[Federal Register Volume 67, Number 191 (Wednesday, October 2, 2002)]
[Rules and Regulations]
[Pages 61762-61767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-24968]


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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: Final rule.

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SUMMARY: This final rule amends the Beef Promotion and Research Rules 
and Regulations (Rules and Regulations) established under the Beef 
Promotion and Research Act of 1985 (Act) by providing producers the 
opportunity to voluntarily 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. In addition, 
the chart which establishes the party responsible for collecting and 
remitting assessments in brand inspected States to the QSBC or the 
Cattlemen's Beef Promotion and Research Board (Board) is updated to 
reflect the changes the cattle industry has incurred since the 
inception of the program.

EFFECTIVE DATE: October 1, 2002.

FOR FURTHER INFORMATION CONTACT: Kenneth R. Payne, Chief; Marketing 
Programs Branch, Room 2638-S; Livestock and Seed Program; Agricultural 
Marketing Service (AMS), USDA; STOP 0251; 1400 Independence Avenue, 
SW.; Washington, DC 20250-0251; telephone 202/720-1115.

SUPPLEMENTARY INFORMATION: Prior document in this proceeding: Proposed 
Rule--Beef Promotion and Research Program: Amendment to Beef Promotion 
and Research Rules and Regulations published October 19, 2001 (66 FR 
53127), with a 60 day comment period. The comment period ended December 
18, 2001.

Executive Order 12866

    The Office of Management and Budget (OMB) has waived the review 
process required by Executive Order 12866 for this action.

[[Page 61763]]

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule 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 of the provisions of this 
rule.

Regulatory Flexibility Act

    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 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 of Agriculture's (Department) 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. In addition, there are 11 States with brand inspectors. 
The majority of these operations are considered small businesses under 
the criteria established by the Small Business Administration.
    This final 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 producers State of 
residence.
    The impact on QSBCs will 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 Department 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 Department also estimates that 
assessments on up to one-sixth of the cattle (1 million head) will 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 will 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 $19 million annually and retain one-
half that amount or $9.5 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 about a 1 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 that 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, the feedlot operator, and the purchaser of the 
cattle for 3 years.
    We estimate the average cost of the reporting burden per respondent 
would be $16 annually.
    We estimate the total average cost of the recordkeeping 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 final rule will 
not have a significant economic impact on a substantial number of small 
entities.
    The proposed rule that was published in the Federal Register on 
October 19, 2001 (66 FR 53127), invited interested persons to submit 
comments to the Department concerning potential effects. No comments 
were received regarding the RFA.

Paperwork Reduction Act

    In accordance with OMB regulations (5 CFR Part 1320) which 
implement the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), 
the information collection and recordkeeping requirements contained in 
this rule have been approved by OMB under OMB control number 0581-0202.
    Title: Certification of Producer Directed Payment of Assessments.
    OMB Number: 0581-0202
    Expiration Date of Approval: March 1, 2005.
    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 imported cattle and beef products are collected by 
the U.S. Customs Service at the rate of $1 per head or the live animal 
equivalent of beef and beef products. 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 
published in the Federal Register on February 26, 1988 (53 FR 5749). 
The producer assessments are then remitted to QSBCs in 45 States and to 
the Board in the remaining States. QSBCs retain up to 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 final ``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.

[[Page 61764]]

    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: 3 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.

Background

    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 domestic 
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: ``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 
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 modification to the regulations to 
permit producer-directed payment of assessments will result in the 
collecting person, at the time of sale, collecting a document 
certifying that the assessment had been paid in advance by the 
producer.
    The Department believes that this producer-directed payment option 
will be used by producers of a relatively small share of all cattle 
sold. This rule will 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 final rule 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 up to 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.

