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Sec. 1217.34 Procedure.

(a) At a properly convened meeting of the Council, eight members shall
constitute a quorum. Any action of the Council shall require the concurring
votes of a majority of those present and voting. At
assembled meetings, all votes shall be cast in person.
(b) In matters of an emergency nature when there is not enough time to
call an assembled meeting of the Council, the Council may act upon the
concurring votes of a majority of its members by mail, telephone, facsimile,
or by other means of communication: Provided, that each proposition is
explained accurately, fully, and substantially
identically to each member. All telephone votes shall be promptly confirmed
in writing and recorded in the Council minutes.


Sec. 1217.35 Compensation and Reimbursement.

Members of the Council, when acting as members, shall serve without
compensation but shall be reimbursed for reasonable travel expenses, as
approved by the Council, incurred by them in the performance of their duties
as Council members.


Sec. 1217.36 Powers and duties.

The Council shall have the following powers and duties:
(a) To administer this subpart in accordance with its terms and
provisions of the Act;
(b) With the approval of the Secretary, to invest funds, pending
disbursement pursuant to a plan or project, only in: obligations of the
United States or any agency thereof; in general obligations of any State or
any political subdivision thereof; in any interest-bearing account or
certificate of deposit of a bank which is a member of the Federal Reserve
System; or in obligations fully guaranteed as to principal and interest by
the United States;
(c) To appoint from its members an executive committee and to delegate
to the committee authority to administer the terms and provisions of this
subpart under the direction of the Council and within the policies
determined by the Council;
(d) To receive, investigate, and report to the Secretary complaints of
violations of this part; and
(e) To recommend to the Secretary amendments to this part.
(f) To meet and organize and to select from among its members a
chairperson, other officers, and committees and subcommittees, as the
Council determines to be appropriate;
(g) To develop and recommend to the Secretary for approval such bylaws
as may be necessary for the functioning of the Council and such rules as may
be necessary to administer the Order, including activities authorized to be
carried out under the Order;
(h) To employ such persons as it may deem necessary and to
determine the compensation and define the duties of each;
(i) To prepare and submit to the Secretary for the Secretary's approval,
a budget on a fiscal period basis of its anticipated expenses in the
administration of this part including the probable costs of all programs or
projects and to recommend a rate of assessment with respect thereto;
(j) To receive and review or on its own develop programs and projects
and to enter into contracts or agreements with the approval of the Secretary
for the development and carrying out of programs or projects of promotion,
and information;
(k) To maintain minutes, books, and records which shall be
available to the Secretary for inspection and audit, and to prepare and
submit such reports from time to time to the Secretary, as the
Secretary may prescribe, and to make appropriate accounting with respect to
the receipt and disbursement of funds entrusted to it; (l) To
periodically prepare and make public reports of its
activities carried out, and, at least once each fiscal period, to make
public an accounting of funds received and expended;
(m) To cause its books to be audited by a certified public
accountant at the end of each fiscal period and to submit a copy of each
audit to the Secretary;
(n) To give to the Secretary the same notice of meetings of the Council
and subcommittees (including those conducted by telephone) as is given to
members in order that representatives of the Secretary may attend such
meetings;
(o) To submit to the Secretary such information pertaining to this
subpart as the Secretary may request;
(p) To notify olive oil importers and first handlers of all Council
meetings through news releases or other means;
(q) To develop and recommend such rules and regulations to the Secretary
for approval as may be necessary for the development and execution of plans,
projects, or activities to effectuate the declared purpose of the Act.
(r) To act as intermediary between the Secretary and any producer, first
handler, or importer.
(s) To work to achieve an effective, continuous, and coordinated program
of promotion, research, information, evaluation, and industry information
designed to strengthen the olive oil industry's position in the marketplace;
maintain and expand existing markets and uses for olive oil; and to carry
out programs, plans, and projects designed to provide maximum benefits to
the olive oil industry.


