[Federal Register Volume 66, Number 94 (Tuesday, May 15, 2001)]
[Rules and Regulations]
[Pages 26783-26785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-12141]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 66, No. 94 / Tuesday, May 15, 2001 / Rules 
and Regulations

[[Page 26783]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1260

[No. LS-98-005]


Amendment to the Beef Promotion and Research Rules and 
Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule will amend the Beef Promotion and Research 
Rules and Regulations (Rules and Regulations) issued under the Beef 
Promotion and Research Act of 1985 (Act), to clarify requirements for 
documenting cattle sales transactions for which no assessments are due. 
This amendment specifically requires the timely filing of Statement of 
Certification of Non-Producer Status forms to obtain exemption from 
assessment. Based upon comments received, this final rule reflects 
changes made to the amendments as proposed.

EFFECTIVE DATE: July 16, 2001.

FOR FURTHER INFORMATION CONTACT: Ralph L. Tapp, Chief; Marketing 
Programs Branch, Room 2627-S; Livestock and Seed Program; Agricultural 
Marketing Service, USDA; STOP 0251; 1400 Independence Avenue, SW.; 
Washington, DC 20250-0251. Telephone number 202/720-1115.

SUPPLEMENTARY INFORMATION:

Executive Orders 12866 and 12988; the Regulatory Flexibility Act; 
and the Paperwork Reduction Act

    This final rule has been reviewed under Executive Order 12866. The 
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.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have a retroactive effect. 
Section 11 of the Act (7 U.S.C. 2910) 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.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601 et seq.), AMS has considered the economic 
impact of this final rule on 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. The 
Agricultural Marketing Service (AMS) has determined that this final 
rule will not have a significant economic impact on a substantial 
number of small business entities.
    In the January 26, 2001, issue of ``Cattle,'' the Department of 
Agriculture's (Department) National Agricultural Statistics Service 
estimates that in 2000 there were 1.1 million cattle operations in the 
United States. The majority of these operations subject to the Beef 
Promotion and Research Order (Order), 7 U.S.C. 1260.101 et seq., are 
considered small businesses under the criteria established by the Small 
Business Administration.
    This final rule imposes no new burden on the industry as it merely 
clarifies the timing for filing of the Statement of Certification of 
Non-Producer Status forms when no assessment is due on cattle sales 
transactions. The regulations provide for certification of non-producer 
status for certain transactions. This action specifies the time of 
filing of the Statement of Certification of Non-Producer Status forms 
in order to obtain an exemption from paying assessments.
    In compliance with the Office of Management and Budget (OMB) 
regulations [5 CFR Part 1320] which implements the Paperwork Reduction 
Act [44 U.S.C. 3501 et seq.], the information collection requirements 
contained in this final rule have been previously approved by OMB and 
were assigned OMB control number 0581-0093.

Background

    The Act authorizes the establishment of a national beef promotion 
and research program. The Order and the Rules and Regulations govern 
the administration of the program. The program is administered by the 
Cattlemen's Beef Promotion and Research Board (Board) that is composed 
of 110 cattle producers and importers. The program is funded by a $1-
per-head assessment on producer marketings of cattle in the United 
States, cattle imported into the United States, and an equivalent 
amount on imported beef and beef products. In 45 States, Qualified 
State Beef Councils (QSBC) collect the assessments remitted under the 
program. QSBCs retain up to half of the assessments they collect for 
State-directed programs and remit the remainder to the Board. The Board 
receives all producer assessments in five States with relatively small 
cattle numbers that do not have QSBCs and all assessments on imported 
cattle, beef, and beef products.
    The domestic assessment, due each time cattle are sold by a 
producer, is collected by the buyer or ``collecting person'' for 
remittance to the Board or QSBC. The term ``producer'' is defined in 
the Order as follows: ``Producer means any person who owns or acquires 
ownership of cattle; provided, however, that a person shall not be 
considered a producer within the meaning of this subpart if (a) the 
person's only share in the proceeds of a sale of cattle or beef is a 
sales commission, handling fee, or other service fee; or (b) the person 
(1) acquired ownership of cattle to facilitate the transfer of 
ownership of such cattle from the seller to a third party, (2) resold 
such cattle no later than 10 days from the date on which the person 
acquired ownership, and (3) certified, as required by regulations 
prescribed by the Board and approved by the Secretary, that the 
requirements of this provision have been satisfied.'' 7 CFR 1260.116.
    When a person who is not a producer, under the above definition, 
sells cattle within 10 days of the date the person purchased the 
cattle, the collecting person is not required to collect the $1 
assessment from that person (seller), if the seller provides the 
collecting person with a Statement of Certification of Non-Producer 
Status on a form approved by the Board and the Secretary. Although,

[[Page 26784]]