Comments

    On October 19, 2001, the Department published in the Federal 
Register (66 FR 53127) for comment a proposed rule to amend the Rules 
and Regulations established under the Act. The proposed rule provided 
the opportunity for a producer to pay the $1-per-head assessment to the 
QSBC located in the producer's State of residence prior to sale, 
subject to certain conditions.
    The proposed rule was published with a request for comments to be 
submitted by December 18, 2001. The Department received comments from 
47 national and State beef and dairy cattle organizations, and brand 
inspectors, as well as from cattle producers. Comments from 44 
commenters were filed on time. Eleven commenters supported the proposed 
rule while four commenters proposed modifications and requested 
clarifications to it. Twenty-nine commenters opposed the proposed rule. 
Three comments were submitted after the comment period ended. The late 
comments, however, supported the rule as proposed.
    The comments are discussed below, together with a description of 
the changes made by the Department in this final rule. In general, 
persons and organizations in States that may see an increase in 
assessments supported the proposed rule, while persons and 
organizations in the primary cattle feeding States that may see a 
reduction in assessments did not support the proposed rule.
    Three commenters suggested producers, QSBCs, the Board, the feedlot 
operator, and the purchaser of the cattle should maintain copies of the 
Certification of Producers Direct Payment of Cattle Assessments forms 
on file for 3 years rather than 2 years. The standard procedure 
currently in place for random compliance audits of remitters is 3 
years. The Department believes that this comment has merit, and this 
change is reflected in Sec.  1260.311(f)(4) by removing 2 years and 
inserting 3 years.
    One commenter asserted that the QSBC which receives the additional 
checkoff funds must be responsible for compliance. Currently, QSBCs are 
responsible for collecting and remitting the assessment to the Board 
and ensuring that those persons subject to the assessment remit them. 
In States where there is no QSBC, the Board is responsible for 
compliance. Accordingly, the Department is not making any changes in 
response to this comment.
    The same commenter suggested that the term Board could be omitted 
from Sec.  1260.311(f)(1), as only

[[Page 61765]]

the QSBC located in the State where the producer resides would apply. 
The commenter noted that producers in the five States without a QSBC 
will be unable to use this option as their dollar already is currently 
directed to the Board. The Department believes that this comment has 
merit and therefore the term Board is removed from Sec.  1260.311(f)(1) 
in this final rule.
    Five commenters stated that the regulations must specify what 
``cattle of a producer's own production'' are in order to ensure this 
includes only offspring from a producer's own cow herd that have been 
continuously and exclusively under his or her ownership, and are being 
sent to feedlots with the intent of continuously owning the cattle 
through the entire feeding phase. The Department believes that this 
comment has merit and additional clarification regarding the meaning of 
``cattle of a producer's own production'' is reflected in new Sec.  
1260.311(f)(iii) of this final rule.
    Three commenters asserted that producers must list the number of 
their cow herds on the certificate as a method to cross check that the 
cattle transported to the feedyard qualify as retained ownership 
cattle. The Department believes that this additional requirement would 
not have any impact on compliance activities. The current compliance 
practices in the industry and the proposed certification process are 
sufficient to ensure compliance with the provisions of the Act, the 
Beef Promotion and Research Order (Order), and this final rule.
    Two commenters suggested that the regulation should apply only to 
true retained ownership cattle. Since cattle sold through auctions, 
dealer/order buyers, and country sales are not applicable, the 
commenters believe these references should be removed from the table in 
Sec.  1260.311(c). While the table in Sec.  1260.311(c) is being 
updated as part of this final rule, it does not directly apply to the 
producer payment option of this final rule. It specifies the party 
responsible for collecting and remitting assessments in designated 
States. Accordingly, the Department is not making any changes in 
response to these comments.
    Another commenter stated that assessments should be collected on 
cattle sold within the first 30 days of movement and the dollars 
returned to the State of Origin under the current rules. The Department 
believes that the option provided for in this rule is flexible and cost 
effective for producers. Under Sec.  1260.311(f)(1)(ii) of the rule 
producers can pay the assessment either before or at the time the 
cattle are transported. Therefore, we are not making any changes to the 
