[Federal Register Volume 71, Number 158 (Wednesday, August 16, 2006)]
[Rules and Regulations]
[Pages 47074-47076]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-13477]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1260

[No. LS-01-06]


Amendment to the Beef Promotion and Research Rules and 
Regulations--Final Rule

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This final rule amends the Beef Promotion and Research Order 
(Order) established under the Beef Promotion and Research Act of 1985 
(Act) to reduce assessment levels for imported beef and beef products 
based on revised determinations of live animal equivalencies and to 
update and expand the Harmonized Tariff System (HTS) numbers and 
categories, which identify imported live cattle, beef, and beef 
products to conform with recent updates in the numbers and categories 
used by the U.S. Customs and Border Protection (Customs).

DATES: Effective Date: September 15, 2006.

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; facsimile 202/720-1125; telephone 202/
720-1115, or by e-mail at [email protected].

SUPPLEMENTARY INFORMATION: 

Executive Order 12866

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

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 to the provisions of this 
rule.

Regulatory Flexibility Act

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA)(5

[[Page 47075]]

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 effect of the 
Order upon small entities was discussed in the July 18, 1986 Federal 
Register [51 FR 26132]. 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.
    There are approximately 270 importers who import beef or edible 
beef products into the United States and 198 importers who import live 
cattle into the United States. The majority of these operations subject 
to the Order are considered small businesses under the criteria 
established by the Small Business Administration (SBA)[13 CFR 121.201]. 
SBA defines small agricultural service firms as those having annual 
receipts of $6.5 million or less.
    The final rule will impose no significant burden on the industry. 
It will merely update and expand the HTS numbers and categories to 
conform to recent updates in the numbers and categories used by 
Customs. This final rule will also adjust the live animal equivalencies 
used to determine the amount of assessments collected on imported beef 
and beef products. This adjustment reflects an increase in the average 
dressed weight of cows slaughtered under Federal inspection that has 
occurred since the inception of the Beef Checkoff Program. Accordingly, 
the Administrator of AMS has determined that this action will not have 
a significant impact on a substantial number of small entities.

Paperwork Reduction Act

    In accordance with the Office of Management and Budget (OMB) 
regulations [5 CFR part 1320] that implement the Paperwork Reduction 
Act of 1995 [44 U.S.C. Chapter 35], the information collection and 
recordkeeping requirements contained in the Order and Rules and 
Regulations have previously been approved by OMB under OMB control 
number 0581-0202 and merged into OMB control number 0581-0093.

Background

    The Act authorized the establishment of a national beef promotion 
and research program. The final Order was published in the Federal 
Register on July 18, 1986, (51 FR 21632) and the collection of 
assessments began on October 1, 1986. The program is administered by 
the Cattlemen's Beef Promotion and Research Board (Board) appointed by 
the Secretary of Agriculture (Secretary) from industry nominations 
composed of 104 cattle producers and importers. The program is funded 
by a $1-per-head assessment on producer marketing of cattle in the 
United States and on imported cattle as well as an equivalent amount on 
imported beef and beef products.
    Importers pay assessments on imported cattle, beef, and beef 
products. Customs collects and remits the assessment to the Board. The 
term ``importer'' is defined as ``any person who imports cattle, beef, 
or beef products from outside the United States.'' Imported beef or 
beef products is defined as ``products which are imported into the 
United States which the Secretary determines contain a substantial 
amount of beef including those products which have been assigned one or 
more of the following numbers in the Tariff Schedule of the United 
States.''
    In 1989, Customs implemented a new numbering system, the HTS, to 
replace the Tariff Schedule of the United States (TSUS) system. The 
Department of Agriculture (USDA) updated the TSUS to HTS, in a final 
rule, published in the Federal Register on April 20, 1989, (54 FR 
15915) to conform with updates made by Customs. Since the inception of 
HTS, it has undergone many changes. First, the original 11 digit system 
has been replaced with a 10 digit system. Additionally, most of the 
categories regarding imported beef and beef products have been 
subdivided and the new categories have been assigned HTS numbers. The 
purpose of this final rule is to update, expand, and revise the table 
found under Sec.  1260.172 (7 CFR 1260.172) to reflect the current HTS 
numbers.
    As a result of these changes to HTS, there are 20 new categories 
that cover imported live cattle subject to assessment compared with the 
previous 8 categories. The 30 categories identifying imported beef and 
beef products have been expanded to 54 categories.
    This final rule simply updates and expands the chart published in 
the 1989 final rule to conform with recent changes to the HTS numbering 
system and revises the live weight equivalents used to calculate import 
assessments. Importers are currently paying the same assessment level 
for imported beef and beef products that was established when the Order 
was first published in 1986. At that time, the average dressed weight 
of cows slaughtered under Federal inspection was determined to be 509 
pounds. USDA determined that using the average dressed weight of 
domestic cows slaughtered under Federal inspection would be most 
suitable because about 90 percent of imported beef and beef products 
were similar to domestic cow beef.
    The Act requires that assessments on imported beef and beef 
products be determined by converting such imports into live animal 
equivalents to ascertain the corresponding number of head of cattle. 
Carcass weight is the principle factor in calculating live animal 
equivalents. Under the Order, the Board may increase or decrease the 
level of assessments for imported beef and beef products based upon 
revised determination of live animal equivalencies.
    Prior to publishing the proposed rule, USDA received two 
recommendations concerning importer assessments. The Meat Importers 
Council of America (MICA) requested to increase the live animal 
equivalency rate that would reduce the amount of assessments collected 
from importers of beef and beef products. MICA suggests using the 
dressed cow weight for calendar year 2000 to recalculate levels of 
assessments. This average would be 579 pounds. In updating the average 
dressed cow weight for calendar year 2004, the average would be 614 
pounds. The Board recommends using an average dressed cow weight from 
1987 to the most current data. The Board states that ``establishing an 
average over this period of time takes into account short term highs 
and lows due to the cattle cycle, weather effects, and feed prices.'' 
This average would be 555 pounds.