Sec. 1217.37 Prohibited activities.

(a) The Council may not engage in and shall prohibit the employees and
agents of the Council from engaging in:
(1) Any action that would be a conflict of interest; or
(2) Using funds collected by the Council under the Order to undertake
any action for the purpose of influencing legislation or governmental action
or policy, including local, state, national, and foreign governments, other
than recommending to the Secretary
amendments to the Order.
(b) No Council program, plan, or project shall make any false or
misleading claims on behalf of olive oil or false, misleading, or
disparaging statements with respect to the attributes or use of another
agricultural commodity.

Research, Promotion, and Information


Sec. 1217.40 Research, promotion, and information.

(a) The Council shall develop and submit to the Secretary for approval
any plans or projects authorized in this section. Such plans or projects
shall provide for:
(1) The establishment, issuance, effectuation, and administration of
appropriate plans or projects for research, promotion, and
information designed to strengthen the position of olive oil in the
marketplace, to maintain, develop, and expand markets for olive oil, and to
encourage further development of the domestic industry; and (2) The
establishment and conduct of marketing research and development projects to
the end that the acquisition of knowledge pertaining to olive oil or its
consumption and use may be encouraged or expanded or to the end that the
marketing and utilization of olive oil may be encouraged, expanded,
improved, or made more efficient.
(b) No program, plan, or project shall be implemented prior to its
approval by the Secretary. Once a program, plan, or project is so approved,
the Council shall take appropriate steps to implement it. (c) Each
program, plan, or project implemented under this subpart shall be reviewed
or evaluated periodically by the Council to ensure that it contributes to an
effective program of promotion, research, or information. If it is found by
the Council that any such program, plan, or project does not contribute to
an effective program of promotion,

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research, or information, then the Council shall terminate such program,
plan, or project.


Sec. 1217.41 Contracts.

(a) The Council may enter into contracts or make agreements for the
development and carrying out of research, promotion, and information, and
pay for the costs of such contracts or agreements, after approval from the
Secretary.
(b) Each contract or agreement shall provide that:
(1) The contractor or agreeing party shall develop and submit to the
Council a program, plan, or project together with a budget or budgets that
shall show the estimated cost to be incurred for such program, plan, or
project;
(2) The contractor or agreeing party shall keep accurate records of all
its transactions and make periodic reports to the Council of activities
conducted, submit accounting for funds received and
expended, and make such other reports as the Secretary or the Council may
require;
(3) The Secretary may audit the records of any contracting or agreeing
party periodically; and
(4) Any subcontractor who enters into a contract with a Council
contractor and who receives or otherwise uses funds allocated by the Council
shall be subject to the same provisions as the contractor.

Expenses and Assessments


Sec. 1217.50 Budget and expenses.

(a) Prior to the beginning of each fiscal period, or as may be necessary
thereafter, the Council shall prepare and submit to the Secretary a budget
on a fiscal period basis of its anticipated expenses and disbursements in
the administration of the Order and probable costs of research, promotion,
and information. Each such budget shall include:
(1) A statement of objectives and strategy for each program, plan, or
project;
(2) A summary of anticipated revenue, with comparative data for at least
one preceding year (except for the initial budget);
(3) A summary of proposed expenditures for each program, plan, or
project; and
(4) Staff and administrative expense breakdowns, with comparative data
for at least one preceding year (except for the initial budget). (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 Secretary, including shifting funds from one program, plan,
or project to another. Shifts of funds which do not cause an increase in the
Council's approved budget and which are consistent with governing bylaws,
approved by the Secretary, need not have prior approval from the Secretary.
(d) The Council is authorized to incur such expenses, including
provision for a reasonable reserve, as the Secretary finds are
reasonable and likely to be incurred by the Council 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 Council.
(e) With approval of the Secretary, the Council may borrow money for the
payment of administrative expenses, subject to the same fiscal, budget, and
audit controls as other funds of the Council. Any funds borrowed by the
Council shall be expended only for startup costs and capital outlays and are
limited to the first year of operation of the Council.
(f) The Council may accept voluntary contributions, but these shall only
be used to pay expenses incurred in the conduct of programs, plans, and
projects. Such contributions shall be free from any
encumbrance by the donor, and the Council shall retain complete control of
their use.
(g) The Council shall reimburse the Secretary for all expenses incurred
by the Secretary in the implementation, administration, and supervision of
the Order, including all referendum costs in connection with the Order.
(h) The Council may not expend for administration, maintenance, and
functioning of the Council in any fiscal year an amount that exceeds 15
percent of the assessments and other income received by the Council for that
fiscal year. Reimbursements to the Secretary required under paragraph (g) of
this section are excluded from this limitation on spending.


