[Federal Register Volume 87, Number 87 (Thursday, May 5, 2022)]
[Proposed Rules]
[Pages 26695-26699]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-09485]


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

  Federal Register / Vol. 87, No. 87 / Thursday, May 5, 2022 / Proposed 
Rules  

[[Page 26695]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

9 CFR Parts 201 and 203

[Doc. No. AMS-FTPP-21-0015]
RIN 0581-AE01


Preserving Trust Benefits Under the Packers and Stockyards Act

AGENCY: Agricultural Marketing Service, Department of Agriculture 
(USDA).

ACTION: Proposed rule; request for comments.

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SUMMARY: The Agricultural Marketing Service (AMS) proposes to revise 
the regulations providing instructions for livestock sellers and live 
poultry sellers or growers who desire to preserve their interest in 
statutory trusts under the Packers and Stockyards Act (Act). The 
proposed revisions would add procedures and timeframes for a livestock 
seller to notify the livestock dealer and the Secretary of Agriculture 
that the seller has not received full payment for livestock purchased 
by the dealer and that the seller intends to preserve its trust 
interests. Additionally, under this proposed rule, livestock dealers 
with average annual purchases over $100,000 would be required to obtain 
written acknowledgement from livestock sellers that trust benefits do 
not pertain to credit sales and would be required to maintain records 
related to credit sales. The proposed revisions to the Packers and 
Stockyards regulations reflect recent amendments to the Act that 
provide for a livestock dealer trust.

DATES: Comments received by June 6, 2022 will be considered prior to 
issuance of a final rule. Pursuant to the Paperwork Reduction Act 
(PRA), comments on the information collection burden must be received 
by July 5, 2022.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. All comments must be submitted through 
the Federal e-rulemaking portal at https://www.regulations.gov and 
should reference the document number and the date and page number of 
this issue of the Federal Register. All comments submitted in response 
to this proposed rule will be included in the record and will be made 
available to the public. Please be advised that the identity of the 
individuals or entities submitting comments will be made public on the 
internet at https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: S. Brett Offutt, Chief Legal Officer/
Policy Advisor; Packers and Stockyards Division, USDA AMS Fair Trade 
Practices Program; phone: 202-690-4355; or email: 
[email protected].

SUPPLEMENTARY INFORMATION: Section 763 of the Consolidated 
Appropriations Act, 2021 (Pub. L. 116-260; December 27, 2020), amended 
the Packers and Stockyards Act, 1921, as previously amended (7 U.S.C. 
181 et seq.), by adding a new section 318 (7 U.S.C. 217b) establishing 
a statutory trust for the benefit of unpaid cash sellers of livestock.
    Under the new trust provisions, livestock dealers whose average 
annual purchases of livestock exceed $100,000 must hold all inventories 
of and receivables and proceeds from livestock purchased in cash sales 
in trust for the benefit of all unpaid cash sellers of that livestock 
until the cash sellers have been paid in full. Livestock sellers lose 
their interest in the trust unless they notify livestock dealers and 
the Secretary of Agriculture (Secretary) in writing that payment has 
not been received. Such notice must be provided within 30 days of the 
final date when payment was due or within 15 days of notice that a 
dealer's payment instrument has been dishonored.
    The newly added section 318 of the Act further provides that the 
dealer trust provisions apply only to cash sales, which are defined in 
the statute as sales in which the seller does not expressly extend 
credit to the buyer. Thus, livestock sellers have no claim against the 
trust if they have extended credit to the buyer.
    Currently, Sec.  203.15 of the Packers and Stockyards regulations 
outlines the process by which livestock sellers and live poultry 
sellers and growers preserve their interest in the packer and poultry 
trusts previously established under the Act (see 9 CFR 203.15). AMS 
proposes to revise Sec.  203.15, which would continue to provide for 
preservation of trust benefits under the packer and poultry trusts, by 
adding the process by which livestock sellers can preserve their 
interests under the new livestock dealer trust. Sections 206, 207, and 
318 of the Act (7 U.S.C. 196, 197, 217b) require livestock sellers and 
poultry sellers or growers to notify packers, live poultry dealers, or 
livestock dealers and the Secretary in writing of their intent to 
preserve their trust benefits within 30 days of the final day on which 
payment was due or within 15 days of receiving notice that the 
packer's, live poultry dealer's, or livestock dealer's payment 
instrument was dishonored. Accordingly, the revised Sec.  203.15 would 
outline how sellers and growers can comply with the statutory 
requirement. The written notification should state that notification is 
to preserve trust benefits; identify both parties in the transaction; 
and include the date of the transaction, the date notice was received 
that the payment instrument was dishonored (if applicable), and the 
amount of money due. Written notification may be by letter, fax, email, 
or other electronic transmission, preferably filed with the Packers and 
Stockyards Division of AMS. Section 203.15 of the regulations still 
provides that while the written notification described above is 
preferred, any written notice to the buyer and the Secretary that the 
seller has not received full payment is sufficient to meet the 
statutory requirement if it is given within the prescribed timeframes. 
Finally, Sec.  203.15 would be revised to include the statutory 
definition of a cash sale, meaning a sale in which the seller does not 
expressly extend credit to the buyer.
    Section 201.200 of the regulations currently prohibits packers 
whose average annual livestock purchases exceed $500,000 from entering 
into credit agreements with livestock sellers unless the packer obtains 
written acknowledgement from the seller that the seller has no trust 
rights with respect to each particular sale under a credit agreement. 
Under the proposed revisions for this rule, Sec.  201.200 would also 
prohibit livestock dealers whose average annual livestock purchases 
exceed $100,000 from entering into credit agreements with livestock 
sellers

