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[Federal Register Volume 75, Number 141 (Friday, July 23, 2010)]
[Rules and Regulations]
[Pages 43031-43037]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-18096]

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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
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Federal Register / Vol. 75, No. 141 / Friday, July 23, 2010 / Rules 
and Regulations

[[Page 43031]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 63

[Doc. No. AMS-LS-08-0064]

National Sheep Industry Improvement Center

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule and request for comments.

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

SUMMARY: This interim rule promulgates rules and regulations 
establishing a National Sheep Industry Improvement Center (NSIIC) 
program, consistent with the Food, Conservation, and Energy Act of 2008 
(Farm Bill). This rule establishes the NSIIC and a Board of Directors 
(Board) that will manage and be responsible for the general supervision 
of the activities of the NSIIC, with oversight from the U.S. Department 
of Agriculture (USDA). The NSIIC is authorized to use funds to make 
grants to eligible entities in accordance with a strategic plan. 
Additionally, this interim rule also announces USDA's Agricultural 
Marketing Service (AMS) request for approval of a new information 
collection in accordance with the Paperwork Reduction Act of 1995.

DATES: Effective Date: This interim rule is effective September 21, 
2010.
    Comment Date: Written comments on the regulatory provisions of this 
interim rule must be received by September 21, 2010. Pursuant to the 
PRA, comments on the information collection burden must be received by 
September 21, 2010. Comments will be posted as received, with any 
personal information provided.

ADDRESSES: Interested persons are invited to submit comments concerning 
this interim rule. Comments must be posted on http//
www.regulations.gov; or sent to Kenneth R. Payne, Chief, Marketing 
Programs Branch, Livestock and Seed Program, AMS, USDA, Room 2628-S, 
STOP 0251, 1400 Independence Avenue, SW., Washington, DC 20250-0251; 
via Fax to 202/720-1125; or e-mail to Kenneth.Payne@ams.usda.gov.
    In addition, comments concerning the information collection and 
recordkeeping requirement of this rule should be sent to the Desk 
Officer for Agriculture, Office of Information and Regulatory Affairs, 
Office of Management and Budget (OMB), New Executive Office Building, 
725 17th St., NW., Room 725, Washington, DC 20503. Comments are invited 
on: (1) Whether the proposed collection of information is necessary for 
the proper performance of the functions of the agency, including 
whether the information will have practical utility; (2) the accuracy 
of the agency's estimate of the burden on the proposed collection of 
information including the validity of the methodology and assumptions 
used; (3) ways to enhance the quality, utility, and clarity of the 
information to be collected; and (4) ways to minimize the burden of the 
collection of information on those who are to respond, including the 
use of appropriate automated electronic, mechanical, other 
technological collection techniques or other forms of information 
technology.
    All comments should reference the document number (AMS-LS-08-0064) 
and the volume, date, and page number of this issue of the Federal 
Register.

FOR FURTHER INFORMATION CONTACT: Kenneth R. Payne, Chief, Marketing 
Programs Branch; Telephone 202/720-1115; Fax: 202/720-1125; or e-mail 
Kenneth.Payne@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This interim rule is published pursuant to 7 
U.S.C. 2008j as amended by section 11009 of the Food, Conservation, and 
Energy Act of 2008 (Pub. L. 110-246) and will create a new part 63 in 
Title 7 of the Code of Federal Regulations for the establishment and 
function of the NSIIC.

Executive Order 12866

    This interim rule has been determined to be not significant for the 
purposes of Executive Order 12866 and therefore, has not been reviewed 
by the OMB.

Public Law 104-4

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. 
L. 104-4) establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State and local governments and 
the private sector. Under section 202 of the UMRA, the AMS generally 
must prepare a written statement, including a cost-benefit analysis, 
for proposed and final rules with ``Federal mandates'' that may result 
in expenditures by State and local governments, in the aggregate, or by 
the private sector, of $100 million or more in any one year (2 U.S.C. 
1532). When such a statement is needed for a rule, section 205 of the 
UMRA generally requires Federal agencies to identify and consider a 
reasonable number of regulatory alternatives and adopt the least 
costly, most cost-effective, or least burdensome alternative that 
achieves the objectives of the rule (2 U.S.C. 1535). This rule contains 
no Federal mandates (under the regulatory provisions of Title II of the 
UMRA) for State and local governments or the private sector of $100 
million or more in any one year. Therefore, this rule is not subject to 
the requirements of sections 202 and 205 of the UMRA.

Executive Order 12988

    This interim rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have any retroactive 
effect. There are no administrative proceedings that must be exhausted 
before parties may file in court.

