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The original documents are located in Box 51, folder "1976/07/14 HR10930 Cotton
Research and Promotion Program" of the White House Records Office: Legislation Case
Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
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domain. The copyrights to materials written by other individuals or organizations are presumed to
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copyright claim, please contact the Gerald R. Ford Presidential Library.
Exact duplicates within this folder were not digitized.
Digitized from Box 51 of the White House Records Office Legislation Case Files at the Gerald R. Ford Presidential Library
APPROVED
87/4/16
THE WHITE HOUSE
ACTION
WASHINGTON
LAST DAY: July 17
July 12, 1976
Posted
MEMORANDUM FOR
THE PRESIDENT
7/15/76
FROM:
JIM CANNON June
SUBJECT:
H.R. 10930 - Cotton Research and
Promotion Program
archives
7/15/76
Attached for your consideration is H.R. 10930, sponsored
by Representative Bowen.
The enrolled bill would amend existing law to:
-- repeal the authorization to use public funds in
the Cotton Research and Promotion Program, effective
October 1, 1977.
-- authorizes, subject to approval in a referendum of
producers, an increase in the per bale assessment paid
by cotton producers in an amount not to exceed one
percent of the value of the cotton (current price is
about $300/bale);
-- requires the Cotton Board to reimburse the Secretary
of Agriculture (1) for expenses, not to exceed $200,000
incurred in connection with any cotton referendum
conducted by the Secretary and (2) for administrative
costs incurred by the Secretary of up to five employee
years associated with supervising the administration
of a cotton order; and
-- authorizes the Secretary of Agriculture to appoint up to
three consumer advisers to the Cotton Board.
Additional discussion of the provisions of the enrolled bill
is provided in OMB's enrolled bill report at Tab A.
OMB, Max Friedersdorf, CEA, Bill Seidman, Counsel's Office
(Lazarus) and I recommend approval of the enrolled bill.
RECOMMENDATION
That you sign H.R. 10930 at Tab B.
WELLS FORD LIBRARY
#
PRESIDENT
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE
UNITED
OFFICE OF management AND BUDGET
SECUTIVE
ONE
STATES
WASHINGTON, D.C. 20503
JUL 12 1976
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 10930 - Cotton research and
promotion program
Sponsor - Rep. Bowen (D) Mississippi
Last Day for Action
July 17, 1976 - Saturday
Purpose
Amends existing law to (1) eliminate Federal funding sup-
port for the cotton research and promotion program, and
(2) authorize an increase in the assessment paid by cotton
producers for cotton research and promotion activities.
Agency Recommendations
Office of Management and Budget
Approval
Department of Agriculture
Approval
Council of Economic Advisers
No objection
Discussion
Under provisions of the Cotton Research and Promotion Act
of 1966, the Cotton Board, composed of 20 non-government
members appointed by the Secretary of Agriculture, admin-
isters a research and promotion program for cotton. Fund-
ing for the program currently comes from two sources:
(1) a $1 per bale assessment levied on cotton producers --
refunds are made to producers when requested; and, (2) an
annual authorization to use up to $20 million of Commodity
Credit Corporation (CCC) funds through fiscal year 1978
and $10 million thereafter.
-2-
After netting out refunds, the producer-supported program
was funded at about $10 million in fiscal year 1976 and it
is expected to be around $9 million in fiscal year 1977.
With respect to CCC monies, $3 million was appropriated
for fiscal year 1976 and its use was restricted to research
activities while the fiscal year 1977 Agriculture appro-
priation bill that was cleared by Congress late last month
did not provide funds for the cotton program.
This move to eliminate Federal funding support is consistent
with your budget for fiscal year 1977, and it also reflects
the recent trend toward making agricultural commodity pro-
motion programs entirely self-supporting.
H.R. 10930 would make the following changes in the present
cotton research and promotion program:
--- repeals the authorization to use public (CCC) funds
in the program, effective October 1, 1977 (this
date allows the obligation and use of funds appro-
priated in fiscal year 1976) ;
-- authorizes, subject to approval in a referendum of
producers, an increase in the per bale assessment
paid by cotton producers in an amount not to exceed
one percent of the value of the cotton (current price
is about $300/bale) ;
-- requires the Cotton Board to reimburse the Secretary
(1) for expenses, not to exceed $200,000, incurred
in connection with any cotton referendum conducted
by the Secretary, and (2) for administrative costs
incurred by the Secretary of up to five employee
years associated with supervising the administration
of a cotton order; and,
-- authorizes the Secretary to appoint up to three
consumer advisors to the Cotton Board.
-3-
Generally, H.R. 10930 reflects the amendments that were
recommended by Agriculture during congressional considera-
tion of the bill, and in its enrolled bill letter, the
Department notes that:
"
the enactment of H.R. 10930 would result
in an annual savings of $3 million of appro-
priated funds due to the repeal of section
610 as well as savings of approximately $70,000
appropriated annually for administrative
expenses.
"
While this Office continues to question the overall effec-
tiveness of agricultural commodity promotion programs,
and the Council of Economic Advisers expresses the same
concern in its enrolled bill letter, we share CEA's view
that H.R. 10930 does improve the nature of the present
cotton promotion program by shifting certain costs from
the Federal Government to the cotton industry. Accordingly,
we recommend approval of H.R. 10930.
James Director Try
for
Legislative Reference
Enclosures
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
Date: July 22
Time:
530pm
FOR ACTION: Paul Leach
cc (for information): Jack Marsh
Bill Seidman
b
Jim Cavanaugh
Max Friedersdorf
Ed Schmults
Ken Lazarus the
FROM THE STAFF SECRETARY
DUE: Date: July 13
Time: 500pm
SUBJECT:
H.R. 10930-Cotton research and promotion program
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
( 1098 J
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
K. R. COLE, JR.
telephone the Staff Secretary immediately.
For the President
STATES DEPARTMENT OF DEPARTMENT
DEPARTMENT OF AGRICULTURE
OFFICE OF THE SECRETARY
WASHINGTON, D. C. 20250
July 8, 1976
Honorable James T. Lynn
Director, Office of Management
and Budget
Washington, D.C. 20503
Dear Mr. Lynn:
In reply to the request of your office, the following report is submitted
on the enrolled enactment of H.R. 10930, "To repeal section 610 of the
Agricultural Act of 1970 pertaining to the use of Commodity Credit Cor-
poration funds for research and promotion and to amend section 7 (e) of
the Cotton Research and Promotion Act to provide for an additional
assessment and for reimbursement of certain expenses incurred by the
Secretary of Agriculture."
This Department recommends that the President approve the bill.
H.R. 10930 makes two basic changes in the cotton research and promotion
program. First, the bill repeals section 610 of the Agricultural Act
of 1970, as amended, thereby terminating public funding of a portion of
the program. This would be consistent with the approach taken in other
commodity research and promotion programs in that they are fully producer-
financed. Second, the bill authorizes an increase in the assessment
paid by cotton producers to fund a self-help program of research, promotion,
and market development, subject to approval by producers in a referendum.
In addition, the federal costs of administering the program and the cost of
holding the producer referendum would be reimbursed by cotton producers
with funds derived from their assessments.
It is believed that the enactment of H.R. 10930 would result in an annual
savings of $3 million of appropriated funds due to the repeal of section
610 as well as savings of approximately $70,000 appropriated annually for
administrative expenses.
Sincerely,
Earl Earl L. Butz
Secretary
THE CHAIRMAN OF THE
COUNCIL OF ECONOMIC ADVISERS
WASHINGTON
July 12, 1976
Dear Mr. Frey:
In response to your request for CEA's views on
H. R. 10390, to permit an increase in the assessment
for cotton research and promotion, we are not opposed
to the bill.
This legislation is one of a series of bills which
provide governmentally sanctioned and supported mechanisms
for promotion of agricultural commodities. These bills
tend to increase the prices of the products promoted,
and it is not clear that they provide corresponding
benefits to either consumers or producers. In general,
we believe it is unwise for government to assist in
such promotion schemes for private industries, even
in competitive industries such as agriculture.
However, H. R. 10390 would also shift costs of
current cotton promotion activities from USDA to the
cotton industry. There are no official estimates of
the budget savings of this shift but it would be
significant, and has been estimated by the CBO to be
in the neighborhood of $10 million. For this reason
we raise no objection to the bill.
Sincerely
Man Greenspan
Mr. James Frey
Assistant Director for
Legislative Reference
Office of Management and Budget
Washington, D. C. 20503
REVOLUTION
AMERICAN
BICENTENNIAL
1776-1976
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
Date:
Time:
July 12
530pm
FOR ACTION:
Paul Leach
'CC (for information):
Jack Marsh
Bill Seidman
Jim Cavanaugh
Max Friedersdorf
Ed Schmults
Ken Lazarus
FROM THE STAFF SECRETARY
DUE: Date: July 13
Time: 500pm
SUBJECT:
H.R. 10930-Cotton research and promotion program
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James M. Cannon
telephone the Staff Scoretary immediately.
For the President
THE WHITE HOUSE
ACTION MI
DUM
WASHINGTON
LOG NO.:
Date: Ju
Time:
530pm
FOR AC'
Paul Leach
'cc (for information):
Jack Marsh
Bill Seidman
Jim Cavanaugh
Max Friedersdorf
Ed Schmults
Ken Lazarus
FROM THE STAFF SECRETARY
DUE: Date: July 13
Time: 500pm
SUBJECT:
H.R. 10930-Cotton research and promotion program
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
OK -PCZ -
Recommend-sy - sign
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James M. Cannon
telephone the Staff Secretary immediately.
