[Federal Register Volume 66, Number 203 (Friday, October 19, 2001)]
[Proposed Rules]
[Pages 53127-53130]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-26394]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1260

[No. LS-99-20]


Amendment to the Beef Promotion and Research Rules and 
Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend the Beef Promotion and Research 
Rules and Regulations (Rules and Regulations) established under the 
Beef Promotion and Research Act of 1985 (Act) to provide the 
opportunity for a producer to pay the $1-per-head assessment to the 
Qualified State Beef Council (QSBC) located in the producer's State of 
residence prior to sale, subject to certain conditions.

DATES: Written comments must be received by December 18, 2001. Written 
comments on the information collection requirements must be received on 
or before December 18, 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 received 
may be inspected at this location between 8 a.m. and 4:30 p.m., Monday 
through Friday, except holidays. State that your comments refer to 
Docket No. LS-99-20.
    Pursuant to the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 
3501 et seq.), also send comments regarding the merits of the burden 
estimate, ways to minimize the burden, including through the use of 
automated collection techniques or other forms of information 
technology, or any other aspect of this collection of information to 
the above address. Comments concerning the information collection and 
recordkeeping under the PRA should also be sent to the Desk Officer for 
Agriculture, Offices of Information and Regulatory Affairs, Office of 
Management and Budget (OMB), Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Ralph L. Tapp, Chief, Marketing 
Programs Branch on 202/720-1115 or fax 202/720-1125.

SUPPLEMENTARY INFORMATION:

Executive Orders 12866 and 12988, the Regulatory Flexibility Act, 
and the Paperwork Reduction Act

    The Department of Agriculture (Department) is proposing this rule 
in conformance with Executive Order 12866. This rule has been 
determined not to be significant and, therefore, has not been reviewed 
by OMB.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have a retroactive effect. 
Section 11 of the Act provides that nothing in the Act may be construed 
to preempt or supersede any other program relating to beef promotion 
organized and operated under the laws of the United States or any 
State. There are no administrative proceedings that must be exhausted 
prior to any judicial challenge to the provisions of this rule.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA)(5 U.S.C. 601 et seq.), the Administrator of AMS has 
considered the economic effect of this action on small entities and has 
determined that this proposed rule will not have a significant economic 
impact on a substantial number of small business entities. The purpose 
of RFA is to fit regulatory actions to the scale of businesses subject 
to such actions in order that small businesses will not be unduly 
burdened.
    The Department's National Agricultural Statistics Service estimates 
that in calendar year 2000 the number of cattle operations in the 
United States totaled approximately 1.1 million, including feedlot 
operations. There are also 45 QSBCs in the United States. The majority 
of these operations are considered small businesses under the criteria 
established by the Small Business Administration.
    The proposed rule imposes no significant burden on the industry as 
it merely gives producers the opportunity to voluntarily pay the $1-
per-head assessment on cattle of their own production prior to sale and 
to remit the assessments to the QSBC located in the producer's State of 
residence.
    The impact on QSBCs would be a redistribution of an estimated 
maximum of one-half million dollars of the $40 million currently 
retained annually in total by the 45 QSBCs. The agency estimates that 
up to 6 million head or 20 percent of the approximately 30 million head 
of steers and heifers slaughtered annually are sold for slaughter under 
retained ownership. The agency also estimates that assessments on up to 
one-sixth of the cattle (1 million head) would be paid in advance to 
QSBCs. If the $1 assessment were paid in advance to QSBCs on these 
cattle, the QSBCs' 50 percent share of up to $1 million in assessments 
or as much as $500,000 would be redistributed among the QSBCs.
    The major cattle feeding States of Texas, Nebraska, Kansas, 
Colorado, and Oklahoma could reasonably be expected to account for up 
to 80 percent of the $500,000 in reduced revenue to QSBCs annually. 
These States collect an average of $8 million annually and retain one-
half that amount or $4 million. Assuming that the revenue to each of 
these five States available for State directed programs was reduced by 
an average of $80,000, it would represent a 2-percent decrease in the 
average revenue available for State directed programs in these States.
    The remaining 40 QSBCs have annual State budgets that average about 
$500,000. An estimated net increase in annual income for these States, 
as a result of the advance payment of assessments, could average up to 
$10,000 per State representing a 2-percent increase.
    Producers wishing to direct payment of assessments to the QSBC in 
the producers' State of residence when cattle are sent to another State 
for feeding under retained ownership would complete a form which would 
be provided to affected parties including the QSBC, the feedlot, and 
the packer or the collecting person.
    Copies of the completed ``Certification of Producer Directed 
Payment of Cattle Assessments'' form shall be maintained on file by the 
producer, the QSBC or the Board, the feedlot operator, and the 
purchaser of the cattle for 2 years.
    We estimate the average cost of the reporting burden per respondent 
would be $16 annually.
    We estimate the total average cost of the recordkeeper burden per 
recordkeeper would be $8 annually.
    The Administrator of AMS has considered the economic effect of this 
action on small entities and has determined that this proposed rule 
will not have a significant economic impact on a substantial number of 
small entities.
    In compliance with OMB regulations [5 CFR part 1320] which 
implements PRA, the information collection requirements contained in 
this proposed rule are being submitted for OMB approval.
    Title: Certification of Producer Directed Payment of Assessments.

