[Federal Register Volume 63, Number 215 (Friday, November 6, 1998)]
[Proposed Rules]
[Pages 59893-59907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29729]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1216

[FV-98-702-PR]


Proposed Peanut Promotion, Research, and Information Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The U.S. Department of Agriculture (the Department or USDA) is 
seeking comments regarding the establishment of an industry-funded 
promotion, research, and information program for peanuts. A proposed 
program--the Peanut Promotion, Research, and Information Order 
(Order)--was submitted to USDA by the American Farm Bureau Federation. 
Under the Order, peanut producers would pay an assessment of 1 percent 
of the price of farmers stock peanuts sold to first handlers. First 
handlers and marketing associations would remit the assessments to the 
proposed National Peanut Board (Board). The proposed program would be 
implemented under the Commodity Promotion, Research, and Information 
Act of 1996 (Act).

DATES: Comments must be received by January 5, 1999.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule to the Docket Clerk, Research and 
Promotion Branch, Fruit and Vegetable Programs, Agricultural Marketing 
Service, USDA, Stop 0244, Room 2535-S, 1400 Independence Avenue, S.W., 
Washington, D.C. 20250-0244. Comments should be submitted in triplicate 
and will be made available for public inspection at the above address 
during regular business hours. Comments may also be submitted 
electronically to: [email protected]. All comments should 
reference the docket number and the date and page number of this issue 
of the Federal Register. A copy of this rule may be found at: 
www.ams.usda.gov/fv/rpdocketlist.htm. Pursuant to the PRA, send 
comments regarding the merits of the burden estimate, ways to minimize 
the burden, including the use of automated collection techniques or 
other forms of

[[Page 59894]]

information technology, or any other aspect of this collection of 
information to the above address. Comments concerning the information 
collection under the PRA should also be sent to the Desk Officer for 
Agriculture, Office of Information and Regulatory Affairs, Office of 
Management and Budget, Washington, D.C. 20503.

FOR FURTHER INFORMATION CONTACT: Angela C. Snyder, Research and 
Promotion Branch, Fruit and Vegetable Programs, AMS, USDA, Stop 0244, 
1400 Independence Avenue, S.W., Room 2535-S, Washington, D.C. 20250-
0244; telephone (910) 860-4689 or fax (202) 205-2800.

SUPPLEMENTARY INFORMATION: This proposed Order is issued pursuant to 
the Commodity Promotion, Research, and Information Act of 1996, 7 
U.S.C. 7401-7425; Public Law 104-127, enacted April 4, 1996, 
hereinafter referred to as the Act.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
Section 524 of the Act provides that the Act shall not affect or 
preempt any other Federal or state law authorizing promotion or 
research relating to an agricultural commodity.
    Under Section 519 of the Act, a person subject to the Order may 
file a petition with the Secretary stating that the Order, any 
provision of the Order, or any obligation imposed in connection with 
the Order, is not established in accordance with the law, and 
requesting a modification of the Order or an exemption from the Order. 
Any petition filed challenging the Order, any provision of the Order, 
or any obligation imposed in connection with the Order, shall be filed 
within 2 years after the effective date of the Order, provision, or 
obligation subject to challenge in the petition. The petitioner will 
have the opportunity for a hearing on the petition. Thereafter, the 
Secretary of Agriculture (Secretary) will issue a ruling on a petition. 
The Act provides that the district court of the United States for any 
district in which the petitioner resides or conducts business shall 
have the jurisdiction to review a final ruling on the petition, if the 
petitioner files a complaint for that purpose not later than 20 days 
after the date of the entry of the Secretary's final ruling.

Executive Order 12866

    This proposed rule has been determined not significant for purposes 
of Executive Order 12866 and therefore has not been reviewed by the 
Office of Management and Budget (OMB).

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C. 
601 et seq.], the Agency is required to examine the impact of the 
proposed rule on small entities. The purpose of the RFA is to fit 
regulatory actions to the scale of businesses subject to such actions 
so that small businesses will not be disproportionately burdened.
    The Act authorizes generic programs of promotion, research, and 
information for agricultural commodities. Congress found that it is in 
the national public interest and vital to the welfare of the 
agricultural economy of the United States to maintain and expand 
existing markets and develop new markets and uses for agricultural 
commodities through industry-funded, government-supervised, generic 
commodity promotion programs.
    This program is intended to develop and finance an effective and 
coordinated program of promotion, research, and consumer information to 
maintain and expand the markets for peanuts. A proposal was submitted 
by the American Farm Bureau Federation (proponent), working in 
cooperation with 20 state and regional peanut grower organizations 
representing the nine primary peanut-producing states. The proponent 
has proposed that peanut producers approve the program in a referendum 
in advance of its implementation, and producer members would serve on 
the 1-member Board that would administer the program under USDA's 
supervision. In addition, any person subject to the program may file 
with the Secretary a petition stating that the Order or any provision 
is not in accordance with law and requesting a modification of the 
Order or an exemption from the Order.
    While the proposed Order would impose certain recordkeeping 
requirements on first handlers, information required under the proposed 
Order could be compiled from records currently maintained. First 
handlers and area marketing associations--for peanuts placed under loan 
with the Commodity Credit Corporation (CCC) in the price support 
program administered for CCC by USDA's Farm Service Agency (FSA)--would 
collect and remit all assessments to the Board. Their responsibilities 
would include accurate recordkeeping and accounting of all peanuts 
purchased or contracted for, including the number of pounds handled, 
price paid to the producer, and when peanuts are purchased. The forms 
require the minimum information necessary to effectively carry out the 
requirements of the program, and their use is necessary to fulfill the 
intent of the Act. Such records shall be retained for at least two 
years. These requirements are either already being conducted as a 
normal business practice or are required by other USDA peanut 
regulations. The added burden to first handlers and area marketing 
associations for a peanut promotion, research, and information program 
is therefore expected to be minimal.
    There is also a minimal burden on producers. The burden relates to 
those producers who would seek nomination to serve on the Board and 
those who vote in referenda. In addition, the proposed Order would 
require producers to keep records and to provide information to the 
Board or the Secretary when requested. However, it is not anticipated 
that producers would be required to submit forms to the Board. Most 
likely, the information would be obtained through an audit of a 
producer's records to confirm information provided by a first handler 
or if a first handler did not file the required reports as part of the 
Board's compliance operation.
    The estimated annual cost of providing the information to the Board 
by an estimated 98 respondents (21 producers, 57 first handlers, and 20 
producer organizations) would be $4,059.85 or $5.00 per producer, 
$66.05 per first handler, and $9.50 per producer organization.
    The Department would oversee program operations and, if the program 
is implemented, would conduct a referendum (1) every five years to 
determine whether peanut producers support continuation of the program, 
(2) at the request of the Board established under the Order, or (3) at 
the request of 10 percent or more of the number of persons eligible to 
vote in referenda. Additionally, the Secretary may conduct a referendum 
at any time to determine whether the continuation, suspension, or 
termination of the Order or a provision of the Order is favored by 
those eligible to vote in referenda.
    There are approximately 25,000 producers and 57 first handlers of 
peanuts that would be subject to the program. Most of the producers 
would be classified as small businesses under the criteria established 
by the Small Business Administration (SBA) [13 CFR 121.601]. Most first 
handlers would not be classified as small businesses. The SBA defines 
small agricultural handlers as those whose annual receipts are less 
than $5 million, and small agricultural

[[Page 59895]]

