[Federal Register Volume 73, Number 88 (Tuesday, May 6, 2008)]
[Rules and Regulations]
[Pages 25398-25417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-9327]



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Part IV





Department of Agriculture





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Agricultural Marketing Service



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7 CFR Part 1221



Sorghum Promotion, Research, and Information Order; Final Rule

  Federal Register / Vol. 73, No. 88 / Tuesday, May 6, 2008 / Rules and 
Regulations  

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1221

[Docket No. AMS-LS-07-0056, LS-07-02]


Sorghum Promotion, Research, and Information Order

AGENCY: Agricultural Marketing Service (AMS), USDA.

ACTION: Final rule.

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SUMMARY: This rule establishes an industry-funded promotion, research, 
and information program for sorghum, which includes but is not limited 
to, grain sorghum, sorghum forage, sorghum hay, sorghum haylage, 
sorghum billets, and sorghum silage. For the purpose of clarity, the 
term sorghum means all the above mentioned types of sorghum unless 
specifically identified otherwise. The Sorghum Promotion, Research, and 
Information Order (Order) is implemented under the authority of the 
Commodity Promotion, Research, and Information Act of 1996 (Act). The 
Order will establish a national Sorghum Promotion, Research, and 
Information Board (Board) comprised initially of 13 sorghum producers. 
Producers and importers will pay assessments based on the value of the 
sorghum they produce or import. A referendum will be conducted 3 years 
after assessments begin to determine if sorghum producers and importers 
favor the program.

DATES: Effective May 7, 2008. Collection of assessments and appropriate 
reporting will begin on July 1, 2008.

FOR FURTHER INFORMATION CONTACT: Kenneth R. Payne, Chief, Marketing 
Programs Branch; Telephone: (202) 720-1115; Fax: (202) 720-1125, or E-
mail [email protected].

SUPPLEMENTARY INFORMATION: This Order is issued pursuant to the Act of 
1996 (7 U.S.C. 7411-7425) enacted April 4, 1996, hereafter referred to 
as the Act. A proposed Order was published November 23, 2007 [72 FR 
65842].

Executive Order 12988

    This final 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 of Agriculture (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 may request 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 will issue a ruling on the petition. The Act 
provides that the district court of the U.S. 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 13132

    This final rule has been reviewed under Executive Order 13132, 
Federalism. This Order directs agencies to construe, in regulations and 
otherwise, a Federal statute to preempt State law only when the statute 
contains an express preemption provision. 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.
    Six States currently have State-legislated sorghum research and 
promotion programs. In accordance with the Act, this final rule will 
not preempt any of these State-legislated programs. Further, section 
1221.112(j) of the final Order provides for an annual allocation to 
State programs based on the State's proportional contribution of total 
assessments collected by the national sorghum checkoff program.
    In 2005 and 2006, representatives of the six State-legislated 
sorghum promotion programs were among other sorghum industry 
representatives who met with AMS representatives to discuss the 
possibility of implementing a national sorghum checkoff program. State 
program representatives participated in the development of the 
provisions of the proposed Order during these meetings and through 
direct communication with the National Sorghum Producers (NSP) during 
the drafting of its proposal.
    Not only were the States informed throughout the development of the 
national sorghum checkoff program, they were instrumental in the 
sorghum industry's decision to institute a national sorghum checkoff 
program. In addition to receiving support from NSP and the U.S. Grains 
Council, an organization that is dedicated to expanding export 
opportunities and markets for sorghum and sorghum products, industry 
and producer organizations from four of the largest grain sorghum 
production States: Kansas, Nebraska, Texas, and Oklahoma expressed 
their support for the proposed Order. New Mexico, a producer of grain 
sorghum and sorghum silage, also expressed support. Within these 
States, the following organizations indicated their interest in 
establishing the program: The Texas Grain Sorghum Board; the Texas 
Grain Sorghum Association; the Kansas Grain Sorghum Producers 
Association; the Kansas Grain Sorghum Commission; the Nebraska Grain 
Sorghum Producers Association; the Oklahoma Grain Sorghum Association; 
and the New Mexico Grain Sorghum Association.

Executive Order 12866

    This final 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. 
601-612), USDA is required to examine the impact of this 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, commodity 
promotion programs.
    The Order is intended to develop and finance, through assessments, 
an effective and coordinated program of promotion, research, and 
information to maintain and expand the markets for sorghum. While the 
Order will impose certain reporting and recordkeeping requirements on 
persons subject to the Order, the information required under the Order 
can generally be compiled from records currently maintained.
    Under the Order, first handlers will remit assessments collected 
from

[[Page 25399]]

producers to the Board. First handlers will also be required to keep 
records and provide information to the Board that it deems necessary. 
Currently, first handlers already complete and maintain the same or 
similar information for existing State sorghum and soybean programs, as 
well as for the Soybean Checkoff Program (7 CFR part 1220). Reporting 
forms will require the minimum information necessary to fulfill the 
intent of the Act. Such records and reports will be retained for 2 
years beyond the fiscal year of their applicability. First handlers 
will also be required to make available, to the Secretary, their books 
and records in order to determine compliance with the Order.
    In addition to paying assessments, producers and importers will 
have a reporting and recordkeeping burden. This burden relates to 
producers and importers who will seek nomination to serve on the Board, 
request an organic exemption, request a refund of assessments paid, or 
vote in a nation-wide referendum. The Order requires producers and 
importers to keep records and to provide information to the Board or 
the Secretary when requested and to keep records to qualify for a 
refund. However, it is not anticipated that producers will be required 
to regularly submit assessment and other related information to the 
Board. Information may be obtained through an audit of producers' 
records to confirm information provided by first handlers or as part of 
the Board's compliance program.
    When seeking nominations to serve on the Board, producers will be 
required to complete two forms that would be submitted to the 
Secretary.
    Any producer paying assessments may request a refund of assessments 
paid by submitting an application to the Board. Refunds will be made 
only if the program is not approved in referendum.
    With regard to imports of sorghum, U.S. Customs and Border 
Protection (Customs) will collect and remit assessments from importers 
to the Board. Customs will also provide information to the Board 
regarding the value and volume of imported sorghum, and therefore it is 
not anticipated that importers will have any regular reporting burden. 
The Order requires importers to keep records and to provide information 
to the Board or the Secretary, when requested, and to keep records to 
qualify for a refund. Information may be obtained through an audit of 
importers' records to confirm information provided by Customs or as 
part of the Board's compliance program.
    Importers will have similar reporting and recordkeeping 
requirements as producers concerning nominations to serve on the Board, 
organic exemptions, refunds of assessments paid, or referendums.
    The Small Business Administration (SBA) [13 CFR 121.201] defines 
small agricultural service businesses as those whose annual receipts 
are less than $6.5 million. According to the National Agricultural 
Statistics Service (NASS) 2002 Census of Agriculture, there are 22 
grain sorghum producing States and approximately 3,000 wholesale grain 
merchants who will be considered first handlers under the Order, in 
these 22 States. By calculating the average values of product sold by 
grain merchants in each of the 22 grain sorghum producing States, one 
can determine that 16 States have wholesale grain industries where, on 
average, the wholesalers each sold in excess of $6.5 million per year. 
This gives a rough approximation that as many as 73 percent of 
wholesale grain elevators in grain sorghum producing States may have 
annual sales in excess of $6.5 million and therefore are determined not 
to be small businesses.
    Based upon data collected from State sorghum boards, NSP estimates 
that approximately 1,150 first handlers of grain sorghum will be 
affected. This number represents the number of wholesale grain 
merchants who buy grain sorghum of the 3,000 wholesale grain merchants 
approximated. Although State promotion, research, and information 
programs do not currently exist for sorghum forage, sorghum hay, 
sorghum haylage, sorghum billets, or sorghum silage, NSP estimates that 
approximately 700 first handlers of these products will be affected. 
This was determined through discussions with State sorghum promotions 
program representatives and State organizations representing sorghum 
producers. We assume that some of these 700 first handlers will be 
small businesses.
    Under SBA criteria, importers of sorghum are considered 
agricultural service businesses. The Order defines an importer as a 
person who imports more than 1,000 bushels of grain sorghum, or 5,000 
tons of sorghum forage, sorghum hay, sorghum haylage, sorghum billets, 
or sorghum silage during a calendar year.
    At present, a relatively small amount of grain sorghum is imported 
into the United States, and the exact number of sorghum importers who 
will be affected by the proposed Order is not known. It is believed 
that most grain sorghum imports are related to sorghum seed breeding 
activities at the present time. For the purpose of this RFA, we 
therefore will assume that some importers are small businesses.
    For 2005, United States International Trade Commission (USITC) 
database reports indicate that there were 24,549 bushels of grain 
sorghum imported, valued at $96,800. Based upon 2005 NASS data, this 
total would equal approximately 0.01 percent of the value of the 
domestic grain sorghum crop. In 2006, USITC database reports indicate 
that there were 2,547 bushels of grain sorghum imported, valued at 
$46,000. Using 2006 NASS data, this would again equal approximately 
0.01 percent of the value of the domestic grain sorghum crop. Using 
data from USITC reports for January--August 2007, the amount of grain 
sorghum imported is currently 75,497 bushels, valued at $374,000. Based 
upon NASS projections for the upcoming marketing year, grain sorghum 
imports would equal approximately 0.02 percent of the value of the 2007 
domestic grain sorghum crop.
    The SBA defines small agricultural producers as those having annual 
receipts of not more than $750,000 annually. According to the NASS 2002 
Census of Agriculture, the average grain sorghum farm size is 204 
acres. The USDA Economic Research Service's (ERS) Feed Grains Data Base 
Yearbook Tables indicate that for 2002 the weighted average farm price 
for grain sorghum was $2.32 per bushel and that, on average, 50.6 
bushels per acre were produced. Based on these figures, the average 
value of grain sorghum produced would be $23,948. Accordingly, most 
grain sorghum producers subject to this Order are determined to be 
small businesses.
    Sufficient data are not available to make similar calculations for 
the burden of assessments on sorghum forage, sorghum hay, sorghum 
haylage, sorghum billets, sorghum silage and sorghum seed producers. 
For the purpose of this RFA, we will assume that these producers are 
small businesses.
    ERS' report Feed Outlook, August 14, 2007, forecasted grain sorghum 
production of 475 million bushels in 2007, making it the largest 
production year since 2001. If this level of production were realized, 
the proposed Board would collect $9.4 million in assessments on grain 
sorghum. While ERS does not provide a production forecast for sorghum 
silage, NASS reports that 4,642,000 tons of sorghum silage was produced 
in 2006. NASS does not estimate the value of sorghum silage, but at $18 
per ton, an estimate provided by NSP, the Board would collect 
approximately $2.9 million from

[[Page 25400]]

sorghum silage. Were production and prices to remain at these record 
levels, the Board could collect approximately $12.3 million from 
domestic production of grain and silage sorghum and $2,244 from 
imported grain sorghum.
    An estimate of the grain sorghum assessments that would have been 
paid by producers in 2002 can be calculated by multiplying the average 
farm size (204 acres) by the average production (50.6 bushels per acre) 
by the price received ($2.32 per bushel) by the proposed grain sorghum 
assessment rate of 6 tenths of one percent of the value of the grain 
sorghum (0.006). The burden to each farm can be estimated to be 
approximately $144 for 2002. In this example, the year 2002 was 
selected because it is the most recent NASS Census of Agriculture 
reporting farm size.
    Sufficient data are not available to make a more accurate forecast 
of assessment collections on sorghum forage, sorghum hay, sorghum 
haylage, sorghum billets, and sorghum silage production. In addition to 
sorghum first handlers, importers, and producers, there are other 
entities affected by the Order. State, regional and national 
organizations representing sorghum producers and importers will have a 
role in the Order. There will be some burden on producer organizations 
that want to participate in the program by becoming certified to make 
nominations to the Board. USDA estimates that two organizations within 
each State will request certification.
    Shortly after the effective date of this Order, USDA will publish a 
notice in the Federal Register announcing that it will accept 
applications for certification of organizations to participate in the 
nomination of Board members pursuant to criteria in section 1221.107. 
Certified organizations will be required to re-submit applications for 
certification periodically. It is anticipated that this will occur 
every 5 years.
    Additionally, there will be a burden on State sorghum producer 
organizations requesting qualification by the Secretary to receive 
funding from the Board pursuant to section 1221.112(j). Only one 
organization within each State will be qualified by the Secretary to 
receive funding from the Board, and preference will be given to 
existing State legislated sorghum promotion organizations. 
Organizations will be required to submit an application for 
qualification to the Secretary pursuant to section 1221.128. It is 
estimated that one organization will be qualified per State although it 
is not required that each State have a qualified organization. 
Qualified organizations receiving funding through the Order will be 
required to re-submit applications for qualification periodically. It 
is anticipated that this will occur every 5 years.
    While the exact number of certified and qualified organizations is 
not known, nonetheless their membership, to a great extent, are 
producers who are largely small entities, and, when applicable, 
importers who we assume some of which are small entities.
    The Act provides authority to tailor a program according to the 
individual needs of an industry. Section 514 of the Act provides for 
orders applicable to producers, first handlers, and other persons in 
the marketing chain as appropriate. Provision is made for permissive 
terms in an order in Section 516 of the Act and authorizes an order to 
provide for 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; and provision for credits for generic and branded 
activities. In addition, Section 518 of the Act provides for a 
referendum 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.
    This Order includes provisions for a delayed referendum. Approval 
will be based upon the majority of those persons voting for approval 
who were engaged in the production or importation of sorghum during the 
representative period established by the Secretary.
    We have not identified any relevant Federal rules that are 
currently in effect that duplicate, overlap, or conflict with this 
rule.

