71306 Federal Register / Vol. 88, No. 198 / Monday, October 16, 2023 / Proposed Rules 

eligibility requirements, and other 

pertinent information. Such sources of 

publicity may include, but are not 

limited to, print, radio, email 

communications, and social media; and 

(2) By such other means as the Agent 

may deem advisable. 

(d) Distribute to Eligible Natural Grass 

Sod Producers whose names and 

contact information are known to the 

Referendum Agent, the instructions on 

voting, a ballot, and a summary of the 

terms and conditions of the proposed 

Natural Grass Sod Promotion, Research, 

and Information Order or the 

continuance of the Natural Grass Sod 

Promotion, Research, and Information 

Order, as the case may be. No Person 

who claims to be an Eligible Natural 

Grass Sod Producer shall be refused a 

ballot; 

(e) At the end of the voting period, 

collect, open, number, and review the 

ballots and tabulate the results in the 

presence of an agent of a third party 

authorized to monitor the Referendum 

process; 

(f) Prepare a report on the 

Referendum; and 

(g) Announce the results to the public. 

§ 1240.85 Subagents. 

The Referendum Agent may appoint 

any individual or individuals necessary 

or desirable to assist the Agent in 

performing such Agent’s functions of 

this Subpart. Each individual so 

appointed may be authorized by the 

Agent to perform any or all of the 

functions which, in the absence of such 

appointment, shall be performed by the 

Agent. 

§ 1240.86 Ballots. 

The Referendum Agent and subagents 

shall accept all ballots cast. However, if 

an Agent or subagent deems that a ballot 

should be challenged for any reason, the 

Agent or subagent shall endorse above 

their signature, on the ballot, a 

statement to the effect that such ballot 

was challenged, by whom challenged, 

the reasons therefore, the results of any 

investigations made with respect 

thereto, and the disposition thereof. 

Ballots deemed invalid under this 

Subpart shall not be counted. 

§ 1240.87 Referendum report. 

Except as otherwise directed, the 

Referendum Agent shall prepare and 

submit to the Administrator a report on 

the results of the Referendum, the 

manner in which it was conducted, the 

extent and kind of public notice given, 

and other information pertinent to the 

analysis of the Referendum and its 

results. 

§ 1240.88 Confidential information. 

The ballots and other information or 

reports that reveal, or tend to reveal, the 

vote of any Natural Grass Sod Producer 

and the voter list shall be strictly 

confidential and shall not be disclosed. 

§ 1240.89 OMB control number. 

The control number assigned to the 

information collection requirement in 

this Subpart by the Office of 

Management and Budget pursuant to the 

Paperwork Reduction Act of 1995, 44 

U.S.C. is OMB control number 0581– 

NEW. 

Melissa Bailey, 

Associate Administrator, Agricultural 

Marketing Service. 

[FR Doc. 2023–22508 Filed 10–13–23; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 1240 

[Doc. No. AMS–LP–21–0028] 

RIN 0581–AE07 

Natural Grass Sod Promotion, 

Research, and Information Order 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule invites 

comments on the establishment of an 

industry-funded promotion, research, 

and information program for natural 

grass sod products. The proposed 

Natural Grass Sod Promotion, Research, 

and Information Order (Order) was 

submitted to the U.S. Department of 

Agriculture (USDA) by Turfgrass 

Producers International (TPI), a group of 

natural grass sod producers. The 

proposed Order also announces the 

Agricultural Marketing Service’s (AMS) 

intent to request approval from the 

Office of Management and Budget 

(OMB) of new information collection 

requirements to implement the program. 

DATES: Comments must be received on 

or before December 15, 2023 to be 

assured of consideration. Pursuant to 

the Paperwork Reduction Act (44 U.S.C. 

chapter 35) (PRA), comments of the 

information collection burden that 

would result from this proposal must be 

received on or before December 15, 2023 

to be assured of consideration. 

ADDRESSES: Interested persons are 

invited to submit comments concerning 

this document by using the electronic 

process available at https://

www.regulations.gov. Written comments 

may also be submitted to Jeana 

Harbison, Director; Research and 

Promotion Division; Livestock and 

Poultry Program, AMS, USDA; Room 

2625–S, STOP 0251, 1400 Independence 

Avenue SW, Washington, DC 20250– 

0251. All comments should reference 

the document number and the date and 

page number of this issue of the Federal 

Register. All comments received will be 

posted without change, including any 

personal information provided, at 

https://www.regulations.gov and will be 

included in the record and made 

available to the public. 

Pursuant to the PRA, 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, should be sent 

to the address above. In addition, 

comments concerning the information 

collection should be sent to the Desk 

Office for Agriculture; Office of 

Information and Regulatory Affairs; 

Office of Management and Budget; New 

Executive Office Building; 725 17th 

Street NW, Room 725; Washington, DC 

20503. 

FOR FURTHER INFORMATION CONTACT: 

Jeana Harbison; Director; Research and 

Promotion Division; Telephone: (202) 

527–3398 or Email: Jeana.M.Harbison@

usda.gov. 

SUPPLEMENTARY INFORMATION: 

This proposed rule is issued pursuant 

to the Commodity Promotion, Research, 

and Information Act of 1996 (the Act) (7 

U.S.C. 7411–7425). 

Executive Order 12866, 13563, and 

14094 

Executive Orders (E.O.) 12866 and 

13563 direct agencies to assess costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, 

reducing costs, harmonizing rules, and 

promoting flexibility. Executive Order 

14094 updates and modernizes E.O. 

12866 and directs agencies to conduct 

proactive outreach to engage interested 

and affected parties through a variety of 

means, such as through field offices, 

and alternative platforms and media. 

This rulemaking has been designated as 

not a ‘‘significant regulatory action’’ 

under section 3(f) of Executive Order 

12866. Accordingly, the Office of 


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Federal Register / Vol. 88, No. 198 / Monday, October 16, 2023 / Proposed Rules 71307 

Management and Budget (OMB) has not 

reviewed this action. 

Executive Order 12988 

This proposed rule has been reviewed 

under E.O. 12988, Civil Justice Reform. 

It is not intended to have retroactive 

effect. Section 524 of the Act (7 U.S.C. 

7423) provides that it 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 (7 U.S.C. 

7418), 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 

United States 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 13175 

This proposed rule has been reviewed 

under E.O. 13175—Consultation and 

Coordination with Indian Tribal 

Governments, which requires Federal 

agencies to consult and coordinate with 

Tribes on a government-to-government 

basis on: (1) policies that have Tribal 

implication, including regulation, 

legislative comments, or proposed 

legislation; and (2) other policy 

statements or actions that have 

substantial direct effects on one or more 

Indian Tribes, on the relationship 

between the Federal Government and 

Indian Tribes, or on the distribution of 

power and responsibilities between the 

Federal Government and Indian Tribes. 

AMS has assessed the impact of this 

proposed rule on Indian Tribes and 

determined that this rulemaking would 

not have Tribal implications that require 

consultation under E.O. 13175. AMS 

hosts a quarterly teleconference with 

Tribal leaders where matters of mutual 

interest regarding the marketing of 

agricultural products are discussed. 

Information about the proposed 

regulation will be shared during an 

upcoming quarterly call, and Tribal 

leaders will be informed about the 

proposed regulation and the 

opportunity to submit comments. AMS 

will work with the USDA Office of 

Tribal Relations to ensure meaningful 

consultation is provided as needed with 

regards to the regulations. 

Background 

The proposed Order is an industry 

effort to establish a national program 

with a Board composed of natural grass 

sod producers and one public member 

to promote and strengthen consumer 

demand for natural grass. Initially, 

producers would pay one-tenth (1/10th) 

of one penny ($0.01) per square foot, or 

the equivalent thereof, of natural grass 

sod products. No natural grass sod 

producer would be exempt from paying 

the assessment unless producing a 

certified organic product under the 

National Organic Program. A 

referendum to determine whether 

producers favor the Order would take 

place before the Order would go into 

effect. This proposed rule also 

announces AMS’s intent to request 

approval by the OMB of new 

information collection requirements to 

implement the program. 

Authority in 1996 Act 

The proposed Order is authorized by 

the Act (7 U.S.C. 7411–7425), which 

authorizes USDA to establish 

agricultural commodity research and 

promotion orders that may include a 

combination of promotion, research, 

industry information, and consumer 

information activities funded by 

mandatory assessments. Consistent with 

section 512 of the Act (7 U.S.C. 7411), 

the proposed Order would maintain and 

expand existing markets and develop 

new markets and uses for natural grass. 

Section 515 of the Act (7 U.S.C. 7413), 

provides for establishment of a Board 

composed of producers and one public 

member. As defined in section 513 of 

the Act (7 U.S.C. 7412), agricultural 

commodities include ‘‘products 

processed or manufactured from 

products specified in the preceding 

subparagraphs, as determined 

appropriate by the Secretary.’’ 7 U.S.C. 

7412(1)(F). The Act also includes 

provisions that authorize the Secretary 

to tailor programs to the specific 

characteristics of different commodities, 

including section 514 of the Act (7 

U.S.C. 7413) that provides USDA 

discretion in determining to whom the 

Order should apply among the 

following: (1) producers, (2) first 

handlers and others in the marketing 

chain as appropriate, and (3) importers 

(if imports are subject to assessments). 

7 U.S.C. 4713(a)(1). Natural grass falls 

within the Act’s definition of an 

agricultural commodity, and natural 

grass sod producers fall within the 

categories of ‘‘first handlers’’. Section 

516 of the Act (7 U.S.C. 7415), states 

that an Order may include different 

payment and reporting schedules; 

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 (7 

U.S.C. 7417) provides for a referendum 

to ascertain approval of an order to be 

conducted either prior to it going into 

effect or within 3 years after 

assessments first begin under the order. 

The Act also provides three different 

methods for determining approval of an 

order in a referendum. 

Industry Overview 

The 2017 survey by USDA-National 

Agricultural Statistics Service (NASS) 

places the value of the U.S. natural grass 

sod industry at over $1.1 billion, 

produced on 1,465 farms totaling 

339,451 acres. These farms exist 

nationwide with documented active 

natural grass sod farms in no fewer than 

49 States. The widespread distribution 

of natural grass sod farms is due in part 

to the diversity of natural grass species, 

allowing them to adapt to different 

climates. Grass species such as 

Bentgrass, Fine fescue, Tall fescue, and 

Kentucky bluegrass thrive in USDA 

plant hardiness zones 1a through 6a, 

while Bermudagrass, Buffalograss, 

Centipedegrass, Seashore Paspalum, St. 

Augustinegrass, and Zoysiagrass 

perform well in zones 7a through 10a. 

There are also various species of native 

grasses and other adapted grasses that 

are gaining popularity in various 

regions. All these products are produced 

by natural grass sod farmers throughout 

the United States and are included in 

the definition of natural grass products 

as indicated in this Order. 

The $1.1 billion of natural grass sod 

produced in 2017 by U.S. natural grass 

sod farms enters the market where it 

contributes significantly to the 

industries that focus on sustainable 

growth through public and private 

initiatives supporting environmentally 

responsible investments, as well as 

those industries that support it. These 

sectors include the home lawn care, 

sports field, golf course, roadside, and 

other markets that are essential 


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71308 Federal Register / Vol. 88, No. 198 / Monday, October 16, 2023 / Proposed Rules 

1Waltz, Clint, 2018 Sod Producers Report, 

Annual Survey Examines Inventory and Price. UAC 

Winter Magazine, Winter 2018, at 44. See also 

Miller, Grady, 2018 Sod Producers Report for North 

Carolina, Turffiles.ncsu.edu, https://

www.turffiles.ncsu.edu/2018/04/2018-sodproducers-report-for-north-carolina/ (last visited 

Jun. 9, 2021); Richards, Steve. 2018 SC Sod 

Producers Survey Results (2018, Clemson 

University). 

2National Association of Landscape Professionals 

(NALP), Landscape Industry Statistics, 

Landscapeprofessionals.org, https://

www.landscapeprofessionals.org/LP/About/ 

Industry-Statistics/LP/Media/landscape-industrystatistics.aspx (last visited Jun. 9, 2021). 

