handler member shall be allocated to any group (cooperative or independent) which during the fiscal period preceding the fiscal period in which nominations are made handled more than 37.5 percent but not more than 62.5 percent of the total quantity of grapefruit handled by all handlers; and any group which handled more than 62.5 percent shall be allocated a third member.

(d) The committee may, with the approval of the Secretary, change the number of producer or handler positions on the committee, reapportion the membership between cooperatives and independents, and limit the number of positions that may be filled by persons affiliated with the same packinghouse or handling organization, as may be necessary to assure equitable representation.

§ 904.21 Term of office.

The term of office of the members and alternate members shall be two fiscal periods: Provided, That the term of office of initial members and alternates shall begin as soon as practicable subsequent to the effective date of this part and end August 31, 1981. Each member and alternate shall serve during the term of office for which that person is selected and has qualified and shall continue to serve until a successor is selected and has qualified.

§ 904.22 Nomination.

(a) Initial producer and handler members. Nomination for the initial members and alternate members of the committee for each position may be submitted to the Secretary by individual producers and handlers. Such nominations may be made by means of meetings of handlers and meetings of producers of the applicable groups (cooperative or independent). Any such nominations shall be filed with the Secretary not later than the effective date of this part. If such nominations are not filed as specified in this section, the Secretary may select initial members and alternate members, without regard to nomination, on the basis of the representation provided in § 904.20.

(b) Successor producer members. (1) The Secretary shall cause to be held, not later than July 1 of each odd-numbered year, meetings of producers for the purpose of making nominations for members and alternate members of the committee.

(2) Only producers, including duly authorized officers or employees of producers, who are present shall participate in the nomination of producer members and alternates. Each producer shall be entitled to cast only one vote for each nominee to be selected. To the extent practicable, only producers affiliated with cooperative marketing organizations may elect nominees affiliated with such organizations; and only producers not affiliated with cooperative marketing organizations may elect nominees not so affiliated. In the event some of a producer's grapefruit is handled through a cooperative marketing organization and some is handled through an organization that is not a cooperative marketing organization, such producer shall be eligible to participate only in the category (i.e., cooperative or independent) in which such producer's major volume of grapefruit is handled.

(c) Successor handler members. (1) The Secretary shall cause to be held, not later than July 1 of each odd-numbered year, meetings of handlers for the purpose of making nominations for members and alternate members of the committee.

(2) Only handlers, including duly authorized officers or employees of handlers, who are present and who are eligible to serve as handler members of the committee shall participate in the nomination of handler members and alternate handler members of the committee. Each handler shall be entitled to cast only one vote for each nominee to be selected.

(3) To the extent practicable, only handlers affiliated with cooperative marketing organizations may vote for nominees affiliated with such organizations, and only handlers not affiliated with cooperative marketing organizations may vote for nominees not so affiliated.

(d) Reapportionment. Any required reapportionment of committee membership shall be announced at nomina

§ 904.25 Alternate members.

An alternate member shall act in the place of the member during such member's absence. In the event of the death, removal, resignation, or disqualification of a member, the alternate shall act for that member until a successor for such member is selected and has qualified. In the event that neither the member nor that member's alternate are able to attend a committee meeting, the chairman, with the concurrence of the majority of the members present may designate any other alternate present who is not acting as a member to serve in such member's place at the meeting. To the extent practicable, any such alternate so designated shall have the same affiliation as the absent member and only producer alternates may serve for absent producer members and only handler alternates may serve for absent handler members.

§ 904.26 Vacancies.

To fill any vacancy occasioned by the failure of any person selected as a member, or as an alternate member of the committee to qualify, or in the

It shall be the duty of the committee: (a) To select a chairman from its membership, and to select such other officers and adopt such rules and regulations for the conduct of its business as it may deem advisable;

(b) To keep minutes, books, and records which will clearly reflect all of its acts and transactions, which minutes, books, and records shall at all times be subject to the examination of the Secretary; and to mail a copy of the minutes to the Secretary promptly following each committee meeting and to any other interested person who has filed his or her name and address with the committee for such purpose;

(c) To act as intermediary between the Secretary and the producers and handlers;

(d) To furnish the Secretary with such available information as the Secretary may request;

(e) To appoint such employees as it may deem necessary and to determine the salaries and define the duties of such employees;

(f) To cause its books to be audited by a competent public accountant at least once for each fiscal period, and at such other time as it deems necessary or as the Secretary may request, and to file with the Secretary copies of all audit reports;

(g) To prepare a monthly statement of financial operations of the committee and to make such reports, together with the minutes of the meetings of the committee, available for inspection by any producer or handler at the office of the committee;

(h) To determine as near as practicable the total crop of grapefruit, and to make such determinations, including determinations by grade and size as it may deem necessary or as may be prescribed by the Secretary, in connection with the administration of this part;

(i) To investigate the growing, handling, and marketing conditions with respect to grapefruit and to assemble data in connection therewith;

(j) To prepare and mail, as soon as practicable after the close of each fiscal period, to the Secretary, and to each handler and grower who make requests therefor, an annual report covering the operation of the previous fiscal period;

(k) With the approval of the Secretary, to increase or decrease the membership of the committee;

(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; and

(m) To establish, with the approval of the Secretary, procedures for the nomination of and qualification for a public member and alternate.

§ 904.29 Compensation and expenses.

