[Congressional Record Volume 141, Number 192 (Tuesday, December 5, 1995)]
[Senate]
[Pages S18029-S18033]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD:
  S. 1449. A bill to make agricultural promotion boards and councils 
more responsive to producers whose mandatory assessments support the 
activities of such boards and councils, to improve the representation 
and participation of such producers of such boards and councils, to 
ensure the appropriate use of promotion funds, to prevent legislatively 
authorized promotion and research boards from using mandatory 
assessments to directly or indirectly influence legislation or 
governmental action or policy, and for other purposes; to the Committee 
on Agriculture, Nutrition, and Forestry.


             THE AGRICULTURAL PROMOTION ACCOUNTABILITY ACT

 Mr. FEINGOLD. Mr. President, I introduce legislation 
addressing existing and future agricultural promotion programs. 
Fundamentally, Mr. President, my legislation, the Agricultural 
Promotion and Accountability Act, makes some modest and common sense 
reforms to all of the existing agricultural promotion programs in order 
to make them more accountable to, and representative of, the farmers 
who pay for the programs. These congressionally authorized programs 
create boards and councils, made up of agricultural producers, which 
have the authority to assess a mandatory fee on producers to pay for 
the costs of board or council sponsored self-help promotion activities.
  Agricultural promotion programs are designed to allow producers to 
engage in self-help initiatives to promote their products to the 
consumer, to enhance demand and ultimately improve the economic 
security of farmers paying the assessment. It is hard to argue with 
that basic goal, Mr. President. These programs are fully funded and 
managed by farmers, with oversight conducted by the Department of 
Agriculture. The boards or councils authorized by Congress collect the 
producer funds and then conduct generic promotion activities for the 
specific commodity by contracting out the specific advertising and 
research projects to private entities.
  While some of these programs have existed for nearly 30 years, the 
majority were created and implemented in the last 10 years. In fact, 
since 1982, when national promotion programs collected just $45 million 
annually, the amount of money collected under mandatory promotion 
programs has increased ten-fold.
  These programs currently cover about 16 agricultural commodities 
including milk, beef, pork, eggs, soybeans, cotton as well as many 
specialty commodities. All totalled these programs collect roughly $500 
million annually from producers and processors of commodities. 
According to USDA, 90 percent of all U.S. producers contribute money 
for promotion programs, either State or federally authorized. The 
growth in the number of these programs in the last decade is not 
surprising. As Federal dollars to support agriculture dwindle due to 
budget constraints, Congress has stood ready to allow producers to 
engage in these self-help efforts. I understand that when the Congress 
addresses omnibus farm legislation either this year or next year, that 
my colleagues and I will be asked to approve additional commodity 
promotion programs for popcorn, canola and rapeseed and perhaps other 
commodities as well.
  But Mr. President, while the goals of these programs are truly 
admirable, I am concerned that some of the issues raised by some 
farmers with respect to these programs have been swept away in the 
Congressional tide to approve more and more producer-supported checkoff 
programs. Congress has approved so many of these programs in such a 
short period of time that we have not taken a step back to look at 
overall principles guiding these programs and whether or not the 
programs are operating as they should be.
  These programs are typically referred to as checkoff programs since 
the funds that producers must pay to the promotion boards and councils 
are automatically deducted from the producer's check received for 
commodities sold. In many cases, the checkoff is a fixed amount, such 
as 15 cents per hundred pounds of milk sold, or $1 per head of beef or 
dairy cattle sold. In other cases, the amount deducted is a percentage 
of the market value of the commodity sold. The checkoff payment is 
mandatory and essentially permanent once a majority of producers 
approve of the overall program in an initial referendum.
  To give my colleagues an idea of the scope of producer contributions, 
consider the annual investment of a small Wisconsin dairy farm. A milk 
producer with a 50 cow herd, averaging 18,000 pounds per cow per year, 
would pay about $1,350 annually for State, regional, and Federal milk 
promotion activities. Mr. President, that is a large contribution for 
such a small farm. Consider that a large dairy with 1,000 cows, such as 
those in the southwest and western regions of the country, averaging 
18,000 pounds of milk per cow, contributes about $27,000 annually for 
mandatory milk promotion. Consider also that a dairyman who also raises 
hogs, replacement heifers, and soybeans would contribute to the pork, 
beef, and soybean promotion program. Mr. President, these mandatory 
contributions represent a sizable investment by the individuals 
required to pay them.
  On the surface, these programs appear well-supported by farmers and 
others paying the mandatory assessments. However, as I have travelled 
the 