[[Page 26696]]

unless the purchasing dealer obtains written acknowledgement from the 
seller that the seller has no trust rights with respect to each 
particular sale under a credit agreement. The seller's written 
acknowledgment statement would further provide that the credit 
agreement covers a single sale, remains in effect until a specified 
date, or remains in effect until it is canceled in writing by either 
party. The seller's acknowledgement would be dated and signed by the 
seller. The purchasing livestock dealer would be required to maintain 
records of the acknowledgement, as well as all other documents related 
to the credit agreement, for as long as required by any law or by the 
AMS Administrator, but for no less than two years following the 
expiration of the credit agreement referred to in the acknowledgment. 
Finally, the purchasing dealer would be required to provide a copy of 
the acknowledgment to the seller.
    Average annual livestock purchase amount may be determined by 
information establishing actual yearly dealer purchases, or a dealer's 
purchases as stated on its most recent annual report filed pursuant to 
the requirements of 9 CFR 201.97. Average annual livestock purchase 
amount may be determined for new dealers that have not operated for a 
year's time and for dealers that have not filed an annual report in the 
prior two years, according to their actual livestock purchases for the 
current year to date, extrapolated to a yearly amount, if necessary. In 
general, the proposed new requirements for livestock dealers in Sec.  
201.200 are similar to the current requirements for packers who enter 
into credit agreements with livestock sellers.

