[Federal Register Volume 60, Number 233 (Tuesday, December 5, 1995)]
[Proposed Rules]
[Pages 62298-62314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29528]
[[Page 62297]]
_______________________________________________________________________
Part II
Department of Agriculture
_______________________________________________________________________
Agricultural Marketing Service
_______________________________________________________________________
7 CFR Part 1280
Sheep and Wool Promotion, Research, Education, and Information Order;
Proposed Rule
Federal Register / Vol. 60, No. 233 / Tuesday, December 5, 1995 /
Proposed Rules
[[Page 62298]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1280
[No. LS-94-015]
Sheep and Wool Promotion, Research, Education, and Information
Order
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: The Sheep Promotion, Research, and Information Act of 1994
(Act), authorized the establishment of a national, industry-funded and
-operated sheep and wool promotion, research, education, and
information program. On January 4, 1995, the Agricultural Marketing
Service (AMS) published in the Federal Register an invitation to submit
proposals for a sheep and wool promotion, research, education, and
information order (Order). AMS received an entire industry proposal as
well as four other partial proposals, all of which were published for
public comment in the June 2, 1995, issue of the Federal Register. A
public meeting was held on June 26, 1995, at the Department of
Agriculture (Department) to discuss the proposed Order and to solicit
comments on the proposal. After evaluating the written comments
submitted, the transcript from the public meeting, and other available
material, an Order is issued pursuant to the provisions of the Act and
will be subject to a referendum.
Before the Order is made effective, a referendum must be conducted
among sheep producers, sheep feeders, and importers of sheep and sheep
products, except importers of raw wool. A final referendum rule will be
published separately in the Federal Register. If sheep producers,
feeders, and importers voting in the referendum approve the proposed
Order, all producers, feeders, and importers would be required to pay
assessments, which would be used in a national program of sheep and
wool promotion, research, education, consumer, industry, and producer
information.
The certification and nomination procedures for the establishment
of the National Sheep Promotion, Research, and Information Board
(Board) as well as other implementing regulations will be published
separately in the Federal Register.
ADDRESSES: Ralph L. Tapp, Chief; Marketing Programs Branch, Room 2606-
S; Livestock and Seed Division, AMS-USDA; P.O. Box 96456; Washington,
D.C. 20090-6456.
FOR FURTHER INFORMATION CONTACT: Ralph L. Tapp, Chief, Marketing
Programs Branch, 202/720-1115.
SUPPLEMENTARY INFORMATION: Prior documents: Notice-Invitation to submit
proposals published January 4, 1995 (60 FR 381); Proposed Rule-Sheep
and Wool Promotion, Research, Education, and Information Order
published June 2, 1995 (60 FR 28747); Proposed Rule: Procedures for
Conduct of Referendum published August 8, 1995 (60 FR 40313); Notice-
Certification of Organization for Eligibility to Make Nominations to
the Proposed Board published August 8, 1995 (60 FR 40343); Proposed
Rule-Rules and Regulations published October 3, 1995 (60 FR 51737).
Regulatory Impact Analysis
Executive Orders 12866 and 12778 and the Regulatory Flexibility Act
This proposed rule has been determined to be not significant for
purposes of Executive Order 12866 and therefore has not been reviewed
by the Office of Management and Budget (OMB).
This proposed rule was reviewed under Executive Order 12778, Civil
Justice Reform. It is not intended to have a retroactive effect. This
rule would not preempt any State or local laws, regulations, or
policies unless they present an irreconcilable conflict with this rule.
The Act provides that any person subject to the Order may file with
the Secretary a petition stating that the Order, any provision of the
Order, or any obligation imposed in connection with the Order is not in
accordance with the law, and requesting a modification of the Order or
an exemption from certain provisions or obligations of the Order. The
petitioner would have the opportunity for a hearing on the petition.
Thereafter the Secretary would issue a decision on the petition. The
Act provides that the district court of the United States in the
district in which the petitioner resides or carries on business has
jurisdiction to review the Secretary's decision, if the petitioner
files a complaint for that purpose not later than 20 days after the
date of the entry of the decision. The petitioner must exhaust his or
her administrative remedies before filing such a complaint in the
district court.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA)(5 U.S.C. 601 et seq.), the Administrator of AMS has
considered the economic impact of this proposed action on small
entities.
The purpose of RFA is to fit regulatory actions to the scale of the
businesses that are subject to such actions so that small businesses
would not be unduly or disproportionately burdened.
According to the January 27, 1995, issue of ``Sheep and Goats,''
published by the Department's National Agricultural Statistics Service,
there are approximately 87,350 sheep operations in the United States,
nearly all of which would be classified as small businesses under the
criteria established by the Small Business Administration (13 CFR
121.601). Additionally, there are approximately 9,000 importers of
sheep and sheep products, nearly all of which would be classified as
small businesses.
This proposed Order would require each person who makes payment to
a sheep producer, feeder, or handler of sheep or sheep products to be a
collecting person, and to collect an assessment from that sheep
producer, feeder, or handler of sheep or sheep products. Any person who
buys domestic live sheep or greasy wool for processing must also
collect the assessment and remit it to the Board. Each person who
processes or causes to be processed sheep or sheep products of that
person's own production and who markets the processed products would
pay an assessment and remit the assessment to the Board. Any person who
exports live sheep or greasy wool would be required to remit an
assessment to the Board. Finally, each person who imports into the
United States sheep, sheep products, wool, or wool products, other than
raw wool, would pay an assessment. The U.S. Customs Service (Customs)
would collect the assessments on imported sheep and sheep products
(except raw wool) and forward them to AMS for disbursement to the
Board.
The rate of assessment on domestic sheep producers, feeders, and
exporters of live sheep and greasy wool would be 1-cent-per-pound on
live sheep sold and 2-cents-per-pound on greasy wool sold. Importers
would be assessed 1-cent-per-pound on live sheep and the equivalent of
1-cent-per-pound of live sheep for sheep products and 2-cents-per-pound
of degreased wool or the equivalent of degreased wool for wool and wool
products. Imported raw wool would be exempt from assessments. Each
person who processes or causes to be processed sheep or sheep products
of that person's own production and markets the processed products
would be assessed the equivalent of 1-cent-per-pound of live sheep sold
and 2-cents-per-pound of greasy wool sold. All assessment rates
[[Page 62299]]
may be adjusted in accordance with the applicable provisions of the
Act.
Paperwork Reduction
In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C.
Chapter 35), the information collection requirements contained herein
were submitted to OMB for approval and assigned OMB No. 0581-0093. This
action sets forth the provisions for establishing a nationwide,
industry-funded sheep and wool promotion, research, education, and
information program. The information collection requirements as
required by this action and necessary for the implementation of this
Order include:
(1) A report by each collecting person required to remit
assessments to the Board for live sheep or greasy wool purchased from
the producer, feeder, or handler of sheep or sheep products; by each
person marketing sheep or sheep products of that person's own
production; and by each exporter of sheep or greasy wool. The estimated
number of respondents for this report is 700. Each respondent would
submit one report per month, unless otherwise prescribed by the Board,
and the estimated average reporting burden is 0.5 hours per response;
(2) A requirement to maintain sufficient records to verify reports
submitted under the Order. The estimated number of recordkeepers needed
to comply with this requirement is 700, each of whom would have an
estimated annual reporting burden of 0.5 hours;
(3) An application for certification of organization, to be
completed by eligible organizations that request certification in order
to be eligible to nominate producers, feeders, and importers to the
Board. The estimated number of respondents is 70 (with each submitting
one response), and the estimated average reporting burden is 0.5 hour
per response;
(4) A nomination form by which certified organizations will
nominate producers, feeders, and importers for membership on the Board.
The estimated number of respondents is 60 for the first year of the
Order, and 20 each year thereafter. Each respondent would submit one
response per year, and the estimated average reporting burden is 0.5
hour per response; and
(5) An advisory committee membership background information form,
to be completed by candidates nominated by certified organizations for
appointment to the Board. The estimated number of respondents is 240
during the first year of the Order, and 80 each year thereafter. Each
respondent would submit one response per year, and the estimated
average reporting burden is 0.5 hour per response.
Background
The Act (7 U.S.C. 7101-7111), approved October 22, 1994, authorizes
the Secretary to establish a national sheep and wool promotion,
research, education, and information program. The program would be
funded by a mandatory assessment on domestic sheep producers, sheep
feeders, and exporters of live sheep and greasy wool of 1-cent-per-
pound on live sheep sold and 2-cents- per-pound on greasy wool sold.
Importers would be assessed 1-cent-per-pound on live sheep imported and
the equivalent of 1-cent-per-pound of live sheep for sheep products
imported and 2-cents-per-pound of degreased wool or the equivalent of
degreased wool for wool and wool products imported. Imported raw wool
would be exempt from assessments. Each person who processes or causes
to be processed sheep or sheep products of that person's own
production, and who markets the processed products, would be assessed
the equivalent of 1-cent-per-pound of live sheep sold and 2-cents-per-
pound of greasy wool sold. All assessment rates may be adjusted in
accordance with applicable provisions of the Act.
The Act provides for the submission of proposals for a Sheep and
Wool Promotion, Research, Education, and Information Order (Order). The
Secretary may propose the issuance of an Order, or an association of
sheep producers may submit and request the issuance of an Order. The
Act provides that when the Secretary decides to propose an Order or
receives a request and proposal for an Order, the Secretary shall
publish the proposed Order and give due notice and opportunity for
public comment. As established by the Act, the Order provides for the
establishment of a Board comprised of 85 sheep producers, 10 sheep
feeders, and 25 importers of sheep and sheep products. The Act further
provides that any State with one member may have an alternate member.
The Department issued an invitation to submit proposals for an
initial Order in the January 4, 1995, (60 FR 381) issue of the Federal
Register. In response to that invitation, the American Sheep Industry
Association (ASI), the sheep industry's producer member organization,
submitted a proposed Order. In addition, the New Zealand Meat Producers
Board, the Australian Meat and Live-stock Corporation, the Wools of New
Zealand, the National Lamb Feeders Association, and the Lamb Committee
of the National Livestock and Meat Board each submitted a partial
proposal.
The Department also received letters from other interested parties.
The Department did not consider these letters to be proposals because
they primarily addressed information related to provisions of the Act
itself. Copies of these letters and the comments received in response
to the proposed Order, are available for public inspection.
The Department published ASI's proposal as Proposal I, the New
Zealand Meat Producers Board's proposal as Proposal II, the Australian
Meat and Live-stock Corporation's proposal as Proposal III, the Wools
of New Zealand's proposal as Proposal IV, and the National Lamb Feeders
Association's proposal as Proposal V. The Department modified these
proposals slightly in order to (1) make them consistent with the Act
and other similar national research and promotion programs supervised
by the Department, (2) simplify the language and format of some
provisions, and (3) add certain sections necessary for the proper
administration of the Order by the Department. The Department rejected
the proposal submitted by the Lamb Committee of the National Livestock
and Meat Board and discussed that proposal in the proposed rule. Each
proposal was published in the June 2, 1995, issue of the Federal
Register (60 FR 28747). Interested persons were invited to submit
comments on the proposals until July 17, 1995.