producers are defined as those having annual receipts of not more than 
$500,000 annually.
    According to USDA's National Agricultural Statistics Service 
(NASS), the nine major peanut-producing states in the United States 
account for 99 percent of the peanuts grown in this country. The 
combined production from these states totaled 3.5 billion pounds in 
1997. NASS reports that Georgia was the largest producer (38 percent of 
the total), followed by Texas (23 percent), Alabama (11 percent), North 
Carolina (9 percent), Florida (6 percent), Virginia (5 percent), 
Oklahoma (5 percent), New Mexico (1 percent), and South Carolina (1 
percent). The farm value of peanuts in 1997 reached $932 million. 
According to 1992 Census of Agriculture (Census) data, small amounts of 
peanuts were also grown in seven other states.
    According to the proponent, based on Census for these nine states, 
36 percent of the peanut-producing counties in the United States had 35 
percent or more of their total crop income from peanuts. Twenty-four 
percent of the counties had 50 percent or more of their crop income 
from peanuts. From a state perspective, 70 percent of the crop income 
in Alabama's peanut-producing counties is generated from peanuts. For 
Virginia, the percentage is 48 percent. In addition, 16,194 farms 
harvested peanuts in 1992. Of these, 15,914 were located in the nine 
primary peanut-producing states.
    Three main types of peanuts are grown in the United States: 
Florunners, Virginia, and Spanish. The southeast growing region grows 
mostly the medium-kernel Runner peanuts. The southwest growing region 
used to grow two-thirds Spanish and one-third Runner peanuts, but now 
more Runners than Spanish are grown. Virtually all of the Spanish 
peanut production is in Oklahoma and Texas. In the Virginia-Carolina 
region, mainly large-kernel Virginia peanuts are grown. New Mexico 
grows a fourth type of peanut, the Valencia.
    Peanut manufacturers produce three principal peanut products: 
peanut butter, packaged nuts (including salted, unsalted, flavored, and 
honey-roasted nuts), and peanut candies. In most years, half of all 
peanuts produced in the United States for edible purposes are used to 
manufacture peanut butter. Packaged nuts account for almost one-third 
of all processed peanuts. Some of these (commonly referred to as 
``ballpark'' peanuts) are roasted in the shell, while a much larger 
quantity is used as shelled peanuts packed as dry-roasted peanuts, 
salted peanuts, and salted mixed nuts. Some peanuts are ground to 
produce peanut granules and flour. Other peanuts are crushed to produce 
oil.
    According to USDA's Foreign Agricultural Service, U.S. exports of 
peanuts (including peanut meal, oil, and peanut butter) totaled 880 
million inshell equivalent pounds in 1997, with a value of $285 million 
(U.S. point of departure for the foreign country). Of the total 
quantity, 60 percent was shelled peanuts used as nuts, 11 percent was 
blanched or otherwise prepared or preserved peanuts, 10 percent was 
inshell peanuts, 7 percent was peanut butter, 4 percent was shelled oil 
stock peanuts, 4 percent was crude peanut oil, and 3 percent was 
refined peanut oil.
    The major destinations for domestic shelled peanuts for use as nuts 
are Canada, Mexico, the United Kingdom, and the Netherlands. Blanched 
or otherwise prepared peanuts are sent mainly to Western Europe, 
especially the Netherlands, France, and Spain. Inshell peanuts are 
mainly exported to Canada and various countries in Western Europe. 
Peanut butter is sent to many countries, with the largest amounts going 
to Canada and Saudi Arabia. Peanut oil and oil stock peanuts are 
exported world-wide, but major destinations can vary from year to year.
    Approximately 250 million inshell equivalent pounds of peanuts and 
processed peanuts (including oil and peanut butter) were imported in 
1997 with a combined value (f.o.b. country of origin) of $73 million. 
Most of the imports (45 percent) were shelled peanuts for use as nuts. 
The major U.S. supplier is Argentina, but several other countries 
export shelled peanuts to the United States, including Mexico, 
Nicaragua, and South Africa.
    Peanut butter imports are also significant and accounted for about 
32 percent of the total quantity of nuts (inshell basis) imported in 
1997. Most peanut butter imports come from Canada and Argentina. The 
other major import category--crude and refined peanut oil--are shipped 
mainly from Argentina and Nicaragua and account for approximately 18 
percent of total imports (inshell equivalent basis). Inshell peanuts, 
primarily from Mexico, accounted for nearly 3 percent of total imports 
in 1997. About 3 percent of total imports consisted of blanched or 
other processed peanuts, mainly from China. Imports of oil stock 
shelled peanuts were negligible.
    Most peanuts produced in other countries are crushed for oil and 
protein meal. The United States is the main producer of peanuts used in 
such edible products as peanut butter, roasted peanuts, and peanut 
candies. Peanuts are one of the world's principal oilseeds, ranking 
fourth behind soybeans, cottonseed, and rapeseed. India and China 
usually account for half of the world's peanut production.
    According to The Agriculture Statistics Report published by USDA, 
during the 1995-96 season, the average annual production per U.S. 
producer was approximately 144,228 pounds of peanuts. Peanuts produced 
during these growing seasons provided average annual gross sales of 
$42,222 per peanut producer. The value of the 1995-96 crop was 
approximately $1.013 billion. During the same period, per capita 
consumption in the United States was 5.7 pounds of peanuts.
    The proposed Order would authorize a fixed assessment paid by 
producers (to be collected by first handlers) at a rate of 1 percent of 
the price paid for all farmers stock peanuts, regardless of whether the 
peanuts are sold commercially or placed under loan with CCC in the 
price support program administered for CCC by FSA.
    Section 516(a)(1) of the Act provides authority to the Secretary to 
exempt from the Order any de minimis quantity of an agricultural 
commodity otherwise covered by the Order. The proponent has elected not 
to provide for exemptions for a de minimis amount regarding peanuts. 
Therefore, the term de minimis is not defined in the proposed Order, 
and a de minimis exemption is not included.
    At the proposed rate of assessment of 1 percent of farm value, the 
Board would collect approximately $10 million annually, assuming 1 
billion pounds of peanuts are produced. It is expected that the 1 
percent rate of assessment would represent approximately 1 percent of 
producers' average return. In 1995-96, the average price for peanuts 
was $0.293 per pound.
    USDA will keep all individuals informed throughout the referendum 
process to ensure that they are aware of and are able to participate in 
the referendum. USDA will publicize information regarding the 
referendum process so that trade associations and related industry 
media can be kept informed. If the program is implemented, the newly 
established Board would recommend to USDA regulations for the program.
    In addition, the peanut industry would nominate producers to serve 
as members on the Board. The Board would recommend the assessment rate, 
programs and projects, a budget, and any other rules and regulations 
that might be necessary for the administration of the program. USDA

[[Page 59896]]

would ensure that the nominees represent the peanut industry in 
accordance with the Act. Primary peanut-producing states are defined in 
the Order as Alabama, Florida, Georgia, New Mexico, North Carolina, 
Oklahoma, South Carolina, Texas, and Virginia, provided that these 
states maintain 3-year average production of at least 10,000 tons of 
peanuts each. Minor peanut-producing states are defined in the Order as 
all peanut-producing states other than the primary peanut-producing 
states. Currently, the following states would be considered minor 
states: Arizona, California, Louisiana, Mississippi, and Tennessee.
    Each primary producing state would have one member on the Board, 
and the minor peanut-producing states would be represented collectively 
by one member on the Board. Each member would have an alternate. 
Therefore, the Board would have 10 members and 10 alternates.
    Proposed recordkeeping and reporting requirements for the peanut 
promotion, research, and information program would be designed to 
minimize the burden on first handlers. It is USDA's goal to collect 
information from forms already submitted to another USDA agency. Any 
information collection that could not occur through forms already in 
use would pose minimal additional burden. The peanut promotion program 
would be designed to strengthen the position of peanuts in the 
marketplace, maintain and expand existing domestic and foreign markets, 
and develop new uses and markets for peanuts.
    The estimated annual cost of providing the information to the 
proposed Board by an estimated 98 respondents (21 producers, 57 first 
handlers, and 20 producer organizations) would be $4,059.85, or $5.00 
per producer, $66.05 per first handler, and $9.50 per producer 
organization.
    With regard to alternatives to this proposed rule, the Act itself 
does provide for authority to tailor a program according to the 
individual needs of an industry. Provision is made for permissive terms 
in an order in Section 516 of the Act, and other sections provide for 
alternatives. For example, Section 514 of the Act provides for orders 
applicable to (1) producers, (2) first handlers and other persons in 
the marketing chain as appropriate, and (3) importers (if imports are 
subject to assessment). Section 516 authorizes an order to provide for 
exemption of de minimis quantities of an agricultural commodity; 
different payment and reporting schedules; coverage of research, 
promotion, and information activities to expand, improve, or make more 
efficient the marketing or use of an agricultural commodity in both 
domestic and foreign markets; provision for reserve funds; provision 
for credits for generic and branded activities; and assessment of 
imports. In addition, Section 518 of the Act provides for referenda to 
ascertain approval of an order to be conducted either prior to its 
going into effect or within 3 years after assessments first begin under 
the order. An order also may provide for its approval in a referendum 
to be based upon (1) a majority of those persons voting; (2) persons 
voting for approval who represent a majority of the volume of the 
agricultural commodity; or (3) a majority of those persons voting for 
approval who also represent a majority of the volume of the 
agricultural commodity. Section 515 of the Act provides for 
establishment of a board from among producers, first handlers, and 
others in the marketing chain as appropriate and importers, if 
importers are subject to assessment.
    This proposal includes provisions for both domestic and foreign 
market expansion and improvement; reserve funds; and an initial 
referendum to be conducted prior to the Order going into effect and 
with approval based upon a majority of those persons voting in a 
referendum.
    While we have performed this Initial Regulatory Flexibility 
Analysis regarding the impact of this proposed Order on small entities, 
in order to obtain all the data necessary for a comprehensive analysis, 
we invite comments concerning potential effects of the proposed Order. 
In particular, we are interested in obtaining more information on the 
number and kind of small entities that may incur benefits or costs from 
implementation of the proposed Order and information on the expected 
benefits or costs.

