[Federal Register: November 23, 2007 (Volume 72, Number 225)]
[Proposed Rules]
[Page 65841-65859]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23no07-20]
[[Page 65841]]
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Part II
Department of Agriculture
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Agricultural Marketing Service
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7 CFR Part 1221
Sorghum Promotion, Research, and Information Order; Proposed Rule
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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: Proposed rule.
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SUMMARY: The Department of Agriculture (USDA) is seeking comments
regarding the establishment of 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 will mean all the above mentioned types of sorghum unless
specifically identified otherwise. The proposed Order would be
implemented under the Commodity Promotion, Research, and Information
Act of 1996 (Act). The proposed Sorghum Promotion, Research, and
Information Order (Order) would establish a national Sorghum Promotion,
Research, and Information Board (Board) comprised initially of 13
sorghum producers. Producers and importers would pay assessments based
on the value of the sorghum they produce or import. A referendum would
be conducted 3 years after assessments begin to determine if sorghum
producers and importers favor the program.
DATES: Comments must be received by January 22, 2008. Pursuant to the
Paperwork Reduction Act (44 U.S.C. Chapter 35) (PRA), comments on the
information collection burden that would result from this proposal must
be received by January 22, 2008.
ADDRESSES: Comments must be posted online at http://www.regulations.gov
or sent to Kenneth R. Payne, Chief, Marketing Programs, Livestock and
Seed Program, AMS, USDA, Room 2628-S, STOP 0251, 1400 Independence
Avenue, SW., Washington, DC 20250-0251; Telephone: (202) 720-1115; Fax:
(202) 720-1125. Comments will be made available for public inspection
at the above address during regular business hours or via the Internet
at http://www.regulations.gov. All comments should reference the docket
number, Docket No. AMS-LS-07-0056; LS-07-02, the date, and the page
number of this issue of the Federal Register.
Pursuant to the PRA, send comments regarding the accuracy of the
burden estimate; ways to minimize the burden, including the use of
automated collection techniques or other forms of information
technology; or any other aspect of this information collection to the
above address. In addition, comments concerning the information
collection also should be sent to the Desk Officer for Agriculture,
Office of Information and Regulatory Affairs, Office of Management and
Budget, New Executive Office Building, 725 17th St., NW., Room 725,
Washington, DC 20503.
FOR FURTHER INFORMATION CONTACT: Kenneth R. Payne, Chief, Marketing
Programs Branch; Telephone: (202) 720-1115; Fax: (202) 720-1125, or e-
mail Kenneth.Payne@usda.gov.
SUPPLEMENTARY INFORMATION: This proposed Order is issued pursuant to
the Act of 1996 (7 U.S.C. 7411-7425).
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. It is not intended to have retroactive effect.
Section 524 of the Act provides that the Act shall not affect or
preempt any other Federal or State law authorizing promotion or
research relating to an agricultural commodity.
Under Section 519 of the Act, a person subject to the Order may
file a petition with the Secretary 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 proposed 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 proposed rule
would not preempt any of these State-legislated programs. Further,
section 1221.112(j) of the proposed Order provides for an annual
allocation to State programs based on the State's proportional
contribution of total assessments collected by the national program.
In 2005 and 2006, representatives of the 6 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 promotion, research, and information
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 their proposal.
Not only were the States informed throughout the development of the
national program, they were instrumental in the sorghum industry's
decision to institute a national 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 producing States have expressed their support for
the proposed Order--Kansas, Nebraska, Texas, and Oklahoma. New Mexico,
a producer of grain sorghum and sorghum silage, has also expressed
support. Within these States, the following organizations have
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 proposed rule has been determined not significant for purposes
of Executive Order 12866 and therefore
[[Page 65843]]
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 the proposed rule
on small entities. The purpose of the RFA is to fit regulatory actions
to the scale of businesses subject to such actions so that small
businesses will not be disproportionately burdened.
The Act authorizes generic programs of promotion, research, and
information for agricultural commodities. Congress found that it is in
the national public interest and vital to the welfare of the
agricultural economy of the U.S. 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
proposed Order would impose certain reporting and recordkeeping
requirements on persons subject to the Order, the information required
under the proposed Order could generally be compiled from records
currently maintained.
Under the proposed Order, first handlers would remit assessments
collected from producers to the Board. First handlers would 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 1221). Reporting forms would require the minimum information
necessary to fulfill the intent of the Act. Such records and reports
would be retained for 2 years beyond the fiscal year of their
applicability. First handlers would 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 would have a reporting
and recordkeeping burden. This burden relates to producers and
importers who would 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 proposed Order requires producers 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 would be required to regularly submit
assessment and other related information to the Board. Information
could 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 would be
required to complete two forms that would be submitted to the
Secretary.
