§ 1205.319 Term of office.

The members of the Board and their alternates shall serve for terms of 3 years, but the initial members and alternates shall be selected to represent the cotton-producing States in each of the cotton-producing regions for terms expiring on December 31, 1968, 1969, or 1970, so that, as nearly as practicable, the terms of one-third of the members and their alternates from cotton-producing States in any such region expire each year. Each member and alternate member shall continue to serve until his successor is selected and has qualified. § 1205.320 Nominations.

All nominations authorized under § 1205.318 shall be made within such period of time and in such manner as the Secretary shall prescribe. The eligible producer organizations within each cotton-producing State, as certified pursuant to § 1205.337, shall caucus for the purpose of jointly nominating two qualified persons for each member and for each alternate member to be selected to represent the cotton producers of such cotton-producing State. If joint agreement is not reached with respect to the nominees for any such position each such organization may nominate two qualified persons for any position on which there was no agreement.

nate member of the Board shall be nominated and selected in the manner specified in §§ 1205.318, 1205.320, and 1205.321. § 1205.324 Alternate members.

An alternate member of the Board, during the absence of the member for whom he is the alternate, shall act in the place and stead of such member and perform such other duties as assigned. In the event of the death, removal, resignation, or disqualification of a member, his alternate shall act for him until a successor for such member is selected and qualified. In the event both a member of the Board and his alternate are unable to attend a Board meeting, the Board may designate any other alternate member from the same cotton-producing State or region to serve in such member's place and stead at such meeting. § 1205.325 Procedure.

A majority of the members of the Board, or alternates acting for members, shall constitute a quorum and any action of the Board shall require the concurring votes of at least a majority of those present and voting. At assembled meetings all votes shall be cast in person. For routine and noncontroversial matters which do not require deliberation and the exchange of views, and in matters of an emergency nature when there is not enough time to call an assembled meeting of the Board, the Board may also take action upon the concurring votes of a majority of its members by mail, telegraph or telephone, but any such action by telephone shall be confirmed promptly in writing.

§ 1205.326 Compensation and reimbursement.

The members of the Board, and alternates when acting as members, shall serve without compensation but shall be reimbursed for necessary expenses, as approved by the Board, incurred by them in the performance of their duties under this subpart.

§ 1205.327 Powers.

The Board shall have the following powers:

(a) To administer the provisions of this subpart in accordance with its terms and provisions;

(b) Subject to the approval of the Secretary, to make rules and regulations to effectuate the terms and provisions of this subpart including the designation

The Board shall have the following duties:

(a) To select from among its members a chairman and such other officers as may be necessary for the conduct of its business, and to define their duties;

(b) To appoint or employ such persons as it may deem necessary and to determine the compensation and to define the duties of each;

(c) With the approval of the Secretary, to enter into contracts or agreements for the development and submission to it of research and promotion plans or projects authorized by § 1205.329, and for the carrying out of such plans or projects when approved by the Secretary, and for the payment of the costs thereof with funds collected pursuant to § 1205.331, with an organization or association whose governing body consists of cotton producers selected by the cotton producer organizations certified by the Secretary under § 1205.337, in such manner that the producers of each cotton-producing State will, to the extent practicable, have representation on the governing body of such organization in the proportion that the cotton marketed by the producers of such State bears to the total cotton marketed by the producers of all cotton-producing States, subject to adjustments to reflect lack of participation in the program by reason of refunds under § 1205.332. Any such contract or agreement shall provide that such contracting organization or association shall develop and submit annually to the Cotton Board, for the purpose of review and making recommendations to the Secretary, a program of research, advertising, and sales promotion projects, together with a budget, or budgets, which shall show the estimated cost to be incurred for such projects, and that any such projects shall become effective upon approval by the Secretary. Any such contract or agreement shall also provide that the contracting organi

zation shall keep accurate records of all its transactions, which shall be available to the Secretary and Board on demand, and make an annual report to the Cotton Board of activities carried out and an accounting for funds received and expended, and such other reports as the Secretary may require;

