Authorized by federal legislation, a Check-off is designed to maintain and expand markets for an industry’s products. Check-offs are governed by an Order that sets the parameters of the program and are run by an industry nominated board of directors appointed by the Secretary of Agriculture. While program funds may not be used for lobbying or advocacy, they are available for informational, educational, and promotional activities in support of an industry’s products.
How is it formed?
A check-off is established as a result of an affirmative referendum of a majority of the companies voting who represent a majority of the volume of the paper and paper-based packaging produced or imported that would be covered by the program. Companies producing or importing 100,000 short tons or more of paper and paper-based products annually are eligible to vote in the referendum, conducted by the U.S. Department of Agriculture.
An approved Check-off would undergo a follow-up referendum no more than seven years after the assessments begin, and referendums can be requested at any time by the Board or 10 percent of those eligible to vote. In addition, by law an evaluation of the effectiveness of the program must be undertaken every five years.
Currently, a volunteer Panel of industry CEOs is working to shepherd the Check-off exploration and development phase. The Panel is responsible for oversight regarding the parameters of the program; the development of the draft Order for the USDA; and outreach and education for industry companies that will be included in a public referendum.
Assuming a positive referendum, the Panel will then submit two nominations for each initial Board seat to the U.S. Department of Agriculture Secretary, who appoints the Board members. Once constituted, the Board then will submit nominations for future vacancies. The 12-member Board will be comprised of producers and importers subject to the assessment.
By law, the Board must reflect the geographic distribution of domestic production and the quantity of imports. Accordingly, the Board will include 10 producers broken out by geographic region (6 from South; 1 from Northeast; 2 from Midwest; and 1 from West) and two importer representatives. The geographic distribution of these seats will be reviewed at least once in every five-year period.
Among other responsibilities, Check-off Board members will administer the Order, develop annual budgets, invest funds, accept voluntary contributions, and contract to carry out the Order.
Board members also provide oversight to ensure that no Check-off funds are used to lobby or engage in false or disparaging advertising.
Initial Board seats will have staggered durations, after which members will serve no more than two full consecutive three-year terms.