Natural Grass Sod Promotion, Research, and Information Order, 71306-71323 [2023-22502]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 88, Number 198 (Monday, October 16, 2023)]
[Proposed Rules]
[Pages 71306-71323]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-22502]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1240

[Doc. No. AMS-LP-21-0028]
RIN 0581-AE07


Natural Grass Sod Promotion, Research, and Information Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule invites comments on the establishment of an 
industry-funded promotion, research, and information program for 
natural grass sod products. The proposed Natural Grass Sod Promotion, 
Research, and Information Order (Order) was submitted to the U.S. 
Department of Agriculture (USDA) by Turfgrass Producers International 
(TPI), a group of natural grass sod producers. The proposed Order also 
announces the Agricultural Marketing Service's (AMS) intent to request 
approval from the Office of Management and Budget (OMB) of new 
information collection requirements to implement the program.

DATES: Comments must be received on or before December 15, 2023 to be 
assured of consideration. Pursuant to the Paperwork Reduction Act (44 
U.S.C. chapter 35) (PRA), comments of the information collection burden 
that would result from this proposal must be received on or before 
December 15, 2023 to be assured of consideration.

ADDRESSES: Interested persons are invited to submit comments concerning 
this document by using the electronic process available at https://www.regulations.gov. Written comments may also be submitted to Jeana 
Harbison, Director; Research and Promotion Division; Livestock and 
Poultry Program, AMS, USDA; Room 2625-S, STOP 0251, 1400 Independence 
Avenue SW, Washington, DC 20250-0251. All comments should reference the 
document number and the date and page number of this issue of the 
Federal Register. All comments received will be posted without change, 
including any personal information provided, at https://www.regulations.gov and will be included in the record and made 
available to the public.
    Pursuant to the PRA, comments regarding the accuracy of the burden 
estimate, ways to minimize the burden, including the use of automated 
collection techniques or other forms of information technology, should 
be sent to the address above. In addition, comments concerning the 
information collection should be sent to the Desk Office for 
Agriculture; Office of Information and Regulatory Affairs; Office of 
Management and Budget; New Executive Office Building; 725 17th Street 
NW, Room 725; Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Jeana Harbison; Director; Research and 
Promotion Division; Telephone: (202) 527-3398 or Email: 
[email protected].

SUPPLEMENTARY INFORMATION: 
    This proposed rule is issued pursuant to the Commodity Promotion, 
Research, and Information Act of 1996 (the Act) (7 U.S.C. 7411-7425).

Executive Order 12866, 13563, and 14094

    Executive Orders (E.O.) 12866 and 13563 direct agencies to assess 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 14094 updates and modernizes E.O. 12866 and directs 
agencies to conduct proactive outreach to engage interested and 
affected parties through a variety of means, such as through field 
offices, and alternative platforms and media. This rulemaking has been 
designated as not a ``significant regulatory action'' under section 
3(f) of Executive Order 12866. Accordingly, the Office of

[[Page 71307]]

Management and Budget (OMB) has not reviewed this action.

Executive Order 12988

    This proposed rule has been reviewed under E.O. 12988, Civil 
Justice Reform. It is not intended to have retroactive effect. Section 
524 of the Act (7 U.S.C. 7423) provides that it shall not affect or 
preempt any other Federal or State law authorizing promotion or 
research relating to an agricultural commodity.
    Under section 519 of the Act (7 U.S.C. 7418), a person subject to 
the Order may file a petition with the Secretary of Agriculture 
(Secretary) stating that the Order, any provision of the Order, or any 
obligation imposed in connection with the Order, is not established in 
accordance with the law, and may request a modification of the Order or 
an exemption from the Order. Any petition filed challenging the Order, 
any provision of the Order, or any obligation imposed in connection 
with the Order, shall be filed within 2 years after the effective date 
of the Order, provision, or obligation subject to challenge in the 
petition. The petitioner will have the opportunity for a hearing on the 
petition. Thereafter, the Secretary will issue a ruling on the 
petition. The Act provides that the district court of the United States 
for any district in which the petitioner resides or conducts business 
shall have the jurisdiction to review a final ruling on the petition, 
if the petitioner files a complaint for that purpose not later than 20 
days after the date of the entry of the Secretary's final ruling.

Executive Order 13175

    This proposed rule has been reviewed under E.O. 13175--Consultation 
and Coordination with Indian Tribal Governments, which requires Federal 
agencies to consult and coordinate with Tribes on a government-to-
government basis on: (1) policies that have Tribal implication, 
including regulation, legislative comments, or proposed legislation; 
and (2) other policy statements or actions that have substantial direct 
effects on one or more Indian Tribes, on the relationship between the 
Federal Government and Indian Tribes, or on the distribution of power 
and responsibilities between the Federal Government and Indian Tribes.
    AMS has assessed the impact of this proposed rule on Indian Tribes 
and determined that this rulemaking would not have Tribal implications 
that require consultation under E.O. 13175. AMS hosts a quarterly 
teleconference with Tribal leaders where matters of mutual interest 
regarding the marketing of agricultural products are discussed. 
Information about the proposed regulation will be shared during an 
upcoming quarterly call, and Tribal leaders will be informed about the 
proposed regulation and the opportunity to submit comments. AMS will 
work with the USDA Office of Tribal Relations to ensure meaningful 
consultation is provided as needed with regards to the regulations.

Background

    The proposed Order is an industry effort to establish a national 
program with a Board composed of natural grass sod producers and one 
public member to promote and strengthen consumer demand for natural 
grass. Initially, producers would pay one-tenth (1/10th) of one penny 
($0.01) per square foot, or the equivalent thereof, of natural grass 
sod products. No natural grass sod producer would be exempt from paying 
the assessment unless producing a certified organic product under the 
National Organic Program. A referendum to determine whether producers 
favor the Order would take place before the Order would go into effect. 
This proposed rule also announces AMS's intent to request approval by 
the OMB of new information collection requirements to implement the 
program.

Authority in 1996 Act

    The proposed Order is authorized by the Act (7 U.S.C. 7411-7425), 
which authorizes USDA to establish agricultural commodity research and 
promotion orders that may include a combination of promotion, research, 
industry information, and consumer information activities funded by 
mandatory assessments. Consistent with section 512 of the Act (7 U.S.C. 
7411), the proposed Order would maintain and expand existing markets 
and develop new markets and uses for natural grass. Section 515 of the 
Act (7 U.S.C. 7413), provides for establishment of a Board composed of 
producers and one public member. As defined in section 513 of the Act 
(7 U.S.C. 7412), agricultural commodities include ``products processed 
or manufactured from products specified in the preceding subparagraphs, 
as determined appropriate by the Secretary.'' 7 U.S.C. 7412(1)(F). The 
Act also includes provisions that authorize the Secretary to tailor 
programs to the specific characteristics of different commodities, 
including section 514 of the Act (7 U.S.C. 7413) that provides USDA 
discretion in determining to whom the Order should apply among the 
following: (1) producers, (2) first handlers and others in the 
marketing chain as appropriate, and (3) importers (if imports are 
subject to assessments). 7 U.S.C. 4713(a)(1). Natural grass falls 
within the Act's definition of an agricultural commodity, and natural 
grass sod producers fall within the categories of ``first handlers''. 
Section 516 of the Act (7 U.S.C. 7415), states that an Order may 
include different payment and reporting schedules; coverage of 
research, promotion, and information activities to expand, improve, or 
make more efficient the marketing or use of an agricultural commodity 
in both domestic and foreign markets; provision for reserve funds; and 
provision for credits for generic and branded activities. In addition, 
section 518 of the Act (7 U.S.C. 7417) provides for a referendum to 
ascertain approval of an order to be conducted either prior to it going 
into effect or within 3 years after assessments first begin under the 
order. The Act also provides three different methods for determining 
approval of an order in a referendum.

Industry Overview

    The 2017 survey by USDA-National Agricultural Statistics Service 
(NASS) places the value of the U.S. natural grass sod industry at over 
$1.1 billion, produced on 1,465 farms totaling 339,451 acres. These 
farms exist nationwide with documented active natural grass sod farms 
in no fewer than 49 States. The widespread distribution of natural 
grass sod farms is due in part to the diversity of natural grass 
species, allowing them to adapt to different climates. Grass species 
such as Bentgrass, Fine fescue, Tall fescue, and Kentucky bluegrass 
thrive in USDA plant hardiness zones 1a through 6a, while Bermudagrass, 
Buffalograss, Centipedegrass, Seashore Paspalum, St. Augustinegrass, 
and Zoysiagrass perform well in zones 7a through 10a. There are also 
various species of native grasses and other adapted grasses that are 
gaining popularity in various regions. All these products are produced 
by natural grass sod farmers throughout the United States and are 
included in the definition of natural grass products as indicated in 
this Order.
    The $1.1 billion of natural grass sod produced in 2017 by U.S. 
natural grass sod farms enters the market where it contributes 
significantly to the industries that focus on sustainable growth 
through public and private initiatives supporting environmentally 
responsible investments, as well as those industries that support it. 
These sectors include the home lawn care, sports field, golf course, 
roadside, and other markets that are essential

[[Page 71308]]

components of local economies nationwide. Seed industries, primarily in 
the Midwest and Pacific Northwest, supply seed for sod farms growing 
cool-season grasses including ryegrass, fescues, bluegrasses, and 
native or adapted mixtures. This industry produces over 600 million 
pounds of natural grass seed in Oregon alone, much of which is 
distributed to U.S. natural grass sod farms to produce sod that is then 
sold to other segments of the green industry. In addition to 
contributing to rural agricultural economies, natural grass sod also 
contributes significantly to urban economies. In states that track sod 
sales data, landscape contractors in urban and suburban areas purchase 
between 39.2 percent and 68.2 percent of total sales, followed by sales 
to athletic complexes and golf courses that make up between 18.2 
percent and 44.5 percent of total sales.\1\ The supply chain that moves 
much of this natural grass sod further contributes to local economies 
through home improvement centers, lawn and landscaping services, 
equipment and materials purchases, and more. It is estimated that the 
U.S. lawn care industry alone was worth up to $93 billion in 2018, 
employed more than 1 million people, and represented 513,305 
businesses.\2\
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    \1\ Waltz, Clint, 2018 Sod Producers Report, Annual Survey 
Examines Inventory and Price. UAC Winter Magazine, Winter 2018, at 
44. See also Miller, Grady, 2018 Sod Producers Report for North 
Carolina, Turffiles.ncsu.edu, https://www.turffiles.ncsu.edu/2018/04/2018-sod-producers-report-for-north-carolina/ (last visited Jun. 
9, 2021); Richards, Steve. 2018 SC Sod Producers Survey Results 
(2018, Clemson University).
    \2\ National Association of Landscape Professionals (NALP), 
Landscape Industry Statistics, Landscapeprofessionals.org, https://www.landscapeprofessionals.org/LP/About/Industry-Statistics/LP/Media/landscape-industry-statistics.aspx (last visited Jun. 9, 
2021).
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Need for a Program