3 2020 Synthetic Turf Market Report for North 

America, Synthetic Turf Council https://

www.syntheticturfcouncil.org/news/512350/ 

Synthetic-Turf-Council-STC-Releases-2020- 

Synthetic-Turf-Market-Report-for-NorthAmerica.htm (last visited June 2, 2021). 

components of local economies 

nationwide. Seed industries, primarily 

in the Midwest and Pacific Northwest, 

supply seed for sod farms growing coolseason grasses including ryegrass, 

fescues, bluegrasses, and native or 

adapted mixtures. This industry 

produces over 600 million pounds of 

natural grass seed in Oregon alone, 

much of which is distributed to U.S. 

natural grass sod farms to produce sod 

that is then sold to other segments of the 

green industry. In addition to 

contributing to rural agricultural 

economies, natural grass sod also 

contributes significantly to urban 

economies. In states that track sod sales 

data, landscape contractors in urban and 

suburban areas purchase between 39.2 

percent and 68.2 percent of total sales, 

followed by sales to athletic complexes 

and golf courses that make up between 

18.2 percent and 44.5 percent of total 

sales.1 The supply chain that moves 

much of this natural grass sod further 

contributes to local economies through 

home improvement centers, lawn and 

landscaping services, equipment and 

materials purchases, and more. It is 

estimated that the U.S. lawn care 

industry alone was worth up to $93 

billion in 2018, employed more than 1 

million people, and represented 513,305 

businesses.2

Need for a Program 

The need for a national research and 

promotion program is evidenced by 

trends that discourage consumers from 

using natural grass products. Natural 

grass sod producers in many areas of the 

United States are experiencing social 

and market trends that are increasingly 

impacting consumer perception and the 

value of natural grass. These trends can 

ignore the value of natural grass lawns 

and athletic fields in urban and 

suburban environments and have 

resulted in consumers reducing the 

amount of grass they manage and/or 

replacing it with other products. The 

most common alternative for athletic 

fields in schools, municipal parks, and 

open grounds is often plastic, artificial 

turf. However, in home lawns or public 

spaces, these alternative products also 

include patios, decks, mulch, concrete 

or brick pavers, and rubberized 

playgrounds. Data from the 2020 

Synthetic Turf Council Market Report 

for North America, which is the primary 

competitor for natural grass in public 

spaces, school grounds, and parks, 

indicates that the synthetic turf industry 

has grown 15 percent since 2017 with 

a current value of $2.7 billion. It also 

states that it will continue to grow at a 

rate of 5.7 percent through 2022, with 

sports fields representing 63 percent of 

the market and rapid growth in 

landscape applications.3 The landscape 

and sports field markets represent the 

two largest customer segments for 

natural grass sod producers for those 

who report data on customers. 

As proposed by the industry, a natural 

sod checkoff would help educate 

consumers and other stakeholders about 

the value that plants, including natural 

grass, impart on urban and suburban 

areas. Plants, including natural grass, 

are often viewed as requiring large 

amounts of inputs from water, fertilizer, 

and chemicals with few valuable 

outputs. As a result, when balancing 

natural grass systems on inputs alone 

with no recognition or assessment of 

outputs, the resulting analysis often 

results in an inaccurate determination 

that natural grasses are resource 

intensive. However, when accounting 

for new technologies such as droughttolerant varieties, reduced mowing, and 

improvements in irrigation, as well as 

the many ecosystem services (carbon 

sequestration, oxygen production, 

groundwater recharge, filtering of 

pollutants, stormwater and runoff 

reduction) that are provided by lawns, 

parks, and roadsides, a more accurate 

characterization is that managed 

landscapes, including natural grass sod, 

provide many benefits in urban and 

suburban areas. 

The aforementioned perception of 

natural grass is embedded in language 

used by numerous governing bodies that 

produce building codes and standards 

for private and public spaces. These 

codes provide incentives for builders to 

reduce or remove natural grass from 

residential, business, and public spaces 

with the intent of reducing inputs. 

However, many such requirements do 

not factor in the many benefits that 

plants, including natural grasses, 

provide to these areas or recognize that 

simply eliminating them from the 

system is not a sustainable approach for 

urban and suburban construction. 

Artificial turf is the primary 

competitor to natural grass for athletic 

fields on school grounds, public parks, 

and collegiate or professional sports 

venues. The growth of the artificial turf 

market is increasingly reducing the 

market for natural grass sports fields. 

TPI is the proponent group that 

submitted the proposed Order to USDA 

on June 18, 2021, requesting the 

establishment of a natural grass sod 

research and promotion program. Since 

at least 2013, U.S. natural grass sod 

producers have been considering the 

implementation of a natural grass sod 

research and promotion program. 

Although State and local sod 

associations have explored the option of 

establishing voluntary research and 

promotion programs in previous years, 

they were deemed impractical and 

unsustainable without the 

administration and enforcement 

provided by USDA’s AMS through the 

authority provided in the Act. In 2017, 

TPI, a trade association representing 

natural grass sod farmers, equipment 

manufacturers, seed producers, and 

other industry participants with 

members located in almost every U.S. 

State and over 30 countries, decided to 

formally investigate USDA’s research 

and promotion programs. From 2017 to 

2019, TPI spoke with representatives at 

trade associations with aligned interests, 

USDA’s AMS, a public policy 

consultant, and legal counsel to 

determine if a research and promotion 

program for the U.S. natural grass sod 

industry was feasible. After much 

deliberation and interest from U.S. 

natural grass sod producers, the 

industry, led by TPI, decided that the 

time was right for the natural grass sod 

industry to pursue a national research 

and promotion program. 

In 2019, after visiting with the trade 

associations with aligned interests and 

USDA’s AMS, the industry decided to 

host a webinar to get feedback from 

natural grass sod producers regarding 

their interest in developing a national 

grass sod research and promotion 

program. On May 19th, 2020, U.S. sod 

producers participated in a 2-hour 

online seminar to learn more about 

USDA’s research and promotion 

programs. After this webinar, attendees 

were polled to determine their interest 

in developing a national research and 

promotion program for the natural grass 

sod industry and 64 percent stated they 

were very interested, 20 percent stated 

they were interested, 13 percent stated 

they were interested in learning more, 

and only 3 percent stated they were not 


ddrumheller on DSK120RN23PROD with PROPOSALS1
Federal Register / Vol. 88, No. 198 / Monday, October 16, 2023 / Proposed Rules 71309 

4 Industry Analysis and Justification for Natural 

Grass Sod Promotion, Research, and Information 

Order, Turfgrass Producers International https://

www.ams.usda.gov/sites/default/files/media/ 

SodIndustryAnalysisandJustificationDraft.pdf (last 

visited June 28, 2021). 

5See 2017 Census of Agriculture, USDA National 

Agricultural Statistics Service https://

www.nass.usda.gov/Publications/AgCensus/2017/ 

index.php (last visited Nov. 16, 2020). 

interested.4 Attendees in this webinar 

were also polled to determine their 

interest in serving on the sod research 

and promotion drafting committee, of 

which 14 sod producers were selected. 

This drafting committee has finalized 

the proposed Order contained herein for 

submission to USDA. The proposed 

Order contains all of the relevant 

information on research and promotion 

programs, including the proposed 

assessment rate that was determined 

through an analysis of U.S. natural grass 

sod production farm and acreage data 

from the 2017 USDA–NASS Census of 

Agriculture along with internal data 

from TPI. A wide range of farm sizes, 

annual acres harvested, and assessment 

rates were assembled for analysis to 

determine an assessment rate that 

would (1) be amenable to sod producers; 

(2) not be overly burdensome; and (3) 

result in enough funds to have an 

impact on the market. At the end of 

these discussions, the entire formation 

committee of 14 members of different 

farm sizes, regions, and products all 

agreed that the proposed assessment 

rate met each of those conditions. 

Specific Provisions 

The proposed Order is authorized 

under the 1996 Act which authorizes 

USDA to establish agricultural 

commodity research and promotion 

orders and is consistent with existing 

orders for other commodities. The 

proposed order is also a part of an 

industry effort to establish a national 

program with a Board composed of 

natural grass sod producers and one 

public member to promote and 

strengthen consumer demand for 

natural grass. Many parties including 

USDA’s AMS, a public policy 

consultant, and private legal counsel 

were all consulted and determined that 

a research and promotion program for 

the U.S. natural grass sod industry was 

feasible. In addition to this 

determination, the industry hosted a 2- 

hour webinar where feedback was given 

from natural grass sod producers 

regarding their interest in developing a 

national grass sod research and 

promotion program. More than a 

majority (64 percent) of the attendees 

stated that they were very interested in 

establishing a research and promotion 

program for U.S. natural grass sod while 

only 3 percent stated they were not 

interested. Fourteen sod producers who 

attended the webinar created the sod 

research and promotion drafting 

committee, which drafted the proposed 

Order that contains all the relevant 

information on research and promotion 

programs. 

Because the regulatory text proposed 

herein contains the complete proposed 

Order, this section will highlight key 

proposed provisions. 

Definitions 

Pursuant to section 513 of the Act (7 

U.S.C. 7412), § 1240.20 of the proposed 

Order defines certain terms that would 

be used throughout the Order. Several of 

the terms are common to all research 

and promotion programs authorized 

under the Act while other terms are 

specific to the proposed natural grass 

sod Order. 

Proposed § 1240.20 would define the 

term ‘‘Act’’ to mean the Commodity 

Promotion, Research, and Information 

Act of 1996 (7 U.S.C. 7412), and any 

amendments thereto. 

This proposed Order would require 

natural grass sod producers to pay 

assessments toward the Natural Grass 

Sod Research and Promotion program. 

Therefore, ‘‘natural grass sod producer’’ 

is defined as any person who produces 

natural grass sod products in the United 

States. 

The proposed Order defines ‘‘Natural 

Grass’’ as a plant species in the Poaceae 

family, or living plants in other taxa 

serving a similar purpose, as often 

found in sites such as lawns, sports 

fields, golf courses, parks, cemeteries, 

roadsides, and others. 

The term ‘‘natural grass sod product’’ 

refers to natural grass produced for 

retail, wholesale, or commercial sale, 

including monostands or blends or 

mixtures of Bentgrass, Bermudagrass, 

Buffalograss, Centipedegrass, Fine 

fescue, Kentucky bluegrass, Ryegrass, 

Seashore Paspalum, St. Augustinegrass, 

Tall fescue, Zoysiagrass, Bahiagrass, 

other native or adapted plants harvested 

and sold as sod, and products 

containing natural grass with artificial 

elements that are sold as sod. For 

purposes of this Order, natural grass sod 

product excludes all artificial and 

synthetic turf or grass products, natural 

grass seed, sprigs, and plugs. 

Establishment of the Board 

Pursuant to section 515 of the Act (7 

U.S.C. 7413), §§ 1240.30 through 

1240.39 of the proposed Order detail the 

establishment and membership of the 

proposed Natural Grass Sod Board, 

nominations, appointments, the term of 

office, removal and vacancies, 

procedures, compensation and 

reimbursement, powers and duties, and 

prohibited activities. 

Section 1240.30(b) specifies the Board 

would be composed of 11 members. 

Three members would represent North/ 

Cool-Season Region, four would 

represent the South/Warm-Season 

Region, three would represent the 

Transition Zone/California Region, and 

one would be a public member. See 

table 1 below for a detailed list of States 

in each region. The total number of 

Board members could not be increased. 

The division of representation would be 

intended to reflect the relative 

percentage square footage of 

assessments paid by natural grass sod 

producers into the research and 

promotion program. See table 1 for a 

summary of geographical distribution of 

farms, acres, and receipts. At least once 

every 5 years but no more frequently 

than once every 3 years, the Board 

would review the geographical 

distribution of the square footage of 

natural grass sod products sold within 

the United States. Any changes in Board 

composition implemented by the 

Secretary would be made through 

rulemaking. All Board members would 

be appointed by the Secretary from 

nominations as set forth in the proposed 

§ 1240.31. 

TABLE 1—FARMS, ACRES AND SALES BY PROPOSED REGIONS 5

Region Number of 

members States Farms Acres Sales 

North/Cool Season ........... 3 AK, CO, CT, DE, ID, IL, IN, IA, ME, MA, MI, MN, MT, NE, NH, 

NJ, NY, ND, OH, OR, PA, RI, SD, UT, VT, WA, WI, WY.

508 75,151 $282,742,266 

South/Warm Season ......... 4 AL, AZ, FL, GA, HI, LA, MS, NV, NM, SC, TX, US Territories ....... 609 177,179 563,044,248 

Transition Zone/California 3 AR, CA, DC, KS, KY, MD, MO, NC, OK, TN, VA, WV ................... 343 84,068 292,805,000 


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Any natural grass sod producer who 

does not have outstanding assessments 

may seek nomination for any vacant 

position in the region they produce and 

sell natural grass sod products. 

Nominees that produce and sell in 

multiple regions may seek nomination 

in one region of their choice. To seek 

nomination to the Board, the interested 

natural grass sod producer would 

provide the Board a short background 

statement outlining their qualifications. 

Any public member interested in 

seeking nomination would provide the 

Board a short background statement 

outlining their qualifications. 

Section 1240.32 of the proposed 

Order would specify the nominee’s 

agreement to serve. Natural grass sod 

producers and public members 

nominated to serve on the Board would 

be required to submit to the Secretary a 

written agreement to serve on the Board 

if appointed by the Secretary, disclose 

any relationship with any natural grass 

promotion entity or organization that 

has been or is being considered for a 

contractual relationship with the Board, 

and withdraw from participation in 

deliberations, decision-making, and 

voting on matters that concern the 

relationship of an entity or organization 

considered for a contractual 

relationship. 

Section 1240.33 of the proposed 

Order would specify the appointments 

by the Secretary and terms of office, 

respectively. 

Except for the initial Board, the Board 

members would serve 3 years or until 

the Secretary selects his or her 

successor. The initial Board member 

terms would be staggered at 1, 2, and 3 

years. Each region initial would have 

one member who serves 2-year terms 

and two members who serve 3-year 

terms. Additionally, the South/WarmSeason Region would have one member 

who serves a 2-year term. The public 

member initial term would be a 3-year 

term. The Secretary would determine 

which of the initial members shall serve 

a term of 1, 2, or 3 years. Members who 

serve on the initial Board would be 

eligible to serve a second term of 3 

years. 