Any producer paying assessments could request a refund of
assessments paid by submitting an application to the Board. Refunds
would be made only if the program was not approved in referendum.
With regard to imports of sorghum, U.S. Customs and Border
Protection (Customs) would collect and remit assessments from importers
to the Board. Customs would also provide information to the Board
regarding the value and volume of imported sorghum, and therefore it is
not anticipated that importers would have any regular reporting burden.
The proposed Order would require 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 could be obtained
through an audit of importers' records to confirm information provided
by Customs or as part of the Board's compliance program.
Importers would 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 would be considered first handlers under the proposed
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
would not be considered small businesses.
Based upon data collected from State sorghum boards, NSP estimates
that approximately 1,150 first handlers of grain sorghum could be
affected. This number represents the number of wholesale grain
merchants who buy grain sorghum out of the approximately 3,000
wholesale grain merchants identified in the paragraph above. 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 could be affected. This was determined
through discussions with State sorghum promotions program
representatives and State organizations representing sorghum producers.
In order to have as much information as possible, we are inviting
comments on the number and size of handlers of all types of sorghum
that would be affected by this proposed Order.
Under SBA criteria, importers of sorghum are considered
agricultural service businesses. The proposed 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 U.S., and the exact number of sorghum importers who would 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 initial Regulatory
Flexibility Analysis, we therefore will assume that some importers
would be 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
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of the 2007 domestic grain sorghum crop.
In order to have as much information as possible for a
comprehensive analysis of sorghum importers, we are inviting comments
regarding the importation, marketing, and uses of all types of imported
sorghum.
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 was 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 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 proposed Order would be classified as small
businesses.
Sufficient data is 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. We
are therefore inviting comments regarding the burden of assessments on
all types of sorghum.
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 were
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 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 is not available to make a more accurate forecast
of assessment collections on sorghum forage, sorghum hay, sorghum
haylage, sorghum billets, and sorghum silage production. We therefore
are also inviting comments regarding the production and value of all
types of sorghum.
In addition to sorghum first handlers, importers, and producers,
there are other entities affected by the proposed Order. State,
regional and national organizations representing sorghum producers and
importers would have a role in the proposed Order. There would be some
burden on producer organizations that voluntarily request to
participate in the program by becoming certified to make nominations to
the Board. AMS estimates that two organizations within each State would
request certification. It is not known at this time how many sorghum
producer organizations may wish to be certified.
If this proposed Order is implemented, AMS would publish a notice
in the Federal Register announcing that it would accept applications
for certification of organizations to participate in the nomination of
Board members pursuant to criteria in section 1221.107. Certified
organizations would be required to re-submit applications for
certification periodically. It is anticipated that this would occur
every 5 years.
Additionally, there would be a burden on 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 would be qualified by the Secretary to
receive funding from the Board and preference would be given to
existing State legislated sorghum promotion organizations.
Organizations would be required to submit an application for
qualification to the Secretary pursuant to section 1221.128. It is
estimated that one organization would be qualified per State although
it is not required that each State have a qualified organization.
Qualified organizations receiving funding through the Order would be
required to re-submit applications for qualification periodically. It
is anticipated that this would occur every 5 years.
While the exact number of certified and qualified organizations is
not known, nonetheless their membership to a great extent would be
producers who are largely small entities, and, when applicable,
importers who we assume include small entities.
With regard to alternatives to this proposed rule, the Act itself
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 proposal includes provisions for a delayed referendum.
Approval would 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. While we have performed this initial Regulatory Flexibility
Analysis regarding the impact of this proposed Order on small entities,
in order to obtain all the data necessary for a comprehensive analysis,
we invite comments concerning potential effects of the proposed Order.
In particular, we are seeking information on the number and size of
first handlers, producers, and importers that would be covered by the
program. We are also requesting information on certified and qualified
organizations. In addition, we are interested in more information on
the number and kind of small entities that may incur benefits or costs
from
[[Page 65845]]
implementation of the proposed Order and information on expected
benefits or costs.
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
announces its intention to request approval for a new information
collection for the proposed sorghum program.
Under the proposed Order, first handlers would be required to
collect assessments from producers, file reports with, and submit
assessments to the Board. While the proposed Order would impose certain
recordkeeping requirements on first handlers, information required
under the proposed Order could be compiled from records currently
maintained. Such records would be retained for at least two years
beyond the marketing year of their applicability. Each first handler
would be responsible for the collection of assessments and remittance
of the assessments to the Board. It is anticipated that the bulk of
assessments would be submitted to the Board by first handlers who
purchase sorghum. A producer would be considered a first handler when
that person markets sorghum of their own production directly to a
consumer.
