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[Federal Register Volume 77, Number 42 (Friday, March 2, 2012)]
[Proposed Rules]
[Pages 12752-12754]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-5145]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1260

[Doc. No. AMS-LS-11-0086]

Beef Promotion and Research; Amendment to the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would expand the contracting authority as 
established under the Beef Promotion and Research (Order). The Beef 
Research and Information Act (Act) requires that the Beef Promotion 
Operating Committee (BPOC) enter into contracts with established 
national non-profit industry-governed organizations including the 
Federation of State Beef Councils to implement programs of promotion, 
research, consumer information, and industry information. The Act does 
not define ``national non-profit industry governed organization,'' 
however, the Order states that these organizations must be governed by 
a board of directors representing the cattle or beef industry on a 
national basis and that they were active and ongoing prior to enactment 
of the Act. This proposed rule would change the date requirement in the 
Order so that organizations otherwise qualified could be eligible to 
contract with the BPOC for the implementation and conduct of Beef 
Checkoff programs if they have been active and ongoing for at least two 
years.

DATES: Written comments must be received by May 1, 2012.

ADDRESSES: Comments must be posted online at www.regulations.gov or 
sent to Craig Shackelford, Agricultural Marketing Specialist, Marketing 
Programs Division, Livestock and Seed Program, Agricultural Marketing 
Service, USDA, Room 2628-S, STOP 0251, 1400 Independence Avenue SW., 
Washington, DC 20250-0251; or fax to (202) 720-1125. All comments 
should reference the docket number, the date, and the page number of 
this issue of the Federal Register. Comments will be available for 
public inspection at the aforementioned address, as well as on the 
Internet at http://www.regulations.gov/.

FOR FURTHER INFORMATION CONTACT: Craig Shackelford, Agricultural 
Marketing Specialist, Marketing Programs Division, on 202/720-1115, fax 
202/720-1125, or by email at craig.shackelford@ams.usda.gov.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

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

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have 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.

[[Page 12753]]

Regulatory Flexibility Act and Paperwork Reduction Act

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing 
Service (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 
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.
    In the February 2011 publication of ``Farms, Land in Farms, and 
Livestock Operations,'' the U.S. Department of Agriculture's (USDA) 
National Agricultural Statistics Service (NASS) estimates that in 2010 
the number of operations in the United States with cattle totaled 
approximately 935,000. The majority of these operations that are 
subject to the Order may be classified as small entities.
    The proposed rule imposes no new burden on the industry. It merely 
expands the contracting authority within the Order to permit a greater 
number of organizations to perform work on behalf of the BPOC. These 
organizations in general represent the operations that are subject to 
the Order.