[[Page S 18030]]
countryside of Wisconsin, holding listening sessions in each of 
Wisconsin's 72 counties each year, I have learned that, in fact, these 
programs tend to be controversial among farmers in Wisconsin. In my 
home State, where some counties are home to more cows than people, the 
most controversial of the boards are the National Dairy Promotion and 
Research Board and the Cattlemen's Beef Promotion and Research Board.
  In the 103d Congress, when I served as a member of the Senate 
Agriculture Committee, I had the opportunity to be involved in the 
creation of new promotion programs as well as the modification of 
existing programs. I learned, Mr. President, that the controversy 
stemming from these programs goes well beyond the beef and dairy 
programs. In each case, Mr. President, when the Committee addressed 
promotion programs from eggs to sheep to beef, the controversy among 
the producers footing the bill for the program was significant. In 
response to some of the concerns raised by farmers, the Senate 
Subcommittee on Domestic and Foreign Marketing and Promotion held a 
hearing on the beef and dairy promotion programs. The House Agriculture 
Committee held a similar hearing on the beef, pork, eggs and dairy 
checkoff programs in the 103d Congress. The bill I am introducing today 
addresses the concerns that have been voiced in these hearings during 
my tenure on the Committee and since that time.
  The concerns checkoff paying farmers have raised include:
  The promotion programs do not provide for adequate input by,or 
representation of, the producers paying for the program.
  The programs once authorized continue into perpetuity with little 
opportunity for producer review or reauthorization. All but one of the 
existing programs are permanently authorized by Congress.
  In most cases concerned producers must expend their own time and 
resources to gather enough names on a petition--usually 10 percent of 
all eligible producers--in order to call for another approval 
referendum.
  In the case of the dairy promotion program, cooperatives are allowed 
to vote on behalf of their producers, which some farmers contend biases 
the referendum by drowning out the voices of dissenting producers.
  The promotion programs require all producers to pay for a program 
regardless of whether they agree with the program, whether they think 
the program is working, and whether they spend their own money on 
individual promotion efforts.
  The programs far too often engage in activities well beyond those 
intended by the producers who approved the program at its initiation. 
Some producers complain that broad-scale public relations work funded 
by checkoff dollars does little to enhance demand and far more to 
advance the political objectives of certain contracting organizations. 
Such activities may violate the prohibition on the use of checkoff 
funds to influence government action or policy. Last August, during the 
Senate subcommittee hearing mentioned previously, staff of USDA pointed 
out one specific promotion effort that may have entered the grey area 
of prohibited activities.
  The programs provide preferential treatment to certain industry-
governed farmer organization to the exclusion of others. Some farmers 
contend that the ties between some promotion boards and the industry-
lobbying organization are too tight and may create a conflict of 
interest for those boards.
  The programs that do provide contracts or grants to specific lobbying 
organizations may be indirectly supporting or subsidizing the 
legislative activities of that organization. This concern has been 
voiced by a number of members of the Senate and the House with respect 
to the use of Federal funds and grants provided to lobbying 
organizations. In fact, much time and effort has been expended in the 
Senate to ensure that Congressionally authorized funding is not 
ultimately used for lobbying activities. The concerns that farmers have 
raised with respect to the use of checkoff dollars are consistent with 
these concerns.
  The mandatory nature of the programs and the contractual relationship 
maintained by some of the boards implicate the First Amendment rights 
of producers who should not be required to associate with a group with 
whom they do not agree. In fact, some state-wide promotion programs 
similar to the individual promotion programs addressed in my 
legislation, have been successfully challenged on First Amendment 
grounds.
  Mr. President, I think these are serious concerns. The fact that 
these programs impose an additional targeted tax on producers 
purportedly for their own good, should compel the Congress to take 
these complaints seriously, as well. Producers initially approved all 
of these promotion programs based on very specific goals and with a 
number of requirements and constraints. As members of the body that 
authorized these programs, we must ensure that the initial goals of 
these programs are being met and that those farmers required to pay for 
them have assurances that the programs are operated fairly and 
democratically within the bounds of the statute and without bias 
towards or against specific segments of the taxed industry.
  The legislation I am introducing today will help accomplish those 
goals without restricting the ability of the promotion boards to 
accomplish their objectives of enhancing consumer demand for the 
commodity. The Agricultural Promotion and Accountability Act provides 
guidelines to promotion boards and councils on the prohibited 
activities with respect to lobbying and other activities intended to 
influence government action or policy. It makes some conforming changes 
to existing statutes to ensure that all promotion programs are subject 
to the same restrictions.
  The bill addresses the concern that too much money is spent on broad 
scale public relations work and not enough on direct promotion of the 
product, by limiting the types of public relations works that can be 
conducted. In fairness to all producers in arguably heterogenous 
agricultural sectors, industry image enhancement activities are 
prohibited. What might be a desirable image for one segment of an 
agricultural sector, might not be desirable for other segments of the 
industry. Since the checkoff assessments are levied equally on all 
producers, in most cases, general public relations work with checkoff 
funds is not an appropriate or equitable use of promotion dollars. 
Instead, all boards will be allowed to promote the image of the generic 
product itself, which is consistent with the goal of enhancing consumer 
demand.
  The bill also improves the democratic nature of promotion boards and 
councils by providing producers with an opportunity to reauthorize 
their program, on average, every 5 years. Referenda on approval or 
termination of the mandatory promotion programs would be held 
periodically to assure that producers continue to support the program 
in which they make substantial annual investments. During that 
referendum, producers will also be allowed to decide whether or not 
they favor instituting refunds of assessments to producers who request 
them. These provisions will provide the checkoff paying producer with 
more control over the promotion boards they fund. Additionally, 
producers argue that if they are allowed a regular review of their 
programs, the boards will be more accountable to the farmers who foot 
the bill.
  The concern about the fungibility of checkoff dollars paid in 
contracts to industry-governed lobbying organizations is perhaps one of 
the most difficult issues to address. It is, of course, not a new 
issue. In fact, just 3 years ago, Secretary of Agriculture Dan 
Glickman, then a member of Congress, stated in a promotion program 
oversight hearing that ``Congress should not be in the business of 
enacting programs which will result in the collection of funds from all 
farmers for the benefit of lobbying groups which may represent the view 
of just a fraction of the farmers.'' As I stated earlier, that is 
exactly what some producers contend is happening under some of the 
agricultural promotion programs.
  To address those concerns the Agricultural Promotion Accountability 
Act creates a number of safeguards to ensure the independence of the 
boards from their contractors, to avoid conflicts of interest between 
the board and any contractor or grantee, to ensure 