Executive Order 13132

    This interim rule has been reviewed under Executive Order 13132, 
Federalism, and has been determined that this rule does not have 
sufficient Federalism implications to warrant the preparation of a 
Federalism Assessment. The provisions contained in this rule would not 
have a substantial direct effect on States or their political 
subdivisions or on the distribution of power and responsibilities among 
the various levels of government.

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), the agency is required to examine the impact of regulatory 
actions on small entities. The purpose of the RFA

[[Page 43032]]

is to fit regulatory actions to the scale of businesses subject to such 
actions so that small businesses will not be disproportionately 
burdened. AMS certifies that this rule will not have a significant 
impact on a substantial number of small entities as defined in the RFA.
    The purpose of the NSIIC is to: (1) Promote strategic development 
activities and collaborative efforts by private and State entities to 
maximize the impact of Federal assistance to strengthen and enhance the 
production and marketing of sheep or goat products in the United 
States; (2) Optimize the use of available human capital and resources 
within the sheep or goat industries; (3) Provide assistance to meet the 
needs of the sheep or goat industry for infrastructure development, 
business development, production, resource development, and market and 
environmental research; (4) Advance activities that empower and build 
the capacity of the U.S. sheep or goat industry to design unique 
responses to the special needs of the sheep or goat industries on both 
a regional and national basis; and (5) Adopt flexible and innovative 
approaches to solving the long-term needs of the United States sheep or 
goat industry.
    A Board of Directors will manage and be responsible for the general 
supervision of the structure of the NSIIC, with oversight from USDA. 
The Board is comprised of seven voting members, of whom four would be 
active producers of sheep or goats in the United States, two would have 
expertise in finance and management, and one would have expertise in 
lamb, wool, goat, or goat product marketing. The Secretary would 
appoint the voting members from nominations submitted by eligible 
organizations. There also would be two non-voting members on the Board, 
the Under Secretary of Agriculture for Rural Development (RD) and the 
Under Secretary of Agriculture for Research, Education, and Economics.
    This rule provides opportunity for public, private, or cooperative 
organizations; associations, including corporations not operated for 
profit; federally recognized Indian Tribes; public or quasi-public 
agencies to be considered eligible entities to submit grant proposals 
to the Board. According to various sheep and goat association Web 
sites, there are approximately 215 regional, State, and national sheep 
and goat organizations located throughout the United States. In 
addition, according to the Department of the Interior's August 11, 
2009, Federal Register (74 FR 40218); there are approximately 564 
federally recognized American Indian Tribes in the United States.
    According to the 2007 Census of Agriculture, there were 83,134 
farms with sheep and lamb and 144,466 farms with goats in the United 
States. Thus, at least approximately 227,600 sheep, lamb and goat 
producers potentially would be eligible to serve on the four producer 
positions on the Board of NSIIC. Two positions on the Board are for 
persons with expertise in finance and management, while one position is 
for a person with expertise in lamb, wool, goat, or goat product 
marketing. It is estimated that not more than 10 national organizations 
would be eligible to nominate the voting members of the Board to the 
Secretary for appointment.
    Most producers would be classified as small businesses under the 
criteria established by the Small Business Administration (13 CFR 
121.201). The members of the national organizations would be expected 
to reflect this same size. The SBA defines small agricultural service 
firms as those whose annual receipts are less than $7 million, and 
small agricultural producers are defined as those having annual 
receipts of not more than $750,000 annually. With regard to persons who 
have expertise in finance and management or expertise in lamb, wool, 
goat, or goat product marketing, and other eligible entities, AMS does 
not have specific information on the number and size of all such 
persons or entities and requests comments providing pertinent 
information or data. Nonetheless, we would estimate that a number of 
such persons would be considered small entities.
    The information collection burden is discussed in the following 
section.

