[Federal Register Volume 67, Number 139 (Friday, July 19, 2002)]
[Proposed Rules]
[Pages 47474-47477]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-18258]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 67, No. 139 / Friday, July 19, 2002 / 
Proposed Rules  

[[Page 47474]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1230

[No. LS-02-09]


Pork Promotion, Research, and Consumer Information Order: Rules 
and Regulations--Decrease in Assessment Rate and Decrease of Importer 
Assessments

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: Pursuant to the Pork Promotion, Research, and Consumer 
Information Act of 1985 (Act) and the Pork Promotion, Research, and 
Consumer Information Order (Order) thereunder, this proposed rule would 
decrease the current rate of assessment of 0.45 percent of the market 
value of porcine animals to 0.40 percent, and decrease the amount of 
assessment per pound due on imported pork and pork products (two- to 
four-hundredths of a cent per pound) to reflect the combined effect of 
the increase in the 2001 average price for domestic barrows and gilts 
(about 7 percent) and the proposed decrease in the assessment rate. The 
assessment decrease would decrease annual funding of the promotion, 
research, and consumer information program by an estimated $5 million 
to $6 million with an estimated $290,000 decrease in importer 
assessments. The assessment decrease reflects the National Pork 
Producers Delegate Body's (Delegate Body) desire to lessen the 
assessment burden on producers and make such funds available to pork 
producers and the industry. The adjustment in importer assessments also 
would bring the equivalent market value of live animals from which 
imported pork and pork products are derived in line with the market 
value of domestic porcine animals. A Harmonized Tariff Schedule (HTS) 
number for prepared or preserved pork also would be added to the 
regulations.

DATES: Written comments must be received by August 19, 2002.

ADDRESSES: Send a copy of your comments to Kenneth R. Payne, Chief; 
Marketing Programs Branch, Room 2627-S; Livestock and Seed Program, 
AMS, USDA; STOP 0251; 1400 Independence Avenue, SW.; Washington, DC 
20250-0251. Comments may also be submitted electronically to: 
[email protected] or by facsimile at 202/720-1125. All comments 
should reference the docket number LS-02-09, the date, and the page 
number of this issue of the Federal Register. Comments will be 
available for public inspection via the Internet at http://www.ams.usda.gov/lsg/mpb/rp-pork.htm or during regular business hours, 
8:00 a.m. to 4:30 p.m. Eastern Time, Monday through Friday, at the 
above address.

FOR FURTHER INFORMATION CONTACT: Kenneth R. Payne, Chief, Marketing 
Programs Branch, 202/720-1115.

SUPPLEMENTARY INFORMATION:

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

    The Office of Management and Budget has waived the review process 
required by Executive Order 12866.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposal is not intended to have a 
retroactive effect. 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 Department of 
Agriculture (Department) 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 Department 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 Department'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 
(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 81,000 pork 
producers and 500 importers may be classified as small entities under 
the Small Business Administration definition (13 CFR 121.201).
    This proposed rule would decrease the rate of the assessment from 
0.45 percent of the market value of porcine animals to 0.40 percent, 
and would decrease the cents per pound and per kilogram of assessments 
on imported pork and pork products subject to assessment. Adjusting the 
rate of assessment from 0.45 percent to 0.40 percent and decreasing the 
assessment on imported pork and pork products would result in an 
estimated decrease in assessments of $5 million to $6 million over a 
12-month period. Of that amount, approximately $290,000 would be 
attributed to the decrease in importer assessments. The gross market 
value of all swine marketed in the United States during 2000 exceeded 
$11.7 billion. This decrease would reduce the assessment burden on 
producers. The adjustment in importer assessments also would bring the 
equivalent market value of live animals from which imported pork and 
pork products are derived in line with the market value of domestic 
porcine animals. A HTS number for prepared or preserved pork also would 
be added to the regulations. Therefore, the economic impact of the 
proposed assessments will not be a significant part of the total market 
value of swine. Accordingly, the Administrator of the Agricultural 
Marketing Service (AMS)