    The need for a national research and promotion program is evidenced 
by trends that discourage consumers from using natural grass products. 
Natural grass sod producers in many areas of the United States are 
experiencing social and market trends that are increasingly impacting 
consumer perception and the value of natural grass. These trends can 
ignore the value of natural grass lawns and athletic fields in urban 
and suburban environments and have resulted in consumers reducing the 
amount of grass they manage and/or replacing it with other products. 
The most common alternative for athletic fields in schools, municipal 
parks, and open grounds is often plastic, artificial turf. However, in 
home lawns or public spaces, these alternative products also include 
patios, decks, mulch, concrete or brick pavers, and rubberized 
playgrounds. Data from the 2020 Synthetic Turf Council Market Report 
for North America, which is the primary competitor for natural grass in 
public spaces, school grounds, and parks, indicates that the synthetic 
turf industry has grown 15 percent since 2017 with a current value of 
$2.7 billion. It also states that it will continue to grow at a rate of 
5.7 percent through 2022, with sports fields representing 63 percent of 
the market and rapid growth in landscape applications.\3\ The landscape 
and sports field markets represent the two largest customer segments 
for natural grass sod producers for those who report data on customers.
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    \3\ 2020 Synthetic Turf Market Report for North America, 
Synthetic Turf Council https://www.syntheticturfcouncil.org/news/512350/Synthetic-Turf-Council-STC-Releases-2020-Synthetic-Turf-Market-Report-for-North-America.htm (last visited June 2, 2021).
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    As proposed by the industry, a natural sod checkoff would help 
educate consumers and other stakeholders about the value that plants, 
including natural grass, impart on urban and suburban areas. Plants, 
including natural grass, are often viewed as requiring large amounts of 
inputs from water, fertilizer, and chemicals with few valuable outputs. 
As a result, when balancing natural grass systems on inputs alone with 
no recognition or assessment of outputs, the resulting analysis often 
results in an inaccurate determination that natural grasses are 
resource intensive. However, when accounting for new technologies such 
as drought-tolerant varieties, reduced mowing, and improvements in 
irrigation, as well as the many ecosystem services (carbon 
sequestration, oxygen production, groundwater recharge, filtering of 
pollutants, stormwater and runoff reduction) that are provided by 
lawns, parks, and roadsides, a more accurate characterization is that 
managed landscapes, including natural grass sod, provide many benefits 
in urban and suburban areas.
    The aforementioned perception of natural grass is embedded in 
language used by numerous governing bodies that produce building codes 
and standards for private and public spaces. These codes provide 
incentives for builders to reduce or remove natural grass from 
residential, business, and public spaces with the intent of reducing 
inputs. However, many such requirements do not factor in the many 
benefits that plants, including natural grasses, provide to these areas 
or recognize that simply eliminating them from the system is not a 
sustainable approach for urban and suburban construction.
    Artificial turf is the primary competitor to natural grass for 
athletic fields on school grounds, public parks, and collegiate or 
professional sports venues. The growth of the artificial turf market is 
increasingly reducing the market for natural grass sports fields.
    TPI is the proponent group that submitted the proposed Order to 
USDA on June 18, 2021, requesting the establishment of a natural grass 
sod research and promotion program. Since at least 2013, U.S. natural 
grass sod producers have been considering the implementation of a 
natural grass sod research and promotion program. Although State and 
local sod associations have explored the option of establishing 
voluntary research and promotion programs in previous years, they were 
deemed impractical and unsustainable without the administration and 
enforcement provided by USDA's AMS through the authority provided in 
the Act. In 2017, TPI, a trade association representing natural grass 
sod farmers, equipment manufacturers, seed producers, and other 
industry participants with members located in almost every U.S. State 
and over 30 countries, decided to formally investigate USDA's research 
and promotion programs. From 2017 to 2019, TPI spoke with 
representatives at trade associations with aligned interests, USDA's 
AMS, a public policy consultant, and legal counsel to determine if a 
research and promotion program for the U.S. natural grass sod industry 
was feasible. After much deliberation and interest from U.S. natural 
grass sod producers, the industry, led by TPI, decided that the time 
was right for the natural grass sod industry to pursue a national 
research and promotion program.
    In 2019, after visiting with the trade associations with aligned 
interests and USDA's AMS, the industry decided to host a webinar to get 
feedback from natural grass sod producers regarding their interest in 
developing a national grass sod research and promotion program. On May 
19th, 2020, U.S. sod producers participated in a 2-hour online seminar 
to learn more about USDA's research and promotion programs. After this 
webinar, attendees were polled to determine their interest in 
developing a national research and promotion program for the natural 
grass sod industry and 64 percent stated they were very interested, 20 
percent stated they were interested, 13 percent stated they were 
interested in learning more, and only 3 percent stated they were not

[[Page 71309]]

interested.\4\ Attendees in this webinar were also polled to determine 
their interest in serving on the sod research and promotion drafting 
committee, of which 14 sod producers were selected.
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    \4\ Industry Analysis and Justification for Natural Grass Sod 
Promotion, Research, and Information Order, Turfgrass Producers 
International https://www.ams.usda.gov/sites/default/files/media/SodIndustryAnalysisandJustificationDraft.pdf (last visited June 28, 
2021).
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    This drafting committee has finalized the proposed Order contained 
herein for submission to USDA. The proposed Order contains all of the 
relevant information on research and promotion programs, including the 
proposed assessment rate that was determined through an analysis of 
U.S. natural grass sod production farm and acreage data from the 2017 
USDA-NASS Census of Agriculture along with internal data from TPI. A 
wide range of farm sizes, annual acres harvested, and assessment rates 
were assembled for analysis to determine an assessment rate that would 
(1) be amenable to sod producers; (2) not be overly burdensome; and (3) 
result in enough funds to have an impact on the market. At the end of 
these discussions, the entire formation committee of 14 members of 
different farm sizes, regions, and products all agreed that the 
proposed assessment rate met each of those conditions.

Specific Provisions

    The proposed Order is authorized under the 1996 Act which 
authorizes USDA to establish agricultural commodity research and 
promotion orders and is consistent with existing orders for other 
commodities. The proposed order is also a part of an industry effort to 
establish a national program with a Board composed of natural grass sod 
producers and one public member to promote and strengthen consumer 
demand for natural grass. Many parties including USDA's AMS, a public 
policy consultant, and private legal counsel were all consulted and 
determined that a research and promotion program for the U.S. natural 
grass sod industry was feasible. In addition to this determination, the 
industry hosted a 2-hour webinar where feedback was given from natural 
grass sod producers regarding their interest in developing a national 
grass sod research and promotion program. More than a majority (64 
percent) of the attendees stated that they were very interested in 
establishing a research and promotion program for U.S. natural grass 
sod while only 3 percent stated they were not interested. Fourteen sod 
producers who attended the webinar created the sod research and 
promotion drafting committee, which drafted the proposed Order that 
contains all the relevant information on research and promotion 
programs.
    Because the regulatory text proposed herein contains the complete 
proposed Order, this section will highlight key proposed provisions.

Definitions

    Pursuant to section 513 of the Act (7 U.S.C. 7412), Sec.  1240.20 
of the proposed Order defines certain terms that would be used 
throughout the Order. Several of the terms are common to all research 
and promotion programs authorized under the Act while other terms are 
specific to the proposed natural grass sod Order.
    Proposed Sec.  1240.20 would define the term ``Act'' to mean the 
Commodity Promotion, Research, and Information Act of 1996 (7 U.S.C. 
7412), and any amendments thereto.
    This proposed Order would require natural grass sod producers to 
pay assessments toward the Natural Grass Sod Research and Promotion 
program. Therefore, ``natural grass sod producer'' is defined as any 
person who produces natural grass sod products in the United States.
    The proposed Order defines ``Natural Grass'' as a plant species in 
the Poaceae family, or living plants in other taxa serving a similar 
purpose, as often found in sites such as lawns, sports fields, golf 
courses, parks, cemeteries, roadsides, and others.
    The term ``natural grass sod product'' refers to natural grass 
produced for retail, wholesale, or commercial sale, including 
monostands or blends or mixtures of Bentgrass, Bermudagrass, 
Buffalograss, Centipedegrass, Fine fescue, Kentucky bluegrass, 
Ryegrass, Seashore Paspalum, St. Augustinegrass, Tall fescue, 
Zoysiagrass, Bahiagrass, other native or adapted plants harvested and 
sold as sod, and products containing natural grass with artificial 
elements that are sold as sod. For purposes of this Order, natural 
grass sod product excludes all artificial and synthetic turf or grass 
products, natural grass seed, sprigs, and plugs.

Establishment of the Board

    Pursuant to section 515 of the Act (7 U.S.C. 7413), Sec. Sec.  
1240.30 through 1240.39 of the proposed Order detail the establishment 
and membership of the proposed Natural Grass Sod Board, nominations, 
appointments, the term of office, removal and vacancies, procedures, 
compensation and reimbursement, powers and duties, and prohibited 
activities.
    Section 1240.30(b) specifies the Board would be composed of 11 
members. Three members would represent North/Cool-Season Region, four 
would represent the South/Warm-Season Region, three would represent the 
Transition Zone/California Region, and one would be a public member. 
See table 1 below for a detailed list of States in each region. The 
total number of Board members could not be increased. The division of 
representation would be intended to reflect the relative percentage 
square footage of assessments paid by natural grass sod producers into 
the research and promotion program. See table 1 for a summary of 
geographical distribution of farms, acres, and receipts. At least once 
every 5 years but no more frequently than once every 3 years, the Board 
would review the geographical distribution of the square footage of 
natural grass sod products sold within the United States. Any changes 
in Board composition implemented by the Secretary would be made through 
rulemaking. All Board members would be appointed by the Secretary from 
nominations as set forth in the proposed Sec.  1240.31.
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    \5\ See 2017 Census of Agriculture, USDA National Agricultural 
Statistics Service https://www.nass.usda.gov/Publications/AgCensus/2017/index.php (last visited Nov. 16, 2020).

                             Table 1--Farms, Acres and Sales by Proposed Regions \5\
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                                        Number of
                Region                   members               States              Farms    Acres       Sales
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North/Cool Season....................           3  AK, CO, CT, DE, ID, IL, IN,       508    75,151  $282,742,266
                                                    IA, ME, MA, MI, MN, MT, NE,
                                                    NH, NJ, NY, ND, OH, OR, PA,
                                                    RI, SD, UT, VT, WA, WI, WY.
South/Warm Season....................           4  AL, AZ, FL, GA, HI, LA, MS,       609   177,179   563,044,248
                                                    NV, NM, SC, TX, US
                                                    Territories.
Transition Zone/California...........           3  AR, CA, DC, KS, KY, MD, MO,       343    84,068   292,805,000
                                                    NC, OK, TN, VA, WV.
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[[Page 71310]]