[[Page 53128]]

    OMB Number: 0581-New collection.
    Expiration Date of Approval: 3 years from date of approval.
    Type of Request: Approval of new information collection.
    Abstract: The Act provides for a program of promotion, research, 
consumer information, and industry information funded by assessments 
paid by beef producers each time cattle are sold and by importers of 
cattle and beef products upon importation.
    Assessments on cattle and beef imports are collected by the U.S. 
Customs Service at the rate of $1 per head or the equivalent. An 
assessment of $1 per head is due from the producer each time a producer 
sells cattle in the United States. The assessment is to be collected by 
the purchaser or other ``collecting person'' as provided in the rules 
and regulations. The producer assessments are then remitted to QSBCs in 
45 States and to the Cattlemen's Beef Promotion and Research Board 
(Board) in the remaining States. QSBCs retain one-half of the $1 
assessment for use in State directed programs and forward the other 
half to the Board.
    Currently, QSBCs in the traditional cattle feeding States (e.g., 
Texas, Kansas, Nebraska, Oklahoma, and Colorado) collect and retain 
assessments on cattle sold that are owned by producers residing in 
other States. This benefits QSBCs in the States that have large numbers 
of cattle in feedlots owned by producers residing in other States. Some 
producers retain ownership of cattle and transport them to one of the 
cattle feeding States. To provide producers with more flexibility and 
to provide the opportunity for a more equitable distribution of 
assessment funds to States based on cattle ownership, the proposed 
``Certification of Producer Directed Payment of Cattle Assessments'' 
form would be made available for use by producers who want the QSBC 
located in their States of residence to receive assessment funds rather 
than the QSBC in the State where the cattle are fed.
    1. Certification of Producer Directed Payment of Assessments.
    Estimate of Burden: The public reporting burden for this collection 
of information is estimated to average .20 hour per response.
    Respondents: Producers wishing to direct payment of assessments to 
the QSBC in the producers' State of residence when cattle are sent to 
another State for feeding under retained ownership would use the form.
    Estimated Number of Respondents: 1,000.
    Estimated Number of Responses per Respondent: 4.
    Estimated Total Annual Burden on Respondents: 800 hours.
    Total cost: $16,000.
    2. Maintenance of records: 2 years.
    Estimate of Burden: The public recordkeeping burden for keeping 
this document is estimated to average .10 hour per recordkeeper.
    Recordkeepers: Producers, QSBCs, feedlot operators, and purchasers.
    Estimated Number of Recordkeepers: 1,260.
    Estimated Total Recordkeeping Hours: 504 hours.
    Estimated Total Cost: $10,080.
    The total average cost of the estimated annual reporting burden per 
respondent would be: $16.00.
    The total average cost of the recordkeeping burden per recordkeeper 
would be: $8.00.
    Comments are invited on: (1) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
proposed collection of information including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on those who 
are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology. Comments concerning the 
information collection and recordkeeping requirements contained in this 
action should reference the Docket Number LS-99-20, together with the 
date and page number of this issue of the Federal Register. Comments 
may be sent to Ralph L. Tapp, Chief; Marketing Programs Branch, Room 
2627-S; Livestock and Seed Program, AMS, USDA; STOP 0251; 1400 
Independence Avenue, SW.; Washington, DC 20250-0251; telephone: 202/
720-1115 or Fax: 202/720-1125. All comments received will be available 
for public inspection during regular business hours at the above 
address. Comments also should be sent to the Desk Officer for 
Agriculture, Office of Information and Regulatory Affairs, Office of 
Management and Budget, Washington, DC 20503.
    This proposed rule would amend the rules and regulations published 
in the Federal Register on February 26, 1988 (53 FR 5749) (7 CFR 
Sec. 1260.301 to Sec. 1260.315). These regulations further define the 
requirements of the Beef Promotion and Research Order (Order) (51 FR 
21632) (7 CFR Sec. 1260.101 to Sec. 1260.217) under the Beef Promotion 
and Research Act of 1985 (Act), 7 U.S.C. 2901-2911.