Sections 1240.34 and 1240.35 of the 

proposed Order would specify reasons 

for removal and how vacancies would 

be filled. The Secretary would be able 

to remove a Board member if he or she 

determines there is failure or refusal by 

the Board member to perform his or her 

duties properly or if the Board member 

engages in an act of dishonesty or 

willful misconduct. Refusing to follow 

the Act’s and Order’s purpose would 

also be a reason for removal. If a 

member is removed from office or 

resigns, the position would 

automatically become vacant. If a 

member becomes disqualified for 

ceasing to produce natural grass or 

ceases to do business in the region he 

or she represents, this position would be 

vacated within 6 months from the date 

of disqualifying event. 

Section 1240.36 of the proposed 

Order would specify procedures of the 

Board. A majority of voting Board 

members present at a meeting would 

constitute a quorum. Each voting 

member of the Board would be entitled 

to one vote on most matters put to the 

Board and the motion would carry if 

supported by a simple majority of the 

total votes. Recommendations to change 

the assessment rate, adopt a budget, or 

call for a referendum would require 

affirmation by two-thirds (2⁄3) of the 

Board members. When, in the opinion 

of the chairperson of the Board, such 

action is considered necessary, the 

members could vote by internet service, 

videoconference, teleconference, or any 

other means of communication. Actions 

taken under these procedures would be 

valid only if all members were notified 

of the meeting and all members were 

provided the opportunity to vote. Proxy 

voting would not be permitted. All votes 

would be recorded in Board minutes. 

The procedures for conducting Board 

meetings would be established by the 

Board and approved by the Secretary. 

Section 1240.37 of the proposed 

Order would specify that all members of 

the Board would serve without 

compensation; however, reimbursement 

for reasonable travel expenses incurred 

when performing Board duties would be 

provided as approved by the Board. 

Section 1240.38 of the proposed 

Order would specify the powers and 

duties of the Board. These powers and 

duties would include, among other 

things, to administer the Order and 

collect assessments; to develop bylaws 

and recommend rulemaking necessary 

to administer the Order; to select a 

chairperson and other Board officers; to 

form other committees and 

subcommittees as necessary; to hire staff 

or contractors as appropriate to carry 

out the Board’s duties; to develop and 

carry out generic promotion, research, 

and information activities related to 

natural grass products; to develop and 

administer programs, plans, and 

projects to benefit the natural grass 

industry; to submit a budget to USDA 

for approval prior to the start of the 

fiscal year; to borrow funds necessary to 

cover startup costs of the Order; to 

maintain such records and books 

available to the Secretary for inspection 

and audit upon request; to have its 

books audited by an outside certified 

public accountant at the end of each 

fiscal period and at other times as 

requested by the Secretary; to notify 

natural grass sod producers and the 

Secretary of all Board meetings through 

press releases or other means; to act as 

intermediary between the Secretary and 

any natural grass sod producer; to 

furnish to the Secretary any information 

or records he or she may request; to 

receive, investigate and report to the 

Secretary complaints of violations of the 

Order; to recommend to the Secretary 

changes to the Order as the Board 

considers appropriate; to strengthen and 

provide maximum benefits to the 

natural grass sod industry; to invest 

Board funds appropriately; to pay the 

cost of activities with assessments 

collected under and earnings from 

invested assessments and other funds; 

to recommend changes to assessments 

as appropriate; to appoint and convene 

committees to assist in the development 

of research, promotion, advertising, and 

information programs for natural grass; 

to periodically prepare and make public 

reports of program activities and, at 

least once each fiscal period, to make 

public an accounting of funds received 

and expended; and to allocate a 

percentage of the assessments collected 

on the sale of natural grass sod products 

in a State or a region to one or more 

programs proposed by a Qualified 

Organization, under contract, to receive 

funding. 

Section 1240.39 of the proposed 

Order would specify prohibited 

activities that are common to all 

promotion programs authorized under 

the Act. The Board members and 

employees would not engage in any 

actions that would be a conflict of 

interest; use funds collected by the 

Board to lobby (influencing any 

legislation or governmental action or 

policy by local, State, national, and 

foreign governments, or subdivisions 

thereof, other than recommending to the 

Secretary amendments to the Order); or 

engage in any advertising, including 

promotion, research, or information 

activities authorized to be carried out 

under the Order that may be false, 

misleading, or disparaging to another 

agricultural commodity. 

Expenses and Assessments 

Pursuant to sections 516 (7 U.S.C. 

7415) and 517 (7 U.S.C. 7416) of the 

Act, §§ 1240.45 through 1240.47 of the 

proposed Order would detail 

requirements regarding the Board’s 

budget and expenses, financial 

statements, and assessments. At least 60 

calendar days before the start of the 

fiscal period, and as necessary during 

the year, the Board would submit a 


ddrumheller on DSK120RN23PROD with PROPOSALS1
Federal Register / Vol. 88, No. 198 / Monday, October 16, 2023 / Proposed Rules 71311 

6See US Gov’t Accountability Office, GAO–18– 

54, AGRICULTURAL PROMOTION PROGRAMS 

USDA Could Build on Existing Efforts to Further 

Strengthen Its Oversight (2017), https://

www.gao.gov/assets/690/688519.pdf. 

budget to the Secretary detailing its 

projected expenses. The budget would 

include a list of objectives and 

strategies, a summary of anticipated 

revenue, and expenses for each program 

along with a breakdown of staff and 

administrative expenses. Except for the 

initial budget, the Board’s budgets 

would include comparative data for at 

least one preceding fiscal period. Each 

budget would provide for adequate 

funds to cover the Board’s anticipated 

expenses. Any amendment or addition 

to an approved budget would have to be 

approved by Secretary, including 

shifting of funds from one program, 

plan, or project to another. The Board 

would reimburse the Secretary for all 

expenses incurred in the 

implementation, administration, 

enforcement, supervision of the Order, 

including all referendum costs in 

connection with the Order. 

During the first year of the Board’s 

operation, the Board could borrow 

money for the payment of startup 

expenses limited to the first year of 

operation. The Board could accept 

voluntary contributions to carry out 

activities so long as the contributions 

are identified in the Board’s annual 

operating budget and are free from any 

encumbrance by the donor. The Board 

would retain control over use of any 

funds. The Board could also receive 

funds from Federal or State grants with 

approval of the Secretary for specific 

authorized projects. 

Beginning 3 years after establishment 

of the Board, the Board would be 

limited to spending no more than 15 

percent of its available funds for 

administration, maintenance, and 

functioning of the Board. 

Reimbursements to USDA would not be 

considered administrative costs. As an 

example, if the Board received $2 

million in assessments during a fiscal 

period, and had available $500,000 in 

reserve funds, the Board’s available 

funds would be $2,500,000. In this 

scenario, the Board would be limited to 

spending no more than $375,000 (0.15 

× $2.5 million) on administrative costs. 

The 15 percent spending limit is 

consistent with section 515 of the Act (7 

U.S.C. 7413). The Board could establish 

an operating monetary reserve and carry 

over excess funds from one fiscal period 

to the next, provided the funds did not 

exceed two fiscal year budgets. For 

example, if the Board’s budgeted 

expenses for a fiscal period were $2 

million, it could carry over no more 

than $4 million in reserve. 

Section 1240.46 of the proposed 

Order would specify the financial 

statement requirements. The Board 

would be required to submit to USDA 

financial statements on a quarterly 

basis, or at any other time requested by 

the Secretary. Financial statements 

would include, at a minimum, a balance 

sheet, an income statement, 

investments, and an expense budget. 

Section 1240.47 of the proposed 

Order would specify the assessments. 

The Board’s programs and expenses 

would be funded by assessments on 

natural grass sod products and other 

funds available to the Board. Under the 

proposed Order, natural grass sod 

producers would pay one-tenth (1⁄10th) 

of one penny ($0.01) per square foot, or 

the equivalent thereof, of all-natural 

grass sod products that the natural grass 

sod producer sells in the United States. 

For example, a farm that harvested 

10,000 square feet of sod would pay $10 

in assessments (10,000 × .001). This 

assessment rate was determined through 

an analysis of U.S. natural grass sod 

production farm and acreage data from 

the 2017 USDA–NASS Census of 

Agriculture along with internal data 

from TPI. A wide range of farm sizes, 

annual acres harvested, and assessment 

rates were assembled for analysis to 

determine an assessment rate that 

would (1) be amenable to sod producers; 

(2) not be overly burdensome; and (3) 

result in enough funds to have an 

impact on the market. At the end of 

these discussions, the entire formation 

committee of 14 members of different 

farm sizes, regions, and products all 

agreed that the proposed assessment 

rate met each of those conditions. 

Twenty-four months after the Order 

would become effective and 

periodically thereafter, the Board would 

review the assessment rate and, if 

approved by a vote of at least two-thirds 

(2⁄3) of the Board, submit a 

recommendation for a change in the 

assessment rate to the Secretary. The 

assessment rate would not exceed oneeighth (1⁄8th) of one penny ($0.01) per 

square foot of natural grass sod products 

sold without approval by a majority of 

natural grass sod producers in a 

referendum. 

In terms of assessment collection, the 

natural grass sod producer would remit 

assessments for natural grass product 

sold to the Board every quarter with a 

remittance form. 

Based on 2017 USDA NASS 

production acreage, TPI estimates 

assessments would be valued at 

approximately $14.9 million annually. 

Assessments would be collected from 

approximately 1,459 natural grass sod 

producers. 

In addition, individuals producing 

certified organic natural grass sod, 

according to 7 CFR part 205, would be 

exempt from paying assessments. 

Producers would apply to the Board 

annually for a certificate of exemption 

using a form provided by the Board. 

Pursuant to section 517(f) of the Act 

(7 U.S.C. 7416) and section 1240.45(j) of 

this Order, the Board would be 

permitted to invest assessments 

collected under the Order in the 

following: (1) obligations of the United 

States or any agency of the United 

States; (2) general obligations of any 

State or any political subdivision of a 

State; (3) interest-bearing accounts or 

certificates of deposit of financial 

institutions that are members of the 

Federal Reserve; and (4) obligations 

fully guaranteed as to principal interest 

by the United States. 

The program would be funded by the 

industry through assessments paid by 

natural grass sod producers, as defined 

in the Proposed Order. Based on the 

proposed assessment rate and an 

analysis of industry statistics provided 

by USDA and maintained by TPI, 

publicly available farm statistics as well 

as TPI, the program is estimated to 

collect $14,900,000 annually in 

assessments and will conduct research, 

marketing, and promotion programs that 

will benefit the entire industry. The 

benefits of such programs are expected 

to outweigh the costs of the program. 

Evaluations of similar research and 

promotion programs by independent 

economists, required to be conducted 

every 5 years, have shown positive 

financial benefits with benefit-cost 

ratios in the range of $2.14 to $17.40 for 

every dollar invested in the programs.6

After reviewing and considering all 

relevant information, AMS has 

determined that the assessments 

collected from the natural grass sod 

producers will be relatively small in 

comparison to their revenue. 

Under voluntary programs, the 

current universe of assessment payers 

does not always include all the industry 

participants who would likely benefit 

from generic research and promotion 

activities. Therefore, a mandatory 

research and promotion program would 

be best positioned to have the greatest 

industry impact with the broadest level 

of industry support by eliminating free 

riders. A free rider is an entity who 

benefits from a service without having 

to pay for it. The research and 

promotion program would be able to 

combine assessment funds from natural 

grass sod producers and have a broad 

impact on the industry by developing 

new markets, strengthening existing 


ddrumheller on DSK120RN23PROD with PROPOSALS1
71312 Federal Register / Vol. 88, No. 198 / Monday, October 16, 2023 / Proposed Rules 

7 2020 Synthetic Turf Market Report for North 

America, Synthetic Turf Council https://

www.syntheticturfcouncil.org/news/512350/ 

Synthetic-Turf-Council-STC-Releases-2020- 

Synthetic-Turf-Market-Report-for-NorthAmerica.htm (last visited June 2, 2021). 

markets, conducting important 

consumer and scientific research, and 

promoting industry initiatives and 

activities. 

Promotion, Research, and Information 

Pursuant to section 516 of the Act (7 

U.S.C. 7415), §§ 1240.50 through 

1240.52 of the Order would describe the 

promotion, research, and information 

projects authorized by the Order. The 

Board would develop and submit to the 

Secretary for approval programs, plans, 

or projects that would provide 

promotion, research, and information. 

These activities would also provide 

information to consumers and industry 

groups. The Board could only 

implement a program or project upon 

approval by the Secretary. The Board 

would evaluate each program to ensure 

it contributes to an effective promotion 

program and complies with the Act and 

Order. 

At least once every 5 years, the Board 

would fund an independent evaluation 

to determine the effectiveness of the 

Order and programs pursuant to the Act. 

The findings of the evaluation would be 

made available to the Secretary and the 

general public. Finally, the proposed 

Order would specify that any patents, 

copyrights, trademarks, inventions, 

product formulations and publications 

developed with funds received by the 

Board would be the property of the U.S. 