Comments

    On October 5, 2005, USDA published in the Federal Register (70 FR 
58095) a proposed rule to amend the Beef Promotion and Research Order 
(Order) established under the Beef Promotion and Research Act of 1985 
(Act) to reduce assessment levels for imported beef and beef products 
based on revised determinations of live animal equivalencies and to 
update and expand the HTS numbers and categories, which identify 
imported live cattle, beef, and beef products to conform with recent 
updates in the numbers and categories used by the Customs.
    USDA received in a timely manner two comments, one from the 
Executive Director of the Meat Importers Council of America (MICA) and 
another from an interested party. The two comments have been posted on 
AMS' Web site at http://www.ams.usda.gov/lsg/mpb/rp-beef.htm. The 
changes suggested by commenters are discussed below.

[[Page 47076]]

Discussion of Comments

    The USDA proposed establishing the average carcass weight using a 
5-year weighted average carcass weight of domestic cows. Although MICA 
supports the reduction of assessment levels for imported beef and beef 
products, MICA contends the basis for determining the assessment should 
not be the proposed 5-year weighted average carcass weight of all cows 
slaughtered in the U.S. under Federal inspection because imported beef 
is derived from a range of classes of stock, including steers, heifers 
and bulls as well as cows. The commenter recommended that the formula 
be based on a mix of cow and steer weights. Thus, MICA proposed that 
the carcass weight used to calculate the assessments on imported beef 
be based on a ratio of one-third (1/3) of the 5-year average carcass 
weight of steers and two-thirds (2/3) of the 5-year average carcass 
weight of cows which would result in an average carcass weight of 
approximately 663 pounds. While this does not take into account bulls 
and heifers, the commenter feels that the differences in these two 
classes would probably balance each other out and, thus, would not 
materially affect the calculation.
    USDA reviewed total imported beef and veal production on a carcass 
weight equivalent to identify the top 10 countries exporting to the 
United States in 2005. These countries accounted for more than 99 
percent of U.S. beef and veal imports for that year. We then calculated 
the average carcass weight of cattle slaughtered in each country for 
the years 2000-2004 by dividing total beef production by the total 
number of cattle slaughtered. Based on our calculations, the average 
carcass weight of these 10 exporting countries was 592 pounds during 
this period, which is the same weight published in the proposed rule. 
In other words, accounting for all cattle (whether steers, heifers, 
cows, or bulls) produced by the leading countries from which the United 
States imports beef leads to the same carcass weight equivalent as that 
in the proposed rule. Using the recent 5-year average carcass weight of 
all domestic cows slaughtered in the U.S. under Federal inspection is 
very representative of the average carcass weight of for those 
countries importing to the U.S. Consequently, the comment is not 
adopted.
    While expressing general misgivings concerning the program, the 
second commenter suggested that the assessment rate should be increased 
to $10 per head. The Act provides that the assessment rate for live 
imported cattle be $1 per head. Consequently, this comment is not 
adopted.
    Accordingly, it is appropriate to use a 5-year average dressed 
weight of domestic cows slaughtered under Federal inspection of 592 
pounds to calculate assessments on imported beef and beef products.