Sec. 1217.51 Financial statements.

(a) As requested by the Secretary, the Council shall prepare and submit
financial statements to the Secretary on a regular basis. 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-to-date
expenditures, and the unexpended budget.
(b) Each financial statement shall be submitted to the Secretary within
30 days after the end of the time period to which it applies. (c) The
Council shall submit annually to the Secretary an annual financial statement
within 90 days after the end of the fiscal year to which it applies.


Sec. 1217.52 Assessments.

(a) Each importer and first handler shall pay to the Council, upon
demand, the assessment as may be approved by the Secretary. Such assessment
shall be the amount established by the Secretary pursuant to paragraph (b)
of this section.
(b) Except as otherwise provided, the rate of assessment shall be $0.01
per pound of olive oil imported or produced and handled in the United
States. The rate of assessment may be raised to a maximum of $0.02 per pound
as recommended by the Council and approved by the Secretary, but it shall
not be raised more than $0.002 per year in any fiscal year.
(c) Importers of olive oil shall pay the assessment to the Council
through the U.S. Customs Service at the time of entry. The U.S. Customs
Service shall remit the assessment to the Council.
(d) The import assessment shall be uniformly applied to imported olive
oil identified by the numbers 1509.10.20, 1509.10.40, 1509.90.20,
1509.90.40, 1510.00.40, and 1510.00.60 in the Harmonized Tariff Schedule of
the United States.
(e) Assessments due from a first handler shall be paid to the Council at
such time and in such manner as the Council, with the Secretary's approval,
directs pursuant to regulations issued hereunder. Such regulations may
provide for different importer or first handler payment schedules so as to
recognize differences in marketing or purchasing practices and procedures.
(f) The Council shall impose a late payment charge on any person who
fails to remit to the Council the total amount for which the person is
liable on or before the payment due date established under this section. The
late payment charge will be in the form of interest on the outstanding
portion of any amount for which the person is liable. The rate of interest
shall be prescribed in regulations issued by the Secretary.
(g) Persons failing to remit total assessments due in a timely manner
may also be subject to actions by the Secretary under federal debt
collection procedures.


Sec. 1217.53 Exemption from assessment.

(a) A domestic first handler who handles less than 6,000 pounds of olive
oil per year or an importer who imports less than 6,000 pounds of olive oil
per

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year shall be eligible for an exemption from the assessment.
(b) To claim such exemption, a first handler or importer shall submit an
application to the Council stating the basis on which the person claims the
exemption for such year.
(c) If, after a person claims an exemption from assessments for any year
under this section, and such person no longer meets the
requirements of this paragraph for an exemption, such person shall provide
additional information to the Council in the form and manner prescribed by
the Council, subject to approval by the Secretary, and pay an assessment on
all the olive oil handled or imported by such person during the year for
which the person claimed the exemption. (d) Exempted individuals are
subject to such safeguards as
prescribed in this part to prevent improper use of this exemption.


Sec. 1217.54 Operating reserve.

The Council may establish an operating monetary reserve and may carry
over to subsequent fiscal periods excess funds in any reserve so
established: Provided, That the funds in the reserve shall not exceed one
fiscal period's budget. Subject to approval by the Secretary, such reserve
funds may be used to defray any expenses authorized under this part.


