[Federal Register Volume 76, Number 13 (Thursday, January 20, 2011)]
[Rules and Regulations]
[Pages 3485-3487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-1093]



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 Rules and Regulations
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  Federal Register / Vol. 76, No. 13 / Thursday, January 20, 2011 / 
Rules and Regulations  

[[Page 3485]]



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: Final rule.

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SUMMARY: The Department of Agriculture's (USDA) Grain Inspection, 
Packers and Stockyards Administration (GIPSA) is amending one section 
of the regulations under the Packers and Stockyards Act of 1921, as 
amended and supplemented (P&S Act), regarding the requirement that 
stockyard owners, market agencies, dealers, packers, and 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 final rule requires that regulated entities 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. In addition, a minimum period 
of 120 days will now be required between these two tests. GIPSA is also 
including in this final rule an exception for the testing of scales 
with limited seasonal use. More frequent testing, however, will still 
be required in cases where a scale does not maintain accuracy between 
tests. Finally, we are amending that same section of the regulations to 
add ``swine contractors'' to the list of regulated entities to which 
the section applies. GIPSA believes that this final rule will 
facilitate GIPSA's ability to regulate the business operations of 
stockyard owners, swine contractors, market agencies, dealers, packers, 
and live poultry dealers through the effective enforcement of the P&S 
Act.

DATES: This final rule becomes effective on February 22, 2011.

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. 181 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. Regulated entities 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 of the regulations (9 CFR 
201.71) requires that scales must meet all applicable requirements of 
the 2009 edition of the National Institute of Standards and Technology 
Handbook 44, ``Specifications, Tolerances, and Other Technical 
Requirements for Weighing and Measuring Devices.''
    Under current procedures, the P&SP regional office, which has 
enforcement responsibility for the geographic location where a specific 
scale is located, notifies the regulated entity that its scale is due 
for testing in the event that the regulated entity has not filed a 
scale test report within the required 6-month timeframe. Thereafter, 
GIPSA sends the regulated entity 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 
regulated entity fails to provide GIPSA with the required test report, 
GIPSA issues to the regulated entity a Notice of Violation, used to 
inform the regulated entity that its scale test reports were not 
received within the required timeframe under P&S Act regulations. GIPSA 
also notifies the regulated entity 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 regulated entity may be in 
violation of the P&S Act for failing to submit a timely scale test 
report. As a result, GIPSA is amending Sec.  201.72(a) (9 CFR 
201.72(a)) of the P&SA regulations to delete the term ``approximately'' 
in order to clearly state that regulated entities 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 will 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-
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 
will dispel any confusion among swine contractors regarding which 
regulations under the P&S Act are applicable to them. It will also 
allow GIPSA to more easily identify and enforce violations of the P&S 
Act.
    GIPSA published a Notice of Proposed Rulemaking in the Federal 
Register on August 24, 2009, (74 FR 162) seeking public comment on the 
proposed changes to the regulations. The comment period on the proposed 
rule closed October 23, 2009.

[[Page 3486]]

