7 U.S.C. § 7414 — Required terms in orders

Page 2009 TITLE 7—AGRICULTURE § 7414 (15) State The term ‘‘State’’ means any of the States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the United States. (16) Suspend The term ‘‘suspend’’ means to issue a rule under section 553 of title 5 to temporarily pre- vent the operation of an order during a par- ticular period of time specified in the rule. (17) Terminate The term ‘‘terminate’’ means to issue a rule under section 553 of title 5 to cancel perma- nently the operation of an order beginning on a date certain specified in the rule. (18) United States The term ‘‘United States’’ means collec- tively the 50 States, the District of Columbia, the Commonwealth of Puerto Rico and the territories and possessions of the United States. (Pub. L. 104–127, title V, § 513, Apr. 4, 1996, 110 Stat. 1033; Pub. L. 113–79, title X, § 10004(f), Feb. 7, 2014, 128 Stat. 944.) Editorial Notes AMENDMENTS 2014—Par. (1)(E) to (G). Pub. L. 113–79 added subpar. (E) and redesignated former subpars. (E) and (F) as (F) and (G), respectively. § 7413. Issuance of orders (a) Issuance authorized (1) In general To effectuate the purpose of this subchapter, the Secretary may issue, and amend from time to time, orders applicable to— (A) the producers of an agricultural com- modity; (B) the first handlers of the agricultural commodity and other persons in the mar- keting chain as appropriate; and (C) the importers of the agricultural com- modity, if imports of the agricultural com- modity are subject to assessment under sec- tion 7415(f) of this title. (2) National scope Each order issued under this section shall be national in scope. (b) Procedure for issuance (1) Development or receipt of proposed order A proposed order with respect to an agricul- tural commodity may be— (A) prepared by the Secretary at any time; or (B) submitted to the Secretary by— (i) an association of producers of the ag- ricultural commodity; or (ii) any other person that may be af- fected by the issuance of an order with re- spect to the agricultural commodity. (2) Consideration of proposed order If the Secretary determines that a proposed order is consistent with and will effectuate the purpose of this subchapter, the Secretary shall publish the proposed order in the Federal Reg- ister and give due notice and opportunity for public comment on the proposed order. (3) Existence of other orders In deciding whether a proposal for an order is consistent with and will effectuate the pur- pose of this subchapter, the Secretary may consider the existence of other Federal pro- motion, research, and information programs or orders issued or developed pursuant to any other law. (4) Preparation of final order After notice and opportunity for public com- ment under paragraph (2) regarding a proposed order, the Secretary shall take into consider- ation the comments received in preparing a final order. The Secretary shall ensure that the final order is in conformity with the terms, conditions, and requirements of this subchapter. (c) Issuance and effective date If the Secretary determines that the final order developed with respect to an agricultural commodity is consistent with and will effec- tuate the purpose of this subchapter, the Sec- retary shall issue the final order. Except in the case of an order for which an initial referendum is conducted under section 7417(a) of this title, the final order shall be issued and become effec- tive not later than 270 days after the date of publication of the proposed order that was the basis for the final order. (d) Amendments From time to time the Secretary may amend any order, consistent with the requirements of section 7422 of this title. (Pub. L. 104–127, title V, § 514, Apr. 4, 1996, 110 Stat. 1035.) § 7414. Required terms in orders (a) In general Each order shall contain the terms and condi- tions specified in this section. (b) Board (1) Establishment Each order shall establish a board to carry out a program of generic promotion, research, and information regarding the agricultural commodity covered by the order and intended to effectuate the purpose of this subchapter. (2) Board membership (A) Number of members Each board shall consist of the number of members considered by the Secretary, in consultation with the agricultural com- modity industry involved, to be appropriate to administer the order. In addition to mem- bers, the Secretary may also provide for al- ternates on the board. (B) Appointment The Secretary shall appoint the members and any alternates of a board from among producers of the agricultural commodity and first handlers and others in the marketing Page 2010 TITLE 7—AGRICULTURE § 7414 chain as appropriate. If imports of the agri- cultural commodity covered by an order are subject to assessment under section 7415(f) of this title, the Secretary shall also appoint importers as members of the board and as al- ternates if alternates are included on the board. The Secretary may appoint 1 or more members of the general public to each board. (C) Nominations The Secretary may make appointments from nominations made pursuant to the method set forth in the order. (D) Geographical representation To ensure fair and equitable representa- tion of the agricultural commodity industry covered by an order, the composition of each board shall reflect the geographical distribu- tion of the production of the agricultural commodity involved in the United States and the quantity or value of the agricultural commodity imported into the United States. (3) Reapportionment of board membership In accordance with rules issued by the Sec- retary, at least once in each 5-year period, but not more frequently than once in each 3-year period, each board shall— (A) review the geographical distribution in the United States of the production of the agricultural commodity covered by the order involved and the quantity or value of the agricultural commodity imported into the United States; and (B) if warranted, recommend to the Sec- retary the reapportionment of the board membership to reflect changes in the geo- graphical distribution of the production of the agricultural commodity and the quan- tity or value of the imported agricultural commodity. (4) Notice (A) Vacancies Each order shall provide for notice of board vacancies to the agricultural com- modity industry involved. (B) Meetings Each board shall provide the Secretary with prior notice of meetings of the board to permit the Secretary, or a designated rep- resentative of the Secretary, to attend