farm Service Agency or FSA means the U.S. Department of 
Agriculture's Farm Service Agency.



Sec. 1216.9  Farmers stock peanuts.

    Farmers stock peanuts means picked or threshed peanuts produced in 
the United States which have not been changed (except for removal of 
foreign material, loose shelled kernels and excess moisture) from the 
condition in which picked or threshed peanuts are customarily marketed 
by producers, plus any loose shelled kernels that are removed from 
farmers stock peanuts before such farmers stock peanuts are marketed.



Sec. 1216.10  First handler.

    First handler means any person who handles peanuts in a capacity 
other than that of a custom cleaner or dryer, an assembler, a 
warehouseman, or other intermediary between the producer and the person 
handling.



Sec. 1216.11  Fiscal year.

    Fiscal year is synonymous with crop year and means the 12-month 
period beginning with August 1 of any year and ending with July 31 of 
the following year, or such other period as determined by the Board and 
approved by the Secretary.



Sec. 1216.12  Handle.

    Handle means to engage in the receiving or acquiring, cleaning and 
shelling, cleaning in-shell, or crushing of peanuts and in the shipment 
(except as a common or contract carrier of peanuts owned by another) or 
sale of cleaned in-shell or shelled peanuts, or other activity causing 
peanuts to enter the current of commerce: Provided, that this term does 
not include sales or deliveries of peanuts by a producer to a handler or 
to an intermediary person engaged in delivering peanuts to handler(s) 
and: Provided further, that this term does not include sales or 
deliveries of peanuts by such intermediary person(s) to a handler.



Sec. 1216.13  Information.

    Information means information and programs that are designed to 
increase efficiency in processing and to develop new markets, marketing 
strategies, increased market efficiency, and activities that are 
designed to enhance the image of peanuts on a national or international 
basis. These include:
    (a) Consumer information, which means any action taken to provide 
information to, and broaden the understanding of, the general public 
regarding the consumption, use, nutritional attributes, and care of 
peanuts; and
    (b) Producer information, which means information and programs that 
will lead to the development of new markets, new marketing strategies, 
or increased efficiency for the peanut industry, and activities to 
enhance the image of the peanut industry.



Sec. 1216.14  Market.

    Market means to sell or otherwise dispose of peanuts into 
interstate, foreign, or intrastate commerce by buying, marketing, 
distributing, or otherwise placing peanuts into commerce.



Sec. 1216.15  Minor peanut-producing states.

    Minor peanut-producing states means all peanut-producing states with 
the exception of Alabama, Florida, Georgia, Mississippi, New Mexico, 
North Carolina, Oklahoma, South Carolina, Texas, and Virginia.

[73 FR 14921, Mar. 20, 2008]



Sec. 1216.16  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. 1216.17  Part and subpart.

    Part means the Peanut Promotion, Research, and Information Order and

[[Page 184]]

all rules, regulations, and supplemental Orders issued pursuant to the 
Act and the Order. The Order shall be a ``subpart'' of such part.



Sec. 1216.18  Peanuts.

    Peanuts means the seeds of the legume arachis hypogaea and includes 
both in-shell and shelled peanuts other than those marketed by the 
producer in green form for consumption as boiled peanuts.



Sec. 1216.19  Peanut producer organization.

    Peanut producer organization means a state-legislated peanut 
promotion, research, and education commission or organization. For 
states without a state-legislated peanut promotion, research, and 
education commission or organization, ``peanut producer organization'' 
means any organization which has the primary purpose of representing 
peanut producers and has peanut producers as members.



Sec. 1216.20  Person.

    Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity.



Sec. 1216.21  Primary peanut-producing states.

    Primary peanut-producing states means Alabama, Florida, Georgia, 
Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, 
Texas, and Virginia, Provided, these states maintain three-year average 
production of at least 10,000 tons of peanuts.

[73 FR 14921, Mar. 20, 2008]



Sec. 1216.22  Producer.

    Producer means any person engaged in the production and sale of 
peanuts and who owns, or shares the ownership and risk of loss of the 
crop. This does not include quota holders who do not share in the risk 
of loss of the crop.



Sec. 1216.23  Promotion.

    Promotion means any action taken by the Board under this Order, 
including paid advertising, to present a favorable image of peanuts to 
the public to improve the competitive position of peanuts in the 
marketplace, including domestic and international markets, and to 
stimulate sales of peanuts.



Sec. 1216.24  [Reserved]



Sec. 1216.25  Research.

    Research means any type of test, study, or analysis designed to 
advance the image, desirability, use, marketability, production, product 
development, or quality of peanuts, including research relating to 
nutritional value and cost of production.



Sec. 1216.26  Secretary.

    Secretary means the Secretary of Agriculture of the United States, 
or any officer or employee of the U.S. Department of Agriculture to whom 
authority has heretofore been delegated, or to whom authority may 
hereafter be delegated, to act in the Secretary's stead.



Sec. 1216.27  Suspend.

    Suspend means to issue a rule under section 553 of title 5, United 
States Code, to temporarily prevent the operation of an Order, or part 
thereof, during a particular period of time specified in the rule.



Sec. 1216.28  State.

    State means any of the 50 states, the District of Columbia, the 
Commonwealth of Puerto Rico, or any territory or possession of the 
United States.



Sec. 1216.29  Terminate.

    Terminate means to issue a rule under section 553 of title 5, United 
States Code, to cancel permanently the operation of an Order, or part 
thereof, beginning on a date certain specified in the rule.



Sec. 1216.30  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.

                          National Peanut Board



Sec. 1216.40  Establishment and membership.

    (a) Establishment of a National Peanut Board. There is hereby 
established a

[[Page 185]]

National Peanut Board, hereinafter called the Board, composed of no more 
than 11 peanut producers and alternates, appointed by the Secretary from 
nominations as follows:
    (1) Ten members and alternates. One member and one alternate shall 
be appointed from each primary peanut-producing state, who are producers 
and whose nominations have been submitted by certified peanut producer 
organizations within a primary peanut-producing state.
    (2) The minor peanut-producing states shall collectively have one 
at-large member and one alternate, who are producers, to be appointed by 
the Secretary from nominations submitted by certified peanut producer 
organizations within minor peanut-producing states or from other 
certified farm organizations that include peanut producers as part of 
their membership.
    (b) Adjustment of membership. At least once in each five-year 
period, but not more frequently than once in each three-year period, the 
Board, or a person or agency designated by the Board, shall review the 
geographical distribution of peanuts in the United States and make 
recommendation(s) to the Secretary to continue without change, or 
whether changes should be made in the number of representatives on the 
Board to reflect changes in the geographical distribution of the 
production of peanuts.

[64 FR 41256, July 29, 1999, as amended at 73 FR 14921, Mar. 20, 2008]



Sec. 1216.41  Nominations.

    (a) All nominations authorized under Sec. 1216.40 shall be made 
within such a period of time as the Secretary shall prescribe. Eligible 
peanut producer organizations within each state as certified pursuant to 
Sec. 1216.70 shall nominate two qualified persons for each member and 
each alternate member. The nominees shall be elected at an open meeting 
among peanut producers eligible to serve on the Board. Any certified 
peanut producer organization representing a minor peanut-producing state 
may nominate two eligible persons for each member and two eligible 
persons for each alternate member.
    (b) As soon as practicable after this subpart becomes effective, the 
Secretary shall obtain nominations for appointment to the initial 
promotion Board from certified nominating organizations. In any 
subsequent year in which an appointment to the Board is to be made, 
nominations for positions whose terms will expire shall be obtained from 
certified nominating organizations by the Board's staff and submitted to 
the Secretary by May 1 of such year, or other such date as approved by 
the Secretary.
    (c) Except for initial Board members, whose nomination process will 
be initiated by the Secretary, the Board shall issue the call for 
nominations by March 1 of each year.
    (d) The nomination meeting shall be announced 30 days in advance:
    (1) By utilizing available media or public information sources, 
without incurring advertising expense, to publicize the dates, places, 
method of voting, eligibility requirements, and other pertinent 
information. Such sources of publicity may include, but are not limited 
to, print and radio; and
    (2) By such other means as deemed advisable.
    (e) At nominations meetings, Department personnel will be present to 
oversee and to verify eligibility and count ballots.



Sec. 1216.42  Selection.

    From the nominations, the Secretary shall select the members of the 
Board and alternates for each primary peanut-producing state. The 
Secretary shall select one member and one alternate from all nominations 
submitted by certified peanut producer organizations representing minor 
peanut-producing states.



Sec. 1216.43  Term of office.

    All members and alternates of the Board shall each serve for terms 
of three years, except that the members and alternates appointed to the 
initial Board shall serve proportionately for two-, three-, and four-
year terms, with the length of the terms determined at random. No member 
or alternate may serve more than two consecutive three-year terms. An 
alternate, after serving two consecutive three-year terms, may serve as 
a member for an additional two consecutive three-year terms. A

[[Page 186]]

member, after serving two consecutive three-year terms, may serve as an 
alternate for an additional two consecutive three-year terms. Each 
member and alternate shall continue to serve until a successor is 
selected and has qualified.
    (a) Those members serving initial terms of two or four years may 
serve one successive three-year term.
    (b) Any successor serving one year or less may serve two consecutive 
three-year terms.



Sec. 1216.44  Vacancies.

    To fill any vacancy resulting from the failure to qualify of any 
person selected as a member or as an alternate member of the Board, or 
in the event of death, removal, resignation, or disqualification of any 
member or alternate member of the Board, a successor for the unexpired 
term of such member or alternate member of the Board shall be nominated 
and selected in the manner specified in Sec. 1216.40.



Sec. 1216.45  Alternate members.

    An alternate member of the Board, during the absence of the member 
for the primary peanut-producing state or at-large member for whom the 
person is the alternate, shall act in the place and stead of such member 
and perform such duties as assigned. In the event of death, removal, 
resignation, or disqualification of any member, the alternate for that 
state or at-large member shall act for the member until a successor for 
such member is selected and qualified. In the event that both a producer 
member of the Board and the alternate are unable to attend a meeting, 
the Board may not designate any other alternate to serve in such 
member's or alternate's place and stead for such a meeting.



Sec. 1216.46  Procedure.

    (a) A majority of the members of the Board, including alternate 
members acting for members, shall constitute a quorum.
    (b) At assembled meetings, all votes shall be cast in person. Board 
actions shall be weighted by value of production as determined by a 
primary peanut-producing state's three-year running average of total 
gross farm income derived from all peanut sales. The at-large Board 
member's vote shall be weighted by the collective value of production 
from all minor peanut-producing states' three-year running average of 
total gross farm income derived from all peanut sales. Any Board action 
shall require the concurring votes of members or alternates from states 
representing more than 50 percent of total U.S. gross farm income 
derived from all peanut sales, plus an additional two votes from any 
other Board members, provided a minimum of five votes concur.
    (c) For routine and noncontroversial matters which do not require 
deliberation and the exchange of views, and in matters of an emergency 
nature when there is not time to call an assembled meeting of the Board, 
the Board may also take action as prescribed in this section by mail, 
facsimile, telephone, or any telecommunication method appropriate for 
the conduct of business, but any such action shall be confirmed in 
writing within 30 days.
    (d) There shall be no voting by proxy.
    (e) The chairperson shall be a voting member.



Sec. 1216.47  Compensation and reimbursement.

    The members of the Board, and alternates when acting as members, 
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.



Sec. 1216.48  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;

[[Page 187]]

    (d) To employ persons, other than the 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;
    (e) To develop programs 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 relevant. 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 
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;
    (f) To prepare and submit for approval of the Secretary fiscal year 
budgets in accordance with Sec. 1216.50;
    (g) 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 prescribe; 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;
    (h) To cause its books to be audited by a competent auditor at the 
end of each fiscal year and at such other times as the Secretary may 
request, and to submit a report of the audit directly to the Secretary;
    (i) To give the Secretary the same notice of meetings of the Board 
as is given to members in order that the Secretary's representative(s) 
may attend such meetings, and to keep and report minutes of each meeting 
of the Board to the Secretary;
    (j) To act as intermediary between the Secretary and any producer or 
first handler;
    (k) To furnish to the Secretary any information or records that the 
Secretary may request;
    (l) To receive, investigate, and report to the Secretary complaints 
of violations of the Order;
    (m) To recommend to the Secretary such amendments to the Order as 
the Board considers appropriate; and
    (n) To work to achieve an effective, continuous, and coordinated 
program of promotion, research, consumer information, evaluation, and 
industry information designed to strengthen the peanut industry's 
position in the marketplace; maintain and expand existing markets and 
uses for peanuts; and to carry out programs, plans, and projects 
designed to provide maximum benefits to the peanut industry.



Sec. 1216.49  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, including local, state, national, and international, 
other than recommending to the Secretary amendments to the Order; and

[[Page 188]]

    (c) Any advertising, including promotion, research, and information 
activities authorized to be carried out under the Order, that is false 
or misleading or disparaging to another agricultural commodity.

                        Expenses and Assessments



Sec. 1216.50  Budget and expenses.

    (a) At least 60 days prior to the beginning of each fiscal year, and 
as may be necessary thereafter, the Board shall prepare and submit to 
the Secretary a budget for the fiscal year covering its anticipated 
expenses and disbursements in administering this subpart. Each such 
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 for 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 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 subpart.
    (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. Shifts of funds 
which do not cause an increase in the Board's approved budget and which 
are consistent with governing bylaws need not have prior approval by the 
Secretary.
    (d) The Board is authorized to incur such expenses, including 
provision for a reasonable 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 subpart. 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 funds 
borrowed by the Board shall be expended only for startup costs and 
capital outlays 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. Such contributions shall be free from any encumbrance by 
the donor and the Board shall retain complete control of their use.
    (g) The Board shall reimburse the Secretary for all expenses 
incurred by the Secretary in the implementation, administration, and 
supervision of the Order, including all referendum costs in connection 
with the Order.
    (h) The Board may not expend for administration, maintenance, and 
functioning of the Board in any fiscal year an amount that exceeds 10 
percent of the assessments and other income received by the Board for 
that fiscal year. Reimbursements to the Secretary required under 
paragraph (g) of this section are excluded from this limitation on 
spending.
    (i) The Board shall allocate, to the extent practicable, no less 
than 80 percent of the assessments collected on all peanuts available 
for any fiscal year on national and regional promotion, research, and 
information activities. The Board shall allocate, to the extent 
practicable, no more than 20 percent of assessments collected on all 
peanuts available for any fiscal year for use in state or regional 
research programs. Specific percentages and amounts shall be determined 
annually by the Board, with the approval of the Secretary.
    (j) Certified peanut producer organizations may submit requests for 
funding for research and/or generic promotion projects. Amounts approved 
for each state shall not exceed the pro rata Share of funds available 
for that State as determined by the Board and approved by the Secretary. 
Amounts allocated by the Board for state research or promotion 
activities will be based on requests submitted to the Board when it is 
determined that they meet

[[Page 189]]

the goals and objectives stated in the Order.
    (k) Assessments collected, less pro rata administrative expenses, 
from the gross sales of contract export additional peanuts shall be 
allocated by the Board for the promotion and related research of export 
peanuts.
    (l) The Board shall determine annually how total funds shall be 
allocated pursuant to paragraphs (i), (j), and (k) of this section, with 
the approval of the Secretary.



Sec. 1216.51  Assessments.

    (a) The funds necessary to pay for programs and other costs 
authorized by this part shall be acquired by the levying of assessments 
upon producers in a manner prescribed by the Secretary.
    (b) Each first handler, at such times and in such manner as 
prescribed by the Secretary, shall collect from each producer or first 
purchaser/handler and pay assessments to the Board on all peanuts 
handled, including peanuts produced by the first handler, no later than 
60 days after the last day of the month in which the peanuts were 
marketed.
    (c) Such assessments shall be levied at a rate of one (1%) percent 
of the price paid for all farmers stock peanuts sold. Price paid is one 
(1%) percent of loan value.
    (d) For peanuts placed under a marketing assistance loan with the 
Department's Commodity Credit Corporation, the Commodity Credit 
Corporation, or any entity determined by the Commodity Credit 
Corporation shall deduct and remit to the Board, from the proceeds of 
the loan paid to the producer, one (1%) percent of the loan value of the 
peanuts as determined by the warehouse receipt accompanying such 
peanuts, no more than 60 days after the last day of the month in which 
the peanuts were placed under a marketing assistance loan.
    (e) If a producer places peanuts under a marketing assistance loan 
and subsequently redeems and sells such peanuts at a price greater than 
the loan amount, the producer shall pay the difference between the sales 
price and the loan value of the peanuts multiplied by one (1%) percent 
to the Board within sixty (60) days after the final day of the loan 
availability period.
    (f) All assessments collected under this section are to be used for 
expenses and expenditures pursuant to this Order and for the 
establishment of an operating reserve as prescribed in the Order.
    (g) The Board shall impose a late payment charge on any person who 
fails to remit to the Board the total amount for which the person is 
liable on or before the payment due date established under this section. 
The late payment charge will be in the form of interest on the 
outstanding portion of any amount for which the person is liable. The 
rate of interest shall be prescribed in regulations issued by the 
Secretary.
    (h) Persons failing to remit total assessments due in a timely 
manner may also be subject to actions under federal debt collection 
procedures.
    (i) The Board may authorize other organizations to collect 
assessments on its behalf with the approval of the Secretary.
    (j) The assessment rate may not be increased unless the new rate is 
approved by a referendum among eligible producers.

[70 FR 55226, Sept. 21, 2005]



Sec. 1216.52  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 information, with respect to peanuts; and
    (2) The establishment and conduct of research with respect to the 
use, nutritional value, sale, distribution, and marketing of peanuts and 
peanut products, and the creation of new products thereof, to the end 
that marketing and use of peanuts may be encouraged, expanded, improved, 
or made more acceptable and to advance the image, desirability, or 
quality of peanuts.

[[Page 190]]

    (b) No program, plan, or project shall be implemented prior to its 
approval 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 
consumer 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 consumer information, then the Board shall 
terminate such program, plan, or project.
    (d) No program, plan, or project shall make any false claims on 
behalf of peanuts or use unfair or deceptive acts or practices with 
respect to the quality, value, or use of any competing product. Peanuts 
of all domestic origins shall be treated equally.



Sec. 1216.53  Independent evaluation.

    The Board shall, not less often than every five years, authorize and 
fund, from funds otherwise available to the Board, an independent 
evaluation of the effectiveness of the Order and other 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 section.



Sec. 1216.54  Operating reserve.