Paperwork Reduction Act

    In accordance with OMB regulation (5 CFR part 1320) that implements 
the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) (PRA), AMS 
has submitted to OMB a new information collection that has been 
assigned OMB control number 0581-0246.
    Abstract: The information collection requirements in the request 
are essential to carry out the intent of the Act.
    Under the Order, first handlers will be required to collect 
assessments from producers, file reports with, and submit assessments 
to the Board. While the Order will impose certain recordkeeping 
requirements on first handlers, information required under the Order 
can be compiled from records currently maintained. Such records must be 
retained for at least 2 years beyond the marketing year of their 
applicability. Each first handler will be responsible for the 
collection of assessments and remittance of the assessments to the 
Board. It is anticipated that the bulk of assessments will be submitted 
to the Board by first handlers who purchase sorghum. A producer will be 
considered a first handler when that person markets sorghum of their 
own production directly to a consumer.
    The Order's provisions have been carefully reviewed, and every 
effort has been made to minimize any unnecessary recordkeeping costs or 
requirements.
    The forms on which information is to be collected require the 
minimum information necessary to effectively carry out the requirements 
of the Order. 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 are designed to be 
simple and easy to understand and place as small a burden as possible 
on the person required to file the information.
    The timing and frequency of collecting information are 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.
    For the purpose of estimating the cost of reporting and 
recordkeeping, $18.55 is used, which is the mean hourly earnings of 
first line supervisors and managers of farming, fishing, and forestry 
workers as obtained from the U.S. Department of Labor Bureau of Labor 
Statistics National Compensation Survey of Occupational Wages.

[[Page 25401]]

    Information collection requirements include:
    (1) Background Information Form (OMB Form No. 0505-0001).
    Estimate of Burden: Public reporting for this collection of 
information is estimated to average 0.5 hours per response for each 
producer or importer nominated to serve on the Board.
    Respondents: Producers and importers.
    Estimated Number of Respondents: (26 for initial nominations to the 
Board, 8 in the second year, 10 in the third year, and 8 in the fourth 
year, sequencing 8, 10 and 8 annually, thereafter).
    Estimated Number of Responses per Respondent: 0.33.
    Estimated Total Annual Burden on Respondents: 4.29 hours for the 
initial nominations to the Sorghum Board and sequencing 1.3, 1.6, and 
1.3 annually thereafter.
    Total Cost: (Number of respondents x responses per respondent x 
$18.55) $79.58 initial, and sequencing $24.12, $29.68, and $24.12 
annually thereafter.
    (2) 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 0.1 hour per record keeper 
maintaining such records.
    Recordkeepers: Producers, importers, and first handlers.
    Estimated Number of Recordkeepers: 35,050.
    Estimated Total Recordkeeping Hours: (Number of recordkeepers x 0.1 
hours) 3,502 hours.
    Total Cost: (Number of record keepers x 0.1 hour per record keeper 
x $18.55) $64,962.
    (3) Remittance Form by Each First Handler.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.25 hour per first handler.
    Respondents: First handlers.
    Estimated Number of Respondents: (1,150 first handlers of grain 
plus 700 first handlers of silage and hay) 1,850.
    Estimated Number of Responses per Respondent: 12.
    Estimated Total Annual Burden on Respondents: (Number of first 
handlers x total number of reports x 0.25 hour per report) 5,550 hours.
    Total Cost: (5,550 hours x $18.55) $102,952.50.
    (4) Application for Refund Form.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.167 hour per response.
    Respondents: Producers and importers.
    Estimated Number of Respondents: (25 percent of 33,200 total 
producers) 8,300.
    Estimated Number of Responses per Respondent: 6.
    Estimated Total Annual Burden: (8,300 producers x 6 reports per 
year x 0.167 hour per report) 8,317 hours.
    Total Cost: (8,317 hours x $18.55) $154,280.
    (5) Application for Certification of Organizations.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.5 hour per response.
    Respondents: National, State, or regional sorghum associations or 
organizations.
    Estimated Number of Respondents: (Two organizations certified in 
each of 22 sorghum producing States) 44.
    Estimated Number of Responses per Respondent: (Estimating 
recertification every 5 years) 0.2.
    Estimated Total Annual Burden: (44 organizations x 0.2 responses x 
0.5 hour per response) 4.4 hours.
    Total Cost: (4.4 hours x $18.55) $81.62.
    (6) Application for Qualification of Organizations.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.5 hour per response.
    Respondents: State associations or organizations.
    Estimated Number of Respondents: (1 organization certified in each 
of 22 sorghum producing States) 22.
    Estimated Number of Responses per Respondent: (Estimating 
requalification every 5 years) 0.2.
    Estimated Total Annual Burden: (22 organizations x 0.2 responses x 
0.5 hour per response) 2.2 hours.
    Total Cost: $40.81.
    (7) Nominations for Appointments to the Sorghum Board Form.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.5 hour per response.
    Respondents: National, State, or regional sorghum associations and 
organizations.
    Estimated Number of Respondents: (Certified organizations) 22.
    Estimated Number of Responses per Respondent: one per year.
    Estimated Total Annual Burden: (22 organizations x 1 response x 0.5 
hour per response) 11 hours.
    Total Cost: (11 hours x $18.55) $204.
    (8) Organic Exemption Form.
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.5 hour per exemption form.
    Respondents: Producers and importers.
    Estimated Number of Respondents: 10.
    Estimated Number of Responses per Respondent: (Annual exemption 
application required) 1.0.
    Estimated Total Annual Burden on Respondents: 5.0 hour.
    Total Cost: (5 hours x $18.55) $92.75.
    (9) Referendum Ballot.
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.1 hour per referendum ballot.
    Respondents: Producers and importers.
    Estimated Number of Respondents: 8,300.
    Estimated Number of Responses per Respondent: (Estimating 
referendums every 5 years) 0.2.
    Estimated Total Annual Burden on Respondents: 166 hours.
    Total Cost: (166 hours x $18.55) $3,079.30.
    In the proposed rule published November 23, 2007, [72 FR 65842] 
comments were invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of functions of the 
proposed Order and the USDA'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.
    No separate comments were received regarding the information 
collection section. However, one comment was received concerning 
recordkeeping and is discussed in the comment section.

Background

    NSP submitted a draft Order to USDA on December 28, 2006, along 
with letters of support from nine industry organizations. These letters 
represented producer organizations from five sorghum producing States, 
NSP, and the U.S. Grains Council.
    According to NSP, a national promotion, sorghum checkoff program 
will allow the industry to address a number of production and marketing 
problems it currently faces. Three main

[[Page 25402]]

problems currently affecting sorghum producers are as follows: Lack of 
yield improvement and technology; aggressive market competition; and 
lagging ethanol research. The sorghum industry has declined in recent 
years in both production and acreage.
    State grain sorghum promotion, research, and information programs 
currently exist in Kansas, Texas, Nebraska, Oklahoma, Louisiana, and 
Arkansas. These promotion, research, and information programs are based 
on volumetric assessments, so as volumes of grain sorghum change, so do 
the promotion, research, and information assessments. This variability 
leads to sporadic research funding. Also, State programs cannot 
generate a sufficient scale of funding to effectuate large coordinated 
research programs.
    The national sorghum checkoff program addresses both of these 
concerns.
    The assessment provisions of the Order are based on value, so 
variability of funding will lessen. Also, the revenue generated by a 
national sorghum checkoff program is anticipated to reach levels that 
can adequately fund large coordinated research programs in sorghum.
    The proponent requested that the implementation referendum be 
conducted within 3 years after assessments begin, which is consistent 
with the provisions of the Act. Approval will be based upon a majority 
of eligible persons voting for approval who have engaged in the 
production or importation of sorghum during the representative period 
established by the Secretary.
    The program will be administered by a 13-member Board appointed by 
the Secretary from industry nominations. The Board will recommend to 
the Secretary the assessment rate, programs and projects, budgets, and 
any rules and regulations that might be necessary for the 
administration of the program. The Board will consist of five producers 
nominated from the State with the largest production, three from the 
State with the second largest production, one from the State with the 
third largest production, and four producers to serve as at-large 
representatives, among which two representatives are appointed from 
States other than the top three sorghum producing States.
    Importers will be entitled to one seat if the value of assessments 
collected on imported sorghum reaches or exceeds the production of the 
State with the third largest sorghum production. Currently, imports of 
grain sorghum are very limited and not at a value that would trigger 
the provision of appointing an importer representative to serve on the 
Board. For example, Nebraska was the third largest producer of grain 
sorghum in 2006 at approximately 19,200,000 bushels. Imports of grain 
sorghum in 2006, according to USITC data, were 2,547 bushels.
    For the purpose of establishing the initial Board, USDA grain 
sorghum production data will be used to determine the top three grain 
sorghum producing States. Section 515(3) of the Act provides for 
periodic reapportionment of the Board. The Act provides that at least 
once every 5 years, but not more frequently than once every 3 years the 
Board shall review the geographical distribution of the production of 
the agricultural commodity covered by the Order including the quantity 
or value. If warranted, the Board will recommend reapportionment of the 
Board membership.
    The key to understanding reapportionment in the Order is the 
definition of production. For the purpose of reapportionment under 
Section 1221.100 of the Order, production means the total assessments 
collected by the Board during the last 5 crop years, excluding the high 
and low years.
    Section 1221.100(f) of the Order specifically uses the term 
production and does not refer to a quantity such as ``bushels'' 
harvested per acre. The intent of this is to use assessment collections 
as the basis for reapportionment.
    The Order uses this definition since it best accounts for the 
difference in geographic regions found in the sorghum belt where 
sorghum prices vary widely. Furthermore, NASS does not report pricing 
for sorghum forage, sorghum hay, sorghum haylage, sorghum billets, and 
sorghum silage, so the Board assessment records will provide a method 
to track the value of all types of sorghum. Using the assessment 
collections will permit the Board to analyze sorghum production in a 
consistent manner and base reapportionment decisions on a value as 
provided for in the Act.
    The Order establishes an assessment in section 1221.116 that will 
be paid by sorghum producers and importers. The assessment will be 
collected and remitted to the Board by first handlers. The term 
producer is defined in the proposal as any person who is engaged in the 
production and sale of sorghum in the United States and who owns or 
shares the ownership and risk of loss of the sorghum.
    Importer is defined as any person importing more than 1,000 bushels 
of grain sorghum; or 5,000 tons of sorghum forage, sorghum hay, sorghum 
haylage, sorghum billets, or sorghum silage into the United States in a 
calendar year as a principal or as an agent, broker, or consignee of 
any person who produces or purchases sorghum outside of the United 
States for sale in the United States, and who is listed as the importer 
of record for such sorghum. First handler is defined as the first 
person who buys or takes possession (excluding a common or contract 
carrier of sorghum owned by another) of more than 1,000 bushels of 
grain sorghum; or 5,000 tons of sorghum forage, sorghum hay, sorghum 
haylage, sorghum billets, or sorghum silage from producers in a 
calendar year for marketing. The term first handler includes a producer 
who markets sorghum of the producer's own production directly to 
consumers. It may also mean the Commodity Credit Corporation (CCC) in 
any case in which sorghum is pledged as collateral for a loan issued 
under any CCC price support loan program and the sorghum is forfeited 
by the producer in lieu of loan repayment.
    The definition of first handler is constructed so that any 
commercial grain elevator will meet the requirement of the definition 
by buying more than the minimum amount of grain sorghum in a calendar 
year and therefore will assess all grain sorghum purchased. The 
definition of first handler is designed to exclude small cattle feeding 
operations and dairies that would buy less than 1,000 bushels of grain 
sorghum or 5,000 tons of sorghum forage, sorghum hay, sorghum haylage, 
sorghum billets, or sorghum silage. The Order does not have a de 
minimis clause applicable to producers, but it does define first 
handler and importer in a way as to exclude very small entities.
    As mentioned above, the approximately 1,850 first handlers of 
sorghum will collect and remit assessments to the Board. First handlers 
will remit assessments to the Board on a monthly basis along with a 
report detailing the volume of sorghum on which assessments were 
collected as well as identifying the State in which the sorghum was 
produced. Information regarding the origin of the sorghum's production 
is necessary so that the Board can make recommendations to USDA 
regarding reapportionment of its membership.
    Section 1221.119 of the Order provides for refunds. Any producer or 
importer from whom an assessment is collected and remitted to the 
Board, or who pays an assessment directly to the Board, through the 
announcement of the results of the implementing referendum,