    Any natural grass sod producer who does not have outstanding 
assessments may seek nomination for any vacant position in the region 
they produce and sell natural grass sod products. Nominees that produce 
and sell in multiple regions may seek nomination in one region of their 
choice. To seek nomination to the Board, the interested natural grass 
sod producer would provide the Board a short background statement 
outlining their qualifications. Any public member interested in seeking 
nomination would provide the Board a short background statement 
outlining their qualifications.
    Section 1240.32 of the proposed Order would specify the nominee's 
agreement to serve. Natural grass sod producers and public members 
nominated to serve on the Board would be required to submit to the 
Secretary a written agreement to serve on the Board if appointed by the 
Secretary, disclose any relationship with any natural grass promotion 
entity or organization that has been or is being considered for a 
contractual relationship with the Board, and withdraw from 
participation in deliberations, decision-making, and voting on matters 
that concern the relationship of an entity or organization considered 
for a contractual relationship.
    Section 1240.33 of the proposed Order would specify the 
appointments by the Secretary and terms of office, respectively.
    Except for the initial Board, the Board members would serve 3 years 
or until the Secretary selects his or her successor. The initial Board 
member terms would be staggered at 1, 2, and 3 years. Each region 
initial would have one member who serves 2-year terms and two members 
who serve 3-year terms. Additionally, the South/Warm-Season Region 
would have one member who serves a 2-year term. The public member 
initial term would be a 3-year term. The Secretary would determine 
which of the initial members shall serve a term of 1, 2, or 3 years. 
Members who serve on the initial Board would be eligible to serve a 
second term of 3 years.
    Sections 1240.34 and 1240.35 of the proposed Order would specify 
reasons for removal and how vacancies would be filled. The Secretary 
would be able to remove a Board member if he or she determines there is 
failure or refusal by the Board member to perform his or her duties 
properly or if the Board member engages in an act of dishonesty or 
willful misconduct. Refusing to follow the Act's and Order's purpose 
would also be a reason for removal. If a member is removed from office 
or resigns, the position would automatically become vacant. If a member 
becomes disqualified for ceasing to produce natural grass or ceases to 
do business in the region he or she represents, this position would be 
vacated within 6 months from the date of disqualifying event.
    Section 1240.36 of the proposed Order would specify procedures of 
the Board. A majority of voting Board members present at a meeting 
would constitute a quorum. Each voting member of the Board would be 
entitled to one vote on most matters put to the Board and the motion 
would carry if supported by a simple majority of the total votes. 
Recommendations to change the assessment rate, adopt a budget, or call 
for a referendum would require affirmation by two-thirds (\2/3\) of the 
Board members. When, in the opinion of the chairperson of the Board, 
such action is considered necessary, the members could vote by internet 
service, videoconference, teleconference, or any other means of 
communication. Actions taken under these procedures would be valid only 
if all members were notified of the meeting and all members were 
provided the opportunity to vote. Proxy voting would not be permitted. 
All votes would be recorded in Board minutes. The procedures for 
conducting Board meetings would be established by the Board and 
approved by the Secretary.
    Section 1240.37 of the proposed Order would specify that all 
members of the Board would serve without compensation; however, 
reimbursement for reasonable travel expenses incurred when performing 
Board duties would be provided as approved by the Board.
    Section 1240.38 of the proposed Order would specify the powers and 
duties of the Board. These powers and duties would include, among other 
things, to administer the Order and collect assessments; to develop 
bylaws and recommend rulemaking necessary to administer the Order; to 
select a chairperson and other Board officers; to form other committees 
and subcommittees as necessary; to hire staff or contractors as 
appropriate to carry out the Board's duties; to develop and carry out 
generic promotion, research, and information activities related to 
natural grass products; to develop and administer programs, plans, and 
projects to benefit the natural grass industry; to submit a budget to 
USDA for approval prior to the start of the fiscal year; to borrow 
funds necessary to cover startup costs of the Order; to maintain such 
records and books available to the Secretary for inspection and audit 
upon request; to have its books audited by an outside certified public 
accountant at the end of each fiscal period and at other times as 
requested by the Secretary; to notify natural grass sod producers and 
the Secretary of all Board meetings through press releases or other 
means; to act as intermediary between the Secretary and any natural 
grass sod producer; to furnish to the Secretary any information or 
records he or she may request; to receive, investigate and report to 
the Secretary complaints of violations of the Order; to recommend to 
the Secretary changes to the Order as the Board considers appropriate; 
to strengthen and provide maximum benefits to the natural grass sod 
industry; to invest Board funds appropriately; to pay the cost of 
activities with assessments collected under and earnings from invested 
assessments and other funds; to recommend changes to assessments as 
appropriate; to appoint and convene committees to assist in the 
development of research, promotion, advertising, and information 
programs for natural grass; to periodically prepare and make public 
reports of program activities and, at least once each fiscal period, to 
make public an accounting of funds received and expended; and to 
allocate a percentage of the assessments collected on the sale of 
natural grass sod products in a State or a region to one or more 
programs proposed by a Qualified Organization, under contract, to 
receive funding.
    Section 1240.39 of the proposed Order would specify prohibited 
activities that are common to all promotion programs authorized under 
the Act. The Board members and employees would not engage in any 
actions that would be a conflict of interest; use funds collected by 
the Board to lobby (influencing any legislation or governmental action 
or policy by local, State, national, and foreign governments, or 
subdivisions thereof, other than recommending to the Secretary 
amendments to the Order); or engage in any advertising, including 
promotion, research, or information activities authorized to be carried 
out under the Order that may be false, misleading, or disparaging to 
another agricultural commodity.

Expenses and Assessments

    Pursuant to sections 516 (7 U.S.C. 7415) and 517 (7 U.S.C. 7416) of 
the Act, Sec. Sec.  1240.45 through 1240.47 of the proposed Order would 
detail requirements regarding the Board's budget and expenses, 
financial statements, and assessments. At least 60 calendar days before 
the start of the fiscal period, and as necessary during the year, the 
Board would submit a

[[Page 71311]]

budget to the Secretary detailing its projected expenses. The budget 
would include a list of objectives and strategies, a summary of 
anticipated revenue, and expenses for each program along with a 
breakdown of staff and administrative expenses. Except for the initial 
budget, the Board's budgets would include comparative data for at least 
one preceding fiscal period. Each budget would provide for adequate 
funds to cover the Board's anticipated expenses. Any amendment or 
addition to an approved budget would have to be approved by Secretary, 
including shifting of funds from one program, plan, or project to 
another. The Board would reimburse the Secretary for all expenses 
incurred in the implementation, administration, enforcement, 
supervision of the Order, including all referendum costs in connection 
with the Order.
    During the first year of the Board's operation, the Board could 
borrow money for the payment of startup expenses limited to the first 
year of operation. The Board could accept voluntary contributions to 
carry out activities so long as the contributions are identified in the 
Board's annual operating budget and are free from any encumbrance by 
the donor. The Board would retain control over use of any funds. The 
Board could also receive funds from Federal or State grants with 
approval of the Secretary for specific authorized projects.
    Beginning 3 years after establishment of the Board, the Board would 
be limited to spending no more than 15 percent of its available funds 
for administration, maintenance, and functioning of the Board. 
Reimbursements to USDA would not be considered administrative costs. As 
an example, if the Board received $2 million in assessments during a 
fiscal period, and had available $500,000 in reserve funds, the Board's 
available funds would be $2,500,000. In this scenario, the Board would 
be limited to spending no more than $375,000 (0.15 x $2.5 million) on 
administrative costs. The 15 percent spending limit is consistent with 
section 515 of the Act (7 U.S.C. 7413). The Board could establish an 
operating monetary reserve and carry over excess funds from one fiscal 
period to the next, provided the funds did not exceed two fiscal year 
budgets. For example, if the Board's budgeted expenses for a fiscal 
period were $2 million, it could carry over no more than $4 million in 
reserve.
    Section 1240.46 of the proposed Order would specify the financial 
statement requirements. The Board would be required to submit to USDA 
financial statements on a quarterly basis, or at any other time 
requested by the Secretary. Financial statements would include, at a 
minimum, a balance sheet, an income statement, investments, and an 
expense budget.
    Section 1240.47 of the proposed Order would specify the 
assessments. The Board's programs and expenses would be funded by 
assessments on natural grass sod products and other funds available to 
the Board. Under the proposed Order, natural grass sod producers would 
pay one-tenth (\1/10\th) of one penny ($0.01) per square foot, or the 
equivalent thereof, of all-natural grass sod products that the natural 
grass sod producer sells in the United States. For example, a farm that 
harvested 10,000 square feet of sod would pay $10 in assessments 
(10,000 x .001). This assessment rate was determined through an 
analysis of U.S. natural grass sod production farm and acreage data 
from the 2017 USDA-NASS Census of Agriculture along with internal data 
from TPI. A wide range of farm sizes, annual acres harvested, and 
assessment rates were assembled for analysis to determine an assessment 
rate that would (1) be amenable to sod producers; (2) not be overly 
burdensome; and (3) result in enough funds to have an impact on the 
market. At the end of these discussions, the entire formation committee 
of 14 members of different farm sizes, regions, and products all agreed 
that the proposed assessment rate met each of those conditions.
    Twenty-four months after the Order would become effective and 
periodically thereafter, the Board would review the assessment rate 
and, if approved by a vote of at least two-thirds (\2/3\) of the Board, 
submit a recommendation for a change in the assessment rate to the 
Secretary. The assessment rate would not exceed one-eighth (\1/8\th) of 
one penny ($0.01) per square foot of natural grass sod products sold 
without approval by a majority of natural grass sod producers in a 
referendum.
    In terms of assessment collection, the natural grass sod producer 
would remit assessments for natural grass product sold to the Board 
every quarter with a remittance form.
    Based on 2017 USDA NASS production acreage, TPI estimates 
assessments would be valued at approximately $14.9 million annually. 
Assessments would be collected from approximately 1,459 natural grass 
sod producers.
    In addition, individuals producing certified organic natural grass 
sod, according to 7 CFR part 205, would be exempt from paying 
assessments. Producers would apply to the Board annually for a 
certificate of exemption using a form provided by the Board.
    Pursuant to section 517(f) of the Act (7 U.S.C. 7416) and section 
1240.45(j) of this Order, the Board would be permitted to invest 
assessments collected under the Order in the following: (1) obligations 
of the United States or any agency of the United States; (2) general 
obligations of any State or any political subdivision of a State; (3) 
interest-bearing accounts or certificates of deposit of financial 
institutions that are members of the Federal Reserve; and (4) 
obligations fully guaranteed as to principal interest by the United 
States.
    The program would be funded by the industry through assessments 
paid by natural grass sod producers, as defined in the Proposed Order. 
Based on the proposed assessment rate and an analysis of industry 
statistics provided by USDA and maintained by TPI, publicly available 
farm statistics as well as TPI, the program is estimated to collect 
$14,900,000 annually in assessments and will conduct research, 
marketing, and promotion programs that will benefit the entire 
industry. The benefits of such programs are expected to outweigh the 
costs of the program. Evaluations of similar research and promotion 
programs by independent economists, required to be conducted every 5 
years, have shown positive financial benefits with benefit-cost ratios 
in the range of $2.14 to $17.40 for every dollar invested in the 
programs.\6\ After reviewing and considering all relevant information, 
AMS has determined that the assessments collected from the natural 
grass sod producers will be relatively small in comparison to their 
revenue.
---------------------------------------------------------------------------

    \6\ See US Gov't Accountability Office, GAO-18-54, AGRICULTURAL 
PROMOTION PROGRAMS USDA Could Build on Existing Efforts to Further 
Strengthen Its Oversight (2017), https://www.gao.gov/assets/690/688519.pdf.
---------------------------------------------------------------------------

    Under voluntary programs, the current universe of assessment payers 
does not always include all the industry participants who would likely 
benefit from generic research and promotion activities. Therefore, a 
mandatory research and promotion program would be best positioned to 
have the greatest industry impact with the broadest level of industry 
support by eliminating free riders. A free rider is an entity who 
benefits from a service without having to pay for it. The research and 
promotion program would be able to combine assessment funds from 
natural grass sod producers and have a broad impact on the industry by 
developing new markets, strengthening existing

[[Page 71312]]

markets, conducting important consumer and scientific research, and 
promoting industry initiatives and activities.

Promotion, Research, and Information

    Pursuant to section 516 of the Act (7 U.S.C. 7415), Sec. Sec.  
1240.50 through 1240.52 of the Order would describe the promotion, 
research, and information projects authorized by the Order. The Board 
would develop and submit to the Secretary for approval programs, plans, 
or projects that would provide promotion, research, and information. 
These activities would also provide information to consumers and 
industry groups. The Board could only implement a program or project 
upon approval by the Secretary. The Board would evaluate each program 
to ensure it contributes to an effective promotion program and complies 
with the Act and Order.
    At least once every 5 years, the Board would fund an independent 
evaluation to determine the effectiveness of the Order and programs 
pursuant to the Act. The findings of the evaluation would be made 
available to the Secretary and the general public. Finally, the 
proposed Order would specify that any patents, copyrights, trademarks, 
inventions, product formulations and publications developed with funds 
received by the Board would be the property of the U.S. Government, as 
represented by the Board. These, along with any rents, royalties, and 
the like from their use would be considered income subject to the same 
fiscal, budget, and audit controls as other funds of the Board, and 
could be licensed with approval of the Secretary.

Report, Books, and Records

    Pursuant to section 515 of the Act (7 U.S.C. 7413), Sec. Sec.  
1240.60 through 1240.62 of the proposed Order specify the reporting and 
recordkeeping requirements under the proposed Order as well as 
requirements regarding confidentiality of information. Each natural 
grass sod producer would be required to submit an assessment remittance 
form and assessments to the Board on a quarterly basis. The information 
required in the form would include, but not be limited to, the name and 
contact information of the natural grass sod producer, the quantity of 
natural grass sod products sold, and the natural grass sod producer's 
identification numbers, as applicable. Records would be made available 
to the Board or USDA during normal business hours and retained for at 
least 3 years past the fiscal year.
    In addition to books and records, the proposed Order would also 
require that all information obtained from persons subject to the Order 
as a result of proposed recordkeeping and reporting requirements would 
be kept confidential by all officers, employees, and agents of the 
Board and USDA. Pursuant to the Act, such information could only be 
disclosed if the Secretary considered it relevant, and the information 
were revealed in a judicial proceeding or administrative hearing 
brought at the direction or at the request of the Secretary or to which 
the Secretary or any officer of USDA was a party. Other exceptions for 
disclosure of confidential information would include the issuance of 
general statements based on reports or on information relating to a 
number of persons subject to the proposed Order, if the statements did 
not identify the information furnished by any person, or the 
publication, by direction of the Secretary, of the name of any person 
violating the Order and a statement of the particular provisions of the 
Order violated.