Government, as represented by the 

Board. These, along with any rents, 

royalties, and the like from their use 

would be considered income subject to 

the same fiscal, budget, and audit 

controls as other funds of the Board, and 

could be licensed with approval of the 

Secretary. 

Report, Books, and Records 

Pursuant to section 515 of the Act (7 

U.S.C. 7413), §§ 1240.60 through 

1240.62 of the proposed Order specify 

the reporting and recordkeeping 

requirements under the proposed Order 

as well as requirements regarding 

confidentiality of information. Each 

natural grass sod producer would be 

required to submit an assessment 

remittance form and assessments to the 

Board on a quarterly basis. The 

information required in the form would 

include, but not be limited to, the name 

and contact information of the natural 

grass sod producer, the quantity of 

natural grass sod products sold, and the 

natural grass sod producer’s 

identification numbers, as applicable. 

Records would be made available to the 

Board or USDA during normal business 

hours and retained for at least 3 years 

past the fiscal year. 

In addition to books and records, the 

proposed Order would also require that 

all information obtained from persons 

subject to the Order as a result of 

proposed recordkeeping and reporting 

requirements would be kept 

confidential by all officers, employees, 

and agents of the Board and USDA. 

Pursuant to the Act, such information 

could only be disclosed if the Secretary 

considered it relevant, and the 

information were revealed in a judicial 

proceeding or administrative hearing 

brought at the direction or at the request 

of the Secretary or to which the 

Secretary or any officer of USDA was a 

party. Other exceptions for disclosure of 

confidential information would include 

the issuance of general statements based 

on reports or on information relating to 

a number of persons subject to the 

proposed Order, if the statements did 

not identify the information furnished 

by any person, or the publication, by 

direction of the Secretary, of the name 

of any person violating the Order and a 

statement of the particular provisions of 

the Order violated. 

Initial Regulatory Flexibility Act 

In accordance with the Regulatory 

Flexibility Act (RFA) (5 U.S.C. 601– 

612), AMS is required to examine the 

impact of this rulemaking on small 

entities. Accordingly, AMS has 

prepared this initial regulatory 

flexibility analysis (RFA). 

The purpose of 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 Small 

Business Administration defines, in 13 

CFR part 121, small agricultural 

producers as those having annual 

receipts of no more than $750,000. 

The affected industry falls under the 

North American Industry Classification 

System (NAICS) code: 111421—Sod 

Farming. 

Need for a Program 

The TPI, who represents natural grass 

sod farmers, equipment manufacturers, 

seed producers, and other industry 

participants, is the proponent group that 

submitted the proposed Order to USDA 

on June 16, 2021, requesting the 

establishment of a natural grass sod 

promotion, research, and information 

program. In 2017, TPI began to explore 

the creation of a promotion and research 

program. TPI worked with natural grass 

sod producers and other industry 

organizations to gauge interest in the 

development of such a program. In 2020 

a drafting committee was formed to 

develop a draft Order. The drafting 

committee comprised fourteen natural 

grass sod producers representing a wide 

variety of natural grass sod farms. The 

producers represented a range of farm 

size, years in business, and familiarity 

with other research and promotion 

programs. The drafting committee 

proposed Order was part of the 

submission by TPI to USDA for 

consideration of a program. The 

proposed Order submitted by TPI 

intends to educate the public on the 

value of natural grass products, market 

and promote the benefits of natural 

grass on a national scale, provide U.S. 

sod farmers with marketing tools, and 

provide information to organizations for 

use in the development of model codes 

and standards for building codes. 

The synthetic turf industry has grown 

15 percent since 2017 with a current 

value of $2.7 billion and continues to 

grow at a rate of 5.7 percent through 

2022, with sports fields representing 63 

percent of the market and rapid growth 

in landscape applications.7 The rise in 

synthetic turf numbers comes from 

social and market trends that have 

driven consumer perception of natural 

grass lawns and athletic fields in urban 

and suburban environments. These 

trends have caused consumers to 

misunderstand the value of natural grass 

lawns and athletic fields in urban and 

suburban environments. This has 

caused consumers to reduce the amount 

of grass they manage and/or replace it 

with other products like plastic, 

artificial turf, patios, decks, mulch, 

concrete, brick pavers, and rubberized 

playgrounds. These misconceptions 

have had a significant impact on natural 

grass sod producers in many areas of the 

United States. 

Objectives of the Action 

As noted in the preamble above, the 

program would conduct research, 

marketing, and promotion activities that 

will benefit the entire industry. Primary 

goals of the program include educating 

consumers and stakeholders of the 

benefits of natural grass and providing 

producers with marketing tools they can 

use to grow their business. The purpose 

of the program would be to strengthen 

the position of natural grass sod in the 

marketplace, maintain and expand 

markets for natural grass sod, and 

develop new uses for natural grass sod. 

Legal Basis for the Rule 

The Proposed Order is authorized by 

the 1996 Act, which provides USDA the 


ddrumheller on DSK120RN23PROD with PROPOSALS1
Federal Register / Vol. 88, No. 198 / Monday, October 16, 2023 / Proposed Rules 71313 

8 2017 USDA NASS Census https://

www.nass.usda.gov/Publications/AgCensus/2017/ 

Full_Report/Volume_1,_Chapter_1_US/st99_1_

0039_0039.pdf. 

authorization to establish research and 

promotion programs for agricultural 

commodities. Under the Act, 

‘‘agricultural commodities’’ are defined 

to include agricultural products as well 

as ‘‘products processed or manufactured 

from products specified in the 

preceding subparagraphs, as determined 

appropriate by the Secretary.’’ The Act 

also includes provisions that authorize 

the Secretary to tailor programs to the 

specific characteristics of each different 

commodity, including section 7413 that 

provides USDA discretion in 

determining to whom the Order should 

apply among the following: ‘‘(A) the 

producers of an agricultural commodity; 

(B) the first handlers of the agricultural 

commodity and other persons in the 

marketing chain as appropriate; and (C) 

the importers of the agricultural 

commodity, if imports of the 

agricultural commodity are subject to 

assessment. . .’’. 

Natural grass sod products fall within 

the Act’s definition of an agricultural 

commodity and natural grass sod 

producers, as defined in the proposed 

Order, fall within the categories of ‘‘first 

handlers’’ and ‘‘other persons in the 

marketing chain.’’ The proposed Order, 

which will establish a program of 

promotion, research, and information to 

promote consumer demand for natural 

grass sod products and strengthen the 

position of the natural grass sod 

industry in the marketplace, is 

consistent with the Congressional intent 

of the Act to maintain and expand 

existing markets as well as develop new 

markets and uses for agricultural 

commodities. As such, USDA is 

authorized to establish the Natural Grass 

Sod Promotion, Research, and 

Information program by approving the 

proposed Order. 

As part of the approval process set 

forth in the Act, the industry must 

formulate an Order and submit it to 

USDA for review and final approval. 

Implementation of the Order, like all 

rulemaking, is subject to public notice 

and comment, and is subject to ongoing 

referenda where participants are given 

the opportunity to vote to determine 

whether the program shall continue to 

operate. If approved by the USDA and 

through the ongoing referenda, the 

Order becomes a regulation codified in 

the U.S. Code of Federal Regulations 

and carries the force of law. 

There are no known Federal rules that 

duplicate, overlap, or conflict with the 

Proposed Order. 

Alternatives to the Rule 

USDA considered the alternative of 

no action; that is, the status quo. This 

alternative, however, would leave the 

industry without the tools of a research 

and promotion program to strengthen 

the position in the marketplace, 

maintain and expand markets, and 

develop new uses. 

Although there has been sporadic 

success attempting to fund efforts as 

described above at the local level with 

pooled resources of producers and/or 

associations, voluntary research and 

promotion efforts at the national level 

have historically been marginally 

successful due to the lack of funds 

available to undertake larger programs. 

There are several entities that fund 

natural grass research and promotion 

efforts at state and regional levels, but 

none of which have the capacity to fund 

these efforts on a large scale. For 

instance, many State sod associations 

funds research and promotion at levels 

under $10,000 annually. TPI funds 

research and promotion through its 

foundation, The Lawn Institute, at up to 

$50,000 to $100,000 annually. However, 

these types of funds are raised through 

voluntary contributions and fundraising 

efforts such as auctions, raffles, 

activities, etc., and, while they have 

successfully been able to impact natural 

grass research and promotion on a small 

scale, none of these efforts can achieve 

what is proposed through a natural grass 

sod checkoff. A natural grass sod 

checkoff would not only be able to raise 

significant funds for these efforts, but 

the checkoff could also respond to 

changing needs in research and 

promotion. Through the collection of an 

assessment on natural grass sod 

products on a national scale, the 

research and promotion program will be 

able to leverage pooled assessment 

funds and have a more consistent and 

wide-scale industry impact. 

The natural grass sod production 

industry has been discussing a research 

and promotion program since at least 

2013. TPI and other interested 

stakeholders have held numerous 

meetings and conducted outreach across 

the industry to gauge interest in a 

research and promotion program for 

natural grass sod products. As noted 

above, a majority of the natural grass 

sod producers who actively participated 

in the May 19, 2020, webinar supported 

the development of such a program for 

consideration. This resulted in the 

creation of the sod research and 

promotion drafting committee, which 

drafted the proposed order that is under 

consideration in this proposed rule. 

After careful analysis and discussions, 

the natural grass sod industry 

determined that a research and 

promotion program would be best 

positioned to have the greatest industry 

impact with the broadest level of 

industry support. 

Impact on Small Businesses 

The Small Business Administration 

(SBA) defines, in 13 CFR part 121, small 

agricultural producers as those having 

annual receipts of no more than 

$750,000. According to the 2017 USDA 

NASS data, 1,034 firms—approximately 

70 percent of producers—would be 

classified as small agricultural 

producers based on value of sales per 

farm. Table 2 compares the average 

value of sales per farm to the average 

assessment per farm for each category. 

Because the assessment is calculated on 

a production basis, the proportionate 

burden is the same across the industry, 

regardless of firm size. On a farm basis, 

small natural grass sod producers would 

pay between $174 and $7,111 in 

assessments annually per firm, while 

large natural grass sod producers would 

pay between $13,297 and $63,420. 

TABLE 2 8—NUMBER OF FARMS, ACRES, VALUE OF SALES, AND AVERAGE PROPOSED ASSESSMENT PER FARM

NAICS code 111421 2017 Dollars 

Farms Acres Avg. value of 

sales per farm 

Avg. annual 

assessment per 

farm 

Total Industry ........................................................................... 1,459 339,551 $787,467 $10,138 

Small Firms (<$750,000) ......................................................... 1,034 74,938 233,459 2,886 

Large Firms (>750,000) ........................................................... 425 264,614 11,526,586 33,134 


ddrumheller on DSK120RN23PROD with PROPOSALS1
71314 Federal Register / Vol. 88, No. 198 / Monday, October 16, 2023 / Proposed Rules 

9USDA Agricultural Marketing Service, 

Livestock, Poultry, and Grain Market News https:// 

www.ams.usda.gov/mnreports/ams_2930.pdf. 

10Occupational Employment and Wages, May 

2020; 11–9013 Farmers, Ranchers, and Other 

Agricultural Managers https://www.bls.gov/oes/ 

current/oes119013.htm. 

11News Release Bureau of Labor Statistics, 

Employer Costs for Employee Compensation—June 

17, 2021, https://www.bls.gov/news.release/pdf/ 

ecec.pdf. 

12Economic News Release: Employer Costs for 

Employee Compensation Summary for December 

2020 https://www.bls.gov/news.release/ 

ecec.nr0.htm. 

13Occupational Employment and Wages, May 

2020; 11–9013 Farmers, Ranchers, and Other 

Agricultural Managers https://www.bls.gov/oes/ 

current/oes119013.htm. 

14News Release Bureau of Labor Statistics, 

Employer Costs for Employee Compensation—June 

17, 2021, https://www.bls.gov/news.release/pdf/ 

ecec.pdf. 

15Economic News Release: Employer Costs for 

Employee Compensation Summary for December 

2020 https://www.bls.gov/news.release/ 

ecec.nr0.htm. 

The proposed assessment rate of 

1/10th of one penny per square foot was 

decided upon by the industry in part 

because it was determined that rate 

would not create any undue burdens to 

sod farms of any size, including small 

businesses. Data from the National 

Quarterly Sod Report; 2020 Summer 

Quarter 9 indicate a range of natural 

grass sod prices across the United States 

from $0.16 to $0.50 per square foot 

results in additional costs of between 

0.62 percent and 0.2 percent. 

Furthermore, when evaluating the 

prices based on weighted averages 

instead of ranges, the additional costs 

incurred are between 0.42 percent and 

0.24 percent. 

This level of assessment should have 

minimal impact on sod farms of any 

size, large or small, and was part of the 

consideration for the drafting committee 

in supporting the proposed rate. For 

instance, a sod farm that is considered 

a small business may harvest as little as 

10 acres annually. At the proposed 

assessment rate and pricing data from 

the National Sod Report, the annual 

contribution of that farm to the research 

and promotion program would be $435 

per year, while generating sales revenue 

between $69,696 and $217,800. 

Required Reporting and Recordkeeping 

The required reporting and 

recordkeeping to remit assessments do 

not require specialized skills or training. 