Paperwork Reduction Act

    In accordance with the PRA, this interim rule announces that AMS is 
requesting review and approval from OMB of a new information 
collection. AMS has based these estimates on industry research and 
experience with other boards and advisory committees. The proposed 
forms are necessary to appoint a Board to effectively carry out the 
requirements of the enabling legislation--including seating a Board. 
The nomination process is not expected to have a significant impact on 
persons affected. The overall impact of the NSIIC program under the Act 
is expected to be beneficial to sheep and goat industries.
    The proposed forms have been carefully reviewed, and every effort 
has been made to minimize any unnecessary recordkeeping costs or 
requirements. Such information can be supplied without data processing 
equipment or outside technical expertise. There are no additional 
training requirements for individuals filling out reports 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. In 
addition, the information to be included on these forms is not 
available from other sources because such information relates 
specifically to individual producers or industry members who are 
nominated to the Board. Therefore, there is no practical method for 
collecting the required information without the use of these forms.
    Title: National Sheep Industry Improvement Center.
    OMB Number: 0581-NEW.
    Expiration Date of Approval: 3 years from date of OMB approval.
    Type of Request: Approval of a new information collection.
    Abstract: The primary objective of the NSIIC is to assist U.S. 
sheep and goat industries by strengthening and enhancing the production 
and marketing of sheep, goats, and their products in the United States. 
The information collection requirements in the request are essential to 
carry out the intent of the enabling legislation.
    AMS will accept nominations for membership on the Board from 
national organizations that (1) consist primarily of active sheep or 
goat producers in the United States and (2) have the primary interest 
of sheep or goat production in the United States. A nomination for 
appointment form would be submitted by such national organizations (who 
may submit more than one nominee) while a background information form 
and nominee's agreement to serve form would be submitted by each 
producer or industry member nominated to serve on the Board.
    Estimate of Burden: The public reporting and recordkeeping burden 
for this collection of information is estimated to total 40 hours the 
first year and 16 hours each year after. We will submit a justification 
for change to report new burden hours added to form AD-755.

(1) Nominations for Appointments Form

    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.5 hour per response.
    Respondents: National organizations submitting nominations to the 
Board who (1) consist primarily of active sheep or goat producers in 
the United States and (2) have the primary interest of sheep or goat 
production in the United States.

[[Page 43033]]

    Estimated number of Respondents: 10.
    Estimated number of Responses per Respondent: 1 per year.
    Estimated Total Annual Burden: 5 hours.

(2) Background Information Form (OMB Form No. 0505-0001)

    Estimate of Burden: Public reporting for this collection of 
information is estimated to average 0.5 hour per response for each 
producer or industry member nominated to serve on the Board.
    Respondents: Sheep or goat producers; Persons with expertise in 
finance and management; and Persons with expertise in lamb, wool, goat, 
or goat marketing.
    Estimated number of Respondents: (56 for initial nominations to the 
NSIIC Board, about 18 in the second year, about 18 in the third year).
    Estimated number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 28 hours for the 
initial nominations to the NSIIC Board and approximately 9 hours 
annually thereafter.

(3) Nominee's Agreement To Serve

    Estimate of Burden: Public reporting for this collection of 
information is estimated to average .125 hours per response for each 
producer or industry member nominated to serve on the Board.
    Respondents: Sheep or goat producers; Persons with expertise in 
finance and management; and Persons with expertise in lamb, wool, goat, 
or goat marketing.
    Estimated Number of Respondents: (56 for initial nominations to the 
NSIIC Board, about 18 in the second year, about 18 in the third year).
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 7 hours for the 
initial nominations to the NSIIC Board and approximately 2.25 (rounded 
down to 2) hours annually thereafter.
    Comments are invited on: (1) Whether the new collection of 
information is necessary for the proper performance of the functions of 
the NSIIC, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
new collection of information including the validity of the methodology 
and assumptions used; (3) ways to enhance the quality, utility, and 
clarity of the information to be collected; and (4) 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.