Discussion of Comments and Final Action

    GIPSA received 42 comments from livestock auction markets, 
livestock producers, livestock ranchers, related industry associations, 
State and county agencies, feed operations, a poultry grower, and the 
University of California's Cooperative Extension. The 42 comments 
received referenced our proposal to require that regulated entities 
have scales tested twice within each calendar year. Because no comments 
were received regarding our proposal to add swine contractors to the 
list of regulated entities, swine contractors will be added to the list 
of regulated entities in the final rule as proposed.
    Of the 42 comments received, two commenters supported the rule. One 
commenter recommended that we implement the rule as written; the other 
suggested that scales be tested more frequently. Six commenters 
submitted general statements that did not specifically address the 
timing of scale tests presented in our proposal, but instead objected 
to increased government regulations. Thirty-four commenters (including 
14 from State and local government entities) questioned the need for 
more than one scale test per year, especially for scales that are used 
seasonally or only when livestock is being shipped during a certain 
time period of the year. Many commenters objected to our proposal 
stating that it would double their costs of compliance with the P&S 
Act, would place an unjust regulatory burden on small businesses, be 
costly to State and local governments charged with certifying the 
scales, and would make it difficult for regulated entities to obtain 
the services of a limited number of accredited scale testers. For 
example, one commenter from the Oregon Department of Agriculture stated 
that there are nearly 54,000 scales within the State's jurisdiction, 
and the State lacks the money to double the workload of its nine scale 
testers without a sharp increase in funding. Another commenter added 
that States would have difficulty scheduling additional inspectors even 
if the cost of the inspections was paid for by the regulated entities.
    Currently, the regulations require that scale tests be completed at 
least twice per calendar year. This is unchanged in the proposed 
regulations. Because we did not propose to increase the number of scale 
tests from the two tests required in the current regulations, GIPSA 
believes that there would be no increased burden on individuals or 
agencies responsible for scale testing as a result of this final rule.
    Twenty of the 40 commenters objecting to our proposed rule, 
however, suggested that GIPSA consider adding an exception to the 
current regulations that would allow scales used seasonally to be 
tested once per year. While GIPSA maintains that its initial proposal 
to delete the term ``approximately'' in order to clearly state that 
regulated entities must be required to complete a scale test twice in a 
calendar year was appropriate in order to clarify the regulations, we 
agree with the commenters' suggestion and will include in the final 
rule an exception for the testing of scales with limited seasonal use. 
A scale used from either January 1 through June 30, or July 1 through 
December 31, but not during both periods, will be considered by GIPSA 
to be a seasonal scale. GIPSA will require that these scales be tested 
once during each calendar year, within 6 months prior to use.
    Finally, GIPSA believes that many comments may have resulted from 
commenters believing that GIPSA was proposing regulations affecting 
everyone who owns scales, which is not the case. GIPSA's intent is that 
only regulated entities be affected by the proposed rule. Accordingly, 
GIPSA is replacing in the final rule all references to ``scale 
owners,'' with references to ``regulated entities'' to dispel any 
confusion that may have arisen from our proposal.
    Based on the foregoing discussion, we will therefore modify the 
proposed 201.72(a) (9 CFR 201.72(a)) in the final rule to (1) provide 
an exception to the testing requirements for limited seasonal scales if 
they are used only once per calendar year and tested within 6 months 
prior to use, and (2) delete from the second sentence the phrase ``As a 
scale owner, * * *.'' since the phrase, GIPSA believes, led many of the 
commenters to mistakenly believe that the regulation applies to non-
regulated entities.

Executive Order 12866 and Regulatory Flexibility Act

    This final 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 
final rule 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 thresholds under this final rule are defined 
by the SBA as small businesses as follows: 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 are considered as small 
businesses by the SBA, we believe that this final rule will not affect 
those entities significantly since all of the entities, as regulated 
entities, are already required to report scale tests results to GIPSA 
twice in a calendar year at 6-month intervals. Again, we are amending 
the regulations to clarify the time interval between required scale 
tests in order to enhance GIPSA's ability to enforce the P&S Act. 
Furthermore, this final rule reduces the number of tests required for 
scales operated on a seasonal basis by regulated entities. And while 
this final rule also affects swine contractors, most such entities do 
not meet the definition for small entities under the SBA. Accordingly, 
we have considered the effects of this final rule under the RFA and 
believe that it will not have a significant impact on a substantial 
number of small entities.
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    \2\ See: http://archive.gipsa.usda.gov/pubs/2008_psp_annual_report.pdf.
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Executive Order 12988

    This final 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

[[Page 3487]]

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 record keeping 
requirements that are covered by this final 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, 9 CFR part 201 is 
amended as follows:

PART 201--REGULATIONS UNDER THE PACKERS AND STOCKYARDS ACT

0
1. The authority citation for part 201 would continue to read as 
follows:

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

0
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. 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. Except that if scales are used on a limited 
seasonal basis (during either the 6-month period of January through 
June or July through December, but not both) for purposes of purchase, 
sale, acquisition, payment or settlement, the stockyard owner, swine 
contractor, market agency, dealer, live poultry dealer, or packer 
making use of such scales, must complete one scale test within 6-months 
prior to use.
    (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. 2011-1093 Filed 1-19-11; 8:45 am]
BILLING CODE 3410-KD-P