If, at the end of a fiscal period, the assessments collected are in excess of expenses incurred, such excess shall be accounted for as follows:

1. (a) The committee, with the approval of the Secretary, may establish an operating reserve and may carry over to subsequent fiscal periods excess funds in a reserve so established, except funds in the reserve shall not exceed the equivalent of approximately three fiscal periods' budgeted expenses. Such reserve funds may be used:

   1. (1) To defray any expenses authorized under this part;
   2. (2) To defray expenses during any fiscal period prior to the time assessment income is sufficient to cover such expenses;
   3. (3) To cover deficits incurred during any fiscal period when assessment income is less than expenses;
   4. (4) To defray expenses incurred during any period when any or all provisions of this part are suspended or are inoperative; and

   5. (5) To cover necessary expenses of liquidation in the event of termination of this part.

      Upon termination of this part, 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 except that to the extent practicable, such funds shall be returned pro rata to the persons from whom such funds were collected.

2. (b) If such excess is not retained in a reserve as provided in paragraph (a) of this section, each handler entitled to a proportionate refund of the excess assessments collected shall be credited at the end of a fiscal period with such refund against the operations of the following fiscal period unless such handler demands payment thereof, in which event such proportionate refund shall be paid.