7 U.S.C. § 2106 — Required terms and conditions in orders

Page 1399 TITLE 7—AGRICULTURE § 2106 § 2102. Orders of Secretary to cotton handlers To effectuate the declared policy of this chap- ter, the Secretary shall, subject to the provi- sions of this chapter, issue and from time to time amend, orders applicable to persons en- gaged in the harvesting, marketing, ginning, or other handling of cotton, hereinafter referred to as handlers. Such orders shall be applicable to all production or marketing areas, or both, in the United States. (Pub. L. 89–502, § 3, July 13, 1966, 80 Stat. 280.) § 2103. Notice and hearing upon proposed orders Whenever the Secretary has reason to believe that the issuance of an order will tend to effec- tuate the declared policy of this chapter, he shall give due notice and opportunity for a hear- ing upon a proposed order. Such hearing may be requested and a proposal for an order submitted by any cotton producer organization certified pursuant to section 2113 of this title or by any other interested person or persons, including the Secretary. (Pub. L. 89–502, § 4, July 13, 1966, 80 Stat. 280.) § 2104. Finding and issuance of orders After notice and opportunity for hearing as provided in section 2103 of this title, the Sec- retary shall issue an order if he finds, and sets forth in such order, upon the evidence intro- duced at such hearing, that the issuance of such order and all the terms and conditions thereof will tend to effectuate the declared policy of this chapter. (Pub. L. 89–502, § 5, July 13, 1966, 80 Stat. 280.) § 2105. Permissive terms and conditions in orders Orders issued pursuant to this chapter shall contain one or more of the following terms and conditions, and except as provided in section 2106 of this title, no others. (a) Providing for the establishment, issuance, effectuation, and administration of appropriate plans or projects for the advertising and sales promotion of cotton and its products and for the disbursement of necessary funds for such pur- poses: Provided, however, That any such plan or project shall be directed toward increasing the general demand for cotton or its products but no reference to a private brand or trade name shall be made if the Secretary determines that such reference will result in undue discrimination against the cotton products of other persons: And provided further, That no such advertising or sales promotion programs shall make use of false or unwarranted claims in behalf of cotton or its products or false or unwarranted state- ments with respect to the quality, value, or use of any competing product. (b) Providing for establishing and carrying on research and development projects and studies with respect to the production, ginning, proc- essing, distribution, or utilization of cotton and its products, to the end that the marketing and utilization of cotton may be encouraged, ex- panded, improved, or made more efficient, and for the disbursement of necessary funds for such purposes. (c) Providing that handlers or any class of handlers maintain and make available for in- spection such books and records as may be re- quired by the order and for the filing of reports by such handlers at the times, in the manner, and having the content prescribed by the order, to the end that information and data shall be made available to the Cotton Board and to the Secretary which is appropriate or necessary to the effectuation, administration, or enforcement of this chapter or of any order or regulation issued pursuant to this chapter: Provided, how- ever, That all information so obtained shall be kept confidential by all officers and employees of the Department of Agriculture and of the Cot- ton Board, and only such information so fur- nished or acquired as the Secretary deems rel- evant shall be disclosed by them, and then only in a suit or administrative hearing brought at the direction, or upon the request, of the Sec- retary of Agriculture, or to which he or any offi- cer of the United States is a party, and involv- ing the order with reference to which the infor- mation so to be disclosed was furnished or ac- quired. Nothing in this section shall be deemed to prohibit (1) the issuance of general state- ments based upon the reports of a number of handlers subject to an order, which statements do not identify the information furnished by any person, or (2) the publication by direction of the Secretary, of the name of any person violating any order, together with a statement of the par- ticular provisions of the order violated by such person. Any such officer or employee violating the provisions of this subsection shall upon con- viction be subject to a fine of not more than $1,000 or to imprisonment for not more than one year, or to