For the Fresident
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
Date:
Time:
July 12
530pm
FOR ACTION:
Paul Leach
'CC (for information):
Jack Marsh
Bill Seidman
Jim Cavanaugh
Max Friedersdorf
Ed Schmults
Ken Lazarus
FROM THE STAFF SECRETARY
DUE: Date: July 13
Time:
500pm
SUBJECT:
H.R. 10930-Cotton research and promotion program
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
No objection -- Ken Lazarus 7/13/76
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James N. Cannon
telephone the Staff Secretary immediately.
For the President
THE WHITE HOUSE
WASHINGTON
July 13, 1976
MEMORANDUM FOR:
JIM CAVANAUGH
FROM:
MAX L. FRIEDERSDORF m.6
SUBJECT:
HR 10930 - Cotton Research and promotion program
The Office of Legislative Affairs concurs with the agencies
that the
subject bill be signed.
Attachments
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
JUL 12 1976
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 10930 - Cotton research and
promotion program
Sponsor - Rep. Bowen (D) Mississippi
Last Day for Action
July 17, 1976 - Saturday
Purpose
Amends existing law to (1) eliminate Federal funding sup-
port for the cotton research and promotion program, and
(2) authorize an increase in the assessment paid by cotton
producers for cotton research and promotion activities.
Agency Recommendations
Office of Management and Budget
Approval
Department of Agriculture
Approval
Council of Economic Advisers
No objection
Discussion
Under provisions of the Cotton Research and Promotion Act
of 1966, the Cotton Board, composed of 20 non-government
members appointed by the Secretary of Agriculture, admin-
isters a research and promotion program for cotton. Fund-
ing for the program currently comes from two sources:
(1) a $1 per bale assessment levied on cotton producers --
refunds are made to producers when requested; and, (2) an
annual authorization to use up to $20 million of Commodity
Credit Corporation (CCC) funds through fiscal year 1978
and $10 million thereafter.
94TH CONGRESS
HOUSE OF REPRESENTATIVES
REPORT
2d Session
No. 94-1157
AMENDMENTS TO COTTON RESEARCH AND
PROMOTION PROGRAM
MAY 15, 1976-Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Mr. FOLEY, from the Committee on Agriculture,
submitted the following
REPORT
[Including the Congressional Budget Office cost estimates]
[To accompany H.R. 10930]
The Committee on Agriculture, to whom was referred the bill (H.R.
10930), to amend section 7 (e) of the Cotton Research and Promotion
Act to provide for an additional assessment and for reimbursement
of certain expenses incurred by the Secretary of Agriculture and to
repeal section 610 of the Agricultural Act of 1970 pertaining to the
use of Commodity Credit Corporation funds for research and promo-
tion, having considered the same, report favorably thereon with
amendments and recommend that the bill as amended do pass.
The amendments are as follows:
Page 1, line 3, strike all after the enacting clause and insert in lieu
thereof the following:
That section 610 of the Agricultural Act of 1970, as amended (7 U.S.C. 2119), is
repealed effective October 1, 1977.
SEC. 2. Section 7(e) of the Cotton Research and Promotion Act (7 U.S.C.
2106 (e) ) is amended as follows:
(1) At the end of the first sentence strike the period and add the following
", and for reimbursing the Secretary (1) for expenses not to exceed $200,000
incurred by him in connection with any referendum conducted under section 8,
and (2) for administrative costs incurred by the Secretary for supervisory work
up to 5 employee years after an order or amendment to an order hsa been issued
and made effective.".
(2) At the end of the second sentence strike the period and add the following
", unless specifically authorized by provisions of this subsection.".
(3) At the end of the third sentence strike the period and add the
following: "but, subject to approval in a referendum as provided in
section 8, the Secretary shall issue an amendment to the order which
shall provide that in each marketing year, the rate shall be supple-
mented by an additional per bale amount to be collected or paid as
(1)
2
3
provided in this subsection, such amount to be at a rate as prescribed in
the amendment to the order, but not to exceed one per centum of the
Since the dollar per bale program was enacted in 1966, the dollar has
value of cotton as determined by the Cotton Board and the Secretary.
shrunk in value due to inflation experienced over the past several years
Neither the amendment to the order authorized by the foregoing pro-
to only 60 cents today. In addition, government funds in support of
visions nor the disapproval of such amendment in a referendum shall
the program were cut in 1974 and 1975 from $10 million per year to
operate to decrease or otherwise affect the amount of the assessment of
$3 million annually and by this bill would be eliminated entirely. An-
$1.00 per bale in effect under the order published in the Federal Regis-
other form of public support has likewise been reduced. The utilization
ter on December 31, 1966. No authority under this Act may be used as
research effort devoted to cotton by USDA and State Agricultural
a basis to advertise or solicit votes in any referendum relating to the
Experiment Stations has decreased by some 10 percent in the period
rate of assessment with funds collected under this Act.".
1966 to 1974.
And amend the title to read as follows:
The program provided for by the Cotton Research and Promotion
To repeal section 610 of the Agricultural Act of 1970 pertain-
Act has provided concentrated effort in research and promotion to en-
ing to the use of Commodity Credit Corporation funds for research
able cotton to regain markets which have been lost to synthetics and
and promotion and to amend section 7(e) of the Cotton Research
other competing fabrics over the last number of years. In 1960, cot-
and Promotion Act to provide for an additional assessment and
ton had about 65 percent of the U.S. textile fiber market and this fell
for reimbursement of certain expenses incurred by the Secretary
below 30 percent in 1973. Cotton was gradually losing its markets to
of Agriculture.
synthetics, in part, because of the vast resources provided for research
PURPOSE AND NEED
and development and for advertising and marketing support. In the
early 1960's, synthetic fiber corporations were spending about $120
H.R. 10930 makes two basic changes in the Cotton Research and
million a year for research and advertising alone. In 1974 the synthetic
Promotion Program. First, the bill repeals section 610 of the Agricul-
industry invested $234 million in fiber research and $60 million in ad-
tural Act of 1970 which authorizes government financing to supple-
vertising to promote sales of synthetic fibers. By comparison the
ment funds available for the Cotton Research and Promotion Act. Sec-
amount spent by Cotton, Inc., was but $5.4 million for fiber research
ond, it authorizes an increase in the assessment paid by producers to
and $3.4 million for advertising for cotton. In part, as a result of the
fund a self-help program of research and marketing, subject to ap-
program authorized by the Cotton Research and Promotion Act, cot-
proval by producers in a referendum.
ton moved back to 30.3 percent of the fiber market in 1974. It has held
The Cotton Research and Promotion Act was adopted in 1966 to
steady since and looks better yet for the future assuming proper sup-
enable cotton producers to establish, finance, and carry out a coordi-
port is provided for the program.
nated program of research and promotion to improve the competitive
Cotton research and promotion programs date back to 1938 when
position of, and to expand markets for, cotton. The Act authorized
rayon was beginning to make inroads into cotton's markets. To help
an assessment of $1 per bale on cotton producers and accorded each
combat this threat, a group of cotton leaders organized the National
producer the right to obtain a refund if he was not in favor of the pro-
Cotton Council with the objective of increasing consumption of United
gram. These funds were supplemented by government funds under sec-
States cotton and its products through research and promotion as well
tion 610 of the Agricultural Act of 1970. H.R. 10930 does not change
as through other needed projects. The Council tried various voluntary
the Cotton Research and Promotion Act in any basic way. It ends pub-
financing plans. In 1960, it organized the Cotton Producers Institute
lic support for the program and at the same time provides cotton grow-
as a division of the Council with its funds going entirely to research
ers in the United States an opportunity to decide for themselves as to
and promotion projects. Collections went from a little over $1 mil-
whether or not they will assess themselves additional charges to sup-
lion the first year to a high of about $3 million and then began to
port the research and promotion effort.
decline for a number of reasons. As the program started to erode
A healthy, profitable cotton economy is an asset to the national econ-
throughout the cotton producing area, it became clear a uniform
omy for its contributions to the domestic economy and its significant
method of financing was needed. This led to enactment of the Cotton
contribution to our export trade and the all important balance of pay-
Research and Promotion Act which became effective with the 1967
ments in international trade.
crop. That Act set up a quasi-governmental agency called the Cotton
There is a need for a coordinated research and promotion program
Board to administer the program with assessments collected under
to be carried out by approvimately 250,000 cotton producers in the
the Act. The Act maintained the voluntary nature of the original
United States if cotton is to maintain and expand its markets. Cotton
producer effort by allowing refunds to producers who did not wish to
is facing well organized and highly financed competition from syn-
participate.
thetic fabrics. There are seven major chemical companies which con-
Public hearings were held on a proposed cotton research and promo-
trol an estimated 84 percent of synthetic production-in 1974 the two
tion order and a referendum vote by cotton producers approved the
largest dominated the market with 54 percent of sales. Research in the
order by a 68-percent majority of growers voting.
fields of cotton production and marketing have been completely over-
The implementing order was issued on December 31, 1966.
shadowed by the heavily financed programs of research and marketing
In early 1967, the Secretary of Agriculture appointed 20 members
support by the almost unlimited resources of the manufacturers of
and 20 alternate members to the Cotton Board which met for its
synthetic textile products.
initial meeting in March.