The proposed Order's provisions have been carefully reviewed, and
every effort has been made to minimize any unnecessary recordkeeping
costs or requirements.
The proposed forms would require the minimum information necessary
to effectively carry out the requirements of the proposed Order, and
their use is necessary to fulfill the intent of the Act. Such
information can be supplied without data processing equipment or
outside technical expertise. In addition, there are no additional
training requirements for individuals filling out reports and remitting
assessments to the Board. The forms would be simple 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, the proposal uses $18.55, 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.
Information collection requirements that are included in this
proposal 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
Sorghum 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 recordkeeper
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 recordkeepers x 0.1 hour per recordkeeper 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: Six.
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: (one 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.
[[Page 65846]]
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 hours 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.
Comments are 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.
Comments concerning information collection should be sent to the
address cited under the ADDRESSES section.
Background
NSP submitted a draft Sorghum Promotion, Research, and Information
Order to USDA on December 28, 2006, along with letters of support from
nine industry organizations. These letters represent producer
organizations from five sorghum producing States, NSP, and the U.S.
Grains Council.
USDA has modified the proponent's proposal to provide clarity,
consistency, and correctness with respect to word usage and
terminology. USDA also changed the proposal to make it consistent to
other similar national research and promotion programs.
According to NSP, a national promotion, research, and information
program for sorghum would allow the industry to address a number of
production and marketing problems it currently faces. Three main
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. A national promotion, research, and information
program would address both of these concerns.
The proposed Order would be based on value, so variability of
funding would lessen. Also, the revenue generated by a national
promotion, research, and information program would reach levels that
could adequately fund large coordinated research programs in sorghum.
NSP proposes that the implementation referendum be conducted within
3 years after assessments begin, which is consistent with the
provisions of the Act. Approval would 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 would be administered by a 13-member Board appointed by
the Secretary from industry nominations. The Board would recommend the
assessment rate, programs and projects, budgets, and any rules and
regulations that might be necessary for the administration of the
program. The Board would 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 would serve as at-large representatives
with at least two representatives appointed from States other than the
top three sorghum producing States.
Importers would 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 would 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 would recommend reapportionment of
the Board membership.
For the purpose of reapportionment under Section 1221.100 of the
proposed Order, ``production'' means the total assessments collected by
the Board during the last 5 crop years, excluding the high and low
years. The key to understanding reapportionment in the proposed Order
is the definition of production. The proposed Order in section
1221.100(f) specifically uses the term production and never refers to a
quantity such as ``bushels'' harvested per acre. The intent of this was
to use assessment collections as the basis for reapportionment and
maintain a link to assessment collections.
The proposed Order would use this definition since it reflects 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 would permit the
[[Page 65847]]
Board to analyze sorghum production in a consistent manner and base
reapportionment decisions on a value as provided for in the Act.
According to NASS, in 2005 the grain sorghum crop yielded 393.9
million bushels. Kansas was the largest producer at 195.0 million
bushels, or 49.5 percent of the total crop. The 2005 grain sorghum crop
was valued by NASS at $737 million dollars. Conversely, the 1984 grain
sorghum crop was 866.2 million bushels. Kansas was the largest producer
at 216.8 million bushels, or 25.0 percent of the total crop. The 1984
grain sorghum crop was valued by NASS at $2.1 billion dollars.
The sorghum silage crop in 2005 was 4.2 million tons. Texas was the
largest producer at 1.5 million tons, or 35.6 percent of the total
sorghum silage crop. Although NASS does not estimate the value of
sorghum silage, at $18 per ton, the 2005 crop would be valued at $75.6
million. The 1984 sorghum silage crop was 6.5 million tons. Kansas was
the largest producer at 2.1 million tons, or 32.3 percent of the total
sorghum silage crop. Again, if the silage was valued at $18 per ton,
the 1984 sorghum silage crop was worth $117.0 million. NASS sorghum
silage estimates do not include the use of sorghum for haying or
grazing. Acreage decline has also occurred during this period. In 1984,
17.3 million acres were planted for grain sorghum and sorghum silage
while in 2005 only 6.5 million acres were planted. According to the
NASS 2002 Census of Agriculture, 33,200 farms reported growing grain
sorghum as a crop for an average of 204 acres per farm. In the NASS
1997 Census of Agriculture, 50,860 farms reported growing grain sorghum
as a crop for an average of 170 acres per farm.
The U.S. is the largest exporter of grain sorghum in the world.