The transactional documentation will be 

added to documents already generated 

and maintained by natural grass sod 

producers. Reporting requirements are 

expected to be the same for both large 

and small entities. 

It is estimated it will take 

approximately 2 hours annually, or 30 

minutes every quarter, to complete and 

submit the remittance form to the Board. 

This is estimated to cost each natural 

grass sod producer $102 per year. For 

the purpose of estimating the cost of 

reporting and recordkeeping, this 

proposed rule uses $51 per hour. To 

arrive at this amount, AMS took the 

mean hourly earnings of farmers, 

ranchers, and other agricultural 

managers ($36.93) from the U.S. 

Department of Labor, Bureau of Labor 

Statistics, May 2020 National 

Occupational Employment and Wages 

Estimates.10 The average mean hourly 

wage rate of $36.93 plus an additional 

38.1 percent to account for benefits and 

compensation,11 for a total hourly wage 

of $51, was used to calculate annual 

cost. Costs of benefits and compensation 

guidance was obtained from the Bureau 

of Labor Statistics News Release issued 

December 14, 2018.12

AMS is committed to complying with 

the E-Government Act, to promote the 

use of the internet and other 

information technologies to provide 

increased opportunities for citizen 

access to Government information and 

services, and for other purposes. 

Regarding outreach efforts, USDA 

would keep these individuals informed 

throughout the program implementation 

and referendum process to ensure that 

they are aware of and are able to 

participate in the program 

implementation process. USDA would 

also publicize information regarding the 

referendum process so that trade 

associations and related industry media 

can be kept informed. 

Although AMS has performed this 

initial RFA analysis regarding the 

impact of the proposed rule on small 

entities, in order to have as much data 

as possible for a more comprehensive 

analysis, we invite comments 

concerning potential effects. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

chapter 35), AMS announces its 

intention to request approval for a new 

information collection for the proposed 

natural grass sod program. 

Title: Natural Grass Sod Research, 

Promotion, and Information Order. 

OMB Number: 0581–NEW. 

Expiration Date of Approval: 3 years 

from approval date. 

Type of Request: New information 

collection for research and promotion 

program. 

Abstract: The information collection 

requirements are essential to carry out 

the intent of the Act. The information 

collection pertains to a proposal 

submitted by TPI for the development of 

a national research and promotion 

program for natural grass sod. The 

program would be administered by a 

Board of producer members selected by 

the Secretary. Natural grass sod 

producers would be assessed under the 

program for natural grass products. The 

program would provide an exemption 

from assessment for any organic natural 

grass products under the approved 

National Organic Program (7 CFR part 

205). The purpose of the proposed 

program is to help build the market for 

natural grass. 

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. 

The information collection 

requirements under the program address 

Board nominations, collection of 

assessments, and the organic exemption. 

For Board nominations, natural grass 

sod producers and the public member 

must complete the ‘‘Nomination for 

Appointment’’ form to obtain names of 

nominees for appointment as members 

of the Board. Each individual must also 

complete a ‘‘Nominee’s Agreement to 

Serve’’ form to allow the individual to 

disclose any relationship that could be 

of conflict while serving on the Board. 

Together with the AD–755 form, which 

details background information, this 

form would ensure the individual is 

qualified to serve on the Board. 

Assessments would be collected using 

the ‘‘Quarterly Report and Remittance of 

Amount Due’’ form. In conjunction, the 

‘‘Organic Exemption Request’’ form 

would deduct any natural grass sod 

under the National Organic Program. 

For the purpose of estimating the cost 

of reporting and recordkeeping, this 

proposed rule uses $51 per hour. To 

arrive at this amount, AMS used the 

mean hourly earnings of farmers, 

ranchers, and other agricultural 

managers ($36.93) from the U.S. 

Department of Labor, Bureau of Labor 

Statistics, May 2020 National 

Occupational Employment and Wages 

Estimates.13 The mean hourly earnings 

rate of $36.93 plus an additional 38.1 

percent to account for benefits and 

compensation,14 for total hourly 

earnings of $51, was used to calculate 

annual cost. Costs of benefits and 

compensation guidance was obtained 

from the Bureau of Labor Statistics 

News Release issued December 14, 

2018.15

Information collection requirements 

that are included in this proposal are: 


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(1) LP–7 Application for SelfCertification of Nominating 

Organizations (OMB Form No. 0581– 

NEW) 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 0.5 hours per 

response for each nominating 

organization. 

Respondents: Natural grass sod 

producers and State or regional sod 

associations (15 State or regional sod 

associations). 

Estimated Number of Respondents: 

25. 

Estimated Number of Responses per 

Respondent: (Estimate recertification 

every 5 years) 0.2. 

Estimated Total Annual Burden on 

Respondents: (25 organizations and 

producers × 0.2 responses × 0.5 hour per 

response) 2.50 hours. 

Total Cost: (2.50 hours × $51) 

$127.50. 

(2) LP–4 Nomination for Appointment to 

the Board (OMB Form No. 0581–NEW) 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 0.5 hours per 

response. 

Respondents: Natural grass sod 

producers. 

Estimated Number of Respondents: 

20. 

Estimated Number of Responses per 

Respondent: One per year. 

Estimated Total Annual Burden on 

Respondents: (20 responses × 0.5 hour 

per response) 10 hours. 

Total Cost: (10 hours × $51) $510. 

(3) LP–6 Quarterly Report and 

Remittance of Amount Due for 

Assessment (OMB Form No. 0581–NEW) 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 0.5 hours per 

form. 

Respondents: Natural grass sod 

producers. 

Estimated Number of Respondents: 

1,460. 

Estimated Number of Responses per 

Respondent: 2 per year. 

Estimated Total Annual Burden on 

Respondents: (1,460 Number of 

respondents × 2 total number of reports 

× 0.50 hour per report) 2,920 hours. 

Total Cost: (2,920 hours × $51) 

$148,920. 

(4) AMS–15 Organic Exemption (OMB 

Form No. 0581–0093) 

Estimate of Burden: Public 

recordkeeping burden for this collection 

of information is estimated to average 

0.25 hours per exemption form. 

Respondents: Natural grass sod 

producers. 

Estimated Number of Respondents: 

10. 

Estimated Number of Responses per 

Respondent: (Annual organic exemption 

required) 1. 

Estimated Total Annual Burden on 

Respondents: (10 Number of 

respondents × 1 total number of reports 

× 0.25 hours per report) 2.50 hours. 

Total Cost: (2.50 hours × $51) 

$127.50. 

(5) AD–755 Background Information on 

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 natural grass sod 

producer and public member nominated 

to serve on the Board. 

Respondents: Natural grass sod 

producers. 

Estimated Number of Respondents: 

14.33 (20 for initial nominations to the 

Board, 12 every year except 14 every 

third year in subsequent years). 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 10 hours for the initial 

nominations to the Board and 7 hours 

annually thereafter. 

Total Cost: (Number of respondents × 

responses per respondent × $51) $510 

initial, and $357 annually thereafter. 

(6) 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 2 

hours per recordkeeper maintaining 

such records. 

Recordkeepers: Natural grass sod 

producers. 

Estimated Number of Recordkeepers: 

1,400. 

Estimated Total Recordkeeping 

Hours: (1,400 Number of recordkeepers 

× 2.0 hours) 2,800 hours. 

Total Cost: (1,400 Number of 

recordkeepers × 2.0 hours per 

recordkeeper × $51) $142,800. 

As noted above, under the proposed 

Order, natural grass sod producers 

would be required to pay assessments, 

file reports with, and submit 

assessments to the Board. While the 

proposed Order would impose certain 

recordkeeping requirements on natural 

grass sod producers, information 

required under the proposed Order 

could be compiled from records 

currently maintained. The Order would 

require such records to be retained for 

at least 3 years beyond the fiscal year of 

their applicability. 

The proposed Order’s provisions have 

been carefully reviewed, and every 

effort has been made to minimize any 

unnecessary recordkeeping costs or 

requirements, including efforts to utilize 

information already submitted under 

other programs administered by USDA 

and other State programs. 

The proposed forms would require 

the minimum information necessary to 

effectively carry out the requirements of 

the program, 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, easy to 

understand, and place as small a burden 

as possible on the person required to file 

the information. 

Collecting information quarterly 

would coincide with normal industry 

business practices. 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. The requirement to keep 

records for three years is consistent with 

normal industry practices. In addition, 

the information to be included on these 

forms is not available from other sources 

because such information relates 

specifically to individual domestic 

producers 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. 

Request for Public Comment Under the 

Paperwork Reduction Act 

Comments are invited on: (a) Whether 

the proposed collection of information 

is necessary for the proper performance 

of functions of the Order and AMS’s 

oversight of the program, including 

whether the information will have 

practical utility; (b) the accuracy of 

AMS’s estimate of the burden of the 

proposed collection of information, 

including the validity of the 

methodology and assumptions used; (c) 

the accuracy of AMS’s estimate of the 

number of natural grass sod producers 

that would be covered under the 

program; (d) ways to enhance the 

quality, utility, and clarity of the 

information to be collected; and (e) 

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 the 

information collection requirements 


ddrumheller on DSK120RN23PROD with PROPOSALS1
71316 Federal Register / Vol. 88, No. 198 / Monday, October 16, 2023 / Proposed Rules 

contained in this action should 

reference the OMB number, docket 

number, date, and page number of this 

issue of the Federal Register. Comments 

should be sent to the address referenced 

in the ADDRESSES section of this 

proposed rule. 

This proposed rule invites comments 

on the establishment of an industryfunded research, promotion, and 

information program for natural grass 

products. Comments should clearly 

indicate whether or not you support any 

or all of the provisions proposed. 

Indicate the reason for your position 

and include relevant information and 

data to further support your position. 

List of Subjects in 7 CFR Part 1240 

Administrative practice and 

procedure, Advertising, Consumer 

information, Marketing agreements, 

Natural grass sod, Reporting and 

recordkeeping requirements. 

■ For the reasons set forth in the 

preamble, the Agricultural Marketing 

Service proposes to amend title 7, 

chapter XI of the Code of Federal 

Regulations by adding part 1240 to read 

as follows: 

PART 1240—NATURAL GRASS SOD 

PROMOTION, RESEARCH, AND 

INFORMATION ORDER 

Subpart A—Natural Grass Sod Promotion, 

Research, and Information Order 

Sec. 

1240.10 General. 

1240.20 Definitions. 

Natural Grass Sod Board 

1240.30 Establishment and membership. 

1240.31 Nominations and appointments. 

1240.32 Nominee’s Agreement to Serve. 

1240.33 Term of office. 

1240.34 Removal. 

1240.35 Vacancies. 

1240.36 Procedure. 

1240.37 Reimbursement and attendance. 

1240.38 Powers and duties. 

1240.39 Prohibited activities. 

Expenses and Assessments 

1240.45 Budget and expenses. 

1240.46 Financial statements. 

1240.47 Assessments. 

Promotion, Research, and Information 

1240.50 Programs. 

1240.51 Independent evaluation. 

1240.52 Patents, copyrights, trademarks, 

inventions, product formulations, and 

publications. 

Reports, Books, and Records 

1240.60 Reports. 

1240.61 Books and records. 

1240.62 Confidential treatment. 

1240.63 Qualification of natural grass sod 

organizations. 

Miscellaneous 

1240.70 Right of the Secretary. 

1240.71 Referenda. 

1240.72 Suspension or termination. 

1240.73 Proceedings after termination. 

1240.74 Effect of termination or 

amendment. 

1240.75 Personal liability. 

1240.76 Separability. 

1240.77 Amendments. 

1240.78 OMB control number. 

Subpart B—[Reserved] 

Authority: 7 U.S.C. 7411–7425; 7 U.S.C. 

7401. 

Subpart A—Natural Grass Sod 

Promotion, Research, and Information 

Order 

§ 1240.10 General. 

The terms defined/specified in this 

subpart shall apply to the natural grass 

sod promotion, research, and 

information Board authorized under the 

Act. 

§ 1240.20 Definitions. 

Act means the Commodity Promotion, 

Research and Information Act of 1996 (7 

U.S.C. 7411–7425), and any 

amendments thereto. 

Board means the Natural Grass Sod 

Promotion, Research, and Information 

Board established pursuant to § 1240.30, 

or such other name as recommended by 

the Board and approved by USDA. 

Conflict of interest means a situation 

in which a member or employee of the 

Board has a direct or indirect financial 

interest in a person who performs a 

service for, or enters into a contract 

with, the Board for anything of 

economic value. 

Department or USDA means the U.S. 

Department of Agriculture, 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. 

Eligible natural grass sod producer 

refers to a natural grass sod producer 

that has sold natural grass sod products 

in the United States during the 

Representative Period and is eligible to 

vote in the initial referendum or 

Subsequent Referenda. 

Fiscal Year and marketing year means 

the 12-month period ending on 

December 31 or such other period as 

recommended by the Board and 

approved by the Secretary. 

