[Federal Register Volume 74, Number 162 (Monday, August 24, 2009)]
[Proposed Rules]
[Pages 42608-42610]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-20337]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 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. 74, No. 162 / Monday, August 24, 2009 / 
Proposed Rules  

[[Page 42608]]


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DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

9 CFR Part 201

RIN 0580-AB10


Required Scale Tests

AGENCY: Grain Inspection, Packers and Stockyards Administration, USDA.

ACTION: Proposed rule.

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SUMMARY: The Department of Agriculture's (USDA) Grain Inspection, 
Packers and Stockyards Administration (GIPSA) is proposing to amend one 
section of the regulations under the Packers and Stockyards Act of 
1921, as amended (P&S Act), regarding the requirement that stockyard 
owners, market agencies, dealers, packers, or live poultry dealers that 
weigh livestock, live poultry, or feed, have their scales tested at 
least twice each calendar year at intervals of approximately 6 months. 
This proposal would amend the current regulations to state that the 6-
month interval in which scale owners must have their scales tested each 
calendar year is no longer approximate. Specifically, the proposal 
would require that scale owners complete the first of the two scale 
tests between January 1 and June 30 of the calendar year. The remaining 
scale test would be required to be completed between July 1 and 
December 31 of the calendar year. In addition, a minimum period of 120 
days would be required between these two tests. More frequent testing 
would still be required in cases where a scale does not maintain 
accuracy between tests. Finally, we are proposing to amend that section 
of the regulations to add ``swine contractors'' to the list of 
regulated entities to which the section applies. GIPSA believes that 
this proposed action would facilitate GIPSA's ability to regulate the 
business operations of stockyard owners, swine contractors, market 
agencies, dealers, packers, or live poultry dealers through the 
effective enforcement of the P&S Act.

DATES: Written or electronic comments received by October 23, 2009 will 
be considered prior to issuance of a final rule.

ADDRESSES: You may submit your written or electronic comments on this 
proposed rule to:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
     Mail: Tess Butler, GIPSA, USDA, 1400 Independence Avenue, 
SW., room 1643-S, Washington, DC 20260-3642.
     E-mail comments to [email protected].
     Fax: (202) 690-2173.
    Comments should be identified as ``P&SP, Required Scale Tests,'' 
and should make reference to the date and page number of this issue of 
the Federal Register. All comments will become a matter of public 
record and available for public inspection at the above address during 
regular business hours (7 CFR 1.27(b)). Please call the GIPSA 
Management Support Staff at (202) 720-7486 for an appointment to view 
the comments.

FOR FURTHER INFORMATION CONTACT: S. Brett Offutt, Director, Policy and 
Litigation Division, P&SP, GIPSA, 1400 Independence Ave., SW., 
Washington, DC 20250, (202) 720-7363, [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The Grain Inspection, Packers and Stockyards Administration (GIPSA) 
administers and enforces the P&S Act (7 U.S.C. et seq.). Under 
authority delegated to GIPSA by the Secretary of Agriculture in section 
407(a) of the P&S Act (7 U.S.C. 228), we are authorized to issue 
regulations necessary to carry out the provisions of the P&S Act.
    Section 201.72 of the current regulations under the P&S Act (9 CFR 
201.72) requires that each stockyard owner, market agency, dealer, 
packer, or live poultry dealer who weighs livestock, live poultry, or 
feed for purposes of purchase, sale, acquisition, payment, or 
settlement, or who weighs livestock carcasses for the purpose of 
purchase on a carcass weight basis, or who furnishes scales for such 
purposes, have such scales tested at least twice during each calendar 
year at intervals of approximately 6 months. Scale owners must then 
report the results of the scale tests to the GIPSA Packers and 
Stockyards Program (P&SP) regional office for the geographical region 
where the scale is located. Section 201.71 (9 CFR 201.71) requires that 
scales must meet all applicable requirements of the National Institute 
of Standards and Technology Handbook 44, ``Specifications, Tolerances, 
and Other Technical Requirements for Weighing and Measuring Devices,'' 
most recently adopted and incorporated by reference into the P&S Act 
regulations (currently, the 1996 edition).
    Under current procedures, the P&SP regional office, which has 
enforcement responsibility for the geographic location where a specific 
scale is located, notifies the scale owner that its scale is due for 
testing in the event that the scale owner has not filed a scale test 
report within the required 6-month timeframe. Thereafter, GIPSA sends 
the scale owner a follow-up letter, or Notice of Default, if GIPSA does 
not receive the scale test report within 30 days from the date that the 
scale test report was due. Finally, if the scale owner fails to provide 
GIPSA with the required test report, GIPSA issues to the scale owner a 
Notice of Violation, used to inform the scale owner that its scale test 
reports were not received within the required timeframe under P&S Act 
regulations. GIPSA also notifies the scale owner that the scale may not 
be used further until the violation is corrected.
    Because the regulations now state that scale tests must be 
performed at ``approximately'' 6-month intervals, GIPSA has found that 
it is difficult to determine when a scale owner may be in violation of 
the P&S Act for failing to submit a timely scale test report. As a 
result, GIPSA is proposing that section 201.72(a) (9 CFR 201.72(a)) of 
the P&SA regulations be amended to delete the term ``approximately'' in 
order to clearly state that scale owners must submit a scale test 
report to GIPSA every 6 months in a calendar year between the periods 
January 1 and June 30, and July 1 and December 31, respectively. GIPSA 
would continue to require more frequent testing of specific scales in 
cases where the scales do not maintain accuracy between tests.
    The Farm Security and Rural Investment Act of 2002 (Pub. L. 107-