Initial Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), AMS is required to examine the impact of this rulemaking on 
small entities. Accordingly, AMS has prepared this initial regulatory 
flexibility analysis (RFA).
    The purpose of RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so that small businesses will not be 
disproportionately burdened. The Small Business Administration defines, 
in 13 CFR part 121, small agricultural producers as those having annual 
receipts of no more than $750,000.
    The affected industry falls under the North American Industry 
Classification System (NAICS) code: 111421--Sod Farming.

Need for a Program

    The TPI, who represents natural grass sod farmers, equipment 
manufacturers, seed producers, and other industry participants, is the 
proponent group that submitted the proposed Order to USDA on June 16, 
2021, requesting the establishment of a natural grass sod promotion, 
research, and information program. In 2017, TPI began to explore the 
creation of a promotion and research program. TPI worked with natural 
grass sod producers and other industry organizations to gauge interest 
in the development of such a program. In 2020 a drafting committee was 
formed to develop a draft Order. The drafting committee comprised 
fourteen natural grass sod producers representing a wide variety of 
natural grass sod farms. The producers represented a range of farm 
size, years in business, and familiarity with other research and 
promotion programs. The drafting committee proposed Order was part of 
the submission by TPI to USDA for consideration of a program. The 
proposed Order submitted by TPI intends to educate the public on the 
value of natural grass products, market and promote the benefits of 
natural grass on a national scale, provide U.S. sod farmers with 
marketing tools, and provide information to organizations for use in 
the development of model codes and standards for building codes.
    The synthetic turf industry has grown 15 percent since 2017 with a 
current value of $2.7 billion and continues to grow at a rate of 5.7 
percent through 2022, with sports fields representing 63 percent of the 
market and rapid growth in landscape applications.\7\ The rise in 
synthetic turf numbers comes from social and market trends that have 
driven consumer perception of natural grass lawns and athletic fields 
in urban and suburban environments. These trends have caused consumers 
to misunderstand the value of natural grass lawns and athletic fields 
in urban and suburban environments. This has caused consumers to reduce 
the amount of grass they manage and/or replace it with other products 
like plastic, artificial turf, patios, decks, mulch, concrete, brick 
pavers, and rubberized playgrounds. These misconceptions have had a 
significant impact on natural grass sod producers in many areas of the 
United States.
---------------------------------------------------------------------------

    \7\ 2020 Synthetic Turf Market Report for North America, 
Synthetic Turf Council https://www.syntheticturfcouncil.org/news/512350/Synthetic-Turf-Council-STC-Releases-2020-Synthetic-Turf-Market-Report-for-North-America.htm (last visited June 2, 2021).
---------------------------------------------------------------------------

Objectives of the Action

    As noted in the preamble above, the program would conduct research, 
marketing, and promotion activities that will benefit the entire 
industry. Primary goals of the program include educating consumers and 
stakeholders of the benefits of natural grass and providing producers 
with marketing tools they can use to grow their business. The purpose 
of the program would be to strengthen the position of natural grass sod 
in the marketplace, maintain and expand markets for natural grass sod, 
and develop new uses for natural grass sod.

Legal Basis for the Rule

    The Proposed Order is authorized by the 1996 Act, which provides 
USDA the

[[Page 71313]]

authorization to establish research and promotion programs for 
agricultural commodities. Under the Act, ``agricultural commodities'' 
are defined to include agricultural products as well as ``products 
processed or manufactured from products specified in the preceding 
subparagraphs, as determined appropriate by the Secretary.'' The Act 
also includes provisions that authorize the Secretary to tailor 
programs to the specific characteristics of each different commodity, 
including section 7413 that provides USDA discretion in determining to 
whom the Order should apply among the following: ``(A) the producers of 
an agricultural commodity; (B) the first handlers of the agricultural 
commodity and other persons in the marketing chain as appropriate; and 
(C) the importers of the agricultural commodity, if imports of the 
agricultural commodity are subject to assessment. . .''.
    Natural grass sod products fall within the Act's definition of an 
agricultural commodity and natural grass sod producers, as defined in 
the proposed Order, fall within the categories of ``first handlers'' 
and ``other persons in the marketing chain.'' The proposed Order, which 
will establish a program of promotion, research, and information to 
promote consumer demand for natural grass sod products and strengthen 
the position of the natural grass sod industry in the marketplace, is 
consistent with the Congressional intent of the Act to maintain and 
expand existing markets as well as develop new markets and uses for 
agricultural commodities. As such, USDA is authorized to establish the 
Natural Grass Sod Promotion, Research, and Information program by 
approving the proposed Order.
    As part of the approval process set forth in the Act, the industry 
must formulate an Order and submit it to USDA for review and final 
approval. Implementation of the Order, like all rulemaking, is subject 
to public notice and comment, and is subject to ongoing referenda where 
participants are given the opportunity to vote to determine whether the 
program shall continue to operate. If approved by the USDA and through 
the ongoing referenda, the Order becomes a regulation codified in the 
U.S. Code of Federal Regulations and carries the force of law.
    There are no known Federal rules that duplicate, overlap, or 
conflict with the Proposed Order.

Alternatives to the Rule

    USDA considered the alternative of no action; that is, the status 
quo. This alternative, however, would leave the industry without the 
tools of a research and promotion program to strengthen the position in 
the marketplace, maintain and expand markets, and develop new uses.
    Although there has been sporadic success attempting to fund efforts 
as described above at the local level with pooled resources of 
producers and/or associations, voluntary research and promotion efforts 
at the national level have historically been marginally successful due 
to the lack of funds available to undertake larger programs. There are 
several entities that fund natural grass research and promotion efforts 
at state and regional levels, but none of which have the capacity to 
fund these efforts on a large scale. For instance, many State sod 
associations funds research and promotion at levels under $10,000 
annually. TPI funds research and promotion through its foundation, The 
Lawn Institute, at up to $50,000 to $100,000 annually. However, these 
types of funds are raised through voluntary contributions and 
fundraising efforts such as auctions, raffles, activities, etc., and, 
while they have successfully been able to impact natural grass research 
and promotion on a small scale, none of these efforts can achieve what 
is proposed through a natural grass sod checkoff. A natural grass sod 
checkoff would not only be able to raise significant funds for these 
efforts, but the checkoff could also respond to changing needs in 
research and promotion. Through the collection of an assessment on 
natural grass sod products on a national scale, the research and 
promotion program will be able to leverage pooled assessment funds and 
have a more consistent and wide-scale industry impact.
    The natural grass sod production industry has been discussing a 
research and promotion program since at least 2013. TPI and other 
interested stakeholders have held numerous meetings and conducted 
outreach across the industry to gauge interest in a research and 
promotion program for natural grass sod products. As noted above, a 
majority of the natural grass sod producers who actively participated 
in the May 19, 2020, webinar supported the development of such a 
program for consideration. This resulted in the creation of the sod 
research and promotion drafting committee, which drafted the proposed 
order that is under consideration in this proposed rule.
    After careful analysis and discussions, the natural grass sod 
industry determined that a research and promotion program would be best 
positioned to have the greatest industry impact with the broadest level 
of industry support.

Impact on Small Businesses

    The Small Business Administration (SBA) defines, in 13 CFR part 
121, small agricultural producers as those having annual receipts of no 
more than $750,000. According to the 2017 USDA NASS data, 1,034 firms--
approximately 70 percent of producers--would be classified as small 
agricultural producers based on value of sales per farm. Table 2 
compares the average value of sales per farm to the average assessment 
per farm for each category. Because the assessment is calculated on a 
production basis, the proportionate burden is the same across the 
industry, regardless of firm size. On a farm basis, small natural grass 
sod producers would pay between $174 and $7,111 in assessments annually 
per firm, while large natural grass sod producers would pay between 
$13,297 and $63,420.
---------------------------------------------------------------------------

    \8\ 2017 USDA NASS Census https://www.nass.usda.gov/Publications/AgCensus/2017/Full_Report/Volume_1,_Chapter_1_US/st99_1_0039_0039.pdf.

          Table 2 \8\--Number of Farms, Acres, Value of Sales, and Average Proposed Assessment per Farm
----------------------------------------------------------------------------------------------------------------
                             NAICS code 111421                                          2017 Dollars
----------------------------------------------------------------------------------------------------------------
                                                                                                  Avg. annual
                                            Farms              Acres          Avg. value of      assessment per
                                                                              sales per farm          farm
----------------------------------------------------------------------------------------------------------------
Total Industry......................              1,459            339,551           $787,467            $10,138
Small Firms (<$750,000).............              1,034             74,938            233,459              2,886
Large Firms (>750,000)..............                425            264,614         11,526,586             33,134
----------------------------------------------------------------------------------------------------------------


[[Page 71314]]

    The proposed assessment rate of 1/10th of one penny per square foot 
was decided upon by the industry in part because it was determined that 
rate would not create any undue burdens to sod farms of any size, 
including small businesses. Data from the National Quarterly Sod 
Report; 2020 Summer Quarter \9\ indicate a range of natural grass sod 
prices across the United States from $0.16 to $0.50 per square foot 
results in additional costs of between 0.62 percent and 0.2 percent. 
Furthermore, when evaluating the prices based on weighted averages 
instead of ranges, the additional costs incurred are between 0.42 
percent and 0.24 percent.
---------------------------------------------------------------------------

    \9\ USDA Agricultural Marketing Service, Livestock, Poultry, and 
Grain Market News https://www.ams.usda.gov/mnreports/ams_2930.pdf.
---------------------------------------------------------------------------

    This level of assessment should have minimal impact on sod farms of 
any size, large or small, and was part of the consideration for the 
drafting committee in supporting the proposed rate. For instance, a sod 
farm that is considered a small business may harvest as little as 10 
acres annually. At the proposed assessment rate and pricing data from 
the National Sod Report, the annual contribution of that farm to the 
research and promotion program would be $435 per year, while generating 
sales revenue between $69,696 and $217,800.

Required Reporting and Recordkeeping

    The required reporting and recordkeeping to remit assessments do 
not require specialized skills or training. The transactional 
documentation will be added to documents already generated and 
maintained by natural grass sod producers. Reporting requirements are 
expected to be the same for both large and small entities.
    It is estimated it will take approximately 2 hours annually, or 30 
minutes every quarter, to complete and submit the remittance form to 
the Board. This is estimated to cost each natural grass sod producer 
$102 per year. For the purpose of estimating the cost of reporting and 
recordkeeping, this proposed rule uses $51 per hour. To arrive at this 
amount, AMS took the mean hourly earnings of farmers, ranchers, and 
other agricultural managers ($36.93) from the U.S. Department of Labor, 
Bureau of Labor Statistics, May 2020 National Occupational Employment 
and Wages Estimates.\10\ The average mean hourly wage rate of $36.93 
plus an additional 38.1 percent to account for benefits and 
compensation,\11\ for a total hourly wage of $51, was used to calculate 
annual cost. Costs of benefits and compensation guidance was obtained 
from the Bureau of Labor Statistics News Release issued December 14, 
2018.\12\
---------------------------------------------------------------------------

    \10\ Occupational Employment and Wages, May 2020; 11-9013 
Farmers, Ranchers, and Other Agricultural Managers https://www.bls.gov/oes/current/oes119013.htm.
    \11\ News Release Bureau of Labor Statistics, Employer Costs for 
Employee Compensation--June 17, 2021, https://www.bls.gov/news.release/pdf/ecec.pdf.
    \12\ Economic News Release: Employer Costs for Employee 
Compensation Summary for December 2020 https://www.bls.gov/news.release/ecec.nr0.htm.
---------------------------------------------------------------------------