4
5
The Cotton Board developed and issued regulations governing the
collection and refund of producers assessments and entered into a
SECTION-BY-SECTION ANALYSIS
contract with the Cotton Producers Institute-now Cotton Inc.-to
develop and implement a research and promotion program.
Section 1.-This section repeals section 610 of the Agricultural Act
Collection of producer assessments began with the 1967 cotton crop
of 1970, as amended, effective October 1, 1977, thereby terminating
and the first research and promotion program and budget was ap-
public funding of the program. After that date the program will be
proved and implemented in calendar year 1968.
supported entirely with funds collected from producers of cotton. Sec-
According to the U.S.D.A., through June 30, 1975, $85 million in
tion 610 authorizes Commodity Credit Corporation to make available
producer funds have been collected; $8 million have been refunded
$10 million annually for research and promotion programs conducted
leaving net collections of $77 million. Refunds have ranged from 3
through the Cotton Board established under the Cotton Research and
percent in 1967 to 12.5 percent in 1974.
Promotion Act and provides discretionary authority to the Secretary
Section 610 of the Agricultural Act of 1970 as amended by the
to make additional sums available for such purpose not exceeding $10
Agriculture and Consumer Protection Act of 1973 authorized the
million. There is an amount of $3 million appropriated pursuant to
use of $10 million of Commodity Credit Corporation funds annually
this authority in the appropriation act for the Department of Agricul-
in fiscal years 1972-78 for the program. The Agricultural Appropri-
ture for the current fiscal year. While testimony at the hearing indi-
ations Acts for 1974, 1975 and 1976 limited the section 610 funds to
cated that it was not anticipated additional funds would be made avail-
$3 million annually to be used for research only. Through fiscal year
able pursuant to section 610 for the next fiscal year, the effective date
1976 a total of $29 million of CCC funds has been made available
of this provision is postponed until October 1, 1977, to allow funds
for this program.
appropriated in the current fiscal year to be obligated and utilized un-
Through June 30, 1975, $71 million of producer funds have been
der on-going contracts which will continue into the next year.
expended with about 60 percent devoted to promotion and 40 percent
Section 2.-This section amends section 7 (e) of the Cotton Research
to research; $25 million of section 610 funds have been spent through
and Promotion Act as follows:
the same date, about equally divided between promotion and research.
Paragraph (1) provides that the assessments collected under the
Beginning in fiscal 1974 the use of section 610 funds has been limited
order shall be used to reimburse the Secretary (a) for expenses, not to
to research.
exceed $200,000, incurred by him in connection with any referendum
The current fiscal year producer-funded program is budgeted at
conducted under section 8 for approval of an order or an amendment
$10.1 million. Available producer funds for the fiscal year 1977 budg-
of an order and (b) for administrative costs incurred by the Secretary
et will be around $9 million, the smallest annual budget since the
for supervisory work up to five employee years after an order or amend-
first year of the program. The only other funds available to increase
ment to an order has been issued and made effective. It is the inten-
fiscal 1977 program would be Cotton Inc.'s own funds of just over $1
tion of the Committee that the dollar limitation on the USDA expenses
million (which were inherited from the voluntary program prior
to be borne by producer assessments-$200,000 for the cost of the
to 1966) and about $500,000 in patent and royalty funds.
referendum, and 5 employee years for the administrative costs for
Many benefits have been derived from the research and promotion
supervisory work-be viewed as ceilings and are not requirements that
efforts funded by the Act. For example, a coordinated research pro-
the full amount be utilized.
gram through contracts and cooperative agreements with State Ex-
Paragraph (2) sets forth an exception to the provision in the Act
periment Stations resulted in the development of the mechanical rick
that no more than one assessment shall be made on any bale of cotton
compactors and the module builder system. These systems permit the
SO as to take account of any supplemental assessment authorized pursu-
handling of seed cotton in a much more efficient manner for the grow-
ant to section 7 (e) as amended by H.R. 10930.
er, preserving the quality of the lint and seed, and reducing field
Paragraph (3) provides an authorization for a supplemental rate of
loss.
assessment of an amount not to exceed 1 percent of the value of cotton
Textile research at Cotton Inc.'s plant and under contract and co-
as determined by the Cotton Board and the Secretary. The supple-
operative agreements have been responsible for new and better fab-
mental rate set forth in the bill is a maximum. So long as this amount
rics, such as fire retardant and easy-care fabrics. Research is on-
is not exceeded, the amended order could provide either a flat dollar
going now to combat the occupational and safety health hazard of
and cent rate per bale or a rate based on a percentage of value per bale
byssinosis. In the promotion area, Cotton Inc. has been concentrating
using past or current cotton prices. The Cotton Board would be ex-
in advertising, mill motivation and new product merchandizing to in-
pected to engage in such meetings or communication with cotton grow-
crease cotton consumption at the mill, manufacturer, and retail levels.
ers as it deems necessary in order to arrive at a rate or rate procedure
The program provided under the Act guarantees a strongly compet-
for recommendation to the Secretary. Thereafter, the views of growers
itive fiber market by establishing a cooperative effort to accomplish
and others would be obtained on the assessment rate and other pro-
research and marketing program that is now beginning to show posi-
visions of the proposed amendment to the order in hearings conducted
tive results.
by the Secretary. The decision on the assessment rate to be included
It will, if adequately funded, restore cotton to its rightfu position
in the amendment to the order would be made by the Cotton Board
as a fabric unequalled for comfort, durability and economy of use.
and the Secretary after giving consideration to the hearing record and
the recommendations in connection therewith.
6
7
If the maximum amount is not utilized in an amendment to the
order, and it becomes necessary at a later date to increase the amount
nature. They provided for a repeal of section 610 of the Agricultural
further, such action would be authorized under the Act, SO long as
Act of 1970 to become effective October 1, 1977, instead of the July 1
the total supplemental assessments did not exceed the prescribed rate
date as in the bill as originally introduced. The change was made SO
of one percent of the value of the cotton.
that the time would coincide with the beginning of the fiscal year.
Before any such supplemental assessment could become effective,
The bill was then ordered reported to the full Committee with a rec-
it would, of course, have to be approved by producers in a referendum
ommendation that it be passed, by a roll call vote of 9 yeas to 0 nays
conducted under section 8. Neither an amendment to the order pro-
in the presence of a quorum.
viding for a supplemental rate of assessment nor disapproval of such
The Committee on Agriculture met on May 6, 1976, to consider the
amendment shall operate to decrease or otherwise affect the assessment
bill. At that time, it adopted an amendment offered by Mr. Krebs
of $1.00 per bale currently in effect.
which would provide for the cost of the referendum in an amount not
The paragraph also provides that no authority under the Act may
to exceed $200,000 to be borne from assessments collected from pro-
be used as a basis to advertise or solicit votes in any referendum relat-
ducers. In the discussion of the Krebs' amendment, it was pointed out
ing to the rate of assessment with funds collected under the Act. This
by Mr. Bowen that the limitation of $200,000 should be more than
provision does not derogate from the authority of the Cotton Board
ample to cover the expected costs of the referendum. The Department
or Cotton Inc. to conduct on-going promotion programs in its cus-
of Agriculture originally estimated the expense at a higher figure
tomary and usual manner in which it explains the work that is being
but had revised its figures downward and advised Mr. Bowen that
performed under the order, but it is not expected that this activity
the costs to ASCS for the conduct of the referendum would be in
would be conducted in such a manner as to advertise or solicit votes
the amount of approximately $129,000 with a possibility of an addi-
in the referendum.
tional $25,000 while the costs to Agricultural Marketing Service in
COMMITTEE CONSIDERATION
connection with the hearings preliminary to the referendum should
total $21,100, for a grand total of approximately $175,000. An amend-
The Subcommittee on Cotton held hearings on H.R. 10930 on De-
ment was also offered by Mr. Findley and agreed to by the Committee
cember 16 and 17, 1975. Testimony was received in support of the leg-
which provides that no authority under the Act may be used as a
islation from representatives of many producer organizations includ-
basis to advertise or solicit votes in any referendum relating to the
ing organizations from the States of Arizona, California, Alabama,
rate of assessment with funds collected under the Act.