    The Board shall establish an operating monetary reserve and may 
carry over to subsequent fiscal years excess funds in a reserve so 
established; Provided, that funds in the reserve shall not exceed any 
fiscal year's anticipated expenses.



Sec. 1216.55  Investment of funds.

    The Board may invest, pending disbursement, funds it receives under 
this subpart, only in obligations of the United States or any agency of 
the United States; general obligations of any state or any political 
subdivision of a state; interest bearing accounts or certificates of 
deposit of financial institutions that are members of the Federal 
Reserve system; or obligations that are fully guaranteed as to principal 
and interest by the United States.



Sec. 1216.56  Exemption for organic peanuts.

    (a) A producer who operates 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, except 
as provided for in paragraph (g) of this section; and is not a split 
operation shall be exempt from the payment of assessments.
    (b) In order to apply for this exemption, an eligible peanut 
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 August 1 as long as the producer continues to be eligible for 
the exemption.
    (c) The request shall include the following: The producer's name and 
address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA-accredited certifying agent as defined in 
section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), 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.
    (d) If the producer complies with the requirements of this section, 
the Board will approve the exemption and issue a Certificate of 
Exemption to the producer. For exemption requests received on or before 
August 15, 2005, the Board will have 60 days to approve the exemption 
request; after August 15, 2005, the Board will have 30 days to approve 
the exemption request. If the application is disapproved, the Board will 
notify the applicant of the reason(s) for approval within the same 
timeframe.
    (e) The producer shall provide a copy of the Certificate of 
Exemption to each handler to whom the producer sells peanuts. The 
handler shall maintain records showing the exempt producer's name and 
address and the exemption number assigned by the Board.
    (f) The exemption will apply at the first reporting period following 
the

[[Page 191]]

issuance of the Certificate of Exemption.
    (g) Agricultural commodities produced and marketed under an organic 
system plan, as described in 7 CFR 205.201, but not sold, labeled, or 
represented as organic, shall not disqualify a producer from exemption 
under this section, except that producers who produce both organic and 
non-organic agricultural commodities as a result of split operations 
shall not qualify for exemption. Reasons for conventional sales include 
lack of demand for organic products, isolated use of antibiotics for 
humane purposes, chemical or pesticide use as the result of State or 
emergency spray programs, and crops from a buffer area as described in 7 
CFR part 205, provided all other criteria are met.

[70 FR 2757, Jan. 14, 2005]

                       Reports, Books, and Records



Sec. 1216.60  Reports.

    (a) Each producer and first handler subject to this part shall be 
required to report to the employees of the Board, at such times and in 
such manner as it may prescribe, such information as may be necessary 
for the Board to perform its duties. Such reports shall include, but 
shall not be limited to the following:
    (1) Number of pounds of peanuts produced or handled;
    (2) Price paid to producers (entry in value of segment section on 
the FSA 1007 form); and
    (3) Total assessments collected.
    (b) First Handlers shall submit monthly reports to the Board. These 
reports shall accompany the payment of the collected assessments and 
shall be due 60 days after the last day of the month in which the 
peanuts were marketed.



Sec. 1216.61  Books and records.

    Each first handler and producer subject to this subpart shall 
maintain and make available for inspection by the Secretary and 
employees and agents of the Board such books and records as are 
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 records shall include but are not 
limited to the following: copies of FSA 1007 forms, the names and 
address of producers, and the date the assessments were collected. Such 
records shall be retained for at least two years beyond the marketing 
year of their applicability.



Sec. 1216.62  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, importers, exporters, or 
handlers. 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.

             Certification of Peanut Producer Organizations



Sec. 1216.70  Certification.

    (a) Organizations receiving certification from the Secretary will be 
entitled to submit nominations for Board

[[Page 192]]

membership to the Secretary for appointment and to submit requests for 
funding to the Board.
    (b) For major peanut-producing states, state-legislated peanut 
promotion, research, and information organizations may request 
certification, provided the state-legislated promotion program submits a 
factual report that shall contain information deemed relevant and 
specified by the Secretary for the making of such determination pursuant 
to paragraph (e) of this section.
    (c) If a state-legislated peanut promotion, research and information 
organization in a major peanut-producing state does not elect to seek 
certification from the Secretary within a specified time period as 
determined by the Secretary, or does not meet eligibility requirements 
as specified by the Secretary, then any peanut producer organization 
whose primary purpose is to represent peanut producers within a primary 
peanut-producing state, or any other organization which has peanut 
producers as part of its membership, may request certification. 
Certification shall be based, in addition to other available 
information, upon a factual report submitted by the organization that 
shall contain information deemed relevant and specified by the Secretary 
for the making of such determination pursuant to paragraph (e) of this 
section.
    (d) For minor peanut-producing states, any organization that has 
peanut producers as part of its membership may request certification.
    (e) The information required for certification by the Secretary may 
include, but is not limited to, the following:
    (1) The geographic distribution within the state covered by the 
organization's active membership;
    (2) The nature and size of the organization's active membership in 
the state, proportion of the organization's active membership accounted 
for by producers, a map showing the peanut-producing counties in the 
state in which the organization has members, the volume of peanuts 
produced in each county, the number of peanut producers in each county, 
and the size of the organization's active peanut producer membership in 
each county;
    (3) The extent to which the peanut producer membership of such 
organization is represented in setting the organization's policies;
    (4) Evidence of stability and permanency of the organization;
    (5) Sources from which the organization's operating funds are 
derived;
    (6) Functions of the organization;
    (7) The organization's ability and willingness to further the aims 
and objectives of the Act and Order; and,
    (8) Demonstrated experience administering generic state promotion 
and research programs.
    (f) The Secretary's determination as to eligibility or certification 
of an organization shall be final.

                              Miscellaneous



Sec. 1216.80  Right of the Secretary.

    All fiscal matters, programs, plans, or projects, rules or 
regulations, reports, or other substantive actions proposed and prepared 
by the Board shall be submitted to the Secretary for approval.



Sec. 1216.81  Implementation of the Order.

    The Order shall not become effective unless:
    (a) The Secretary determines that the Order is consistent with and 
will effectuate the purposes of the Act; and
    (b) The Order is approved by a simple majority of the peanut 
producers as defined in Sec. 1216.21 voting in a referendum who, during 
a representative period determined by the Secretary, have been engaged 
in the production of peanuts.



Sec. 1216.82  Suspension and termination.

    (a) The Secretary shall suspend or terminate this subpart or a 
provision thereof if the Secretary finds that this subpart or a 
provision thereof obstructs or does not tend to effectuate the purposes 
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) Every five years, the Secretary shall hold a referendum to 
determine whether peanut producers favor the

[[Page 193]]

continuation of the Order. The Secretary will also conduct a referendum 
if 10 percent or more of all eligible peanut producers request the 
Secretary to hold a referendum. In addition, the Secretary may hold a 
referendum at any time.
    (c) The Secretary shall suspend or terminate this subpart at the end 
of the marketing year whenever the Secretary determines that its 
suspension or termination is approved or favored by a simple majority of 
the producers voting in a referendum who, during a representative period 
determined by the Secretary, have been engaged in the production of 
peanuts.
    (d) If, as a result of the referendum conducted under paragraph (b) 
of this section, the Secretary determines that this subpart is not 
approved, the Secretary shall:
    (1) Not later than 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. 1216.83  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 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 the peanut producer organizations, certified 
pursuant to Sec. 1216.70, in the interest of continuing peanut 
promotion, research, and information programs.



Sec. 1216.84  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; or
    (b) Release or extinguish any violation of this subpart or any 
regulation issued thereunder; or
    (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. 1216.85  Personal liability.

    No member or alternate member 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 alternate, 
except for acts of dishonesty or willful misconduct.



Sec. 1216.86  Separability.

    If any provision of this subpart is declared invalid or the 
applicability

[[Page 194]]

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. 1216.87  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. 1216.88  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. 1216.82 shall apply to determine disposition of all such 
property.



Subpart B_Procedure for the Conduct of Referenda in Connection With the 
            Peanut Promotion, Research, and Information Order



Sec. 1216.100  General.

    Referenda to determine whether eligible peanut producers favor the 
issuance, amendment, suspension, or termination of a Peanut Promotion, 
Research, and Information Order shall be conducted in accordance with 
this subpart.



Sec. 1216.101  Definitions.

    The following definitions apply to this subpart:
    (a) Administrator means the Administrator of the Agricultural 
Marketing Service, with power to redelegate, or any officer or employee 
of the Department to whom authority has been delegated or may hereafter 
be delegated to act in the Administrator's stead.
    (b) Order means the Peanut Promotion, Research, and Information 
Order.
    (c) Referendum agent or agent means the individual or individuals 
designated by the Secretary to conduct the referendum.
    (d) Representative period means the period designated by the 
Secretary.
    (e) Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity. For 
the purpose of this definition, the term ``partnership'' includes, but 
is not limited to:
    (1) A husband and a wife who have title to, or leasehold interest 
in, a peanut farm as tenants in common, joint tenants, tenants by the 
entirety, or, under community property laws, as community property; and
    (2) So-called ``joint ventures'' wherein one or more parties to an 
agreement, informal or otherwise, contributed land and others 
contributed capital, labor, management, or other services, or any 
variation of such contributions by two or more parties.
    (f) Eligible producer means any person who is engaged in the 
production and sale of peanuts in the United States and who:
    (1) Owns, or shares the ownership and risk of loss of, the crop. 
This does not include quota holders who do not share in the risk of loss 
of the crop;
    (2) Rents peanut production facilities and equipment resulting in 
the ownership of all or a portion of the peanuts produced;
    (3) Owns peanut production facilities and equipment but does not 
manage them and, as compensation, obtains the ownership of a portion of 
the peanuts produced; or
    (4) Is a party in a landlord-tenant relationship or a divided 
ownership arrangement involving totally independent entities cooperating 
only to produce peanuts who share the risk of loss and receive a share 
of the peanuts produced. No other acquisition of legal

[[Page 195]]

title to peanuts shall be deemed to result in persons becoming eligible 
producers.



Sec. 1216.102  Voting.

    (a) Each person who is an eligible producer, as defined in this 
subpart, at the time of the referendum and during the representative 
period, shall be entitled to cast only one ballot in the referendum. 
However, each producer in a landlord-tenant relationship or a divided 
ownership arrangement involving totally independent entities cooperating 
only to produce peanuts, in which more than one of the parties is a 
producer, shall be entitled to cast one ballot in the referendum 
covering only such producer's share of the ownership.
    (b) Proxy voting is not authorized, but an officer or employee of an 
eligible corporate producer, or an administrator, executor, or trustee 
or an eligible producing entity may cast a ballot on behalf of such 
producer. Any individual so voting in a referendum shall certify that 
such individual is an officer or employee of the eligible producer, or 
an administrator, executive, or trustee of an eligible producing entity 
and that such individual has the authority to take such action. Upon 
request of the referendum agent, the individual shall submit adequate 
evidence of such authority.
    (c) All ballots are to be cast by mail or by facsimile, as 
instructed by the Secretary.



Sec. 1216.103  Instructions.

    The referendum agent shall conduct the referendum, in the manner 
provided in this subpart, under the supervision of the Administrator. 
The Administrator may prescribe additional instructions, not 
inconsistent with the provisions hereof, to govern the procedure to be 
followed by the referendum agent. Such agent shall:
    (a) Determine the period during which ballots may be cast.
    (b) Provide ballots and related material to be used in the 
referendum. The ballot shall provide for recording essential 
information, including that needed for ascertaining whether the person 
voting, or on whose behalf the vote is cast, is an eligible voter.
    (c) Give reasonable public notice of the referendum:
    (1) By utilizing available media or public information sources, 
without incurring advertising expense, to publicize the dates, places, 
method of voting, eligibility requirements, and other pertinent 
information. Such sources of publicity may include, but are not limited 
to, print and radio; and
    (2) By such other means as the agent may deem advisable.
    (d) Mail to eligible producers whose names and addresses are known 
to the referendum agent, the instructions on voting, a ballot, and a 
summary of the terms and conditions of the Peanut Promotion, Research, 
and Information Order. No person who claims to be eligible to vote shall 
be refused a ballot.
    (e) At the end of the voting period, collect, open, number, and 
review the ballots and tabulate the results in the presence of an agent 
of a third party authorized to monitor the referendum process.
    (f) Prepare a report on the referendum.
    (g) Announce the results to the public.



Sec. 1216.104  Subagents.

    The referendum agent may appoint any individual or individuals 
necessary or desirable to assist the agent in performing such agent's 
functions under this subpart. Each individual so appointed may be 
authorized by the agent to perform any or all of the functions which, in 
the absence of such appointment, shall be performed by the agent.



Sec. 1216.105  Ballots.

    The referendum agent and subagents shall accept all ballots cast. 
However, if an agent or subagent deems that a ballot should be 
challenged for any reason, the agent or subagent shall endorse above 
their signature, on the ballot, a statement to the effect that such 
ballot was challenged, by whom challenged, the reasons therefor, the 
results of any investigations made with respect thereto, and the 
disposition thereof. Ballots invalid under this subpart shall not be 
counted.

[[Page 196]]



Sec. 1216.106  Referendum report.

    Except as otherwise directed, the referendum agent shall prepare and 
submit to the Administrator a report on results of the referendum, the 
manner in which it was conducted, the extent and kind of public notice 
given, and other information pertinent to analysis of the referendum and 
its results.



Sec. 1216.107  Confidential information.

    The ballots and other information or reports that reveal, or tend to 
reveal, the vote of any person covered under the Act and the voting list 
shall be held confidential and shall not be disclosed.



PART 1217_SOFTWOOD LUMBER RESEARCH, PROMOTION, CONSUMER EDUCATION AND 
INDUSTRY INFORMATION ORDER--Table of Contents



 Subpart A_Softwood Lumber Research, Promotion, Consumer Education and 
                       Industry Information Order

                               Definitions

Sec.
1217.1 Act.
1217.2 Blue Ribbon Commission or BRC.
1217.3 Board or Softwood Lumber Board.
1217.4 Board foot.
1217.5 Conflict of interest.
1217.6 Customs or CBP.
1217.7 Department or USDA.
1217.8 Domestic manufacturer.
1217.9 Export.
1217.10 Fiscal period or year.
1217.11 Importer.
1217.12 Information.
1217.13 Manufacture.
1217.14 Manufacturer for the U.S. market.
1217.15 Marketing.
1217.16 Nominal size.
1217.17 Order.
1217.18 Part and subpart.
1217.19 Person.
1217.20 Planing.
1217.21 Programs, plans and projects.
1217.22 Promotion.
1217.23 Research.
1217.24 Secretary.
1217.25 Softwood.
1217.26 Softwood lumber.
1217.27 State.
1217.28 Suspend.
1217.29 Terminate.
1217.30 United States.

                          Softwood Lumber Board

1217.40 Establishment and membership.
1217.41 Nominations and appointments.
1217.42 Term of office.
1217.43 Removal and vacancies.
1217.44 Procedure.
1217.45 Reimbursement and attendance.
1217.46 Powers and duties.
1217.47 Prohibited activities.

                        Expenses and Assessments

1217.50 Budget and expenses.
1217.51 Financial statements.
1217.52 Assessments.
1217.53 Exemption from assessment.

                   Promotion, Research and Information

1217.60 Programs, plans and projects.
1217.61 Independent evaluation.
1217.62 Patents, copyrights, inventions, product formulations, and 
          publications.

                       Reports, Books, and Records

1217.70 Reports.
1217.71 Books and records.
1217.72 Confidential treatment.

                              Miscellaneous

1217.80 Right of the Secretary.
1217.81 Referenda.
1217.82 Suspension or termination.
1217.83 Proceedings after termination.
1217.84 Effect of termination or amendment.
1217.85 Personal liability.
1217.86 Separability.
1217.87 Amendments.
1217.88 OMB control numbers.

                     Subpart B_Referendum Procedures

1217.100 General.
1217.101 Definitions.
1217.102 Voting.
1217.103 Instructions.
1217.104 Subagents.
1217.105 Ballots.
1217.106 Referendum report.
1217.107 Confidential information.
1217.108 OMB Control number.

    Authority: 7 U.S.C. 7411-7425; 7 U.S.C. 7401.

    Source: 76 FR 22755, Apr. 22, 2011, unless otherwise noted.



 Subpart A_Softwood Lumber Research, Promotion, Consumer Education, and 
                       Industry Information Order

    Source: 76 FR 46193, Aug. 2, 2011, unless otherwise noted.

[[Page 197]]

                               Definitions



Sec. 1217.1  Act.

    Act means the Commodity Promotion, Research, and Information Act of 
1996 (7 U.S.C. 7411-7425), and any amendments thereto.



Sec. 1217.2  Blue Ribbon Commission or BRC.

    Blue Ribbon Commission or BRC means the 21-member committee 
representing businesses that manufacture softwood lumber in the United 
States or import softwood lumber to the United States formed to pursue 
an industry research, promotion, and information program.



Sec. 1217.3  Board or Softwood Lumber Board.

    Board or Softwood Lumber Board means the administrative body 
established pursuant to Sec. 1217.40, or such other name as recommended 
by the Board and approved by the Department.



Sec. 1217.4  Board foot.

    Board foot or BF means a unit of measurement of softwood lumber 
represented by a board 12-inches long, 12-inches wide, and 1-inch thick 
or its cubic equivalent. A board foot calculation for softwood lumber 1 
inch or more in thickness is based on its nominal thickness and width 
and the actual length. Softwood lumber with a nominal thickness of less 
than 1 inch is calculated as 1 inch.



Sec. 1217.5  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.



Sec. 1217.6  Customs or CBP.

    Customs or CBP means Customs and Border Protection, an agency of the 
United States Department of Homeland Security.



Sec. 1217.7  Department or USDA.

    Department or USDA means the U.S. 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. 1217.8  Domestic manufacturer.

    Domestic manufacturer means any person who is a first handler and is 
engaged in the manufacturing, sale and shipment of softwood lumber in 
the United States during a fiscal period and who owns, or shares in the 
ownership and risk of loss of manufacturing of softwood lumber or a 
person who is engaged in the business of manufacturing, or causes to be 
manufactured, sold and shipped such softwood lumber in the United States 
beyond personal use. This term does not include any person who re-
manufactures softwood lumber that has already been subject to assessment 
under this Order.



Sec. 1217.9  Export.

    Export means to manufacture and ship softwood lumber from within the 
United States to locations outside of the United States.



Sec. 1217.10  Fiscal period or year.