Background Information

    The NSIIC was initially authorized under the Consolidated Farm and 
Rural Development Act (Act). The Act, as amended, was passed as part of 
the 1996 Farm Bill (Pub. L. 104-127). The initial legislation included 
a provision that privatized the NSIIC 10 years after its ratification 
or once the full appropriation of $50 million was disbursed. 
Subsequently, the NSIIC was privatized on September 30, 2006 (72 FR 
28945).
    In 2008, the NSIIC was re-established under Title XI of the Food, 
Conservation, and Energy Act of 2008 (Pub. L. 110-246), also known as 
the 2008 Farm Bill. Section 11009 of the 2008 Farm Bill repealed the 
requirement in section 375(e)(6) of the Act to privatize the NSIIC. 
Additionally, the 2008 Farm Bill provided for $1,000,000 in mandatory 
funding for fiscal year 2008 from the Commodity Credit Corporation for 
the NSIIC to remain available until expended, as well as authorization 
for appropriations in the amount of $10 million for each of fiscal 
years 2008 through 2012.
    The authorizing legislation established in the United States 
Department of the Treasury (Treasury) the NIISC Revolving Fund (Fund). 
The Fund is to be available to the NSIIC, without fiscal year 
limitation, to carry out the authorized programs and activities of the 
NSIIC. The law provides authority for amounts in the Fund to be used 
for direct loans, loan guarantees, cooperative agreements, equity 
interests, investments, repayable grants, and grants to eligible 
entities, either directly or through an intermediary, in accordance 
with a strategic plan submitted by the NSIIC to the Secretary. This 
rulemaking will establish the NSIIC and use of the Fund for making only 
grants to eligible entities.
    The purpose of the NSIIC is to: (1) Promote strategic development 
activities and collaborative efforts by private and State entities to 
maximize the impact of Federal assistance to strengthen and enhance 
production and marketing of sheep or goat products in the United 
States; (2) Optimize the use of available human capital and resources 
within the sheep or goat industries; (3) Provide assistance to meet the 
needs of the sheep or goat industry for infrastructure development, 
business development, production, resource development, and market and 
environmental research; (4) Advance activities that empower and build 
the capacity of the U.S. sheep or goat industry to design unique 
responses to the special needs of the sheep or goat industries on both 
a regional and national basis; and (5) Adopt flexible and innovative 
approaches to solving the long-term needs of the United States sheep or 
goat industry.
    The management of the NSIIC is vested in a Board that is appointed 
by the Secretary. The Secretary reviews and monitors compliance of the 
Board as provided under the Act and rules and regulations. The Board is 
composed of seven voting members, of whom four would be active 
producers of sheep or goats in the United States, two would have 
expertise in finance and management, and one would have expertise in 
lamb, wool, goat, or goat product marketing. The Board would also 
include two non-voting members, the Under Secretary of Agriculture for 
Rural Development (RD) and the Under Secretary of Agriculture for 
Research, Education, and Economics. The Secretary would appoint the 
voting members from nominations submitted by eligible organizations. A 
member's term of office shall be 3 years with a maximum of two terms. 
Board members shall initially serve staggered terms of 1, 2, or 3 
years, as determined by the Secretary. Only national organizations that 
(1) consist primarily of active sheep or goat producers in the United 
States and (2) have the primary interest of sheep or goat production in 
the United States can make nominations to the Board. USDA will announce 
in a nationwide press release that USDA is accepting nominations from 
the aforementioned national organizations.
    The Board will meet not less than once each fiscal year. Board 
members will not receive compensation for serving on the Board, but 
will be reimbursed for travel, subsistence, and other necessary 
expenses. The Board shall be responsible for general supervision of the 
NSIIC; review of any contract and grant to be made or entered into by 
the NSIIC and any financial assistance provided to the NSIIC; making 
final decision--by majority vote--on whether or not to provide grants 
to an eligible entity; and developing and establishing a budget plan 
and long-term operating plan to carry out the goals of the NSIIC.
    The authorizing legislation establishes in the Treasury, the NSIIC 
Fund. The Fund is to be available to the NSIIC, without fiscal year 
limitation, to carry out the authorized programs and activities of the 
NSIIC. The law provides authority for amounts in the Fund to be

[[Page 43034]]

used to carry out authorized program activities of the NSIIC.
    This interim rule authorizes a grant only program to be 
administered by the NSIIC Board. Based on funding, the Board will 
periodically announce that proposals may be submitted to the Board for 
consideration from eligible entities. The Board would determine how 
funds would be allocated. Proposals submitted to the Board must be 
consistent with the purpose of the NSIIC, which are to: (1) Promote 
strategic development activities and collaborative efforts by private 
and State entities to maximize the impact of Federal assistance to 
strengthen and enhance the production and marketing of sheep or goat 
products in the United States; (2) Optimize the use of available human 
capital and resources within the sheep or goat industries; (3) Provide 
assistance to meet the needs of the sheep or goat industry for 
infrastructure development, business development, production, resource 
development, and market and environmental research; (4) Advance 
activities that empower and build the capacity of the U.S. sheep or 
goat industry to design unique responses to the special needs of the 
sheep or goat industries on both a regional and national basis; and (5) 
Adopt flexible and innovative approaches to solving the long-term needs 
of the United States sheep or goat industry.

Discussion of Interim Regulatory Text

    Sections 63.1 through 63.13 define certain terms pertinent to 
nomination processes for establishment of a NSIIC Board.
    Sections 63.100 through 63.112 include provisions relating to the 
Board. These provisions cover establishment and membership, 
certification of organizations, the nomination process, powers and 
duties of the Board and other pertinent information related to Board 
function and operation.
    Section 63.200 details the establishment and purpose of the NSIIC.
    Sections 63.300 through 63.301 detail the establishment and use of 
the Fund. Specifically, these sections detail the purposes for which 
the Board shall expend funds and how the Fund shall be managed. This 
interim rule permits the making of contracts and grants only.
    Sections 63.400 through 63.402 pertain to the books and records of 
the Board and the NSIIC, which the Secretary has access to and outlines 
the responsibilities for confidentiality.
    Sections 63.500 through 63.505 contain miscellaneous provisions 
necessary for the function of the NSIIC and the oversight of USDA.
    Pursuant to 5 U.S.C. 553, it is found and determined upon good 
cause that it is impracticable and contrary to the public interest to 
give preliminary notice prior to putting this rule into effect in order 
to establish the Board and the NSIIC program at the earliest possible 
date consistent with the 2008 Farm Bill.