[[Page 47475]]

has determined that this action will 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 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, 64 
FR 44643, and 66 FR 67071) and assessments began on November 1, 1986. 
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 
effective December 1, 1991 (56 FR 51635), and to 0.45 percent effective 
September 3, 1995 (60 FR 29963). Based on the assessment rate of 0.45 
percent, the total annual assessments collected during 2001 were 
approximately $57.4 million. Assessments on imported pork and pork 
products accounted for about $3.7 million of the total.
    The Order requires that producers pay to the National Pork Board an 
assessment of 0.45 percent of the market value of each porcine animal 
upon sale. However, for purposes of collecting and remitting 
assessments, porcine animals are divided into three separate categories 
(1) feeder pigs, (2) slaughter hogs, and (3) breeding stock. The Order 
specifies that purchasers of feeder pigs, slaughter hogs, and breeding 
stock shall collect an assessment on these animals if assessments are 
due. The Order further provides that for the purpose of collecting and 
remitting assessments persons engaged as a commission merchant, auction 
market, or livestock market in the business of receiving such porcine 
animals for sale on commission for or on behalf of a producer shall be 
deemed to be a purchaser.
    The Order requires importers of porcine animals to pay U.S. Customs 
Service (USCS), upon importation, the assessment of 0.45 percent of the 
porcine 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 
producers were produced.
    The Act and Sec. 1230.71 of the Order contain provisions for 
adjusting the initial rate of assessment. The Delegate Body has the 
responsibility to recommend the rate of assessment to the Department. 
The 2002 Delegate Body, at its annual meeting on March 1-2, 2002, in 
Denver, Colorado, voted to recommend to the Department that the rate of 
assessment of 0.45 percent be decreased to 0.40 percent. There were 167 
Delegate Body members appointed by the Secretary in 2002. At the 
Delegate Body meeting 144 delegates were present during voting and 
voted 50,750.1 valid share votes. States and importers are allotted one 
share per $1,000 of the aggregated amount of assessment collected. 
There were 29,974.9 share votes cast in favor of the 0.05 percent 
decrease.
    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 rate of assessment or changes in the annual average price of 
domestic barrows and gilts to maintain equity of assessments between 
domestic and porcine animals and imported pork and pork products.
    This proposed rule would decrease the amount of assessment on all 
of the imported pork and pork products subject to assessment as 
published in the Federal Register as a final rule December 28, 2001, 
and effective on January 28, 2002 (66 FR 67071). The assessment 
decrease reflects the Delegate Body's desire to lessen the assessment 
burden on producers and make such funds available to pork producers and 
the industry. The adjustment in importer assessments also would bring 
the equivalent market value of live animals from which imported pork 
and pork products are derived in line with the market value of domestic 
porcine animals. A HTS number for prepared or preserved pork also would 
be added to the regulations.
    The methodology for determining the per-pound amounts 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 which are published in the Department's Agricultural Handbook 
No. 697 ``Conversion Factors and Weights and Measurers.'' 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 74 percent, which is the average dressing percentage of porcine 
animals in the United States as recognized by the industry. Thirdly, 
the equivalent value of the live porcine animals is determined by 
multiplying the live animal equivalent weight by an annual average 
market price for barrows and gilts as calculated by the Department's, 
AMS, Livestock and Grain Market News (LGMN) Branch. Finally, the 
equivalent value is multiplied by the applicable assessment rate 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 the last adjustment was made in the amount of the assessment 
due on live hogs and imported pork and pork products (66 FR 67071), 
there has been a change in the way LGMN Branch reports hog prices. Due 
to the implementation of the Livestock Mandatory Price Reporting 
Program, LGMN no longer report hogs on a live basis because most of the 
industry moved to buying hogs on a carcass basis. Thus, the Iowa-
Southern Minnesota hog reports are now reported on a carcass basis 
defined by muscle and fat. Previously, these reports were quoted for 
49-52 percent lean yield barrows and gilts weighing an average of 240-
280 pounds live weight. Therefore, the only consistent price available 
for hogs for calendar year 2001 is the average base carcass price for 
51-52 percent lean hogs derived from the National Base Lean Hog Carcass 
Slaughter Cost Report. To convert this figure to a live basis, it must 
be multiplied by 74 percent, the average dressing percentage of porcine 
animals in the United States as recognized by the industry.
    The average annual market price increased from $42.70 per 
hundredweight in 2000 to $45.87 per hundredweight in 2001, an increase 
of about 7 percent. The combined effect of the proposed assessment rate 
decrease and the increase in the average annual market price would 
result in a decrease in assessments for all HTS numbers listed in the 
table in Sec. 1230.110(b), 66 FR 67071; December 28, 2001, of an amount 
equal to two- to four-hundredths of a cent per pound, or as