List of Subjects in 7 CFR part 1260

    Administrative practice and procedure, Advertising, Agricultural 
research, Marketing agreements, Meat and meat products, Beef, and Beef 
products.


0
For the reasons set forth in the preamble, title 7 of the CFR part 1260 
is amended as follows:

PART 1260--BEEF PROMOTION AND RESEARCH

0
1. The authority citation for 7 CFR part 1260 continues to read as 
follows:

    Authority: 7 U.S.C. 2901-2911.


0
2. Paragraph (b)(2) of Sec.  1260.172 is revised to read as follows:


Sec.  1260.172  Assessments.

* * * * *
    (b) * * *
    (2) The assessment rates for imported cattle, beef, and beef 
products are as follows:

                          Imported Live Cattle
------------------------------------------------------------------------
                                                            Assessment
                         HTS No.                           rate  (head)
------------------------------------------------------------------------
0102.10.0010............................................           $1.00
0102.10.0020............................................            1.00
0102.10.0030............................................            1.00
0102.10.0050............................................            1.00
0102.90.2011............................................            1.00
0102.90.2012............................................            1.00
0102.90.4024............................................            1.00
0102.90.4028............................................            1.00
0102.90.4034............................................            1.00
0102.90.4038............................................            1.00
0102.90.4054............................................            1.00
0102.90.4058............................................            1.00
0102.90.4062............................................            1.00
0102.90.4064............................................            1.00
0102.90.4066............................................            1.00
0102.90.4068............................................            1.00
0102.90.4072............................................            1.00
0102.90.4074............................................            1.00
0102.90.4082............................................            1.00
0102.90.4084............................................            1.00
------------------------------------------------------------------------


                     Imported Beef and Beef Products
------------------------------------------------------------------------
                                                            Assessment
                         HTS No.                            rate per kg
------------------------------------------------------------------------
0201.10.0510............................................       .01459542
0201.10.0590............................................       .00379102
0201.10.1010............................................       .01459542
0201.10.1090............................................       .00379102
0201.10.5010............................................       .01459542
0201.10.5090............................................       .00511787
0201.20.0200............................................       .00530743
0201.20.0400............................................       .00511787
0201.20.0600............................................       .00379102
0201.20.1000............................................       .00530743
0201.20.3000............................................       .00511787
0201.20.5000............................................       .00379102
0201.20.8090............................................       .00379102
0201.30.0200............................................       .00530743
0201.30.0400............................................       .00511787
0201.30.0600............................................       .00379102
0201.30.1000............................................       .00530743
0201.30.3000............................................       .00511787
0201.30.5000............................................       .00511787
0201.30.8090............................................       .00511787
0202.10.0510............................................       .01459542
0202.10.0590............................................       .00379102
0202.10.1010............................................       .01459542
0202.10.1090............................................       .00370102
0202.10.5010............................................       .01459542
0202.10.5090............................................       .00379102
0202.20.0200............................................       .00530743
0202.20.0400............................................       .00511787
0202.20.0600............................................       .00379102
0202.20.1000............................................       .00530743
0202.20.3000............................................       .00511787
0202.20.5000............................................       .00379102
0202.20.8000............................................       .00379102
0202.30.0200............................................       .00530743
0202.30.0400............................................       .00511787
0202.30.0600............................................       .00527837
0202.30.1000............................................       .00530743
0202.30.3000............................................       .00511787
0202.30.5000............................................       .00511787
0202.30.8000............................................       .00379102
0206.10.0000............................................       .00379102
0206.21.0000............................................       .00379102
0206.22.0000............................................       .00379102
0206.29.0000............................................       .00379102
0210.20.0000............................................       .00615701
1601.00.4010............................................       .00473877
1601.00.4090............................................       .00473877
1601.00.6020............................................       .00473877
1602.50.0900............................................       .00663428
1602.50.1020............................................       .00663428
1602.50.1040............................................       .00663428
1602.50.2020............................................       .00701388
1602.50.2040............................................       .00701388
1602.50.6000............................................       .00720293
------------------------------------------------------------------------

* * * * *

    Dated: August 9, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-13477 Filed 8-15-06; 8:45 am]
BILLING CODE 3410-02-P