Regulatory Analyses

Executive Orders 12866 and 13563

    AMS is issuing this proposed rule in conformance with Executive 
Orders (E.O.) 12866 and 13563, which direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulations are necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety effects, distributive impacts, and equity). 
E.O. 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility.
    AMS believes that the livestock industry is best served by revising 
the existing regulation at 9 CFR 203.15 that addresses preserving 
packer and poultry trust benefits under the Act to include provisions 
related to the new livestock dealer trust. The industry is already 
familiar with the notification process. AMS anticipates that additional 
costs or the adoption of new practices related to compliance with the 
proposed rule would be minimal. Livestock sellers can use the 
instructions in this proposed rule to most efficiently file notice with 
dealers and AMS of their intent to preserve trust benefits. However, 
this proposed rule would also provide flexibility because the proposed 
revisions allow that any written notification to dealers and the 
Secretary within the prescribed timeframes that the seller has not 
received full payment for livestock will meet the statutory 
requirement. Furthermore, AMS believes that including the statutory 
definition of ``cash sale'' in Sec.  203.15 can help sellers better 
understand the conditions under which they can preserve their trust 
benefits.
    Regarding proposed revisions to Sec.  201.200, AMS believes that 
both buyers and sellers benefit when livestock dealers with more than 
$100,000 average annual purchases are required to obtain written 
acknowledgment from sellers that trust benefits do not extend to 
livestock purchases under credit terms, and to maintain all records 
related to such sales, including the written acknowledgement. Obtaining 
the written acknowledgement, as well as providing the seller with a 
copy of the written agreement and maintaining pertinent records, 
demonstrates that both parties understand the conditions of credit 
sales as they relate to dealer trust benefits. AMS does not expect the 
proposed rule to provide any environmental, public health, or safety 
benefits.
    This proposed rule does not meet the criteria of a significant 
regulatory action under E.O. 12866 as supplemented by E.O. 13563. 
Therefore, the Office of Management and Budget (OMB) has not reviewed 
this rule under those orders.

Regulatory Flexibility Act

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.), AMS has considered the economic impact of 
this action on small business entities.
    The proposed rule would affect dealers that purchase more than 
$100,000 in cattle, hogs, sheep, goats, horses, or mules annually. It 
would also affect livestock producers, other dealers, and livestock 
auctions from which the dealers purchased livestock.
    The Small Business Administration (SBA) defines small businesses by 
their North American Industry Classification System (NAICS) codes. 
Livestock dealers and livestock auctions would be classified as NAICS 
code 424520--Livestock Merchant Wholesalers, which includes all 
livestock dealers except dealers in horses and mules, and code 424590--
Other Farm Product Raw Material Merchant Wholesalers.\1\ For both 
classifications, SBA defined a small business as one with 100 employees 
or fewer.\2\
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    \1\ Office of the President, OMB. ``North American Industry 
Classification System United States, 2017,'' pp. 336-337. https://www.census.gov/naics/reference_files_tools/2017_NAICS_Manual.pdf.
    \2\ ``Table of Small Business Size Standards Matched to North 
American Industry Classification System Codes,'' Small Business 
Administration, effective August 19, 2019, p. 24. https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%20of%20Size%20Standards_Effective%20Aug%2019%2C%202019_Rev.pdf.
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    Livestock dealers, including livestock auctions, are required to 
register and file annual reports with AMS. In 2017 and 2018, 3,015 
livestock dealers purchased more than $100,000 in livestock for their 
own account or for the account of others.\3\ Livestock dealers do not 
disclose the number of employees in their annual reports, but based on 
its familiarity with the industry, AMS estimates at most three or four 
firms had more than 100 employees. At least 99.8 percent would be small 
businesses under the SBA definition.
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    \3\ USDA, AMS. ``Report Pursuant to Section 12103 of the 
Agriculture Improvement Act of 2018: Study to Determine the 
Feasibility of Establishing a Livestock Dealer Statutory Trust.'' 
December 20, 2019, p. 39. https://www.ams.usda.gov/sites/default/files/media/LivestockDealerStatutoryTrustSenttoCongress.pdf.
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    Producers selling livestock would be classified as NAICS codes: 
12111--Beef Cattle Ranching and Farming, 112210--Hog and Pig Farming, 
112410--Sheep Farming, 112420--Goat Farming, and 112920--Horses and 
Other Equine Production. For each producer classification, SBA defined 
a small business as one with $1 million or less in annual receipts.\4\
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    \4\ ``Table of Small Business Size Standards Matched to North 
American Industry Classification System Codes,'' Small Business 
Administration, effective August 19, 2019, pp. 2-3.
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    The 2017 Census of Agriculture categorizes cattle producers, hog 
producers, sheep and lamb producers, and horse and mule producers by 
the size of their operation. The Census of Agriculture tables 
categorize producers' sales by number of head not the value of their 
receipts, but data from the tables enable AMS to make a rough estimate 
of the number of producers that would qualify as small businesses as 
defined by SBA.
    Census of Agriculture tables indicate that 711,827 farms reported 
sales of cattle or calves in 2017, of which

