Mr. HOLLAND, from the Committee on Agriculture and Forestry, submitted the following REPORT [To accompany S. 1181] The Committee on Agriculture and Forestry, to which was referred the bill (S. 1181) to enable potato growers to finance a nationally coordinated research and promotion program to improve their competitive position and expand their markets for potatoes by increasing consumer acceptance of such potatoes and potato products and by improving the quality of potatoes and potato products that are made available to the consumer, having considered the same, reports favorably thereon with amendments and recommends that the bill (as amended) do pass. SHORT EXPLANATION Title I, the "Potato Research and Promotion Act," provides for a program of potato research, development, advertising, and promotion, to be financed by assessments of not more than 1 cent per hundred pounds of potatoes produced commercially in the 48 contiguous States. It is generally similar to the Cotton Research and Promotion Act, which was approved July 13, 1966. The program would be effective only if approved by the Secretary of Agriculture after notice and hearing and by two-thirds (in number and volume and at least a majority in number) of the producers voting in a referendum. It would be administered by a "National Potato Promotion Board" composed of producer representatives selected by the Secretary from producer nominees. The board would develop a budget and program, recommend assessment rates, and enter into agreements to carry them out, all subject to the approval of the Secretary. Assessments would be collected by handlers. Only commercial producers, who produce five or more acres of potatoes, would vote or be subject to assessment. Any producer could obtain a refund of his assessment if he desired. Title II would amend section 8c(6) (I) of the Agricultural Adjustment Act (7 U.S.C. 608c(6) (I)) to add tomatoes to the list of commodities for which paid advertising can be provided under marketing orders. HEARINGS All witnesses, except those connected with the Farm Bureau, favored the bill. AMENDMENTS All of the substantive amendments to title I of the bill were proposed by the Department of Agriculture and are fully explained in its report attached hereto. Witnesses at the hearings had no opposition to the Department amendments. Title II, added by the committee, would accord tomatoes the same treatment with respect to paid advertising under marketing orders as is now accorded a long list of other commodities. The addition of title II required a number of purely technical amendments to title I. SECTION-BY-SECTION ANALYSIS TITLE I Section 1. Short title.-"Potato Research and Promotion Act." Section 2. Findings and declaration of policy.-This section declares it to be the policy, through assessments on potatoes harvested in the United States, to finance a potato research, development, advertising, and promotion program. The committee amendment would include a finding that the program is vital to interstate commerce in potatoes and potato products, and a finding that all commerce in potatoes is or affects interstate com merce. Section 3. Definitions. This section defines "Secretary", "person", "potatoes", "handler", "producer", and "promotion". The term "potatoes" is restricted to Irish potatoes grown by producers in the 48 contiguous States. "Producer" means a person engaged in the growing of 5 or more acres of potatoes. The term "promotion” includes paid advertising. The committee amendments delete the definition of "handle," and limit handlers to persons who handle potatoes "in a manner specified in a plan issued pursuant to this title or in the rules and regulations issued thereunder." The purpose is to provide a greater degree of flexibility in the selection of the handler who is to collect the as sessments. Section 4. Authority to issue a plan. This section directs the Secretary to issue and amend from time to time plans authorizing handlers to collect assessments on potatoes handled, and authorizing the use of such funds for research, development, advertising, and promotion of potatoes. S. Rept. 91-416 Section 5. Notice and hearing.-This section requires the Secretary to give due notice and opportunity for a hearing upon a proposed plan, whenever he believes that a plan will tend to effectuate title I of the act. Section 6. Finding and issuance of a plan.-This section requires the Secretary to issue a plan if he finds, upon the evidence introduced at the hearing, that the plan will tend to effectuate title I of the act. The committee amendment would delete the words "or modifications," which are unnecessary and confusing. Section 7. Regulations.-This section authorizes the Secretary to make such regulations as may be necessary to carry out title I. Section 8. Required terms in plans. Any plan issued under the bill would provide for establishment of a National Potato Promotion Board to (1) administer the plan, (2) make regulations to effectuate it, (3) receive, investigate, and report to the Secretary complaints of violations, (4) recommend amendments to the Secretary, and (5) exercise such other duties and powers as the plan may provide. The board would be composed of representatives of producers selected by the Secretary from nominations made by producers in the manner prescribed by the Secretary. If producers failed to select nominees the Secretary would appoint producers on the basis of representation provided for in such plan. Board members would serve without compensation, but would be reimbursed for reasonable expenses incurred in performing their duties. The board would submit a budget of plan costs to the Secretary for his approval, on a fiscal period basis, and recommend the assessment rate, which would be fixed by the Secretary at not to exceed 1 cent per 100 pounds of potatoes handled. Funds collected would be used for research, development, advertising, or promotion of potatoes and potato products and such other expenses for the administration, maintenance, and functioning of the board as might be authorized by the Secretary. Promotion programs could not refer to brand names, or make false or unwarranted statements in behalf of potatoes or potato products or about competing products. Funds could not be used to influence governmental policy, except with respect to plan amendment. Any producer would have the right to