List of Subjects in 7 CFR Part 63

    Administrative practice and procedure, Advertising, Consumer 
Information, Goat and goat products, Lamb and lamb products, Marketing 
agreements, Reporting and recordkeeping requirements.

0
For the reasons set forth in the preamble, chapter I of Title 7 is 
amended by adding part 63 to read as follows:

PART 63--NATIONAL SHEEP INDUSTRY IMPROVEMENT CENTER

Subpart A-General Provisions

Definitions

Sec.
63.1 Act.
63.2 Board.
63.3 Department or USDA.
63.4 Eligible entity.
63.5 Eligible organization.
63.6 Fiscal year.
63.7 Fund.
63.8 NSIIC.
63.9 Part.
63.10 Secretary.
63.11 Under Secretary for Rural Development.
63.12 Under Secretary for Research, Education, and Economics.
63.13 United States.

Board of Directors

63.100 Establishment and membership.
63.101 Nominations.
63.102 Nominee's agreement to serve.
63.103 Appointment.
63.104 Vacancies.
63.105 Nominating organizations.
63.106 Term of office.
63.107 Compensation.
63.108 Removal.
63.109 Procedure.
63.110 Powers and duties of the Board.
63.111 Prohibited activities.
63.112 Conflict of interest.

National Sheep Industry Improvement Center

63.200 NSIIC Establishment and purpose.

Revolving Fund

63.300 Establishment.
63.301 Use of fund.

Reports, Books, and Records

63.400 Books and records.
63.401 Use of information.
63.402 Confidentiality.

Miscellaneous

63.500 Compliance.
63.501 Patents, copyrights, inventions, trademarks, information, 
publications, and product formulations.
63.502 Personal liability.
63.503 Separability.
63.504 Amendments.
63.505 OMB control number.
Subpart B [Reserved]

    Authority:  7 U.S.C. 2008j.

Subpart A-General Provisions

Definitions

Sec.  63.1  Act.

    Act means section 375 of the Consolidated Farm and Rural 
Development Act, 7 U.S.C. 2008j, as amended by section 11009 of the 
Food, Conservation, and Energy Act of 2008 (Pub. L. 110-246).

Sec.  63.2  Board.

    Board means National Sheep Industry Improvement Center Board of 
Directors established under Sec.  63.100.

Sec.  63.3  Department or USDA.

    Department or USDA means the United States Department of 
Agriculture.

Sec.  63.4  Eligible entity.

    Eligible entity means an entity that promotes the betterment of the 
United States sheep or goat industries and that is a public, private, 
or cooperative organization; an association, including a corporation 
not operated for profit; a federally recognized Indian Tribe; or a 
public or quasi-public agency.

Sec.  63.5  Eligible organization.

    Eligible organization means any national organization that meets 
the criteria provided for in Sec.  63.105 as being eligible to submit 
nominations for membership on the Board.

Sec.  63.6  Fiscal year.

    Fiscal year means a calendar year or any other 12 month period as 
determined by the Board.

Sec.  63.7  Fund.

    Fund means the NSIIC Revolving Fund established in the United 
States Department of the Treasury that is available to the NSIIC 
without fiscal year limitation, to carry out the programs and 
activities authorized under the Act.

Sec.  63.8  NSIIC.

    NSIIC or Center means the National Sheep Industry Improvement 
Center established under Sec.  63.200.

Sec.  63.9  Part.

    Part means the rules and regulations issued pursuant to the Act 
that appear

[[Page 43035]]

in part 63 of Title 7 of the Code of Federal Regulations.

Sec.  63.10  Secretary.

    Secretary means the Secretary of Agriculture of the United States 
or any other 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.  63.11  Under Secretary for Rural Development.

    Under Secretary for Rural Development means the Under Secretary for 
Rural Development of the U.S. Department of Agriculture, or any other 
officer or employee of the Department designated by the Under Secretary 
to act in the Under Secretary's stead.

Sec.  63.12  Under Secretary for Research, Education, and Economics.

    Under Secretary for Research, Education, and Economics means the 
Under Secretary for Research, Education, and Economics of the U.S. 
Department of Agriculture, or any other officer or employee of the 
Department designated by the Under Secretary to act in the Under 
Secretary's stead.

Sec.  63.13  United States.