Florida, Louisiana, Georgia, Virginia, the Carolinas, Tennessee, and
In the course of discussion, the question was raised as to whether
Texas. Support for the legislation also came from members of the
the Secretary would have authority after enactment of H.R. 10930 to
Board of Cotton Inc., and from a representative of the National Cot-
review effectively expenditures of funds under the program. In re-
ton Council, the National Cottonseed Producers Association, the
sponse to the question, reference was made to various provisions of
American Cotton Shippers Association, and the Cotton Warehouse-
the Cotton Research and Promotion Act which help to assure that
men's Association. Since the hearings a letter in support of the legis-
the Secretary would continue to be authorized to exercise his au-
lation was received from the American Farm Bureau Federation.
thority in this area. These provisions include the requirement that the
At the hearing, the Administrator, Agricultural Marketing Serv-
Cotton Board submit to the Secretary for approval sales, promotion
ice, U.S. Department of Agriculture, testified that the Department
or research plans or projects, budgets of its anticipated expenses and
had no objection to enactment of H.R. 10930 if amended as suggested.
disbursement in the administration of the order including the costs of
He recommended first that reimbursement for administrative costs
advertising and promotion and research and development projects. A
not be confined to a specific number of employee years (as introduced
reference was also made to the requirement that the Cotton Board
the bill provided for reimbursement for 2.5 employee years), and
maintain such books and records and make such records available to
that the Depatment should be reimbursed for all costs associated with
the Secretary as he may prescribe for the appropriate accounting of
the holding of a producer referendum to approve additional assess-
the Cotton Board of all funds entrusted to it. In addition, mention
ments.
was made of the authority of the Secretary to issue orders and regula-
Finally, at the hearings a representative of the Mid-continent Far-
tions under the statute and to conduct investigations to assure proper
mers Association appeared and urged deferral of action on H.R.
protection of producers' interests. The Cotton Board also has respon-
10930 pending an impartial evaluation by an outside source of pro-
sibilities under the Act which the Committee expects will be carried
gram effectiveness. He also suggested a number of modifications in the
out fully. These include, among other things, the responsibility to ad-
program.
minister the order in accordance with its terms and conditions and,
The Subcommittee on Cotton met in mark-up session on April 7,
as indicated above, to develop the plans and projects for advertising,
1976. It considered and adopted two amendments offered by Mr.
sales promotion and research and development as well as the fiscal year
Bowen. One provides for administrative costs incurred by the Sec-
budget which are submitted to the Secretary for his approval.
retary for supervisory work of up to five employee years to be made
Following discussion, the Committee voted in the presence of a quo-
from assessments rather than costs involving 2.5 employee years as
rum by voice vote to report the bill with a recommendation that it do
provided in the bill as introduced. The change was offered to meet,
pass.
in part, a request from USDA. The other changes were technical in
8
9
ADMINISTRATION POSITION
undefined means by the Cotton Board and the Secretary. Neither is it
clear as to who would establish the rate of the additional assessment.
The following report was received from the Department of Agri-
The Committee may want to consider changing the language to
culture concerning its position on H.R. 10930. In the letter the USDA
specify an exact per bale amount of the additional assessment rather
made certain recommendations for changes in the bill. To accommo-
than providing that the amount be prescribed in an amendment to the
date the concerns of USDA, the Committee acted to provide reimburse-
Order. This would be consistent with the action taken by Congress
ment for Department costs incurred under the program as explained
when it set the initial $1 per bale in the Act. It would also facilitate and
more fully elsewhere in this report. The Department also recommended
simplify the collection and remittance of assessments by handlers to
a change in the language regarding the supplemental assessment to
the Cotton Board as well as eliminate the need for an annual deter-
require an exact per bale amount. However, it should be noted that
mination of the value of cotton by the Cotton Board and the Secretary.
the amount set forth in H.R. 10930 is a maximum and there is au-
In any event, we recommend that the language be revised to clarify
thority under the bill to specify an assessment at a lesser rate which
the amount of the assessment and the basis on which it is to be
could be in the form of a fixed dollar and cent amount, if the Secretary
established.
and the Cotton Board should find it desirable.
Section 2 provides for the repeal of section 610 of the Agricultural
Act of 1970 effective July 1, 1977. Thus, authority for the use of sec-
DEPARTMENT OF AGRICULTURE,
tion 610 funds would be continued for most of fiscal year 1977. Section
OFFICE OF THE SECRETARY,
610 authorizes the use of Commodity Credit Corporation funds for
Washington, D.C., December 17, 1975.
cotton research activities. The Department agrees with the repeal of
Hon. THOMAS S. FOLEY,
section 610 of the Agricultural Act of 1970. This would be consistent
Chairman, Committee on Agriculture,
with the approach taken in other commodity research and promotion
House of Representatives,
programs in that they are fully producer-financed. However, it should
Washington, D.C.
be noted that the repeal of section 610 would in no way affect our
DEAR MR. CHAIRMAN This is in reply to your request for a report
responsibility for supervising the producer-financed program. The De-
on H.R. 10930, a bill "To amend section 7(e) of the Cotton Research
partment has well-defined oversight and surveillance responsibilities
and Promotion Act to provide for an additional assessment and for
in the Cotton Research and Promotion Act. We assure the Congress
reimbursement of certain expenses incurred by the Secretary of Agri-
that these activities will continue.
culture and to repeal section 610 of the Agricultural Act of 1970 per-
Because of the ambiguity in the assessment provisions of the bill, we
taining to the use of Commodity Credit Corporation funds for re-
are unable to estimate the total amount of revenue to be generated by
search and promotion."
this proposal.
The Department has no objection to the enactment of H.R. 10930 if
With respect to the provisions of Public Law 91-190, Section 102
amended and clarified as set forth herein.
(2) (C), we believe this legislation would have no significant impact
Section 1(1) of the bill would provide for the reimbursement of ad-
on the quality of the environment.
ministrative costs incurred by the Department for supervisory work
The Office of Management and Budget advises that there is no ob-
involving 2.5 employee years after an order or amendment to an
jection to the presentation of this report from the standpoint of the
order has been issued and made effective. We recommend that a pro-
Administration's program.
vision be made for reimbursement of all administrative costs in-
Sincerely,
curred by the agency within the Department directly responsible for
RICHARD L. FELTNER,
program administration-in this case the Agricultural Marketing
Assistant Secretary.
Service. We further recommend that the Department be reimbursed
for all costs associated with the holding of a producer referendum to
CURRENT AND FIVE SUBSEQUENT FISCAL YEAR Cost ESTIMATE
approve additional assessments. The Department assumed all costs
of developing the Order, holding public hearings, and holding the
Pursuant to clause 7 of Rule XIII of the Rules of the House of
producer referendum in 1966. Any costs associated with other than
Representatives, the Committee estimates that H.R. 10930 should not
the initial referendum of 1966 should be defrayed from program
result in any government costs during the current and five subsequent
assessments.
fiscal year period. To the contrary, it should result in cost savings to
Section 1(2) contains language necessary to authorize the collection
the United States. First, H.R. 10930 repeals effective October 1977
of an additional assessment on each bale over and above the present $1
authority under section 610 of the Agricultural Act of 1970 under
per bale assessment.
which CCC funds have been made available for the cotton research
Section 1 (3) of the bill provides for an additional producer assess-
and promotion program. Section 610 authorizes $10 million in CCC
ment for research and promotion. This is a decision that must ulti-
funds to be used annually for this purpose and makes an additional $10
mately be reached in a referendum by cotton producers themselves if
million available at the discretion of the Secretary from funds avail-
Congress approves this amendment. The language in this section is not
able for payments on each of the cotton crops through the 1977 crop.
clear as to whether the additional assessment is to be an amount per
For the current fiscal year, the amount available under section 610 has
bale or a percentage of some value of cotton to be determined in some
been limited to $3 million. H.R. 10930 would have potential savings
10
11
of $20 million in fiscal year 1978, when the repeal first becomes effec-
attached cost estimate for H.R. 10930, the Cotton Research and Promo-
tive and $10 mililon each year thereafter, assuming the full authoriza-
tion Act.
tion under section 610 would otherwise have been made available for
Should the Committee so desire, we would be pleased to provide fur-
the program.
ther details on the attached cost estimate.
There are other cost savings resulting from H.R. 10930. The bill
Sincerely,
provides that certain program costs now paid from funds appropri-
ALICE M. RIVLIN,
ated under the Cotton Research and Promotion Act would be borne
Director.
in the future by producer assessments. These include up to $200,000
Attachment.
for costs associated with any referendum conducted under the Act,
CONGRESSIONAL BUDGET OFFICE
and administrative costs for supervisory work involving up to 5 em-
ployee years after an order or amendment thereto has been made
COST ESTIMATE
effective. These maximum limits should be more than enough to cover
MAY 14, 1976.
anticipated expenses for the future. Information from the USDA
1. Bill Number: H.R. 10930
indicates that the costs associated with a referendum should not ex-
2. Bill Title: Cotton Research and Promotion
ceed $175,000 and the administrative costs to the Department for
3. Purpose of Bill:
supervisory work should not exceed approximately 3 employee years
Under Section 610 of the Agricultural Act of 1970, as amended, the
and involve an expenditure of some $72-75,000 with a potential that it
Commodity Credit Corporation, through the Cotton Board, provides
might go up to 5 employee years over the next three years depending
funds for cotton research, promotion and market development. Sec-
on the workload.
tion 610 authorizes $20 million per year for these purposes through
The provision for reimbursement of referendum expenses would
crop year 1977 (FY 1978) and $10 million per year thereafter. These
save the USDA for expenses incurred in the referendum on the in-
funds are supplemented by assessments paid by cotton growers under
crease in the assessment, which most probably would occur in fiscal
provisions of the Cotton Research and Promotion Act.
year 1977, and on any referendum which might occur thereafter. The
H.R. 10930 would repeal Section 610 and would, thus eliminate the
savings resulting from reimbursement of administrative costs would
use of CCC funds for cotton research and promotion. In addition,
be a savings on an annual basis of the amount set forth above for this
the bill would authorize the Secretary of Agriculture to issue an order
purpose.
that would raise the level of cotton assessments. This proposal requires
The Committee's estimate is consistent with the estimate of the Con-
the endorsement of cotton growers voting in a referendum. The fed-
gressional Budget Office which appears elsewhere in this report.
eral costs of administering the cotton research and promotion pro-
motion program and the cost of supervising the referendum would
INFLATIONARY IMPACT STATEMENT
be reimbursed by cotton growers with funds derived from them
assessments.
Pursuant to clause (1) (4) of Rule XI of the Rules of the House of
4. Cost Estimate:
Representatives, the Committee estimates that enactment of H.R.
