Outline and Text of Proposed Order for 

Research and Promotion Programs 

• General 

• Board 

• Programs, Plans, and Projects 

• Expenses and Assessments 

• Reports, Books, and Records 

• Referendum Procedures 

• Miscellaneous 

 General

Definitions: Examples of definitions that will be needed to carry out the provisions of the 

order are: fiscal period, board, handler, producer, processor, importer, market or 

marketing, research, promotion, industry information, consumer information, the 

commodity covered, plans, projects, and programs. 

Board

Name and composition of the board: The industry has flexibility in determining the 

number of members and what segment(s) of the industry they would represent. If 

imports are assessed, importers must have equitable representation on the board. 

Indicate if there would be alternates for the members or a public member and whether 

members would serve at-large or represent regions, districts, or states. 

Term of office: The term of office is usually 3 years, except for the initial terms of 2, 3 

and 4 years to provide for staggered terms of office. Thereafter, one third of the board 

will be appointed each year. Each member and alternate may serve only two consecutive 

terms in office. The term of office may be on a calendar year or fiscal year basis or begin 

at anytime during the year as appropriate for the industry. 

Nomination Procedures: Nominations may be made at meetings in the production area, 

regionally, or state by state, or by mail ballot. Two nominees must be submitted to the 

Secretary of Agriculture for each position on the board. Whereas nominees to serve as 

industry members are usually elected by their peers, nominees for public member 

positions are usually nominated by the board after it has been appointed. 

Procedures for reapportionment of board membership: At least once every five years, 

the board must review the geographical distribution of U.S. production on the 

commodity and, if the program covers imports, the quantity or value of the imports 

of the commodity. If warranted, membership on the board must be changed to reflect 

changes in the geographical distribution of domestic production and the quantity or value 

of imports. This is accomplished by notice and comment rulemaking. 
Powers and duties: These are standard and include administering the order in accordance 

with its terms and conditions; collecting assessments; developing and recommending to 

the Secretary of Agriculture bylaws and rules; meeting, organizing, and selecting officers 

and committee; providing the Secretary with advance notice of meetings; employing 

staff; conducting generic promotion, research, and consumer and industry information 

activities; preparing and submitting to the Secretary rate of assessment and an annual 

budget and marketing plan; entering into contracts as necessary; keeping records; 

receiving, investigating, and reporting to the Secretary violations of the order; and 

recommending to the Secretary amendments to the order. In addition, each board is 

required to finance an independent evaluation of its program’s effectiveness at least once 

every 5 years. 

Meeting Procedures: This includes matters such as quorum requirements and voting 

procedures. 

Programs, Plans, and Projects

Types of Research and Promotion Activities which may be conducted: It is in this section 

that the industry describes the types of activities that may be conducted under the 

program. The authority may be broad or include specific requirements, such as requiring 

expenditures on domestic and export promotions to be proportionate to the amount of 

assessments collected on domestic and export shipments or restrictions on production 

research. The statute prohibits (1) any action that could be a conflict of interest; (2) using 

funds collected by the board for the purpose of influencing any legislation or 

governmental action or policy other than recommending to the Secretary amendments to 

the order; and (3) any advertising that may be false, misleading or disparaging to another 

agriculture commodity. 

Requirements for Contractors: This section requires each contractor to comply with all 

provisions of the statute and the order. It may also contain individual program-specific 

requirements. 

Expenses and Assessments

Assessment Rate and Procedures: This section sets the assessment rate or a maximum 

assessment rate as well as provisions for raising and lowering the rate. If imports are 

assessed, the assessment must be comparable to the domestic assessment. The rate may 

be based on a unit of the commodity or value. If the order specifies a delayed 

referendum, the assessment rate may not be raised between the time the program is 

implemented and the initial referendum. There may be no more than one assessment 

levied on a first handler or importer with respect to any agricultural commodity. This 

section also prescribes how and when covered entities are to remit their assessments. 

Different Payment and Reporting Schedules (optional): The order may authorize the 

board to grant different payment and reporting schedules to recognize differences in 

marketing practices and procedures used in different production and importing areas. 
Exemptions (options): If the order authorizes exemptions from assessments, it should 

also provide safeguards for ensuring that exemption provisions are not abused. 

