---
kind: "section"
citation: "7 U.S.C. § 6407"
title: "7"
title_heading: "Agriculture"
number: "6407"
heading: "Required terms in orders"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/7/6407"
units:
  - "Chapter 93 — Processor-Funded Milk Promotion Program"
---

# §6407. Required terms in orders

- (a) **In general—** Each order issued under this chapter shall contain the terms and conditions prescribed in this section.
- (b) **National Processor Advertising and Promotion Board—**
  - (1) **Establishment—** The order shall establish a National Processor [Advertising](/usc/7/6402.md?p=1) and Promotion [Board](/usc/7/6402.md?p=2) to administer the order.
  - (2) **Service to entire industry—** In administering the order, the [Board](/usc/7/6402.md?p=2) shall carry out programs and projects that will provide maximum benefit to the fluid milk industry and promote only [fluid milk products](/usc/7/6402.md?p=3). The [Board](/usc/7/6402.md?p=2) shall, to the extent practicable, ensure that [advertising](/usc/7/6402.md?p=1) coverage in each region is proportionate to the funds collected from each region.
  - (3) **Regions—** The [Secretary](/usc/7/6402.md?p=7) shall establish not less than 12 nor more than 15 regions in order to ensure appropriate geographic representation on the [Board](/usc/7/6402.md?p=2).
  - (4) **Board membership—** The [Board](/usc/7/6402.md?p=2) shall consist of one member appointed by the [Secretary](/usc/7/6402.md?p=7), from among [fluid milk processors](/usc/7/6402.md?p=4), to represent each of the regions established under [paragraph (3)](#b-3), with the membership representing, to the extent practicable, differing sizes of operations. The [Secretary](/usc/7/6402.md?p=7) shall appoint five additional at-large members to the [Board](/usc/7/6402.md?p=2), of which at least three shall be [fluid milk processors](/usc/7/6402.md?p=4) and at least one shall be from the general public.
  - (5) **Terms of office—** The members of the [Board](/usc/7/6402.md?p=2) shall serve for terms of 3 years, except that the members appointed to the initial [Board](/usc/7/6402.md?p=2) shall serve, proportionately, for terms of 1, 2, and 3 years, as determined by the [Secretary](/usc/7/6402.md?p=7). No member shall serve for more than 2 consecutive terms, except that the members that are selected to serve for the initial term of 1 or 2 years shall be eligible to be reappointed for a 3-year term.
  - (6) **Compensation—** Each member of the [Board](/usc/7/6402.md?p=2) shall serve without compensation, but shall be reimbursed for necessary and reasonable expenses incurred in the performance of duties of the [Board](/usc/7/6402.md?p=2).
- (c) **Powers and duties of Board—** The order shall define the powers and duties of the [Board](/usc/7/6402.md?p=2), which shall include the power and duty—
  - (1) to administer the order in accordance with the terms and conditions of the order;
  - (2) to make rules to effectuate the terms and conditions of the order;
  - (3) to receive, investigate, and report to the [Secretary](/usc/7/6402.md?p=7) complaints of violations of the order;
  - (4) to develop and recommend such rules, regulations, and amendments to the order to the [Secretary](/usc/7/6402.md?p=7) for approval as may be necessary for the development and execution of programs or projects to carry out the order;
  - (5) to [employ](/usc/7/499a.md?p=b-10) such [persons](/usc/7/499a.md?p=b-1) as the [Board](/usc/7/6402.md?p=2) considers necessary and determine the compensation and define the duties of the [persons](/usc/7/499a.md?p=b-1);
  - (6) to prepare and submit for the approval of the [Secretary](/usc/7/6402.md?p=7), prior to the beginning of each fiscal year, a fiscal year budget of the anticipated expenses in the administration of the order, including the probable costs of all programs and projects;
  - (7) to develop programs and projects, subject to [subsection (d)](#d);
  - (8) to enter into contracts or agreements, with the approval of the [Secretary](/usc/7/6402.md?p=7), to develop and carry out programs or projects of [research](/usc/7/6402.md?p=6) and [advertising](/usc/7/6402.md?p=1);
  - (9) to carry out [advertising](/usc/7/6402.md?p=1) or [research](/usc/7/6402.md?p=6), and pay the costs of the projects with funds collected pursuant to [section 6409 of this title](/usc/7/6409.md);
  - (10) to keep minutes, books, and records that reflect all of the acts and transactions of the [Board](/usc/7/6402.md?p=2), and promptly report minutes of each [Board](/usc/7/6402.md?p=2) meeting to the [Secretary](/usc/7/6402.md?p=7);
  - (11) to furnish the [Secretary](/usc/7/6402.md?p=7) with such other information as the [Secretary](/usc/7/6402.md?p=7) may require; and
  - (12) to invest funds collected by the [Board](/usc/7/6402.md?p=2) pursuant to [subsection (g)](#g).