The Department received 137 written comments concerning the
proposed Order from individual sheep producers, sheep feeders,
importers of sheep and sheep products, State sheep producer
organizations, general farm organizations, universities, and other
interested parties. Ninety-three comments were filed on time and forty-
four comments were filed after the comment period closed. The late
comments generally expressed the same views as the timely comments that
are discussed herein, and the commenters generally supported the
primary proposed Order with certain qualifications.
The substantive changes suggested by commenters are discussed
below, together with a description of changes made by the Department
upon review of the proposed Order and the comments. The Department has
also made other minor changes of a nonsubstantial nature for clarity
and accuracy.
Of the ninety-three timely comments, sixty-two comments supported
the proposed Order as published or expressed support with some
[[Page 62300]]
modifications or clarifications. Six comments opposed the entire Order
or portions thereof. The remaining comments neither supported nor
opposed the proposal in its entirety, but rather addressed specific
sections in the proposed Order or made general comments relating to the
Act or the Order. Forty-two comments did not express opposition to
Proposal II which would provide for 6 of the 25 importer Board members
to represent importers of sheep meat and that 1 member of the Executive
Committee be an importer of sheep meat and that organizations that
represent importers of sheep or sheep products may make nominations for
representation of the importer unit. Two comments opposed Proposal II.
Fifty-nine comments opposed Proposal III which would prohibit the use
of assessments for specific country of origin promotion programs and
two comments supported Proposal III. Forty-eight comments opposed
Proposal IV which would provide that funds generated under the Act be
used to promote (1) a wide range of wool products in the United States,
including interior textile product; e.g., carpet rugs, and upholstery;
and (2) wool generically rather than to promote wool specifically grown
in the United States and four comments supported Proposal IV. Finally,
fifty-two comments supported Proposal V, which would provide that
domestic assessments could be used to promote ``Fresh American Lamb.''
The discussions are organized by headings of the proposed Order's
provisions.
Definitions
Two commenters recommended that we review all of the terminology in
Sec. 1280.101 through Sec. 1280.136 in the proposed Order and clarify
any terms that are ambiguous, in order to ensure that the definitions
in the proposed Order generally conform with or mirror those in the
Act. We agree, and reviewed the definitions and determined that the
definitions in the proposed Order either mirror the definitions in the
Act or conform to the Act's intent.
Section 1280.108 Degreased Wool
One commenter stated that the definition of ``degreased wool'' has
created some confusion because the term for ``degreased wool'' used
both in the United States and abroad, is ``scoured wool.'' The
commenter recommended that the term ``degreased wool'' be changed to
``scoured wool.'' We have not adopted this recommendation because the
Act defines the term ``degreased wool'' and we believe that the
proposed Order's definition should mirror the Act's definition.
Accordingly, this suggestion is not adopted.
Section 1280.113 Feeder
Five commenters opposed the definition of ``feeder'' in the
proposed Order. One commenter suggested that a ``feeder'' should be
defined as ``a person that is the second owner of the lamb'' because
the definition in the Act and in the proposed Order was ambiguous and
could allow a person who was primarily a producer to occupy a feeder
seat on the Board but prohibit a person who is primarily a feeder to
occupy a producer seat on the Board. The same commenter also stated
that according to the definition in the proposed Order many producers
could be feeders, but few feeders could be producers. Another commenter
suggested that ``feeder'' should be defined as ``a producer who
purchases more than 500 head of lambs a year, to be finished for the
commercial market.'' The commenter believes that the intent of the Act
was not to include 4-H club members who show market sheep or other
individuals who sell only a few market lambs in the definition of
``feeder''. Another commenter suggested that ``feeder'' should be
defined as ``any person other than a producer who purchases lambs to be
finished for the commercial market.'' Another commenter suggested that
a ``feeder'' should be defined as one whose main source of income (over
50 percent) comes from lambs purchased for the purpose of feeding to
market weight. Another commenter opposed the definition of ``feeder''
but did not provide an alternate definition. The Act itself defines
``feeder'' as any person who feeds lambs until the lambs reach
slaughter weight. The Department finds that the definition in the
proposed Order should mirror that found in the Act. Accordingly, we
have not adopted any of these suggestions.
Section 1280.122 Producer
Five commenters opposed the definition of ``producer'' in the
proposed Order. One commenter suggested that ``producer'' be defined as
any person involved in certain industry segments * * * to include but
not be limited to * * * a ``commercial'' ewe flock, purebred operation,
speciality lamb and/or wool market segment, 4-H member or youth,
because that definition is more representative of the producer segment
of the sheep industry. Another commenter suggested that ``producer'' be
defined as any producer who markets less than 500 purchased lambs per
year. Another commenter suggested that ``producer'' be defined as one
who breeds sheep for the production of lamb and wool. Three other
commenters opposed the definition of ``producer'' but did not provide
an alternative definition. The Act defines ``producer'' as any person,
other than a feeder, who owns or acquires ownership of sheep. The
Department finds that the definition in the proposed Order should
mirror that found in the Act. Accordingly, we have not adopted these
suggestions.
One commenter suggested that the definitions of ``feeder,''
``importer'' and ``producer'' include a minimum age restriction and
thus require an individual to be at least 18 years of age to ensure
that those eligible to vote in the referendum are actually engaged in
the commercial feeding, importation or production of sheep and sheep
products. The Act does not specify any age limit or restriction as an
eligibility requirement, and there are no age limits or restrictions on
persons who are required to pay assessments. The Department believes
that Congress intended that each person who is subject to the
assessment should be entitled to vote. Accordingly, we have not adopted
this suggestion.
Section 1280.126 Qualified State Sheep Board
One commenter opposed the definition of ``Qualified State Sheep
Board (QSSB)'' because Sec. 1280.126 of the proposed Order was
inconsistent with Sec. 2(5), ``Findings and Declaration Policy,'' of
the Act, which states that existing State organizations which conduct
sheep and sheep product promotion, research, industry, and consumer
education programs that are invaluable to the efforts of promoting the
consumption of sheep and sheep products. The commenter further believes
that the definition of ``QSSB'' would allow any private trade
association to be recognized as a ``QSSB,'' because they are entities
organized and operating within the State. Additionally, the commenter
states that Sec. 1280.126 in the proposed Order defines QSSB as a sheep
and wool promotion entity but also appears to include entities that
conduct promotion, research or consumer information programs with
respect to sheep or wool or both. Finally, the same commenter suggested
that Sec. 1280.126 in the proposed Order be amended to include the
following subsection ``(d)'': ``(d) * * * has agreed to maintain books
and records as specified in regulations approved by the Secretary, to
be subject to audit by or at the direction of the Secretary, to abide
by all terms of the Act and the Order and to immediately
[[Page 62301]]
suspend any and all activities funded by assessments collected pursuant
to the Act and Order upon receipt of such a request from the
Secretary.'' The Department believes that the Board would have the
authority to certify a ``QSSB'' in each State. Furthermore, the
Department believes that the Board should have the latitude to
establish requirements, subject to Departmental approval, to ensure
that funds expended by ``QSSB's'' are spent in accordance with the Act
and the Order. The Act defines a ``QSSB'', as a sheep and wool
promotion entity that is authorized by State statute or organized and
operating within a State, receives voluntary contributions or dues and
conducts promotion, research, or consumer information programs with
respect to sheep or wool, or both, and is recognized by the Board as
the sheep and wool promotion entity within the State; except that not
more than one QSSB shall exist in any State at any one time. Therefore,
we believe that the definition in the proposed Order should mirror that
found in the Act. Accordingly, we have not adopted these suggestions.
Section 1280.127 Raw Wool
Six commenters suggested that the definition of ``raw wool'' should
be expanded to include wooltop, noils of wool and wool waste so that
the definition is both clear and consistent with the North American
Free Trade Agreement ``Yarn Forward'' rule of origin for wool and other
textile imports. The Department has reviewed the definition of ``raw
wool,'' and believes that Congress intended to assess processed sheep
and sheep products but not raw wool. The Act defines ``raw wool'' as
greasy wool, pulled wool, degreased wool, or carbonized wool.
Furthermore, the Department finds that wooltop, noils of wool, and wool
waste result from the processing of raw wool as defined in the Act and
we believe that Congress intended that all processed products would be
subject to the assessment. Therefore, to expand the definition would
not be consistent with the intent of the Act. We have determined that
the definition in the proposed Order mirrors that found in the Act.
Accordingly, we have not adopted this suggestion.
National Sheep Promotion, Research, and Information Board
Section 1280.201 Establishment and Membership of the Board
Eighteen commenters opposed one or more aspects of the
``Establishment and Membership of the Board'' portion of the proposed
Order. In general, the commenters felt that (1) the Board was too large
and cumbersome for the sheep industry, (2) the Board should realign its
membership on a 3-year basis based on actual collections from each
industry segment, (3) the Board should include a packer/breaker/
retailer member because including representatives of all or some of
these entities would enhance communication and lead to greater
promotional efficiency and cooperation, (4) the Board is not fairly
representative of producer, feeder and importer groups based on total
assessment contributions, and (5) a certain number of seats on the
Board should be held by each member category--sheep producers, sheep
feeders and importers of sheep and sheep products--based on total
assessments collected from these groups.
The Act provides for the establishment and membership of the Board,
including the number of members from each industry segment to be
represented on the Board. The Act does not authorize the Board's
membership to (1) be adjusted on a 3-year basis, (2) include a packer/
breaker/retailer seat or (3) be based on total contributions from each
industry segment. Accordingly, we have not adopted any of these
suggestions.
One commenter suggested amending Sec. 1280.201 to include the
following subsection: ``(e) in accordance with regulations approved by
the Secretary, at least every 3 years and not more than every 2 years,
the Board shall review the relative investments made by producers,
feeders, and importers through payment of assessments and, if
warranted, shall reapportion representation on the Board in order to
best reflect the current state of the sheep and sheep products industry
and ensure equitable representation in relation to respective groups
total assessments.'' The Act authorizes the establishment of a 120-
member Board comprised of 85 producers, 10 feeders and 25 importers.
The Act does not authorize reapportionment of the Board for any reason.
Accordingly, we have not adopted this suggestion. The same commenter
also suggested amending Sec. 1280.201 to include a subsection ``(f)''
to read: ``(f) a quorum of the Board shall consist of the producer
representatives, importer representatives and feeder representatives or
their respective alternates and a majority vote of representatives at a
meeting in which a quorum is present shall constitute an act on the
Board.'' The Department has determined that the Board should have the
latitude to determine what constitutes a quorum of the Board in
developing its operating principles and procedures. Accordingly, this
suggestion is not adopted.
One commenter suggested that the Board be selected in a manner
similar to that used by the Consolidated Farm Service Agency for county
and State committee elections. The Act requires that the Secretary
appoint the Board from nominations submitted by certified
organizations. Accordingly, we have not adopted this suggestion.