Background and Proposed Change

    The Act authorizes the establishment of a national beef promotion 
and research program. The final Order establishing a beef promotion and 
research program was published in the Federal Register on July 18, 
1986, (51 FR 21632) and assessments began on October 1, 1986. The 
program is administered by the Board which is composed of 110 cattle 
producers and importers. The program is funded by a $1-per-head 
assessment on producer marketings of cattle in the United States and an 
equivalent amount on imported cattle, beef, and beef products. In 45 
States, QSBCs receive the $1-per-head of cattle assessment remitted 
under the program and retain up to half of the $1 for State-directed 
programs and remit the remainder to the Board. The Board receives all 
import assessments and all producer assessments in the five States with 
relatively small cattle numbers that do not have QSBCs. In 2000, the 45 
QSBCs received a total of about $80 million in assessments. QSBCs 
retained about $40 million and remitted approximately $40 million to 
the Board.
    The domestic assessment, due each time cattle are sold by a 
producer, is collected by the buyer or ``collecting person'' and 
remitted to the Board or QSBC. The term ``producer'' is defined as 
follows: ``means any person who owns or acquires ownership of cattle; 
provided, however, that a person shall not be considered a producer 
within the meaning of this subpart if (a) the person's only share in 
the proceeds of a sale of cattle or beef is a sales commission, 
handling fee, or other service fee; or (b) the person (1) acquired 
ownership of cattle to facilitate the transfer of ownership of such 
cattle from the seller to a third-party, (2) resold such cattle no 
later than 10 days from the date on which the person acquired 
ownership, and (3) certified, as required by regulations prescribed by 
the Board and approved by the Secretary, that the requirements of this 
provision have been satisfied.''
    When cattle are sold within 10 days of purchase by a person who is 
not a producer under the above definition, the collecting person is not 
required to collect the $1 assessment from the person (seller), if the 
seller provides the collecting person with a Statement of Certification 
of Non-Producer Status on a form approved by the Board and the 
Secretary. The person claiming non-producer status must submit to the

[[Page 53129]]