the meetings. (5) Term of office (A) In general The members and any alternates of a board shall each serve for a term of 3 years, except that the members and any alternates initially appointed to a board shall serve for terms of not more than 2, 3, and 4 years, as specified by the order. (B) Limitation on consecutive terms A member or alternate may serve not more than 2 consecutive terms. (C) Continuation of term Notwithstanding subparagraph (B), each member or alternate shall continue to serve until a successor is appointed by the Sec- retary. (D) Vacancies A vacancy arising before the expiration of a term of office of an incumbent member or alternate of a board shall be filled in a man- ner provided for in the order. (6) Compensation (A) In general Members and any alternates of a board shall serve without compensation. (B) Travel expenses If approved by a board, members or alter- nates shall be reimbursed for reasonable travel expenses, which may include a per diem allowance or actual subsistence in- curred while away from their homes or reg- ular places of business in the performance of services for the board. (c) Powers and duties of board Each order shall specify the powers and duties of the board established under the order, which shall include the power and duty— (1) to administer the order in accordance with its terms and conditions and to collect assessments; (2) to develop and recommend to the Sec- retary for approval such bylaws as may be nec- essary 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; (3) to meet, organize, and select from among the members of the board a chairperson, other officers, and committees and subcommittees, as the board determines to be appropriate; (4) to employ persons, other than the mem- bers, as the board considers necessary to assist the board in carrying out its duties, and to de- termine the compensation and specify the du- ties of the persons; (5) subject to subsection (e), to develop and carry out generic promotion, research, and in- formation activities relating to the agricul- tural commodity covered by the order; (6) to prepare and submit for the approval of the Secretary, before the beginning of each fis- cal year, rates of assessment under section 7416 of this title and an annual budget of the anticipated expenses to be incurred in the ad- ministration of the order, including the prob- able cost of each promotion, research, and in- formation activity proposed to be developed or carried out by the board; (7) to borrow funds necessary for the startup expenses of the order; (8) subject to subsection (f), to enter into contracts or agreements to develop and carry out generic promotion, research, and informa- tion activities relating to the agricultural commodity covered by the order; (9) to pay the cost of the activities with as- sessments collected under section 7416 of this title, earnings from invested assessments, and other funds; (10) to keep records that accurately reflect the actions and transactions of the board, to keep and report minutes of each meeting of the board to the Secretary, and to furnish the Secretary with any information or records the Secretary requests; Page 2011 TITLE 7—AGRICULTURE § 7414 (11) to receive, investigate, and report to the Secretary complaints of violations of the order; and (12) to recommend to the Secretary such amendments to the order as the board con- siders appropriate. (d) Prohibited activities A board may not engage in, and shall prohibit the employees and agents of the board from en- gaging in— (1) any action that would be a conflict of in- terest; (2) using funds collected by the board under the order, any action undertaken for the pur- pose of influencing any legislation or govern- mental action or policy other than recom- mending to the Secretary amendments to the order; and (3) any advertising, including promotion, re- search, and information activities authorized to be carried out under the order, that may be false or misleading or disparaging to another agricultural commodity. (e) Activities and budgets (1) Activities Each order shall require the board estab- lished under the order to submit to the Sec- retary for approval plans and projects for pro- motion, research, or information relating to the agricultural commodity covered by the order. (2) Budgets (A) Submission to Secretary Each order shall require the board estab- lished under the order to submit to the Sec- retary for approval a budget of its antici- pated annual expenses and disbursements to be paid to administer the order. The budget shall be submitted before the beginning of a fiscal year and as frequently as may be nec- essary after the beginning of the fiscal year. (B) Reimbursement of Secretary Each order shall require that the Sec- retary be reimbursed for all expenses in- curred by the Secretary in the implementa- tion, administration, and supervision of the order, including all referenda costs incurred in connection with the order. (3) Incurring expenses A board may incur the expenses described in paragraph (2) and other expenses for the ad- ministration, maintenance, and functioning of the board as authorized by the Secretary. (4) Payment of expenses Expenses incurred under paragraph (3) shall be paid by a board using assessments collected under section 7416 of this title, earnings ob- tained from assessments, and other income of the board. Any funds borrowed by the board shall be expended only for startup costs and capital outlays. (5) Limitation on spending For fiscal years beginning 3 or more years after the date of the establishment of a board, the board may not expend for administration (except for reimbursements to the Secretary required under paragraph (2)(B)), maintenance, and functioning of the board in a fiscal year an amount that exceeds 15 percent of the as- sessment and other income received by the board for the fiscal year. (f) Contracts and agreements (1) In general Each order shall provide that, with the ap- proval of the Secretary, the board established under the order may— (A) enter into contracts and agreements to carry out generic promotion, research, and information activities relating to the agri- cultural commodity covered by the order, including contracts and agreements with producer associations or other entities as considered appropriate by the Secretary; and (B) pay the cost of approved generic pro- motion, research, and information activities using assessments collected under section 7416 of this title, earnings obtained from as- sessments, and other income of