Background and Proposed Action

    The Order is authorized by the Act of 1985 [7 U.S.C. 2901-2918]. 
The Act was passed as part of the 1985 Farm Bill [Pub. L. 99-198]. The 
program became effective on July 18, 1986, when the Order was issued 
[51 FR 26132]. Assessments began on October 1, 1986.
    Section 5(6) of the Act provides that the BPOC, to insure 
coordination and efficient use of funds, shall enter into contracts or 
agreements for implementing any activities which it has approved to be 
carried out, with established national nonprofit industry-governed 
organizations including the Federation of State Beef Councils. This 
language has the effect of requiring the BPOC to contract with 
organizations, which qualify as established national non-profit 
industry-governed organizations. The Act does not define ``national 
non-profit industry governed organization.''
    Currently, section 1260.113 of the Order defines ``established 
national non-profit industry-governed organizations'' as organizations 
which: (a) Are non-profit organizations pursuant to sections 501(c)(3), 
(5) or (6) of the Internal Revenue Code (26 U.S.C. 501(c)(3), (5), and 
(6)); (b) are governed by a board of directors representing the cattle 
or beef industry on a national basis; and (c) were active and ongoing 
before enactment of the Act. This proposed rule would amend section 
1260.113 of the Order by replacing the existing language under 
paragraph (c), ``were active and ongoing before the enactment of the 
Act'' with ``have been active and ongoing for at least two years.''
    The Act, enacted on December 23, 1985, directed the Secretary of 
Agriculture (Secretary) to accept proposals from any certified 
organization or interested person. The Department published an 
invitation to submit proposals in the Federal Register on February 14, 
1986 [51 FR 5543]. USDA received an industry proposal that it published 
in a proposal rule on March 14, 1986 [51 FR 8980]. This proposed rule 
included a definition of ``established national non-profit industry 
governed organizations'' that read: ```Established National Non-profit 
Industry Governed Organizations' means any organization which: (a) are 
non-profit organizations pursuant to sections 501(c)(3), (5) or (6) of 
the Internal Revenue Code, 26 U.S.C. 501(c)(3), (5) and (6); (b) are 
governed by a board of directors representing the cattle or beef 
industry on a national basis whose Board is composed of a majority of 
producers; and (c) was active and ongoing before enactment of the 
Act.''
    The final rule that issued the Order was published on July 18, 1986 
[51 FR 26132]. The definition for ``established national non-profit 
industry governed organizations'' was modified by deletion of the 
requirement that the board of directors of such organizations be 
composed of a majority of producers. This modification was made based 
on comments to the proposed rule that said the previous definition was 
too restrictive.
    At the time of the passage of the Act and the promulgation of the 
Order, a limited number of industry-governed organizations existed with 
the requisite knowledge, skills, and experience related to the 
marketing of beef and beef products. The proponents of the Beef 
Checkoff wished to utilize and coordinate with those organizations 
already conducting activities similar to those envisioned under the Act 
and to enhance coordination and the efficient use of funds among beef 
promotion entities, and to enhance accountability to producers.
    This proposed rule would amend the definition of ``Established 
National Non-profit Industry Governed Organizations'' to permit the 
BPOC to contract with a growing number of organizations possessing the 
requisite experience, skills and information related to the marketing 
of beef and beef products that exist today while still requiring a 
minimum level of organizational experience so as not to encourage the 
unnecessary proliferation of inexperienced organizations desiring to 
contract with the BPOC. USDA believes that a minimum level of 
experience within an organization is beneficial. To achieve both goals, 
this proposal would amend Sec.  1260.113 ``Established national non-
profit industry-governed organizations'' by replacing the existing 
language under paragraph (c) to read ``have been active or ongoing for 
at least two years.''
    In 2006, the National Cattlemen's Beef Association (NCBA) and the 
American Farm Bureau initiated the Industry-Wide Beef Checkoff 
Taskforce (Taskforce) to review, study, and recommend enhancements to 
the Beef Checkoff program for the purpose of strengthening the Beef 
Checkoff Program for the common good of the beef industry. The 
Taskforce included producer and industry representatives and 
representatives from national organizations, while USDA took on an 
advisory role during meetings. The Taskforce issued a report in 
September 2006, which included a recommendation to eliminate section 
1260.113(c) in order to make the Beef Checkoff more inclusive. USDA 
believes that permitting a greater number of organizations to contract 
with the BPOC could bring new perspectives to the contracting process.
    In February 2008 at the Cattle Industry Annual Convention, leaders 
of the Cattlemen's Beef Board (Board) asked AMS officials if the Board 
could conduct a program review. The industry officials believed that it 
would be in the best interest of the Beef Checkoff Program to conduct a 
review of the operations to determine if there are any changes that 
need to or could be made in program operations, the Act, or Order that 
would facilitate a more effective Beef Checkoff Program. Included in 
the Board's subsequent January 2009 recommendations to AMS was a 
recommendation for a statutory amendment intended to result in an 
expansion of the contracting authority to organizations created after 
the 1986 enactment of the Act.
    Finally, a meeting was held in Minneapolis, Minnesota, on September 
27, 2011, attended by many industry stakeholders and co-hosted by the 
U.S. Cattlemen's Association and the National Farmers Union as 
requested by the Secretary. The goal of the meeting

[[Page 12754]]

was to bring more broad-based producer support to the Beef Checkoff 
program through a discussion of issues regarding Beef Checkoff 
administration and to provide the Secretary with recommendations that 
would enhance support for the Beef Checkoff. Many major Beef Checkoff 
industry stakeholders attended, including the American National 
Cattlewomen, American Veal Association, Livestock Marketing 
Association, NCBA, National Livestock Producers Association, and 
Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America 
(R-CALF). Representatives from the AMS also attended the meeting, as 
did the Chief Executive Officer and Producer Chairman of the Board.
    As a result of that meeting, the Secretary received a joint letter 
signed by most of the organizations in attendance. The letter requested 
that USDA amend Beef Checkoff regulations to expand the contracting 
authority as authorized under the Act and Order by permitting 
organizations that are active and ongoing for at least two years to 
contract with the BPOC.

Conclusion

    A greater number of beef industry organizations exist now than did 
at the time the Order was issued. The Beef Checkoff Program could 
benefit from the perspectives and skills of some of these organizations 
that are ineligible solely because they were formed after the enactment 
of the Act. For several years, the beef industry has been recommending 
expanding the eligibility of organizations to contract with the BPOC in 
order to enhance the Beef Checkoff Program. Amending the Order would 
allow the BPOC to contract with organizations possessing the requisite 
experience, skills and information related to the marketing of beef and 
beef products, as is intended under the Act.
    A 60-day comment period is provided to allow interested persons to 
respond to this proposal. Sixty days is deemed appropriate to 
facilitate the orderly and thoughtful consideration of this proposal.

List of Subjects in 7 CFR Part 1260

    Administrative practice and procedure, Advertising, Agricultural 
research, Imports, Marketing agreement, Meat and meat products, 
Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, it is proposed that 7 
CFR part 1260 be amended as follows:

PART 1260--BEEF PROMOTION AND RESEARCH

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

    Authority: 7 U.S.C. 2901-2911 and 7 U.S.C. 7401.

    2. In Sec.  1260.113, paragraph (c) is revised to read as follows:

Sec.  1260.113  Established national non-profit industry-governed 
organizations.

* * * * *
    (c) Have been active and ongoing for at least two years.

    Dated: February 28, 2012.
Robert C. Keeney,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2012-5145 Filed 3-1-12; 8:45 am]
BILLING CODE 3410-02-P
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