[[Page 42609]]

171) (Act) amended the P&S Act to add ``swine contractor'' as a 
regulated entity. Section 10502 of the Act defined swine contractor as 
``* * * any person engaged in the business of obtaining swine under a 
swine production contract for the purpose of slaughtering the swine or 
selling the swine for slaughter, if (a) the swine is obtained by the 
person in commerce; or (b) the swine (including products from the 
swine) obtained by the person is sold or shipped in commerce.''
    Adding ``swine contractor'' to specific sections of the regulations 
would dispel any confusion among swine contractors regarding which 
regulations under the P&S Act are applicable to them. It would also 
allow GIPSA to more easily identify and enforce violations of the P&S 
Act.

Options Considered

    We considered the option of leaving the term ``approximately'' in 
the regulations and instead issuing guidance on what GIPSA considers as 
being a timely report by a scale owner. GIPSA determined, however, that 
the regulations should be amended to clearly state the requirement for 
testing scales in order to give adequate notice to scale owners of when 
they would be in violation of the regulation. We believe that this 
proposed amendment to the regulations would enhance our effectiveness 
in regulating the business operations of stockyard owners, market 
agencies, dealers, packers, or live poultry dealers through the 
enforcement of the P&S Act.
    We considered the option of not adding swine contractors to the 
regulations; we would continue to protect the interest of swine 
producers indirectly through regulation of packers, dealers, and market 
agencies. That option, however, is contrary to the intent of Congress, 
which amended the P&S Act to give GIPSA specific authority over swine 
contractors. The proposed changes to add swine contractor as a 
regulated entity would make this section consistent with other 
regulations under the P&S Act regarding regulated entities that have 
been amended to include swine contractors.
    In addition, we are proposing to amend the wording of section 
201.72 (9 CFR 201.72) to comply with the President's Memorandum of June 
1, 1998, Plain Language in Government Writing (63 FR 31885). We are 
also proposing to amend 201.71(b) to substitute ``P&SP'' for ``P&S'' to 
reflect the current name of this USDA-GIPSA program.