    Fiscal period or year means a calendar year from January 1 through 
December 31, or such other period as recommended by the Board and 
approved by the Secretary.



Sec. 1217.11  Importer.

    Importer means any person who imports softwood lumber from outside 
the United States for sale in the United States as a principal or as an 
agent, broker, or consignee of any person who manufactures softwood 
lumber outside the United States for sale in the United States, and who 
is listed in the import records as the importer of record for such 
softwood lumber.



Sec. 1217.12  Information.

    Information means activities or programs designed to disseminate the 
results of research, new and existing marketing programs, new and 
existing marketing strategies, new and existing uses and applications, 
and to enhance the image of softwood lumber and the forests from which 
it comes. These include:

[[Page 198]]

    (a) Consumer education, which means any action taken to provide 
information to, and broaden the understanding of, the general public 
regarding softwood lumber; and
    (b) Industry information, which means information and programs that 
would enhance the image of the softwood lumber industry.



Sec. 1217.13  Manufacture.

    Manufacture means the process of transforming softwood logs into 
softwood lumber.



Sec. 1217.14  Manufacturer for the U.S. market.

    Manufacturer for the U.S. market means domestic manufacturers and 
importers of softwood lumber as defined in this Order.



Sec. 1217.15  Marketing.

    Marketing means the sale or other disposition of softwood lumber in 
interstate, foreign, or intrastate commerce.



Sec. 1217.16  Nominal size.

    Nominal size means the size by which softwood lumber is known and 
sold in the marketplace that differs from actual size and is based on 
the thickness and width of a board when it is first cut from a log, or 
rough cut, prior to drying and planing.



Sec. 1217.17  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. 1217.18  Part and subpart.

    Part means the Softwood Lumber Research, Promotion, Consumer 
Education, and Industry 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. 1217.19  Person.

    Person means any individual, group of individuals, partnership, 
company, corporation, association, affiliate, cooperative, or any other 
legal entity.



Sec. 1217.20  Planing.

    Planing means the act of smoothing the surface of a board to make 
the wood a uniform size.



Sec. 1217.21  Programs, plans, and projects.

    Programs, plans and projects mean those research, promotion and 
information programs, plans, or projects established pursuant to this 
Order.



Sec. 1217.22  Promotion.

    Promotion means any action taken, including paid advertising, public 
relations and other communications, and promoting the results of 
research, that presents a favorable image of softwood lumber to the 
public and to any and all consumers and those who influence consumption 
of softwood lumber with the intent of improving the perception, markets 
and competitive position of softwood lumber and stimulating sales of 
softwood lumber.



Sec. 1217.23  Research.

    Research means any activity that advances the position of softwood 
lumber in the marketplace that includes any type of test, study, or 
analysis designed to advance the image, desirability, use, 
marketability, sales, product development, or quality of softwood 
lumber; new applications; improving softwood lumber's position in 
building and fire codes; softwood lumber product testing and safety; and 
evaluating the effectiveness of market development and promotion efforts 
including life cycle studies, forestry, sustainable forest management, 
environmental preferrability, competitiveness, efficiency, pest and 
disease control, water quality and other management aspects of forestry 
and the forests from which softwood lumber originates.



Sec. 1217.24  Secretary.

    Secretary means the Secretary of Agriculture of the United States, 
or any other officer or employee of the Department to whom authority has 
been delegated, or to whom authority may hereafter be delegated, to act 
in the Secretary's stead.

[[Page 199]]



Sec. 1217.25  Softwood.

    Softwood means one of the botanical groups of trees that have 
needle-like or scale-like leaves, or conifers.



Sec. 1217.26  Softwood lumber.

    Softwood lumber means and includes softwood lumber and products 
manufactured from softwood as described in section 804(a) of Title VIII 
of the Tariff Act of 1930, as amended (19 U.S.C. 1202-1683g), and as 
assessed under Sec. 1217.52.



Sec. 1217.27  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. 1217.28  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. 1217.29  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 date certain specified in the rule.



Sec. 1217.30  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.

                          Softwood Lumber Board



Sec. 1217.40  Establishment and membership.

    (a) Establishment of the Board. There is hereby established a 
Softwood Lumber Board to administer the terms and provisions of this 
Order and promote the use of softwood lumber. The Board shall be 
composed of manufacturers for the U.S. market who manufacture and 
domestically ship or import 15 million board feet or more of softwood 
lumber in the United States during a fiscal period. Seats on the Board 
shall be apportioned based on the volume of softwood lumber manufactured 
and shipped within the United States by domestic manufacturers and the 
volume of softwood lumber imported into the United States.
    (b) The Board shall be composed of 18 or 19 members, depending upon 
whether an additional importer member is appointed to the Board, 
pursuant to paragraph (b)(2)(iii) of this section. The Board shall be 
established as follows:
    (1) Domestic manufacturers. Twelve members shall be domestic 
manufacturers from the following three regions:
    (i) Six members shall be from the U.S. South Region, which consists 
of the states of Alabama, Arkansas, Florida, Georgia, Louisiana, 
Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, and 
Texas;
    (ii) Five members shall be from the U.S. West Region, which consists 
of the states of Alaska, Arizona, California, Colorado, Hawaii, Idaho, 
Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, 
Washington, and Wyoming; and
    (iii) One member shall be from the Northeast and lake States Region, 
which consists of the states of Connecticut, Delaware, Illinois, 
Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, 
Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New 
York, Ohio, Pennsylvania, Rhode Island, Virginia, Vermont, West 
Virginia, Wisconsin, and all other parts of the United States not listed 
in paragraphs (b)(1)(i), (b)(1)(ii), or (b)(1)(iii) of this section.
    (2) Importers. Six members shall be importers who represent the 
following regions and import the majority of their softwood lumber from 
the respective region:
    (i) Four members shall import softwood lumber from the Canadian West 
Region, which consists of the provinces of British Columbia and Alberta; 
and
    (ii) Two members shall import softwood lumber from the Canadian East 
Region, which consists of the Canadian territories and all other 
Canadian provinces not listed in paragraph (b)(2)(i) of this section 
that import softwood lumber into the United States.

[[Page 200]]

    (iii) If the Secretary, at the request of the Board or on his or her 
own, determines that it would be consistent with the provisions of the 
Act, the Secretary may appoint an additional importer to the Board to 
represent a region not otherwise specified in paragraphs (b)(2)(i) and 
(ii) of this section. Nominees would be solicited as prescribed in Sec. 
1217.41(b), or in the case of the Secretary acting on his or her own 
will be handled by the Secretary, and all the names of eligible 
candidates would be submitted to the Secretary for consideration. Such 
nominees must certify that the majority of their softwood lumber is 
imported from such region. In addition, representation for the region 
not otherwise specified in paragraphs (b)(2)(i) and (ii) of this section 
would be subject to the Board review and reapportionment provided for in 
paragraph (c) of this section.
    (c) In each five-year period, but not more frequently than once in 
each three-year period, the Board shall:
    (1) Review, based on a three-year average, the geographical 
distribution of the volume of softwood lumber manufactured and shipped 
within the United States by domestic manufacturers and the volume of 
softwood lumber imported into the United States; and
    (2) If warranted, recommend to the Secretary the reapportionment of 
the Board membership to reflect changes in the geographical distribution 
of the volume of softwood lumber manufactured and shipped within the 
United States by domestic manufacturers and the volume of softwood 
lumber imported into the United States. The destination of volumes 
between regions also shall be considered. The number of Board members 
may also be changed. Any changes in Board composition shall be 
implemented by the Secretary through rulemaking.



Sec. 1217.41  Nominations and appointments.

    (a) Initial nominations will be submitted to the Secretary by the 
Blue Ribbon Commission. Before considering any nominations, the BRC 
shall publicize the nomination process, using trade press or other means 
it deems appropriate, and shall outreach to all known manufacturers for 
the U.S. market who domestically manufacture and/or import 15 million 
board feet or more of softwood lumber per fiscal year in order to 
generate nominees that reflect the different operations within the 
softwood lumber industry. The BRC may use regional caucuses, mail or 
other methods to elicit potential nominees. The BRC shall submit the 
nominations to the Secretary and recommend two nominees for each Board 
position specified in paragraphs (b)(1), (b)(2)(i) and (b)(2)(ii) of 
Sec. 1217.40. All nominees solicited pursuant to Sec. 
1217.40(b)(2)(iii) shall be submitted to the Secretary through the BRC. 
From the nominations submitted by the BRC, the Secretary shall select 
the members of the Board.
    (b) Subsequent nominations shall be conducted as follows:
    (1) The Board shall outreach to all segments of the softwood lumber 
industry. Softwood lumber domestic manufacturers and importers may 
submit nominations to the Board. Subsequent nominees must domestically 
manufacture and/or import 15 million board feet or more of softwood 
lumber per fiscal year;
    (2) Domestic manufacturers and importer nominees may provide the 
Board a short background statement outlining their qualifications to 
serve on the Board;
    (3) Nominees that are both a domestic manufacturer and an importer 
may seek nomination to the Board and vote in the nomination process as 
either a domestic manufacturer or an importer, but not both: Provided, 
That, such nominees who domestically manufacture the majority of their 
softwood lumber may seek nomination and vote as a domestic manufacturer, 
and such nominees who import the majority of their softwood lumber may 
seek nomination and vote as an importer. Such nominees must domestically 
manufacture and import 15 million board feet or more of softwood lumber 
per fiscal year;
    (4) Domestic manufacturers who manufacture softwood lumber in more 
than one region may seek nomination only in the region in which they 
manufacture the majority of their softwood lumber. The names of domestic 
manufacturer nominees shall be placed on a

[[Page 201]]

ballot by region. The ballots along with the background statements shall 
be mailed to domestic manufacturers in each respective region for a 
vote. Domestic manufacturers who manufacture softwood lumber in more 
than one region may only vote in the region in which they manufacture 
the majority of their softwood lumber. The votes shall be tabulated for 
each region with the nominee receiving the highest number of votes at 
the top of the list in descending order by vote. The top two candidates 
for each position shall be submitted to the Secretary;
    (5) Importer nominees shall certify that the majority of their 
softwood lumber is imported from the respective region for which they 
are seeking to represent on the Board and shall provide documentation to 
verify this if requested by the Board. The names of importer nominees 
shall be placed on a ballot by region. The ballots along with the 
background statements shall be mailed to importers in each respective 
region for a vote. Importers who import softwood lumber from more than 
one region may only vote in the region from which they import the 
majority of their softwood lumber. The votes shall be tabulated for each 
region with the nominee receiving the highest number of votes at the top 
of the list in descending order by vote. The top two candidates for each 
position shall be submitted to the Secretary.
    (6) The Board must submit nominations to the Secretary at least six 
months before the new Board term begins. From the nominations submitted 
by the Board, the Secretary shall select the members of the Board;
    (7) No two members shall be employed by a single corporation, 
company, partnership, or any other legal entity; and
    (8) The Board may recommend to the Secretary modifications to its 
nomination procedures as it deems appropriate. Any such modifications 
shall be implemented through rulemaking by the Secretary.



Sec. 1217.42  Term of office.

    (a) With the exception of the initial Board, each Board member will 
serve a three-year term or until the Secretary selects his or her 
successor. Each term of office shall begin on January 1 and end on 
December 31. No member may serve more than two consecutive terms, 
excluding any term of office less than three years.
    (b) For the initial board, the terms of Board members shall be 
staggered for two, three, and four years. Determination of which of the 
initial members shall serve a term of two, three, or four years shall be 
recommended to the Secretary by the Blue Ribbon Commission.



Sec. 1217.43  Removal and vacancies.

    (a) In the event that any member of the Board ceases to work for or 
be affiliated with a domestic manufacturer or importer or ceases to do 
business in the region he or she represents, such position shall become 
vacant.
    (b) The Board may recommend to the Secretary that a member be 
removed from office if the member consistently refuses to perform his or 
her duties or engages in dishonest acts or willful misconduct. The 
Secretary may remove the member if he or she finds that the Board's 
recommendation shows adequate cause. 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) If a position becomes vacant, nominations to fill the vacancy 
will be conducted using the nominations process set forth in this Order. 
A vacancy will not be required to be filled if the unexpired term is 
less than six months.



Sec. 1217.44  Procedure.

    (a) A majority of the Board members (10) will constitute a quorum so 
long as at least three of the members present are importer members and 
six of the members present are domestic manufacturers. If participation 
by telephone or other means is permitted, members participating by such 
means shall count as present in determining quorum or other voting 
requirements set forth in this section.

[[Page 202]]

    (b) All votes at meetings of the Board and executive committee will 
be cast in person or by electronic voting or other means as the Board 
and Secretary deem appropriate to allow members participating by 
telephone or other electronic means to cast votes. Voting by proxy will 
not be allowed.
    (c) Each member of the Board will be entitled to one vote on any 
matter put to the Board and the motion will carry if supported by 10 
Board members, except for recommendations to change the assessment rate 
or to adopt a budget, both of which require affirmation by at least two-
thirds (12 members for an 18 member Board and 13 members for a 19 member 
Board) of the Board members. If a Board has vacant positions, 
recommendations to change the assessment rate or to adopt a budget must 
pass by an affirmative vote of at least two-thirds of the Board members, 
exclusive of the vacant seats.
    (d) The Board must give members and the Secretary timely notice of 
all Board, executive and committee meetings.
    (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) Ten (10) Board members vote in favor of the action (unless two-
thirds vote of the Board members is required under the Order); and
    (3) All votes are promptly confirmed in writing and recorded in the 
Board minutes.



Sec. 1217.45  Reimbursement and attendance.

    Board members will serve without compensation. Board members will be 
reimbursed for reasonable travel expenses, as approved by the Board, 
which they incur when performing Board business.



Sec. 1217.46  Powers and duties.

    The Board shall have the following powers and duties:
    (a) To administer this 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, regulations 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 its members a 
chairperson and, such other officers as may be necessary;
    (d) To create an executive committee of five members of the Board 
comprised of the chairperson and four other members elected by the 
Board. The duties of the executive committee shall be specified in 
bylaws that are recommended by the Board and approved by the Secretary;
    (e) To create other committees or subcommittees, which may include 
individuals other than Board members, as the Board deems necessary from 
its membership and other representatives it deems appropriate;
    (f) To employ or contract with such persons, other than the members, 
as it may deem necessary to assist the Board in carrying out its duties, 
and to determine the compensation and define the duties of each;
    (g) To notify manufacturers for the U.S. market of all Board 
meetings through press releases or other means and to give the Secretary 
the same notice of Board meetings, executive committee, and subcommittee 
meetings that is given to members in order that the Secretary's 
representative(s) may attend such meetings, and to keep and report 
minutes of each meeting to the Secretary;
    (h) To develop and administer programs, plans, and projects and 
enter into contracts or agreements, which must be approved by the 
Secretary before becoming effective, for promotion, research, and 
information, including consumer and industry information, research and 
advertising designed to strengthen the softwood lumber industry's 
position in the marketplace and

[[Page 203]]

to maintain, develop, and expand markets for softwood lumber. The 
payment of costs for such activities shall be with funds collected 
pursuant to the Order, including funds collected pursuant to Sec. 
1217.50(f). Each 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 that specifies 
the cost to be incurred to carry out the activity;
    (2) The contractor or agreeing party shall keep accurate records of 
all of 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 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.
    (i) To prepare and submit to the Secretary for approval 60 calendar 
days in advance of the beginning of a fiscal period, rates of assessment 
and a budget of the anticipated expenses to be incurred in the 
administration of the Order, including the probable cost of each 
promotion, research, and information activity proposed to be developed 
or carried out by the Board;
    (j) To borrow funds necessary for startup expenses of the Order;
    (k) To invest assessments collected and other funds received 
pursuant to the Order and use earnings from invested assessments to pay 
for activities carried out pursuant to the Order;
    (l) To recommend changes to the assessment rates as provided in this 
part;
    (m) To cause its books to be audited by a 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 each audit directly 
to the Secretary;
    (n) To periodically prepare and make public and to make available to 
manufacturers for the U.S. market reports of its activities and, at 
least once each fiscal period, to make public an accounting of funds 
received and expended;
    (o) To maintain minutes, books, and records and prepare and submit 
to the Secretary such reports from time to time as may be required for 
appropriate accounting with respect to the receipt and disbursement of 
funds entrusted to it, and to submit to the Secretary such information 
pertaining to this part or subpart as he or she may request;
    (p) To act as an intermediary between the Secretary and any 
manufacturer for the U.S. market;
    (q) To receive, investigate and report to the Secretary complaints 
of violations of the Order; and
    (r) To develop and recommend such rules and regulations to the 
Secretary for approval as may be necessary for the development and 
execution of plans or activities to effectuate the purposes of the Act.



Sec. 1217.47  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 
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. Softwood 
lumber of all geographic origins shall be treated equally.

                        Expenses and Assessments



Sec. 1217.50  Budget and expenses.

    (a) At least 60 calendar days prior to the beginning of each fiscal 
period, and as may be necessary thereafter, the Board shall prepare and 
submit to the Department a budget for the fiscal period covering its 
anticipated expenses and disbursements in administering

[[Page 204]]

this part. The budget for research, promotion or information may not be 
implemented prior to approval by the Secretary. Each such 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 for at 
least one preceding fiscal 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 at least one preceding fiscal 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 Order.
    (c) Subject to this section, any amendment or addition to an 
approved budget must be approved by the Department, 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 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 subpart. Such expenses shall be paid from 
funds received by the Board.
    (e) With approval of the Department, the Board may borrow money for 
the payment of startup expenses subject to the same fiscal, budget, and 
audit controls as other funds of the Board. Any funds borrowed shall be 
expended only for startup costs and capital outlays and are limited to 
the first year of operation by the Board.
    (f) The Board may accept voluntary contributions, and is encouraged 
to seek other appropriate funding sources to carry out activities 
authorized by the Order. Such contributions shall be free from any 
encumbrances by the donor and the Board shall retain complete control of 
their use. The Board may receive funds from outside sources (i.e., 
Federal or State grants, Foreign Agricultural Service funds), with 
approval of the Secretary, for specific authorized projects.
    (g) 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.
    (h) For fiscal years beginning two years after the date the of the 
first Board meeting, the Board may not expend for administration, 
maintenance, and the functioning of the Board an amount that is greater 
than 8 percent of the assessment and other income received by and 
available to the Board for the fiscal year. For purposes of this 
limitation, reimbursements to the Secretary shall not be considered 
administrative costs.
    (i) 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 subpart.
    (j) 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 part 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;
    (4) Obligations fully guaranteed as to principal interest by the 
United States; or
    (5) Other investments as authorized by the Secretary.