[[Page S 18031]]
that contracts are let on both an equitable and efficient basis 
providing a voice for all check-off paying producers, and to safeguard 
against any checkoff dollars being used for prohibited activities.
  Mr. President, I think the modest changes this legislation makes to 
promotion programs will go a long way to ensure the continued 
productivity and success of these promotion boards while providing 
producers a greater voice in how their money is spent. I urge my 
colleagues to support this legislation.
  I ask unanimous consent that a letter of support for the Agricultural 
Promotion Accountability Act from the National Farmers Union be 
included in the Record. I ask unanimous consent that the text of the 
legislation be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1449

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Agricultural Promotion 
     Accountability Act of 1995''.

     SEC. 2. PURPOSE.

       The purpose of this Act is to make agricultural promotion 
     boards and councils more responsive to producers whose 
     mandatory assessments support the activities of such boards 
     and councils, to improve the representation and participation 
     of such producers on such boards and councils, to ensure the 
     independence of such boards and councils, to ensure the 
     appropriate use of promotion funds, and to prevent 
     legislatively authorized agricultural promotion and research 
     boards from using mandatory assessments to directly or 
     indirectly influence legislation or governmental action or 
     policy.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Influencing legislation or governmental action or 
     policy.--The term ``influencing legislation or governmental 
     action or policy'' includes--
       (A) establishing, administering, contributing to, or paying 
     the expenses of a political party campaign, political action 
     committee, or other organization established for the purpose 
     of influencing the outcome of an election;
       (B) attempting to influence--
       (i) the outcome of any Federal, State or local election, 
     referendum, initiative, or similar procedure through a cash 
     contribution, in-kind contribution, endorsement, publicity or 
     public relations activity or similar activity;
       (ii) the introduction, modification, or enactment of any 
     Federal or State legislation or signature or veto of any 
     enrolled Federal or State legislation, including through--