Mexico and Japan are the largest customers. According to the December
11, 2006, World Agricultural Supply and Demand Estimates by USDA, in
the 2006-2007 marketing year, exports will be the single largest use of
grain sorghum. The feed industry is the largest domestic market for
grain sorghum.
Grain sorghum is growing rapidly in industrial usage. Ethanol
accounts for 23 to 26 percent of domestic grain sorghum use. According
to NSP, this is the fastest growing segment of use for grain sorghum
resulting in new ethanol plants in western Kansas and the panhandle of
Texas. While this is promising, research into starch availability and
fermentation is significantly less in grain sorghum as compared to some
other grains. A national promotion, research, and information program
could invest in this type of research to keep grain sorghum as a viable
alternative in current ethanol production systems. Additionally, NSP
estimates there are approximately 3 million acres of forage type
sorghum planted in the U.S. each year. There is no official data kept
regarding actual production numbers. However, with the ever increasing
price of energy worldwide, significant interest has surfaced in the use
of forage sorghum as a feedstock for cellulosic ethanol production.
While most of the Department of Energy research and focus is currently
on crops like switchgrass and corn stubble, both U.S. and international
research document that forage sorghum has a tremendous ability to
produce large amounts of cellulosic material while utilizing much less
water than many other plants. A national promotion, research, and
information program could invest in this research and better position
forage sorghum in the forefront of cellulosic ethanol production.
Grain sorghum yield increases have lagged behind corn, soybeans,
and cotton in annual increases. Much of the difference in yield
increases among the crops can be attributed directly to limited
technology investment related to sorghum production. According to NSP,
the difference in per acre profitability between corn and sorghum is
significant. Private industry, in order to maximize stockholder return
on investment, is investing research dollars in corn, soybeans, and
cotton, instead of sorghum. Additionally, a survey by Frey \1\
documented that there are 545 corn plant breeders including private,
State, and USDA Agricultural Research Service (ARS) plant breeders. An
NSP survey estimates that there are only 20 sorghum plant breeders at
the private, State, and ARS levels. Therefore, the proponents of the
proposed Order identify this as an opportunity where a national program
of promotion, research, and information, through investment in genetic
research, could improve sorghum yields and expand markets for sorghum.
---------------------------------------------------------------------------
\1\ Frey, K.J. 1996. National plant breeding survey-1. Iowa
State Univ., Iowa Agr. and Home Econ. Expt. Stn. Spec. Rpt. 98.
---------------------------------------------------------------------------
Additional basic agricultural research opportunities exist for
sorghum production. Several crops now have herbicides approved for use
as over-the-top, postemergence grass control products. Sorghum
production could benefit from this type of technology and a national
promotion, research, and information program could fund the research
needed to make this available for sorghum producers.
The sorghum industry is facing competition in the marketplace from
both indirect and direct competitors. Like all agricultural
commodities, sorghum must compete for a share of customers' dollars. On
average, approximately 45 percent of U.S. grain sorghum production goes
to the export market. The top foreign market for U.S. grain sorghum for
the last ten years has been Mexico. Due to the passage of the North
American Free Trade Agreement (NAFTA), beginning in 2008, U.S. corn
will be allowed duty-free entry into Mexico. Currently, cracked corn is
entering Mexico without tariff and has depressed grain sorghum imports
into Mexico. When U.S. corn enters duty-free into Mexico, industry
analysts suggest that a significant portion of the U.S. grain sorghum
crop will need an alternative market. This will lead to the need for
greater investment in new market opportunities, domestically as well as
internationally. This investment could come from a national promotion,
research, and information program.
According to NSP information, one key U.S. sorghum competitor is
Australia. Australian farmers invest 1 percent of the value producers
receive for grain sorghum each year towards promotion and research, and
the Australian government invests an additional amount equal to 0.6
percent of the value producers receive for grain sorghum for research
and market development. This is an investment of 1.6 percent of the
value producers receive for grain sorghum. In contrast, all six of the
current U.S. State grain sorghum checkoff programs, when combined, only
account for 0.22 percent of value producers receive for grain sorghum.
The USDA, through the ARS, invests 0.50 percent of the value producers
receive for grain sorghum into sorghum research. U.S. investment of a
total of 0.72 percent is less than half of the investment made by
Australia. A national promotion, research, and information program
could provide research into alternative uses for sorghum and help
increase market share.
The proposed Order would establish an assessment in section
1221.116 that would be paid by sorghum producers and importers. The
assessment would 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 U.S.
and who owns or shares the ownership and risk of loss of the sorghum.