[[Page 25403]]

upon failure of the referendum will then have the right to receive from 
the Board a refund of assessments paid. Any producer or importer 
requesting a refund will be required to submit an application on the 
prescribed form to the Board within 60 days from the date the 
assessments were paid by such producer or importer, but no later than 
the date the results of the required referendum are announced by the 
Secretary. Section 1221.112(j) provides for an allocation of a portion 
of all assessments collected to be made available to qualified State 
sorghum producer organizations. Each year the Board will establish an 
allocation amount of no less than 15 percent but no more than 25 
percent of the total assessments collected on all sorghum available for 
any fiscal period, less the expenses incurred by the Secretary for 
administration and supervision of the Order. The funds can be made 
available for use by qualified sorghum producer organizations pursuant 
to section 1221.128 for State programs of generic promotion, research, 
and information. Amounts allocated by the Board for State generic 
promotion, research, and information programs will be based on requests 
submitted to the Board by qualified sorghum producer organizations. An 
important aspect of the availability of an allocation to a qualified 
State organization is that the organization will not automatically 
receive a 15-25 percent allocation. Each year the qualified 
organizations will have to submit requests for the funds, which can be 
for no more than their allocated amount. A detailed plan describing 
projects with budgets would be a part of this request to demonstrate 
that the allocation will be used in a way consistent with the Act and 
Order.
    An example of how an allocation amount could be determined is as 
follows:

    A particular qualified State organization contributes 40 percent 
of the total assessments collected by the Board for the previous 
annual fiscal period. Total assessments collected less the USDA 
expenses for the previous fiscal period were $12,300,000. The Board 
has set the allocation amount at 25 percent. The qualified 
organization representing that State may submit requests up to 
$1,230,000 ($12,300,000 x 40 percent x 25 percent).

    The Order provides for exemptions from assessments under specific 
conditions. Any importer of less than and including 1,000 bushels of 
grain sorghum; or 5,000 tons of sorghum forage, sorghum hay, sorghum 
haylage, sorghum billets, or sorghum silage per calendar year may claim 
an exemption from the assessment required under section 1221.116. An 
importer desiring an exemption must apply to the Board for a 
certificate of exemption and certify that the importer will import less 
than the above stated quantities of sorghum. The Board will then issue 
a certificate of exemption and the importers who receive a certificate 
of exemption will be eligible for reimbursement of assessments 
collected by Customs. The Board may require persons receiving an 
exemption from assessments to provide to the Board reports on the 
disposition of exempt sorghum and, in the case of importers, proof of 
payment of assessments.
    A producer or importer who operates under an approved National 
Organic Program (NOP) (7 CFR part 205) system plan; produces only 
products that are eligible to be labeled as 100 percent organic under 
the NOP may be exempt from the payment of assessments. The producer or 
importer must submit a request to the Board annually as long as the 
producer continues to be eligible for the exemption.
    The Order is summarized as follows: Sections 1221.1 through 1221.32 
of the Order define certain terms such as producer, handler, and 
importer which are used in the Order.
    Sections 1221.100 through 1221.111 include provisions relating to 
the Board. These provisions cover establishment and membership, 
nominations nominee's agreement to serve, appointment, term of office, 
vacancies, removal, certification of organizations, procedure, 
compensation and reimbursement, powers and duties, and prohibited 
activities.
    Section 1221.112 through 1221.120 covers expenses and assessments. 
Sections 1221.112 through 1221.115 include provisions relating to 
budget and expenses, financial statements, operating reserve, and 
investment of funds. Section 1221.116 through 1221.120 include 
provisions related to assessments and specify assessment rates, and the 
imposition of late payment charges. Also included are provisions for 
exemptions, refund, escrow accounts, refunds, and procedures for 
obtaining a refund. Section 1221.116 was changed by AMS in the proposed 
rule to specify that if Customs does not collect an assessment from an 
importer, the importer is responsible for paying the assessment to the 
Board.
    Section 1221.221 through 1221.223 covers programs, plans, and 
projects detailing the types of activities to be engaged by the Board. 
Also covered are provisions for an independent evaluation and the 
protection of patents, copyrights, inventions, trademarks, information, 
publications, and product formulations derived from assessment funded 
activities.
    Section 1221.124 through 1221.127 includes provisions for reporting 
requirements on first handlers and importers; books and records; use of 
information; and the confidential treatment of all personally 
identifiable information obtained from books and records of persons 
subject to the Order.
    Section 1221.128 covers the qualification by the Secretary of State 
organizations that would be eligible to receive funding from the Board. 
Section 1221.128 was changed by AMS in the proposed rule by adding 
paragraph (e) to express the primary considerations in determining the 
qualification of an organization to receive funding.
    Sections 1221.129 through 1221.138 discusses the rights of the 
Secretary; referenda; suspension or termination; proceeding after 
termination; effects of termination or amendment; personal liability; 
separability; amendments; rules and regulations; and OMB numbers.
    The changes suggested by the commenters are discussed below, along 
with changes made by USDA upon further review. Also, USDA has made 
other miscellaneous changes for the purpose of clarity and accuracy. 
For the readers' convenience, the discussion of comments is organized 
by topic headings.

Comments

    USDA published a proposed Order on November 23, 2007 [72 FR 65849] 
with a request for comments on the proposal to be received by January 
22, 2008. USDA received 215 timely comments on the proposed Order. Five 
comments were received after the close of the comment period. No new 
issues were raised by these comments. Twenty-three of the comments were 
from State and national organizations representing producers or 
providing agricultural related services from the States of Arkansas, 
Nebraska, Kansas, Texas, Oklahoma, and Colorado. One of these 
organizations represents itself as the largest importer of sorghum into 
the United States. Five of these organizations submitted comments in 
opposition to the proposed Order. One hundred sixty-seven comments were 
submitted by producers in support of the proposed Order from the States 
of Arkansas, Colorado, Kansas, Texas, New Mexico, South Dakota, 
Nebraska, and Missouri. Twenty-two producers submitted comments 
opposing the proposal in part or in whole.

[[Page 25404]]

Supporting Comments

    One hundred thirty-seven comments identified the pooling of 
resources as a significant benefit of a national mandatory sorghum 
checkoff program. Several of these comments cited the Soybean and 
Cotton Checkoff programs as successful farmer funded self-help programs 
that have contributed substantially to the benefit of their respective 
industries. These comments stressed that for sorghum to remain a viable 
rotation crop, a national sorghum checkoff program must be implemented.
    Some comments addressed funded research as a resulting benefit of 
establishing a national mandatory sorghum checkoff program.
    Eight comments, in support of the proposal, specifically identified 
the proposed funding allocation to States as an appropriate way to help 
support State level research and promotion initiatives while 
emphasizing the financial strength of a national sorghum checkoff 
program.
    One hundred twelve comments, in support of the proposal, identified 
weed control as an area where a national sorghum checkoff program could 
fund major research. Comments from producers and large and small 
production States specifically mentioned shatter cane and other grasses 
as important areas of weed control research that could be performed by 
the national sorghum checkoff program.
    Sixty-four comments addressed the need for national level research 
relating to the development of cellulosic ethanol production. These 
comments were submitted by producers of both grain and forage type 
sorghums.
    Sixty-eight comments suggested that research into improving sorghum 
yields has been historically underfunded, especially when compared to 
the tremendous amount of resources devoted by private companies into 
corn and soybean yield research. These comments were submitted by 
producers from large and small production States.
    Twenty comments specifically mentioned that a national sorghum 
checkoff program could more effectively fund sorghum breeding and 
genetics programs. Some of these comments suggested that improved 
varieties would encourage greater planted acreage and production, which 
would expand and stabilize sorghum markets.
    Twenty-six comments, in favor of the proposal, specifically 
mentioned that a national sorghum checkoff program could address the 
issues of developing new markets, domestic and foreign, for grain 
sorghum.

Assessment Rate Cap

    Seventy-two supporting comments recommended changing text in 
section 1221.116, Assessments, to clarify that the assessment rates on 
grain and silage may not be raised above a cap of 1 percent. These 
comments suggest changing the text in section 1221.116 so that the 
maximum modification of the assessment rate would be 0.4 percent of net 
market value in 1221.116(c)(1) and 0.65 percent of net market value in 
1221.116(c)(2). This would cap the assessment rates for all sorghum at 
1 percent of net market value. We agree that a clarification is 
appropriate. However, USDA has changed section 1221.116(c)(1), section 
1221.116(c)(2), and section 1221.116(e) so that the Order reflects the 
intent of the original submission by the proponent. The cap for the 
assessment rates at 1 percent of the net market value will appear only 
in section 1221.116(e). Further, any change in the assessment rates 
must be promulgated through regulations approved by the Secretary.

Other Changes for Consistency With NSP Submission

    Several supportive commenters recommended five changes to the 
regulatory text in the Order to make the text consistent with the 
intent of the original submission of the proponent and to correct 
miscellaneous grammatical errors.
    The comments recommended changing 1221.104(c)(5) by adding ``at 
large national representatives shall also have their staggered terms 
assigned by the Secretary''; removing an unnecessary semicolon from 
1221.117; correcting a section reference in 1221.123 from 1221.131 to 
1221.132; changing an ``or'' to ``and'' in 1221.130(b)(3) so that a 
petition for a referendum would require 10 percent of eligible 
producers and importers (A similar change was also supported by an 
organization that opposes the proposal); adding ``and Importers'' to 
1221.130(c) to reflect that both producers and importers, who are 
eligible, may vote in referendums. These changes have merit and have 
been made in the final rule.

Opposing Comments

    Twenty-two comments from producers and five comments from 
organizations were submitted opposing the implementation of the 
proposal or portions thereof. A number of topics were discussed.