       (I) communication with any member or employee of a 
     legislative body or agency or with any governmental official 
     or employee who may participate in the formulation of the 
     legislation, including engaging State or local officials in 
     similar activity (not including a communication to an 
     appropriate government official in response to a written 
     request by the official for factual, scientific, or technical 
     information relating to the conduct, implementation, or 
     results of promotion, research, consumer information and 
     education, industry information, or producer information 
     activities under a promotion program);
       (II) planning, preparing, funding, or distributing any 
     publicity or propaganda to affect the opinion of the general 
     public or a segment of the public in connection with a 
     pending legislative matter; or
       (III) urging members of the general public or any segment 
     of the general public to contribute to, or participate in, 
     any mass demonstration, march, rally, fund-raising drive, 
     lobbying campaign, letter-writing campaign, or telephone 
     campaign in connection with a pending legislative matter;

       (C) carrying out a legislative liaison activity, including 
     attendance at a legislative session or committee hearing to 
     gather information regarding legislation or to analyze the 
     effect of legislation, if the activity is carried on in 
     support of, or in knowing preparation for, an effort to 
     influence legislation or government action or policy;
       (D) carrying out an opinion survey of the general public or 
     a segment of the public, general research, or information 
     gathering, if carried out in support of, or in knowing 
     preparation for, an effort to influence legislation or 
     government action or policy; or
       (E) attempting to influence any agency action or agency 
     proceeding, as the terms are defined in section 551 of title 
     5, United States Code, through--
       (i) communication with any government official or employee 
     who may participate in the action or proceeding (not 
     including a communication to an appropriate government 
     official in response to a written request by the official for 
     factual, scientific, or technical information relating to the 
     conduct, implementation, or results of promotion, research, 
     consumer information or education, or industry information of 
     producer information activities under a promotion program);
       (ii) planning, preparing, funding, or distributing any 
     publicity or propaganda to affect the opinions of the general 
     public or any segment of the general public in connection 
     with the action or proceeding; or
       (iii) urging members of the general public or any segment 
     of the general public to contribute to, or participate in, 
     any mass demonstration, march, rally, fundraising drive, 
     lobbying campaign, letter-writing campaign, or telephone 
     campaign in connection with the action or proceeding.
       (2) Promotion program.--The term ``promotion program'' 
     means--
       (A) the cotton research and promotion program established 
     under the Cotton Research and Promotion Act (7 U.S.C. 2101 et 
     seq.);
       (B) the potato research, development, advertising, and 
     promotion program established under the Potato Research and 
     Promotion Act (7 U.S.C. 2611 et seq.);
       (C) the egg research, consumer and producer education, and 
     promotion program established under the Egg Research and 
     Consumer Information Act (7 U.S.C. 2701 et seq.);
       (D) the beef promotion and research program established 
     under the Beef Research and Information Act (7 U.S.C. 2901 et 
     seq.);
       (E) the wheat research and nutrition education program 
     established under the Wheat and Wheat Foods Research and 
     Nutrition Education Act (7 U.S.C. 3401 et seq.);
       (F) the dairy promotion program established under the Dairy 
     Production Stabilization Act of 1983 (7 U.S.C. 4501 et seq.);
       (G) the honey research, promotion, and consumer education 
     program established under the Honey Research, Promotion, and 
     Consumer Information Act (7 U.S.C. 4601 et seq.);
       (H) the pork promotion, research, and consumer information 
     program established under the Pork Promotion, Research, and 
     Consumer Information Act (7 U.S.C. 4801 et seq.);
       (I) the watermelon research, development, advertising, and 
     promotion program established under the Watermelon Research 
     and Promotion Act (7 U.S.C. 4901 et seq.);
       (J) the pecan promotion, research, industry information, 
     and consumer information program established under the Pecan 
     Promotion and Research Act of 1990 (7 U.S.C. 6001 et seq.);
       (K) the mushroom promotion, research, and consumer and 
     industry information program established under the Mushroom 
     Promotion, Research, and Consumer Information Act of 1990 (7 
     U.S.C. 6101 et seq.);
       (L) the lime research, promotion, and consumer information 
     program established under the Lime Research, Promotion, and 
     Consumer Information Act of 1990 (7 U.S.C. 6201 et seq.);
       (M) the soybean promotion, research, consumer information, 
     and industry information program established under the 
     Soybean Promotion, Research, and Consumer Information Act (7 
     U.S.C. 6301 et seq.);
       (N) the fluid milk advertising and promotion program 
     established under the Fluid Milk Promotion Act of 1990 (7 
     U.S.C. 6401 et seq.);
       (O) the flowers and greens promotion, consumer information, 
     and related research program established under the Fresh Cut 
     Flowers and Fresh Cut Greens Promotion and Information Act of 
     1993 (7 U.S.C. 6801 et seq.);
       (P) the sheep promotion, research, consumer information, 
     education, and industry information program established under 
     the Sheep Promotion, Research, and Information Act of 1994 (7 
     U.S.C. 7101 et seq.); and
       (Q) any other coordinated program of promotion, research, 
     industry information, and consumer information that is funded 
     by mandatory assessments on producers and designed to 
     maintain and expand markets and uses for an agricultural 
     commodity, as determined by the Secretary.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.