[[Page 26697]]

704,776 (99 percent) produced fewer than 1,000 head, averaged less than 
$1 million in sales, and would be small businesses.\5\ Of the 64,871 
hog farms reporting sales, the 57,084 farms (88 percent) that produced 
fewer than 5,000 head would qualify as small businesses.\6\ Of the 
101,387 farms producing sheep and lambs, 101,280 (99.9 percent) would 
qualify as small businesses.\7\ The Census of Agriculture reported 
74,227 farms that sold horses. Of those, 74,065 (99.8 percent) sold 
fewer than 50 horses, averaged less than $1 million in sales, and would 
be considered small businesses. All the 10,435 farms that sold donkeys 
or mules were small businesses.\8\ The Census did not have sales 
information for goat producers.
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    \5\ USDA, National Agricultural Statistics Service (NASS). 
``2017 Census of Agriculture: United States Summary and State Data'' 
Volume 1. April 2019, p. 23. https://www.nass.usda.gov/Publications/AgCensus/2017/Full_Report/Volume_1,_Chapter_1_US/usv1.pdf.
    \6\ Ibid., p. 24.
    \7\ Ibid., p. 25.
    \8\ Ibid., p. 26.
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    More than 99 percent of the cattle, sheep and lamb, horse, and mule 
producers were small businesses. Hog production was more concentrated, 
with only 88 percent qualifying as small businesses. As group, these 
livestock producers were about 98.5 percent small businesses.
    The proposed rule has two new provisions that affect small 
businesses: (1) The rule outlines how sellers can comply with the 
statutory requirement of providing written notification to dealers and 
to the Secretary if they wish to preserve their rights to the dealer 
trust, and (2) the rule requires dealers to obtain written 
acknowledgement from the seller that the seller waives their rights to 
the trust with respect to each particular sale under a credit 
agreement.
    The costs of filing a trust claim would only apply to livestock 
sellers. There are few requirements. The cost would be the value of the 
time required to write and send the notification. AMS expects writing 
and sending the notification would require no more than a half hour of 
a manager's time. The U.S. Bureau of Labor Statistics estimated the 
average hourly wage for farmers, ranchers, and other agricultural 
managers to be $36.93.\9\ If it takes one half hour to file the claim, 
filing the claim would cost $18.47.
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    \9\ Department of Labor (USDOL), Bureau of Labor Statistics 
(BLS). Occupational Employment Statistics. ``Occupational Employment 
and Wages, May 2020. 11-9013 Farmers, Ranchers, and Other 
Agricultural Managers.'' https://www.bls.gov/oes/current/oes119013.htm#nat.
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    In a review of dealer bond claims filed with AMS from October 2013 
through June 2019, AMS found claims against 82 dealers from 184 
claimants.\10\ If sellers file trust claims at a similar rate as they 
have filed bond claims in the past, AMS could expect 14.5 incidents in 
which one or more sellers makes a valid claim against a dealer's trust 
each year, with an average of 2.25 claimants for each trust incident, 
or 33 claimants per year. At a cost of $18.47 for each claim, AMS 
expects annual costs to the industry to be $609.51. Since nearly all 
livestock producers and livestock dealers who might sell livestock to 
other dealers are small business entities, AMS expects that nearly all 
of the claimants would be small businesses.
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    \10\ USDA, AMS. ``Report Pursuant to Section 12103 of the 
Agriculture Improvement Act of 2018: Study to Determine the 
Feasibility of Establishing a Livestock Dealer Statutory Trust.'' 
December 20, 2019, p. 70.
