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[Federal Register Volume 60, Number 31 (Wednesday, February 15, 1995)]
[Proposed Rules]
[Pages 8579-8581]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3783]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1230

RIN 0581-AB36
[No. LS-94-010]

Pork Promotion, Research, and Consumer Information Act of 1985--
Increase in Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: Pursuant to the Pork Promotion, Research, and Consumer 
Information Act of 1985 (Act) and the Pork Promotion, Research, and 
Consumer Information Order (Order) thereunder, this proposed rule would 
increase the rate of assessment of 0.35 percent of market value of 
porcine animals to 0.45 percent; and adjust the amount of assessment 
per pound due on imported pork and pork products to reflect the 
proposed 0.10 percent increase in the assessment rate and the decrease 
in the 1994 average price for domestic barrows and gilts. The proposed 
assessment increase and the proposed adjustment in assessments on 
imported pork and pork products would increase annual funding of the 
promotion, research, and consumer information program by an estimated 
$10 million to $12 million over a 12-month period.

DATES: Written comments must be received by March 17, 1995.

ADDRESSES: Send two copies of comments to Ralph L. Tapp, Chief; 
Marketing Programs Branch; Livestock and Seed Division; Agricultural 
Marketing Service (AMS), USDA; P.O. Box 96456, Room 2624-S; Washington, 
DC 20090-6456. Comments will be available for public inspection during 
regular business hours at the above office in Room 2624 South 
Agricultural Building, 14th and Independence Avenue SW., Washington, 
DC.

FOR FURTHER INFORMATION CONTACT: Ralph L. Tapp, Chief, Marketing 
Programs Branch, 202/720-1115.

SUPPLEMENTARY INFORMATION:

Executive Order 12866 and Regulatory Flexibility Act

     The Department is issuing this rule in conformance with Executive 
Order 12866.
    This proposed rule has been reviewed under Executive Order 12778, 
Civil Justice Reform. This proposed rule is not intended to have a 
retroactive effect. The Act states that the statute is intended to 
occupy the field of promotion and consumer education involving pork and 
pork products and of [[Page 8580]] obtaining funds thereof from pork 
producers and that the regulation of such activity (other than a 
regulation or requirement relating to a matter of public health or the 
provision of State or local funds for such activity) that is in 
addition to or different from the Act may not be imposed by a State.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 1625 of the Act, a 
person subject to an order may file a petition with the Secretary 
stating that such order, a provision of such order or an obligation 
imposed in connection with such order is not in accordance with law; 
and requesting a modification of the order or an exemption from the 
order. Such person is afforded the opportunity for a hearing on the 
petition. After the hearing, the Secretary would rule on the petition. 
The Act provides that the district court of the United States in the 
district in which the person resides or does business has jurisdiction 
to review the Secretary's determination, if a complaint is filed not 
later than 20 days after the date such person receives notice of such 
determination.
    Information available to the Department indicates that nearly all 
of the estimated 278,000 pork producers and many of the estimated 200 
importers can be classified as small entities. This proposed rule would 
increase the rate of the assessment from 0.35 percent of the market 
value of porcine animals to 0.45 percent, and would increase the cents 
per pound and per kilogram of assessments on imported pork and pork 
products subject to assessment. Adjusting the rate of assessment from 
0.35 to 0.45 percent and increasing the assessment on imported pork and 
pork products would result in an estimated increase in assessments of 
$10 million to $12 million over a 12-month period. However, the gross 
market value of all swine marketed in the United States during 1993 
exceeded $10.6 billion. The economic impact of the proposed assessments 
will not be a significant part of the total market value of swine.
    This proposed rule also would adjust importer assessments to 
reflect the increase in the assessment rate from 0.35 to 0.45 percent 
and to reflect a decrease in the 1994 average market price for domestic 
barrows and gilts. The combined effect of the assessment rate increase 
and the decrease in the average market price would increase the 
assessments on imported pork and pork products subject to assessments 
by two- to four-hundredths of a cent per pound, or as expressed in 
cents per kilogram, four- to nine-hundredths of a cent per kilogram. 
Adjusting the assessments on imported pork and pork products would 
result in an estimated increase in assessments of $175,000 over a 12-
month period.
    Accordingly, the Administrator of AMS has determined that this 
action will not have a significant economic impact on a substantial 
number of small entities.
    The information collection requirements contained in part 1230, 
subparts A and B, have been previously approved by the Office of 
Management and Budget (OMB) and have been assigned OMB Control Number 
0851-0151.
    The Act (7 U.S.C. 4801-4819) approved December 23, 1985, authorized 
the establishment of a national pork promotion, research, and consumer 
information program. The program is funded by an assessment rate of 
0.35 percent of the market value of all porcine animals marketed in the 
United States and an equivalent amount of assessment on imported 
porcine animals, pork, and pork products. The final Order establishing 
a pork promotion, research, and consumer information program was 
published in the September 5, 1986, issue of the Federal Register (51 
FR 31896; as corrected, at 51 FR 26283, and amended at 53 FR 1909, and 
53 FR 30243). Assessments began on December 1, 1986.
    The Order requires that producers pay to the Board an assessment of 
0.35 percent of the market value of each porcine animal upon sale. 
However, for purposes of collecting and remitting assessments, porcine 
animals are divided into three separate categories (1) feeder pigs, (2) 
slaughter hogs, and (3) breeding stock. The Order specifies that 
purchasers of feeder pigs, slaughter hogs, and breeding stock shall 
collect an assessment on these animals if assessments are due. The 
Order further provides that for the purpose of collecting and remitting 
assessments persons engaged as a commission merchant, auction market or 
livestock market in the business of receiving such porcine animals for 
sale on commission for or on behalf of a producer shall be deemed to be 
a purchaser.
    The Order requires importers of porcine animals to pay the U.S. 
Customs Service (USCS), upon importation, the assessment of 0.35 
percent of the porcine animal's declared value and importers of pork 
and pork products to pay USCS, upon importation, the assessment of 0.35 
percent of the market value of the live porcine animals from which such 
pork and pork products were produced.
    The procedures for collection and remittance of assessments are 
specified in Sec. 1230.71 of the Order.
    Pursuant to section 1620 of the Act, the assessment rate of 0.25 
percent of the market value of porcine animals, pork, or pork products 
sold or imported was established in the initial Order and was changed 
to 0.35 percent on December 1, 1991. Based on the assessment rate of 
0.35 percent, the total annual assessments collected during 1994 were 
approximately $42 million. Assessments on imported pork and pork 
products accounted for about $1.5 million of the total.
    The Act and Sec. 1230.71 of the Order contain provisions for 
increasing the initial rate of assessment. Section 1620(b)(2) of the 
Act provides that the rate of the assessment in the initial Order may 
be increased by not more than 0.1 percent per year upon recommendation 
of the National Pork Producers Delegate Body whose producer and 
importer members are appointed annually by the Secretary. The Act 
further provides that the rate of assessment may be increased by no 
more than 0.1 percent annually not to exceed 0.5 percent of the market 
value unless the Delegate Body recommends a greater increase and the 
increase is approved in a referendum.
    The 1994 Delegate Body, at its annual meeting on March 3-5, 1994, 
in Denver, Colorado, voted overwhelmingly to recommend to the Secretary 
that the rate of assessment of 0.35 percent be increased to 0.45 
percent. There were 170 Delegate Body members appointed by the 
Secretary in 1994. At the Delegate Body meeting 154 delegates were 
present during voting and voted 37,226 valid share votes. States and 
importers are allotted one share per $1,000 of the aggregated amount of 
assessment collected. There were 31,089 share votes cast in favor of 
the 0.1 percent increase.
    The following example will illustrate the effect of the 0.1 percent 
increase on a per head basis. Based on the 1994 annual average five 
market price of $39.57 per hundredweight for barrows and gilts with an 
average weight of 248 pounds as reported in the USDA's publication 
``Livestock, Meat, and Wool Weekly Summary and Statistics'' published 
in January 1995, the total assessment per head at the assessment rate 
of 0.45 percent would be 44 cents. At the assessment rate of 0.35 
percent, the total per-head assessment would be 34 cents. Based on the 
Delegate Body's recommendation in accordance with Sec. 1230.71(d) of 
the Order, it is proposed that regulations be issued increasing the 
rate of assessments from 0.35 to 0.45 percent. [[Page 8581]] 
    This proposed rule also would increase the amount of assessment on 
all of the imported pork and pork products subject to assessment as 
published in the Federal Register as a final rule September 8, 1994, 
and effective on October 11, 1994 (59 FR 46323). This adjustment would 
reflect the increase in the assessment rate to 0.45 percent and would 
be consistent with the decrease in the annual average price of domestic 
barrows and gilts for calendar year 1994 as reported by USDA, AMS, 
Livestock and Grain Market News (LGMN) Branch. This adjustment in 
assessments would make the equivalent market value of the live porcine 
animal from which the imported pork and pork products were derived 
reflect the recent decrease in the market value of domestic porcine 
animals, thereby promoting comparability between the importer and 
domestic assessments.
    The methodology for determining the per-pound amounts for imported 
pork and pork products was described in the supplementary information 
accompanying the Order and published in the September 5, 1986, Federal 
Register at 51 FR 31901. The weight of imported pork and pork products 
is converted to a carcass weight equivalent by utilizing conversion 
factors which are published in the USDA Statistical Bulletin No. 616 
``Conversion Factors and Weights and Measures.'' These conversion 
factors take into account the removal of bone, weight lost in cooking 
or other processing, and the nonpork components of pork products. 
Secondly, the carcass weight equivalent is converted to a live animal 
equivalent weight by dividing the carcass weight equivalent by 70 
percent, which is the average dressing percentage of porcine animals in 
the United States. Thirdly, the equivalent value of the live porcine 
animal is determined by multiplying the live animal equivalent weight 
by an annual average market price for barrows and gilts as reported by 
the USDA, AMS, LGMN Branch. The annual average price, which was based 
on price data from six major markets, is now based on only five markets 
as one of the six markets--St. Louis--closed in 1994. This average 
price is published on a yearly basis during the month of January in the 
LGMN Branch's publication ``Livestock, Meat, and Wool Weekly Summary 
and Statistics.'' Finally, the equivalent value is multiplied by the 
applicable assessment rate of 0.45 percent due on imported pork and 
pork products. The end result is expressed in an amount per pound for 
each type of pork or pork product. To determine the amount per kilogram 
for pork and pork products subject to assessment under the Act and 
Order, the cent-per-pound assessments are multiplied by a metric 
conversion factor 2.2046 and carried to the sixth decimal.
    The formula in the preamble for the Order at 51 FR 31901 
contemplated that it would be necessary to recalculate the equivalent 
live animal value of imported pork and pork products to reflect 
increases in the rate of assessments or changes in the annual average 
price of domestic barrows and gilts to maintain equity of assessments 
between domestic and porcine animals and imported pork and pork 
products.
    Substituting the proposed assessment rate of 0.45 in the formula 
and using the 1994 average annual five market price for domestic 
barrows and gilts of $39.57 per hundredweight would result in an 
increase in assessments for all the Harmonized Tariff Systems (HTS) 
numbers in the table in Sec. 1230.110, 59 FR 46323; September 8, 1994, 
of an amount equal to two- to four-hundredths of a cent per pound, or 
as expressed in cents per kilogram, four- to nine-hundredths of a cent 
per kilogram. Based on Department of Commerce, Bureau of Census, data 
on the volume of imported pork and pork products available for the 
period January 1, 1994, through September 30, 1994, the proposed 
increases in the assessment amounts would result in an estimated 
$175,000 increase in importer assessments over a 12-month period.