The members of the committee and alternates when acting as members, shall serve without compensation, but they shall be reimbursed for reasonable expenses, as approved by the committee, incurred by them in the performance of their duties under this part. Alternate members shall be reimbursed for expenses necessarily incurred by them in attending committee meetings at the request of the committee, notwithstanding that the

likely to be incurred by the committee for its maintenance and functioning during each fiscal period.

(b) The Secretary shall fix the rate(s) of assessment to be paid by handlers and such rate(s) may be fixed by variety. At any time during or after a fiscal period, the Secretary may increase the rate(s) of assessment in order to secure sufficient funds to cover any later finding by the Secretary relative to the expenses of the committee. Such increased rate with respect to any particular variety shall be applicable to all grapefruit of that variety handled during that fiscal period. To provide funds for the administration of this part, the committee may accept the payment of assessments in advance, or may borrow money for such purpose.

(c) The payment of assessments for the maintenance and functioning of the committee may be required under this part throughout the period it is in effect, irrespective of whether particular provisions thereof are suspended or become inoperative.

(d) Any assessment not paid by a handler within a period of time prescribed by the committee may be subject to an interest or late payment charge, or both. The period of time, rate of interest, and late payment charge shall be as recommended by the committee and approved by the Secretary.

§ 904.36 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 paragraph (a)(2) of this section, it shall be refunded proportionately to the handlers from whom it was collected: Provided, That any sum paid by a handler in excess of his or her pro rata share of the expenses during any fiscal period may be applied by the committee at the end of such fiscal period to any outstanding obligations due the committee from such handler.

(2) The committee, with the approval of the Secretary, may carry over such excess into subsequent fiscal peri

ods as a reserve: Provided, That such reserve shall not exceed an amount approximating one full fiscal period's expenses, exclusive of inspection costs. Any such reserve may be maintained by variety. 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, or (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: Provided, That to the extent practical, such funds shall be returned pro rata to the handlers from whom such funds were collected.

(b) All funds received by the committee shall be used solely for purposes specified in this part and shall be accounted for in the manner provided 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 or her possession to the committee, and shall execute such assignments and other instruments as may be necessary or appropriate to vest in the committee full title to all of the property, funds, and claims vested in such member pursuant to this part.

RESEARCH AND MARKET DEVELOPMENT § 904.37 Production research, marketing research, and market development.

The committee, with the approval of the Secretary, may establish or provide for the establishment of production research, marketing research and development projects designed to assist, improve or promote the market

ing, distribution, consumption or efficient production of any variety or varieties of grapefruit. The expense of such activities shall be paid from funds collected under § 904.35. Such projects may provide for any form of marketing promotion, including paid advertising. Any such project for promotion and advertising may utilize an identifying mark or term which shall be made available for use by all hanIdlers in accordance with such terms and conditions as the committee, with the approval of the Secretary, may prescribe.

REGULATION

§ 904.38 Marketing policy.

Prior to submitting recommendations under § 904.39, the committee shall submit to the Secretary a report setting forth the marketing policy it deems advisable for the ensuing fiscal period. Additional reports shall be submitted from time to time if it is deemed advisable by the committee to adopt a new or modified marketing policy because of changes in the demand and supply situation for grapefruit. The committee shall publicly announce the submission of each marketing policy report and copies thereof shall be available at the committee's office for inspection by any producer or handler. In determining each such marketing policy the committee shall give due consideration to the following:

(a) Market price by grade and size of each variety of grapefruit;

(b) Supply of grapefruit by grade and size of each variety of grapefruit; (c) Supply of competing fruits;

(d) Expected demand conditions for grapefruit in different market outlets; (e) Type of regulation expected to be recommended during the fiscal period; (f) Trend and level of consumer income;

(g) Marketing conditions affecting grapefruit prices; and

(h) Other relevant factors.

§ 904.39 Recommendations for regulation. Whenever the committee finds it advisable to regulate the handling of any particular grade, quality, size, or maturity, or any combination thereof, of

any variety of grapefruit during any period, it shall recommend such regulation for that period. Recommendations may include different grade, quality, size, or maturity requirements, or any combination thereof, for any variety handled to any of the marketing zones established pursuant to § 904.43.

§ 904.41 Issuance of regulations.

(a) Whenever the Secretary finds from the recommendations and information submitted by the committee or from other available information, that limiting the handling of any variety of grapefruit to any particular grade, quality, size, or maturity, or any combination thereof, would tend to effectuate the declared policy of the act, the Secretary shall so limit the handling of the variety for a specified period; and the limitation may prescribe different grade, quality, size, or maturity requirements, or any combination thereof, for the handling of any such variety by the initial handler thereof directly to the marketing zones specified. The committee shall be informed immediately of any such regulation issued by the Secretary; and the committee shall promptly give adequate notice thereof to handlers.

(b) Whenever the Secretary finds from the recommendation and information submitted by the committee, or from other available information, that to establish and maintain in effect minimum standards of quality or maturity, or both, for the handling of grapefruit during any period would tend to effectuate the declared policy of the act and be in the public interest, the Secretary shall establish in terms of grades, sizes, or both, such standard, designate such period, and so limit the handling of such grapefruit. The Secretary shall immediately notify the committee of the issuance of any such regulation; and the committee shall promptly give adequate notice thereof to handlers.

8 904.42 Modification, suspension, or termination of regulations.

(a) In the event the committee at any time finds that, by reason of changed conditions, any regulations