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    The cost of obtaining a written waiver acknowledgement from the 
seller would only apply to livestock dealers. AMS provides sample 
wording for the acknowledgment and expects that obtaining written 
acknowledgment from the seller would take no more than a half hour of a 
dealer's time, or $18.47 for each acknowledgement.
    AMS has no data on the number of dealers that purchase livestock 
with credit agreements, or the number of trust waiver acknowledgements 
dealers obtain from sellers and maintain. AMS's experience has been 
that the number of sellers acknowledging they waive their trust rights 
is relatively small. Sellers are reluctant to extend credit because 
they would be required to give up their rights to file trust claims or 
they have not had the financial resources to extend credit. With packer 
trusts, packers typically have not created separate trust waiver 
acknowledgements for each transaction. Instead, the waiver 
acknowledgments tend to cover a number of transactions over a period of 
time, limiting the number of written trust waivers required.
    Regarding dealer trusts, AMS expects that relatively few sellers 
would enter into credit agreements requiring trust waiver 
acknowledgments. However, if a dealer must obtain waiver 
acknowledgments according to proposed Sec.  201.200, AMS expects that 
the dealer would limit the number of waiver acknowledgments by having a 
single waiver acknowledgment cover a number of transactions over a 
period of time. AMS estimates that at most, ten percent (302) of the 
3,015 dealers that average annual purchases of more than $100,000 in 
livestock would have credit agreements that require trust waiver 
acknowledgements. Dealers that purchase livestock with credit 
agreements may also purchase other livestock through cash sales, for 
which they are not required to obtain trust waiver acknowledgements 
from sellers. AMS estimates that each dealer that purchases livestock 
with credit and obtains trust waivers from sellers will only do so with 
an average of five customers in a year. That amounts to a total cost of 
$27,890 for all of the expected trust waivers (302 dealers x 5 waivers/
dealer x $18.47/waiver).
    The costs would not be spread uniformly across dealers. Dealers 
that do not enter into credit agreements would have no costs. Only the 
estimated ten percent of dealers that purchase livestock under a credit 
agreement with the seller would need trust waiver acknowledgments. The 
cost would average $92 for each dealer that purchases livestock with a 
credit agreement, which is about 0.1 percent of the minimum amount 
($100,000) of average annual livestock purchases that makes a dealer 
responsible for obtaining waiver acknowledgments from credit sellers. 
Costs would likely be correlated with the size of the dealer: Smaller 
dealers that purchase livestock on credit from fewer sellers would have 
fewer trust waiver acknowledgements.
    AMS expects total marginal costs for the two provisions to be 
$28,599. Small businesses would be responsible for nearly all of the 
costs. In 2017 and 2018, livestock dealers that purchased more than 
$100,000 in a year purchased a yearly total of $27.065 billion in 
livestock.\11\ Compared to the amount of business that livestock 
dealers conduct, an annual cost of $28,599 is 0.00011 percent of total 
dealer livestock purchases. Accordingly, AMS has determined that this 
action would not have a significant negative economic impact on a 
substantial number of these small business entities.
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    \11\ USDA, AMS. ``Report Pursuant to Section 12103 of the 
Agriculture Improvement Act of 2018: Study to Determine the 
Feasibility of Establishing a Livestock Dealer Statutory Trust.'' 
December 20, 2019, p. 33.
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Paperwork Reduction Act