Paperwork Reduction Act

    In accordance with the Office of Management and Budget (OMB) 
regulation [5 CFR Part 1320] which implements the Paperwork Reduction 
Act of 1995 [44 U.S.C. Chapter 35], the information collection and 
recordkeeping requirements that may be imposed by this Order have been 
submitted to OMB for approval.
    Title: National Research, Promotion, and Consumer Information 
Programs.
    OMB Number for background form (number 1 below): 0505-0001.
    Expiration Date of Approval: November 30, 1998.
    OMB Number for other information collections: 0581-0093.
    Expiration Date of Approval: November 30, 2000.
    Type of Request: Revision of currently approved information 
collections for advisory committees and boards and for research and 
promotion programs.
    Abstract: The information collection requirements in the request 
are essential to carry out the intent of the Act.
    In addition, there will be the additional burden on producers of 
voting in referenda. The referendum ballot, which represents the 
information collection requirement relating to referenda, is addressed 
in a proposed rule on referendum procedures which is published 
separately in this issue of the Federal Register.
    Under the proposed program, first handlers would be required to 
collect assessments from producers and file reports with and submit 
assessments to the Board. While the proposed Order would impose certain 
recordkeeping requirements on first handlers, information required 
under the proposed Order could be compiled from records currently 
maintained. Such records shall be retained for at least two years 
beyond the marketing year of their applicability. The estimated annual 
cost of providing the information to the Board by an estimated 98 
respondents (21 producers, 57 first handlers, and 20 producer 
organizations) would be $4,059.85, or $5.00 per producer, $66.05 per 
first handler, and $9.50 per producer organization.
    The proposed Order's provisions have been carefully reviewed, and 
every effort has been made to minimize any unnecessary recordkeeping 
costs or requirements, including efforts to utilize information already 
submitted under other peanut programs administered by the Department. 
The Department is exploring ways to obtain some of the information 
needed from forms already in use.
    The proposed forms would require the minimum information necessary 
to effectively carry out the requirements of the program, and their use 
is necessary to fulfill the intent of the Act. Such information can be 
supplied without data processing equipment or outside technical 
expertise. In addition, there are no additional training requirements 
for individuals filling out reports and remitting assessments to the 
Board. The forms would be simple, easy to understand, and place as 
small a burden as possible on the person required to file the 
information.
    Collecting information monthly would coincide with normal industry 
business practices. Reporting other than monthly would impose an 
additional and unnecessary recordkeeping burden on first handlers. The 
timing and frequency of collecting information is

[[Page 59897]]

intended to meet the needs of the industry while minimizing the amount 
of work necessary to fill out the required reports. In addition, the 
information to be included on these forms is not available from other 
sources because such information relates specifically to individual 
producers and first handlers who are subject to the provisions of the 
Act.
    Therefore, there is no practical method for collecting the required 
information without the use of these forms.
    Information collection requirements that are included in this 
proposal include:
    (1) A background information form to be completed by candidates 
nominated by certified producer organizations for appointment to the 
Board.
    Estimate of Burden: Public reporting for this collection of 
information is estimated to average 0.5 hours per response for each 
producer.
    Respondents: Producers.
    Estimated number of Respondents: 21 (average of 40 for initial 
nominations to the Board and approximately 12 respondents annually 
thereafter for each 3-year period).
    Estimated number of Responses per Respondent: 1 every 3 years.
    Estimated Total Annual Burden on Respondents: 20 hours for the 
initial nominations to the promotion board and 6 hours annually 
thereafter.
    (2) A monthly report by each first handler of peanuts.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.5 hours per each first handler 
reporting on peanuts handled.
    Respondents: First handlers.
    Estimated number of Respondents: 57.
    Estimated number of Responses per Respondent: 12.
    Estimated Total Annual Burden on Respondents: 342 hours.
    (3) A nomination form by which certified producer organizations 
would nominate producers for membership on the Board.
    Estimate of Burden: Public reporting burden for this collecting of 
information is estimated to average 0.5 hours per response.
    Respondents: Certified producer organizations.
    Estimated number of Respondents: 20.
    Estimated number of Responses per Respondent: 1 per year.
    Estimated Total Annual Burden on Respondents: 10 hours.
    (4) A request of peanut producer organizations for certification of 
eligibility to nominate Board members.
    Estimate of Burden: Public reporting for this collection of 
information is estimated to average 0.5 hours per response for each 
organization.
    Respondents: Peanut producer organizations.
    Estimated number of Respondents: 9.
    Estimated number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 9 hours.
    (5) A requirement to maintain records sufficient to verify reports 
submitted under the Order.
    Estimate of Burden: Public recordkeeping burden for keeping this 
information is estimated to average 0.5 hours per recordkeeper 
maintaining such records.
    Recordkeepers: First handlers.
    Estimated number of recordkeepers: 57.
    Estimated total recordkeeping hours: 28.5 hours.
    Comments are invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of functions of the 
Order and the Department's oversight of the program, including whether 
the information will have practical utility; (b) the accuracy of USDA's 
estimate of the burden of the proposed collection of information, 
including the validity of the methodology and assumption used; (c) ways 
to enhance the quality, utility, and clarity of the information to be 
collected; and (d) ways to minimize the burden of the collection of 
information on those who are to respond, including the use of 
appropriate automated, electronic, mechanical, or other technological 
collection techniques or other forms of information technology.
    The Act provides for the submission of proposals for a peanut 
promotion, research, and information order by industry organizations or 
any other interested person affected by the Act.
    Comments concerning the information collection requirements 
contained in this action should reference OMB No. 0581-0093. Comments 
addressing the nomination background information form should reference 
OMB No. 0505-0001. In addition, the docket number, date, and page 
number of this issue of the Federal Register also should be referenced. 
Comments should be sent to the USDA Docket Clerk and the OMB Desk 
Officer for Agriculture at the addresses and within the time-frames 
listed above. All responses to this notice will be summarized and 
included in the request for OMB approval.
    OMB is required to make a decision concerning the collection of 
information contained in this rule between 30 and 60 days after 
publication. Therefore, a comment to OMB is best assured of having its 
full effect if OMB receives it within 30 days of publication.

Background

    The Act authorizes the Secretary, under a generic authority, to 
establish agricultural commodity research and promotion orders. Section 
516 of the Act provides permissive terms for orders, and other sections 
provide for alternatives. For example, Section 514 of the Act provides 
for orders applicable to (1) producers, (2) first handlers and others 
in the marketing chain as appropriate, and (3) importers (if importers 
are subject to assessment). Section 516 authorizes an order to provide 
for exemption of de minimis quantities of an agricultural commodity; 
different payment and reporting schedules; coverage of research, 
promotion, and information activities to expand, improve, or make more 
efficient the marketing or use of an agricultural commodity in both 
domestic and foreign markets; provision for reserve funds; provision 
for credits for generic and branded activities; and assessment of 
imports. In addition, Section 518 of the Act provides for referenda to 
ascertain approval of an order to be conducted either prior to its 
going into effect or within 3 years after assessments first begin under 
the order. The order also may provide for its approval in a referendum 
based upon different voting patterns. Section 515 provides for 
establishment of a board from among producers, first handlers and 
others in the marketing chain as appropriate, and importers, if imports 
are subject to assessment.
    This proposed Order includes provisions for both domestic and 
foreign market expansion and improvement, reserve funds, and an initial 
referendum to be conducted prior to the Order going into effect and 
with approval based upon a majority of those persons voting in the 
referendum.
    The Act provides for a number of optional provisions that allow the 
tailoring of orders for different commodities.
    The proponent, working in cooperation with 20 state and regional 
peanut industry organizations representing the nine primary peanut-
producing states, has requested the establishment of a national peanut 
promotion, research, and information order pursuant to the Act. The Act 
authorizes the establishment and operation of generic promotion 
programs which may include a combination of promotion, research, 
industry information, and consumer

[[Page 59898]]

information activities funded by mandatory assessments. These programs 
are designed to maintain and expand markets and uses for agricultural 
commodities. This proposal would provide for the development and 
financing of an effective and coordinated program of research, 
promotion, and information for peanuts. The purpose of the program 
would be to strengthen the position of peanuts in domestic and foreign 
markets, and to develop, maintain, and expand markets for peanuts.
    The program would not become effective until approved by peanut 
producers in a referendum to be conducted by USDA. Section 518 of the 
Act provides for the Department (1) to conduct an initial referendum, 
preceding a proposed order's effective date, among persons who would 
pay assessments under the program or (2) to implement a proposed order, 
pending the conduct of a referendum, among persons subject to 
assessments, within 3 years after assessments first begin.
    In accordance with Section 518(e) of the Act, the results of the 
referendum must be determined one of three ways: (1) Approval by a 
majority of those persons voting; (2) approval by persons voting who 
represent a majority of the volume of the commodity covered by the 
program; or (3) approval by a majority of the persons voting who also 
represent a majority of the volume of the commodity produced, handled, 
or imported by the persons voting.
    The proponent proposes that the Department conduct an initial 
referendum preceding the proposed Order's effective date and that 
approval of the Order be determined by a simple majority of the 
producers voting.
    In accordance with the Act, the Department would oversee the 
program's operations. In addition, the Act requires the Secretary to 
conduct subsequent referenda: (1) not later than 7 years after 
assessments first begin under the Order; or (2) at the request of the 
board established under the Order; or (3) at the request of 10 percent 
or more of the number of persons eligible to vote. The proponent group 
has requested that a referendum be conducted every 5 years to determine 
if producers want the program to continue.
    In addition to these criteria, the Act provides that the Secretary 
may conduct a referendum at any time to determine whether the 
continuation, suspension, or termination of the Order or a provision of 
the Order is favored by persons eligible to vote.
    The proponent states that the United States Congress has 
established a number of programs since the early 1930's to support and 
stabilize farm prices and income and to adjust production in 1934. In 
1949, a revised system of marketing quotas and acreage allotments for 
peanuts began. Since then, Congress has amended and changed the peanut 
program a number of times, with the latest changes made to the peanut 
title in 1996 with the passage of the Federal Agriculture Improvement 
and Reform (FAIR) Act. The new program retains its price support and 
supply management elements while operating at no cost to the government 
other than administrative expenses common to all price support 
programs. The new program also lowers the loan rate for quota peanuts 
from $678 per ton to $610 per ton and freezes that price for the life 
of the program, through 2002. In addition, the quota level, which the 
Secretary could not set below 1.35 million tons prior to passage of the 
FAIR Act, has been reduced to equal the anticipated domestic demand for 
peanuts.
    The proponent has identified a number of market and production 
factors that suggest the need for a national research, promotion, and 
information program for peanuts. The most basic problem affecting 
peanut marketing is a drop in demand caused by negative health 
perceptions of peanuts' fat content, competition from other snack 
foods, and lack of awareness among young people.
    In addition, the proponent cites other factors. Government 
purchases of peanut butter is down. If purchases return to historic 
heights, purchases will still not be enough to reverse supply/demand 
trends. Also, a 1997 Gallup survey revealed that 87 percent of all 
consumers are peanut users, while 13 percent did not consume any 
peanuts in the past year. Per capita consumption of peanuts has been 
decreasing. It appears now that demand trends have bottomed out and are 
starting to rise. National promotion could bolster this trend.
    The same survey indicated that the percent of peanut non-users is 
increasing, as is the percent of young people not consuming peanuts or 
peanut products. Thirty-five percent of all consumers surveyed 
indicated they did not consume any snack peanuts, and more than 40 
percent thought peanuts contained cholesterol when, in fact, peanuts 
contain none.
    The proponent also states that 26 percent of all consumers did not 
consume any peanut butter last year. Peanut butter could be an 
affordable alternative for low-income consumers in comparison to other 
sandwich options, but fewer and fewer low income consumers are using 
peanut butter as an alternative.
    In addition, in 1996, the farm value of U.S. peanuts fell below $1 
billion to $970 million for the first time since 1982.
    Further, the domestic industry is facing increased competition in 
the United States and abroad from lower-priced peanuts produced in 
other countries. The value of peanuts and peanut products imported into 
the United States exceeded $100 million in 1996.
    All of these factors have led the domestic peanut industry to seek 
a national promotion program to find ways to further increase the 
consumption of U.S. peanuts.
    Section 516(f) of the Act allows an order to authorize the levying 
of assessments on imports of the commodity covered by the program or on 
products containing that commodity, at a rate comparable to the rate 
determined for the domestic agricultural commodity covered by the 
order. The proponent has elected in its proposal not to assess imports.
    The assessment levied on domestically produced peanuts would be 
used to pay for promotion, research, and consumer and industry 
information as well as administration, maintenance, and functioning of 
the Board. Expenses incurred by the Secretary in implementing and 
administering the Order, including referenda costs, also would be paid 
from assessments.
    Sections 516(e)(1) and (2) of the Act state that the Secretary may 
provide credits of assessments for generic and branded activities. The 
proponent has elected not to propose credits for generic or branded 
activities. Therefore, the terms ``generic activities'' and ``branded 
activities'' are not defined in the Order, and credits for assessments 
would not be made.
    First handlers would be responsible for the collection of 
assessments from the producer and payment to the promotion Board. First 
handlers would be required to maintain records for each producer for 
whom peanuts are handled, including peanuts produced by the first 
handler. In addition, first handlers would be required to file reports 
regarding the collection, payment, or remittance of the assessments.
    All information obtained from persons subject to this Order as a 
result of recordkeeping and reporting requirements will be kept 
confidential by all officers, employees, and agents of the Department 
and of the Board. However, this information may be