Board Membership

    Five organizations, opposing the proposal, submitted comments 
regarding Board membership and asserted that the proposed Board 
structure favors the largest production States. Further, that the 
largest production State would control 40 percent of the Board's 
membership. They believe that this would allow the largest production 
States to influence the spending of resources for promotion and 
research to the exclusion of small production States.
    One commenter suggested that as an alternative to creating a 
national sorghum checkoff program, the sorghum industry should continue 
under the current system of State legislated and voluntary State level 
sorghum checkoff programs and be encouraged to establish a coordinating 
checkoff board comprised of State programs.
    One commenter recommended adoption of a method of apportionment 
that would prevent any State from having more than 25 percent of Board 
seats. One commenter noted that the Board would have broad powers under 
1221.112 and 1221.116 and that the interest of small production States 
would not be represented under the proposed Board structure.
    To address this issue, the apportionment method suggested by the 
commenter distributes Board seats using a combination of representation 
assigned to the top five production States and dividing the remainder 
of sorghum production areas into four regions. States and regions would 
then be allotted representation based on the value production. States 
or regions with production valued at less than $75 million would get 
one member. States of regions with production valued between $75 
million and $225 million would receive two members, and States or 
regions with production valued above $225 million would receive three 
members. Importers would receive membership using the same criteria 
based on the value of imported product. Under this system the size of 
the Board would expand and contract as acreage and crop prices change, 
and a five year average of crop value would be calculated annually to 
determine Board membership.
    Other commenters reviewed this alternative representation mechanism 
and offered comments regarding its merits. These comments noted that 
under the alternative representation mechanism, the number of Board 
members would continue to increase as sorghum production increases thus 
potentially leading to an overly large board and increased 
administrative costs associated with travel and Board meetings. These 
commenters also suggested that the alternative representation plan does 
not

[[Page 25405]]

substantially contribute to minimizing majority membership for the 
largest production States.
    The alternative apportionment method suggested by the commenter is 
significantly different from the proposal and has not been subject to 
public comment. Nonetheless, USDA believes that a board comprised of 13 
members is an appropriate and reasonable size for the anticipated 
revenue of the national sorghum checkoff program. Further, based on 
review of the comments, grain sorghum production is heavily 
concentrated in three States. Based on 2007 NASS production data, three 
States account for 79 percent of the total United States production. 
Therefore, USDA believes it reasonable to have Board representation 
reflect this production. Additionally, under the representation 
mechanism proposed in the Order, certified organizations are 
responsible for the submission of qualified nominees from all 
geographic areas to fill at-large positions for nomination and 
appointment to the Board by the Secretary. Also, representation on the 
Board will be reviewed at least once every five years and the Board may 
recommend to the Secretary that representation be altered to reflect 
any change in geographical distribution of domestic sorghum production. 
Sorghum imported into the United States will also be reviewed. Board 
members are appointed by the Secretary and are expected to make 
decisions that would benefit the entire sorghum industry. Therefore, 
USDA is finalizing this section as proposed.

Allocation of Assessments to States

    Several opposing commenters stated that the ``pass-back'' 
allocation (section 1221.112(j) is too small and recommended an 
increase to 50 percent citing the Beef Promotion and Research Order and 
the Soybean Promotion, Research, and Consumer Information Order as 
examples. Other commenters suggested that the funding allocation should 
be automatically provided to States at 50 percent. Several commenters 
asserted that the proposal's funding allocation provision will not 
provide adequate funding to maintain State checkoff programs given 
different research needs in small production States. Several of these 
opposing commenters suggested that research needs are different in 
small production States because grain sorghum utilization varies among 
small States. They asserted that small production States are interested 
in weed control research and verification and not interested in 
breeding programs or ethanol research. Further, they stated that 
without proper representation on the Board, combined with loss of 
individual assessment funding, they believed research vital to their 
interest will go unfunded. They contended, their assessments would go 
to fund research that would not benefit small production States, and 
university researchers in small production States would lose funding. 
They noted that other national programs, such as the Soybean Promotion, 
Research, and Consumer Information Order in particular, have 
implemented programs that left State programs at least as well off 
after implementation of the national program.
    As previously noted, eight comments, in support of the proposal, 
specifically identified the proposed funding allocation to States as an 
appropriate way to help support State level research and promotion 
initiatives while emphasizing the financial strength of a national 
sorghum checkoff program.
    Seven supportive commenters rebutted these comments opposed to the 
proposed State funding allocation. Several of the supporting commenters 
noted that the State funding allocation was not intended to be a 
funding mechanism for State checkoff boards but, rather a method to 
fund promotion and research initiatives specific to States that are not 
currently addressed by national promotion and research initiatives. 
Some commenters noted that, currently, State checkoffs are responsible 
for costs associated with collecting assessments while under the 
proposal they would have no such costs because the national Board would 
collect assessments. These commenters suggested that, in addition to 
the State funding allocation, these qualified State programs could 
apply for and receive additional funding from the Board on a project-
by-project basis.
    One supportive commenter responding to the opposing comments on 
State funding allocation stated that the commenter had visited 
personally with a number of university researchers regarding the State 
funding allocation. This commenter stated that these researchers had no 
reservation competing on a national level for research funding and that 
in doing so felt that the research proposals with the most merit would 
rise to priority and receive funding. Other supportive commenters noted 
that while the Beef Promotion and Research Order and the Soybean 
Promotion, Research, and Consumer Information Order retain 50 percent 
of assessments, other checkoffs do not.
    The Lamb Promotion, Research, and Information Order and Blueberry 
Promotion, Research, and Information Order provide no funding 
allocation back to States. The Cotton Research and Promotion Order, the 
oldest program, passes back 5 percent to States and the Peanut 
Promotion, Research, and Information Order currently returns 20 percent 
to States. The National Pork Promotion, Research, and Consumer 
Information Order, on average, returns about 16 percent to States.
    While several existing national checkoff programs provide varying 
degrees of funding to State research, promotion, and information 
efforts, some of these programs have percentages established by statute 
while other programs have percentages established in their order's 
provisions. The proposed Order provided for an annual allocation to 
State programs based on a State's proportional contribution of total 
assessments collected by the national sorghum checkoff program. The 
allocation amount would be no less than 15 percent but no more than 25 
percent of total assessments collected. We believe that the provision 
provides for a reasonable allocation for State generic programs while 
maintaining an appropriate level of funding for the national program. 
Also, a 50 percent funding allocation should be subject to public 
comment. Further, the national program does not preempt existing State 
checkoff programs. Thus, States are not precluded from establishing or 
continuing a State checkoff program in addition to a national sorghum 
checkoff Program. Accordingly, these suggestions are not adopted.

Referendum

    A number of opposing commenters stated they were against a delayed 
referendum. Some commenters cited their organization's policies that 
state that commodity checkoff programs should be approved by producer 
referendum prior to implementation or change of a program. Other 
commenters suggested that no one should be subject to assessment 
without the opportunity to vote in a referendum beforehand.
    A number of supporting commenters reviewed the opposing comments 
regarding the delayed referendum and submitted additional comments. 
These commenters stated that accurately identifying all sorghum 
producers who would be eligible to vote in the referendum is not 
possible prior to the collection of assessments, thereby making it 
impractical to conduct an up-front referendum. Other commenters cited 
that it would be problematic and impractical to conduct an up-front 
referendum due to the significant expense of a referendum when there 
are

[[Page 25406]]

no funds available to reimburse USDA for the expense.
    Section 518 of the Act provides for both required referenda and 
optional referenda for determining whether persons covered by an order 
favor the order. The Act provides for an optional referendum procedure 
that authorizes an up-front referendum for which, USDA has historically 
required the proponent industry to post a bond well in advance of an 
order's effective date to cover all costs associated with development 
of an order as well as referendum expenses.
    The Act allows for a referendum to be conducted up to three years 
after the effective date of the Order. This allows all persons subject 
to the Order a sufficient amount of time to observe the management and 
functioning of the new program before making a decision regarding its 
continuation. Further, the Order provides an opportunity to request and 
receive a refund of assessments if the initial referendum fails. 
Accordingly, USDA is finalizing the Order with the delayed referendum 
requirement. Prior to the referendum, USDA will issue regulations for 
public comment regarding the process in which the referendum will be 
conducted.

First Handlers

    A number of comments and requests for clarification were made 
regarding first handlers and their role in the sorghum promotion, 
research, and information program. Among the topics raised were: 
Reimbursement payments to first handlers for cost associated with 
collections; economic impact analysis; redefining first handlers; 
recording the State of origin of sorghum; first handler representation 
on the Board; clarifying the time of assessment collection; and 
clarification of the date of sale.

Payments to First Handlers

    A commenter stated the commenter's belief that first handlers would 
bear the burden of implementing the checkoff and, therefore requested 
that USDA consider reimbursing first handlers up to 10 percent of 
sorghum checkoff assessments collected to offset the direct costs 
incurred in collecting, submitting, and maintaining records for the 
national sorghum promotion, research, and information program. While 
first handlers are subject to the Order, the Act does not provide for 
such reimbursement of administrative expenses to first handlers or 
anyone else in the marketing chain. Accordingly, USDA does not accept 
this proposed change.

Definition of First Handler

    A commenter suggested that the definition of first handler be 
changed because 1,000 bushels is too low of a limit to exclude a 
handler from their obligation to pay the assessment. This commenter 
also suggested that grain buyers may not know at the beginning of the 
year how much sorghum they will buy, thus placing them in the position 
of either refunding assessments if they don't reach the 1,000 bushel 
limit or assessing after-the-fact once they reach the trigger. Either 
way, the commenter suggested, that this would cause an undue burden on 
the handler.
    We disagree. The definition of first handler is constructed so that 
every commercial grain elevator, under current industry practices, 
would exceed the threshold since they typically buy more than the 
minimum threshold amount of sorghum in a calendar year. Therefore, all 
sorghum purchased by first handlers would be assessed.
    The definition of first handler is designed to exclude small cattle 
feeding operations and dairies that would buy less than 1,000 bushels 
of grain sorghum or 5,000 tons of sorghum forage, sorghum hay, sorghum 
haylage, sorghum billets, or sorghum silage. According to NASS data, 
the average U.S. sorghum production in 2007 was 74.2 bushels per acre. 
Any commercial grain elevator that purchases 13.5 acres of sorghum will 
have met the definition. According to the NASS' 2002 Census of 
Agriculture, the average grain sorghum farm size was 204 acres. If a 
commercial grain elevator has even one grain sorghum producing 
customer, they would likely meet the limit more than 15 times over. 
Accordingly, USDA believes that the 1,000 bushel limit is appropriate 
and will not burden commercial grain buyers. Accordingly, this 
suggestion to change the definition of first handler is not adopted.

State of Origin of Sorghum

    A commenter suggested that the requirement for first handlers to 
keep records of the State of Origin of their sorghum purchases is a 
burden that is not part of their regular course of business. This 
requirement is essential to the Board's determination of 
representation, which is based on assessment collections for each 
State. The information is also needed in identifying the appropriate 
State to receive funding allocations. A similar requirement is part of 
the Soybean Promotion, Research, and Consumer Information Order's 
recordkeeping requirements as well as other State programs and has not 
proven to be a substantial burden. The burden estimated under this 
program is minimal and necessary for carrying out the provisions of the 
Order. Accordingly, this comment is not adopted.

First Handler Representation on Board

    A commenter criticized the lack of representation of first handlers 
on the Board stating that first handlers deserved representation 
because of the disproportionate economic impact they will incur as a 
result of implementing the checkoff. We disagree. The program's effect 
on first handlers is not unreasonable. Further, the representation 
provisions of the Order are appropriate as they afford representation 
to those persons who pay the assessments. Accordingly, this comment is 
not adopted.

Time of Assessment Collection

    A commenter asked for clarification of the term handled as it 
relates to the timing of the assessment collection. While the 
collection of assessments is on handled sorghum the assessment occurs 
at the time the producer sells the sorghum and the net market value is 
established. Also, the commenter suggested that the wording of section 
1221.124(1) be changed to clarify that records would only be required 
for sorghum bushels on which assessments have been collected. We 
disagree. The information required in subparagraph (a)(1) is needed by 
the Board to carry out its responsibilities under the Order. 
Accordingly, no change is made as a result of this comment.

Date of Sale

    A commenter asked for clarification of the date of sale. The 
commenter suggested that in the context of the grain trade, a better 
term might be date of settlement which would reflect the date when the 
assessment is deducted from the producer's payment in fulfillment of a 
contract. USDA believes that this comment has merit, but also believes 
that a more appropriate term would be date on which assessments were 
paid. Therefore, USDA is changing 1221.125(b)(5) to read as follows: 
``(5) date on which assessments were paid; and''. Further, this change 
makes the term consistent with 1221.124(4). The commenter also 
suggested making a similar change in section 1221.116. However, USDA 
does not believe any change is necessary in this section.

[[Page 25407]]

Miscellaneous Comments

Nomination and Appointment

    Two commenters, one in support and one in opposition to the Order, 
expressed concern that USDA removed a paragraph of text from the 
original submission that would have allowed the Board to make 
adjustments in procedures for the nomination to, appointment to, or 
representation on the Board without amending the Order. This sentence 
would have been included in 1221.100(f) at the end of the paragraph. 
The Order provides for a review every five years of sorghum production 
and importation to determine whether there is equitable representation 
on the Board. However, given the organization and structure of the 
Board, rulemaking is appropriate and necessary to make such 
adjustments. Accordingly, no changes are made as a result of these 
comments.