collecting person a Statement of Certification of Non-Producer Status 
``at the time of sale'' in lieu of paying the assessment.
    In a similar fashion this proposed modification to the regulations 
to permit producer directed payment of assessments would result in the 
collecting person, at the time of sale, collecting a document 
certifying the assessment had been paid in advance by the producer.
    It is believed that this producer directed payment option would be 
used by producers of a relatively small share of all cattle sold. It 
would apply only to cattle of a producer's own production transported 
to another State under retained ownership for feeding prior to sale as 
slaughter cattle. Utilizing this option would permit a producer who 
retains ownership of cattle to ensure that the QSBC located in the 
State where the producer resides receives the $1 checkoff rather than 
the QSBC in the State in which the cattle are located when sold. This 
could increase checkoff revenue for many QSBCs such as those located in 
the southeastern United States that currently do not receive revenue 
from cattle owned and sold by producers residing in the southeastern 
States who use feedlots in States such as Texas, Kansas, Nebraska, 
Oklahoma, and Colorado to finish cattle before selling the cattle to 
packers.
    Since States retain one-half of the $1-per-head checkoff for use in 
State directed programs, providing producers with the flexibility and 
the opportunity to direct payment of the assessment to their home State 
likely would increase revenue in many States such as Florida, Georgia, 
Alabama, and Mississippi with limited feedlot capacity.
    The Department estimates that a maximum of $500,000 of the total 
$40 million currently retained annually by the 45 QSBCs would be 
redirected to States that currently do not receive revenue from cattle 
owned and sold by their producers. Approximately 6 million head, or 20 
percent, of the estimated 30 million head of steers and heifers 
slaughtered annually are sold for slaughter under retained ownership. 
The Department estimates that assessments on up to one-sixth of the 
cattle (1 million head) would be paid in advance under this proposal to 
QSBCs.
    The major cattle feeding States of Texas, Nebraska, Kansas, 
Colorado, and Oklahoma could reasonably be expected to account for up 
to 80 percent of the $500,000 in reduced revenue to QSBCs annually. 
These States collect an average of $8 million annually and retain one-
half that amount or $4 million. Assuming that the revenue to each of 
these five States available for State directed programs was reduced by 
an average of $80,000, it would represent a 2-percent decrease in the 
average revenue available for State directed programs in these States.
    The remaining 40 QSBCs have annual State budgets that average about 
$500,000. An estimated net increase in annual income for these States, 
as a result of the advance payment of assessments, could average up to 
$10,000 per State representing a 2-percent increase.
    Producers desiring to direct payment of assessments could do so 
subject to the requirements of a new paragraph Sec. 1260.311(f) which 
would read as follows:
    ``(f)(1) A producer who transports, prior to sale, cattle of that 
producer's own production to another State, may elect to make a 
directed payment of the $1-per-head assessment in advance to the QSBC 
in the State in which the producer resides, or to the Board if there is 
no QSBC in such State, provided that the producer fulfills the 
requirements set forth below:
    (i) transports the cattle under retained ownership to a feedlot or 
similar location, and the cattle remain at such location, prior to 
sale, for a period not less than 30 days; and
    (ii) the producer, at the time of transport, signs a Certification 
of Producer Directed Payment of Cattle Assessments form indicating that 
the assessment has been paid in advance. A copy of the certification 
form establishing the payment of the assessment shall be sent by the 
producer with the assessment when remitted to the QSBC or the Board. 
The producer also shall send a copy of the certification form to the 
feedlot operator at the time the cattle are delivered. A copy of the 
certification form also shall be given to the purchaser of the cattle 
by the feedlot operator at the time of sale.
    (2) The certification form will include the following information:

    1. Producer's Name.
    2. Producer's social security number or Tax I.D. number.
    3. Producer's address (street address or P.O. Box, city, State, and 
zip code).
    4. Signature of Producer.
    5. Producer's State of residence.
    6. Number of cattle shipped to out of State feedyard under retained 
ownership.
    7. Date cattle shipped.
    8. State where cattle will be on feed.
    9. Name of feedyard.
    10. Address of feedyard.

    (3) For those cattle for which the assessment has been producer 
directed and paid in advance pursuant to subparagraph (1) above, the 
purchaser of the cattle shall not be required to collect and remit the 
assessment, but shall maintain on file a copy of the Certification of 
Producer Directed Payment of Cattle Assessments form completed and 
signed by the producer who originally transported the cattle under 
retained ownership.
    (4) For those cattle for which the assessment has been producer 
directed and paid in advance pursuant to subparagraph (1) above, copies 
of the completed Certification of Producer Directed Payment of Cattle 
Assessments form shall be maintained on file by the producer, the QSBC 
or the Board, the feedlot operator, and the purchaser of the cattle for 
2 years.''

List of Subjects in 7 CFR Part 1260

    Advertising, Agricultural research, Imports, Marketing agreements, 
Meat and meat products, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, it is proposed that 
title 7 of the CFR part 1260 be amended as follows:

PART 1260--BEEF PROMOTION AND RESEARCH

    1. The authority citation of part 1260 continues to read as 
follows:

    Authority: 7 U.S.C. 2901 et seq.

    2. Paragraph (a) of Sec. 1260.311 is revised to read as follows:


Sec. 1260.311  Collecting persons for purposes of collection of 
assessments.

* * * * *
    (a) Except as provided in paragraphs (b), (c), and (f) of this 
section, each person making payment to a producer for cattle purchased 
in the United States shall collect from the producer an assessment at 
the rate of $1 per head of cattle purchased and shall be responsible 
for remitting assessments to the QSBC or the Board as provided in 
Sec. 1260.312. The collecting person shall collect the assessment at 
the time the collecting person makes payment or any credit to the 
producer's account for the cattle purchased. The person paying the 
producer shall give the producer a receipt indicating payment of the 
assessment.
* * * * *
    3. Paragraph (c) of Sec. 1260.311 is revised to read as follows:
* * * * *
    (c) In the States listed below there exists a requirement that 
cattle be brand inspected by State authorized inspectors prior to sale. 
In addition, when cattle

