[Federal Register Volume 72, Number 133 (Thursday, July 12, 2007)]
[Rules and Regulations]
[Pages 37995-37997]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-13548]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1220

[Docket No. AMS-LS-07-0084; LS-05-07]


Soybean Promotion and Research Program; Section 610 Review

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Confirmation of regulations.

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

SUMMARY: This document summarizes the results of an Agricultural 
Marketing Service (AMS) review of the Soybean Promotion, Research, and 
Consumer Information Program under the criteria contained in section 
610 of the Regulatory Flexibility Act (RFA). Based upon its review, AMS 
has determined that the Soybean Research and Promotion Order (Order) 
should be continued without change.

ADDRESSES: Interested persons may obtain a copy of the review. Requests 
for copies should be sent to Kenneth R. Payne, Chief, Marketing 
Programs, Livestock and Seed Program, AMS, USDA, Room 2628-S, STOP 
0251, 1400 Independence Avenue, SW., Washington, DC 20250-0251; Phone: 
(202) 720-1115; Fax: (202) 720-1125; or, online at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Kenneth R. Payne, Chief, Marketing 
Programs Branch, Livestock and Seed Program, AMS, USDA, Room 2638-S, 
STOP 0251, 1400 Independence Avenue, SW., Washington, DC 20250-0251 or 
e-mail [email protected].

SUPPLEMENTARY INFORMATION: The Order (7 CFR 1220) is authorized under 
the Soybean Promotion, Research, and Consumer Information Act (Act) (7 
U.S.C. 6301 et seq.). This program is a national producer program for 
soybean and soybean product promotion, research, consumer information, 
and industry information as part of a comprehensive strategy to 
strengthen the soybean industry's position in the marketplace by 
maintaining and expanding existing domestic and foreign markets and 
uses for soybeans and soybean products, and to develop new markets and 
uses for soybean and soybean products. Soybean producers fund this 
program through a mandatory assessment of one-half of one percent (0.5 
percent) of the net market price per bushel on soybeans marketed. 
Assessments collected under this program are used for promotion, 
research, consumer information, and industry information.
    The national program is administered by the United Soybean Board 
(Board), which has 64 producer members. Board members serve 3-year 
terms and represent 28 states and 2 geographic units.
    On February 18, 1999, AMS published in the Federal Register (64 FR 
8014), a plan to review certain regulations, including the Soybean 
Promotion, Research, and Consumer Information Program, known as the 
Soybean Checkoff Program (Program), under criteria contained in section 
610 of the Regulatory Flexibility Act (RFA) (U.S.C. 601-612). Updated 
plans were published in the Federal Register on January 4, 2002 (67 FR 
525), August 14, 2003 (68 FR 48574), and March 24, 2006 (71 FR 14827). 
The reviews are being conducted over the next 10 years under section 
610 of the RFA. Because many AMS regulations impact small entities, AMS 
decided, as a matter of policy, to review certain regulations which, 
although they may not meet the threshold requirement under section 610 
of the RFA, warranted review.
    As part of its review of the Program, AMS published a notice of 
review and request for written comments on the Soybean Research and 
Promotion Order in the December 2, 2005 issue of the

[[Page 37996]]