Forty-two commenters indicated that they did not oppose proposal
II, which proposed that 6 of the 25 importer members would represent
importers of sheep meat, that 1 member of the Executive Committee be an
importer of sheep meat, and that organizations representing importers
of sheep or sheep products may make nominations for representation for
the importer unit. Two commenters opposed Proposal II because
allocating six seats for meat importers would give meat importers a
greater number of seats than they would have if representation were
based on contributions to the annual revenue. Additionally, commenters
suggested that Sec. 1280.201(c) of the proposed Order be amended to
read as follows: ``The importer positions shall be allocated
proportionally to importers of wool products, sheep meat, sheep, and
sheep products according to the relative contributions to checkoff
revenues.'' The Act does not provide for a specified number of seats on
the Board or the Executive Committee for each importer segment; i.e.,
sheep meat and wool. However, the Department has determined that the
Secretary should have the latitude to appoint representatives to the
Board in a manner that best reflects the interests of the various
importer segments. Accordingly, we have not adopted these suggestions.
One commenter perceived that the proposed Order lacks any minimum
qualifications for entities seeking recognition as Qualified State
Sheep Boards and suggested that the Department compare Sec. 1280.207
and Sec. 1280.126. Additionally, the commenter indicated that the
proposed Order appears to establish such standards for those
organizations certified to nominate candidates for the Board, but not
for those who handle the assessments collected under the program. The
Department has reviewed these sections and determined that both are
consistent with the intent of the Act. Thus, we have made no changes to
this section in this proposed rule.
Section 1280.202 Nominations
Two commenters suggested that the industry representatives
nominated to
[[Page 62302]]
the Board should be elected by the members of each industry segment
because the Secretary is unfamiliar with the abilities of individuals
in the various industries. The Department believes that the
certification and nomination process would give the Secretary the
opportunity to appoint members who best represent each industry segment
because certified organizations comprised of members of those segments
will submit nominations to the Board. Additionally, the Act requires
the Secretary to appoint the Board. Accordingly, we have not adopted
this suggestion.
One commenter stated that the Department had modified the language
of its initial proposal concerning nomination of importers in a way
that made it appear that importer representatives need not be actual
importers. The commenter suggests that the term ``importer
representatives'' be used rather than ``importer'' because the term
``importer representatives'' would be less restrictive and does not
imply that the Board members must actually import wool products. The
Department did not include this portion of the proposal as submitted.
However, the Department has again reviewed the original language in the
initial proposal and believes that its slight modification did not
materially change the proposal's meaning. The Act requires the
Secretary to appoint importers to seats established under the Act from
nominations submitted by qualified organizations that represent
importers. Furthermore, the Act defines ``importer'' as any person who
imports sheep or sheep products into the United States and a ``person''
as any individual, group of individuals, partnership, corporation,
association, cooperative, or any other legal entity. Consequently, the
Department believes that the Act intended that persons who import sheep
and sheep products should be eligible for appointment to the Board.
Accordingly, we have not adopted this suggestion.
One commenter opposed the inclusion of 25 importers on the Board
because U.S. producers do not have the opportunity to influence policy
in foreign countries. The Act provides that 25 importers of sheep and
sheep products are to be represented on the Board. Accordingly, we have
not adopted this suggestion.
Two commenters suggested that Sec. 1280.202 of the proposed Order
limits nominations to members of certified organizations because the
definition of ``feeder'' and ``producer'' appears to allow a producer
to qualify as a feeder but specifically prohibits feeders from
qualifying as producers. In addition, the commenters believe that the
definition of ``feeder'' and ``producer'' may also invite First
Amendment challenges by individuals claiming to occupy, or to have an
opportunity to occupy a feeder seat, but who are required to join a
producer trade association and pay dues to such association to be
eligible to be nominated to the Board. The Department carefully
reviewed the Act, the proposed Order, and the nomination procedures to
ensure that the nomination process would be conducted as provided for
in the Act. The Act provides for certified producer organizations to
submit only nominations from their membership for the unit in which the
certified organization is located. There is no similar restriction on
certified feeder and importer organizations. The Department finds no
need to change the Order as a result of these comments.
One commenter suggested that the Secretary should not be authorized
to appoint the Board. The Act specifically authorizes the Secretary to
appoint the Board from nominations submitted by certified
organizations. Accordingly, we have rejected this suggestion.
Section 1280.205 Method of Obtaining Nominations
One commenter suggested that Sec. 1280.205(a) (1) and (2) in the
proposed Order should provide that individuals as well as certified
organizations be certified as eligible to submit nominations. The Act
provides for all nominations to be made from certified producer, feeder
and importer organizations. If no organization is certified for an
industry segment or for a State in the case of producers, the proposed
Order permits the Secretary to obtain nominees by other means.
Accordingly, we have not adopted this suggestion. The commenter further
suggested that Sec. 1280.205(2)(C) in the proposed Order be amended to
read as follows: ``The organization has a primary and overriding
interest in representing the feeder or importer segment of the sheep
industry as opposed to some other aspect of the industry.'' The Act
establishes the criteria for certification, and it is not necessary to
modify the Order in order to carry out the Act's provisions. The
Department finds that the proposed changes to Sec. 1280.205 enumerated
above are unnecessary. Accordingly, we have not adopted them.
One commenter noted that Sec. 1280.205(b)(2) in the proposed Order
contained a misprint and suggested that the language ``shall be made by
the Secretary'' be inserted between the words ``Board'' and ``from.''
There was, in fact, a misprint and we have amended the language in
Sec. 1280.205(b)(2) of the Order to mirror the language in the Act.
One commenter was concerned that producer nominees would have to be
members of a certified organization in order to be nominated to the
Board. The Act requires producer organizations to submit only
nominations from the membership of the organization for the unit in
which the organization is located. Accordingly, we have not changed
this subsection in this proposed rule.
Section 1280.207 Certification
One commenter suggested that the National Lamb Feeders Association
be the exclusive nominator of lamb feeder representatives, and be
eligible to submit the names of the 15 sheep feeders for appointment to
the 10 sheep feeder positions on the Board. The Department considered a
similar comment proposed during the development of the proposed Order
and did not accept it for inclusion in the proposed Order. This
suggestion, if accepted, would prevent other existing organizations or
new organizations from being eligible to nominate feeders to the Board,
thereby restricting the opportunity for all qualified organizations to
participate in the nomination process in contravention of the Act.
Accordingly, we have rejected this suggestion.
Section 1280.208 Term of Office
One commenter noted that the word ``proportionally'' was
substituted for the word ``proportionately'' in the proposed Order. To
make the Order's language consistent with the language in the Act, we
have replaced the word ``proportionally'' with ``proportionately'' in
Sec. 1280.208 in this proposed Order.
Section 1280.211 Powers and Duties of the Board
Two commenters suggested that Sec. 1280.211(h) in the proposed
Order should be amended to read as follows: ``to contract with
entities, if necessary, to implement plans or projects in accordance
with the Act and whenever possible, the Board shall use existing
national organizations representative of feeders, importers, or
producers to implement plans and projects in order to increase
efficiency and minimize costs.'' The Act does not require the Board to
utilize existing national organizations to implement plans and
projects. The Department believes that the Board could use such
organizations
[[Page 62303]]
if it determined that they could effectively carry out certain
projects, however, we believe that this language would unduly restrict
the Board's authority to enter into contracts. The Department finds
that Sec. 1280.211(h) mirrors the Act which states: ``* * * to contract
with entities, if necessary, to carry out plans and projects in
accordance with the Act.'' Accordingly, we have not adopted this
language.
One commenter suggested that the Board should contract directly
with existing national lamb organizations like the other existing
livestock checkoff programs that contract with national organizations
because this would ensure continued funding for such existing national
organizations. The Act provides the Board with the power to contract
with such entities, if necessary, to implement plans or projects in
accordance with the Act. However, this suggestion if adopted as a
requirement would limit the Board's ability to conduct its program in
the most efficient and effective manner. Accordingly, we have not
adopted this suggestion.
Section 1280.215 Use of Assessments
Fifty-nine commenters suggested that funds collected under the
program should be used to fund promotion programs of ``Fresh American
Lamb'' and other U.S. sheep products because the majority of funds
collected would be generated from U.S. producers and feeders.
Additionally, some commenters suggested using domestic assessments to
fund promotion projects for ``Fresh American Lamb'' and other U.S.
sheep products would provide the Board with the flexibility to
establish the most effective program to enhance the markets for lamb
and other sheep products. Furthermore, many commenters believe that
this program is a domestic program funded primarily by U.S. growers,
and because other livestock research and promotion programs do not
prohibit country of origin promotion, funds generated under this
program should not prohibit country of origin promotion. However other
commenters contend that funds generated under the program should not be
used for specific country of origin promotion, but to promote lamb and
wool generically because generic promotion would provide for more
equitable use of funds and be less subject to legal challenge. In
addition, the same commenters pointed out that the promotion of lamb
and wool generically would ensure that importers are not disadvantaged
in light of their limited representation on the Board and the Executive
Committee.
The Department believes that the Board should have the latitude to
fund promotion plans and projects which specifically make reference to
sheep and wool produced in the U.S. with the limitation that funding
for such domestic country of origin plans and projects cannot exceed
the combined domestic assessments collected on sheep and sheep products
and further that the percentage of domestic assessments spent on the
promotion of domestic sheep and sheep products shall not exceed the
percentage of import assessments spent on the generic promotion of
sheep and sheep products. Accordingly, Sec. 1280.215 is revised in this
proposed Order to allow Board funding of promotion plans and projects
which involve identification of domestic sheep and sheep products as
being U.S. produced but limit the amount of assessments the Board can
spend on such plans and projects.
One commenter suggested that at least one-half of the assessments
collected should be spent on promotion activities because the industry
is changing and in a crisis. The Department believes that establishing
a specific amount of assessments to fund a specific program area in the
Order would limit the Board's flexibility to administer the program
effectively. Accordingly, we have not adopted this suggestion. This
same commenter also suggested that the National Lamb Feeders
Association (NLFA) receive funding from the new Board. We previously
determined that the Act does not authorize such funding and do not
adopt this suggestion in this proposed Order.
Two commenters suggested that funds generated under the Act and the
Order should promote a wide range of wool products in the United
States, including interior textile products; e.g., carpets, rugs, and
upholstery. The Department believes that the Board should be given the
latitude to use funds for programs in a manner that would benefit the
industry most effectively. The Department anticipates that the Board
would fund projects according to the needs of the industry.
Accordingly, we have not adopted this suggestion.
Two commenters suggested that assessments collected on wool should
be spent on wool projects and assessments collected on lamb should be
spent on lamb projects. The Department believes that the Board should
have the latitude to spend funds on projects that would best address
the economic needs of the entire industry. Accordingly, we have not
adopted this suggestion.
One commenter suggested that no more than 4 percent of the annual
assessments collected should be used for overhead and administrative
expenses, in order to limit the amount of assessments used for such
expenses. The Act does not limit administrative and overhead expenses.
The Department expects that the Board would maintain its administrative
and overhead expenses at a reasonable level. Accordingly, we have not
adopted this suggestion.