[[Page 59899]]

disclosed only if the Secretary considers the information relevant, and 
the information is revealed in a judicial proceeding or administrative 
hearing brought at the direction or on the request of the Secretary or 
to which the Secretary or any officer of the Department is a party. 
Other exceptions for disclosure of confidential information would 
include the issuance of general statements based on reports or on 
information relating to a number of persons subject to an order if the 
statements do not identify the information furnished by any person or 
the publication, by direction of the Secretary of the name of any 
person violating the Order and a statement of the particular provisions 
of the Order violated by the person.
    The proposed Order provides for the Department to conduct an 
initial referendum preceding the proposed Order's effective date. 
Therefore, the proposed Order must be approved by a majority of the 
producers voting for approval. The proposed Order also provides for 
subsequent referenda to be conducted (1) every 5 years after the 
program is in effect, (2) at the request of the Board established under 
the Order, or (3) when requested by 10 percent or more of peanut 
producers covered by the Order. In addition, the Secretary may conduct 
a referendum at any time.
    The Act requires that such a proposed order provide for the 
establishment of a board to administer the program under USDA 
supervision. The proponent's proposal provides for a 10-member National 
Peanut Board, as stated earlier.
    To ensure fair and equitable representation of the peanut industry 
on the Board, the Act requires membership on the Board to reflect the 
geographical distribution of the production of peanuts. To that end, 
this proposal provides that each primary peanut-producing state would 
be represented on the Board by one producer member and alternate and 
that the minor peanut-producing states would be represented 
collectively by one at-large producer member and alternate. Based on 
current information on production in the various states, the Order 
defines the primary peanut-producing states as Alabama, Florida, 
Georgia, New Mexico, North Carolina, Oklahoma, South Carolina, Texas, 
and Virginia, provided that these states maintain three-year average 
production of at least 10,000 tons of peanuts.
    Upon implementation of the Order and pursuant to the Act, the Board 
would at least once in each five-year period, but not more frequently 
than once in each three-year period, review the geographical 
distribution of peanuts in the United States and make a recommendation 
to the Secretary after considering the results of its review and other 
information it deems relevant regarding the reapportionment of the 
Board.
    Members and alternates would serve for three-year terms, except 
that the members and alternates appointed to the initial Board would 
serve proportionately for two-, three-, and four-year terms. No member 
or alternate would serve more than two consecutive three-year terms.
    The proposed Order submitted by the proponent is summarized as 
follows:
    Sections 1216.01 through 1216.31 of the proposed Order define 
certain terms, such as peanuts, minor peanut-producing states, primary 
peanut-producing states, producer, and quota peanuts, which are used in 
the proposed Order.
    Sections 1216.40 through 1216.49 include provisions relating to the 
Board establishment and membership, nominations, selections and 
acceptance, term of office, vacancies, alternate members, and 
compensation and reimbursement; procedures for conducting Board 
business; and powers and duties of the Board, which is the governing 
body authorized to administer the Order through the implementation of 
programs, plans, projects, budgets, and contracts to promote and 
disseminate information about peanuts, subject to oversight of the 
Secretary. These sections also include maintenance of books and records 
by the Board and prohibited activities of the Board, its employees, and 
agents.
    In order to ensure support throughout the production area for all 
Board votes, Sec. 1216.46(b) provides that all Board members' votes 
would be weighted by the value of production represented by each 
member. The votes of members from primary peanut-producing states would 
represent their respective states' three-year running average of total 
gross farm income derived from all peanut sales. The votes of the at-
large Board member would equal the collective value of production from 
all minor peanut-producing states' three year running average of total 
gross farm income from all peanut sales. Any Board action would require 
the concurring votes of members collectively representing more than 50 
percent of the total U.S. gross farm income derived from all peanut 
sales plus an additional two votes from other Board members, provided a 
minimum of five members concur. Therefore, regardless of the volume 
voted by the members, no Board action would be approved unless at least 
five members voted in favor of it. Similarly, if five members vote in 
favor of a motion and those five members do not represent more than 50 
percent of the total U.S. gross farm income derived from all peanut 
sales, the motion would not be approved.
    Sections 1216.50 through 1216.55 would cover budget review and 
approval; authorize the collection of assessments; use of assessments, 
including reimbursement of necessary expenses incurred by the Board for 
the performance of its duties, including expenses incurred for the 
Department's oversight responsibilities; specify who pays the 
assessment and how; authorize the imposition of a late-payment charge 
on past-due assessments; address programs, plans, and projects; require 
the Board to conduct periodically an independent review of its overall 
program; specify a program operating reserve; and cover the investment 
of assessment funds.
    The proponent recommends a proposed assessment rate of 1 percent of 
the price paid for all farmers stock peanuts sold. Peanut producers may 
sell their peanuts commercially or put them in a government loan 
program. For peanuts sold commercially, the first handler would remit 
the assessment to the Board. The assessment would be 1 percent of the 
price paid for the peanuts.
    Under a loan program administered by FSA, a peanut producer also 
has the option of delivering the peanuts to an area marketing 
association and receiving payment for the peanuts from CCC. If the 
peanut promotion program is implemented, the area association would 
deduct 1 percent of the payment from the producer's proceeds and remit 
that amount to the Board as the producer's initial assessment payment 
on the peanuts. After the association sells the peanuts, the area 
association reimburses CCC the amount of the payment to the producer 
and deducts its expenses from the selling price. If the peanut 
promotion program is implemented and if there is any profit from the 
sale of the peanuts, the association would deduct 1 percent of the 
profit, remit that amount to the Board to pay the producer's 
assessment, and pay the balance to the producer.
    The Board may raise or lower the rate of assessment with approval 
of the Secretary.
    The federal debt collection procedures referenced in 
Sec. 1216.51(g) include those set forth in 7 CFR 3.1 through 3.36 for 
all research and promotion programs administered by AMS (60 FR 12533, 
March 7, 1995).