Executive Order 12866 and Regulatory Flexibility Act

    This rule has been determined to be not significant for the 
purposes of Executive Order 12866 and, therefore, has not been reviewed 
by the Office of Management and Budget (OMB).
    Also, pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA); GIPSA has considered the economic impact of this 
action on small entities. The purpose of the RFA is to fit regulatory 
actions to the scale of businesses subject to such actions in order 
that small businesses will not be unduly or disproportionately 
burdened.
    The Small Business Administration (SBA) defines small businesses by 
their North American Industry Classification System Codes.\1\ The 
affected entities and size threshold under the proposed rule would 
define as a small business: NAICS code 12111, cattle producers; NAICS 
code 112210, hog producers and swine contractors; and NAICS codes 
112320 and 112330, broiler and turkey producers if their sales are less 
than $750,000 per year, respectively. Live poultry dealers, NACIS code 
31165; and hog and cattle slaughterers, NACIS code 311611, 
respectively, are considered as small businesses if they have fewer 
than 500 employees. Stockyards are found under NACIS code 424520, 
``Livestock Merchant Wholesalers,'' and are considered to be small 
businesses if they have fewer than 100 employees.
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    \1\ See: http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.
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    According to the 2008 Annual Report, Packers and Stockyards 
Program,\2\ published on March 1, 2009, there were 339 bonded livestock 
slaughter firms, 126 live poultry dealers, 4,685 bonded dealers, 1,326 
bonded market agencies, and 1,392 posted stockyards operating subject 
to the P&S Act. While many of these entities would be considered as 
small businesses by the SBA, we believe that our proposal would not 
affect those entities significantly since all of the entities, as scale 
owners, are already required to report scale test results to GIPSA 
twice in a calendar year at 6-month intervals. Again, we are proposing 
this amendment to the regulations to clarify the time interval that 
scale owners must have their scales tested in order to enhance GIPSA's 
ability to enhance its enforcement of the P&S Act. GIPSA believes that 
the benefits of this proposed rule outweigh the costs because every 
scale owner needs to understand the requirements for having their 
scales tested in order to avoid violating the P&S Act. While this 
proposed rule would also affect swine contractors, most such entities 
do not meet the definition for small entities under the SBA. Therefore, 
we are not providing an initial regulatory flexibility analysis.
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    \2\ See: http://archive.gipsa.usda.gov/pubs/2008_psp_annual_report.pdf.
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    We have considered the effects of this rulemaking action under the 
RFA and we believe that it will not have a significant impact on a 
substantial number of small entities. We welcome comments on the cost 
of compliance with this rule, and particularly on the impact of this 
proposed rule on small entities. We also welcome comments on 
alternatives to the proposed rule that would achieve the same purpose 
with less cost to, or burden upon scale owners.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. These actions are not intended to have 
retroactive effect. This rule would not pre-empt state or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule. There are no administrative procedures that 
must be exhausted prior to any judicial challenge to the provisions of 
this rule.

Paperwork Reduction Act

    In accordance with the Office of Management and Budget 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 that are covered by this proposed rule were approved under 
OMB number 0580-0015 on January 30, 2009, and expire on January 31, 
2011.

E-Government Act Compliance

    GIPSA is committed to complying with the E-Government Act, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

List of Subjects in 9 CFR Part 201

    Reporting and recordkeeping requirements, Measurement standards, 
Trade practices.

    For the reasons set forth in the preamble, we propose to amend 9 
CFR part 201 as follows:

PART 201--REGULATIONS UNDER THE PACKERS AND STOCKYARDS ACT

    1. The authority citation for part 201 would continue to read as 
follows:

     Authority:  7 U.S.C. 181-229c.


[[Page 42610]]


    2. Section 201.72 is revised to read as follows:


Sec.  201.72  Scales; testing of.

    (a) As a stockyard owner, swine contractor, market agency, dealer, 
packer, or live poultry dealer who weighs livestock, live poultry, or 
feed for purposes of purchase, sale, acquisition, payment, or 
settlement of livestock or live poultry, or who weighs livestock 
carcasses for the purpose of purchase on a carcass weight basis, or who 
furnishes scales for such purposes, you must have your scales tested by 
competent persons at least twice during each calendar year. As a scale 
owner, you must complete the first of the two scale tests between 
January 1 and June 30 of the calendar year. The remaining scale test 
must be completed between July 1 and December 31 of the calendar year. 
You must have a minimum period of 120 days between these two tests. 
More frequent testing will be required in cases where the scale does 
not maintain accuracy between tests.
    (b) As a stockyard owner, swine contractor, market agency, dealer, 
packer, or live poultry dealer who weighs livestock, livestock 
carcasses, live poultry, or feed for purposes of purchase, sale, 
acquisition, payment, or settlement of livestock, livestock carcasses 
or live poultry, you must furnish reports of tests and inspections on 
forms approved by the Administrator. You must retain one copy of the 
test and inspection report for yourself, and file a second copy with 
the P&SP regional office for the geographical region where the scale is 
located.
    (c) When scales used for weighing livestock, livestock carcasses, 
live poultry, or feed are tested and inspected by a State agency, 
municipality, or other governmental subdivision, the forms used by such 
agency for reporting such scale tests and inspections may be accepted 
in lieu of the forms approved for this same purpose by the 
Administrator if the forms contain substantially the same information.

J. Dudley Butler,
Administrator, Grain Inspection, Packers and Stockyards Administration.
[FR Doc. E9-20337 Filed 8-21-09; 8:45 am]
BILLING CODE 3410-KD-P