    AMS is committed to complying with the E-Government Act, to promote 
the use of the internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    Regarding outreach efforts, USDA would keep these individuals 
informed throughout the program implementation and referendum process 
to ensure that they are aware of and are able to participate in the 
program implementation process. USDA would also publicize information 
regarding the referendum process so that trade associations and related 
industry media can be kept informed.
    Although AMS has performed this initial RFA analysis regarding the 
impact of the proposed rule on small entities, in order to have as much 
data as possible for a more comprehensive analysis, we invite comments 
concerning potential effects.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
chapter 35), AMS announces its intention to request approval for a new 
information collection for the proposed natural grass sod program.
    Title: Natural Grass Sod Research, Promotion, and Information 
Order.
    OMB Number: 0581-NEW.
    Expiration Date of Approval: 3 years from approval date.
    Type of Request: New information collection for research and 
promotion program.
    Abstract: The information collection requirements are essential to 
carry out the intent of the Act. The information collection pertains to 
a proposal submitted by TPI for the development of a national research 
and promotion program for natural grass sod. The program would be 
administered by a Board of producer members selected by the Secretary. 
Natural grass sod producers would be assessed under the program for 
natural grass products. The program would provide an exemption from 
assessment for any organic natural grass products under the approved 
National Organic Program (7 CFR part 205). The purpose of the proposed 
program is to help build the market for natural grass.
    The proposed forms would require the minimum information necessary 
to effectively carry out the requirements of the proposed Order, and 
their use is necessary to fulfill the intent of the Act.
    The information collection requirements under the program address 
Board nominations, collection of assessments, and the organic 
exemption. For Board nominations, natural grass sod producers and the 
public member must complete the ``Nomination for Appointment'' form to 
obtain names of nominees for appointment as members of the Board. Each 
individual must also complete a ``Nominee's Agreement to Serve'' form 
to allow the individual to disclose any relationship that could be of 
conflict while serving on the Board. Together with the AD-755 form, 
which details background information, this form would ensure the 
individual is qualified to serve on the Board. Assessments would be 
collected using the ``Quarterly Report and Remittance of Amount Due'' 
form. In conjunction, the ``Organic Exemption Request'' form would 
deduct any natural grass sod under the National Organic Program.
    For the purpose of estimating the cost of reporting and 
recordkeeping, this proposed rule uses $51 per hour. To arrive at this 
amount, AMS used the mean hourly earnings of farmers, ranchers, and 
other agricultural managers ($36.93) from the U.S. Department of Labor, 
Bureau of Labor Statistics, May 2020 National Occupational Employment 
and Wages Estimates.\13\ The mean hourly earnings rate of $36.93 plus 
an additional 38.1 percent to account for benefits and 
compensation,\14\ for total hourly earnings of $51, was used to 
calculate annual cost. Costs of benefits and compensation guidance was 
obtained from the Bureau of Labor Statistics News Release issued 
December 14, 2018.\15\
---------------------------------------------------------------------------

    \13\ Occupational Employment and Wages, May 2020; 11-9013 
Farmers, Ranchers, and Other Agricultural Managers https://www.bls.gov/oes/current/oes119013.htm.
    \14\ News Release Bureau of Labor Statistics, Employer Costs for 
Employee Compensation--June 17, 2021, https://www.bls.gov/news.release/pdf/ecec.pdf.
    \15\ Economic News Release: Employer Costs for Employee 
Compensation Summary for December 2020 https://www.bls.gov/news.release/ecec.nr0.htm.
---------------------------------------------------------------------------

    Information collection requirements that are included in this 
proposal are:

[[Page 71315]]

(1) LP-7 Application for Self-Certification of Nominating Organizations 
(OMB Form No. 0581-NEW)

    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.5 hours per response for each 
nominating organization.
    Respondents: Natural grass sod producers and State or regional sod 
associations (15 State or regional sod associations).
    Estimated Number of Respondents: 25.
    Estimated Number of Responses per Respondent: (Estimate 
recertification every 5 years) 0.2.
    Estimated Total Annual Burden on Respondents: (25 organizations and 
producers x 0.2 responses x 0.5 hour per response) 2.50 hours.
    Total Cost: (2.50 hours x $51) $127.50.

(2) LP-4 Nomination for Appointment to the Board (OMB Form No. 0581-
NEW)

    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.5 hours per response.
    Respondents: Natural grass sod producers.
    Estimated Number of Respondents: 20.
    Estimated Number of Responses per Respondent: One per year.
    Estimated Total Annual Burden on Respondents: (20 responses x 0.5 
hour per response) 10 hours.
    Total Cost: (10 hours x $51) $510.

(3) LP-6 Quarterly Report and Remittance of Amount Due for Assessment 
(OMB Form No. 0581-NEW)

    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.5 hours per form.
    Respondents: Natural grass sod producers.
    Estimated Number of Respondents: 1,460.
    Estimated Number of Responses per Respondent: 2 per year.
    Estimated Total Annual Burden on Respondents: (1,460 Number of 
respondents x 2 total number of reports x 0.50 hour per report) 2,920 
hours.
    Total Cost: (2,920 hours x $51) $148,920.

(4) AMS-15 Organic Exemption (OMB Form No. 0581-0093)

    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.25 hours per exemption form.
    Respondents: Natural grass sod producers.
    Estimated Number of Respondents: 10.
    Estimated Number of Responses per Respondent: (Annual organic 
exemption required) 1.
    Estimated Total Annual Burden on Respondents: (10 Number of 
respondents x 1 total number of reports x 0.25 hours per report) 2.50 
hours.
    Total Cost: (2.50 hours x $51) $127.50.

(5) AD-755 Background Information on Form (OMB Form No. 0505-0001)

    Estimate of Burden: Public reporting for this collection of 
information is estimated to average 0.5 hours per response for each 
natural grass sod producer and public member nominated to serve on the 
Board.
    Respondents: Natural grass sod producers.
    Estimated Number of Respondents: 14.33 (20 for initial nominations 
to the Board, 12 every year except 14 every third year in subsequent 
years).
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 10 hours for the 
initial nominations to the Board and 7 hours annually thereafter.
    Total Cost: (Number of respondents x responses per respondent x 
$51) $510 initial, and $357 annually thereafter.

(6) Requirement To Maintain Records Sufficient To Verify Reports 
Submitted Under the Order

    Estimate of Burden: Public recordkeeping burden for keeping this 
information is estimated to average 2 hours per recordkeeper 
maintaining such records.
    Recordkeepers: Natural grass sod producers.
    Estimated Number of Recordkeepers: 1,400.
    Estimated Total Recordkeeping Hours: (1,400 Number of recordkeepers 
x 2.0 hours) 2,800 hours.
    Total Cost: (1,400 Number of recordkeepers x 2.0 hours per 
recordkeeper x $51) $142,800.
    As noted above, under the proposed Order, natural grass sod 
producers would be required to pay assessments, file reports with, and 
submit assessments to the Board. While the proposed Order would impose 
certain recordkeeping requirements on natural grass sod producers, 
information required under the proposed Order could be compiled from 
records currently maintained. The Order would require such records to 
be retained for at least 3 years beyond the fiscal year of their 
applicability.
    The proposed Order's provisions have been carefully reviewed, and 
every effort has been made to minimize any unnecessary recordkeeping 
costs or requirements, including efforts to utilize information already 
submitted under other programs administered by USDA and other State 
programs.
    The proposed forms would require the minimum information necessary 
to effectively carry out the requirements of the program, and their use 
is necessary to fulfill the intent of the Act. Such information can be 
supplied without data processing equipment or outside technical 
expertise. In addition, there are no additional training requirements 
for individuals filling out reports and remitting assessments to the 
Board. The forms would be simple, easy to understand, and place as 
small a burden as possible on the person required to file the 
information.
    Collecting information quarterly would coincide with normal 
industry business practices. The timing and frequency of collecting 
information are intended to meet the needs of the industry while 
minimizing the amount of work necessary to fill out the required 
reports. The requirement to keep records for three years is consistent 
with normal industry practices. In addition, the information to be 
included on these forms is not available from other sources because 
such information relates specifically to individual domestic producers 
who are subject to the provisions of the Act. Therefore, there is no 
practical method for collecting the required information without the 
use of these forms.

Request for Public Comment Under the Paperwork Reduction Act

    Comments are invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of functions of the 
Order and AMS's oversight of the program, including whether the 
information will have practical utility; (b) the accuracy of AMS's 
estimate of the burden of the proposed collection of information, 
including the validity of the methodology and assumptions used; (c) the 
accuracy of AMS's estimate of the number of natural grass sod producers 
that would be covered under the program; (d) ways to enhance the 
quality, utility, and clarity of the information to be collected; and 
(e) ways to minimize the burden of the collection of information on 
those who are to respond, including the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology.
    Comments concerning the information collection requirements

[[Page 71316]]

contained in this action should reference the OMB number, docket 
number, date, and page number of this issue of the Federal Register. 
Comments should be sent to the address referenced in the ADDRESSES 
section of this proposed rule.
    This proposed rule invites comments on the establishment of an 
industry-funded research, promotion, and information program for 
natural grass products. Comments should clearly indicate whether or not 
you support any or all of the provisions proposed. Indicate the reason 
for your position and include relevant information and data to further 
support your position.

List of Subjects in 7 CFR Part 1240

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Natural grass sod, Reporting and 
recordkeeping requirements.


0
For the reasons set forth in the preamble, the Agricultural Marketing 
Service proposes to amend title 7, chapter XI of the Code of Federal 
Regulations by adding part 1240 to read as follows:

PART 1240--NATURAL GRASS SOD PROMOTION, RESEARCH, AND INFORMATION 
ORDER

Subpart A--Natural Grass Sod Promotion, Research, and Information Order
Sec.
1240.10 General.
1240.20 Definitions.

Natural Grass Sod Board

1240.30 Establishment and membership.
1240.31 Nominations and appointments.
1240.32 Nominee's Agreement to Serve.
1240.33 Term of office.
1240.34 Removal.
1240.35 Vacancies.
1240.36 Procedure.
1240.37 Reimbursement and attendance.
1240.38 Powers and duties.
1240.39 Prohibited activities.

Expenses and Assessments

1240.45 Budget and expenses.
1240.46 Financial statements.
1240.47 Assessments.

Promotion, Research, and Information

1240.50 Programs.
1240.51 Independent evaluation.
1240.52 Patents, copyrights, trademarks, inventions, product 
formulations, and publications.

Reports, Books, and Records

1240.60 Reports.
1240.61 Books and records.
1240.62 Confidential treatment.
1240.63 Qualification of natural grass sod organizations.

Miscellaneous

1240.70 Right of the Secretary.
1240.71 Referenda.
1240.72 Suspension or termination.
1240.73 Proceedings after termination.
1240.74 Effect of termination or amendment.
1240.75 Personal liability.
1240.76 Separability.
1240.77 Amendments.
1240.78 OMB control number.
Subpart B--[Reserved]

    Authority:  7 U.S.C. 7411-7425; 7 U.S.C. 7401.

Subpart A--Natural Grass Sod Promotion, Research, and Information 
Order


Sec.  1240.10  General.

    The terms defined/specified in this subpart shall apply to the 
natural grass sod promotion, research, and information Board authorized 
under the Act.


Sec.  1240.20  Definitions.

