[Federal Register Volume 66, Number 156 (Monday, August 13, 2001)]
[Proposed Rules]
[Pages 42469-42472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-20097]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1230

[No. LS-01-02]


Pork Promotion, Research, and Consumer Information Order--
Increase in Importer Assessments

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: Pursuant to the Pork Promotion, Research, and Consumer 
Information Act of 1985 (Act) and the Pork Promotion, Research, and 
Consumer Information Order (Order) issued thereunder, this proposed 
rule would increase by seven-hundredths to one-tenth of a cent per 
pound the amount of the assessment per pound due on imported pork and 
pork products to reflect an increase in the 2000 average price for 
domestic barrows and gilts. This proposed action would bring the 
equivalent market value of the live animals from which such imported 
pork and pork products were derived in line with the market values of 
domestic porcine animals. These proposed changes will facilitate the 
continued collection of assessments on imported porcine animals, pork, 
and pork products.

DATES: Comments must be received by September 12, 2001.

ADDRESSES: Send two copies of comments to Ralph L. Tapp, Chief; 
Marketing Programs Branch, Room 2627-S; Livestock and Seed Program; 
Agricultural Marketing Service (AMS), USDA; STOP 0251; 1400 
Independence Avenue, SW.; Washington, DC 20250-0251. Comments will be 
available for public inspection during regular business hours at the 
above office in Room 2627 South Building; 14th and Independence Avenue, 
SW.; Washington, DC.

FOR FURTHER INFORMATION CONTACT: Ralph L. Tapp, Chief, Marketing 
Programs Branch, 202/720-1115.

SUPPLEMENTARY INFORMATION:

Executive Orders 12866 and 12988 and Regulatory Flexibility Act

    This proposed rule has been determined not significant for purposes 
of Executive Order 12866 and therefore has not been reviewed by the 
Office of Management and Budget.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposal is not intended to have a 
retroactive effect.

[[Page 42470]]