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

Board of Directors

Sec.  63.100  Establishment and membership.

    There is hereby established a National Sheep Industry Improvement 
Center Board. The Board is composed of seven voting members and two 
non-voting members. Voting members of the Board shall be appointed by 
the Secretary from nominations submitted in accordance with this part. 
The Board shall consist of the following:
    (a) Voting Members.
    (1) Four members shall be active producers of sheep or goats in the 
United States;
    (2) Two members shall have expertise in finance and management; and
    (3) One member shall have expertise in lamb, wool, goat, or goat 
product marketing.
    (b) Non-Voting Members.
    (1) One member shall be the Under Secretary of Agriculture for 
Rural Development, USDA; and
    (2) One member shall be the Under Secretary for Research, 
Education, and Economics, USDA.

Sec.  63.101  Nominations.

    All nominations authorized under this section shall be made in the 
following manner:
    (a) Nominations shall be obtained by the Secretary from national 
organizations eligible under Sec.  63.105. An eligible organization 
shall submit to the Secretary for consideration at least two 
nominations for one or more voting member seats on the Board. If two 
nominations for each voting member seat are not submitted by such 
organization(s), then the Secretary may solicit nominations from other 
sources.
    (b) After the establishment of the initial Board, USDA shall 
announce when a vacancy does or will exist. Nomination for subsequent 
Board members shall be submitted to the Secretary not less than sixty 
(60) days prior to the expiration of the terms of the members 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 Sec.  
63.104.
    (c) If more than one eligible organization exists, they may caucus 
and jointly nominate at least two qualified persons for each position. 
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 at least two nominees for each appointment to be made.

Sec.  63.102  Nominee's agreement to serve.

    Any 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 that may create a conflict of 
interest under Sec.  63.112; and
    (c) Withdraw from participation in deliberations, decision-making, 
or voting on matters which concern any relationship disclosed under 
paragraph (b) of this section.

Sec.  63.103  Appointment.

    From the nominations made pursuant to Sec.  63.101, the Secretary 
shall appoint the members of the Board.

Sec.  63.104  Vacancies.

    To fill any vacancy occasioned by the death, removal, resignation, 
or disqualification of any member of the Board, the Secretary shall 
appoint a successor from the most recent list of nominations for the 
position or the Secretary shall request nominations for a successor 
pursuant to Sec.  63.101 and such successor shall be appointed pursuant 
to Sec.  63.103.

Sec.  63.105  Nominating organizations.

    (a) In general. Nominations for voting members of the Board may be 
submitted by any national organization that the Secretary determines 
meets the eligibility criteria established under paragraph (b) of this 
section.
    (b) Basis for eligibility. A national organization is eligible to 
submit nominations for voting members on the Board if:
    (1) The membership of the organization consists primarily of active 
sheep or goat producers in the United States; and
    (2) The primary interest of the organization is the production of 
sheep or goats in the United States.

Sec.  63.106  Term of office.

    (a) The voting members of the Board shall serve for a term of three 
years; except that persons (other than the chairperson) appointed to 
the initial Board shall serve staggered terms of one, two, and three 
years, as determined by the Secretary.
    (b) No member may serve more than two consecutive full terms.

Sec.  63.107  Compensation.

    Board members shall serve without compensation, but shall be 
reimbursed for their reasonable travel, subsistence, and other 
necessary expenses incurred in performing their duties as members of 
the Board.

Sec.  63.108  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 acts 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 detrimental to 
the purposes of the Act.

Sec.  63.109  Procedure.

    (a) At a Board meeting, it will be considered a quorum when a 
simple majority of the voting representatives are present.
    (b) A decision of the Board shall be made by a majority of the 
voting members of the board.
    (c) The Board shall meet not less than once each fiscal year at the 
call of the chairperson or at the request of the executive director.
    (d) The location of the meeting shall be established by the Board.
    (e) A chairperson shall be selected from among the voting members 
of the Board and all serve a term of office of two years.

[[Page 43036]]

    (f) All Board members and the Secretary will be notified at least 
30 days in advance of all Board meetings, unless an emergency meeting 
is declared.
    (g) In lieu of voting at a properly convened meeting and, when in 
the opinion of the chairperson of the Board such action is necessary, 
the Board may take action if supported by a simple majority of the 
Board representatives by mail, telephone, electronic mail, facsimile, 
or any other means of communication. In that event, all representatives 
must be notified and provided the opportunity to vote. Any action so 
taken shall have the same force and effect as though such action had 
been taken at a properly convened meeting of the Board. All telephone 
votes shall be confirmed promptly in writing. All votes shall be 
recorded in Board minutes.
    (h) There shall be no voting by proxy.
    (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.  63.110  Powers and duties of the Board.