Enactment of H.R. 10930 would lead to a reduction in federal costs
10930 will have no inflationary impact on the national economy.
as a result of the reimbursement provisions and the termination of the
BUDGET ACT COMPLIANCE (SECTION 308 AND SECTION 403)
CCC cotton promotion program. The estimated cost savings are shown
in the table below.
The provisions of clause 2(1) (3) (B) of Rule XI of the Rules of the
COST SAVINGS
House of Representatives and section 308 (a) of the Congressional
IIn thousands of dellars; fiscal year]
Budget Act of 1974 (relating to estimates of new budget authority or
new or increased tax expenditures) are not considered applicable. The
1977
1978
1979
1980
1981
estimate and comparison prepared by the Director of the Congressional
Repeal of CCC funding
Reimbursement of administrative cost
20,000
10, 000
10,000
Budget Office under clause 2(1) (3) (C) of Rule XI of the Congres-
10,000
69
73
Reimbursement of referendum cost
77
82
87
sional Budget Act of 1974 submitted to the Committee prior to the
175
Total
filing of this report are as follows:
244
20,073
10,077
10,082
10, 087
CONGRESS OF THE UNITED STATES,
5. Basis of Estimate:
CONGRESSIONAL BUDGET OFFICE,
The estimates of the savings resulting from the termination of CCC
Washington, D.C., May 14, 1976.
support represent the funds authorized in Section 610. It is assumed
Hon. THOMAS S. FOLEY,
that all of the funds authorized would have been spent in the year of
Chairman, Committee on Agriculture,
the authorization. Savings would not occur until FY 1978, the year
U.S. House of Representatives,
Section 610 would be repealed. The estimates of the funds reimbursed
Washington, D.C.
for administrative expenses reflect CBO projections of the cost of
DEAR MR. CHAIRMAN Pursuant to Section 403 of the Congressional
managing the cotton research and promotion program. The Agricul-
Budget Act of 1974, the Congressional Budget Office has prepared the
12
13
tural Marketing Service spent about $65,000 for the cotton program
for supervisory work up to 5 employee years after an order or amend-
in FY 1976. Future costs were projected using CBO estimates of the
ment to an order has been issued and made effective. To facilitate the
expected changes in federal salaries. The reimbursement for the cost of
collection and payment of such assessments, the Cotton Board may des-
supervising a referendum is based on a Department of Agriculture
ignate different handlers or classes of handlers to recognize differences
estimate. It was assumed that only one referendum would be held and
in marketing practices or procedures utilized in any State or area, ex-
that this vote would occur in FY 1977 for the purpose of endorsing
cept that no more than one such assessment shall be made on any bale
or rejecting the new assessments. The last referendum was held about
ten years ago when the assessments were first authorized.
subsection. of cotton unless specifically authorized by provisions of this
6. Estimate Comparison None available.
The rate of assessment prescribed by the order shall be $1 per bale of
7. Previous CBO Estimate: None.
cotton handled but, subject to approval in a referendum as pro-
8. Estimate Prepared By: Robert M. Gordon (225-5275).
vided in section 8, the Secretary shall issue an amendment to the order
9. Estimate Approved By:
which shall provide that in each marketing year, the rate shall be sup-
JAMES L. BLUM,
plemented by an additional per bale amount to be collected or paid as
Assistant Director
provided in this subsection, such amount to be at a rate as prescribed in
for Budget Analysis.
the amendment to the order, but not to exceed one per centum of the
value of cotton as determined by the Cotton Board and the Secretary.
OVERSIGHT STATEMENT
Neither the amendment to the order authorized by the foregoing pro-
visions nor the disapproval of such amendment in a referendum shall
No summary of oversight findings and recommendations made by
operate to decrease or otherwise affect the amount of the assessment of
the Committee on Government Operations under clause 2(b) (2) of
$1.00 per bale in effect under the order published in the Federal Reg-
Rule X of the Rules of the House of Representatives was available to
ister on December 31, 1966. No authority under this Act may be used
the Committee with reference to the subject matter specifically ad-
as a basis to advertise or solicit votes in any referendum relating to the
dressed by H.R. 10930, as amended.
rate of assessment with funds collected under this Act. The Secretary
No specific oversight activities, other than the hearing accompany-
may maintain a suit against any person subject to the order for the
ing the Committee's consideration of H.R. 10930, as amended, were.
collection of such assessment, and the several district courts of the
conducted by the Committee within the definition of clause 2(b) (1).
United States are hereby vested with jurisdiction to entertain such
of Rule x of the Rules of the House of Representatives.
suits regardless of the amount in controversy: Provided, That the
remedies provided in this section shall be in addition to, and not ex-
CHANGES IN EXISTING LAW
clusive of, the remedies provided for elsewhere in this Act or now or
In compliance with clause 3 of Rule XIII of the Rules of the House
hereafter existing at law or in equity.
of Representatives, changes in existing law made by the bill are shown
as follows (existing law proposed to be omitted is enclosed in black
AGRICULTURAL ACT OF 1970
brackets, new matter is printed in italic, and existing law in which no-
change is proposed is shown in roman) :
*
COTTON RESEARCH AND PROMOTION ACT
[SEC. 610. The Commodity Credit Corporation, in furtherance of
its powers and duties under subsections (e) and (f) of section 5 of
the Commodity Credit Corporation Charter Act, shall, through the
Cotton Board established under the Cotton Research and Promotion
Sec. 7.
Act, and upon approval of the Secretary, enter into agreements with
(e) Providing that the producer or other person for whom the cot-
the contracting organization specified pursuant to section (g) of that
ton is being handled shall to the handler of cotton designated by the
Act for the conduct, in domestic and foreign markets, of market de-
Cotton Board pursuant to regulations issued under the order and that
velopment, research or sales promotion programs and programs to aid
such handler of cotton shall collect from the producer or other person
in the development of new and additional markets, marketing facili-
for whom the cotton, including cotton owned by the handler, is being
ties and uses for cotton and cotton products, including programs to
handled, and shall pay to the Cotton Board, an assessment prescribed
facilitate the utilization and commercial application of research find-
by the order, on the basis of bales of cotton handled, for such expenses
ings. Each year the amount available for such agreements shall be that
and expenditures, including provision for a reasonable reserve, as the
portion of the funds (not exceeding $10,000,000) authorized to be
Secretary finds are reasonable and likely to be incurred by the Cotton
made available to cooperators under the cotton program for such year
Board under the order, during any period specified by him[], and
but which is not paid to producers because of a statutory limitation
for reimbursing the Secretary (1) for expenses not to exceed $200,000
on the amounts of such funds payable to any producer. The Secretary
incurred by him in connection with any referendum conducted under
is authorized to deduct from funds available for payments to pro-
section 8, and (2) for administrative costs incurred by the Secretary
14
ducers under section 103 of the Agricultural Act of 1949, as amended,
on each of the 1972 and 1973 crops of upland cotton such additional
sums for use as specified above (not exceeding $10,000,000 for each
such crop) as he determines desirable; and the final rate of payment
provided in section 103 if higher than the rate of the preliminary pay-
ment provided in such section shall be reduced to the extent necessary
to defray such costs. No funds made available under this section shall
be used for the purpose of influencing legislative action or general
farm policy with respect to cotton.]
Calendar No. 966
94TH CONGRESS
SENATE
REPORT
2d Session
No. 94-1023
COTTON RESEARCH AND PROMOTION PROGRAM
JULY 1 (legislative day JUNE 18), 1976.-Ordered to be printed
Mr. ALLEN, from the Committee on Agriculture and Forestry,
submitted the following
REPORT
[To accompany H.R. 10930]
The Committee on Agriculture and Forestry, to which was referred
the bill (H.R. 10930) to repeal section 610 of the Agricultural
Act of 1970 pertaining to the use of Commodity Credit Corporation
funds for research and promotion and to amend section 7(e) of the
Cotton Research and Promotion Act to provide for an additional
assessment and for reimbursement of certain expenses incurred by
the Secretary of Agriculture, having considered the same, reports
favorably thereon without amendment and recommends that the bill
do pass.
SHORT EXPLANATION
H.R. 10930 makes changes in the cotton research and promotion
program. The bill-
(1) repeals section 610 of the Agricultural Act of 1970, which
authorizes Government financing to supplement funds available
through producer assessments under the Cotton Research and
Promotion Act;
(2) authorizes, subject to a referendum among producers, a
supplemental rate of producer assessment not to exceed 1 percent
of the value of cotton as determined by the Cotton Board and
the Secretary of Agriculture. Neither an amendment to the order
providing for a supplemental rate of assessment nor the disap-
proval of such amendment would operate to decrease or other-
wise affect the assessment of $1 per bale currently in effect; and
(3) authorizes the Secretary to appoint consumer advisors to
the Cotton Board. In number, they are not to exceed 15 percent
of the membership of the Cotton Board.
57-010
2
3
BACKGROUND AND NEED FOR LEGISLATION
There are seven major chemical companies which control an estimated
I.
84 percent of synthetic production. In 1974, the two largest companies
dominated the market with 54 percent of sales. Research in the fields
The Cotton Research and Promotion Act was enacted in 1966 to
of cotton production and marketing has been almost completely over-
enable cotton producers to establish, finance, and carry out a coordi-
shadowed by the heavily-financed programs of research and marketing
nated program of research and promotion to improve the competitive
by the manufacturers of synthetic textile products.
position of, and to expand markets for, cotton. The Act authorized
The program authorized by the Cotton Research and Promotion
an assessment of $1 per bale of cotton and accorded individual pro-
Act, has, however, enabled cotton to regain markets which had been
ducers the right to obtain refunds of the assessments if they were not
lost to synthetics and other competing fabrics. In 1960, cotton had
in favor of the program. These funds were later supplemented by Gov-
about 65 percent of the U.S. textile fiber market, and this fell below
ernment funds under section 610 of the Agricultural Act of 1970.