Sec. 1217.55 Independent evaluation.

The Council shall, not less often than every five years, authorize and
fund, from funds otherwise available to the Council, an independent
evaluation of the effectiveness of the Order and programs conducted by the
Council pursuant to the Act. The Council shall submit to the Secretary, and
make available to the public, the results of each periodic independent
evaluation conducted under this paragraph.


Sec. 1217.56 Patents, copyrights, inventions, product formulations, and
publications.

(a) Any patents, copyrights, inventions, or publications developed
through the use of funds collected by the Council under the provisions of
this subpart shall be the property of the U.S. Government as represented by
the Council, and shall, along with any rents, royalties, residual payments,
or other income from the rental, sale, leasing, franchising, or other uses
of such patents, copyrights, inventions, or publications, inure to the
benefit of the Council, and shall be considered income subject to the same
fiscal, budget, and audit controls as other funds of the Board. Upon
termination of this subpart, Sec. 1217.73 shall apply to determine
disposition of all such property. (b) Should patents, copyrights,
inventions or publications be developed through the use of funds received by
the Council under this subpart and funds contributed by another organization
or person, the ownership and related rights to such patents, copyrights,
inventions, or publications shall be determined by an agreement between the
Council and the party contributing funds towards the development of such
patent, copyright, invention or publication in a manner consistent with
paragraph (a) of this section, subject to approval by the Secretary.

Reports, Books, and Records


Sec. 1217.60 Reports.

Each first handler and importer shall be required to report to the
administrative staff of the Council, at such times and in such manner as it
may prescribe, such information as may be necessary for the Council to
perform its duties. Such reports shall include, but shall not be limited to
the following:
(a) For first handlers, the total quantity of olive oil handled during
the reporting period; and a record of assessments paid,
including a statement from the handler that the assessment has been paid on
all olive oil handled during the reporting period.
(b) For importers, the total quantity of olive oil imported during the
reporting period and a record of each importation of olive oil during such
period, giving quantity, date, and port of entry.
(c) For persons who have an exemption from assessments under Sec.
1217.53, such information as deemed necessary by the Council, and approved
by the Secretary, concerning the exemption including
disposition of exempted olive oil.
(d) Information reported to the administrative staff of the Council
regarding total quantity, assessments, and other specific information must
be kept confidential in accordance with Sec. 1217.62.


Sec. 1217.61 Books and records.

First handlers and importers shall maintain, and during normal business
hours make available for inspection by employees of the Council or the
Secretary, such books and records as are necessary to carry out the
provisions of this subpart and the regulations issued thereunder, including
such records as are necessary to verify any required reports. Such records
shall be maintained for two years beyond the first period of their
applicability.


Sec. 1217.62 Confidential treatment.

All information obtained from the books, records, or reports required to
be maintained shall be kept confidential by all persons, including employees
of the Council and all officers and employees and former officers and
employees of contracting and subcontracting agencies or agreeing parties
having access to such information, and shall not be made available to
Council members, first handlers, or importers. Only such information as the
Secretary deems relevant shall be disclosed to the public and then only in a
suit or administrative hearing brought at the direction, or upon the request
of the Secretary, or to which the Secretary or any officer of the United
States is a party, and involving this subpart, except that nothing in this
subpart shall be deemed to prohibit:
(a) The issuance of general statements based upon the reports of a
number of first handlers or importers subject to any order, if such
statements do not either expressly or tacitly identify the information
furnished by any person;
(b) The publication by direction of the Secretary, of the name of any
person convicted of violating this subpart, together with a statement of the
particular provisions of the Order violated by such person.
(c) Any disclosure of any confidential information by any employee of
the Council shall be considered willful misconduct.

Miscellaneous


Sec. 1218.70 Right of the Secretary.