Assessment Remittance

    Several commenters requested that USDA consider changing the 
assessment remittance requirement from monthly to quarterly. An 
appropriate remittance schedule is critical to the Board's functioning. 
While no change is made to the final rule, USDA, in consultation with 
the Board, will review this issue after the program has been fully 
implemented. Consequently, unless otherwise prescribed in future 
regulations, assessments are due by the 15th of the following month in 
which assessments are collected.

Freezing of Assessment Rate

    A commenter suggested that the assessment rate be frozen for a 
period of three years until after the referendum is conducted. We 
disagree. Section 1221.116(e) provides that the Board may make 
recommendations to the Secretary to raise or lower the assessment rate 
by no more than 0.2 percent of net market value received by the 
producer in any given year. We believe that the Board needs such 
discretion to recommend changes to assessments in order to fully 
exercise its authority to develop promotion, research, and information 
programs, plans, and projects. Accordingly, no change to the Order's 
provisions is made as a result of this comment.

Non-Preemption of State Checkoffs

    A commenter asked for clarification regarding the non-preemption of 
State checkoffs due to concern that recordkeeping for a State and 
national checkoff would be burdensome. While the national sorghum 
program imposes certain reporting and recordkeeping requirements, 
information required under the Order can be completed from records 
already maintained. Such information is the same or similar to existing 
State sorghum and soybean programs, as well as the Soybean Checkoff 
program (7 CFR part 1220). Six States currently have State-legislated 
sorghum research and promotion programs. Further, the Order's 
provisions have been carefully reviewed and every effort has been made 
to minimize any unnecessary reporting or recordkeeping requirements. 
Accordingly, no change is made as a result of this comment.

Economic Impact Analysis

    A commenter requested that USDA conduct a comprehensive economic 
impact analysis prior to implementing the Order. We believe that 
comprehensive analysis of the Order has been conducted under applicable 
Executive Orders, the Regulatory Flexibility Act and the Paperwork 
Reduction Act. In addition, in 2005 and 2006, representatives of the 
six State-legislated sorghum promotion programs were among other 
sorghum industry representatives who met with AMS representatives to 
discuss the possibility of implementing a national sorghum checkoff 
program. State program representatives participated in the development 
of the provisions of the proposed Order during these meetings and 
through direct communication with the NSP during the drafting of its 
proposal.

Books and Records

    AMS is changing section 1221.125(a) to make clear that producers as 
well as first handlers and importers are required to maintain and make 
available during normal business hours for inspection by employees or 
agents of the Board or the Secretary, such books and records as are 
necessary to carry out the provisions of the Order and regulations. 
Such changes better conform Order language to the provisions of the 
Act.

Budget and Expenses

    AMS is changing section 1221.112(l) to make clear that remaining 
funds available to the Board after calculating State allocations should 
be applied, to the extent practicable, to promotion, research, and 
information programs, plans, or projects provided for in section 
1221.121. Also, the term ``generic'' and a more detailed description of 
the request made by qualified sorghum producer organizations is added 
to section 1221.112 for clarity.
    After consideration of all relevant materials presented, including 
the proposal and comments received, the Department has determined that 
this Order is consistent with and will effectuate the purposes of the 
1996 Act.
    It is found that good cause exist for not postponing the effective 
date of this rule until 30 days after publication in the Federal 
Register (5 U.S.C. 553) because given that the collection and 
remittance of assessments begin on July 1, 2008, the initial Board 
should be appointed as soon as possible in order to carry out the 
purposes of the program.

List of Subjects in 7 CFR Part 1221

    Administrative practice and procedure, Advertising, Sorghum and 
sorghum product, Consumer information, Marketing agreements, Reporting 
and recordkeeping requirements.

0
For the reasons set forth in the preamble, Title 7 of Chapter XI of the 
Code of Federal Regulations is amended to add part 1221 to read as 
follows:

PART 1221--SORGHUM PROMOTION, RESEARCH, AND INFORMATION ORDER

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

Definitions

Sec.
1221.1 Act.
1221.2 Board.
1221.3 Calendar year.
1221.4 Certified organization.
1221.5 Conflict of interest.
1221.6 Crop year.
1221.7 Customs.
1221.8 Department.
1221.9 First handler.
1221.10 Fiscal period.
1221.11 Handle.
1221.12 Harvest.
1221.13 Importer.
1221.14 Information.
1221.15 Market.
1221.16 Net market price.
1221.17 Net market value.
1221.18 Order.
1221.19 Part and subpart.
1221.20 Person.
1221.21 Producer.
1221.22 Production.
1221.23 Promotion.
1221.24 Qualified sorghum producer organization.
1221.25 Referendum.
1221.26 Research.
1221.27 Secretary.
1221.28 Sorghum.
1221.29 State.
1221.30 Suspend.
1221.31 Terminate.
1221.32 United States.

Sorghum Promotion, Research, and Information Board

1221.100 Establishment and representation.

[[Page 25408]]

1221.101 Nominations.
1221.102 Nominee's agreement to serve.
1221.103 Appointment.
1221.104 Term of office.
1221.105 Vacancies.
1221.106 Removal.
1221.107 Certification of organizations.
1221.108 Procedure.
1221.109 Compensation and reimbursement.
1221.110 Powers and duties.
1221.111 Prohibited activities.

Expenses and Assessments

1221.112 Budget and expenses.
1221.113 Financial statements.
1221.114 Operating reserve.
1221.115 Investment of funds.
1221.116 Assessments.
1221.117 Exemptions.
1221.118 Refund escrow accounts.
1221.119 Refunds.
1221.120 Procedure for obtaining a refund.

Promotion, Research, and Information

1221.121 Programs, plans, and projects.
1221.122 Independent evaluation.
1221.123 Patents, copyrights, inventions, trademarks, information, 
publications, and product formulations.

Reports, Books, and Records

1221.124 Reports.
1221.125 Books and records.
1221.126 Use of information.
1221.127 Confidential treatment.

Qualification of Sorghum Producer Organizations

1221.128 Qualification.

Miscellaneous

1221.129 Right of the Secretary.
1221.130 Referenda.
1221.131 Suspension or termination.
1221.132 Proceedings after termination.
1221.133 Effect of termination or amendment.
1221.134 Personal liability.
1221.135 Separability.
1221.136 Amendments.
1221.137 Rules and regulations.
1221.138 OMB control numbers.
Subparts B through E--[Reserved]

    Authority: 7 U.S.C. 7411-7425 and 7 U.S.C. 7401.

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

Definitions


Sec.  1221.1  Act.

    Act means the Commodity Promotion, Research, and Information Act of 
1996 (7 U.S.C. 7411-7425), and any amendments thereto.


Sec.  1221.2  Board.

    Board or Sorghum Promotion, Research, and Information Board means 
the administrative body established pursuant to Sec.  1221.100, or such 
other name as recommended by the Board and approved by the Secretary.


Sec.  1221.3  Calendar year.

    Calendar year means the 12-month period from January 1 through 
December 31.


Sec.  1221.4  Certified organization.

    Certified organization means any organization that has been 
certified by the Secretary pursuant to this part as eligible to submit 
nominations for membership on the Board.


Sec.  1221.5  Conflict of interest.

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


Sec.  1221.6  Crop year.

    Crop year means the time period by which the USDA reports crop 
production for sorghum and is indicated by the calendar year in which 
sorghum is normally harvested.


Sec.  1221.7  Customs.

    Customs means the U.S. Customs and Border Protection of the U.S. 
Department of Homeland Security.


Sec.  1221.8  Department.

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


Sec.  1221.9  First handler.

    First handler means the first person who buys or takes possession 
(excluding a common or contract carrier of sorghum owned by another) of 
more than 1,000 bushels of grain sorghum; or 5,000 tons of sorghum 
forage, sorghum hay, sorghum haylage, sorghum billets, or sorghum 
silage from producers in a calendar year for marketing. The term first 
handler includes a producer who markets sorghum of the producer's own 
production directly to consumers. In any case in which sorghum is 
pledged as collateral for a loan issued under any Commodity Credit 
Corporation price support loan program and the sorghum is forfeited by 
the producer in lieu of loan repayment, the Commodity Credit 
Corporation will be considered a first handler.


Sec.  1221.10  Fiscal period.

    Fiscal period means the 12-month period ending on December 31 or 
such other consecutive 12-month period as shall be recommended by the 
Board and approved by the Secretary.


Sec.  1221.11  Handle.

    Handle means to engage in the receiving or acquiring of sorghum and 
in the shipment (except as a common or contract carrier of sorghum 
owned by another) or sale of sorghum, or other activity causing sorghum 
to enter the current of commerce.


Sec.  1221.12  Harvest.

    Harvest means combining or threshing sorghum for grain and/or 
severing the stalks from the land with mechanized equipment.


Sec.  1221.13  Importer.

    Importer means any person importing more than 1,000 bushels of 
grain sorghum; or 5,000 tons of sorghum forage, sorghum hay, sorghum 
haylage, sorghum billets, or sorghum silage into the United States in a 
calendar year as a principal or as an agent, broker, or consignee of 
any person who produces or purchases sorghum outside of the United 
States for sale in the United States, and who is listed as the importer 
of record for such sorghum.


Sec.  1221.14  Information.

    Information means information and programs that are designed to 
develop new markets and marketing strategies; increase market 
efficiency; enhance the image of sorghum on a national or international 
basis; and assist producers in meeting their conservation objectives. 
These include, but are not exclusive to:
    (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 
sorghum;
    (b) Industry information, which means information and programs that 
will lead to the development of new markets, new marketing strategies, 
or increased efficiency for the sorghum industry, and activities to 
enhance the image of the sorghum industry.


Sec.  1221.15  Market.

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


Sec.  1221.16  Net market price.

    Net market price means the sales price, or other value, per 
volumetric unit, received by a producer for sorghum after adjustments 
for any premium or discount.


Sec.  1221.17  Net market value.

    Net market value means:

[[Page 25409]]

    (a) Except as provided in paragraph (b)and (c) of this section, the 
value found by multiplying the net market price by the appropriate 
quantity of the volumetric units or the minimum value in a production 
contract received by a producer for sorghum after adjustments for any 
premium or discount.
    (b) For imported sorghum, the total value paid by the importer for 
the sorghum as reported on the appropriate Customs form; or
    (c) For sorghum pledged as collateral for a loan issued under any 
Commodity Credit Corporation price support loan program, the principal 
amount of the loan.


Sec.  1221.18  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.  1221.19  Part and subpart.

    Part means the Sorghum 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.  1221.20  Person.

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


Sec.  1221.21  Producer.

    Producer means any person who is engaged in the production and sale 
of sorghum in the United States and who owns, or shares the ownership 
and risk of loss of, the sorghum.


Sec.  1221.22  Production.

    Production, as used in Sec.  1221.100, means:
    (a) for the purpose of establishing the initial Board in paragraphs 
(a), (b), (c), (d), and (e) of Sec.  1221.100, the volume of grain 
sorghum produced during the last 5 crop years, excluding the high and 
low years, and
    (b) For the purpose of reapportionment in paragraphs (e) and (f) of 
Sec.  1221.100, the total assessments collected by the Board during the 
last 5 crop years, excluding the high and low years.


Sec.  1221.23  Promotion.

    Promotion means any action taken to present a favorable image of 
sorghum to the public and the end-user industry for the purpose of 
improving the competitive position of sorghum and stimulating the sale 
of sorghum. This includes paid advertising and public relations.


Sec.  1221.24  Qualified sorghum producer organization.

    Qualified sorghum producer organization means a qualified State-
legislated sorghum promotion, research, and education commission or 
organization, approved by the Secretary. For States without a qualified 
State-legislated sorghum promotion, research, and education commission 
or organization, qualified sorghum producer organization means any 
qualified organization that has the primary purpose of representing 
sorghum producers, has sorghum producers as members, and that is 
approved by the Secretary.


Sec.  1221.25  Referendum.

    Referendum means a referendum conducted by the Secretary pursuant 
to the Act whereby producers and importers are provided the opportunity 
to vote to determine whether the continuance of this subpart is favored 
by a majority of eligible persons voting.


