[Federal Register Volume 60, Number 159 (Thursday, August 17, 1995)]
[Rules and Regulations]
[Pages 42777-42779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20350]



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DEPARTMENT OF AGRICULTURE
Grain Inspection, Packers and Stockyards Administration

9 CFR Parts 201 and 203

RIN 0580-AA43


Regulations and Statements of General Policy Issued Under the 
Packers and Stockyards Act: Definitions, Industry Rules, Schedules of 
Rates and Charges, Proceeds of Sales, Accounts and Records, Trade 
Practices, Stockyard Services, Brand Inspection, and Buyers Expenses

AGENCY: Grain Inspection, Packers and Stockyards Administration, USDA.

ACTION: Final rule.

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SUMMARY: Proposed amendments to rules issued under the Packers and 
Stockyards (P&S) Act (7 U.S.C. 181 et seq.) were published in the 
Federal Register (59 FR 26763) on May 24, 1994, and identified as Group 
I. This document adopts proposed changes which remove two regulations 
regarding posting and deposting of stockyards, amend one trade practice 
regulation and retain 14 regulations and 3 statements of general policy 
in their present form.

EFFECTIVE DATE: September 18, 1995.

FOR FURTHER INFORMATION CONTACT: Daniel Van Ackeren, Director, 
Livestock Marketing Division (202) 720-6951, or Tommy Morris, Director, 
Packer and Poultry Division (202) 720-7363.
    In response to the proposed rule published in the Federal Register 
(59 FR 26763), the Agency received one comment from a livestock trade 
association, that commented on regulations Sec. 201.5, Sec. 201.6, and 
Sec. 201.61 and statement of general policy Sec. 203.5.
    The commenter concurs with the deletion of Sec. 201.5 which 
pertains to Agency procedures on posting a stockyard and Sec. 201.6 
which regards Agency deposting procedures. Both of these regulations 
involve procedural steps taken by the Agency in posting and deposting 
stockyards which are specified by the P&S Act. These two regulations 
are primarily informational 

[[Page 42778]]
in nature and are not necessary in carrying out the provisions of the 
Act.
    The commenter strongly supports modification of Sec. 201.61(a). 
That subsection prohibits market agencies selling on commission from 
entering into arrangements with dealers and other buyers which would 
lessen their loyalty to their consignors or impair their selling 
services. In addition, the subsection specifically prohibits a market 
agency selling on commission from providing clearing services for an 
independent dealer purchasing livestock from consignments made to that 
market agency.
    As proposed, Sec. 201.61(a) will be amended by modifying the last 
sentence of the subsection to permit market agencies selling on 
commission to provide clearing services to independent dealers that 
purchase livestock from consignments to such market agencies selling on 
commission, provided that full disclosure of the clearing arrangement 
is noted on the accounting to the consignor. Full disclosure of the 
clearing arrangement will protect livestock consignors without 
unnecessarily restricting purchases from consignment and allow market 
agencies selling on commission greater flexibility in representing the 
interests of livestock sellers. Modifications to Sec. 201.56 published 
in the Federal Register (58 FR 52884) October 13, 1993, make these 
recommended changes necessary and appropriate.
    As proposed, each of the following regulations and statements of 
general policy will be retained in its present form:

Sec. 201.1  Meaning of words.
Sec. 201.2  Terms defined.
Sec. 201.3  Authority.
Sec. 201.4  Bylaws, rules and regulations, and requirements of 
exchanges, associations, or other organizations; applicability, 
establishment.
Sec. 201.17  Requirements for filing tariffs.
Sec. 201.39  Payment to be made to consignor or shipper by market 
agencies; exceptions.
Sec. 201.44  Market agencies to render prompt accounting for 
purchases on order.
Sec. 201.45  Market agencies to make records available for 
inspection by owners, consignors and purchasers.
Sec. 201.81  Suspended registrants.
Sec. 201.82  Care and promptness in weighing and handling livestock 
and live poultry.
Sec. 201.86  Brand inspection: Application for authorization, 
registration, and filing of schedules, reciprocal arrangements, and 
maintenance of identity of consignments.
Sec. 201.94  Information as to business; furnishing of by packers, 
live poultry dealers, stockyards owners, market agencies, and 
dealers.
Sec. 201.95  Inspection of business records and facilities.
Sec. 201.96  Unauthorized disclosure of business information 
prohibited.
Sec. 203.5  Statement with respect to market agencies paying the 
expenses of livestock buyers.
Sec. 203.12  Statement with respect to providing services and 
facilities at stockyards on a reasonable and nondiscriminatory 
basis.
Sec. 203.17  Statement of general policy with respect to rates and 
charges at posted stockyards.