    In accordance with the PRA (44 U.S.C. Chapter 35), the information 
requirements under the regulations have been approved previously by OMB 
and assigned OMB No. 0581-0308. Changes are necessary in those 
requirements as a result of this proposed rule.
    Title: Preserving Trust Benefits Under the Packers and Stockyards 
Act.
    OMB Number: 0581-NEW.
    Expiration Date of Approval: 3 years from approval.

[[Page 26698]]

    Type of Request: Intent to seek approval to conduct a new 
information collection.
    Abstract: The Packers and Stockyards Act, 1921 (Act) (7 U.S.C. 181 
et seq.), was recently amended by the addition of section 318 (7 U.S.C. 
217b), establishing a statutory trust for the benefit of unpaid cash 
sellers of livestock. Under the amended Act, livestock dealers whose 
average annual purchases of livestock exceed $100,000 must hold all 
inventories of and receivables and proceeds from livestock purchased in 
cash sales in trust for the benefit of all unpaid cash sellers of that 
livestock until the cash sellers have been paid in full.
    Under the new statutory trust provisions, livestock sellers lose 
their interest in the trust unless they notify livestock dealers and 
the Secretary of Agriculture (Secretary) in writing that payment has 
not been received. Such notice must be provided within 30 days of the 
final date when payment was due or within 15 days of notice that a 
dealer's payment instrument has been dishonored. The statute further 
provides that trust provisions apply only to cash sales, which are 
defined in the statute as sales in which the seller does not expressly 
extend credit to the buyer. Thus, livestock sellers have no claim 
against the trust if they have extended credit to the buyer.
    AMS seeks approval for a new information collection related to the 
livestock dealer trust to implement new regulatory requirements. 
Livestock dealers who purchase livestock under credit terms and whose 
average annual purchases of livestock exceed $100,000 must obtain 
written acknowledgements from sellers that trust benefits do not 
pertain to credit sales. Dealers must provide copies of the 
acknowledgements to sellers and must retain the acknowledgements for 
two years after the expiration of the subject credit agreements. 
Additionally, a livestock seller who has not received payment in full 
for cash livestock sales must notify both the dealer and the Secretary 
of Agriculture in writing and within specified timeframes that the 
seller has not received full payment and intends to preserve their 
interest in the dealer trust. Providing such notice to the Secretary 
will enable USDA to initiate enforcement investigations and further 
actions as necessary.
    Authority:
     In accordance with the Paperwork Reduction Act of 1995 (44 
U.S.C. Chapter 35) and
     The Packers and Stockyards Act, 1921 (7 U.S.C. 181 et 
seq.), as amended.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 15 to 30 minutes.
    Respondents: Livestock dealers and sellers.
    Estimated Number of Potential Respondents: 335.
    Estimated Total Potential Annual Responses: 1,845.
    Maximum Estimated Total Annual Burden on All Respondents: 847 
hours.
    Comments are invited on: (1) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on those who 
are to respond, including the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology. Comments may be sent to the following 
address:
     Internet: www.regulations.gov.
    All written comments should be identified with the docket number 
AMS-FTPP-21-0015 and should reference the date and this issue of the 
Federal Register. All comments will be posted on the internet and 
available for viewing at www.regulations.gov.
    All responses to this notice will be summarized and included in the 
request for OMB approval. All comments will become a matter of public 
record.
    Upon approval by OMB, this information collection would be merged 
with the information collection currently approved for the Packers and 
Stockyards Division--OMB No. 0581-0308.
    Reports and forms are periodically reviewed to reduce information 
requirements and duplication by industry and public sector agencies. 
Should additional changes become necessary, they would be submitted to 
OMB for approval.

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this 
proposed rule as not a major rule as defined by 5 U.S.C. 804(2).

E-Government Act

    USDA is committed to complying with the E-Government Act (44 U.S.C. 
3601 et seq.) by promoting 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.

Executive Order 13175

    This proposed rule has been reviewed under E.O. 13175--Consultation 
and Coordination with Indian Tribal Governments, which requires 
agencies to consider whether their rulemaking actions would have tribal 
implications. AMS has determined that this proposed rule is unlikely to 
have substantial direct effects on one or more Indian tribes, on the 
relationship between the Federal Government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian tribes.

Executive Order 12988

    This proposed rule has been reviewed under E.O. 12988, Civil 
Justice Reform. It is not intended to have retroactive effect. There 
are no administrative procedures that must be exhausted prior to 
judicial challenge to the provisions of this proposed rule.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposal. Comments are due June 6, 2022. All comments 
submitted by the deadline will be considered before finalizing this 
proposed rule.
    Additional regulations pertaining to the new livestock dealer trust 
will be considered in a separate rulemaking action.

List of Subjects

9 CFR Part 201

    Confidential business information, Reporting and recordkeeping 
requirements, Stockyards, Surety bonds, Trade practices.

9 CFR Part 203

    Reporting and recordkeeping requirements, Stockyards.

