[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Rules and Regulations]
[Pages 19514-19524]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10887]



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DEPARTMENT OF AGRICULTURE
7 CFR Part 1280

[No. LS-94-015]


Sheep and Wool Promotion, Research, Education, and Information 
Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule establishes a Sheep and Wool Promotion, Research, 
Education, and Information Order (Order) which is authorized by the 
Sheep Promotion, Research, and Information Act of 1994 (Act). The 
program will be funded by assessments collected from sheep producers, 
sheep feeders and importers of sheep and sheep products. The program 
will be administered by a National Sheep Promotion, Research, and 
Information Board (Board).
    Implementing regulations will be published separately in the 
Federal Register.

EFFECTIVE DATE: This final rule is effective May 3, 1996, except that 
Sec. 1280.224-1280.228 become effective July 1, 1996.

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 Organizations 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); 
Proposed Rule-Sheep and Wool Promotion, Research, Education, and 
Information Order published December 5, 1995 (60 FR 62298); and Final 
Rule and Referendum Order-Procedures for the Conduct of Referendum 
published December 15, 1995 (60 FR 64297).

Regulatory Impact Analysis

Executive Orders 12866 and 12778 and the Regulatory Flexibility Act

    This final 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 final 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.), AMS has considered the economic 
impact of this final 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 
Sec. 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 final Order will 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 will pay 
an assessment and remit the assessment to the Board. Any person who 
exports live sheep or greasy wool will 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

[[Page 19515]]

wool, will pay an assessment. The U.S. Customs Service (Customs) will 
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 will be 1 cent per pound on 
live sheep sold and 2 cents per pound on greasy wool sold. Importers 
will 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 will 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 will 
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 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 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), enacted October 22, 1994, authorizes 
the Secretary to establish a national sheep and wool promotion, 
research, education, and information program. The program will 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 will 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 
will 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, will 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. The Act further provides that an order contain certain 
specified terms and conditions. Such terms and conditions included 
provisions concerning the establishment of and composition of a Board 
and the powers and duties of such a Board. Also included under terms 
and conditions are provisions concerning plans and budgets, contracts 
and agreements, books and records of the Board, assessments, 
prohibitions, and reports, books, and records of collecting persons 
required to remit assessments and each person required to collect the 
assessment pursuant to the Act and the Order.
    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 producer member may have an alternate producer 
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.
    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

[[Page 19516]]