rule in response to this comment.
    Three commenters stated that the regulations should address death 
loss on cattle that are prepaid in the State of Origin. The commenters 
suggested that the proposal should specify that the producer will not 
be given a credit of their dollar for cattle that have died before they 
are shipped to the ultimate purchaser of the cattle. The Department 
believes that this comment has merit. Because of the low mortality 
rates and the costs associated with administrative matters involving 
investigation of animal death and producer, QSBC and Board 
notification, the costs associated with producer credits would be 
substantial, far in excess of the $1-per-head assessment paid by the 
producer. Therefore, we are adding a new paragraph 5 to Sec.  
1260.311(f) of this final rule to prohibit credits of assessments for 
those cattle lost because of death.
    Three commenters asserted that many feedlots and retained ownership 
programs involve sorting and co-mingling of cattle from various owners 
into numerous different pens and lots and then sold to the packer at 
different times. Consequently, if the assessment is prepaid, the 
documentation on those cattle could be confusing since they will not be 
processed in the same lot. The Department believes the feedlot should 
not be required to complete a new form. Feedlots may note on the 
existing form that the specific cattle marketed have been prepaid in 
order to facilitate their own recordkeeping. Accordingly, we are not 
making any changes in response to this comment.
    One commenter expressed concern that some cattle may be placed on 
feed with the producer having the intention of retaining ownership 
through the entire feeding cycle. However, during the feeding cycle, 
the producer may decide to sell a partial interest in the cattle within 
the feedyard. The purpose of this rule is to provide producers the 
opportunity to voluntarily pay the $1-per-head assessment to the QSBC 
on cattle transported to a feedyard under retained ownership. This rule 
does not provide producers with an opportunity for a credit. If a 
producer transfers any interest in the cattle prior to their sale to a 
purchaser, the cattle are no longer covered under the provisions of 
this rule. Consequently, an additional assessment is due as a result of 
the new owner transfer, even if the transfer of ownership is only 
partial.
    Four commenters asserted that the QSBC receiving the checkoff 
should be required to send a new verification form to the feedlot to 
notify it that the checkoff has been received. The Department believes 
that any additional certification of producer payment by QSBCs would be 
unnecessary and burdensome. As noted previously, the Department 
believes that the current certification is sufficient to ensure 
compliance with the provisions of this final rule. Therefore, we are 
not making any changes in response to this comment.
    One commenter stated that the assessments should be paid at the 
time of transport. Under Sec.  1260.311(f)(1)(ii) of the rule producers 
can pay the assessment either before or at the time the cattle are 
transported.
    One commenter suggested that the packer should retain a copy of the 
certificate, not the feedlot, because the packer, as the purchaser, is 
responsible for collecting the checkoff for slaughter cattle. The 
commenter believes that this would provide a simple and streamlined 
procedure for compliance and audit. Section 1260.311(f)(4) requires 
that the certification form be sent to all parties involved, including 
packers when they act as purchasers.
    One commenter suggested that the producer should be responsible for 
ensuring the paperwork accompanies the cattle throughout the production 
process. Section 1260.311(f)(1)(i) requires that the certification be 
completed by the producer and sent to the feedlot operator. This 
certification will accompany the cattle when they are sold.
    One commenter believes that the final regulation will create 
compliance problems and will be difficult to correctly monitor and may 
cause double assessments, incorrect assessments, or no assessments 
collected. The Department believes that because of the anticipated 
small number of producers that will prepay the assessment, any 
compliance problems that may arise will be manageable. In addition, the 
rule provides that the required certification must accompany the cattle 
through the entire process, thereby minimizing any potential compliance 
problems. Further, if the certification does not accompany the cattle, 
those cattle would be assessed the $1-per-head checkoff in accordance 
with the Act and the Order.
    Twenty-eight commenters asserted that the proposal would increase 
paperwork required to accompany cattle transported to other States. The 
Department does not anticipate a significant increase in administrative 
costs and paperwork for those States primarily affected by this final 
rule because of the anticipated small number of producers who will 
prepay the assessment.