The Act states that the statute is intended to occupy the field of 
promotion and consumer education involving pork and pork products and 
of obtaining funds thereof from pork producers and that the regulation 
of such activity (other than a regulation or requirement relating to a 
matter of public health or the provision of State or local funds for 
such activity) that is in addition to or different from the Act may not 
be imposed by a State.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under Sec. 1625 of the Act, a 
person subject to an order may file a petition with the Secretary 
stating that such order, a provision of such order or an obligation 
imposed in connection with such order is not in accordance with the 
law; and requesting a modification of the order or an exemption from 
the order. Such person is afforded the opportunity for a hearing on the 
petition. After the hearing, the Secretary would rule on the petition. 
The Act provides that the district court of the United States in the 
district in which a person resides or does business has jurisdiction to 
review the Secretary's determination, if a complaint is filed not later 
than 20 days after the date such person receives notice of such 
determination.
    This action also was reviewed under the Regulatory Flexibility Act 
(RFA) (5 United States Code (U.S.C.) 601 et seq.). The effect of the 
Order upon small entities initially was discussed in the September 5, 
1986, issue of the Federal Register (51 FR 31898). It was determined at 
that time that the Order would not have a significant effect upon a 
substantial number of small entities. Many of the estimated 500 
importers may be classified as small entities under the Small Business 
Administration definition (13 CFR 121.201).
    This proposed rule would increase the amount of assessments on 
imported pork and pork products subject to assessment by seven-
hundredths to one-tenth of a cent per pound, or as expressed in cents 
per kilogram, fifteen-hundredths to twenty-two-hundredths of a cent per 
kilogram. This increase is consistent with the increase in the annual 
average price of domestic barrows and gilts for calendar year 2000. The 
average annual market price increased from $31.46 in 1999 to $42.70 in 
2000, an increase of about 36 percent. Adjusting the assessments on 
imported pork and pork products would result in an estimated increase 
in assessments of $713,000 over a 12-month period. Assessments 
collected on imported hogs, pork, and pork products for 2000 were 
$3,384,096. Accordingly, the Acting Administrator of AMS has determined 
that this action would not have a significant economic impact on a 
substantial number of small entities.
    The Act (7 U.S.C. 4801-4819) approved December 23, 1985, authorized 
the establishment of a national pork promotion, research, and consumer 
information program. The program was funded by an initial assessment 
rate of 0.25 percent of the market value of all porcine animals 
marketed in the United States and on imported porcine animals with an 
equivalent assessment on pork and pork products. However, that rate was 
increased to 0.35 percent in 1991 (56 FR 51635) and to 0.45 percent 
effective September 3, 1995 (60 FR 29963). The final Order establishing 
a pork promotion, research, and consumer information program was 
published in the September 5, 1986, issue of the Federal Register (51 
FR 31898; as corrected, at 51 FR 36383 and amended at 53 FR 1909, 53 FR 
30243, 56 FR 4, 56 FR 51635, 60 FR 29963, 61 FR 29002, 62 FR 26205, 63 
FR 45936, and 64 FR 44643) and assessments began on November 1, 1986.
    The Order requires importers of porcine animals to pay U.S. Customs 
Service (USCS), upon importation, the assessment of 0.45 percent of the 
animal's declared value and importers of pork and pork products to pay 
USCS, upon importation, the assessment of 0.45 percent of the market 
value of the live porcine animals from which such pork and pork 
products were produced. This proposed rule would increase the 
assessments on all of the imported pork and pork products subject to 
assessment as published in the Federal Register as a final rule August 
17, 1999, and effective on September 16, 1999 (64 FR 44643). This 
increase is consistent with the increase in the annual average price of 
domestic barrows and gilts for calendar year 2000 as calculated by the 
Department of Agriculture's (Department), AMS, Livestock and Grain 
Market News (LGMN) Branch. This increase in assessments would make the 
equivalent market value of the live porcine animal from which the 
imported pork and pork products were derived reflect the recent 
increase in the market value of domestic porcine animals, thereby 
promoting comparability between importer and domestic assessments. This 
proposed rule would not change the current assessment rate of 0.45 
percent of the market value.
    The methodology for determining the per pound amount of assessments 
for imported pork and pork products was described in the Supplementary 
Information accompanying the Order and published in the September 5, 
1986, Federal Register at 51 FR 31901. The weight of imported pork and 
pork products is converted to a carcass weight equivalent by utilizing 
conversion factors that are published in the Department's Statistical 
Bulletin No. 697 ``Conversion Factors and Weights and Measures.'' These 
conversion factors take into account the removal of bone, weight lost 
in cooking or other processing, and the nonpork components of pork 
products. Secondly, the carcass weight equivalent is converted to a 
live animal equivalent weight by dividing the carcass weight equivalent 
by 70 percent, which is the average dressing percentage of porcine 
animals in the United States. Thirdly, the equivalent value of the live 
porcine animal is determined by multiplying the live animal equivalent 
weight by an annual average market price for barrows and gilts as 
calculated by LGMN Branch. Finally, the equivalent value is multiplied 
by the applicable assessment rate of 0.45 percent due on imported pork 
and pork products. The end result is expressed in an amount per pound 
for each type of pork or pork product. To determine the amount per 
kilogram for pork and pork products subject to assessment under the Act 
and Order, the cent per pound assessments are multiplied by a metric 
conversion factor 2.2046 and carried to the sixth decimal.
    Since 1999 when the last adjustment was made in the amount of the 
assessment due on live hogs and imported pork and pork products (64 FR 
44643), there has been a change in the way LGMN Branch reports hog 
prices. For calendar year 1998, the annual average price for barrows 
and gilts was based on the average price for barrows and gilts at five 
terminal markets. LGMN Branch no longer reports the average price at 
terminal markets. When the Order was published on September 5, 1986, 
LGMN Branch reported an annual average price of barrows and gilts based 
on the seven major markets (East St. Louis, Illinois; Omaha, Nebraska; 
Peoria, Illinois; St. Joseph, Missouri; South St. Paul, Minnesota; 
Sioux City, Iowa; and Sioux Falls, South Dakota) and that price was 
used to calculate the equivalent live animal value of imported pork and 
pork products. In 1991, one of the seven markets, Peoria, Illinois, 
closed and LGMN Branch changed its report to include the annual average 
price from only six markets. Again in 1994, another market, East St. 
Louis, Illinois, closed and LGMN began reporting annual average price 
for barrows and gilts based

[[Page 42471]]