[[Page 53130]]

are sold in the sales transactions listed below in those States, these 
State authorized inspectors are authorized to, and shall, except as 
provided for in paragraph (f) of this section, collect assessments due 
as a result of the sale of cattle. In those transactions in which 
inspectors are responsible for collecting assessments, the person 
paying the producer shall not be responsible for the collection and 
remittance of such assessments. The following chart identifies the 
party responsible for collecting and remitting assessments in these 
States:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Sales through auction   Sales to a slaughter/                            Sales to an order
              States                        market                  packer            Sales to a feedlot         buyer/dealer        Country sales \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Arizona...........................  CP                      CP                      CP                      B                      B
California........................  CP                      CP                      B                       B-CP                   B
Colorado..........................  CP                      B                       B                       B                      B
Idaho.............................  CP                      CP                      B                       B                      B
Montana...........................  CP                      B                       B                       B                      B
Nebraska..........................  CP                      CP                      B-CP                    B-CP                   B-CP
Oregon............................  CP                      B-CP                    B                       B                      B
New Mexico........................  CP                      B-CP                    B-CP                    B-CP                   B-CP
Utah..............................  CP                      B-CP                    B                       B                      B
Washington........................  CP                      CP                      B                       B-CP                   B
Wyoming...........................  CP                      B                       B                       B                      B
--------------------------------------------------------------------------------------------------------------------------------------------------------
Key:
B--Brand inspector has responsibility to collect and remit assessments due.
CP--The person paying the producer shall be the collecting person and has responsibility to collect and remit the assessments due.
B-CP--Brand inspector has responsibility to collect; however, when there has not been a physical brand inspection the person paying the producer shall
  be the collecting person and has the responsibility to collect and remit assessments due.
\1\ For the purpose of this subpart, the term ``country sales'' shall include any sales not conducted at an auction or livestock market and which is not
  a sale to a slaughter/packer, feedlot, or order buyer or dealer.

* * * * *
    4. A new paragraph (f) of Sec. 1260.311 is added to read as 
follows:
    (f)(1) A producer who transports, prior to sale, cattle of that 
producer's own production to another State, may elect to make a 
directed payment of the $1-per-head assessment in advance to the QSBC 
in the State in which the producer resides, or to the Board if there is 
no QSBC in such State, provided that the producer fulfills the 
requirements set forth below:
    (i) transports the cattle under retained ownership to a feedlot or 
similar location, and the cattle remain at such location, prior to 
sale, for a period not less than 30 days; and
    (ii) the producer, at the time of transport, signs a Certification 
of Producer Directed Payment of Cattle Assessments form indicating that 
the assessment has been paid in advance. A copy of the certification 
form establishing the payment of the assessment shall be sent by the 
producer with the assessment when remitted to the QSBC or the Board. 
The producer also shall send a copy of the certification form to the 
feedlot operator at the time the cattle are delivered. A copy of the 
certification form also shall be given to the purchaser of the cattle 
by the feedlot operator at the time of sale.
    (2) The certification form will include the following information:

    1. Producer's Name.
    2. Producer's social security number or Tax I.D. number.
    3. Producer's address (street address or P.O. Box, city, State, and 
zip code).
    4. Signature of Producer.
    5. Producer's State of residence.
    6. Number of cattle shipped to out of State feedyard under retained 
ownership.
    7. Date cattle shipped.
    8. State where cattle will be on feed.
    9. Name of feedyard.
    10. Address of feedyard.

    (3) For those cattle for which the assessment has been producer 
directed and paid in advance pursuant to paragraph (f)(1) of this 
section, the purchaser of the cattle shall not be required to collect 
and remit the assessment, but shall maintain on file a copy of the 
Certification of Producer Directed Payment of Cattle Assessments form 
completed and signed by the producer who originally transported the 
cattle under retained ownership.
    (4) For those cattle for which the assessment has been producer 
directed and paid in advance pursuant to paragraph (f)(1) of this 
section, copies of the completed Certification of Producer Directed 
Payment of Cattle Assessments form shall be maintained on file by the 
producer, the QSBC or the Board, the feedlot operator, and the 
purchaser of the cattle for 2 years.

    Dated: October 12, 2001.
Kenneth C. Clayton,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 01-26394 Filed 10-18-01; 8:45 am]
BILLING CODE 3410-02-P