Sec. 1217.51  Financial statements.

    (a) The Board shall prepare and submit financial statements to the 
Department on a quarterly basis, or at any other time as requested by 
the Secretary. Each such financial statement shall include, but not be 
limited to, a balance sheet, income statement,

[[Page 205]]

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 Department 
within 30 calendar days after the end of the time period to which it 
applies.
    (c) The Board shall submit to the Department an annual financial 
statement within 90 calendar days after the end of the fiscal year to 
which it applies.



Sec. 1217.52  Assessments.

    (a) The Board's programs and expenses shall be paid by assessments 
on manufacturers for the U.S. market, other income of the Board, and 
other funds available to the Board.
    (b) Subject to the exemptions specified in Sec. 1217.53, each 
manufacturer for the U.S. market shall pay an assessment to the Board at 
the rate of $0.35 per thousand board feet of softwood lumber except that 
no person shall pay an assessment on the first 15 million board feet of 
softwood lumber otherwise subject to assessment in a fiscal year. 
Domestic manufacturers shall pay assessments based on the volume of 
softwood lumber shipped within the United States and importers shall pay 
assessments based on the volume of softwood lumber imported to the 
United States.
    (c) At least 24 months after the Order becomes effective and 
periodically thereafter, the Board shall review and may recommend to the 
Secretary, upon an affirmative vote by at least two-thirds of the Board 
members, a change in the assessment rate. In no event may the rate be 
less than $0.35 per thousand board feet nor more than $0.50 per thousand 
board feet. A change in the assessment rate is subject to rulemaking by 
the Secretary.
    (d) Domestic manufacturers shall remit to the Board the amount due 
no later than the 30th calendar day of the month following the end of 
the quarter in which the softwood lumber was shipped.
    (e) Domestic product that cannot be categorized in the Harmomized 
Tariff Schedule of the United States (HTSUS) numbers listed in paragraph 
(h) of this section if it were an import is not covered under this 
Order.
    (f) Softwood lumber originating in the United States that is 
exported to another country and shipped back to the United States is 
covered under this Order, provided that it can be categorized in the 
HTSUS numbers listed in paragraph (h) of this section.
    (g) Each importer of softwood lumber shall pay through Customs to 
the Board an assessment on softwood lumber imported into the United 
States as described in section 804(a) of Title VIII of the Tariff Act of 
1930, as amended (19 U.S.C. 1202-1683g), provided that it can be 
categorized in the HTSUS numbers listed in paragraph (h) of this 
section.
    (h) The HTSUS categories and assessment rates on imported softwood 
lumber are listed in the table below. A factor shall be used to 
determine the equivalent volume of softwood lumber in thousand board 
feet. The factor used to convert one cubic meter to one thousand board 
feet is 0.423776001. Accordingly, the assessment rate per cubic meter is 
as follows.

------------------------------------------------------------------------
                                                          Assessment  $/
                     Softwood lumber                        cubic meter
------------------------------------------------------------------------
4407.10.01..............................................         $0.1483
4409.10.05..............................................          0.1483
4409.10.10..............................................          0.1483
4409.10.20..............................................          0.1483
4409.10.90..............................................          0.1483
4418.90.25..............................................          0.1483
------------------------------------------------------------------------

    (i) In the event that any HTSUS number subject to assessment is 
changed and such change is merely a replacement of a previous number and 
has no impact on the description of the softwood lumber involved, 
assessments will continue to be collected based on the new number.
    (j) If Customs does not collect an assessment from an importer, the 
importer is responsible for paying the assessment directly to the Board 
no later than the 30th calendar day of the month following the end of 
the quarter in which the softwood lumber was imported.
    (k) Articles brought into the United States temporarily and for 
which an exemption is claimed under subchapter XIII of chapter 98 of the 
HTSUS are not covered under this Order. If assessments are collected by 
Customs for these products, the importer may apply

[[Page 206]]

to the Board for a refund of assessments.
    (l) When a domestic manufacturer or importer fails to pay the 
assessment within 60 calendar days of the date it is due, the Board may 
impose a late payment charge and interest. The late payment charge and 
rate of interest shall be prescribed in regulations issued by the 
Secretary. All late assessments shall be subject to the specified late 
payment charge and interest. Persons failing to remit total assessments 
due in a timely manner may also be subject to actions under Federal debt 
collection procedures.
    (m) The Board may accept advance payment of assessments from any 
manufacturer for the U.S. market that will be credited toward any amount 
for which that person may become liable. The Board may not pay interest 
on any advance payment.
    (n) If the Board is not in place by the date the first assessments 
are to be collected, the Secretary shall receive assessments and shall 
pay such assessments and any interest earned to the Board when it is 
formed.



Sec. 1217.53  Exemption from assessment.

    (a) Manufacturers for the U.S. market who domestically ship and/or 
import less than 15 million board feet annually. (1) Domestic 
manufacturers who ship less than 15 million board feet of softwood 
lumber within the United States in a fiscal year are exempt from paying 
assessments. Such manufacturers must apply to the Board, on a form 
provided by the Board, for a certificate of exemption prior to the start 
of the fiscal year. This is an annual exemption and domestic 
manufacturers must reapply each year. Such manufacturers shall certify 
that they will ship less than 15 million board feet of softwood lumber 
during the fiscal year for which the exemption is claimed. Upon receipt 
of an application for exemption, the Board shall determine whether an 
exemption may be granted. The Board may request past shipment data to 
support the exemption request. The Board will then issue, if deemed 
appropriate, a certificate of exemption to the eligible domestic 
manufacturer. It is the responsibility of the domestic manufacturer to 
retain a copy of the certificate of exemption.
    (2) Importers who import into the United States less than 15 million 
board feet of softwood lumber in a fiscal year are exempt from paying 
assessments. Such importers must apply to the Board, on a form provided 
by the Board, for a certificate of exemption prior to the start of the 
fiscal year. This is an annual exemption and importers must reapply each 
year. Such importers shall certify that they will import less than 15 
million board feet of softwood lumber during the fiscal year for which 
the exemption is claimed. Upon receipt of an application for exemption, 
the Board shall determine whether an exemption is granted. The Board may 
request past import data to support the exemption request. The Board 
will then issue, if deemed appropriate, a certificate of exemption to 
the eligible importer. It is the responsibility of the importer to 
retain a copy of the certificate of exemption. The importer may be 
requested to submit a copy of the certificate to Customs. If Customs 
collects the assessment, the Board shall refund such importers their 
assessments no later than 60 calendar days after receipt of such 
assessments by the Board. No interest shall be paid on the assessments 
collected by Customs.
    (3) Domestic manufacturers who did not apply to the Board for an 
exemption and shipped less than 15 million board feet of softwood lumber 
within the United States during the fiscal year 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 domestic manufacturer 
accordingly.
    (4) Importers who did not apply to the Board for an exemption and 
imported less than 15 million board feet of softwood lumber during the 
fiscal year shall receive a refund from the Board for the applicable 
assessments within 30 calendar days after the end of the fiscal year.
    (5) If an entity is both a domestic manufacturer and an importer, 
the sum of such entity's domestic shipments and imports during a fiscal 
year

[[Page 207]]

shall count towards the 15 million board feet exemption.
    (6) Domestic manufacturers and importers who received an exemption 
certificate from the Board but domestically shipped or imported 15 
million board feet or more of softwood lumber during the fiscal year 
shall pay the Board the applicable assessments owed on the domestic 
shipments or imports over the 15 million board foot-exemption threshold 
within 30 calendar days after the end of the fiscal year and submit any 
necessary reports to the Board pursuant to Sec. 1217.70.
    (7) The Board may develop additional procedures to administer this 
exemption as appropriate. Such procedures shall be implemented through 
rulemaking by the Secretary.
    (b) Manufacturers for the U.S. market who domestically ship and/or 
import 15 million board feet or more annually. (1) Domestic 
manufacturers who domestically ship 15 million board feet or more per 
fiscal year shall not pay assessments on their first 15 million board 
feet of softwood lumber shipped during the applicable fiscal year.
    (2) Importers who import 15 million board feet or more per fiscal 
year shall be exempt from paying assessments on their first 15 million 
board feet of softwood lumber imported during the applicable fiscal 
year. Such importers shall receive a refund from the Board for the 
applicable assessments collected by Customs. The Board shall refund such 
importers their assessments no later than 60 calendar days after receipt 
by the Board.
    (c) Export. Shipments of softwood lumber by domestic manufacturers 
to locations outside of the United States are exempt from assessment. 
The Board shall establish procedures for approval by the Secretary for 
refunding assessments that may be paid on such shipments and establish 
any necessary safeguards as deemed appropriate. Safeguard procedures 
shall be implemented by the Secretary through rulemaking. The Board may 
also recommend to the Secretary that such shipments be assessed if it 
deems appropriate. Such action shall be implemented by the Secretary 
through rulemaking.
    (d) Organic. (1) Organic Act means section 2103 of the Organic Foods 
Production Act of 1990 (7 U.S.C. 6501-6522).
    (2) A domestic manufacturer who operates under an approved National 
Organic Program (NOP) (7 CFR part 205) system plan, only manufactures 
and ships softwood lumber that is 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 
domestic manufacturer 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 year as long as such 
manufacturer continues to be eligible for the exemption. The request 
shall include the following: The manufacturer'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 softwood lumber that is 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 
softwood lumber, on a form provided by the Board, at any time initially 
and annually thereafter on or before the beginning of the fiscal year as 
long as the importer continues to be eligible for the exemption. This 
documentation shall include the same information as required by domestic 
manufacturers in paragraph (d)(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.

[[Page 208]]

The Board will also issue the importer a 9-digit alphanumeric number 
valid for 1 year from the date of issue. This alphanumeric number should 
be entered by the importer to Customs at entry summary. Any line item 
entry of 100 percent organic softwood lumber bearing this alphanumeric 
number assigned by the Board will not be subject to assessments.
    (4) Importers who are exempt from assessment in paragraph (d)(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.

                  Promotion, Research, and Information



Sec. 1217.60  Programs, plans, and projects.

    (a) The Board shall develop and submit to the Secretary for approval 
programs, plans and projects authorized by this subpart. Such programs, 
plans and projects shall provide for promotion, research, education and 
other activities including consumer and industry information and 
advertising designed to:
    (1) Maintain, develop, expand and grow markets for softwood lumber;
    (2) Enhance and strengthen the image, reputation and public 
acceptance of softwood lumber and the forests from which it comes;
    (3) Develop new markets and marketing strategies for softwood 
lumber;
    (4) Expand the knowledge and understanding of the strength, safety 
and technical applications and encourage innovation in the use of 
softwood lumber;
    (5) Transfer and disseminate the knowledge and understanding of the 
strength, safety, environmental and sustainable benefits and technical 
applications of softwood lumber; and
    (6) Develop, expand and grow existing and new opportunities and 
applications for softwood lumber.
    (b) No program, plan, or project shall be implemented prior to its 
approval by the Secretary. Once a program, plan, or project is so 
approved, the Board shall take appropriate steps to implement it.
    (c) The Board must evaluate each program, plan and project 
authorized under this subpart to ensure that it contributes to an 
effective and coordinated program of research, promotion and 
information. The Board must submit the evaluations to the Secretary. If 
the Board finds that a program, plan or project does not contribute to 
an effective program of promotion, research, or information, then the 
Board shall terminate such plan or program.



Sec. 1217.61  Independent evaluation.

    At least once every five years, the Board shall authorize and fund 
from funds otherwise available to the Board, an independent evaluation 
of the effectiveness of the Order and the 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. 1217.62  Patents, copyrights, trademarks, inventions, product 
formulations, and publications.

    Any patents, copyrights, trademarks, inventions, product 
formulations, and publications 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, inventions, 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. 1217.83 shall apply to determine disposition of all 
such property.

[[Page 209]]

                       Reports, Books, and Records



Sec. 1217.70  Reports.

    (a) Each manufacturer for the U.S. market will be required to 
provide periodically to the Board such information as the Board, with 
the approval of the Secretary, may require. Such information may 
include, but not be limited to:
    (1) For domestic manufacturers:
    (i) The name, address and telephone number of the domestic 
manufacturer;
    (ii) The board feet of softwood lumber shipped within the United 
States;
    (iii) The board feet of softwood lumber for which assessments were 
paid; and
    (iv) The board feet of softwood lumber that was exported.
    (2) For importers:
    (i) The name, address and telephone number of the importer;
    (ii) The board feet of softwood lumber imported;
    (iii) The board feet of softwood lumber for which assessments were 
paid; and
    (iv) The country of export.
    (b) For domestic manufacturers, such information shall accompany the 
collected payment of assessments on a quarterly basis specified in Sec. 
1217.52. For importers who pay their assessments directly to the Board, 
such information shall accompany the payment of collected assessments 
within 30 calendar days after importation specified in Sec. 1217.52.



Sec. 1217.71  Books and records.

    Each manufacturer for the U.S. market, including those exempt under 
Sec. 1217.53, shall maintain any books and records necessary to carry 
out the provisions of this subpart and regulations issued thereunder, 
including such records as are necessary to verify any required reports. 
Domestic manufacturers who only export softwood lumber shall also retain 
such books and records. Such books and records must be made available 
during normal business hours for inspection by the Board's or 
Secretary's employees or agents. A manufacturer for the U.S. market must 
maintain the books and records for two years beyond the fiscal period to 
which they apply.



Sec. 1217.72  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 or other manufacturers for the U.S. market. 
Only those persons having a specific need for such information solely 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 at 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 part, together 
with a statement of the particular provisions of this part violated by 
such person.

                              Miscellaneous



Sec. 1217.80  Right of the Secretary.

    All fiscal matters, programs or projects, contracts, rules or 
regulations, reports, or other substantive actions proposed and prepared 
by the Board shall be submitted to the Secretary for approval.



Sec. 1217.81  Referenda.

    (a) Initial referendum. The Order shall not become effective unless 
the Order is approved by a majority of domestic manufacturers and 
importers voting in the referendum who also represent a

[[Page 210]]

majority of the volume of softwood lumber represented in the referendum 
who, during a representative period determined by the Secretary, have 
been engaged in the domestic manufacturing or importation of softwood 
lumber. A single entity who domestically manufactures and imports 
softwood lumber may cast one vote in the referendum.
    (b) Subsequent referenda. The Secretary shall conduct subsequent 
referenda:
    (1) For the purpose of ascertaining whether manufacturers for the 
U.S. market favor the amendment, continuation, suspension, or 
termination of the Order;
    (2) Five years after this Order becomes effective and every five 
years thereafter, to determine whether softwood lumber manufacturers for 
the U.S. market favor the continuation of the Order. The Order shall 
continue if it is favored by a majority of domestic manufacturers and 
importers voting in the referendum who also represent a majority of the 
volume of softwood lumber represented in the referendum who, during a 
representative period determined by the Secretary, have been engaged in 
the domestic manufacturing or importation of softwood lumber;
    (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. 1217.82  Suspension or termination.

    (a) The Secretary shall suspend or terminate this part or subpart or 
a provision thereof, if the Secretary finds that this part or subpart or 
a provision thereof obstructs or does not tend to effectuate the 
purposes 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 domestic 
manufacturers and importers voting in the referendum who also represent 
a majority of the volume represented in the referendum who, during a 
representative period determined by the Secretary, have been engaged in 
the domestic manufacturing or importation of softwood lumber.
    (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) calendar days after 
making the determination, suspend or terminate, as the case may be, the 
collection of assessments under this subpart.
    (2) As soon as practical, suspend or terminate, as the case may be, 
activities under this subpart in an orderly manner.



Sec. 1217.83  Proceedings after termination.

    (a) Upon termination of this subpart, the Board shall recommend to 
the Secretary up to nine of its members, representing all regions 
specified in Sec. 1217.40(b), three of whom shall be importers and six 
of whom shall be domestic manufacturers, to serve as trustees for the 
purpose of liquidating the Board's affairs. 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 existing claim 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 trustees, to such person or person as the Secretary directs; 
and
    (4) Upon request of the Secretary execute such assignments or other 
instruments necessary or appropriate to vest in such persons title and 
right to all of the funds, property, and claims vested

[[Page 211]]

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 softwood lumber industry 
organizations in the United States whose mission is generic softwood 
lumber promotion, research, and information programs.



Sec. 1217.84  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; or
    (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. 1217.85  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. 1217.86  Separability.

    If any provision of this subpart is declared invalid or the 
applicability of it 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. 1217.87  Amendments.

    Amendments to this subpart may be proposed from time to time by the 
Board or any interested person affected by the provisions of the Act, 
including the Secretary.



Sec. 1217.88  OMB Control numbers.

    The control numbers 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, are OMB control 
number 0505-0001 (Board nominee background statement) and OMB control 
number 0581-0264.

[76 FR 46193, Aug. 2, 2011, as amended at 76 FR 53816, Aug. 30, 2011]



                     Subpart B_Referendum Procedures



Sec. 1217.100  General.

    Referenda to determine whether eligible domestic manufacturers and 
importers favor the issuance, continuance, amendment, suspension, or 
termination of the Softwood Lumber Research, Promotion, Consumer 
Education, and Industry Information Order shall be conducted in 
accordance with this subpart.



Sec. 1217.101  Definitions.

    For the purposes of this subpart:
    (a) Administrator means the Administrator of the Agricultural 
Marketing Service, with power to delegate, or any officer or employee of 
the U.S. Department of Agriculture to whom authority has been delegated 
or may hereafter be delegated to act in the Administrator's stead.
    (b) Customs or CPB means Customs and Border Protection, an agency of 
the United States Department of Homeland Security.
    (c) Department or USDA means the U.S. 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.