     SEC. 4. INFLUENCING LEGISLATION OR GOVERNMENTAL ACTION OR 
                   POLICY.

       (a) In General.--A board or council established by a 
     promotion program may not use any funds collected by the 
     board or council for the purpose of directly or indirectly 
     influencing legislation or governmental action or policy, 
     except for the development and recommendation of amendments 
     to the promotion program to the Secretary.
       (b) Conforming Amendments.--
       (1) Cotton.--Section 7(h) of the Cotton Research and 
     Promotion Act (7 U.S.C. 2106(h)) is amended by striking 
     ``influencing governmental policy or action'' and inserting 
     ``directly or indirectly influencing legislation or 
     governmental action or policy (as defined in section 3(1) of 
     the Agricultural Promotion Accountability Act of 1995)''.
       (2) Potatoes.--Section 308(f)(3) of the Potato Research and 
     Promotion Act (7 U.S.C. 2617(f)(3)) is amended by striking 
     ``influencing governmental policy or action'' and inserting 
     ``directly or indirectly influencing legislation or 
     governmental action or policy (as defined in section 3(1) of 
     the Agricultural Promotion Accountability Act of 1995)''.
       (3) Eggs.--Section 8(h) of the Egg Research and Consumer 
     Information Act (7 U.S.C. 2707) is amended by striking 
     ``influencing governmental policy or action'' and inserting 
     ``directly or indirectly influencing legislation or 
     governmental action or policy (as defined in section 3(1) of 
     the Agricultural Promotion Accountability Act of 1995)''.
       (4) Beef.--Section 5(10) of the Beef Research and 
     Information Act (7 U.S.C. 2904(10)) is amended--

[[Page S 18032]]