[[Page 59900]]

    Sections 1216.60 through 1206.62 concern reporting and 
recordkeeping requirements for persons subject to the Order and protect 
the confidentiality of information from such books, records, or 
reports.
    Section 1216.70 describes the certification requirements for 
peanut-producer organizations to be eligible to nominate Board members 
and submit requests for funds from the Board.
    Sections 1216.80 through 1216.87 describe the rights of the 
Secretary; authorize the Secretary to suspend or terminate the Order 
when deemed appropriate; prescribe proceedings after suspension or 
termination; address personal liability, separability, and amendments; 
and address patents, copyrights, trademarks, information, publications, 
and product formulations developed through the use of assessment funds.
    The Department has modified the proponent's proposal to make it 
consistent with the Act, other similar national research and promotion 
programs, and other Federal peanut programs administered by the 
Department; for consistency throughout the text; and for clarity.
    In the definitions and throughout the text of the Order, ``farmer 
stock peanuts'' was changed to ``farmers stock peanuts'' for 
consistency with industry use and existing regulations.
    A definition for ``first handler'' was added for consistency with 
similar national research and promotion programs, and subsequent 
sections were renumbered accordingly.
    The definition of ``information'' was rewritten to include 
activities designed to enhance peanuts' image, to add definitions of 
``consumer information'' and ``producer information,'' and to conform 
with the Act.
    The definition of ``quota peanuts'' was rewritten to reference 7 
CFR Part 729.
    In Sec. 1216.41 (Nominations), the phrase ``qualified nominating 
organizations'' was changed to read ``certified nominating 
organizations'' for consistency with the text.
    In addition, Sec. 1216.50(h) has been revised to be consistent with 
the Act. Paragraph (e)(5) Limitation on spending of Sec. 515 of the Act 
states that a board ``may not expend for administration (except for 
reimbursements to the Secretary * * *)'' an amount that exceeds 15 
percent of the board's income during any fiscal year. The proposal 
submitted set a more stringent limitation of 10 percent and stated that 
administrative expenses included reimbursement to the Secretary. The 
Order may set the more stringent limitation of 10 percent because that 
amount is less than the 15 percent provided in the Act. However, the 
Order may not provide that reimbursements to the Secretary are covered 
by the limitation on spending.
    Other minor changes which do not materially affect the text were 
made for consistency. For instance, in the definitions, ``additional 
peanuts are * * *'' was changed to read ``additional peanuts means * * 
*'' As another example, in sections containing only one paragraph, the 
paragraph designation was removed. Minor grammatical changes also were 
made.
    The proponent submitted ``Subpart B--Voting Procedures and Approval 
of the Peanut Promotion, Research, and Information Order.'' This 
proposed subpart has been revised and included as Sec. 1216.80 of the 
proposed Order.
    The Department has determined that this proposed Order is 
consistent with and will effectuate the purposes of the Act.
    The proposal set forth below has not received the approval of the 
Secretary.

List of Subjects in 7 CFR Part 1216

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Peanut promotion, Reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, it is proposed that 
Title 7 of Chapter XI of the Code of Federal Regulations be amended as 
follows:
    1. Part 1216 is added to read as follows:

PART 1216--PEANUT PROMOTION, RESEARCH, AND INFORMATION ORDER

Subpart A--Peanut Promotion, Research, and Information Order

Definitions

Sec.

1216.01  Act.
1216.02  Additional peanuts.
1216.03  Area marketing association.
1216.04  Board.
1216.05  Conflict of interest.
1216.06  Contract export additional peanuts.
1216.07  Department.
1216.08  Farmers stock peanuts.
1216.09  First handler.
1216.10  Fiscal year.
1216.11  Handle.
1216.12  Information.
1216.13  Market.
1216.14  Minor peanut-producing states.
1216.15  Order.
1216.16  Part and subpart.
1216.17  Peanuts.
1216.18  Peanut producer organization.
1216.19  Person.
1216.20  Primary peanut-producing states.
1216.21  Producer.
1216.22  Promotion.
1216.23  Quota peanuts.
1216.24  Research.
1216.25  Secretary.
1216.26  Suspend.
1216.27  State.
1216.28  Terminate.
1216.29  United States.

National Peanut Board

1216.40  Establishment and membership.
1216.41  Nominations.
1216.42  Selection.
1216.43  Term of office.
1216.44  Vacancies.
1216.45  Alternate members.
1216.46  Procedure.
1216.47  Compensation and reimbursement.
1216.48  Powers and duties of the National Peanut Board.
1216.49  Prohibited activities.

Expenses and Assessments

1216.50  Budget and expenses.
1216.51  Assessments.
1216.52  Programs, plans, and projects.
1216.53  Independent evaluation.
1216.54  Operating reserve.
1216.55  Investment of funds.

Reports, Books, and Records

1216.60  Reports.
1216.61  Books and records.
1216.62  Confidential treatment.

Certification of Peanut Producer Organizations

1216.70  Certification.

Miscellaneous

1216.80  Implementation of Order.
1216.81  Suspension and termination.
1216.82  Proceedings after termination.
1216.83  Effect of termination or amendment.
1216.84  Personal liability.
1216.85  Separability.
1216.86  Amendments.
1216.87  Patents, copyrights, trademarks, information, publications, 
and product formulations.

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

Subpart A--Peanut Promotion, Research, and Information Order

Definitions


Sec. 1216.01  Act.

    Act means the Commodity Promotion, Research, and Information Act of 
1996 (7 U.S.C. 7401-7425; Public Law 104-127; 110 Stat. 1029), or any 
amendments thereto.


Sec. 1216.02  Additional peanuts.

    Additional peanuts means peanuts which are marketed from a farm 
other than peanuts marketed or considered marketed as quota peanuts.


Sec. 1216.03  Area marketing association.

    Area marketing association means an association selected and 
approved by the Secretary to conduct activities under regulations of 
the Department's Farm

[[Page 59901]]

Service Agency. Under an inter-agency agreement, area marketing 
associations will assist in the collection of assessments under this 
subpart. The approved area marketing associations and the areas served 
by such associations are as follows:
    (a) GFA Peanut Association of Camilla, Georgia (GFA). GFA serves 
the southeastern area consisting of Puerto Rico, the U.S. Virgin 
Islands, and the states of Alabama, Florida, Georgia, Mississippi, and 
that part of South Carolina south and west of the Santee-Congaree-Broad 
Rivers;
    (b) Peanut Growers Cooperative Marketing Association of Franklin, 
Virginia (PGCMA). PGCMA serves the Virginia-Carolina area consisting of 
the District of Columbia, and the states of Connecticut, Delaware, 
Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, 
Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, 
North Carolina, Ohio, Pennsylvania, Rhode Island, Tennessee, Vermont, 
Virginia, West Virginia, Wisconsin, and that part of South Carolina 
north and east of the Santee-Congaree-Broad Rivers; and
    (c) Southwestern Peanut Growers Association of Gorman, Texas 
(SWPGA). SWPGA serves the southwestern area consisting of the states of 
Alaska, Arizona, Arkansas, California, Colorado, Hawaii, Idaho, Kansas, 
Louisiana, Montana, Nebraska, New Mexico, Nevada, North Dakota, 
Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, and Wyoming, 
and all other territories of the United States not listed in paragraph 
(a) or (b) of this section.


Sec. 1216.04  Board.

    Board means the administrative body referred to as the National 
Peanut Board established pursuant to Sec. 1216.40 of this subpart.


Sec. 1216.05  Conflict of interest.

    Conflict of interest means a situation in which a member or 
employee of the Board has a direct or indirect financial interest in a 
person who performs a service for, or enters into a contract with, the 
Board for anything of economic value.


Sec. 1216.06  Contract export additional peanuts.

    Contract export additional peanuts are additional peanuts for 
exportation, including peanuts for crushing for exportation, for which 
a contract has been entered into between a first handler and a 
producer.


Sec. 1216.07  Department.

    Department means the U.S. Department of Agriculture.


Sec. 1216.08  Farmers stock peanuts.

    Farmers stock peanuts means picked or threshed peanuts produced in 
the United States which have not been changed (except for removal of 
foreign material, loose shelled kernels and excess moisture) from the 
condition in which picked or threshed peanuts are customarily marketed 
by producers, plus any loose shelled kernels that are removed from 
farmers stock peanuts before such farmers stock peanuts are marketed.


Sec. 1216.09  First handler.

    First handler means any person who handles peanuts in a capacity 
other than that of a custom cleaner or dryer, an assembler, a 
warehouseman, or other intermediary between the producer and the person 
handling.


Sec. 1216.10  Fiscal year.

    Fiscal year is synonymous with crop year and means the 12-month 
period beginning with August 1 of any year and ending with July 31 of 
the following year, or such other period as determined by the Board and 
approved by the Secretary.


Sec. 1216.11  Handle.

    Handle means to engage in the receiving or acquiring, cleaning and 
shelling, cleaning inshell, or crushing of peanuts and in the shipment 
(except as a common or contract carrier of peanuts owned by another) or 
sale of cleaned inshell or shelled peanuts, or other activity causing 
peanuts to enter the current of commerce: Provided, That this term does 
not include sales or deliveries of peanuts by a producer to a handler 
or to an intermediary person engaged in delivering peanuts to 
handler(s) and Provided further, That this term does not include sales 
or deliveries of peanuts by such intermediary person(s) to a handler.


Sec. 1216.12  Information.

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


Sec. 1216.13  Market.

    Market means to sell or otherwise dispose of peanuts into 
interstate, foreign, or intrastate commerce by buying, marketing, 
distributing, or otherwise placing peanuts into commerce.


Sec. 1216.14  Minor peanut-producing states.

    Minor peanut-producing states means all peanut-producing states 
with the exception of Alabama, Florida, Georgia, New Mexico, North 
Carolina, Oklahoma, South Carolina, Texas, and Virginia.


Sec. 1216.15  Order.

    Order means an order issued by the Secretary under section 514 of 
the Act that provides for a program of generic promotion, research, and 
information regarding agricultural commodities authorized under the 
Act.


Sec. 1216.16  Part and subpart.

    Part means the Peanut Promotion, Research, and Information Order 
and all rules, regulations, and supplemental orders issued pursuant to 
the Act and the Order. The Order shall be a ``subpart'' of such part.