    The management of the NSIIC shall be vested in the Board of 
Directors. The Board shall have the following powers and duties:
    (a) Be responsible for the general supervision of the NSIIC;
    (b) Review any grant or contract agreement to be made or entered 
into by the NSIIC and any financial assistance provided to the NSIIC;
    (c) Make the final decision, by majority vote, on whether or not to 
provide grants to an eligible entity in accordance with the strategic 
plan;
    (d) Develop and establish a budget plan and long-term operating 
plan to carry out the goals of the NSIIC;
    (e) Adopt, and amend as appropriate, bylaws as necessary for the 
proper management and functioning of the NSIIC;
    (f) Provide a system of organization to fix responsibility and 
promote efficiency in carrying out the functions of the NSIIC;
    (g) Appoint and establish compensation for an executive director, 
who will serve at the pleasure of the Board, to be the chief executive 
officer of the NSIIC;
    (h) Appoint other officers, attorneys, employees, and agents as 
necessary and set forth their respective duties and powers;
    (i) Delegate, by resolution, to the chairperson, the executive 
director, or any other officer or employee any function, power, or duty 
of the Board--other than voting on a grant, contract, agreement, 
budget, or annual strategic plan; and
    (j) Consult with the following entities to carry out this part:
    (1) State departments of agriculture;
    (2) Federal departments and agencies;
    (3) Nonprofit development corporations;
    (4) Colleges and universities;
    (5) Banking and other credit-related agencies;
    (6) Agriculture and agribusiness organizations, and
    (7) Regional planning and development organizations.

Sec.  63.111  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 under Sec.  63.112;
    (b) Using funds 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 the Order; and
    (c) Any activity that is false, misleading, or disparaging to 
another agricultural commodity.

Sec.  63.112  Conflict of interest.

    (a) In general. Members of the Board shall not vote on any 
particular matter pending before the Board in which, to the knowledge 
of the member, an interest is held by the member, any spouse of the 
member, any child of the member, any partner of the member, any 
organization in which the member is serving as an officer, director, 
trustee, partner, or employee; or any person with whom the member is 
negotiating or has any arrangement concerning prospective employment or 
with whom the member has a financial interest, except as provided in 
paragraph (c) of this section.
    (b) Validity of action. An action by a member of the Board that 
violates Sec.  63.112 (a) shall not impair or otherwise affect the 
validity of any otherwise lawful action by the Board.
    (c) Disclosure. If a member of the Board makes full disclosure of 
an interest and, prior to any participation by the member, the Board 
determines, by majority vote, that the interest is too remote or too 
inconsequential to affect the integrity of any participation by the 
member, the member may participate in the matter relating to the 
interest, except as provided in paragraph (d) of this section. A member 
that discloses an interest under section Sec.  63.112(a) shall not vote 
on a determination of whether the member may participate in the matter 
relating to the interest.
    (d) Remands. The Secretary may vacate and remand to the Board for 
reconsideration any decision made if the Secretary determines that 
there has been a violation of this section or any conflict of interest 
provision of the bylaws of the Board with respect to the decision.
    (1) In the case of any violation and remand of a funding decision 
to the Board, the Secretary shall inform the Board of the reasons for 
the remand.
    (2) If a decision with respect to the matter is remanded to the 
Board by reason of a conflict of interest faced by a Board member, the 
member may not participate in any subsequent decision with respect to 
the matter.

National Sheep Industry Improvement Center

Sec.  63.200  NSIIC Establishment and purpose.

    (a) There is hereby established a National Sheep Industry 
Improvement Center. The purpose of the Center shall be to:
    (1) Promote strategic development activities and collaborative 
efforts by private and State entities to maximize the impact of Federal 
assistance to strengthen and enhance production and marketing of sheep 
or goat products in the United States;
    (2) Optimize the use of available human capital and resources 
within the sheep or goat industries;
    (3) Provide assistance to meet the needs of the sheep or goat 
industry for infrastructure development, business development, 
production, resource development, and market and environmental 
research;
    (4) Advance activities that empower and build the capacity of the 
U.S. sheep or goat industry to design unique responses to the special 
needs of the sheep or goat industries on both a regional and national 
basis; and
    (5) Adopt flexible and innovative approaches to solving the long-
term needs of the United States sheep and goat industry.
    (b) The NSIIC shall submit to the Secretary an annual strategic 
plan for the delivery of financial assistance provided by the NSIIC. A 
strategic plan shall identify:
    (1) Goals, methods, and a benchmark for measuring the success of 
carrying out the plan and how the plan relates to the national and 
regional goals of the NSIIC;
    (2) The amount and sources of Federal and non-Federal funds that 
are available for carrying out the plan;

[[Page 43037]]

    (3) Funding priorities;
    (4) Selection criteria for funding; and
    (5) A method of distributing funding.

