and define the duties of each such person, and to protect the handling of committee funds through fidelity bonds;

(e) To investigate from time to time and to assemble data on the growing, harvesting, shipping, and marketing conditions with respect to lettuce;

(f) To prepare a marketing policy; (g) To recommend marketing regulations to the Secretary;

(h) To recommend rules and procedures for, and to make determinations in connection with, issuance of Certificates of Privilege;

(i) To keep minutes, books, and records which clearly reflect all of the acts and transactions of the committee and such minutes, books, and records shall be subject to examination at any time by the Secretary or by his authorized agent or representative. Minutes of each committee meeting shall be reported promptly to the Secretary. At the end of each marketing season a statistical and historical report of operations shall be compiled and furnished to the Secretary.

(j) At the beginning of each fiscal period, to prepare a budget of its expenses for such fiscal period, together with a report thereon;

(k) To cause the books of the committee to be audited by a competent accountant at least once each fiscal period, and at such other time as the committee may deem necessary or as the Secretary may request. The report of such audit shall show the receipt and expenditure of funds collected pursuant to this part. A copy of each such report shall be furnished to the Secretary and a copy of each such report shall be made available at the principal office of the committee for inspection by producers and handlers; and

(1) To consult, cooperate, and exchange information with other marketing order committees and other individuals or agencies in connection with all proper committee activities and objectives under this part.

EXPENSES AND ASSESSMENTS

§ 971.40 Expenses.

The committee is authorized to incur such expenses as the Secretary may find are reasonable and likely to be incurred during each fiscal period for its maintenance and functioning, and for such purposes as the Secretary, pursuant to this subpart, determines to be appro

priate. Each handler's share of such expense shall be proportionate to the ratio between the total quantity of lettuce under regulation handled by him as the first handler thereof during a fiscal period and the total quantity of lettuce under regulation handled by all handlers as first handlers thereof during such fiscal period.

§ 971.41 Budget.

As soon as practicable after the beginning of each fiscal period and as may be necessary thereafter, the committee shall prepare an estimated budget of income and expenditures necessary for the administration of this part. The committee may recommend a rate of assessment calculated to provide adequate funds to defray its proposed expenditures. The committee shall present such budget to the Secretary with an accompanying the report showing basis for its calculations.

§ 971.42 Assessments.

(a) The funds to cover the committee's expenses shall be acquired by the levying of assessments upon handlers as provided in this subpart. Each handler who first handles lettuce which is regulated under this part shall pay assessments to the committee upon demand, which assessments shall be in payment of such handler's pro rata share of the committee's expenses.

(b) Assessments shall be levied upon handlers at rates established by the Secretary. Such rates may be established upon the basis of the committee's recommendations and other available information. Such rates may be applied to specified containers used in the production area.

(c) At any time during, or subsequent to, a given fiscal period the committee may recommend the approval of an amended budget and an increase in the rate of assessment. Upon the basis of such recommendations, or other available information, the Secretary may approve an amended budget and increase the rate of assessment. Such increase shall be applicable to all lettuce which was regulated under this part and which was handled by the first handler thereof during such fiscal period.

§ 971.43 Accounting.

(a) If, at the end of a fiscal period, the assessments collected are in excess of expenses incurred, such excess shall

be accounted for in accordance with one of the following:

(1) If such excess is not retained in a reserve, as provided in subparagraph (2) of this paragraph, it shall be refunded proportionately and to the extent practical to the persons from whom it was collected.

(2) The committee, with the approval of the Secretary, may carry over such excess into subsequent fiscal periods as a reserve: Provided, That funds already in the reserve do not equal approximately

one fiscal period's expenses. Such reserve funds may be used (i) to defray expenses, during any fiscal period, prior to the time assessment income is sufficient to cover such expenses, (ii) to cover deficits incurred during any fiscal period when assessment income is less than expenses, (iii) to defray expenses incurred during any period when any or all provisions of this part are suspended or are inoperative, (iv) to cover necessary expenses of liquidation in the event of termination of this part. Upon such termination, any funds not required to defray the necessary expenses of liquidation shall be disposed of in such manner as the Secretary may determine to be appropriate.

(b) All funds received by the committee pursuant to the provisions of this part shall be used solely for the purpose specified in this part and shall be accounted for in the manner provided for in this part. The Secretary may at any time require the committee and its members to account for all receipts and disbursements.

(c) Upon the removal or expiration of the term of office of any member of the committee, such member shall account for all receipts and disbursements and deliver all property and funds in his possession to the committee, and shall execute such assignments and other instruments as may be necessary and appropriate to vest in the committee full title to all of the property, funds, and claims vested in such member pursuant to this part.

(d) The committee may make recommendations to the Secretary for one or more of the members, thereof, or any other person, to act as a trustee for holding records, funds, or any other committee property during periods of suspension of this subpart, or during any period or periods when regulations are not in effect and if the Secretary deter

§ 971.50 Marketing policy.