Sec. 1216.17  Peanuts.

    Peanuts means the seeds of the legume arachis hypogaea and includes 
both inshell and shelled peanuts other than those marketed by the 
producer in green form for consumption as boiled peanuts.


Sec. 1216.18  Peanut producer organization.

    Peanut producer organization means a state-legislated peanut 
promotion, research, and education commission or organization. For 
states without a state-legislated peanut promotion, research, and 
education commission or organization, ``peanut producer organization'' 
means any organization which has the primary purpose of representing 
peanut producers and has peanut producers as members.


Sec. 1216.19  Person.

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


Sec. 1216.20  Primary peanut-producing states.

    Primary peanut-producing states means Alabama, Florida, Georgia, 
New

[[Page 59902]]

Mexico, North Carolina, Oklahoma, South Carolina, Texas, and Virginia, 
Provided, these states maintain three-year average production of at 
least 10,000 tons of peanuts.


Sec. 1216.21  Producer.

    Producer means any person engaged in the production and sale of 
peanuts and who owns, or shares the ownership and risk of loss of, the 
crop. This does not include quota holders who do not share in the risk 
of loss of the crop.


Sec. 1216.22  Promotion.

    Promotion means any action taken by the National Peanut Board under 
this Order, including paid advertising, to present a favorable image of 
peanuts to the public to improve the competitive position of peanuts in 
the marketplace, including domestic and international markets, and to 
stimulate sales of peanuts.


Sec. 1216.23  Quota peanuts.

    Quota peanuts means peanuts which are:
    (a) Eligible for domestic edible uses; and
    (b) Marketed or considered marketed from a farm as quota peanuts 
pursuant to the provisions of 7 CFR Part 729 and are not in excess of 
the effective farm poundage quota established for the farm on which 
such peanuts were produced.


Sec. 1216.24  Research.

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


Sec. 1216.25  Secretary.

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


Sec. 1216.26  Suspend.

    Suspend means to issue a rule under section 553 of title 5, United 
States Code, to temporarily prevent the operation of an order during a 
particular period of time specified in the rule.


Sec. 1216.27  State.

    State means any of the 50 states, the District of Columbia, the 
Commonwealth of Puerto Rico, or any territory or possession of the 
United States.


Sec. 1216.28  Terminate.

    Terminate means to issue a rule under section 553 of title 5, 
United States Code, to cancel permanently the operation of an order 
beginning on a date certain specified in the rule.


Sec. 1216.29  United States.

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

National Peanut Board


Sec. 1216.40  Establishment and membership.

    (a) Establishment of a National Peanut Board. There is hereby 
established a National Peanut Board, hereinafter called the Board, 
composed of no more than 10 peanut producers and alternates, appointed 
by the Secretary from nominations as follows:
    (1) Nine members and alternates. One member and one alternate shall 
be appointed from each primary peanut-producing state, who are 
producers and whose nominations have been submitted by certified peanut 
producer organizations within a primary peanut-producing state.
    (2) The minor peanut-producing states shall collectively have one 
at-large member and one alternate, who are producers, to be appointed 
by the Secretary from nominations submitted by certified peanut 
producer organizations within minor peanut-producing states or from 
other certified farm organizations that include peanut producers as 
part of their membership.
    (b) Adjustment of membership. At least once in each five-year 
period, but not more frequently than once in each three-year period, 
the Board, or a person or agency designated by the Board, shall review 
the geographical distribution of peanuts in the United States and make 
recommendation(s) to the Secretary to continue without change, or 
whether changes should be made in the number of representatives on the 
Board to reflect changes in the geographical distribution of the 
production of peanuts.


Sec. 1216.41  Nominations.

    (a) All nominations authorized under Sec. 1216.40 shall be made 
within such a period of time as the Secretary shall prescribe. Eligible 
peanut producer organizations within each state as certified pursuant 
to Sec. 1216.70 shall nominate two qualified persons for each member 
and each alternate member. The nominees shall be chosen at an open 
meeting by election among the general membership. Any certified peanut 
producer organization representing a minor peanut-producing state may 
nominate two eligible persons for each member and two eligible persons 
for each alternate member.
    (b) As soon as practicable after this subpart becomes effective, 
the Secretary shall obtain nominations for appointment to the initial 
promotion Board from certified nominating organizations. In any 
subsequent year in which an appointment to the Board is to be made, 
nominations for positions whose terms will expire shall be obtained 
from certified nominating organizations by the Board's staff and 
submitted to the Secretary by May 1 of such year, or other such date as 
approved by the Secretary.
    (c) Except for initial Board members, whose nomination process will 
be initiated by the Secretary, the Board shall issue call for 
nominations by March 1 of each year.


Sec. 1216.42  Selection.

    From the nominations, the Secretary shall select the members of the 
Board and alternates for each primary peanut-producing state. The 
Secretary shall select one member and one alternate from all 
nominations submitted by certified peanut producer organizations 
representing minor peanut-producing states.


Sec. 1216.43  Term of office.

    (a) All members and alternates of the Board shall each serve for 
terms of three years, except that the members and alternates appointed 
to the initial Board shall serve proportionately for two-, three-, and 
four-year terms, with the length of the terms determined at random. No 
member or alternate may serve more than two consecutive three-year 
terms. An alternate, after serving two consecutive three-year terms, 
may serve as a member for an additional two consecutive three-year 
terms. A member, after serving two consecutive three-year terms, may 
serve as an alternate for an additional two consecutive three-year 
terms. Each member and alternate shall continue to serve until a 
successor is selected and has qualified.
    (1) Those members serving initial terms of two or four years may 
serve one successive three-year term.
    (2) Any successor serving one year or less may serve two 
consecutive three-year terms.


Sec. 1216.44  Vacancies.

    To fill any vacancy resulting from the failure to qualify of any 
person selected as a member or as an alternate member of the Board, or 
in the event of death, removal, resignation, or disqualification of any 
member or alternate member of

[[Page 59903]]

the Board, a successor for the unexpired term of such member or 
alternate member of the Board shall be nominated and selected in the 
manner specified in Sec. 1216.40 of this Order.


Sec. 1216.45  Alternate members.

    An alternate member of the Board, during the absence of the member 
for the primary peanut-producing state or at-large member for whom the 
person is the alternate, shall act in the place and stead of such 
member and perform such duties as assigned. In the event of death, 
removal, resignation, or disqualification of any member, the alternate 
for that state or at-large member shall act for the member until a 
successor for such member is selected and qualified. In the event that 
both a producer member of the Board and the alternate are unable to 
attend a meeting, the Board may not designate any other alternate to 
serve in such member's or alternate's place and stead for such a 
meeting.


Sec. 1216.46  Procedure.

    (a) A majority of the members of the Board, including alternate 
members acting for members, shall constitute a quorum.
    (b) At assembled meetings, all votes shall be cast in person. Board 
actions shall be weighted by value of production as determined by a 
primary peanut-producing state's three-year running average of total 
gross farm income derived from all peanut sales. The at-large Board 
member's vote shall be weighted by the collective value of production 
from all minor peanut-producing states' three-year running average of 
total gross farm income derived from all peanut sales. Any Board action 
shall require the concurring votes of members or alternates from states 
representing more than 50 percent of total U.S. gross farm income 
derived from all peanut sales, plus an additional two votes from any 
other Board members, provided a minimum of five votes concur.
    (c) For routine and noncontroversial matters which do not require 
deliberation and the exchange of views, and in matters of an emergency 
nature when there is not time to call an assembled meeting of the 
Board, the Board may also take action as prescribed in this section by 
mail, facsimile, telephone, or any telecommunication method appropriate 
for the conduct of business, but any such action shall be confirmed in 
writing within 30 days.
    (d) There shall be no voting by proxy.
    (e) The chairperson shall be a voting member.


Sec. 1216.47  Compensation and reimbursement.

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


Sec. 1216.48  Powers and duties of the National Peanut Board.