30 percent in 1973. Cotton was gradually losing its markets to syn-
Cotton research and promotion programs date back to 1938 when
thetics, in part, because of the vast resources provided for research
rayon was beginning to make inroads into cotton's markets. To help
and development and for advertising and marketing support. In the
combat this threat, a group of cotton leaders organized the National
early 1960's, synthetic fiber corporations were spending about $120
Cotton Council with the objective of increasing consumption of
million a year for research and advertising alone. In 1974, the syn-
United States cotton and its products through research and promotion
thetic industry invested $234 million in fiber research and $60 million
as well as through other needed projects. The Council tried various
in advertising to promote sales of synthetic fibers. By comparison, the
voluntary financing plans. In 1960, it organized the Cotton Producers
amount spent by Cotton, Inc., was but $5.4 million for fiber research
Institute, as a division of the Council, with its funds going entirely to
and $3.4 million for advertising for cotton. In part, as a result of the
research and promotion projects. Collections went from a little over
program authorized by the Cotton Research and Promotion Act, cot-
$1 million the first year to a high of about $3 million and then began
ton moved back to 30.3 percent of the fiber market in 1974.
to decline for a number of reasons. As the program began to erode
throughout the cotton producing area, it became clear a uniform
III.
method of financing was needed. This led to enactment of the Cotton
Research and Promotion Act, which became effective with the 1967
According to the Department of Agriculture, through June 30,
crop.
1975. $85 million in producer funds have been collected under the Cot-
The 1966 Act and the implementing order subsequently approved
ton Research and Promotion Act; $8 million have been refunded, leav-
in a referendum of cotton producers provide the basic procedures for
ing net collections of $77 million. Refunds have ranged from 3 per-
carrying out the cotton research and promotion program. The Act and
cent in 1967 to 12.5 percent in 1974.
the order provide for establishment of a quasi-governmental agency to
Section 610 of the Agricultural Act of 1970, as amended by the Ag-
administer the program. This agency is the 20-member Cotton Board
riculture and Consumer Protection Act of 1973, authorized the use of
appointed by the Secretary from nominations made by producer as-
Commodity Credit Corporation funds in fiscal years 1972-78 for the
sociations in each State in the Cotton Belt. The Board handles the col-
cotton research and promotion program. However, the appropriations
lection of the $1 per bale assessments from producers and makes re-
acts for the Department of Agriculture for 1974, 1975, and 1976 lim-
funds of assessments upon request. It also has responsibility for
ited the section 610 funds to $3 million annually to be used for re-
safeguarding and investing the funds in accordance with governmen-
search only. Through fiscal year 1976, a total of $29 million of Com-
tal regulations. The other major function of the Board is to review each
modity Credit Corporation funds has been made available for the
year proposed research and promotion projects.
program.
The Act and order provide for a contracting organization to develop
Through June 30, 1975, $71 million of producer funds have been ex-
cotton research and promotion projects and related budgets and to
pended with about 60 percent devoted to promotion and 40 percent to
carry out the projects after approval by the Cotton Board and the
research $25 million of section 610 funds have been spent through the
Secretary of Agriculture. This organization, Cotton, Inc., is governed
same date, about equally divided between promotion and research.
by a board of directors composed of cotton producers elected by pro-
The current fiscal year producer-funded program is budgeted at
ducer associations in each Cotton Belt State.
$10.1 million. Available producer funds for the fiscal year 1977 budget
will be around $9 million, the smallest annual budget since the first
II.
year of the program.
IV.
A healthy, profitable cotton industry is an asset to the national econ-
omy and makes a significant contribution to our export trade and the
Many benefits have been derived from the cotton research and pro-
all-important balance of payments in international trade.
motion program. For example, a coordinated research program
There is a need for a coordinated research and promotion program
through contracts and cooperative agreements with State experiment
if cotton is to maintain and expand its markets. Cotton is facing well-
stations resulted in the development of the mechanical rick compactors
organized and highly-financed competition from synthetic fabrics.
and the module builder system. These systems permit the handling of
S.R. 1023
S.R. 1023
4
5
seed cotton in a much more efficient manner for the grower, preserving
determined by the Cotton Board and the Secretary. The supplemental
the quality of the lint and seed, and reducing field loss.
rate set forth in the bill is a maximum. So long as this amount is not
Textile research at Cotton, Inc.'s plant and under contract and co-
exceeded, the amended order could provide either a flat dollar-and-
operative agreements has been responsible for new and better fab-
cent rate per bale or a rate based on a percentage of value per bale
rics, such as fire retardant and easy-care fabrics. Research is ongoing
using past or current cotton prices. The Cotton Board would be ex-
now to combat the occupational and safety health hazard of byssino-
pected to engage in such meetings or communication with cotton
sis. In the promotion area, Cotton, Inc., has been concentrating in
growers as it deems necessary in order to arrive at a rate or rate pro-
advertising, mill motivation, and new product merchandizing to in-
cedure for recommendation to the Secretary. Thereafter, the views
crease cotton consumption at the mill, manufacturer, and retail levels.
of growers and others would be obtained on the assessment rate and
The program will, if adequately funded, help restore cotton to its
other provisions of the proposed amendment to the order in hearings
rightful position as a fabric unequalled for comfort, durability, and
conducted by the Secretary. The decision on the assessment rate to be
economy of use. H.R. 10930, while terminating Government financing
included in the amendment to the order would be made by the Cotton
of the program, provides cotton growers in the United States an op-
Board and the Secretary after giving consideration to the hearing
portunity to decide for themselves whether they wish to assess them-
record and the recommendations in connection therewith.
selves additional charges to support the research and promotion effort.
Before any supplemental assessment could become effective, it would,
(In hearings on H.R. 10930 before the Subcommittee on Cotton of the
of course, have to be approved by producers in a referendum conducted
House Committee on Agriculture, cotton producer organizations were
under section 8 of the Act. Neither an amendment to the order pro-
virtually unanimous in their support of the bill.)
viding for a supplemental rate of assessment nor disapproval of such
amendment would operate to decrease or otherwise affect the assess-
SECTION-BY-SECTION ANALYSIS
ment of $1 per bale currently in effect.
Paragraph (3) also provides that no authority under the Act may
Section 1. Repeal of section 610 of the Agricultural Act of 1970
be used as a basis to advertise or solicit votes in any referendum re-
Section 1 of the bill repeals section 610 of the Agricultural Act of
lating to the rate of assessment with funds collected under the Act.
1970, as amended, effective October 1, 1977, thereby terminating pub-
This provision does not affect the authority of the Cotton Board or
lic funding of the program. After that date, the program will be
Cotton, Inc. to conduct ongoing promotion programs in their cus-
supported entirely with funds collected from producers of cotton.
tomary and usual manner in which they explain the work that is being
Section 610 authorizes the Commodity Credit Corporation to make
performed under the order, but it is not expected that this activity
available $10 million annually for research and promotion programs
will be conducted in such a manner as to advertise or solicit votes in the
conducted through the Cotton Board established under the Cotton
referendum.
Research and Promotion Act and provides discretionary authority to
the Secretary of Agriculture to make additional sums available, not
Section 3. Appointment of consumer advisors to the Cotton Board
to exceed $10 million annually.
Section 3 of the bill authorizes the Secretary of Agriculture to ap-
point consumer advisors to the Cotton Board. In number, they are
Section 2. Supplemental rate of assessment and reimbursement for
not to exceed 15 percent of the membership of the Cotton Board.
Departmental administrative costs
Section 2 of the bill contains three paragraphs amending section
DEPARTMENTAL VIEWS
7(e) of the Cotton Research and Promotion Act.
Paragraph (1) provides that the assessments collected under the
The Committee on Agriculture and Forestry has not received a re-
Act shall be used to reimburse the Secretary of Agriculture for (a)
port from the Department of Agriculture on H.R. 10930. However, in
expenses, not to exceed $200,000, incurred by him in connection with
a letter to Chairman Foley of the House Committee on Agriculture
any referendum conducted under section 8 for approval of an order
dated December 17, 1975, Assistant Secretary of Agriculture Richard
or an amendment of an order and (b) administrative costs incurred
L. Feltner stated that the Department had no objection to the enact-
by the Secretary for supervisory work up to 5 employee years after
ment of H.R. 10930 if amended and clarified in certain respects. The
an order or amendment to an order has been issued and made effective.
letter from the Assistant Secretary reads as follows:
The limitations on the USDA expenses to be borne by producer assess-
ments-$200,000 for the cost of the referendum and 5 employee years
DEPARMENT OF AGRICULTURE,
for the administrative costs for supervisory work-are, of course,
OFFICE OF THE SECRETARY,
ceilings and are not requirements that the full amount be utilized.
Washington, D.C., December 17, 1975.
Paragraph (2) sets forth an exception to the provision in the Act
Hon. THOMAS S. FOLEY,
that no more than one assessment shall be made on any bale of cotton
Chairman, Committee on Agriculture, House of Representatives,
SO as to take account of any supplemental assessment authorized pur-
Washington, D.C.
suant to section 7 (e), as amended by the bill.