Some commenters suggested that any funds used for export promotion
or in furtherance of other export activity should be separately
accounted for, a percentage of total Board funds used in this manner
should be refunded to importers who pay the assessments, and that
expenditures for production-related research or information programs
specifically targeted for promotion or product quality and safety-
related expenditures should be treated similarly because such
expenditures would not benefit importers. The Department has concluded
that the Board should have the latitude to determine how funds are to
be spent, subject to the approval of the Secretary. Further, the Act
does not provide for reimbursements. Accordingly, we have not adopted
these suggestions.
Executive Committee
Section 1280.217 Membership
One commenter suggested that each of the seven regions established
under Sec. 1280.211(n) in the proposed Order should be represented by
one member of the Executive Committee for a total of seven members
representing producers. The commenter further suggested that (1) each
member be elected by a majority vote of the directors from their
respective region; (2) three members represent feeders and be elected
by a majority vote of the 10 feeder directors; and (3) three members
represent importers and be elected by a majority vote of the 25
importer directors. The Department believes that the Board should have
the latitude to determine how the Executive Committee is structured,
within the requirements of the Act, and that the Board should establish
voting requirements in its policies and procedures, subject to the
Secretary's approval. In addition, the Act provides for one ``feeder,''
member on the Executive Committee, not three. Accordingly, we have not
adopted this suggestion.
One commenter suggested that Sec. 1280.217 in the proposed Order
implicates both equal protection and compelled association clauses of
the Constitution because feeder and importer members would be elected
by
[[Page 62304]]
producer members. The commenter asked that Sec. 1280.217 be amended to
allow the various industry segments to name their own representatives
to the Executive Committee. The Department believes that the Board
should establish procedures for the nomination and election of
Executive Committee members in its policies and procedures, subject to
the requirements of the Act, and approval of the Secretary. Thus, we
have rejected the request to amend Sec. 1280.217 of the proposed Order,
and have published the language as initially proposed without change.
Several commenters recommended that of the three importer members
who serve on the Executive Committee, one member should represent
importers of sheep meat to ensure that the sheep meat industry has a
voice on the Executive Committee. The Act does not specify the consist
of the 3 importer members who serve on the Executive Committee. The Act
merely provides that the Executive Committee would be elected by the
membership of the Board. The Department believes that the Board should
have the latitude to allocate the three importer member seats on the
Executive Committee among importers of sheep, sheep meat, and wool and
wool products. Accordingly, we have not adopted this suggestion.
Section 1280.221 Quorum
We received two comments concerning the establishment of a quorum
of the Executive Committee. One commenter suggested that a quorum
should be 11 members to ensure the presence of at least one nonproducer
member. In addition, another commenter suggested that a quorum should
consist of eight members, including the feeder representative and at
least one importer representative. The language in the proposed Order
mirrors the Act's requirement, which says that a quorum of the
Executive Committee shall consist of eight members. The Act does not
require a feeder or importer representative to be included. Importer
and feeder representation within the 8-member quorum could be
considered by the Board in developing its policies and procedures.
Accordingly this suggestion is not adopted.
Section 1280.222 Vacancies
One commenter suggested that any vacancy on the Executive Committee
be filled by the process established pursuant to Sec. 1280.217 in the
proposed Order, except that the Executive Committee members would be
elected by each industry segment. The Act requires that the Executive
Committee be elected by the Board which includes produces, feeders, and
importers. The Department believes that the Board should have the
latitude to establish the procedures for filling a vacancy on the
Executive Committee consistent with the requirements of the Act and
subject to the approval of the Secretary. Accordingly, we have not
adopted this suggestion.
Assessments
Section 1280.224 Sheep Purchases
Four commenters were concerned about the high assessment rate
compared to other commodity checkoff programs, and two of these
commenters were concerned that the rate of assessment could increase
over time. The Act establishes the initial assessment rate and
specifies the manner in which the initial assessment rate may be
adjusted. Such adjustments must be recommended by the Board and
approved by the Secretary. Accordingly, this section is not amended in
the Order.
One commenter suggested that the domestic and import rate of
assessment should increase or decrease proportionately when the Board
recommends a change in the assessment rate. The Act authorizes
increases or decreases in the assessment rate for both domestic and
imported sheep and sheep products. The Department believes that
Congress intended that any adjustments in the initial assessment rate
should be the same for all persons subject to assessment under the Act.
Consequently, the Secretary will carefully review any Board recommended
assessment adjustments to ensure that such adjustments are applied
equally to all persons who are required to pay an assessment.
Accordingly, Sec. 1280.224(d), Sec. 1280.225(d) and Sec. 1280.228 (c)
and (d) have been revised to reflect the intent of this suggestion.
One commenter felt that the method of collecting money at the
various stages in the production chain would not be workable. The Act
establishes the method of collecting assessments and identifies those
persons responsible for collecting and remitting the assessment. Thus,
we have not adopted this suggestion.
Section 1280.228 Imports
One commenter expressed opposition to Customs or any other
government agency collecting funds from importers to promote the use of
wool and sheep on the grounds that it is improper for the U.S.
government to promote U.S. domestic consumption of imported or domestic
products. Customs merely serves as a collecting agent as authorized by
the Act. Using Customs as a collecting agent in other similar checkoff
programs has proven to be an exceptionally economical way of collecting
importer assessments and ensuring compliance.
Several commenters suggested that the Department work with Customs
or develop a joint committee to develop and publish the Harmonized
Tariff Schedule (HTS) classification numbers, assessment amount, and
the conversion factors for the various HTS numbers subject to
assessment. Furthermore, these commenters asked for clarification on
how the clean wool equivalent would be calculated or determined on the
various types of imported wool and wool products. The Department
published a proposed rule in the Federal Register (60 FR 51737) that
(1) identifies the HTS classification numbers for imported sheep and
sheep products subject to assessment; (2) describes how the assessment
would be calculated if the proposed Order were approved in referendum;
and (3) identifies the conversion factors that would be used to convert
sheep meat to a live weight equivalent and wool products to a degreased
wool equivalent.
Some commenters expressed concern about multiple assessments being
collected on wool or wool products imported into the U.S. after having
been previously exported on one or more occasions to other countries
for further processing (ie., weaving, cutting and/or assembly) and
suggested that a drawback or refund of the assessment should be
authorized if multiple assessments are collected. The Department
believes that this comment would be more appropriately addressed in the
implementing rules and regulations published in the Federal Register
(60 FR 51737).
One commenter suggested that rates set forth in Sec. 1280.228 (c)
and (d) in the proposed Order should be reduced yearly by a percentage
calculated by dividing the amounts provided to States pursuant to
paragraphs (a) and (b) of Sec. 1280.229 in the proposed Order by the
total assessments collected by the Board on domestic marketings in the
year funding is given to the States. Section 1280.229 of this subpart
applies to QSSBs and as required by the Act sets forth the amount of
annual assessments collected by the Board that must be returned to each
QSSB. Section 1280.229 also specifies the minimum amount QSSBs would
receive and requires that procedures be established to account for the
funds. Accordingly,
[[Page 62305]]
we have not adopted this suggestion. The same commenter suggested that
``as adjusted pursuant to Sec. 1280.229,'' be added at the end of the
first sentence under Sec. 1280.228 (c) and (d) in the proposed Order.
The provisions of Sec. 1280.229, as previously discussed relate to the
distribution of collected assessments to QSSBs and are not applicable
to the assessment rate provisions for imported sheep and sheep products
set forth in Sec. 1280.228. Thus, we have not adopted this suggestion.
One commenter suggested that the phrase ``and importer
representatives'' be inserted after ``domestic sheep industry'' under
Sec. 1280.228(c). The language in the proposed Order mirrors that found
in the Act. Accordingly, we have not adopted this suggestion.
One commenter suggested that the Order require a specific finding
that a proposed increase in the assessment rate does not violate the
U.S. GATT obligations, preferably in consultation with the U.S. Trade
Representative (USTR). The Secretary is already directed to consult
with USTR pursuant to 7 U.S.C. 2278. Accordingly, this suggestion is
not adopted.
Several commenters suggested that raw wool should not be exempt
from the assessment collection provisions of the Act because the
exemption of raw wool would create ``free rides'' because certain
importers of raw wool would benefit from the program without actually
paying an assessment on raw wool. The Act exempts imported raw wool
from assessments. Accordingly, we have not adopted this suggestion.
Two commenters requested an explanation of how the equivalent in
wool and wool products is to be calculated--specifically for wooltop,
noils of wool, and wool wastes and generally for wool products that
have been further processed. The Department has published in the
Federal Register (60 FR 51737) proposed rules and regulations
concerning the method of calculation to be used in determining the
assessment amount for live sheep, sheep meat, and wool and wool
products.
One commenter noted that Sec. 1280.228(d) in the proposed Order
substituted the word ``clean'' for ``degreased.'' The Department did
substitute the word and believes that the language in the proposed
Order should mirror the language in the Act. Thus, the word ``clean''
is replaced with ``degreased'' in Sec. 1280.228(d) in this proposed
Order.
One commenter suggested that ``equal protection'' problems could
arise because of the exemption of raw wool, inadequate representation
of lamb feeders, and inclusion of importers. The Act specifically
exempts raw wool and sets forth the composition of the Board.
Several commenters suggested that processors of wool and wool
products be allowed to retain 5 to 10 percent of the total amount of
assessments collected to cover additional administrative costs
associated with collecting and remitting assessments. The Act does not
permit collecting persons to retain a portion of the assessments
collected to offset administrative costs. Accordingly, we have not
adopted this suggestion.
Section 1280.229 Qualified State Sheep Boards
One commenter suggested that the Qualified State Sheep Boards
(QSSBs), the Board and those who contract with the QSSBs and the Board
should separately account for checkoff funds. The commenter also
suggested that each QSSB should (1) be required to give a written plan
showing how it plans to protect against improper uses of assessments;
(2) certify each year that it has not used assessments for forbidden
purposes; and (3) permit the Secretary and the Board the opportunity to
audit QSSBs and groups that contract with the Board and QSSBs. Section
1280.229(c) in the proposed Order provides that the Board would
establish procedures with the approval of the Secretary to account for
funds expended by the QSSBs. Additionally, Sec. 1280.213, Books and
Records of the Board, provides that (1) the Secretary may inspect and
audit books and records of the Board; (2) the Board must prepare and
submit from time-to-time such reports as prescribed by the Secretary;
and (3) the Board's books are to be audited by an independent auditor
at the end of each fiscal year, and auditor's report submitted to the
Secretary. Additionally, the Department believes the Act intends that
the Board, the QSSBs and any organizations receiving funds to conduct
program activities would be accountable for all funds received, and
would be required to expend those funds in accordance with the Act and
the Order. Therefore, although the Department agrees that
accountability for funds is important, we have not made changes in this
proposed Order as a result of these suggestions because the proposed
Order already provides for such accountability. The Department believes
that the Board would develop operating procedures and guidelines to
ensure that any funds collected under the authority of this subpart
would be accounted for as authorized under the Act. Accordingly, we
have not adopted this suggestion.