Sec.  1221.26  Research.

    Research means any type of test, study, or analysis designed to 
advance the knowledge, image, desirability, use, marketability, 
production, product development, or quality of sorghum, including, but 
not limited to, research relating to yield, nutritional value, cost of 
production, new product development, inbred and hybrid development, 
nutritional value, health research, and marketing of sorghum.


Sec.  1221.27  Secretary.

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


Sec.  1221.28  Sorghum.

    Sorghum means any harvested portion of Sorghum bicolor (L.) Moench 
or any related species of the genus Sorghum of the family Poaceae. This 
includes, but is not limited to, grain sorghum (including hybrid 
sorghum seeds, inbred sorghum line seed, and sorghum cultivar seed), 
sorghum forage, sorghum hay, sorghum haylage, sorghum billets, and 
sorghum silage.


Sec.  1221.29  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.  1221.30  Suspend.

    Suspend means to issue a rule under section 553 of title 5, U.S.C., 
to temporarily prevent the operation of an order or part thereof during 
a particular period of time specified in the rule.


Sec.  1221.31  Terminate.

    Terminate means to issue a rule under section 553 of title 5, 
U.S.C., to cancel permanently the operation of an order or part thereof 
beginning on a certain date specified in the rule.


Sec.  1221.32  United States.

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

Sorghum Promotion, Research, and Information Board


Sec.  1221.100  Establishment and representation.

    There is hereby established a Sorghum Promotion, Research, and 
Information Board, hereinafter called the Board. Representation 
includes, but is not limited to, fixed State seats determined by total 
production with at-large seats to allow representation from a broad 
geographical area. The Board shall initially be composed of 13 
representatives, with the maximum number of producers from one State 
limited to 6, appointed by the Secretary from nominations as follows:
    (a) The largest production State based on total production shall 
have 5 sorghum producers to serve as representatives.
    (b) The second largest production State based on total production 
shall have 3 sorghum producers to serve as representatives.
    (c) The third largest production State based on total production 
shall have one sorghum producer to serve as a representative.
    (d) There shall be 4 sorghum producers to serve as at-large 
national representatives with at least two representatives appointed 
from States not described in paragraphs (a), (b), and (c) of this 
section.
    (e) If the value of assessments on imported sorghum reaches or 
exceeds the production of the third largest sorghum production State, 
there shall be one importer to serve as a representative plus an 
additional at-large national representative, with the maximum number of 
producers from one State being increased from six to seven.
    (f) At least once every 5 years, the Board will review the 
geographical distribution of production of sorghum in the United 
States, the production of

[[Page 25410]]

sorghum in the United States, and the value of assessments on sorghum 
imported into the United States. The review will be based on Board 
assessment records and statistics from the USDA. If warranted, the 
Board may recommend to the Secretary that representation on the Board 
be altered to reflect any changes in geographical distribution of 
domestic sorghum production. If, in the review, the Board determines 
that the value of assessments on sorghum imported into the United 
States exceeds 15 percent of the production of sorghum, the Board shall 
recommend to the Secretary that the nomination procedures and 
appointments to the Board be altered as necessary or appropriate to 
facilitate the equitable representation of importers on the Board.


Sec.  1221.101  Nominations.

    All nominations authorized under this section shall be made in the 
following manner:
    (a) Nominations for State-specific and at-large national seats 
shall be obtained by the Secretary from eligible organizations 
certified under Sec.  1221.107. Certified eligible organizations 
representing producers in a State, or when making nominations for at-
large seats, shall submit to the Secretary at least two nominees for 
each vacant seat. If the Secretary determines that a State is not 
represented by a certified eligible organization, then the Secretary 
may solicit nominations from other organizations or other persons 
residing in the State.
    (b) If so required pursuant to Sec.  1221.100(f), at least two 
nominations for the importer representative shall be submitted by the 
Board to the Secretary.
    (c) After the establishment of the initial Board, the Secretary 
shall announce when a vacancy does or will exist. Nominations for 
subsequent Board representatives shall be submitted to the Secretary 
not less than 90 days prior to the expiration of the terms of the 
representatives whose terms are expiring, in the manner as described in 
this section. In the case of vacancies due to reasons other than the 
expiration of a term of office, successor Board members shall be 
appointed pursuant to section 1221.105.
    (d) When there is more than one certified eligible organization 
representing a State or when the Secretary solicits nominations from 
organizations and persons residing in that State, or when eligible 
certified organizations are nominating persons for at-large positions, 
eligible certified organizations may caucus and jointly nominate two 
qualified producers for each position on the Board for which a 
representative is to be appointed. If joint agreement is not reached 
with respect to any such nominations, or if no caucus is held, each 
eligible organization may submit to the Secretary two nominees for each 
appointment to be made to represent that State, or to fill an at-large 
position.


Sec.  1221.102  Nominee's agreement to serve.

    Any producer or person nominated to serve on the Board shall file 
with the Secretary at the time of the nomination a written agreement 
to:
    (a) Serve on the Board if appointed;
    (b) Disclose any relationship with any sorghum promotion entity or 
with any organization that has or is being considered for a contractual 
relationship with the Board; and
    (c) Withdraw from participation in deliberations, decision-making, 
or voting on matters that concern the relationship disclosed under 
paragraph (b) of this section.


Sec.  1221.103  Appointment.

    From the nominations made pursuant to Sec.  1221.101, the Secretary 
shall appoint the representatives of the Board on the basis of 
representation provided in Sec.  1221.100.


Sec.  1221.104  Term of office.

    (a) The term of office for the representatives of the Board shall 
be three years, except for the initial term, pursuant to paragraph (c) 
of this section.
    (b) Representatives may serve a maximum of 2 consecutive 3-year 
terms.
    (c) When the Board is first established, the Secretary shall 
establish staggered terms as follows:
    (1) Largest Production State--2 representatives shall serve a 2-
year term, 1 representative shall serve a 3-year term, and 2 
representatives shall serve a 4-year term.
    (2) Second Largest Production State--1 representative shall serve a 
2-year term, 1 representative shall serve a 3-year term, and 1 
representative shall serve a 4-year term.
    (3) Third Largest Production State--The representative shall serve 
a 3-year term.
    (4) At-large national--1 representative shall serve a 2-year term, 
2 representatives shall serve a 3-year term, and 1 representative shall 
serve a 4-year term.
    (5) States with multiple representatives shall have their staggered 
terms assigned by the Secretary. At-large national representatives 
shall also have their staggered terms assigned by the Secretary.
    (6) Representatives serving initial terms of 2 or 4 years shall be 
eligible to serve a single term of 3 years after their initial 2- or 4-
year term.
    (d) Each representative shall continue to serve until a successor 
is appointed by the Secretary and has accepted the position.
    (e) Any successor appointed pursuant to Sec.  1221.105 serving 1 
year or less may serve two consecutive 3-year terms.


Sec.  1221.105  Vacancies.

    To fill any vacancy occasioned by the death, removal, resignation, 
or disqualification of any member of the Board, a successor for the 
unexpired term of such representative shall be appointed by the 
Secretary pursuant to Sec.  1221.103 from the most recent list of 
nominations for the position pursuant to Sec.  1221.101 or the 
Secretary shall request nominations for a successor pursuant to Sec.  
1221.101, except that said nomination and replacement shall not be 
required if an unexpired term is less than 6 months.


Sec.  1221.106  Removal.

    If the Secretary determines that any person appointed under this 
part fails or refuses to perform his or her duties properly or engages 
in an act of dishonesty or willful misconduct, the Secretary shall 
remove the person from office. A person appointed under this part or 
any employee of the Board may be removed by the Secretary if the 
Secretary determines that the person's continued service would be a 
detriment to the purposes of the Act.


Sec.  1221.107  Certification of organizations.

    (a) The eligibility of State, regional, or national organizations 
to participate in making nominations for membership on the Board shall 
be certified by the Secretary. Those organizations that may seek 
certification include:
    (1) State-legislated sorghum promotion, research, and information 
organizations;
    (2) Organizations whose primary purpose is to represent sorghum 
producers within a State, region, or at the national level; or,
    (3) Organizations that have sorghum producers as members.
    (b) Such eligibility shall be based, in addition to other 
information, upon a report submitted by the organization that shall 
contain information deemed relevant and specified by the Secretary for 
the making of such determination, including the following:
    (1) The geographic territory covered by the organization's active 
membership;
    (2) The nature and size of the organization's active membership,

[[Page 25411]]

proportion of active membership accounted for by producers, a map 
showing the sorghum producing counties in which the organization has 
active members, the volume of sorghum produced in each such county, the 
number of sorghum producers in each such county, and the size of the 
organization's active sorghum producer membership in each such county;
    (3) The extent to which the sorghum 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) The functions of the organization; and
    (7) The ability and willingness of the organization to further the 
purpose and objectives of the Act.
    (c) The primary consideration in determining the eligibility of an 
organization shall be whether its sorghum producer membership consists 
of a sufficiently large number of sorghum producers who produce a 
relatively significant volume of sorghum to reasonably warrant its 
participation in the nomination of State specific and national at-large 
members to the Board. Any sorghum producer organization found eligible 
by the Secretary under this section shall be certified by the 
Secretary, and the Secretary's determination as to eligibility shall be 
final.


Sec.  1221.108  Procedure.

    (a) At a Board meeting, it will be considered a quorum when a 
simple majority of the voting representatives are present.
    (b) At the start of each fiscal period, the Board will approve a 
chairperson, vice chairperson, and secretary/treasurer who will conduct 
meetings throughout that period.
    (c) All Board representatives and the Secretary or the Secretary's 
designee will be notified at least 30 days in advance of all Board and 
committee meetings, unless an emergency meeting is declared.
    (d) Each voting representative of the Board will be entitled to one 
vote on any matter put to the Board, and the motion will carry if 
supported by a simple majority of the total votes of the Board 
representatives present at the meeting.
    (e) It will be considered a quorum at a committee meeting when a 
simple majority of those assigned to the committee are present at the 
meeting. Committees may consist of individuals other than Board 
representatives, and such individuals may vote in committee meetings. 
Committee members shall serve without compensation but shall be 
reimbursed for reasonable travel expenses, as approved by the Board.
    (f) In lieu of voting at a properly convened meeting and, when in 
the opinion of the chairperson of the Board such action is considered 
necessary, the Board may take action if supported by a simple majority 
of the Board representatives by mail, telephone, electronic mail, 
facsimile, or any other means of communication. In that event, all 
representatives must be notified and provided the opportunity to vote. 
Any action so taken shall have the same force and effect as though such 
action had been taken at a properly convened meeting of the Board. All 
telephone votes shall be confirmed promptly in writing. All votes shall 
be recorded in Board minutes.
    (g) There shall be no voting by proxy.
    (h) The chairperson shall be a voting representative.
    (i) The organization of the Board and the procedures for conducting 
meetings of the Board shall be in accordance with its bylaws, which 
shall be established by the Board and approved by the Secretary.


Sec.  1221.109  Compensation and reimbursement.

    The representatives of the Board 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 
representatives.


Sec.  1221.110  Powers and duties.

    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 not less than annually, and organize, and select from 
among the representatives of the Board a chairperson, other officers, 
committees, and subcommittees, as the Board determines appropriate;
    (d) To employ persons, other than the representatives, 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, plans, 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, 
plans, 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. Furthermore, 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 
period budgets in accordance with Sec.  1221.112;
    (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 period 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 Board and committee 
meetings as is given to representatives in order that the Secretary's 
representative(s) may attend such meetings;

[[Page 25412]]

    (j) To act as intermediary between the Secretary and any producer, 
first handler or importer;
    (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 with the approval of the 
Secretary, to make rules and regulations to effectuate the terms and 
provisions of this subpart;
    (n) To work to achieve an effective, continuous, and coordinated 
program of promotion, research, consumer information, evaluation, and 
industry information designed to strengthen the sorghum industry's 
position in the marketplace; maintain and expand existing markets and 
uses for sorghum; and to carry out programs, plans, and projects 
designed to provide maximum benefits to the sorghum industry;
    (o) To provide not less than annually a report to producers and 
importers accounting for the funds expended by the Board, and 
describing programs implemented under the Act; and to make such report 
available to the public upon request; and
    (p) To invest funds in accordance with Sec.  1221.115.