Credit for State Assessments (optional): The order may authorize credits of assessments 

for those individuals who contribute to other similar generic research, promotion, and 

information programs at the state, regional, or local level. 

Credit for Branded Activities by Cooperatives (optional): The Secretary may permit a 

farmer cooperative that engages in branded activities to receive an annual credit. The 

cost of the branded activities could be deducted from the amount of any assessments that 

would otherwise be required to be paid to the national promotion board by the producer 

members of the cooperative. 

Penalties for not Paying Assessments: The order should provide that individuals not 

paying assessments on time are subject to late payment penalties and interest. 

Provisions for Safeguarding Industry Funds and Establishing Reserves: This section of 

the order prescribes investment policies and parameters for reserve funds. 

Escrow Account and Refund Procedures if a Delayed Referendum is Proposed: If the 

order contemplates a delayed referendum, the board must establish an escrow account to 

hold 10 percent of assessments collected between the date the order becomes effective 

and the date of the referendum. Assessment payers must be allowed to apply for a refund 

of the assessments they paid under the program. Refunds will be made from the escrow 

account if the industry votes to discontinue the program. If the escrow account does not 

contain adequate funds to pay refunds of 100 percent, the board shall refund assessments 

to the requestors on a prorated basis. 

Reimbursement of Government Costs: This includes costs incurred by USDA from the 

date the order is requested, including start-up on referendum costs, plus U.S. Customs 

Service costs if imports are assessed. 

Limitation on Spending: Each year beginning three years after the board is established, 

the board’s annual administrative expenses (except for reimbursements to the 

government) may not exceed 15 percent of its income for the year. 

Prohibited Activities: No funds may be used for any promotion, research, and 

information activities that are false, misleading, or disparaging to another agricultural 

commodity. A board member, employee, or agent may not engage in any action that 

would be a conflict of interest; use funds collected for the purpose of influencing any 

legislation or governmental action or policy other than recommending to the Secretary 

amendments to the order. 

Reports, Books, and Records

Description of Reporting Forms and When They Should be Filed
Record Keeping Requirements: Each covered entity must keep records as required by 

this section. 

Confidentiality Requirements: All information collected under the auspices of the order 

must be kept confidential by all officers, employees, and agents of USDA and the board, 

except for the issuance of general statements. 

Referendum Procedures

Up-front or Delayed Referendum: The order may provide for a referendum to be held 

prior to implementation or it may be delayed. If the industry requests a delayed 

referendum, the referendum must be held within three years after assessment collections 

begin under the program. 

Who Will Vote: Those who pay assessments would vote in referenda. If imports are 

assessed, importers must be allowed to vote in referenda. 

How Referendum will be Conducted: The industry has the options of advance 

registration and/or voting by mail or in-person. 

Requirements for Passage: An order may provide for its approval (1) by a majority of 

those voting; (2) by persons voting who represent a majority of the volume of the 

commodity voted in the referendum; or (3) both. 

Periodic Continuance Referenda (optional): The order may provide that USDA conduct 

a referendum periodically (e.g., every 5 or 6 years) to determine if the industry wants the 

program to continue. 

Miscellaneous

Right of the Secretary: This is a standard section, and it states that all activities of the 

board shall be submitted to the Secretary for approval. 

Suspension and Termination Procedures: This section describes the steps to terminate a 

program, including the appointment by the Secretary of trustees from among the board 

members and the disposition of residual funds not required to dray the necessary 

expenses of liquidation. 

Amendment Procedures: This is a general section stating that amendments to the order 

may be recommended from time to time by the board or any interested person affected by 

the program, including the Secretary. 

Personal Liability of Board Members and Staff: This section explains that no member or 

employee of the board shall be held personally responsible, either individually or jointly, 

to any person for errors in judgment, mistakes, or other acts or failures to act, except for 

acts of dishonesty or willful misconduct. 
Statement on Patents, Copyrights, Inventions, Publications, and Product Formulations: 

Any patents, copyrights, publications, or product formulation developed through the use 

of funds received by the board under the order shall be the property of the United States 

Government. Royalties and other income from the rental, sale, leasing, franchising, or 

other uses of patents, copyrights, inventions, publications, or product formulations belong 

to the board.