Two commenters suggested that importers receive a credit similar to
the 20 percent share of funding returned to State QSSBs, contending
that State funding defeats the basic purpose of the law which is to
promote sheep products nationwide. The Act does not authorize the Board
to distribute to importers a portion of the annual assessments similar
to that distributed to QSSBs. Thus, we have not adopted this
suggestion.
Section 1280.230 Collection
One commenter suggested that Sec. 1280.230(b), Late Payment
Charges, in the proposed Order should include a provision stating that
any collector shall have the right to submit a written petition to the
Board to have these charges waived or adjusted under this subpart. The
commenter indicated the provisions should also state: ``The Board shall
consider such petitions and is empowered to waive or reduce penalties
upon a two-thirds majority vote.'' Although, the Department believes
that the Board should have the flexibility to establish collection
procedures consistent with the Act's intent and Order provisions, we
have not adopted this suggestion concerning late payments.
Another commenter suggested that the 2-percent per month late
payment charge is usurious and should be pegged to the 30-year Treasury
bill. The 2-percent late payment charge is designed to encourage people
to remit assessments on a timely basis. The Department does not believe
that reducing the late payment charge would further the purposes of the
Act. Accordingly, we have not adopted this suggestion.
Fifty-three commenters supported Sec. 1280.230(d) in the proposed
Order which provides that the Secretary is authorized to receive
assessments if the Board is not in place by the date the first
assessments are to be collected. We have adopted this section as
proposed.
Section 1280.231 Prohibitions on Use of Funds
Fifty-six commenters opposed and two supported the language of
Sec. 1280.231(d) in the proposed Order, which provides that no plans or
projects shall be undertaken to promote or advertise any sheep or sheep
products by brand or trade name without the approval of the Board and
the concurrence of the Secretary. The commenters opposed the language
because Board approval and Secretary concurrence is already authorized
under
[[Page 62306]]
the Act and in the proposal submitted by the proponents of Proposal I.
Therefore, the commenters feel that there is no need to address these
plans separately from the Board's other activities and that doing so
will result in additional bureaucracy and administration costs. The Act
and proposed Order already authorize the Board and the Secretary to
approve plans and projects for funding with assessments collected under
the authority of this subpart. However, based on the Department's
experience with other similar commodity promotion and research programs
under the Department's oversight, branded promotion projects involve
joint funding with participating private firms and a cooperative
agreement. Consequently, the Department believes that such arrangements
are more complex than the usual plans and projects and thus require
additional review and evaluation to insure that branded promotions are
in compliance with the Act and the proposed Order and Departmental
policy. Based on the Department's past experience, jointly funded
branded advertising projects have been reviewed and approved without
added expense or undue delays. Accordingly, Sec. 1280.231(d) of the
proposed Order is published in this rule with no modifications.
One commenter suggested that Sec. 1280.231, Prohibition on Use of
Funds, be deleted because it would restrict the sheep industry's
ability to defend against detrimental legislation. The Act prohibits
funds generated under this program from being used in any manner for
the purpose of influencing legislation or government action or policy.
Accordingly, we have not adopted this suggestion.
One commenter suggested that Sec. 1280.231(b)(2) should be
strengthened because no assessments should be used to influence
government decision-making under the guise of providing information
requested by a friendly government official who is actually helping the
industry to support or oppose legislation in which it has interest. The
Department believes that the language provided in the Act and in the
proposed Order addresses this concern. Accordingly, we have not adopted
this suggestion.
Additional Comments
One commenter suggested that the Department conduct an economic
impact study because of (1) the recordkeeping burden on the industry;
(2) the loss of the Wool Act; and (3) the addition of the new program.
The Administrator, AMS, previously determined pursuant to the
requirements set forth in the Regulatory Flexibility Act that the
economic impact on small entities would not be significant. The
Department does not anticipate a significant increase in costs and
paperwork burden to those persons subject to the provisions of the Act
and Order because most of the records required to be maintained are
normally maintained by all businesses in the sheep industry and the
calculation of assessments is a one step procedure that uses readily
available records. Accordingly, we have not adopted this suggestion.
One commenter asked how the vote on the referendum would be
conducted and how seats on the Executive Committee and the Board would
be assigned because the Board is heavily weighted toward sheep growers.
The Department published proposed referendum rules for public comment
on August 8, 1995, in the Federal Register (60 FR 40313). These
proposed rules include the registration and voting procedures. Also,
the Act establishes the number of seats for the Executive Committee and
the Board. We have made no changes in this proposed Order based on
these questions.
Several commenters suggested that additional hearings be conducted
throughout the country to allow time for the necessary revisions and
allow for additional public comment. The Department conducted a public
meeting on June 26, 1995, and provided a 45-day comment period so that
any person interested in the sheep and wool checkoff program would have
the opportunity to present testimony or submit comments by the July 17,
1995, deadline. The Department does not feel it is necessary to hold
additional public meetings. Also, there are timeframes set forth in the
Act. Further, all costs incurred by the Department in conducting the
additional meetings are reimbursable by the sheep industry.
Accordingly, we have not adopted this suggestion.
A few commenters suggested that the implementation of the program
be delayed to allow sheep on feed inventories to be more manageable and
allow producers to be assessed their fair share. The sheep industry has
requested that assessments begin as soon as possible so that
promotional and other activities can begin. Because of the time frames
set forth in the Act, the Department believes that Congress intended
for the Department to proceed in an expeditious manner. The Department
has determined that no useful purpose would be served in delaying
implementation of this program.
One commenter suggested that the Department ensure that importers
are eligible to participate in the referendum. The Act provides that
sheep producers, sheep feeders, and importers of sheep and sheep
products who, during a representative period established by the
Department, were engaged in sheep production, sheep feeding or
importation of sheep and sheep products--excluding importers of raw
wool--are eligible to vote in the referendum. The Department believes
that Congress intended that each person who is subject to the
assessment is entitled to vote. Consequently, the Department has
proposed and published referendum rules in the Federal Register (60 FR
40313).
List of Subjects in 7 CFR Part 1280
Administrative practice and procedure, Advertising, Agricultural
research, Marketing agreements, Sheep and sheep products, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, it is proposed that
chapter XI of title 7 of the Code of Federal Regulations be amended as
follows:
1. Part 1280 is proposed to be added as follows:
PART 1280--SHEEP PROMOTION, RESEARCH, AND INFORMATION
Subpart A--Sheep and Wool Promotion, Research, Education, and
Information Order
Definitions
Sec.
1280.101 Act.
1280.102 Board.
1280.103 Carbonized wool.
1280.104 Certified organization.
1280.105 Collecting person.
1280.106 Consumer information.
1280.107 Customs Service.
1280.108 Degreased wool.
1280.109 Department.
1280.110 Education.
1280.111 Executive Committee.
1280.112 Exporter.
1280.113 Feeder.
1280.114 Greasy wool.
1280.115 Handler.
1280.116 Importer.
1280.117 Industry information.
1280.118 National feeder organization.
1280.119 Part and subpart.
1280.120 Person.
1280.121 Processor.
1280.122 Producer.
1280.123 Producer information.
1280.124 Promotion.
1280.125 Pulled wool.
1280.126 Qualified State Sheep Board.
1280.127 Raw wool.
1280.128 Research.
1280.129 Secretary.
1280.130 Sheep.
[[Page 62307]]
1280.131 Sheep products.
1280.132 State.
1280.133 Unit.
1280.134 United States.
1280.135 Wool.
1280.136 Wool products.
National Sheep Promotion, Research, and Information Board
1280.201 Establishment and membership of the Board.
1280.202 Nominations.
1280.203 Nominee's agreement to serve.
1280.204 Appointment.
1280.205 Method of obtaining nominations.
1280.206 Vacancies.
1280.207 Certification of organizations.
1280.208 Term of office.
1280.209 Compensation.
1280.210 Removal.
1280.211 Powers and duties of the Board.
1280.212 Budgets.
1280.213 Books and records of the Board.
1280.214 Investment of funds.
1280.215 Use of assessments.
Executive Committee
1280.216 Establishment.
1280.217 Membership.
1280.218 Powers and duties.
1280.219 Term of office.
1280.220 Chairperson.
1280.221 Quorum.
1280.222 Vacancies.
Expenses
1280.223 Expenses.
Assessments
1280.224 Sheep purchases.
1280.225 Wool purchases.
1280.226 Direct processing.
1280.227 Exports.
1280.228 Imports.
1280.229 Qualified State Sheep Board.
1280.230 Collection.
1280.231 Prohibition on use of funds.
Reports, Books, and Records
1280.232 Reports.
1280.233 Books and records.
1280.234 Use of information.
1280.235 Confidentiality.
Miscellaneous
1280.240 Right of the Secretary.
1280.241 Proceedings after termination.
1280.242 Effect of termination or amendment.
1280.243 Personal liability.
1280.244 Patents, copyrights, inventions, and publications.
1280.245 Amendments.
1280.246 Separability.
Subpart B--[Reserved]
Subpart C--[Reserved]
Subpart D--[Reserved]
Subpart E--[Reserved]
Authority: 7 U.S.C. 7101-7111.
Subpart A--Sheep and Wool Promotion, Research, Education, and
Information Order
Definitions
Sec. 1280.101 Act.
The term Act means the Sheep Promotion, Research, and Information
Act of 1994, 7 U.S.C. 7101-7111; Public Law No. 103-107; 108 Stat.
4210, enacted October 22, 1994, and any amendments thereto.
Sec. 1280.102 Board.
The term Board means the National Sheep Promotion, Research, and
Information Board established pursuant to Sec. 1280.201.
Sec. 1280.103 Carbonized wool.
The term carbonized wool means wool that has been immersed in a
bath, usually of mineral acids or acid salts, that destroys vegetable
matter in the wool, but does not affect the wool fibers.
Sec. 1280.104 Certified organization.
The term certified organization means any organization that has
been certified by the Secretary pursuant to this part as being eligible
to submit nominations for membership on the Board.
Sec. 1280.105 Collecting person.
The term collecting person means any person who is responsible for
collecting an assessment pursuant to the Act, this subpart and
regulations prescribed by the Board and approved by the Secretary,
including processors and any other persons who are required to remit
assessments to the Board pursuant to this part, except that a
collecting person who is a market agency; i.e., commission merchant,
auction market, or livestock market in the business of receiving such
sheep or sheep products for sale on commission for or on behalf of a
producer or feeder shall pass the collected assessments on to the
subsequent purchaser pursuant to the Act, this subpart and the
regulations prescribed by the Board and approved by the Secretary.
Sec. 1280.106 Consumer information.
The term consumer information means nutritional data and other
information that would assist consumers and other persons in making
evaluations and decisions regarding the purchase, preparation, or use
of sheep products.
Sec. 1280.107 Customs Service.
The term Customs Service means the U.S. Customs Service of the
Department of the Treasury.
Sec. 1280.108 Degreased wool.
The term degreased wool means wool from which the bulk of
impurities has been removed by processing.
Sec. 1280.109 Department.
The term Department means the U.S. Department of Agriculture.
Sec. 1280.110 Education.
The term education means activities providing information relating
to the sheep industry or sheep products to producers, feeders,
importers, consumers, and other persons.