DEAR MR. CHAIRMAN: This is in reply to your request for a report
Paragraph (3) provides authority for a supplemental rate of assess-
on H.R. 10930, a bill "To amend section 7(e) of the Cotton Research
ment in an amount not to exceed 1 percent of the value of cotton as
S.R. 1023
S.R. 1023
6
7
and Promotion Act to provide for an additional assessment and for
responsibility for supervising the producer-financed program. The De-
reimbursement of certain expenses incurred by the Secretary of Agri-
partment has well-defined oversight and surveillance responsibilities
culture and to repeal section 610 of the Agricultural Act of 1970 per-
in the Cotton Research and Promotion Act. We assure the Congress
taining to the use of Commodity Credit Corporation funds for re-
that these activities will continue.
search and promotion.
Because of the ambiguity in the assessment provisions of the bill, we
The Department has no objection to the enactment of H.R. 10930 if
are unable to estimate the total amount of revenue to be generated by
amended and clarified as set forth herein.
this proposal.
Section 1 (1) of the bill would provide for the reimbursement of ad-
With respect to the provisions of Public Law 91-190, Section 102
ministrative costs incurred by the Department for supervisory work
(2) (C), we believe this legislation would have no significant impact
involving 2.5 employee years after an order or amendment to an
on the quality of the environment.
order has been issued and made effective. We recommend that a pro-
The Office of Management and Budget advises that there is no ob-
0
vision be made for reimbursement of all administrative costs in-
jection to the presentation of this report from the standpoint of the
curred by the agency within the Department directly responsible for
Administration's program.
program administration-in this case the Agricultural Marketing
Sincerely,
Service. We further recommend that the Department be reimbursed
RICHARD L. FELTNER,
for all costs associated with the holding of a producer referendum to
Assistant Secretary.
approve additional assessments. The Department assumed all costs
COST ESTIMATE
of developing the Order, holding public hearings, and holding the
producer referendum in 1966. Any costs associated with other than
I.
the initial referendum of 1966 should be defrayed from program
assessments.
In accordance with section 252 of the Legislative Reorganization
Section 1 (2) contains language necessary to authorize the collection
Act of 1970, the Committee estimates that the enactment of H.R. 10930
of an additional assessment on each bale over and above the present $1
would not result in any additional costs for the Federal Government
per bale assessment.
but should result in significant savings. There are in fact two sources
Section 1(3) of the bill provides for an additional producer assess-
of savings.
ment for research and promotion. This is a decision that must ulti-
First, H.R. 10930 would repeal the authority under section 610 of
mately be reached in a referendum by cotton producers themselves if
the Agricultural Act of 1970 that authorizes up to $10 million in
Congress approves this amendment. The language in this section is not
Commodity Credit Corporation funds for the purpose of cotton re-
clear as to whether the additional assessment is to be an amount per
search and promotion. The Secretary of Agriculture also has the
bale or a percentage of some value of cotton to be determined in some
discretion to designate up to $10 million from funds for the cotton
undefined means by the Cotton Board and the Secretary. Neither is it
program to use for research and promotion. Therefore, the potential
clear as to who would establish the rate of the additional assessment.
savings to the Federal Government from the repeal of section 610 is
The Committee may want to consider changing the language to
$20 million in fiscal 1978. However, the actual savings will probably
specify an exact per bale amount of the additional assessment rather
be closer to $3 million a year-the average Federal contribution for
than providing that the amount be prescribed in an amendment to the
the past three years.
Order. This would be consistent with the action taken by Congress
A second source of savings would result from the provisions in
when it set the initial $1 per bale in the Act. It would also facilitate and
H.R. 10930 which provide that certain administrative costs, now
simplify the collection and remittance of assessments by handlers to
borne by the Government, would be paid by cotton producers. These
the Cotton Board as well as eliminate the need for an annual deter-
include up to $200,000 for costs associated with any referendum con-
mination of the value of cotton by the Cotton Board and the Secretary.
ducted under the Act, and administrative costs for supervisory work
In any event, we recommend that the language be revised to clarify
involving up to 5 employee years after an order or amendment thereto
the amount of the assessment and the basis on which it is to be
has been made effective. These maximum limits should be more than
established.
enough to cover anticipated expenses for the future. According to
Section 2 provides for the repeal of section 610 of the Agricultural
the Department of Agriculture, the costs associated with a referendum
Act of 1970 effective July 1, 1977. Thus, authority for the use of sec-
should not exceed $175,000, and the administrative costs to the Depart-
tion 610 funds would be continued for most of fiscal year 1977. Section
ment for supervisory work should not exceed 3 employee years at this
610 authorizes the use of Commodity Credit Corporation funds for
time.
cotton research activities. The Department agrees with the repeal of
The Committee's estimate for potential savings from enactment of
section 610 of the Agricultural Act of 1970. This would be consistent
this bill is basically consistent with the estimate of the Congressional
with the approach taken in other commodity research and promotion
Budget Office. However, realized savings will probably average about
programs in that they are fully producer-financed. However, it should
$3 million a year in 1978 through 1981 because this is the more likely
be noted that the repeal of section 610 would in no way affect our
funding level that could be expected. In addition, the savings in 1977
S.R. 1023
S.R. 1023
8
9
would only be $69,000 because the estimated "savings" for reimburse-
the endorsement of cotton growers voting in a referendum. The Fed-
ment of the referendum cost is a cost that would not be incurred unless
eral costs of administering the cotton research and promotion pro-
the legislation is passed. The net effect, therefore, is zero.
gram and the cost of supervising the referendum would be reimbursed
by cotton growers with funds derived from the assessments.
COST SAVINGS
4. Cost Estimate:
(Thousands of dollars; fiscal years]
Enactment of H.R. 10930 would lead to a reduction in Federal costs
as a result of the reimbursement provisions and the termination of the
1977
1978
1979
1980
1981
CCC cotton promotion program. The estimated cost savings are shown
Decrease in budget authority
0
20,000
10,000
10,000
10,000
in the table below.
Total Reduction in costs
69
3,073
3, 077
3,082
3,087
COST SAVINGS
Reduction in outlays
0
3,000
3,000
3,000
3,000
Reduction in administrative costs
69
73
77
82
87
IIn thousands of dellars; fiscal year]
1977
1978
1979
1980
1981
II.
Repeal of CCC funding
20,000
10,000
10,000
10,000
The cost estimate prepared by the Congressional Budget Office pur-
Reimbursement of administrative cost
69
73
77
82
87
"Reimbursement of referendum cost
175
suant to section 403 of the Congressional Budget Act of 1974 reads as
follows:
Total
244
20,073
10,077
10,082
10, 087
CONGRESS OF THE UNITED STATES,
CONGRESSIONAL BUDGET OFFICE,
5. Basis of Estimate:
Washington, D.C., May 14, 1976.
The estimates of the savings resulting from the termination of CCC
Hon. THOMAS S. FOLEY,
support represent the funds authorized in Section 610. It is assumed
Chairman, Committee on Agriculture,
that all of the funds authorized would have been spent in the year of
U.S. House of Representatives, Washington, D.C.
the authorization. Savings would not occur until FY 1978, the year
DEAR MR. CHAIRMAN Pursuant to Section 403 of the Congressional
Section 610 would be repealed. The estimates of the funds reimbursed
Budget Act of 1974, the Congressional Budget Office has prepared the
for administrative expenses reflect CBO projections of the cost of
attached cost estimate for H.R. 10930, the Cotton Research and Promo-
managing the cotton research and promotion program. The Agricul-
tion Act.
tural Marketing Service spent about $65,000 for the cotton program
Should the Committee SO desire, we would be pleased to provide fur-
in FY 1976. Future costs were projected using CBO estimates of the
ther details on the attached cost estimate.
expected changes in Federal salaries. The reimbursement for the cost of
Sincerely,
supervising a referendum is based on a Department of Agriculture
ALICE M. RIVLIN,
estimate. It was assumed that only one referendum would be held and
Director.
that this vote would occur in FY 1977 for the purpose of endorsing
Attachment.
or rejecting the new assessments. The last referendum was held about
CONGRESSIONAL BUDGET OFFICE
ten years ago when the assessments were first authorized.
6. Estimate Comparison: None available.
7. Previous CBO Estimate: None.
COST ESTIMATE
MAY 14, 1976.
8. Estimate Prepared By: Robert M. Gordon (225-5275).
1. Bill Number: H.R. 10930
9. Estimate Approved By:
2. Bill Title Cotton Research and Promotion
JAMES L. BLUM,
3. Purpose of Bill:
Assistant Director
Under Section 610 of the Agricultural Act of 1970, as amended, the
for Budget Analysis.
Commodity Credit Corporation, through the Cotton Board, provides
III.
funds for cotton research, promotion and market development. Sec-
The Committee did not receive a cost estimate from the Depart-
tion 610 authorizes $20 million per year for these purposes through
ment of Agriculture.
crop year 1977 (FY 1978) and $10 million per year thereafter. These
funds are supplemented by assessments paid by cotton growers under
CHANGES IN EXISTING LAW
provisions of the Cotton Research and Promotion Act.