Information means information and 

programs for consumers, customers, 

architects, city planners, and various 

industry participants and trades 

personnel, including educational 

activities, information, and programs 

designed to enhance and broaden the 

understanding of the use and attributes 

of natural grass, increase efficiency in 

producing natural grass sod products, 

maintain and expand existing markets, 

and develop new markets and marketing 

strategies. These include: 

(1) Consumer education and 

information, which means any action 

taken to provide information to, and 

broaden the understanding of, the 

general public regarding natural grass; 

and 

(2) Industry information, which 

means information and Programs that 

would enhance the image of the natural 

grass industry. 

Initial referendum refers to the 

referendum required to approve this 

subpart as outlined in § 1240.71. 

Natural grass refers to plant species in 

the Poaceae family, or living plants in 

other taxa serving a similar purpose, as 

often found in sites such as lawns, 

sports fields, golf courses, parks, 

cemeteries, roadsides and others. 

Natural grass sod producer means any 

person who produces natural grass sod 

products in the United States. 

Natural grass sod product refers to 

natural grass produced for retail, 

wholesale, or commercial sale, 

including monostands or blends or 

mixtures of Bentgrass, Bermudagrass, 

Buffalograss, Centipedegrass, Fine 

fescue, Kentucky bluegrass, Ryegrass, 

Seashore Paspalum, St. Augustinegrass, 

Tall fescue, Zoysiagrass, Bahiagrass, 

other native or adapted plants harvested 

and sold as sod, and products 

containing natural grass with artificial 

elements that are sold as sod. For 

purposes of this Order, natural grass sod 

product excludes all artificial and 

synthetic turf or grass products, natural 

grass seed, sprigs, and plugs. 

Order means an order issued by the 

Secretary under section 7413 of the Act 

that provides for a program of generic 

promotion, research, and information 

regarding agricultural commodities 

authorized under the Act. 

Part and subpart means the Natural 

Grass Sod Promotion, Research, and 

Information Order and all rules, 

regulations, and supplemental orders 

issued pursuant to the Act and the 

Order. The Natural Grass Sod 

Promotion, Research, and Information 

Order shall be a subpart of such part. 

Person means any individual, group 

of individuals, partnership, corporation, 

association, cooperative, or any other 

legal entity. 

Produce means the process of growing 

and/or harvesting natural grass sod 

products for the purpose of selling such 

products either individually or in 

combination with other products, real 


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property, or services in the United 

States. 

Program means those generic 

research, promotion, and information 

programs, plans, or projects established 

pursuant to the Order. 

Promotion means any action, 

including paid advertising and the 

dissemination of Information, utilizing 

public relations or other means, to 

enhance and broaden the understanding 

of the use and attributes of natural grass 

for the purpose of maintaining and 

expanding markets for natural grass sod 

products. 

Qualified organization means any 

organization that has the primary 

purpose of representing natural grass 

sod producers, has natural grass sod 

producers as members, has a board of 

directors comprised of a majority of 

natural grass sod producers, and is 

approved by the Secretary pursuant to 

the qualification process set forth in 

§ 1240.63. 

Quarterly period means one of the 

four 3-month periods that are based 

upon a calendar year cycle (i.e., January 

1–March 31, April 1–June 30, July 1– 

September 30, and October 1–December 

31). 

Representative period means the time 

period designated by the Secretary 

pursuant to section 518 (7 U.S.C. 7417) 

of the Act. 

Research means any type of test, 

study, or analysis designed to enhance 

the image, desirability, use, 

marketability, production, 

environmental quality, or sustainability 

of natural grass, including research 

directed to product characteristics and 

product development like new products 

or improved technology in the 

production of natural grass sod 

products. 

Secretary means the Secretary of 

Agriculture of the United States, or any 

other officer or employee of the 

Department to whom authority has been 

delegated, or to whom authority may 

hereafter be delegated, to act in the 

Secretary’s stead. 

State means any of the 50 States of the 

United States, the District of Columbia, 

the Commonwealth of Puerto Rico, or 

any territory or possession of the United 

States. 

Subsequent Referenda refers to any 

referendum conducted pursuant to 

§ 1240.71 of this subpart after this 

subpart becomes effective. 

Suspend means to issue a rule under 

5 U.S.C. 553 to temporarily prevent the 

operation of an Order or part thereof 

during a particular period of time 

specified in the rule. 

Terminate means to issue a rule under 

5 U.S.C. 553 to cancel permanently the 

operation of an Order or part thereof 

beginning on a date certain specified in 

the rule. 

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. 

Natural Grass Sod Promotion, 

Research, and Information Board 

§ 1240.30 Establishment and membership. 

(a) Establishment of the Board. There 

is hereby established a Natural Grass 

Sod Promotion, Research, and 

Information Board to administer the 

terms and provisions of this part. The 

Board shall be composed of natural 

grass sod producers that sell natural 

grass sod products in the United States 

during a marketing year and a public 

member. Seats on the Board shall be 

apportioned as set forth in paragraph (b) 

of this section based on the geographical 

distribution of the quantity of natural 

grass sod products sold in the United 

States. 

(b) Composition of Board. The Board 

shall be composed of 11 members who 

are natural grass sod producers and one 

public member. The Board shall be 

established as follows: 

(1) North/Cool-Season Region. Three 

members shall be appointed from the 

North/Cool-Season Region, which 

includes the following States: Alaska, 

Colorado, Connecticut, Delaware, Idaho, 

Illinois, Indiana, Iowa, Maine, 

Massachusetts, Michigan, Minnesota, 

Montana, Nebraska, New Hampshire, 

New Jersey, New York, North Dakota, 

Ohio, Oregon, Pennsylvania, Rhode 

Island, South Dakota, Utah, Vermont, 

Washington, Wisconsin, and Wyoming. 

(2) South/Warm-Season Region. Four 

members shall be appointed from the 

South/Warm-Season Region, which 

includes the following States: Alabama, 

Arizona, Florida, Georgia, Hawaii, 

Louisiana, Mississippi, Nevada, New 

Mexico, South Carolina, Texas, and all 

territories and possessions of the United 

States, including but not limited to, the 

Commonwealth of Puerto Rico. 

(3) Transition Zone/California Region. 

Three members shall be appointed from 

the Transition Zone/California Region, 

which includes the following States: 

Arkansas, California, the District of 

Columbia, Kansas, Kentucky, Maryland, 

Missouri, North Carolina, Oklahoma, 

Tennessee, Virginia, and West Virginia. 

(4) States with the highest volume of 

natural grass sod production. The three 

(3) States with the highest volume of 

natural grass sod production, as 

determined by the Secretary on an 

annual basis, shall have at least one (1) 

natural grass sod producer to serve as a 

representative on the Board, in their 

respective Region. 

(5) Public member. One public 

member. The public member may not be 

a natural grass sod producer or have a 

financial interest in the production, 

sales, marketing or distribution of 

natural grass sod. Nominations to the 

Secretary for the public member 

position may be obtained through selfnomination to the Board and from Board 

members in such a manner as 

recommended by the Board and 

approved by the Secretary and shall be 

appointed by the Secretary. Should the 

Board fail to nominate a public member, 

the Secretary may appoint such 

member. 

(c) Reapportionment. At least once in 

every 5-year period, but not more 

frequently than once in every 3-year 

period, the Board will review the 

geographical distribution of the square 

footage of natural grass sod Products 

sold within the United States. The 

review will be conducted using the 

Board’s annual assessment receipts, 

industry data provided by USDA, and, 

if available, other reliable reports from 

the industry. If warranted, the Board 

will recommend to the Secretary that 

the membership, geographical regions, 

and/or size of the Board be adjusted to 

reflect changes in geographical 

distribution of the square footage of 

natural grass sod products sold in the 

United States. Any changes in Board 

composition shall be implemented by 

the Secretary through rulemaking. 

§ 1240.31 Nominations and appointments. 

(a) Initial nominations shall be 

submitted to the Secretary by the 

industry organizations that have a board 

composed of a majority of natural grass 

sod producers; by individual natural 

grass sod producers: and from members 

of the public. The Secretary shall select 

the initial members of the Board from 

the nominations submitted. 

(b) Subsequent nominations shall be 

conducted as follows: 

(1) The Board shall conduct outreach 

to all known natural grass sod producers 

that sell natural grass sod products in a 

marketing year as well as any known 

industry organizations that have a board 

comprised of a majority of natural grass 

sod producers. Natural grass sod 

producers and industry organizations 

may submit nominations to the Board; 

(2) Natural grass sod producer 

nominees and the public member 

nominee may provide the Board a short 

background statement outlining their 

qualifications to serve on the Board; 


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(3) Nominees may seek nomination to 

the Board for all vacant seats for which 

the nominees are qualified; 

(4) Natural grass sod producers must 

produce and sell natural grass sod 

products in the region for which they 

seek nomination. Nominees that 

produce and sell in multiple regions 

may seek nomination in one region of 

their choice. The Board will issue the 

call for nominations to all known 

natural grass sod producers and 

recommend nominees for each open 

seat and the additional nominees to the 

Secretary; 

(5) The public member shall be 

nominated by a Qualified Organization 

and through self-nomination to the 

Board. The public member shall have no 

direct financial interest in the 

commercial production or marketing of 

natural grass sod except as a consumer 

and shall not be a director, stockholder, 

officer or employee of any firm so 

engaged. The Board shall prescribe such 

additional qualifications, administrative 

rules and procedures for selection and 

voting for each candidate as it deems 

necessary and the Secretary approves. 

(6) The Board will evaluate all the 

nominees and recommend at least two 

names for each open seat. Other 

qualified persons interested in serving 

in the open seats, but not recommended 

by the Board, will be designated by the 

Board as additional nominees for 

consideration by the Secretary; 

(7) The Board must submit 

nominations to the Secretary at least 90 

days before the new Board term begins. 

From the nominations submitted by the 

Board, the Secretary shall select the 

members of the Board; 

(8) Any natural grass sod producer 

and public member nominated to serve 

on the Board shall file with the 

Secretary at the time of the nomination 

a background questionnaire; 

(9) From the nominations made 

pursuant to this section, the Secretary 

shall appoint members of the Board on 

the basis of representation provided in 

§ 1240.30(b); 

(10) No two Board members shall be 

employed by a single corporation, 

company, partnership or any other legal 

entity that pays assessments under this 

Subpart; and, 

(11) The Board may recommend to the 

Secretary modifications to its 

nomination procedures as it deems 

appropriate. Any such modification 

shall be implemented through 

rulemaking by the Secretary. 

§ 1240.32 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 National Grass 

Sod Producer or with any organization 

that has or is being considered for a 

contractual relationship with the Board; 

and (c) withdraw from participation in 

deliberations, decision-making, or 

voting on matters that concern the 

relationship disclosed. 

§ 1240.33 Term of office. 

(a) With the exception of the initial 

Board, each Board member shall serve 

for a term of 3 years or until the 

Secretary selects his or her successor. 

Each term of office shall begin and end 

on dates determined by the Board. No 

member may serve more than two full 

consecutive 3-year terms, except as 

provided in paragraph (b) of this 

section. 

(b) For the initial Board, the terms of 

the Board members shall be staggered 

for 1, 2 and 3 years. Each region initially 

shall have one member who serves 2- 

year terms and two members who serve 

3-year terms. In addition, the South/ 

Warm-Season Region shall have one 

member who serves a 1-year term. The 

Secretary shall determine which of the 

initial members shall serve a term of 1, 

2, or 3 years. The public member shall 

serve an initial three-year term. 

(c) Members serving the initial terms 

of all durations will be eligible to serve 

a second term of 3 years. Members who 

are appointed to serve the remainder of 

a term are eligible to serve two 

additional 3-year terms. A public 

member serving the initial term is not 

eligible to serve two additional 3-year 

terms. 

§ 1240.34 Removal. 

The Board may recommend to the 

Secretary that a member be removed 

from office if the member consistently 

fails or refuses to perform his or her 

duties properly or engages in dishonest 

acts or willful misconduct, which 

removal is subject to the Secretary’s 

approval. If the Secretary determines 

that a member fails or refuses to perform 

his or her duties properly or engages in 

acts of dishonestly or willful 

misconduct, the Secretary shall remove 

the person from office. A person 

appointed under this subpart 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. 

§ 1240.35 Vacancies. 

(a) If a member is removed from office 

or resigns, or in the event of death of 

any member, such position shall 

automatically become vacant. 

(b) If a member becomes disqualified 

for ceasing to produce natural grass sod 

products or ceasing to do business in 

the region he or she represents, such 

position shall be vacated within a 

period of 6 months from the date of the 

disqualifying event. 

(c) If a position becomes vacant, 

nominations to fill the vacancy will be 

conducted using the nominations 

process set forth in this subpart or the 

Board may recommend to the Secretary 

that he or she appoint a successor from 

the most recent list of nominations for 

the position. 

(d) A vacancy will not be required to 

be filled if the unexpired term is less 

than 6 months. 

§ 1240.36 Procedure. 

(a) The Board shall publicly announce 

all scheduled Board meetings through a 

direct communication, press release, or 

other means and give the Secretary the 

same notice of meetings of the Board 

(including committees, subcommittees, 

and the like) as is given to members so 

that the Secretary’s representative(s) 

may attend such meetings. 

(b) A majority (50 percent plus one) 

of the Board members shall constitute a 

quorum at any meeting of the Board. 