both, and shall be removed from of- fice. (d) Terms and conditions incidental to and not inconsistent with the terms and conditions spec- ified in this chapter and necessary to effectuate the other provisions of such order. (Pub. L. 89–502, § 6, July 13, 1966, 80 Stat. 280.) § 2106. Required terms and conditions in orders Orders issued pursuant to this chapter shall contain the following terms and conditions: (a) Providing for the establishment and selec- tion by the Secretary, of a Cotton Board, and de- fining its powers and duties, which shall include only the powers: (1) To administer such order in accordance with its terms and provisions; (2) To make rules and regulations to effec- tuate the terms and provisions of such order, including the designation of the person re- sponsible for collecting the assessment; (3) To receive, investigate, and report to the Secretary complaints of violations of such order; and (4) To recommend to the Secretary amend- ments to such order. (b) Providing that the Cotton Board shall be composed of (1) representatives of cotton pro- ducers selected by the Secretary, from nomina- tions submitted by eligible producer organiza- tions within a cotton-producing State, as cer- tified pursuant to section 2113 of this title, or, if the Secretary determines that a substantial Page 1400 TITLE 7—AGRICULTURE § 2106 number of producers are not members of or their interests are not represented by any such eligi- ble producer organizations, from nominations made by producers in the manner authorized by the Secretary, so that the representation of cot- ton producers on the Board for each cotton-pro- ducing State shall reflect, to the extent prac- ticable, the proportion which that State’s mar- ketings of cotton bears to the total marketings of cotton in the United States, and (2) when im- ports of cotton are subject to an order, an appro- priate number of representatives, as determined by the Secretary, of importers of cotton on which assessments are paid under this chapter. Such importer representatives shall be ap- pointed by the Secretary after consultation with organizations representing importers, as deter- mined by the Secretary. Each cotton-producing State shall be entitled to at least one represent- ative on the Cotton Board. The Secretary may appoint a number of consumer advisors to the Cotton Board not to exceed 15 per centum of the membership of the Cotton Board. The Cotton Board shall reimburse the consumer advisors for expenses incurred in attending meetings of the Board in the same manner as the Cotton Board members. (c) Providing that the Cotton Board shall, sub- ject to the provisions of subsection (g) of this section, develop and submit to the Secretary for his approval any advertising or sales promotion or research and development plans or projects, and that any such plan or project must be ap- proved by the Secretary before becoming effec- tive. (d) Providing that the Cotton Board shall, sub- ject to the provisions of subsection (g) of this section, submit to the Secretary for his ap- proval, budgets on a fiscal period basis of its an- ticipated expenses and disbursements in the ad- ministration of the order, including probable costs of advertising and promotion and research and development projects. (e)(1) Providing that— (A) the producer or other person for whom the cotton is being handled shall pay to the handler of such cotton designated by the Cot- ton Board pursuant to regulations issued under the order; (B) such handler shall collect from the pro- ducer or other person for whom the cotton, in- cluding cotton owned by the handler, is being handled, and shall pay to the Cotton Board; and (C) each importer shall pay to the Cotton Board on imports of cotton, an assessment prescribed by the order, on the basis of bales of cotton handled or imported. The assessment shall cover such expenses and ex- penditures, including provision for a reasonable reserve, as the Secretary finds are reasonable and likely to be incurred by the Cotton Board under the order, during any period specified by the Secretary. (2) The order shall provide for reimbursing the Secretary— (A) for expenses not to exceed $300,000 in- curred by the Secretary in connection with any referendum conducted under section 2107 of this title; and (B) for administrative costs incurred by the Secretary for supervisory work up to 5 em- ployee years after an order or amendment to an order has been issued and made effective. There shall also be included in the order a provi- sion for reimbursing any agency of the Federal Government that assists in administering the import provisions of the order for a reasonable amount of the expenses incurred by that agency in connection therewith. (3) To facilitate the collection