Sec.  1221.111  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 is a conflict of interest;
    (b) Using funds collected by the Board under the Order to undertake 
any action for the purpose of influencing legislation or governmental 
action or policy, by local, State, national, and foreign governments, 
other than recommending to the Secretary amendments to this part; 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.  1221.112  Budget and expenses.

    (a) Prior to the beginning of each fiscal period, and as may be 
necessary thereafter, the Board shall prepare and submit to the 
Secretary a budget for the fiscal period 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 that increases the budget must be approved by the 
Secretary. Shifts of funds that do not result in an increase in the 
Board's approved budget and that are consistent with this subpart and 
the Board's 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 fiscal period 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 in accordance with the Order. Such contributions 
shall be free from any encumbrance by the donor and the Board shall 
retain complete control of their use.
    (g) In accordance with Sec.  1221.118(a), the Board shall deposit 
funds in a refund escrow account and refrain from allocating this 
amount for expenditure until the Order is approved by the required 
referendum except as provided for in Sec.  1221.118.
    (h) The Board shall allocate an appropriate amount each year to 
allow for payment of future referendums.
    (i) 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.
    (j) The Board shall determine annually an allocation amount no less 
than 15 percent but no more than 25 percent of the total assessments 
collected on all sorghum available for any fiscal period, less the 
expenses pursuant to paragraph (i), for use by qualified sorghum 
producer organizations pursuant to Sec.  1221.128 for State programs of 
generic promotion, research, and information. Amounts allocated by the 
Board for State generic promotion, research, and information programs 
will be based on requests submitted to the Board by qualified sorghum 
producer organizations when it is determined that these requests meet 
the goals and objectives stated in the Act and Order. The request shall 
include detailed programs, plans, or projects with budgets. Qualified 
sorghum producer organizations shall not submit requests for State 
generic promotion, research, and information programs that exceed the 
annual allocation amount determined by the Board which shall be the 
product of:
    (1) The State's proportional contribution based on reports 
submitted by first handlers pursuant to Sec.  1221.124(a) to total 
assessments remitted on all sorghum for the previous fiscal period; 
multiplied by
    (2) The total assessments collected on all sorghum for the previous 
fiscal period less expenses pursuant to paragraph (i) of this section.
    (k) The Board may not expend for administration, maintenance, and 
functioning of the Board in any fiscal period an amount that exceeds 10 
percent of the assessments and other income received by the Board for 
that fiscal period except for the initial fiscal period. Reimbursements 
to the Secretary required under paragraph (i) of this section are 
excluded from this limitation on spending.
    (l) The Board shall allocate all other funds available for any 
fiscal period, to the extent practicable, subject to paragraphs (g), 
(h), (i), (j), and (k) of this section on programs, plans, or projects, 
as provided for in Sec.  1221.121.
    (m) The Board shall determine annually the allocation of total 
funds pursuant to this section, with the approval of the Secretary.


Sec.  1221.113  Financial statements.

    (a) As requested by the Secretary, the Board shall prepare and 
submit financial statements to the Secretary on a monthly basis. Each 
such financial statement shall include, but not be

[[Page 25413]]

limited to, a balance sheet, income statement, and expense budget. The 
expense budget shall show expenditures during the time period covered 
by the report, fiscal period-to-date expenditures, and the unexpended 
budget.
    (b) Each financial statement shall be submitted to the Secretary 
within 30 days after the end of the time period to which it applies.
    (c) The Board shall submit annually to the Secretary an annual 
financial statement within 90 days after the end of the fiscal period 
to which it applies.


Sec.  1221.114  Operating reserve.

    The Board may establish an operating monetary reserve and may carry 
over to subsequent fiscal period excess funds in a reserve so 
established, provided that funds in the reserve shall not exceed one 
fiscal period's anticipated expenses.


Sec.  1221.115  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.


Sec.  1221.116  Assessments.

    (a) The funds to cover the Board's expenses shall be paid from 
assessments on producers and importers, donations from any person not 
subject to assessments under this Order, and other funds available to 
the Board and subject to the limitations contained therein.
    (b) First handlers of domestic sorghum shall be responsible for 
collecting assessments from producers on all domestically handled 
sorghum. This includes sorghum of the first handler's own production. 
Grain pledged as collateral for a Commodity Credit Corporation price 
support loan program shall be considered handled sorghum. A first 
handler shall not collect an assessment on sorghum from a producer when 
said producer presents documentation demonstrating that an assessment 
has previously been collected on said sorghum.
    (c) The following assessment rates for sorghum shall apply:
    (1) Grain sorghum shall be initially assessed at a rate of 0.6 
percent of net market value received by the producer pursuant to 
paragraph (e) of this section; and
    (2) Sorghum forage, sorghum hay, sorghum haylage, sorghum billets, 
and sorghum silage shall be initially assessed at a rate of 0.35 
percent of net market value received by the producer pursuant to 
paragraph (e) of this section.
    (d) Importers of sorghum shall pay an assessment to the Board 
through Customs on sorghum imported into the United States. The 
following apply to imported sorghum:
    (1) The assessment rates for imported sorghum shall be the same or 
equivalent to the rates for sorghum produced in the United States.
    (2) The import assessment shall be uniformly applied to imported 
sorghum that is identified by the numbers 1007.00.0020 and 1007.00.0040 
in the Harmonized Tariff Schedule of the United States.
    (3) The assessments due on imported sorghum shall be paid when the 
sorghum enters the United States.
    (4) If Customs does not collect an assessment from an importer, the 
importer is responsible for paying the assessment to the Board.
    (e) The Board will review the assessment rates and may make 
recommendations to modify the assessment rates to the Secretary. 
Assessment rates may be raised or lowered no more than 0.2 percent of 
net market value received by producers and importers in any one 
calendar year. The maximum assessment rate cannot exceed 1 percent of 
the net market value received by producers and importers.
    (f) Each person responsible for collecting assessments under 
paragraph (b) of this section shall remit the amount due to the Board 
in such a manner as required by regulations recommended by the Board 
and prescribed by the Secretary.
    (g) Any unpaid assessment due to the Board pursuant to this section 
shall be increased 2 percent each month beginning with the day 
following the date such assessments were due. Any remaining amount due, 
which shall include any unpaid charges previously made pursuant to this 
paragraph, shall be increased at the same rate on the corresponding day 
of each month thereafter until paid. For the purposes of this 
paragraph, any assessment determined at a later date than the date 
prescribed by this subpart because of a person's failure to timely 
submit a report to the Board shall be considered to have been payable 
by the date it would have been due if the report had been filed timely. 
The timeliness of a payment to the Board shall be based on the 
applicable postmark date or the date actually received by the Board.
    (h) An additional charge shall be imposed on any person subject to 
a late payment charge 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 by the Secretary.
    (i) Persons failing to remit total assessments due in a timely 
manner may also be subject to actions under Federal debt collection 
procedures.
    (j) The Board may authorize other organizations to collect 
assessments on its behalf with the approval of the Secretary.
    (k) The collection of assessments pursuant to this section shall 
begin with respect to sorghum handled on or after the effective date 
established by the Secretary and shall continue until terminated or 
suspended by the Secretary.
    (l) If the Board is not in place by the date the first assessments 
are to be collected, the Secretary shall have the authority to receive 
assessments and invest them on behalf of the Board, and shall pay such 
assessments and any interest earned to the Board when it is formed. The 
Secretary shall have the authority to promulgate rules and regulations 
concerning assessments and the collection of assessments, if the Board 
is not in place or is otherwise unable to develop such rules and 
regulations.
    (m) Payment remitted pursuant to this subpart shall be in the form 
of a negotiable instrument made payable to the Board. Such remittances 
and the reports specified in Sec. Sec.  1221.124 and 1221.125 shall be 
mailed to the location designated by the Board.


Sec.  1221.117  Exemptions.

    (a) Any importer of less than and including 1,000 bushels of grain 
sorghum or 5,000 tons of sorghum forage, sorghum hay, sorghum haylage, 
sorghum billets, or sorghum silage per calendar year may claim an 
exemption from the assessment required under Sec.  1221.116.
    (b) An importer desiring an exemption shall apply to the Board, on 
a form provided by the Board, for a certificate of exemption. An 
importer shall certify that the importer will import less than and 
including 1,000 bushels of grain sorghum or 5,000 tons of sorghum 
forage, sorghum hay, sorghum haylage, sorghum billets, or sorghum 
silage.
    (c) Upon receipt of an application, the Board shall determine 
whether an exemption may be granted. The Board then will issue, if 
deemed appropriate, a certificate of exemption to each person who is 
eligible to receive one. It is the responsibility of these persons to 
retain a copy of the certificate of exemption.

[[Page 25414]]

    (d) Importers who receive a certificate of exemption shall be 
eligible for reimbursement of assessments collected by Customs. These 
importers shall apply to the Board for reimbursement of any assessments 
paid. No interest will be paid on the assessments collected by Customs. 
Requests for reimbursement shall be submitted to the Board within 90 
days of the last day of the calendar year the sorghum was actually 
imported.
    (e) Any person who desires an exemption from assessments for a 
subsequent calendar year shall reapply to the Board, on a form provided 
by the Board, for a certificate of exemption.
    (f) The Board may require persons receiving an exemption from 
assessments to provide to the Board reports on the disposition of 
exempt sorghum and, in the case of importers, proof of payment of 
assessments.
    (g) A producer or importer who operates under an approved National 
Organic Program (NOP) (7 CFR part 205) system plan; produces or imports 
only products that are eligible to be labeled as 100 percent organic 
under the NOP, except as provided for in paragraph (m) of this section; 
and is not, or does not import products from, a split operation shall 
be exempt from the payment of assessments.
    (h) To apply for an exemption under this section, the applicant 
shall submit the request to the Board or other party as designated by 
the Board, on a form provided by the Board, at any time initially and 
annually thereafter on or before January 1 as long as the applicant 
continues to be eligible for the exemption.
    (i) The request shall include the following: The applicant's name 
and address, a copy of the organic farm or organic handling operation 
certificate provided by a USDA accredited certifying agent as defined 
in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 
6502), a signed certification that the applicant meets all of the 
requirements specified for an assessment exemption, and such other 
information as may be required by the Board and with the approval of 
the Secretary.
    (j) If the applicant complies with the requirements of this 
section, the Board or designee will grant the exemption and issue a 
Certificate of Exemption to the applicant. The Board will have 30 days 
from the date of receiving the request to approve the exemption 
request. If the application is disapproved, the Board will notify the 
applicant of the reason(s) for disapproval within the same timeframe.
    (k) The producer or importer shall provide a copy of the 
Certificate of Exemption to each first handler. The first handler shall 
maintain records showing the name and address of the exempt producer or 
importer and the exemption number assigned by the Board.
    (l) The exemption will apply at the first reporting period 
following the issuance of the exemption.
    (m) Agricultural commodities produced and marketed under an organic 
system plan, as described in 7 CFR 205.201, but not sold, labeled, or 
represented as organic, shall not disqualify a producer or importer 
from exemption under this section, except that producers or importers 
who produce or import both organic and non-organic agricultural 
commodities as a result of split operations shall not qualify for 
exemption. Reasons for conventional sales include lack of demand for 
organic products, isolated use of antibiotics for humane purposes, 
chemical or pesticide use as the result of State or emergency spray 
programs, and crops from a buffer area as described in 7 CFR Part 205, 
provided all other criteria are met.


Sec.  1221.118  Refund escrow accounts.

    (a) The Board shall establish an interest bearing escrow account 
with a financial institution that is a member of the Federal Reserve 
System and will deposit into such account an amount equal to the 
product obtained by multiplying the total amount of assessments 
collected by the Board during the period beginning on the effective 
date of the Order and ending on the date the Secretary announces the 
results of the required referendum by ten percent (10 percent).
    (b) Upon failure of the required referendum, the Board shall pay 
refunds of assessments to eligible persons requesting refunds during 
the period beginning on the effective date of the Order and ending on 
the date the Secretary announces the results of the required referendum 
in the manner specified in paragraph (c) of this section.
    (c) If the amount deposited in the escrow account is less than the 
amount of refunds requested, the Board shall prorate the amount 
deposited in such account among all eligible persons who request a 
refund of assessments paid no later than 90 days after the required 
referendum results are announced by the Secretary.
    (d) If the Order is approved by the required referendum conducted 
under Sec.  1221.130 then:
    (1) The escrow account shall be closed; and
    (2) The funds shall be available to the Board for disbursement 
under Sec.  1221.112.