(a) At the beginning of each season, and as the Secretary may require, the committee shall prepare a marketing policy statement. Such policy statement shall indicate the data on lettuce supplies and demand on which the committee bases its judgments and recommendations. It shall indicate also the kind or types of regulations contemplated during the ensuing season, and, to the extent practical, shall include recommendations for specific regulations. Notice of such marketing policy shall be given to producers, handlers, and other interested parties by bulletins, newspapers, or other appropriate media, and copies thereof shall be submitted to the Secretary and shall be available generally.

(b) Marketing policy statements relating to recommendations for regulations other than volume regulation shall give appropriate consideration to lettuce supplies for the remainder of the season, with special consideration to:

(1) Estimates of total supplies including grade, size, and quality thereof, in the production area;

(2) Estimates of supplies in competing areas;

(3) Market prices by grades, sizes, containers, and packs;

(4) Estimates of supplies of competing commodities;

(5) Anticipated marketing problems; (6) Level and trend of consumer income; and

(7) Other relevant factors.

(c) Marketing policy statements relating to recommendations for volume

(a) Upon complying with the requirements of § 971.50, the committee may recommend regulations to the Secretary whenever it finds that such regulations as are provided for in this subpart will tend to effectuate the declared policy of the Act.

(b) At any time during a specified period for which the Secretary has fixed the quantity of lettuce which may be handled, if the committee deems such action advisable, it may recommend to the Secretary that such quantity be increased for such period. The committee's reasons therefor shall be submitted with any such recommendation. § 971.52 Issuance of regulations.

(a) The Secretary shall limit by regulation the handling of lettuce whenever he finds from the recommendations and information submitted by the committee, or from other available information, that such regulations would tend to effectuate the declared policy of the Act.

(b) Such regulations may:

(1) Limit in any or all portions of the production area the handling of particular grades, sizes, qualities, or packs, or any combination thereof, of any or all varieties of lettuce during any period.

(2) Limit the handling of particular grades, sizes, qualities, or packs of lettuce differently for different varieties, for different portions of the production area, for different markets, for different containers, or any combination of the foregoing, during any period.

(3) Fix the size, capacity, weight, dimensions, or pack of the container or containers used in handling lettuce.

(4) Establish holidays by prohibiting the packaging of lettuce during a speci

fied period or periods. No regulation issued pursuant hereto shall be effective for more than 72 hours, and not less than 72 hours shall elapse between the termination of any such holiday and the beginning of the next such period.

(5) (i) Fix the total quantity of lettuce which may be handled by all handlers during any period or periods. The total quantity so fixed for handling during any period may be increased by the Secretary during such period.

(ii) Fix the proportions of each handler's allotment which he may not exceed in any one day.

(6) Limit the handling of lettuce, when parity prices have been established, by establishing and maintaining minimum standards of quality and maturity in terms of grades or sizes, or an orderly flow of lettuce supplies to market throughout its normal marketing season to avoid unreasonable fluctuations in supplies and prices, or both.

(c) Quantity regulations may be issued upon determination that the terms and provisions of § 971.53 have been met.

(d) Regulations issued hereunder may be amended, modified, suspended, or terminated whenever it is determined:

(1) That such action is warranted upon recommendation of the committee or other available information;

(2) That such action is essential to provide relief from inspection, assessment, or regulations under paragraph (b) of this section for minimum quantities less than customary commercial transactions;

(3) That regulations issued hereunder obstruct or no longer tend to effectuate the declared policy of the Act.

§ 971.53 Allocation bases and allot

ments.

(a) Estimates of lettuce available for current shipment. The committee, with approval of the Secretary, shall establish uniform rules for estimating available supplies of lettuce, or of any grade, size, or quality thereof, during any specified period or periods. Among other appropriate requirements, such rules may provide that:

(1) Each person who has lettuce available for current shipment shall submit to the committee, at such time and in such manner as may be designated by the committee, and upon forms made available by it, a written application for an allocation base and for allotments as provided in this part;

(2) Each application shall be substantiated in such manner and shall be supported by such evidence as the committee may require, and shall include at least the name and address of the producer, or duly authorized agent, if any, for each field or portion thereof, from which lettuce is to be harvested and which is included in the quantity of lettuce available for current shipment by the applicant; an accurate description of the location of each such field or portion thereof, including the number of acres contained therein;

(3) Such application shall include only such lettuce for current shipment which the applicant controls by a bona fide written contract giving the applicant authority to handle such lettuce, or by having legal title or possession thereof, or by having executed a bona fide written agreement to purchase such lettuce;

(4) Each such application shall state the harvesting percentages for each week, or other specified allotment period, which the applicant intends to apply to particular, identified fields during such harvesting periods. Such declarations shall be pursuant to formulas established by the committee indicating the range of percentages which may be declared as available for harvest during each of the two or more weeks in which lettuce may be harvested from individual fields.