and payment of such assessments, the Cotton Board may des- ignate different handlers or importers or classes of handlers or importers to recognize differences in marketing practices or procedures utilized in any State or area, except that no more than one such assessment shall be made on any bale of cotton, unless specifically authorized by provi- sions of this subsection. (4) The rate of assessment prescribed by the order shall be $1 per bale of cotton handled, sup- plemented by an additional per bale amount not to exceed 1 percent of the value of cotton as de- termined by the Cotton Board and the Sec- retary. The rate of assessment on imports of cotton shall be determined in the same manner as the rate of assessment per bale of cotton han- dled, and the value to be placed on cotton im- ports for the purpose of determining the assess- ment on such imports shall be established by the Secretary in a fair and equitable manner. The Secretary shall establish procedures to en- sure that the upland cotton content of imported products is not subject to more than one assess- ment under this chapter. (5) No authority under this chapter may be used as a basis to advertise or solicit votes in any referendum relating to the rate of assess- ment with funds collected under this chapter. (6) The Secretary may maintain a suit against any person subject to the order for the collec- tion of such assessment, and the several district courts of the United States are hereby vested with jurisdiction to entertain such suits regard- less of the amount in controversy. The remedies provided in this section shall be in addition to, and not exclusive of, the remedies provided for elsewhere in this chapter or now or hereafter ex- isting at law or in equity. (7) The provisions of this subsection and sub- section (b) shall not apply to cottonseed and the products derived from cottonseed whether do- mestically produced or imported. (8) The provisions of this subsection relating to importers and assessments on imports of cot- ton shall be effective only if approved in a ref- erendum as provided in section 2107(b) or 2107(c) of this title. (f) Providing that the Cotton Board shall maintain such books and records and prepare and submit such reports from time to time, to the Secretary as he may prescribe, and for ap- propriate accounting by the Cotton Board with respect to the receipt and disbursement of all funds entrusted to it. (g) Providing that the Cotton Board, with the approval of the Secretary, shall enter into con- tracts or agreements for the development and carrying out of the activities authorized under the order pursuant to sections 2105(a) and (b) of this title and for the payment of the costs there- of with funds collected pursuant to the order, with an organization or association whose gov- Page 1401 TITLE 7—AGRICULTURE § 2107 erning body consists of cotton producers se- lected by the cotton producer organizations cer- tified by the Secretary under section 2113 of this title, in such manner that the producers of each cotton-producing State will, to the extent prac- ticable, have representation on the governing body of such organization in the proportion that the cotton marketed by the producers of such State bears to the total cotton marketed by the producers of all cotton-producing States, subject to adjustments to reflect lack of participation in the program by reason of refunds under sec- tion 2110 of this title. Any such contract or agreement shall provide that such contracting organization or association shall develop and submit annually to the Cotton Board, for the purpose of review and making recommendations to the Secretary, a program of research, adver- tising, and sales promotion projects, together with a budget, or budgets, which shall show the estimated cost to be incurred for such projects, and that any such projects shall become effec- tive upon approval by the Secretary. Any such contract or agreement shall also provide that the contracting organization shall keep accu- rate records of all its transactions and make an annual report to the Cotton Board of activities carried out and an accounting for funds received and expended, and such other reports as the Sec- retary may require. (h) Providing that no funds collected by the Cotton Board under the order shall in any man- ner be used for the purpose of influencing gov- ernmental policy or action, except as provided by subsection (a)(4) of this section. (Pub. L. 89–502, § 7, July 13, 1966, 80 Stat. 281; Pub. L. 94–366, §§ 2, 3, July 14, 1976, 90 Stat. 991, 992; Pub. L. 101–624, title XIX, § 1992, Nov. 28, 1990, 104 Stat. 3909; Pub. L. 102–237, title VIII, § 808(a)(1), Dec. 13, 1991, 105 Stat. 1883.) Editorial Notes AMENDMENTS 1991—Subsec. (e)(4). Pub. L. 102–237 