food within the United States, and upon receipt of such certificate said processor shall be excused from invoicing to said purchaser an assessment with respect to such processed wheat and from paying any assessment with respect thereto.

COLLECTION AND RECORD OF ASSESSMENTS

SEC. 21. The pro rata assessment to be imposed pursuant to section 20 with respect to any hundredweight of processed wheat shall be imposed upon and payable by one of the following persons:

(1) the initial processor or a subsequent processor thereof if the same constitutes, or is a material or ingredient in, an end product produced by said processor; or

(2) the end product manufacturer who purchases the same from a processor for use as a material or ingredient in producing an end product; or

(3) the processor who purchases the same from a processor if he does not resell it to another processor, or to an end product manufactuer, or for use other than as human food within the United States.

The amount of an assessment imposed on an initial processor as provided in clause (1) above shall be due and payable to the council within such time, not to exceed sixty days after the sale by him of the end product produced by him, as shall be prescribed by regulation. The amount of an assessment imposed on an end product manufacturer as provided in clause (2) above or on a subsequent processor as provided in clause (1) or (3) above shall be due and payable to the preceding processor from whom the manufacturer or subsequent processor purchased the processed wheat in respect of which the assessment is imposed, within such time, not to exceed sixty days after such purchase, as shall be prescribed by regulation. The amount of an assessment added by a processor as a separate item to his invoice for processed wheat pursuant to section 20 shall not become due and payable by said processor to the council, or, as the case may be, to the processor from whom he purchased the processed wheat, until after receipt thereof by him from the purchaser to whom it is so invoiced by him. Processors shall serve without compensation as collection agents for the council. Each processor who collects an assessment from a purchaser of processed wheat shall be obligated to remit the same to the council, or, as the case may be, to the processor from whom he purchased the processed wheat. The collection and remittance of the assessment in all cases shall be made, reported, and recorded at such times and in such manner as shall be established by rules and regulations adopted by the council and approved by the Secretary.

FAILURE TO PAY ASSESSMENT

SEC. 22 (a) The council may maintain in its own name a civil action against(1) any processor who (A) fails or refuses to invoice any subsequent processor or end product manufacturer for the assessment imposed as provided in sections 20 and 21 of this Act; or (B) fails or refuses to record, report, or remit to the council any assessment as provided in sections 20 and 21 of this Act, or

(2) any subsequent processor or end product manufacturer who fails or refuses to pay the amount of any assessment pursuant to the provisions of this Act, to recover the amount of any such assessment, and shall be entitled to recover court costs and reasonable attorney's fees in any such action in which the council prevails.

(b) A processor shall promptly notify the council of the failure or refusal of any person to pay to such processor the amount of any assessment made against such person under this Act.

AUTHORITY TO CARRY OUT PROJECTS

SEC. 23. Any approved research, education, or promotion plan or project may be carried out by the council directly or under a contract with an agent or other organization, public or private, including an agent or organization whose officers, directors, employees, or agents are also members, employees, or agents of the council. Any such contracting agent or organization shall be required to maintain accurate financial and other records which will be subject to regular audit and review by the council and the Secretary.

COUNCIL RESPONSIBILITIES

SEC. 24. The council shall be responsible to the Secretary for the efficient and effective performance of its duties and functions, including, but not limited to, the collection, handling, safekeeping, disbursement, and accounting of funds, subject to good accounting practice and regular audit of records by the Secretary; the recording of processing statistics that serve as a basis for collections; contracting for necessary services to carry out the approved program; the employment of qualified personnel; the policing of collections; processing information and disbursements; and other responsibilities of good management.

REPORTS AND RECORDS

SEC. 25. (a) Whenever a program becomes effective as provided herein, each processor shall, at such times as may be prescribed in regulations promulgated by the Secretary, report to the council, in such detail and on such forms as shall be provided by the council, the total hundredweight of processed wheat intended for use, or end product manufacture for use, as human food within the United States in the immediately preceding month, by types designated by the council. Upon request of the council, made with the approval of the Secretary, each processor shall also furnish to the council, in such manner and at such times as it may prescribe, such other information as may be necessary to enable the council to perform its duties under this Act.