(b) Committee verification. The committee shall check and determine the accuracy of the information submitted pursuant to this section and shall be authorized to make a thorough investigation of any application. Whenever the committee finds an error, omission, or inaccuracy in any such information, it shall correct the same and shall give the person who submitted such report a reasonable opportunity to discuss with the committee the factors considered in making the correction.

(c) Allocation base. Each week during the marketing season when volume regulation is likely to be recommended, the committee shall compute the total quantity of lettuce available for current shipment by each person who has applied for an allocation base and for allotments. On the basis of such computation, the committee shall fix an allocation base for each person entitled thereto. Such allocation base shall represent the ratio between the total quantity of lettuce available for current shipment by each applicant and the total quantity of lettuce available for current shipment by all

such applicants for allocation bases. The committee shall notify the Secretary of the allocation base fixed for each person and shall notify each such person of the allocation base fixed for him.

(d) Allotments. (1) Whenever the Secretary has fixed the quantity of lettuce which may be handled during any week, the committee shall calculate the quantity of lettuce which may be handled by each such person during such week. The said quantity shall be the allotment of such person and shall be in an amount equivalent to the product of the allocation base of such person and the total quantity of lettuce fixed by the Secretary as the total quantity of lettuce which may be handled during such week. The committee shall give reasonable notice to each person of the allotment computed for him pursuant to this part.

(2) The committee, with approval of the Secretary, shall establish uniform rules to the end that handlers' allotments will be apportioned equitably among producers thereof.

(e) Verification of compliance with allotments. Fields or blocks of lettuce included in applications for allocation bases and allotments shall be checked from time to time, as deemed necessary by the committee, to determine compliance with allotments. Checking procedures, methods for establishing committee determinations, means for notifying handlers and other persons of the extent to which allotments on specific fields or blocks have been used, and provision for issuance of certificates of compliance with allotments shall be in accordance with rules recommended by the committee and approved by the Secretary. Such rules may also provide that a handler shall not package or sell lettuce from a field or fields on which allotments applicable to the available supply estimated therefor have been exhausted unless regulations in effect under § 971.52 (b) (5) are suspended or terminated.

(f) Adjustment of allotments. The committee may, pursuant to rules and regulations recommended by the committee and approved by the Secretary, provide for transferring or adjusting allotments during any allotment period. Such adjustments may be based upon factors such as weather, changes in maturity, condition, harvestability, changes in ownership or control of such lettuce, or other factors affecting the supplies of lettuce available for current shipment.

(g) Assignment of allotments. In connection with all shipments of lettuce other than shipments by rail car, the committee may require, pursuant to rules approved by the Secretary, that each such shipment shall be accompanied by an assignment of allotment covering such shipment provided by the first handler thereof. Such rules shall provide for appropriate forms, methods and manner of issuance thereof, and information to be required in connection therewith.

§ 971.54 Handling for special purposes.

Regulations in effect pursuant to §§ 971.42 971.52, or 971.60 may be modified, suspended, or terminated by the Secretary, upon recommendation of the committee, to facilitate handling of lettuce for: (a) relief or charity; (b) experimental purposes; (c) exports; and (d) other special purposes.

§ 971.60

INSPECTION

Inspection and certification.

(a) Whenever the handling of lettuce is regulated pursuant to § 971.52 or at other times when recommended by the committee and approved by the Secretary, no handler shall handle lettuce unless it is inspected by an authorized representative of the Federal-State Inspection Service and it is covered by a valid inspection certificate, except when relieved from such requirements pursuant to § 971.52 (d) or § 971.54, or paragraph (b) of this section.

(b) Regrading, resorting, repacking any lot of lettuce, or breaking any lot (without continuing identification of applicable inspection or sub-certification thereof), shall invalidate any prior inspection certificate insofar as the requirements of this section are concerned.

No handler shall handle lettuce after a lot has been broken, regraded, repacked or resorted, or in any other way additionally prepared for market, unless such lettuce is inspected by an authorized representative of the Federal or FederalState Inspection Service. Such inspection requirements on regraded, resorted, repacked, or broken lots of lettuce may be modified, suspended or terminated upon recommendation by the committee, and approval of the Secretary.

(c) Upon recommendation of the committee and approval by the Secretary, any or all lettuce so inspected and certified shall be identified by appropriate seals, stamps, or tags, to be affixed to the containers by the handler under the direction and supervision of a Federal or Federal-State inspector or the

committee.

(d) Insofar as the requirements of this section are concerned, the length of time for which an inspection certificate is valid may be established by the committee with the approval of the Secretary.

(e) When lettuce is inspected in accordance with the requirements of this section, a copy of each inspection certificate issued shall be made available to the committee by the inspection service.

(f) The committee may recommend and the Secretary may require that no handler shall transport or cause the transportation of lettuce by motor vehicle or by other means unless such shipment is accompanied by a copy of the inspection certificate issued thereon, or other document authorized by the committee to indicate that such inspection has been performed. Such certificate or document shall be surrendered to such authority as may be designated. REPORTS