    The Board shall have the following powers and duties:
    (a) To administer the Order in accordance with its terms and 
conditions and to collect assessments;
    (b) To develop and recommend to the Secretary for approval such 
bylaws as may be necessary for the functioning of the Board, and such 
rules as may be necessary to administer the Order, including activities 
authorized to be carried out under the Order;
    (c) To meet, organize, and select from among the members of the 
Board a chairperson, other officers, committees, and subcommittees, as 
the Board determines to be appropriate;
    (d) To employ persons, other than the members, as the Board 
considers necessary to assist the Board in carrying out its duties and 
to determine the compensation and specify the duties of such persons;
    (e) To develop programs and projects, and enter into contracts or 
agreements, which must be approved by the Secretary before becoming 
effective, for the development and carrying out of programs or projects 
of research, information, or promotion, and the payment of costs 
thereof with funds collected pursuant to this subpart. Each contract or 
agreement shall provide that any person who enters into a contract or 
agreement with the Board shall develop and submit to the Board a 
proposed activity; keep accurate records of all of its transactions 
relating to the contract or agreement; account for funds received and 
expended in connection with the contract or agreement; make periodic 
reports to the Board of activities conducted under the contract or 
agreement; and make such other reports available as the Board or the 
Secretary considers relevant. Any contract or agreement shall provide 
that:
    (1) The contractor or agreeing party shall develop and submit to 
the Board a program, plan, or project together with a budget or budgets 
that shall show the estimated cost to be incurred for such program, 
plan, or project;
    (2) The contractor or agreeing party shall keep accurate records of 
all its transactions and make periodic reports to the Board of 
activities conducted, submit accounting for funds received and 
expended, and make such other reports as the Secretary or the Board may 
require;
    (3) The Secretary may audit the records of the contracting or 
agreeing party periodically; and
    (4) Any subcontractor who enters into a contract with a Board 
contractor and who receives or otherwise uses funds allocated by the 
Board shall be subject to the same provisions as the contractor.
    (f) To prepare and submit for approval of the Secretary fiscal year 
budgets in accordance with Sec. 1216.50;
    (g) To maintain such records and books and prepare and submit such 
reports and records from time to time to the Secretary as the Secretary 
may prescribe; to make appropriate accounting with respect to the 
receipt and disbursement of all funds entrusted to it; and to keep 
records that accurately reflect the actions and transactions of the 
Board;
    (h) To cause its books to be audited by a competent auditor at the 
end of each fiscal year and at such other times as the Secretary may 
request, and to submit a report of the audit directly to the Secretary;
    (i) To give the Secretary the same notice of meetings of the Board 
as is given to members in order that the Secretary's representative(s) 
may attend such meetings, and to keep and report minutes of each 
meeting of the Board to the Secretary;
    (j) To act as intermediary between the Secretary and any producer 
or first handler;
    (k) To furnish to the Secretary any information or records that the 
Secretary may request;
    (l) To receive, investigate, and report to the Secretary complaints 
of violations of the Order;
    (m) To recommend to the Secretary such amendments to the Order as 
the Board considers appropriate; and
    (n) To work to achieve an effective, continuous, and coordinated 
program of promotion, research, consumer information, evaluation, and 
industry information designed to strengthen the peanut industry's 
position in the marketplace; maintain and expand existing markets and 
uses for peanuts; and to carry out programs, plans, and projects 
designed to provide maximum benefits to the peanut industry.


Sec. 1216.49  Prohibited activities.

    The Board may not engage in, and shall prohibit the employees and 
agents of the Board from engaging in:
    (a) Any action that would be a conflict of interest;
    (b) Using funds collected by the Board under the Order to undertake 
any action

[[Page 59904]]

for the purpose of influencing legislation or governmental action or 
policy, including local, state, national, and international, other than 
recommending to the Secretary amendments to the Order; and
    (c) Any advertising, including promotion, research, and information 
activities authorized to be carried out under the Order, that is false 
or misleading or disparaging to another agricultural commodity.

Expenses and Assessments


Sec. 1216.50  Budget and expenses.

    (a) At least 60 days prior to the beginning of each fiscal year, 
and as may be necessary thereafter, the Board shall prepare and submit 
to the Secretary a budget for the fiscal year covering its anticipated 
expenses and disbursements in administering this subpart. Each such 
budget shall include:
    (1) A statement of objectives and strategy for each program, plan, 
or project;
    (2) A summary of anticipated revenue, with comparative data for at 
least one preceding year (except for the initial budget);
    (3) A summary of proposed expenditures for each program, plan, or 
project; and
    (4) Staff and administrative expense breakdowns, with comparative 
data for at least one preceding year (except for the initial budget).
    (b) Each budget shall provide adequate funds to defray its proposed 
expenditures and to provide for a reserve as set forth in this subpart.
    (c) Subject to this section, any amendment or addition to an 
approved budget must be approved by the Secretary, including shifting 
funds from one program, plan, or project to another. Shifts of funds 
which do not cause an increase in the Board's approved budget and which 
are consistent with governing bylaws need not have prior approval by 
the Secretary.
    (d) The Board is authorized to incur such expenses, including 
provision for a reasonable reserve, as the Secretary finds are 
reasonable and likely to be incurred by the Board for its maintenance 
and functioning, and to enable it to exercise its powers and perform 
its duties in accordance with the provisions of this subpart. Such 
expenses shall be paid from funds received by the Board.
    (e) With approval of the Secretary, the Board may borrow money for 
the payment of administrative expenses, subject to the same fiscal, 
budget, and audit controls as other funds of the Board. Any funds 
borrowed by the Board shall be expended only for startup costs and 
capital outlays and are limited to the first year of operation of the 
Board.
    (f) The Board may accept voluntary contributions, but these shall 
only be used to pay expenses incurred in the conduct of programs, 
plans, and projects. Such contributions shall be free from any 
encumbrance by the donor and the Board shall retain complete control of 
their use.
    (g) The Board shall reimburse the Secretary for all expenses 
incurred by the Secretary in the implementation, administration, and 
supervision of the Order, including all referendum costs in connection 
with the Order.
    (h) The Board may not expend for administration, maintenance, and 
functioning of the Board in any fiscal year an amount that exceeds 10 
percent of the assessments and other income received by the Board for 
that fiscal year. Reimbursements to the Secretary required under 
paragraph (g) are excluded from this limitation on spending.
    (i) The Board shall allocate, to the extent practicable, 80 percent 
of the assessments collected on quota peanuts for any fiscal year on 
national and regional promotion, research, and information activities. 
The Board shall allocate, to the extent practicable, 20 percent of 
assessments collected on quota peanuts for any fiscal year for use in 
state or regional research programs. Specific percentages and amounts 
shall be determined annually by the Board, with the approval of the 
Secretary.
    (j) Certified peanut producer organizations may submit requests for 
funding for research and/or generic promotion projects. Amounts 
approved for each state shall not exceed the pro rata share of funds 
available for that state as determined by the Board and approved by the 
Secretary. Amounts allocated by the Board for state research or 
promotion activities will be based on requests submitted to the Board 
and approved when it is determined that they meet the goals and 
objectives stated in the Order.
    (k) Assessments collected, less pro rata administrative expenses, 
from the gross sales of contract export additional peanuts shall be 
provided by the Board to an appropriate organization approved by the 
Secretary as the primary contractor for the promotion and related 
research of export peanuts.
    (l) The Board shall determine annually how total funds shall be 
allocated pursuant to paragraph (i), (j), and (k) of this section, with 
the approval of the Secretary.


Sec. 1216.51  Assessments.

    (a) The funds to cover the Board's expenses shall be acquired by 
the levying of assessments upon producers as prescribed in regulations 
issued by the Secretary.
    (b) Each first handler, at such times and in such manner as 
prescribed by regulations issued by the Secretary, shall collect from 
each producer and pay assessments to the Board on all peanuts handled, 
including peanuts owned by the first handler: Provided, that the 
deadline prescribed in the regulations for remittance of assessments 
shall be no more than 60 days after the last day of the month in which 
the peanuts were marketed.
    (c) Such assessments shall be levied at a rate of 1 percent of the 
price paid for all farmers stock peanuts sold.
    (d) For peanuts placed under loan with the Department's Commodity 
Credit Corporation, each area marketing association shall remit to the 
Board the following:
    (1) One (1) percent of the initial price paid for either quota or 
additional peanuts no more than 60 days after the last day of the month 
in which the peanuts were placed under loan; and
    (2) One (1) percent of the profit from the sale of the peanuts 
within 60 days after the final day of the area association's fiscal 
year.
    (e) All assessments collected under this section are to be used for 
expenses and expenditures pursuant to this Order and for the 
establishment of an operating reserve as prescribed in the Order.
    (f) The Board shall impose a late payment charge on any person who 
fails to remit to the Board the total amount for which the person is 
liable on or before the payment due date established under this 
section. The late payment charge will be in the form of interest on the 
outstanding portion of any amount for which the person is liable. The 
rate of interest shall be prescribed in regulations issued by the 
Secretary.
    (g) Persons failing to remit total assessments due in a timely 
manner may also be subject to actions under federal debt collection 
procedures.
    (h) The Board may authorize other organizations to collect 
assessments on its behalf with the approval of the Secretary.


Sec. 1216.52  Programs, plans, and projects.

    (a) The Board shall receive and evaluate, or on its own initiative 
develop, and submit to the Secretary for approval any program, plan, or 
project authorized under this subpart. Such programs, plans, or 
projects shall provide for:

[[Page 59905]]

    (1) The establishment, issuance, effectuation, and administration 
of appropriate programs for promotion, research, and information, 
including producer and consumer information, with respect to peanuts; 
and
    (2) The establishment and conduct of research with respect to the 
use, nutritional value, sale, distribution, and marketing of peanuts 
and peanut products, and the creation of new products thereof, to the 
end that marketing and use of peanuts may be encouraged, expanded, 
improved, or made more acceptable and to advance the image, 
desirability, or quality of peanuts.
    (b) No program, plan, or project shall be implemented prior to its 
approval by the Secretary. Once a program, plan, or project is so 
approved, the Board shall take appropriate steps to implement it.
    (c) Each program, plan, or project implemented under this subpart 
shall be reviewed or evaluated periodically by the Board to ensure that 
it contributes to an effective program of promotion, research, or 
consumer information. If it is found by the Board that any such 
program, plan, or project does not contribute to an effective program 
of promotion, research, or consumer information, then the Board shall 
terminate such program, plan, or project.
    (d) No program, plan, or project shall make any false claims on 
behalf of peanuts or use unfair or deceptive acts or practices with 
respect to the quality, value, or use of any competing product. Peanuts 
of all domestic origins shall be treated equally.


Sec. 1216.53  Independent evaluation.

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


Sec. 1216.54  Operating reserve.

    The Board shall establish an operating monetary reserve and may 
carry over to subsequent fiscal years excess funds in a reserve so 
established; Provided, that funds in the reserve shall not exceed any 
fiscal year's anticipated expenses.


Sec. 1216.55  Investment of funds.