       (A) by striking ``influencing governmental action or 
     policy'' and inserting ``directly or indirectly influencing 
     legislation or governmental action or policy (as defined in 
     section 3(1) of the Agricultural Promotion Accountability Act 
     of 1995)''; and
       (B) by inserting ``to the Secretary'' before the period at 
     the end.
       (5) Wheat.--Section 1706(i) of the Wheat and Wheat Foods 
     Research and Nutrition Education Act (7 U.S.C. 3405(i)) is 
     amended by striking ``influencing governmental policy or 
     action'' and inserting ``directly or indirectly influencing 
     legislation or governmental action or policy (as defined in 
     section 3(1) of the Agricultural Promotion Accountability Act 
     of 1995)''.
       (6) Dairy.--Section 113(j) of the Dairy Production 
     Stabilization Act of 1983 (7 U.S.C. 4504(j)) is amended by 
     striking ``influencing governmental policy or action'' and 
     inserting ``directly or indirectly influencing legislation or 
     governmental action or policy (as defined in section 3(1) of 
     the Agricultural Promotion Accountability Act of 1995),''.
       (7) Honey.--Section 7(h) of the Honey Research, Promotion, 
     and Consumer Information Act (7 U.S.C. 4606(h)) is amended by 
     striking ``influencing governmental policy or action'' and 
     inserting ``directly or indirectly influencing legislation or 
     governmental action or policy (as defined in section 3(1) of 
     the Agricultural Promotion Accountability Act of 1995)''.
       (8) Pork.--Section 1620(e) of the Pork Promotion, Research, 
     and Consumer Information Act (7 U.S.C. 4809(e)) is amended by 
     striking ``influencing legislation'' and all that follows 
     through the period at the end and inserting the following: 
     ``directly or indirectly influencing legislation or 
     governmental action or policy (as defined in section 3(1) of 
     the Agricultural Promotion Accountability Act of 1995), 
     except to recommend amendments to the order to the 
     Secretary.''.
       (9) Watermelons.--Section 1647(g)(3) of the Watermelon 
     Research and Promotion Act (7 U.S.C. 4906(g)(3)) is amended 
     by striking ``influencing governmental policy or action'' and 
     inserting ``directly or indirectly influencing legislation or 
     governmental action or policy (as defined in section 3(1) of 
     the Agricultural Promotion Accountability Act of 1995)''.
       (10) Pecans.--Section 1910(g)(1) of the Pecan Promotion and 
     Research Act of 1990 (7 U.S.C. 6005(g)(1)) is amended--
       (A) in the matter preceding paragraph (1)--
       (i) by striking ``to,'' and inserting ``for the purpose 
     of,''; and
       (ii) by striking ``to--'' and inserting ``for the purpose 
     of--'';
       (B) in paragraph (1), by striking ``influence legislation 
     or governmental action'' and inserting ``directly or 
     indirectly influencing legislation or governmental action or 
     policy (as defined in section 3(1) of the Agricultural 
     Promotion Accountability Act of 1995)'';
       (C) in paragraph (2), by striking ``engage'' and inserting 
     ``engaging''; and
       (D) in paragraph (3), by striking ``engage'' and inserting 
     ``engaging''.
       (11) Mushrooms.--Section 1925(h) of the Mushroom Promotion, 
     Research, and Consumer Information Act of 1990 (7 U.S.C. 
     6104(h)) is amended by striking ``influencing legislation or 
     governmental action or policy'' and inserting ``directly or 
     indirectly influencing legislation or governmental action or 
     policy (as defined in section 3(1) of the Agricultural 
     Promotion Accountability Act of 1995)''.
       (12) Limes.--Section 1955(g) of the Lime Research, 
     Promotion, and Consumer Information Act of 1990 (7 U.S.C. 
     6204(g)) is amended by striking ``influencing legislation or 
     governmental policy or action'' and inserting ``directly or 
     indirectly influencing legislation or governmental action or 
     policy (as defined in section 3(1) of the Agricultural 
     Promotion Accountability Act of 1995)''.
       (13) Soybeans.--Section 1969(p) of the Soybean Promotion, 
     Research, and Consumer Information Act (7 U.S.C. 6304(p) is 
     amended--
       (A) in paragraph (1), by striking ``influencing legislation 
     or governmental action or policy'' and inserting ``directly 
     or indirectly influencing legislation or governmental action 
     or policy (as defined in section 3(1) of the Agricultural 
     Promotion Accountability Act of 1995)''; and
       (B) in paragraph (2)--
       (i) in subparagraph (A), by inserting ``to the Secretary'' 
     before the semicolon; and
       (ii) in subparagraph (B), by inserting ``, in response to a 
     request made by the officials,'' after ``officials''.
       (14) Milk.--Section 1999H(j)(1) of the Fluid Milk Promotion 
     Act of 1990 (7 U.S.C. 6407(j)(1)) is amended by striking 
     ``influencing legislation or governmental action or policy'' 
     and inserting ``directly or indirectly influencing 
     legislation or governmental action or policy (as defined in 
     section 3(1) of the Agricultural Promotion Accountability Act 
     of 1995)''.
       (15) Flowers and greens.--Section 5(i) of the Fresh Cut 
     Flowers and Fresh Cut Greens Promotion and Information Act of 
     1993 (7 U.S.C. 6804(i)) is amended by striking ``influencing 
     legislation or government action or policy'' and inserting 
     ``directly or indirectly influencing legislation or 
     governmental action or policy (as defined in section 3(1) of 
     the Agricultural Promotion Accountability Act of 1995)''.
       (16) Sheep.--Section 5(l)(1) of the Sheep Promotion, 
     Research, and Information Act of 1994 (7 U.S.C. 7104(l)(1)) 
     is amended by striking ``influencing legislation or 
     government action or policy'' and inserting ``directly or 
     indirectly influencing legislation or governmental action or 
     policy (as defined in section 3(1) of the Agricultural 
     Promotion Accountability Act of 1995)''.

     SEC. 5. PROMOTING THE IMAGE OF AN INDUSTRY PROHIBITED.