Sec.  1221.119  Refunds.

    Any producer or importer from whom an assessment is collected and 
remitted to the Board, or who pays an assessment directly to the Board, 
under authority of the Act and this subpart through the announcement of 
the results of the required referendum, upon failure of the required 
referendum shall have the right to receive from the Board a refund of 
such assessment, or a prorated share thereof, upon submission of proof 
satisfactory to the Board that the producer or importer paid the 
assessment for which refund is sought. Any such demand shall be made by 
such producer or importer in accordance with the provisions of this 
subpart and in a manner consistent with regulations recommended by the 
Board and prescribed by the Secretary.


Sec.  1221.120  Procedure for obtaining a refund.

    Upon failure of the required referendum, each producer or importer 
who paid an assessment pursuant to this subpart during the period 
beginning on the effective date of the Order and ending on the date the 
required referendum results are announced may obtain a refund of such 
assessment only by following the procedures prescribed in this section 
and any regulations recommended by the Board and prescribed by the 
Secretary:
    (a) A producer or importer shall obtain a Board-approved refund 
application form from the Board. Such forms may be obtained by written 
request to the Board and the request shall bear the producer's or 
importer's signature or properly witnessed mark.
    (b) Any producer or importer requesting a refund shall submit an 
application on the prescribed form to the Board within 60 days from the 
date the assessments were paid by such producer or importer but no 
later than the date the results of the required referendum are 
announced by the Secretary. The refund application shall show:
    (1) Producer's or importer's name and address;
    (2) Name and address of the person who collected applicant's 
assessment;
    (3) Number of bushels or tons of sorghum on which a refund is 
requested;
    (4) Total amount of refund requested;
    (5) Date or inclusive dates on which assessments were paid; and

[[Page 25415]]

    (6) The producer's or importer's signature or properly witnessed 
mark.
    (c) The documentation provided pursuant to Sec.  1221.125(b) to the 
producer by the first handler responsible for collecting an assessment 
pursuant to this subpart, or a copy thereof, or such other evidence 
deemed satisfactory to the Board, shall accompany the producer's refund 
application. An importer must submit documentation showing that the 
assessment was paid along with a copy of the appropriate Customs form 
stating the net market value of the sorghum.
    (d) The Board shall initiate payment of refund requests, or pay a 
prorated share thereof, within 90 days of the date the results of the 
required referendum are released by the Secretary. Refunds shall be 
paid in a manner consistent with Sec.  1221.119.

Promotion, Research, and Information


Sec.  1221.121  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:
    (1) The establishment, issuance, effectuation, and administration 
of appropriate programs for promotion, research, and information, 
including consumer and industry information, with respect to sorghum; 
and
    (2) The establishment and conduct of research with respect, but not 
limited to: The yield, use, nutritional value and benefits, sale, 
distribution, and marketing of sorghum, and the creation of new 
products thereof, to the end that the marketing and use of sorghum may 
be encouraged, expanded, improved, or made more acceptable; and to 
advance the image, desirability, or quality of sorghum.
    (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 
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 information, then the Board shall terminate such program, 
plan, or project.
    (d) No program, plan, or project including advertising shall be 
false or misleading or disparaging to another agricultural commodity. 
Sorghum of all origins shall be treated equally.


Sec.  1221.122  Independent evaluation.

    Pursuant to the Federal Agriculture Improvement and Reform Act of 
1996 (7 U.S.C. 7401), 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.  1221.123  Patents, copyrights, inventions, trademarks, 
information, publications, and product formulations.

    (a) Any patents, copyrights, inventions, trademarks, information, 
publications, or product formulations developed through the use of 
funds collected by the Board under the provisions of 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, inventions, trademarks, information, 
publications, or product formulations, inure to the benefit of the 
Board; shall be considered income subject to the same fiscal, budget, 
and audit controls as other funds of the Board; and may be licensed 
subject to approval by the Secretary. Upon termination of this subpart, 
Sec.  1221.132 shall apply to determine disposition of all such 
property.
    (b) Should patents, copyrights, inventions, trademarks, 
information, publications, or product formulations be developed through 
the use of funds collected by the Board under this subpart and funds 
contributed by another organization or person, ownership and related 
rights to such patents, copyrights, inventions, trademarks, 
information, publications, or product formulations shall be determined 
by agreement between the Board and the party contributing funds towards 
the development of such patents, copyrights, inventions, trademarks, 
information, publications, or product formulations in a manner 
consistent with paragraph (a) of this section.

Reports, Books, and Records


Sec.  1221.124  Reports.

    (a) Each first handler, on a State-by-State basis, will be required 
to provide to the Board periodically such information as may be 
required by the Board, with the approval of the Secretary, which may 
include but not be limited to the following:
    (1) Number of bushels or tons of domestic sorghum within the State 
that were marketed to the first handler;
    (2) Number of bushels or tons of domestic sorghum within the State 
on which an assessment was paid;
    (3) The amount of assessments remitted on sorghum within the State;
    (4) Date that any assessments were paid within the State;
    (5) The explanation, if necessary, to show why the remittance is 
less than the applicable assessment rate multiplied by the net market 
price multiplied by the number of bushels or tons within the State that 
were marketed to the first handler; and
    (6) The first handler's tax identification number.
    (b) Each importer will be required to provide to the Board 
periodically such information as may be required by the Board, with the 
approval of the Secretary, which may include but not be limited to the 
following:
    (1) Number of bushels or tons of sorghum imported;
    (2) Number of bushels or tons of imported sorghum on which an 
assessment was paid;
    (3) The amount of assessments remitted;
    (4) Date that any assessments were paid;
    (5) The explanation, if necessary, to show why the remittance is 
less than the applicable assessment rate multiplied by the net market 
value; and
    (6) The importer's tax identification number.


Sec.  1221.125  Books and records.

    (a) Each first handler, producer, or importer subject to this 
subpart shall maintain and make available during normal business hours 
for inspection By employees or agents of the Board or the Secretary 
such books and records as are necessary to carry out the provisions of 
this part, including records necessary to verify any required reports. 
Such records shall be maintained for at least 2 years beyond the fiscal 
period of their applicability.
    (b) Each first handler responsible for collecting assessments 
pursuant to this subpart is required to give the producer from whom the 
assessment was collected, written evidence of payment of the assessment 
paid pursuant to this subpart. Such written evidence serving as a 
receipt shall include, but not be limited to, the following 
information:
    (1) Name and address of the first handler,

[[Page 25416]]

    (2) Name of producer who paid the assessment,
    (3) Total number of bushels or tons of sorghum on which the 
assessment was paid,
    (4) Total assessment paid by the producer,
    (5) Date on which assessments were paid, and
    (6) Such other information as the Board, with the approval of the 
Secretary, may require.


Sec.  1221.126  Use of information.

    Information from records or reports required pursuant to this 
subpart shall be made available to the Secretary as is appropriate to 
the administration or enforcement of the Act, subpart, or any 
regulation issued under the Act. In addition, the Secretary may 
authorize the use, under this part, of information regarding producers, 
first handlers, or importers, that is accumulated under laws or 
regulations other than the Act or regulations issued under the Act.


Sec.  1221.127  Confidential treatment.

    All information obtained from books, records, or reports under the 
Act and this part 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 
representatives, first handlers, producers, or importers. 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 there from, 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 part, together 
with a statement of the particular provisions of this part violated by 
such person.

Qualification of Sorghum Producer Organizations


Sec.  1221.128  Qualification.

    (a) Organizations receiving qualification from the Secretary will 
be entitled to submit requests for funding to the Board pursuant to 
Sec.  1221.112(j). Only one sorghum producer organization per State may 
be qualified.
    (b) State-legislated sorghum promotion, research, and information 
organizations may request qualification and will be considered first 
for qualification by the Secretary.
    (c) If a State-legislated sorghum promotion, research, and 
information organization does not elect to seek qualification 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 State sorghum producer organization whose 
primary purpose is to represent sorghum producers within a State, or 
any other State organization that has sorghum producers as part of its 
membership, may request qualification.
    (d) Qualification 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, including the 
following:
    (1) The geographic territory covered by the organization's active 
membership;
    (2) The nature and size of the organization's active membership, 
proportion of active membership accounted for by producers, a map 
showing the sorghum-producing counties in which the organization has 
active members, the volume of sorghum produced in each such county, the 
number of sorghum producers in each such county, and the size of the 
organization's active sorghum producer membership in each such county;
    (3) The extent to which the sorghum 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 organizations operating funds are 
derived;
    (6) The functions of the organization; and
    (7) The ability and willingness of the organization to further the 
purpose and objectives of the Act.
    (e) The primary consideration in determining the eligibility of an 
organization shall be whether its sorghum producer membership consists 
of a sufficiently large number of sorghum producers who produce a 
relatively significant volume of sorghum to reasonably warrant its 
qualification to submit requests for funding to the Board. Any sorghum 
producer organization found eligible by the Secretary under this 
section will be qualified by the Secretary, and the Secretary's 
determination as to eligibility shall be final.

Miscellaneous


Sec.  1221.129  Right of the Secretary.

    All fiscal matters, programs, plans, or projects, rules or 
regulations, reports, or other substantive actions proposed and 
prepared by the Board shall be submitted to the Secretary for approval.


Sec.  1221.130  Referenda.

    (a) For the purpose of ascertaining whether the persons subject to 
this part favor the continuation, suspension, or termination of this 
part, the Secretary shall conduct a referendum among persons subject to 
assessments under Sec.  1221.116 who, during a representative period 
determined by the Secretary, have engaged in the production or 
importation of sorghum.
    (1) The referendum shall be conducted not later than 3 years after 
assessments first begin under this part.
    (2) This part will be approved in a referendum if a majority of 
those persons voting vote for approval.
    (b) The Secretary shall conduct a subsequent referendum:
    (1) Not later than 7 years after assessments first begin under this 
part;
    (2) At the request of the Board; or
    (3) At the request of 10 percent or more of the sorghum producers 
and importers eligible to vote to determine if the persons favor the 
continuation, suspension, or termination of this part.
    (c) The Secretary may conduct a referendum at any time to determine 
whether the continuation, suspension or termination of this part or a 
provision of this part is favored by sorghum producers and importers 
eligible to vote.
    (d) The Board shall reimburse the Secretary for any expenses 
incurred by the Secretary to conduct referenda.
    (e) A referendum conducted under this section with respect to this 
part shall be conducted in the manner determined by the Secretary to be 
appropriate.


Sec.  1221.131  Suspension or termination.

    (a) The Secretary shall suspend or terminate this part or subpart 
or a provision thereof if the Secretary finds that the subpart or a 
provision thereof obstructs or does not tend to effectuate

[[Page 25417]]

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) The Secretary shall suspend or terminate this subpart at the 
end of the fiscal period whenever the Secretary determines that its 
suspension or termination is approved or favored by a majority of the 
producers and importers voting who, during a representative period 
determined by the Secretary, have been engaged in the production or 
importation of sorghum.
    (c) If, as a result of a referendum the Secretary determines that 
this subpart is not approved, the Secretary shall:
    (1) No 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.  1221.132  Proceedings after termination.

    (a) Upon the termination of this subpart, the Board shall recommend 
not more than five of its representatives 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, by qualified organizations 
pursuant to Sec.  1221.128 in the interest of continuing sorghum 
promotion, research, and information programs.


Sec.  1221.133  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, the 
termination or amendment of this part or any subpart 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 part; or
    (b) Release or extinguish any violation of this part; 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.  1221.134  Personal liability.

    No representative or employee 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 representative or 
employee, except for acts of dishonesty or willful misconduct.


Sec.  1221.135  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.  1221.136  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.  1221.137  Rules and regulations.

    The Secretary may prescribe such rules and regulations as may be 
necessary to effectively carry out the provisions of this subpart.


Sec.  1221.138  OMB control number.

    The control number assigned to the information collection 
requirements of this part by the Office of Management and Budget 
pursuant to the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, 
is OMB control number 0581-0246.

Subparts B Through E--[Reserved]

    Dated: April 24, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-9327 Filed 5-5-08; 8:45 am]
BILLING CODE 3410-02-P