    The Board may invest, pending disbursement, funds it receives under 
this subpart, only in obligations of the United States or any agency of 
the United States; general obligations of any state or any political 
subdivision of a state; interest bearing accounts or certificates of 
deposit of financial institutions that are members of the Federal 
Reserve system; or obligations that are fully guaranteed as to 
principal and interest by the United States.

Reports, Books, and Records


Sec. 1216.60  Reports.

    Each first handler and producer subject to this subpart may be 
required to provide to the Board periodically such information as is 
required by regulations, which may include but not be limited to the 
following:
    (a) Number of pounds handled and the price paid to the producer;
    (b) Number of pounds on which an assessment was collected;
    (c) Name and address of person from whom the first handler has 
collected the assessments on each pound handled; and
    (d) Date collection was made on each pound handled.


Sec. 1216.61  Books and records.

    Each first handler and producer subject to this subpart shall 
maintain and make available for inspection by the Secretary such books 
and records as are necessary to carry out the provisions of this 
subpart and the regulations issued thereunder, including such records 
as are necessary to verify any reports required. Such records shall be 
retained for at least two years beyond the marketing year of their 
applicability.


Sec. 1216.62  Confidential treatment.

    All information obtained from books, records, or reports under the 
Act, this subpart, and the regulations issued thereunder shall be kept 
confidential by all persons, including all employees and former 
employees of the Board, all officers and employees and former officers 
and employees of contracting and subcontracting agencies or agreeing 
parties having access to such information. Such information shall not 
be available to Board members, producers, importers, exporters, or 
handlers. Only those persons having a specific need for such 
information to effectively administer the provisions of this subpart 
shall have access to such information. Only such information so 
obtained as the Secretary deems relevant shall be disclosed by them, 
and then only in a judicial proceeding or administrative hearing 
brought at the direction, or on the request, of the Secretary, or to 
which the Secretary or any officer of the United States is a party, and 
involving this subpart. Nothing in this section shall be deemed to 
prohibit:
    (a) The issuance of general statements based upon the reports of 
the number of persons subject to this subpart or statistical data 
collected therefrom, which statements do not identify the information 
furnished by any person; and
    (b) The publication, by direction of the Secretary, of the name of 
any person who has been adjudged to have violated this subpart, 
together with a statement of the particular provisions of this subpart 
violated by such person.

Certification of Peanut Producer Organizations


Sec. 1216.70  Certification.

    (a) Organizations receiving certification from the Secretary will 
be entitled to submit nominations for Board membership to Secretary for 
appointment and to submit requests for funding to the Board.
    (b) For major peanut-producing states, state-legislated peanut 
promotion, research, and information organizations may request 
certification, provided the state-legislated promotion program submits 
a factual report that shall contain information deemed relevant and 
specified by the Secretary for the making of such determination 
pursuant to paragraph (e) of this section.
    (c) If a state-legislated peanut promotion, research and 
information organization in a major peanut-producing state does not 
elect to seek certification from the Secretary within a specified time 
period as determined by the Secretary, or does not meet eligibility 
requirements as specified by the Secretary, then any peanut producer 
organization whose primary purpose is to represent peanut producers 
within a primary peanut-producing state, or any other organization 
which has peanut producers as part of its membership, may request 
certification. Certification shall be based, in addition to other 
available information, upon a factual report submitted by the 
organization that shall contain information deemed relevant and 
specified by the Secretary for the making of such determination 
pursuant to paragraph (e) of this section.
    (d) For minor peanut-producing states, any organization that has 
peanut producers as part of its membership may request certification.
    (e) The information required for certification by the Secretary may 
include, but is not limited to, the following:
    (1) The geographic distribution within the state covered by the 
organization's active membership;

[[Page 59906]]

    (2) The nature and size of the organization's active membership in 
the state, proportion of total such active membership accounted for by 
producers, a map showing the peanut-producing counties in such state in 
which the organization has members, the volume of peanuts produced in 
each such county, the number of peanut producers in each such county, 
and the size of the organization's active peanut producer membership in 
each such county;
    (3) The extent to which the peanut producer membership of such 
organization is represented in setting the organization's policies;
    (4) Evidence of stability and permanency of the organization;
    (5) Sources from which the organization's operating funds are 
derived;
    (6) Functions of the organization;
    (7) The organization's ability and willingness to further the aims 
and objectives of the Act and Order; and,
    (8) Demonstrated experience administering generic state promotion 
and research programs.
    (f) The Secretary's determination as to eligibility or 
certification of an organization shall be final.

Miscellaneous


Sec. 1216.80  Implementation of the Order.

    The Order shall not become effective unless:
    (a) The Secretary determines that the Order is consistent with and 
will effectuate the purposes of the Act; and
    (b) The Order is approved by a simple majority of the peanut 
producers voting in a referendum who, during a representative period 
determined by the Secretary, have been engaged in the production of 
peanuts.


Sec. 1216.81  Suspension and termination.

    (a) The Secretary shall suspend or terminate this subpart or a 
provision thereof if the Secretary finds that the subpart or a 
provision thereof obstructs or does not tend to effectuate the purposes 
of the Act, or if the Secretary determines that this subpart or a 
provision thereof is not favored by persons voting in a referendum 
conducted pursuant to the Act.
    (b) Every five years, the Secretary shall hold a referendum to 
determine whether peanut producers favor the continuation of the Order. 
The Secretary will also conduct a referendum if 10 percent or more of 
all eligible peanut producers request the Secretary to hold a 
referendum. In addition, the Secretary may hold a referendum at any 
time.
    (c) The Secretary shall suspend or terminate this subpart at the 
end of the marketing year whenever the Secretary determines that its 
suspension or termination is approved or favored by a simple majority 
of the producers voting in a referendum who, during a representative 
period determined by the Secretary, have been engaged in the production 
of peanuts.
    (d) If, as a result of the referendum conducted under paragraph (b) 
of this section, the Secretary determines that this subpart is not 
approved, the Secretary shall:
    (1) Not later than 180 days after making the determination, suspend 
or terminate, as the case may be, collection of assessments under this 
subpart; and
    (2) As soon as practical, suspend or terminate, as the case may be, 
activities under this subpart in an orderly manner.


Sec. 1216.82  Proceedings after termination.

    (a) Upon the termination of this subpart, the Board shall recommend 
not more than three of its members to the Secretary to serve as 
trustees for the purpose of liquidating the affairs of the Board. Such 
persons, upon designation by the Secretary, shall become trustees of 
all of the funds and property then in the possession or under control 
of the Board, including claims for any funds unpaid or property not 
delivered, or any other claim existing at the time of such termination.
    (b) The said trustees shall:
    (1) Continue in such capacity until discharged by the Secretary;
    (2) Carry out the obligations of the Board under any contracts or 
agreements entered into pursuant to the Order;
    (3) From time to time account for all receipts and disbursements 
and deliver all property on hand, together with all books and records 
of the Board and the trustees, to such person or persons as the 
Secretary may direct; and
    (4) Upon request of the Secretary execute such assignments or other 
instruments necessary and appropriate to vest in such persons title and 
right to all funds, property and claims vested in the Board or the 
trustees pursuant to the Order.
    (c) Any person to whom funds, property or claims have been 
transferred or delivered pursuant to the Order shall be subject to the 
same obligations imposed upon the Board and upon the trustees.
    (d) Any residual funds not required to defray the necessary 
expenses of liquidation shall be turned over to the Secretary to be 
disposed of, to the extent practical, to the peanut producer 
organizations, certified pursuant to Sec. 1216.70, in the interest of 
continuing peanut promotion, research, and information programs.


Sec. 1216.83  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, the 
termination of this subpart or of any regulation issued pursuant 
thereto, or the issuance of any amendment to either thereof, shall not:
    (a) Affect or waive any right, duty, obligation or liability which 
shall have arisen or which may thereafter arise in connection with any 
provision of this subpart or any regulation issued thereunder; or
    (b) Release or extinguish any violation of this subpart or any 
regulation issued thereunder; or
    (c) Affect or impair any rights or remedies of the United States, 
or of the Secretary or of any other persons, with respect to any such 
violation.


Sec. 1216.84  Personal liability.

    No member or alternate member of the Board shall be held personally 
responsible, either individually or jointly with others, in any way 
whatsoever, to any person for errors in judgment, mistakes, or other 
acts, either of commission or omission, as such member or alternate, 
except for acts of dishonesty or willful misconduct.


Sec. 1216.85  Separability.

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


Sec. 1216.86  Amendments.

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


Sec. 1216.87  Patents, copyrights, trademarks, information, 
publications, and product formulations.

    Patents, copyrights, trademarks, information, publications, and 
product formulations developed through the use of funds received by the 
Board under this subpart shall be the property of the U.S. Government 
as represented by the Board and shall, along with any rents, royalties, 
residual payments, or other income from the rental, sales, leasing, 
franchising, or other uses of such patents, copyrights, trademarks, 
information, publications, or product formulations, inure to the 
benefit of the Board; shall be considered income subject to the same 
fiscal, budget, and

[[Page 59907]]

audit controls as other funds of the Board; and may be licensed subject 
to approval by the Secretary. Upon termination of this subpart, 
Sec. 1216.82 shall apply to determine disposition of all such property.

    Dated: November 2, 1998.
Enrique E. Figueroa,
Administrator, Agricultural Marketing Service.
[FR Doc. 98-29729 Filed 11-5-98; 8:45 am]
BILLING CODE 3410-02-P