(b) Whenever a program becomes effective as provided herein, each processor shall establish books, records, and other information necessary to the orderly and accurate collection of any assessment duly prescribed, and shall thereafter maintain such books, records, and information for a period of three years, the same to be made available for examination by the Secretary or duly authorized persons on request.

(c) All reports and records submitted by processors to the council and received by it pursuant to the provisions of this section shall at all times be in custody of one or more confidential employees designated by the council. No member of the council, nor any employee thereof, nor any employee of the Department, shall disclose to any person, other than the Secretary upon request therefor, any data or information obtained or extracted from such reports and records which might affect the trade, position, financial condition, or business operation of a particular producer, processor, or end product manufacturer, except that such data and information may be combined, and made available to any person, in the form of general reports in which the identities of individual producers, processors, or end product manufacturers are not disclosed. Such data and information may also be disclosed to any extent necessary to effect compliance with the provisions of this Act and the regulations issued thereunder, including publication of the name of the processor or his customer who has refused to comply with the requirements of this Act.

ACCOUNTING AND CARE OF FUNDS

SEC. 26. (a) Moneys collected, handled, or disbursed by the council shall be handled only by persons under bond, and similar bonds shall be required of all persons or agents, accepting council funds or contracts to carry out council activities, programs, or projects approved by the Secretary. Monthly statements of cash account, quarterly analyses of expenditures, and annual financial statements, the latter in the form of an audited report certified to by a firm of certified public accountants, shall be made to the Secretary by the council. Any periodic statement of audit by the Secretary shall be made available to the council.

(b) The confidential employees of the council referred to in section 25(c) of this Act or any other confidential employee appointed by the council shall serve as treasurer thereof and shall receive all moneys and shall countersign, together with one or more members of the council designated by it for such purpose, all checks in disbursement of moneys. Income in excess of expenditures shall be held in United States Government or federally approved depositories for Government funds, or may be invested for the account of the council in short-term United States Government securities as directed by the council. A working reserve of funds may thus be accumulated but it shall not exceed at any time more than the following year's total estimated expenditures of the council. Should such moneys exceed the annual estimated expenditures of the council, the rate of assessment shall be lowered to maintain the amount held in reserve at a level

equal to not more than one full year's annual estimated expenditures. Except as provided in section 23 of this Act, no part of such moneys or the net earnings thereon shall inure to the benefit of any member or employee of the council or private person or individual.

PROHIBITION ON USE OF FUNDS TO INFLUENCE GOVERNMENT POLICY OR ACTIONS SEC. 27. No funds collected by the council under authority of this Act shall be used for the purpose of influencing governmental policy or action.

REGULATIONS AND ENFORCEMENT

SEC. 28. The Secretary is authorized to issue such orders, rules, and regulations as may be necessary to carry out the provisions of this Act and the powers vested in him by this Act.

COURT JURISDICTION

SEC. 29. The several district courts of the United States are vested with exclusive jurisdiction to entertain suits in the name of the United States or the council, without regard to jurisdictional amount, to enforce, and to prevent and restrain any person from violating this Act, or any order, rule, regulation or agreement made or issued pursuant thereto. Such action may be brought in any district in which such person may be found. A civil action authorized to be brought under this Act in the name of the United States shall be referred by the Secretary to the Attorney General for appropriate action.