[[Page 61766]]

    Twenty-seven commenters asserted that the top five cattle producing 
States would have to deal with this new procedure more frequently than 
other States. While the Department recognizes that the larger cattle 
producing States will likely be more affected, we believe that because 
of the anticipated small number of producers who will prepay the 
assessment, any additional burden will be small.
    Twenty-nine commenters asserted that in the hosting State, 
livestock markets, packing plants, feedlots, etc., will need to 
implement a new accounting procedure to exempt the checkoff from this 
type of transaction. The Department believes that the certification 
form completed by the producer should not require persons to implement 
a new accounting system since the cattle will have already been 
assessed.
    Twenty-nine commenters asserted that in the hosting State, double 
assessments may increase if cattle arrive without the new 
certification. If the certification does not accompany the cattle, 
those cattle would be assessed the $1-per-head checkoff in accordance 
with the Act and the Order. It is the responsibility of the producer to 
ensure that the certification form accompanies the cattle when they are 
transported to the feedlot.
    Twenty-nine commenters asserted that if out of State cattle arrive 
without the certification, brand inspectors will, by law, collect the 
assessment. As previously noted, if the certification form does not 
accompany the cattle, the brand inspector will collect the assessment 
in accordance with the Act, the Order, and the Rules and Regulations.
    Twenty-one commenters asserted that if out of State cattle arrive 
without the prepaid document, QSBCs will have increased workload due to 
processing the double assessments. The Department does not anticipate a 
significant increase in workload or paperwork burden because of the 
anticipated small number of producers who will prepay the assessment. 
If cattle arrive without the required certification, the cattle will be 
assessed in accordance with the Act, the Order, and the Rules and 
Regulations.
    One commenter asserted that the proposal would divert a significant 
amount of funds away from promotion into record and paperwork 
management. The Department does not expect that there will be a 
significant increase in workload or paperwork burden because of the 
anticipated small number of producers who will prepay the assessment.
    Additional Changes. We are making nonsubstantiative changes to 
Sec.  1260.311(f) for the purpose of clarity. In addition, the Board 
recommended that the chart under Sec.  1260.311(c) be corrected and 
updated to reflect the current collection and remittance procedures in 
States where brand inspectors are responsible for collecting and 
remitting assessment. Based upon our review of the Board's comment, we 
are making changes to the chart in this rule as follows:
    Add the State of Nevada and change collecting person (CP) to brand 
inspector (B) in Idaho for transactions which occur at auction markets 
and slaughter/packer. The changes reflect those additions and changes 
to the chart under Sec.  1260.311(c).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Sales  through     Sales to a                       Sales to an
                               States                                    auction         slaughter/       Sales to a      order buyer/    Country  sales
                                                                         markets           packer          feedlot           dealer
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nevada.............................................................               B                B                B                B                B
Idaho..............................................................               B                B                B                B                B
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Pursuant to 5 U.S.C. 553, it is found and determined that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register. An effective date of 
October 1, 2002, will allow producers to take advantage of this action 
in time for fall cattle marketings. This rule permits producers who 
retain ownership of cattle that are shipped to another State for 
feeding to pay the $1 checkoff to the QSBC located in the State where 
the producer resides rather than the QSBC in the State in which the 
cattle are located when sold.

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, 7 CFR part 1260 is 
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. 2901-2911.


    2. In Sec.  1260.311, revise paragraphs (a) and (c) and add 
paragraph (f) 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.
* * * * *
    (c) In the States listed in the following chart there exists a 
requirement that cattle be brand inspected by State authorized 
inspectors prior to sale. In addition, when cattle 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:

[[Page 61767]]



--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         Sales to a                       Sales to  an
                               State                                  Sales  through     slaughter/       Sales to a     order  buyer/    Country  sales
                                                                     auction  market       packer          feedlot           dealer            \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Arizona............................................................                CP               CP               CP              B                B
California.........................................................                CP               CP              B               B-CP              B
Colorado...........................................................                CP              B                B                B                B
Idaho..............................................................               B                B                B                B                B
Montana............................................................                CP              B                B                B                B
Nebraska...........................................................                CP               CP             B-CP             B-CP             B-CP
Nevada.............................................................               B                B                B                B                B
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.

* * * * *
    (f)(1) In lieu of each person making a payment to a producer for 
cattle purchased in the United States, producers are provided the 
option in accordance with this paragraph (f) to remit the assessment to 
the QSBC in the State in which the producer resides. 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, provided that the producer fulfills the following 
requirements:
    (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, either before or 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, and remits the 
assessment to the appropriate QSBC. A copy of the certification form 
indicating the payment of the assessment shall be sent by the producer 
with the assessment when remitted to the QSBC. 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:

(i) Producer's Name.
(ii) Producer's social security number or Tax I.D. number.
(iii) Producer's address (street address or P.O. Box, city, State, and 
zip code).
(iv) Signature of Producer.
(v) Producer's State of residence.
(vi) Number of cattle shipped to out of State feedyard under retained 
ownership.
(vii) Date cattle shipped.
(viii) State where cattle will be on feed.
(ix) Name of feedyard.
(x) Address of feedyard.

    (3) Cattle of a producer's own production shall be those cattle 
which meet all of the following requirements:
    (i) The cattle shall be offspring of a producer's own cow herd;
    (ii) The cattle shall have been continuously and exclusively under 
the producer's ownership; and
    (iii) The cattle are transported to a feedlot with such producer 
continuously owning the cattle through the entire feeding phase.
    (4) 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.
    (5) 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 3 years.
    (6) Producers shall not receive credit of the assessment required 
to be paid pursuant to paragraph (f)(1) of this section for those 
cattle lost because of death.

    Dated: September 26, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-24968 Filed 9-27-02; 3:57 pm]
BILLING CODE 3410-02-P