the majority of non-producers provide collecting persons with a 
Statement of Certification of Non-Producer Status ``at the time of 
sale,'' the Rules and Regulations do not specify when the Statement of 
Certification of Non-Producer Status form is due. Board audits of 
collecting persons' accounting records have revealed transactions in 
which neither the $1 assessment, nor the Statement of Certification of 
Non-Producer Status required in lieu of the assessment, was obtained 
from the seller of the cattle by the collecting person for the 
transaction.
    For the purpose of making it clear that the Statement of 
Certification of Non-Producer Status form must be filed with the 
collecting person in a timely manner, it was proposed that 
Sec. 1260.314(b) of the Rules and Regulations be amended to read as 
follows: ``(b) Each person seeking non-producer status pursuant to 
Sec. 1260.116 of this part shall provide to the collecting person on a 
form approved by the Board and the Secretary a Statement of 
Certification of Non-Producer Status at the time the collecting person 
makes payment to the seller of cattle, in lieu of the assessment that 
would otherwise be due. If the collecting person is a brand inspector, 
as provided for in Sec. 1260.311, the seller of cattle must provide to 
the brand inspector a Statement of Certification of Non-Producer Status 
at the time the physical brand inspection is completed in lieu of the 
assessment that would otherwise be due.''
    On August 28, 1998, AMS published in the Federal Register (63 FR 
45971) for public comment a proposed rule providing for the above 
amendment to Sec. 1260.314(b) of the Rules and Regulations.
    The Department received two comments concerning the proposed rule. 
A summary of the comments and the Department's responses are set forth 
below.
    The first commenter urged the Department to withdraw the proposed 
revisions to the timely filing of Statements of Certification of Non-
Producer Status forms. The commenter asserted that the proposed rule 
lacks merit because the Department and the Board have failed to 
demonstrate any real need for the revisions to the filing of Statements 
of Certification of Non-Producer Status.
    The Department does not agree with the commenter's assertion. The 
revisions to the Rules and Regulations are necessary to clarify that 
documentation of non-producer status is required in conjunction with 
the transactions. Board audits have revealed that some collecting 
persons believe the current language permits documentation to be 
developed months or years after the transactions occurred. The 
revisions in this final rule are needed to clarify the Rules and 
Regulations and to ensure compliance with them.
    The commenter also asserted that the revisions to the timely filing 
of Statements of Certification on Non-Producer Status forms could 
result in confusion and enforcement problems for the marketing sector. 
The Department believes that the revisions to Sec. 1260.314 in this 
final rule will not result in any confusion and enforcement problems 
for the marketing sector. In fact, as discussed further below, the 
revisions clarify when the Statement of Certification of Non-Producer 
Status is to be filed.
    The commenter stated that groups representing ``collecting 
persons'' were not consulted prior to development and publication of 
the proposed rule.
    The proposed rule was promulgated in accordance with the provisions 
of the Administrative Procedure Act, and all members of the public were 
given a 60-day period to submit comments.
    The commenter further stated that the Board ``needs to address the 
real problems and issues of the beef checkoff.'' The commenter did not 
give any further explanation for what was meant by this statement.
    Finally, the commenter objected to the proposed requirement that 
the Statement of Certification of Non-Producer Status be filed at the 
time payment is made to the seller. The commenter stated that in many 
transactions the seller is not physically present when payment is made 
by auction markets, dealers, order buyers, feedlots, and packers. The 
commenter suggested that the final rule take into account current 
marketing practices, including mailing delays that would prevent filing 
of the Statement of Certification of Non-Producer Status until several 
days after payment is made.
    The Department believes that the commenter's suggestion has merit. 
Accordingly, Sec. 1260.314 is revised in this final rule to specify 
that if the seller is not physically present during a cattle sales 
transaction in which the seller claims non-producer status, such seller 
shall deliver to the collecting person an original Statement of 
Certification of Non-Producer Status within 10 business days of the 
date the collecting person makes payment to the seller of the cattle.
    The second commenter supported the proposed revisions to the Rules 
and Regulations, and suggested adding language to Sec. 1260.314 to 
reflect procedures used in several brand inspected States that do not 
require Statement of Certification of Non-Producer Status forms from 
those reselling cattle within 10 days of purchase.
    The Department agrees with the commenter's suggestion. Several 
brand inspected States require a brand inspection certificate which 
shows that the assessment has been deducted less than 10 days prior to 
resale. Since brand inspection certificates provide documentation 
acceptable to the Board and the Department that the assessment has been 
paid less than 10 days prior to resale, it serves as proof of non-
producer status under Sec. 1260.314. Consequently, a non-producer 
status form is not required in these transactions. Section 1260.314 has 
been revised accordingly in this final rule.

List of Subjects in 7 CFR Part 1260

    Advertising, Agricultural research, Imports, Marketing agreements, 
Meat and meat products, Reporting and recordkeeping requirements.

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

PART 1260--BEEF PROMOTION AND RESEARCH

    1. The authority citation of part 1260 continues to read as 
follows:

    Authority: 7 U.S.C. 2901 et seq.

    2. Section 1260.314 is amended by redesignating paragraph (c) as 
paragraph (e), revising paragraph (b), and adding two new paragraphs 
(c) and (d) to read as follows:


Sec. 1260.314  Certification of non-producer status for certain 
transactions.

* * * * *
    (b) Each person seeking non-producer status pursuant to 
Sec. 1260.116 shall provide the collecting person, on a form approved 
by the Board and the Secretary, with a Statement of Certification of 
Non-Producer Status at the time the collecting person makes payment to 
the seller of cattle, in lieu of the assessment that would otherwise be 
due, except as provided for in paragraphs (c) and (d) of this section.
    (c) When the seller of cattle is not physically present during a 
sales transaction in which the seller claims non-producer status, such 
seller shall deliver to the collecting person an original Statement of 
Certification of Non-Producer Status within 10 business days of the 
date the collecting person makes payment to the seller of the cattle.

[[Page 26785]]

    (d) If the collecting person is a brand inspector, as provided for 
in Sec. 1260.311, the seller of cattle claiming non-producer status 
shall provide to the brand inspector at the time the physical brand 
inspection is completed, in lieu of the assessment that would otherwise 
be due, either: a Statement of Certification of Non-Producer Status or 
a valid brand inspection certificate which shows collection of the 
assessment by a brand inspector in a transaction which took place not 
more than 10 days prior to the sale of the cattle.
* * * * *

    Dated: May 9, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 01-12141 Filed 5-14-01; 8:45 am]
BILLING CODE 3410-02-P