ENFORCEMENT AUTHORITY

SEC. 30. Whenever the Secretary has reason to believe that any processor, or his customer, council member, officer, or employee, or a contracting person or contracting agent, or any employee of any of the aforenamed, or any other person or entity subject to this Act, has violated or is violating the provisions of this Act, or any order, regulation, rule, or agreement issued pursuant to this Act, the Secretary shall have the power to institute an investigation. If the Secretary determines therefrom that there is probable cause for institution of a civil action, he shall refer the matter to the Attorney General for appropriate action. For the purpose of any investigation instituted by the Secretary, he is empowered to administer oaths and affirmations, subpena witnesses, compel their attendance, take evidence, and require the production of any books, papers, and documents the Secretary believes relevant to the inquiry; and, if necessary, to invoke the aid of any district court of the United States, within the jurisdiction of which such investigation or proceeding is carried on, to enforce compliance. Any failure to obey an order of any such court may be punished by such court as a contempt thereof.

PERSONAL LIABILITY

SEC. 31. No member of the council, or any member serving as trustee as provided in section 32 below, or any employee, representative, or agent thereof 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 a member, trustee, employee, representative, or agent, except for acts of dishonesty.

TERMINATION OF ACT

SEC. 32. (a) Within one hundred and twenty days following the end of five years from the date of enactment of this Act, and, within one hundred and twenty days following the end of each five-year period thereafter (so long as the Act continues in effect), the council shall review the progress made toward attaining the objectives of this Act, whereupon the voting members thereof shall prepare a report of such progress for the Secretary. If the council's report to the Secretary by the voting members thereof does not unanimously recommend the continuation of this Act it shall automatically terminate at the end of such one hundred and twenty days.

(b) Notwithstanding the provisions of subsection (a) of this section, or the amendment or repeal of this Act, in the event of the termination, at any time, of al: programs under this Act, the members of the council shall, for the purpose of liquidating the affairs of the council, continue as trustees of all the funds and

property then in its possession, or under its control, including claims for any funds unpaid or property not delivered at time of such termination. Any funds collected from assessments and not yet remitted to the council at the time of such termination shall be remitted to the council.

(c) The trustees shall (1) continue in such capacity until discharged by the Secretary; (2) 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 (3) upon request of the Secretary execute such assignments or other instruments necessary or appropriate to vest in such person, full title and right to all the funds, property, and claims vested in the council or the trustees pursuant thereto.

(d) Any person to whom funds, property, or claims have been transferred or delivered, pursuant to this section, shall be subject to the same obligation imposed upon the council and upon the trustees.

(e) Any funds collected from assessments hereunder and remaining unexpended in the possession of the council or the trustees at or after the termination of all programs, shall be distributed in such manner as the Secretary may direct: Provided, That such funds shall be returned on a pro rata basis to the processors who remitted funds to the council, and such processors shall return the funds on a pro rata basis to the other processors or end product manufacturers from whom collected, except that each processor may retain therefrom an amount which will reimburse him for applicable accounting expenses as determined by the Secretary.

PRESERVATION OF RIGHTS

SEC. 33. The termination of all programs under this Act or of any regulation issued thereunder shall not (1) 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 Act or any regulation issued thereunder, or (2) release or extinguish any violation of this Act or any regulation issued thereunder, or (3) affect or impair any rights or remedies of the Secretary, or of any other person, with respect to such violation.

SEPARABILITY CLAUSE

SEC. 34. If any provision of this Act or the application thereof to any person or circumstances is held invalid, the validity of the remainder of the Act and of the application of such provision to other persons or circumstances shall not be affected thereby.

AUTHORIZATION FOR APPROPRIATIONS

SEC. 35. There are hereby authorized to be appropriated such funds as are necessary to carry out the provisions of this Act. The funds so appropriated shall not be available for payment of the expenses or expenditures of the council in administering any provisions of this Act.

Hon. W. R. POAGE,

DEPARTMENT OF AGRICULTURE,

OFFICE OF THE SECRETARY, Washington, D.C., May 2, 1972.

Chairman, Committee on Agriculture,
House of Representatives.

DEAR MR. CHAIRMAN: This is in reply to the request from your Committee, dated March 8, 1972, for a report on H.R. 13514, known as the Wheat and Wheat Foods Research, Education, and Promotion Act. This bill would provide for a program of research, education, and promotion to maintain and expand markets for wheat and wheat products for use as human foods within the United States. The Department favors enactment of the bill with modifications.