    In the process of reviewing these regulations, it was determined 
that they were necessary to the efficient and effective enforcement of 
the P&S Act and to the orderly conduct of the marketing system. The 
absence of any of the regulations would be detrimental to the industry 
and could result in increased litigation.
    One comment was received concerning Sec. 203.5. This statement of 
general policy informs market agencies selling on commission that 
paying business expenses of buyers attending their livestock sales 
would be viewed as a violation of the P&S Act. The commenter disagreed 
with the Agency's proposal to retain Sec. 203.5 in its present form, 
stating that such payment by market agencies selling on commission of 
certain minor business expenses of buyers is not in and of itself 
contrary to the intent of the Act. After considering the comment, the 
Agency has concluded this policy statement will be retained in its 
present form. The Agency believes that market agencies selling on 
commission paying the business expenses of buyers could lead to a 
method of competition between similarly engaged market agencies and 
result in undue and unreasonable cost burdens on such selling agencies 
and the livestock producers who sell their livestock through such 
market agencies. This statement of general policy correctly reflects 
the Agency's policy toward such activities and the legal effect of that 
policy, therefore, no changes are considered appropriate. No comments 
were received concerning any of the other regulations or statements of 
general policy.
    The proposed change in Sec. 201.61 does not impose or change any 
recordkeeping or information collection requirements. Existing 
requirements in this regulation have been previously approved by OMB 
under Control No. 0590-0001.
    As provided by the Regulatory Flexibility Act, it is hereby 
certified that this amended rule will not have a significant economic 
impact on a substantial number of small entities and a statement 
explaining the reasons for the certification is set forth in the 
following paragraph and is being provided to the Chief Counsel for 
Advocacy of the Small Business Administration.
    While this amended rule impacts small entities, it will not have a 
significant economic impact on any entity, large or small. The primary 
effect of this rule is to remove restrictions on purchases by dealers 
from consignments of a market agency that provides clearing services to 
that dealer.
    This amended rule has been determined to be not significant for 
purposes of E.O. 12866 and therefore, has not been reviewed by OMB.
    This amendment does not impose any new paperwork requirement and 
does not have Federalism implications under the criteria of E.O.12612.
    This amendment has been reviewed under E.O. 12778, Civil Justice 
Reform, and is not intended to have retroactive effect. This amendment 
will not preempt State or local laws, regulations, or policies unless 
they present an irreconcilable conflict with this amendment. Prior to 
judicial challenge of the amendment to rule, a party must first be 
found by the Secretary to be in violation of the P&S Act and in 
violation of the accompanying regulation. Second, the party must appeal 
that finding and the validity of the regulation to the Secretary in the 
course of the administrative proceeding. Only after taking these steps, 
may the party challenge the regulation in a court of competent 
jurisdiction.

List of Subjects in 9 CFR Parts 201 and 203

    Rates, Records, Stockyards, Tariffs, and Trade practices.

    Done at Washington, DC, this 10th day of August.
James R. Baker,
Administrator, Grain Inspection, Packers and Stockyards Administration.

    For the reasons set forth in the preamble, the Grain Inspection, 
Packers and Stockyards Administration will amend 9 CFR Part 201 as 
follows:
    1. The authority citation for part 201 continues to read as 
follows:

    Authority: 7 U.S.C. 204, 228; 7 CFR 2.17(e), 2.56.

PART 201--[AMENDED]


Sec. 201.5  [Removed]

    2. Remove Sec. 201.5.


Sec. 201.6  [Removed]

    3. Remove Sec. 201.6.
    4. Revise Sec. 201.61(a) to read as follows:

[[Page 42779]]



Sec. 201.61  Market agencies selling or purchasing livestock on 
commission; relationships with dealers.

    (a) Market agencies selling on commission. No market agency selling 
consigned livestock shall enter into any agreement, relationship or 
association with dealers or other buyers which has a tendency to lessen 
the loyalty of the market agency to its consignors or impair the 
quality of the market agency's selling services. No market agency 
selling livestock on commission shall provide clearing services for any 
independent dealer who purchases livestock from consignment to such 
market agency without disclosing, on the account of sale to the 
consignor, the name of the buyer and the nature of the financial 
relationship between the buyer and the market agency.
* * * * *
(Approved by the Office of Management and Budget under control 
number 0590-0001)

[FR Doc. 95-20350 Filed 8-16-95; 8:45 am]
BILLING CODE 3410-KD-P