Federal Register (70 FR 72257). Comments were due January 31, 2006. 
Comments were received from 18 various State soybean associations, a 
national trade association, and several soybean producers.
    The review was undertaken to determine whether the Order should be 
continued without change, amended, or rescinded (consistent with the 
objectives of the Act) to minimize the impacts on small entities. In 
conducting this review, AMS considered the following factors: (1) The 
continued need for the Order; (2) the nature of complaints or comments 
from the public concerning the Order; (3) the complexity of the Order; 
(4) the extent to which the Order overlaps, duplicates, or conflicts 
with other Federal rules and, to the extent feasible, with state and 
local governmental rules; and (5) the length of time since the Order 
has been evaluated or the degree to which technology, economic 
conditions, or other factors have changed in the area affected by the 
Order.
    Comments: USDA received comments from 18 various State soybean 
associations, national trade associations, and soybean producers 
regarding the Order and/or the regulations in response to the published 
notice of review.
    A comment from the chairman of the United Soybean Board discussed 
background information about the Program as well as rationale for the 
continuation of the Order. The comment from the Board chairman 
addressed the intent of the 610 review. The chairman also referenced 
the results of the 2004 request for a referendum, in which only 3,206 
valid requests for a referendum were cast. A total of 66,388 valid 
votes were required to prompt a referendum. Additionally, the comment 
referred to the recent return on investment study, which evaluated 
Program activities from 1995-2001, and determined that for every $1 
invested, producers received $6.75 in returns.
    Thirteen comments addressed the process used by the Board for 
selecting contractors. To obtain contractors, the Board periodically 
announces Request for Proposals (RFP) for potential contractors who 
provide specific services for the Board. As part of the oversight 
responsibility, USDA reviews and approves all contracts between the 
Board and contractors. The Board continually evaluates the work of all 
contractors, who are subject to audits. Competitive bidding is used by 
the Board and subcontractors, when deemed necessary.
    Eighteen comments received questioned how the Board manages the 
Program's finances. The Board's financial records are audited on an 
annual basis by an independent auditor. Through the Board's compliance 
program and auditing authority, Qualified State Soybean Boards (QSSB) 
are periodically reviewed to ensure proper accounting procedures are in 
place so that checkoff dollars are not commingled with non-checkoff 
dollars and are spent on authorized activities. AMS also reviews and 
approves the annual financial audit of the Board, the operating and 
administrative budgets of the Board, and amendments made to either 
budget as the fiscal year progresses. Producers and organizations 
representing soybean producers are encouraged to attend State meetings 
and provide input during the decision-making process.
    For budgeting purposes, the Board has adopted the use of a Budget 
Allocation Model, which allows all producers the opportunity to direct 
programs and funding. This model is used in conjunction with the 
Board's committee structure to allocate checkoff funds for Board 
activity. The Board is required under the Order to have its financial 
records annually reviewed by an independent certified public 
accountant. To date, the audits have not reflected any substantive 
reasons for concern and have indicated that the Board does adhere to 
the administrative cap set forth in the Act. Board financial 
information and meeting minutes are available to QSSBs and the general 
public upon request to the Board and are distributed to Board members.
    The Board, by representation of producers nominated by State boards 
and appointed by the Secretary, is responsible for decisions that 
impact the entire soybean industry. Therefore, AMS understands the 
value of transparency of the Board's decisions and actions. In fiscal 
year 2006, Beyond the Bean magazine was distributed quarterly to 
producers to communicate educational, action-oriented checkoff 
activities of the Board. Additionally, Board and committee meetings are 
open to the public. The public, which includes QSSB representatives and 
producers, are afforded the opportunity to participate in Board and 
committee meetings and are encouraged to provide input in the decision-
making process.
    Fifteen comments made recommendations that include changes to the 
Act, such as: Doubling the assessment rate, changing how Board members 
are selected, the removal of legislation authorizing the Coordinating 
Committee, allowing for the payment of membership dues with checkoff 
dollars, and allowing checkoff funds generated in States to remain 
under the sole discretion and control of the each respective State. 
However, implementation of these suggestions would require changes to 
language in the Act itself, which would require congressional action.
    Fourteen comments recommended changes to the Order, including 
suggestions on how referendums are conducted and a request to correct 
an erroneously eliminated section that allows State checkoff programs 
to pay refunds and mandate that producers requesting a refund direct 
their total assessment to the Board. The Order was amended in January 
2007 to add the eliminated section back into the Order. The Order 
currently allows for soybean producers to petition for a referendum 
every five years. Suggestions received from the public on how the Order 
can be revised concerning change the referendum process have been 
forwarded to the Board for further consideration.
    Five comments addressed the Board's decision to establish the 
United States Soybean Export Council (USSEC). AMS has reviewed all 
agreements and contracts to ensure that all activities were performed 
and permissible under the Act and Order. Preliminary information 
pertaining to the creation of USSEC and impact upon ASA are anticipated 
and will be distributed to Board members. Such information will also be 
made available to the public upon request.
    Five comments addressed the method used for calculating eligible 
soybean producers. According to the Act, the term ``producer'' is 
defined as ``any person engaged in the growing of soybeans in the 
United States, who owns or shares the ownership and risk of loss of 
such soybeans.'' USDA periodically reviews data available from the Farm 
Service Agency to determine the total number of producers eligible to 
participate in a request for referendum.
    Two comments indicated that the period used for Minimum Assessment 
Provision by the Board should begin either September or October instead 
of the beginning of the calendar year. The calendar year is used in 
order to provide consistency among the various accounting periods used 
by the QSSBs.
    Based upon this review, the USDA has determined that the Order is 
not unduly complex. The USDA has not identified any relevant Federal 
rules or State and local regulations that duplicate, overlap, or 
conflict with the Order's requirements. While there are organizations 
that exist to conduct soybean research, the Board works with these 
organizations complementarily. In many cases, the work being done by

[[Page 37997]]

these research institutions is either fully or partially funded by the 
Board.
    There are State programs that promote generic soybeans and soybean 
products. These State programs are, in most cases, affiliated with the 
Board as the QSSBs in their respective States or geographic units. 
Assessments are collected by QSSBs, portions of which are retained by 
their respective geographic units for local generic soybean promotion, 
research, and information.
    Additionally, these are some organizations that exist solely to 
represent soybean producers. These organizations are voluntary in 
nature and serve different functions. The activities of these 
organizations concentrate in areas not covered by the Order, and 
therefore do not duplicate or conflict with the Order
    Based upon the review, AMS has determined that the Order should 
continue without change. AMS plans to continue working with the soybean 
industry in maintaining an effective Program.

    Authority: 7 U.S.C. 6301-6311.

    Dated: July 9, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
 [FR Doc. E7-13548 Filed 7-11-07; 8:45 am]
BILLING CODE 3410-02-P