(d) To review and submit to the Secretary any research and promotion plans or projects which have been developed and submitted to it by the contracting organization or association, together with its recommendations with respect to the approval thereof by the Secretary;

(e) To submit to the Secretary for his approval budgets on a fiscal period basis of its anticipated expenses and disbursements in the administration of this subpart, including probable costs of advertising and promotion and research and development projects as estimated in the budget or budgets submitted to it by the contracting organization or association, with the Board's recommendations with respect thereto;

(f) To maintain such books and records and prepare and submit such reports from time to time to the Secretary as he may prescribe, and to make appropriate accounting with respect to the receipt and disbursement of all funds entrusted to it;

(g) To cause its books to be audited by a competent public accountant at least once each fiscal period and at such other times as the Secretary may request, and to submit a copy of each such audit to the Secretary;

(h) To give the Secretary the same notice of meetings of the Board as is given to members in order that his representative may attend such meetings;

(i) To act as intermediary between the Secretary and any producer or handler; (j) To submit to the Secretary such information as he may request.

RESEARCH AND PROMOTION

§ 1205.329 Research and promotion. The Cotton Board shall in the manner prescribed in § 1205.328 (c) establish or provide for: (a) The establishment, issuance, effectuation, and administration of appropriate plans or projects for the advertising and sales promotion of cotton and its products, which plans or projects shall be directed toward increasing the general demand for cotton or its prod

ucts in accordance with section 6(a) of the act;

(b) The establishment and carrying on of research and development projects and studies with respect to the production, ginning, processing, distribution, or utilization of cotton and its products in accordance with section 6(b) of the act, to the end that the marketing and utilization of cotton may be encouraged, expanded, improved, or made more efficient.

EXPENSES AND ASSESSMENTS 1205.330 Expenses.

The Board is authorized to incur such expenses as the Secretary finds are 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. The funds to cover such expenses shall be paid from assessments received pursuant to § 1205.331.

Each cotton producer or other person for whom cotton is being handled shall pay to the handler thereof designated by the Cotton Board pursuant to regulations issued by the Board and such handler shall collect from the producer or other person for whom the cotton, including cotton owned by the handler, is being handled, and shall pay to the Cotton Board, at such times and in such manner as prescribed by regulations issued by the Board, an assessment at the rate of $1 per bale of cotton handled, for such expenses and expenditures, including provision for a reasonable reserve, as the Secretary finds are reasonable and likely to be incurred by the Cotton Board under this subpart, except that no more than one such assessment shall be made on any bale of cotton.

No funds collected by the Board under this subpart shall in any manner be used for the purpose of influencing governmental policy or action except in recommending to the Secretary amendments to this subpart.

REPORTS, BOOKS, AND RECORDS

§ 1205.334 Reports.

Each handler subject to this subpart may be required to report to the Cotton Board periodically such information as is required by regulations, which information may include but not be limited to, the following:

(a) Number of bales handled;

(b) Number of bales on which an assessment was collected;

(c) Name and address of person from whom he has collected the assessment on each bale handled;

(d) Date collection was made on each bale handled.

§ 1205.335 Books and records.

Each handler subject to this subpart shall maintain and make available for inspection by the Cotton Board and 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 reports required. Such records shall be retained for at least 2 years beyond the marketing year of their applicability. § 1205.336 Confidential treatment.

(a) All information obtained from such books, records, or reports shall be kept confidential by all officers and employees of the Department of Agriculture and of the Cotton Board, and only such information so furnished or acquired as the Secretary deems relevant shall be disclosed by them, and then only in a suit or administrative hearing brought at the direction, or upon the re

quest, of the Secretary of Agriculture, or to which he or any officer of the United States is a party, and involving this subpart. Nothing in this § 1205.336 shall be deemed to prohibit (1) the issuance of general statements based upon the reports of a number of handlers subject to this subpart, which statements do not identify the information furnished by any person, or (2) the publication by direction of the Secretary, of the name of any person violating this subpart, together with a statement of the particular provisions of this subpart violated by such person.