[[Page 212]]

    (d) Eligible domestic manufacturer means any person who manufactured 
and shipped 15 million board feet or more of softwood lumber in the 
United States during the representative period.
    (e) Eligible importer means any person who imported 15 million board 
feet or more of softwood lumber into the United States during the 
representative period as a principal or as an agent, broker, or 
consignee of any person who manufactured softwood lumber outside of the 
United States for sale in the United States, and who is listed as the 
importer of record for such softwood lumber. Importation occurs when 
softwood lumber manufactured outside of the United States is released 
from custody by Customs and introduced into the stream of commerce in 
the United States. Included are persons who hold title to foreign-
manufactured softwood lumber immediately upon release by Customs, as 
well as any persons who act on behalf of others, as agents or brokers, 
to secure the release of softwood lumber from Customs when such softwood 
lumber is entered or withdrawn for use in the United States.
    (f) Manufacture means the process of transforming softwood logs into 
softwood lumber.
    (g) Order means the Softwood Lumber Research, Promotion, Consumer 
Education and Industry Information Order.
    (h) Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity. For 
the purpose of this definition, the term ``partnership'' includes, but 
is not limited to:
    (1) A husband and a wife who have title to, or leasehold interest 
in, a softwood lumber manufacturing entity as tenants in common, joint 
tenants, tenants by the entirety, or, under community property laws, as 
community property; and
    (2) So called ``joint ventures'' wherein one or more parties to an 
agreement, informal or otherwise, contributed land, facilities, capital, 
labor, management, equipment, or other services, or any variation of 
such contributions by two or more parties, so that it results in the 
domestic manufacturing or importation of softwood lumber and the 
authority to transfer title to the softwood lumber so manufactured or 
imported.
    (i) Referendum agent or agent means the individual or individuals 
designated by the Secretary to conduct the referendum.
    (j) Representative period means the period designated by the 
Department.
    (k) Softwood means one of the botanical groups of trees that have 
needle-like or scale-like leaves, the conifers.
    (l) Softwood lumber means and includes softwood lumber and products 
manufactured from softwood as described in section 804(a) within Title 
VIII (Softwood Lumber Act of 2008 or SLA of 2008) of the Tariff Act of 
1930 (19 U.S.C. 1202-1683g), as amended by section 3301 of the Food, 
Conservation and Energy Act of 2008 (Pub. L. 110-246, enacted June 18, 
2008) and categorized in the following Harmonized Tariff Schedule of the 
United States (HTSUS) numbers--4407.10.01, 4409.10.05, 4409.10.10, 
4409.10.20, 4409.10.90, and 4418.90.25. Domestic product that cannot be 
categorized in the referenced HTSUS numbers if it were an import is not 
covered under this order. Further, softwood lumber originating in the 
United States that is exported to another country and shipped back to 
the United States is also covered under this Order, provided it can be 
categorized in the referenced HTSUS numbers. Additionally, articles 
brought into the United States temporarily and for which an exemption is 
claimed under subchapter XIII of chapter 98 of the HTSUS are exempted 
from the SLA of 2008 and are not covered under this Order.
    (m) 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.



Sec. 1217.102  Voting.

    (a) Each eligible domestic manufacturer and importer of softwood 
lumber shall be entitled to cast only one ballot in the referendum. 
However, each domestic manufacturer in a landlord/tenant relationship or 
a divided ownership arrangement involving totally independent entities 
cooperating only to manufacture softwood lumber, in

[[Page 213]]

which more than one of the parties is a domestic manufacturer or 
importer, shall be entitled to cast one ballot in the referendum 
covering only such domestic manufacturer or importer's share of 
ownership.
    (b) Proxy voting is not authorized, but an officer or employee of an 
eligible corporate domestic manufacturer or importer, or an 
administrator, executor, or trustee of an eligible entity may cast a 
ballot on behalf of such entity. Any individual so voting in a 
referendum shall certify that such individual is an officer or employee 
of the eligible entity, or an administrator, executive, or trustee of an 
eligible entity and that such individual has the authority to take such 
action. Upon request of the referendum agent, the individual shall 
submit adequate evidence of such authority.
    (c) A single entity who domestically manufactures and imports 
softwood lumber may cast one vote in the referendum.
    (d) All ballots are to be cast by mail or other means, as instructed 
by the Department.



Sec. 1217.103  Instructions.

    The referendum agent shall conduct the referendum, in the manner 
provided in this subpart, under the supervision of the Administrator. 
The Administrator may prescribe additional instructions, consistent with 
the provisions of this subpart, to govern the procedure to be followed 
by the referendum agent. Such agent shall:
    (a) Determine the period during which ballots may be cast;
    (b) Provide ballots and related material to be used in the 
referendum. The ballot shall provide for recording essential 
information, including that needed for ascertaining whether the person 
voting, or on whose behalf the vote is cast, is an eligible voter;
    (c) Give reasonable public notice of the referendum:
    (1) By using available media or public information sources, without 
incurring advertising expense, to publicize the dates, places, method of 
voting, eligibility requirements, and other pertinent information. Such 
sources of publicity may include, but are not limited to, print and 
radio; and
    (2) By such other means as the agent may deem advisable.
    (d) Mail to eligible domestic manufacturers and importers whose 
names and addresses are known to the referendum agent, the instructions 
on voting, a ballot, and a summary of the terms and conditions of the 
proposed Order. No person who claims to be eligible to vote shall be 
refused a ballot;
    (e) At the end of the voting period, collect, open, number, and 
review the ballots and tabulate the results in the presence of an agent 
of a third party authorized to monitor the referendum process;
    (f) Prepare a report on the referendum; and
    (g) Announce the results to the public.



Sec. 1217.104  Subagents.

    The referendum agent may appoint any individual or individuals 
necessary or desirable to assist the agent in performing such agent's 
functions of this subpart. Each individual so appointed may be 
authorized by the agent to perform any or all of the functions which, in 
the absence of such appointment, shall be performed by the agent.



Sec. 1217.105  Ballots.

    The referendum agent and subagents shall accept all ballots cast. 
However, if an agent or subagent deems that a ballot should be 
challenged for any reason, the agent or subagent shall endorse above 
their signature, on the ballot, a statement to the effect that such 
ballot was challenged, by whom challenged, the reasons therefore, the 
results of any investigations made with respect thereto, and the 
disposition thereof. Ballots invalid under this subpart shall not be 
counted.



Sec. 1217.106  Referendum report.

    Except as otherwise directed, the referendum agent shall prepare and 
submit to the Administrator a report on the results of the referendum, 
the manner in which it was conducted, the extent and kind of public 
notice given, and other information pertinent to the analysis of the 
referendum and its results.

[[Page 214]]



Sec. 1217.107  Confidential information.

    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. 1217.108  OMB control number.

    The control number assigned to the information collection 
requirement in this subpart by the Office of Management and Budget 
pursuant to the Paperwork Reduction Act of 1995, 44 U.S.C. is OMB 
control number 0581-NEW.



PART 1218_BLUEBERRY PROMOTION, RESEARCH, AND INFORMATION ORDER--Table 
of Contents



     Subpart A_Blueberry Promotion, Research, and Information Order

                               Definitions

Sec.
1218.1 Act.
1218.2 Blueberries.
1218.3 Conflict of interest.
1218.4 Crop year.
1218.5 Department.
1218.6 Exporter.
1218.7 First handler.
1218.8 Fiscal period.
1218.9 Importer.
1218.10 Information.
1218.11 Market or marketing.
1218.12 Order.
1218.13 Part and subpart.
1218.14 Person.
1218.15 Processed blueberries.
1218.16 Producer.
1218.17 Promotion.
1218.18 Research.
1218.19 Secretary.
1218.20 Suspend.
1218.21 Terminate.
1218.22 United States.
1218.23 U.S. Highbush Blueberry Council.

                     U.S. Highbush Blueberry Council

1218.40 Establishment and membership.
1218.41 Nominations and appointments.
1218.42 Term of office.
1218.43 Vacancies.
1218.44 Alternate members.
1218.45 Procedure.
1218.46 Compensation and reimbursement.
1218.47 Powers and duties.
1218.48 Prohibited activities.

                        Expenses and Assessments

1218.50 Budget and expenses.
1218.51 Financial statements.
1218.52 Assessments.
1218.53 Exemption procedures.
1218.54 Programs, plans, and projects.
1218.55 Independent evaluation.
1218.56 Patents, copyrights, trademarks, information, publications, and 
          product formulations.

                       Reports, Books, and Records

1218.60 Reports.
1218.61 Books and records.
1218.62 Confidential treatment.

                              Miscellaneous

1218.70 Right of the Secretary.
1218.71 Referenda.
1218.72 Suspension and termination.
1218.73 Proceedings after termination.
1218.74 Effect of termination or amendment.
1218.75 Personal liability.
1218.76 Separability.
1218.77 Amendments.
1218.78 OMB control numbers.

Subpart B_Procedure for the Conduct of Referenda in Connection with the 
          Blueberry Promotion, Research, and Information Order

1218.100 General.
1218.101 Definitions.
1218.102 Voting.
1218.103 Instructions.
1218.104 Subagents.
1218.105 Ballots.
1218.106 Referendum report.
1218.107 Confidential information.

    Authority: 7 U.S.C. 7411-7425 and 7 U.S.C. 7401.

    Source: 65 FR 7654, Feb. 15, 2000, unless otherwise noted.



     Subpart A_Blueberry Promotion, Research, and Information Order

    Source: 65 FR 43963, July 17, 2000, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 1218 appear at 66 FR 
37118, 37119, July 17, 2001.

    Editorial Note: Nomenclature changes to part 1218 appear at 71 FR 
77245, Dec. 26, 2006.

                               Definitions



Sec. 1218.1  Act.

    Act means the Commodity Promotion, Research, and Information Act of 
1996 (7 U.S.C. 7401-7425; Pub. L. 104-

[[Page 215]]

127; 110 Stat. 1029), or any amendments thereto.



Sec. 1218.2  Blueberries.

    Blueberries means cultivated blueberries grown in or imported into 
the United States of the genus Vaccinium Corymbosum and Ashei, including 
the northern highbush, southern highbush, rabbit eye varieties, and any 
hybrid, and excluding the lowbush (native) blueberry Vaccinium 
Angustifolium.



Sec. 1218.3  Conflict of interest.

    Conflict of interest means a situation in which a member or employee 
of the U.S. Highbush Blueberry Council has a direct or indirect 
financial interest in a person who performs a service for, or enters 
into a contract with, the Council for anything of economic value.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37118, July 17, 2001; 
71 FR 44554, Aug. 7, 2006]



Sec. 1218.4  Crop year.

    Crop year means the 12-month period from November 1 through October 
31 of the following year or such other period approved by the Secretary.



Sec. 1218.5  Department.

    Department means the U.S. Department of Agriculture.



Sec. 1218.6  Exporter.

    Exporter means a person involved in exporting blueberries from 
another country to the United States.



Sec. 1218.7  First handler.

    First handler means any person, (excluding a common or contract 
carrier), receiving blueberries from producers and who as owner, agent, 
or otherwise ships or causes blueberries to be shipped as specified in 
the Order. This definition includes those engaged in the business of 
buying, selling and/or offering for sale; receiving; packing; grading; 
marketing; or distributing blueberries in commercial quantities. This 
definition includes a retailer, except a retailer who purchases or 
acquires from, or handles on behalf of any producer, blueberries. The 
term first handler includes a producer who handles or markets 
blueberries of the producer's own production.



Sec. 1218.8  Fiscal period.

    Fiscal period means a calendar year from January 1 through December 
31, or such other period as approved by the Secretary.



Sec. 1218.9  Importer.

    Importer means any person who imports fresh or processed blueberries 
into the United States as a principal or as an agent, broker, or 
consignee of any person who produces or handles fresh or processed 
blueberries 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 blueberries.



Sec. 1218.10  Information.

    Information means information and programs that are designed to 
increase efficiency in processing and to develop new markets, marketing 
strategies, increase market efficiency, and activities that are designed 
to enhance the image of blueberries on a national or international 
basis. These include:
    (a) Consumer information, which means any action taken to provide 
information to, and broaden the understanding of, the general public 
regarding the consumption, use, nutritional attributes, and care of 
blueberries; and
    (b) Industry information, which means information and programs that 
will lead to the development of new markets, new marketing strategies, 
or increased efficiency for the blueberry industry, and activities to 
enhance the image of the blueberry industry.



Sec. 1218.11  Market or marketing.

    (a) Marketing means the sale or other disposition of blueberries in 
any channel of commerce.
    (b) To market means to sell or otherwise dispose of blueberries in 
interstate, foreign, or intrastate commerce.



Sec. 1218.12  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.

[[Page 216]]



Sec. 1218.13  Part and subpart.

    Part means the Blueberry 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. 1218.14  Person.

    Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity.



Sec. 1218.15  Processed blueberries.

    Processed blueberries means blueberries which have been frozen, 
dried, pureed, or made into juice.



Sec. 1218.16  Producer.

    Producer means any person who grows blueberries in the United States 
for sale in commerce, or a person who is engaged in the business of 
producing, or causing to be produced for any market, blueberries beyond 
the person's own family use and having value at first point of sale.



Sec. 1218.17  Promotion.

    Promotion means any action taken to present a favorable image of 
blueberries to the general public and the food industry for the purpose 
of improving the competitive position of blueberries both in the United 
States and abroad and stimulating the sale of blueberries. This includes 
paid advertising and public relations.



Sec. 1218.18  Research.

    Research means any type of test, study, or analysis designed to 
advance the image, desirability, use, marketability, production, product 
development, or quality of blueberries, including research relating to 
nutritional value, cost of production, new product development, varietal 
development, nutritional value, health research, and marketing of 
blueberries.



Sec. 1218.19  Secretary.

    Secretary means the Secretary of Agriculture of the United States, 
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. 1218.20  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. 1218.21  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 date certain specified in the rule.



Sec. 1218.22  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.



Sec. 1218.23  U.S. Highbush Blueberry Council.

    U.S. Highbush Blueberry Council or the Council means the 
administrative body established pursuant to Sec. 1218.40.

[71 FR 44554, Aug. 7, 2006]

                     U.S. Highbush Blueberry Council



Sec. 1218.40  Establishment and membership.

    (a) Establishment of the U.S. Highbush Blueberry Council. There is 
hereby established a U.S. Highbush Blueberry Council, hereinafter called 
the Council, composed of no more than 16 members and alternates, 
appointed by the Secretary from nominations as follows:
    (1) One producer member and alternate from each of the following 
regions:
    (i) Region 1 Western Region (all states from the Pacific 
east to the Rockies): Alaska, Arizona, California, Colorado, Hawaii, 
Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and 
Wyoming.
    (ii) Region 2 Midwest Region (all states east of the 
Rockies to the Great Lakes and south to the Kansas/Missouri/Kentucky 
state line): Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, 
Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and 
Wisconsin.

[[Page 217]]

    (iii) Region 3 Northeast Region (all states east of the 
Great Lakes and North of the North Carolina/Tennessee state line): 
Connecticut, Delaware, New York, Maine, Maryland, Massachusetts, New 
Hampshire, New Jersey, Pennsylvania, Rhode Island, Virginia, Vermont, 
Washington, D.C., and West Virginia.
    (iv) Region 4 Southern Region (all states south of the 
Virginia/Kentucky/Missouri/Kansas state line and east of the Rockies): 
Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North 
Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, and Texas.
    (2) One producer member and alternate from each of the top six 
blueberry producing states, based upon the average of the total tons 
produced over the previous three years. Average tonnage will be based 
upon production and assessment figures generated by the Council.
    (3) Three importers and alternates.
    (4) One exporter and alternate shall be filled by foreign blueberry 
producers currently shipping blueberries into the United States from the 
largest foreign blueberry production area, based on a three-year 
average.
    (5) One first handler member and alternate shall be filled by a 
United States based independent or cooperative organization which is a 
producer/shipper of domestic blueberries.
    (6) One public member and alternate.
    (b) Adjustment of membership. At least once every five years, the 
Council will review the geographical distribution of United States 
production of blueberries and the quantity of imports. The review will 
be conducted through an audit of state crop production figures and 
Council assessment records. If warranted, the Council will recommend to 
the Secretary that the membership on the Council be altered to reflect 
any changes in the geographical distribution of domestic blueberry 
production and the quantity of imports. If the level of imports 
increases, importer members and alternates may be added to the Council.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001; 
71 FR 44554, Aug. 7, 2006; 75 FR 31282, June 3, 2010]



Sec. 1218.41  Nominations and appointments.

    (a) Voting for regional and state representatives will be made by 
mail ballot.
    (b) When a state has a state blueberry commission or marketing order 
in place, the state commission or committee will nominate members to 
serve on the Council. At least two nominees shall be submitted to the 
Secretary for each member and each alternate.
    (c) Nomination and election of regional and state representatives 
where no commission or order is in place will be handled by the Council 
staff. The Council staff will seek nominations for members and 
alternates from the specific states and/or regions. Nominations will be 
returned to the Council office and placed on a ballot which will then be 
sent to producers in the state and/or region for a vote. The final 
nominee for member will have received the highest number of votes cast. 
The person with the second highest number of votes cast will be the 
final nominee for alternate. The persons with the third and fourth 
highest number of votes cast will be designated as additional nominees 
for consideration by the Secretary.
    (d) Nominations for the importer, exporter, first handler, and 
public member positions will be made by the Council. Two nominees for 
each member and each alternate position will be submitted to the 
Secretary for consideration.
    (e) From the nominations, the Secretary shall select the members and 
alternate members of the Council.

[71 FR 44555, Aug. 7, 2006]



Sec. 1218.42  Term of office.

    Council members and alternates will serve for a term of three years 
and be able to serve a maximum of two consecutive terms. A Council 
member may serve as an alternate during the years the member is 
ineligible for a member position. When the Council is first established, 
the state representatives, first handler member, and their respected 
alternates will be assigned initial terms of three years. Regional 
representatives, the importer member, the exporter member, public 
member, and

[[Page 218]]

their alternates will serve an initial term of two years. Thereafter, 
each of these positions will carry a full three-year term. Council 
nominations and appointments will take place in two out of every three 
years. Each term of office will end on December 31, with new terms of 
office beginning on January 1.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]



Sec. 1218.43  Vacancies.

    (a) In the event that any member of the Council ceases to be a 
member of the category of members from which the member was appointed to 
the Council, such position shall automatically become vacant.
    (b) If a member of the Council consistently refuses to perform the 
duties of a member of the Council, or if a member of the Council engages 
in acts of dishonesty or willful misconduct, the Council may recommend 
to the Secretary that the member be removed from office. If the 
Secretary finds the recommendation of the Council shows adequate cause, 
the Secretary shall remove such member from office.
    (c) Should any member position become vacant, the alternate of that 
member shall automatically assume the position of said member. Should 
the positions of both a member and such member's alternate become 
vacant, successors for the unexpired terms of such member and alternate 
shall be appointed in the manner specified in Sec. 1218.40 and Sec. 
1218.41, except that said nomination and replacement shall not be 
required if said unexpired terms are less than six months.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]



Sec. 1218.44  Alternate members.