List of Subjects in 7 CFR Part 1230

    Administrative practice and procedure, Advertising, Agriculture 
research, Marketing agreement, Meat and meat products, Pork and pork 
products.

    For the reasons set forth in the preamble, it is proposed that 7 
CFR part 1230 be amended as set forth below:

PART 1230--PORK PROMOTION, RESEARCH, AND CONSUMER INFORMATION

    1. The authority citation for 7 CFR Part 1230 continues to read as 
follows:

    Authority: 7 U.S.C. 4801-4819.

Subpart--[Amended]

    2. Subpart B--Rules and Regulations is amended by revising 
Sec. 1220.110 to read as follows:

Sec. 1230.110  Assessments on Imported Pork and Pork Products.

    (a) The following HTS categories of imported live porcine animals 
are subject to assessment at the rate specified.

------------------------------------------------------------------------
 Live porcine                                                           
    animals                            Assessment                       
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0103.10.0000..  0.45 percent Customs Entered Value.                     
0103.91.0000..  0.45 percent Customs Entered Value.                     
0103.92.0000..  0.45 percent Customs Entered Value.                     
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    (b) The following HTS categories of imported pork and pork products 
are subject to assessment at the rates specified. Assessment

------------------------------------------------------------------------
                                                       Assessment       
            Pork and pork products             -------------------------
                                                  Cents/lb     Cents/kg 
------------------------------------------------------------------------
0203.11.0000..................................          .25      .551150
0203.12.1010..................................          .25      .551150
0203.12.1020..................................          .25      .551150
0203.12.9010..................................          .25      .551150
0203.12.9020..................................          .25      .551150
0203.19.2010..................................          .30      .661380
0203.19.2090..................................          .30      .661380
0203.19.4010..................................          .25      .551150
0203.19.4090..................................          .25      .551150
0203.21.0000..................................          .25      .551150
0203.22.1000..................................          .25      .551150
0203.22.9000..................................          .25      .551150
0203.29.2000..................................          .30      .661380
0203.29.4000..................................          .25      .551150
0206.30.0000..................................          .25      .551150
0206.41.0000..................................          .25      .551150
0206.49.0000..................................          .25      .551150
0210.11.0010..................................          .25      .551150
0210.11.0020..................................          .25      .551150
0210.12.0020..................................          .25      .551150
0210.12.0040..................................          .25      .551150
0210.19.0010..................................          .30      .661380
0210.19.0090..................................          .30      .661380
1601.00.2010..................................          .35      .771610
1601.00.2090..................................          .35      .771610
1602.41.2020..................................          .38      .837748
1602.41.2040..................................          .38      .837748
1602.41.9000..................................          .25      .551150
1602.42.2020..................................          .38      .837748
1602.42.2040..................................          .38      .837748
1602.42.4000..................................          .25      .551150
1602.49.2000..................................          .35      .771610
1602.49.4000..................................          .30      .661380
------------------------------------------------------------------------

    3. Subpart B--Rules and Regulations is amended by revising 
Sec. 1230.1120 to read as follows:

Sec. 1230.112  Rate of assessment.

    In accordance with Sec. 1230.71(d) the rate of assessment shall be 
0.45 percent of market value.

    Dated: February 9, 1995.
Lon Hatamiya,
Administrator.
[FR Doc. 95-3783 Filed 2-14-95; 8:45 am]
BILLING CODE 3410-02-P
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