- (d) **Plans and budgets—**
  - (1) **Budgets—** The order shall require the [Board](/usc/7/6402.md?p=2), prior to the beginning of each fiscal year, or as may be necessary after the beginning of the fiscal year, to develop budgets of the anticipated expenses and disbursements of the [Board](/usc/7/6402.md?p=2) in the implementation of the order, including projected costs of [research](/usc/7/6402.md?p=6) and [advertising](/usc/7/6402.md?p=1). The budget shall be submitted to the [Secretary](/usc/7/6402.md?p=7) and be effective on the approval of the [Secretary](/usc/7/6402.md?p=7).
  - (2) **Incurring expenses—** The [Board](/usc/7/6402.md?p=2) may incur such expenses for [research](/usc/7/6402.md?p=6) or [advertising](/usc/7/6402.md?p=1) of [fluid milk products](/usc/7/6402.md?p=3), and other expenses for the administration, maintenance, and functioning of the [Board](/usc/7/6402.md?p=2), as may be authorized by the [Secretary](/usc/7/6402.md?p=7). The expenses shall include any implementation, administrative, and referendum costs incurred by the [Department](/usc/7/6402.md?p=5).
  - (3) **Paying expenses—** The funds to cover the expenses referred to in [paragraph (2)](#d-2) shall be paid from assessments collected under [section 6409 of this title](/usc/7/6409.md).
  - (4) **Limitation on spending—** Effective 1 year after the date of the establishment of the [Board](/usc/7/6402.md?p=2), the [Board](/usc/7/6402.md?p=2) shall not spend in excess of 5 percent of the assessments collected for the administration of the [Board](/usc/7/6402.md?p=2).
- (e) **Prohibition on branded advertising—** A program or project conducted under this chapter shall not make any reference to private brand names or use false or unwarranted claims on behalf of [fluid milk products](/usc/7/6402.md?p=3), or false or unwarranted statements with respect to the attributes or use of any competing products, except that this subsection shall not preclude the [Board](/usc/7/6402.md?p=2) from offering its programs and projects for use by commercial parties, under such terms and conditions as the [Board](/usc/7/6402.md?p=2) may prescribe as approved by the [Secretary](/usc/7/6402.md?p=7).
- (f) **Contracts and agreements—**
  - (1) **In general—** To ensure efficient use of funds collected under this chapter, the order shall provide that the [Board](/usc/7/6402.md?p=2) may enter into contracts or agreements for the implementation and carrying out of programs or projects for [fluid milk products](/usc/7/6402.md?p=3) [research](/usc/7/6402.md?p=6) and [advertising](/usc/7/6402.md?p=1) and for the payment of the costs of the programs or projects with funds received by the [Board](/usc/7/6402.md?p=2) under the order.
  - (2) **Requirements—** Any such contract or agreement shall provide that—
    - (A) the contracting party shall develop and submit to the [Board](/usc/7/6402.md?p=2) a program or project, together with a budget or budgets that shall disclose estimated costs to be incurred for such program or project;
    - (B) the program or project shall become effective on the approval of the [Secretary](/usc/7/6402.md?p=7); and
    - (C) the contracting party shall keep accurate records of all of the transactions of the contracting party, account for funds received and expended, make periodic reports to the [Board](/usc/7/6402.md?p=2) of activities conducted, and make such other reports as the [Board](/usc/7/6402.md?p=2) or the [Secretary](/usc/7/6402.md?p=7) may require.
- (g) **Investment of funds—**
  - (1) **In general—** The order shall provide that the [Board](/usc/7/6402.md?p=2), with the approval of the [Secretary](/usc/7/6402.md?p=7), may invest assessment funds collected by the [Board](/usc/7/6402.md?p=2) under the order, pending disbursement of the funds, only in—
    - (A) obligations of the [United States](/usc/7/6402.md?p=8) or any agency thereof;
    - (B) general obligations of any [State](/usc/7/198.md?p=5) or any political subdivision thereof;
    - (C) any interest-bearing account or certificate of deposit of a [bank](/usc/7/27.md?p=a) that is a member of the Federal Reserve System; or
    - (D) obligations fully guaranteed as to principal and interest by the [United States](/usc/7/6402.md?p=8).
  - (2) **Income—** Income from any such investment may be used for any purpose for which the invested funds may be used.
- (h) **Books and records of Board—**
  - (1) **In general—** The order shall require the [Board](/usc/7/6402.md?p=2) to—
    - (A) maintain such books and records (which shall be available to the [Secretary](/usc/7/6402.md?p=7) for inspection and audit) as the [Secretary](/usc/7/6402.md?p=7) may prescribe;
    - (B) prepare and submit to the [Secretary](/usc/7/6402.md?p=7), from time to time, such reports as the [Secretary](/usc/7/6402.md?p=7) may prescribe; and
    - (C) account for the receipt and disbursement of all funds entrusted to the [Board](/usc/7/6402.md?p=2).
  - (2) **Audits—** The [Board](/usc/7/6402.md?p=2) shall cause the books and records of the [Board](/usc/7/6402.md?p=2) to be audited by an independent auditor at the end of each fiscal year. A report of each such audit shall be submitted to the [Secretary](/usc/7/6402.md?p=7).