    For the reasons set forth in the preamble, AMS proposes to amend 9 
CFR chapter II as follows:

PART 201--ADMINISTERING THE PACKERS AND STOCKYARDS ACT

0
1. The authority citation for 9 CFR part 201 continues to read as 
follows:

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

0
2. Amend Sec.  201.200 by:
0
a. Revising the section heading;
0
b. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d), 
respectively;
0
c. Adding new paragraph (b);
0
d. Revising newly redesignated paragraph (c); and

[[Page 26699]]

0
e. Removing the parenthetical authority at the end of the section.
    The revisions and addition read as follows:


Sec.  201.200   Sale of livestock on credit.

* * * * *
    (b) No dealer whose average annual purchases of livestock exceed 
$100,000 shall purchase livestock on credit unless:
    (1) Before purchasing livestock on credit, the dealer obtains from 
the seller a written acknowledgement that includes the information 
described in this paragraph (b)(1).
    (i) The following statement:
    On this date I am entering into a written agreement for the sale of 
livestock on credit to__, a dealer, and I understand that in doing so I 
will have no rights under the trust provisions of section 318 of the 
Packers and Stockyards Act, 1921, as amended (7 U.S.C. 217b), with 
respect to any such credit sale.
    (ii) A statement about whether the credit sales agreement covers a 
single sale; covers multiple sales and remains in effect through a 
certain date and states the date; or remains in effect until canceled 
in writing by either party.
    (iii) The date the seller signed the agreement.
    (iv) The seller's signature.
    (2) The dealer retains the written acknowledgment, together with 
all other documents, if any, setting forth the terms of credit sales on 
which the purchaser and seller have agreed, and the dealer retains a 
copy thereof, in their records for such time as is required by any law, 
or by written notice served on the dealer by the Administrator, but not 
less than two calendar years from the date of expiration of the written 
agreement referred to in the acknowledgment.
    (3) The dealer provides a copy of the acknowledgment to the seller.
    (c) Purchasing livestock for which payment is to be made by a draft 
which is not a check shall constitute purchasing such livestock on 
credit within the meaning of paragraphs (a) and (b) of this section. 
(See also Sec.  201.43(b)(1).)
* * * * *

PART 203--STATEMENTS OF GENERAL POLICY UNDER THE PACKERS AND 
STOCKYARDS ACT

0
3. The authority for 9 CFR part 203 continues to read as follows:

    Authority:  7 CFR 2.22 and 2.81.

0
4. Revise Sec.  203.15 to read as follows:


Sec.  203.15  Trust benefits under sections 206, 207, and 318 of the 
Packers and Stockyards Act.

    (a) Within the times specified under sections 206(b), 207(d), and 
318(b) of the Act, any livestock seller, live poultry seller or grower, 
to preserve their interest in the statutory trust, must give written 
notice to the appropriate packer, live poultry dealer, or livestock 
dealer and file such notice with the Secretary within the prescribed 
time by letter, fax, email, or other electronic transmission. The 
written notice should provide:
    (1) Notification to preserve trust benefits:
    (2) Identification of packer, live poultry dealer, or livestock 
dealer;
    (3) Identification of seller or poultry grower;
    (4) Date of the transaction;
    (5) Date of seller's or poultry grower's receipt of notice that 
payment instrument has been dishonored (if applicable); and
    (6) Amount of money due; and to make certain that a copy of such 
letter, fax, email, or other electronic transmission is filed with a 
PSD regional office or with the PSD headquarters office within the 
prescribed time.
    (b) While the information in paragraphs (a)(1) through (6) of this 
section is desirable, any written notice which informs the packer, live 
poultry dealer, or livestock dealer, and the Secretary that the packer, 
live poultry dealer, or livestock dealer has failed to pay is 
sufficient to meet the statutory requirement in paragraph (a) of this 
section if it is given within the prescribed time.
    (c) For purposes of administering statutory trusts under the Act, a 
cash sale means a sale in which the seller does not expressly extend 
credit to the buyer.


(Approved by the Office of Management and Budget under control number 
0581-0308)

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2022-09485 Filed 5-4-22; 8:45 am]
BILLING CODE P