[[Page 65848]]
``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 U.S. 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 U.S. for
sale in the U.S., 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 would meet the requirement of the definition
by buying more than the minimum amount of grain sorghum in a calendar
year and therefore would 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 proposed 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 would collect and remit assessments to the Board. First
handlers would 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
would be necessary so that the Board could make recommendations to USDA
regarding reapportionment of its membership.
Section 1221.119 of the proposed 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, upon
failure of the referendum would then have the right to receive from the
Board a refund of assessments paid. Any producer or importer requesting
a refund would 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) proposes an allocation of a portion of all
assessments collected could be available to qualified State sorghum
producer organizations. Each year the Board would 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 could be made
available for use by qualified sorghum producer organizations pursuant
to section 1221.128 for State programs of promotion, research, and
information. Amounts allocated by the Board for State promotion,
research, and information programs would 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 would not automatically receive a
15-25 percent allocation. The Board would establish each year that the
qualified organizations would have to submit requests for the funds,
which could be for no more than their allocated amount. A detailed
marketing plan describing projects with budgets would be a part of this
request to demonstrate that the allocation would be used in a way
consistent with the Order.
An example of how an allocation amount would 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 proposed 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 would 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
would then issue a certificate of exemption and the importers who
receive a certificate of exemption would 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 could be exempt from the payment of assessments. The producer
or importer would submit the request to the Board annually as long as
the producer continues to be eligible for the exemption.
The proposed Order submitted by the proponent is summarized as
follows with discussion of the provisions that were changed.
Section 1221.1 through 1221.32 of the proposed Order defines
certain terms such as sorghum, producer, importer, and first handler,
which are used in the proposed Order. The term ``unit'' was removed as
unnecessary from the definitions and section 1221.101 was amended to
eliminate the use of the term.
Section 1221.100 through 1221.111 includes 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, power and duties, and prohibited
activities. The Board is the governing body authorized to administer
the Order through the implementation of programs, plans, projects,
budgets, and contracts to promote and disseminate information about
sorghum, subject to oversight of the Secretary. Section 1221.106,
removal, was added to make the proposal consistent with similar orders
and to express the Secretary's authority to remove any person from the
Board under certain circumstances. Section 1221.107 was amended by
adding paragraph (c) to express the primary considerations in
determining the
[[Page 65849]]
certification of an organization to nominate persons to serve on the
Board.
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 116 was amended to specify that if Customs
does not collect an assessment form 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 amended 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.
While the proposal set forth below has not received the approval of
USDA, it is determined that the proposed Order is consistent with and
will effectuate the purposes of the Act.
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.
For the reasons set forth in the preamble, it is proposed that
Chapter XI of Title 7 of the Code of Federal Regulations be amended to
add Part 1221 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.
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.
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.
[[Page 65850]]
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:
(a) Except as provided in paragraph (b) 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 section 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
section 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.
[[Page 65851]]
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 producing 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 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
Department. 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
[[Page 65852]]
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 Producing 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 Producing 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 Producing 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 the 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 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,
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
[[Page 65853]]
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 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;
(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
[[Page 65854]]
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) of this section, for use by
qualified sorghum producer organizations pursuant to Sec. 1221.128 for
State programs of promotion, research, and information. Amounts
allocated by the Board for State 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 Order. Qualified
sorghum producer organizations shall not submit requests for State
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 pursuant to paragraphs (g),
(h), (i), (j), and (k) of this section on national, regional, multi-
State, and State promotion, research, and information programs. Amounts
allocated by the Board for national, regional, multi-State, and State
promotion, research, and information programs will be based on requests
submitted to the Board when it is determined that these requests meet
the goals and objectives stated in the Order.
(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 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 with a maximum
modification of 1 percent 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 with a maximum
modification of 1 percent 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
[[Page 65855]]
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 the producer in any one calendar year.
(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. 1221.124 and Sec. 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.
(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
[[Page 65856]]
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. 1121.130 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
(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. 7411-7425), 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
[[Page 65857]]
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. 1221.131 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 handled within
the State;
(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 handled within the
State; 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 or importer shall maintain and make
available to the Secretary for inspection such books and records as may
be required by regulations recommended by the Board and prescribed by
the Secretary, 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,
(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 of sale, 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 therefrom, which statements do not identify the information
furnished by any person; and
(b) The publication, by direction of the Secretary, of the name of
any person who has been adjudged to have violated this 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
[[Page 65858]]
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
or 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 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 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
[[Page 65859]]
(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 0505--new.
Subparts B Through E--[Reserved]
Dated: November 15, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 07-5767 Filed 11-21-07; 8:45 am]
BILLING CODE 3410-02-P