H.R. 10930 would repeal Section 610 and would thus eliminate the
In compliance with subsection (4) of rule XXIX of the Standing
use of CCC funds for cotton research and promotion. In addition,
Rules of the Senate, changes in existing law made by the bill are
the bill would authorize the Secretary of Agriculture to issue an order
shown as follows (existing law proposed to be omitted is enclosed in
that would raise the level of cotton assessments. This proposal requires
black brackets, new matter is printed in italic, existing law in which
no change is proposed is shown in roman)
:
S.R. 1023
S.R. 1023
10
11
AGRICULTURAL ACT OF 1970
not members of or their interests are not represented by any such
eligible producer organizations, from nominations made by producers
in the manner authorized by the Secretary, SO that the representation
[Sec. 610. The Commodity Credit Corporation, in furtherance of its
of cotton producers on the Board for each cotton-producing State
powers and duties under subsections (e) and (f) of section 5 of the
shall reflect, to the extent practicable, the proportion which that
Commodity Credit Corporation Charter Act, shall, through the Cotton
State's marketings of cotton bears to the total marketings of cotton in
Board established under the Cotton Research and Promotion Act, and
the United States: Provided, however, That each cotton-producing
upon approval of the Secretary, enter into agreements with the con-
State shall be entitled to at least one representative on the Cotton
tracting organization specified pursuant to section (g) of that Act for
Board. The Secretary may appoint a number of consumer advisors to
the conduct, in domestic and foreign markets, of market development,
the Cotton Board not to exceed 15 per centum of the membership of
research or sales promotion programs and programs to aid in the de-
the Cotton Board. The Cotton Board shall reimburse the consumer
velopment of new and additional markets, marketing facilities and uses
advisors for expenses incurred in attending meetings of the Board in
for cotton and cotton products, including programs to facilitate the
the same manner as the Cotton Board members.
utilization and commercial application of research findings. Each year
(c) Providing that the Cotton Board shall, subject to the provisions
the amount available for such agreements shall be 10 million dollars.
of subsection (g) of this section, develop and submit to the Secretary
The Secretary is authorized to deduct from funds available for pay-
for his approval any advertising or sales promotion or research and
ments to producers under section 103 of the Agricultural Act of 1949,
development plans or projects, and that any such plan or project must
as amended, on each of the 1972 through 1977 crops of upland cotton
be approved by the Secretary before becoming effective.
such additional sums for use as specified above (not exceeding $10,-
(d) Providing that the Cotton Board shall, subject to the provisions
000,000 for each such crop) as he determines desirable; and the final
of subsection (g) of this section, submit to the Secretary for his
rate of payment provided in section 103 if higher than the rate of
approval, budgets on a fiscal period basis of its anticipated expenses
the preliminary payment provided in such section shall be reduced
and disbursements in the administration of the order, including prob-
to the extent necessary to defray such costs. No funds made available
able costs of advertising and promotion and research and development
under this section shall be used for the purpose of influencing legis-
projects.
lative action or general farm policy with respect to cotton.
(e) Providing that the producer or other person for whom the cotton
1
is being handled shall pay to the handler of cotton designated by the
Cotton Board pursuant to regulations issued under the order and that
such handler of cotton shall collect from the producer or other person
COTTON RESEARCH AND PROMOTION ACT
for whom the cotton, including cotton owned by the handler, is being
handled, and shall pay to the Cotton Board, an assessment prescribed
*
by the order, on the basis of bales of cotton handled, for such expenses
REQUIRED TERMS IN ORDERS
and expenditures, including provision for a reasonable reserve, as
the Secretary finds are reasonable and likely to be incurred by the Cot-
SEC. 7. Orders issued pursuant to this Act shall contain. the follow-
ton Board under the order, during any period specified by him[.]
ing terms and conditions:
and for reimbursing the Secretary (1) for expenses not to exceed
(a) Providing for the establishment and selection by the Secretary,
$200,000 incurred by him in connection with any eferendum conducted
of a Cotton Board, and defining its powers and duties, which shall
under section 8, and (2) for administrative costs incurred by the Sec-
include only the powers:
retary for supervisory work up to 5 employee years after an order or
(1) To administer such order in accordance with its terms and
amendment to an order has been issued and made effective. To facili-
provisions;
tate the collection and payment of such assessments, the Cotton Board
(2) To make rules and regulations to effectuate the terms and
may designate different handlers or classes of handlers to recognize
provisions of such order, including the designation of the handler
differences in marketing practices or procedures utilized in any State
responsible for collecting the producer assessment;
or area, except that no more than one such assessment shall be made on
of violations of such order; and
(3) To receive, investigate, and report to the Secretary complaints
any bale of cotton , unless specifically authorized by provisions of
this subsection. The rate of assessment prescribed by the order shall
(4) To recommend to the Secretary amendments to such order.
be $1 per bale of cotton handled but, subject to approval in a refer-
(b) Providing that the Cotton Board shall be composed of repre-
endum as provided in section 8, the Secretary shall issue an amend-
sentatives of cotton producers selected by the Secretary from nomi-
ment to the order which shall provide that, in each marketing year,
nations submitted by eligible producer organizations within a cotton-
the rate shall be supplemented by an additional per bale amount to be
producing State, as certified pursuant to section 14 of this Act, or, if
collected or paid as provided in this subsection, such amount to be at
the Secretary determines that a substantial number of producers are
a rate as prescribed in the amendment to the order, but not to exceed
one per centum of the value of cotton as determined by the Cotton
1 Section 610 is repealed effective Oct. 1, 1977.
Board and the Secretary. Neither the amendment to the order author-
S.R. 1023
S.R. 1023
12
ized by the foregoing provisions nor the disapproval of such amend-
ment in a referendum shall operate to decrease or otherwise affect the
amount of the assessment of $1' per bale in effect under the order
published in the Federal Register on December 31, 1966. No authority
under this Act may be used as a basis to advertise or solicit votes in
any referendum relating to the rate of assessment with funds collected,
under this Act. The Secretary may maintain a suit against any person
subject to the order for the collection of such assessment, and the sev-
eral district courts of the United States are hereby vested. with
jurisdiction to entertain such suits regardless of the amount in con-
troversy: Provided, That the remedies provided in this section shall
be in addition to, and not exclusive of, the remedies provided for else-
where in this Act or now or hereafter existing at law or in equity.
(f) Providing that the Cotton Board shall maintain such books and
records and prepare and submit such reports from time to time, to the
Secretary as he may prescribe, and for appropriate accounting by the
Cotton Board with respect to the receipt and disbursement of all
funds entrusted to it.
(g) Providing that the Cotton Board, with the approval. of the
Secretary, shall enter into contracts or agreements for the development
and carrying out of the activities authorized under the order pursuant
to sections 6 (a) and (b), and for the payment of the costs thereof
with funds collected pursuant to the order, with an organization or
association whose governing body consists of cotton producers selected
by the cotton producer organizations certified by the Secretary under
section 14, in such manner that the producers of each cotton-producing
State will, to the extent practicable, have representation on the gov-
erning 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 section 11. 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 organization shall keep accurate records
of all its transactions 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.
(h) Providing that no funds collected by the Cotton Board under
the order shall in any manner be used for the purpose of influencing
governmental policy or action, except as provided by subsection (a) (4)
of this section.
*
*
*
S.R. 1023
H.R. 10930
3
Ainety-fourth Congress of the United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Monday, the nineteenth day of January,
one thousand nine hundred and seventy-six
An Act
To repeal section 610 of the Agricultural Act of 1970 pertaining to the use of
Commodity Credit Corporation funds for research and promotion and to
amend section 7(e) of the Cotton Research and Promotion Act to provide for
an additional assessment and for reimbursement of certain expenses incurred
by the Secretary of Agriculture.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That section 610
of the Agricultural Act of 1970, as amended (7 U.S.C. 2119), is
repealed effective October 1, 1977.
SEC. 2. Section 7(e) of the Cotton Research and Promotion Act
(7 U.S.C. 2106(e)) is amended as follows:
(1) At the end of the first sentence strike the period and add the
following: ", and for reimbursing the Secretary (1) for expenses
not to exceed $200,000 incurred by him in connection with any refer-
endum conducted under section 8, and (2) for administrative costs
incurred by the Secretary for supervisory work up to 5 employee years
after an order or amendment to an order has been issued and made
effective.".
(2) At the end of the second sentence strike the period and add
the following: ", unless specifically authorized by provisions of this
subsection.".
(3) At the end of the third sentence strike the period and add the
following: "but, subject to approval in a referendum as provided in
section 8, the Secretary shall issue an amendment to the order which
shall provide that, in each marketing year, the rate shall be supple-
mented by an additional per bale amount to be collected or paid as
provided in this subsection, such amount to be at a rate as prescribed
in the amendment to the order, but not to exceed 1 per centum of the
value of cotton as determined by the Cotton Board and the Secretary.
Neither the amendment to the order authorized by the foregoing pro-
visions nor the disapproval of such amendment in a referendum shall
operate to decrease or otherwise affect the amount of the assessment
of $1 per bale in effect under the order published in the Federal
Register on December 31, 1966. No authority under this Act may be
used as a basis to advertise or solicit votes in any referendum relating
to the rate of assessment with funds collected under this Act.".
H.R. 10930-2
SEC. 3. Section 7(b) of the Cotton Research and Promotion Act
(7 U.S.C. 2106 (b)) is amended by adding at the end thereof the
following: "The Secretary may appoint a number of consumer advisors
to the Cotton Board not to exceed 15 per centum of the membership
of the Cotton Board. The Cotton Board shall reimburse the consumer
advisors for expenses incurred in attending meetings of the Board
in the same manner as the Cotton Board members.".
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.