(c) Each member of the Board shall be 

entitled to one (1) vote on any matter 

put to the Board and the motion will 

carry if supported by a majority (50 

percent plus one vote) of Board 

members, except for recommendations 

to change the assessment rate, adopt a 

budget, or call for a referendum, which 

require affirmation by two-thirds of the 

total number of Board members. 

(d) At an assembled meeting, all votes 

shall be cast in person. At a meeting in 

which some or all members attend via 

an internet service, videoconference, or 

teleconference, members may cast votes 

remotely by using available technology 

according to procedures that shall be 

established by the Board. 

(e) In lieu of voting at an assembled 

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 majority of 

members (unless two-thirds is required 

under the Order) by mail, telephone, 

electronic mail, facsimile, or any other 

means of communication. In that event, 

all members 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 an assembled 

meeting. All votes shall be recorded in 

Board minutes. 

(f) There shall be no proxy voting. 

(g) The organization of the Board and 

the procedures for conducting meetings 


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of the Board shall be in accordance with 

its bylaws, which shall be established 

by the Board and approved by the 

Secretary. 

§ 1240.37 Reimbursement and attendance. 

Board members shall serve without 

compensation, but shall be reimbursed 

for reasonable travel expenses, as 

approved by the Board, which they 

incur when performing Board business. 

§ 1240.38 Powers and duties. 

The Board shall have the following 

powers and duties: 

(a) To administer this subpart 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 and 

regulations 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, 

organize, and select from among the 

members of the Board a chairperson, 

vice chairperson, secretary/treasurer, 

other officers, and committees and 

subcommittees, as the Board determines 

to be appropriate. The committees and 

subcommittees may include persons 

other than Board members, including 

representatives of natural grass sod 

producers, as the Board deems 

necessary and appropriate, provided 

Board members constitute a majority of 

all committees and subcommittees; 

(d) To employ or contract with 

persons, other than the Board members, 

as the Board considers necessary to 

assist the Board in carrying out its 

duties, and to determine the 

compensation and specify the duties of 

the persons; 

(e) To develop and submit programs 

to the Secretary for the Secretary’s 

approval, and enter into contracts or 

agreements related to such programs, 

which must be approved by the 

Secretary before becoming effective, for 

the development and carrying out of 

Programs of Promotion, Research, and 

Information. The payment of costs for 

such activities shall be from funds 

collected pursuant to this Order. Each 

contract or agreement shall provide that: 

(1) The contractor or agreeing party 

shall develop and submit to the Board 

a Program together with a budget or 

budgets that shall show the estimated 

cost to be incurred for such Program; 

(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; 

and 

(5) Any other provisions required by 

the Secretary. 

(f) To allocate, to the extent 

practicable, up to fifty percent (50%) of 

the assessments collected on the sale of 

natural grass sod Products in a State or 

group of States, as defined in § 1240.20, 

less administrative costs, to one or more 

Programs proposed by a Qualified 

Organization representing such State or 

group of States. On an annual basis, the 

Board shall solicit proposals for 

Programs, select the Programs that shall 

receive funding, and enter into contracts 

only with the entities that will directly 

implement the Programs. If the 

Qualified Organization is not the entity 

that will implement the Program, the 

Board may reimburse the Qualified 

Organization for reasonable 

administrative costs incurred while 

making such proposal. For purposes of 

this § 1240.38, the Secretary shall have 

the authority to approve an organization 

that the Board nominates to be a 

‘‘Qualified Organization’’ pursuant to 

the qualification process set forth in 

§ 1240.63. 

(g) To prepare and submit for the 

approval of the Secretary fiscal year 

budgets in accordance with § 1240.45. 

(h) To borrow funds necessary for 

startup expenses or other capital outlays 

of the Board as set forth in the subpart; 

(i) To invest assessments collected 

and other funds received pursuant to 

this subpart and use earnings from 

invested assessments to pay for 

activities carried out pursuant to this 

subpart; 

(j) To recommend changes to the 

assessment rates as provided in this 

subpart; 

(k) To cause its books to be audited 

by an independent auditor at the end of 

each fiscal year and at such other times 

as the Secretary may request, and to 

submit a report of the audit directly to 

the Secretary; 

(l) To periodically prepare and make 

public reports of program activities and, 

at least once each fiscal year, to make 

public an accounting of funds received 

and expended; 

(m) To maintain such minutes, books 

and records, and prepare and submit 

such reports and records from time-totime 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; 

(n) To act as an intermediary between 

the Secretary and any natural grass sod 

producer; 

(o) To receive, investigate, and report 

to the Secretary complaints of violations 

of this subpart; 

(p) To recommend to the Secretary 

such amendments to this subpart as the 

Board considers appropriate; and 

(q) To work to achieve an effective, 

continuous, and coordinated Program of 

Promotion, Research, and Information 

and to carry out programs designed to 

provide maximum benefits to the 

natural grass sod industry. 

§ 1240.39 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 would be 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 or subdivision 

thereof, other than recommending to the 

Secretary amendments to this subpart; 

and 

(c) Any Program or advertising that is 

false, misleading, or disparaging to 

another agricultural commodity. Natural 

grass sod products of all geographic 

origins shall be treated equally. 

Expenses and Assessments 

§ 1240.45 Budget and expenses. 

(a) At least 60 calendar days prior to 

the beginning of each fiscal year, and as 

may be necessary thereafter, the Board 

shall prepare and submit to USDA a 

budget for the fiscal year covering its 

anticipated expenses and disbursements 

in administering this Part. The budget 

for Research, Promotion, or Information 

may not be implemented prior to 

approval by the Secretary. Each such 

budget shall include: 

(1) A statement of objectives and 

strategy for each Program; 

(2) A summary of anticipated revenue, 

with comparative data for at least one 

preceding fiscal year, except for the 

initial budget; 

(3) A summary of proposed 

expenditures for each Program; and 

(4) Staff and administrative expense 

breakdowns, with comparative data for 

at least one preceding fiscal year, except 

for the initial budget. 


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(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 must be approved by the 

Department. Shifts of funds that do not 

result in an increase in the Board’s 

approved budget and are consistent 

with governing bylaws need not have 

prior approval by the Department. 

(d) The Board is authorized to incur 

such expenses, including provision for 

a reserve, as the Secretary finds 

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 from the 

Department, the Board may borrow 

funds necessary for startup expenses or 

other capital outlays of the Board as set 

forth in the subpart, which funds shall 

be subject to the same fiscal, budget, 

and audit controls as other funds of the 

Board. 

(f) The Board may accept voluntary 

contributions. Such contributions shall 

be free from any encumbrance by the 

donor and the Board shall retain 

complete control of their use. The Board 

may receive funds from outside sources 

with approval of the Secretary for 

specific authorized projects. 

(g) The Board shall reimburse the 

Secretary for all expenses incurred by 

the Secretary in the implementation, 

administration, enforcement and 

supervision of this Subpart, including 

all referendum costs in connection with 

this subpart. 

(h) For fiscal years beginning 3 years 

after the date of the establishment of the 

Board, the Board may not expend for 

administration, maintenance, and the 

functioning of the Board an amount that 

is greater than 15 percent of the 

assessment and other income received 

by and available to the Board for the 

fiscal year. For purposes of this 

limitation, reimbursements to the 

Secretary, and other Board expenses 

outlined in guidance provided by the 

Secretary shall not be considered 

administrative costs. 

(i) The Board may establish an 

operating monetary reserve and may 

carry over to subsequent Fiscal Years 

excess funds in any reserve so 

established; provided that, the funds in 

the reserve do not exceed two fiscal 

years’ budget of expenses. Subject to 

approval by the Secretary, such reserve 

funds may be used to defray any 

expenses authorized under this subpart. 

(j) Pending disbursement of 

assessments and all other revenue under 

a budget approved by the Secretary, the 

Board may invest assessments and all 

other revenues collected under this 

subpart in: 

(1) Obligations of the United States or 

any agency of the United States; 

(2) General obligations of any State or 

any political subdivision of a State; 

(3) Interest bearing accounts or 

certificates of deposit of financial 

institutions that are members of the 

Federal Reserve System; 

(4) Obligations fully guaranteed as to 

principal interest by the United States; 

or 

(5) Other investments as authorized 

by the Secretary. 

§ 1240.46 Financial statements. 

(a) The Board shall prepare and 

submit financial statements to the 

Department on a quarterly basis, or at 

any other time as requested by the 

Secretary. 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, year-todate expenditures, and the unexpended 

budget. 

(b) Each financial statement shall be 

submitted to the Department within 30 

calendar days after the end of the time 

period to which it applies. 

(c) The Board shall submit to the 

Department an annual financial 

statement within 90 calendar days after 

the end of the fiscal year to which it 

applies. 

§ 1240.47 Assessments. 

(a) The Board’s programs and 

expenses shall be paid by assessments 

on producers of natural grass sod 

products in the United States, other 

income of the Board, and other funds 

available to the Board. 

(b) Each natural grass sod producer 

shall be required to pay an assessment 

to the Board in the amount of one-tenth 

(1/10th) of one penny ($0.01) per square 

foot, or the equivalent thereof, of all 

natural grass sod products that the 

natural grass sod producer sells in the 

United States. 

(c) Twenty-four months after this 

subpart becomes effective and 

periodically thereafter, the Board shall 

review the assessment rate and, if so 

approved by a vote of at least two-thirds 

(2⁄3) of the Board, submit a 

recommendation for a change in the 

assessment rate to the Secretary. The 

assessment rate may not exceed oneeighth (1⁄8th) of one penny ($0.01) per 

square foot of natural grass sod products 

sold without approval by a majority of 

natural grass sod producers in a 

referendum conducted pursuant to the 

procedures in this part. 

(d) Upon the effective date of this 

Subpart, all natural grass sod producers 

shall be responsible for maintaining 

proper and sufficient sales receipts and 

records in order to accurately calculate 

their assessments owed to the Board 

pursuant to this Subpart. After each 

quarterly period, or such other time 

period set by the Board, natural grass 

sod producers shall calculate the 

amount of assessments they owe the 

Board and remit such payment to the 

Board no later than the last calendar day 

of the month following the end of the 

quarterly period, or such other time 

period set by the Board, in which the 

natural grass sod products were sold. 

(e) If any natural grass sod producer 

fails to pay the assessment within 60 

calendar days of the date it is due, the 

Board may impose a late payment 

charge and interest. The one-time late 

payment charge shall be equal to ten 

percent (10 percent) of the assessments 

due before interest charges have 

accrued. In addition to the late payment 

charge, one and one-half percent (1.5 

percent) per month interest on the 

outstanding balance, including any late 

payment charge and accrued interest, 

will be added to any accounts for which 

payment has not been received by the 

Board within 60 calendar days after the 

assessments are due. Such interest will 

continue to accrue monthly until the 

outstanding balance is paid to the 

Board. Persons failing to remit total 

assessments due in a timely manner 

may also be subject to actions under 

Federal debt collection procedures or 

other means as the Board recommends 

to the Secretary. 

(f) The Board may accept advance 

payment of assessments from any 

natural grass sod producer that will be 

credited toward any amount for which 

that person may become liable. The 

Board may not pay interest on any 

advance payment. 

(g) If the Board is not in place by the 

date the first assessments are to be 

collected, the Secretary shall receive 

assessments and shall pay such 

assessments and any interest earned to 

the Board when it is formed. 

Promotion, Research, and Information 

§ 1240.50 Programs. 

(a) The Board shall develop and 

submit to the Secretary for approval 

Programs authorized by this Subpart. 

Such Programs shall provide for 

Promotion, Research, Information and 


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other activities, including consumer and 

industry information and advertising. 

(b) No Program shall be implemented 

prior to its approval by the Secretary. 

Once a program is so approved, the 

Board shall take appropriate steps to 

implement it. 

(c) The Board must evaluate each 

program authorized under this subpart 

to ensure that it contributes to an 

effective and coordinated Program of 

Research, Promotion, and Information. 

The Board must submit the evaluations 

to the Secretary. If the Board finds that 

a program does not contribute to an 

effective Program of Promotion, 

Research, or Information, then the Board 

shall terminate such Program. 

(d) No Program authorized under this 

subpart shall reference a brand or trade 

name of any natural grass sod product 

without the approval of the Board and 

Secretary. 

§ 1240.51 Independent evaluation. 

At least once every five years, the 

Board shall authorize and fund from 

funds otherwise available to the Board, 

an independent evaluation of the 

effectiveness of this subpart and the 

Programs conducted by the Board 

pursuant to the part. The Board shall 

submit to the Secretary, and make 

available to the public, the results of 

each periodic independent evaluation 

conducted under this section. 

§ 1240.52 Patents, copyrights, trademarks, 

inventions, product formulations, and 

publications. 

(a) Any patents, copyrights, 

trademarks, inventions, product 

formulations, and publications 

developed through the use of funds 

received by the Board under 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, trademarks, 

inventions, product formulations, or 

publications, 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, § 1240.73 

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 together with funds contributed 

by another organization or person, the 

ownership and related rights to such 

patents, copyrights, inventions, 

trademarks, information, publications, 

or product formulations shall be 

determined by an agreement between 

the Board and the party contributing 

funds toward the development of such 

patents, copyrights, inventions, 

trademarks, information, publications, 

or product formulations in a manner 

consistent with paragraph (a) of this 

section, subject to the approval by the 

Secretary. 