[[Page 47476]]

expressed in cents per kilogram, four-hundredths to nine-hundredths of 
a cent per kilogram. Based on Department of Commerce, Bureau of Census, 
data on the volume of pork and pork products imported during 2001, the 
proposed decreases in the assessment amounts would result in an 
estimated $290,000 decrease in importer assessments over a 12-month 
period. In addition, this rule adds a new HTS number--1602.49.9000--to 
the table in Sec. 1230.110(b). This HTS number has been assigned to 
prepared or preserved pork. In 2001, over 2,114 metric tons of prepared 
or preserved pork products were imported into the United States as 
reported by the Department of Commerce.
    This proposed rule provides for a 30-day comment period which is 
deemed appropriate because the proposed rule provides for a decrease in 
the assessment rate and it is intended to implement this change, if 
adopted, as soon as possible so that the funds representing the 
decrease will be available to pork producers and the pork industry at 
the earliest possible date.

List of Subjects in 7 CFR Part 1230

    Administrative practice and procedure, Advertising, Agriculture 
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 set forth below:

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. Section 1230.110 is revised to read as follows:


Sec. 1230.110  Assessments on imported pork and pork products.

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

----------------------------------------------------------------------------------------------------------------
                       Live porcine animals                                          Assessment
----------------------------------------------------------------------------------------------------------------
0103.10.0000......................................................           0.40 percent Customs Entered Value.
0103.91.0000......................................................           0.40 percent Customs Entered Value.
0103.92.0000......................................................           0.40 percent Customs Entered Value.
----------------------------------------------------------------------------------------------------------------

    (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.................................          .25       .551150
0203.12.1010.................................          .25       .551150
0203.12.1020.................................          .25       .551150
0203.12.9010.................................          .25       .551150
0203.12.9020.................................          .25       .551150
0203.19.2010.................................          .29       .639334
0203.19.2090.................................          .29       .639334
0203.19.4010.................................          .25       .551150
0203.19.4090.................................          .25       .551150
0203.21.0000.................................          .25       .551150
0203.22.1000.................................          .25       .551150
0203.22.9000.................................          .25       .551150
0203.29.2000.................................          .29       .639334
0203.29.4000.................................          .25       .551150
0206.30.0000.................................          .25       .551150
0206.41.0000.................................          .25       .551150
0206.49.0000.................................          .25       .551150
0210.11.0010.................................          .25       .551150
0210.11.0020.................................          .25       .551150
0210.12.0020.................................          .25       .551150
0210.12.0040.................................          .25       .551150
0210.19.0010.................................          .29       .639334
0210.19.0090.................................          .29       .639334
1601.00.2010.................................          .34       .749564
1601.00.2090.................................          .34       .749564
1602.41.2020.................................          .37       .815702
1602.41.2040.................................          .37       .815702
1602.41.9000.................................          .25       .551150
1602.42.2020.................................          .37       .815702
1602.42.2040.................................          .37       .815702
1602.42.4000.................................          .25       .551150
1602.49.2000.................................          .34       .749564
1602.49.4000.................................          .29       .639334
1602.49.9000.................................          .29       .639334
------------------------------------------------------------------------


[[Page 47477]]

    3. Section 1230.112 is revised to read as follows:


Sec. 1230.112  Rate of assessment.

    In accordance with Sec. 1230.71(d) the rate of assessment shall be 
0.40 percent of market value.

    Dated: July 15, 2002.
A. J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-18258 Filed 7-18-02; 8:45 am]
BILLING CODE 3410-02-P