obtain a refund of any assessment collected from him by making demand personally in the prescribed manner. The committee gave consideration to the fact that in some States there may be State marketing research and promotion programs; and that producers in such States may not want to participate in the program provided by the bill. The committee wishes to emphasize that in such States, as well as in all other States, the producers need not participate in the program under the bill, since subsection (g) of this section gives every producer the right to obtain a refund of the assessment collected from him. Subject to the approval of the Secretary, the board would develop research, development, advertising, or promotion programs and enter into agreements to have them carried out. The board would maintain S. Rept. 91-416 books and records, report the the Secretary as prescribed, and cause a complete audit report to be submitted to the Secretary at the end of each fiscal period. Section 9. Permissive terms in plans. In addition, any plan could provide (1) authority to exempt potatoes used for nonfood purposes, (2) authority to designate different handler payment and rereporting schedules to recognize differences in practices and procedures in different production areas, (3) authority to accumulate reserve funds not exceeding the amount budgeted for 2 years' operation, and (4) other necessary terms and conditions. Subsections (c), (d), and (f) of this section provide for the establishment of research, development, advertising, and promotion programs. Since these programs are also provided for in a more detailed and restricted manner in section 8, and since section 8 provisions are mandatory, the bill should be construed as subjecting any such programs to all of the provisions and restrictions of section 8. Subsection (f) makes it clear that foreign promotion is authorized. The Committee amendment to subsection (e) merely makes a technical correction, substituting ", development," for "and develop ment or". Section 10. Assessments.-As introduced, this section provides for collection of assessments by the first handler. The Committee amendments would (1) provide for collection by handlers designated by the board pursuant to regulations under the plan and (2) to permit designation of different handlers or classes of handlers to recognize differences in marketing practices or procedures in different States or areas. Handlers would be required to keep accurate records of collections and make appropriate reports. Information obtained would be kept confidential subject to a fine of up to $1,000 or imprisonment up to 1 year, or both. Section 11. Petition and review.--This section provides for appeals to the Secretary and the district court from any provision which is not in accordance with law. Section 12. Enforcement. This section provides for specific enforcement and injunction by the district courts and for criminal penalties. The committee amendments (1) permit criminal penalties without proof of "willful" conduct, (2) provide a minimum fine of $100, (3) substitute language generally associated with civil penalties, and (4) eliminate unnecessary language relative to suits to enforce collection. Section 13. Investigation and power to subpena.-This section authorizes the Secretary to make necessary investigations, administer oaths, subpena witnesses, and require the production of records. It also provides immunity from prosecution for any matter on which a witness is compelled to testify after claiming his privilege against self incrimination. Section 14. Requirement of referendum.-No plan would be effective unless approved by two-thirds (by number or volume of production and in any event by a majority in number) of the producers voting in a referendum. The vote would be confidential and any Department S Rept. 91-416 employee making disclosure would be subject to a fine of up to $1,000, or imprisonment up to 1 year, or both. Section 15. Suspension or termination of plans.-Any plan, or provision thereof, would be suspended or terminated if the Secretary found that it did not tend to effectuate the act. A plan would also be suspended or terminated if such suspension or termination were favored by a majority (in both number and volume) of the producers voting in a referendum. The Secretary could conduct a referendum at any time and would be required to do so on request of the board or 10 percent or more of the potato producers. Section 16. Amendment procedure.-Plans could be amended in the same manner as provided for their issuance. Section 17. Separability.-Invalidity of any part of title I would not affect the remainder. Section 18. Authorization.-Funds appropriated under section 32 of Public Law 320, 74th Cong., are made available for carrying out title I, but not for carrying out any plan thereunder. Section 19. Effective date. Title I would be effective upon enact ment. TITLE II Paid advertising may now be provided under marketing orders for cherries, carrots, citrus fruits, onions, Tokay grapes, fresh pears, dates, plums, nectarines, celery, sweet corn, limes, olives, pecans, and avocados. Title II of the bill would add tomatoes to this list. DEPARTMENTAL VIEWS The report of the Department favoring enactment of the bill is attached. Hon. ALLEN J. ELLENDER, DEPARTMENT OF AGRICULTURE, Chairman, Committee on Agriculture and Forestry, U.S. Senate. DEAR MR. CHAIRMAN: This is in reply to your request of March 3 for a report on S. 1181. The purpose of the bill is to enable potatogrowers to finance a nationally coordinated research and promotion program to improve their competitive position and expand their markets for potatoes. The Department has no objection to this bill but suggests some modifications. The bill provides for authority to establish a plan to collect assessments on potatoes produced in the 48 contiguous States of the United States. Producers with less than 5 acres will be exempt from assessments. The assessments will be used for promotion of potatoes including paid advertising. In addition, assessments can be used for research and development projects. The costs incurred by the potato industry in administering the program will also be paid from assessments. Prior approval by the Secretary of Agriculture for all projects and expenditures is provided for as a safeguard against improper use of funds. S. Rept. 91-416 |