All fiscal matters, programs, plans, or projects, rules or
regulations, reports, or other substantive actions proposed and prepared by
the Council shall be submitted to the Secretary for approval.


Sec. 1217.71 Referenda.

(a) Implementation. For the purpose of ascertaining whether the persons
to be covered by the Order favor the Order going into effect, the Secretary
shall conduct an initial referendum among persons to be subject to the
assessment under Sec. 1217.52 who, during a
representative period determined by the Secretary, engaged in the handling
or importation of olive oil. The Order must be approved by a simple majority
of those voting.
(b) Subsequent referenda. The Secretary shall hold subsequent referenda:
Not later than seven years after assessments first begin under the Order; at
the request of the Council; or when petitioned by 10 percent or more of the
olive oil first handlers and importers eligible to vote to determine if they
favor termination or suspension

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of this subpart. In addition, the Secretary may hold a referendum at any
time.


Sec. 1217.72 Suspension or termination.

(a) The Secretary shall suspend or terminate this part or subpart or a
provision thereof at the end of the marketing year whenever the Secretary
determines that the subpart or a provision thereof obstructs or does not
tend to effectuate the purposes of the Act, or if the Secretary determines
that its suspension or termination is approved or favored in a referendum by
a simple majority of the persons voting in a referendum who, during a
representative period determined by the Secretary, have been engaged in the
handling or importation of olive oil.
(b) If, as a result of a referendum, the Secretary determines that this
subpart is not approved, the Secretary shall:
(1) No later than 180 days after making the determination, suspend or
terminate, as the case may be, collection of assessments under this subpart;
and
(2) As soon as practical, suspend or terminate, as the case may be,
activities under this subpart in an orderly manner.


Sec. 1217.73 Proceedings after termination.

(a) Upon the termination of this subpart, the Council shall recommend to
the Secretary not more than five of its members to serve as trustees for the
purpose of liquidating the affairs of the Council. Such persons, upon
designation by the Secretary, shall become trustees of all funds and
property owned, in possession of, or under control of the Council, including
claims for any funds unpaid or property not delivered or any other claim
existing 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 Council under any contracts or agreements
entered into by it pursuant to the Order;
(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
Council and of the trustees, to such person as the Secretary may direct; and
(4) Upon the direction of the Secretary, execute such assignments or
other instruments necessary or appropriate to vest in such person full title
and right to all of the funds, property, and claims vested in the Council or
the trustees pursuant to the Order.
(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 as imposed upon the Council and the trustees. (d) Any
residual funds not required to defray the necessary expenses of liquidation
shall be returned to the persons who
contributed such funds, or paid assessments, or, if not practicable, shall
be turned over to the Secretary to be utilized, to the extent practicable,
in the interest of continuing one or more of the olive oil research or
information programs authorized under the Order.


Sec. 1217.74 Effect of termination or amendment.

Unless otherwise expressly provided by the Secretary, the
termination of this subpart or any regulation issued thereunder, 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 such rule or regulation issued thereunder;
(b) Release or extinguish any violation of this subpart or of any rule
or regulation issued thereunder; or
(c) Affect or impair any rights or remedies of the United States, the
Secretary, or of any person, with respect to any such violation.


Sec. 1217.75 Personal liability.

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


Sec. 1217.76 Separability.

If any provision of this subpart is declared invalid or the
applicability thereof to any person or circumstance is held invalid, the
validity of the remainder of this subpart, or the applicability thereof to
other persons or circumstances shall not be affected thereby.


Sec. 1217.77 Amendments.

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


Sec. 1217.78 OMB control numbers.

The control number 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, is yet to be
determined. The Council nominee background statement form is assigned OMB
control number 0505-0001.

Dated: August 18, 1999.
Kathleen A. Merrigan,
Administrator, Agricultural Marketing Service.
[FR Doc. 99-22107 Filed 8-25-99; 8:45 am]
BILLING CODE 3410-02-P
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