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. On June 26, 1995, a public meeting was held at the Department to 
afford any interested person the opportunity to comment on the proposed 
Order.
    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 comments 
on the proposed Order were discussed in the December 5, 1995, issue of 
the Federal Register (60 FR 62298). A nationwide referendum was held on 
February 6, 1996, among eligible producers, feeders, and importers to 
determine whether the Order would become effective. Requests for 
absentee ballots were available from January 16, 1996, through January 
26, 1996. An Order becomes effective only if the Secretary determines 
that the Order has been approved by not less than a majority of the 
producers, feeders, and importers voting in the referendum or at least 
two-thirds of the production represented by persons voting in the 
referendum. The Order was approved by a majority of those persons 
voting in the referendum.
    The Order provisions as proposed by the Department and approved in 
the referendum are summarized as follows:
    Sections 1280.101-1280.136 of the Order define certain words that 
are used in the Order.
    Sections 1280.201-1280.211 of the Order concern the establishment, 
membership, nominations, method of obtaining nominations, certification 
of organizations, term of office, compensation, removal, and powers and 
duties of the Board, which is the governing body authorized to 
administer the Order subject to the oversight of the Secretary.
    Sections 1280.212-1280.214 of the Order provide for budget review 
and approval, maintenance of books and records by the Board, and the 
investment of funds.
    Section 1280.215 of the Order authorizes the use of assessments 
which includes expenditures of funds for domestic country of origin 
specific promotion and reimbursement for expenses incurred for the 
Department's oversight responsibilities.
    Sections 1280.216-1280.222 of the Order establish that the 
membership of the Executive Committee will be composed of 14 members, 
including 7 producer members elected from 7 regions reflecting sheep 
production and sheep producers, 1 sheep feeder, 3 importers of sheep or 
sheep products, and 3 elected officers of the Board. In addition, these 
sections authorize the Executive Committee to develop plans and 
projects of promotion, research, consumer information, education, 
industry information, and producer information with respect to sheep 
and sheep products and to develop and submit to the Board budgets of 
anticipated expenses and disbursements for program projects. The 
Secretary must approve such plans, projects, or budgets before they are 
implemented.
    Section 1280.223 of the Order holds the Board responsible for 
expenses of the Board and the Executive Committee, and establish 
requirements for contracts and agreements that the Board enters into.
    Sections 1280.224-1280.228 establish assessment rates on sheep and 
sheep products as provided by the Act. These sections also provide that 
the domestic rate and the import rate must be raised or lowered 
simultaneously by an equivalent amount.
    Section 1280.229 authorizes each Qualified State Sheep Board (QSSB) 
to receive 20 percent of the total assessments collected by the Board 
on the marketing of domestic sheep and domestic sheep products in any 
one year from each State. However, no QSSB will receive less than 
$2,500 per year.
    Section 1280.230 of the Order establishes collection procedures for 
each person responsible for collecting the assessment, fixes a 2 
percent late payment charge for past due assessments, and authorizes 
the Secretary to receive assessments on behalf of the Board, if the 
Board is not in place or is otherwise unable to collect assessments.
    Section 1280.231 of the Order prohibits funds received under this 
program from being used to influence Government action or policy, with 
certain specified exceptions. In addition, funds received under this 
program that are used to conduct plans or projects shall not (1) make 
false or misleading claims on behalf of sheep or sheep products or 
against a competing product or (2) 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.
    Sections 1280.232-1280.235 of the Order contain reporting and 
recordkeeping requirements for persons subject to the Order, and 
provide that all information obtained by the Board or the Department 
from books and reports required by the Order would be kept 
confidential. A correction is made to Sec. 1280.235(d) by deleting the 
word ``subpart'' and inserting in its place the word ``section.''
    Sections 1280.240-1280.246 of the Order contain miscellaneous 
provisions, including provisions concerning the Secretary's authority; 
proceedings after the termination of the Order; the effect of 
termination or amendment of the Order; personal liability of Board 
members; patents, copyrights, inventions and publications; amendments 
to the Order; and separability of Order provisions.
    On February 6, 1996, a nationwide referendum was conducted among 
eligible sheep producers, sheep feeders, and importers of sheep and 
sheep products to determine whether the Order should become effective. 
Requests for absentee ballots were available from January 16, 1996, 
through January 26, 1996. The representative period for establishing 
voter eligibility was from January 1, 1994, through December 31, 1994.
    It is determined that a majority of those persons who voted in the 
referendum approved the implementation of the Order. To become 
effective, the Order had to be approved either by a simple majority 
vote or by those persons voting in the referendum who accounted for at 
least two-thirds of the production voted.
    After consideration of all relevant material presented, including 
the initial proposals, comments received, the referendum results, and 
other available information, it is found that the Order and all of the 
terms and conditions thereof, should be made final.
    Pursuant to 5 U.S.C. 553, it is also found and determined that good 
cause exists for not postponing the effective date of this action until 
30 days after publication in the Federal Register. Each section of this 
final rule except, Sec. 1280.224 through Sec. 1280.228 which establish 
assessment rates on both domestic and imported sheep and sheep products 
as provided by the Act, will become effective upon publication of this 
final rule. Sections 1280.224-1280.228 of the Order will become 
effective July 1, 1996, after regulations implementing the collection 
and remittance procedures are issued and published in the Federal 
Register.

[[Page 19517]]

Accordingly, no useful purpose would be served in delaying the 
effective date of the other provisions of the Order. The Act requires 
implementation of the Order if the Order is approved by the sheep and 
wool industry and the sheep and wool industry approved the Order in the 
February 6, 1996, referendum. Further, the Board must be appointed to 
administer the program as soon as possible. Therefore, this final rule 
is effective on the day following date of publication in the Federal 
Register except for the provisions in Sec. 1280.224-Sec. 1280.228.

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, 7 CFR Part 1280 of the 
Code of Federal Regulations is amended as follows:

PART 1280--SHEEP PROMOTION, RESEARCH, AND INFORMATION

    1. The authority citation for Part 1280 continues to read as 
follows:

    Authority: 7 U.S.C. 7101-7111.

    2. In Part 1280, Subpart A is added to read as follows:
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.
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  Export.
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, invention, and publication.
1280.245  Amendments.
1280.246  Separability.

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 Statute 
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.

[[Page 19518]]

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 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

[[Page 19519]]

                                                                        
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) of this subpart 
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 
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 paragraphs (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, decision making, 
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 above, the 
Secretary shall appoint the members of the Board on the basis of 
representation provided in Sec. 1280.201 above.


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:
    (A) The organization's active membership includes a significant 
number of feeders or importers in relation to the total membership of 
the organization;
    (B) There is evidence of stability and permanency of the 
organization; and
    (C) 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

[[Page 19520]]

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 
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:

[[Page 19521]]

    (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:
    (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.


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 (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,

[[Page 19522]]

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  Export.

    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) into the United States shall pay an assessment to the Board.
    (b) Collection. Customs 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 Boards.

    (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

[[Page 19523]]

information, or producer information activities under this subpart;
    (c) A plan or project conducted pursuant to this title 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 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:
    (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 section, on conviction, shall be subject to a fine of not more 
than $1,000, or to imprisonment for not more than 1 year, or both, 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:

[[Page 19524]]

    (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.


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 publication.

    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.

    Dated: April 26, 1996.
Lon Hatamiya,
Administrator.
[FR Doc. 96-10887 Filed 5-1-96; 8:45 am]
BILLING CODE 3410-02-P