    An alternate member of the Council, during the absence of the member 
for whom the person is the alternate, shall act in the place and stead 
of such member and perform such duties as assigned. In the event of 
death, removal, resignation, or disqualification of any member, the 
alternate for that member shall automatically assume the position of 
said member. In the event that both a producer member of the Council and 
the alternate are unable to attend a meeting, the Council may not 
designate any other alternate to serve in such member's or alternate's 
place and stead for such a meeting.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]



Sec. 1218.45  Procedure.

    (a) At a Council meeting, it will be considered a quorum when a 
minimum of nine members, or their alternates serving in the absence, are 
present.
    (b) At the start of each fiscal period, the Council will select a 
chairperson and vice chairperson who will conduct meetings throughout 
that period.
    (c) All Council members and alternates will receive a minimum of 10 
days advance notice of all Council and committee meetings.
    (d) Each member of the Council will be entitled to one vote on any 
matter put to the Council, and the motion will carry if supported by one 
vote more than 50 percent of the total votes represented by the Council 
members present.
    (e) It will be considered a quorum at a committee meeting when at 
least one more than half of those assigned to the committee are present. 
Alternates may also be assigned to committees as necessary. Committees 
may also consist of individuals other than Council members and such 
individuals may vote in committee meetings. These committee members 
shall serve without compensation but shall be reimbursed for reasonable 
travel expenses, as approved by the Council.
    (f) In lieu of voting at a properly convened meeting and, when in 
the opinion of the chairperson of the Council such action is considered 
necessary, the Council may take action if supported by one vote more 
than 50 percent of the members by mail, telephone, electronic mail, 
facsimile, or any other means of communication, and all telephone votes 
shall be confirmed promptly in writing. In that event, all members must 
be notified and provided the opportunity to vote. Any action so taken 
shall have the same force and effect as though such action had been 
taken at a properly convened meeting of the Council. All

[[Page 219]]

votes shall be recorded in Council minutes.
    (g) There shall be no voting by proxy.
    (h) The chairperson shall be a voting member.
    (i) The organization of the Council and the procedures for the 
conducting of meetings of the Council shall be in accordance with its 
bylaws, which shall be established by the Council and approved by the 
Secretary.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001; 
75 FR 31282, June 3, 2010]



Sec. 1218.46  Compensation and reimbursement.

    The members of the Council, and alternates when acting as members, 
shall serve without compensation but shall be reimbursed for reasonable 
travel expenses, as approved by the Council, incurred by them in the 
performance of their duties as Council members.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]



Sec. 1218.47  Powers and duties.

    The Council 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 Council, 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 
Council a chairperson, other officers, committees, and subcommittees, as 
the Council determines to be appropriate;
    (d) To employ persons, other than the members, as the Council 
considers necessary to assist the Council in carrying out its duties and 
to determine the compensation and specify the duties of such persons;
    (e) To develop programs 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 Council shall develop and submit to the Council 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 Council of activities conducted under the contract or 
agreement; and make such other reports available as the Council or the 
Secretary considers relevant. Any contract or agreement shall provide 
that:
    (1) The contractor or agreeing party shall develop and submit to the 
Council 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 Council of 
activities conducted, submit accounting for funds received and expended, 
and make such other reports as the Secretary or the Council 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 Council 
contractor and who receives or otherwise uses funds allocated by the 
Council shall be subject to the same provisions as the contractor.
    (f) To prepare and submit for approval of the Secretary fiscal year 
budgets in accordance with Sec. 1218.50;
    (g) 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 prescribe; 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 
Council;
    (h) To cause its books to be audited by a competent auditor at the 
end of each fiscal year and at such other times as the Secretary may 
request, and to submit a report of the audit directly to the Secretary;

[[Page 220]]

    (i) To give the Secretary the same notice of meetings of the Council 
as is given to members in order that the Secretary's representative(s) 
may attend such meetings, and to keep and report minutes of each meeting 
of the Council to the Secretary;
    (j) To act as intermediary between the Secretary and any producer, 
first handler, importer, or exporter;
    (k) To furnish to the Secretary any information or records that the 
Secretary may request;
    (l) To receive, investigate, and report to the Secretary complaints 
of violations of the Order;
    (m) To recommend to the Secretary such amendments to the Order as 
the Council considers appropriate; and
    (n) To work to achieve an effective, continuous, and coordinated 
program of promotion, research, consumer information, evaluation, and 
industry information designed to strengthen the blueberry industry's 
position in the marketplace; maintain and expand existing markets and 
uses for blueberries; and to carry out programs, plans, and projects 
designed to provide maximum benefits to the blueberry industry.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]



Sec. 1218.48  Prohibited activities.

    The Council may not engage in, and shall prohibit the employees and 
agents of the Council from engaging in:
    (a) Any action that would be a conflict of interest; and
    (b) Using funds collected by the Council 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, other than recommending to the Secretary amendments to the 
Order.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]

                        Expenses and Assessments



Sec. 1218.50  Budget and expenses.

    (a) At least 60 days prior to the beginning of each fiscal year, and 
as may be necessary thereafter, the Council shall prepare and submit to 
the Secretary a budget for the fiscal year covering its anticipated 
expenses and disbursements in administering this subpart. Each such 
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 at least on 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 subpart.
    (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. Shifts of funds 
which do not cause an increase in the Council's approved budget and 
which are consistent with governing bylaws need not have prior approval 
by the Secretary.
    (d) The Council is authorized to incur such expenses, including 
provision for a reasonable reserve, as the Secretary finds are 
reasonable and likely to be incurred by the Council for its maintenance 
and functioning, and to enable it to exercise its powers and perform its 
duties in accordance with the provisions of this subpart. Such expenses 
shall be paid from funds received by the Council.
    (e) With approval of the Secretary, the Council may borrow money for 
the payment of administrative expenses, subject to the same fiscal, 
budget, and audit controls as other funds of the Council. Any funds 
borrowed by the Council shall be expended only for startup costs and 
capital outlays and are limited to the first year of operation of the 
Council.
    (f) The Council may accept voluntary contributions, but these shall 
only be used to pay expenses incurred in the conduct of programs, plans, 
and projects. Such contributions shall be free from any encumbrance by 
the donor and the Council shall retain complete control of their use.

[[Page 221]]

    (g) The Council 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.
    (h) The Council shall reimburse the Secretary for all expenses 
incurred by the Secretary in the implementation, administration, and 
supervision of the Order, including all referendum costs in connection 
with the Order.
    (i) The Council may not expend for administration, maintenance, and 
functioning of the Council in any fiscal year an amount that exceeds 15 
percent of the assessments and other income received by the Council for 
that fiscal year. Reimbursements to the Secretary required under 
paragraph (h) are excluded from this limitation on spending.
    (j) The Council 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. Subject to approval by the Secretary, such 
reserve funds may be used to defray any expenses authorized under this 
part.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]



Sec. 1218.51  Financial statements.

    (a) As requested by the Secretary, the Council shall prepare and 
submit financial statements to the Secretary on a periodic basis. 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 30 days after the end of the time period to which it applies.
    (c) The Council shall submit annually to the Secretary an annual 
financial statement within 90 days after the end of the fiscal year to 
which it applies.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]



Sec. 1218.52  Assessments.

    (a) The funds to cover the Council's expenses shall be paid from 
assessments on producers and importers, donations from any person not 
subject to assessments under this Order, and other funds available to 
the Board including those collected pursuant to Sec. 1218.56 and 
subject to the limitations contained therein.
    (b) The collection of assessments on domestic blueberries will be 
the responsibility of the first handler receiving the blueberries. In 
the case of the producer acting as its own first handler, the producer 
will be required to collect and remit its individual assessments.
    (c) Such assessments shall be levied at a rate of $12 per ton on all 
blueberries. The assessment rate will be reviewed, and may be modified 
with the approval of the Secretary, after the first referendum is 
conducted as stated in Sec. 1218.71(b).
    (d) Each importer of fresh and processed blueberries shall pay an 
assessment to the Council on blueberries imported for marketing in the 
United States, through the U.S. Customs Service.
    (1) The assessment rate for imported fresh and processed blueberries 
shall be the same or equivalent to the rate for fresh blueberries 
produced in the United States.
    (2) The import assessment shall be uniformly applied to imported 
fresh and frozen blueberries that are identified by the numbers 
0810.40.0028 and 0811.90.2028, respectively, in the Harmonized Tariff 
Schedule of the United States or any other numbers used to identify 
fresh and frozen blueberries. Assessments on other types of imported 
processed blueberries, such as dried blueberries, puree, and juice, may 
be added at the recommendation of the Council with the approval of the 
Secretary.
    (3) The assessments due on imported fresh and processed blueberries 
shall be paid when they enter or are withdrawn for consumption in the 
United States.
    (e) All assessment payments and reports will be submitted to the 
office of the Council. All final payments for a crop year are to be 
received no later than November 30 of that year. A late

[[Page 222]]

payment charge shall be imposed on any handler who fails to remit to the 
Council, the total amount for which any such handler is liable on or 
before the due date established by the Council. In addition to the late 
payment charge, an interest charge shall be imposed on the outstanding 
amount for which the handler is liable. The rate of interest shall be 
prescribed in regulations issued by the Secretary.
    (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 Council may authorize other organizations to collect 
assessments on its behalf with the approval of the Secretary.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]



Sec. 1218.53  Exemption procedures.

    (a) Any producer who produces less than 2,000 pounds of blueberries 
annually shall be exempt from the payment of assessments. Such producer 
may apply to the Council--on a form provided by the Council--for a 
certificate of exemption. Such producer shall certify that the 
producer's production of blueberries shall be less than 2,000 pounds for 
the fiscal year for which the exemption is claimed.
    (b) Any importer who imports less than 2,000 pounds of fresh and 
frozen blueberries annually shall be exempt from the payment of 
assessments. Such importer may apply to the Council--on a form provided 
by the Council--for a certificate of exemption. Such importer shall 
certify that the importer's importation of fresh and frozen blueberries 
shall not exceed 2,000 pounds for the fiscal year for which the 
exemption is claimed.
    (c) A producer who operates 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, except 
as provided for in paragraph (g) of this section; and is not a split 
operation shall be exempt from the payment of assessments.
    (d) To apply for this exemption, a producer shall submit a request 
for exemption to the Council--on a form provided by the Council--at any 
time initially and annually thereafter on or before January 1 as long as 
the producer continues to be eligible for the exemption. The request 
shall include the following: The producer's name and address, with a 
copy of the organic farm or organic handling operation certificate 
provided by a USDA-accredited certifying agent as defined in section 
2103 of the Organic Foods Production Act of 1990 (7 CFR part 205), 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. If a 
producer complies with the requirements in paragraph (c) of this 
section, the Council will grant an assessment exemption and issue a 
certification of exemption to the producer. For exemption requests 
received on or before August 15, 2005, the Council will have 60 days to 
approve the exemption request; after August 15, 2005, the Council will 
have 30 days to approve the exemption request. If the application is 
disapproved, the Council will notify the applicant of the reason(s) for 
disapproval within the same timeframe.
    (e) An importer who imports only products that are eligible to be 
labeled as 100 percent organic under the NOP (7 CFR part 205) and who is 
not a split operation shall be exempt from the payment of assessments. 
That importer may submit documentation to the Board and request an 
exemption from assessment on 100 percent organic fresh and frozen 
blueberries--on a form provided by the Council--at any time initially 
and annually thereafter on or before January 1 as long as the importer 
continues to be eligible for the exemption. This documentation shall 
include the same information required of producers in paragraph (d) of 
this section. If the importer complies with the requirements of this 
section, the Council will grant the exemption and issue a Certificate of 
Exemption to the importer. The Council will also issue the importer a 9-
digit alphanumeric Harmonized Tariff Schedule (HTS) classification valid 
for 1 year from the date of issue. This HTS classification should be 
entered by the importer on the Customs entry documentation. Any line

[[Page 223]]

item entry of 100 percent organic fresh and frozen blueberries bearing 
this HTS classification assigned by the Council will not be subject to 
assessments.
    (f) The exemption will apply immediately following the issuance of 
the Certificate of Exemption.
    (g) Agricultural commodities produced and marketed under an organic 
system plan, as described in 7 CFR 205.201, but not sold, labeled, or 
represented as organic, shall not disqualify a producer from exemption 
under this section, except that producers who produce both organic and 
non-organic agricultural commodities as a result of split operations 
shall not qualify for exemption. Reasons for conventional sales include 
lack of demand for organic products, isolated use of antibiotics for 
humane purposes, chemical or pesticide use as the result of State or 
emergency spray programs, and crops from a buffer area as described in 7 
CFR part 205, provided all other criteria are met.
    (h) On receipt of an application, the Council shall determine 
whether an exemption may be granted. The Council then will issue, if 
deemed appropriate, a certificate of exemption to each person who is 
eligible to receive one. Each producer who is exempt from assessment 
must provide an exemption number to the first handler in order to be 
exempt from the collection of an assessment on blueberries. First 
handlers and importers, except as otherwise authorized by the Council, 
shall maintain records showing the exemptee's name and address along 
with the exemption number assigned by the Council.
    (i) Importers who are exempt from assessment shall be eligible for 
reimbursement of assessments collected by the U.S. Customs Service and 
shall apply to the Council for reimbursement of such assessments paid. 
No interest will be paid on assessments collected by the U.S. Customs 
Service. Requests for reimbursement shall be submitted to the Council 
within 90 days of the last day of the year the blueberries were actually 
imported.
    (j) Any person who desires an exemption from assessments for a 
subsequent fiscal year shall reapply to the Council, on a form provided 
by the Council, for a certificate of exemption.
    (k) The Council may require persons receiving an exemption from 
assessments to provide to the Council reports on the disposition of 
exempt blueberries and, in the case of importers, proof of payment of 
assessments.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001; 
70 FR 2758, Jan. 14, 2005]



Sec. 1218.54  Programs, plans, and projects.

    (a) The Council 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 information, with respect to fresh and processed 
blueberries; and
    (2) The establishment and conduct of research with respect to the 
use, nutritional value, sale, distribution, and marketing of fresh and 
processed blueberries, and the creation of new products thereof, to the 
end that the marketing and use of blueberries may be encouraged, 
expanded, improved, or made more acceptable and to advance the image, 
desirability, or quality of fresh and processed blueberries.
    (b) No program, plan, or project shall be implemented prior to its 
approval by the Secretary. Once a program, plan, or project is so 
approved, the Council 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 Council to ensure 
that it contributes to an effective program of promotion, research, or 
information. If it is found by the Council that any such program, plan, 
or project does not contribute to an effective program of promotion, 
research, or information, then the Council shall terminate such program, 
plan, or project.
    (d) No program, plan, or project including advertising shall be 
false or

[[Page 224]]

misleading or disparaging another agricultural commodity. Blueberries of 
all origins shall be treated equally.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]



Sec. 1218.55  Independent evaluation.

    The Council shall, not less often than every five years, authorize 
and fund, from funds otherwise available to the Council, an independent 
evaluation of the effectiveness of the Order and other programs 
conducted by the Council pursuant to the Act. The Council shall submit 
to the Secretary, and make available to the public, the results of each 
periodic independent evaluation conducted under this paragraph.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]



Sec. 1218.56  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 
Council under this subpart shall be the property of the U.S. Government 
as represented by the Council 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 Council; shall be considered income subject to the 
same fiscal, budget, and audit controls as other funds of the Council; 
and may be licensed subject to approval by the Secretary. Upon 
termination of this subpart, Sec. 1218.73 shall apply to determine 
disposition of all such property.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]

                       Reports, Books, and Records



Sec. 1218.60  Reports.

    (a) Each first handler subject to this subpart may be required to 
provide to the Council periodically such information as may be required 
by the Council, with the approval of the Secretary, which may include 
but not be limited to the following:
    (1) Number of pounds handled;
    (2) Number of pounds on which an assessment was collected;
    (3) Name and address of person from whom the first handler has 
collected the assessments on each pound handled; and
    (4) Date collection was made on each pound handled. All reports are 
due to the Council 30 days after the end of the crop year.
    (b) Each producer and importer subject to this subpart may be 
required to provide to the Council periodically such information as may 
be required by the Council, with the approval of the Secretary, which 
may include but not be limited to the following:
    (1) Number of pounds produced;
    (2) Number of pounds on which an assessment was paid;
    (3) Name and address of the producer;
    (4) Date collection was made on each pound produced. All reports are 
due to the Council 30 days after the end of the crop year.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]



Sec. 1218.61  Books and records.

    Each first handler, producer, and importer subject to this subpart 
shall maintain and make available for inspection by the Secretary such 
books and records as are 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 records shall be 
retained for at least 2 years beyond the fiscal period of their 
applicability.



Sec. 1218.62  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 Council, 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 Council members, producers, importers, exporters, or first 
handlers. Only those persons having a specific need for such information 
to

[[Page 225]]

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.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]

                              Miscellaneous



Sec. 1218.70  Right of the Secretary.

    All fiscal matters, programs, plans, or projects, rules or 
regulations, reports, or other substantive actions proposed and prepared 
by the Council shall be submitted to the Secretary for approval.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]



Sec. 1218.71  Referenda.

    (a) Initial referendum. The Order shall not become effective unless:
    (1) The Secretary determines that the Order is consistent with and 
will effectuate the purposes of the Act; and
    (2) The Order is approved by a majority of producers and importers 
voting for approval who also represent a majority of the volume of 
blueberries represented in the referendum who, during a representative 
period determined by the Secretary, have been engaged in the production 
or importation of blueberries.
    (b) Subsequent referenda. Every five years, the Secretary shall hold 
a referendum to determine whether blueberry producers and importers 
favor the continuation of the Order. The Order shall continue if it is 
favored by a majority of producers and importers voting for approval who 
also represent a majority of the volume of blueberries represented in 
the referendum who, during a representative period determined by the 
Secretary, have been engaged in the production or importation of 
blueberries. The Secretary will also conduct a referendum if 10 percent 
or more of all eligible blueberry producers and importers request the 
Secretary to hold a referendum. In addition, the Secretary may hold a 
referendum at any time.



Sec. 1218.72  Suspension and 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 purposes 
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 marketing year whenever the Secretary determines that its 
suspension or termination is approved or favored by a majority of 
producers and importers voting for approval who also represent a 
majority of the volume of blueberries represented in the referendum who, 
during a representative period determined by the Secretary, have been 
engaged in the production or importation of blueberries.
    (c) If, as a result of a referendum the Secretary determines that 
this subpart is not approved, the Secretary shall:
    (1) Not later than 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. 1218.73  Proceedings after termination.