    Act means the Commodity Promotion, Research and Information Act of 
1996 (7 U.S.C. 7411-7425), and any amendments thereto.
    Board means the Natural Grass Sod Promotion, Research, and 
Information Board established pursuant to Sec.  1240.30, or such other 
name as recommended by the Board and approved by USDA.
    Conflict of interest means a situation in which a member or 
employee of the Board has a direct or indirect financial interest in a 
person who performs a service for, or enters into a contract with, the 
Board for anything of economic value.
    Department or USDA means the U.S. Department of Agriculture, or any 
officer or employee of the Department to whom authority has heretofore 
been delegated, or to whom authority may hereafter be delegated, to act 
in the Secretary's stead.
    Eligible natural grass sod producer refers to a natural grass sod 
producer that has sold natural grass sod products in the United States 
during the Representative Period and is eligible to vote in the initial 
referendum or Subsequent Referenda.
    Fiscal Year and marketing year means the 12-month period ending on 
December 31 or such other period as recommended by the Board and 
approved by the Secretary.
    Information means information and programs for consumers, 
customers, architects, city planners, and various industry participants 
and trades personnel, including educational activities, information, 
and programs designed to enhance and broaden the understanding of the 
use and attributes of natural grass, increase efficiency in producing 
natural grass sod products, maintain and expand existing markets, and 
develop new markets and marketing strategies. These include:
    (1) Consumer education and information, which means any action 
taken to provide information to, and broaden the understanding of, the 
general public regarding natural grass; and
    (2) Industry information, which means information and Programs that 
would enhance the image of the natural grass industry.
    Initial referendum refers to the referendum required to approve 
this subpart as outlined in Sec.  1240.71.
    Natural grass refers to plant species in the Poaceae family, or 
living plants in other taxa serving a similar purpose, as often found 
in sites such as lawns, sports fields, golf courses, parks, cemeteries, 
roadsides and others.
    Natural grass sod producer means any person who produces natural 
grass sod products in the United States.
    Natural grass sod product refers to natural grass produced for 
retail, wholesale, or commercial sale, including monostands or blends 
or mixtures of Bentgrass, Bermudagrass, Buffalograss, Centipedegrass, 
Fine fescue, Kentucky bluegrass, Ryegrass, Seashore Paspalum, St. 
Augustinegrass, Tall fescue, Zoysiagrass, Bahiagrass, other native or 
adapted plants harvested and sold as sod, and products containing 
natural grass with artificial elements that are sold as sod. For 
purposes of this Order, natural grass sod product excludes all 
artificial and synthetic turf or grass products, natural grass seed, 
sprigs, and plugs.
    Order means an order issued by the Secretary under section 7413 of 
the Act that provides for a program of generic promotion, research, and 
information regarding agricultural commodities authorized under the 
Act.
    Part and subpart means the Natural Grass Sod Promotion, Research, 
and Information Order and all rules, regulations, and supplemental 
orders issued pursuant to the Act and the Order. The Natural Grass Sod 
Promotion, Research, and Information Order shall be a subpart of such 
part.
    Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity.
    Produce means the process of growing and/or harvesting natural 
grass sod products for the purpose of selling such products either 
individually or in combination with other products, real

[[Page 71317]]

property, or services in the United States.
    Program means those generic research, promotion, and information 
programs, plans, or projects established pursuant to the Order.
    Promotion means any action, including paid advertising and the 
dissemination of Information, utilizing public relations or other 
means, to enhance and broaden the understanding of the use and 
attributes of natural grass for the purpose of maintaining and 
expanding markets for natural grass sod products.
    Qualified organization means any organization that has the primary 
purpose of representing natural grass sod producers, has natural grass 
sod producers as members, has a board of directors comprised of a 
majority of natural grass sod producers, and is approved by the 
Secretary pursuant to the qualification process set forth in Sec.  
1240.63.
    Quarterly period means one of the four 3-month periods that are 
based upon a calendar year cycle (i.e., January 1-March 31, April 1-
June 30, July 1-September 30, and October 1-December 31).
    Representative period means the time period designated by the 
Secretary pursuant to section 518 (7 U.S.C. 7417) of the Act.
    Research means any type of test, study, or analysis designed to 
enhance the image, desirability, use, marketability, production, 
environmental quality, or sustainability of natural grass, including 
research directed to product characteristics and product development 
like new products or improved technology in the production of natural 
grass sod products.
    Secretary means the Secretary of Agriculture of the United States, 
or any other officer or employee of the Department to whom authority 
has been delegated, or to whom authority may hereafter be delegated, to 
act in the Secretary's stead.
    State means any of the 50 States of the United States, the District 
of Columbia, the Commonwealth of Puerto Rico, or any territory or 
possession of the United States.
    Subsequent Referenda refers to any referendum conducted pursuant to 
Sec.  1240.71 of this subpart after this subpart becomes effective.
    Suspend means to issue a rule under 5 U.S.C. 553 to temporarily 
prevent the operation of an Order or part thereof during a particular 
period of time specified in the rule.
    Terminate means to issue a rule under 5 U.S.C. 553 to cancel 
permanently the operation of an Order or part thereof beginning on a 
date certain specified in the rule.
    United States means collectively the 50 States, the District of 
Columbia, the Commonwealth of Puerto Rico and the territories and 
possessions of the United States.

Natural Grass Sod Promotion, Research, and Information Board


Sec.  1240.30  Establishment and membership.

    (a) Establishment of the Board. There is hereby established a 
Natural Grass Sod Promotion, Research, and Information Board to 
administer the terms and provisions of this part. The Board shall be 
composed of natural grass sod producers that sell natural grass sod 
products in the United States during a marketing year and a public 
member. Seats on the Board shall be apportioned as set forth in 
paragraph (b) of this section based on the geographical distribution of 
the quantity of natural grass sod products sold in the United States.
    (b) Composition of Board. The Board shall be composed of 11 members 
who are natural grass sod producers and one public member. The Board 
shall be established as follows:
    (1) North/Cool-Season Region. Three members shall be appointed from 
the North/Cool-Season Region, which includes the following States: 
Alaska, Colorado, Connecticut, Delaware, Idaho, Illinois, Indiana, 
Iowa, Maine, Massachusetts, Michigan, Minnesota, Montana, Nebraska, New 
Hampshire, New Jersey, New York, North Dakota, Ohio, Oregon, 
Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Washington, 
Wisconsin, and Wyoming.
    (2) South/Warm-Season Region. Four members shall be appointed from 
the South/Warm-Season Region, which includes the following States: 
Alabama, Arizona, Florida, Georgia, Hawaii, Louisiana, Mississippi, 
Nevada, New Mexico, South Carolina, Texas, and all territories and 
possessions of the United States, including but not limited to, the 
Commonwealth of Puerto Rico.
    (3) Transition Zone/California Region. Three members shall be 
appointed from the Transition Zone/California Region, which includes 
the following States: Arkansas, California, the District of Columbia, 
Kansas, Kentucky, Maryland, Missouri, North Carolina, Oklahoma, 
Tennessee, Virginia, and West Virginia.
    (4) States with the highest volume of natural grass sod production. 
The three (3) States with the highest volume of natural grass sod 
production, as determined by the Secretary on an annual basis, shall 
have at least one (1) natural grass sod producer to serve as a 
representative on the Board, in their respective Region.
    (5) Public member. One public member. The public member may not be 
a natural grass sod producer or have a financial interest in the 
production, sales, marketing or distribution of natural grass sod. 
Nominations to the Secretary for the public member position may be 
obtained through self-nomination to the Board and from Board members in 
such a manner as recommended by the Board and approved by the Secretary 
and shall be appointed by the Secretary. Should the Board fail to 
nominate a public member, the Secretary may appoint such member.
    (c) Reapportionment. At least once in every 5-year period, but not 
more frequently than once in every 3-year period, the Board will review 
the geographical distribution of the square footage of natural grass 
sod Products sold within the United States. The review will be 
conducted using the Board's annual assessment receipts, industry data 
provided by USDA, and, if available, other reliable reports from the 
industry. If warranted, the Board will recommend to the Secretary that 
the membership, geographical regions, and/or size of the Board be 
adjusted to reflect changes in geographical distribution of the square 
footage of natural grass sod products sold in the United States. Any 
changes in Board composition shall be implemented by the Secretary 
through rulemaking.


Sec.  1240.31  Nominations and appointments.

    (a) Initial nominations shall be submitted to the Secretary by the 
industry organizations that have a board composed of a majority of 
natural grass sod producers; by individual natural grass sod producers: 
and from members of the public. The Secretary shall select the initial 
members of the Board from the nominations submitted.
    (b) Subsequent nominations shall be conducted as follows:
    (1) The Board shall conduct outreach to all known natural grass sod 
producers that sell natural grass sod products in a marketing year as 
well as any known industry organizations that have a board comprised of 
a majority of natural grass sod producers. Natural grass sod producers 
and industry organizations may submit nominations to the Board;
    (2) Natural grass sod producer nominees and the public member 
nominee may provide the Board a short background statement outlining 
their qualifications to serve on the Board;

[[Page 71318]]

    (3) Nominees may seek nomination to the Board for all vacant seats 
for which the nominees are qualified;
    (4) Natural grass sod producers must produce and sell natural grass 
sod products in the region for which they seek nomination. Nominees 
that produce and sell in multiple regions may seek nomination in one 
region of their choice. The Board will issue the call for nominations 
to all known natural grass sod producers and recommend nominees for 
each open seat and the additional nominees to the Secretary;
    (5) The public member shall be nominated by a Qualified 
Organization and through self-nomination to the Board. The public 
member shall have no direct financial interest in the commercial 
production or marketing of natural grass sod except as a consumer and 
shall not be a director, stockholder, officer or employee of any firm 
so engaged. The Board shall prescribe such additional qualifications, 
administrative rules and procedures for selection and voting for each 
candidate as it deems necessary and the Secretary approves.
    (6) The Board will evaluate all the nominees and recommend at least 
two names for each open seat. Other qualified persons interested in 
serving in the open seats, but not recommended by the Board, will be 
designated by the Board as additional nominees for consideration by the 
Secretary;
    (7) The Board must submit nominations to the Secretary at least 90 
days before the new Board term begins. From the nominations submitted 
by the Board, the Secretary shall select the members of the Board;
    (8) Any natural grass sod producer and public member nominated to 
serve on the Board shall file with the Secretary at the time of the 
nomination a background questionnaire;
    (9) From the nominations made pursuant to this section, the 
Secretary shall appoint members of the Board on the basis of 
representation provided in Sec.  1240.30(b);
    (10) No two Board members shall be employed by a single 
corporation, company, partnership or any other legal entity that pays 
assessments under this Subpart; and,
    (11) The Board may recommend to the Secretary modifications to its 
nomination procedures as it deems appropriate. Any such modification 
shall be implemented through rulemaking by the Secretary.


Sec.  1240.32  Nominee's agreement to serve.

    Any producer or person nominated to serve on the Board shall file 
with the Secretary at the time of the nomination a written agreement 
to: (a) serve on the Board if appointed; (b) disclose any relationship 
with any National Grass Sod Producer or with any organization that has 
or is being considered for a contractual relationship with the Board; 
and (c) withdraw from participation in deliberations, decision-making, 
or voting on matters that concern the relationship disclosed.


Sec.  1240.33  Term of office.

    (a) With the exception of the initial Board, each Board member 
shall serve for a term of 3 years or until the Secretary selects his or 
her successor. Each term of office shall begin and end on dates 
determined by the Board. No member may serve more than two full 
consecutive 3-year terms, except as provided in paragraph (b) of this 
section.
    (b) For the initial Board, the terms of the Board members shall be 
staggered for 1, 2 and 3 years. Each region initially shall have one 
member who serves 2-year terms and two members who serve 3-year terms. 
In addition, the South/Warm-Season Region shall have one member who 
serves a 1-year term. The Secretary shall determine which of the 
initial members shall serve a term of 1, 2, or 3 years. The public 
member shall serve an initial three-year term.
    (c) Members serving the initial terms of all durations will be 
eligible to serve a second term of 3 years. Members who are appointed 
to serve the remainder of a term are eligible to serve two additional 
3-year terms. A public member serving the initial term is not eligible 
to serve two additional 3-year terms.


Sec.  1240.34  Removal.

    The Board may recommend to the Secretary that a member be removed 
from office if the member consistently fails or refuses to perform his 
or her duties properly or engages in dishonest acts or willful 
misconduct, which removal is subject to the Secretary's approval. If 
the Secretary determines that a member fails or refuses to perform his 
or her duties properly or engages in acts of dishonestly or willful 
misconduct, the Secretary shall remove the person from office. A person 
appointed under this subpart may be removed by the Secretary if the 
Secretary determines that the person's continued service would be 
detrimental to the purposes of the Act.


Sec.  1240.35  Vacancies.

    (a) If a member is removed from office or resigns, or in the event 
of death of any member, such position shall automatically become 
vacant.
    (b) If a member becomes disqualified for ceasing to produce natural 
grass sod products or ceasing to do business in the region he or she 
represents, such position shall be vacated within a period of 6 months 
from the date of the disqualifying event.
    (c) If a position becomes vacant, nominations to fill the vacancy 
will be conducted using the nominations process set forth in this 
subpart or the Board may recommend to the Secretary that he or she 
appoint a successor from the most recent list of nominations for the 
position.
    (d) A vacancy will not be required to be filled if the unexpired 
term is less than 6 months.


Sec.  1240.36  Procedure.