Wheat producers, processors, and end-product manufacturers have worked together for a number of years to develop the program set forth in this bill. It provides a mechanism whereby they can, with Government assistance, develop and implement programs to maintain and expand domestic markets for wheatbased products as human food.

Our principal concern with the bill relates to the roles of the Secretary and the Wheat and Wheat Foods Foundation in the administration of the program. Under the bill, a Wheat Industry Council is to be established to administer the program and collect assessments. It, therefore, will be exercising substantial governmental authority and powers. However, section 5(a) of the bill states that the Council is not to be an agency or establishment of the United States Govern

ment. This raises a question concerning the delegation of governmental powers, and the exercise thereof, to an organization which is not an agency or establishment of the United States.

The bill provides that the Secretary shall appoint the members of the Wheat Industry Council-the agency designated to administer the program-and that he shall be responsible for the program only to the extent of approving or disapproving matters decided upon by the Council (see section 9). It further provides that in appointing voting members of the Council, the Secretary shall be limited to persons nominated by the Wheat and Wheat Foods Foundation, a private industry organization representing wheat producers, processors, and end-product manufacturers. He may reject nominees and ask for additional nominees, but he cannot appoint a person who has not been nominated by the Foundation. This raises a question as to whether this is an improper limitation on the Executive Branch's responsibility for the appointment of executive officials.

There also is a question as to whether the proposed delegation to the Foundation adequately recognizes the interests of non-members of the Foundation who might now or in the future be directly affected by the program. Authorizing legislation for other commodity research and promotion programs contains provisions for public hearings, referenda and assessment refunds. This bill does not contain such provisions. All of these may not be practical for this program, in view of the complex structure and organization of industry participation in the program. Even without specific provisions in the bill we believe the Secretary could use rule-making or public hearing procedures in the promulgation of orders, rules and regulations to implement the program, in order to provide an opportunity for interested and affected persons outside the Wheat and Wheat Foods Foundation to have their views heard and considered.

There are a number of other items which we believe could be modified for technical improvement of the bill. We stand ready to assist the Committee in developing appropriate modifications or in providing additional information for the Committee's use in considering the bill.

H.R. 13514 would not have a significant impact on the quality of the environment.

Costs of administration by the Department would approximate $55,000 for fiscal year 1973 and for each of the next five subsequent fiscal years. Sections 19 and 20 of the bill provide that the Department's cost of administration will be defrayed by assessments. Section 35 authorizes the appropriation of funds to carry out the provisions of the Act, but excludes the payment of expenditures of the Council in administering the Act. It is our understanding that the intent of section 35 is to provide funds for the operation of the program only until such time that the Department will be reimbursed by the Council from funds collected by assessment.

In view of the time situation we have not obtained advice from the Office of Management and Budget regarding the relationship of this proposed legislation to the Administration's program.

Sincerely,

J. PHIL CAMPBELL.

Mr. PURCELL. Mr. John C. Blum, Deputy Administrator of the Regulatory Programs for the Agricultural Marketing Service, is our first

witness.

We will be glad to hear from you at this time.

STATEMENT OF JOHN C. BLUM, DEPUTY ADMINISTRATOR, REGULATORY PROGRAMS, AGRICULTURAL MARKETING SERVICE, U.S. DEPARTMENT OF AGRICULTURE, ACCOMPANIED BY HOWARD WOODWORTH, DIRECTOR, GRAIN DIVISION, AGRICULTURAL MARKETING SERVICE; J. C. KRAUSE, DIRECTOR, MARKETING DIVISION, OFFICE OF GENERAL COUNSEL; AND JAMES CODDINGTON, GRAIN DIVISION

Mr. BLUM. Thank you, Mr. Chairman.

Mr. Chairman, I am pleased to have this opportunity to present the Department's views on H.R. 13514, known as the Wheat and Wheat