Reports, Books, and Records 

§ 1240.60 Reports. 

(a) Natural grass sod producers will be 

required to provide periodically to the 

Board such information as the Board, 

with the approval of the Secretary, may 

require. Such information may include, 

but not be limited to: 

(1) The name and contact information 

of the natural grass sod producer; 

(2) The quantity of natural grass sod 

products sold; 

(3) The date that any assessments 

were paid; and 

(4) The natural grass sod producer’s 

TIN, EIN, or other identification as may 

be applicable. 

(b) Such information shall be reported 

to the Board no later than the 30th 

calendar day of the month following the 

end of the quarterly period in which the 

natural grass sod products were sold 

and shall accompany the collected 

payment of assessments as specified in 

§ 1240.47. First quarter data (January– 

March) shall be reported to the Board no 

later than the April 30th; second quarter 

data (April–June) shall be reported no 

later than July 31st; third quarter data 

(July–September) shall be reported no 

later than October 31st; and fourth 

quarter data (October–December) shall 

be reported no later than January 31st of 

the following marketing year. 

(c) In addition to the information 

required to be regularly reported to the 

Board, the Board may request additional 

information from natural grass sod 

producers as deemed necessary by the 

Board, subject to approval by the 

Secretary. 

§ 1240.61 Books and records. 

Each natural grass sod producer shall 

maintain any books and records 

necessary to carry out the provisions of 

this subpart and regulations issued 

thereunder, including such records as 

are necessary to verify any required 

reports. Such books and records must be 

made available during normal business 

hours for inspection by the Board’s or 

Secretary’s employees or agents. Natural 

grass sod producers must maintain the 

books and records for 3 years beyond 

the fiscal year to which they apply. 

§ 1240.62 Confidential treatment. 

All information obtained from books, 

records, or reports under the Act, this 

subpart and the regulations issued 

thereunder 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 members or 

natural grass sod producers. Only those 

Persons having a specific need for such 

information solely 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 at 

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 or 

subpart violated by such Person. 

§ 1240.63 Qualification of natural grass 

sod organizations. 

(a) Organizations receiving 

qualification from the Secretary will be 

entitled to submit requests for funding 

to the Board pursuant to § 1240.38. Only 

one natural grass sod producer 

organization per State may be qualified 

and only one natural grass sod producer 

per group of States may be qualified. 

(b) Any natural grass sod producer 

organization whose primary purpose is 

to represent natural grass sod producers 

within a State or group of States may 

request qualification. 

(c) Qualification shall be based, in 

addition to other available information, 

upon a factual report submitted by the 

organization that shall contain such 

information as the Secretary deems 

relevant for making such determination, 

including the following: 


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(1) The geographic territory covered 

by the organization’s active 

membership; 

(2) The nature and size of the 

organization’s active membership and 

proportion of active membership 

accounted for by natural grass sod 

producers; 

(3) The extent to which natural grass 

sod producers are represented on the 

organization’s board of directors; 

(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. 

(d) The primary consideration in 

determining the eligibility of an 

organization shall be whether its natural 

grass sod producer membership consists 

of a sufficiently large number of natural 

grass sod producers who produce a 

relatively significant volume of Sod as 

to reasonably warrant its qualification to 

submit requests for funding to the 

Board. Any natural grass sod 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 

§ 1240.70 Right of the Secretary. 

All fiscal matters, Programs, contracts, 

rules or regulations, reports, or other 

substantive actions proposed and 

prepared by the Board shall be 

submitted to the Secretary for approval. 

§ 1240.71 Referenda. 

(a) Initial referendum. The Order shall 

not become effective unless the Order is 

approved by a simple majority (50 

percent + one vote) of the natural grass 

sod producers voting in the initial 

referendum that have been engaged in 

the production and sale of natural grass 

sod products in the United States during 

a representative period determined by 

the Secretary. Each natural grass sod 

producer may cast one vote in the initial 

referendum. 

(b) Subsequent Referenda. The 

Secretary shall conduct Subsequent 

Referenda: 

(1) Not later than 7 years after this 

Order becomes effective and every 7 

years thereafter, to determine whether 

natural grass sod producers favor the 

continuation of this Subpart. This 

subpart shall continue if it is approved 

by a simple majority (50 percent + one 

vote) of natural grass sod producers 

voting in the subsequent referendum 

that have been engaged in the 

production and sale of natural grass sod 

products in the United States during a 

representative period determined by the 

Secretary. Each natural grass sod 

producer may cast one vote in the 

Subsequent Referenda; 

(2) At the request of the two-thirds of 

the members of the Board established in 

this Subpart; 

(3) At the request of 10 percent or 

more of the total number of eligible 

natural grass sod producers; or 

(4) At any time as determined by the 

Secretary. 

(c) Referendum procedures. The 

initial referendum and all Subsequent 

Referenda shall be conducted pursuant 

to the procedures outlined in subpart B. 

§ 1240.72 Suspension or termination. 

(a) The Secretary shall Suspend or 

Terminate this part or subpart or a 

provision thereof, if the Secretary finds 

that this part or 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 eligible natural grass sod 

producers in a subsequent referendum. 

(b) The Secretary shall Suspend or 

Terminate this subpart at the end of the 

fiscal year whenever the Secretary 

determines that its suspension or 

termination is favored by a simple 

majority of eligible natural grass sod 

producers voting in a subsequent 

referendum. 

(c) If, as a result of a Subsequent 

Referendum, the Secretary determines 

that this subpart is not approved, the 

Secretary shall: 

(1) Not later than 180 calendar days 

after making the determination, 

Suspend or Terminate, as the case may 

be, the collection of assessments under 

this subpart. 

(2) As soon as practical, Suspend or 

Terminate, as the case may be, activities 

under this subpart in an orderly 

manner. 

§ 1240.73 Proceedings after termination. 

(a) Upon termination of this subpart, 

the Board shall recommend to the 

Secretary up to five of its members to 

serve as trustees for the purpose of 

liquidating the Board’s affairs. 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 existing claim 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 this 

subpart; 

(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 

trustees, to such Person or Persons as 

the Secretary directs; and 

(4) Upon request of the Secretary, 

execute such assignments or other 

instruments necessary or appropriate to 

vest in such person’s title and right to 

all of the funds, property, and claims 

vested in the Board or the trustees 

pursuant to this Subpart. 

(c) Any Person to whom funds, 

property, or claims have been 

transferred or delivered pursuant to this 

subpart 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, to one or more organizations 

in the United States whose mission is 

generic promotion, Research, and 

Information programs. 

§ 1240.74 Effect of termination or 

amendment. 

Unless otherwise expressly provided 

by the Secretary, the termination of this 

subpart or of any regulation issued 

pursuant thereto, or the issuance of any 

amendment to either 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 

subpart or any regulation issued 

thereunder; 

(b) Release or extinguish any violation 

of this subpart or any regulation issued 

thereunder; 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. 

§ 1240.75 Personal liability. 

No member 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 member or employee, 

except for acts of dishonesty or willful 

misconduct. 

§ 1240.76 Separability. 

If any provision of this subpart is 

declared invalid or the applicability of 


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it 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. 

§ 1240.77 Amendments. 

Amendments to this subpart may be 

proposed from time to time by the Board 

or any interested Person affected by the 

provisions of the Act, including the 

Secretary. 

§ 1240.78 OMB control number. 

The control numbers assigned to the 

information collection requirements by 

the Office of Management and Budget 

pursuant to the Paperwork Reduction 

Act of 1995, 44 U.S.C. chapter 35, are 

OMB control numbers 0505–0001 

(Background Information Form), 0581– 

0093 (Organic Exemption), and 0581– 

NEW. 

Subpart B—[Reserved] 

Melissa Bailey, 

Associate Administrator, Agricultural 

Marketing Service. 

[FR Doc. 2023–22502 Filed 10–13–23; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 301 

[REG–127391–16] 

RIN 1545–BQ34 

Modernizing Regulations on Sales of 

Seized Property 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: This document contains 

proposed amendments to modernize 

regulations regarding the sale of a 

taxpayer’s property that the IRS seizes 

by levy. The proposed amendments 

would allow the IRS to maximize sale 

proceeds for the benefit of the taxpayer 

whose property the IRS has seized and 

the public fisc. The proposed 

regulations would affect all sales of 

property the IRS seizes by levy. 

DATES: Electronic or written comments 

and requests for a public hearing must 

be received by December 15, 2023. 

ADDRESSES: Commenters are strongly 

encouraged to submit public comments 

electronically. Submit electronic 

submissions via the Federal 

eRulemaking Portal at 

www.regulations.gov (IRS REG–127391– 

16). Once submitted to the Federal 

eRulemaking Portal, comments cannot 

be edited or withdrawn. The 

Department of the Treasury (Treasury 

Department) and the IRS will publish 

any comments submitted electronically, 

and on paper, to the public docket. 

Paper submissions may be sent to: 

CC:PA:LPD:PR (REG–127391–16), Room 

5203, Internal Revenue Service, P.O. 

Box 7604, Ben Franklin Station, 

Washington, DC 20044. 

FOR FURTHER INFORMATION CONTACT: 

Concerning the proposed regulations, 

Micah A. Levy, (202) 317–6832; 

concerning the submission of comments 

or requests for a public hearing, Vivian 

Hayes (202) 317–6901 (not toll-free 

numbers) or by sending an email to 

publichearings@irs.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

This document contains proposed 

amendments to the Procedure and 

Administration Regulations (26 CFR 

part 301) under section 6335 of the 

Internal Revenue Code (Code) relating to 

the sale of property that is seized by 

levy (seized property). 

I. Statutory Background 

Section 6335 of the Code governs how 

the IRS sells seized property. It was 

enacted as part of the Internal Revenue 

Code of 1954, Public Law 83–591, ch. 

736, 68A Stat. 3, 785–86 (1954), though 

many of its provisions date back to 

1866. See Act of July 3, 1866, ch. 184, 

14 Stat. 106, 107–110 (1866). 

Section 6335(a) requires the Secretary 

of the Treasury or her delegate 

(Secretary), as soon as practicable after 

a seizure, to give written notice of the 

seizure to the owner of the property that 

was seized (or, in the case of personal 

property, to the property’s possessor). 

The notice must specify the sum 

demanded and contain, in the case of 

personal property, an account of the 

property seized and, in the case of real 

property, a description with reasonable 

certainty of the seized property. Notice 

must be given to the owner (or 

possessor) either in person, by leaving it 

at the owner’s (or possessor’s) usual 

place of abode or business, or, in certain 

instances, by mail. 

Section 6335(b) requires the 

Secretary, as soon as practicable after a 

seizure, to give the property’s owner 

written notice of the forthcoming sale. 

The notice must be provided in the 

same manner prescribed in section 

6335(a) for the notice of seizure. Section 

6335(b) also requires that the Secretary 

publicize the sale to the general public 

by publishing notice ‘‘in some 

newspaper published or generally 

circulated within the county wherein 

such seizure is made,’’ or if such a 

newspaper does not exist, by posting 

‘‘notice at the post office nearest the 

place where the seizure is made and in 

not less than two other public places.’’ 

The notice of sale must specify the 

property to be sold and the time, place, 

manner, and conditions of the sale. 

Section 6335(c) provides that if seized 

property is not divisible in a way that 

would allow for a sale of part of the 

property to fully satisfy the whole 

amount of the tax and expenses, the 

Secretary is to sell the whole property. 

Section 6335(d) requires that the time 

of sale be not less than 10 days nor more 

than 40 days from the time public notice 

of the sale is provided under section 

6335(b). The place of sale must be 

within the county in which the property 

is seized except by special order of the 

Secretary. 

Section 6335(e) specifies the manner 

and conditions of sale. Section 

6335(e)(1) provides general rules about 

determinations relating to the minimum 

price, a sale being made to the highest 

bidder at or above the minimum price, 

the instances in which property will be 

deemed sold to the United States at the 

minimum price, and the instances in 

which the property will be released to 

the owner. Section 6335(e)(2) further 

directs the Secretary to prescribe by 

regulation the following additional rules 

applicable to the manner and other 

conditions of sale: requiring the sale not 

to be conducted in any manner other 

than by public auction or by public sale 

under sealed bids; in the case of the 

seizure of several items of property 

whether the property is to be offered 

separately, in groups, or in the 

aggregate, and sold under whichever 

method produces the highest aggregate 

amount; whether the announcement of 

the minimum price may be delayed 

until the receipt of the highest bid; 

whether payment in full is to be 

required at the time of acceptance of a 

bid or whether a part of such payment 

may be deferred for a period not to 

exceed one month; the extent to which 

additional methods (including 

advertising) may be used in giving 

notice of a sale; and under what 

circumstances the Secretary may 

adjourn a sale from time to time not to 

exceed in all one month. Congress 

delegated this authority to allow the IRS 

‘‘latitude to provide modern rules for 

selling property in the best manner 

possible.’’ H.R. Rep. No. 83–1337, at 410 

(1954); S. Rep. No. 83–1622, at 578 

(1954). Section 6335(e)(3) specifies what 


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