    (a) The Board shall publicly announce all scheduled Board meetings 
through a direct communication, press release, or other means and give 
the Secretary the same notice of meetings of the Board (including 
committees, subcommittees, and the like) as is given to members so that 
the Secretary's representative(s) may attend such meetings.
    (b) A majority (50 percent plus one) of the Board members shall 
constitute a quorum at any meeting of the Board.
    (c) Each member of the Board shall be entitled to one (1) vote on 
any matter put to the Board and the motion will carry if supported by a 
majority (50 percent plus one vote) of Board members, except for 
recommendations to change the assessment rate, adopt a budget, or call 
for a referendum, which require affirmation by two-thirds of the total 
number of Board members.
    (d) At an assembled meeting, all votes shall be cast in person. At 
a meeting in which some or all members attend via an internet service, 
videoconference, or teleconference, members may cast votes remotely by 
using available technology according to procedures that shall be 
established by the Board.
    (e) In lieu of voting at an assembled meeting and, when in the 
opinion of the chairperson of the Board such action is considered 
necessary, the Board may take action if supported by a majority of 
members (unless two-thirds is required under the Order) by mail, 
telephone, electronic mail, facsimile, or any other means of 
communication. In that event, all members must be notified and provided 
the opportunity to vote. Any action so taken shall have the same force 
and effect as though such action had been taken at an assembled 
meeting. All votes shall be recorded in Board minutes.
    (f) There shall be no proxy voting.
    (g) The organization of the Board and the procedures for conducting 
meetings

[[Page 71319]]

of the Board shall be in accordance with its bylaws, which shall be 
established by the Board and approved by the Secretary.


Sec.  1240.37  Reimbursement and attendance.

    Board members shall serve without compensation, but shall be 
reimbursed for reasonable travel expenses, as approved by the Board, 
which they incur when performing Board business.


Sec.  1240.38  Powers and duties.

    The Board shall have the following powers and duties:
    (a) To administer this subpart in accordance with its terms and 
conditions and to collect assessments;
    (b) To develop and recommend to the Secretary for approval such 
bylaws as may be necessary for the functioning of the Board, and such 
rules and regulations as may be necessary to administer the Order, 
including activities authorized to be carried out under the Order;
    (c) To meet not less than annually, organize, and select from among 
the members of the Board a chairperson, vice chairperson, secretary/
treasurer, other officers, and committees and subcommittees, as the 
Board determines to be appropriate. The committees and subcommittees 
may include persons other than Board members, including representatives 
of natural grass sod producers, as the Board deems necessary and 
appropriate, provided Board members constitute a majority of all 
committees and subcommittees;
    (d) To employ or contract with persons, other than the Board 
members, as the Board considers necessary to assist the Board in 
carrying out its duties, and to determine the compensation and specify 
the duties of the persons;
    (e) To develop and submit programs to the Secretary for the 
Secretary's approval, and enter into contracts or agreements related to 
such programs, which must be approved by the Secretary before becoming 
effective, for the development and carrying out of Programs of 
Promotion, Research, and Information. The payment of costs for such 
activities shall be from funds collected pursuant to this Order. Each 
contract or agreement shall provide that:
    (1) The contractor or agreeing party shall develop and submit to 
the Board a Program together with a budget or budgets that shall show 
the estimated cost to be incurred for such Program;
    (2) The contractor or agreeing party shall keep accurate records of 
all its transactions and make periodic reports to the Board of 
activities conducted, submit accounting for funds received and 
expended, and make such other reports as the Secretary or the Board may 
require;
    (3) The Secretary may audit the records of the contracting or 
agreeing party periodically; and
    (4) Any subcontractor who enters into a contract with a Board 
contractor and who receives or otherwise uses funds allocated by the 
Board shall be subject to the same provisions as the contractor; and
    (5) Any other provisions required by the Secretary.
    (f) To allocate, to the extent practicable, up to fifty percent 
(50%) of the assessments collected on the sale of natural grass sod 
Products in a State or group of States, as defined in Sec.  1240.20, 
less administrative costs, to one or more Programs proposed by a 
Qualified Organization representing such State or group of States. On 
an annual basis, the Board shall solicit proposals for Programs, select 
the Programs that shall receive funding, and enter into contracts only 
with the entities that will directly implement the Programs. If the 
Qualified Organization is not the entity that will implement the 
Program, the Board may reimburse the Qualified Organization for 
reasonable administrative costs incurred while making such proposal. 
For purposes of this Sec.  1240.38, the Secretary shall have the 
authority to approve an organization that the Board nominates to be a 
``Qualified Organization'' pursuant to the qualification process set 
forth in Sec.  1240.63.
    (g) To prepare and submit for the approval of the Secretary fiscal 
year budgets in accordance with Sec.  1240.45.
    (h) To borrow funds necessary for startup expenses or other capital 
outlays of the Board as set forth in the subpart;
    (i) To invest assessments collected and other funds received 
pursuant to this subpart and use earnings from invested assessments to 
pay for activities carried out pursuant to this subpart;
    (j) To recommend changes to the assessment rates as provided in 
this subpart;
    (k) To cause its books to be audited by an independent auditor at 
the end of each fiscal year and at such other times as the Secretary 
may request, and to submit a report of the audit directly to the 
Secretary;
    (l) To periodically prepare and make public reports of program 
activities and, at least once each fiscal year, to make public an 
accounting of funds received and expended;
    (m) To maintain such minutes, books and records, and prepare and 
submit such reports and records from time-to-time to the Secretary as 
the Secretary may prescribe; to make appropriate accounting with 
respect to the receipt and disbursement of all funds entrusted to it; 
and to keep records that accurately reflect the actions and 
transactions of the Board;
    (n) To act as an intermediary between the Secretary and any natural 
grass sod producer;
    (o) To receive, investigate, and report to the Secretary complaints 
of violations of this subpart;
    (p) To recommend to the Secretary such amendments to this subpart 
as the Board considers appropriate; and
    (q) To work to achieve an effective, continuous, and coordinated 
Program of Promotion, Research, and Information and to carry out 
programs designed to provide maximum benefits to the natural grass sod 
industry.


Sec.  1240.39  Prohibited activities.

    The Board may not engage in, and shall prohibit the employees and 
agents of the Board from engaging in:
    (a) Any action that would be a conflict of interest;
    (b) Using funds collected by the Board under the Order to undertake 
any action for the purpose of influencing legislation or governmental 
action or policy, by local, state, national, and foreign governments or 
subdivision thereof, other than recommending to the Secretary 
amendments to this subpart; and
    (c) Any Program or advertising that is false, misleading, or 
disparaging to another agricultural commodity. Natural grass sod 
products of all geographic origins shall be treated equally.

Expenses and Assessments


Sec.  1240.45  Budget and expenses.

    (a) At least 60 calendar days prior to the beginning of each fiscal 
year, and as may be necessary thereafter, the Board shall prepare and 
submit to USDA a budget for the fiscal year covering its anticipated 
expenses and disbursements in administering this Part. The budget for 
Research, Promotion, or Information may not be implemented prior to 
approval by the Secretary. Each such budget shall include:
    (1) A statement of objectives and strategy for each Program;
    (2) A summary of anticipated revenue, with comparative data for at 
least one preceding fiscal year, except for the initial budget;
    (3) A summary of proposed expenditures for each Program; and
    (4) Staff and administrative expense breakdowns, with comparative 
data for at least one preceding fiscal year, except for the initial 
budget.

[[Page 71320]]

    (b) Each budget shall provide adequate funds to defray its proposed 
expenditures and to provide for a reserve as set forth in this subpart.
    (c) Subject to this section, any amendment or addition to an 
approved budget must be approved by the Department. Shifts of funds 
that do not result in an increase in the Board's approved budget and 
are consistent with governing bylaws need not have prior approval by 
the Department.
    (d) The Board is authorized to incur such expenses, including 
provision for a reserve, as the Secretary finds reasonable and likely 
to be incurred by the Board for its maintenance and functioning, and to 
enable it to exercise its powers and perform its duties in accordance 
with the provisions of this subpart. Such expenses shall be paid from 
funds received by the Board.
    (e) With approval from the Department, the Board may borrow funds 
necessary for startup expenses or other capital outlays of the Board as 
set forth in the subpart, which funds shall be subject to the same 
fiscal, budget, and audit controls as other funds of the Board.
    (f) The Board may accept voluntary contributions. Such 
contributions shall be free from any encumbrance by the donor and the 
Board shall retain complete control of their use. The Board may receive 
funds from outside sources with approval of the Secretary for specific 
authorized projects.
    (g) The Board shall reimburse the Secretary for all expenses 
incurred by the Secretary in the implementation, administration, 
enforcement and supervision of this Subpart, including all referendum 
costs in connection with this subpart.
    (h) For fiscal years beginning 3 years after the date of the 
establishment of the Board, the Board may not expend for 
administration, maintenance, and the functioning of the Board an amount 
that is greater than 15 percent of the assessment and other income 
received by and available to the Board for the fiscal year. For 
purposes of this limitation, reimbursements to the Secretary, and other 
Board expenses outlined in guidance provided by the Secretary shall not 
be considered administrative costs.
    (i) The Board may establish an operating monetary reserve and may 
carry over to subsequent Fiscal Years excess funds in any reserve so 
established; provided that, the funds in the reserve do not exceed two 
fiscal years' budget of expenses. Subject to approval by the Secretary, 
such reserve funds may be used to defray any expenses authorized under 
this subpart.
    (j) Pending disbursement of assessments and all other revenue under 
a budget approved by the Secretary, the Board may invest assessments 
and all other revenues collected under this subpart in:
    (1) Obligations of the United States or any agency of the United 
States;
    (2) General obligations of any State or any political subdivision 
of a State;
    (3) Interest bearing accounts or certificates of deposit of 
financial institutions that are members of the Federal Reserve System;
    (4) Obligations fully guaranteed as to principal interest by the 
United States; or
    (5) Other investments as authorized by the Secretary.


Sec.  1240.46  Financial statements.

    (a) The Board shall prepare and submit financial statements to the 
Department on a quarterly basis, or at any other time as requested by 
the Secretary. Each such financial statement shall include, but not be 
limited to, a balance sheet, income statement, and expense budget. The 
expense budget shall show expenditures during the time period covered 
by the report, year-to-date expenditures, and the unexpended budget.
    (b) Each financial statement shall be submitted to the Department 
within 30 calendar days after the end of the time period to which it 
applies.
    (c) The Board shall submit to the Department an annual financial 
statement within 90 calendar days after the end of the fiscal year to 
which it applies.


Sec.  1240.47  Assessments.

    (a) The Board's programs and expenses shall be paid by assessments 
on producers of natural grass sod products in the United States, other 
income of the Board, and other funds available to the Board.
    (b) Each natural grass sod producer shall be required to pay an 
assessment to the Board in the amount of one-tenth (1/10th) of one 
penny ($0.01) per square foot, or the equivalent thereof, of all 
natural grass sod products that the natural grass sod producer sells in 
the United States.
    (c) Twenty-four months after this subpart becomes effective and 
periodically thereafter, the Board shall review the assessment rate 
and, if so approved by a vote of at least two-thirds (\2/3\) of the 
Board, submit a recommendation for a change in the assessment rate to 
the Secretary. The assessment rate may not exceed one-eighth (\1/8\th) 
of one penny ($0.01) per square foot of natural grass sod products sold 
without approval by a majority of natural grass sod producers in a 
referendum conducted pursuant to the procedures in this part.
    (d) Upon the effective date of this Subpart, all natural grass sod 
producers shall be responsible for maintaining proper and sufficient 
sales receipts and records in order to accurately calculate their 
assessments owed to the Board pursuant to this Subpart. After each 
quarterly period, or such other time period set by the Board, natural 
grass sod producers shall calculate the amount of assessments they owe 
the Board and remit such payment to the Board no later than the last 
calendar day of the month following the end of the quarterly period, or 
such other time period set by the Board, in which the natural grass sod 
products were sold.
    (e) If any natural grass sod producer fails to pay the assessment 
within 60 calendar days of the date it is due, the Board may impose a 
late payment charge and interest. The one-time late payment charge 
shall be equal to ten percent (10 percent) of the assessments due 
before interest charges have accrued. In addition to the late payment 
charge, one and one-half percent (1.5 percent) per month interest on 
the outstanding balance, including any late payment charge and accrued 
interest, will be added to any accounts for which payment has not been 
received by the Board within 60 calendar days after the assessments are 
due. Such interest will continue to accrue monthly until the 
outstanding balance is paid to the Board. Persons failing to remit 
total assessments due in a timely manner may also be subject to actions 
under Federal debt collection procedures or other means as the Board 
recommends to the Secretary.
    (f) The Board may accept advance payment of assessments from any 
natural grass sod producer that will be credited toward any amount for 
which that person may become liable. The Board may not pay interest on 
any advance payment.
    (g) If the Board is not in place by the date the first assessments 
are to be collected, the Secretary shall receive assessments and shall 
pay such assessments and any interest earned to the Board when it is 
formed.