Sec. 1280.111 Executive Committee.
The term Executive Committee means the Executive Committee of the
Board established under Sec. 1280.216.
Sec. 1280.112 Exporter.
The term exporter means any person who exports domestic live sheep
or greasy wool from the United States.
Sec. 1280.113 Feeder.
The term feeder means any person who feeds lambs until the lambs
reach slaughter weight.
Sec. 1280.114 Greasy wool.
The term greasy wool means wool that has not been washed or
otherwise cleaned.
Sec. 1280.115 Handler.
The term handler means any person who purchases and markets greasy
wool.
Sec. 1280.116 Importer.
The term importer means any person who imports sheep or sheep
products into the United States.
Sec. 1280.117 Industry information.
The term industry information means information and programs that
would lead to increased efficiency in processing and the development of
new markets, marketing strategies, increased marketing efficiency, and
activities to enhance the image of sheep or sheep products on a
national or international basis.
Sec. 1280.118 National feeder organization.
The term national feeder organization means any organization of
feeders that has been certified by the Secretary pursuant to the Act
and this part as being eligible to submit nominations for membership on
the Board.
Sec. 1280.119 Part and subpart.
Part means the Sheep and Wool Promotion, Research, Education, and
Information Order and all rules and regulations issued pursuant to the
Act
[[Page 62308]]
and the Order, and the Order itself shall be a subpart of such part.
Sec. 1280.120 Person.
The term person means any individual, group of individuals,
partnership, corporation, association, cooperative, or any other legal
entity.
Sec. 1280.121 Processor.
The term processor means any person who slaughters sheep or
processes greasy wool into degreased wool.
Sec. 1280.122 Producer.
The term producer means any person, other than a feeder, who owns
or acquires ownership of sheep.
Sec. 1280.123 Producer information.
The term producer information means activities designed to provide
producers, feeders, and importers with information relating to
production or marketing efficiencies or developments, program
activities, or other information that would facilitate an increase in
the consumption of sheep or sheep products.
Sec. 1280.124 Promotion.
The term promotion means any action (including paid advertising) to
advance the image and desirability of sheep or sheep products, to
improve the competitive position, and stimulate sales, of sheep
products in the domestic and international marketplace.
Sec. 1280.125 Pulled wool.
The term pulled wool means wool that is pulled from the skin of
slaughtered sheep.
Sec. 1280.126 Qualified State Sheep Board.
The term Qualified State Sheep Board means a sheep and wool
promotion entity that:
(a) Is authorized by State statute or organized and operating
within a State;
(b) Receives voluntary contributions or dues and conducts
promotion, research, or consumer information programs with respect to
sheep or wool, or both; and
(c) Is recognized by the Board as the sheep and wool promotion
entity within the State; except that not more than one QSSB shall exist
in any State at any one time.
Sec. 1280.127 Raw wool.
The term raw wool means greasy wool, pulled wool, degreased wool,
or carbonized wool.
Sec. 1280.128 Research.
The term research means development projects and studies relating
to the production (including the feeding of sheep), processing,
distribution, or use of sheep or sheep products, to encourage, expand,
improve, or make more efficient the marketing of sheep or sheep
products.
Sec. 1280.129 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, or to whom authority may be delegated, to
act in the Secretary's stead.
Sec. 1280.130 Sheep.
The term sheep means ovine animals of any age, including lambs.
Sec. 1280.131 Sheep products.
The term sheep products means products produced in whole or in part
from sheep, including wool and products containing wool fiber.
Sec. 1280.132 State.
The term State means each of the 50 States.
Sec. 1280.133 Unit.
The term unit means each State, group of States, or class
designation that is represented on the Board.
Sec. 1280.134 United States.
The term United States means the 50 States and the District of
Columbia.
Sec. 1280.135 Wool.
The term wool means the fiber from the fleece of a sheep.
Sec. 1280.136 Wool products.
The term wool products means products produced, in whole or in
part, from wool and products containing wool fiber.
National Sheep Promotion, Research, and Information Board
Sec. 1280.201 Establishment and membership of the Board.
There is hereby established a National Sheep Promotion, Research,
and Information Board (Board) of 120 members. Members of the Board
shall be appointed by the Secretary from nominations submitted in
accordance with this subpart. The seats shall be apportioned as
follows:
(a) Producers. For purposes of nominating producers to the Board,
each State shall be represented by the following number of members:
------------------------------------------------------------------------
Board
Unit members
------------------------------------------------------------------------
Alabama...................................................... 1
Alaska....................................................... 1
Arizona...................................................... 1
Arkansas..................................................... 1
California................................................... 5
Colorado..................................................... 4
Connecticut.................................................. 1
Delaware..................................................... 1
Florida...................................................... 1
Georgia...................................................... 1
Hawaii....................................................... 1
Idaho........................................................ 2
Illinois..................................................... 1
Indiana...................................................... 1
Iowa......................................................... 2
Kansas....................................................... 1
Kentucky..................................................... 1
Louisiana.................................................... 1
Maine........................................................ 1
Maryland..................................................... 1
Massachusetts................................................ 1
Michigan..................................................... 1
Minnesota.................................................... 2
Mississippi.................................................. 1
Missouri..................................................... 1
Montana...................................................... 5
Nebraska..................................................... 1
Nevada....................................................... 1
New Hampshire................................................ 1
New Jersey................................................... 1
New Mexico................................................... 2
New York..................................................... 1
North Carolina............................................... 1
North Dakota................................................. 2
Ohio......................................................... 1
Oklahoma..................................................... 1
Oregon....................................................... 2
Pennsylvania................................................. 1
Rhode Island................................................. 1
South Carolina............................................... 1
South Dakota................................................. 4
Tennessee.................................................... 1
Texas........................................................ 10
Utah......................................................... 3
Vermont...................................................... 1
Virginia..................................................... 1
Washington................................................... 1
West Virginia................................................ 1
Wisconsin.................................................... 1
Wyoming...................................................... 5
------------------------------------------------------------------------
(b) Feeders. The feeder sheep industry shall be represented by 10
members.
(c) Importers. Importers shall be represented by 25 members.
(d) Alternates. A unit represented by only one producer member may
have an alternate member appointed to ensure representation at meetings
of the Board.
Sec. 1280.202 Nominations.
(a) Producers. The Secretary shall appoint producers and alternates
to represent units as specified under Sec. 1280.201(a) from nominations
submitted by organizations certified under Sec. 1280.207. A certified
organization may submit only nominations for producer representatives
and alternates if appropriate from the membership of the organization
for the unit in which the organization operates. To be represented on
the Board, each certified organization
[[Page 62309]]
shall submit to the Secretary at least 1.5 nominations for each seat on
the Board for which the unit is entitled to representation. If a unit
is entitled to only one seat on the Board, the unit shall submit at
least two nominations for the appointment.
(b) Feeders. The Secretary shall appoint representatives of the
feeder sheep industry to seats established under Sec. 1280.201(b) from
nominations submitted by qualified national organizations that
represent the feeder sheep industry. To be represented on the Board,
the industry shall provide at least 1.5 nominations for each
appointment to the Board to which the feeder sheep industry is
entitled.
(c) Importers. The Secretary shall appoint importers to seats
established under Sec. 1280.201(c) from nominations submitted by
qualified organizations that represent importers. The Secretary shall
receive at least 1.5 nominations for each appointment to the Board to
which importers are entitled.
(d) As soon as practicable, the Secretary shall obtain nominations
from certified organizations. If no organization is certified in a unit
the Secretary may use other means to obtain nominations. A certified
organization shall only submit nominations for positions on the Board
representing units in which such certified organization can establish
that it is certified as eligible to submit nominations for
representation of that unit of individual producers, feeders, or
importers residing in that unit.
(e) After the establishment of the initial Board, the Department
shall announce when a vacancy does or will exist. Nominations shall be
initiated not less than 6 months before the expiration of the terms of
the members whose terms are expiring, in the manner described in
Sec. 1280.205(b). In the case of vacancies due to reasons other than
the expiration of term of office, successor Board members shall be
appointed pursuant to Sec. 1280.206.
(f) Where there is more than one eligible organization representing
producers, feeders, or importers in a State or unit, they may caucus
and jointly nominate a minimum of 1.5 qualified persons for each
position representing that State or unit on the Board for which a
member is to be appointed. If joint agreement is not reached with
respect to any such nominations, or if no caucus is held, each
certified organization may submit nominations for each appointment to
be made to represent that State or unit.
(g) Nominations should be submitted in order of preference and, for
the initial Board, in order of preference for staggered terms. If the
Secretary rejects any nominations submitted and there are insufficient
nominations submitted from which appointments can be made, the
Secretary may request additional nominations under paragraph (a), (b),
or (c) of this section.
Sec. 1280.203 Nominee's agreement to serve.
Any producer, feeder, or importer nominated to serve on the Board,
or as an alternate, shall file with the Secretary at the time of the
nomination a written agreement to:
(a) Serve on the Board if appointed;
(b) Disclose any relationship with any organization that operates a
qualified State or regional program or has a contractual relationship
with the Board; and
(c) Withdraw from participation in deliberations, decisionmaking,
or voting on matters that concern the relationship disclosed under
paragraph (b) of this section.
Sec. 1280.204 Appointment.
From the nominations made pursuant to Sec. 1280.202, the Secretary
shall appoint the members of the Board on the basis of representation
provided in Sec. 1280.201.
Sec. 1280.205 Method of obtaining nominations.
(a) Initially established Board. (1) Producer and alternate
nominations. The Secretary shall solicit, from organizations certified
under Sec. 1280.207, nominations for each producer's or alternate
member's seat on the initially-established Board to which a unit is
entitled. If no such organization exist, the Secretary shall solicit
nominations for appointments in such manner as the Secretary determines
appropriate.
(2) Feeder and importer nominations. The Secretary shall solicit,
from certified organizations that represent feeders and importers,
nominations for each seat to which feeders or importers are entitled.
If no such organization exists, the Secretary shall solicit nominations
for appointments in such manner as the Secretary determines
appropriate. In determining whether an organization is eligible to
submit nominations under this subparagraph, the Secretary shall
determine whether:
(i) The organization's active membership includes a significant
number of feeders or importers in relation to the total membership of
the organization;
(ii) There is evidence of stability and permanency of the
organization; and
(iii) The organization has a primary and overriding interest in
representing the feeder or importer segment of the sheep industry.
(b) Subsequent appointment--(1) Producer nominations. The
solicitation of nominations for subsequent appointment to the Board
from eligible organizations certified under Sec. 1280.207 shall be
initiated by the Secretary, with the Board securing the nominations for
the Secretary.
(2) Feeder and importer nominations. The solicitation of feeder and
importer nominations for subsequent appointment to the Board shall be
made by the Secretary from organizations certified in accordance with
paragraph (a)(2) of this section.
Sec. 1280.206 Vacancies.
To fill any vacancy occasioned by the death, removal, resignation,
or disqualification of any member of the Board, the Secretary shall
appoint a successor from the most recent list of nominations for the
position or from nominations submitted by the Board.