the board. (2) Requirements Each contract or agreement shall provide that any person who enters into the contract or agreement with the board shall— (A) develop and submit to the board a pro- posed activity together with a budget that specifies the cost to be incurred to carry out the activity; (B) keep accurate records of all of its transactions relating to the contract or agreement; (C) account for funds received and ex- pended in connection with the contract or agreement; (D) make periodic reports to the board of activities conducted under the contract or agreement; and (E) make such other reports as the board or the Secretary considers relevant. (g) Records of board (1) In general Each order shall require the board estab- lished under the order— (A) to maintain such records as the Sec- retary may require and to make the records available to the Secretary for inspection and audit; (B) to collect and submit to the Secretary, at any time the Secretary may specify, any information the Secretary may request; and (C) to account for the receipt and disburse- ment of all funds in the possession, or under the control, of the board. (2) Audits Each order shall require the board estab- lished under the order to have— (A) its records audited by an independent auditor at the end of each fiscal year; and (B) a report of the audit submitted di- rectly to the Secretary. (h) Periodic evaluation In accordance with section 7401(c) of this title, each order shall require the board established under the order to provide for the independent evaluation of all generic promotion, research, Page 2012 TITLE 7—AGRICULTURE § 7415 and information activities undertaken under the order. (i) Books and records of persons covered by order (1) In general Each order shall require that producers, first handlers and other persons in the marketing chain as appropriate, and importers covered by the order shall— (A) maintain records sufficient to ensure compliance with the order and regulations; (B) submit to the board established under the order any information required by the board to carry out its responsibilities under the order; and (C) make the records described in subpara- graph (A) available, during normal business hours, for inspection by employees or agents of the board or the Department, including any records necessary to verify information required under subparagraph (B). (2) Time requirement Any record required to be maintained under paragraph (1) shall be maintained for such time period as the Secretary may prescribe. (3) Other information The Secretary may use, and may authorize the board to use under this subchapter, infor- mation regarding persons subject to an order that is collected by the Department under any other law. (4) Confidentiality of information (A) In general Except as otherwise provided in this sub- chapter, all information obtained under paragraph (1) or as part of a referendum under section 7417 of this title shall be kept confidential by all officers, employees, and agents of the Department and of the board. (B) Disclosure Information referred to in subparagraph (A) may be disclosed only if— (i) the Secretary considers the informa- tion relevant; and (ii) the information is revealed in a judi- cial proceeding or administrative hearing brought at the direction or on the request of the Secretary or to which the Secretary or any officer of the Department is a party. (C) Other exceptions This paragraph shall not prohibit— (i) the issuance of general statements based on reports or on information relat- ing to a number of persons subject to an order if the statements do not identify the information furnished by any person; or (ii) the publication, by direction of the Secretary, of the name of any person vio- lating any order and a statement of the particular provisions of the order violated by the person. (D) Penalty Any person who willfully violates this sub- section shall be subject, on conviction, to a fine of not more than $1,000 or to imprison- ment for not more than 1 year, or both. (5) Withholding information This subsection shall not authorize the with- holding of information from Congress. (Pub. L. 104–127, title V, § 515, Apr. 4, 1996, 110 Stat. 1036.) § 7415. Permissive terms in orders (a) Exemptions An order issued under this subchapter may contain— (1) authority for the Secretary to exempt from the order any de minimis quantity of an agricultural commodity otherwise covered by the order; and (2) authority for the board established under the order to require satisfactory safeguards against improper use of the exemption. (b) Different payment and reporting schedules An order issued under this subchapter may contain authority for the board established under the order to designate different payment and reporting schedules to recognize differences in agricultural commodity industry marketing practices and procedures used in different pro- duction and importing areas. (c) Activities An order issued under this subchapter may contain authority to develop and carry out re- search, promotion, and information activities designed to expand, improve, or make more effi- cient the marketing or use of the agricultural commodity covered by the order in domestic and foreign markets. Section 7414(e) of this title shall apply with respect to activities authorized under this subsection. (d) Reserve funds An order issued under this subchapter may contain authority to reserve funds from assess- ments collected under section 7416 of this title to permit an effective and continuous coordi- nated program of research, promotion, and in- formation in years when the yield from assess- ments may be reduced, except that the amount of funds reserved may not exceed the greatest aggregate amount of the anticipated disburse- ments specified in budgets approved under sec- tion 7414(e) of this title by the Secretary for any 2 fiscal years. (e) Credits (1) Generic activities An order issued under this subchapter may contain authority to provide credits of assess- ments for those individuals who contribute to other similar generic research, promotion, and information programs at the State, regional, or local level. (2) Branded activities (A) In general The Secretary may permit a farmer coop- erative that engages in branded activities relating to the marketing of the products of members of the cooperative to receive an an- nual credit for the activities and related ex- penditures in the form of a deduction of the total cost of the activities and related ex- penditures from the amount of any assess-