on five markets. In December 1998, two more of the original seven 
markets, Sioux City, Iowa, and Omaha, Nebraska, closed and LGMN Branch 
discontinued reporting market prices based on the three remaining 
markets because these markets did not have a sufficient volume of sales 
to accurately reflect a national average price for barrows and gilts.
    In 1999, LGMN Branch replaced the five-market report with the Iowa-
Southern Minnesota hog report as the source for the national average 
price for barrows and gilts. This average price, comparable to the 
former five-market annual average price, was quoted for 49-52 percent 
lean yield barrows and gilts weighing an average of 240-280 pounds live 
weight. LGMN Branch reported these prices daily as well as publishing a 
monthly average price in the ``Livestock, Meat and Wool Weekly Summary 
and Statistics.'' While LGMN Branch discontinued publishing an annual 
average price of barrows and gilts in the ``Livestock, Meat and Wool 
Weekly Summary and Statistics,'' they had calculated the annual average 
price for barrows and gilts based on the 12 monthly average prices in 
the Iowa-Southern Minnesota hog reports. This annual average price was 
used in the calculations for determining the per pound amount of 
assessments for imported pork and pork products. Further changes are 
anticipated in the future due to implementation of the Livestock 
Mandatory Price Reporting program (65 FR 75464) on April 2, 2001.
    The formula in the preamble for the Order at 51 FR 31901 
contemplated that it would be necessary to recalculate the equivalent 
live animal value of imported pork and pork products to reflect changes 
in the annual average price of domestic barrows and gilts to maintain 
equity of assessments between domestic porcine animals and imported 
pork and pork products.
    The last time the cent per pound assessments for imported pork and 
pork products listed in the table in Sec. 1230.110(b) were adjusted was 
for calendar year 1998 (64 FR 44643). The equivalent live animal value 
of imported pork and pork products was recalculated for calendar year 
1999 and when compared to the equivalent live animal value for calendar 
year 1998, no adjustments in the cents per pound assessments were 
necessary for imported pork and pork products subject to assessment 
under the Act and Order. In 1999 the average annual price for barrows 
and gilts was $31.46 per hundredweight as determined by LGMN Branch 
based on monthly average prices for barrows and gilts published in the 
``Livestock, Meat and Wool Weekly Summary and Statistics.'' The 1998 
average price for barrows and gilts was $31.82 per hundredweight. The 
cents per pound assessments for calendar year 1999 remained the same as 
calendar year 1998.
    The average annual market price increased from $31.46 per 
hundredweight in 1999 to $42.70 per hundredweight in 2000, an increase 
of about 36 percent. This increase would result in a corresponding 
increase in assessments for all HTS numbers listed in the table in 
Sec. 1230.110(b), 64 FR 44643; August 17, 1999, of an amount equal to 
seven-hundredths to one-tenth of a cent per pound, or as expressed in 
cents per kilogram, fifteen-hundredths to twenty-two hundredths of a 
cent per kilogram. Based on the most recent available Department of 
Commerce, Bureau of Census, data on the volume of imported pork and 
pork products available for the period January 1, 2000, through 
September 30, 2000, the proposed increase in assessment amounts would 
result in an estimated $713,000 increase in assessments over a 12-month 
period. The assessment rate for imported live hogs is not affected by 
the change in the cents per pound assessment rate for imported pork and 
pork products.
    This proposed rule provides for a 30-day comment period. This 
comment period is appropriate because the proposed rule simply provides 
for an adjustment in the per pound assessment levels on imported pork 
and pork products to reflect changes in live hog prices which occurred 
from 1999 to 2000. These live hog prices form the basis for the 
assessments. This adjustment, if adopted, should be made effective as 
soon as possible to promote optimum equity.

List of Subjects in 7 CFR Part 1230

    Administrative practice and procedure, Advertising, Agricultural 
research, Marketing agreement, Meat and meat products, Pork and pork 
products.
    For the reasons set forth in the preamble, it is proposed that 7 
CFR part 1230 be amended as follows:

PART 1230--PORK PROMOTION, RESEARCH, AND CONSUMER INFORMATION

    1. The authority citation for 7 CFR part 1230 continues to read as 
follows:

    Authority: 7 U.S.C. 4801-4819.

Subpart B--[Amended]

    2. In Subpart B--Rules and Regulations, Sec. 1230.110 is revised to 
read as follows:


Sec. 1230.110  Assessments on imported pork and pork products.

    (a) The following HTS categories of imported live porcine animals 
are subject to assessment at the rate specified.

------------------------------------------------------------------------
           Live porcine animals                      Assessment
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0103.10.0000..............................  0.45 percent Customs Entered
                                             Value.
0103.91.0000..............................  0.45 percent Customs Entered
                                             Value.
0103.92.0000..............................  0.45 percent Customs Entered
                                             Value.
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    (b) The following HTS categories of imported pork and pork products 
are subject to assessment at the rates specified.

------------------------------------------------------------------------
                                                         Assessment
              Pork and Pork  Products              ---------------------
                                                     cents/lb   cents/kg
------------------------------------------------------------------------
0203.11.0000......................................        .27    .595242
0203.12.1010......................................        .27    .595242
0203.12.1020......................................        .27    .595242
0203.12.9010......................................        .27    .595242
0203.12.9020......................................        .27    .595242
0203.19.2010......................................        .32    .705472
0203.19.2090......................................        .32    .705472
0203.19.4010......................................        .27    .595242
0203.19.4090......................................        .27    .595242
0203.21.0000......................................        .27    .595242
0203.22.1000......................................        .27    .595242
0203.22.9000......................................        .27    .595242
0203.29.2000......................................        .32    .705472
0203.29.4000......................................        .27    .595242
0206.30.0000......................................        .27    .595242
0206.41.0000......................................        .27    .595242
0206.49.0000......................................        .27    .595242
0210.11.0010......................................        .27    .595242
0210.11.0020......................................        .27    .595242
0210.12.0020......................................        .27    .595242
0210.12.0040......................................        .27    .595242
0210.19.0010......................................        .32    .705472
0210.19.0090......................................        .32    .705472
1601.00.2010......................................        .38    .837748
1601.00.2090......................................        .38    .837748
1602.41.2020......................................        .41    .903886
1602.41.2040......................................        .41    .903886
1602.41.9000......................................        .27    .595242
1602.42.2020......................................        .41    .903886
1602.42.2040......................................        .41    .903886
1602.42.4000......................................        .27    .595242
1602.49.2000......................................        .38    .837748
1602.49.4000......................................        .32    .705472
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    Dated: August 3, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 01-20097 Filed 8-10-01; 8:45 am]
BILLING CODE 3410-02-P