made technical amendment to reference to this chapter to correct error in corresponding reference in original act. 1990—Subsec. (a)(2). Pub. L. 101–624, § 1992(1), sub- stituted ‘‘person’’ for ‘‘handler’’ and struck out ‘‘pro- ducer’’ before ‘‘assessment’’. Subsec. (b). Pub. L. 101–624, § 1992(2), inserted ‘‘(1)’’, and substituted ‘‘, and (2) when imports of cotton are subject to an order, an appropriate number of rep- resentatives, as determined by the Secretary, of im- porters of cotton on which assessments are paid under this chapter. Such importer representatives shall be appointed by the Secretary after consultation with or- ganizations representing importers, as determined by the Secretary. Each cotton-producing State shall be en- titled to at least one representative on the Cotton Board.’’ for ‘‘: Provided, however, That each cotton-pro- ducing State shall be entitled to at least one represent- ative on the Cotton Board.’’ Subsec. (e). Pub. L. 101–624, § 1992(3), amended subsec. (e) generally, substituting present provisions for provi- sions relating to a producer-paid assessment at a rate of $1 per bale, with a possible per-bale supplement not to exceed 1 per centum of the value of the cotton, along with other provisions relating to use of assessment funds, referendums and procedures concerning any sup- plemental assessments, and judicial action to collect assessments. 1976—Subsec. (b). Pub. L. 94–366, § 3, inserted provi- sions which authorized Secretary to appoint consumer advisors up to 15 per centum of the membership of the Cotton Board, and authorized reimbursing such advi- sors for expenses incurred in attending the Board meet- ings. Subsec. (e). Pub. L. 94–366, § 2, inserted provisions au- thorizing reimbursement of the Secretary up to $200,000 for expenses incurred in conducting a referendum pur- suant to section 2107 of this title and for administrative costs incurred by him for supervisory work up to five employee years after an order or an amendment to an order has been issued and made effective, inserted pro- visions authorizing assessment of a bale of cotton more than once if called for by a provision in this subsection, and inserted provisions authorizing Secretary to amend the rate order to supplement the rate in each mar- keting year by an additional per bale amount not to ex- ceed 1 per centum of the value of the cotton as deter- mined by the Cotton Board and the Secretary. § 2107. Referenda (a) Referendum and cotton producer approval of orders The Secretary shall conduct a referendum among persons who, during a representative pe- riod determined by the Secretary, have been en- gaged in the production of cotton for the pur- pose of ascertaining whether the issuance of an order is approved or favored by producers. No order issued pursuant to this chapter shall be ef- fective unless the Secretary determines that the issuance of such order is approved or favored by not less than two-thirds of the producers voting in such referendum, or by the producers of not less than two-thirds of the cotton produced dur- ing the representative period by producers vot- ing in such referendum and by not less than a majority of the producers voting in such ref- erendum. (b) Referendum on proposed amendment to order implementing provisions of 1990 amendments to this chapter (1) Notwithstanding the provisions of sections 2103 and 2104 of this title, not later than 150 days after the date of enactment of the Cotton Re- search and Promotion Act Amendments of 1990 [November 28, 1990], and after notice and oppor- tunity for public comment, the Secretary shall issue a proposed amendment to the order imple- menting the provisions of such Act, which shall become effective as provided in paragraph (2). (2) Notwithstanding the provisions of sub- section (a), the Secretary shall, within a period not to exceed 8 months after November 28, 1990, conduct a referendum among persons who have been cotton producers during a representative period, as determined by the Secretary, and per- sons who are importers of cotton and who, dur- ing a 12-month period ending not later than 90 days prior to the conduct of the referendum under this section imported a quantity of cotton in excess of the de minimis quantity (if any) es- tablished by the Secretary under section 2116(c)(2) of this title, for the purpose of ascertaining if a majority of those voting ap- prove the proposed amendment to the order issued by the Secretary under paragraph (1). The Secretary shall announce the results of the ref- erendum within 30 days after the date of such referendum. If the amendment is approved in the referendum, within a period not to exceed 90 days from the date of announcement of the re- sults of such referendum, the Secretary shall