       (a) In General.--A board or council established by a 
     promotion program may not use any funds collected by the 
     board or council for the purpose of enhancing the image of an 
     industry, except that the board or council may promote the 
     image of a product with the express intent of stimulating 
     demand for and sales of an agricultural product in the 
     marketplace.
       (b) Conforming Amendments.--
       (1) Beef.--Section 3(9) of the Beef Research and 
     Information Act (7 U.S.C. 2902(9)) is amended by striking ``, 
     increased efficiency'' and all that follows through 
     ``industry'' and inserting ``and increased efficiency''.
       (2) Pecans.--Section 1907(12) of the Pecan Promotion and 
     Research Act of 1990 (7 U.S.C. 6002(12)) is amended by 
     striking ``, increased efficiency'' and all that follows 
     through ``industry'' and inserting ``and increased 
     efficiency''.
       (3) Mushrooms.--Section 1923(7) of the Mushroom Promotion, 
     Research, and Consumer Information Act of 1990 (7 U.S.C. 
     6103(7)) is amended by striking ``, increased efficiency'' 
     and all that follows through ``industry'' and inserting ``and 
     increased efficiency''.
       (4) Soybeans.--Section 1967(7) of the Soybean Promotion, 
     Research, and Consumer Information Act (7 U.S.C. 6302(7)) is 
     amended by striking ``, and activities'' and all that follows 
     through ``industry''.

     SEC. 6. LIMITATIONS ON CONTRACTING.

       (a) Permitted Contracts or Agreements.--Notwithstanding any 
     other provision of law, a board or council established by a 
     promotion program shall not be limited to contracting with, 
     or entering into an agreement with, an established national 
     nonprofit industry-governed organization.
       (b) Competitive Bidding.--It is the policy of Congress that 
     boards and councils should, to the extent practicable, use 
     competitive bidding in the awarding of contracts and grants 
     for activities authorized under a promotion program.
       (c) Independence of Boards and Councils.--
       (1) Applications and recommendations not binding.--
     Notwithstanding any other provision of law, a board or 
     council established by a promotion program shall not be bound 
     by a proposed application for a board or council contract or 
     a recommendation or advice of a potential contractor or a 
     national nonprofit industry-governed organization on the use 
     of board or council receipts.
       (2) Interlocking boards or membership.--Notwithstanding any 
     other provision of law, no person shall be eligible to be a 
     member of any board or council established by a promotion 
     program (including operating and nominating committees) if 
     the person serves in any decision making capacity, such as 
     that of a member of the board of directors, executive 
     committee, or other committee, for an entity that enters into 
     a contract or other agreement with the board or council.
       (3) Requirements for contracting.--A contractor or grantee 
     of a board or council may not use funds collected through 
     mandatory assessments under a promotion program to fund any 
     staff (including expenses or other activities of the staff) 
     who, in part, engage in 1 or more activities to influence 
     legislation or governmental action or policy.
       (d) Producer Approval of Relationships With Boards or 
     Councils.--
       (1) In general.--Except as provided in paragraph (2) and 
     notwithstanding any other provision of law, the entering into 
     of a permanent cooperative arrangement or the establishment 
     of a joint committee (including an arrangement that is 
     advisory in nature) by a board or council established by a 
     promotion program with a national nonprofit industry-governed 
     organization shall require the prior approval of at least \2/
     3\ of the eligible producers under the promotion program.
       (2) Exception.--Paragraph (1) shall not apply to a 
     cooperative arrangement or joint committee--
       (A) that was established prior to January 1, 1995; or
       (B) that includes representatives or participation from all 
     producer-, processor-, or handler-governed national nonprofit 
     organizations (including general farm organizations) that 
     represent any but an insignificant number of producers, 
     processors, or handlers paying assessments under the 
     promotion program to the board or council, as determined by 
     the Secretary.
       (3) Permanent cooperative arrangement.--In this subsection, 
     the term ``permanent cooperative arrangement'' means a formal 
     or informal, written or unwritten agreement or understanding 
     establishing a relationship, a liaison, a sole source 
     contract, or an operational mechanism under which a board or 
     council shares staff, facilities, or other resources or 
     carries out coordinated activities with any entity on a more 
     or less permanent and exclusive basis.
       (e) Fungibility of Board or Council Funds.--
       (1) In general.--The Inspector General of the Department of 
     Agriculture shall conduct an annual review of contractual 
     arrangements between each board or council established by a 
     promotion program and any entity or association that engages 
     in activities to influence legislation or governmental action 
     or policy and receives a significant 

[[Page S 18033]]
     amount of funding from the board or council as determined by the 
     Secretary.
       (2) Scope of review.--A review under paragraph (1) shall 
     examine whether any funds collected by the board or council 
     are used to directly or indirectly fund or subsidize an 
     entity or association that engages in influencing legislation 
     or governmental action or policy.
       (3) Report.--The Secretary shall submit a report on the 
     findings of any review under this subsection and make 
     recommendations for any actions that should be taken as a 
     result of the findings to the Committee on Agriculture of the 
     House of Representatives and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate.