    (a) Upon the termination of this subpart, the Council shall 
recommend not more than three of its members to the

[[Page 226]]

Secretary to serve as trustees for the purpose of liquidating the 
affairs of the Council. 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 Council, 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 Council 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 
Council 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 Council 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 Council 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 the blueberry producer organizations in the 
interest of continuing blueberry promotion, research, and information 
programs.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]



Sec. 1218.74  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; or
    (b) Release or extinguish any violation of this subpart or any 
regulation issued thereunder; or
    (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. 1218.75  Personal liability.

    No member, alternate member, or employee of the Council 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, 
alternate, or employee, except for acts of dishonesty or willful 
misconduct.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]



Sec. 1218.76  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. 1218.77  Amendments.

    Amendments to this subpart may be proposed from time to time by the 
Council or by any interested person affected by the provisions of the 
Act, including the Secretary.

[65 FR 43963, July 17, 2000, as amended at 66 FR 37119, July 17, 2001]



Sec. 1218.78  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 0581-0093, except for the Council nominee background statement 
form which is assigned OMB control number 0505-001.

[[Page 227]]



Subpart B_Procedure for the Conduct of Referenda in Connection with the 
          Blueberry Promotion, Research, and Information Order



Sec. 1218.100  General.

    Referenda to determine whether eligible blueberry producers and 
importers favor the issuance, amendment, suspension, or termination of 
the Blueberry Promotion, Research, and Information Order shall be 
conducted in accordance with this subpart.



Sec. 1218.101  Definitions.

    (a) Administrator means the Administrator of the Agricultural 
Marketing Service, with power to redelegate, or any officer or employee 
of the U.S. Department of Agriculture to whom authority has been 
delegated or may hereafter be delegated to act in the Administrator's 
stead.
    (b) Blueberries means cultivated blueberries grown in or imported 
into the United States of the genus Vaccinium Corymbosum and Ashei, 
including the northern highbush, southern highbush, rabbit eye 
varieties, and any hybrid, and excluding the lowbush (native) blueberry 
Vaccinium Angustifolium.
    (c) Eligible importer means any person who imported 2,000 pounds or 
more of fresh or processed blueberries, that are identified by the 
numbers 0810.40.0028 and 0811.90.2028, respectively, in the Harmonized 
Tariff Schedule of the United States or any other numbers used to 
identify fresh and frozen blueberries. Importation occurs when 
commodities originating outside the United States are entered or 
withdrawn from the U.S. Customs Service for consumption in the United 
States. Included are persons who hold title to foreign-produced 
blueberries immediately upon release by the U.S. Customs Service, as 
well as any persons who act on behalf of others, as agents or brokers, 
to secure the release of blueberries from the U.S. Customs Service when 
such blueberries are entered or withdrawn for consumption in the United 
States.
    (d) Eligible producer means any person who produced 2,000 pounds or 
more of blueberries in the United States during the representative 
period who:
    (1) Owns, or shares the ownership and risk of loss of, the crop;
    (2) Rents blueberry production facilities and equipment resulting in 
the ownership of all or a portion of the blueberries produced;
    (3) Owns blueberry production facilities and equipment but does not 
manage them and, as compensation, obtains the ownership of a portion of 
the blueberries produced; or
    (4) Is a party in a landlord-tenant relationship or a divided 
ownership arrangement involving totally independent entities cooperating 
only to produce blueberries who share the risk of loss and receive a 
share of the blueberries produced. No other acquisition of legal title 
to blueberries shall be deemed to result in persons becoming eligible 
producers.
    (e) Order means the Blueberry Promotion, Research, and Information 
Order.
    (f) Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity. For 
the purpose of this definition, the term ``partnership'' includes, but 
is not limited to:
    (1) A husband and a wife who have title to, or leasehold interest 
in, a blueberry farm as tenants in common, joint tenants, tenants by the 
entirety, or, under community property laws, as community property; and
    (2) So-called ``joint ventures'' wherein one or more parties to an 
agreement, informal or otherwise, contributed land and others 
contributed capital, labor, management, or other services, or any 
variation of such contributions by two or more parties.
    (g) Processed blueberries means blueberries which have been frozen, 
dried, pureed, or made into juice.
    (h) Referendum agent or agent means the individual or individuals 
designated by the Secretary to conduct the referendum.
    (i) Representative period means the period designated by the 
Secretary.
    (j) 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.

[[Page 228]]



Sec. 1218.102  Voting.

    (a) Each person who is an eligible producer or an eligible importer, 
as defined in this subpart, at the time of the referendum and during the 
representative period, shall be entitled to cast only one ballot in the 
referendum. However, each producer in a landlord-tenant relationship or 
a divided ownership arrangement involving totally independent entities 
cooperating only to produce blueberries, in which more than one of the 
parties is a producer, shall be entitled to cast one ballot in the 
referendum covering only such producer's share of the ownership.
    (b) Proxy voting is not authorized, but an officer or employee of an 
eligible corporate producer or importer, or an administrator, executor, 
or trustee or an eligible entity may cast a ballot on behalf of such 
entity. Any individual so voting in a referendum shall certify that such 
individual is an officer or employee of the eligible entity, or an 
administrator, executive, or trustee of an eligible entity and that such 
individual has the authority to take such action. Upon request of the 
referendum agent, the individual shall submit adequate evidence of such 
authority.
    (c) All ballots are to be cast by mail or by facsimile, as 
instructed by the Secretary.



Sec. 1218.103  Instructions.

    The referendum agent shall conduct the referendum, in the manner 
herein provided, under the supervision of the Administrator. The 
Administrator may prescribe additional instructions, not inconsistent 
with the provisions hereof, to govern the procedure to be followed by 
the referendum agent. Such agent shall:
    (a) Determine the period during which ballots may be cast.
    (b) Provide ballots and related material to be used in the 
referendum. The ballot shall provide for recording essential 
information, including that needed for ascertaining whether the person 
voting, or on whose behalf the vote is cast, is an eligible voter.
    (c) Give reasonable public notice of the referendum:
    (1) By utilizing available media or public information sources, 
without incurring advertising expense, to publicize the dates, places, 
method of voting, eligibility requirements, and other pertinent 
information. Such sources of publicity may include, but are not limited 
to, print and radio; and
    (2) By such other means as the agent may deem advisable.
    (d) Mail to eligible producers and importers whose names and 
addresses are known to the referendum agent, the instructions on voting, 
a ballot, and a summary of the terms and conditions of the proposed 
Order. No person who claims to be eligible to vote shall be refused a 
ballot.
    (e) At the end of the voting period, collect, open, number, and 
review the ballots and tabulate the results in the presence of an agent 
of a third party authorized to monitor the referendum process.
    (f) Prepare a report on the referendum.
    (g) Announce the results to the public.



Sec. 1218.104  Subagents.

    The referendum agent may appoint any individual or individuals 
necessary or desirable to assist the agent in performing such agent's 
functions hereunder. Each individual so appointed may be authorized by 
the agent to perform any or all of the functions which, in the absence 
of such appointment, shall be performed by the agent.



Sec. 1218.105  Ballots.

    The referendum agent and subagents shall accept all ballots cast. 
However, if an agent or subagent deems that a ballot should be 
challenged for any reason, the agent or subagent shall endorse above 
their signature, on the ballot, a statement to the effect that such 
ballot was challenged, by whom challenged, the reasons therefore, the 
results of any investigations made with respect thereto, and the 
disposition thereof. Ballots invalid under this subpart shall not be 
counted.



Sec. 1218.106  Referendum report.

    Except as otherwise directed, the referendum agent shall prepare and 
submit to the Administrator a report on

[[Page 229]]

the results of the referendum, the manner in which it was conducted, the 
extent and kind of public notice given, and other information pertinent 
to the analysis of the referendum and its results.



Sec. 1218.107  Confidential information.

    The ballots and other information or reports that reveal, or tend to 
reveal, the vote of any person covered under the Act and the voting list 
shall be held confidential and shall not be disclosed.



PART 1219_HASS AVOCADO PROMOTION, RESEARCH, AND INFORMATION--Table of
Contents



    Subpart A_Hass Avocado Promotion, Research, and Information Order

                               Definitions

Sec.
1219.1 Act.
1219.2 Association.
1219.3 Conflict of interest.
1219.4 Consumer information.
1219.5 Crop year.
1219.6 Customs.
1219.7 Department.
1219.8 Exempt handler.
1219.9 First handler.
1219.10 Fiscal period or marketing year.
1219.11 Handle.
1219.12 Hass avocado.
1219.13 Hass Avocado Board.
1219.14 Importer.
1219.15 Industry information.
1219.16 Marketing.
1219.17 Order.
1219.18 Part and subpart.
1219.19 Person.
1219.20 Producer.
1219.21 Programs, plans, and projects.
1219.22 Promotion.
1219.23 Research.
1219.24 Secretary.
1219.25 State.
1219.26 United States.

                         The Hass Avocado Board

1219.30 Establishment and membership.
1219.31 Initial nomination and appointment of producer members and 
          alternates.
1219.32 Initial nomination and appointment of importer members and 
          alternates.
1219.33 Subsequent nomination and appointment of Board members and 
          alternates.
1219.34 Failure to nominate.
1219.35 Term of office.
1219.36 Vacancies.
1219.37 Alternate members.
1219.38 Powers and duties.
1219.39 Board procedure.
1219.40 Committee procedure.
1219.41 Compensation and expenses.
1219.42 Prohibited activities.

                   Budgets, Expenses, and Assessments

1219.50 Budgets, programs, plans, and projects.
1219.51 Contracts and agreements.
1219.52 Control of administrative costs.
1219.53 Budget and expenses.
1219.54 Assessments.
1219.55 Exemption from assessment.
1219.56 Adjustment of accounts.
1219.57 Patents, copyrights, trademarks, publications, and product 
          formulations.
1219.58 Importer associations.

                       Books, Records, and Reports

1219.60 Reports.
1219.61 Books and records.
1219.62 Books and records of the Board.
1219.63 Confidential treatment.
1219.64 List of importers.
1219.65 List of producers.

                              Miscellaneous

1219.70 Right of the Secretary.
1219.71 Suspension or termination.
1210.72 Proceedings after termination.
1219.73 Effect of termination or amendment.
1219.74 Personal liability.
1219.75 Separability.
1219.76 Amendments.
1219.77 OMB control numbers.

                     Subpart B_Referendum Procedures

1219.100 General.
1219.101 Definitions.
1219.102 Registration.
1219.103 Voting.
1219.104 Instructions.
1219.105 Subagents.
1219.106 Ballots.
1219.107 Referendum report.
1219.108 Confidential information.
1219.109 OMB control number.

                     Subpart C_Rules and Regulations

1219.200 Terms defined.
1219.201 Definitions.
1219.202 Exemption for organic Hass avocados.
1219.203 Reapportionment of membership.

    Authority: 7 U.S.C. 7801-7813 and 7 U.S.C. 7401.

    Source: 67 FR 7264, Feb. 19, 2002, unless otherwise noted.

[[Page 230]]



    Subpart A_Hass Avocado Promotion, Research, and Information Order

    Source: 67 FR 56897, Sept. 6, 2002, unless otherwise noted.

                               Definitions



Sec. 1219.1  Act.

    Act means the Hass Avocado Promotion, Research, and Information Act 
of 2000, Public Law 106-387, 7 U.S.C. 7801-7813, and any amendments 
thereto.



Sec. 1219.2  Association.

    Association means an avocado organization established by State 
statute in a State with the majority of Hass avocado production in the 
United States.



Sec. 1219.3  Conflict of interest.

    Conflict of interest means a situation in which a Board member or 
employee 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.



Sec. 1219.4  Consumer information.

    Consumer information means any action or program that disseminates 
or otherwise provides information to consumers and other persons, on the 
use, nutritional attributes, and other information that will assist 
consumers and other persons in the United States in making evaluations 
and decisions regarding the purchase, preparation, and use of Hass 
avocados.



Sec. 1219.5  Crop year.

    Crop year means the period from November 1 of one year through 
October 31 of the following year, or such other one-year period 
recommended by the Board and approved by the Secretary.



Sec. 1219.6  Customs.

    Customs means the United States Customs Service.



Sec. 1219.7  Department.

    Department means the United States Department of Agriculture.



Sec. 1219.8  Exempt handler.

    Exempt handler means a person who would otherwise be considered a 
first handler, except that all Hass avocados purchased by the person 
have already been subject to assessments under the Order. A person who 
handles both Hass avocados that have already been subject to assessments 
under the Order and Hass avocados that have not been subject to 
assessments under the Order is a first handler.



Sec. 1219.9  First handler.

    First handler means a person operating in the Hass avocado marketing 
system that sells domestic or imported Hass avocados for consumption in 
the United States and who is responsible for remitting assessments to 
the Board. For the purposes of the Order, the term means the first 
person who handles Hass avocados for sale (except a common or contract 
carrier of Hass avocados owned by another person), including a producer 
who handles Hass avocados for sale of the producer's own production.



Sec. 1219.10  Fiscal period or marketing year.

    Fiscal period or marketing year means the period beginning on 
November 1 of any year and extending through the last day of October of 
the following year, or such other consecutive 12-month period as shall 
be recommended by the Board and approved by the Secretary.



Sec. 1219.11  Handle.

    Handle means to pack, process, transport, purchase, or in any other 
way to place or cause Hass avocados to which one has title or possession 
to be placed in the current of commerce. Such term shall not include the 
transportation or delivery of Hass avocados by the producer thereof to a 
handler.



Sec. 1219.12  Hass avocado.

    Hass avocado means the fruit grown in or imported into the United 
States of the species Persea americana Mill., or other type of avocados 
that, in the determination of the Board, with approval of the Secretary, 
is so similar to

[[Page 231]]

the Hass variety avocado as to be indistinguishable to consumers in 
fresh form. The term shall include all fruit in fresh, frozen, or any 
other processed form.



Sec. 1219.13  Hass Avocado Board.

    Hass Avocado Board or the Board means the administrative body 
established pursuant to Sec. 1219.40.



Sec. 1219.14  Importer.

    Importer means any person who imports Hass avocados into the United 
States. The term includes a person who holds title to Hass avocados 
produced outside of the United States immediately upon release by 
Customs, as well as any person who acts on behalf of others, as an 
agent, broker, or consignee, to secure the release of Hass avocados from 
Customs and the introduction of the released Hass avocados into the 
current of commerce and who is listed in the import records of Customs 
as the importer of record for such Hass avocados.



Sec. 1219.15  Industry information.

    Industry information means information, programs, and activities 
that are designed to increase efficiency in processing, enhance the 
development of new markets and marketing strategies, increase marketing 
efficiency, and enhance the image of Hass avocados and the Hass avocado 
industry in the United States.



Sec. 1219.16  Marketing.

    Marketing means any activity related to the sale or other 
disposition of Hass avocados in any channel of commerce.



Sec. 1219.17  Order.

    Order means this subpart.



Sec. 1219.18  Part and subpart.

    Part means the Order and all rules, regulations, and supplemental 
orders issued pursuant to the Act and the Order. The Order itself shall 
be a subpart of such part.



Sec. 1219.19  Person.

    Person means any individual, group of individuals, firm, 
partnership, corporation, joint stock company, association, cooperative, 
or any other legal entity.



Sec. 1219.20  Producer.

    Producer means any person who is engaged in the business of 
producing Hass avocados in the United States for commercial use, who 
owns, or shares the ownership and risk of loss, of such Hass avocados.



Sec. 1219.21  Programs, plans, and projects.

    Programs, plans, and projects means those research, promotion, and 
information programs, plans, studies, or projects established pursuant 
to Sec. 1219.50.



Sec. 1219.22  Promotion.

    Promotion means any action to advance the image, desirability, or 
marketability of Hass avocados in the United States, including paid 
advertising, sales promotion, and publicity. Promotion activities are 
designed to improve the competitive position and stimulate sales of Hass 
avocados in the domestic marketplace.



Sec. 1219.23  Research.

    Research means any type of test, study, or analysis relating to 
market research, market development, and market efforts, or relating to 
the use, quality, or nutritional value of Hass avocados, other related 
food science research, or research designed to advance the knowledge, 
image, desirability, usage, or marketability of Hass avocados in the 
United States.



Sec. 1219.24  Secretary.

    Secretary means the Secretary of Agriculture of the United States or 
any other 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. 1219.25  State.

    State means any of the several 50 States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth 
of the Northern Mariana Islands, the United States Virgin Islands, Guam, 
American Samoa, the Republic of the

[[Page 232]]

Marshall Islands, and the Federated States of Micronesia.



Sec. 1219.26  United States.

    United States means collectively the several 50 States of the United 
States, the District of Columbia, the Commonwealth of Puerto Rico, the 
Commonwealth of the Northern Mariana Islands, the United States Virgin 
Islands, Guam, American Samoa, the Republic of the Marshall Islands, and 
the Federated States of Micronesia.

                         The Hass Avocado Board



Sec. 1219.30  Establishment and membership.

    (a) A Hass Avocado Board, called the Board elsewhere in this part, 
is hereby established to administer the terms and provisions of this 
subpart. The Board shall consist of 12 members nominated by the Hass 
avocado industry and appointed by the Secretary as provided in this 
subpart, each of whom shall have an alternate nominated and appointed in 
the same manner as members of the Board are nominated and appointed. 
Board members and alternates shall be domiciled in the United States.
    (b) The membership of the Board shall be divided as follows:
    (1) Seven members and their alternates shall be producers of Hass 
avocados that are subject to assessments under this subpart;
    (2) Two members and their alternates shall be importers of Hass 
avocados that are subject to assessments under this subpart; and
    (3) Three members shall be producers of Hass avocados that are 
subject to assessments under this subpart or importers of Hass avocados 
that are subject to assessments under this subpart. Producers and 
importers shall be allocated to these positions so as to assure as 
nearly as possible that the composition of the 12-member Board reflects 
the proportion of domestic production and imports supplying the United 
States market. Such proportion shall be based on the Secretary's 
determination of the average volume of domestic production and the 
average volume of imports into the United States market over the 
previous three years, based on all information available to the 
Secretary.
    (c) Three years after the assessment of funds commences pursuant to 
this subpart, and at the end of each three-year period thereafter, the 
Board shall review the production of domestic Hass avocados in the 
United States and the volume of imported Hass avocados on the basis of 
the amount of assessments collected from producers and importers over 
the immediately preceding three-year period and, if warranted, recommend 
to the Secretary the reapportionment of the positions authorized in 
paragraph (b)(3) of this section to reflect changes in the proportion of 
domestic Hass avocado production to the volume of imported Hass 
avocados, to the extent possible in the Act. Any adjustment under this 
paragraph shall be subject to the review and approval of the Secretary.
    (d) For purposes of this section, importer means a person who is 
involved in, as a substantial activity, the importation of Hass avocados 
for sale or marketing in the United States (either directly or as an 
agent, broker, or consignee of any person that produces Hass avocados 
outside of the United States for sale in the United States), who is 
subject to assessments under the Order, and who is listed by Customs as 
the importer of record for such Hass avocados. A substantial activity 
means that the volume of a person's Hass avocado imports must exceed the 
volume of the person's production or handling of domestic Hass avocados.