Sec. 1280.207 Certification of organizations.
(a) In general. The eligibility of any State organization to
represent producers and to participate in the making of nominations
under this subpart shall be certified by the Secretary. The Secretary
shall certify any State organization that the Secretary determines
meets the eligibility criteria established under paragraph (b) of this
section. An eligibility determination by the Secretary shall be final.
(b) Basis for certification. Certification shall be based upon, in
addition to other available information, a factual report submitted by
the organization that shall contain information considered relevant and
specified by the Secretary, including:
(1) The geographic territory covered by the active membership of
the organization;
(2) The nature and size of the active membership of the
organization, including the proportion of the total number of active
producers represented by the organization;
(3) Evidence of stability and permanency of the organization;
(4) Sources from which the operating funds of the organization are
derived;
(5) The functions of the organization; and
(6) The ability and willingness of the organization to further the
aims and objectives of the Act.
(c) Primary considerations. A primary consideration in determining
the eligibility of an organization under this paragraph shall be
whether:
(1) The membership of the organization consists primarily of
[[Page 62310]]
producers who own a substantial quantity of sheep; and
(2) An interest of the organization is in the production of sheep.
Sec. 1280.208 Term of office.
Each appointment to the Board shall be for a term of 3 years,
except that appointments to the initially established Board shall be
proportionately for 1-year, 2-year, and 3-year terms. No person may
serve more than two consecutive 3-year terms, except that elected
officers shall not be subject to the term limitation while they hold
office.
Sec. 1280.209 Compensation.
Board members shall serve without compensation, but shall be
reimbursed for their reasonable expenses incurred in performing their
duties as Board members.
Sec. 1280.210 Removal.
If the Secretary determines that any person appointed under this
part fails to perform his or her duties properly or engages in acts of
dishonesty or willful misconduct, the Secretary shall remove the person
from office. The Secretary may remove a person appointed or certified
under this part, or any employee of the Board, if the Secretary
determines that the person's continued service would be detrimental to
the purposes of the Act.
Sec. 1280.211 Powers and duties of the Board.
The Board shall have the following powers and duties:
(a) To elect officers of the Board, including a chairperson, vice
chairperson, and secretary/treasurer;
(b) To administer this subpart in accordance with its terms and
provisions;
(c) To recommend regulations to effectuate the terms and provisions
of this subpart;
(d) To hold at least one annual meeting and any additional meetings
it deems appropriate;
(e) To elect members of the Board to serve on the Executive
Committee;
(f) To approve or reject budgets submitted by the Executive
Committee;
(g) To submit budgets to the Secretary for approval;
(h) To contract with entities, if necessary, to implement plans or
projects in accordance with the Act;
(i) To conduct programs of promotion, research, consumer
information, education, industry information, and producer information;
(j) To receive, investigate, and report to the Secretary complaints
of violations of this subpart;
(k) To recommend to the Secretary amendments to this subpart;
(l) To provide the Secretary with prior notice of meetings of the
Board to permit the Secretary or a designated representative to attend
such meetings;
(m) To provide not less than annually a report to producers,
feeders, and importers, accounting for the funds expended by the Board,
and describing programs implemented under the Act; and to make such
report available to the public upon request;
(n) To establish seven regions that, to the extent practicable,
contain geographically contiguous States and approximately equal
numbers of sheep producers and sheep production;
(o) To employ or retain necessary staff; and
(p) To invest funds in accordance with Sec. 1280.214.
Sec. 1280.212 Budgets.
(a) In general. The Board shall review the budget submitted by the
Executive Committee, on a fiscal year basis, of anticipated expenses
and disbursements by the Board, including probable costs of
administration and promotion, research, consumer information,
education, industry information, and producer information projects. The
Board shall submit the budget to the Secretary for the Secretary's
approval.
(b) Limitation. No expenditure of funds may be made by the Board
unless such expenditure is authorized under a budget or budget
amendment approved by the Secretary.
Sec. 1280.213 Books and records of the Board.
The Board shall:
(a) Maintain such books and records, which shall be made available
to the Secretary for inspection and audit, as the Secretary may
prescribe;
(b) Prepare and submit to the Secretary, from time-to-time, such
reports as the Secretary may prescribe; and
(c) Account for the receipt and disbursement of all funds entrusted
to it. The Board shall cause its books and records to be audited by an
independent auditor at the end of each fiscal year, and a report of
such audit to be submitted to the Secretary.
Sec. 1280.214 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
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. Any income from any such investment may be used for any purpose
for which the invested funds may be used.
Sec. 1280.215 Use of assessments.
(a) Assessments received by the Board shall be used by the Board:
(1) To fund promotion, research, education, and information plans
and projects authorized under this subpart, including promotion plans
and projects which make specific reference to domestic sheep and sheep
products originating or being produced and/or marketed in the U.S.,
except that the combined expenditures for such promotion plans and
projects involving domestic country of origin shall be limited to no
more than the combined domestic assessments collected on sheep and
sheep products and the percentage of domestic assessments spent on the
promotion of domestic sheep and sheep products shall not exceed the
percentage of import assessments spent on the generic promotion of
sheep and sheep products; and
(2) For the payment of expenses incurred in administering this
subpart, including a reasonable reserve.
(b) The Board shall reimburse the Secretary, from assessments
collected, for costs incurred in implementing and administering the
Order as provided for under the Act.
Executive Committee
Sec. 1280.216 Establishment.
The Board shall establish an Executive Committee of the Board to
assist the Board in the administration of the terms and provisions of
this subpart, under the direction of the Board, and consistent with the
policies determined by the Board.
Sec. 1280.217 Membership.
The Executive Committee shall be comprised of 14 members as
follows:
(a) Eleven members of the Executive Committee shall be elected by
the Board annually. Of these members:
(1) One member shall represent each of the seven regions
established under Sec. 1280.211(n) for a total of seven members
representing producers;
(2) One member shall represent feeders; and
(3) Three members shall represent importers.
(b) The remaining three members of the Executive Committee shall be
the elected officers of the Board.
[[Page 62311]]
Sec. 1280.218 Powers and duties.
(a) Plans and projects. The Executive Committee shall develop plans
or projects of promotion and advertising, research, consumer
information, education, industry information, and producer information,
which plans or projects shall be paid for with assessments collected by
the Board. The plans or projects shall not become effective until
approved by the Secretary.
(b) Budgets. The Executive Committee shall be responsible for
developing and submitting to the Board, for Board approval, budgets on
a fiscal year basis of the Board's anticipated expenses and
disbursements, including the estimated costs of advertising and
promotion, research, consumer information, education, industry
information, and producer information projects. The Board shall approve
or disapprove such budgets and, if approved, shall submit them to the
Secretary for the Secretary's approval.
Sec. 1280.219 Term of office.
Terms of appointment to the Executive Committee shall be for 1
year.
Sec. 1280.220 Chairperson.
The Chairperson of the Board shall serve as chairperson of the
Executive Committee.
Sec. 1280.221 Quorum.
A quorum of the Executive Committee shall consist of eight members.
Sec. 1280.222 Vacancies.
To fill any vacancy caused by the death, removal, resignation, or
disqualification of any member of the Executive Committee, the Board
shall elect a successor for the position pursuant to Sec. 1280.217.
Expenses
Sec. 1280.223 Expenses.
(a) The Board shall be responsible for all expenses of the Board
and the Executive Committee.
(b) Contracts and Agreements. Any contract or agreement entered
into by the Board shall provide that:
(1) The contracting party shall develop and submit to the Board a
plan or project of promotion, research, education, consumer
information, industry information, and producer information, together
with a budget or budgets that shall show estimated costs to be incurred
for such plan or project; and
(2) No plan, project, contract, or agreement shall become effective
until it has been approved by the Secretary.
(c) The contracting party shall:
(1) keep accurate records of all of its transactions;
(2) account for funds received and expended, including staff time,
salaries, and expenses expended on behalf of Board activities;
(3) make periodic reports to the Board of activities conducted; and
(4) make such other reports as the Board or the Secretary may
require.
Assessments
Sec. 1280.224 Sheep purchases.
(a) In general. Each person making payment to a producer or feeder
for sheep purchased from the producer or feeder shall be a collecting
person and shall collect an assessment from the producer or feeder on
each sheep sold by the producer or feeder. Each such producer or feeder
shall pay such assessment to the collecting person at the rate set
forth in paragraph (d) of this section.
(b) Remittances. Each processor making payment to a producer,
feeder, or collecting person for sheep purchased from the producer,
feeder, or collecting person shall be a collecting person and shall
collect an assessment from the producer, feeder, or other collecting
person on each sheep sold by the producer, feeder, or collecting
person, and each such producer, feeder, or collecting person shall pay
such assessment to the processor at the rate set forth in paragraph (d)
in this section, and such processor shall remit the assessment to the
Board.
(c) Processing. Any person who purchases sheep for processing shall
collect the assessment from the seller and remit the assessment to the
Board.
(d) Rate. Except as otherwise provided, the rate of assessment
shall be 1-cent-per-pound of live sheep sold. The rate of assessment
may be raised or lowered no more than 0.15 of a cent in any 1 year as
recommended by the Executive Committee and approved by the Board and
the Secretary. However, if the Board makes a recommendation to the
Secretary to raise or lower the assessment rates, the domestic rate and
the import rate must be raised or lowered simultaneously by an
equivalent amount. The rate of assessment shall not exceed 2\1/2\-
cents-per-pound.
Sec. 1280.225 Wool purchases.
(a) In general. Each person making payment to a producer, feeder,
or handler of wool for wool purchased from the producer, feeder, or
handler shall be a collecting person and shall collect an assessment
from the producer, feeder, or handler on each pound of greasy wool
sold. The producer, feeder, or handler shall pay such assessment to the
collecting person at the rate set forth in paragraph (d) of this
section.
(b) Remittances. Each processor making payment to a producer,
feeder, handler, or collecting person for wool purchased from the
producer, feeder, handler, or collecting person shall be a collecting
person and shall collect an assessment from the producer, feeder,
handler, or other collecting person on all wool sold by the producer,
feeder, handler, or collecting person, and each such producer, feeder,
handler, or collecting person shall pay such assessment to the
processor at the rate set forth in paragraph (d) of this section and
such processor shall remit the assessment to the Board.
(c) Processing. Any person purchasing greasy wool for processing
shall collect the assessment and remit the assessment to the Board.
(d) Rate. Except as otherwise provided, the rate of assessment
shall be 2-cents-per-pound. The rate of assessment may be raised or
lowered no more than 0.2 of a cent per pound in any 1 year as
recommended by the Executive Committee and approved by the Board and
the Secretary. However, if the Board makes a recommendation to the
Secretary to raise or lower the assessment rates, the domestic rate and
the import rate must be raised or lowered simultaneously by an
equivalent amount. The rate of assessment shall not exceed 4-cents-per-
pound of greasy wool.
Sec. 1280.226 Direct processing.
Each person who processes or causes to be processed sheep or sheep
products of that person's own production, and markets such sheep or
sheep products, shall pay an assessment on such sheep or sheep products
at the time of sale at a rate equivalent to the rate established in
Sec. 1280.224(d) or Sec. 1280.225(d), as appropriate, and shall remit
such assessment to the Board.