     SEC. 7. PERIODIC REFERENDA.

       (a) In General.--Notwithstanding any other provision of 
     law, not less than 4 nor more than 6 years after the date of 
     enactment of this Act or the date on which the Secretary 
     determines the results of the most recent referendum for a 
     promotion program, whichever is earlier, and not less than 
     once every 5 years thereafter, the Secretary shall conduct a 
     referendum to determine whether to approve or terminate the 
     order under the promotion program and whether refunds should 
     be made under the order.
       (b) Procedure.--The referendum under subsection (a) shall 
     be conducted using the same eligibility and other procedures 
     as the referendum used to approve the original order under 
     the promotion program, except that, notwithstanding any other 
     provision of law, no greater than a simple majority of 
     eligible producers shall be required to approve the making of 
     refunds to producers.
       (c) Termination.--
       (1) In general.--If the percentage of persons voting to 
     approve the order does not equal or exceed the percentage of 
     persons necessary to approve the continuation of the original 
     order under the promotion program, the Secretary shall 
     terminate the order.
       (2) Time of termination.--The Secretary shall terminate the 
     order at the end of the marketing year during which the 
     referendum is conducted.
       (d) Refunds.--If the making of refunds is approved in a 
     referendum under subsection (a), the Secretary shall 
     establish a procedure for making the refunds not later than 
     180 days after the date of the referendum.
       (e) Cooperative Association.--Notwithstanding subsection 
     (b), a cooperative association may not vote on behalf of the 
     members of the association in a referendum conducted under 
     this section.
       (f) Inactive Promotion Programs.--The Secretary shall not 
     conduct a referendum of a promotion program under this 
     section if the Secretary determines that the promotion 
     program is not active.

                                       National Farmers Union,

                                                 November 7, 1995.
     Re legislation to regulate producer assessments for promotion 
         funding.

     Hon. Russ Feingold,
     U.S. Senator,
     Washington, DC.
       Dear Senator Feingold: On behalf of the nearly 300,000 farm 
     families of the National Farmers Union, I write to express 
     our strong support of the Agricultural Promotion 
     Accountability Act of 1995. Many of our members pay multiple 
     mandatory assessments for promotion funding, amounting to 
     thousands of dollars per year, per producer. Our 1995 
     national policy statement calls for legislative safeguards to 
     insure the use of promotion funds is controlled by the 
     producers who pay the assessments, and that dollars are used 
     to enhance producer profitability. Your proposed legislation 
     will help address several items of concern.
       (1) It is essential that mandatory assessments are not used 
     for lobbying. Although lobbying is prohibited under current 
     law, your bill makes the prohibition meaningful by clearly 
     defining the prohibited activities.
       (2) It is essential that producers control how their 
     dollars are spent. Your legislation ensures that decisions 
     are made by independent, accountable boards. Your legislation 
     also helps ensure that all producers have a voice, not just 
     those who belong to a specific trade association. Your 
     legislation further promotes producer control by prohibiting 
     bloc voting.
       (3) It is essential that an independent review of funding 
     be conducted annually. We support naming the Inspector 
     General of USDA to conduct this review.
       (4) It is essential that periodic referenda are held to 
     provide producers the opportunity to review whether the 
     promotion program is worth continuing. Your legislation 
     achieves this by specifying a referendum every five years, 
     including a referendum on refunds.
       (5) It is essential that assessments are used for 
     activities to enhance producer price. The proposed 
     legislation meets this goal by prohibiting use of funding for 
     influencing regulatory bodies, and other purposes not 
     specifically linked to product promotion.
       Thank you for your work on behalf of family farmers. 
     Promotion assessments affect nearly every farmer and the 
     topic always produces much debate whenever discussed by 
     producers. Your legislation is a positive step in addressing 
     many concerns. We look forward to working with you to pass 
     this bill.
           Sincerely,
                                                   Leland Swenson,
     President.

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