Sec. 1219.31  Initial nomination and appointment of producer members 
and alternates.

    (a) The Association will nominate producer members and alternates to 
serve on the Board in accordance with the following procedures.
    (1) The Association shall establish a list of producers in the 
United States who are eligible to serve on the Board and notify all 
producers that they may nominate persons to serve as members and 
alternates on the Board.
    (2) After names are received from the producers, the Association 
shall prepare a ballot with the names of all persons nominated and mail 
it to all producers to allow them the opportunity

[[Page 233]]

to vote for the persons who will represent their interests on the Board.
    (3) After tabulating the vote, the Association shall announce the 
results and submit two names for each producer member and two names for 
each alternate producer member to the Secretary from the persons 
receiving the highest number of votes.
    (b) The Secretary shall select the producer members and alternates 
of the Board from the names submitted by the Association. Following the 
selection of the producer members, the Secretary shall select the 
alternate producer members. In selecting the alternate members, the 
Secretary shall consider the names submitted by the Association for each 
alternate member position along with the individuals whose names were 
submitted by the Association for each Board member position but were not 
selected for that position.



Sec. 1219.32  Initial nomination and appointment of importer members and alternates.

    (a) The Department will conduct the nomination process for the 
initial importer members and alternates on the Board in accordance with 
the following procedures.
    (1) The Department shall notify all known importers and importer 
organizations that they may nominate persons to serve as importer 
members and alternates on the Board.
    (2) After names are received from the importers and importer 
organizations, the Department shall prepare a ballot with the names of 
all persons nominated and mail it to all known importers to allow them 
the opportunity to vote for the persons who will represent their 
interests on the Board.
    (3) After tabulating the vote, the Department shall announce the 
results and submit two names for each importer member and two names for 
each alternate importer member to the Secretary from the persons 
receiving the highest number of votes.
    (b) The Secretary shall select the importer members and alternates 
of the Board from the nominees elected by importers. Following the 
selection of the importer members, the Secretary shall select the 
alternate importer members. In selecting the alternate members, the 
Secretary shall consider the names for each alternate member position 
along with the individuals who were elected by importers for each Board 
member position but were not selected for that position.



Sec. 1219.33  Subsequent nomination and appointment of Board members 
and alternates.

    The Board's staff shall announce at least 150 days in advance of the 
expiration of members' and alternates' terms that such terms are 
expiring and shall solicit nominations in accordance with procedures 
recommended by the Board and approved by the Secretary. Nominations for 
such positions should be submitted to the Secretary no less than 90 days 
prior to the expiration of the terms.



Sec. 1219.34  Failure to nominate.

    In any case in which producers or importers fail to nominate 
individuals for appointment to the Board, the Secretary may appoint 
individuals to fill vacancies from the appropriate segments of the 
industry.



Sec. 1219.35  Term of office.

    The members and alternate members of the Board shall serve for terms 
of three years, except the members of the initial Board shall serve 
terms as follows: Four members and four alternates shall serve for two-
year terms; four members and four alternates shall serve for three-year 
terms; and four members and four alternates shall serve for four-year 
terms. No member shall serve more than two consecutive three-year terms. 
Members and alternates serving initial two-year or four-year terms may 
serve for one additional three-year term. A Board member may serve as an 
alternate during the years the member is ineligible for a member 
position. Each term of office will end on October 31, with new terms of 
office beginning on November 1.



Sec. 1219.36  Vacancies.

    (a) In the event any member or alternate of the Board ceases to be a 
member of the category of members from which the member was appointed to 
the Board, such member or alternate

[[Page 234]]

shall be disqualified from serving on the Board and the 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 
that the recommendation of the Board shows adequate cause, the member 
shall be removed from office.
    (c) Should any Board member position become vacant in the event of 
the death, removal, resignation, or disqualification, the alternate of 
that member shall automatically assume the position of said member. The 
alternate shall serve until the end of the member's normal term. If 
there is no alternate member to assume the position of member, the 
successor member and alternate shall be nominated and selected in the 
manner specified in Sec. Sec. 1219.31, 1219.32, or 1219.33.
    (d) Should any alternate member become vacant in the event of death, 
removal, resignation, or disqualification, the Board may nominate 
persons to serve for the unexpired term of such alternate member. The 
nomination shall be conducted at a regularly scheduled Board meeting as 
soon as practicable after the vacancy occurs. The Board may solicit the 
names of nominees from producers and importers prior to the meeting and 
from the floor of the meeting. All nominees must meet the qualifications 
for nomination. The Board shall submit two nominees for each vacancy to 
the Secretary. A vacancy will not be required to be filled if the 
unexpired term is less than six months.



Sec. 1219.37  Alternate members.

    An alternate member of the Board, during the absence of the member 
for whom the person is the alternate, shall act in the place and stead 
of such member and perform such duties as assigned. In the event of the 
death, removal, resignation, or disqualification of any member, the 
alternate for that member shall automatically assume the position of 
said member. In the event that both a member of the Board and the 
alternate are unable to attend a meeting, the Board may not designate 
any other alternate to serve in such member's or alternate's place and 
stead for the meeting.



Sec. 1219.38  Powers and duties.

    The Board shall have the following powers and duties in addition to 
the responsibilities and authorities specified in other sections of this 
subpart:
    (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, at 
the start of each fiscal period, and at such other times as the Board 
determines to be appropriate;
    (d) To recommend to the Secretary rules and regulations to 
effectuate the terms and conditions of this subpart;
    (e) To employ such persons, other than the 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;
    (f) To appoint from its members an executive committee and to 
delegate to the committee authority to administer the terms and 
provisions of this subpart under the direction of the Board and within 
the policies determined by the Board and approved by the Secretary;
    (g) To develop budgets for the implementation of this subpart and 
submit the budgets to the Secretary for approval and to propose and 
develop (or receive and evaluate), approve, and submit to the Secretary 
for approval programs, plans, and projects for Hass avocado promotion, 
industry information, consumer information, or related research;
    (h) To develop and implement after the approval by the Secretary 
programs, plans, and projects for Hass

[[Page 235]]

avocado promotion, industry information, consumer information, or 
related research, to contract or enter into agreements with appropriate 
persons to implement the programs, plans, and projects, and to pay the 
costs of the implementation of contracts and agreements with funds 
collected under this subpart.
    (i) 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 prescribe; 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;
    (j) To work to achieve an effective, continuous, and coordinated 
program of promotion, research, consumer information, and industry 
information designed to strengthen the Hass avocado industry's position 
in the domestic marketplace; to maintain and expand existing domestic 
markets and uses for Hass avocados; to create new domestic markets; and 
to carry out programs, plans, and projects designed to provide maximum 
benefits to the Hass avocado industry;
    (k) To evaluate on-going and completed programs, plans, and projects 
for Hass avocado promotion, industry information, consumer information, 
or related research and to comply with the independent evaluation 
provisions of the Federal Agricultural Improvement and Reform Act of 
1996 [7 U.S.C. 7401 et seq.];
    (l) To receive, investigate, and report to the Secretary complaints 
of violations of the Order;
    (m) To recommend to the Secretary amendments to this Order;
    (n) To invest, pending disbursement under a program, plan, or 
project, funds collected through assessments authorized under this Act 
only 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) Any interest-bearing account or certificate of deposit of a bank 
that is a member of the Federal Reserve System; or
    (4) Obligations fully guaranteed as to principal and interest by the 
United States, except that income from any such invested funds may be 
used only for a purpose for which the invested funds may be used;
    (o) To borrow funds necessary for the startup expenses of the Order;
    (p) To cause the books of the Board to be audited by a qualified 
independent auditor at the end of each fiscal period and to submit a 
report of the audit directly to the Secretary;
    (q) To give the Secretary the same notice of meetings and 
teleconferences of the Board and its committees as is given to members 
in order that the Secretary's representative(s) may attend or 
participate in the meetings;
    (r) To act as intermediary between the Secretary and any producer, 
first handler, or importer;
    (s) To periodically prepare and make public reports of its 
activities carried out, and at least once each fiscal period, to make 
public an accounting of funds received and expended; and
    (t) To notify Hass avocado producers, first handlers, and importers 
of all Board meetings through news releases or other means.



Sec. 1219.39  Board procedure.

    (a) At a properly convened meeting of the Board, seven (7) members, 
including alternates acting in place of members of the Board, shall 
constitute a quorum: Provided, that such alternates shall serve only 
when the member is absent from a meeting. Any action of the Board shall 
require the concurring votes of a majority of those present and voting. 
At assembled meetings, all votes shall be cast in person.
    (b) In lieu of voting at a properly convened meeting and, when in 
the opinion of the chairperson of the Board such action is considered 
necessary, the Board may take action if supported by one vote more than 
50 percent of the members by mail, telephone, electronic mail, 
facsimile, or other means of communication. Such alternative means for 
the Board taking action may be undertaken for various reasons. These 
reasons include the need to address matters of an emergency nature when

[[Page 236]]

there is not enough time to call an assembled meeting of the Board. All 
telephone votes shall be confirmed promptly in writing. In that event, 
all members must be notified and provided an opportunity to vote. Any 
action so taken shall have the same force and effect as though such 
action had been taken at a properly convened meeting of the Board. All 
votes shall be recorded in the Board minutes.
    (c) All Board members and alternates and the Secretary will be 
notified at least 10 days in advance of all Board meetings, except the 
chairperson of the Board can waive the 10-day requirement in matters of 
an emergency nature.
    (d) Each member of the Board will be entitled to one vote on any 
matter put to the Board, and the motion will carry if supported by one 
vote more than 50 percent of the total votes represented by the Board 
members present.
    (e) There shall be no voting by proxy.
    (f) The chairperson shall be a voting member of the Board.



Sec. 1219.40  Committee procedure.

    (a) The Board may establish committees as deemed necessary to carry 
out the purposes and objectives of the Order.
    (b) The chairperson of the Board shall appoint all committee 
chairpersons and shall appoint all members of each committee after 
consultation with the committee chairperson affected. Appointments are 
subject to approval by the Board and may be changed from time to time as 
determined by the chairperson of the Board with the concurrence of the 
Board.
    (c) The chairperson of the Board may appoint committee members from 
among the Board members and alternates and from the industry in general.
    (d) The rules and procedures under which committees conduct their 
activities shall be prescribed in the Board's bylaws.
    (e) Committee members and the Secretary will be notified at least 10 
days in advance of all committee meetings.
    (f) It will be considered a quorum at a committee meeting when at 
least one more than half of those assigned to the committee are present.
    (g) There shall be no voting by proxy on committees.
    (h) The chairperson of the Board shall be an ex-officio member of 
all committees.



Sec. 1219.41  Compensation and expenses.

    (a) The members and alternates of the Board and committee members 
shall serve without compensation but shall be reimbursed for reasonable 
out-of-pocket expenses, as approved by the Board, incurred by them in 
the performance of their duties.
    (b) The Board shall have in place sufficient internal controls to 
prevent reimbursements or expenditures for unreasonable or otherwise 
controversial travel and meeting expenses.



Sec. 1219.42  Prohibited activities.

    The Board may not engage in and shall prohibit its employees and 
agents from engaging in:
    (a) Any action that would be a conflict of interest. For the 
purposes of this subpart, Board members and employees thereof must 
disclose any relationship with any organization or company that has a 
contract with the Board or operates a State promotion program. No member 
may vote on any matter in which the member or member's business entity 
has a financial interest.
    (b) Using funds collected under this subpart for the purpose of 
influencing legislation or governmental action or policy, by local, 
national, and foreign governments, except to develop and make 
recommendations to the Secretary as provided for in this subpart.
    (c) In a program, plan, or project conducted under this subpart:
    (1) Making any reference to private brand names or making false, 
misleading, disparaging, or unwarranted claims on behalf of Hass 
avocados or
    (2) Making any false, misleading, or disparaging statements with 
respect to the attributes or use of any agricultural product. This 
section shall not preclude the Board from offering its programs, plans, 
and projects for use by commercial parties under such terms and 
conditions as the Board may prescribe as approved by the Secretary.
    (d) For the purposes of this section, a reference to State of origin 
or country

[[Page 237]]

of origin does not constitute a reference to a private brand name with 
regard to any funds credited to or disbursed by the Board to the 
Association or to any importer association established in accordance 
with Sec. 1219.54.

                   Budgets, Expenses, and Assessments



Sec. 1219.50  Budgets, programs, plans, and projects.

    (a) The Board shall submit to the Secretary, on a fiscal period 
basis, annual budgets of its anticipated expenses and disbursements of 
the Board in the administration of this subpart, including the projected 
costs of Hass avocado promotion, industry information, consumer 
information, and related research programs, plans, and projects. The 
first budget shall cover such period as may remain before the beginning 
of the next fiscal period. If such fiscal period is 90 days or less, the 
first budget shall cover such period, as well as the next fiscal period. 
Thereafter, the Board shall submit budgets for each succeeding fiscal 
period not less than 60 days before the beginning of such fiscal period.
    (b) The Board shall receive and evaluate, or on its own initiative 
develop programs, plans and projects for Hass avocado promotion, 
industry information, consumer information as well as related research. 
The Board shall submit to the Secretary for approval any program, plan, 
or project authorized in this subpart. Such programs, plans or projects 
shall provide for:
    (1) The establishment, implementation, issuance, effectuation, 
administration, and evaluation of appropriate programs, plans, or 
projects for advertising, sales promotion, other promotion, and consumer 
information with respect to Hass avocados directed toward increasing the 
general demand for Hass avocados in the United States. Funds shall be 
available as necessary to carry out this section;
    (2) The establishment, implementation, issuance, effectuation, 
administration, and evaluation of appropriate programs, plans, and 
projects designed to strengthen the position of the Hass avocado 
industry in the domestic marketplace; to maintain, develop, and expand 
markets for Hass avocados in the United States; to lead to the 
development of new marketing strategies; to advance the image and 
desirability of, increase the efficiency of, and encourage further 
development of the Hass avocado industry; and to provide for the 
disbursement of necessary funds for the purposes described in this 
section;
    (3) The establishment, implementation, issuance, effectuation, 
administration, and evaluation of programs, plans, and projects for 
marketing development research; research on the sale, distribution, 
marketing, use, quality, and nutritional value of Hass avocados; and 
other research with respect to Hass avocado marketing, promotion, 
industry information, or consumer information, including the creation of 
new products thereof. Information acquired from such plans and projects 
shall be disseminated as appropriate. Funds shall be available as 
necessary to carry out this section; and
    (4) The Board to enter into contracts or make agreements for the 
development and carrying out of research, promotion, and information, 
and pay for the costs of such contracts or agreements with funds 
collected pursuant to Sec. 1219.54.
    (c) A budget, program, plan, or project for Hass avocados promotion, 
industry information, consumer information, or related research may not 
be implemented prior to approval of the budget, program, plan, or 
project by the Secretary. If the Secretary fails to provide notice to 
the Board or approval or disapproval of a budget, program, plan, or 
project within 45 days after receipt, such budget, program, plan, or 
project shall be deemed approved by the Secretary and may be implemented 
by the Board.
    (d) The Board, from time to time, may seek advice and consult with 
experts from the production, import, wholesale, and retail segments of 
the Hass avocado industry to assist in the development of promotion, 
industry information, consumer information, and related research 
programs, plans, and projects. For these purposes, the Board may appoint 
special committees composed of persons other than Board members. A 
committee so appointed shall consult directly with the Board.

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    (e) Programs must be conducted throughout the year to reflect the 
periods when imported and domestic Hass avocados are in the U.S. 
marketplace.
    (f) The Board shall consult with both the Association and importer 
associations on programs, plans, and projects for generic promotions.



Sec. 1219.51  Contracts and agreements.

    (a) The Board shall enter into a contract or an agreement with the 
Association for the implementation of programs, plans, or projects for 
promotion, industry information, consumer information, or related 
research with respect to Hass avocados and for the payment of the cost 
of the contract or agreement with funds received by the Board under this 
subpart. The Board may disburse such funds as necessary for these 
purposes after such programs, plans, or projects have been submitted to 
and approved by the Secretary.
    (b) Any contract or agreement entered into shall provide that the 
contracting or agreeing party shall develop and submit to the Board a 
program, plan or project, together with a budget that includes the 
estimated costs to be incurred for the program, plan or project, and 
such program, plan or project shall become effective on the approval of 
the Secretary. For such contract or agreement, the contracting or 
agreeing party shall:
    (1) Keep accurate records of all transactions of the party;
    (2) Account for funds received and expended;
    (3) Make periodic reports to the Board of activities conducted; and
    (4) Make such other reports as the Board or the Secretary shall 
require.
    (c) The Secretary may audit the records of the contracting or 
agreeing party periodically.
    (d) Contractors and subcontractors are subject to the provisions of 
Sec. 1219.42.
    (e) The Board may enter into contracts or agreements for 
administrative services, including contracts for employment, as may be 
required to conduct its business. To the extent appropriate to the 
contract involved, contracts or agreements entered into by the Board 
under the authority of this section shall conform to the provisions 
described in paragraph (b) of this section.



Sec. 1219.52  Control of administrative costs.

    (a) As soon as practicable after September 9, 2002, and after 
consultation with the Secretary and other appropriate persons, the Board 
shall implement a system of cost controls based on normally accepted 
business practices to:
    (1) Ensure that the costs incurred by the Board in administering 
this part in any fiscal period shall not exceed 10 percent of the 
projected level of assessments and other income received by the Board 
for generic promotion and research programs for that fiscal period; and
    (2) Cover the minimum administrative activities and personnel needed 
to properly administer and enforce this subpart, and conduct, supervise, 
and evaluate programs, plans, and projects under this subpart.
    (b) Reimbursements to the Secretary required under Sec. 1219.53(b) 
are excluded from the limitation on spending.
    (c) To the extent possible, the Board shall use the resources, 
staffs, and facilities of existing avocado organizations as provided in 
Sec. 1219.54(a).



Sec. 1219.53  Budget and expenses.

    (a) The Board is authorized to incur such expenses, including 
provision for a reason