Revolving Fund

Sec.  63.300  Establishment.

    The NSIIC Revolving Fund established in the Treasury shall be 
available to the NSIIC, without fiscal year limitation, to carry out 
the authorized programs and activities of the NSIIC under this part. 
There shall be deposited in the Fund:
    (a) Such amounts as may be appropriated, transferred, or otherwise 
made available to support programs and activities of the NSIIC;
    (b) Payments received from any source for products, services, or 
property furnished in connection with the activities of the NSIIC;
    (c) Fees and royalties collected by the NSIIC from licensing or 
other arrangements relating to commercialization of products developed 
through projects funded, in whole or part, by grants or contracts 
executed by the NSIIC;
    (d) Donations or contributions accepted by the NSIIC to support 
authorized programs and activities. Such contributions shall be free 
from any encumbrance by the donor and the NSIIC shall retain complete 
control of their use; and
    (e) Any other funds acquired by the NSIIC.

Sec.  63.301  Use of fund.

    The NSIIC shall use the Fund to:
    (a) Make grants to eligible entities in accordance with a strategic 
plan submitted under Sec.  63.310 of this part. Specifically, amounts 
in the Fund may be used to:
    (1) Participate with Federal and State agencies in financing 
activities that are in accordance with the strategic plan, including 
participation with several States in a regional effort;
    (2) Participate with other public and private funding sources in 
financing activities that are in accordance with the strategic plan, 
including participation in a regional effort;
    (3) Accrue interest;
    (4) Serve broad geographic areas and regions of diverse production, 
to the maximum extent practicable;
    (5) Only to supplement and not supplant Federal, State, and private 
funds expended for rural development;
    (6) For administration purposes, with a maximum 3 percent of the 
NSIIC Fund balance at the beginning of each fiscal year for the 
administration of the NSIIC; and
    (b) Provide funds to eligible entities contingent upon that entity 
agreeing to account for the amounts using generally accepted accounting 
principles and to provide access to the Secretary for inspection and 
audit of such records.

Reports, Books, and Records

Sec.  63.400  Books and records.

    The Board and NSIIC shall:
    (a) Maintain such books and records, which shall be made available 
to the Secretary for inspection and audit as is appropriate for the 
administration or enforcement of the Act or rules and regulations 
issued thereunder;
    (b) Prepare and submit to the Secretary, from time to time, such 
reports as the Secretary may prescribe; and
    (c) Account for the receipt and disbursement of all funds entrusted 
to it. The NSIIC shall cause its books and records to be audited by an 
independent auditor at the end of each fiscal year, and a report of 
such audit to be submitted to the Secretary.

Sec.  63.401  Use of information.

    Information from records or reports required pursuant to this part 
shall be made available to the Secretary as is appropriate for the 
administration or enforcement of the Act or rules and regulation issued 
thereunder.

Sec.  63.402  Confidentiality.

    All information obtained from books, records, reports, or any other 
material obtained under the Act and this part, shall be kept 
confidential by all persons, including employees and former employees 
of the NSIIC. Nothing in this section shall be deemed to prohibit the 
issuance of general statements based upon the reports or the 
statistical data, which statements do not identify the information 
furnished by any entity.

Miscellaneous

Sec.  63.500  Compliance.

    The Secretary shall review and monitor compliance by the Board and 
the NSIIC with the Act and this part.

Sec.  63.501  Patents, copyrights, inventions, trademarks, information, 
publications, and product formulations.

    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. Should patents, copyrights, 
inventions, trademarks, information, publications, or product 
formulations be developed through the use of funds collected by the 
Board under this part 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 this paragraph.

Sec.  63.502  Personal liability.

    No member or employee of the Board shall be held personally 
responsible, either individually or jointly, in any way whatsoever to 
any person for errors in judgment, mistakes, or other acts, either of 
commission or omission, as such member or employee, except for acts of 
dishonesty or willful misconduct.

Sec.  63.503  Separability.

    If any provision of the part is declared invalid or the 
applicability thereof to any person or circumstance 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.  63.504  Amendments.

    Amendments to this part may be proposed, from time to time, by the 
Board or by any interested persons affected by the provisions of the 
Act, including the Secretary.

Sec.  63.505  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.

Subpart B [Reserved]

    Dated: July 19, 2010.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. 2010-18096 Filed 7-22-10; 8:45 am]
BILLING CODE 3410-02-P
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