- (i) **Books and records of processors—**
  - (1) **In general—** The order shall require that each [fluid milk processor](/usc/7/6402.md?p=4) subject to this chapter maintain and make available for inspection such books and records as may be required by the order and file reports at the time, in the manner, and having the content prescribed by the order.
  - (2) **Use of information—** Information obtained under [paragraph (1)](#i-1) shall be made available to the [Secretary](/usc/7/6402.md?p=7) as is appropriate for the effectuation, administration, or enforcement of this chapter, or any order or regulation issued under this chapter.
  - (3) **Confidentiality—**
    - (A) **In general—** Except as provided in subparagraphs [(B)](#i-3-B) and [(C)](#i-3-C), commercial or financial information that is obtained under paragraph [(1)](#i-1) or [(2)](#i-2) and that is privileged or confidential shall be kept confidential by all officers and employees of the [Department](/usc/7/6402.md?p=5) and agents of the [Board](/usc/7/6402.md?p=2), and only such information so obtained as the [Secretary](/usc/7/6402.md?p=7) considers relevant may be disclosed to the public by them and then only in a suit or administrative hearing brought at the request of the [Secretary](/usc/7/6402.md?p=7), or to which the [Secretary](/usc/7/6402.md?p=7) or any officer of the [United States](/usc/7/6402.md?p=8) is a party, and involving the order.
    - (B) **Availability of information—** Except as otherwise provided in this chapter, information obtained under this chapter may be made available to another agency of the Federal Government for a civil or criminal law enforcement activity if the activity is authorized by law and if the head of the agency has made a written request to the [Secretary](/usc/7/6402.md?p=7) specifying the particular information desired and the law enforcement activity for which the information is sought.
    - (C) **Other exceptions—** Nothing in [subparagraph (A)](#i-3-A) may be construed to prohibit—
      - (i) the issuance of general statements, based on the reports, of the number of [persons](/usc/7/499a.md?p=b-1) subject to an order or statistical data collected from the [persons](/usc/7/499a.md?p=b-1), which statements do not identify the information furnished by any [person](/usc/7/499a.md?p=b-1); or
      - (ii) the publication, by direction of the [Secretary](/usc/7/6402.md?p=7), of the name of any [person](/usc/7/499a.md?p=b-1) violating any order, together with a statement of the particular provisions of the order violated by the [person](/usc/7/499a.md?p=b-1).
  - (4) **Penalty—** Any [person](/usc/7/499a.md?p=b-1) violating this subsection, on conviction, shall be subject to a fine of not more than $1,000 or to imprisonment for not more than 1 year, or both, and if such [person](/usc/7/499a.md?p=b-1) is an agent of the [Board](/usc/7/6402.md?p=2) or an officer or employee of the [Department](/usc/7/6402.md?p=5), shall be removed from office.
  - (5) **Withholding information—** Nothing in this subsection shall authorize the [Secretary](/usc/7/6402.md?p=7) to withhold information from a duly authorized committee or subcommittee of Congress.
  - (6) **Time requirement—** The records required under [paragraph (1)](#i-1) shall be maintained for 2 years beyond the fiscal year of the applicability of the records.
- (j) **Prohibition on use of funds to influence governmental action—**
  - (1) **In general—** Except as otherwise provided in [paragraph (2)](#j-2), the order shall prohibit any funds collected by the [Board](/usc/7/6402.md?p=2) under the order from being used in any manner for the purpose of influencing legislation or government action or policy.
  - (2) **Exception—** [Paragraph (1)](#j-1) shall not apply to the development or recommendation of amendments to the order.
- (k) **Coordination—** The order shall require the [Board](/usc/7/6402.md?p=2) to take reasonable steps to coordinate the collection of assessments, and [advertising](/usc/7/6402.md?p=1) and [research](/usc/7/6402.md?p=6) activities of the [Board](/usc/7/6402.md?p=2) with the National Dairy Promotion and [Research](/usc/7/6402.md?p=6) [Board](/usc/7/6402.md?p=2) established under [section 4504(b) of this title](/usc/7/4504.md?p=b).
- (l) **Exemptions—** The order shall exempt [fluid milk products](/usc/7/6402.md?p=3) exported from the [United States](/usc/7/6402.md?p=8) from assessments under the order.
- (m) **Report—** The [Secretary](/usc/7/6402.md?p=7) shall provide annually for an independent evaluation of the effectiveness of the fluid milk promotion program carried out under this chapter during the previous fiscal year, in conjunction with the evaluation of the National Dairy Promotion and [Research](/usc/7/6402.md?p=6) [Board](/usc/7/6402.md?p=2) established under [section 4504(b) of this title](/usc/7/4504.md?p=b).
- (n) **Other terms and conditions—** The order also shall contain such terms and conditions, not inconsistent with this chapter, as are necessary to effectuate this chapter, including regulations relating to the assessment of late payment charges.

## Source credit

(Pub. L. 101–624, title XIX, § 1999H, Nov. 28, 1990, 104 Stat. 3916.)