Sec. 1280.227 Exports.
Each person who exports live sheep or greasy wool shall remit the
assessment on such sheep or greasy wool at the time of export, at a
rate equivalent to the rate established in Sec. 1280.224(d) or
Sec. 1280.225(d), as appropriate, and shall remit such assessment to
the Board.
Sec. 1280.228 Imports.
(a) In general. Each person who imports sheep or sheep products or
who imports wool or products containing wool (with the exception of raw
wool)
[[Page 62312]]
into the United States shall pay an assessment to the Board.
(b) Collection. The Customs Service is authorized to collect and
remit such assessment to the Secretary for disbursement to the Board.
(c) Rate for sheep and sheep products. The assessment rate for
sheep shall be 1-cent-per-pound of live sheep. The assessment rate for
sheep products shall be the equivalent of 1-cent-per-pound of live
sheep, as determined by the Secretary in consultation with the domestic
sheep industry. Such rates may be raised or lowered no more than 0.15-
cent-per-pound in any 1 year as recommended by the Executive Committee
and approved by the Board and the Secretary, but shall not exceed 2\1/
2\-cents-per-pound. However, if the Board makes a recommendation to the
Secretary to raise or lower the assessment rates, the domestic rate and
the import rate must be raised or lowered simultaneously by an
equivalent amount.
(d) Rate for wool and wool products. The assessment rate for wool
and products containing wool shall be 2-cents-per-pound of degreased
wool or the equivalent of degreased wool. The rate of assessment may be
raised or lowered no more than 0.2-cents-per-pound in any 1 year, as
recommended by the Executive Committee and approved by the Board and
the Secretary, but shall not exceed 4-cents-per-pound of degreased wool
or the equivalent. However, if the Board makes a recommendation to the
Secretary to raise or lower the assessment rates, the domestic rate and
the import rate must be raised or lowered simultaneously by an
equivalent amount.
(e) The Secretary shall issue regulations regarding the assessment
rates for imported sheep and sheep products. The Secretary may exclude
from assessment certain imported products that contain de minimis
levels of sheep or sheep products and waive the assessment on such
products.
Sec. 1280.229 Qualified State Sheep Board.
(a) Except as provided in paragraph (b) of this section, 20 percent
of the total assessments collected by the Board on the marketings of
domestic sheep and domestic sheep products in any 1 year from a State
shall be returned to the QSSB of the State.
(b) No QSSB shall receive less than $2,500 under paragraph (a) of
this section in any 1 year. (c) The Board shall establish procedures
with the approval of the Secretary to account for funds expended
pursuant to paragraphs (a) and (b) of this section.
Sec. 1280.230 Collection.
(a) Each person responsible for the collection and remittance to
the Board of assessments under this subpart shall do so on a monthly
basis, unless the Board, with the approval of the Secretary, has
specifically authorized otherwise.
(b) Late payment charges. Any unpaid assessments due the Board or
from a person responsible for remitting assessments to the Board, shall
be increased by 2 percent each month beginning with the day after the
date such assessments were due under this subpart. Any assessments or
late payment charges that remain unpaid shall be increased at the same
rate on the corresponding day of each month thereafter until paid.
(c) Any unpaid assessments due to the Board pursuant to
Sec. 1280.224, Sec. 1280.225, Sec. 1280.226, and Sec. 1280.227 shall be
increased 2 percent each month beginning with the day following the
date such assessments were due. Any remaining amount due, which shall
include any unpaid charges previously made pursuant to this paragraph,
shall be increased at the same rate on the corresponding day of each
month thereafter until paid. For the purposes of this paragraph, any
assessment determined at a date later than the date prescribed by this
subpart because of a person's failure to submit a timely report to the
Board shall be considered to have been payable by the date it would
have been due if the report had been timely filed. The date of payment
is the applicable postmark date or the date of receipt by the Board,
whichever is earlier.
(d) 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. The
Secretary shall have the authority to promulgate rules and regulations
concerning assessments and the collection of assessments if the Board
is not in place or is otherwise unable to develop such rules and
regulations.
Sec. 1280.231 Prohibition on use of funds.
(a) Except as otherwise provided in paragraph (b) of this section,
no funds collected by the Board under this subpart shall be used in any
manner for the purpose of influencing any action or policy of the
United States Government, any foreign or State Government, or any
political subdivision thereof.
(b) The prohibition in paragraph (a) 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 under this subpart.
(c) A plan or project conducted pursuant to this part shall not
make false or misleading claims on behalf of sheep or sheep products or
against a competing product.
(d) No such plans or projects shall be undertaken to promote or
advertise any sheep or sheep products by brand or trade name without
the approval of the Board and the concurrence of the Secretary.
Reports, Books, and Records
Sec. 1280.232 Reports.
(a) Each collecting person, including processors and other persons
required to remit assessments to the Board pursuant to Sec. 1280.224(b)
for live sheep, each person who markets sheep products of that person's
own production and each exporter of sheep shall report to the Board
information pursuant to regulations prescribed by the Board and
approved by the Secretary. Such information may include:
(1) The number of sheep purchased, initially transferred or which,
in any other manner, are subject to the collection of assessment, and
the dates of such transaction;
(2) The number of sheep imported or exported, or the equivalent
thereof of sheep products imported;
(3) The amount of assessment remitted;
(4) An explanation for the remittance of any assessment that is
less than the pounds of sheep multiplied by the assessment rate; and
(5) The date any assessment was paid.
(b) Each collecting person, including processors and other persons
required to remit assessments to the Board pursuant to Sec. 1280.225(b)
for wool purchased from the producer or handler of wool or wool
products, each person purchasing greasy wool for processing, each
importer of wool or wool products (except raw wool), each exporter of
greasy wool, and each person who markets wool of that person's own
production shall report to the Board information pursuant to
regulations prescribed by the Board and approved by the Secretary. Such
information may include:
[[Page 62313]]
(1) The amount of wool purchased, initially transferred or in any
other manner subject to the collection of assessment, and the dates of
such transaction;
(2) The amount of wool imported (except raw wool) or the equivalent
thereof of wool products imported or the amount of greasy wool
exported;
(3) The amount of assessment remitted;
(4) An explanation for the remittance of an assessment that is less
than the pounds of wool multiplied by the assessment rate; and
(5) The date any assessment was paid.
Sec. 1280.233 Books and records.
(a) Each collecting person, including processors and other persons
required to remit assessments to the Board, each importer of sheep or
sheep products (except raw wool), and exporter of sheep or greasy wool,
and each person who markets sheep products of that person's own
production, shall maintain and make available for inspection such books
and records as may be required by regulations prescribed by the Board
and approved by the Secretary, including records necessary to verify
any required reports. Such records shall be maintained for the period
of time prescribed by the regulations issued hereunder.
(b) Document evidencing payment of assessments. Each collecting
person responsible for collecting an assessment paid pursuant to this
subpart, other than a person who slaughters sheep or markets sheep
products of his or her own production for sale, is required to give the
person or collecting person from whom the collecting person collected
an assessment written evidence of payment of the assessments paid
pursuant to this subpart. Such written evidence serving as a receipt
shall include:
(1) Name and address of the collecting person;
(2) Name of the producer who paid the assessment;
(3) Number of head of sheep or pounds of wool sold;
(4) Total assessments paid by the producer;
(5) Date; and
(6) Such other information as the Board, with the approval of the
Secretary, may require.
Sec. 1280.234 Use of information.
Information from records or reports required pursuant to this
subpart shall be made available to the Secretary as is appropriate to
the administration or enforcement of the Act, this subpart or any
regulation issued under the Act. In addition, the Secretary shall
authorize the use under this part of information that is accumulated
under laws or regulations other than the Act or regulations issued
under the Act regarding persons paying producers, feeders, importers,
handlers, or processors.
Sec. 1280.235 Confidentiality.
(a) All information from records or reports required pursuant to
this subpart shall be kept confidential by all officers and employees
of the Department and of the Board. Such information may be disclosed
only if the Secretary considers the information relevant, the
information is disclosed 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
the information relates to the Act.
(b) Administration. No information obtained under the authority of
this subpart 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) General statements. Nothing in paragraph (a) of this section
may be deemed to prohibit:
(1) The issuance of general statements, based on 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; or
(2) The publication, by direction of the Secretary, of the name of
any person violating this subpart and a statement of the particular
provisions of this subpart violated by such person.
(d) Penalty. Any person who willfully violates the provisions of
this subpart, 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, and
if the person is an officer or employee of the Board or the Department,
that person shall be removed from office.
Miscellaneous
Sec. 1280.240 Right of the Secretary.
All fiscal matters, programs or projects, bylaws, rules or
regulations, reports, or other substantive actions proposed, and
prepared by the Board shall be submitted to the Secretary for approval.
Sec. 1280.241 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 of the Board against third parties that
exist at the time of such termination.
(b) The trustees shall:
(1) Act as trustees until discharged by the Secretary;
(2) Carry out the obligations of the Board under any contracts or
agreements entered into by the Board pursuant to Sec. 1280.223(b);
(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 assignment of
other instruments necessary or appropriate to transfer to such persons
full title and right to all of the funds, property, and claims of the
Board or the trustees pursuant to this subpart.
(c) Any person to whom funds, property or claims have been
transferred or delivered pursuant to this subpart shall be subject to
the same obligation imposed upon the Board and upon the trustees.
(d) Any residual funds not required to pay the necessary costs of
liquidation shall be turned over to the Secretary to be used, to the
extent practicable, for continuing one or more of the promotion,
research, consumer information, education, industry information, and
producer information plans or projects authorized pursuant to this
subpart.
Sec. 1280.242 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 that
has arisen or may hereafter 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,
the Secretary or any person with respect to any such violation.
[[Page 62314]]
Sec. 1280.243 Personal liability.
No member, employee, or agent of the Board, including employees,
agents, or Board members of the QSSB, acting pursuant to the authority
provided in this subpart, 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, employee, or agent except for acts of
dishonesty or willful misconduct.
Sec. 1280.244 Patents, copyrights, inventions, and publications.
Any patents, copyrights, inventions, or publications developed
through the use of funds remitted to the Board under the provisions of
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, sales, leasing,
franchising, or other uses of such patents, copyrights, inventions, or
publications, inure to the benefit of the Board. Upon termination of
this subpart, Sec. 1280.240 shall apply to determine disposition of all
such property.
Sec. 1280.245 Amendments.
Amendments to the 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. 1280.246 Separability.
If any provision of this subpart is declared invalid or its
applicability to any person or circumstances is held invalid, the
validity of the remainder of this subpart of the applicability thereof
to other persons or circumstances shall not be affected thereby.
Subpart B--[Reserved]
Subpart C--[Reserved]
Subpart D--[Reserved]
Subpart E--[Reserved]
Dated: November 29, 1995.
Lon Hatamiya,
Administrator.
[FR Doc. 95-29528 Filed 12-1-95; 3:00 pm]
BILLING CODE 3410-02-P