(b) All information with respect to refunds made to individual producers shall be kept confidential by all officers and employees of the Department of Agriculture and of the Cotton Board.

CERTIFICATION OF COTTON PRODUCER
ORGANIZATION

Any cotton producer organization within a cotton-producing State may request the Secretary for certification of eligibility to participate in nominating members and alternate members to represent such State on the Cotton Board. Such eligibility shall be based in addition to other available information upon a factual report submitted by the organization which shall contain information deemed relevant and specified by the Secretary for the making of such determination, including the following:

(a) Geographic territory within the State covered by the organization's active membership;

(b) Nature and size of the organization's active membership in the State, proportion of total of such active membership accounted for by farmers, a map showing the cotton-producing counties in such State in which the organization has members, the volume of cotton produced in each such county, the number of cotton producers in each such county, and the size of the organization's active cotton producer membership in each such county;

(c) The extent to which the cotton producer membership of such organization is represented in setting the organization's policies;

(d) Evidence of stability and permanency of the organization;

(e) Sources from which the organization's operating funds are derived;

(f) Functions of the organization; and (g) The organization's ability and willingness to further the aims and objectives of the act.

The primary consideration in determining the eligibility of an organization shall be whether its cotton farmer membership consists of a sufficiently large number of the cotton producers who produce a relatively significant volume of cotton to reasonably warrant its participation in the nomination of members for the Cotton Board. Any cotton producer organization found eligible by the Secretary under this § 1205.337 will be certified by the Secretary, and his determination as to eligibility is final. MISCELLANEOUS

(a) The Secretary will, whenever he finds that this subpart or any provision thereof obstructs or does not tend to effectuate the declared policy of the act, terminate or suspend the operation of this subpart or such provision.

(b) The Secretary may conduct a referendum at any time, and shall hold a referendum on request of 10 per centum or more of the number of cotton producers voting in the referendum approving this subpart, to determine whether cotton producers favor the termination or suspension of this subpart, and he shall suspend or terminate such subpart at the end of the marketing year whenever he determines that its suspension or termination is approved or favored by a majority of the producers of cotton voting in such referendum who, during a representative period determined by the Secretary, have beer engaged in the production of cotton, and who produced more than 50 per centum of the volume of the cotton produced by the cotton producers voting in the referendum.

§ 1205.339 Proceedings after termination.

(a) Upon the termination of this subpart the Cotton Board shall recommend not more than five of its members to the Secretary to serve as trustees, for the purpose of liquidating the affairs of the Cotton Board. 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 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 Cotton Board under any -contracts or agreements entered into by it pursuant to § 1205.328(c); (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 of the trustees, to such person or persons as the Secretary may direct; and (4) upon the request of the Secretary execute such assignments or other instruments necessary or appropriate to vest in such person or persons full title and right to all of the funds, property, and claims vested in the Board or the trustees pursuant to this § 1205.339.

(c) Any person to whom funds, property, or claims have been transferred or delivered pursuant to this § 1205.339 shall be subject to the same obligation imposed upon the Cotton 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 practicable, in the interest of continuing one or more of the cotton research or promotion programs hitherto authorized.

§ 1205.340 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, or (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 person, with respect to any such violation.

§ 1205.341 Personal liability.

No member or alternate member of the Cotton Board shall be held personally responsible, either individually or jointly with others, in any way whatsoever, to any person for errors in judgment, mis

(a) Cotton Division. "Cotton Division" means the Cotton Division of the Consumer and Marketing Service of the U.S. Department of Agriculture.

(b) Director. "Director" means the Director of the Cotton Division. § 1205.402

Determination of Cotton Board membership.

In determining whether any cottonproducing State is entitled to be represented by more than one member on the Cotton Board pursuant to § 1205.318, average annual production of upland cotton in terms of 500-pound gross weight bales for the 5 crop years 1961 through 1965 shall be used as the basis for determination of such additional members. Accordingly, Texas is entitled to be represented on the Cotton Board by a total of five members, California by a total of two members, Mississippi by a total of two members, and each other cotton-producing State by one member