Promotion, Research, and Information


Sec.  1240.50  Programs.

    (a) The Board shall develop and submit to the Secretary for 
approval Programs authorized by this Subpart. Such Programs shall 
provide for Promotion, Research, Information and

[[Page 71321]]

other activities, including consumer and industry information and 
advertising.
    (b) No Program shall be implemented prior to its approval by the 
Secretary. Once a program is so approved, the Board shall take 
appropriate steps to implement it.
    (c) The Board must evaluate each program authorized under this 
subpart to ensure that it contributes to an effective and coordinated 
Program of Research, Promotion, and Information. The Board must submit 
the evaluations to the Secretary. If the Board finds that a program 
does not contribute to an effective Program of Promotion, Research, or 
Information, then the Board shall terminate such Program.
    (d) No Program authorized under this subpart shall reference a 
brand or trade name of any natural grass sod product without the 
approval of the Board and Secretary.


Sec.  1240.51  Independent evaluation.

    At least once every five years, the Board shall authorize and fund 
from funds otherwise available to the Board, an independent evaluation 
of the effectiveness of this subpart and the Programs conducted by the 
Board pursuant to the part. The Board shall submit to the Secretary, 
and make available to the public, the results of each periodic 
independent evaluation conducted under this section.


Sec.  1240.52  Patents, copyrights, trademarks, inventions, product 
formulations, and publications.

    (a) Any patents, copyrights, trademarks, inventions, product 
formulations, and publications developed through the use of funds 
received by the Board under this subpart shall be the property of the 
U.S. Government, as represented by the Board, and shall along with any 
rents, royalties, residual payments, or other income from the rental, 
sales, leasing, franchising, or other uses of such patents, copyrights, 
trademarks, inventions, product formulations, or publications, inure to 
the benefit of the Board, shall be considered income subject to the 
same fiscal, budget, and audit controls as other funds of the Board, 
and may be licensed subject to approval by the Secretary. Upon 
termination of this subpart, Sec.  1240.73 shall apply to determine 
disposition of all such property.
    (b) Should patents, copyrights, inventions, trademarks, 
information, publications, or product formulations be developed through 
the use of funds collected by the Board under this subpart together 
with funds contributed by another organization or person, the ownership 
and related rights to such patents, copyrights, inventions, trademarks, 
information, publications, or product formulations shall be determined 
by an agreement between the Board and the party contributing funds 
toward the development of such patents, copyrights, inventions, 
trademarks, information, publications, or product formulations in a 
manner consistent with paragraph (a) of this section, subject to the 
approval by the Secretary.

Reports, Books, and Records


Sec.  1240.60  Reports.

    (a) Natural grass sod producers will be required to provide 
periodically to the Board such information as the Board, with the 
approval of the Secretary, may require. Such information may include, 
but not be limited to:
    (1) The name and contact information of the natural grass sod 
producer;
    (2) The quantity of natural grass sod products sold;
    (3) The date that any assessments were paid; and
    (4) The natural grass sod producer's TIN, EIN, or other 
identification as may be applicable.
    (b) Such information shall be reported to the Board no later than 
the 30th calendar day of the month following the end of the quarterly 
period in which the natural grass sod products were sold and shall 
accompany the collected payment of assessments as specified in Sec.  
1240.47. First quarter data (January-March) shall be reported to the 
Board no later than the April 30th; second quarter data (April-June) 
shall be reported no later than July 31st; third quarter data (July-
September) shall be reported no later than October 31st; and fourth 
quarter data (October-December) shall be reported no later than January 
31st of the following marketing year.
    (c) In addition to the information required to be regularly 
reported to the Board, the Board may request additional information 
from natural grass sod producers as deemed necessary by the Board, 
subject to approval by the Secretary.


Sec.  1240.61  Books and records.

    Each natural grass sod producer shall maintain any books and 
records necessary to carry out the provisions of this subpart and 
regulations issued thereunder, including such records as are necessary 
to verify any required reports. Such books and records must be made 
available during normal business hours for inspection by the Board's or 
Secretary's employees or agents. Natural grass sod producers must 
maintain the books and records for 3 years beyond the fiscal year to 
which they apply.


Sec.  1240.62  Confidential treatment.

    All information obtained from books, records, or reports under the 
Act, this subpart and the regulations issued thereunder shall be kept 
confidential by all persons, including all employees and former 
employees of the Board, all officers and employees and former officers 
and employees of contracting and subcontracting agencies or agreeing 
parties having access to such information. Such information shall not 
be available to Board members or natural grass sod producers. Only 
those Persons having a specific need for such information solely to 
effectively administer the provisions of this subpart shall have access 
to such information. Only such information so obtained as the Secretary 
deems relevant shall be disclosed by them, and then only in a judicial 
proceeding or administrative hearing brought at the direction, or at 
the request, of the Secretary, or to which the Secretary or any officer 
of the United States is a party, and involving this subpart. Nothing in 
this section shall be deemed to prohibit:
    (a) The issuance of general statements based upon the reports of 
the number of persons subject to this subpart or statistical data 
collected therefrom, which statements do not identify the information 
furnished by any person; and
    (b) The publication, by direction of the Secretary, of the name of 
any person who has been adjudged to have violated this part, together 
with a statement of the particular provisions of this part or subpart 
violated by such Person.


Sec.  1240.63  Qualification of natural grass sod organizations.

    (a) Organizations receiving qualification from the Secretary will 
be entitled to submit requests for funding to the Board pursuant to 
Sec.  1240.38. Only one natural grass sod producer organization per 
State may be qualified and only one natural grass sod producer per 
group of States may be qualified.
    (b) Any natural grass sod producer organization whose primary 
purpose is to represent natural grass sod producers within a State or 
group of States may request qualification.
    (c) Qualification shall be based, in addition to other available 
information, upon a factual report submitted by the organization that 
shall contain such information as the Secretary deems relevant for 
making such determination, including the following:

[[Page 71322]]

    (1) The geographic territory covered by the organization's active 
membership;
    (2) The nature and size of the organization's active membership and 
proportion of active membership accounted for by natural grass sod 
producers;
    (3) The extent to which natural grass sod producers are represented 
on the organization's board of directors;
    (4) Evidence of stability and permanency of the organization;
    (5) Sources from which the organizations operating funds are 
derived;
    (6) The functions of the organization; and
    (7) The ability and willingness of the organization to further the 
purpose and objectives of the Act.
    (d) The primary consideration in determining the eligibility of an 
organization shall be whether its natural grass sod producer membership 
consists of a sufficiently large number of natural grass sod producers 
who produce a relatively significant volume of Sod as to reasonably 
warrant its qualification to submit requests for funding to the Board. 
Any natural grass sod producer organization found eligible by the 
Secretary under this section will be qualified by the Secretary, and 
the Secretary's determination as to eligibility shall be final.

Miscellaneous


Sec.  1240.70  Right of the Secretary.

    All fiscal matters, Programs, contracts, rules or regulations, 
reports, or other substantive actions proposed and prepared by the 
Board shall be submitted to the Secretary for approval.


Sec.  1240.71  Referenda.

    (a) Initial referendum. The Order shall not become effective unless 
the Order is approved by a simple majority (50 percent + one vote) of 
the natural grass sod producers voting in the initial referendum that 
have been engaged in the production and sale of natural grass sod 
products in the United States during a representative period determined 
by the Secretary. Each natural grass sod producer may cast one vote in 
the initial referendum.
    (b) Subsequent Referenda. The Secretary shall conduct Subsequent 
Referenda:
    (1) Not later than 7 years after this Order becomes effective and 
every 7 years thereafter, to determine whether natural grass sod 
producers favor the continuation of this Subpart. This subpart shall 
continue if it is approved by a simple majority (50 percent + one vote) 
of natural grass sod producers voting in the subsequent referendum that 
have been engaged in the production and sale of natural grass sod 
products in the United States during a representative period determined 
by the Secretary. Each natural grass sod producer may cast one vote in 
the Subsequent Referenda;
    (2) At the request of the two-thirds of the members of the Board 
established in this Subpart;
    (3) At the request of 10 percent or more of the total number of 
eligible natural grass sod producers; or
    (4) At any time as determined by the Secretary.
    (c) Referendum procedures. The initial referendum and all 
Subsequent Referenda shall be conducted pursuant to the procedures 
outlined in subpart B.


Sec.  1240.72  Suspension or termination.

    (a) The Secretary shall Suspend or Terminate this part or subpart 
or a provision thereof, if the Secretary finds that this part or 
subpart or a provision thereof obstructs or does not tend to effectuate 
the purposes of the Act, or if the Secretary determines that this 
subpart or a provision thereof is not favored by eligible natural grass 
sod producers in a subsequent referendum.
    (b) The Secretary shall Suspend or Terminate this subpart at the 
end of the fiscal year whenever the Secretary determines that its 
suspension or termination is favored by a simple majority of eligible 
natural grass sod producers voting in a subsequent referendum.
    (c) If, as a result of a Subsequent Referendum, the Secretary 
determines that this subpart is not approved, the Secretary shall:
    (1) Not later than 180 calendar days after making the 
determination, Suspend or Terminate, as the case may be, the collection 
of assessments under this subpart.
    (2) As soon as practical, Suspend or Terminate, as the case may be, 
activities under this subpart in an orderly manner.


Sec.  1240.73  Proceedings after termination.

    (a) Upon termination of this subpart, the Board shall recommend to 
the Secretary up to five of its members to serve as trustees for the 
purpose of liquidating the Board's affairs. Such persons, upon 
designation by the Secretary, shall become trustees of all of the funds 
and property then in the possession or under control of the Board, 
including claims for any funds unpaid or property not delivered, or any 
other existing claim at the time of such termination.
    (b) The said trustees shall:
    (1) Continue in such capacity until discharged by the Secretary;
    (2) Carry out the obligations of the Board under any contracts or 
agreements entered into pursuant to this subpart;
    (3) From time to time account for all receipts and disbursements 
and deliver all property on hand, together with all books and records 
of the Board and trustees, to such Person or Persons as the Secretary 
directs; and
    (4) Upon request of the Secretary, execute such assignments or 
other instruments necessary or appropriate to vest in such person's 
title and right to all of the funds, property, and claims vested in the 
Board or the trustees pursuant to this Subpart.
    (c) Any Person to whom funds, property, or claims have been 
transferred or delivered pursuant to this subpart shall be subject to 
the same obligations imposed upon the Board and upon the trustees.
    (d) Any residual funds not required to defray the necessary 
expenses of liquidation shall be turned over to the Secretary to be 
disposed of, to the extent practical, to one or more organizations in 
the United States whose mission is generic promotion, Research, and 
Information programs.


Sec.  1240.74  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, the 
termination of this subpart or of any regulation issued pursuant 
thereto, or the issuance of any amendment to either thereof, shall not:
    (a) Affect or waive any right, duty, obligation, or liability which 
shall have arisen or which may thereafter arise in connection with any 
provision of this subpart or any regulation issued thereunder;
    (b) Release or extinguish any violation of this subpart or any 
regulation issued thereunder; or
    (c) Affect or impair any rights or remedies of the United States, 
or of the Secretary or of any other persons, with respect to any such 
violation.


Sec.  1240.75  Personal liability.

    No member or employee of the Board 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 such member or employee, 
except for acts of dishonesty or willful misconduct.


Sec.  1240.76  Separability.

    If any provision of this subpart is declared invalid or the 
applicability of

[[Page 71323]]

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


Sec.  1240.77  Amendments.

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


Sec.  1240.78  OMB control number.

    The control numbers assigned to the information collection 
requirements by the Office of Management and Budget pursuant to the 
Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35, are OMB control 
numbers 0505-0001 (Background Information Form), 0581-0093 (Organic 
Exemption), and 0581-NEW.

Subpart B--[Reserved]

Melissa Bailey,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-22502 Filed 10-13-23; 8:45 am]
BILLING CODE P